Q2 2025 Moving iMage Technologies Inc Earnings Call

Speaker Change: [music].

Greetings and welcome to the moving image technologies second quarter 2025 earnings Conference call.

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. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

Speaker Change: I didn't have my pleasure to introduce your host Brian Segal. Thank you you may begin.

Brian Segal: Thank you operator, good morning, and welcome to the moving image Technologies earnings conference call and webcast.

Speaker Change: With me today is chairman and CEO Sohrab.

Speaker Change: We'll provide an industry overview Francois Godfrey President and C O who will provide a strategy and business update that she has also green.

Speaker Change: For those of you who have not seen today's release is available in the investors section of our website.

Speaker Change: 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.

Speaker Change: Words like believe expect anticipate me. If these are our best estimates as I'm, describing it but that there can be no assurances unexpected or anticipated results fragrance will actually take place.

Speaker Change: 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 SEC.

Phil: Now I'd like to turn the call over to Phil go ahead Phil.

Phil: Thank you, Brian and thanks to everyone joining us today.

Speaker Change: Until Robson CEO moving in these technologies or M. I T. I'm encouraged by our progress and our second quarter of fiscal 2025, returning to growth in cutting our losses, the broader industry tone continues to be more positive as well, notably the industry report a strong holiday season.

Speaker Change: After the challenges posed by the Hollywood strikes, which negatively impacted the number and timing of movie releases over the past year.

Speaker Change: Setbacks appear to be behind US now and we're energized by a full slate of content expected for 2025.

Speaker Change: Players like AMC, Regal and Cinemark supported record Thanksgiving highlighting the resilience of the cinema sector AMC.

Speaker Change: AMC has seen rising attendants, especially for our major releases and Cinemark noted stronger than anticipated demand in the third quarter, but the audience is embracing both premium experiences and traditional movie going with respect to the technology upgrade cycle. The industry is reaching a pivotal point with thousands of projectors and servers.

Speaker Change: Due for replacement over the next few years the need for upgrades represents a growth opportunity for <unk> over the next few years as we continue to support our clients' evolving technological demand M I.

Speaker Change: He is exceptionally well positioned to capture a piece of this growth as the industry moves forward, leading in cinema innovation with essential products and solutions tailored to meet the high expectations of today's theater goers I'll now turn over the call to Francois to discuss his priorities as the new President and C O O.

Speaker Change: And provide a business update francois.

Francois Godfrey: Thank you Phil and my first three months as President and C. O L. I have focused on identifying and prioritizing opportunities to drive revenue growth and margin expansion in our core cinema business strengthened.

Francois Godfrey: Strengthening our profitability will enhance our flexibility to invest in our higher margin high growth initiatives, while maintaining transparency I believe and under promising and over delivering moving forward, we will share updates on emerging initiatives once they reach meaningful milestones.

Francois Godfrey: The industry is cyclical driven by multi year technology refresh cycles and we are in the early days of a new upgrade cycles centered around laser projectors. This cycle might've started sooner if not for the disruptions of the past five years first COVID-19 than the Hollywood strikes.

Francois Godfrey: Both of which slowed our customers' spending to this day. However, our strong 2020 for summer and holiday box office reaffirmed the industry's resilience and optimism is growing for 2020 fives full release slate.

Francois Godfrey: Historically major cinema change like AMC, Regal and Cinemark invest early while the independent small and mid sized circuits, our primary customer base follow later right.

Francois Godfrey: Right now we're still in the early stages of this upgrade cycle, but momentum is slowly building cinema Con this cinema industry's premier global institutional event for studios and theater operators in April will be an important barometer and a strong summer box office could accelerate customer spending.

Francois Godfrey: My focus is on capturing more of this early demand while positioning M. I T for the broader industry wide refresh.

Francois Godfrey: My immediate priority is driving higher revenue growth in our core cinema business, which with our operating leverage can move us into profitability quickly I see opportunities in securing a larger share of technology upgrades, expanding wallet share with existing customers acquiring.

Francois Godfrey: New customers strengthening our run rate business, which currently generates around $2 million per quarter two.

To achieve this we're putting in place more formalized sales processes and testing cost effective marketing strategies to reach untapped customers, who may not be fully aware of our broad product portfolio and capabilities.

Francois Godfrey: While I'm very enthusiastic about our emerging products I want to be pragmatic about their rollout timelines. My goal is to prioritize initiatives with the fastest ROI, both within cinema and in adjacent entertainment markets like stadiums and arenas I'll now provide brief updates on these initiatives in.

Francois Godfrey: Cinema, followed by an update on E. Scotty.

Francois Godfrey: L. A a professional power amplifiers, we are actively integrating these into new projects, but real volume will come from the replacement market large cinema circuits are testing these products now and while procurement cycles take up to 18 months successful adoption could drive significant sales growth. We're also plan.

Francois Godfrey: <unk> seeds for expansion in Europe.

Speaker Change: Cindy you see is our quality control platform that integrates an Iot network and SaaS software for cinema operators to run their theaters more efficiently while progress has been slower than expected. We remain committed to this initiative and we will provide updates as we make progress in upgrading the technology.

Speaker Change: Jack and finalize our go to market strategy.

Speaker Change: With esports in cinema, we are well positioned with our movies sports mobile gaming cart systems. When this market starts to take off industry interest remains high despite delays at our partner sandbox, which is now focusing on going operational and funding its rollout of amateur esports leagues.

Speaker Change: Hosted and movie theaters through sponsorships and promotions rather than capital raising if they can execute it will hopefully kick start the business for both companies in parallel we're exploring direct discussions with larger players to accelerate this opportunity.

Speaker Change: And my translator and 80, a compliant accessibility solutions. We are currently reassessing, our entire accessibility product strategy, including M I translator to unlock additional market opportunities.

Speaker Change: EQECAT is a product in development that is meant to bring fan engagement services for stadiums and arenas through a digitized version of our Caddy Cup holders.

Speaker Change: This opportunity has taken longer than anticipated, we still believe in the potential of this product. We're currently refining the technology and business model, while looking to secure an initial partner.

Speaker Change: In summary, the industry challenges from the Hollywood strikes continue to lessen our core cinema business is showing early signs of a rebound in our emerging initiatives holds strong long term potential as the industry recovers, we're well positioned to capitalize on opportunities and drive sustainable growth we're still.

Brian Segal: <unk> early in the cycle, but we're excited about what's ahead and look forward to sharing our progress with that I. Thank you and I'll turn it over to Brian.

Brian Segal: Thanks Francois.

Thank you everyone for attending our earnings call.

Brian Segal: We had a tough Q1 'twenty five comp we returned to year over year top line growth gross margin expansion loss reductions in Q2 25, despite a traditionally being our seasonally slowest quarter as theater operators tend to keep them all what explains integration during the holiday season.

Brian Segal: Revenue increased by five 4%.

Brian Segal: Mix. This quarter was also favorable leading to a 23, 3% increase in gross profit from the prior year to $936000 as we recognized revenue from two premium technology installations in order for accessibility compliance products during the quarter.

Brian Segal: This led to a robust gross margin of 27, 2% up 400 basis points from last year.

Operating expenses were $1.497 million down $92000 compared to last year sucked into head count and other cost reductions we made at the beginning of the fiscal year.

Brian Segal: Remember that we took out roughly 600000 of annualized costs, most of which are expected to positively impact our fiscal 2025 results.

Brian Segal: Operating loss improved by $269000 to a negative $561000 compared to a negative $830000 last year.

Brian Segal: This led to a $267 and our net loss to $527000 from $794000 last year.

Brian Segal: If yes improved from negative <unk> to negative five.

Brian Segal: Looking to our balance sheet cash increased $38000 to $5 3 million from the beginning of the fiscal year, indicating we remained well capitalized.

Brian Segal: Moving to our third quarter outlook, we expect continued year over year revenue growth gross margin expansion and loss reductions note that despite the combination of strong holiday box office at the beginning of the technology refresh cycle and a new customer budget cycle, which are all positives for M. I T over the medium to longer term. We are still in the early part of the bell curve for spending in most of our.

Brian Segal: Customer base tends to fall a bit early to late majority part of the curve.

Brian Segal: In summary, we remain focused on initiatives and offerings that we believe will accelerate revenue growth increased gross margins and drive us to profitability for investors. We are committed to providing updates on meaningful 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 is that ask where are we in Turkey.

Brian Segal: And our handle that moving image news thanks for joining us today, and we look forward to speaking with you again on our next call. Operator, we are ready for questions. If there are any.

Brian Segal: Great. Thank you I'd like to turn the floor over now to Brian Siegel, who will read any question that came in over the web.

Brian Segal: Thanks.

Speaker Change: What's the cash position improving along with the outlook of the business are is the company considering another shareholder repurchase program over.

Brian Segal: Over the next fiscal year.

Brian Segal: We will continue to evaluate it we are optimistic about the rest of this year and next fiscal year. So as we plan for our next fiscal year, we will look at that as an option.

Brian Segal: Great.

Brian Segal: That appears to be all the questions. We have at this time, so operator, we can close that out.

Speaker Change: Okay. Thank you Mike. Thank you very much. This does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you again for your participation.

Brian Segal: [music].

Brian Segal: Yes.

Brian Segal: [music].