MIND Technology(US:MIND)2022-09-13 15:16Financial Data and Key Metrics Changes - Revenues for Q2 2023 were approximately $8.7 million, representing a 28% increase compared to $6.8 million in Q2 2022, but slightly below Q1 2023 revenues of $9.1 million [10][16] - Operating loss improved to approximately $1.6 million from $2.6 million in Q2 2022 and $2.5 million in Q1 2023 [10] - Gross profit for Q2 2023 was $3.5 million, up approximately 59% year-over-year, resulting in a gross profit margin of approximately 40%, an increase from 33% in the prior year [16] - Net loss from continuing operations was $1.7 million compared to a loss of $2.7 million in Q2 2022 [18] - Adjusted EBITDA from continuing operations was a loss of $1 million, an improvement from a loss of $1.8 million in Q2 2022 [18] Business Line Data and Key Metrics Changes - The marine seismic industry is experiencing robust order activity due to sustained global energy prices, positively impacting the exploration business [11] - Increased interest in alternative energy, particularly offshore wind farms, is driving demand in the marine survey business [11] - The company has seen heightened order activity for maritime security technology, particularly in response to global geopolitical tensions [14] Market Data and Key Metrics Changes - Backlog as of July 31, 2022, was approximately $19.3 million, up from $13.1 million at the beginning of the fiscal year [12] - The company is experiencing positive momentum across its three key markets: exploration, defense, and survey [12] Company Strategy and Development Direction - The company aims to capitalize on market trends driven by high energy prices and geopolitical factors, focusing on expanding its product offerings in marine seismic, survey, and defense sectors [11][12] - Management is optimistic about the potential for growth in the second half of fiscal 2023, expecting improved financial performance [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges such as supply chain issues and changing delivery requirements but remains confident in the company's position and market trends [22] - The expectation is for a fall-off in Q3 revenues compared to Q2, but significant improvement is anticipated in Q4, potentially leading to profitability [21][22] Other Important Information - The company deferred payment of dividends on preferred stock to preserve financial flexibility, with plans to resume payments in the future [23] - The company has no funded debt or outstanding obligations aside from normal trade obligations, maintaining a largely variable cost structure [19] Q&A Session Summary Question: Revenue expectations for the year - Management maintains revenue expectations of approximately $30 million to $40 million for the year, with the second half expected to outperform the first [29][30] Question: Cash management for large orders - Management is focused on managing liquidity and working capital, exploring options such as pre-payments and monetizing non-strategic assets to fulfill large orders [32][34] Question: European joint venture status - The joint venture is expected to contribute more in the next fiscal year, with some benefits already being realized from the geopolitical situation [37][39] Question: Backlog and future orders - The backlog of $19.3 million is expected to cover the majority of revenue targets for the fiscal year, with additional high-confidence opportunities being pursued [40][41] Question: Transition to profitability - Management believes that the second half of the fiscal year could lead to profitability, setting the stage for a higher base level of business going forward [53][54]