Press Release Details
Mitcham Industries Reports Fiscal 2019 Third Quarter Results
Total revenues for the third quarter of fiscal 2019 increased 71% to
During the third quarter, the Company sold its Russian land leasing operations, through the sale of its wholly-owned Russian subsidiary. Since the Company no longer has exposure to Russian Ruble to US Dollar translation risk,
Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation, non-cash costs of lease pool equipment sales and non-cash foreign exchange gains and losses) for the third quarter of fiscal 2019 was approximately
"As previously anticipated, our Marine Technology Products segment experienced an increase in activity during the third quarter, resulting in a significant improvement in top-line growth. Our Seamap business delivered a digital source controller system during the quarter; and there has been a healthy increase in demand for spare parts and repairs. The large installed base of Seamap products is providing substantial upside in terms of increased repairs and maintenance, and we expect that business to continue to grow in the fourth quarter and into fiscal 2020. We anticipate the delivery of our first
"For our Klein business, we saw a significant improvement from recent periods. This was driven in part by the delivery of a previously announced order for our flagship 5900 sonar system for the Royal Netherlands Navy. We are experiencing a pick-up in activity at Klein, and we are receiving an increasing level of inquiries from our continued engagement with various navies in addition to hydrographic and oceanographic companies.
"On the
"On the financial front, our capital structure remains strong, with no debt on our balance sheet and ample liquidity, including cash and cash equivalents of
FISCAL 2019 THIRD QUARTER RESULTS
Total revenues for the third quarter of fiscal 2019 increased compared to last year's third quarter to
Equipment leasing revenues for the third quarter of fiscal 2019, excluding lease pool equipment sales, were
Lease pool depreciation expense in the third quarter of fiscal 2019 decreased to
Selling, general and administrative expenses decreased slightly to
CONFERENCE CALL
We have scheduled a conference call for
About
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. |
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936-291-2277 |
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Jack Lascar / Mark Roberson |
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Dennard Lascar Investor Relations |
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713-529-6600 |
Tables to Follow
MITCHAM INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (unaudited) |
|||||
October 31, 2018 |
January 31, 2018 |
||||
ASSETS |
|||||
Current assets: |
|||||
Cash and cash equivalents |
$ |
5,406 |
$ |
9,902 |
|
Restricted cash |
213 |
244 |
|||
Accounts and contracts receivable, net of allowance for doubtful accounts of $3,108 and $3,885 at October 31, 2018 and January 31, 2018, respectively |
17,440 |
10,494 |
|||
Inventories, net |
11,679 |
10,856 |
|||
Prepaid expenses and other current assets |
1,603 |
1,550 |
|||
Total current assets |
36,341 |
33,046 |
|||
Seismic equipment lease pool and property and equipment, net |
16,655 |
22,900 |
|||
Intangible assets, net |
10,911 |
8,015 |
|||
Goodwill |
2,531 |
2,531 |
|||
Non-current prepaid income taxes |
1,434 |
1,609 |
|||
Deferred tax asset |
58 |
— |
|||
Long-term receivables, net of allowance for doubtful accounts of $532 and $2,282 at October 31, 2018 and January 31, 2018, respectively |
— |
4,652 |
|||
Other assets |
609 |
926 |
|||
Total assets |
$ |
68,539 |
$ |
73,679 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Current liabilities: |
|||||
Accounts payable |
$ |
2,096 |
$ |
1,271 |
|
Deferred revenue |
156 |
741 |
|||
Accrued expenses and other current liabilities |
5,477 |
5,253 |
|||
Income taxes payable |
556 |
258 |
|||
Total current liabilities |
8,285 |
7,523 |
|||
Deferred tax liability |
— |
307 |
|||
Total liabilities |
8,285 |
7,830 |
|||
Shareholders' equity: |
|||||
Preferred stock, $1.00 par value; 1,000 shares authorized; 798 and 532 shares issued and outstanding at October 31, 2018 and January 31, 2018, respectively |
17,612 |
11,544 |
|||
Common stock, $0.01 par value; 20,000 shares authorized; 14,049 and 14,019 shares issued at October 31, 2018 and January 31, 2018, respectively |
140 |
140 |
|||
Additional paid-in capital |
122,879 |
122,304 |
|||
Treasury stock, at cost (1,929 shares at October 31, 2018 and January 31, 2018) |
(16,860) |
(16,860) |
|||
Accumulated deficit |
(59,355) |
(42,425) |
|||
Accumulated other comprehensive loss |
(4,162) |
(8,854) |
|||
Total shareholders' equity |
60,254 |
65,849 |
|||
Total liabilities and shareholders' equity |
$ |
68,539 |
$ |
73,679 |
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 |
|||||||||||
2018 |
2017 |
2018 |
2017 |
|||||||||
Revenues: |
||||||||||||
Sale of marine technology products |
$ |
9,277 |
$ |
5,955 |
$ |
18,720 |
$ |
22,429 |
||||
Equipment leasing |
3,166 |
2,071 |
7,493 |
5,765 |
||||||||
Sale of lease pool and other equipment |
2,208 |
618 |
4,401 |
9,719 |
||||||||
Total revenues |
14,651 |
8,644 |
30,614 |
37,913 |
||||||||
Cost of sales: |
||||||||||||
Sale of marine technology products |
4,904 |
3,132 |
10,206 |
12,975 |
||||||||
Equipment leasing (including lease pool depreciation) |
3,296 |
4,400 |
10,120 |
13,815 |
||||||||
Lease pool equipment sales |
1,227 |
211 |
1,959 |
6,410 |
||||||||
Total cost of sales |
9,427 |
7,743 |
22,285 |
33,200 |
||||||||
Gross profit |
5,224 |
901 |
8,329 |
4,713 |
||||||||
Operating expenses: |
||||||||||||
Selling, general and administrative |
4,819 |
4,879 |
15,953 |
14,508 |
||||||||
Research and development |
175 |
299 |
857 |
637 |
||||||||
Provision for doubtful accounts |
— |
— |
200 |
— |
||||||||
Depreciation and amortization |
579 |
516 |
1,816 |
1,622 |
||||||||
Total operating expenses |
5,573 |
5,694 |
18,826 |
16,767 |
||||||||
Operating loss |
(349) |
(4,793) |
(10,497) |
(12,054) |
||||||||
Other income (expense): |
||||||||||||
Loss on sale (including $5,355 of cumulative translation loss) |
(4,905) |
— |
(4,905) |
— |
||||||||
Interest income, net |
12 |
52 |
47 |
23 |
||||||||
Other, net |
(198) |
46 |
(57) |
(107) |
||||||||
Total other (expense) income |
(5,091) |
98 |
(4,915) |
(84) |
||||||||
Loss before income taxes |
(5,440) |
(4,695) |
(15,412) |
(12,138) |
||||||||
Benefit (provision) for income taxes |
249 |
(586) |
(273) |
(1,172) |
||||||||
Net loss |
$ |
(5,191) |
$ |
(5,281) |
$ |
(15,685) |
$ |
(13,310) |
||||
Preferred stock dividends |
(449) |
(229) |
(1,245) |
(630) |
||||||||
Net loss attributable to common shareholders |
$ |
(5,640) |
$ |
(5,510) |
$ |
(16,930) |
$ |
(13,940) |
||||
Net loss per common share: |
||||||||||||
Basic |
$ |
(0.47) |
$ |
(0.46) |
$ |
(1.40) |
$ |
(1.15) |
||||
Diluted |
$ |
(0.47) |
$ |
(0.46) |
$ |
(1.40) |
$ |
(1.15) |
||||
Shares used in computing loss per common share: |
||||||||||||
Basic |
12,119 |
12,087 |
12,100 |
12,082 |
||||||||
Diluted |
12,119 |
12,087 |
12,100 |
12,082 |
MITCHAM INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) |
||||||
For the Nine Months Ended October 31, |
||||||
2018 |
2017 |
|||||
Cash flows from operating activities: |
||||||
Net loss |
$ |
(15,685) |
$ |
(13,310) |
||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||
Depreciation and amortization |
9,184 |
13,219 |
||||
Stock-based compensation |
575 |
685 |
||||
Provision for inventory obsolescence |
140 |
58 |
||||
Provision for doubtful accounts, net of charge offs |
200 |
— |
||||
Gross profit from sale of lease pool equipment |
(1,848) |
(3,080) |
||||
Loss on sale of business |
4,905 |
— |
||||
Deferred tax expense |
(365) |
(31) |
||||
Non-current prepaid tax |
472 |
— |
||||
Changes in: |
||||||
Trade accounts and contracts receivable |
(878) |
5,129 |
||||
Unbilled revenue |
(2,435) |
— |
||||
Inventories |
(1,304) |
79 |
||||
Prepaid expenses and other current assets |
(1,158) |
207 |
||||
Income taxes receivable and payable |
— |
714 |
||||
Accounts payable, accrued expenses and other current liabilities |
(626) |
(1,244) |
||||
Deferred revenue |
527 |
— |
||||
Foreign exchange losses net of gains |
336 |
(252) |
||||
Net cash (used in) provided by operating activities |
(7,960) |
2,174 |
||||
Cash flows from investing activities: |
||||||
Purchases of seismic equipment held for lease |
(1,424) |
(321) |
||||
Acquisition of assets |
(3,000) |
— |
||||
Purchases of property and equipment |
(696) |
(276) |
||||
Sales of used lease pool equipment |
4,124 |
6,690 |
||||
Sale of business, net of cash sold |
(147) |
— |
||||
Net cash (used in) provided by investing activities |
(1,143) |
6,093 |
||||
Cash flows from financing activities: |
||||||
Net payments on revolving line of credit |
— |
(3,500) |
||||
Payments on term loan and other borrowings |
— |
(2,807) |
||||
Net proceeds from preferred stock offering |
6,135 |
1,847 |
||||
Preferred stock dividends |
(1,245) |
(630) |
||||
Net cash provided by (used in) financing activities |
4,890 |
(5,090) |
||||
Effect of changes in foreign exchange rates on cash, cash equivalents and restricted cash |
(314) |
82 |
||||
Net (decrease) increase in cash, cash equivalents and restricted cash |
(4,527) |
3,259 |
||||
Cash, cash equivalents and restricted cash, beginning of period |
10,146 |
3,511 |
||||
Cash, cash equivalents and restricted cash, end of period |
$ |
5,619 |
$ |
6,770 |
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 |
|||||||||||
2018 |
2017 |
2018 |
2017 |
|||||||||
(in thousands) |
(in thousands) |
|||||||||||
Reconciliation of Net loss to EBITDA and Adjusted EBITDA |
||||||||||||
Net loss |
$ |
(5,191) |
$ |
(5,281) |
$ |
(15,685) |
$ |
(13,310) |
||||
Interest income, net |
(12) |
(52) |
(47) |
(23) |
||||||||
Depreciation and amortization |
2,785 |
4,124 |
9,184 |
13,219 |
||||||||
(Benefit) provision for income taxes |
(249) |
586 |
273 |
1,172 |
||||||||
EBITDA (1) |
(2,667) |
(623) |
(6,275) |
1,058 |
||||||||
Non-cash foreign exchange (gains) losses |
5,605 |
(41) |
5,618 |
320 |
||||||||
Stock-based compensation |
207 |
224 |
575 |
685 |
||||||||
Cost of lease pool sales |
265 |
34 |
899 |
6,228 |
||||||||
Adjusted EBITDA (1) |
$ |
3,410 |
$ |
(406) |
$ |
817 |
$ |
8,291 |
||||
Reconciliation of Net cash provided by operating activities to EBITDA |
||||||||||||
Net cash (used in) provided by operating activities |
$ |
(2,161) |
$ |
(1,912) |
$ |
(7,960) |
$ |
2,174 |
||||
Stock-based compensation |
(207) |
(224) |
(575) |
(685) |
||||||||
Provision for doubtful accounts |
— |
— |
(200) |
— |
||||||||
Provision for inventory obsolescence |
(25) |
9 |
(140) |
(58) |
||||||||
Changes in trade accounts, contracts and notes receivable |
5,199 |
748 |
3,313 |
(5,129) |
||||||||
Interest (received) paid |
— |
(36) |
2 |
84 |
||||||||
Taxes paid, net of refunds |
146 |
277 |
414 |
436 |
||||||||
Gross profit from sale of lease pool equipment |
602 |
228 |
1,848 |
3,080 |
||||||||
Loss from sale of MSE |
(4,905) |
— |
(4,905) |
— |
||||||||
Changes in inventory |
(102) |
(186) |
1,304 |
(79) |
||||||||
Changes in accounts payable, accrued expenses and other current liabilities and deferred revenue |
(511) |
315 |
98 |
1,244 |
||||||||
Changes in prepaid expenses and other current assets |
(277) |
(6) |
1,158 |
(207) |
||||||||
Foreign exchange (losses) gains, net |
(272) |
181 |
(336) |
252 |
||||||||
Other |
(154) |
(17) |
(296) |
(54) |
||||||||
EBITDA (1) |
$ |
(2,667) |
$ |
(623) |
$ |
(6,275) |
$ |
1,058 |
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 and stock-based compensation. 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. 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, service debt 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 |
For the Nine Months Ended |
|||||||||||||||
2018 |
2017 |
2018 |
2017 |
|||||||||||||
Revenues: |
||||||||||||||||
Marine technology products |
$ |
9,305 |
$ |
5,992 |
$ |
19,025 |
$ |
22,565 |
||||||||
Equipment leasing |
5,386 |
2,730 |
11,906 |
15,546 |
||||||||||||
Inter-segment sales |
(40) |
(78) |
(317) |
(198) |
||||||||||||
Total revenues |
14,651 |
8,644 |
30,614 |
37,913 |
||||||||||||
Cost of sales: |
||||||||||||||||
Marine technology products |
4,918 |
3,174 |
10,497 |
13,116 |
||||||||||||
Equipment leasing |
4,535 |
4,647 |
12,091 |
20,282 |
||||||||||||
Inter-segment costs |
(26) |
(78) |
(303) |
(198) |
||||||||||||
Total cost of sales |
9,427 |
7,743 |
22,285 |
33,200 |
||||||||||||
Gross profit |
5,224 |
901 |
8,329 |
4,713 |
||||||||||||
Operating expenses: |
||||||||||||||||
Selling, general and administrative |
4,819 |
4,879 |
15,953 |
14,508 |
||||||||||||
Research and development |
175 |
299 |
857 |
637 |
||||||||||||
Provision for doubtful accounts |
— |
— |
200 |
— |
||||||||||||
Depreciation and amortization |
579 |
516 |
1,816 |
1,622 |
||||||||||||
Total operating expenses |
5,573 |
5,694 |
18,826 |
16,767 |
||||||||||||
Operating loss |
$ |
(349) |
$ |
(4,793) |
$ |
(10,497) |
$ |
(12,054) |
||||||||
Marine Technology Products Segment: |
||||||||||||||||
Revenues: |
||||||||||||||||
Seamap |
$ |
5,537 |
$ |
3,676 |
$ |
11,103 |
$ |
16,053 |
||||||||
Klein |
3,092 |
1,517 |
6,195 |
3,456 |
||||||||||||
SAP |
1,085 |
1,087 |
2,362 |
3,998 |
||||||||||||
Intra-segment sales |
(409) |
(288) |
(635) |
(942) |
||||||||||||
9,305 |
5,992 |
19,025 |
22,565 |
|||||||||||||
Cost of sales: |
||||||||||||||||
Seamap |
2,869 |
1,671 |
5,498 |
8,438 |
||||||||||||
Klein |
1,553 |
894 |
3,679 |
2,571 |
||||||||||||
SAP |
905 |
896 |
1,969 |
3,158 |
||||||||||||
Intra-segment sales |
(409) |
(287) |
(649) |
(1,051) |
||||||||||||
4,918 |
3,174 |
10,497 |
13,116 |
|||||||||||||
Gross profit |
$ |
4,387 |
$ |
2,818 |
$ |
8,528 |
$ |
9,449 |
||||||||
Gross profit margin |
47 |
% |
47 |
% |
45 |
% |
42 |
% |
||||||||
Equipment Leasing Segment: |
||||||||||||||||
Revenue: |
||||||||||||||||
Equipment leasing |
$ |
3,178 |
$ |
2,071 |
$ |
7,505 |
$ |
5,765 |
||||||||
Lease pool equipment sales |
867 |
247 |
2,748 |
9,309 |
||||||||||||
Other equipment sales |
1,341 |
412 |
1,653 |
472 |
||||||||||||
5,386 |
2,730 |
11,906 |
15,546 |
|||||||||||||
Cost of sales: |
||||||||||||||||
Direct costs-equipment leasing |
1,132 |
858 |
2,857 |
2,363 |
||||||||||||
Lease pool depreciation |
2,176 |
3,578 |
7,275 |
11,509 |
||||||||||||
Cost of lease pool equipment sales |
265 |
34 |
899 |
6,228 |
||||||||||||
Cost of other equipment sales |
962 |
177 |
1,060 |
182 |
||||||||||||
4,535 |
4,647 |
12,091 |
20,282 |
|||||||||||||
Gross profit (loss) |
$ |
851 |
$ |
(1,917) |
$ |
(185) |
$ |
(4,736) |
||||||||
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