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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Executive
Martin Plaehn

diluted share. The Pakedge and Triad product lines are well integrated into our channel with growing adoption by our dealer network. Since introducing these products to our channel, approximately 60% and 40% of our active dealers have ordered Pakedge networking and Triad speaker products respectively.

Though our Board approved $20 million share repurchase plan, we utilized $7.4 million of cash to repurchase 300,000 shares of Control4 stock on the open market. And our balance sheet remains strong with $76.6 million in unrestricted cash and investments as of March 31, 2018. During the first quarter we generated positive cash flow from operations of $0.5 million and paid $3.6 million for taxes in lieu of issuing an additional 146,359 shares of stock related to the net settlement of restricted stock units that vested during the quarter.

Control4's mission is to be both the platform ecosystem and market leader for premium automation and network solutions for the connected home market. We estimate that Control4 has captured less than 2% of our North America target home market, which includes households with annual income over $150,000. And we viewed this as a tremendous opportunity as we increasingly offer a broader range of innovative products, which enhance our ability to enable more homes to become smart homes.

During the first quarter, we continued executing on our key operational, business and product development programs that advance our mission and business strategy. Here is a quick update of the key developments since we last spoke on an earnings call. First in February we announced our latest update of our operating system Control4 OS 210-1 and began shipping a new small system automation controller named the CA-1 for control and automation. This new controller is specifically designed for the new construction production housing market, multi-dwelling condominium and apartment construction, as well as hotel guest room installations. The CA-1 supplements our EA entertainment and automation series we launched in early 2016. The CA-1 has a US MSRP of $350 and runs the Control4 OS supporting the full device ecosystem of Control4.

With a streamlined feature set designed for the production housing opportunity and non entertainment centered automation installations. The CA-1 includes support for both Apple and Android mobile applications, as well as our Control4 Foresight subscription service for remote access, notification alerts, project backup and (inaudible) personalization functionality. The reception of the CA-1 in its first several months is solid amongst those Control4 dealers, who have existing relationships with production builders of housing communities, high-rise apartments and condominiums. Initial CA-1 sales to these dealers are ramping and are largely incremental business to our new and existing custom home business served by our EA series.

We expect continued broadening of the CA-1 adoption by Control4 dealers who have production relationships with builders and unit volume should begin ramping across the next several quarters at specification in new construction lead times are absorbed. Second, we continue to strengthen and expand our connected home platform and partnership ecosystem, including our simple device discovery