Mitcham Industries Reports Fiscal 2021 First Quarter Results

THE WOODLANDS, Texas, June 10, 2020 /PRNewswire/ -- Mitcham Industries, Inc. (NASDAQ: MIND) ("Mitcham" or "the Company") today announced financial results for its fiscal 2021 first quarter ending April 30, 2020.

Total revenues for the first quarter of fiscal 2021 were $7.4 million compared to $13.3 million in the fourth quarter of fiscal 2020 and $9.9 million in the first quarter of fiscal 2020.  The year over year decline was attributable to a 46% decline in Marine Technology Products segment revenues, partially offset by a 6% increase in Equipment Leasing segment revenues. 

The Company reported a net loss of $6.6 million in the first quarter of fiscal 2021 compared to a net loss of $3.7 million in the fourth quarter of fiscal 2020 and a net loss of $2.4 million in the first quarter of fiscal 2020. The fiscal 2021 first quarter included a non-cash charge of approximately $2.5 million related to the impairment of goodwill. Net loss attributable to common shareholders was $7.2 million, or a $(0.59) loss per share in the first quarter of fiscal 2021. This compares to a fiscal 2020 fourth quarter loss of $4.3 million, or a $(0.35) loss per share, and a $2.9 million loss, or a $(0.24) loss per share, in the first quarter of fiscal 2020.   

Adjusted EBITDA for the first quarter of fiscal 2021 declined sequentially to a loss of $952,000 compared to a positive $124,000 in the fourth quarter of fiscal 2020 and $61,000 in the first quarter of fiscal 2020. However, net cash provided by operating activities was $929,000 in the first quarter of fiscal 2021 and cash balances increased to approximately $4.7 million as of April 30, 2020, as compared to approximately $3.2 million as of January 31, 2020. Adjusted EBITDA, which is a non-GAAP measure, is defined and reconciled to reported net loss and cash provided by operating activities, the most directly comparable financial measures calculated and  presented in accordance with United States generally accepted accounting principles, in the accompanying financial tables.

Rob Capps, Mitcham's Co-Chief Executive Officer, stated, "The unprecedented disruptions caused by the COVID-19 pandemic have had a negative impact on our operations and near-term order flow, as reflected by the lower sales in our Marine Technology Products segment. It is difficult to predict the future impact of the global pandemic and economic downturn on our business.  However, we are hopeful that it will be short-lived. One encouraging sign is an increase in our backlog to approximately $10.2 million at April 30, 2020 versus approximately $8.9 million at January 31, 2020.

"We also continued to focus on our cost structure and lowered our selling, general and administrative expenses during the quarter by 11% year-over-year," added Capps.  "Gross margins during the first quarter were negatively impacted by unabsorbed overhead costs due to the significantly lower level of sales and production activity.  We are taking a number of actions to reduce costs in response to the disruptions caused by the global downturn and to other structural changes in our business.

"We remain focused on our vision of making the Company a leading provider of innovative marine technology and products and are excited about a number of new business and technology initiatives that we are pursuing.  As announced last week, we think it now appropriate to rebrand and refocus the Company.  Accordingly, we have proposed to our shareholders a reincorporation from the State of Texas to Delaware, which will include changing the name of the Company to MIND Technology, Inc.  We think this name is more appropriate for the Company, as it has moved away from its traditional seismic leasing business and become a leading technology provider in the marine survey, marine exploration and maritime defense industries.  

Please refer to the Definitive Proxy that was filed with the Securities and Exchange Commission on May 29, 2020, accessible at http://ir.mitchamindustries.com/ under SEC filings, and that is being mailed to shareholders for more details on the proposed reincorporation.

Mr. Capps concluded, "We believe that our operational flexibility, next-generation marine technology portfolio, debt-free capital structure and additional benefits from our proposed reincorporation and rebranding will provide a solid foundation to pursue our envisioned opportunities in the worldwide marine technology market." 

CONFERENCE CALL

Management has scheduled a conference call for Thursday, June 11th at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) to discuss fiscal 2021 first quarter results and its rebranding efforts.  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 June 18, 2020 and may be accessed by calling (201) 612-7415 and using passcode 13703929#. 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 by 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. 

Contacts:

Rob Capps, Co-CEO


Mitcham Industries, Inc.


936-291-2277




Ken Dennard / Zach Vaughan


Dennard Lascar Investor Relations


713-529-6600


MIND@dennardlascar.com 

Forward-looking Statements

Certain statements and information in this press release concerning results for the quarter ended April 30, 2020 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.  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, volatility in commodity prices for oil and natural gas and the extent of disruptions caused by the COVID-19 outbreak.

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.

Tables to Follow

MITCHAM INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)



April 30, 2020


January 31, 2020

ASSETS

Current assets:




Cash and cash equivalents

$

4,705



$

3,090


Restricted cash



144


Accounts receivable, net of allowance for doubtful accounts of $2,196 and $4,054 at April 30, 2020 and January 31, 2020, respectively

7,996



11,921


Inventories, net

13,783



13,261


Prepaid expenses and other current assets

2,515



2,211


Total current assets

28,999



30,627


Seismic equipment lease pool and property and equipment, net

12,002



13,777


Operating lease right-of-use assets

1,957



2,300


Intangible assets, net

7,703



8,161


Goodwill



2,531


Long-term receivables, net of allowance for doubtful accounts of $- and $- at April 30, 2020 and January 31, 2020, respectively

535



403


Other assets

7



429


Total assets

$

51,203



$

58,228


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:




Accounts payable

$

3,292



$

2,650


Deferred revenue

602



765


Accrued expenses and other current liabilities

3,071



3,452


Income taxes payable

620



242


Operating lease liabilities - current

966



1,339


Total current liabilities

8,551



8,448


Operating lease liabilities - non-current

991



961


Other non-current liabilities

911



967


Deferred tax liability

200



200


Total liabilities

10,653



10,576


Shareholders' equity:




Preferred stock, $1.00 par value; 1,000 shares authorized; 994 and 994 shares issued and outstanding at April 30, 2020 and January 31, 2020, respectively

22,104



22,104


Common stock, $0.01 par value; 20,000 shares authorized; 14,097 and 14,097 shares issued at April 30, 2020, and January 31, 2020, respectively

141



141


Additional paid-in capital

124,194



123,964


Treasury stock, at cost (1,929 shares at April 30, 2020 and January 31, 2020)

(16,860)



(16,860)


Accumulated deficit

(84,511)



(77,310)


Accumulated other comprehensive loss

(4,518)



(4,387)


Total shareholders' equity

40,550



47,652


Total liabilities and shareholders' equity

$

51,203



$

58,228


 

MITCHAM INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)




For the Three Months Ended
April 30,



2020


2019

Revenues:





Sale of marine technology products


$

3,187



$

5,977


Equipment leasing


2,575



3,323


Sale of lease pool and other equipment


1,613



557


Total revenues


7,375



9,857


Cost of sales:





Sale of marine technology products


2,703



3,455


Equipment leasing (including lease pool depreciation)


1,770



2,411


Equipment sales


713



250


Total cost of sales


5,186



6,116


Gross profit


2,189



3,741


Operating expenses:





Selling, general and administrative


4,654



5,232


Research and development


410



315


Impairment of intangible assets


2,531




Depreciation and amortization


774



650


Total operating expenses


8,369



6,197


Operating loss


(6,180)



(2,456)


Other income (expense):





Interest expense, net


(11)



(11)


Other, net


70



107


Total other income


59



96


Loss before income taxes


(6,121)



(2,360)


Provision for income taxes


(521)



(55)


Net loss


$

(6,642)



$

(2,415)


Preferred stock dividends


(559)



(471)


Net loss attributable to common shareholders


$

(7,201)



$

(2,886)


Net loss per common share:





Basic


$

(0.59)



$

(0.24)


Diluted


$

(0.59)



$

(0.24)


Shares used in computing loss per common share:





Basic


12,172



12,119


Diluted


12,172



12,119


 

MITCHAM INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)




For the Three Months Ended
April 30,



2020


2019

Cash flows from operating activities:





Net loss


$

(6,642)



$

(2,415)


Adjustments to reconcile net loss to net cash used in operating activities:





Depreciation and amortization


1,701



2,131


Stock-based compensation


230



172


Impairment of intangible assets


2,531




Provision for inventory obsolescence


22




Gross profit from sale of lease pool equipment


(850)



(363)


Deferred tax expense




135


Changes in:





Accounts receivable


3,728



76


Unbilled revenue


(9)



5


Inventories


(554)



(501)


Prepaid expenses and other current assets


201



(672)


Income taxes receivable and payable


424



2


Accounts payable, accrued expenses and other current liabilities


300



(382)


Deferred revenue


(153)



(23)


Foreign exchange losses net of gains




(16)


Net cash provided by (used in) operating activities


929



(1,851)


Cash flows from investing activities:





Purchases of seismic equipment held for lease


(110)




Purchases of property and equipment


(65)



(366)


Sales of used lease pool equipment


1,414



730


Sale of business, net of cash sold




239


Net cash provided by investing activities


1,239



603


Cash flows from financing activities:





Net proceeds from preferred stock offering




409


Preferred stock dividends


(559)



(471)


Net cash used in financing activities


(559)



(62)


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


(138)



(100)


Net decrease in cash, cash equivalents and restricted cash


1,471



(1,410)


Cash, cash equivalents and restricted cash, beginning of period


3,234



9,549


Cash, cash equivalents and restricted cash, end of period


$

4,705



$

8,139


 

MITCHAM INDUSTRIES, INC.

Reconciliation of Net Loss and Net Cash Provided by Operating Activities to EBITDA and

Adjusted EBITDA

(in thousands)

(unaudited)




For the Three Months Ended
April 30,



2020


2019

Reconciliation of Net loss to EBITDA and Adjusted EBITDA





Net loss


$

(6,642)



$

(2,415)


Interest expense (income), net


11



11


Depreciation and amortization


1,701



2,131


Provision (benefit) for income taxes


521



55


EBITDA (1)


(4,409)



(218)


Non-cash foreign exchange losses


109



52


Stock-based compensation


230



172


Impairment of intangible assets


2,531




Cost of lease pool sales


587



55


Adjusted EBITDA (1)


$

(952)



$

61


Reconciliation of Net Cash Provided by Operating Activities to EBITDA





Net cash provided by (used in) operating activities


$

929



$

(1,851)


Stock-based compensation


(230)



(172)


Provision for inventory obsolescence


(22)




Changes in accounts receivable (current and long-term)


(3,719)



(76)


Interest paid


11



14


Taxes paid, net of refunds


149



97


Gross profit from sale of lease pool equipment


850



363


Changes in inventory


554



501


Changes in accounts payable, accrued expenses and other current liabilities and deferred revenue


(147)



405


Impairment of intangible assets


(2,531)




Changes in prepaid expenses and other current assets


(201)



672


Foreign exchange (losses) gains, net




16


Other


(52)



(187)


EBITDA (1)


$

(4,409)



$

(218)




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, impairment of intangible assets, 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
April 30,



2020


2019

Revenues:





Marine technology products


$

3,212



$

5,982


Equipment leasing


4,188



3,935


Inter-segment sales


(25)



(60)


Total revenues


7,375



9,857


Cost of sales:





Marine technology products


2,728



3,515


Equipment leasing


2,483



2,661


Inter-segment costs


(25)



(60)


Total cost of sales


5,186



6,116


Gross profit


2,189



3,741


Operating expenses:





Selling, general and administrative


4,654



5,232


Research and development


410



315


Impairment of intangible assets


2,531




Depreciation and amortization


774



650


Total operating expenses


8,369



6,197


Operating loss


$

(6,180)



$

(2,456)


Marine Technology Products Segment:





Revenues:





Seamap


$

2,213



$

4,324


Klein


1,241



1,561


SAP




101


Intra-segment sales


(242)



(4)




3,212



5,982


Cost of sales:





Seamap


1,894



2,323


Klein


1,076



1,101


SAP




95


Intra-segment sales


(242)



(4)




2,728



3,515


Gross profit


$

484



$

2,467


Gross profit margin


15

%


41

%

Equipment Leasing Segment:





Revenue:



Equipment leasing


$

2,576



$

3,378


Lease pool equipment sales


1,436



419


Other equipment sales


176



138




4,188



3,935


Cost of sales:



Direct costs-equipment leasing


844



965


Lease pool depreciation


926



1,446


Cost of lease pool equipment sales


587



56


Cost of other equipment sales


126



194




2,483



2,661


Gross profit


$

1,705



$

1,274


 

Cision View original content:http://www.prnewswire.com/news-releases/mitcham-industries-reports-fiscal-2021-first-quarter-results-301073985.html

SOURCE Mitcham Industries, Inc.

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