Mind Technology Inc Q3 2026 Earnings Call Transcript

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

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Before we get to the ATM questions, your confidence in your fiscal Q4, does that in part we got that recurring base around $6 million per quarter. And even though we just heard the announcement on the orders, these are orders we've talked about for a couple of quarters. Does that imply that they were already in process? So the turnaround for delivery is going to be much quicker than maybe a typical order that you might get that would require two, three quarters before you actually deliver those?

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : If we look at past quarters, such as Q1 of fiscal '25, similar revenue, similar product mix. This go around, you had a 300 basis point improvement in your gross margin. So you've done well in that part of the business, obviously offset a little bit by a 10% increase on the SG&A due to stock-based comp. When we see the system sales included in those numbers where it makes up a bigger part of that mix, it appears the contribution margin of those large systems is 60% roughly or if not greater. Is that what you're able to bid those projects at? Or is that because we're seeing some of that fixed cost absorption that allows that contribution margin to be so robust? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, MIND.OQ - Q3 2026 Mind Technology Inc Earnings Call

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Okay. And you talked about a lull period, orders slowed. Give us little -- you talked about geopolitical risk, given the leadership in the globe right now, it doesn't seem like that's going to abate anytime soon. What gives you that confidence that lull period ends? And two, of the pipeline of orders that you do have, is it more from existing past customers? Or are you seeing an influx of new customers showing interest in your product lines?

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Okay. Now let's get to the ATM. Backing into the numbers, it looks like you sold about 1 million shares at $11 less brokerage fees at the end of the quarter. The two weeks subsequent to the quarter, the stock price runs up to 14%. I would assume if you participated, you would have let us know that and probably by ending the ATM, allow the stock to get up to 14 on that side of it. Where -- did you see something that you are targeting as a potential event? Or is this more of a case of just getting a buffer to your net working capital?

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Does that imply that if the share price got back in that range, you would use that as an opportunity again? Or are you pretty well set with where you are now?

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Okay. And you talked about the Horizon long term still looks good. What creates that step-up function for the company where we're not in that $8 million to $14 million a quarter type outlook depending on the schedules and deliveries, where we get that to that $12 million to $20 million a quarter going forward. What's it going to take to step it up? Is it going to be a potential M&A type situation or affiliation? Or is there something a new product or something that allows us to step up to show that growth for the company?

Question: Mike Mitcham - NCR Corporation - Analyst : Could you expand a little bit on the GWL collaboration? Is that meant to be an aftermarket servicing? Or is that more of a product line expansion or whatever you can share would be great.

Question: Ross Taylor - ARS Investment Partners - Analyst : First, I just want to confirm, so you had done no ATM action in the current quarter, correct? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, MIND.OQ - Q3 2026 Mind Technology Inc Earnings Call

Question: Ross Taylor - ARS Investment Partners - Analyst : But when you're talking about your 1 million shares and $11 million raise, you're including what you did on the last day, correct?

Question: Ross Taylor - ARS Investment Partners - Analyst : Okay. So we got the math from that now. Okay. A couple of things. One, you talked about the ability to do a quick turnaround on the recent orders that you got after the end of the prior quarter. Are the costs for building those systems. It sounds like you've already started building some of them. You might even have some of them already built. Are those costs when we get the Q, will those costs actually be in the Q anywhere?

Question: Ross Taylor - ARS Investment Partners - Analyst : Okay. And what kind of cost are we looking at? So how much of inventory should we assume is tied into orders that will be going out this quarter?

Question: Ross Taylor - ARS Investment Partners - Analyst : Okay. I'm trying to get the idea of what cash -- what we should be looking at for free cash flow. And it would seem that you should have a pretty strong free cash flow quarter given that you've already put some of the costs in the inventory? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, MIND.OQ - Q3 2026 Mind Technology Inc Earnings Call

Question: Ross Taylor - ARS Investment Partners - Analyst : Okay, cool. Now it looks like you've talked about your opportunities. You obviously appear to be trying to find a way to ship or create income in the US, where you have tax loss carryforwards. Can you give an idea of kind of what type of magnitude, what type of expense? How do you value something if you're going to -- if you want to build that, how much of it can you effectively greenfield, you have your new expanded facility? How should we see run through that on an annual basis? Because it does sound like what you're trying to do is become -- you've got that tax asset and you're trying to find a way to turn that into value.

Question: Ross Taylor - ARS Investment Partners - Analyst : Okay. And touching on something Tyson asked on the 661 and kind of maintenance-type work that you guys -- recurring work you guys are doing. Is that -- is that a safe run rate on a quarterly basis effectively going forward, should we assume that how does it grow as your systems in the market grow?

Question: Ross Taylor - ARS Investment Partners - Analyst : Okay. And lastly, should we be looking at expecting your operating profit margin to push back up towards levels you were at some of your prior quarters? This quarter sets up -- it sounds like it sets up to be a strong quarter. You've got a lot of business that you got some systems business that should, I would think, allow you to push pretty well into the fixed cost structure. The last quarter, I have to say a little with the net profit margin. So I'm wondering if we're going to see it recover strongly in the current quarter.

Question: Ross Taylor - ARS Investment Partners - Analyst : Well I'm excited to see what you can do this quarter. I'm hopeful that you will stay off the ATM for a bit until you find a way to spend it to make back that money. I understand you want US liquidity, but at the same time, I think shareholders would love to see you actually -- would love to see that capital deployed in the way that's going to be adding to value for the company. So other than that, that's what I --