Moving iMage Technologies Announces Third Quarter Fiscal 2024 Results

Rhea-AI Summary

Moving iMage Technologies (NYSE AMERICAN: MITQ) reported its Q3 fiscal 2024 results, showing a 4.0% revenue increase to $3.9 million compared to $3.7 million in the prior year. However, gross profit fell by 35.1% to $0.7 million, with a gross margin of 17.4%. The company reported a GAAP operating loss of $0.6 million and a net loss per share of $0.06. The decline was attributed to the long tail effects of 2023's actors and writers strike, lower gross margins from a large order, and strong operating leverage.

Despite these challenges, MiT noted optimistic developments, including promising field tests of LEA's smart power amps and positive advancements in their E-caddy concept for sports stadiums. However, the broader rollout of the CineQC platform has been delayed for significant technology upgrades. MiT also repurchased 310,000 shares during the quarter, holding $5.9 million in cash as of March 31, 2024.

Positive

• Revenue increased 4.0% to $3.9 million in Q3 2024.
• Field tests for LEA’s smart power amps showed promising results.
• E-caddy concept for sports stadiums moved to early manufacturing and testing stage.
• Company repurchased 310,000 shares during the quarter.
• Company holds $5.9 million in cash as of March 31, 2024.

Negative

• Gross profit decreased by 35.1% to $0.7 million.
• Gross margin dropped to 17.4%.
• GAAP operating loss of $0.6 million was reported.
• Net loss per share increased to $0.06 from $0.04.
• Broad rollout of CineQC delayed for significant technology upgrades.
• Revenue for YTD fiscal 2024 decreased by 4.5% to $13.8 million.
• Operating income for YTD fiscal 2024 declined by 78.5% to $1.1 million.
• GAAP net loss for YTD fiscal 2024 worsened by 102.5% to $1.0 million.

Insights

Financial Analyst

Moving iMage Technologies (MITQ) reported revenue growth of 4, reaching $3.9 million for Q3 Fiscal 2024. However, the company's gross margin fell significantly to 17.4 from 27.9 in the same period last year. This decline is largely attributed to a high-volume order of seating with lower margins. Additionally, the company's GAAP operating loss increased to $0.6 million compared to $0.5 million last year, indicating heightened operating expenses or inefficiencies.

While the overall revenue increase is positive, the declining margins and rising losses showcase underlying financial challenges. The cash reserve of $5.9 million provides some cushion but highlights the need for improved operational management. The recent share repurchase is a positive signal, suggesting management's confidence in the company's future prospects despite near-term challenges.

Investors should monitor how the company addresses its margin compression and operational losses. Even though revenue is growing, the key will be to manage costs effectively and improve profitability.

Market Research Analyst

The company's diversification into products like the LEA smart power amplifiers and the E-caddy concept shows promise, especially with regards to the $30-60 million Total Addressable Market (TAM) in North America for LEA. The positive field test results at top-10 cinema circuits could catalyze future revenue growth if scaled effectively.

However, the delayed rollout of the CineQC SaaS platform due to technological shortcomings indicates the challenges faced in tech development and the need for patience from investors. Efforts to scale the Esports business through partnerships also present a long-term growth opportunity, albeit with inherent risks of dependency on external funding and market dynamics.

Overall, these initiatives could become significant growth drivers, but investors must stay cautious as these markets are competitive and require substantial investment and time to yield results.

Tech Expert

The move towards field testing and early manufacturing of new technologies such as the LEA smart power amps and the E-caddy demonstrates MiT's commitment to innovation. The LEA amplifiers, if successfully adopted, could enhance their value proposition in cinema and other entertainment venues, offering a competitive edge in a potentially lucrative market.

However, the delayed rollout of the CineQC SaaS platform highlights the critical challenges of scaling software solutions. This calls for significant technological upgrades, indicating that the current infrastructure may not meet scalability demands. The positive angle is that these upgrades are expected to provide MiT with direct control over the technology, which could streamline future developments and rollouts.

Given the complexities and development timelines in tech, investors should view these projects as long-term value creators rather than immediate revenue boosters.

FOUNTAIN VALLEY, Calif.--(BUSINESS WIRE)-- Moving iMage Technologies, Inc. (NYSE AMERICAN: MITQ), (“MiT”), a leading technology and services company for cinema, Esports, stadiums, arenas and other out-of-home entertainment venues, today announced results for its third quarter ended March 31, 2024.

“As expected, the long tail of the actors and writers strike in late 2023 impacted our third quarter results,” said Phil Rafnson, chairman and chief executive officer of MiT. “The strikes impacted the industry year to date for several reasons, including the lower 2024 domestic box office, which analysts expect to be flat to down, and budgeting delays at many of our customers. Specifically, we have seen multiple projects and orders pushed out into future quarters. Additionally, our quarterly financial results were affected by a large order for seats, which have a significantly lower gross margin than the Company average, and the negative side to having strong operating leverage.”

Fiscal 2024 Commentary

“While we expect the industry hangover to continue into our fourth fiscal quarter, we have seen new recent activity that gives us reasons for optimism. First, we finished field testing for LEA’s smart power amps with a top-10 circuit, and the results were promising. We also began testing these products at another top-10 circuit and hope to start field testing at two other top-10 circuits over the next few quarters. While we have had some early success scoping LEA products into new cinema builds, keep in mind the attrition market for LEA smart power amplifiers represents a $30-60 million annual TAM in North America for us to penetrate over time.

“Behind the scenes, we continue moving forward with our emerging product lines. Our E-caddy concept was well received by the handful of Major League Baseball and other sports stadium executives we met and is now expected to move into the early manufacturing and testing stage during our fourth quarter. Here, we also had some recent positive news on the hardware side related to power consumption, which could materially expand the range of services we can offer.

“For CineQC, the SaaS quality control and management platform that we license and resell into cinema, the broader rollout has been delayed due to needing a more robust system. While we’ve been co-developing with our paying customer, at zero expense to us, after a thorough evaluation, we decided the underlying technology needs alterations to scale, and we plan to significantly upgrade the technology, which should take approximately two quarters to complete. When finished, we expect to have direct control of the technology and a path to finally market the offering more broadly.

“For Esports, we’ve pivoted recently to take a parallel approach with certain larger potential customers while SNDBX is working to raise growth capital. If successful, we believe this could help scale our Esports business more quickly,” concluded Rafnson.

Third Quarter Highlights (Fiscal 2024 versus Fiscal 2023)

• Revenue increased 4.0% to $3.9 million compared to $3.7 million;
• Gross Profit decreased to $0.7 million compared to $1.0 million; Gross Margin was 17.4%;
• GAAP Operating Loss of ($0.6) million compared to ($0.5) million;
• GAAP Net Loss and Loss per Share (EPS) of ($0.6) million and ($0.06) compared to ($0.4) million and $(0.04), respectively;
• Non-GAAP Net Loss and Loss per Share (EPS) of ($0.6) million and ($0.06) compared to ($0.4) million and $(0.04), respectively;
• As of March 31, 2024, the Company held cash of $5.9 million;
• During the quarter, the Company repurchased 310,000 shares.

Select Financial Metrics: FY24 versus FY23*
in millions, except for Income (loss) per Share and percentages	3Q24	3Q23	Change	YTD FY24	YTD FY23	Change
Total Revenue	$3.9	$3.7	4.0%	$13.8	$14.4	-4.5%
Gross Profit	$0.7	$1.0	-35.1%	$3.3	$3.9	-16.8%
Gross Margin	17.4%	27.9%		23.6%	27.1%
Operating Income (Loss)	($0.6)	($0.5)	-23.4%	($1.1)	($0.6)	-78.5%
Operating Margin	-16.7%	-14.1%		-7.9%	-4.3%
GAAP Net Income (Loss)	($0.6)	($0.4)	-41.7%	($1.0)	($0.5)	-102.5%
GAAP Earnings (Loss) per Share	(0.06)	($0.04)	-48.8%	($0.09)	($0.04)	-96.8%
Non-GAAP Net Income (Loss)	($0.6)	($0.4)	-40.6%	($1.0)	($0.5)	-109.3%
Non-GAAP Income (Loss) Per Share	($0.06)	($0.04)	-47.6%	($0.09)	($0.04)	-104.8%
nm = not measurable/meaningful; *may not add up due to rounding

Trended Financials*
in millions, except for Income (loss) per Share and percentages	1Q23	2Q23	3Q23	4Q23	1Q24	2Q24	3Q24		FY22	FY23	YTD FY24
Total Revenue	$5.9	$4.8	$3.7	$5.8	$6.6	$3.3	$3.9		$18.4	$20.2	$13.8
Gross Profit	$1.6	$1.3	$1.0	$1.4	$1.8	$0.8	$0.7		$4.5	$5.3	$3.3
Gross Margin	26.6%	27.1%	27.9%	24.2%	27.4%	23.2%	17.4%		24.3%	26.3%	23.6%
Operating Income (Loss)	$0.0	($0.1)	($0.5)	($1.4)	$0.4	($0.8)	($0.6)		($1.8)	($2.0)	($1.1)
Operating Margin	0.8%	-2.8%	-14.1%	-23.5%	5.8%	-25.4%	-16.7%		-9.6%	-9.8%	-7.9%
GAAP Net Income (Loss)	($0.1)	$0.0	($0.4)	($1.3)	$0.4	($0.8)	($0.6)		($1.3)	($1.8)	($1.0)
Diluted Income (Loss) per Share	($0.01)	$0.00	($0.04)	($0.12)	$0.04	(0.07)	($0.06)		($0.13)	($0.17)	($0.09)
Non-GAAP Net Income (Loss)	($0.1)	$0.0	($0.4)	($0.2)	$0.4	($0.8)	($0.6)		($1.5)	($0.7)	($1.0)
Non-GAAP Diluted Income (Loss) per Share	($0.01)	$0.00	($0.04)	($0.02)	$0.04	($0.07)	($0.06)		($0.14)	($0.07)	($0.09)
*may not add up due to rounding

Dial-in and Webcast Information

Date/Time: Wednesday, May 15, 2024, 12:00 p.m. ET
Toll-Free: 1-877-407-4021
Toll/International: 1-201-689-8472
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=1671871&tp_key=cda72b6393

Telephone Replay

Replay Dial-In: 1-844-512-2921 or 1-412-317-6671
Replay Expiration: Wednesday, May 29, 2024 at 11:59 p.m. ET
Access ID: 13746715
Telephone Replays will be made available after the 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)
		March 31,				June 30,
		2024				2023
		(unauditied)
Assets
Current Assets:
Cash		$	5,946			$	6,616
Accounts receivable, net			890				905
Inventories, net			4,220				4,419
Prepaid expenses and other			938				451
Total Current Assets			11,994				12,391
Long-Term Assets:
Right-of-use asset			214				415
Property and equipment, net			31				28
Intangibles, net			437				480
Other assets			16				16
Total Long-Term Assets			698				939
Total Assets		$	12,692			$	13,330
Liabilities And Stockholders’ Equity
Current Liabilities:
Accounts payable		$	1,457			$	1,507
Accrued expenses			747				618
Customer deposits			3,895				3,169
Lease liability–current			224				280
Unearned warranty revenue			52				26
Total Current Liabilities			6,375				5,600
Long-Term Liabilities:
Lease liability–non-current			—				151
Total Long-Term Liabilities			—				151
Total Liabilities			6,375				5,751
Stockholders’ Equity
Common stock, $0.00001 par value, 100,000,000 shares authorized, 10,285,971 and 10,685,778 shares issued and outstanding at March 31, 2024 and June 30, 2023, respectively			—				—
Additional paid-in capital			12,157				12,462
Accumulated deficit			(5,840	)			(4,883	)
Total Stockholders’ Equity			6,317				7,579
Total Liabilities and Stockholders’ Equity		$	12,692			$	13,330

MOVING IMAGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share and per share amounts)
(unaudited)
		Three Months Ended								Nine Months Ended
		March 31,								March 31,
		2024				2023				2024				2023
Net sales		$	3,890			$	3,741			$	13,790			$	14,435
Cost of goods sold			3,214				2,699				10,536				10,523
Gross profit			676				1,042				3,254				3,912
Operating expenses:
Research and development			73				66				212				195
Selling and marketing			547				663				1,717				1,867
General and administrative			705				839				2,421				2,464
Total operating expenses			1,325				1,568				4,350				4,526
Operating loss			(649	)			(526	)			(1,096	)			(614	)
Other income (expense)
Unrealized loss on marketable securities			—				81				—				243
Realized loss on marketable securities			—				—				—				(167	)
Interest and other income, net			48				21				140				66
Total other income (expense)			48				102				140				142
Net income/(loss)		$	(601	)		$	(424	)		$	(956	)		$	(472	)
Net profit/(loss) per common share basic and diluted		$	(0.06	)		$	(0.04	)		$	(0.09	)		$	(0.04	)
Weighted average shares outstanding: basic and diluted			10,436,519				10,956,413				10,593,229				10,947,790

MOVING IMAGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
		Nine Months Ended
		December 31,
		2024				2023
Cash flows from operating activities:
Net income/(loss)		$	(956	)		$	(472	)
Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities:
Provision for credit losses			(52	)			(5	)
Inventory reserve			433				80
Depreciation expense			9				6
Amortization expense			43				72
ROU amortization			201				—
Stock option compensation expense			15				—
Realized gain on investments			—				(76	)
Changes in operating assets and liabilities
Accounts receivable			67				778
Inventories, net			(234	)			(883	)
Prepaid expenses and other			(487	)			289
Accounts payable			(50	)			558
Accrued expenses			129				(6	)
Unearned warranty revenue			26				30
Customer deposits			726				(1,066	)
Lease liabilities			(207	)			—
Net cash used in operating activities			(337	)			(685	)
Cash flows from investing activities
Sales of marketable securities			—				12,418
Purchases of marketable securities			—				(7,660	)
Purchases of property and equipment			(12	)			(7	)
Net cash provided by used in investing activities			(12	)			4,751
Cash flows from financing activities
Stock Buyback			(334	)			(49	)
Stock issued for Director expense			13				—
Net cash (used in) financing activities			(321	)			(49	)
Net increase (decrease) in cash			(670	)			4,017
Cash, beginning of the year			6,616				2,340
Cash, end of the year		$	5,946			$	6,357

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 the United States of America and should not be considered an alternative to Net Income as an indicator of our operating performance.

RECONCILIATION OF NON-GAAP ITEMS
(in $millions except for per share numbers)
in millions, except for Income (loss) per Share	1Q23	2Q23	3Q23	4Q23	1Q24	2Q24	3Q24		FY22	FY23	YTD FY24
GAAP Net Income (Loss)	($0.1)	$0.0	($0.4)	($1.3)	$0.4	($0.8)	($0.6)		($1.3)	($1.8)	($1.0)
Other Income (expense)	$0.1	($0.2)	$0.0	$0.0	$0.0	$0.0	$0.0		$0.1	$0.0	$0.0
Impairments	$0.0	$0.0	$0.0	$0.6	$0.0	$0.0	$0.0		$0.0	$0.6	$0.0
SNDBX Write-off	$0.0	$0.0	$0.0	$0.4	$0.0	$0.0	$0.0		$0.0	$0.4	$0.0
Stock Compensation Expense	$0.0	$0.0	$0.0	$0.1	$0.0	$0.0	$0.0		$0.4	$0.1	$0.0
PPP Adjustment	$0.0	$0.0	$0.0	$0.0	$0.0	$0.0	$0.0		($0.7)	$0.0	$0.0
Non-GAAP Net Income (Loss)	$0.0	($0.1)	($0.4)	($0.2)	$0.4	($0.8)	($0.6)		($1.5)	($0.7)	($1.0)
Non-GAAP Diluted Income (Loss) per Share	$0.00	($0.01)	($0.04)	($0.02)	$0.04	($0.07)	($0.06)		($0.15)	($0.07)	($0.09)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240515222987/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 were the Q3 2024 financial results for Moving iMage Technologies (MITQ)?

In Q3 2024, Moving iMage Technologies reported a 4.0% increase in revenue to $3.9 million, a gross profit of $0.7 million, and a net loss per share of $0.06.

How did the actors and writers strike affect MITQ's Q3 2024 results?

The strike in late 2023 impacted the industry, resulting in lower domestic box office revenue and budgeting delays, which contributed to MITQ's financial challenges in Q3 2024.

What is the future outlook for MITQ's LEA smart power amps?

MITQ's field tests for LEA smart power amps with top-10 circuits were promising, and further testing is planned. The attrition market represents a $30-60 million annual TAM in North America.

Why was the rollout of the CineQC platform delayed?

The broader rollout of CineQC was delayed due to the need for significant technology upgrades to ensure scalability.

How much cash did MITQ hold as of March 31, 2024?

As of March 31, 2024, MITQ held $5.9 million in cash.