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)
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SOURCE Mitcham Industries, Inc.
