Thank you and welcome to the Boxlight Fourth Quarter and Full Year 2021 Earnings Conference Call. By now, everyone should have access to the press release issued this afternoon. This call is being webcast and is available for replay. The remarks today will include statements that are considered forward-looking within the meaning of Securities Laws, including forward-looking statements about future results of operations, business strategies, and plans, customer relationships, market trends, and potential growth opportunities. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current knowledge and expectations as of today, and are subject to certain risks and uncertainties and may cause actual results to differ materially from the forward-looking statements. A detailed discussion of such risks and uncertainties are contained in the company's most recent Form 10-K, Form 10-Q and other reports filed with the SEC. The company undertakes no obligation to update any forward-looking statements. On this call, management will refer to non - GAAP measures that when used in combination with GAAP results, provide additional analytic tools to understand the company's operations. The company has provided reconciliations to the most directly comparable GAAP financial measures in the earnings press release, which will be posted on the Investor Relations section of the company's website at investors.boxlight.com. With that, I'll hand the call over to Boxlight's Chairman and Chief Executive Officer, Michael Pope.

Hello, everyone, and thank you for joining the call. Despite significant uncertainty in the world today, including growing concerns with the war in Ukraine, an ongoing battle with COVID-19, rising energy costs, rapid inflation, continued supply chain and logistic challenges, and overall volatility in global equity markets, we continue to see growing demand for our interactive solutions and our outlook is overwhelming with positives. We have reported double-digit or greater revenue growth for five consecutive quarters, a positive profitability trend, and significantly improved working capital. Just two years prior, we reported the full-year 2019 results with $31 million in orders, $33 million in revenue, and an adjusted EBITDA loss of $6 million. We are a dramatically larger company today benefiting from both market expansion, and strategic acquisitions. For the full year 2021, on a proforma combined basis with FrontRow, we generated $250 million in orders, $215 million in revenue and $21 million in adjusted EBITDA. We are gaining our key competitors with an aim to achieve the top industry position in each of our product categories. For the fourth quarter excluding FrontRow, we reported $44 million in revenue, exceeding our guidance of $40 million and delivered organic growth of 38% over the fourth quarter of 2020. The financial results of FrontRow were not included in our Q4 financial statements because we completed the acquisition on December 31. However, due to significant one-time costs incurred to complete the acquisition and related financing, we experienced inflated operating expenses. Additionally, supply chain and logistics costs remained high during the quarter, impacting our gross profit margin. As a result of these additional expenses, we reported a fourth quarter adjusted EBITDA loss of $2 million. We concluded the fourth quarter with an improved balance sheet, including $18 million in cash, $53 million in working capital,…

Thank you, Michael. And I'd like to say Happy Saint Patrick's Day to everyone on the call. Q4 was another record quarter for Boxlight, and I would like to take this opportunity to thank all our stuff and our customers who have helped contribute to our success during the quarter. During Q4, we booked $42 million of orders from our partners, up from $33 million for the same period last year. That represents organic growth of 25% year-on-year. For the full year, our order intake was $216 million compared with $57 million in 2020, representing 283% year-on-year growth. Some of our key orders received during the quarter included $3.1 million from Unit DK in Denmark, where we retain our number one market share position and 23% share of interactive displays. In the U.S. we had significant orders from Bloom previously [Indiscernible] for $2.6 million, Central Technologies based in Tennessee for $2.5 million, DNH Distributing for $2.2 million, $1.9 million from ACT Advanced Classroom Technologies, and $0.9 million from Data Projections in Texas, to name but a few. Overall, our market share of interactive displays in the U.S. has more than doubled over the past two years to greater than 7% according to future source. In Australia, we continue to hold the largest market share of 26% of total IPD sold and received a further $2.2 million of orders from our partner, ASI. In France, we received $1.3 million of orders from our partner, Speechi, and in the UK, where we have 16% of the IFPD market share, we receive orders from over 100 partners including $1.1 million from Roche AV, and $0.9 million from IDMS. This highlights the quality and diversity of our customer base, especially across the U.S. and EMEA. We are also developing very successful partnerships in Australia,…

Thanks, Mark, and good afternoon everyone. To further expand on what you've already heard from Michael and Mark. I would like to add a few figures to provide context to Boxlight international operations. To revenue by country and region, our total revenue in Q4 was $44 million. EMEA was 55%, $24.3 million, of which the UK represented 34%. The America is 38% or $16.5 million and the rest of the world’s 7%, $3.2 million, which was mainly Australia. The top ten customers represent approximately 44% of total sales in Q4. With the single largest customer, that's approximately 9% and these are based across a number of markets, namely the U.S., Denmark, Australia, Finland, France, and Spain. The top 20 customers represent approximately 57%, where the mix is slightly different to previous quarters where this was running around 66%. For our sales product mix and margins in Q4, hardware remained the largest proportion of total revenues at 91%. These were largely sales of interactive flat panel displays and represented 90% of this total with related accessories being the balance of 10%. The balance of all our total revenues coming from software, services, and STEM solutions. Gross margin for the quarter was 21.2%. The IFPD margin was about 20%, which would have been slightly higher. However, as previously reported, with increased global shipping costs, where we're still seeing 4x normal rates, have reduced margins by up to four percentage points. We anticipate the higher costs will remain. As noted in previous quarters, we have experienced some supply chain challenges, including interruptions to inventory production schedules as applied -- continued delays in shipping and receiving goods. We've seen manufacturing costs increase due to these issues which have impacted gross margins. In Q4, the education sector represented 91.5% of all interactive display sales, with…

Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] Please hold a moment while we poll for questions. Your first question is coming from Scott Buck with H.C. Wainwright. Your line is live.

Hey, guys. It's Q - Scott Buck. How are you doing?

Hello, Scott.

Very good. Very good.

I appreciate the time. My first question, I'm just curious if you could talk a little bit about the leverage you might have to pull to combat not just the supply chain headwinds, but now we're dealing with inflation as well?

Yes, both, of course challenges, we've been dealing with supply chain challenges, of course for a couple of years now. So that's something that we feel like we have a relatively good handle on, on what the expectations are. The hope is that will start to improve, but we're not planning on that in the near term, but we're managing that with better planning. And then in addition to that with the new credit facility we brought on, you remember we brought on WhiteHawk as our new lender, $15.5 million was the closing, but we have access to another $10 million facility to help with growth and that's going to help us start to bridge that gap. But then also we're turning the corner. To this point in time, we've got into where we are, even with dramatic growth. But, needing to spend cash to get where we are. And this is the year where we start to turn the other way and we're going to start to bring in positive cash flow. And to the cash from the business will start to fund the business, going forward.

That's helpful, Michael. And on the competitive environment, very nice-looking guide for 2022. Do you guys have a sense of what is the pie getting larger versus you guys taking a larger piece of the pie?

Yes, we're seeing both of that, so the pie absolutely is getting larger. This last year, there was dramatic growth, specifically in interactive flat panels, which is the majority of our business as you heard, but also growth in other categories as well. But -- and that's going to continue in this year. We look at research that comes in from Futuresource Consulting, and they show that their expectation is growth of nearly 20% in the U.S., and in EMEA, it's closer to around 10 points. But globally, we're looking at -- based on our growth, we're going to be in the teams for industry growth. So we can grow like the market. We got to grow in the teams. If we can take some market share from competitors, we can grow quite a bit faster. And we have been doing that to this point. If you look at the research that comes out of Futuresource, they show the percentage of the market that we have. If you go back to a couple of years, we were low single-digits. We've over and doubled that in the last couple of years, and now we're north of seven points of the total interactive flat panel display market, excluding China. Now we hope within a short number of years, we're going to be up definitely well north of 10 points as high as the teens or as high as 20, which would be about where our largest competitor is, they're about around 20 points of the total market.

That's really helpful color. And then last one for me, just on the operating costs going forward. What should we think of it kind of run-rate OpEx here, maybe 4Q pulling out those one-timers?

Yeah. There will be a number of different things in terms of -- when you see the financial as we are publishing. The run rates going forward will have, obviously, a greater amortization piece, now included in our OPEX as we move forward post the completion of the FrontRow transaction. So we will have an increased OPEX but it will actually -- from an adjusted EBITDA perspective, obviously, will be backing out. So we'll be pretty consistent quarter-on-quarter going forward now. Some of the Q4, we had a slight normally and slides up, so it will normally slightly -- our normal range going forward will be slightly below that on a quarter basis, on a normal OPEX, but there will be increased amortization as a result of the recent purchase.

Got it. That's very helpful. I appreciate the additional color, guys. Congrats on the quarter.

Thank you.

Thank you, Scott.

[Operator Instructions] Your next question is coming from Byron Meo with 1031 Private Exchange Group. Your line is live.

Hi. Congratulations on your increase in sales over projections. That's very nice. I know you expected the gross margins to improve as your sales volume and economies of scale progressed. I'm wondering, looking over the next year or two, where do you see gross margins once supply is mediated -- remedied?

Well, I appreciate the question, Byron. A couple of thoughts on that. One is as a business we're focusing more and more on our solutions outside of interactive flat panels. Today, IFPDs around 80% of our business, as you heard, and we're looking at selling a lot more of accessories including the audio solution we brought on with FrontRow, at selling other classroom solutions. Beyond that, we have our software solutions, we had -- you know we focus on STEM of course, science, technology, engineering, math. We have several solutions there. We have a professional services team, but all these other solutions are high-margin, most of those are 40 plus points of margin. And in some cases, 50 plus points margin. So as our product mix include improves and we're last concentrated in interactive flat panel displays our margins will actually improve, so that's one focus. A second one is growing our enterprise vertical. Today, we're 90% as you heard education, we're focusing on enterprise that's a growing opportunity. We won some really great opportunities actually over the last few months. And that we built that our team which is larger now focusing on enterprise and enterprise margins are typically substantially higher in many cases, 50 points a margin even on hardware and enterprise. So as we start to be more successful there, you'll see the margins improve. But then also with scale, we're going to be better at buying that's going to help as we build out our broader solutions, as we've been doing, we're able to charge higher prices and so we're looking wherever we can to increase prices, that can improve margins. And then hopefully, as the economy improves, as the cost of manufacture comes down some, as logistics costs come down some, then that will affect those margins, as well. But if you're looking at a couple of years, we really ought to be north of 30 points. And I think optimize with a total solution like we're selling today in several years forward, we ought to be probably closer around 40 points of margin. That's where we'd like to be eventually. But in the short-term, maybe expect some small upticks over the next few quarters as we start to realize these different opportunities.

That's a great answer. Thank you. Just one last question.

Michael, I'd like to add to that as well, actually.

Yeah, please do.

Just quickly. So obviously we just followed off a two great case from the completion of FrontRow. So when you look at the financials on that, that's in the attachments, you will see also in the margin mix as we change going forward is a very profitable business. So the margin mix will lift naturally as a result of that inclusion, as well as we move forward. And then secondly, would be the point we've previously made in other quarters about increasing prices which we've done and passed on and that's now improving margins as we go. And also, our purchasing power, the volume of our interactive flat panels that we're now selling throughout the world has increased in overseas, giving us good leverage for discussions -- in continued discussions with our manufacturer.

Thank you. And one last question for you. Growth through acquisitions. Are you, guys, eyeing any potential acquisitions like FrontRow, anything on the table, possibly going forward to expand your horizontal or vertical?

Yes. So we're in our scale now. We've come along [Indiscernible] the last couple of years from a little $30 million company to now, we're talking about being a $250 million company. And with that scale, we're a lot more noticed in the industry. So we see a lot more opportunities now than we did in the past. And I would say on a weekly or every couple of weeks, we see a potential new opportunity, not necessarily because we're pursuing it, it’s because a lot of these companies come to us. They see what we're doing, they're seeing our growth, and they want to be part of it. Now we're not actively looking. Right now, the focus is largely on taking advantage of the companies who brought together, focusing on the strong revenue growth, focusing on approved profitability. However, if the right opportunity came along, of course, we would look at that. And of course, the economics would have to be right as well. And like they were with FrontRow, the economics were amazing with FrontRow. We went FrontRow for less than four times EBITDA is going to pay for itself very quickly. So the right opportunity to get came along we would look at it, but we're not actively pursuing many opportunities and feel like we have the right suite of products and the solutions in-house today, and we're going to take advantage of that.

Thank you.

What we have seen on that, Michael, was actually the synergies between FrontRow and the rest of our business. So what we actually see is we can integrate the solutions from FrontRow into the rest of our solutions. And actually we get one plus one equals more than two, so our customers can see better more integrated solutions, and we think that will give us a big differentiation in the marketplace as well. The FrontRow acquisition's only just been completed, but we're very positive what's going to happen over the next 12 months there.

Yes. Great points.

Your next question is coming from Brian Kinstlinger with Alliance Global Partners. Your line is live.

Great. Thanks. Thank you. Since you didn't file your Super 8-K, can you remind us what the gross margins are for FrontRow? And then what is the combined gross margin implied in your $26 million EBITDA guidance?

Yes. If you look at the -- it's approximately 50% gross margin, excuse me, on our FrontRow acquisition, and you'll see it on the historical financials, and that will continue going forward. So on a mix basis, you'll see that that would on average lift the margins to -- as reported, to about 27%. So as we increase and improve the margins on the interactive flat panels and the mix of other products coming in, that will increase as well.

Great, that's helpful. And then you mentioned your new exclusive agreement with trucks and that started at the beginning of October. It's been now probably almost six months. So I'm curious how that's working, first of all, are you gaining market share of truck sales? And then second part of that, how do you see trucks selling your solution versus others? Are they selling yours a lot more? Are they even selling competitors solutions now that they are differentiated? Just take us through how you're seeing that market play out?

Michael, would you want to leave this one, or do we send this one.

Go ahead. Mark, and I will jump in as needed. A – Mark Starkey: Yes, let's say being five months since we saw an exclusive contracts with Bloom as they are now called. And we have to get through a process of actually working out exactly how this is going to work. Because previously we had about 40 sales guys from T and E that was selling Clevertouch. And now we're interacting with about 200 sales guys from Bloom. And they're selling not just Clevertouch they are selling other competitive screens as well. But we are getting a lot of volume from sales guys, a significant amount of volume. I mentioned on the call that we have over $20 million a qualified leads in the pipeline. I think we're going to have exceptional year with Bloom the relationship is very good, very strong. And we see huge opportunities there and then not that we're also doing Mimio deals with them as well, right? It's not just Clevertouch. We still selling a lot Mimio and we will take whatever is the right solution to each customer we would take. But is -- there are number of customers, right? That are important to us.

Can you remind us what you quantify actually the revenue from your trucks and curating relationships in 2021? I mean, you just did $20 million of qualified leads. How does that compare to actual revenue generated in 2021 format?

Do you have that number? The full year?

Sorry, say again for me. Excuse me.

We didn't --

I'm interested in the revenue from [Indiscernible] and [Indiscernible] relationships in 2021 full-year.

Yeah. I clearly got it, I have to -- kind of pulling it probably takes time as you get back -- get a line separately with you.

Brian, to give you an idea, Bluum, as they're called now, was approximately 9% of all of our sales in Q4, they're a single-digit, but they were our largest customer in Q4. For the full year, they're going to be -- it's going to be single-digit, they're not going to count for more than 10 points, but it's significant. It's going to be probably high-single-digits in the percentage.

Which I assume was much lower if we look at all year 2021, is that accurate?

It would've been significant for the full year as well, but it is growing. We set growth targets with Bluum. They're hitting those targets, so we are seeing good growth. But it was still be insignificant for full-year 2021 as well as full-year 2020.

Okay, lastly --

Sorry. Still not pointed. The $20 million of outlook is obviously what we see over the next three to four months in terms of order intake, right? So it's not the full-year outlook.

Right. Thank you for clarification. Lastly, since COVID, we've talked about the federal stimulus money. There's been so much money that sent to K-12. Where are we with that? Are we still another year or two years’ worth of this being a catalyst in United States? Just kind of take us through where we are in that timeline.

Yes, that's right. So the stimulus money that was applied to education for ESER funds, there was ESER 1, 2, and 3, so three tranches. The bulk of that came in ESER 3, and that money is being spent now. We're getting orders where we know, in fact, they are spending that money and they have been accelerating technology implementations because they have or getting the money. But that money is going to last through 2024. That's the expectation. It could potentially go beyond that. A lot of times, the deadlines get extended. They did on the previous tranches. But right now, the expectation is that money would be spent through 2024. And that's why if you look at most industry projections, they're going to see high growth in the U.S. in sales of education technology. And then come 2025, it's going to flat line just a little bit before it starts to go up again.

Is that -- is there a number such as there's $X billion of money -- in stimulus money over that time period or is that unclear necessarily how much money is available?

No. Yes, clear. Yes. It was approximately -- it was just shy $200 billion. It's about $190 billion was the total. Of that $190 billion, I believe -- now I have to pull you the amount. I want to say it was $120 billion, something like that, of the $190 billion was the last tranche, but I can get to that to you, Brian, because that's all public. Probably a quick Google search of ESER funds education will have it pop up. But again, about $190 billion total. The largest tranche of that, the majority of that $190 billion, again, is going to last through 2024.

And when was that -- sorry, did you say that? When was that $120 billion released?

All right. Let me look real quick. Let's even pull it up because I want to make sure I give you the right number here.

The other key thing, Brian, is, I know that Michael mentioned this before, is what you're really going to see, the biggest growth -- obviously, the next couple of years, we're going to have significant growth in the education sector. But what we're starting -- and we're already seeing this, corporate is going to really start to take it all. And in most meeting rooms in any corporate environment, it could be public sector, or finance banking, whatever, in those meeting rooms they generally have non-interactive screens. And what we're going to see -- especially with the likes of Teams, Zoom, the way people are interacting these days, we are seeing those meet rooms being moved over to an interested technology. So we're going to see the growth rate in what we call corporate or enterprise really significantly ramp up. And within three years to five years, we expect the market there to be as big as the market in education.

Yeah.

So back to your question, I was giving you the K-12 numbers so that -- which we track the majority will range in 12, but it's -- it was much higher. So the total education number was $13 billion -- or no, it was $31 billion in March of 2020, another $82 billion that was approved in December 2020, and then $168 billion which was approved in March of 2021. So that's -- doing it in my head here.

No, I got it. That's okay.

That would be $280 billion is the number. So you got $280 billion of education. Now of that, education for those trench is again, March 2020, December 2020, March 2021, the K-12 education portions were $13 billion, $54 billion and $122 billion, so that's kind of roughly $120. Now of the first, which was the Cares Act was the $13 billion you remember when the Cares Act came out that had the $13 billion and then you had the December COVID relief package, that $54 billion. A lot of that's been spent the Cares Act money has been essentially spent. I believe that the bulk of the ESER funds, too have been spent, but a lot of again, the $122 billion for K-12 education is still out there. There's an application process and it's a little bit of paperwork for the school districts to access the funds and the funds, by the way, they are allocated from federal government to state and then the state to allocate to the schools. But that is all happening as we speak. And even just last week, I know that we brought an order in that we were told they were using ESSER three funds.

Great. Okay. Thanks so much.

Absolutely. Thanks, Brian.

We have no further questions from the lines at this time. I would now like to turn the floor back to Michael Pope for closing remarks.

Great. Thank you, everyone for joining the call and for your support to 2021 Earnings Call. We look forward to speaking to you again in May when we report our Q1 2022 results.

Thank you, ladies and gentlemen. This concludes today's conference call. You may disconnect at this time and have a wonderful day. Thank you for your participation.