Strong Global Entertainment Reports Preliminary First Quarter 2023 Operating Results

CHARLOTTE, NC, May 24, 2023 (GLOBE NEWSWIRE) -- Strong Global Entertainment, Inc. (“Strong Global Entertainment” or the “Company”) (NYSE American: SGE), today announced preliminary operating results for the first quarter ended March 31, 2023. The Company completed its initial public offering (IPO) on May 15, 2023 and expects to file a Form 10-Q for the first quarter ended March 31, 2023 in June 2023.

Operational Highlights

• Revenue is expected to be $10.0 million for the first quarter of 2023 compared to $9.7 million in the first quarter of 2022. The increase from the prior year was due to $0.7 million of higher service revenue, partially offset by a $0.5 million decrease in product revenue. Cinema service and screen revenue grew 36% and 23%, respectively, related to the acceleration of laser projection upgrade projects. Revenue from non-cinema customers declined primarily due to timing of several large immersive and military projects in the first quarter of 2022. The Company has increased the scope of its services to better support its customers and to increase market share in cinema services, including cinema screen installation work performed for certain of its customers. The Company expects the upgrades from xenon to laser to accelerate throughout 2023 and continue for at least the next several 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. Gross margins on product sales are expected to increase as the product mix improves with a greater proportion of the revenue derived from cinema screen sales in the current period. Gross margin in the services business during the first quarter of 2023 was impacted by additional travel, overtime, and outside contractor costs to meet customer demand. The Company expects gross margins to improve as it increases staffing levels to meet demand and reduce reliance on outside service providers.
  

Mark Roberson, Chief Executive Officer of Strong Global Entertainment, commented, “Strong Global Entertainment is seeing increasing momentum as the cinema industry recovery accelerates and the demand for cinema services continues to grow. From a seasonality perspective, the first quarter is typically our lightest with both screen sales and installations, and we expect the revenue generated from these parts of our business to increase as we move through 2023. Additionally, with the cinema industry recording its highest first quarter box office results since 2019, and with Apple and Amazon now directing their original content into theaters instead of straight to streaming platforms, we believe that our business is positioned to build considerable momentum. We also continue to add new managed service contracts and are seeing increased demand for our laser projection upgrade capabilities, enhancing an already robust outlook for the balance of 2023.”