Boxlight Reports Full Year 2019 Results

Revenue of $33.0 Million Gross Profit of 27.1% Adjusted EBITDA of $(5.8) Million

Lawrenceville, GA, May 12, 2020 – (BUSINESS WIRE)–Boxlight Corporation (Nasdaq: BOXL) (“Boxlight”), a leading provider of interactive technology solutions for the global education market, today announced the Company’s financial results for the fourth quarter and year ended December 31, 2019.

Key Financial Highlights for Full Year 2019:

• Revenues decreased by 13% to $33.0 million

• Customer orders decreased by 23.3% to $30.9 million

• Gross profit improved by 420 basis points to 27.1%

• Adjusted EBITDA loss increased by 49% to $5.8 million

• Adjusted EPS decreased by 39% to loss of $0.54

Key Financial Highlights for Q4 2019:

• Revenues decreased by 56% to $5.3 million

• Customer orders increased by 3.2% to $6.0 million

• Gross profit decreased to 13%

• Adjusted EBITDA loss increased by 711% to $3.1 million

• Ended quarter with $1.9 million in backorders

Key Business Highlights for Q4 2019:

• Received $1.25 million follow-on investment from The Lind Partners

• Entered into reseller agreement with Sussman Education

• Selected again by Colorado’s Cooperative Education Purchasing Council as Preferred Classroom Audio Visual Solutions Provider

• Awarded new district sales totaling more than $750K in Texas, Georgia and Michigan

• Entered into regional reseller agreements with Superior Fiber & Data Services in Texas and AV Associates in Nebraska, Kansas and Iowa

• Awarded agreement to outfit South Carolina’s Anderson School District One with interactive multi-touch panels

Management Commentary:

“Although our 2019 financial performance lagged the previous year, we made significant progress as a company in preparing the groundwork for our future,” commented, Michael Pope, Chief Executive Officer. “Specifically, we advanced our product offering and improved our sales channel, positioning us to gain market share in future years.

Additions to our product suite include our MimioClarity audio distribution system, Boxlight NDMS, MimioStudio 12 and MimioInteract. We also improved our STEM offering through the acquisition of Modern Robotics and the launch of our MimioMyBot robotics and coding system. In partnership with the Aldrin Family Foundation and ShareSpace Education, we offer our MimioMyBot bundles with the Giant Moon Map™ and Giant Mars Map™ programs. Our professional services division is also expanding with the introduction of on-demand educator certifications.

Our sales channel continues to grow, and during 2019, we added several new channel partners including Virtucom, Sussman Education, Superior Fiber & Data Services and AV Associates. We have over 500 channel partners globally, and our sales growth is dependent on the strength of our partner network.

We plan to release our Q1 2020 earnings on Friday, May 15th and will hold a conference call on Monday, May 18th. At that time, we will discuss our first quarter results and provide additional updates, including the impact of COVID-19 on our financial outlook for the remainder of 2020.”

Financial Results for the Year Ended December 31, 2019:

Revenue for the year ended December 31, 2019 was $33.0 million, a decrease of $4.8 million or 13%, compared to $37.8 million for the year ended December 31, 2018. The decrease in revenue is driven by a $6m decrease in hardware sales, including a $0.6m adjustment resulting from the adoption of ASC Topic 606, which required us to defer and amortize in future periods. These decreases were offset by a $1m increase in both professional development services and software sales. The significant decrease in hardware sales was primarily attributable to two new large contracts in 2018 with school districts resulting in an increase in sales volume.

Gross profit for the year ended December 31, 2019 was $8.9 million, an increase of $0.2 million, compared to $8.7 million for the year ended December 31, 2018. The resulting gross margin was 27.1% for the year ended December 31, 2019, compared to 22.9% for the year ended December 31, 2018. The year-over-year increase in gross margin was primarily due to a larger concentration of interactive flat panel sales with lower product margins during 2018 including two large projects in Beaufort County, South Carolina and Clayton County, Georgia and a shift in product mix from lower to higher margin products such as professional development services and software revenue in 2019.

General and Administrative expenses for the year ended December 31, 2019 were $15.8 million, an increase of $0.8 million or 5%, compared to $15.0 million for the year ended December 31, 2018. The increase was primarily driven by an increase in payroll expenses.

Research and development expenses for the year ended December 31, 2019 were $1.2 million, an increase of $0.5 million or 83%, compared to $0.7 million for the year ended December 31, 2018. The increase was primarily driven by contract services for software consultants and salaries.

Operating loss for the year ended December 31, 2019 was $8.1 million, an increase of $1.1m or 15% compared to $7.0 million for the year ended December 31, 2018. The increase is driven primarily by the increases in general and administrative expense and research and development expense.

Adjusted EBITDA loss for the year ended December 31, 2019 was $5.9 million, a decrease of $2.0 million, or 49.4%, compared to $3.9 million for the year ended December 31, 2018.

Net loss for the year ended December 31, 2019 was $9.5 million, an increase of $2.3 million, or 31%, compared to $7.2 million for the year ended December 31, 2017. The resulting EPS loss for the year ended December 31, 2019 was $(0.88) per diluted share, compared to $(.72) per diluted share for the year ended December 31, 2018.

Financial Results for the Three Months Ended December 31, 2019:

Revenue for the three months ended December 31, 2019 was $5.3 million, a decrease of $6.7 million or 56%, compared to $12 million for the three months ended December 31, 2018. The 2018 revenue included $4.6m of previously deferred revenue related to the large Clayton County contract. In addition, the Company adopted the new revenue recognition guidance (ASC Topic 606) which resulted in a year to date adjustment of $0.6m that was recorded in the fourth quarter of 2019.

Gross profit for the three months ended December 31, 2019 was $0.7 million, a decrease of $2.3 million, compared to $3.0 million for the three months ended December 31, 2018. The resulting gross margin was 12.6% for the three months ended December 31, 2019, compared to 25.2% for the three months ended December 31, 2018. The decline in gross profit was primarily related to the year to date revenue adjustment of $0.6m related to ASC Topic 606 adoption and an increase in customs expense of $0.2m.

General and Administrative expenses for the three months ended December 31, 2019 was $3.9 million, an increase of $0.1 million or 2%, compared to $3.8 million for the three months ended December 31, 2018.

Research and development expenses for the three months ended December 31, 2019 remained flat at $0.3 million compared to the three months ended December 31, 2018.

Operating loss for the three months ended December 31, 2019 was $3.5 million, a decrease of $2.4 million, or 224%, compared to $1.1 million for the three months ended December 31, 2018.

Adjusted EBITDA loss for the three months ended December 31, 2019 was $3.1 million, an increase of $2.7 million or 711% compared to $0.4 million for the three months ended December 31, 2018.

Net loss for the three months ended December 31, 2019 was $3.3 million, an increase of $2.7 million, or 448%, compared to $0.6 million for the three months ended December 31, 2018. The resulting EPS loss for the three months ended December 31, 2019 was $(0.29) per diluted share, compared to $(0.06) per diluted share for the three months ended December 31, 2018.

At December 31, 2019, Boxlight had $1.2 million of cash, $20.5 million of total assets, $6.2 debt, and 11.7 million shares issued and outstanding.

Use of Non-GAAP Financial Measures

To supplement Boxlight’s financial statements presented on a GAAP basis, Boxlight provides EBITDA and Adjusted EBITDA as supplemental measures of its performance.

To provide investors with additional insight and allow for a more comprehensive understanding of the information used by management in its financial and decision-making surrounding pro forma operations, we supplement our consolidated financial statements presented on a basis consistent with U.S. generally accepted accounting principles, or GAAP, with EBITDA and Adjusted EBITDA, non-GAAP financial measures of earnings. EBITDA represents net income before income tax expense (benefit), interest expense, depreciation and amortization. Adjusted EBITDA represents EBITDA plus stock-based compensation and change in fair value of derivative liabilities. Our management uses EBITDA and Adjusted EBITDA as financial measures to evaluate the profitability and efficiency of our business model. We use these non-GAAP financial measures to access the strength of the underlying operations of our business. These adjustments, and the non-GAAP financial measures that are derived from them, provide supplemental information to analyze our operations between periods and over time. We find this especially useful when reviewing pro forma results of operations, which include large non-cash amortizations of intangible assets from acquisitions and stock-based compensation. Investors should consider our non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

About Boxlight Corporation

Boxlight Corporation (Nasdaq: BOXL) is a leading provider of interactive technology solutions under its award-winning brands Clevertouch®, FrontRow™ and Mimio®. The Company aims to improve engagement and communication in diverse business and education environments. Boxlight develops, sells and services its integrated solution suite including interactive displays, collaboration software, audio solutions, supporting accessories, and professional services. For more information about Boxlight and the Boxlight story, visit http://www.boxlight.com and http://www.clevertouch.com and https://www.gofrontrow.com.

Forward Looking Statements

This press release may contain information about Boxlight's view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements because of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to maintain and grow its business, variability of operating results, its development and introduction of new products and services, marketing and other business development initiatives, competition in the industry, etc. Boxlight encourages you to review other factors that may affect its future results in Boxlight’s filings with the Securities and Exchange Commission.

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