MIND Technology, Inc. Q4 FY2026 earnings call

• Global business not materially impacted by Middle East conflict, but monitoring closely.
• 2026 fiscal year showed resilient results despite macro environment. CMAP revenues flat in Q4 vs Q3. Customers deferred new order commitments due to commodity price volatility and geopolitical affairs.
• Long-term growth trajectory and operational momentum intact. Backlog as of Jan 31, 2026 was ~$13.9 million. Received ~$9.5 million orders in Q4, half delivered in Q4, remaining to be delivered early in fiscal 2027.
• Pipeline of potential orders solid, several times greater than firm backlog. Pursuing significant projects like new vessels for governmental organizations. Entered trade finance facility with HSBC to pursue larger projects.
• Aftermarket activities account for ~60% of 2026 total revenues, providing stable recurring revenue. Margins better than large system sales. Installed base of CMAP products expanding, driving more aftermarket activity. Ramping up activity at newly expanded Hatsville facility.

Our three main product lines are Benlink Source Controllers, BuoyLink Positioning Systems, C-Link Stream Assistants. In fiscal 2026, aftermarket business accounted for about 60% of total revenues. Marine technology product revenues for the fourth quarter of 2026 were $9.8 million and full year 2026 were $40.9 million. Full-year gross profit was approximately $18.7 million, representing a gross profit margin of 46% for the year compared to 45% for fiscal 2025. The year-over-year margin improvement was primarily attributable to product mix and cost structure optimization.

• Expect results for fiscal 2027 to be down compared to fiscal 2026. Still expect to be cash flow positive for the year.
• Plan to use enhanced liquidity to position the business for improved financial results through organic growth opportunities, acquisitions, and strategic alliances.

• Market uncertainty, customer decision-making delay, and order commitment deferral due to macro environment and geopolitical affairs may impact actual results.
• Pursuing significant projects involves risks such as providing security bonds and potential challenges in bid processes.

Q: Talk to us about what you see, where the financing is coming from for your customers, and what's driving the delay.

A: Customers were cautious due to energy market uncertainty, M&A activity, and conserving cash. Now seeing improvements in activity outside North America, and longer-term need remains.

Q: Looking at generating a year somewhat under last year, is cash flow expected to be positive?

A: Yes, expect cash flow to be positive in the year.

Q: Talk about acquisition strategy and economics of building for others.

A: Don't want to be contract manufacturer. Looking for partnerships where can leverage existing capabilities. Attractive as a public company with cash flow positive, no debt, pristine balance sheet for entities to monetize.

Q: About large prospects for government entities, how important is tax loss forward asset.

A: Depends on situation, could be meaningful for tax-neutral transaction.

Q: Is U.S.-domiciled a benefit.

A: Probably yes, due to access to U.S. capital markets and positive control standpoint.

Q: What percentage of Q4 revenue was parts services repair.

A: Probably 55 - 60% aftermarket.

Q: About order timing and capital budgets.

A: Capital budgets can go up or down during the year, and governmental agencies work on different calendars. Uptick in inquiries but uncertain when opportunities materialize.

Q: About working with Chinese customers.

A: Do deal directly with Chinese, but some restrictions on certain products.

Q: How to keep shareholder value during fiscal 27 pause.

A: Value proposition growing as progress through fiscal 27 with opportunities to create value.

Q: About large projects for new vessels, framing the scenario.

A: Certain technology aspects unique to us, but some parts of projects have competition and potential contractual issues.