MIND Technology(US:MIND)2022-12-14 16:47Financial Data and Key Metrics Changes - Revenues from continuing operations totaled $4.9 million in Q3 2023, a 41% decrease compared to $8.3 million in the same period last year [12] - Gross profit from continuing operations was $1.5 million, down approximately 53% year-over-year, resulting in a gross profit margin of approximately 31%, down from 38% in the prior year [12][13] - Net loss from continuing operations for Q3 2023 was $3.3 million, compared to a $2.1 million loss in Q3 2022 [15] - Adjusted EBITDA from continuing operations was a loss of $2.7 million, compared to a loss of $1.3 million in Q3 2022 [15] Business Line Data and Key Metrics Changes - The exploration market is experiencing strong order flow, driven by sustained global energy prices, with customers looking to expand their fleets [8] - The marine survey business has seen increased interest due to higher energy prices, particularly for offshore wind farms [9] - Increased order activity for maritime security and surveillance technology, particularly for multi-beam side scan sonar systems, has been noted [10] Market Data and Key Metrics Changes - The backlog as of October 31, 2022, was approximately $19.9 million, up over 50% from $13.1 million at the end of fiscal 2022 [11] - The company is experiencing positive momentum in various markets, supported by favorable macroeconomic conditions [11] Company Strategy and Development Direction - The company aims to capitalize on favorable market trends in exploration, defense, and survey sectors [8] - There is a focus on developing synthetic aperture sonar and passive sonar arrays as part of strategic initiatives [14] - The company anticipates generating revenue of between $12 million and $14 million in Q4 2023, expecting to return to profitability [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges such as supply chain issues and evolving delivery requirements but remains optimistic about future growth [20] - The company is working to address liquidity challenges and aims to resume preferred stock dividend payments in the future [21] - Management believes that the fourth quarter will demonstrate profitability and that positive market trends will continue into fiscal 2024 [22] Other Important Information - The company has no funded debt or outstanding obligations aside from normal trade obligations, with a working capital of approximately $12.8 million and cash of approximately $812,000 as of October 31, 2022 [17] Q&A Session Summary Question: Should Q3 and Q4 be viewed as a composite for a better understanding of the company's position? - Management indicated that while there is some overlap, Q4 is expected to show an increase in revenue beyond the Q3 levels [29] Question: What is the anticipated impact of the joint venture partner in Europe on revenue? - Management is cautious but optimistic about the significant return expected from the joint venture [32] Question: What is the outlook for cash and liquidity by the end of the fiscal year? - Management refrained from projecting cash balances but noted ongoing deliveries and efforts to improve liquidity [35] Question: Why is there a lack of insider buying despite the low stock price? - Management acknowledged some insider buying earlier in the year but noted restrictions on trading due to non-public information [50] Question: How long will it take to reach the $100 million revenue run rate? - Management suggested it may take until the year after next to reach the $100 million target, emphasizing the need for growth to compound [52]