Thank you, and welcome to the Boxlight First Quarter 2022 Earnings Conference Call. 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 the actual results to differ materially from the forward-looking statements. The 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 analytical 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. And with that, I'll handover the call to Boxlight's Chairman and Chief Executive Officer, Michael Pope.

Hello, everyone. And thank you for joining the call today. And we will be publishing a press release with our Q1 results shortly, which will be available in the next few minutes. We made substantial progress during the first quarter across several key company initiatives and delivered another strong financial performance with $64 million in customer orders, $51 million in revenue, and $1.2 million in adjusted EBITDA. We are experiencing growing demand for our solutions globally, as evidenced by our organic growth of 23% and customer orders and 34% and revenue over the first quarter last year. We also concluded Q1 with $43 million in back orders, a 66% organic increase over Q1 last year and a healthy balance sheet with $11 million in cash, $49 million in inventory, $50 million in working capital, and $47 million in net assets. Despite continued supply chain, logistics and other challenges, we're operating at a very high level. And for the second quarter, we expect to deliver $54 million in revenue and greater than $2 million in adjusted EBITDA. There were a substantial number of orders which would have shipped in Q2 that will now ship in early Q3 as a result of product delays. However, we still expect to achieve our full-year guidance of $250 million in revenue and $26 million in adjusted EBITDA. We began 2022 with multiple tech and learning awards and the primary and secondary education categories for our MimioConnect blended learning platform, ProColor interactive displays, MyStemKits curriculum and professional development services. Additionally, just this week, we received several awards from Innovate Magazine including Education Technology Innovation of the Year for our Clevertouch, IMPACT Plus touch screen and overall business growth for our Clevertouch brand. During Q1, we launched our Mimio STEM mobile mission to Mars experience, a mobile…

Thank you, Michael and good evening from Barcelona, where we are showcasing our solutions to corporate and government customers at the international ISE events. We've had a fantastic three days here in Barcelona. Where we have won the award for best business growth and the second award the Best Educational Technology. Q1 was another strong quarter for us. As Michael mentioned earlier, our Q1 revenues grew by 51% and 34% on an organic basis. In terms of bookings, we received up to $16.4 million of orders, representing 34% growth in Q1. If we exclude FrontRow then the organic growth in order intake was 23% for the quarter. Some of our key orders in the U.S. included $10.9 million from Bloom, $6 million of our distribution partner, DNH, $2.2 million from Central Technologies, and $1.1 million from Data Projections. Overseas, sorry, overseas, we had some excellent orders, included $1.9 million from our partner in Denmark, Unit DK, $1.7 million from Roche Audio Visual in the UK, $1.7 million from Camera Mundi in Puerto Rico and $1.5 million from ASI in Australia to highlight a few. Approximately 54% of all orders were received from U.S. with EMEA accounting for about 41% and the rest of the world accounting for approximately 5%. We are seeing significant opportunities in all regions but in particular, we see very large-scale opportunities in the U.S. and in some parts of Europe. The largest opportunities are predominantly in the education sector where we are bidding multiple tenders of 5,000 screens to 10,000 screens at a time. In the corporate sector, we're starting to see the return of work at their office environments and the need to upgrade the collaboration tools in hurdle rooms and larger meeting rooms with Teams and Zoom compatible solutions. Our biggest challenge remains the management of supply chain. We have taken a very proactive stance towards logistics since the start of the pandemic and are ordering at least six to nine months ahead to ensure we have adequate supply to meet demand. Excess logistics and freight costs are still impacting on our gross margins but we have taken specific measures, particularly in the U.S., to address the problem and we anticipate the gross profit percentages will continue to improve throughout Q2 and Q3. In summary, Q1 was a very strong quarter in terms of order intake and revenue and our solutions are getting lots of traction in the market. We continue to develop our key partnerships and alliances across the globe and I look forward to another record quarter in Q2. With that, I will now turn the call over to our CFO, Patrick Foley.

Thanks, Mark. And good afternoon, everyone. To further expand on what you've already heard from Mike Lamar. I would like to add a few figures to provide context to Boxlight's international operations. So, revenue by country and region, total revenue in Q1 was $50.6 million. AMEA, 41% or $20.6 million of which the UK was 53%, the Americas, 52% or $26.5 million, rest of the world, 7%, $3.5 million, which was mainly Australia. The top ten customers represent approximately 39% of total sales in Q1 with the single largest customer at approximately 16%. And these are based across a number of markets, mainly the U.S. Australia, the UK, Denmark and France. The top 20 customers represent approximately 52%. The sales product mix and gross margin, in Q1 hardware, including our integrated software solutions, remain the largest proportion of total revenues at about 90%. Of this total, 76% was of interactive Flat-Panel Display and 14% class room audio solutions, and the balance of 10% being related IFPD accessories. The balance of all other total revenues coming from software, services and STEM solutions. Gross margin for the quarter was 24.9%. The IFPD margin was approximately 20% which would've been slightly higher. However, as reported in previous quarters, increased transportation costs have reduced margin. We anticipate these higher costs will remain throughout 2022. In terms of our screen sizes, in Q1 2022, the education sector represented 92.8% of all interactive flat-panel displays with approximately 75% was 75 inch and 86-inch panels which follows a consistent trend we've seen over the past 12 months. I will now review the first quarter results. The financial results for the three months ended March 31, 2022. Revenues for the three months ended March 31, 2022 were $50.6 million as compared to $33.4 million for the three months…

Ladies and gentlemen, the floor is now open for questions. [Operator Instructions]. Please hold while we pool the questions. Your first question is coming from Brian Kinstlinger of Alliance Global Partners. Sir, please proceed with your question.

Great. Thanks so much for taking my questions. So, your revenue was about $6 million higher than you had originally guided to, which was fantastic. Why was this not enough to offset any of the $800,000 change that you mentioned you accounted for and how you -- the gains that you mentioned in your press release to hit your $2 million EBITDA guidance? I guess I'm just wondering why didn't the pressure. Sorry, I made a mistake. Did the pressure related to supply chain get worse? Just trying to understand the outperformance on the top line that didn't help bottom line. I hope that jumbling made sense.

No Brian, that made sense. So yes, in Q1 we did see margin on the pressure and improved by the time we reached the end of the quarters. January and February we were seeing the net impacts of the [Indiscernible] in most sectors. There have been fuel increases. Theres also being continued and further delays as we've seen with lockdown in China. and freight and shipping Kohl's has actually increased again. So, we are seeing that pressure coming through and through our margin.

But in order to make your appropriate return, everything is increasing, are you not able to increase pricing at all? It seems that for the revenue your generating, you should generate a little bit more profit.

Yes. Absolutely, Brian, so we are doing that. So, one of the key things though is we have increased pricing as we move forward but some of the orders that we were delivering were pre -committed on previous pricing. So that's why they were released and sold into the market in -- through Q1, they were previously committed to prices on orders. So again, we will see that improvement through the margin as we progress through '22.

Okay. And then in regards to the delays you talk about in the second quarter, I've got it at $10 million if my estimate is the one, I'm looking at. So where is that coming from? Is it the U.S.? Is it EMEA? Is it just a few customers? Is it many customers? And then what led to these delays?

Yes. So, I can --

[Indiscernible]

Yes. So basically, we have, Brian, in the supply chain what are called IFPDs that manufacturers in China. So, sourcing the components and actually getting them shipped with the lockdowns, there has been manufacturing delay. So that's what will actually impact the turn of Q2 is that see the receipts of the goods to be able to fulfill the orders. So, it will be one of the timings that it will actually come to slip from Q2 into early Q3 for some of those orders. And it'll be kind of generally in many markets because it's just a delay in production and supply.

Yes. Probably make up so I guess my question would be, why are you comfortable still at $250 million? I assume that's going to back things up and you'll get some orders pushed from 2Q to 3Q, similar as pushed from 3Q to 4Q and then some -- I assume some orders out of 4Q. So, I guess I'm just trying to understand the issue [Indiscernible].

So, it should be hopefully a short-term timing thing. You were seeing as we all know, the lockdowns inside of China, currently so it's obviously impacted factory but auction but also shipments where ports have been closed. So that has the knock-on effect of the products that would land ordinarily in timely basis in Q2 and 3 Q2. So, as they resolve out, we should see that normalize beyond.

Last question. In terms of the revenue guidance, the September quarter is usually seasonally strong, I believe. It's jumped up and down depending on when orders get pushed but, I mean, should we assume that's 40% of the revenue guidance this year?

Yes Brian. We haven't guided that core specifically but yeah, I think if you look, historically, it's definitely a north of 30% of total revenue. There is some shifting as we talked about from Q2 and Q3. So very well could be closer to that figure but --

How do you tell? How do you tell?

-- but you can't tell at this point that's right.

Okay. Thanks, guys

Yeah. Thanks, Brian. Thank you.

Thank you. Your next question is coming from Jack Vander Aarde at the Maxim Group. Sir, please pose your question.

Okay. Great. Thank you. Good afternoon, guys. I appreciate the update. Thanks for taking my questions. I just got the press release pulled up in front of me, so I have a few housekeeping things, just bear with me if I'm quoting things incorrectly. I think I heard that the first-quarter gross margin was 24.9%, and then adjusted for acquisition accounting was 27.4%. I guess, first, is that correct? And then second is that gross margin also adjusted for the higher freight and shipping costs or is that a third layer?

That would be, sorry [Indiscernible] adjusted. Yes, you're absolutely right. The margins that you can see in the press release 24.9% and the effect of the purchase accounting is two-fold. One, we have obviously the deferred revenue adjustments which you can see on the adjusted EBITDA calculation, and also the fair market value as their inventory mark-up from the recent FrontRow acquisition. So as adjusted for those normalized, it's 27.4%. And then yes, further impacted that would've been higher on both counts, pre -adjusted and post-adjusted for the increased freight and transportation costs, which we all still incurring and we'll continue to see that incur. But as I said the [indiscernible 00:23:44] of that going forward two-fold revenue increasing from pricing. And then secondly, efficiency and better sourcing pricing. So, we will see all margins increase.

Okay, And then just a follow-up to that. You mentioned you've taken gross margins, you could improve throughout the year and beginning in the second quarter as well. Just for clarity, the federal acquisition which they closed in that adjustment of the 27.4% margin for acquisition in accounting. That is no longer going to be in the mix then, right? Starting in the second quarter? But you'll still have [Indiscernible] shipping cost?

Yes. It will be actually. So, it will carry on through 2022 and then it will be fully amortized through this year. So that will continue through this year.

Okay. Understood. And then I think I heard 64 million of customer orders in the first quarter with the bulk from the U.S. and then IMEA. For the U.S. orders, just curious back back when before the acquisition of Sahara, the story was always heavily tied in narrowed -- narrated around classrooms in school districts in the U.S. Just wondering for those U.S. orders, how much of this is related to existing school district and classroom customers and refresh cycle. And then are you getting additional traction by penetrating new school districts in the U.S.?

I would say -- sorry, it's Mark here. I would say the majority is new classrooms. We obviously do get repeat business but the majority of it is us attacking and getting new customers. But it's -- predominantly it's the large districts where we can win some significant orders that really pump out and that's why you're seeing such growth in those order numbers. And that's why we're still comfortable not hitting the $250 million for the year.

Yeah. And on the new districts we're bringing on, there -- it's -- the vast majority are refreshes of old technology. So, it's not -- they're not going from zero, they're typically refreshing often interactive whiteboards or other old technology and we're convincing those schools to utilize our interactive flat-panel displays and other solutions as part of that replacement.

Okay. And Michael, just to that point, so it's like a -- it's somewhat of a -- it's a nice cadence from this refresh cycle, it's opening up the opportunity for you to take out wins and get involved. Is there a refresh cycle, I'm thinking of the past, it’s kind of -- I'm sure it varies but like a five-to-seven-year refresh cycle? Is that still kind of the cadence in the U.S. for classroom refreshes? And does that mean your existing -- if most of the new orders are from new customers, are we -- are you expecting a big demand curve from customers that you've had for years that are approaching that refresh upgrade?

Yes. So, the answer is yes, that five-to-seven-year time frame is still a good estimate of when those refreshes would happen. Keep in mind that the majority of the panels that we're installing have a five-year warranty. But in some cases, we've gone as long as seven years on the warranty. And then your follow-up question there on refreshes, we're going to start to see more and more of that. Keep in mind the majority of our sales because of our dramatic growth, we've had the last couple of years, we have very few customers that we spend back five-plus years. But we are expecting to start seeing some of that and we have had a couple of districts where we did about five years ago install and we are seeing some repeat business on refreshes. We're starting to see some of that now, but I think you're going to see that a much more dramatic way over the next couple of years because of our gross cycle.

Okay. Great. That's helpful. And then maybe just one more follow-up from me on OPEX run rate just given FrontRow, I'm sure there's a lot of things involved here. They're more non-recurring, they're onetime in nature. So, if I look at the total OPEX G&A is the biggest line item here. Is this -- I don't know if you have a sense of seasonality and what a normalized OPEX level is now as the business acquisition settles in, what are we thinking on a go-forward quarterly basis for OPEX? Is this above what you think? Any help there would be appreciated.

Yes. That's going to be pretty normal because that's including obviously the amortization of the intangibles related also to the acquisitions continuing. So yes, that's pretty normal.

This is a good steady based or liquid gross forward.

Good indicator for your basis, yes.

Okay. And then just maybe one more I'm not sure if I've heard it mentioned the Samsung bundled collaboration efforts. Is this -- are we moving the chains on this? Is this still a growth driver? Is there any staff you can provide on a number of licenses sold or is this not the focus, is just like an update there would be helpful?

Yeah. So, our main focus with our Samsung partnership is on providing our software licenses, them, purchasing our MimioConnect licenses, which they would -- they are then partnering with their interactive Flat-Panel Display s. And we are getting traction there. They committed, you remember last year we announced they committed a million dollars of licenses that you purchased and we expect them to purchase more licenses this year. We focus less on the distribution side of the business. We can distribute Samsung displays, but we're primarily focusing on our in-house displays. And so, we're seeing less traction there. And although we still are offering a bundle of Samsung Chromebooks with our software and training that's getting a little bit less traction in recent months. And I think that's a function of there's a large amount of competition with that. And so, we focus a little less on that as well. So as far as the Samsung partnership, what you had to see, as far as traction over the next few months is going to be us providing our software licenses of MimioConnect that are bundled with the Samsung displays.

Thanks. Great. That's it for me. I appreciate the color, guys. I'll hop back in queue.

Yeah. Thanks, Jack.

Thank you.

Thank you. [Operator Instructions] So if there are no questions in the queue, I'm going to hand it back to management for final comments.

Thank you, everyone, for your support and for joining us today on the First Quarter of 2022 conference call. We look forward to speaking to you again in August when we report our Q2 2022 results. Thank you.

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