Boxlight(BOXL)2019-11-14 01:33Financial Data and Key Metrics Changes - Revenue for Q3 2019 was 1.4 million or 14% compared to 3.4 million, an increase of 2.4 million in Q3 2018, resulting in a gross margin of 30% for Q3 2019 compared to 24% in Q3 2018 [15][16] - Year-to-date revenue for the nine months ended September 30, 2019, was 1.8 million or 7% compared to 0.3 million, a decrease of 1.2 million in Q3 2018 [17] Business Line Data and Key Metrics Changes - The increase in revenue was primarily driven by sales of hardware, software, and professional development services [15] - The company reported strong traction in its classroom solutions, with existing customers expanding their solutions and new customers adopting replacements for older technologies [6][10] Market Data and Key Metrics Changes - The education technology industry continues to see double-digit growth in the U.S. and internationally, with Boxlight optimistic about growth potential in all product categories [12] - Internationally, contracts were awarded in countries such as Chile, the Dominican Republic, Ecuador, Mexico, and Peru, contributing to a growing international channel [10][42] Company Strategy and Development Direction - The company is focusing on diversifying its product suite to include high-margin proprietary solutions, which is expected to maintain high margins and revenue growth in the future [12] - The introduction of new products, such as the MimioClarity audio distribution system, is anticipated to enhance the company's offerings and drive sales [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that some major deals were pushed out to future quarters, impacting revenue expectations for Q4 2019 [23][26] - The company expects a better first quarter in 2020 due to new deployments and the addition of New York City as a significant customer [31][28] Other Important Information - The company raised $4 million from Lind Partners to support inventory purchases and operating expenses, improving its cash position compared to the previous year [35] - The company is restructuring its European operations to enhance performance in that market [41] Q&A Session Summary Question: Addressing revenue growth guidance shortfall - Management indicated that while Q3 showed good activity, some major deals were delayed, impacting revenue expectations for Q4 [23][25] Question: Demand for specific products - Management noted strong demand for flat panels and the MimioFrame solution, with significant opportunities in various school districts [32] Question: Capital constraints on growth - Management confirmed that while capital needs are being assessed, the company is currently in a better position than the previous year due to improved arrangements and fundraising [35] Question: Adjusted EBITDA calculation - Management explained that adjusted EBITDA is calculated by adding back normal depreciation, amortization, interest expense, stock compensation expense, and changes in the fair value of derivative liabilities [37] Question: Future revenue from existing contracts - Management stated that they are closely monitoring rollout schedules for existing contracts and expect to see revenue growth from these in the upcoming quarters [39] Question: Sales mix of flat panels versus other products - Management indicated that interactive flat panels currently account for about 50% of total sales, with expectations for this percentage to decrease over time as other product lines grow [56][59]