MIND Technology, Inc.

Greetings. Welcome to Mind Technology first quarter fiscal 2026 earnings conference call. At this time, all participants are in listen-only mode. A 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 is now my pleasure to introduce your host, Zach Vaughn. Thank you, sir. You may begin.

Thank you, Operator. Good morning, and welcome to the MIND Technology Fiscal 2026 First 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 have a few items to cover. If you'd 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 June 18. Information on how to access the replay was provided in yesterday's earnings release. Information reported on this call speaks only as of today, Wednesday, June 11, 2025, 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 include the risk factors disclosed by the company from time to time in its filings with the SEC, including in its annual report on Form 10-K for the year ended January 31st, 2025. 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'd like to turn the call over to Rob Capps.

Rob Capps Okay. Thanks, Zach. And thank all of you for joining us today. Today, I will discuss some highlights from the quarter. Mark will then provide a more detailed update on our financials. Then I'll return to wrap things up with some remarks about our outlook. As expected, mine's results for the first quarter were down sequentially after a record fourth quarter. However, the decline was greater than initially anticipated after several customers were unable to take delivery of approximately 5.5 million of orders prior to quarter end. These delays are due either to late delivery of certain third-party components or difficulty in arranging shipping. But these are timing issues, not lost business. As I reminded you repeatedly, a slippage of a few weeks or days for a large order can have a significant impact on a particular period. We expect to deliver these orders in the second quarter. Despite these delays, cash flow from operations again grew during the quarter to about $4.1 million. which is an indication of our improved liquidity. We remain bullish on the balance of this fiscal year despite the shortfall in the first quarter and expect a much improved second quarter. MIND has established a more resilient business with greater order visibility, a strong demand environment, and a much improved balance sheet and capital structure. We will almost certainly encounter other timing issues at some point in the future, but to the extent possible, we're working to mitigate the potential impacts on our financial results. We're doing everything in our power to control what we can control. We're focused on optimizing our supply chain to manage lead times on components to meet the delivery requirements of our customers. Our inventory levels over the past six months have been a great evidence of this, as we're now using our improved visibility to draw down our inventory balances. As a result, we believe MIND remains strategically positioned for growth, improved financial results, and profitability in coming periods. Our backlog of firm orders as of April 30, 2025 was approximately $21 million, compared to $16.2 million as of January 31, 2025, and approximately $31 million as of April 30, 2024. Beyond this backlog, we have an active pipeline of pending and highly confident orders and prospects that are well in excess of our current backlog of received orders. The order for our GUNLINK 4000 system that we announced yesterday morning, which is not included in the above amounts, is a great example of these prospects. Combination of our existing backlog and this active pipeline bode well for strong financial performance as we progress through fiscal 2026 and beyond. As we approach the summer months, I want to remind you that orders, new orders, don't always arrive at a constant rate throughout the year, and order flow is often sporadic. The variance between order flow is commonplace and not cause for concern. We also believe that recent uncertainty in the global economic environment has caused some delays in purchase commitments. Despite this, in recent weeks, we have identified new opportunities. We think this bodes well for the balance of this fiscal year and beyond. We continue to benefit from three main product lines, our gun link source controllers, buoy link positioning systems, and sea link streamer systems. All three of these are meaningful contributors to our backlog and will continue to drive improvements in financial results going forward. As a whole, our CMAT business enjoys a strong market position with each of its products, even a dominant position in some cases. Our backlog and pipeline of orders are almost entirely comprised of these products. And I'm confident that the favorable market dynamics will enable us to generate many new orders in the future. We're also seeing a number of new promising opportunities related to our products that I hope to be able to update you on later this year. Another component that has meaningfully contributed to the sustainability of our improved financial results is our aftermarket business. Historically, approximately 40% of our revenue comes from this aftermarket activity. However, in the first quarter of this year, the aftermarket activity represented approximately 71% of our revenues. Now, this was to be expected due to the deferral of some system sales, as I discussed a moment ago. As our install base of CMAP products continues to expand, with it comes the chance for aftermarket opportunities, such as spare parts, repairs, and support services. As a reminder, our products are deployed in a very harsh environment, and damage is common and often inevitable. We are in the final stages of an expansion of our facility in Huntsville, Texas, which will enable us to provide additional repair and manufacturing services from that location. During the expansion, which has been in progress for the last couple of quarters, our revenue-producing activities have been impaired. However, with the completion of these modifications, we expect the contribution from this location to build during the balance of this year and beyond. We anticipate this becoming a meaningful part of our revenue stream. Turning to our results, marine technology product revenues for the first quarter of fiscal 2026 were $7.9 million. As I mentioned, we expected a natural sequential contraction in revenue after an exceptional fourth quarter. However, we saw approximately $5.5 million of orders slide to the right. We will continue to capitalize on macro tailwinds and customer engagement to stimulate order flow and generate improved results. We have deliberately worked to improve our execution, efficiency, and cost structure. We expect these efforts to deliver favorable results in future periods. Despite broad-based macro uncertainties in recent months, general market conditions within the marine technology space continue to be strong. We see a number of opportunities and continue to field inquiries and respond to requests for quotations. As a result, we are making additional investments to further develop and advance our next generation of marine technology products to meet the evolving needs of our customers. I'm confident that our differentiated approach, best-in-class suite of products, will continue to give us the competitive advantage to address the demand we see within the marine technology industry. Now, I'll let Mark walk you through our first quarter financial results in a bit more detail.