Boxlight Corporation
Q4 2020 Earnings Call Transcript

Published: 25 Mar 2021

[Operator:]

Thank you and welcome to the Boxlight Fourth Quarter and Full Year 2020 Earnings Conference Call. By now, everyone should have access to the press release issued this afternoon. This call is being webcast and is available for replay. The remarks today will include statements that are considered forward-looking within the meaning of securities law, including forward-looking statements about future results of operations, business strategies and plans, customer relationships, market trends and potential growth opportunities. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management’s current knowledge and expectations as of today and are subject to certain risks and uncertainties and may cause the actual results to differ materially from the forward-looking statements. A detailed discussion of such risks and uncertainties are contained in the company’s most recent Form 10-K, Form 10-Q and other reports filed with the SEC. The company undertakes no obligation to update any forward-looking statements.

[Michael Pope:]

Good afternoon, everyone, and thank you for joining our fourth quarter and full year 2020 earnings call. Despite the COVID-19 pandemic that has caused challenging disruptions to traditional communication at both education and business settings, we close the fourth quarter with record customer orders, and outperformed our revenue and earnings guidance. For the quarter, we recorded customer orders of $33 million, revenues of $32 million and adjusted EBITDA a positive $400,000. We also ended the year with $11 million in back orders, the strongest pipeline in our history for both the U.S and EMEA and a healthy balance sheet, including $13 million in cash, $21 million in working capital and $45 million in stockholders' equity. We're seeing an increased demand for our solutions this year, and we expect to report the first quarter of 2021 with revenue greater than $28 million and positive adjusted EBITDA. Although we will not be providing guidance at this time for the full year 2021, note that the first quarter is seasonally slow and has historically accounted for less than 20% of our annual sales. We are benefiting from a robust and growing market for interactive hardware and software solutions with increased spending in both education and corporate sectors. Education systems in particular, are accessing large budget allocations for technology supported by substantial government funding as they outfit classrooms with solutions for virtual, hybrid and traditional learning. As a company, we see unique opportunity to take advantage of this expanding market and capture additional market share by optimizing our sales channel and promoting our best-in-class solutions and exceptional customer support. In September of 2020, we acquired Sahara Presentation Systems, our most significant acquisition to date with a purchase price of approximately $74 million. I'm happy to report that the integration has been overwhelmingly seamless, and we are reaping the benefit of our global scale, additional seasoned leadership, expanded product suite, combined sales channel and dramatically improved financial position.

[Mark Starkey:]

Thank you, Michael. And I'm calling in today tonight from a very dark London. So hello, everyone. It certainly is an exciting industry and I would like to reiterate your points about how smooth the integration of the Sahara business into Boxlight has been. It literally could not have gone any better. I would also like to take this opportunity to thank all our staff and customers who have helped contribute to our success in Q4. During the fourth quarter, we booked over $33 million in orders from our partners. That represents a 453% growth in order intake year-on-year. Some of our key orders included $4.2 million from D&H in the U.S; $2.8 million from Trox in the U.S; $2.8 million from our partner in Denmark, Unit DK; $1.6 million from our partner in Australia, ASI; $1.3 million of orders from our partner in France, Speechi; $1.2 million of orders from Tierney in the U.S; $807k from our partner in Spain, Charmex; and $668,000 from one of our partners in the U.S., IDNS, to highlight just a few.

[Michael Pope:]

Thank you, Mark. In addition to the significant investment in our global sales organization, we are also completely committed to product innovation and are proud of the vast awards and accolades we have received in recent months for our various solutions including our line of interactive flat panel displays, MimioConnect blended learning software platform, MyStemKits, virtual stem curriculum, robo 3D printing solution and professional development content for extending learning beyond the classroom, among others. This month, we announced the grand opening of our virtual classroom in Atlanta, Georgia, which is fully staffed and available for live virtual demonstrations of our full solution suite. We also opened our Clevertouch gallery located in Central London with a key demonstration space, a boardroom, unified communications huddle space and informal meeting area for partners and colleagues. Last November, we appointed Dr. Don Gemeinhardt as Director of Strategic Funding and Grants at Boxlight to provide an additional resource to K-12 school districts in need of support to access various education grants, as well as the nearly $200 billion in federal funds available to K-12 education from the Cares Act, Coronavirus Response and Relief Supplemental Appropriations Act and American rescue plan. Dr. Gemeinhardt Hart plays a key role in helping education leaders and administrators understand the requirements under the various programs and match solutions needed to solve existing problems and challenges such as returning to the classroom safely and bridging the student learning gap. With that, I will now turn the call over to our CFO, Patrick Foley.

[Patrick Foley:]

Thanks, Michael. and good evening to everyone. This is our first full quarter where we are reporting the combined results of Boxlight and Sahara. To further expand on what you've already heard from Michael and Mark, I'd like to add a few figures to provide context to both slides international operations. From a revenue by country and region perspective, our total revenue in Q4 was $31.9 million, of which EMEA represented 64%, the U.S 30%, the rest of the world 6%, which was mainly Australia. In terms of customers, the top 10 customers represents approximately 54% of total sales in Q4, with the single largest customer just under 10%. And these are based across a number of markets, namely the U.S., Denmark, France, Australia, Finland, Spain, Belgium and the U.K. Nearly two thirds of total sales are covered by the top 20 customers. In relation to sales, product mix and gross margin, in Q4 displays remained the largest proportion of total revenues at 73%. These are largely IFPD sales of Mimio and Clevertouch screen. With related accessories generating further 14.2%, the Sahara legacy distribution business was approximately 10% and the balance coming from software, services and stem. Adjusted gross margin for the quarter was 26.4%. The RFPD margin was approximately 27%, which would have been slightly higher, however, due to increased global shipping costs, margins reduced by 2 to 3 percentage points. Although we've seen a slight reduction in global freight and shipping costs, it still remains higher than normal and will impact the next two quarters. In relation to screen sizes, we have seen in recent years, the trend for larger format displays. And in Q4, '20, this continued within the education sector, a 75% of all Mimio and Clevertouch IFPD sales was 75 inch and 86 inch panels. I'll now review our fourth quarter and full year 2020 results. Our financial results for the 3 months ended December 31, 2020 were as follows. Revenues for the 3 months ended December 31 were $31.9 million compared to $5.9 million for the 3 months ended December 31, 2019, resulting in a 437% increase due primarily to the acquisition of Sahara in September 2020. Gross profit for the 3 months ended December 31, 2020, with $3.6 million as compared to $1 million for the 3 months ended December 31, 2019. Gross profit margin for the 3 months ended December 31, 2020, with 11.2% compared to 17.6% for the 3 months ended December 31, 2019, resulting in a decrease of 64 basis points. The change in profit was mainly due to Sahara purchase accounting adjustments, which resulted in a decrease to gross profit of $4.8 million. However, taking this into consideration, the normalized gross profit rate for the 3 months ended December 31, 2020 was $8.4 million, or 26.4%. This was slightly down year-on-year principally due to the increases in global shipping costs which impacted margins, somewhere between 2 to 3 percentage points. Total operating expenses for the 3 months ended December 31, 2020 were $11.1 million compared to $42 million portrayed $4.2 million for the 3 months ended December 31, 2019. The increase resulted from additional overhead costs associated with the acquired Sahara operations in September 2020. Other income expense for the 3 months ended December 31, 2020, with net expense of $1.9 million compared to net other income of $0.2 million for the 3 months ended December 31, 2019. The increase in other expense is due to $0.7 million of increased interest expense associated with increased borrowings, $0.8 million of losses recognized on the settlement of certain debts obligations that are exchanged for common shares, and $0.7 million of gains that were recognized in 2019 upon the re-measurement of certain derivative liability. The company reported a net loss of $8.6 million for the 3 months ended December 2020 as compared to $2.9 million for the 3 months ended December 31, 2019. The net loss attributable to common shareholders was $8.9 million and $2.9 million for the 3 months ended December 31, 2020 and '19, respectively. after deducting six dividends, the Series B preferred shareholders, comprehensive loss was $3.3 million and $2.8 million for the 3 months ended December 31, 2020 and '19, reflecting the fact of cumulative foreign currency translation adjustments of $5.3 million and $0.1 million for the 3 months ended December 31, 2020, and '19, respectively. The resulting EPS loss for the 3 months ended December 31, 2020 was $0.17 loss per diluted share compared to $0.26 loss per diluted share for the 3 months ended December 31, 2019. Adjusted EBITDA for the 3 months ended December 31, 2020 with income of $0.4 million as compared to a loss of $2.6 million for the 3 months ended December 31, 2019. Adjustments to EBITDA include stock-based compensation expense, gains losses for the re-measurement of derivative liabilities, restructuring costs, acquisition costs, and the effects of purchase accounting adjustments in connection with the Sahara acquisition. Adjusted EPS for the 3 months ended December 31, 2020, was $0.01 per diluted share, compared to a $0.24 loss per diluted share for the 3 months ended December 31, 2019. At December 31, 2020, Boxlight has $13.5 million in cash and cash equivalents, $21 million in working capital; $140.4 million in total assets; $24.6 million dollars of debt, $44.9 million in stockholders' equity. 53.3 million common shares issued and outstanding and 2.9 million preferred shares issued and outstanding. The financial results for the year ended December 31, 2020 have revenues for that year ended December 31, 2020 of $54.9 million compared to $33 million for the year ended December 31, 2019. A 66% increase. The increase in revenues was largely a result of the acquisition for Sahara in 2020. Gross profit for the year ended December 31, 2020 was $9.9 million compared to $8.9 million for the year ended December 31, 2019, a 10% increase. The gross margin decrease from 27.1% to 18%. was driven by the effects of the Sahara purchase accounting adjustments of $5.1 million. The resulting normalized gross profit rate for the year ended December 31, 2020 was 27.2% compared to 27.3% for 2019, showing a slight decrease due to the increased global shipping costs. Total operating expenses for the year ended December 31, 2020 with $22.6 million, compared to $17 million for the year ended December 31, 2019. The increased willingness to additional overhead costs of the acquired for hire operation and other income and expense for the year ended December 31, 2020, with a net expense of $4.3 million as compared to net expense of $1.3 million for the year ended December 31, 2019. The increase in other non-operating expenses primarily due to $1 million f additional interest from the increased borrowings. $1.5 million increase in losses incurred from the settlement of certain notes and $0.4 million of increased expense resulting from the fair value re-measurement of derivative liability. The reported net losses were $16.2 million and $9.4 million for the year ended December 31, 2020 and '19, respectively. The net loss increased by $6.8 million. However, this includes $6.6 million GAAP expenses, items related to the Sahara acquisition, $1.6 million amortization of intangibles. $4.2 million fair market value inventory purchase accounting adjustments, and $0.8 million fair market value deferred revenue adjustments. Net loss attributable to the common shareholders was $16.5 million and $9.4 million for the year ended December 31, 2020 and '19, respectively. After deducting the fixed dividends to Series B preferred shareholders. Comprehensive loss was $10.9 million and $9.3 million for the year ended December 31, 2020 and '19, reflecting the effect of cumulative foreign currency translation adjustments of $5.2 million. $0.1 million for the year ended December 31, 2020, and '19 respectively. The resulting EPS loss for the year ended December 31, 2020, was $0.39 per diluted share compared to an $0,88 loss per diluted share for the year ended December 31, 2019. Adjusted EBITDA loss for the year ended December 31, 2020 is $1 million, an improvement of $4.7 million compared to $5.7 million loss for the year ended December 31, 2019. Adjustments to EBITDA include stock-based compensation expense, gains losses from the remeasurement of derivative liabilities, restructuring costs, acquisition costs, and the effects of purchase accounting adjustments in connection with the Sahara acquisition. The adjusted EPS for the year ended December 31, 2020 was $0.02 loss per diluted share compared to $0.53 loss per diluted share for the year ended December 31, 2019. And with that, we'll open up the call for questions.

[Operator:]

And we will take our first question from Jack Vander Aarde with Maxim Group. Go ahead. Your line is open.

[Allen Klee:]

Hello. This is Allen Klee for Jack. First question is on the Samsung partnership. You've talked about how that's going to -- looks like that's going to ramp up. Could you give us a sense of how it was in the fourth quarter? And how you think about kind of what the whole -- what the revenue opportunity is in '21 and longer term?

[Patrick Foley:]

Yes. Do you want me to take this one, Michael?

[Michael Pope:]

Yes, how about you start and I can fill in if needed.

[Patrick Foley:]

Yes, sure. So in terms of Q4, I mean, we've had -- we started to do a very few number of sales with Samsung. But really, the vast majority of the time we've had to rework the go-to-market plan so that both our sales team and their sales team has the ability to take this to market. And that really has been quite complex in terms of figuring out how the channel can buy the Samsung solution, including our software which is embedded on that product. So the minimum numbers at the moment, but our expectation is from Q2 we should be ready with this to really hit the market properly and both sales teams will be able to sell it easily.

[Allen Klee:]

Thank you. And then for your just announced acquisition of Interactive Concepts, I think in the press release it said $6.5 million of revenue last year, positive earnings. How should we think about how that can impact like the benefit you get from owning that and the contribution that might have?

[Michael Pope:]

Yes. So, Allen, a couple of thoughts on that. So the first one is that the purpose of acquisition as we mentioned in the press release and also in our remarks today, was number one, to improve our profit margins. So, of course, us owning a distributor and showing direct to the reseller partners, we pick up additional margin. And that's a major focus for us as a company is to improve our gross profit margins. But then secondarily it's to maintain stronger relationships with our reseller channel in that territory, which is going to help us grow sales in the territory. With that being said, we also mentioned in the press release that we were seeing tremendous growth in at Benelux region, 25% year-on-year growth, I think it can grow quite faster than that. And it's a significant area of Europe. If you look at that Benelux region, it's about 6% of the total European population. So it's important to us strategically. So as far as kind of what it could mean for us is, again, higher gross profit margins, but then also with greater sales growth, we're going to generate of course more to our bottom line ultimately.

[Allen Klee:]

Thank you. And in regards to MimioClarity, you mentioned how this is going to get coordinated into Samsung. But overall, can you give us a sense of what this can mean for revenues in '21? And also I think last quarter, you said you sold about 300 units. And can you share like how many units were sold in 4Q?

[Michael Pope:]

Yes. So with MimioClarity for those that aren't familiar, that's our audio solution. And we don't have a partnership with Samsung, per se on MimioClarity. We can't bundle our MimioClarity solution with Samsung. But the focus was Samsung is on two things. It's our MimioConnect software platform. So that's our SaaS base education platform, and then also the professional development services that we're offering, including the online self-paced learning modules that we're bundling with the Samsung solutions. As far as MimioClarity, though our audio solution, we are actually starting to see significant sales of that solution. We have a couple large contracts that we won and we're installing those solutions now. We haven't broken out the sale to this point in time of what that is. But I think that's something we can do, Allen for our next earnings call after the next quarter. But I will tell you that the opportunity with MimioClarity is as big as it's ever been. And we are indeed selling a large number of those units and delivering a large number of those units.

[Mark Starkey:]

I would add to that, Michael, I'd say that we can't make them quick enough, it's what I would say, right? So we need to get -- we make them far more quickly because of the significant demand.

[Allen Klee:]

That's great. And then one last question, and then I'll get back in the queue. For a couple others, I'll ask later. Just in terms of kind of your mix of some of your end markets, I think you've previously mentioned that Sahara's revenues was 15% corporate, 85% education. I was kind of wondering if you think that mix is going to change. And also you talked about how you're trying -- you have stem and software, which are higher margin. Can you talk about, if you think like the mix of these particular things might change in '21?

[Michael Pope:]

Yes. So, Pat do you want to address -- yes, Pat I would like you to address kind of where we ended up for the quarter. So Allen, that. And then I can fill in at about what -- how I think it's going to turn.

[Patrick Foley:]

Yes, so in terms of the Sahara, kind of revenues for Q4, the Pro as we call it, the Columbia Pro market, that we delivered to was about 15%, i.e. the corporate market of the total IFPD sales that went out as Clevertouch product, and then the balance being education. So it was quite a significant part of that and it's very lucrative in terms of margin.

[Michael Pope:]

And I would add to that, we've talked about FutureSource, who puts out some research that we follow. And if you look at the FutureSource reports, they actually show for 2021, they expect the corporate market of all IFPDs would be about 25% in EMEA and about 16% of total IFPDs in the U.S. So, if we're looking at the future, we had, at a minimum, we had a trend closer to those numbers. About 16% of our total sales in the U.S, 25% in EMEA and I think that we can perhaps start to even exceed those numbers, because we're putting more focus on it. And you heard Mark talk about the reason for that focus. And it's -- number one, there's a massive need. There's not a lot of great providers that are providing interactive flat panels with all the other solutions you need to be successful in those environments. But secondarily, there's -- its higher margins, and because of the higher margins that makes it even more attractive.

[Allen Klee:]

That's great. Congratulations. Thank you. I'll get back in queue.

[Michael Pope:]

Thank you, Allen.

[Operator:]

At this time we will take our next question from Brian Kinstlinger with Alliance Global. Your line .

[Brian Kinstlinger:]

Great, thanks. Can you hear me?

[Michael Pope:]

Yes, we can hear you, Brian.

[Brian Kinstlinger:]

Hello. Oh, great. Great. Hi. Can you -- you mentioned the market share gains at Clevertouch made this year. Can you talk about what you think is driving those gains, how Clevertouch is differentiated if at all? And then with the merger with Boxlight, how you can even further differentiate that product to gain more share?

[Michael Pope:]

Yes, so, Brian, I'll speak a little bit and then Mark, feel free to jump in if you'd like. So first off, as far as differentiation, we have the most comprehensive solution suite on the market for education. We also have a quite comprehensive solution suite for corporate and government. But for first speaking education, our solution suite includes of course interactive flat panels that we've talked about. But beyond that, we sell software, we sell accessories, we have stem solutions, we have a professional services team where we provide training, professional development, and it really is that broader unique offering that makes us more competitive. And if you start with any one of those solutions, we also feel that we have a superior product than most of our competitors out there. So if we're just competing on interactive flat panels, we believe that we have a superior interactive flat panel to most of our competitors, and we can be competitive on price as well. But when you tack on the software and accessories and the services piece, we think we can win out most of the time when we compete in the market.

[Brian Kinstlinger:]

Great. And then you mentioned the CARES Act, and other funds that are being made available to the schools for a variety of reasons in the U.S. Are all of the -- are most of the school systems you talked to aware of these funds? Or do they need to be educated and that's where the channel partners come in. I guess, I'm curious, are they coming to you knowing they have access? Or do you have to educate them?

[Michael Pope:]

Yes, so we don't have to educate them on the funds. Everybody knows about the funds. And the funds generally are allocated by state and then by the states down to the school districts. But the school districts don't just get the funds. Typically there has to be some type of application process to access the funds. And so the answer is yes, they know about the funds. Of course they do. But in some cases, they don't quite understand how to access the funds. And if they -- if even if they know how to access the funds, they may or may not have the resources or wherewithal to prepare the documentation to request the funds. And that's where we hired an in-house grant rider who helps with that, and we're marketing that person. We also -- if you go to our website and look at email campaigns that we do, we talked about helping educators access these relief funds. And then we can provide a lot of that help. But what it comes down to is in some cases preparing the grant paperwork or the request documentation to access the funds, it could be quite a long document, and there's a lot that goes into it. And we do have resources, including this grant rider that can help the school districts be able to apply and receive the funds.

[Brian Kinstlinger:]

Right. A few more. First of all, you mentioned which I think was bullish that the first quarter normally less than 20% of revenue. But when I take the combination of your two companies, but then I add the Samsung opportunity, which may be meaningful to as well as some other catalysts. It seems to you possibly that may be even less of a percentage than it typically is this year or is it too soon to tell?

[Michael Pope:]

Yes, it's probably too soon to tell, because there's a few things that are going into play. One is Samsung, if that ramps, of course, that would make a difference. How soon these federal funds enter the market that could play into it. Also buying habits has shifted a little bit, of course with COVID and initially there are a lot of the buying habits shifted to address the initial needs. And now they're flexing back the other way to address traditional classroom needs. So I think it's tough to tell, but our best estimate is roughly what we provided. And our guidance, you remember it was $28 million for Q1, and then typically Q1 is less than 20%. So you can get an idea of how we're training for the year based on those numbers.

[Brian Kinstlinger:]

And with all of the pieces such as Samsung, stem, the services around it, I guess, I wanted to ask about the gross margin. If I look at the adjusted 26.4%, notwithstanding frieght costs coming down. If we push that aside, do you -- in the past, do you expected to gain a little bit of margin throughout the course of the year is? Do you still feel that way up to 26.4%, and just kind of take us through, with the mix and how that might change a little bit?

[Michael Pope:]

Yes, so still feel like we can improve that. Keep in mind the 26.4% was not including the adjustment of 2 to 3 points on freight cost, right. So if you take the 26.4% plus 2 to 3 points, that's getting you closer to that 30 number. In the past we talked about, we got to be 25 to 30 and we got to be on the high end of that approaching 30. I think this is going to be that year where we can start to demonstrate additional improvement, gross profit margin, and we definitely have to push that 30% margin number. But looking into future years, we've always said and this is still the case, so we know we need to be higher than that. And that's going to happen as we improve our product mix as we talked about, including selling more of our higher margin accessories and our professional services and our software solutions, which are high margin. That's how we're going to get there. We're not going to get there by keeping the same product mix we have today, which is predominantly interactive flat panels.

[Brian Kinstlinger:]

Yes. Lastly, on the acquisition you made this week with Interactive Concepts. Is there a pipeline of similar channel partners or distributors, sorry, that you're evaluating in various geographies, in Europe given wanting to be closer to the customer and the reseller?

[Michael Pope:]

The answer is yes. Yes, there's several others we're looking at. So we'll have to see how that plays out over time. But our model is, ideally in most cases, there's exceptions to this, but in most cases our model is that we want to be closer to the reseller partners and to the end users, where we can again have those higher margins by cutting out that distributor, but then also, where we have a lot more influence. And we think us having more influence, that's going to result in a higher sales growth versus just relying only on a distributor. And keep in mind that distributors sell a lot of other solutions behind -- besides our solutions. And so we're competing sometimes to be able to get market share from that distributor of their business. And so generally, yes, there's going to be others, we're looking at others, and we hope to announce additional opportunities in future quarters.

[Brian Kinstlinger:]

I guess which brings me to one more question that Allen was trying to ask. He did -- yes, this company, this distributor did $6.4 million in revenue? How much revenue did you generate through that distributor? I guess, I'm curious how much you did versus kind of the other technologies out there.

[Michael Pope:]

Yes, we didn't report that number. But to give you an idea about half of their business came through Clevertouch, but the other half came through other distribution. So you could run some numbers on that. And in addition to their revenues of the $6.5 million, you can run the numbers on the $6.5 million. They were quite profitable. So I think we said profitable, but they were quite profitable and that's going to hit our bottom line.

[Brian Kinstlinger:]

Great. Thanks so much.

[Michael Pope:]

Yes, thanks, Brian.

[Operator:]

And we will take our last question from Jack Vander Aarde. I believe that's Allen in for Jack. Please go ahead. Your line is open.

[Allen Klee:]

Yes. Hi. Two quick questions. The first one, remind us -- so you said you did 33 million of customer orders. Remind us how you define that if that means future orders? And if so, over what time period you think you close on them? And I'm asking that related to how you think about the impact of what's going on with container ships and things like that and how you feel about your levels of inventory. I think you ended the year at around $21 million. So, is that -- do you think that you might have a challenge of enough inventory or do you have ways of working around that?

[Michael Pope:]

That's a great question. Allen. The answer is there is -- has been a little bit of a challenge to manage the supply chain because of the challenges with shipping and shortages of certain components and things. We've managed it okay and we don't believe there'll be an impact to our numbers. So as far as our inventory levels, they're healthy. We're in a good place with inventory. The question around customer orders at $33 million, yes, that’s orders we actually received during the quarter, but we didn't ship, right, that's what that means. And then, of course, we had a $30 million or $32 million in sales for the quarter. So that $32 million in sales, those are -- that's, of course, solutions that we've delivered or shipped. As far as the $33 million, excuse me -- as far as we ended the quarter with back orders, I believe it was …

[Patrick Foley:]

$11 million.

[Patrick Foley:]

… a $11 million, okay, the $11 million back orders, that $11 million would be shipped in Q1, I mean that we recognize that $11 million in Q1. There would be minimal, if any, that was not recognized in Q1. And so as far as how long do they carry over was going to be less than a quarter in almost every case.

[Patrick Foley:]

Just to add to that point, Michael, just asking Allen's point about supply chain and the challenges, obviously, that every business is seeing globally in terms of supply chain. So one of the things we have done, obviously, we have a strong balance sheet. And through Q4, we knew this was coming up as a supply chain challenge for the business globally. So we've been actually pre-stock building to actually counter those challenges in readiness to have the stock available to sell. And we have -- and we did the same thing for Q1 and forward. So that's one thing we always looking out on the planning horizon in terms of loss of supply chain 3, 6 months at least ahead in terms of what's needed in terms of demand planning.

[Allen Klee:]

Great. And then one other thing, I think Brian touched on this, I'll try to ask it a little different of just the seasonality in the different quarters. And you mentioned, 1Q is your seasonally slowest, but I took a look over the last 5 years. And if you looked at 4Qs revenues compared to 1Q revenues, there's really no consistent pattern. It's up some years, some years, it's -- so it seems to me that like it's a pretty equal chance that that it could be up sequentially? Or -- so I'm just wondering why that's not the case based on your best judgment today?

[Michael Pope:]

Yes, so we think the …

[Patrick Foley:]

Michael …

[Michael Pope:]

Yes, let me say a couple of thoughts. Let me say a couple of thoughts and you can step in. So if you look at Boxlight historical, we are much more business. And as a smaller business, one large order, right could swing a quarter pretty substantially. And so if you're looking at again quarters from '18, '19, and then first part of '20, we did have some large orders and you would see swings in those quarters. Now that we’re a much larger business and the concentration of one order or one partner is much smaller, you're going to see more normalized approach to evaluate in quarters. And you're not going to see that same variability. But you're right, I mean the potential there could be a large number of orders, or in our case now it'd be have to be several significant contracts that would be able to swing a quarter abnormally. But I think we feel pretty good about that 20% guidance for Q1. We got to be around that number, if you're looking out into the future for Q1.

[Allen Klee:]

Okay, thank you so much.

[Patrick Foley:]

So very briefly to add, just in terms of seasonality as a global business, don't forget the northern, southern hemisphere summer periods of difference, and summer holiday schedules for schools. So buying patterns by behavior changed just on that regard. But also within Europe, there are different buying patterns and ordering patterns in terms of placing their orders on us, so that actually comes into play to help smooth that, but actually it does create a different trend to what you would have seen historically on the Boxlight figures quarterly.

[Allen Klee:]

That -- that's very helpful. Thank you.

[Michael Pope:]

Thanks, Allen. Appreciate it.

[Operator:]

And it appears we have no further questions at this time. I will now turn the program back over to Michael Pope.

[Michael Pope:]

Thank you everyone for your support and joining us today on our fourth quarter and full year 2020 conference call. We look forward to speaking to you again in May when we report our first quarter 2021 results.

[Operator:]

This does conclude today's program. Thank you for your participation. You may disconnect at any time.