Mitcham Industries Reports Fiscal 2020 Third Quarter Results

THE WOODLANDS, Texas, Dec. 4, 2019 /PRNewswire/ -- Mitcham Industries, Inc. (NASDAQ: MIND) ("Mitcham" or "the Company") today announced financial results for its fiscal 2020 third quarter ended October 31, 2019.

Total revenues for the third quarter of fiscal 2020 was $10.7 million, compared to $8.9 million in the second quarter of fiscal 2020 and $14.7 million in the third quarter of fiscal 2019. The 20% sequential improvement was driven primarily by further growth within the Marine Technology Products segment. Year-over-year declines in revenue were primarily due to several sizeable system deliveries during the last year's third quarter, as well as incremental revenue contributions from our former Australian subsidiary, SAP, which has since been sold and is no longer a part of the Company's operations.

The Company reported a net loss of $2.0 million in the third quarter of fiscal 2020, compared to a net loss of $3.1 million in the second quarter of fiscal 2020, and a net loss of $5.2 million in the third quarter of fiscal 2019. Third quarter of fiscal 2020 net loss attributable to common shareholders was $2.6 million, or $(0.21) per share, compared to a loss of $3.6 million, or $(0.30) per share, in the second quarter of fiscal 2019, and a loss of $5.6 million, or $(0.47) per share, in the third quarter of fiscal 2019.

Adjusted EBITDA for the third quarter of fiscal 2020 was $198,000, compared to a loss of $1.0 million in the second quarter of fiscal 2020 and Adjusted EBITDA of $3.4 million in the third quarter of fiscal 2019. Adjusted EBITDA, which is a non-GAAP measure, is defined and reconciled to reported net loss and cash provided by operating activities in the accompanying financial tables.

Rob Capps, Mitcham's Co-Chief Executive Officer, stated, "Our fiscal 2020 third quarter results came in slightly better than expected. We continue our strategic shift as we expanded our position in marine markets with our new technology and products. Our Marine Technology Products segment has accounted for approximately 70% of our total revenues so far this year. We saw sequential improvement this quarter not just in revenues, but also in operating income and adjusted EBITDA.

"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 $12.5 million at the end of the third quarter. As indicated by order activity that we announced recently, we are still seeing healthy levels of customer interest and a number of inquiries for technologies such as BuoyLink, SeaLink and MA-X.

"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 Thursday, December 5(th )at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) to discuss fiscal 2020 third quarter results. To access the call, please dial (412) 902-0030 and ask for the Mitcham Industries call at least 10 minutes prior to the start time. Investors may also listen to the conference live on the Mitcham Industries corporate website, http://www.mitchamindustries.com, by logging onto the site and clicking "Investor Relations." A telephonic replay of the conference call will be available through December 12, 2019 and may be accessed by calling (201) 612-7415 and using passcode 13696799#. A webcast archive will also be available at http://www.mitchamindustries.com shortly after the call and will be accessible for approximately 90 days. For more information, please contact Dennard Lascar Investor Relations (713) 529?6600 or email mind@dennardlascar.com.

About Mitcham Industries

Mitcham Industries, Inc. provides technology to the oceanographic, hydrographic, defense, seismic and security industries. Headquartered in The Woodlands, Texas, Mitcham has a global presence with operating locations in the United States, Canada, Singapore, Malaysia, Hungary, Colombia and the United Kingdom. Mitcham's worldwide Marine Technology Products segment, which includes its Seamap and Klein Marine Systems units, designs, manufactures and sells specialized, high performance, marine sonar and seismic equipment. Through its Equipment Leasing segment, Mitcham believes it is the largest independent provider of exploration equipment to the seismic industry.

Forward-looking Statements

Certain statements and information in this press release concerning results for the quarter ended October 31, 2019 may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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. 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.

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, 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
                                                          
               October 31,                              O
                ctober 31,


                                                         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
                                                                                       
              October 31,


                                                                                      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
                                                     
                October 31,                              
                October 31,


                                                    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                                    For the Nine Months Ended

                                                            October 31,                                    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)


View original content:http://www.prnewswire.com/news-releases/mitcham-industries-reports-fiscal-2020-third-quarter-results-300969418.html

SOURCE Mitcham Industries, Inc.