Q4 2023 Moving iMage Technologies Inc Earnings Call
Greetings and welcome to moving image technologies fourth quarter and year end fiscal 2023 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please.
Press Star Zero on your telephone keypad.
Note. This conference is being recorded I will now turn the conference over to Brian <unk> Senior managing director. Thank you you may begin.
Thank you operator, good morning, and welcome to moving image Technologies earnings Conference call and webcast with me today is chairman and CEO . So Rasmussen, who will provide an industry overview co founder and executive VP of sales and marketing, Joe Delgado, who will provide a strategy and business overview.
Our CFO Don Great 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.
These are our best estimates as of this writing, but that there can be no assurance that expected or anticipated results or events will actually take place actual future results.
So could differ materially from those statements further information on the company's risk factors contained in the company's quarterly and annual reports filed with the SEC.
Now I'd like to turn the call over to Phil taking away. Thank you, Brian and thank you all for joining us today I'm, Phil ration CEO of moving image technologies or.
As you look at it as an investment industry and company specific factors will contribute to our future performance first I'll address the cinema industry tailwind and then Joel will discuss why we're so excited about the future where we are introducing potentially disruptive technologies into cinema esports.
Stadiums arenas and other live entertainment venues.
Historically, our business has been cyclical driven by new technology and technology upgrade cycles.
Currently in the early days of one right now where the cinema owners are starting to upgrade their technology that is coming to the end of its useful life with newer technologies, such as laser projectors with upgraded servers, new screens and sound systems being purchased to replace these additionally, youre, saying cinema owners build new theaters and.
Our refurbished older ones. These new theaters often include new amenities, such as dine in bars and more all with the idea of making going to the movies a destination experience from an industry growth standpoint, as I've discussed previously on these calls Covid took its toll on the industry over there.
Past two years, we have returned to a more normalized environment with the box office originally expected to approach pre pandemic levels. This year. Unfortunately Hollywood strike will cap the upside here. This year, but we are seeing an expansion of another trend that theater owners to bring in business showing non movie Con.
Whether it's sports E Sports concerts, and example is AMC partnering with Taylor Swift to show her concerts and theaters before returning the call over to Joe I'd like to thank our dedicated employees without them, we would not be in what I believe is the strongest position we've ever been in as a company.
From an operational financial product and competitive perspective.
Thank you.
Joe Thank you Phil and good morning, everyone I'll start by briefly reviewing our business and providing updates on each area today cinema as our core legacy business, consisting of Stephanie projects and selling our proprietary U S manufactured goods and third party technologies as Phil mentioned this part.
<unk> business has historically been more cyclical and lumpy with project start dates often being pushed out. Additionally, <unk> projects tend to be at the low end of our gross margin profile, although theres a strong operating leverage in this part of the business today.
<unk> remains the largest part of our business. However, given the low margin profile Lumpiness and timing factors I just mentioned a major part of our strategy going forward is to shift our mix towards higher margin products as well as smoothing out the lumpiness and cyclicality of that business for cinema. This IND.
<unk> is expanding our existing lineup of over 50 proprietary manufactured products, including our ATCA products and caddy lines by manufacturing. These products, we can significantly increase our margins on <unk> projects as well as our overall company gross margin when we sell these products Ala Carte. Additionally, our pea.
Gartner ship with LDA professional for smart power amplifiers is another potential source of growth and margin expansion for the <unk> projects and those all look hard sales each theater needs five or six or even more of these power amplifiers per cinema screen and with early as warranties being twice.
That of the industry average that demonstrates the confidence we have in their overall quality. Currently we have several large circuits testing these products and between the quality and the supply chain issues that some of our competitors are experiencing I wouldn't be surprised to see sales start to ramp in fiscal <unk>.
2024.
Next up for cinema and this is what truly excites me about our future. We're in the latter stages of going to market with a set of potentially disruptive high margin technology offerings that will also bring reoccurring service revenue first I'll discuss our translator offering which I believe has the potential to begin contributing to growth in fiscal 2020 for BMI translator.
As a multi language technology solution with a recurring revenue stream that forms the high end of our accessibility strategy. The market in North America alone is tremendous with over 70 million non English proficient speakers that may not have a previously attended the movies with this product and service those who did attend previously to now have a <unk>.
Significantly enhance the movie going experience. This is a new product class for the industry and adoption has yet to occur that said I believe there are now catalyst said play into adopting the translator solution. The North American theater owners organization known as NATO within the industry to establish the FINMA Foundation and all industry nonprofit.
Charged with promoting and expanding the industry and the overall movie going experience our own Frank Hughes served on its board of directors one of the foundations top marketing priorities is to expand outreach and bring more Eva and non English proficient patrons to the movies. These initiatives fall right into the wheelhouse of it might translate.
And there was a tremendous enthusiasm and interest in the product that semi con and subsequent trade shows. We're currently in talks with several cinema circuits on testing and my translator <unk>. Our SaaS based quality control platform is another example, we've been working with National Amusements, a large international movie circuit on upgrading.
Improving this product unfortunately, the additional development, we have been doing has delayed our plans to rollout the product more broadly. However, once complete we will have a much more robust tested offering to bring to our other clients. The next opportunity for us is to move beyond cinema here, we are targeting to areas other live entertainment venues and east.
Sports I believe esports has a potential to be a significant incremental growth driver for us in fiscal 2024. During the past few months, we have expanded our relationship with sandbox, who aims to build a little league for amateur esports to include an exclusive multimillion dollar supply agreement a minority ownership position aboard advisory seat and co ownership.
Of the IP related to the technology in May we did an investor presentation, which is available on our IR website with Rick Star founder of Sandbox. He laid out his vision for creating that little league of esports by setting up local amateur leagues and movie theaters hosted on the big screen not only is this a very attractive activity for parents and kids.
But for theater owners as well with the Sandbox League of theater can fill excess capacity of over 6000 empty seats per year and get a return on his investment in as little as eight months that is compelling return in general, but especially to the theater owners, who are used to getting a return on their investments in 18 to 24 months. Rick then said he already had enact.
Pipeline in North America of over 2500 locations and another 500 internationally right now he is out doing a funding round, which will enable him to start to ramp locations more quickly finally, the growth opportunity I'm. Most excited about is what we're currently calling E. Caddie, we have infused our caddy product line of cup holders with technology.
That will be developing applications and services for use in stadiums and arenas in September we introduced our first major League Stadium executive and got some great feedback on the type of applications that would get them excited in the months to come will be performing additional market research with other stadium and arena executives to identify the apps and services that will do.
Demand for this product the jam here is huge with millions of existing seats, becoming retrofit candidates. In addition to new stadium and arena bills. The potential here on its own is tremendous but in combination with esports semi translator in Sydney Juicy It can reshape our business and financial models in the years to come we will keep you appraised as we hit <unk>.
Stones as I mentioned on our previous calls we have accelerated the part of our strategy that involves expanding outside of North America. We had established relationships overseas before the pandemic and have been reconnecting over the past few quarters the opportunities here encompass many of our products that we believe can smoothly transition to international markets. Additionally, the cinema market.
Europe is just starting to recover from the pandemic roughly two years. After we did so the timing for us to explore these opportunities couldnt be better and example of Arb opportunities is the acquisition of exclusive global distribution rights into the cinema market for early a professional amplifiers. In addition to testing going on here domestically were also well received.
Last month when I was in Barcelona. This is a high margin product that is hitting the market at just the right time when the competition is struggling with supply chain issues. We also see the opportunity for my translator in Sydney QC to move to international markets in the years to come and Sandbox has a pipeline already established outside of North America. Finally.
We have an active corporate development program that includes business development deals like we made with sandbox and.
Acquisitions, such as the <unk> product line, we acquired another ongoing activities in conclusion, we're still in the early innings of our growth opportunity fiscal 2023 was a bridge year between the pent up post pandemic demand during fiscal 2022 and growth for new products, new markets and refresh.
Great cycles in fiscal 2024, and beyond with that I think.
And I'll turn the call back over to Brian .
Thanks, Joe and thank you everyone for attending our earnings call I'm going to spend a little time, reviewing our model and then I'll take you through the quarter followed by Q&A.
Currently <unk> projects are the key driver for our business, making up roughly 60% to 65% of revenue.
We serve as a project manager for carrying and reselling up Anthony and services for refurbishing and upgrading or building new theaters.
Much of the makeup of our projects are pass through costs with a small margin added in.
Margins are in the mid teens that said, we have several routes to improve these margins demonstrated by our fiscal year 'twenty for results.
Some of the ways that we improve on these margins are the upsell installation services user proprietary manufactured products through the resale of higher margin technology projects, including projectors in servers and more recently sound system products sort of relationship with a professional.
As Joe mentioned F&I, Stephanie projects are more cyclical and can also often start dates pushed out.
Second half of fiscal year 'twenty, three we saw over $3 $4 million pushed out into the future, which negatively impacted our revenue growth rate and loss per share for the full year.
This business has not lost the timing is uncertain, although at the present time, we expect most to all but one fiscal year 'twenty four.
Next we sell our higher margin proprietary manufactured offerings, Ala carte, which have margins ranging from 35% to 55% include our caddy in 88 products.
We continue to increase the number of ridesharing manufactured products that we sell we expect our mix to shift more favorably impact gross margin going forward.
FY2023 we saw the early impact of this as gross margins expanded by 200 basis points versus fiscal year 'twenty two.
Going forward as our emerging products like that that my translator <unk> C and <unk> start to ramp and scale, we expect our mix to shift more significantly away from Anthony.
These products will have 50% plus gross margins.
Now moving to the results fourth quarter revenue of $5 8 million was up 3% versus $5 6 million last year.
Push out as I mentioned earlier negatively impacted revenue by about $1 7 million in the quarter.
For the full year revenue was up 10, 1%.
Q4, gross profit decreased 5% to $1 4 million and gross margin was down 200 basis points to 24, 2% in the quarter, resulting from mix as we sold more higher dollar lower margin projectors during the quarter.
Our full year gross profit increased 19% and gross margin increased 200 basis points to 26, 3%.
Operator: Greetings. Welcome to Moving iMage Technology's fourth quarter in year end fiscal 2023 earnings call. At this time, all participants are in a listen only mode.
Q4, GAAP operating expenses were $2 8 million versus $1 9 million last year.
This year's GAAP operating expenses included about 1 million in noncash accounting write down.
Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded.
Went through the audit we conducted our annual impairment assessment and determined that the carrying value of the caddy goodwill and customer relationships intangible assets had declined.
Brian Siegel: I will now turn the conference over to Brian Siegel, Senior Managing Director. Thank you. You may begin. Thank you, operator. Good morning and welcome to Moving iMage Technology's earnings conference call webcast with me today is chairman and CEO Phil Rafn who will provide an industry overview co founder executive VP of sales and marketing Joe Delgado, who will provide a strategy and business overview and our CFO of the green. For those of you that have not seen today's release, it is available on the investor section of our website.
Accordingly, we impaired goodwill and intangible assets related to this keep in mind that the traditional caddy business is tied to new stadium and arena builds which have not materialized post COVID-19.
Is what we're writing down and it has nothing to do with the potential of our <unk> product and its still in development.
We also determined that due to a slower than expected initial rapid sandbox, we're going to write off the loans to the company.
I know this space being confused and given our strong belief in sandbox E sports strategy and model that our relationship will drive growth for us, but again keep in mind. The write downs are based on accounting forecast, which admittedly we took an ultra conservative view as the business is still an early stage start up.
Brian Siegel: Before beginning, I would like to remind everyone that except for historical information, the matters discussed in this presentation are for the statements that involve several risks and uncertainties. Words like believe expect to anticipate mean that these are our best estimates as of this writing, but that there can be no assurance since I've expected or anticipated results or events will actually take place. Actual future results could differ materially from those statements. Further information, the company's risk factors is contained in the company's quarterly and annual reports filed with the SEC.
Ample sandbox is that trying to close a seed round as we speak.
What is as close as they will be in a position to begin ramping customers.
For the full year GAAP Opex were up $7 3 million again, reflecting the 1 million noncash write offs from Q4.
Excluding the write off Opex was flat despite 10% growth in revenue demonstrating the potential operating leverage we can show going forward as we continue to grow revenue.
Philip Rafnson: Now I'd like to turn the call over to Phil. Take it away. Thank you, Brian.
Philip Rafnson: And thank you all for joining us today. I'm Phil Rafn CEO of Moving iMage Technologies or MIT as you look at MIT as an investment industry and company specific factors will contribute to our future performance. First, I'll address the cinema industry tailwinds and then Joe will discuss why we're so excited about the future where we are introducing potentially disruptive technologies into cinema, esports, stadiums, arenas. And other live entertainment venues. Historically, our business has been technical driven by new technology and technology upgrade cycles.
Q4, GAAP operating loss was $1 4 million versus zero point $5 million last year.
Reflecting the write down in revenue push out excluding the write downs, our operating loss would have been 0.2 million a $300000 improvement from last year.
For the full year GAAP operating loss was $1 8 million versus $1 3 million last year.
Q4, GAAP net loss and loss per share was about $1 8 million and 17 cents compared to a net loss of $1 3 million or 13 cents per share last year.
Philip Rafnson: We are currently in the early days of one right now where the cinema owners are starting to upgrade their technology that is coming to the end of its useful life with newer technologies such as laser projectors with upgraded servers, new screens and sound systems being purchased to replace these. Additionally, we are saying cinema owners build new theaters and upgrade or refurbished older ones. These new theaters often include new amenities such as dining bars and more all with the idea of making going to the movies a destination experience from an industry growth standpoint.
Q4, non-GAAP net loss and loss per share was 0.2 million or <unk> compared to losses of 0.7 million six cents per share last year.
Reconciling this the gap this year, we added back the $1 million in noncash write downs, and the and point 1 million and stock compensation.
For the full year GAAP net loss and loss per share were $1 8 million in 17 versus $1 3 million and 13 cents last year.
Full year, non-GAAP net loss and loss per share or zero point $7 million or seven versus $1 5 million or 14 cents last year.
Philip Rafnson: As I've discussed previously on these calls, COVID took its toll on the industry. Over the past two years, we have returned to a more normalized environment with the box office originally expected to approach pre-pandemic levels this year. Unfortunately, Hollywood strike will cap the upside here this year, but we are seeing an expansion of another trend by theater owners to bring in business showing non-movie content. Whether it's sports e-sports or concerts, an example is AMC partnering with Taylor Swift to show her concerts in theaters.
Reconciling non-GAAP to GAAP in fiscal year 'twenty, three we added back the $1 1 million or one time write downs and stock compensation expense, but last year's non-GAAP EPS excluded the point $7 million gain from the forgiveness of our P. P. P loans and added back zero point $4 million in stock.
Moving to the balance sheet, our cash and cash equivalents were $6 6 million at the end of the fourth quarter up slightly from the third quarter. We were also able to buy back about 273000 shares during the year before our window closed on June 30th.
Philip Rafnson: Before returning to call over to Jill, I'd like to thank our dedicated employees. Without them, we would not be in what I believe is the strongest position we've ever been in as a company from an operational financial product and competitive perspective.
As we look at FY 'twenty four we aren't going to make the same mistakes. We made in FY2023 by providing specific guidance that said I want to be as transparent as possible and we will make some general comments.
First we tend to only have six month visibility into our legacy business, if after need projects and proprietary manufacturing product.
Philip Rafnson: Thank you.
Jose Delgado: Jill, thank you Phil and good morning, everyone. I'll start by briefly reviewing our business and providing updates on each area today. Cinema is our core legacy business consisting of FF&E projects and selling our proprietary U.S, manufactured goods and third party technologies. As Phil mentioned, this part of our business has historically been more cyclical and lumpy with project start dates often being pushed out. Additionally, FF&E projects tend to be at the low end of our gross margin profile. Although there's a strong operating leverage in this part of the business, today, FF&E remains the largest part of our business.
We have said on the call can be lumpy, but pushed it is occurring.
Our first half of the year backlog as of June 30th was over $12 million.
And with Bill Greene, joining us as CFO , we are taking a very conservative approach internally to budgeting for the year, mainly modeling only our legacy at Bethany and proprietary manufactured product businesses.
Our budget calls for similar growth for this year.
Which was about 10% with further paring up losses.
However, there are several opportunities for upside to this forecast that we had not included.
The first is a likely two year 80, a product refresh at a top five cinema circuit that would begin in the second half of fiscal 2024.
Jose Delgado: However, given the low margin profile lumpiness and timing factors, I just mentioned a major part of our strategy going forward is to shift our mix towards higher margin products as well as smoothing out the lumpiness and cyclicality of that business. For cinema, this includes expanding our existing lineup of over 50 proprietary manufactured products including our ADA products and caddy lines. By manufacturing these products, we can significantly increase our margins on FF&E projects as well as our overall company gross margin when we sell these products all a cart.
Next selling more than the 15 to 20 movies sports systems for sandbox that we sold in fiscal.
Full year 'twenty three.
Also have no sales budgeted for Eliot professional products.
And then we budgeted nothing in there for National Amusements Rolling out an acute C to their 500 international locations and or the implementation at new customers for this product.
We have not budgeted any sales for my translator and we have a minimal to no international sales budgeted.
Jose Delgado: Additionally, our partnership with LEA professional for smart power amplifiers is another potential source of growth and margin expansion for the FF&E projects and those all-acart sales. Each theater needs five or six or even more of these power amplifiers per cinema screen and with LEA's warranties being twice that of the industry average that demonstrates the confidence we have in their overall quality. Currently, we have several large circuits testing these products and between the quality at LEA and the supply chain issues that some of our competitors are experiencing, I wouldn't be surprised to see sales start to ramp in fiscal 2024.
In terms of catalysts, you should be looking for announcements on the key initiatives mentioned during this call and the upside opportunities I mentioned, just now we will plan on providing milestone updates for our emergency emerging products and we'll announce whenever orders we can through press releases and on earnings calls this year.
Overall, we have never been in such a strong position within cinema and we're excited that our new initiatives are progressing even if it is slower than we would have hoped originally.
We want to make sure that we have the right offerings and they are ready for prime time before we start marketing more broadly.
Just to let everybody know.
Joe and I will be at the LD Micro conference next week in L. A if you're interested in meeting please reach out to me and then a subsequent information yesterday. It was announced that there was a tentative agreement for the writers strike in Hollywood.
Jose Delgado: Next up for cinema, and this is what truly excites me about our future, we're in the latter stages of going to market with a set of potentially disruptive high margin technology offerings that will also bring reoccurring service revenue. First, I'll discuss our MI Translator offering, which I believe has the potential to begin contributing to growth in fiscal 2024. The MI Translator is a multi-language technology solution with a reoccurring revenue stream that forms the high end of our accessibility strategy.
We I believe is a very positive events that will hopefully be signed officially today.
And that leaves only the Sag aftra talks ongoing and hopefully this will spur those to move forward more quickly.
I want to thank everyone for attending today's call and look forward to speaking with you again on our next call in mid November .
Jose Delgado: The market in North America alone is tremendous with over 70 million non-English proficient speakers that may not have a previously attended the movies. With this product and service, those who did attend previously can now have a significantly enhanced movie going experience. This is a new product class for the industry and adoption has yet to occur. That said, I believe there are now catalysts that play into adopting the MI Translator solution. The North American theater owners organization known as NATO within the industry established the Cinema Foundation and all industry non-profit charts with promoting and expanding the industry and the overall movie going experience.
Operator, we can take questions. Thank you.
To ask a question. Please press star one on your telephone keypad.
For me if you could tell me indicate your line is in the question queue. You May Press star two if he would like to remove your question from the queue and for participants using speaker equipment. It may be necessary to pick up the handset before pressing the star keys, we let's just pause for a brief moment to poll for questions.
Once again it is star one on your telephone keypad.
Jose Delgado: Our own franchise serves on its board of directors, one of the foundations top marketing priorities, it's to expand outreach and bring more ADA and non-English proficient patrons to the movies. These initiatives fall right into the Wii House of MI Translator and there was a tremendous enthusiasm and interest in the product that Cinemacon and subsequent trade shows were currently in talks with several Cinema Circuits on testing MI Translator.
There are no questions at this time. So this will conclude today's conference.
Thank you for your participation you may disconnect your lines at this time.
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Jose Delgado: CineQC or SaaS-based quality control platform is another example. We've been working with national amusements, a large international movie circuit on upgrading and improving this product. Unfortunately, the additional development we have been doing has delayed our plans to roll out the product more broadly, however, once complete, we will have a much more robust tested offering to bring to our other clients.
Okay.
Jose Delgado: The next opportunity for us is to move beyond Cinema. Here, we are targeting two areas. Other live entertainment venues and eSports.
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Jose Delgado: I believe eSports has a potential to be a significant incremental growth driver for us in fiscal 2024. During the past few months, we have expanded our relationship with Sandbox, who aims to build a little league for amateur eSports to include an exclusive multi-million dollar supply agreement, a minority ownership position, a board advisory seat, and co-ownership of the IP related to the technology. That is compelling return in general, but especially to the theater owners who are used to getting a return on their investments in 18 to 24 months.
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Jose Delgado: Rick then said he already had an active pipeline in North America of over 2500 locations and another 500 internationally. Right now, he is out doing a funding round, which will enable him to start to ramp locations more quickly.
Jose Delgado: Finally, the growth opportunity I'm most excited about is what we're currently calling eCADD. We have infused our CADD product line of cup holders with technology that will be developing applications and services for use in stadiums and arenas. In September, we introduced our first major league stadium executive and got some great feedback on the type of applications that would get them excited. In the months to come, we'll be performing additional market research with other stadium and arena executives to identify the apps and services that will drive demand for this product.
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Jose Delgado: The cam here is huge with millions of existing seats becoming retrofit candidates in addition to new stadium and arena bills. The potential here on its own is tremendous, but in combination with eSports, semi-translator and sine QC, it can reshape our business and financial models in the years to come.
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Jose Delgado: We'll keep you appraised as we hit milestones. As I mentioned on our previous calls, we have accelerated the part of our strategy that involves expanding outside of North America. We had established relationships overseas before the pandemic and have been reconnecting over the past few quarters. The opportunities here encompass many of our products that we believe can smoothly transition to international markets. Additionally, the cinema market in Europe is just starting to recover from the pandemic roughly two years after we did, so the timing for us to explore these opportunities couldn't be better.
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Jose Delgado: An example of our opportunities is the acquisition of exclusive global distribution rights into the cinema market for LEA professional amplifiers. In addition to testing going on here domestically, we're also well received last month when I was in Barcelona. This is a high margin product that is hitting the market at just the right time when the competition is struggling with supply chain issues. We also see the opportunity for MI Translator and sine QC to move to international markets in the years to come, and sandbox has a pipeline already established outside of North America. Finally, we have an active corporate development program that includes business development deals like we made with sandbox and LEA, acquisitions such as the ADA product line we acquired and other ongoing activities.
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Jose Delgado: In conclusion, we're still in the early innings of our growth opportunity. Fiscal 2023 was a bridge year between the pent-up post-pandemic demand during fiscal 2022 and growth for new products, new markets, and refresh upgrade cycles in fiscal 2024 and beyond.
Brian Siegel: With that, I thank you, and I'll turn the call back over to Brian. Thanks Joe, and thank you everyone for attending our earnings call. I'm going to spend a little time reviewing our model and then I'll take you through the quarter, followed by Q&A. Currently, FF&E projects are the key driver for our business, making up roughly 60 to 65% of revenue. We serve as a project manager for curing and reselling FF&E services for refurbishing and upgrading or building new theaters.
Brian Siegel: Since much of the makeup over projects are passed through costs with a small margin added in, project margins are in the mid-teens. That said, we have several routes to improve these margins demonstrated by our fiscal year 24 results. Some of the ways that we improve on these margins are to upsell installation services, user proprietary manufactured products, through the resell of higher margin technology projects, including projectors and servers, and more recently sound system products, through a relationship with LEA professional.
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Brian Siegel: As Joe and Phil mentioned, FF&E projects are more cyclical and can also often see start dates pushed out. The second half of fiscal year 23, we saw over $3.4 million pushed out into the future, which negatively impacted our revenue growth rate and lost per share for the full year. While this business is not lost, the timing is uncertain, although at the present time, we expect most to all of it will hit fiscal year 24.
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Brian Siegel: Next, we sell our higher margin for proprietary manufactured offerings out of cart, which have margins ranging from 35 percent to 55 percent, include our CADD and ADA products. As we continue to increase the number of proprietary manufactured products that we sell, we expect our mix to shift and more favorably impact gross margin going forward. That's why 23, we saw the early impact of this as gross margins expanded by 200 basis points versus fiscal year 22.
Brian Siegel: Going forward, as our emerging products like the MI Translators, and if you see an eCADD start to ramp in scale, we expect our mix to shift more significantly away from FF&E, as expect these products will have 50 percent plus gross margins.
Okay.
Brian Siegel: Now, moving to the results. Fourth quarter revenue of 5.8 million was up 3 percent versus 5.6 million last year. Pushouts I mentioned earlier, negatively impacted revenue by about 1.7 million in the quarter. For the full year, revenue was up 10.1 percent. Q4 gross profit decreased 5 percent to 1.4 million and gross margin was down 200 basis points to 24.2 percent in the quarter, resulting from the mix as we sold more higher dollar lower margin projectors during the quarter.
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Brian Siegel: The full year gross profit increased 19 percent and gross margin increased 200 basis points to 26.3 percent. Q4 gap operating expenses were 2.8 million versus 1.9 million last year. This year's gap operating expenses included about 1 million in non-cash accounting write down. As we went through the audit, we conducted our annual impairment assessment and determined that the carrying value of the CADD good well and customer relationships intangible assets had declined. Quarterly, we impaired good will and intangible assets related to this.
Brian Siegel: He did mind that the traditional CADD business is tied to new stadium and arena builds, which have not materialized post-COVID. This is what we're writing down and it's nothing to do with the potential of our E-CADD products that is still in development. We also determined that due to a slower than expected initial ramp at sandbox, we're going to write off the loans to the company. I know this space team confused and given our strong belief in sandbox is an esports strategy and model that our relationship will drive growth for us, but again keep in mind the right downs are based on a counting forecast in which admittedly we took an ultra conservative view as a business is still an early stage startup.
Brian Siegel: For example, sandbox is out trying to close a seed round as we speak. Once as close as they will be in a position to begin wrapping customers. For the full year gap op x were up to 7.3 million again reflecting the 1 million non cash write offs from q4, excluding the right off op x was flat despite 10% growth and revenue demonstrate the potential operating leverage we can show going forward as we continue to grow revenue, q4 gap operating loss was 1.4 million versus 0.5 million last year.
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Brian Siegel: Reflecting the right down and revenue push up, excluding the right downs are operating loss would have been 0.2 million a $300,000 improvement from last year. For the full year gap operating loss was 1.8 million versus 1.3 million last year. Q4 gap net loss and loss per share was about 1.8 million and 17 cents compared to a net loss of 1.3 million or 13 cents per share last year. Q4 non gap net loss and loss per share was 0.2 million or 2 cents compared to losses of 0.7 million and 6 cents per share last year.
Brian Siegel: Reflecting this to gap this year, we added back the 1 million non cash write downs and 0.1 million in stock compensation. For the full year gap net loss and loss per share were 1.8 million and 17 cents versus 1.3 million and 13 cents last year. Full year non gap net loss and loss per share were 0.7 million or 7 cents versus 1.5 million or 14 cents last year. Reconciling non gap to gap in fiscal year 23, we added back the 1.1 million for one time write downs and stock compensation expense.
Brian Siegel: But last year's non gap EPS excluded the 0.7 million dollar gain from the forgiveness of our PPP loans and added back 0.4 million in stock. Moving to the balance sheet our cash and cash equivalents were 6.6 million at the end of the fourth quarter up slightly from third quarter. We were also able to buy back about 273,000 shares during the year before our window closed on June 30th.
Brian Siegel: As we look at FY 24, we aren't going to make the same mistakes we made in FY 23 by providing specific guidance. That said, I want to be as transparent as possible and we'll make some general comments. First, we tend to only have six months' visibility into our legacy business of FF&E projects and proprietary manufacturing products. Which as we have said on the call can be lumpy with pushes occurring. That said, our first half of the year backlog as of June 30th was over $12 million.
Brian Siegel: Second, with Bill Green joining us at CFO, we are taking a very conservative approach internally to budgeting for the year mainly modeling only our legacy FF&E and proprietary manufacturing products businesses. Our budget calls for similar growth to this year, which was about 10% with further pairing of blocks. Fits. However, there are several opportunities for upside to the sport cap that we have not included.
Brian Siegel: The first is a likely two-year ADA product refresh at a top five cinema circuit that would begin in the second half of fiscal 2024. Next, selling more than the 15 to 20 movie sports systems for sandbox that we sold in fiscal year 23. We also have no sales budgeted for LEA professional products. And then we budgeted nothing in there for national amusement's rolling out to the QC to their 500 international locations and or the implementation at new customers for this product.
Brian Siegel: We have not budgeted any sales for MI translator and we have minimal to no international sales budgeted. In terms of catalysts, you should be looking for announcements on the key initiatives mentioned during this call and the upside opportunities I mentioned just now. We will plan up providing milestone updates for emerging products and will announce whatever orders we can through press releases and on earnings calls this year. Overall, we have never been in such a strong position within cinema and we are excited that our new initiatives are progressing even if it's slower than we wanted to have hoped originally.
Brian Siegel: We want to make sure that we have the right offerings and they are ready for prime time before we start marketing more properly.
Brian Siegel: Just to let everybody know, Joe and I will be at the LD micro conference next week in LA. If you're interested in meeting, please reach out to me and then subsequent information.
Brian Siegel: Yesterday, it was announced that there was a 10 of agreement for the writer's strike in Hollywood, which we believe is a very positive event that will hopefully be signed officially today. And that leaves only the SAG after talks ongoing and hopefully this will spur those to move forward more quickly.
Brian Siegel: I want to thank everyone for attending today's call and look forward to speaking with you again on our next call in mid-November.
Operator: Operator, we can take questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation call will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. And for a participant using speaker equipment, it may be necessary to pick up the headset before pressing the star keys. We will just pause for a brief moment to pull for questions. Once again, it is star one on your telephone keypad.
Operator: There are no questions at this time, so this will conclude today's conference. Thank you for your participation. You may disconnect your lines at this time. Thank you very much. Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Unknown Attendee, Jose Delgado, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Philip Rafnson, Brian Siegel, Brian Siegel, Philip Rafnson, .