Press Release Details
Mitcham Industries Reports Fiscal 2020 Third Quarter Results
Total revenues for the third quarter of fiscal 2020 was
The Company reported a net loss of
Adjusted EBITDA for the third quarter of fiscal 2020 was
"As mentioned previously, we are working on a number of fronts to expand our product and technology offerings. We continued to increase our research and development expenses in the quarter and are exploring a number of initiatives to partner with others in order to expand our technology offerings in response to customer requirements. Order activity for our Marine Technology products segment remains robust with a firm order backlog of
"Regarding our financial position, our capital structure remains strong, with no funded debt on our balance sheet and ample liquidity. We expect to produce positive Adjusted EBITDA and operating income in the fourth quarter of this fiscal year and believe we will maintain this momentum going into fiscal 2021," concluded Capps.
CONFERENCE CALL
Management has scheduled a conference call for
About
Forward-looking Statements
Certain statements and information in this press release concerning results for the quarter ended
For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
Contacts: |
Rob Capps, Co-CEO |
Mitcham Industries, Inc. |
|
936-291-2277 |
|
Ken Dennard / Zach Vaughan |
|
Dennard Lascar Investor Relations |
|
713-529-6600 |
Tables to Follow
MITCHAM INDUSTRIES, INC. |
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||
(in thousands, except per share data) |
|||||
(unaudited) |
|||||
October 31, 2019 |
January 31, 2019 |
||||
ASSETS |
|||||
Current assets: |
|||||
Cash and cash equivalents |
$ |
4,650 |
$ |
9,389 |
|
Restricted cash |
149 |
160 |
|||
Accounts receivable, net of allowance for doubtful accounts of $2,069 and $2,113 at October 31, 2019 and January 31, 2019, respectively |
12,947 |
12,082 |
|||
Inventories, net |
13,559 |
10,774 |
|||
Prepaid expenses and other current assets |
1,521 |
1,735 |
|||
Assets held for sale |
— |
2,202 |
|||
Total current assets |
32,826 |
36,342 |
|||
Seismic equipment lease pool and property and equipment, net |
14,021 |
14,155 |
|||
Operating lease right-of-use assets |
2,455 |
— |
|||
Intangible assets, net |
9,453 |
10,495 |
|||
Goodwill |
2,531 |
2,531 |
|||
Deferred tax asset |
68 |
68 |
|||
Long-term receivables, net of allowance for doubtful accounts of $- at October 31, 2019 and January 31, 2019 |
— |
712 |
|||
Other assets |
1,142 |
712 |
|||
Long-term assets held for sale |
— |
286 |
|||
Total assets |
$ |
62,496 |
$ |
65,301 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Current liabilities: |
|||||
Accounts payable |
$ |
3,483 |
$ |
1,534 |
|
Deferred revenue |
210 |
1,040 |
|||
Accrued expenses and other current liabilities |
5,174 |
3,738 |
|||
Income taxes payable |
65 |
224 |
|||
Operating lease liabilities - current |
367 |
— |
|||
Liabilities held for sale |
— |
892 |
|||
Total current liabilities |
9,299 |
7,428 |
|||
Operating lease liabilities - non-current |
2,088 |
— |
|||
Other non-current liabilities |
1,031 |
1,195 |
|||
Total liabilities |
12,418 |
8,623 |
|||
Shareholders' equity: |
|||||
Preferred stock, at cost, $1.00 par value; 1,000 shares authorized; 928 and 830 shares issued and outstanding at October 31, 2019 and January 31, 2019, respectively |
20,540 |
18,330 |
|||
Common stock, $0.01 par value; 20,000 shares authorized; 14,097 and 14,049 shares issued at October 31, 2019, and January 31, 2019, respectively |
141 |
140 |
|||
Additional paid-in capital |
123,721 |
123,085 |
|||
Treasury stock, at cost (1,929 shares at October 31, 2019 and January 31, 2019) |
(16,860) |
(16,860) |
|||
Accumulated deficit |
(73,044) |
(63,973) |
|||
Accumulated other comprehensive loss |
(4,420) |
(4,044) |
|||
Total shareholders' equity |
50,078 |
56,678 |
|||
Total liabilities and shareholders' equity |
$ |
62,496 |
$ |
65,301 |
MITCHAM INDUSTRIES, INC. |
|||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||
(in thousands, except per share data) |
|||||||||||
(unaudited) |
|||||||||||
For the Three Months Ended |
For the Nine Months Ended |
||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||
Revenues: |
|||||||||||
Sale of marine technology products |
$ |
8,062 |
$ |
9,277 |
$ |
20,762 |
$ |
18,720 |
|||
Equipment leasing |
2,305 |
3,166 |
7,002 |
7,493 |
|||||||
Sale of lease pool and other equipment |
296 |
2,208 |
1,654 |
4,401 |
|||||||
Total revenues |
10,663 |
14,651 |
29,418 |
30,614 |
|||||||
Cost of sales: |
|||||||||||
Sale of marine technology products |
4,728 |
4,904 |
12,070 |
10,206 |
|||||||
Equipment leasing (including lease pool depreciation) |
1,833 |
3,296 |
6,124 |
10,120 |
|||||||
Equipment sales |
51 |
1,227 |
550 |
1,959 |
|||||||
Total cost of sales |
6,612 |
9,427 |
18,744 |
22,285 |
|||||||
Gross profit |
4,051 |
5,224 |
10,674 |
8,329 |
|||||||
Operating expenses: |
|||||||||||
Selling, general and administrative |
4,705 |
4,819 |
14,732 |
15,953 |
|||||||
Research and development |
629 |
175 |
1,442 |
857 |
|||||||
Provision for doubtful accounts |
— |
— |
— |
200 |
|||||||
Depreciation and amortization |
646 |
579 |
1,947 |
1,816 |
|||||||
Total operating expenses |
5,980 |
5,573 |
18,121 |
18,826 |
|||||||
Operating loss |
(1,929) |
(349) |
(7,447) |
(10,497) |
|||||||
Other income (expense): |
|||||||||||
Loss on sale (including $5,355 of net cumulative translation loss) |
— |
(4,905) |
— |
(4,905) |
|||||||
Interest (expense) income, net |
(12) |
12 |
(34) |
47 |
|||||||
Other, net |
(27) |
(198) |
65 |
(57) |
|||||||
Total other (expense) income |
(39) |
(5,091) |
31 |
(4,915) |
|||||||
Loss before income taxes |
(1,968) |
(5,440) |
(7,416) |
(15,412) |
|||||||
(Provision) benefit for income taxes |
(60) |
249 |
(163) |
(273) |
|||||||
Net loss |
$ |
(2,028) |
$ |
(5,191) |
$ |
(7,579) |
$ |
(15,685) |
|||
Preferred stock dividends |
(522) |
(449) |
(1,492) |
(1,245) |
|||||||
Net loss attributable to common shareholders |
$ |
(2,550) |
$ |
(5,640) |
$ |
(9,071) |
$ |
(16,930) |
|||
Net loss per common share: |
|||||||||||
Basic |
$ |
(0.21) |
$ |
0.47 |
$ |
(0.75) |
$ |
(1.40) |
|||
Diluted |
$ |
(0.21) |
$ |
0.47 |
$ |
(0.75) |
$ |
(1.40) |
|||
Shares used in computing loss per common share: |
|||||||||||
Basic |
12,158 |
12,119 |
12,135 |
12,100 |
|||||||
Diluted |
12,158 |
12,119 |
12,135 |
12,100 |
MITCHAM INDUSTRIES, INC. |
|||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||
(in thousands) |
|||||
(unaudited) |
|||||
For the Nine Months Ended |
|||||
2019 |
2018 |
||||
Cash flows from operating activities: |
|||||
Net loss |
$ |
(7,579) |
$ |
(15,685) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|||||
Depreciation and amortization |
5,806 |
9,184 |
|||
Stock-based compensation |
611 |
575 |
|||
Provision for doubtful accounts, net of charge offs |
— |
200 |
|||
Provision for inventory obsolescence |
23 |
140 |
|||
Gross profit from sale of lease pool equipment |
(987) |
(1,848) |
|||
Loss on sale of business |
— |
4,905 |
|||
Deferred tax expense |
135 |
(365) |
|||
Non-current prepaid income taxes |
(157) |
472 |
|||
Changes in: |
|||||
Accounts receivable |
(1,020) |
(878) |
|||
Unbilled revenue |
(302) |
(2,435) |
|||
Inventories |
(2,835) |
(1,304) |
|||
Prepaid expenses and other current assets |
240 |
(1,158) |
|||
Accounts payable, accrued expenses and other current liabilities |
(392) |
(626) |
|||
Deferred revenue |
1,979 |
527 |
|||
Foreign exchange losses net of gains |
230 |
336 |
|||
Net cash used in operating activities |
(4,248) |
(7,960) |
|||
Cash flows from investing activities: |
|||||
Purchases of seismic equipment held for lease |
(1,939) |
(1,424) |
|||
Acquisition of assets |
— |
(3,000) |
|||
Purchases of property and equipment |
(893) |
(696) |
|||
Sale of used lease pool equipment |
1,415 |
4,124 |
|||
Sale of business, net of cash sold |
239 |
(147) |
|||
Net cash used in investing activities |
(1,178) |
(1,143) |
|||
Cash flows from financing activities: |
|||||
Proceeds from exercise of stock options |
25 |
— |
|||
Net proceeds from preferred stock offering |
2,211 |
6,135 |
|||
Preferred stock dividends |
(1,492) |
(1,245) |
|||
Net cash provided by financing activities |
744 |
4,890 |
|||
Effect of changes in foreign exchange rates on cash, cash equivalents and restricted cash |
(68) |
(314) |
|||
Net decrease in cash, cash equivalents and restricted cash |
(4,750) |
(4,527) |
|||
Cash, cash equivalents and restricted cash, beginning of period |
9,549 |
10,146 |
|||
Cash, cash equivalents and restricted cash, end of period |
$ |
4,799 |
$ |
5,619 |
MITCHAM INDUSTRIES, INC. |
|||||||||||
Reconciliation of Net Loss and Net Cash Provided by Operating Activities to EBITDA and |
|||||||||||
Adjusted EBITDA |
|||||||||||
(unaudited) |
|||||||||||
For the Three Months Ended |
For the Nine Months Ended |
||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||
(in thousands) |
(in thousands) |
||||||||||
Reconciliation of Net loss to EBITDA and Adjusted EBITDA |
|||||||||||
Net loss |
$ |
(2,028) |
$ |
(5,191) |
$ |
(7,579) |
$ |
(15,685) |
|||
Interest expense (income), net |
12 |
(12) |
34 |
(47) |
|||||||
Depreciation and amortization |
1,846 |
2,785 |
5,806 |
9,184 |
|||||||
Provision (benefit) for income taxes |
60 |
(249) |
163 |
273 |
|||||||
EBITDA (1) |
(110) |
(2,667) |
(1,576) |
(6,275) |
|||||||
Non-cash foreign exchange losses |
15 |
5,605 |
156 |
5,618 |
|||||||
Stock-based compensation |
270 |
207 |
611 |
575 |
|||||||
Cost of lease pool sales |
23 |
265 |
117 |
899 |
|||||||
Adjusted EBITDA (1) |
$ |
198 |
$ |
3,410 |
$ |
(692) |
$ |
817 |
|||
Reconciliation of Net cash provided by operating activities to EBITDA |
|||||||||||
Net cash used in operating activities |
$ |
(745) |
$ |
(2,161) |
$ |
(4,248) |
$ |
(7,960) |
|||
Stock-based compensation |
(270) |
(207) |
(611) |
(575) |
|||||||
Provision for doubtful accounts |
— |
— |
— |
(200) |
|||||||
Provision for inventory obsolescence |
(23) |
(25) |
(23) |
(140) |
|||||||
Changes in accounts receivable (current and long-term) |
1,425 |
5,199 |
1,322 |
3,313 |
|||||||
Interest paid |
13 |
— |
40 |
2 |
|||||||
Taxes paid, net of refunds |
143 |
146 |
325 |
414 |
|||||||
Gross profit from sale of lease pool equipment |
207 |
602 |
987 |
1,848 |
|||||||
Loss on sale of subsidiaries |
— |
(4,905) |
— |
(4,905) |
|||||||
Changes in inventory |
463 |
(102) |
2,835 |
1,304 |
|||||||
Changes in accounts payable, accrued expenses and other current liabilities and deferred revenue |
(1,005) |
(511) |
(1,587) |
98 |
|||||||
Changes in prepaid expenses and other current assets |
(251) |
(277) |
(240) |
1,158 |
|||||||
Foreign exchange losses, net |
(93) |
(272) |
(230) |
(336) |
|||||||
Other |
26 |
(154) |
(146) |
(296) |
|||||||
EBITDA (1) |
$ |
(110) |
$ |
(2,667) |
$ |
(1,576) |
$ |
(6,275) |
(1) |
EBITDA is defined as net income before (a) interest income and interest expense, (b) provision for (or benefit from) income taxes and (c) depreciation and amortization. Adjusted EBITDA excludes non-cash foreign exchange gains and losses, non-cash costs of lease pool equipment sales, stock-based compensation and other non-cash tax related items. We consider EBITDA and Adjusted EBITDA to be important indicators for the performance of our business, but not measures of performance or liquidity calculated in accordance with GAAP. These non-GAAP financial measures are not intended to replace the presentation of financial results in accordance with GAAP. Rather, we have included these non-GAAP financial measures because management utilizes this information for assessing our performance and liquidity, and as indicators of our ability to make capital expenditures and finance working capital requirements and. We believe that EBITDA and Adjusted EBITDA are measurements that are commonly used by analysts and some investors in evaluating the performance and liquidity of companies such as us. In particular, we believe that it is useful to our analysts and investors to understand this relationship because it excludes transactions not related to our core cash operating activities. We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations. EBITDA and Adjusted EBITDA are not measures of financial performance or liquidity under GAAP and should not be considered in isolation or as alternatives to cash flow from operating activities or as alternatives to net income as indicators of operating performance or any other measures of performance derived in accordance with GAAP. In evaluating our performance as measured by EBITDA, management recognizes and considers the limitations of this measurement. EBITDA and Adjusted EBITDA do not reflect our obligations for the payment of income taxes, interest expense or other obligations such as capital expenditures. Accordingly, EBITDA and Adjusted EBITDA are only two of the measurements that management utilizes. Other companies in our industry may calculate EBITDA or Adjusted EBITDA differently than we do and EBITDA and Adjusted EBITDA may not be comparable with similarly titled measures reported by other companies. |
Mitcham Industries, Inc. |
|||||||||||||||
Segment Operating Results |
|||||||||||||||
(in thousands) |
|||||||||||||||
(unaudited) |
|||||||||||||||
For the Three Months Ended October 31, |
For the Nine Months Ended October 31, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Revenues: |
|||||||||||||||
Marine technology products |
$ |
8,065 |
$ |
9,305 |
$ |
20,792 |
$ |
19,025 |
|||||||
Equipment leasing |
2,622 |
5,386 |
8,732 |
11,906 |
|||||||||||
Inter-segment sales |
(24) |
(40) |
(106) |
(317) |
|||||||||||
Total revenues |
10,663 |
14,651 |
29,418 |
30,614 |
|||||||||||
Cost of sales: |
|||||||||||||||
Marine technology products |
4,752 |
4,918 |
12,176 |
10,497 |
|||||||||||
Equipment leasing |
1,884 |
4,535 |
6,674 |
12,091 |
|||||||||||
Inter-segment costs |
(24) |
(26) |
(106) |
(303) |
|||||||||||
Total cost of sales |
6,612 |
9,427 |
18,744 |
22,285 |
|||||||||||
Gross profit |
4,051 |
5,224 |
10,674 |
8,329 |
|||||||||||
Operating expenses: |
|||||||||||||||
Selling, general and administrative |
4,705 |
4,819 |
14,732 |
15,953 |
|||||||||||
Research and development |
629 |
175 |
1,442 |
857 |
|||||||||||
Provision for doubtful accounts |
— |
— |
— |
200 |
|||||||||||
Depreciation and amortization |
646 |
579 |
1,947 |
1,816 |
|||||||||||
Total operating expenses |
5,980 |
5,573 |
18,121 |
18,826 |
|||||||||||
Operating loss |
$ |
(1,929) |
$ |
(349) |
$ |
(7,447) |
$ |
(10,497) |
|||||||
Marine Technology Products Segment: |
|||||||||||||||
Revenues: |
|||||||||||||||
Seamap |
$ |
5,684 |
$ |
5,537 |
$ |
14,912 |
$ |
11,103 |
|||||||
Klein |
2,381 |
3,092 |
5,783 |
6,195 |
|||||||||||
SAP |
— |
1,085 |
101 |
2,362 |
|||||||||||
Intra-segment sales |
— |
(409) |
(4) |
(635) |
|||||||||||
8,065 |
9,305 |
20,792 |
19,025 |
||||||||||||
Cost of sales: |
|||||||||||||||
Seamap |
3,177 |
2,869 |
7,807 |
5,498 |
|||||||||||
Klein |
1,575 |
1,553 |
4,278 |
3,679 |
|||||||||||
SAP |
— |
905 |
95 |
1,969 |
|||||||||||
Intra-segment sales |
— |
(409) |
(4) |
(649) |
|||||||||||
4,752 |
4,918 |
12,176 |
10,497 |
||||||||||||
Gross profit |
$ |
3,313 |
$ |
4,387 |
$ |
8,616 |
$ |
8,528 |
|||||||
Gross profit margin |
41 |
% |
47 |
% |
41 |
% |
45 |
% |
|||||||
Equipment Leasing Segment: |
|||||||||||||||
Revenue: |
|||||||||||||||
Equipment leasing |
$ |
2,326 |
$ |
3,178 |
$ |
7,077 |
$ |
7,505 |
|||||||
Lease pool equipment sales |
230 |
867 |
1,104 |
2,748 |
|||||||||||
Other equipment sales |
66 |
1,341 |
551 |
1,653 |
|||||||||||
2,622 |
5,386 |
8,732 |
11,906 |
||||||||||||
Cost of sales: |
|||||||||||||||
Direct costs-equipment leasing |
665 |
1,132 |
2,367 |
2,857 |
|||||||||||
Lease pool depreciation |
1,168 |
2,176 |
3,757 |
7,275 |
|||||||||||
Cost of lease pool equipment sales |
23 |
265 |
117 |
899 |
|||||||||||
Cost of other equipment sales |
28 |
962 |
433 |
1,060 |
|||||||||||
1,884 |
4,535 |
6,674 |
12,091 |
||||||||||||
Gross profit (loss) |
$ |
738 |
$ |
851 |
$ |
2,058 |
$ |
(185) |
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