MIND TECHNOLOGY, INC. REPORTS FISCAL 2025 THIRD QUARTER RESULTS

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

October 31,

2024

January 31,

2024

ASSETS

Current assets:

Cash and cash equivalents

$

3,505

$

5,289

Accounts receivable, net of allowance for credit losses of $332 at each of October 31,

     2024 and January 31, 2024

9,471

6,566

Inventories, net

17,249

13,371

Prepaid expenses and other current assets

1,039

3,113

Total current assets

31,264

28,339

Property and equipment, net

775

818

Operating lease right-of-use assets

1,526

1,324

Intangible assets, net

2,420

2,888

Deferred tax asset

122

122

Total assets

$

36,107

$

33,491

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

2,179

$

1,623

Deferred revenue

248

203

Customer deposits

3,112

3,446

Accrued expenses and other current liabilities

1,742

2,140

Income taxes payable

2,093

2,114

Operating lease liabilities - current

660

751

Total current liabilities

10,034

10,277

Operating lease liabilities - non-current

866

573

Total liabilities

10,900

10,850

Stockholders' equity:

Preferred stock, $1.00 par value; 2,000 shares authorized; no shares issued and

     outstanding at October 31, 2024 and 1,683 shares issued and outstanding at

     January 31, 2024

—

37,779

Common stock, $0.01 par value; 40,000 shares authorized; 7,969 shares issued and

     outstanding at October 31, 2024 and 1,406 shares issued and outstanding at January

     31, 2024

80

14

Additional paid-in capital

135,572

113,121

Accumulated deficit

(110,479)

(128,307)

Accumulated other comprehensive gain

34

34

Total stockholders' equity

25,207

22,641

Total liabilities and stockholders' equity

$

36,107

$

33,491

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

For the Three Months

Ended October 31,

For the Nine Months

Ended October 31,

2024

2023

2024

2023

Revenues:

Sales of marine technology products

$

12,105

$

4,974

31,819

23,132

Cost of sales:

Sales of marine technology products

6,684

2,721

17,402

13,402

Gross profit

5,421

2,253

14,417

9,730

Operating expenses:

Selling, general and administrative

2,762

2,941

8,305

9,160

Research and development

562

508

1,352

1,479

Depreciation and amortization

221

257

724

892

Total operating expenses

3,545

3,706

10,381

11,531

Operating income (loss)

1,876

(1,453)

4,036

(1,801)

Other income (expense):

Interest expense

—

(169)

—

(536)

Other, net

(189)

25

320

336

Total other income (expense)

(189)

(144)

320

(200)

Income (loss) from continuing operations before income taxes

1,687

(1,597)

4,356

(2,001)

Provision for income taxes

(396)

(112)

(1,313)

(590)

Net income (loss) from continuing operations

1,291

(1,709)

3,043

(2,591)

Income from discontinued operations, net of income taxes

—

2,277

—

1,424

Net income (loss)

$

1,291

$

568

$

3,043

$

(1,167)

Preferred stock dividends - declared

—

(947)

—

(947)

Preferred stock dividends - undeclared

(368)

—

(2,262)

(1,894)

Effect of preferred stock conversion

14,785

—

14,785

—

Net Income (loss) attributable to common stockholders

$

15,708

$

(379)

$

15,566

$

(4,008)

Net Income (loss) per common share - Basic and Diluted

Continuing operations

$

2.87

$

(1.89)

$

5.62

$

(3.86)

Discontinued operations

$

—

$

1.62

$

—

$

1.01

Net income (loss)

$

2.87

$

(0.27)

$

5.62

$

(2.85)

Shares used in computing net income (loss) per common share:

Basic and diluted

5,473

1,406

2,772

1,406

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

For the Nine Months Ended

October 31,

2024

2023

Cash flows from operating activities:

Net income (loss)

$

3,043

$

(1,167)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

724

1,230

Stock-based compensation

141

264

               Gain on sale of Klein

—

(2,393)

Provision for inventory obsolescence

67

23

Gross profit from sale of other equipment

(457)

(385)

Changes in:

Accounts receivable

(3,006)

(688)

Unbilled revenue

164

51

Inventories

(3,944)

(3,174)

Prepaid expenses and other current and long-term assets

2,076

566

Income taxes receivable and payable

(24)

(21)

Accounts payable, accrued expenses and other current liabilities

98

(1,045)

Deferred revenue and customer deposits

(289)

1,115

Net cash used in operating activities

(1,407)

(5,624)

Cash flows from investing activities:

Purchases of property and equipment

(213)

(199)

       Proceeds from the sale of Klein, net

—

10,832

Sale of other equipment

457

385

Net cash provided by investing activities

244

11,018

Cash flows from financing activities:

       Preferred stock conversion transaction costs

(619)

—

       Net proceeds from short-term loan

—

2,947

Payment on short-term loan

—

(3,750)

       Refund of prepaid interest on short-term loan

—

214

Net cash used in financing activities

(619)

(589)

Effect of changes in foreign exchange rates on cash and cash equivalents

(2)

(14)

Net change in cash and cash equivalents

(1,784)

4,791

Cash and cash equivalents, beginning of period

5,289

778

Cash and cash equivalents, end of period

$

3,505

$

5,569

MIND TECHNOLOGY, INC.

Reconciliation of Net Income (Loss) and Net Cash Used in Operating Activities to EBITDA and

Adjusted EBITDA from Continuing Operations

(in thousands)

(unaudited)

For the Three Months

Ended October 31,

For the Nine Months

Ended October 31,

2024

2023

2024

2023

Reconciliation of Net income (loss) to EBITDA and Adjusted

EBITDA from continuing operations

(in thousands)

Net income (loss)

$

1,291

$

568

$

3,043

$

(1,167)

Interest expense, net

—

169

—

536

Depreciation and amortization

221

290

724

1,230

Provision for income taxes

396

112

1,313

590

EBITDA (1)

1,908

1,139

5,080

1,189

Stock-based compensation

47

106

141

264

Income from discontinued operations net of depreciation and amortization

—

(2,308)

—

(1,762)

Adjusted EBITDA from continuing operations (1)

$

1,955

$

(1,063)

$

5,221

$

(309)

Reconciliation of Net Cash Provided by (Used in) Operating

Activities to EBITDA

Net cash provided by (used in) operating activities

$

2,288

$

(2,147)

$

(1,407)

$

(5,624)

Gain on Sale of Klein

—

2,393

—

2,393

Stock-based compensation

(47)

(106)

(141)

(264)

Provision for inventory obsolescence

(22)

(23)

(67)

(23)

Changes in accounts receivable (current and long-term)

(115)

(2,570)

2,842

637

Interest paid, net

—

169

—

576

Taxes paid, net of refunds

473

192

1,411

617

Gross profit from sale of other equipment

—

49

457

385

Changes in inventory

(1,798)

2,841

3,944

3,174

Changes in accounts payable, accrued expenses and other current

liabilities and deferred revenue

2,161

(427)

191

(70)

Changes in prepaid expenses and other current and long-term assets

(1,034)

763

(2,076)

(566)

Other

2

5

(74)

(46)

EBITDA (1)

$

1,908

$

1,139

$

5,080

$

1,189

1.

EBITDA and Adjusted EBITDA are non-GAAP financial measures. 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, stock-based compensation, impairment of intangible assets and other non-cash tax related items. 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 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 and we believe 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.

Contacts:

Rob Capps, President & CEO

MIND Technology, Inc.

281-353-4475

Ken Dennard / Zach Vaughan

Dennard Lascar Investor Relations

713-529-6600

[email protected]