Press Release Details
Mitcham Industries Reports Fiscal 2018 First Quarter Results
Total revenues for the first quarter of fiscal 2018 were
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
"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
"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
Equipment manufacturing and sales decreased slightly to
Equipment leasing revenues for the first quarter of fiscal 2018, excluding lease pool equipment sales, were
Lease pool and other equipment sales were
Lease pool depreciation expense in the first quarter of fiscal 2018 decreased to
General and administrative expenses decreased to
CONFERENCE CALL
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About
Certain statements and information in this press release concerning results for the quarter ended
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
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: |
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936-291-2277 | |
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Dennard • | |
713-529-6600 |
Tables to Follow
| |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(in thousands, except per share data) | |||
(unaudited) | |||
|
| ||
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 |
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 | |
|
3,997 |
3,997 | |
Non-current prepaid income taxes |
1,192 |
- | |
Long-term receivables net of allowance for doubtful accounts of |
4,488 |
2,780 | |
Other assets |
28 |
28 | |
Total assets |
|
| |
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
|
| |
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, |
7,391 |
7,294 | |
Common stock, |
140 |
140 | |
Additional paid-in capital |
121,625 |
121,401 | |
|
(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 |
|
|
| |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
(in thousands, except per share data) | |||
(unaudited) | |||
For the Three Months Ended | |||
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 |
|
| |
Diluted |
|
| |
Shares used in computing net loss per common share: |
|||
Basic |
12,078 |
12,059 | |
Diluted |
12,078 |
12,059 | |
| ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(in thousands) | ||||
(unaudited) | ||||
For the Three Months | ||||
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 |
| |||||
Reconciliation of Net Loss and Net Cash Provided by Operating Activities to EBITDA and Adjusted EBITDA | |||||
For the Three Months Ended | |||||
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 |
|
| |||
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) |
|
| |||
(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 |
For the Three Months Ended | |||
2017 |
2016 | ||
(in thousands) | |||
Revenues: |
|||
Equipment Manufacturing and Sales |
$ 6,911 |
$ 7,220 | |
|
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 | |
|
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: |
|||
|
|
| |
Klein |
938 |
2,136 | |
SAP |
1,290 |
480 | |
Intra-segment sales |
(203) |
(315) | |
6,911 |
7,220 | ||
Cost of sales: |
|||
|
2,561 |
2,539 | |
Klein |
732 |
1,471 | |
SAP |
1,017 |
363 | |
Intra-segment sales |
(312) |
(315) | |
3,998 |
4,058 | ||
Gross profit |
|
| |
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)% |
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