HUNTSVILLE, Texas, June 7, 2017 /PRNewswire/ -- Mitcham Industries,
Inc. (NASDAQ: MIND) ("the Company") today announced financial
results for its fiscal 2018 first quarter ended April 30, 2017.
Total revenues for the first quarter of fiscal 2018 were
$18.4 million compared to
$11.7 million in the first quarter of
fiscal 2017. Revenues from the Equipment Manufacturing and
Sales segment decreased slightly to $6.9
million in the first quarter, compared to $7.2 million in the same period last year.
Revenues from the Equipment Leasing segment were $11.5 million in the first quarter compared to
$4.5 million in the same period last
year. During the quarter, the Company sold lease pool
equipment for proceeds of $8.8
million as it continues to redeploy capital into higher
return investments. The Company reported a net loss attributable to
common shareholders of $2.9 million,
or $(0.24) per share, in the first
quarter of fiscal 2018 compared to a net loss of $6.4 million, or $(0.53) per share, in the first quarter of fiscal
2017. Cash flow provided by operating activities was
approximately $1.1 million in the
first quarter of fiscal 2018 compared to $1.8 million in the first quarter of fiscal
2017.
Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, stock-based compensation, non-cash costs of lease
pool equipment sales and non-cash foreign exchange gains and
losses) for the first quarter of fiscal 2018 was approximately
$9.0 million compared to $2.2 million in the same period last year.
Adjusted EBITDA, which is not a measure determined in accordance
with United States generally
accepted accounting principles ("GAAP"), 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 first quarter unfolded essentially
as anticipated as we continue to make progress in re-positioning
our Company to be a more significant player in the marine industry
and decreasing our exposure to oil and gas exploration
activities. We are taking advantage of structural changes in
the seismic data acquisition industry to rationalize our lease pool
of equipment and re-deploy capital into more attractive
opportunities.
"Reviewing our financial results for the first fiscal quarter of
2018, the Equipment Manufacturing and Sales segment revenues were
essentially flat year-over-year and slightly higher sequentially,
which remains below our expectation. Lower than expected
segment revenues were primarily due to delays in certain orders and
the timing of deliveries.
"Our scope of business in this market is evolving and becoming a
larger part of our total business. We are pursuing several new
opportunities with commercial and military applications, both
internationally and in the United
States. We currently anticipate a stronger fiscal year
in this segment driven by anticipated deliveries and improved
visibility into oceanographic and hydrographic opportunities. We
are not only seeing a greater number of opportunities as we
continue to penetrate new markets and add new customers, but we are
also seeing the scope of some of these projects become larger as
well.
"Land and marine seismic exploration activity continues to be
depressed from historical levels throughout both hemispheres, with
a significant excess supply of equipment overhanging the market.
However, improved oil prices have generated increased levels of
both inquiry and bid activity and we are starting to very slowly
recover from the significant downturn of the last two years.
"We continue to carry a pristine balance sheet with no debt.
Despite the major downturn that we have experienced over the past
two years, we generated cash, repaid debt and strengthened our
capital structure. We do anticipate generating positive
EBITDA and operating cash flow in the current fiscal year.
"As we move through fiscal 2018, we see a number of exciting
opportunities for our manufacturing business and also expect
continued slow improvement in our leasing business. Our strategic
intent going forward is to continue to diversify our sales away
from sole dependence on the oil and gas industry. This will
be done primarily by expanding our equipment and manufacturing
business, both organically and through acquisitions, to gain a
greater foothold in the global marine industry. Based on
these factors, we currently anticipate that fiscal 2018 will
deliver improved financial results over fiscal 2017, not in small
part due to our strategic repositioning of the Company as well as
improved stability in the oil and gas markets."
FISCAL 2018 FIRST QUARTER RESULTS
The first quarter revenue increase was driven for the second
consecutive quarter by a large increase in lease pool equipment
sales compared to the same quarter a year ago. Equipment and
manufacturing sales decreased 4% year-over-year, while equipment
leasing revenues, excluding lease pool equipment sales, decreased
25% from the first quarter of fiscal 2017. Total revenues for
the first quarter of fiscal 2018 were $18.4
million compared to $11.7
million in the same period last year. A significant
portion of our revenues is typically generated from geographic
areas outside the United States.
The percentage of revenues from international customers was
approximately 55% (approximately 84% excluding proceeds from lease
pool equipment sales) in the first quarter of fiscal 2018 compared
to approximately 77% in last year's first fiscal quarter.
Equipment manufacturing and sales decreased slightly to
$6.9 million in the first quarter of
fiscal 2018 compared to $7.2 million
in last year's first quarter. The first quarter sales
consisted of approximately $4.9
million of Seamap equipment, $0.9
million from Klein (including $0.2
million of intra-segment sales) and $1.3 million by SAP.
Equipment leasing revenues for the first quarter of fiscal 2018,
excluding lease pool equipment sales, were $2.7 million compared to $3.6 million in the same period last year.
The year-over-year decrease in first quarter equipment leasing
revenues was driven by a reduction in exploration activity.
Lease pool and other equipment sales were $8.8 million in the first quarter of fiscal 2018,
compared to $0.9 million in the first
quarter a year ago.
Lease pool depreciation expense in the first quarter of fiscal
2018 decreased to $4.2 million from
$6.9 million in the same period a
year ago, due to the reduction in lease pool purchases and sales of
lease pool equipment in fiscal years 2016 and 2017, as well as the
current fiscal year.
General and administrative expenses decreased to $4.9 million in the first quarter of fiscal 2018
versus $5.3 million in the first
quarter of fiscal 2017, due to the impact of continuing cost
reduction efforts.
CONFERENCE CALL
We have scheduled a conference call for Thursday, June 8, 2017 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) to discuss our fiscal
2018 first 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 June 22, 2017 and may be accessed by calling
(201) 612-7415 and using passcode 13662635#. 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
Donna Washburn at Dennard
• Lascar Associates (713) 529‑6600 or email
dwashburn@dennardlascar.com.
About Mitcham Industries
Mitcham Industries, Inc. provides equipment to the geophysical,
oceanographic and hydrographic industries.
Headquartered in Huntsville,
Texas, Mitcham has a global presence with operating
locations in the United States,
Canada, Australia, Singapore, Russia, Hungary, Colombia and the United Kingdom. Mitcham's worldwide Equipment
Manufacturing and Sales Segment, which includes its Seamap and
Klein Marine Systems units, designs, manufactures and sells
specialized, high performance, marine sonar and seismic equipment.
Through its Leasing Segment, Mitcham believes it is the largest
independent provider of exploration equipment to the seismic
industry.
Certain statements and information in this press release
concerning results for the quarter ended April 30, 2017 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, EBITDA, cash flow 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
|
|
|
|
Jack Lascar / Mark
Roberson
|
|
Dennard • Lascar Associates
|
|
713-529-6600
|
Tables to Follow
MITCHAM
INDUSTRIES, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands,
except per share data)
|
(unaudited)
|
|
|
April 30,
2017
|
|
January 31,
2017
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
2,053
|
|
$
2,902
|
Restricted
cash
|
403
|
|
609
|
Accounts and
contracts receivable, net of allowance for doubtful accounts of
$3,720 and $3,716 at April 30, 2017 and January 31, 2017,
respectively
|
16,028
|
|
15,830
|
Inventories,
net
|
13,488
|
|
11,960
|
Prepaid income
taxes
|
221
|
|
1,565
|
Prepaid expenses and
other current assets
|
1,752
|
|
2,193
|
Total
current assets
|
33,945
|
|
35,059
|
Seismic equipment
lease pool and property and equipment, net
|
33,380
|
|
43,838
|
Intangible assets,
net
|
8,720
|
|
9,012
|
Goodwill
|
3,997
|
|
3,997
|
Non-current prepaid
income taxes
|
1,192
|
|
-
|
Long-term receivables
net of allowance for doubtful accounts of $2,188 at April 30, 2017
and January 31, 2017
|
4,488
|
|
2,780
|
Other
assets
|
28
|
|
28
|
Total
assets
|
$85,750
|
|
$94,714
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$ 1,876
|
|
$ 1,929
|
Current maturities –
long-term debt
|
-
|
|
6,371
|
Deferred
revenue
|
560
|
|
651
|
Accrued expenses and
other current liabilities
|
4,595
|
|
4,514
|
Total
current liabilities
|
7,031
|
|
13,465
|
Deferred tax
liability
|
296
|
|
317
|
Total
liabilities
|
7,327
|
|
13,782
|
Shareholders'
equity:
|
|
|
|
Preferred stock, $1.00
par value; 1,000 shares authorized; 348 and 343 shares issued
and outstanding at April 30, 2017 and January 31, 2017,
respectively
|
7,391
|
|
7,294
|
Common stock, $0.01
par value; 20,000 shares authorized; 14,019 shares issued at
April 30, 2017 and January 31, 2017
|
140
|
|
140
|
Additional paid-in
capital
|
121,625
|
|
121,401
|
Treasury stock, at
cost (1,929 shares at April 30, 2017 and January 31,
2017)
|
(16,858)
|
|
(16,858)
|
Accumulated
deficit
|
(23,310)
|
|
(20,451)
|
Accumulated other
comprehensive loss
|
(10,565)
|
|
(10,594)
|
Total
shareholders' equity
|
78,423
|
|
80,932
|
Total
liabilities and shareholders' equity
|
$85,750
|
|
$94,714
|
MITCHAM
INDUSTRIES, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except per share data)
|
(unaudited)
|
|
|
For the Three
Months Ended
April 30,
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
Equipment
manufacturing and sales
|
$
6,888
|
|
$
7,188
|
Equipment
leasing
|
2,717
|
|
3,608
|
Lease pool and other
equipment sales
|
8,828
|
|
935
|
Total
revenues
|
18,433
|
|
11,731
|
|
|
|
|
Cost of
sales:
|
|
|
|
Cost of equipment
manufacturing and sales
|
3,975
|
|
4,021
|
Direct costs -
equipment leasing
|
944
|
|
752
|
Direct costs - lease
pool depreciation
|
4,181
|
|
6,873
|
Cost of lease pool and
other equipment sales
|
6,139
|
|
451
|
Total cost of
sales
|
15,239
|
|
12,097
|
Gross profit
(loss)
|
3,194
|
|
(366)
|
|
|
|
|
Operating
expenses:
|
|
|
|
General and
administrative
|
4,902
|
|
5,313
|
Depreciation and
amortization
|
581
|
|
652
|
Total operating
expenses
|
5,483
|
|
5,965
|
|
|
|
|
Operating
loss
|
(2,289)
|
|
(6,331)
|
|
|
|
|
Other (expense)
income:
|
|
|
|
Interest,
net
|
(46)
|
|
(264)
|
Other, net
|
(101)
|
|
451
|
Total other (expense)
income
|
(147)
|
|
187
|
|
|
|
|
Loss before income
taxes
|
(2,436)
|
|
(6,144)
|
|
|
|
|
Provision for income
taxes
|
(229)
|
|
(299)
|
|
|
|
|
Net
loss
|
$
(2,665)
|
|
$
(6,443)
|
Preferred stock
dividends
|
(194)
|
|
-
|
Net loss
attributable to common shareholders
|
$
(2,859)
|
|
$
(6,443)
|
Net loss per
common share:
|
|
|
|
Basic
|
$ (0.24)
|
|
$ (0.53)
|
Diluted
|
$ (0.24)
|
|
$ (0.53)
|
|
|
|
|
Shares used in
computing net loss per common share:
|
|
|
|
Basic
|
12,078
|
|
12,059
|
Diluted
|
12,078
|
|
12,059
|
|
|
|
|
MITCHAM
INDUSTRIES, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
(unaudited)
|
|
|
|
For the Three
Months Ended April
30,
|
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
|
Net loss
|
|
$
(2,665)
|
|
$
(6,443)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
4,791
|
|
7,558
|
Stock-based
compensation
|
|
224
|
|
247
|
Provision for
inventory obsolescence
|
|
8
|
|
43
|
Gross profit from sale
of lease pool equipment
|
|
(2,689)
|
|
(491)
|
Deferred tax
benefit
|
|
(27)
|
|
(497)
|
Changes in working
capital items:
|
|
|
|
|
Trade accounts and
contracts receivable
|
|
2,175
|
|
2,809
|
Inventories
|
|
(1,403)
|
|
297
|
Prepaid expenses and
other current assets
|
|
549
|
|
(250)
|
Income taxes
receivable and payable
|
|
149
|
|
640
|
Accounts payable,
accrued expenses, other current liabilities and deferred
revenue
|
|
48
|
|
(2,044)
|
Foreign exchange gains
net of losses
|
|
(48)
|
|
(119)
|
Net cash provided by
operating activities
|
|
1,112
|
|
1,750
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases of seismic
equipment held for lease
|
|
(158)
|
|
(522)
|
Purchases of property
and equipment
|
|
(28)
|
|
(82)
|
Sale of used lease
pool equipment
|
|
4,496
|
|
906
|
Net cash provided by
investing activities
|
|
4,310
|
|
302
|
Cash flows from
financing activities:
|
|
|
|
|
Net payments on
revolving line of credit
|
|
(3,500)
|
|
(1,950)
|
Payments on term loan
and other borrowings
|
|
(2,807)
|
|
(804)
|
Net proceeds from
preferred stock offerings
|
|
27
|
|
-
|
Preferred stock
dividends
|
|
(194)
|
|
-
|
Net cash used in
financing activities
|
|
(6,474)
|
|
(2,754)
|
Effect of changes
in foreign exchange rates on cash and cash
equivalents
|
|
(3)
|
|
(707)
|
Net change in cash
and cash equivalents
|
|
(1,055)
|
|
(1,409)
|
Cash and cash
equivalents, beginning of period
|
|
3,511
|
|
3,769
|
Cash and cash
equivalents, end of period
|
|
$
2,456
|
|
$
2,360
|
MITCHAM
INDUSTRIES, INC.
|
Reconciliation of
Net Loss and Net Cash Provided by Operating Activities to EBITDA
and Adjusted EBITDA
|
|
|
For the Three
Months Ended April
30,
|
|
2017
|
|
2016
|
|
(in
thousands)
|
Reconciliation of
Net loss to EBITDA and
Adjusted EBITDA
|
|
|
|
Net loss
|
$
(2,665)
|
|
$
(6,443)
|
Interest expense,
net
|
46
|
|
264
|
Depreciation and
amortization
|
4,791
|
|
7,558
|
Provision for income
taxes
|
229
|
|
299
|
EBITDA
(1)
|
2,401
|
|
1,678
|
Non-cash foreign
exchange losses (gains)
|
194
|
|
(174)
|
Stock-based
compensation
|
224
|
|
247
|
Cost of lease pool
sales
|
6,139
|
|
415
|
Adjusted EBITDA
(1)
|
$
8,958
|
|
$
2,166
|
Reconciliation of
Net cash provided by operating activities to EBITDA
|
|
|
|
Net cash provided by
operating activities
|
$ 1,112
|
|
$ 1,750
|
Stock-based
compensation
|
(224)
|
|
(247)
|
Changes in trade
accounts and contracts receivable
|
(2,175)
|
|
(2,809)
|
Provision for
inventory
|
(8)
|
|
(43)
|
Interest
paid
|
92
|
|
338
|
Taxes paid, net of
refunds
|
13
|
|
151
|
Gross profit from
sale of lease pool equipment
|
2,689
|
|
491
|
Changes in
inventory
|
1,403
|
|
(297)
|
Changes in accounts
payable, accrued expenses other current liabilities and deferred
revenue
|
(48)
|
|
2,044
|
Changes in prepaid
expenses and other current assets
|
(549)
|
|
250
|
Foreign FX currency
losses
|
48
|
|
119
|
Other
|
48
|
|
(69)
|
EBITDA
(1)
|
$ 2,401
|
|
$ 1,678
|
|
|
|
|
|
|
(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 and stock-based compensation. This definition of Adjusted
EBITDA is consistent with the definition in the Credit
Agreement. 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
accounting principles generally accepted in the United States of
America ("GAAP"). 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, service debt and finance working capital
requirements. The Credit Agreement contained financial covenants
based on EBITDA or Adjusted EBITDA. Management believes 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.
|
|
For the Three Months Ended April 30,
|
|
2017
|
|
2016
|
|
(in
thousands)
|
Revenues:
|
|
|
|
Equipment
Manufacturing and Sales
|
$
6,911
|
|
$
7,220
|
Equipment
Leasing
|
11,545
|
|
4,543
|
Inter-segment
sales
|
(23)
|
|
(32)
|
Total revenues
|
18,433
|
|
11,731
|
Cost of
sales:
|
|
|
|
Equipment
Manufacturing and Sales
|
3,998
|
|
4,058
|
Equipment
Leasing
|
11,264
|
|
8,076
|
Inter-segment
costs
|
(23)
|
|
(37)
|
Total cost of
sales
|
15,239
|
|
12,097
|
Gross profit
(loss)
|
3,194
|
|
(366)
|
Operating
expenses:
|
|
|
|
General and
administrative
|
4,902
|
|
5,313
|
Depreciation and
amortization
|
581
|
|
652
|
Total operating
expenses
|
5,483
|
|
5,965
|
Operating
loss
|
$
(2,289)
|
|
$
(6,331)
|
|
|
|
|
Equipment
Manufacturing and Sales Segment-
|
|
|
|
Revenue:
|
|
|
|
Seamap
|
$4,886
|
|
$4,919
|
Klein
|
938
|
|
2,136
|
SAP
|
1,290
|
|
480
|
Intra-segment
sales
|
(203)
|
|
(315)
|
|
6,911
|
|
7,220
|
Cost of
sales:
|
|
|
|
Seamap
|
2,561
|
|
2,539
|
Klein
|
732
|
|
1,471
|
SAP
|
1,017
|
|
363
|
Intra-segment
sales
|
(312)
|
|
(315)
|
|
3,998
|
|
4,058
|
Gross
profit
|
$2,913
|
|
$3,162
|
Gross profit
margin
|
42%
|
|
44%
|
|
|
|
|
Equipment Leasing
Segment-
|
|
|
|
Revenue:
|
|
|
|
Equipment
leasing
|
$
2,717
|
|
$
3,608
|
Lease pool equipment
sales
|
8,828
|
|
906
|
Other equipment
sales
|
-
|
|
29
|
|
11,545
|
|
4,543
|
Cost of
sales:
|
|
|
|
Direct
costs-equipment leasing
|
944
|
|
752
|
Lease pool
depreciation
|
4,181
|
|
6,873
|
Cost of lease pool
equipment sales
|
6,139
|
|
415
|
Cost of other
equipment sales
|
-
|
|
36
|
|
11,264
|
|
8,076
|
Gross profit
(loss)
|
$
281
|
|
$
(3,533)
|
Gross profit
(loss) %
|
2%
|
|
(78)%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mitcham-industries-reports-fiscal-2018-first-quarter-results-300470618.html
SOURCE Mitcham Industries, Inc.