Moving iMage Technologies Announces Second Quarter Fiscal 2024 Results
- Revenue decreased by 32.6% to $3.3 million compared to $4.8 million in the second quarter of fiscal 2023.
- Gross Profit decreased to $0.8 million compared to $1.3 million.
- GAAP Operating Loss was ($0.8) million compared to ($0.1) million.
- The film industry is expected to recover from the strikes, but box office growth rates may remain flat to down.
- MiT is focusing on technology upgrades and potential market expansion in North America with a target annual TAM of $30-60 million for LEA smart power amplifiers.
- The company is developing new product lines like the E-caddy concept for MLB stadiums and exploring service opportunities for future growth.
- Negative financial trends with a decrease in revenue and profit compared to the previous fiscal year.
- Challenges from the end of SVOG spending and strikes impacting box office performance.
- Flat to down box office growth rates expected due to industry recovery from strikes.
- Operating Loss increased significantly by 501.4% to ($0.8) million compared to ($0.1) million in the second quarter of fiscal 2023.
Insights
The reported 32.6% decline in Moving iMage Technologies' revenue for the second quarter, alongside a 42.1% decrease in gross profit, suggests a significant contraction in operational performance. This contraction is primarily attributed to the cessation of the Shuttered Venue Operators Grant and strikes within the writers' and actors' guilds, which have had a downstream effect on the cinema technology and services sector. The reported operating loss widening by over 500% is a critical indicator of the challenges faced by the company in maintaining profitability amidst these external pressures.
Investors should note the gross margin compression from 27.1% to 23.2%, which may be a cause for concern as it reflects a decrease in efficiency or potential increases in cost of goods sold relative to revenue. The GAAP and non-GAAP net loss figures align, indicating a transparent representation of the company's financial health without significant adjustments. The mention of a $30-60 million annual TAM for LEA smart power amplifiers suggests a potential growth avenue, but the company's ability to capture this market should be monitored closely.
An analysis of the entertainment technology sector reveals that the impact of strikes and the post-pandemic recovery trajectory are critical to companies like MiT. The flat to down box office growth rates expected by analysts could signal a slower recovery for the industry. However, MiT's focus on technology upgrades, such as projectors and servers, aligns with the industry's trend towards enhancing customer experience through technological advancements.
The introduction of LEA Professional smart power amplifiers and the positive reception of the E-caddy concept by MLB stadium executives indicate strategic product diversification. While these developments may present opportunities, the actual market response and the efficacy of these product lines in generating revenue will be pivotal. The company's strategic positioning for the latter half of the year, coinciding with the fiscal 2025, will be crucial in determining its ability to rebound and capitalize on emerging market trends.
The end of the Shuttered Venue Operators Grant represents a withdrawal of government support that had previously bolstered the entertainment industry during the pandemic. This change, along with the ripple effects of the writers' and actors' strikes, has led to a tangible slowdown in the sector's economic activity. The forward-looking statements regarding budget setting for 2024 suggest cautious optimism, with an anticipated increase in spending on new projects.
It is essential to consider the broader economic context, including consumer spending patterns and the competitive landscape, when evaluating MiT's potential for recovery. The company's mention of a $30-60 million annual TAM for one of its products provides insight into the market opportunity; however, the ability to penetrate this market will depend on broader economic factors such as disposable income levels and entertainment spending trends.
“As expected, our second quarter results were down versus last year, reflecting the end to the Shuttered Venue Operators Grant, or SVOG, spending and the impact of the writers’ and actors’ strikes, which negatively impacted the box office and our customers’ ability to build budgets for 2024,” said Phil Rafnson, chairman and chief executive officer, MiT. “As a result of these delays, we saw no major projects move forward during the quarter, however, we did see continued benefits from the ongoing technology upgrade cycle.”
Second Quarter Highlights (Fiscal 2024 versus Fiscal 2023)
-
Revenue decreased
32.6% to$3.3 million $4.8 million -
Gross Profit decreased to
$0.8 million $1.3 million 23.2% ; -
GAAP Operating Loss of
( compared to$0.8) million ( ;$0.1) million -
GAAP Net Loss and Loss per Share (EPS) of
( and ($0.8) million $0.07 $0.0 million $0.00 -
Non-GAAP Net Loss and Loss per Share (EPS) of
( and ($0.8) million $0.07 $0.0 million $0.00
Select Financial Metrics: FY24 versus FY23 as of 12/31/2023*
in millions, except for Income (loss) per Share and percentages |
2Q24 |
2Q23 |
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YTD
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Total Revenue |
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Gross Profit |
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Operating Income (Loss) |
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Operating Margin |
- |
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GAAP Net Income (Loss) |
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GAAP Earnings (Loss) per Share |
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Non-GAAP Net Income (Loss) |
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Non-GAAP Income (Loss) Per Share |
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nm = not measurable/meaningful; *may not add up due to rounding |
Fiscal 2024 Commentary
“With the strikes behind us, the film industry is returning to normalized movie-making and marketing operations, but the impact from the strikes will be felt in the box office growth rates this year, which analysts expect to be flat to down. Additionally, our customers have just recently set or are establishing their budgets for 2024, which we hope will reflect more robust spending on new projects during the year’s second half (our first half of fiscal 2025).
“While the overall industry recovers from the strikes, our customers continue to upgrade technology for projectors and servers, and we are also having early success getting LEA Professional smart power amplifiers scoped into future projects. Additionally, several large potential customers are evaluating this product line for replacing current power amplifiers as they fail and need replacing at existing cinemas. We believe the latter, the attrition market for LEA smart power amplifiers, represents a
“We also continued to move forward with our emerging product lines in recent months. Our E-caddy concept was well received by the handful of Major League Baseball stadium executives we met. We are now preparing for in-factory field validation and testing of the hardware and firmware, a precursor to real-world field testing. At the same time, we are scoping out the service opportunity for this offering, which we believe can potentially transform the Company over the next several years,” concluded Rafnson.
| Trended Financials* | ||||||||||
| in millions, except for Income (loss) per Share and percentages | 1Q23 |
2Q23 |
3Q23 |
4Q23 |
1Q24 |
2Q24 |
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FY22 |
FY23 |
YTD
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| Operating Income (Loss) |
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( |
( |
( |
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( |
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( |
( |
( |
| Operating Margin |
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- |
- |
- |
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- |
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- |
- |
- |
| GAAP Net Income (Loss) |
( |
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( |
( |
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( |
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( |
( |
( |
| Diluted Income (Loss) per Share |
( |
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( |
( |
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(0.07) |
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( |
( |
( |
| Non-GAAP Net Income (Loss) |
( |
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( |
( |
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( |
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( |
( |
( |
| Non-GAAP Diluted Income (Loss) per Share |
( |
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( |
( |
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( |
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( |
( |
( |
| *may not add up due to rounding | ||||||||||
Dial-in and Webcast Information
Date/Time: Wednesday, February 14, 2024, 11:00 a.m. ET
Toll-Free: 1-877-407-4018
Toll/International: 1-201-689-8471
Call me™: Participants can use Guest dial-in #s above and be answered by an operator OR click the Call me™ Link for instant telephone access to the event. Call me™ link will be made active 15 minutes prior to scheduled start time.
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1655735&tp_key=73206c05af
Telephone Replay
Replay Dial-In: 1-844-512-2921 or 1-412-317-6671
Replay Expiration: Wednesday, February 28, 2024 at 11:59 p.m. ET
Access ID: 13744353
Telephone Replays will be made available after conference end time.
About Moving iMage Technologies
Moving iMage Technologies is a leading manufacturer and integrator of purpose-built technology solutions and equipment to support a wide variety of entertainment applications, with a focus on motion picture exhibitions, sports venues and eSports. MiT offers a wide range of products and services, including custom engineering, systems design, integration and installation, enterprise software solution, digital cinema, A/V integration, as well as customized solutions for emerging entertainment technology. MiT’s Caddy Products division designs and sells proprietary cup-holder and other seating-based products and lighting systems for theaters and stadiums. For more information, visit www.movingimagetech.com.
Forward-Looking Statements
All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, we assume no obligation to update any forward-looking statements.
MOVING IMAGE TECHNOLOGIES, INC. |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(in thousands except share and per share amounts) |
||||||
(unaudited) |
||||||
|
December 31, |
|
June 30, |
|||
2023 |
|
2023 |
||||
|
||||||
Assets |
|
|
|
|
|
|
Current Assets: |
|
|
||||
Cash |
|
$ |
5,139 |
|
$ |
6,616 |
Accounts receivable, net |
1,138 |
905 |
||||
Inventories, net |
|
|
4,459 |
|
|
4,419 |
Prepaid expenses and other |
|
954 |
|
451 |
||
Total Current Assets |
|
|
11,690 |
|
|
12,391 |
Long-Term Assets: |
|
|
||||
Right-of-use asset |
|
|
282 |
|
|
415 |
Property and equipment, net |
35 |
28 |
||||
Intangibles, net |
|
|
451 |
|
|
480 |
Other assets |
|
16 |
|
16 |
||
Total Long-Term Assets |
|
|
784 |
|
|
939 |
Total Assets |
$ |
12,474 |
$ |
13,330 |
||
|
|
|
|
|
|
|
Liabilities And Stockholders’ Equity |
|
|
||||
Current Liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
1,192 |
$ |
1,507 |
||
Accrued expenses |
|
|
682 |
|
|
618 |
Customer deposits |
3,131 |
3,169 |
||||
Lease liability–current |
|
|
296 |
|
|
280 |
Unearned warranty revenue |
|
40 |
|
26 |
||
Total Current Liabilities |
|
|
5,341 |
|
|
5,600 |
|
|
|||||
Long-Term Liabilities: |
|
|
|
|
|
|
Lease liability–non-current |
|
— |
|
151 |
||
Total Long-Term Liabilities |
|
|
— |
|
|
151 |
Total Liabilities |
|
5,341 |
|
5,751 |
||
Stockholders’ Equity |
|
|
|
|
|
|
Common stock, |
— |
— |
||||
Additional paid-in capital |
|
|
12,371 |
|
|
12,462 |
Accumulated deficit |
|
(5,238) |
|
(4,883) |
||
Total Stockholders’ Equity |
|
|
7,133 |
|
|
7,579 |
Total Liabilities and Stockholders’ Equity |
$ |
12,474 |
$ |
13,330 |
||
MOVING IMAGE TECHNOLOGIES, INC. |
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||
(in thousands except share and per share amounts) |
||||||||||||
(unaudited) |
||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||
December 31, |
December 31, |
|||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||
Net sales |
|
$ |
3,265 |
|
$ |
4,843 |
|
$ |
9,900 |
|
$ |
10,695 |
Cost of goods sold |
|
2,506 |
|
3,531 |
|
7,322 |
|
7,824 |
||||
Gross profit |
|
|
759 |
|
|
1,312 |
|
|
2,578 |
|
|
2,871 |
|
|
|
|
|||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
72 |
61 |
139 |
127 |
||||||||
Selling and marketing |
|
|
628 |
|
|
594 |
|
|
1,170 |
|
|
1,204 |
General and administrative |
|
889 |
|
795 |
|
1,716 |
|
1,630 |
||||
Total operating expenses |
|
|
1,589 |
|
|
1,450 |
|
|
3,025 |
|
|
2,961 |
Operating loss |
|
(830) |
|
(138) |
|
(447) |
|
(90) |
||||
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on marketable securities |
— |
269 |
— |
129 |
||||||||
Realized loss on marketable securities |
|
|
— |
|
|
(110) |
|
|
— |
|
|
(133) |
Interest and other income, net |
|
36 |
|
25 |
|
92 |
|
45 |
||||
Total other income |
|
|
36 |
|
|
184 |
|
|
92 |
|
|
41 |
Net income/(loss) |
|
$ |
(794) |
|
$ |
46 |
|
$ |
(355) |
|
$ |
(49) |
Net profit/(loss) per common share basic and diluted |
$ |
(0.07) |
$ |
0.00 |
$ |
(0.03) |
$ |
(0.00) |
||||
Weighted average shares outstanding: basic and diluted (Note 3) |
|
|
10,655,686 |
|
|
10,958,398 |
|
|
10,670,732 |
|
|
10,943,561 |
MOVING IMAGE TECHNOLOGIES, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Six Months Ended |
||||||
|
|
December 31, |
||||||
|
|
2023 |
|
2022 |
||||
Cash flows from operating activities: |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Net income/(loss) |
|
$ |
(355 |
) |
|
$ |
(49 |
) |
Adjustments to reconcile net profit/(loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
||
Provision for doubtful accounts |
|
|
4 |
|
|
|
(17 |
) |
Depreciation expense |
|
|
5 |
|
|
|
3 |
|
Amortization expense |
|
|
29 |
|
|
|
48 |
|
ROU amortization |
|
|
133 |
|
|
|
(4 |
) |
Stock option compensation expense |
|
|
10 |
|
|
|
— |
|
Realized loss on investments |
|
|
— |
|
|
|
4 |
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(237 |
) |
|
|
360 |
|
Inventories, net |
|
|
(40 |
) |
|
|
(694 |
) |
Prepaid expenses and other |
|
|
(503 |
) |
|
|
597 |
|
Accounts payable |
|
|
(315 |
) |
|
|
44 |
|
Accrued expenses |
|
|
64 |
|
|
|
(125 |
) |
Unearned warranty revenue |
|
|
14 |
|
|
|
41 |
|
Customer deposits |
|
|
(38 |
) |
|
|
(913 |
) |
Lease liabilities |
|
|
(135 |
) |
|
|
— |
|
Net cash used in operating activities |
|
|
(1,364 |
) |
|
|
(705 |
) |
Cash flows from investing activities |
|
|
|
|
|
|
||
Sales of marketable securities |
|
|
— |
|
|
|
4,088 |
|
Purchases of marketable securities |
|
|
— |
|
|
|
(4,144 |
) |
Purchases of property and equipment |
|
|
(12 |
) |
|
|
(4 |
) |
Net cash used in investing activities |
|
|
(12 |
) |
|
|
(60 |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities |
|
|
|
|
|
|
||
Stock Buyback |
|
|
(101 |
) |
|
|
— |
|
Net cash (used in) financing activities |
|
|
(101 |
) |
|
|
— |
|
|
|
|
|
|
|
|
||
Net decrease in cash |
|
|
(1,477 |
) |
|
|
(765 |
) |
Cash, beginning of the year |
|
|
6,616 |
|
|
|
2,340 |
|
Cash, end of the year |
|
$ |
5,139 |
|
|
$ |
1,575 |
|
Use of Non-GAAP Measures
The Company uses non-GAAP net income/loss and earnings/loss per share as a measure customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures that we present. Our management also believes that eliminating one-time items and non-cash stock compensation expense is useful in evaluating our core operating results and comparing results to prior periods. However, non-GAAP metrics are not a measure of financial performance under GAAP in
RECONCILIATION OF NON-GAAP ITEMS |
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(in $millions except for per share numbers) |
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| in millions, except for Income (loss) per Share | 1Q23 |
2Q23 |
3Q23 |
4Q23 |
1Q24 |
2Q24 |
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FY22 |
FY23 |
YTD
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| GAAP Net Income (Loss) |
( |
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( |
( |
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( |
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( |
( |
( |
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| Other Income (expense) |
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( |
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| Impairments |
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| SNDBX Write-off |
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| Stock Compensation Expense |
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| PPP Adjustment |
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( |
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| Non-GAAP Net Income (Loss) |
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( |
( |
( |
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( |
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( |
( |
( |
| Non-GAAP Diluted Income (Loss) per Share |
|
( |
( |
( |
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( |
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( |
( |
( |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240214585591/en/
Brian Siegel, IRC, MBA
Vice President, Investor Relations and Strategic Communications for MiT
Senior Managing Director, Hayden IR
(346) 396-8696
Brian@haydenir.com
Source: Moving iMage Technologies, Inc.
FAQ
What was Moving iMage Technologies, Inc.'s (MITQ) revenue in the second quarter of fiscal 2024?
How did the Gross Profit change in the second quarter of fiscal 2024 for MITQ?
What was the GAAP Operating Loss for MITQ in the second quarter of fiscal 2024?
What is the target annual Total Addressable Market (TAM) for LEA smart power amplifiers in North America?
What new product line is Moving iMage Technologies, Inc. developing for MLB stadiums?
