MIND Technology, Inc.

Greetings, and welcome to the MIND Technology Fiscal 2023 Second Quarter Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Zach Vaughn, with Denard Laskar Investor Relations. Thank you. You may begin.

Thank you, Operator. Good morning and welcome to Mind Technology Fiscal 2023 Second Quarter Comforts Call. We appreciate all of you joining us today. With me are Rob Capps, President and Chief Executive Officer, and Mark Cox, Vice President and Chief Financial Officer. Before I turn the call over to Rob, I have a few items to cover. If you would like to listen to a replay of today's call, it will be available for 90 days via webcast by going to the Investor Relations section of the company's website at mind-technology.com. or via a recorded instant replay until September 20th. Information on how to access this replay was provided in yesterday's earnings release. Information reported on this call speaks only as of today, Tuesday, September 13th, 2022, and therefore you are advised that time-sensitive information may no longer be accurate as of the time of any replay listening or transcript reading. Before we begin, let me remind you that certain statements made by management during this call may constitute forward-looking statements within the meaning of this Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties, and other factors, many of which the company is unable to predict or control, that may cause the company's actual future results or performance to materially differ from any future results or performance expressed or implied by those statements. These risks and uncertainties include the risk factors disclosed by the company from time to time and its filings with the SEC, including in its annual report on Form 10-K for the year ended January 31, 2022. Furthermore, as we start this call, please also refer to the statement regarding forward-looking statements incorporated in our press release issued yesterday. And please note that the contents of our conference call this morning are covered by these statements. Now I would like to turn the call over to Rob Capps.

Okay, thanks, Zach. I'd like to begin by making some observations regarding the second quarter and on the market environment. Mark will then discuss the financials in more detail. At the end, I'll wrap up things with some remarks about our outlook. We're pleased to report that our fiscal 2023 second quarter results came in as expected. Revenues were about 8.7 million, which is up 28% over last year's second quarter, and slightly below the first quarter revenues of 9.1 million. Importantly, our operating loss improved to approximately $1.6 million compared to $2.6 million in last year's second quarter and $2.5 million in the first quarter of this year. And when compared to the first quarter of this year, we saw an improvement in gross margins coupled with lower selling general and administrative expenses and lower research and development costs. As a company, we believe MIND is uniquely positioned to capitalize on the tailwinds that we're seeing in each of our key markets. The sustained global energy prices continue to drive robust order activity in the marine seismic industry. Our marine survey business has also seen an uptick in interest resulting from those same high energy prices as attention shifts towards alternative forms of energy, such as wind farms. The ongoing global geopolitical and security situation has also highlighted the need for our maritime security technology. Therefore, we're optimistic we'll continue to grow our book of business in the coming quarters as we look to execute on the growing demand. Our backlog as of July 31st, 2022 was approximately $19.3 million, which is up from $13.1 million at the beginning of this fiscal year. In addition to this backlog of firm orders, We are pursuing a number of other opportunities for which we have high confidence. These orders reflect the continued positive momentum that we're experiencing in various markets, and we believe that our products are uniquely positioned to benefit from the strengthening macroeconomic environment. As I've mentioned previously, we believe there is positive momentum in each of our three key markets. That's exploration, defense, and survey. Strength in global energy markets is driving demand in the exploration space, as many of our customers are reporting improving metrics and, in some cases, looking to expand their fleets. So that's good news for us. GunLink, BuoyLink, and SeedLink products continue to enjoy broad acceptance in this space. Activity surrounding alternative energy products, such as offshore wind farms, is resulting in an increased demand within the survey market. In addition to our single-beam and multi-beam side-scan sonar systems, we're seeing much interest in our C-Link towed streamer systems for these applications. Recently introduced higher sampling rates for C-Link, which produces higher-resolution images, have resulted in increased interest in these three-dimensional high-resolution systems. The global geopolitical situation, particularly in Europe and Asia, has resulted in increased interest in maritime surveillance and security systems. We have recently experienced increased order activity, particularly for our multi-beam side-scan sonar systems, which we believe is related to these demands. And we also think this bodes well for our program to utilize our commercially developed total seismic arrays at SeaLink as passive sonar arrays in anti-submarine warfare and other maritime security applications, particularly those for utilizing uncrewed platforms. So now let me turn it over to Mark and let him walk you through our second quarter financial results in a bit more detail.