Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: As you consolidate to one brand, Clevertouch, what is the impact on your exclusive channel partner agreements, if at all? And do you see losing any market share before you educate the market and then regain share? A: Dale Strang, CEO: Clevertouch has been established in the US for years, but on a limited basis. We've addressed exclusivity provisions with our channel partners amicably. This move allows us to expand Clevertouch's reach without short-term market share risk. We're not orphaning Mimio users; they can choose between Mimio and Clevertouch interfaces.
Q: What do you attribute the market shrinking so quickly to, especially in the US? A: Dale Strang, CEO: It's a global phenomenon due to heavy spending in a short period, leading to a funding hangover. The refresh cycle is longer than anticipated because the devices are well-built. The commitment to interactive flat panels remains strong, and we expect the situation to improve.
Q: In the face of multiyear weakening demand trends, what makes you bullish about the market opportunity? A: Dale Strang, CEO: We have a lot of history and experience with cyclical business. External researchers indicate a rebound next year, and we're seeing signs of improvement in EMEA. Conversations with partners suggest initiatives are gaining clarity for next year, making us cautiously optimistic in the short term and bullish in the long term.
Q: Are you currently not in compliance with your senior credit agreement, and what are the negotiations like? A: Gregory Wiggins, CFO: We are finalizing a waiver for a senior leverage ratio covenant not met for Q3. We don't anticipate difficulty in obtaining it, as we've maintained good relationships with our lenders. The leverage ratio required was 1.75x, and we're working on refinancing our debt.
Q: Do you see pricing pressure being more pronounced as the market starts to recover, or do you see it easing in the next 12 to 18 months? A: Gregory Wiggins, CFO: We see pricing pressure in the short to midterm due to competitiveness in a slower industry. We expect it to stabilize as the industry returns to growth. Dale Strang, CEO: We can continue to produce better than industry average margins due to our buying leverage and integrated solution approach.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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