MIND - Earnings call transcript Q1 2021

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Operator

Greetings, and welcome to the Mitcham Industries Fiscal First Quarter 2021 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ken Dennard. Thank you, you may begin.

Ken Dennard

Thank you, operator. to Industries welcome Quarter XXXX and Call. Conference morning, the Fiscal Mitcham First Good of us you all appreciate We joining today.

Executive Co-Chief Your hosts Financial Officer Systems. Malden, Chief Officer Executive of and Executive are Rob Officer; Capps, and Co-Chief Vice Marine President and Guy

call turn management, to details the normal I run through. Before the housekeeping over I have to

how call and at are to be XX time days website advised to via or earnings this you'd listen a or to the speaks for If mitchamindustries.com yesterday's only no in that Relations replay time-sensitive as of of transcript listening therefore, reading. by replay you recorded available until going the information Thursday, replay information be via like to the today's Investor access section XXXX, call, is of on instant was it'll may accurate XX, of June as provided the webcast XX, of on and release. Information a longer company's replay replay telephonic reported today, any that June which

may company from forward-looking the report and the Form Reform on differ let included of risk we expressed These include of statements. of certain cause management in materially its that and its results Furthermore, to January filings by for those the include with the uncertainties results this by and these which SEC, covered actual made the performance the refer uncertainties or implied contents in future may factors call also you statements. Securities statements XX-K known to this many ended XXXX. please predict company's the the and of disclosed other remind or by time-to-time call, management's and release morning the yesterday, XX, from year call control factors, annual unknown Private on current Litigation Before or conference issued are statements by risks, expectations unable our company regarding is this statements forward-looking the during any to note or start we performance future constitute These that please meaning based incorporated in that XXXX. forward-looking me statements begin, are statement within press Act as risks the

the like I'd Guy to turn to call Malden. over Now Guy?

Guy Malden

see and These Thanks, And our the of the on the thank the which that pandemic, quarter. address disruptions have for general caused rebranding are COVID-XX for for some would results Ken, of in like and Conference general make little everyone. but for we later. we exciting first Quarter to morning, to comments due joining embarked. Call. us; renaming exciting the us and you the outlook market company yet a good XXXX the proposed We We'll to challenging discuss then before today First Technology, about Fiscal challenging company our us our times opportunities financial will we'll bit more by various MIND detail. Rob talk then about the I'll Inc.

general market As businesses to the resulting reduced quarter and uncertainty first to our there the expected, due disruptions activity from broad-based pandemic. COVID-XX through were

a were revenues results basis, sequential down a XX%. consolidated revenues by were year-over-year XX%. on On back first quarter Our pulling down consolidated basis, roughly with

QX there and pulled back delivered a a For accounted of were Products compared during Seamap as system segment, the both client quarter. Marine SeaLink and most system BuoyLink the with no Technology fourth both decrease for the sequentially. in Seamap deliveries

delayed that second our quarter. had a call, been As postponed also due $X their you the causing Seamap the to a may million remember be from requirements customer delivery revising previous to order had until

in does into the visibility QX, benefit upcoming saw we provide So some as from quarter. result, of no that measure it although a

there the signs, were marketplace remains that recovers. benefit amount there both tremendous economy and we the other will internally uncertainty in and the events, also weather as a to storm encouraging and of While due externally, COVID-XX

our continue In capacity receiving backlog. shutdown and our shipping facilities and Singapore, in the operations on we full and is able working Malaysian were off able operating last continue were early Singapore discussed to The we resumed in May As at to temporary Malaysia and facility last limited week. resume manufacturing were to essentially operations call, government-mandated closed to during operations of limited shutdowns. due and as

to that yet June. we Singapore, month full the of expect to running not are in over While we capacity the build

Now broader economic substantiated quotes. market. note in this weakness been market, marine activity by for notwithstanding, the currently has an to uptick the turning that I'd And request in to we like see

the our With more business to strategy let to of the Marine oil the gas-related diversifying markets. that, attests and While influx widespread these an now despite they sign new from bodes orders, a and expanding technology favorable fundamentals resilience cyclical into turn macroeconomic for the that of over well away Rob. also industry It call haven't of turmoil. yet the are reassuring manifested me

Rob Capps

ago $X.X from Okay. sequentially. you and in fiscal for the Thanks, begin I'll million year first more segment Revenues XX% fourth and down of from It's in XX% $X.X year-ago $X.X quarter year-over-year a the in were million Marine XXXX. quarter Products the million results. quarter. million the XX% Seamap in of the were in Guy. quarter down to revenues financial million giving detailed down $X.X quarter $X down totaled a review Technology by the from the

deliveries a made As delivery compared the BuoyLink large system a and Guy mentioned, with are SeaLink quarter QX. there both in in no

XX% believe COVID-XX the First from Klein revenues a year by and spending to to $X.X compared other the increased disruptions first delay and We to a were the in introduced uncertainty and million decisions. quarter $X.X quarter events many equipment $X.X pandemic quarter million revenues customers decrease million million, the caused the down ago. leasing In in ago from year have $X.X segment, sequentially. a

sequential equipment were was segment lifted driven as down sales sequentially build a equipment $X.X land both the lease While basis, decrease in higher than down well entirely operations the as results in X%, year-over-year, activity. leasing were other and more leasing by segment sales. On by million

first million, Products compared in The million profit and precipitously, revenues. the gross was quarter of first profit prior in to standpoint our to And gross quarter was the year from and million $XXX,XXX segment lower year level versus margin a in million XX% XX% first quarter equipment Gross in for sequentially. our last drive a was adjustment the in XX% down of result was ago First year. from was which overhead XX% profit down from cost manufacturing and $X.X greater quarter. in million revenues million a necessarily down amounts year for the in Marine but $X.X unabsorbed margin entailed decrease $X.X $X.X million $X.X and to the period was absorbed a year's represents leasing $X.X QX. higher the ago a quarter quarter cost. down this delay, ago $X.X In than comparable fourth In of depreciation in in expense segment the short, of the last due a from Technology resulting the business,

and and benefits the XXXX, Our $X.X was cost-containment XX% fiscal X% as yield year-over-year sequentially. quarter million first administrative our were expenses which continue of efforts for down general to meaningful

of recovery the remaining for by the posted ago equity flat operating which recorded with quarter, million, in quarter. This recent quarter the research during an our our and of loss to value of in this an essentially to macroeconomic Our of million deterioration amounted those both impairment charge, the noncash decline compared development we quarter this recent first overall expense million was and Absent was peers year-ago year was in the operating our Like related in which the about charge the year securities quarter last precipitated fourth $XXX,XXX, charge, conditions $X.X and $X.X as quarter, $X.X the the goodwill. was many values the notwithstanding. of market to loss our year.

loss of year. a First quarter EBITDA of last in profit profit a compared $XX,XXX of of quarter QX during was adjusted last year's to first $XXX,XXX and $XXX,XXX a

in first about capital approximately was of of in at the operating $X.X solid. the net cash positive is million provided by Mitcham's At cash end period. million year-ago compared a about liquidity with quarter. cash structure beginning remains is and from up $XX the $XXX,XXX and that $X.X cash However, the had the use which a activities of included debt-free quarter, the of of million, equivalents we capital $X.X million quarter working

for As disruptions handle restricted I've with and before, obligations we mentioned provides and covenants uncertainty cost flexibility. deal environment, and to capital current of our well us believe good of a structures financial blooming suited this the absence of are

more relatively the changes redeploy options with further We to ability to through cost And lease capital also adjust our and favorable monetization pool. in demand activity. of have quickly a we have structure, the to other

decisions. and purchasing of But flow engagement been our we I'd backlog uncertain, is of as tenor and the overall solid issues, request that, the And lead although the [ph] fourth steady $X.X discuss our firm in to weigh can order our environment, the and has reincorporation million rebranding. and while adverse market inquiries the bring does of for associated name With despite Delaware a customer up ongoing quarter activity is to the at these on environment quotes. discussions end macroeconomic change $XX.X Looking in backlog continue see at like quarter delays from encouraging, million. of to

time Texas Accordingly, before our been opportunities company shareholders think going Given Technology, us, the company to more of see state the is the now growth we the rename reincorporation change for to Inc. from appropriate manner has company to to are position the we envision. we recognize plan the better the to Delaware. the transformation Concurrently, ourselves of and that asking through approve a in the to formal and MIND an we we

seeking $X to transaction, $XX from stock of the $X shares or part a $XX shares reincorporation million authorized million of are we preferred stock common to the As and million. to of the authorized million also increase

transactions taking markets. think we levels seek steps focus of to to our our of I it's as the strategic equipment. the in business equipment, structure equipment, We're We additional room our disclosed, as the sales authorized further future decided reflect business as activity. make we value and of it deemphasize on to appropriate to our to the provide global our lower land land facilitate investment prudent recent of well is plans also cost ray for Accordingly, lease technology maximize existing have to to through part we've of no either recently this due reduce we'll for to or capital, further And transactions developments also but leasing the think growth. seismic energy no pool leasing immediate in

now closing over we any take for Let the Guy turn before to call a comments few back me questions.

Guy Malden

Rob. Thanks,

that we adapt we have ample efficiency, headwind, unfazed in our liquidity it those capital continue While and strong cost as maintaining control. a on well, and remain operational variables means can global unfolds situation being economic been focusing and on fundamentals the to judicious allocation. focus This critical while a our keeping to as

build Specific emphasized applications those before, marine Products exploration, search floor going are we've countermeasures the forward, we include will maritime survey, continue mineral and marine defense. mine to out segment. and and addressing exploration anti-submarine and Marine And As three markets: sea recovery, survey, geophysical primary we within markets Technology warfare.

that streamers and the We such and side-scan of these and bathymetry seismic arrays marine products as BuoyLink. in GunLink meet equipment, have seismic sonar, each including such markets, as systems, existing acoustic needs technology

created, the to add to and we're what now. and And remarks. look position Operator? widespread existing today lays products it opportunities to our see has of in impacts apply we and grateful applications. technology to that that formal a despite number new to to any also negative That in forward our We'll happy concludes ahead. global take questions this to are technology and pandemic be be We the

Operator

Thank you.

question-and-answer the now question. be KC Capital. session. your Our Please comes conducting Tyson will question Instructions] proceed Bauer first We line of a with [Operator with from

Tyson Bauer

Good morning, gentlemen.

Guy Malden

Hi, Tyson.

Rob Capps

Tyson. Good morning,

Tyson Bauer

receipts, of And It some down quarters. right asset next Malaysia for $X.X cash cash management now of the two that Just to they're $XX do or of up, books far Is lease million built on pool. sale? got your million Anything as over flow you special others? essence completely unique sounds that as whether anticipate three moving breaking for government away. U.S., like You million we're finally further in you've sales? $XX the up from

Rob Capps

the value that. wouldn't that. leasing to is Tyson. transactions I way in that, way ways, see And we're the say, best to say of to sort looking get again, of some do I'd best

case-by-case basis. opportunities a sales. So we're looking that at on there for are But pool lease

further anticipate sales anticipate I'd would I to other from time, equipment of So transactions. leasing also time but

in reimbursement from U.S., There Paycheck As the we and there's quarter, of Program, the received after the Canada costs. There's end far quarter. Singapore second there $X.X of payroll a some programs, was similar for in are In million something it programs the loan the as in which governmental Protection in the some. so UK. are the

some are there, ongoing workforce some there which this So during out cost of to the of maintain offset time. those period help the opportunities of

Tyson Bauer

built that you've what to of see that you next at? quarters, $X.X that maintaining up you in couple where million want And levels that do over cash, or of the do keep

Rob Capps

change think and levels. down it we'd maintain don't in demands those up. up that. like to I capital out from see Well, as Obviously, working But and goes a dramatic comes come I

Tyson Bauer

updates primes testing to your you global schedules, previously COVID were we coming on the In rents with Okay. with that it? any working in Navy on – provide Those getting involved and of into December. side other play, could with regards U.S. orders, that testing into monthly them, in thrown navies starting

Rob Capps

I noted, did our their the travel some of schedules customers as disrupt address. situation and mean COVID really, of nothing just you restrictions Again, those we because customers. can from

Guy Malden

Some travel. them are of still restricted on

Rob Capps

point. Yes. that But we we to resolve at about this forward. But and can nothing go itself talk specifically expect

Tyson Bauer

system that been delay June, middle delivery, delivered in this we're the Seamap Okay. in on that the The quarter? has now of

Rob Capps

it's It delivered, not in has but yet been process.

Tyson Bauer

Okay.

you month? before to be the end So the expect that of delivered

Rob Capps

for do, of quarter. the We Yes. the end

Tyson Bauer

quarter. of End

to the the in as name, personnel. strategy, forward activities done Okay. be in the you've lot changing of Klein, your hiring seems you a which go focus business

and, year revenue you Klein best We bought have progress not before the year it. the that fact, was seen did on the in

announced various MAX. received what those improvements, sense sales You've have Give a of you technology? that of since technologies new the like us actually technology introductions new

Rob Capps

we Well, yes, have delivered product.

different couple have We sold of in a technology that forms.

– the dramatic not improvement It's we right. we've see. You're we that seen think will

cycle, sales especially. cycle, with we from going know, confident, be are governmental specific improvement cycles a time but you the sales that long and programs, marketplace goes we're on. can getting evaluation quite we're based on that customers, a sometimes, As long these There's feedback very from dealing see long to the as

Tyson Bauer

and/or the and make Okay. – these tech into changes last Board for the and on and we we're all the chips of the to And been now year, cards name the two years. taken that, push all table are the the opportunity timing has the company, okay, in for all we've marine the discussed to now middle in. a Why that, off it's change

Rob Capps

important things just year, impact. an lot more a confident feel to so become having additions which standpoint come real, of started we a are opportunities made think some personnel together. it. the We've We're from about I over of last additions, made these some seeing really more really

plans some into We other technology for of other the have areas, some and further taking existing our expansion technology for applications. of

of So things, just combination it's it's – Tyson. a

it coincides As meeting far timing, specific as with the summer. annual our this

shareholder vote. so we just it's the normal So vote, a shareholder with wanted do to

month ago So reason that's now. from than a the now it do month a rather we right or

Tyson Bauer

queue. the in back go I’ll Okay.

Rob Capps

Okay.

Operator

Instructions] Thank you. Thank [Operator you.

line Our your with Bauer Capital. KC with next question. question Tyson of comes Please from proceed the

Tyson Bauer

quick. Well that was

Rob Capps

wait you to talk to can’t again. We

Tyson Bauer

go. you there Well,

I think lot so we this those in on segment? that are we that, unique to see QX has the referenced QX delivery see that Seamap in situation already expenses in you margin develop a expected a of incurred been system, may of

Rob Capps

as Well, goes I stuff, wouldn't say it we to inventory. Obviously, build that.

standpoint, flow impact. the it that an spending recognize not margin actually you it. cash so but So we It's you're not inventory, cost has from But a from until ship standpoint, necessarily. don't certainly a an cash,

Tyson Bauer

But should... it

Rob Capps

levels increase, of volume more increase overhead. But that, margins you Tyson, having see as you're you'll the because increase, said just see sales absorbing

Tyson Bauer

getting see cash? accounts a is an that down the in Because build not we're draw delivery quarter. on quarter? second – what's expectations going paid that? the will upon necessarily operations on typically in are second Right. the flow receivable to So cash weak very you Or Is that from leasing here

Rob Capps

expect They're we terms, I of specifically, terms. issues from there. That’s normal wanted see kind very those quick reliable so true. so don't Yes. receivables comment we are any customers to transactions but very

Tyson Bauer

any you on are care with there of we're coming done did we in fold? took – doubtful back activity into QX, those those of, given some accounts take those? hopefully, just additional And not Or any that possibly

Rob Capps

still we the the No. our Again, environment. hopeful are the made pursuing. recovery those continuing to see as There's involved current provision likelihood and risk some certainly that given very of some the based we've judgment we're are on But that we'll pursue there. and some

Tyson Bauer

and the be will of percentage of know, some as delivered the this are Of it, in that backlog, that delivered two involved, given related to of within months? be is things million quarter four next services, already to is $XX what expected that other parts, that or we

Rob Capps

not I that I’m specifically. prepared to talk guess, about

expect because from what sales would in we partially be the quarter. year. the within leasing of that. be I think you expect technology first guess products it can second to would as feel all that down marine noted the in quarter, to think I I we But about from I business be we the of is the confident expect say backlog. to quarter the first earlier, We pretty the up

Tyson Bauer

Would you approximately sales anticipate up, or pool lease same? down the be to

Rob Capps

say. Hard to

happen. they those or and As you know, are don't transaction-specific, happen

So it could down. be

at point. predict So I really can't this

Tyson Bauer

Should almost what you having revenue have incur without system an kind that's sales? fairly the So tech annuity-type as we base stream use – normally revenue to for of Marine a you?

Rob Capps

projections tough is needs. a make are about, to because Tyson, have decisions delaying also Yes. specific people environment This but

So to predict it's hard really that.

away any that. stay like forecast specific on So I'd from really to

Tyson Bauer

Okay.

the go tech especially You on Marine would anticipate an increase the in we backlog side, year, though? as through

Rob Capps

yes. would, We

Tyson Bauer

gentlemen. Okay. Thank you,

Rob Capps

Yes.

Guy Malden

Thanks, Tyson.

Operator

you. Thank

your with question. Our Investment line Please Taylor of the comes from Ross ARS proceed next Partners. question with

Ross Taylor

expectations of obviously, out Can get project? you COVID years mapping those of of beyond projections give level, Could at the Board you. some us revenue couple an you for side the Thank have the the Or idea of an us gentlemen business for – the next the and what the crisis for what are you are defense of idea both what undersea to you numbers give situation. side business?

Rob Capps

this projections don't we that. Ross, get specific really at point Yes. into guidance want to on any or

significant Although, part where I focus. putting will say our That's in increases we're business. we of the that expect

growth from So want stay metrics. really specific any I to expect there, we away significant do but

Ross Taylor

part vehicle? on undersea of comment United side-scan may States at are other navies beyond system You the your – be unmanned, looking using an as any sonar

Rob Capps

Absolutely. Absolutely

Ross Taylor

And what nations map? – do Middle European nations? those the find at? we're think are them kind might of on nations, time Eastern horizons looking and those Are you Where we

Rob Capps

I'd say world all would a to not place look over expect to that to places the over is the us map. be on. All you except, good obviously,

Ross Taylor

Okay. say great guys have you Well, that technology. I'd a

when struggled – the the I'm off are the through discount learned understand at to an of that particularly think the view change really to same that just of I'm do. have trading support my wild shares desire meaningful I of not You've to the benefits it the count increasing the bring because not to and it I've share worth, name. bring boards shareholders. what I about testing I equity experience to a they're value better idea

patient would line U.S. business. you I of on asset like been hanging will which I that so like should Rosencrantz for with meaningfully when become stuff for get lot higher, do that. think And turnaround, about the easier. the the have bottom bit price sale you shareholders think little this understand And And and, a seems return that your the and contract concerned that a just I stock to undervalued. I exceptionally I you explore think beach. from a waiting someone way that in Guildenstern a really little find the the major generating if need I'm getting Navy, shareholders a But therefore, is get the I you say think can't

Rob Capps

Ross. Thanks, Okay.

Operator

to Ladies and you. session. final our question-and-answer the that Thank concludes gentlemen, any floor back for I'll turn comments. management

Rob Capps

with you. Thank We forward joining thank at again like to of talking look today. everyone you I'd quarter. Okay. our next to for the us end

MIND Technology (MIND) 11 Jun 202021 Q1 Earnings call transcript