Strong Entertainment(US:SGE)2024-05-14 20:48Revenue and Sales Performance - Revenue increased by 11.2% to $11.1 million in Q1 2024 from $10.0 million in Q1 2023, driven by $0.8 million higher product sales and a $0.3 million increase in service revenue [122]. - The acquisition of Innovative Cinema Solutions, LLC contributed $1.5 million in revenue in Q1 2024 [123]. - The gross profit from product sales increased to $2.1 million or 26.0% of revenues in Q1 2024, up from $1.7 million or 24.1% in Q1 2023 [126]. Profitability and Income - Gross profit was $2.7 million, representing 24.0% of revenues in Q1 2024, compared to $2.3 million or 23.3% in Q1 2023 [125]. - Income from operations decreased by 67.0% to $0.2 million in Q1 2024 from $0.5 million in Q1 2023, impacted by higher general and administrative expenses [128]. - Net income from continuing operations fell by 78.9% to $0.1 million in Q1 2024 compared to $0.6 million in Q1 2023 [121]. - For the three months ended March 31, 2024, the company reported a net loss of $73,000 compared to a net income of $373,000 for the same period in 2023 [142]. - EBITDA for the three months ended March 31, 2024, was $520,000, down from $854,000 in the same period of 2023, representing a decrease of approximately 39.1% [142]. - Adjusted EBITDA for the same period was $409,000, a decline of 45.8% from $755,000 in the prior year [142]. Cash Flow and Financial Position - Cash and cash equivalents at the end of Q1 2024 were $5.1 million, down from $5.5 million as of December 31, 2023 [131]. - Net cash provided by operating activities was $0.2 million in Q1 2024, a decrease from $0.8 million in Q1 2023 due to higher vendor payments [135]. - The company ended Q1 2024 with CAD$3.3 million (approximately $2.5 million) of principal outstanding on its revolving credit facility [134]. Expenses and Losses - The company incurred interest expense of $115,000 in Q1 2024, compared to $56,000 in Q1 2023, indicating an increase of 105.4% [142]. - Depreciation and amortization expenses were $153,000 for Q1 2024, down from $179,000 in Q1 2023, reflecting a decrease of 14.5% [142]. - The company experienced a foreign currency transaction loss of $162,000 in Q1 2024, compared to a loss of $117,000 in Q1 2023 [142]. Revenue Recognition and Accounting Policies - Revenue recognition is based on the transfer of control of goods or services, with no material extended payment terms, as payment is typically due shortly after the sale [149]. - The company recognizes contract assets for services completed but not yet invoiced, and contract liabilities as deferred revenue when cash is received in advance [150]. - The company has not incurred any deferred contract costs as of March 31, 2024 [151]. Future Outlook - The company plans to grow market share and may pursue acquisitions within or outside existing markets [119]. - The company anticipates that revenue and earnings may fluctuate due to market expansion and seasonality effects [144].