Boxlight Corporation (NASDAQ: BOXL), a leading provider of
interactive technology solutions, today released a letter to its
shareholders from Chairman and CEO Michael Pope as follows.
Dear Shareholders:
Thank you for your tremendous support during this exciting time
for Boxlight. We have experienced a significant transition since
our 2016 merger of Mimio and the Boxlight Group, and our subsequent
IPO in 2017. Since that time, we have attracted a tremendous
leadership team, assembled a global sales channel, developed and
refined our award-winning solutions, and closed several additional
acquisitions including Cohuba, Qwizdom, EOS Education, Modern
Robotics, Robo3D, Sahara Presentation Systems and Interactive
Concepts.
Although we are headquartered in Atlanta, Georgia, we are a
global company with nearly 200 employees, including more than 100
employees positioned throughout Europe in the U.K., Germany,
Holland, Sweden, Finland and Belgium. We are also supported by
thousands of representatives across the world through more than
1,000 distributors and reseller partners such as Trox, Tierney,
Central Technologies, Digital Age Technologies, IDNS, Roche Audio
Visual, GV Multimedia, Niavac, Dataflow AV, HCS, Centerprise
International, UNIT.DK, Charmex Internacional, EET Europarts and
Speechi, which promote our range of solutions to the education,
corporate and government sectors. For the fourth quarter of 2020,
we generated approximately 64% of our sales in EMEA, 30% in the
Americas and 6% in the rest of the world.
To date, our solutions have been sold into over 1.2 million
classrooms globally including New York City Public Schools, Broward
County Public Schools, San Diego Unified School District,
Montgomery County Public Schools, Atlanta Public Schools, Academies
Enterprise Trust in England and the Ministry of Education in
Jalisco, Mexico, among others.
Despite the COVID-19 pandemic that has disrupted traditional
communication in both education and enterprise environments, the
market for our interactive solutions is robust and growing with
increasing order volumes and an unprecedented sales pipeline.
Education systems, in particular, are accessing large budget
allocations for technology upgrades and software platforms,
supplemented by substantial government funding, as they outfit
classrooms with solutions for virtual, hybrid and traditional
learning.
For those that have personally struggled as a result of the
COVID-19 virus, my heart goes out to you. My family has been
impacted, including the loss of a loved one, and I wish for you and
your families to stay safe and healthy. As we beat this virus, we
must also nurture our social and emotional well-being, as well as
that of our young people. We have a responsibility to ensure our
children are properly progressing in their development and
education. That includes, as it is safe to do so, having our
students back in traditional classrooms where they learn best.
I’m proud of the social impact we provide as a company,
including our mission of supporting educators with solutions to
drive student outcomes. Nothing is more powerful than education to
improve our lives, regardless of our situation. When we are
empowered with tools to create a more fulfilling future for
ourselves and our families, we increase our capacity to contribute
to our communities and beyond. I am especially passionate about our
initiatives to encourage minorities and women to pursue STEM
(science, technology, engineering and math) education, where they
are significantly underrepresented. STEM careers provide higher
wages, a greater number of opportunities and increased potential
for upward mobility than most other career choices.
We recently provided our fourth quarter 2020 results, exceeding
our guidance, and reported record orders of $33 million, revenues
of $32 million, the largest sales pipeline in our history, positive
Adjusted EBITDA and a strong balance sheet. Additionally, we
committed to revenue guidance for the first quarter of 2021 of $28
million and noted that Q1 is seasonally slow, historically
accounting for less than 20% of our annual revenue. I’m happy to
report that we had a better than expected first quarter and are
lifting our guidance to $31 million in revenue.
As a company, we are capitalizing on both an expanding market
and our unique industry position, driving double-digit revenue
growth and taking market share from our competitors. Our vision is
to be the leader in our market globally, and we are committed to
realizing that vision in a short number of years.
--
I have provided some additional updates as follows:
Q4 2020 Financial Performance
The fourth quarter of 2020 was our first full quarter reporting
our consolidated financial statements subsequent to the acquisition
of Sahara Presentation Systems. For the quarter, we reported
customer orders of $33 million, revenues of $32 million and
Adjusted EBITDA of $400 thousand. We also ended the year with $11
million in backorders, the strongest pipeline in our history for
both the U.S. and EMEA, and a healthy balance sheet including $13
million cash, $21 million working capital and $45 million
stockholders’ equity.
Our significant fourth quarter orders included $4.2 million from
D&H Distributing (US), $2.8 million from UNIT.DK (Denmark),
$2.8 million from Trox (US), $1.6 million from ASI Solutions
(Australia), $1.3 million from Speechi (France), $1.2 million from
Tierney (US), $870 thousand from Charmex Internacional (Spain) and
$668 thousand from IDNS (UK).
Of our total revenues during the fourth quarter, EMEA
represented 64%, North America 30% and the rest of the world 6%.
Interactive displays represented 73% of total revenues, accessories
14%, distribution 10%, with the balance from software, services,
and STEM solutions.
Normalized gross profit margin for the quarter was 26.4%,
adjusted for the net effect of acquisition-related purchase
accounting. The gross profit margin was negatively impacted during
the quarter by 200-300 basis points due to an increase in global
shipping costs.
Q1 2021 Financial Guidance
We are seeing an increased demand for our solutions this year
and are proud to announce that we outperformed our Q1 expectations.
As a result, we are increasing our revenue guidance for the first
quarter to $31 million. Additionally, we received record order
intake for the quarter of greater than $40 million. Note that the
first quarter is seasonally slow, historically accounting for less
than 20% of our annual sales.
We will be formally releasing our earnings next month on or
before May 17th, and we look forward to reporting more details from
the quarter during our earnings conference call.
Market Position
As part of our mission, we are committed to be a leader in
providing interactive technologies for communication and
collaboration environments. Our solutions include hardware,
software, and services.
Although we expect the future will show a more diversified
product mix, today, approximately 70% of our revenues are generated
from the sale of interactive flat panel displays (IFPDs). Of the
global IFPD market, excluding China, we believe we represent
approximately 5% with our two largest competitors each representing
nearly 20%. In certain markets, such as Australia and Denmark, we
are the #1 provider. In broader EMEA, we are the #3 provider, and
in the U.S. the #5 provider. While the majority of our competition
is stagnant, we are gaining market share and see a path to become
either the #1 or #2 provider in every major market in a short
number of years.
It is also of note that Boxlight is the only top five IFPD
supplier in the U.S. which is not directly owned by a foreign
entity. The other four providers are either Chinese or Taiwanese
owned, which raises concerns regarding security and data
sovereignty.
In addition to interactive displays, we are also gaining market
share with several other solutions which generally deliver higher
margins such as our SaaS-based MimioConnect software platform,
MimioClarity audio distribution system, training and professional
development offerings, and STEM solutions, among others. The market
for displays, software, accessories, services and STEM are each
individually multi-billion dollar markets.
We are diversifying geographically and seeing progress outside
the U.S. and EMEA. In Latin America, we have expanded through key
partnerships in Puerto Rico, Columbia, Peru and Costa Rica. In
Australia, we have grown over the last 18 months from minimal sales
to become the #1 IFPD brand in that market. In Asia, we are
developing opportunities with partners in Singapore, Vietnam,
Thailand and Indonesia. In Africa, we have a strong distributor
actively selling our solutions across South Africa, Namibia,
Botswana, Mozambique, Nigeria and Ethiopia.
Today, K-12 education represents 90% of our revenues, and the
corporate and government sectors represent the remaining 10%. We
expect non-K-12 education sales to trend towards 20-30% over the
next several quarters, which is representative of the broader
market. Note also that sales from our corporate and government
verticals currently deliver gross profit margins greater than 40%,
as compared to those for K-12 education of 25-30%.
COVID-19 Impact
The COVID-19 crisis has created significant challenges for both
education and enterprise communication and collaboration. The
struggle of virtual communication, as well as distance and hybrid
learning in education, has forced us to think critically and
creatively, and to be nimble as a company in delivering the
solutions required to meet the challenges of today.
For education, in particular, we have introduced new strategies,
technology solutions, software platforms and professional
development content to assist educators in navigating these new
environments.
The initial data from digital learning has been concerning,
where we have seen reports of widening achievement gaps, especially
for underprepared and disadvantaged students. Additionally, many
students do not have access to digital devices or reliable
internet. As parents and guardians return to work, distance
learning also presents logistical complications with students
remaining home. As it becomes safe to do so, we need to get
students back in the classroom where they learn best.
Acquisitions of Robo3D and MyStemKits, Sahara Presentation
Systems and Interactive Concepts
Robo3D and MyStemKits
In April of 2020, we closed on the acquisition of Robo 3D, a
leading brand of 3D printers, and MyStemKits, the largest online
collection of K-12 STEM curriculum for 3D printing. In addition to
3D printing solutions, our STEM education portfolio also includes
our MyBot robotics and programming system, the Labdisc portable
STEM lab, our MimioView document camera, and STEM specific
curriculum and professional development. We expect our STEM
education division will be a tremendous growth and profit center,
as it continues to provide hands-on learning solutions to empower
today’s students and prepare them for beyond the classroom.
Sahara Presentation Systems
In September of 2020, we acquired Sahara Presentation Systems,
our most significant acquisition to date, with a purchase price of
approximately $74 million. Headquartered in the United Kingdom,
Sahara was a leader in distributed AV products and a manufacturer
of multi-award-winning touchscreens and digital signage products,
including its renowned Clevertouch brand. The company was formed in
1976, and with its exceptional leadership, had grown to more than
100 employees and $100 million in sales, primarily in the EMEA
region.
I’m happy to report that the integration has been overwhelmingly
seamless, and we are reaping the benefit of our global scale,
additional seasoned leadership, expanded product suite, combined
sales channel and dramatically improved financial position.
Interactive Concepts
Last month we announced the acquisition of our Clevertouch
distributor in Belgium and Luxembourg, extending our footprint in
Europe. This transaction is part of a broader strategy to both
improve our profit margins and maintain stronger relationships with
our reseller channel and end users.
We have closed 10 acquisitions as a company since 2016 and will
continue to be acquisitive with a focus on geographic expansion.
However, our primary focus as a company is to take advantage of the
current market conditions and our unique offering to drive strong
organic growth.
Leadership Additions
Our five-member executive team today includes three executives
from the Sahara transaction, namely Mark Starkey as President and
Head of Global Sales, Pat Foley as Chief Financial Officer, and
Shaun Marklew as Chief Technology Officer. The addition of these
experienced and talented leaders to our executive team has helped
our company stay focused on strategic goals while making positive
impacts not only in the market but as an organization. I truly
believe we have the best management team in the industry,
period.
We have also invested heavily in our sales team by recruiting
two high quality sales leaders in the U.S. Scott Willett joined
Boxlight as Head of North American Education Sales in September
2020 and leads the rapid expansion of the sales organization in the
company’s largest market. Scott is a well-respected and trusted
sales leader in education technology and has a history of high
performance at Dell and, most recently, at Promethean. Dan Deem
also joined Boxlight in September 2020 as Senior Vice President
Corporate Solutions. Dan leads our Corporate and Government sales
strategy in the U.S. Dan is a Unified Communications expert and has
held executive-level sales leadership positions at Apple, Nortel,
Promethean and Panasonic. We have also recently hired a head of
internal sales and will be developing our internal sales functions
over the next few quarters in the U.S.
In October 2020 John Ginty was promoted to EMEA Sales Director
to lead the Clevertouch and Sahara Distribution sales teams. Having
been with Sahara for nine years, John has a proven track record of
sales growth, implementing effective sales strategy and is highly
regarded by colleagues and partners.
Samsung Partnership
Our strategic partnership with Samsung has continued to progress
over the last several months. We have developed our MimioConnect
software platform so that it can be deployed directly on Samsung’s
Tizen operating system, and we expect that all Samsung IFPD’s in
the education market will ship with the MimioConnect companion app
as soon as this summer. We have also developed our go to market
plan with Samsung so that our collective sales organizations have
the ability to seamlessly sell the solution into the channel. Now
that the systems are in place, we expect to generate significant
revenues beginning this year.
Government Stimulus Funding for Education
In response to the COVID-19 pandemic, there has been significant
government funding allocated to education. Most notably, in the
U.S., the federal government has committed $30.7 billion for
education as part of the $2.2 trillion CARES Act in March 2020, $82
billion for education as part of the $900 billion Covid Relief Act
signed into law in December, and an additional $168 billion for
education as part of the $1.9 trillion American Rescue Plan enacted
in March 2021. All of our solutions are eligible for these funds,
and we are actively working with many school districts to ensure
that the funds are correctly spent.
Our outreach includes information in a newly published Federal
Funding Guide on the various areas of federal funding available to
address learning loss, purchase education technology, and identify
additional resources for schools. Boxlight solutions aligned to
funding include professional development, our MimioConnect Blended
Learning Platform, MimioSTEM solutions and various interactive
hardware products to support remote and hybrid learning.
Last November, we appointed Dr. Don Gemeinhardt as Director of
Strategic Funding and Grants at Boxlight, to provide an additional
resource to K-12 school districts in need of support to access
various education grants, as well as the nearly $200 billion in
federal funds available to K-12 education from the CARES Act,
CRRSA, and American Rescue Plan. Dr. Gemeinhardt plays a key role
in helping administrators and decision-making teams understand the
requirements of the various programs and match solutions needed to
solve existing problems and challenges such as returning to the
classroom safely and bridging the student learning gap. His help is
critical since school districts generally lack the expertise and
time to conduct grant research and navigate grant applications by
key deadlines.
Atlanta Virtual Classroom and London Clevertouch
Showroom
In March 2020, we announced the grand opening of our virtual
classroom in Atlanta, Georgia, which is fully staffed and available
for live virtual demonstrations of our full solution suite. We also
opened our Clevertouch Gallery located in central London, with over
25 hundred square feet of key demonstration space, a boardroom,
unified communications huddle space, and informal meeting area for
partners and colleagues.
Product Industry Recognition and Product Innovation
Our success as a company is largely a result of our
best-in-class solutions and continued product innovation. From
digital signage to Virtual STEM Kits, we have a solution for any
environment delivering state-of-the-art, interactive and
user-friendly products.
We continue to be recognized for our award-winning products and
tools that enhance the learning and productivity of any school or
organization. We are proud of the achievements and recognitions we
have garnered and humbled by the confidence that so many have shown
by selecting us. Below is a sample of recent awards we have
received:
- The MimioConnect Blended Learning Platform
earned the Tech & Learning Best Remote & Blended Learning
Tools 2021 (both Primary and Secondary Education), the 2020 Tech
& Learning Best of Show Award at ISTE, and The Journal 2020 New
Product Award Winner for Best Remote/Distance Learning Program.
- MyStemKits curriculum, along with Robo 3D
earned the 2020 Tech & Learning Best of Show Award at ISTE and
the 2020 Tech & Learning Award of Excellence. The MyStemKits
Virtual STEM activities, originally created for remote learning
environments due to school closures, earned the Tech & Learning
Best Remote & Blended Learning Tools 2021 (both Primary and
Secondary Education), and The Journal 2020 New Product Award Winner
for Best STEM/STEAM Program/Curriculum and Robotics
System/Curriculum.
- Boxlight-EOS Education, our professional
development division, earned the 2020 Tech & Learning Best of
Show Award at ISTE, and the 2020 Tech & Learning Award of
Excellence for The Distance Teaching Essentials Program (Education
Enterprise Solution).
- The Clevertouch UX Pro touchscreen earned
the 2020 Collaboration Innovation of the Year from AV News Awards,
the 2020 Best of Show Award at InfoComm, and the 2020 Best of Show
at ISE for AV Technology Europe.
- Our Clevertouch IMPACT Plus interactive
touchscreen earned the 2020 Plus X Awards in four categories –
Design, High Quality, Ease of Use and Functionality, the 2020 AV
News Award for Collaboration Innovation, the 2020 Tech &
Learning Best of Show at InfoComm, the 2020 Installation Best of
Show at InfoComm, and the 2020 Installation Best of Show at
ISE.
Additionally, below are some of the solutions that we are
solidifying Boxlight a standout in the global market:
- MimioConnect Blended Learning Platform
combines innovative lesson building and instructional tools to help
create an active and engaged learning environment. It is
specifically designed as a web-accessible learning platform so that
teachers and students can connect to lessons from anywhere making
this a complete solution for in-class, remote and hybrid learning.
Standout features include simple-to-use lesson building and
presentation tools, the ability to import favorite lessons
including 3rd party content, classroom management tools to help
ensure that students are focused during a synchronous lesson and a
built-in video-conferencing tool so there is no need for outside
conferencing software.
- LYNX Whiteboard annotation and lesson
planning software enables teachers and students to interact with
and collaborate on content in the classroom. The easy-to-use
interface creates a smooth and simple experience so that teachers
can focus on teaching and students on learning. Features such as
dual screen mode and a direct link to the browser make learning
more accessible to all, so that content can be differentiated and
cooperative learning incorporated. LYNX Whiteboard runs across
multiple platforms on a variety of devices, such as interactive
touchscreen displays, iPads, iPhones, Android devices, Windows PCs
and Mac. Because it is a cloud-based platform, users can learn or
work whenever and wherever.
- ClevertouchLive digital signage is a
web-controlled management platform designed to enable users to
manage digital communication across Clevertouch screens from any
web-enabled device. This allows users to create dynamic messages
and personalize panel and mobile device interfaces through the
integration of digital images, posters, social media, videos, live
tv, rolling text, and more. Content can be sent to multiple screens
across multiple sites simultaneously making it the ideal tool for
all industry sectors.
- Designed in conjunction with
ClevertouchLive, CleverMessage allows a company to send a central
message instantly to every Clevertouch screen, with 24-7 capability
so that messages are not just about the date and time. With
easy-to-use templates, organizations can create messages with
video, photos, and as alerts, announcements, and news. Zones can be
assigned to different members of staff or departments to update,
for scheduled messaging, and to log-in and make changes from
anywhere.
- Cleverstore is a collection of educational
apps for its IMPACT and IMPACT touchscreens, created by educational
app developers that align with Common Core State Standards in the
U.S. and the National Curriculum in the UK. There are apps for all
ages and most subjects to supplement instructional content from
coding to literacy, including language support. In that same vein,
we have recently added MimioMarket to Boxlight ProColor interactive
flat panel displays. All educational apps are vetted for student
safety and to ensure educational content.
- The MimioClarity classroom audio
distribution system amplifies sound so that teachers and students
can engage without strain or distraction from outside noise. The
system consists of a 60-watt amplifier and receiver combination,
speakers, and teacher and student microphones. The sound is evenly
distributed throughout the room via strategically placed speakers,
perfect for classrooms that are physically distanced for safety.
With MimioClarity, teachers can use a quieter, more natural tone
instead of straining to project their voice to the back of the
room. The teacher mic also has a breakaway lanyard for safety,
along with a Page Up and Page Down button to control applications
like MimioStudio, Google Slides, PowerPoint and other classroom
presentation software. Because MimioClarity can be a standalone or
networked device, updates are easily managed and can be integrated
with existing school audio systems.
- MimioSTEM is our collection of STEM
solutions that open the door to inquiry-based learning, and help
students connect and engage with science, technology, engineering,
and math in relevant and real-life ways. As students grow to
understand how STEM disciplines apply to the real-world around
them, our solutions help to prepare them for life beyond the
classroom by building on key skills such as critical thinking,
collaboration, creativity and communication. From the Mimio MyBot
robotics system to our Robo 3D printer, all STEM products are
turnkey solutions with MyStemKits lessons and activities that
include teacher guides and student assessments. Teachers can
incorporate STEM confidently, including in hybrid and distance
learning environments with MyStemKits Virtual STEM Kits.
- Boxlight-EOS Education provides training
solutions to ensure technology integration, increased efficiency
and effectiveness, and improved outcomes in both education and
corporate sectors. With a rich portfolio of training, professional
development and certification services, they ensure that every
learner feels confident about the work that they do. Boxlight-EOS
has extensive experience in providing high-quality professional
development programs to schools and has worked with thousands of
teachers supporting them in using technology to provide engaging
and effective instruction for remote, hybrid and blended learning
environments. Courses can be customized to help education leaders
implement a wide range of tech solutions to align with specific
teaching and learning goals. Boxlight-EOS also provides
comprehensive professional development for businesses and
employees, working to empower business leaders and staff to
maximize the potential in the workplace through their technology
platforms and applications.
--
I accepted the CEO role on March 20th of last year – at our most
challenging time as a company. The COVID-19 crisis was escalating
and creating tremendous uncertainty, we were sustaining negative
cash flows and were struggling with a challenged balance sheet.
Additionally, on my first day as CEO, our stock hit a 52-week low
of $0.33 among other challenges. Faced with the need to make
immediate and daunting decisions, in that first week we made
massive reductions to our operating budget including reducing our
staff by 30% – one of the most difficult decisions of my
professional career.
I am very proud of the progress we have made since that time,
which is a testament to our tremendous leadership team and
dedicated employees.
Today, I am happy to report that we are better positioned as a
company now than at any time in our history. We are committed to
delivering exciting results over the next several quarters, and I
invite you to take the journey with us.
Sincerely,
Michael Pope Chairman & CEO Boxlight Corporation
About Boxlight Corporation
Boxlight Corporation (NASDAQ: BOXL(“Boxlight”) is a leading
provider of technology solutions for the global education market.
The company improves student engagement and learning outcomes by
providing educators the products they need for the 21st century
classroom. The company develops, sells, and services its
integrated, interactive solution suite of software, classroom
technologies, professional development and support services.
Boxlight also provides educators with thousands of free lesson
plans and activities via MimioConnect®, an interactive teaching
community. For more information about the Boxlight story and its
product offerings, visit http://www.boxlight.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 as a result 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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