Date of Report (Date of Earliest Event Reported): | December 4, 2019 |
Texas | 001-13490 | 76-0210849 | ||||||
_____________________ (State or other jurisdiction | _____________ (Commission | ______________ (I.R.S. Employer | ||||||
of incorporation) | File Number) | Identification No.) | ||||||
2002 Timberloch Place, Suite 400, The Woodlands, Texas | 77380 | |||||||
________________________________ (Address of principal executive offices) | ___________ (Zip Code) |
Registrant’s telephone number, including area code: | 936-291-2277 |
Title of each class | Trading Symbol (s) | Name of each exchange on which registered | ||||||
Common Stock - $0.01 par value per share | MIND | The NASDAQ Stock Market LLC | ||||||
Series A preferred Stock - $1.00 par value per share | MINDP | The NASDAQ Stock Market LLC |
Mitcham Industries, Inc. | ||||||||||||||
December 4, 2019 | By: | /s/ Robert P. Capps | ||||||||||||
Name: Robert P. Capps | ||||||||||||||
Title: Co-Chief Executive Officer, Executive Vice President-Finance and Chief Financial Officer |
Contacts: | Rob Capps, Co-CEO Mitcham Industries, Inc. 936-291-2277 | |||||||
Ken Dennard / Zach Vaughan Dennard Lascar Investor Relations 713-529-6600 |
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 |
For the Three Months Ended October 31, | For the Nine Months Ended October 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 |
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 |
For the Three Months Ended October 31, | For the Nine Months Ended 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) |
For the Three Months Ended October 31, | For the Nine Months Ended 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) |