MIND Technology, Inc.

Greetings and welcome to the MIND Technology fiscal third quarter 2023 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, Ken Denard. Thank you. You may begin.

Thank you, operator, and good morning, everyone. Welcome to the Mind Technology Fiscal 2023 Third Quarter Earnings Conference 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've got a few housekeeping items to cover. If you'd like to listen to a replay of today's call, it'll 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 recorded instant replay telephonically until December 21st. Information on how to access the replay features was provided in yesterday's earnings release. Information reported on this call speaks only as of today, Wednesday, December 14th, 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 the 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 are included in the risk factors disclosed by the company from time to time in its filings with the SEC, including its annual report on Form 10-K for the year ended January 31, 2022. Furthermore, as we start this call, Please 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. And now with that behind me, I'd like to turn the call over to Rob Capps. Rob.

Okay, thanks, Ken. Now, we're doing something a little bit different this quarter. We've prepared an updated presentation covering our discussion this morning, and we posted it to our website. I invite you to refer to that at your leisure. As I usually do, I'll begin with some observations regarding the third quarter and on the market environment. Mark will then discuss the financials in more detail, and I'll wrap things up with some remarks about our outlook. As we mentioned on last quarter's call, we expected our third quarter results to be down a bit sequentially due to the timing of orders which we anticipated delivering in the fourth quarter. While our third quarter revenues of 4.9 million were slightly softer than we had predicted due to orders moving to the right, we believe that this sets the stage for a better than expected fourth quarter, during which we anticipate returning to profitability. We continue to execute on our growing backlog, and our order flow remains positively impacted by favorable macroeconomic trends. As a company, We believe MIND is uniquely positioned to capitalize on the pale winds that we're seeing in each of our three key markets, exploration, defense, and survey. The sustained global energy prices continue to drive robust order activity in the marine seismic industry. Many of our customers in the exploration space are reporting improving metrics, and in some cases, looking to expand their fleets. Our gun link, buoy link, and sea link products continue to enjoy broad acceptance in this space, and we expect our strong order flow in the exploration market to continue through the fourth quarter and into next fiscal year. Our marine survey business has also seen an uptick in interest, resulting from the same higher energy prices, as attention shifts towards alternative forms of energy, such as offshore wind farms. 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 and configurable systems, have resulted in increased interest in these three-dimensional high resolution systems. The ongoing global geopolitical and security situation, particularly in Europe and Asia, continues to highlight the need for our maritime security and surveillance technology. We have recently experienced increased order activity, particularly for our multi-beam side-scan sonar systems, which we believe is related to these demands. We believe our high-speed systems are particularly attractive for missions in the defense space. We also think the recent demand bodes well for our program to utilize our commercially developed towed seismic arrays, C-Link, as passive sonar arrays in anti-submarine warfare and other maritime security applications, particularly those utilizing uncrewed platforms. We've been encouraged by their sponsorizing from our demonstration of this technology at the U.S. Navy's Coastal Trident 2022 exercise in August of this year. Therefore, we're confident that we'll continue to grow our book of business in the coming quarters as we look to execute on the growing demand and favorable market conditions. Our backlog as of October 31st, 2022, was approximately $19.9 million. which is up over 50% from the $13.1 million backlog we reported at the end of fiscal 2022. In addition to this backlog of firm orders, we continue to pursue 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.