MIND Technology(US:MIND)2020-12-04 21:07Financial Performance - For the three months ended October 31, 2020, the net loss from continuing operations was $2.37 million, compared to a loss of $1.32 million for the same period in 2019 [83]. - Adjusted EBITDA from continuing operations for the nine months ended October 31, 2020, was a loss of $5.51 million, compared to a loss of $2.47 million for the same period in 2019 [83]. - Revenues for the three months ended October 31, 2020, were approximately $6.6 million, a decrease of 18.5% from approximately $8.1 million for the same period in 2019 [99]. - For the nine months ended October 31, 2020, revenues were approximately $14.8 million, down 29.5% from approximately $21.0 million for the same period in 2019 [99]. - The operating loss for the three months ended October 31, 2020, was approximately $2.3 million, compared to an operating loss of approximately $1.3 million for the same period in 2019 [99]. - Revenue from discontinued operations decreased approximately 87% to $313,000 for the three months ended October 31, 2020, compared to $2.5 million for the same period in 2019 [112]. Market and Product Development - The company introduced new sonar technology referred to as "MA-X" in fiscal 2020, which is expected to significantly expand market opportunities [92]. - The company is pursuing initiatives to expand product offerings, including new technology and products developed internally and through partnerships [93]. - The company is focusing on three primary markets within the Marine Technology Products segment, including sea-floor survey and anti-submarine warfare [91]. - Strategic initiatives have been initiated to exploit developments in the marine technology industry, including the integration of MA-X technology into unmanned vehicles [94]. - The company has received orders for new seismic source controllers, indicating potential demand growth in the coming months [90]. Operational Challenges - The COVID-19 pandemic has created significant uncertainty, leading to temporary shutdowns and reduced operational efficiencies [86]. - Oil prices declined sharply during the first quarter of fiscal 2021, which could adversely affect customers in the energy industry and their orders [88]. - The liquidity and capital resources remain uncertain due to the COVID-19 pandemic and declining oil prices, which could adversely affect the company's financial position [116]. Cost Management and Financial Position - The Company reported a net cash used in operating activities of approximately $4.8 million for the first nine months of fiscal 2021, compared to $4.2 million for the same period in fiscal 2020 [121]. - As of October 31, 2020, the Company had working capital of approximately $20.7 million, including cash of approximately $2.7 million, a decrease from $31.0 million and $3.2 million, respectively, at January 31, 2020 [120]. - The Company has terminated or furloughed certain employees and contractors as part of cost reduction measures [120]. - The Company has no funded debt or other outstanding obligations outside of normal trade obligations [119]. - The Company has no interest-bearing bank debt on its balance sheet as of October 31, 2020 [130]. Investment and Financing Activities - Cash provided from investing activities increased to approximately $2.7 million in the first nine months of fiscal 2021, compared to $1.4 million in the same period of fiscal 2020 [123]. - The Company received approximately $1.6 million in U.S. government-sponsored loans under the PPP, with expectations that a significant portion will be forgiven [120]. - During the three months ended October 31, 2020, the Company sold 676,283 shares of Common Stock under the 2 ATM program, resulting in net proceeds of approximately $1.3 million [124]. - As of October 31, 2020, the Company had approximately $1.9 million in deposits in foreign banks, which could be distributed to the U.S. without adverse tax consequences [126]. Cost Structure - Research and development costs increased to approximately $912,000 for the third quarter of fiscal 2021, up from approximately $629,000 in the same period of fiscal 2020 [106]. - General and administrative expenses decreased to approximately $3.0 million for the three months ended October 31, 2020, from approximately $3.4 million for the same period in 2019 [103]. - Gross profit margin for the Marine Technology Products segment was 35% for the three months ended October 31, 2020, down from 41% in the same period of 2019 [101]. - Revenue from the sale of Klein products was approximately $1.2 million for the third quarter of fiscal 2021, a decline of 50% from approximately $2.4 million in the prior year period [102].