Mind Technology Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tyson Bauer - KC Capital - Analyst : Good morning, gentlemen, and excellent quarter. Seems like we've now entered into the phase of more of the blocking and tackling quarters with a lot of the financial noise behind us, which is obviously a relief to all. And we're now starting to build that cash buffer for the company. Appears like you should be able to the end the year, your fiscal year at about $5 million in cash unless you have some networking capital gains or other uses that could embellish that number going forward. With that type of capitalization now in place and building that cash buffer for you, what options does that open up for you where we were going from survival to now looking at more of a growth phase for the company?

Question: Tyson Bauer - KC Capital - Analyst : I don't -- speaking for myself, I'm not sure the street or shareholders necessarily want you to go out and do a large acquisition at this point in time. We just caught our --

Question: Tyson Bauer - KC Capital - Analyst : Yeah, exactly. Give us a sense. I think one thing that is missing from perspective, shareholders and institutions that we talk with is just the scope of your global installed base when we're talking about seismic fleets and other service providers in the marine side. That parts, that services business really is a growing annuity force for your future financials. Give us a sense of that global installed base of what that means.

Question: Tyson Bauer - KC Capital - Analyst : And because a couple of years ago, the bigger competitor dropped out of the industry. This really is your ball field here. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 2:00PM, MIND.OQ - Q3 2025 Mind Technology Inc Earnings Call

Question: Tyson Bauer - KC Capital - Analyst : Okay.

Question: Tyson Bauer - KC Capital - Analyst : In the last quarter, you brought up the concept of leverage versus pricing, helping out margins. We saw that leverage on your operating expenses, that additional top line and holding the operating expenses there, the gross margin a little light, but you have product mix, you have other things that go into there. Is that something that we should see a greater influence on that pricing side as your new orders, that pipeline is fairly robust and with the addition of the leverage on the operating side, we'll see bigger improvements in that EBIT margin.

Question: Tyson Bauer - KC Capital - Analyst : Okay. And the question you hear a lot of these conference calls, with the new administration coming in pros and cons, obviously, possible tariffs on one side, deregulation the other side, which can improve Gulf activity. Comments from Pemex, which we've heard various times throughout the past decade plus that don't necessarily materialize, but just your sense within the industry of their outlook in general and how that improves your outlook.

Question: Tyson Bauer - KC Capital - Analyst : Okay. This is the time of year that a lot of your customers are making CapEx decisions for the next calendar year and beyond. Would you anticipate more new order flow as we get beyond the first of the year and really early next year, a little pickup in that activity?

Question: Tyson Bauer - KC Capital - Analyst : Okay. And last question for me, you talked about new generation streamer becoming available. Would that be a prelude to more full system sales once that gets available to the industry and your customer base? And would you expect favorable pricing and margins on that new product coming out?

Question: Tyson Bauer - KC Capital - Analyst : Sound wonderful. Thank you, gentlemen.

Question: Ross Taylor - ARS Investment Partners - Analyst : First, it's always exhausting to follow Tyson because you're having to spend so much time crossing off your questions. First, congratulations on everything you guys have accomplished this year, especially the operational performance, which is really impressive. I have not seen a queue yet so is it possible that you give us what the GAAP earnings would be this year year-to-date? Obviously, your early GAAP earnings were impacted by a number of other factors. These are impacted by some factors, but I'm trying to get a run rate earnings per share number for where you were sitting at this year.

Question: Ross Taylor - ARS Investment Partners - Analyst : Okay. Thank you very much.

Question: Ross Taylor - ARS Investment Partners - Analyst : Yeah, that's what I was looking for. Thank you very much. You said about 40% of revenues and you and Tyson talked about the after-market aspect of your business, is that 40% a number that one should see on an annual basis? I understand because of the fact that it's driven, you might have some seasonality or some orders that are higher or lower. But is that a reasonably good number overall or should we expect to see that be somewhat lower or grow higher as you get more product in the field?

Question: Ross Taylor - ARS Investment Partners - Analyst : Yes. And I would assume that it doesn't matter how new or old a piece of equipment is, it's really how it's being utilized and used, which is what drives the need for it. So that even a new piece of equipment can result in after-market sales reasonably quickly if it turns out that it's used in the environment.

Question: Ross Taylor - ARS Investment Partners - Analyst : Yeah, I can see a lot of things can go wrong with that. What are the needs? You talked two things. One is what is the -- what areas are driving your sales growth in here? I mean, I look at you guys and that we've seen you have the energy market, you have the defense market, you have the subsea mining market, you have the mapping market, you have other markets, looking for Malaysian airliners probably, things of that nature. What is it that's actually -- what are you seeing or are you seeing new areas of interest out there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 2:00PM, MIND.OQ - Q3 2025 Mind Technology Inc Earnings Call

Question: Ross Taylor - ARS Investment Partners - Analyst : And I would think that when the UN has a program that wants to map all the world's ocean bottom, so I would assume that as that goes forward, that's a market opportunity or continuing source of demand. But also, the drone -- the growth of drone submarines and the like, it strikes me as there's a lot of need for subsea mapping along with that type of effort where you, if you're going to program something to go somewhere, you better know that there's not some large rock in the way, is that an area where you're seeing growing interest?

Question: Ross Taylor - ARS Investment Partners - Analyst : Okay. That would be great. Also, you talked about the new products, what kind of CapEx or R&D funding needs do you see having for those?

Question: Ross Taylor - ARS Investment Partners - Analyst : Okay. And is the cash conversion ratio which was a little over 13% this year something we should expect pushing forward?

Question: Ross Taylor - ARS Investment Partners - Analyst : Perfect. Fantastic. And lastly, I would agree with Tyson's comment that I think at this stage given all the success and opportunity, I'm not sure I want to see you guys do a big acquisition just yet. I'm not saying you can't manage it, but I'm saying, let us get to understand what the powerful profitability that matrix here is and then we can push forward. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 2:00PM, MIND.OQ - Q3 2025 Mind Technology Inc Earnings Call

Question: Ross Taylor - ARS Investment Partners - Analyst : I often do.sk my dogs, okay. As I said, you guys are doing a great job. I think this is -- this has really turned things around, business wise. It's -- to me quite honestly, when I look at what you talked about your earnings, your $3 million in earnings for the year that basically gives you a run rate that's probably north of Tyson's or around or north of Tyson's estimate, which quite honestly, even if you know the current price of the stock makes it ridiculously cheap and the market will recognize it. But you guys have done a lot to get there. I want to thank you for your efforts.

Question: Ross Taylor - ARS Investment Partners - Analyst : You take care. Have a great holiday, by the way.