edited transcript of boxl earnings conference call or presentation 16-may-19 1:00pm gmt - where to buy interactive whiteboards

The first quarter of June 4, 2019, 2019 Boxlight Company Revenue (
Thomson StreetEvents)--
Edit record for BOXLIGHT Corp. Earnings Call or presentation Thursday, May 16, 2019 at 1:00:00 GMTTEXT
Chairman and CEO of Michael Ross PopeBoxlight
President and Director Takesha BrownBoxlight-
Allen Conference call participant Allen * research department Alan Robert clermahim Group Co. , Ltd-
Senior vice president and senior TMT analyst, global partner, Research Department Brian David KinstlingerAlliance
MD research director, MD & senior technical analyst
CEO and founder of John NobileTaglich brothers
Research Department-
Chief stock analyst * Stephen HartHayden IR, LLC-
Head of Capital Market Consulting--------------------------------------------------------------------------------Operator [1]--------------------------------------------------------------------------------
Hello everyone, welcome to the 2019 earnings call from Boxlight Corporation in the first quarter. (
Operator instructions)
As a reminder, the meeting is being recorded.
Now it is my pleasure to introduce Stephen Hart of your host Hayden IR. Thank you.
You can start, Sir. --------------------------------------------------------------------------------
Stephen Hart of Hayden IR Co. , Ltd.
Head of Capital Market Consulting [2]--------------------------------------------------------------------------------
Thank you very much, welcome to the 2019 earnings conference call in the first quarter of Boxlight.
So far, everyone should have access to the earnings press release released around 8: 30 today. m. Eastern Time.
This phone is on the webcast and can be replayed.
In our statement today, we will include statements that are considered to be moving forward --
From the meaning of the securities law, including forward-looking
View statements about future results of operations, business strategies and plans, our relationships with our customers, markets and potential growth opportunities.
In addition, management may forward additional-
Look for a statement when answering your question. Forward-
Forward-looking statements, based on the latest knowledge and expectations of management as of today, are affected by certain risks and uncertainties and may lead to significant differences in actual results from forward-looking
Look at the report.
These risks and uncertainties are discussed in detail in our recent table 10Q, Form 10-
In other reports submitted to SEC.
The company has no obligation to update any forwarding-
Look at the report.
In this call, we will mention
GAAP measures that, when used in conjunction with GAAP results, provides us with additional analytical tools to understand our operations.
We provide a reconciliation with the most directly comparable GAAP financial indicators in the earnings press release, which will be published in the Investor Relations section of our investor website. boxlight. com.
With this, I am happy to hand over the phone to Mark Elliott, CEO of Boxlight. --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO3]--------------------------------------------------------------------------------
Thank you, Stephen. good morning, everyone.
We are happy to talk to you again.
Based on our very productive and successful 2018, we will receive a £ 2019 discount
With the development of interactive learning technology, our products and services are also at the forefront of technological transformation.
The first quarter is the slowest quarter of our seasonal earnings, not the forecast for annual performance.
The 2018 decline in the first quarter was [come up]
Some large contracts were completed in 2018 and several projects were postponed in 2019.
We reiterated we the 2019 organic growth 25% to 47 million beauty yuan of guidance.
Our business health should be measured throughout the year, including the second and third quarters.
Over the past 3 years, our annual income has grown from $20 million to $26 million to $38 million, and we believe that we have better growth at any time in our history.
Our dealer partner network is as strong and loyal as ever, plus our experienced management team, strong sales force and continuous product development, enabling us to deliver the best possible servicein-Classes and Awards-
Win interactive technology solutions for the global education market.
This year, we have added several new reseller partners, including S & L integration systems in Georgia, Florida and Alabama.
The core state of Wisconsin Bahwan CyberTek Oman.
We welcome our new partners and thank them for their confidence in our company's best service to their respective markets.
In addition, we have strengthened with Troxell, Howard Technology Solutions, CDW-
G and other strong regional partners, as we have already competed for several of the most important opportunities across the country.
We have the strongest network of partners in the industry, and we see this as an extension of our Boxlight family.
We only sell through channel partners, who are important contributors to our continued growth.
Our team has done a lot of work in developing innovative hardware, software and service solutions, and educators need to improve engagement and learning skills in the classroom.
This is reflected in the large number of successful implementation we have deployed in the US and in major international markets including EMEA and Latin America.
Our goal is to create a record number of potential sales opportunities, and we are confident in our year given our high success --over-
Annual growth prospects.
We are very pleased with the international progress made so far in the EMEA market.
As we acquired Cohuba and added several key elements to our executive sales and support team, we expect total revenue in the EMEA market to exceed 10%.
We also see more and more adoption of our extensive product suite in Latin America to provide solutions for every budget in each market.
We were selected as the official supplier of all educational institutions in Puerto Rico, Peru and Chile to participate in the federal procurement contract.
We expect these countries and the wider Latin American market to make a significant contribution to sales.
We recently launched Microsoft International in the United States. K.
English, French, Spanish, German and Arabic to help our international growth.
We are also evolving to produce other targeted marketing materials and participate in trade shows, conferences and other international events, including BETT meetings in the United StatesK.
, GESS Dubai Middle East conference, school and college exhibition in London, Santillana in Mexico City compare the educational technology of the Sixth Congress and Aguascalientes in Mexico.
Our mission is to change the classroom, change the world, and move beyond the United States and developed countries to the world.
We are one of the few companies that offer solutions that combine classrooms in developing economies with low
Cost-effective solutions including our mimimio MikroTik, MimioTeach, mimimioframe and interactive projectors.
Every one of our subordinates
Cost display leverages our core MimioStudio software solutions to deliver the same overall solution approach for ease of use and integration.
We have also achieved a gross profit margin increase due to better negotiated cost transactions with our major suppliers on key hardware solutions and improved product mix as high yields grow
Profits from hardware, software and services. High-
Edge hardware solutions include our Mimio's micro-robot or MimioMyBot, which is a robot, MimioFrame, MimioTeach and peripheral equipment. High-
Margin software includes Boxlight Unplug d, Boxlight NDMS, and our suite of Qwizdom software solutions.
Our service has also brought a high profit and we have seen an increase in opportunities.
For example, we recently received a service contract with the Clayton County school district, GA for $860,000 in professional development.
Contract includes online instructor-
Complete the led certification of 600 teachers by July, develop training materials for their regional technical liaison and provide on-
Website dedicated to Clayton County Boxlight digital learning experts 100% people.
This professional service contract complements the 3,200 classroom interactive tablets and accessories contracts awarded last year, of which 3,000 classrooms have been successfully installed and deployed on time and on budget.
Our professional development team continues to expand their courses, including the development of a complete MimioStudio certification project in both English and Spanish.
In addition, they are working for Boxlight NDMS, Boxlight Unplug d, mimimiomybot and self-
Online training progress for Qwizdom software solutions. Our whole-
Classroom learning solutions support in 32 languages in 60 countries and are installed in nearly 1 million classrooms.
Our solutions include collaborative learning, learning evaluation, STEM and robotics. We have 500-
And global distributor partners who assist in identifying, locating and winning contracts.
Our complete solution approach is a key advantage of Boxlight, enabling our channel sales partners to negotiate and deliver the right solution and value to meet the unique needs of our customers and
We got paid off. -
Several important contracts were received in the first quarter.
The Colorado collaborative education Procurement Board chose Boxlight and DHE computer systems as exclusive providers of audio-visual solutions for certain classrooms, including Boxlight's ProColor 65-inch and 75-
Ultra-short interaction between inch board, MimioTeach, MimioBoard and mimimio
Throw the projector in their respective categories.
Procurement contracts account for approximately 70% of K-
12 school registrations published in Colorado allow any school in the cooperative to purchase our selective interactive technology without bidding.
The Michigan REMC Association, on behalf of all Michigan schools including Boxlight ProColor 65-awarded Boxlight and digital age technologies as providers of classroom technology solutionsinch and 75-
Ultra-short interaction between inch board, MimioTeach, MimioBoard and mimimio
Throw Projector
The contract will take effect from January 1, 2019 and will be valid until December 31, 2020.
New York state's largest charter school for Applied Technology charter schools choose Boxlight to equip its classrooms with 75-
Inch interactive flat panel display.
We were also selected as an important RFP at Chesapeake Public School in Virginia, where there are more than 39,000 students.
As we said at our last earnings call, after extensive evaluation and pilot process, Boxlight was selected by the San Diego Joint School District in August 2018 to provide 75-
Inch interactive tablet to 150 classrooms in the area.
In November 2018, the education bond referendum passed, providing a large amount of additional funds for the purchase of additional education technology.
With this funding, the area decided to install another 6,000 classrooms, specifying our 75-
70-inch interactive tablet--over a 5-year period.
Our channel partners have received a contract for the region that will be used for submission to the board for approval scheduled for the May 28 board meeting.
The area requires 1,200 classrooms to be installed between June and August, and 1,200 classrooms per year for the remaining four years.
We continue to deliver to our customers clearly and exceed their expectations.
Happy customers who are willing to provide warm recommendation are particularly important in the public sector.
We have made great progress so far in 2018 and 2019.
With a clear demand for our products and recognition by school districts and industry partners that Boxlight technology is best suited for future learning environments, we are growing rapidly.
Replace the old-
The technology interactive whiteboard is in full swing worldwide.
This is combined with the acceptance of exciting technologies and solutions such as tablets, Chromebooks, formative assessment, differentiated teaching, teamwork, STEM, and mainstreaming of special needs, we will continue to grow.
We also offer the best solution set, a complete solution with tested, proven products and services to provide results with our customers to support us
Our market has grown dramatically, and we are more able to meet real needs than anyone anywhere.
We won in public.
Our competitive advantage lies in a wide range of pilot projects.
Our incredible and loyal network of channel partners home, who can choose their own suppliers, continue to choose Boxlight because we offer the complete overall solution.
At Boxlight, this is an exciting time, and our mission is to improve classroom learning and engagement to help educators improve their student performance.
I would like to thank our loyal staff, our trusted customers and our supported partners.
There's a lot to do in our best delivery. in-Classes and Awards-
Win interactive technology solutions for the global education market and continue to create shareholder value.
With this, I handed it over to Michael Pope, president of Boxlight. --------------------------------------------------------------------------------
Michael Ross Pope from boxlet
President and Director4]--------------------------------------------------------------------------------Thank you, Mark.
My comments today will focus on the technological innovation and development of Boxlight, our M & A strategy, including our recent acquisition of modern robots, the $4 million we have received from Lind partners and other investors
Focus on development.
As Mark said, the complete hardware and software solutions we offer are the backbone of our products and the key to our differences.
Our ability to innovate is a key element of our strategy to become a global leader and provider of interactive technology for education in the future.
We have had several important product introductions in recent months.
The new solutions include Boxlight NDMS, MimioStudio 12, Boxlight Unplug d, MimioInteract, and Mimio Cloud.
In addition, in March 14, Boxlight ended its acquisition of modern robots at a total purchase price of just under $1 million, mainly considering Boxlight common stock.
Modern robots are the creators of MyBot, a powerful and innovative K-
Help students from pre-school to high school develop skills and passionate ecosystem and robotics programs for programming and robotics.
Educators gain access through a United software platform and innovative robotsof-the-
Box solutions come with powerful courses, STEM courses, tutorials, and videos.
We are excited to expand our products at a high level
By providing MimioMyBot solutions, STEM and robot markets are required.
Over the next 12 months, we expect to generate more than $2 million in robotics and programming revenue with a gross margin of more than 50%.
Also, as Mark said, our service department signed a contract with Clayton County, GA for $860,000.
We will see the continued appeal of our services and expect them to generate up to 10% of their total revenue by 2020, with a gross profit margin of over 60%.
We have been committed to complementing our organic growth through strategic and value-added acquisitions, and we are delivering on that commitment.
Our success with STEM Solutions, improved software strategies, growing international revenue and increasing services is a concrete example.
We continue to target acquisition opportunities that either increase our global distribution or add a new technology solution opportunity that complements our suite of integrated solutions and increases our gross profit potential.
We expect 2019 to bring in more acquisition opportunities as we want to continue to expand our business worldwide and enhance our suite of integrated solutions.
At, we closed the $4 million investment of Lind partners in the form of convertible notes, which included 24-
Fixed conversion price of $4 per share due month.
With this investment, we feel that we have enough capital to execute our 2019 program, which will link our operations with positive cash flow.
With this, I now transfer the call to Takesha Brown, our CFO. --------------------------------------------------------------------------------
Takesha Brown from BoxlightCFO [5]--------------------------------------------------------------------------------Thank you, Michael.
I will now review our Q1 2019 results.
Revenue for the three months ended March 31, 2019 was $5 million, down $1 million or 16% from $6 million for the three months ended March 31, 2018.
The main reason for the decline was that at 2018 in the first quarter, the company completed several large projects, which led to an increase in sales of MimioTeach, projectors and panels.
In addition, some projects were delayed in the first quarter, but it is expected that they will still be confirmed in 2019.
Gross profit for the three months ended March 31, 2019 was $1.
6 million, an increase of $0.
Compared to $1, 1 million.
The three months ended March 31, 2018 were 5 million per cent.
The resulting gross profit margin is 31.
The three months ended March 31, 2019 were 6% per cent, compared to 24 months.
The three months ended March 31, 2018 were 7% per cent.
The reason for the increase is that the product mix has changed, including
Revenue from profit products and services and reduced freight costs.
The general and administrative costs for the three months ended March 31, 2019 were $3.
8 million, an increase of $0.
6 million or 18% compared to $3.
The three months ended March 31, 2018 were 2 million per cent.
The increase was mainly due to the increase in wage spending, mainly as a result of the new acquisition in 2018.
R & D costs for the three months ended March 31, 2019 were $0.
3 million, an increase of $0.
2 million or 155% compared to $0.
The three months ended March 31, 2018 were 1 million per cent.
R & D costs mainly include costs related to proprietary technology development.
The main reasons for the increase are R & D contractors and wage expenditures.
Other income or expenses for the three months ended March 31, 2019 were $2.
Compared with $0 in revenue, 3 million.
The three months ended March 31, 2018 were 9 million per cent.
The increase in other expenses was primarily non-cash due to changes in the fair value of derivative liabilities.
Operating losses for the three months ended March 31, 2019 were $2.
4 million, an increase of $0.
6 million or 34% compared to $1.
The three months ended March 31, 2018 were 8 million per cent.
The adjusted EBITDA loss for the three months ended March 31, 2019 was $1.
8 million, an increase of $0.
7 million or 70% compared to $1.
The three months ended March 31, 2018 were 1 million per cent.
The net loss for the three months ended March 31, 2019 was $4.
7 million, an increase of $3.
8 million or 418% compared to $0.
The three months ended March 31, 2018 were 9 million per cent.
For the three months ended March 31, 2019, earnings per share lost $0.
Compared to $0, $46 per share after dilution.
Diluted shares per share for 3 months ended March 31, 2018 09.
The increase in net losses is mainly due to changes in wage costs, research and development costs and the fair value of derivative liabilities.
As of March 31, 2019, the price of Boxlight was $2.
7 million in cash, $20.
7 million of total assets, $3.
Debt of 7 million, 10.
6 million shares have been issued and outstanding.
Overall, we noticed that the first quarter was the slowest quarter of our revenue.
However, we are still achieving our goal of 25% years. over-
Annual growth of 47 million to $ 25%, gross profit margin of 30%.
With this, we can start asking questions.
Questions and Answers--------------------------------------------------------------------------------Operator [1]--------------------------------------------------------------------------------(
Operator instructions)
Our first question comes from Brian Kinstlinger, a global partner with the alliance. --------------------------------------------------------------------------------
Brian David Kinstlinger, global partner of the research sector Alliance-
Director of MD research department, MD & senior technical analyst [2]--------------------------------------------------------------------------------
Can you provide an update on the pilot or early progress you made in San Diego? When a customer may decide to push a bigger one-
Scale installation? --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO3]--------------------------------------------------------------------------------
Brian, of course.
San Diego, they have installed about 48 classrooms in the first quarter and are progressing very well.
The reason they re-issued the RFP is because the referendum there provided funding and they wanted to tie it together so they could have it, additional units and up to 6,000 classrooms can be purchased.
So that's what they're specifying now, and they're posting bids for the specified Boxlight.
So it came out.
It has now been approved by the recommendation team.
They submit to our channel partner for transfer communication and then they will pack together to get approval from the board and hopefully get approval in May 28. So. . . --------------------------------------------------------------------------------
Brian David Kinstlinger, global partner of the research sector Alliance-
Director of MD research department, MD & senior technical analyst [4]--------------------------------------------------------------------------------
So basically, there's an RFP, a new RFP that highlights you and Troxell, and it's going to be awarded once it gets new funding? --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO5]--------------------------------------------------------------------------------Yes.
Well, the RFP has been released and has been approved by the selection team.
So now they bring it to Troxell, our channel partner, and then they say, "This is what we want to do, this is the agreement we have with you, we will include the agreement in a package of documents to the board on May 28.
"So it's there, it's done.
Now that it's ready, they hope to start deploying immediately in June.
So they will consider installing up to 1,200 classrooms by the end of July-
Or before the end of August.
So this is a very strong support.
I mean, the pilots they go through are like 15-
A one-month pilot with everyone you can imagine, where you have to have our 5 products there, they rotate them in multiple schools and elsewhere,
So they think we are the best solution to meet their requirements.
And then they did it. -
The first RFP was specially prepared for them in August and they have a fund-
For 150 classrooms, this is the goal of their deployment.
But when the referendum passed across the county, they decided to take back the referendum, redo everything and put the legal team in place, so they could buy this for a bigger price
Scale deployment.
So it's a good thing for Boxlight and our partners, but it does affect some of our revenue in the first quarter. --------------------------------------------------------------------------------
Brian David Kinstlinger, global partner of the research sector Alliance-
Director of MD research department, MD & senior technical analyst [6]--------------------------------------------------------------------------------Yes.
Then, maybe you can measure the application technology contract Charter School and the federal procurement contract with the dollar value.
Then on the federal procurement contract, Boxlight is the only-source vendor?
Is this an idiot with no promises or GWAC, but they bought it under this condition--
Pre-suppliersagreed-upon prices? --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO7]--------------------------------------------------------------------------------Yes.
Yes, there's a rumor coming out that they were selected and we were selected for those categories, but Colorado is a co-op sourcing agreement.
They selected some suppliers and offered the best value.
In this product, the products we have outlined are interactive tablets, projectors, etc.
So now in Colorado and Michigan-
We have a similar arrangement in Iowa.
This is a vehicle for purchase, and schools can sign contracts and purchase without going to bid.
So this is a very favorable purchase agreement and then being selected in these areas there is a very prestigious award.
It is a similar arrangement in Latin American countries such as Chile, Peru and Puerto Rico.
They have a directory out there, but they will select the people in the directory and then allow them to buy. So. . . --------------------------------------------------------------------------------
Brian David Kinstlinger, global partner of the research sector Alliance-
Director of MD research department, MD & senior technical analyst [8]--------------------------------------------------------------------------------
Are you the only company in the catalog?
Or are there any other suppliers in the catalog? --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO9]--------------------------------------------------------------------------------
In Latin American countries, there may be--
I'm not sure about that.
Brian, I'm pretty sure we're the main selected person there, but I have to check it out for you.
I'm not sure if we have the details, but we're in the catalog for these categories and I'm not sure if we're exclusive.
I believe we are in Puerto Rico and Chile as well, but I am not sure about Peru. --------------------------------------------------------------------------------
Brian David Kinstlinger, global partner of the research sector Alliance-
Director of MD research department, MD & senior technical analyst [10]--------------------------------------------------------------------------------Okay.
At the last meeting, you talked about-
I haven't heard of it, but at the press conference you mentioned the Chesapeake School.
It may be the size, scope and duration of the contract.
If you have already said it, I may have missed it. --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO11]--------------------------------------------------------------------------------Yes.
Chesapeake is 39,000-
The student school district there.
So they will have about 2,000 classrooms that they will deploy over a period of time.
Normally, it will--
This will vary depending on their promotion schedule and similar things.
But this is the purchase tool we use and we will start working with them when they come up with a deployment schedule.
But usually, you know, we have-
Clayton County is a good example.
Their initial RFP and purchase agreement was to deploy 3,200 classrooms in 2 to 3 years.
After putting them in, they decided to do so within 6 months.
So this is a very good thing for our company, but we have 5-
There's an annual plan, they stick to 5-year plans.
So it really depends on the budget and requirements and the replacement needs of the districts.
So the good thing is that once they order, then that's predictable, we sit with them and our channel partners to see the launch schedule and how they're going to deploy. --------------------------------------------------------------------------------
Brian David Kinstlinger, global partner of the research sector Alliance-
Director of MD research department, MD & senior technical analyst [12]--------------------------------------------------------------------------------
So in the case of Chesapeake, in terms of the total amount of the contract, taking into account the size of the classroom, this is similar to that of Clayton County.
Or did I read it wrong? --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO13]--------------------------------------------------------------------------------No.
There will be about 2,000 classrooms there over time, and the $2,000 to $3,000 classroom range depends on whether they use tablets or our peripherals.
All of this is possible. But we'll. . . --------------------------------------------------------------------------------
Brian David Kinstlinger, global partner of the research sector Alliance-
Director of MD research department, MD & senior technical analyst [14]--------------------------------------------------------------------------------
My last question about investing $4 million.
When I looked at the cash flow statement in Q, I saw $2.
2 million is the figure that appears to be recognized on the cash flow statement.
Will the rest be confirmed or received in the quarter of June? --------------------------------------------------------------------------------
Takesha Brown from BoxlightCFO [15]--------------------------------------------------------------------------------
Yes, that's right.
We received $2 million in the first quarter and $2 million in April. --------------------------------------------------------------------------------Operator [16]--------------------------------------------------------------------------------
Our next question comes from the lines of Alan Kley and Maxim. --------------------------------------------------------------------------------
Alan Robert Kley of research division Maxim Group LLC
Senior vice president and senior TMT analyst17]--------------------------------------------------------------------------------
As far as your profit margin for the quarter is concerned, I want to try to understand, I think, first of all, China's tariffs, do you think this will affect the profit margin?
Did you take this into account in your guidance of 25% to 30% this year? --------------------------------------------------------------------------------
Michael Ross Pope from boxlet
President and Director18]--------------------------------------------------------------------------------Yes.
Great questions.
So the answer is yes, and we have considered that.
In addition, tariffs do affect--
This is absolutely correct, whether it will also affect the rest of the industry and our competitors.
We are working on some contingency plans, just trying to figure out how to reduce the cost of goods entering the USS.
Tariffs from China.
We are working with some of our manufacturers to solve some problems.
But this is a major consideration.
But even so, yes, we plan to make a total profit of 25% to 30%. --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO19]--------------------------------------------------------------------------------
Our major manufacturers there are aware of this and they are looking for and planning to start manufacturing in countries that are not in China.
This is a huge impact for them, so they have made plans that allow us to do so.
Now they are not affected by the harmonic code yet. --------------------------------------------------------------------------------
Alan Robert Kley of research division Maxim Group LLC
Senior vice president and senior TMT analyst20]--------------------------------------------------------------------------------Okay.
You mentioned that some projects have been delayed at 1Q and you expect revenue to be confirmed later this year.
Can you provide some colors? --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO21]--------------------------------------------------------------------------------
Of course San Diego is where we moved out.
We also chose Shelby County, Memphis, Tennessee. -
There is a bid right there.
But they started a new director search, so they decided to move things out of there.
The Beishan school district had a tender in the first quarter, but then they decided to re-issue it.
Now that we have won the RFP, in fact, we got the purchase order for 176 classrooms from Troxell today.
So these are some that have an impact where they have just moved out, or their government has changed and may move in, we have moved out in the first quarter, but we still believe we will get them.
Of course San Diego is there and Shelby County looks very, very positive and we 've got the North Mountain.
So what we see is those swings.
But they have moved away and we are very confident about it. --------------------------------------------------------------------------------
Alan Robert Kley of research division Maxim Group LLC
Senior vice president and senior TMT analyst22]--------------------------------------------------------------------------------Okay.
Then in terms of the competitive environment of the bidding, have you noticed any changes in the pricing discipline or other similar aspects of the competitor? --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO23]--------------------------------------------------------------------------------
Alan, what we're seeing is that several of our competitors have pulled out of the tablet market.
There are companies like affer, Como, and HoverCam who--
And InFocus.
Such an important company decides that there is more cash demand in this area than they originally asked.
So we gave up the story because there's nothing worse in the market than having a desperate competitor.
So we have to go out and be a little more stable there.
We monitor all bids.
We know the scope we need to get into, in fact, we have an integrated solution there that gives us some competitive advantage, because people are ready to pay more value for our products there other issuesAnd they also --
We protect their investment in the existing curriculum program because we--
We have done an incredible job of being able to accept lesson plans developed by our competitors, mostly smart and live, and we can operate these lesson plans.
Many people have had to coexist with SMART and Promethean over the years, so their software is very capable of doing this.
So, this means that we provide the advantages of protecting the development of all regions.
We can also get them to do better in training as they can do it on one of the platforms there.
This makes it easier for them to recruit teachers in these areas.
So these are the competitive advantages we offer that others don't, which gives us a profit advantage there.
They are very, very easy to define as how much they are and the disruption and unhappiness they cause with the teachers who have spent 10 to 15 years developing the curriculum and having them learn ---
They were told that they had to change the situation and go to another environment.
This is not what they want to do.
So we provide them with this capability, and then we provide them with basic capabilities and software that will allow them to grow in new environments like Google and other integrations.
So that's the problem. it's a good thing for us to let our competitors give up.
We have multiple channel partners.
I mentioned the inside. Core.
This is a competitive channel partner in Wisconsin.
So they have taken us away, and we will let others approach us for the same thing.
We are now competing with a major bid in Wisconsin.
As our partner. Now the market. . . --------------------------------------------------------------------------------
Alan Robert Kley of research division Maxim Group LLC
Senior vice president and senior TMT analyst24]--------------------------------------------------------------------------------Great. --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO25]--------------------------------------------------------------------------------Go ahead.
Sorry, Alan. --------------------------------------------------------------------------------
Alan Robert Kley of research division Maxim Group LLC
Senior vice president and senior TMT analyst26]--------------------------------------------------------------------------------
No, no, I don't want to interrupt you if you have more. --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO27]--------------------------------------------------------------------------------
What I want to say is that what we see is the traditional market shock.
There are many competitors.
I can tell you that Troxell once stated that they have 19 partners who are on sale and they have narrowed this down to 3. And so --
This is similar in all respects.
So customers are now starting to recognize that they may have products in interactive tablets or other similar products, but they don't have enough money or they don't have a complete solution, software, services, support and training are included.
So these are the key factors that are in our favor and we are confident that we will continue to be one of the key suppliers in this industry. --------------------------------------------------------------------------------
Alan Robert Kley of research division Maxim Group LLC
Senior vice president and senior TMT analyst28]--------------------------------------------------------------------------------
My last question is, what do you think about the channels for potential M &? --------------------------------------------------------------------------------
Michael Ross Pope from boxlet
President and Director29]--------------------------------------------------------------------------------Yes.
Good question, Alan.
So we still have a lot of M & A opportunities.
In fact, we have always had companies coming to us and now more than ever, because we have gained more market share in this industry, so we are more eye-catching.
We are also actively looking for opportunities.
We do plan to buy more companies this year.
We do not have any specific guidance on this.
But we are also very selective when we think about acquisitions.
You can look at the acquisitions we have completed in the last 12 months, each of these 4 acquisitions may be small in size, but for our overall solution suite and for our longer durationterm strategy.
So when we're thinking about a new acquisition, we have the same approach, and we're thinking that we think we can improve our existing company and not necessarily change our trajectory, right?
We are just looking for something that can add to what we are already doing.
So maybe keep an eye out that we will definitely have more acquisitions in the future and think they are similar to what we have done in the past.
Specifically, what I want to say is, look at the additional release, as we have already discussed, there are additional technical opportunities or software opportunities. --------------------------------------------------------------------------------Operator [30]--------------------------------------------------------------------------------
Our next question comes from the relationship between John norbiri and the brothers tarlishi. --------------------------------------------------------------------------------
King John, brother Taglich
Research Department-
Chief stock analyst31]--------------------------------------------------------------------------------
Many of my problems have been addressed, but I just want to go back to the delays that affect first-quarter performance.
I know that back in the third quarter of last year, you had some delays, in fact, which gave you a great fourth quarter, a record fourth quarter.
So with respect to the delay in the first quarter, how do you think this will shake in the second, third or fourth quarter?
Can we assume that there will be a lot of this happening in the second quarter?
Or do you think it might go into the third one?
I'm just wondering how much of this will happen in the next few quarters. --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO32]--------------------------------------------------------------------------------Yes.
Again, for anyone in the field of education, the first quarter is a very difficult quarter.
This does not predict the future very well.
I talked to a few of us. -
All of our major channel partners are there and they have similar delays.
However, they continue to comment that their business and people's business are completely-
It's been a long time, they spend a lot of time now, the whole team is very interested.
I 've heard that I think some delays make sense because there's a big alternative market for interactive whiteboards and projectors right now.
There are also a lot of people looking at things like Chromebooks, which are the main deployments.
So they are now analyzing their needs and putting them together.
So they are thinking about something like this, and in the past, they just bought it in the first quarter.
So now they put them together, that's why we see bigger bids and bigger deployments.
So we have a lot of activities.
Our pipeline is very, very powerful.
I would be happy to talk about some of these opportunities, but we can't talk about them for competitive reasons and other similar reasons.
But the delay in the first quarter was--
I think that's the biggest reason I can come up.
There are a lot of activities, a lot--
Our channel sales staff and our channel partners are busier than ever before and are proposing, presenting and reaching out to these.
But I think that's because there's a lot of technology working right now.
Schools that have had Interactive whiteboards for 10 or 15 years now say it's time to change whiteboards.
This is part of it.
They then focus on the tablets and other devices and peripherals associated with it.
So it's a big decision that they put them together and do more review.
But I believe they are continuing now, now and in the future.
From our pipes and everything, we have not lost them.
They are just moving on and then they will be deployed this year. --------------------------------------------------------------------------------
King John, brother Taglich
Research Department-
Chief stock analyst33]--------------------------------------------------------------------------------Okay.
If I can give guidance, I just--
In fact, I am looking at the press release here, which says organic income has grown by 25%.
I saw the word organic. -
I know you bought a modern robot recently.
I just want to know, is this growth rate including modern robotics?
Or is there Modern Robotics beyond that? --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO34]--------------------------------------------------------------------------------Yes.
This includes modern robotics.
The amount is not big this year and I think we are looking for $1 million to $2 million of that.
We got a lot of answers from this point.
This is the hottest market if you look at STEM as a category.
For all the right reasons, everyone is talking about this on a global scale, and robots are the most obvious way.
So we already have companies like Lego and others.
We think we have a solution.
The CEO of Modern Robotics is a very powerful insider within the Lego Group.
He provides sensors and equipment for the Lego team.
So he understands Lego and their strengths in areas we can focus on.
One of the great advantages of modern robotics and our robotics solutions is that Lego sells directly in the US and many other developing countries, and our channel partners are looking for a strong cohesive system that is closely linked.
We are also looking at developing interfaces into our existing Labdisc products, and we have to allow integration between the two products we have there, which allows us to gain a competitive advantage there.
So modern robots will be a huge contributor.
I attended a recent meeting in Austin, Texas where you had 30 minutes to communicate with your respective regions, CIOs, technology and academics.
Each of them is very interested in our robotic approach there and responds at the regional and federal levels, and I believe what we are doing there is the right thing to do.
We are also strengthening this through our EOS team, our professional development team, developing training and courses that we can complement.
Therefore, we believe that we will have a very, very powerful solution with modern robot solutions. --------------------------------------------------------------------------------
King John, brother Taglich
Research Department-
Chief stock analyst35]--------------------------------------------------------------------------------I agree.
Obviously I believe this is a very, very good acquisition of modern robots.
The overall market forecast is very strong.
But if I could-
I know you mentioned earlier that in the next 12 months, revenue will be over $2 million, or about $2 million in the field of modern robotics.
If I could let you know what you think, in a few more years you might be able to penetrate into the market in a few years.
I don't know if you talked about this in terms of market penetration, but since this is a big market, do you think there may be 3 or 5 years left in this regard? --------------------------------------------------------------------------------
Michael Ross Pope from boxlet
President and Director36]--------------------------------------------------------------------------------Yes.
Good question, John.
We must have these numbers inside.
What I want to say is that when you see the growth of robots and STEM, we are now happy to share it outside, which is double
The number of each year, by some measure, is at a higher level.
We think we can grow up at this point, right?
As we said, edtech is on a global scale and we will grow in the north of the market because we are taking market share.
We will do the same thing in robotics.
Chances are obviously very extreme.
I think in the next few quarters we will have a better measure and we will be able to provide some better guidance on the look of the robot. --------------------------------------------------------------------------------
King John, brother Taglich
Research Department-
Chief stock analyst37]--------------------------------------------------------------------------------Fair enough. I --
Last question.
I hope you can talk about the potential you think your product is selling in the USK.
It looks like after you bought Cohuba. --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO38]--------------------------------------------------------------------------------Yes. We've run --we had a --
Andy Pennington, who is in charge of the Cohuba group, is in charge of product management for Promethean.
He is with us and he is now working for our product management team in several key areas. We've got --
We recruited some [mayhem]
He came in from Promethean and another competitor over there.
He built a team there from his competitors.
So we built an infrastructure.
We already have a portfolio there.
We did a lot of marketing there with him.
We have introduced several major channel partners in this market.
We have already won.
We have won the largest college academic education trust similar to the American charter school program (sic)[
Enterprise Trust.
They have 60 schools. they chose us.
So we're very optimistic about what. -
About what they will be able to do.
They're not just in America. K.
But they are also in EMEA.
We saw them through trade shows, conferences and other organizations and competitors we brought in.
They are bringing in their channels and channel partners.
So they are on track and we have an experienced team there.
We have the infrastructure and portfolio they need, and there is messaging as well, because Cohuba does have a complete overall solution approach, which we have built on. --------------------------------------------------------------------------------
Michael Ross Pope from boxlet
President and Director39]--------------------------------------------------------------------------------Yes.
John, specifically, we posted some guidance that you might have seen earlier, and we expect sales in the EMEA region to account for 10% of our total sales this year.
So have some guidance for you and we are also looking forward to a lot of good things for this team in the coming years. --------------------------------------------------------------------------------Operator [40]--------------------------------------------------------------------------------(
Operator instructions)
Our next question comes from the diamond equity research at Hunter Diamond. --------------------------------------------------------------------------------
Diamond Equity Research Co. , Ltd-CEO & Founder [41]--------------------------------------------------------------------------------
So it's just a simple question.
I looked at the operating cash flow that turned positive this quarter.
I just wanted to find out what do you think about your financing options, given the recent $4 million financing?
Judging from the recent positive cash flow situation, how much financing do you wish to seek, do you expect this to continue?
Just your thoughts on financing and overall investment in the business. --------------------------------------------------------------------------------
Michael Ross Pope from boxlet
President and Director42]--------------------------------------------------------------------------------Yes.
Good question, Hunter.
Therefore, positive cash flow from operations is certainly a function of changes in other operating assets.
So we did lose money in the first quarter, and the adjusted EBITDA lost money.
So I think it's just a kind of volatility that you shouldn't expect.
In terms of financing, we did provide guidance with the introduction of $4 million from Linde Partners, which would enable us to get positive cash flow.
So, in addition to considering some options to have a better debt partner, we don't have any capital that we plan to raise at this time.
But so far we have no other plans for new financing.
In terms of the future you should expect, we also provide guidance, we promise that we plan to be a positive cash flow and start to generate a positive EBITDA or an adjusted EBITDA, I should say, so is this year.
You're really going to see the second quarter, the third quarter starting to get results, right?
It's a big buying season.
When we have a lot of income.
We plan to generate enough revenue to offset our operating expenses and bring us to the actively adjusted EBITDA. --------------------------------------------------------------------------------Operator [43]--------------------------------------------------------------------------------
We have no further problems at this time. Mr.
Elliot, I 'd like to return the statement to you now for your closing remarks. --------------------------------------------------------------------------------
James Mark Elliott, Boxlight
Chairman and CEO44]--------------------------------------------------------------------------------Okay.
Thank you all for joining us, for your support and for being part of our first quarter conference call.
We look forward to talking to you next quarter. Thanks a lot. Bye-bye.