D-BOX Technologies Inc. (“D-BOX” or the “Corporation”) (TSX: DBO) a world leader in haptic and immersive experiences, today reported financial results for the first quarter ended June 30, 2024. All dollar amounts are expressed in Canadian currency.

Q1 Fiscal 2025 Highlights
(Compared to Q1 fiscal 2024)

“Our first quarter results reflect the continued softness in the theatrical market, as announced previously, and timing differences in the professional simulation and training market,” said Sébastien Mailhot, President and Chief Executive Officer of D-BOX. “While occupancy rates for D-BOX seats in cinemas remained well above that of standard seating, supported by the appetite for premium offerings, the movie slate during the quarter was not as strong as a year ago; but we see an improved slate trending to the second half of calendar 2024 and beyond. Meanwhile, our sim racing sales were up in the quarter as we continue to see great traction for the D-BOX-equipped product offerings of our existing customers in this market.”

“In the meantime, we have been solidifying our positioning for driving profitable growth in line with our strategic decision to focus on commercial markets. With the recent addition of Jean-François Gagnon to the executive team, we have a streamlined sales and marketing structure. In August, we executed a more favorable credit agreement that provides us more capacity and flexibility for growth, as well as completed an organizational restructuring that will allow us to reduce our cost structure moving forward and tighten our commercial execution.”

First Quarter Overview
Revenues in the first quarter decreased 16% to $8.8 million compared to the same period last year. System sales were down by 15% due to lower sales in the simulation and training and entertainment markets, with the exception of sim racing revenues, which were up $1.1 million in the quarter. Simulation and training system sales were 29% lower at $2.1 million, mainly due to timing differences in orders from automotive customers, which are anticipated to be completed later in the year. Entertainment system sales declined by 7% to $4.2 million, as only four net new theater installations occurred during the quarter, compared to 46 in the same period last year. As of June 30, 2024, the total number of active D-BOX screens reached 933.

Rights for use, rental and maintenance revenues decreased 19% to $2.4 million with the decrease primarily due to an exceptionally strong slate of D-BOX encoded titles in the first quarter of last year (including The Super Mario Bros. Movie, Fast X and Guardians of the Galaxy Vol. 3, among others) and no comparable blockbusters in the first quarter of this year.

Gross profit excluding amortization decreased to $4.8 million from $5.6 million a year ago. Gross margin excluding amortization increased to 55% from 54% due to the higher proportion (market mix) of simulation and training, and sim racing system sales versus theatrical revenues during the quarter. System sales to theatrical customers generally have a slightly lower margin due to rights for use, rental and maintenance revenues generated in the years following the system sale.

Operating expenses were up less than 3%, as a 10% increase in administration expenses and a 4% increase in selling and marketing expenses were partially offset by decreases in research and development expenditures and foreign exchange losses. The increase in administration expenses is due to a $0.1 million increase in expected credit loss charges related to accounts receivable, as well as IT infrastructure upgrade costs.

Adjusted EBITDA was $263 thousand, down from $1.3 million a year ago. The Corporation incurred a net loss of $316 thousand in the quarter compared to net income of $496 thousand a year earlier.

At quarter-end, D-BOX had a cash position and undrawn credit facilities totaling $6.7 million.

Additional Information Regarding the First Quarter Ended June 30, 2024
The financial information relating to the first quarter ended June 30, 2024, should be read in conjunction with the Corporation’s audited consolidated financial statements and the Management’s Discussion and Analysis dated August 13, 2024. These documents are available at www.sedarplus.ca.

For the full release, see here.

About D-BOX
D-BOX creates and redefines realistic, immersive entertainment experiences by moving the body and sparking the imagination through effects: motion, vibration and texture. D-BOX has collaborated with some of the best companies in the world to deliver new ways to enhance great stories. Whether it’s movies, video games, music, relaxation, virtual reality applications, metaverse experience, themed entertainment or professional simulation, D-BOX creates a feeling of presence that makes life resonate like never before. D-BOX Technologies Inc. (TSX: DBO) is headquartered in Montreal with offices in Los Angeles, USA and Beijing, China. Visit D-BOX.com.