Press Release Details

MIND TECHNOLOGY, INC. REPORTS FISCAL 2025 THIRD QUARTER RESULTS

Dec 10, 2024 at 4:15 PM EST

THE WOODLANDS, Texas, Dec. 10, 2024 /PRNewswire/ -- MIND Technology, Inc. (NASDAQ: MIND) ("MIND" or the "Company") today announced financial results for its fiscal 2025 third quarter ended October 31, 2024.

Revenues from continuing operations for the third quarter of fiscal 2025 were approximately $12.1 million compared to approximately $5.0 million in the third quarter of fiscal 2024. The Company reported operating income from continuing operations of approximately $1.9 million for the third quarter of fiscal 2025 compared to an operating loss of $1.5 million for the third quarter of fiscal 2024. Net income for the third quarter of fiscal 2025 amounted to $1.3 million compared to $568,000 in the third quarter of fiscal 2024. Third quarter of fiscal 2025 net income attributable to common shareholders (after the effect of the conversion of preferred stock into common stock) was $15.7 million, or $2.87 per share compared to a loss of $379,000, or a loss of $0.27 per share in the third quarter last year. Adjusted EBITDA from continuing operations for the third quarter of fiscal 2025 was approximately $2.0 million compared to a loss of $1.1 million in the third quarter of fiscal 2024.

Adjusted EBITDA from continuing operations, which is a non-GAAP measure, is defined and reconciled to reported net income (loss) and cash provided by (used in) operating activities in the accompanying financial tables. These are the most directly comparable financial measures calculated and presented in accordance with United States generally accepted accounting principles, or GAAP.

The backlog of Marine Technology Products related to our Seamap segment as of October 31, 2024 was approximately $26.2 million which was flat sequentially compared to backlog as of July 31, 2024.

Rob Capps, MIND's President and Chief Executive Officer, stated, "We are very pleased to report that third quarter revenue grew 21% sequentially and 143% over last year's third quarter. We continue to capitalize on macro tailwinds and customer engagement to stimulate order flow and generate improved results. We are also continually working to improve our execution, efficiency and cost structure, which we expect to contribute to sustained profitability in future quarters. As in the second quarter, we generated positive cash flow from operations in this quarter, increasing our cash balance to $3.5 million as of October 31, 2024.

"We have begun our fiscal fourth quarter with a strong backlog of approximately $26.2 million, essentially flat compared to our second quarter. Looking closer, however, we made substantial order deliveries during the third quarter that contributed to our 21% sequential revenue growth, and we were able to balance this growth with new orders. We expect this trend to continue in future periods and have an active pipeline of pending orders and other prospects that total more than twice our backlog of orders received. The combination of our improved capital structure, encouraging business environment, robust backlog and exceptional pipeline of opportunities gives us confidence for improved financial results in the coming quarters and fiscal year," concluded Capps.

CONFERENCE CALL

Management has scheduled a conference call for Wednesday, December 11, 2024 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) to discuss the Company's fiscal 2025 third quarter results. To access the call, please dial (412) 902-0030 and ask for the MIND Technology call at least 10 minutes prior to the start time.  Investors may also listen to the conference call live on the MIND Technology website, http://mind-technology.com, by logging onto the site and clicking "Investor Relations". A telephonic replay of the conference call will be available through December 18, 2024 and may be accessed by calling (201) 612-7415 and using passcode 13750138#.  A webcast archive will also be available at http://mind-technology.com shortly after the call and will be accessible for approximately 90 days.  For more information, please contact Dennard Lascar Investor Relations by email at MIND@dennardlascar.com.

ABOUT MIND TECHNOLOGY

MIND Technology, Inc. provides technology to the oceanographic, hydrographic, defense, seismic and security industries. Headquartered in The Woodlands, Texas, MIND has a global presence with key operating locations in the United States, Singapore, Malaysia, and the United Kingdom. Its Seamap unit designs, manufactures and sells specialized, high performance, marine exploration and survey equipment.

Forward-looking Statements 

Certain statements and information in this press release concerning results for the quarter ended October 31, 2024 may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "expect," "anticipate," "plan," "intend," "should," "would," "could" or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature.  These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us.  While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate.  All comments concerning our expectations for future revenues and operating results are based on our forecasts of our existing operations and do not include the potential impact of any future acquisitions or dispositions.  Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, without limitation, reductions in our customers' capital budgets, our own capital budget, limitations on the availability of capital or higher costs of capital and volatility in commodity prices for oil and natural gas.

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 SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

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, unless required by law, whether as a result of new information, future events or otherwise. All forward-looking statements included in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to herein. 

Non-GAAP Financial Measures

Certain statements and information in this press release contain non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles, or GAAP.  Company management believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. Company management also believes that these non-GAAP financial measures enhance the ability of investors to analyze the Company's business trends and to understand the Company's performance. In addition, the Company may utilize non-GAAP financial measures as guides in its forecasting, budgeting, and long-term planning processes and to measure operating performance for some management compensation purposes. Any analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.  Reconciliation of Backlog, which is a non-GAAP financial measure, is not included in this press release due to the inherent difficulty and impracticality of quantifying certain amounts that would be required to calculate the most directly comparable GAAP financial measures.

-Tables to Follow-

 

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

 
  

October 31,

2024

  

January 31,

2024

 

ASSETS

 

Current assets:

        

Cash and cash equivalents

 

$

3,505

  

$

5,289

 

Accounts receivable, net of allowance for credit losses of $332 at each of October 31,

     2024 and January 31, 2024

  

9,471

   

6,566

 

Inventories, net

  

17,249

   

13,371

 

Prepaid expenses and other current assets

  

1,039

   

3,113

 

Total current assets

  

31,264

   

28,339

 

Property and equipment, net

  

775

   

818

 

Operating lease right-of-use assets

  

1,526

   

1,324

 

Intangible assets, net

  

2,420

   

2,888

 

Deferred tax asset

  

122

   

122

 

Total assets

 

$

36,107

  

$

33,491

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

Current liabilities:

        

Accounts payable

 

$

2,179

  

$

1,623

 

Deferred revenue

  

248

   

203

 

Customer deposits

  

3,112

   

3,446

 

Accrued expenses and other current liabilities

  

1,742

   

2,140

 

Income taxes payable

  

2,093

   

2,114

 

Operating lease liabilities - current

  

660

   

751

 

Total current liabilities

  

10,034

   

10,277

 

Operating lease liabilities - non-current

  

866

   

573

 

Total liabilities

  

10,900

   

10,850

 

Stockholders' equity:

        

Preferred stock, $1.00 par value; 2,000 shares authorized; no shares issued and

     outstanding at October 31, 2024 and 1,683 shares issued and outstanding at

     January 31, 2024

  

—

   

37,779

 

Common stock, $0.01 par value; 40,000 shares authorized; 7,969 shares issued and

     outstanding at October 31, 2024 and 1,406 shares issued and outstanding at January

     31, 2024

  

80

   

14

 

Additional paid-in capital

  

135,572

   

113,121

 

Accumulated deficit

  

(110,479)

   

(128,307)

 

Accumulated other comprehensive gain

  

34

   

34

 

Total stockholders' equity

  

25,207

   

22,641

 

Total liabilities and stockholders' equity

 

$

36,107

  

$

33,491

 

 

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 
  

For the Three Months

Ended October 31,

  

For the Nine Months

Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 

Revenues:

                

Sales of marine technology products

 

$

12,105

  

$

4,974

   

31,819

   

23,132

 

Cost of sales:

                

Sales of marine technology products

  

6,684

   

2,721

   

17,402

   

13,402

 

Gross profit

  

5,421

   

2,253

   

14,417

   

9,730

 

Operating expenses:

                

Selling, general and administrative

  

2,762

   

2,941

   

8,305

   

9,160

 

Research and development

  

562

   

508

   

1,352

   

1,479

 

Depreciation and amortization

  

221

   

257

   

724

   

892

 

Total operating expenses

  

3,545

   

3,706

   

10,381

   

11,531

 

Operating income (loss)

  

1,876

   

(1,453)

   

4,036

   

(1,801)

 

Other income (expense):

                

Interest expense

  

—

   

(169)

   

—

   

(536)

 

Other, net

  

(189)

   

25

   

320

   

336

 

Total other income (expense)

  

(189)

   

(144)

   

320

   

(200)

 

Income (loss) from continuing operations before income taxes

  

1,687

   

(1,597)

   

4,356

   

(2,001)

 

Provision for income taxes

  

(396)

   

(112)

   

(1,313)

   

(590)

 

Net income (loss) from continuing operations

  

1,291

   

(1,709)

   

3,043

   

(2,591)

 

Income from discontinued operations, net of income taxes

  

—

   

2,277

   

—

   

1,424

 

Net income (loss)

 

$

1,291

  

$

568

  

$

3,043

  

$

(1,167)

 

Preferred stock dividends - declared

  

—

   

(947)

   

—

   

(947)

 

Preferred stock dividends - undeclared

  

(368)

   

—

   

(2,262)

   

(1,894)

 

Effect of preferred stock conversion

  

14,785

   

—

   

14,785

   

—

 

Net Income (loss) attributable to common stockholders

 

$

15,708

  

$

(379)

  

$

15,566

  

$

(4,008)

 

Net Income (loss) per common share - Basic and Diluted

                

Continuing operations

 

$

2.87

  

$

(1.89)

  

$

5.62

  

$

(3.86)

 

Discontinued operations

 

$

—

  

$

1.62

  

$

—

  

$

1.01

 

Net income (loss)

 

$

2.87

  

$

(0.27)

  

$

5.62

  

$

(2.85)

 

Shares used in computing net income (loss) per common share:

                

Basic and diluted

  

5,473

   

1,406

   

2,772

   

1,406

 

 

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 
  

For the Nine Months Ended

October 31,

 
  

2024

  

2023

 

Cash flows from operating activities:

        

Net income (loss)

 

$

3,043

  

$

(1,167)

 

Adjustments to reconcile net income (loss) to net cash used in operating activities:

        

Depreciation and amortization

  

724

   

1,230

 

Stock-based compensation

  

141

   

264

 

               Gain on sale of Klein

  

—

   

(2,393)

 

Provision for inventory obsolescence

  

67

   

23

 

Gross profit from sale of other equipment

  

(457)

   

(385)

 

Changes in:

        

Accounts receivable

  

(3,006)

   

(688)

 

Unbilled revenue

  

164

   

51

 

Inventories

  

(3,944)

   

(3,174)

 

Prepaid expenses and other current and long-term assets

  

2,076

   

566

 

Income taxes receivable and payable

  

(24)

   

(21)

 

Accounts payable, accrued expenses and other current liabilities

  

98

   

(1,045)

 

Deferred revenue and customer deposits

  

(289)

   

1,115

 

Net cash used in operating activities

  

(1,407)

   

(5,624)

 

Cash flows from investing activities:

        

Purchases of property and equipment

  

(213)

   

(199)

 

       Proceeds from the sale of Klein, net

  

—

   

10,832

 

Sale of other equipment

  

457

   

385

 

Net cash provided by investing activities

  

244

   

11,018

 

Cash flows from financing activities:

        

       Preferred stock conversion transaction costs

  

(619)

   

—

 

       Net proceeds from short-term loan

  

—

   

2,947

 

Payment on short-term loan

  

—

   

(3,750)

 

       Refund of prepaid interest on short-term loan

  

—

   

214

 

Net cash used in financing activities

  

(619)

   

(589)

 

Effect of changes in foreign exchange rates on cash and cash equivalents

  

(2)

   

(14)

 

Net change in cash and cash equivalents

  

(1,784)

   

4,791

 

Cash and cash equivalents, beginning of period

  

5,289

   

778

 

Cash and cash equivalents, end of period

 

$

3,505

  

$

5,569

 

 

MIND TECHNOLOGY, INC.

Reconciliation of Net Income (Loss) and Net Cash Used in Operating Activities to EBITDA and

Adjusted EBITDA from Continuing Operations

(in thousands)

(unaudited)

 
  

For the Three Months

Ended October 31,

  

For the Nine Months

Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 

Reconciliation of Net income (loss) to EBITDA and Adjusted

EBITDA from continuing operations

 

(in thousands)

         

Net income (loss)

 

$

1,291

  

$

568

  

$

3,043

  

$

(1,167)

 

Interest expense, net

  

—

   

169

   

—

   

536

 

Depreciation and amortization

  

221

   

290

   

724

   

1,230

 

Provision for income taxes

  

396

   

112

   

1,313

   

590

 

EBITDA (1)

  

1,908

   

1,139

   

5,080

   

1,189

 

Stock-based compensation

  

47

   

106

   

141

   

264

 

Income from discontinued operations net of depreciation and amortization

  

—

   

(2,308)

   

—

   

(1,762)

 

Adjusted EBITDA from continuing operations (1)

 

$

1,955

  

$

(1,063)

  

$

5,221

  

$

(309)

 

Reconciliation of Net Cash Provided by (Used in) Operating

Activities to EBITDA

                

Net cash provided by (used in) operating activities

 

$

2,288

  

$

(2,147)

  

$

(1,407)

  

$

(5,624)

 

Gain on Sale of Klein

  

—

   

2,393

   

—

   

2,393

 

Stock-based compensation

  

(47)

   

(106)

   

(141)

   

(264)

 

Provision for inventory obsolescence

  

(22)

   

(23)

   

(67)

   

(23)

 

Changes in accounts receivable (current and long-term)

  

(115)

   

(2,570)

   

2,842

   

637

 

Interest paid, net

  

—

   

169

   

—

   

576

 

Taxes paid, net of refunds

  

473

   

192

   

1,411

   

617

 

Gross profit from sale of other equipment

  

—

   

49

   

457

   

385

 

Changes in inventory

  

(1,798)

   

2,841

   

3,944

   

3,174

 

Changes in accounts payable, accrued expenses and other current

liabilities and deferred revenue

  

2,161

   

(427)

   

191

   

(70)

 

Changes in prepaid expenses and other current and long-term assets

  

(1,034)

   

763

   

(2,076)

   

(566)

 

Other

  

2

   

5

   

(74)

   

(46)

 

EBITDA (1)

 

$

1,908

  

$

1,139

  

$

5,080

  

$

1,189

 
   
 

1.

EBITDA and Adjusted EBITDA are non-GAAP financial measures. 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, stock-based compensation, impairment of intangible assets 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. 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.

 

Contacts:

Rob Capps, President & CEO

 

MIND Technology, Inc.

 

281-353-4475

  
 

Ken Dennard / Zach Vaughan

 

Dennard Lascar Investor Relations

 

713-529-6600

 

MIND@dennardlascar.com

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