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CHARLOTTE, N.C., May 24, 2023 (Global Newswire) — Strong Global Entertainment, Inc. (“Strong Global Entertainment” or the “Company”) (NYSE: SGE ) today announced preliminary results of operations for the first quarter ended March 31, 2023. The company completed its initial public offering (IPO) on May 15, 2023 and expects to file its Form 10-Q for the first quarter ended March 31, 2023 in June 2023.
Operating Highlights
- Revenue is expected to be $10.0 million in the first quarter of 2023, compared to $9.7 million in the first quarter of 2022. The year-over-year increase was due to an increase in service revenue of $0.7 million, partially offset by a decrease in product revenue of $0.5 million. Theater services and screen revenue increased 36% and 23%, respectively, related to the acceleration of laser projection upgrade projects. The decline in revenue from non-theatre customers was primarily due to the timing of several large immersive and military projects in the first quarter of 2022. The company expanded its services to better support its customers and increase market share in theater services, including movie theater screen installation work performed for some of its customers. Companies expect the upgrade from xenon to laser to accelerate throughout 2023 and continue for at least the next few years.
- Gross profit is expected to be $2.3 million, or 23.3% of revenue, in the first quarter of 2023, compared to $2.2 million, or 22.7% of revenue, in the first quarter of 2022. The gross profit margin of product sales is expected to increase as the product structure improves, and the proportion of cinema screen sales revenue in the current period will increase. Gross margin in the services business in the first quarter of 2023 was impacted by the cost of additional travel, overtime and outside contractors to meet customer demand. The company expects gross margin to improve as it increases staffing levels to meet demand and reduces reliance on external service providers.
Mark Roberson, CEO of Strong Global Entertainment, commented: “Strong Global Entertainment is gaining momentum as the movie industry recovery accelerates and demand for movie services continues to grow. From a seasonal perspective, the first quarter typically is our lightest screen sales and installations, and we expect revenue generated by these parts of our business to increase as we move into 2023. In addition, the film industry posted its highest box office performance in the first quarter since 2019, plus With Apple and Amazon now bringing their original content to theaters, rather than directly to streaming platforms, we believe our business is poised to build considerable momentum. We also continue to add new managed service contracts and are seeing positive impact on our laser projection Increased demand for upgraded capacity reinforces the already strong outlook for the 2023 balance.”
The company will be presenting at LD Micro Invitational XIII on Wednesday, June 7th.
Preliminary financial results in this news release are estimates. They are unaudited and may change after the company’s financial statement closing process is complete. These estimates should not be considered as a substitute for our full interim or annual financial statements prepared in accordance with U.S. GAAP. Therefore, you should not place undue reliance on this preliminary data. Preliminary financial data have been prepared by and are the responsibility of our management. Our independent firm of certified public accountants has not audited, reviewed, prepared or performed any procedure on the accompanying preliminary financial data. Accordingly, our independent registered public accounting firm does not express an opinion or any other form of assurance thereon.
About Strong Global Entertainment, Inc.
Strong Global Entertainment, Inc. is a leader in the entertainment industry, providing mission-critical products and services to theater exhibitors and entertainment venues for more than 80 years. The company manufactures and distributes high-quality large-format projection screens and provides comprehensive management services, technical support and related products and services primarily to theater exhibitors, theme parks, educational institutions and similar venues. In addition to traditional projection screens, the company also manufactures and sells Eclipse curved screens designed for theme parks, immersive exhibits and simulation applications. It also provides maintenance, repair, installation, network support services and other services primarily to theater operators in the United States. The company also owns Strong Studios, Inc., which develops and produces original feature films and television series.
About FG Group Holdings
FG Group Holdings Inc. (NYSE: FGH ) is a diversified holding company with operations and investments across multiple industries. The company owns a majority interest in Strong Global Entertainment (NYSE: SGE ), which includes STRONG/MDI Screen Systems (www.strongmdi.com), the world’s leading supplier of high-quality screen and projection coatings and strong technical services (www.strong-tech.com), which offers a comprehensive managed service offering with nationwide 24/7/365 support to ensure solution uptime and availability. FG Group Holdings also holds equity interests in GreenFirst Forest Products Inc., Firefly Systems, Inc. and FG Financial Group, Inc., and real estate through its Digital Ignition operations.
About Fundamental Global®
base global® It is a private partnership focusing on long-term strategic holdings.base global® Co-founded by former T. Rowe Price, Point72 and Tiger Cub portfolio manager Kyle Cerminara and former TD Ameritrade Chairman and CEO Joe Moglia.Its current holdings include FG Financial Group Inc., FG Group Holdings Inc., BK Technologies Corp., GreenFirst Forest Products, Inc., FG Merger Corp., FG Acquisition Corp., OppFi Inc., Hagerty Inc. and FG Communities, companies
FG® Logo is a registered trademark of Fundamental Global®.
forward-looking statement
This press release contains “forward-looking statements” that are subject to significant risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release can be identified by the use of words such as “expects,” “believes,” “considers,” “may,” “estimates,” “anticipates,” “intends,” “seeks,” and similar expressions,” “may,” “might,” “plan,” “potential,” “forecast,” “project,” “goal,” “goal,” “should,” “will,” “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. In addition, certain forward-looking statements are based on assumptions about future events, which may not prove to be accurate. These and other risks and uncertainties are set forth in the section entitled “Risk Factors” in the definitive prospectus filed with the Securities and Exchange Commission in connection with the public offering Fuller Description. Forward-Looking – The statements contained in this announcement are made as of the date hereof and the Company undertakes no obligation to update such information, except as required by applicable law.
Investor Relations continuedBehavior:
mark robertson
Strong Global Entertainment, Inc. – Chief Executive Officer
(704) 471-6784
IR@strong-entertainment.com
Johannes Bate/Jennifer Bellodo
IMS Investor Relations
(203) 972-9200
sge@imsinvestorrelations.com
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