Moving iMage Technologies (MIT) has reported its financial results for the first quarter of fiscal year 2025, indicating a period of recovery and strategic repositioning. Despite a 21% year-over-year revenue decline to $5.3 million, due to the aftereffects of the Hollywood strikes and a tough comparison with the previous fiscal year's first quarter, the company has observed positive industry trends and remains well-capitalized with $5.2 million in cash and cash equivalents.
Key Takeaways
- Moving iMage Technologies experienced a revenue decline of 21% in Q1 2025 compared to the previous year, with total revenue of $5.3 million.
- Gross profit fell by 24.6% to $1.4 million, and gross margin decreased slightly to 26.1%.
- Operating expenses were flat at $1.4 million, reflecting cost reductions implemented at the start of the quarter.
- The company reported an operating loss of $68,000 and breakeven earnings per share (EPS).
- Positive industry trends observed with a resurgence in box office sales and technological upgrades in the cinema sector.
- The company introduced Francois Godfrey as the new President and COO, focusing on a plan to accelerate revenue growth and improve margins.
- Moving iMage Technologies remains optimistic about its core cinema business and emerging opportunities in Esports and the E-Caddy platform for stadiums and arenas.
Company Outlook
- MIT expects a more favorable comparison in the second quarter due to stronger industry spending and cost reductions.
- The company is focused on accelerating revenue growth, increasing gross margins, and driving profits through its strategic initiatives.
Bearish Highlights
- Q1 2025 faced a challenging comparison with Q1 2024, which benefited from post-COVID box office recovery and the Barbenheimer phenomenon.
- The Hollywood strikes in the previous fiscal year impeded momentum, impacting recent financial performance.
Bullish Highlights
- The cinema sector is showing resilience, with AMC, Regal, and Cinemark reporting improvements.
- MIT is well-positioned to benefit from the industry's technology upgrade cycle, with thousands of projectors and servers due for replacement.
- The company has secured global distribution rights for LEA Professional's smart power amplifiers in the cinema market.
Misses
- Revenue and gross profit numbers fell short of the previous year's figures, reflecting the impact of the Hollywood strikes and a high comparison base.
Q&A Highlights
- No questions were asked during the Q&A session of the earnings call.
In conclusion, Moving iMage Technologies is navigating a period of industry recovery with strategic leadership changes and a focus on long-term growth initiatives. The company's outlook remains positive, bolstered by the rebounding cinema sector and the potential of new market opportunities.
InvestingPro Insights
Moving iMage Technologies' (MITQ) recent financial results and strategic positioning are further illuminated by key metrics and insights from InvestingPro. Despite the reported revenue decline and operational challenges, there are several noteworthy aspects of the company's financial health that merit attention.
According to InvestingPro data, MITQ's market capitalization stands at a modest $5.94 million, reflecting its current position as a small-cap player in the cinema technology sector. This valuation should be considered in the context of the company's revenue, which InvestingPro reports at $20.14 million for the last twelve months as of Q4 2024. The discrepancy between market cap and revenue suggests that the market may be undervaluing MITQ's potential, especially given the positive industry trends and strategic initiatives outlined in the earnings report.
An InvestingPro Tip highlights that MITQ "holds more cash than debt on its balance sheet." This aligns with the company's reported $5.2 million in cash and cash equivalents, underscoring its strong liquidity position. This financial cushion provides MITQ with the flexibility to navigate the current industry challenges and invest in growth opportunities, such as the E-Caddy platform and Esports ventures mentioned in the earnings report.
Another relevant InvestingPro Tip indicates that MITQ is "trading at a low revenue valuation multiple." This observation, coupled with the company's focus on accelerating revenue growth and improving margins under new leadership, suggests potential upside for investors if MITQ can successfully execute its strategic plan.
It's worth noting that InvestingPro offers 11 additional tips for MITQ, providing a more comprehensive analysis for those seeking deeper insights into the company's financial health and market position.
Full transcript - Moving iMage Technologies Inc (MITQ) Q1 2025:
Operator: Greetings, and welcome to the Moving iMage Technologies First Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] At this time I would like to turn the call over to Brian Siegel, Vice President of Investor Relations and Strategic Communications. Please, go ahead Brain.
Brian Siegel: Thank you, operator. Good morning, and welcome to Moving iMage Technologies earnings conference call and webcast. With me today is Chairman and CEO, Phil Rafnson, who will provide an industry overview, Francois Godfrey, President and COO; and Co-Founder, Executive VP of Sales and Marketing, Joe Delgado, who will provide a strategy and business overview and our CFO, Bill Greene. For those of you that have not seen today's release, it is available on the Investors section of our website. Before beginning, I would like to remind everyone that except for historical information, the matters discussed in this presentation are forward-looking statements that involve several risks and uncertainties. Words like believe, expect, anticipate, mean that these are our best estimates as of this writing, but that there can be no assurances of expected or anticipated results or events will actually take place. Actual future results could differ materially from those statements. Further information on the company's risk factors is contained in the company's quarterly and annual reports filed with the SEC. Now I'd like to turn the call over to Phil. Go ahead Phil.
Phil Rafnson: Thank you, Brian. And thanks to everyone joining us today. I'm Phil Rafnson, CEO of Moving iMage Technologies or MIT. I'm encouraged by the progress we've achieved in our first quarter of fiscal 2025, particularly as the industry begins to rebound from the challenges posed by the Hollywood strikes over the past year. Those setbacks appear to be behind us now and we're energized by the clear signs of a box office resurgence and lineup of potential blockbuster releases, sparking renewed enthusiasm for in theater experiences. The broader industry tone has experienced a positive shift as well. Major players like AMC, Regal and Cinemark are reporting solid improvements highlighting the resilience of the cinema sector. AMC has seen rising attendance especially for major releases and Cinemark noted stronger than anticipated demand in their third quarter with audiences embracing both premium experiences and traditional movie going. This reinvigorated interest perfectly aligns with our premium offerings such as immersive sound systems and advanced laser projection upgrades which are increasingly valued by customers looking to elevate the more going experience. Looking at the technology upgrade cycle, the industry is reaching a pivotal point with thousands of projectors and servers due for replacement over the next few years. This need for upgrades represents a growth opportunity for MIT as we continue to support our clients evolving technological demands. As the industry moves forward, MIT is exceptionally well positioned to capture this growth leading in cinema innovation with essential products and solutions tailored to meet the high expectations of today's theater goers. Turning to the recent changes in our leadership structure, the industry and our business is at a critical juncture with cinema rebounding and MIT working on the host of potentially transformational offerings that are in development. I wanted to put in place a long-term succession plan sooner than later. After careful consideration, I decided to promote Francois Godfrey to the role of President and COO reporting directly to me. Francois brings decades of industry experience with strong relationships and has been a key part of our team moving our emerging growth initiatives towards viability. I look forward to working with him as we move into MIT's next phase as a company. I'll now turn the call over to Francois to say a few words.
Francois Godfrey: Thank you, Phil, and I appreciate the opportunity to join today's call. I'm very excited about MIT's prospects for success in the years to come. Over the next month, I plan to thoroughly review our business and operations to develop a business plan designed to accelerate revenue growth, increase gross margin and take advantage of our operating leverage to generate cash flow and profits. While I don't expect any radical changes, I believe this review may flush out opportunities to increase the baseline in our core cinema business, improve operational excellence and align investment in our emerging offerings with an adequate time to go to market strategy. My goal is to share this plan with you on our second quarter earnings call in mid-February. Now, I'll turn the call over to Joe to discuss the business in more detail.
Joe Delgado: Thank you, Francois, and good morning, everyone. Starting with our core Cinema business, we're encouraged by signs of a promising future. In addition to the industry's ongoing recovery, a key catalyst here is the technology upgrade cycle with thousands of projector and server combinations expected to reach the end of their lifecycle in these coming years. These upgrades will involve replacing older systems with new laser technology, with prices ranging from $30,000 to $130,000 depending on specifications. While we won't capture every opportunity, our expertise in this space gives us confidence that this cycle will contribute meaningfully to our cinema growth over the next few years. We're also optimistic about our partnership with LEA Professional, which grants us a global distribution rights for their smart power amplifiers in the cinema market. These amplifiers not only offer high margins, but also provide an extended warranty twice the industry standard, which differentiates them from larger competitors. In North America alone, the existing installed base is valued at approximately $630 million with an estimated 5% to 10% of this equipment requiring replacement each year, representing a total addressable market of approximately $32 million to $63 million. We continue to scope these products into new builds and refurbs whenever possible. Lastly, we're also in the early discussions with potential European customers, and we believe LEA could play an instrumental role in expanding our presence there. Next (LON:NXT) is the Esports and cinemas opportunity, where we've refined and sharpened our strategy over the past few quarters. Initially, our Esports initiative was tied solely to Sandbox, which aims to develop the little league model for Esports. However, delays in Sandbox rollout due to an extended fundraising period have required us to adapt. Despite this, we can confirm customer interest in this concept has not wavered since Sandbox announced a strong domestic pipeline. Recently, Sandbox pivoted away from relying on external capital to focus on sponsorships and operational plans targeting an early 2025 launch of its first leads. Meanwhile, we've adjusted our approach, beginning to pursue direct sales to large theater circuits with the internal capabilities to support e sports leagues. This proactive ship has enabled us to actively engage with theater circuits ready to integrate e sports into their offerings, and we're hopeful these efforts will materialize over the coming quarters. Now, let's talk about E-Caddy, an incredibly exciting and innovative opportunity for us to expand beyond cinema. The market potential here is significant with millions of existing stadium and arena seats that could be retrofitted with our E-Caddy cup holders, alongside a pipeline of newbuild opportunities. What sets E-Caddy apart is that it's more than just a product upgrade. It's a new model designed specifically for stadiums and arenas. Imagine a cup holder that not only holds strengths, but also upgrades the fan experience through services such as advertising or promotions, creating new revenue streams for these venues. We've received positive feedback from Major League Baseball and other sports executives, and we're currently defining and developing both the model and prototype for this technology, both precursors to being able to submit proposals at select stadiums and arenas. The E-Caddy platform has nearly limitless potential with tens of millions of seats worldwide and the versatility to adapt across various venues. We believe E-Caddy can generate high margin, recurring revenue as it scales, meeting the growth demand for technology driven fan engagement solutions. In summary, despite industry challenges, we've stayed focused on our long-term objectives and made solid progress. Our cinema business is showing signs of turning the corner, and our new initiatives, particularly in Esports and E-Caddy are full of potential. As the industry recovers from recent disruptions, including the Hollywood strikes, we're incredibly well positioned to see our strategies yield results. We're still in the early stages, but we're excited for what's ahead and look forward to sharing our progress as we reach these key milestones. With that, I thank you, and I'll turn it over to Brian.
Brian Siegel: Thanks, Joe, and thank you everyone for attending our earnings call. Q1 '25 was always going to be a tough comp as Q1 '24 had tailwinds at its back from the continued box office recovery post COVID and then momentum from the Barbenheimer phenomenon. But virtually as we pointed out several times, Hollywood strike derailed this momentum for the rest of fiscal '24 and we are only now starting to see a pickup. So while our Q1 '25 numbers were down as expected, we did see encouraging signals that gave us optimism for an improved spending environment as we head into the new calendar year. Revenue declined roughly 21% versus last year to $5.3 million. The big difference between the two quarters last year's revenue contained higher run rate business, fewer but larger projects and more orders related to the technology refresh cycle. Gross profit for the first quarter was $1.4 million, a 24.6% decline from the prior year. Gross margin however was 26.1% down 130 basis points from last year. Encouraging sign here is that the mix improved sequentially versus the prior couple of quarters where we had a large lower gross margin seed order. On the expense side, operating expenses reflecting the headcount and other cost reductions we made at the beginning of the quarter were flat at $1.4 million versus last year. Remember that we took out roughly $600,000 of annualized costs most of which is expected to impact fiscal 2025. Operating loss was $68,000 compared to operating income of $400,000 last year and we achieved EPS breakeven for the quarter versus EPS of $0.04 last year. Looking to our balance sheet, our cash and cash equivalents were down only $32,000 at $5.2 million indicating that we remain well capitalized. Moving to our second quarter, historically this has been a seasonally slowest quarter due to the holiday movie schedule and theaters running at high capacity. While we don't expect this pattern to change, we do believe the comp versus last year should be more favorable given the stronger industry spending environment and cost reductions we took this year. In summary, we remain focused on the initiatives and offerings that we believe will accelerate revenue growth, increase gross margins and drive profits. For our investors, we are committed to providing updates on milestones as our merchant growth strategies unfold and we will continue to announce any key developments or orders through press releases and earnings calls as well as on X, where we encourage you to follow us in our handle at Moving iMage news. Thank you for joining us today. We look forward to speaking with you again during the next call in February. Operator, we are ready for questions if any.
Operator: Thank you. [Operator Instructions].
Operator: At this time, there are no questions. This concludes today's conference. [Operator Closing Remarks].
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