Name: TRANS LUX Corp Q4 2015 Earnings Call
Start: 2016-03-30T00:00:00.000Z

Executive Summary

Q4 2015 delivered mixed results: revenue declined year over year and sequentially, but the company posted positive EBITDA for both Q4 ($22k) and FY15 ($1.0M), reflecting improved gross margins and lower operating expenses .
Sequentially, results softened versus a strong Q3 (which was profitable with $173k net income and $897k EBITDA), driven primarily by lower revenue in Q4; however, operating discipline preserved positive quarterly EBITDA .
Management highlighted 2015 execution on margin improvement and cost control, completed a $3.3M rights offering in November to bolster liquidity, and outlined a 2016 focus on revenue growth via product expansion, brand promotion, and new channel partners .
No formal numerical guidance or sell-side estimate comparisons were provided/available for Q4 2015; S&P Global consensus was not available for TNLX, so vs-estimates analysis is not presented (consensus unavailable).

What Went Well and What Went Wrong

What Went Well
- Positive EBITDA in Q4 2015 ($22k) and for FY15 ($1.0M), driven by improved gross margins and lower SG&A; FY net loss improved to $1.7M from $4.6M in 2014 .
- Q3 2015 was a profitable quarter with net income of $173k, revenues up to $8.2M (from $6.1M YoY), and EBITDA of $897k, underpinned by strong digital display sales ($7.3M vs $4.9M YoY) .
- Management execution and funding: completed a $3.3M equity rights offering in November; quote: “The Company had a number of successes in 2015 including improving gross margins, lowering operating expenses and raising $3.3 million in equity capital…” .
What Went Wrong
- Q4 revenue declined to $5.0M from $5.9M YoY and fell sequentially from $8.2M in Q3; net loss widened sequentially to $(659)k from Q3 profitability .
- Full-year revenue decreased 3.3% to $23.6M (vs. $24.4M in 2014), reflecting a smaller top line despite margin gains .
- Lack of numerical guidance and no available sell-side consensus limits external benchmarking and may constrain near-term visibility for investors (consensus unavailable; no numerical guidance in press releases) .

YoY comparison (Q4 2015 vs Q4 2014)

Metric	Q4 2014	Q4 2015
Revenue ($USD Thousands)	5,871	5,007
Net Income (Loss) ($USD Thousands)	(1,555)	(659)
Diluted EPS ($USD)	(0.92)	(0.41)
EBITDA ($USD Thousands)	(844)	22
EBITDA Margin %	(14.4%)	0.4%

Sequential trajectory (Q2–Q4 2015)

Metric	Q2 2015	Q3 2015	Q4 2015
Revenue ($USD Thousands)	6,044	8,162	5,007
Net Income (Loss) ($USD Thousands)	(582)	173	(659)
Diluted EPS ($USD)	(0.35)	0.10	(0.41)
EBITDA ($USD Thousands)	122	897	22
EBITDA Margin %	2.0%	11.0%	0.4%

Segment breakdown (available disclosure)

Segment	Q3 2014	Q3 2015
Digital Display Sales Revenue ($USD Thousands)	4,900	7,300

KPIs (selected)

KPI	Q2 2015	Q3 2015	Q4 2015
EBITDA ($USD Thousands)	122	897	22
EBITDA Margin %	2.0%	11.0%	0.4%
Avg. Shares Out. (Basic & Diluted)	1,685	1,673	1,684

Note: No Wall Street consensus estimates available via S&P Global for Q4 2015; estimate comparison not presented.

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue/Profitability	FY2016	—	No formal numerical guidance provided; 2016 focus on “increasing revenues by expanding our product line, promoting our brand and establishing new channel partners.”	—
Capitalization/Liquidity	Nov 2015	—	Raised $3.3M equity via rights offering (liquidity enhancement)	—

Topic	Q2 2015 (Q-2)	Q3 2015 (Q-1)	Q4 2015 (Current)	Trend
Gross margin and OpEx discipline	“Improved margins and lower SG&A” drove better results	G&A lower; profitability achieved	“Improved gross margins and lower operating expenses” continued; positive EBITDA	Improving
Demand/backlog and execution	“Well positioned… with a strong backlog” entering Q3	OEM program strength; installs at major league and amateur facilities	Focus shifts to revenue growth in 2016 via product/channel initiatives	Early wins → build-out
Working capital/liquidity	—	Rights offering expected to close; access to working capital transforming business	Rights offering completed; raised $3.3M equity	Improving
LED lighting traction	—	“Key wins with global supply agreements” in LED lighting	2016 plan includes brand promotion and channel partners (supports lighting expansion)	Building
Revenue trajectory	$6.0M (Q2)	$8.2M (Q3)	$5.0M (Q4)	Mixed (volatility)

“The Company had a number of successes in 2015 including improving gross margins, lowering operating expenses and raising $3.3 million in equity capital with a rights offering in November.” — J.M. Allain, President & CEO .
“As we begin to move into 2016, our focus will now shift to increasing revenues by expanding our product line, promoting our brand and establishing new channel partners.” — J.M. Allain .
“Sales are up, gross profit is up, and general and administrative expenses are lower; overall we are very pleased with our performance.” — J.M. Allain on Q3 2015 .
“We are pleased with the improved operating results and the improvements in our various sales channels… we are now well positioned going into the third quarter with a strong backlog.” — J.M. Allain on Q2 2015 .

Not applicable; no earnings call transcript or Q&A was filed/available in the document set for Q4 2015.

Wall Street consensus estimates (S&P Global) were not available for TNLX for Q4 2015. As a result, no vs-consensus comparisons are presented for revenue or EPS.

Operating discipline is tangible: positive EBITDA in Q4 and the full year despite lower revenue demonstrates improved gross margins and cost control .
Sequential softness from a strong Q3 underscores revenue volatility; near-term narrative likely hinges on converting backlog and accelerating bookings in digital displays and LED lighting .
Liquidity improved via the $3.3M rights offering, which management views as pivotal to pursuing larger jobs and channel expansion in 2016 .
Q3’s profitable print (and strong display segment contribution) shows the earnings power when volume is healthy; re-attaining that revenue run-rate is the key catalyst to watch .
Lack of formal numerical guidance and absent consensus coverage limit external anchors; investors should focus on execution milestones (new channel partners, product expansion wins, OEM installs) and quarterly revenue cadence .
Monitor EBITDA margin sustainability: while margins improved versus 2014, the Q4 dip in revenue compressed EBITDA margin to ~0.4%; restoring volume is critical for operating leverage .
2016 setup: management’s stated priorities (product, brand, channels) align with returning to growth; proof points on order intake and conversion will likely drive sentiment.

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