Control4 Corporation (NASDAQ:CTRL) Q1 2018 Earnings Conference Call - Preliminary Transcript

May 03, 2018 • 05:00 pm ET

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Control4 Corporation (NASDAQ:CTRL) Q1 2018 Earnings Conference Call - Preliminary Transcript

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Q & A
Operator
Operator

(Operator Instructions) Our first question from Rich Valera with Needham and company.

Analyst
Rich Valera

Thank you. Good afternoon, gentlemen. Martin, I appreciate your comments about working on improving the productivity of your dealership and effectively getting more installs per month or quarter. But you can give us an update on where you stand in terms of the I guess the state of the dealer network in terms of productivity and number of dealers and efforts to both recruit and perhaps prune dealers that haven't been as productive as you'd like?

Executive
Martin Plaehn

Sure, good question. In general, we are quite pleased with the performance of our channel and the progress they are making. We added about 135 dealers in the quarter, trimmed a good number of non-productive dealers as we always do at this time of the year. We continue to invest in programs that are related to product training, installations best practices, as well as programs to help our dealers attract and secure new business via lead qualification, and helping a subset of our dealers with appointments. We expect to scale that service for engaged dealers that want that help. Over the coming quarters we've started that two years ago and at a small basis and it's now at a reasonable scale. And we expect to scale that more significantly over the course of 2018 and 2019. All of that investment is cooked into our forecasts and our guidance with regard to revenue and operating profit. We have probably more Greenfield outside the US with regard to channel expansion especially in countries in Germany, Australia, China; North America still has great potential. It's still the demand I think is stronger than the supply. And we need to continue to bolster efficiency and add more capacity.

Analyst
Rich Valera

Okay, appreciate that color. And then kind of a bigger picture question but you guys are well-known as a partner for Amazon with Alexa being able to be used as a front end to your system. Anything else you can say about potential for additional cooperation with that with Amazon or just how you think about them in the bigger scheme of things?

Executive
Martin Plaehn

We have a good and highly functional interaction with Amazon on multiple topics. The most visible is certainly the Alexa integration. We continue to enhance that. They're continuing to strengthen their functionality. We're deepening our integration alongside them. And we have other initiatives that we're working on that are yet to be announced by either party. So we feel good about our relationship. It's works on the engineering level and coexistence in the channel.

Analyst
Rich Valera

Great, that's helpful. And one final one if I could, certainly nice to see the stock repurchases during the quarter. Anything you'd be willing to say about the potential for more stock buybacks over the relatively near term?

Executive
Martin Plaehn

Well, we've communicated that we are a positive cash flow company. We generate a reasonable amount of cash in a stronger portion of the year Q2, Q3 and Q4. We've used that cash over