Creative Realities Inc. Q2 2019 Results

Adrian J Cotterill, Editor-in-Chief

We listened to the call first, then ploughed through the Creative Realities Inc. (NASDAQ:CREX) Q2 2019 Results Earnings Call Transcript.

On the call were Benchmark Company’s William Sutherland, Creative Realities Inc‘s Rick Mills, CEO and Will Logan, CFO.

Highlights were: –

Last quarter they announced “Q1 is our best quarter ever” and in this call they said “and now we get to use similar language again”. Q2 results showed the ongoing improvement across the entire organization. We quote “Thanks to the strategic reorganization of our sales and marketing team along with the talent we onboarded through the Allure acquisition. We are participating in some of the largest highest quality customer opportunities in the market. Our operational improvements and financial discipline had enabled us to be very competitive while maintaining our gross margins. We are now achieving the scale necessary to compete well for national accounts in the verticals that we know well, in particular, at QSR, branded retail, and large venue, including sports venues, etcetera at this moment”.

The integration of Allure is now complete (they acquired Allure Global in November of 2018)

They are currently in talks with multiple potential acquisition candidates

Revenues were USD 9.3 million for the three-month period ended June 30, 2019, an increase of 2.1 million or 30% compared to the same period in 2018.

Hardware revenue decreased approximately USD 1.2 million or 42% in the second quarter of 2019. This compared to the same period in the prior year, driven by a USD 1.7 million hardware-only project in the second quarter of 2018, which did not recur in 2019 partially offset by an increase in hardware sales to other customers.

Services and other revenue grew approximately USD 3.3 million or 77% in the second quarter of 2019 as compared to the same period in the prior year. Gross margin on services and other revenues increased to 51% in the second quarter of 2019 from 48% in the second quarter of 2018.

Gross Margin increased to 45% in second quarter of 2019 from 43% for the same period in 2018, driven primarily by the aforementioned mix of hardware and services and other revenue. The company achieved operating income of $0.5 million during the second quarter of 2019 as compared to operating breakeven in 2018.

Lastly, Steve Nesbit was announced as a new board member. Steve Nesbit has been in the digital signage, digital advertising, digital out of home and digital merchandising industry since the late 1990s and he has worked in an advisory capacity with companies both inside and outside the digital media market for the past nine years. He brings a wealth of knowledge. “We’re really truly excited that he has joined our board. We expect him to help us in M&A, potential customer introductions and when the time is right, international expansion. So Steve, welcome aboard”.

Leave a Reply