Financial Performance - Net revenues for Q1 2023 were $10.1 million, a slight increase of 0.8% from $10.0 million in Q1 2022[121] - Gross profit for Q1 2023 was $2.48 million, a decrease of 1.3% from $2.51 million in Q1 2022, with a gross profit percentage of 24.5%[127] - The loss from operations remained consistent at $0.78 million for both Q1 2023 and Q1 2022[133] - The company reported a net loss of $4.0 million, or $0.20 per share, in Q1 2023, compared to a net loss of $0.8 million, or $0.04 per share, in Q1 2022[138] - Total segment operating income fell to $407,000 in Q1 2023, down from $476,000 in Q1 2022, a decrease of $69,000 or 14.5%[134] Revenue Segments - Revenue from the Strong Entertainment segment increased by 2.4% to $9.95 million in Q1 2023, driven by higher service revenue[124] - The decline in product revenue was attributed to project timing for Eclipse curvilinear screens, offset by increased sales of traditional cinema screens[125] - Other revenue decreased significantly due to the expiration of a support services agreement with Firefly at the end of 2022[126] - Strong Entertainment segment operating income decreased to $0.6 million in Q1 2023 from $0.6 million in Q1 2022, reflecting a $34,000 decline or 5.6%[134] Cash Flow and Investments - Total cash and cash equivalents increased to $4.3 million as of March 31, 2023, up from $3.8 million at the end of 2022[140] - Net cash used in operating activities improved to $0.5 million in Q1 2023 from $1.7 million in Q1 2022, primarily due to better working capital management[144] - Net cash provided by investing activities was $40,000 in Q1 2023, a decrease from $1.1 million in Q1 2022[145] - Net cash provided by financing activities was $1.0 million in Q1 2023, primarily from net borrowings under the CIBC revolving line of credit[146] - The company is evaluating capital allocation opportunities for investments or acquisitions in public or private companies[116] Other Financial Metrics - The company recorded a total other expense of $2.9 million in Q1 2023, mainly due to a $2.9 million unrealized loss on equity holdings[136] - Unallocated administrative expenses decreased to $1.2 million in Q1 2023 from $1.2 million in Q1 2022, reflecting a $54,000 reduction[135] - The company ended Q1 2023 with outstanding intercompany loans from its Canadian subsidiary of approximately $38.6 million, which could incur a 5% Canadian withholding tax if not repaid[140] Strategic Plans and Market Conditions - The company plans to separate its Strong Entertainment business and pursue an initial public offering to support growth[115] - The company expects the transition from xenon to laser projection to accelerate throughout 2023 and continue for several years[125] - The impact of COVID-19 continues to affect customer spending, particularly in the entertainment and advertising industries[118] - Revenue and earnings fluctuate moderately from quarter to quarter, with potential changes in seasonality patterns as the company expands into new markets[155] - No significant changes in critical accounting policies during the three months ended March 31, 2023[158] - The company is classified as a "smaller reporting company" and thus does not provide quantitative and qualitative disclosures about market risk[159]
FG (FGH) - 2023 Q1 - Quarterly Report