Good day and welcome to the iAccess Alpha Virtual Best Ideas Summer Investment Conference 2025. The next presenting company is MIND Technology. If you'd like to ask a question during the webcast, you may do so at any point during the presentation by clicking on the Ask Question button on the left side of your screen, type your question into the box, and hit Send to submit. I'd now like to turn the floor over to today's host, Rob Capps, President and CEO of MIND Technology. Rob, the floor is yours.
Okay, thanks very much. I'd like to thank everyone for joining us this morning. Once again, my name is Rob Capps. I am the President and CEO of MIND. I'd like to take a few minutes this morning and give you a brief overview of MIND Technology, what we do, what we're all about. I think we'll have plenty of time for you to ask a few questions if you'd like. We will—thanks, Ms. Minnai. We'll forego the safe harbor statement if you'll allow that. What is MIND Technology? What do we do? Very simply put, we design, manufacture, and sell equipment that's used to gather data in the offshore exploration and survey business. Simply put, we don't conduct the surveys, we don't process the data, we supply the kit that enables the data gathering.
We provide this technology in three broad market areas: exploration, which includes traditional oil and gas exploration, as well as other types of exploration; survey markets for offshore installations of all sorts; as well as maritime security, which is an emerging market for us. We operate through our Seamap unit, which we'll talk more about in a few minutes, and have a variety of primary products. Most important of those are the seismic source controllers, GNSS positioning systems, solid towed seismic arrays, as well as a variety of repair and support services. We'll talk a bit more about these products here in a few minutes so you'll get a better understanding of what they do. We think MIND is a very compelling investment opportunity. We think we're very unique. We're profitable. We have a strong, ongoing business with good growth opportunities. We have a pristine capital structure.
We have only common stock and very limited employee options outstanding. We have no debt whatsoever. We have a very, very clean company from which to work from. We think that gives us a great platform to grow this company and deliver value to the shareholders. Enabling us to do that, we think we have a very good market environment for us. I think the macro environment is quite positive for us. If you look at the offshore space, the marine industry space, the long-term outlooks tend to be very positive. A lot of our customers are seeing increasing backlog, increasing profitability. We think the long-term outlook from marine exploration and survey work is really quite bullish.
We're seeing a variety of new applications arise, such as these surveys for offshore installations, such as wind farms, carbon capture facilities, all sorts of offshore installations require this ocean bottom survey work. We're seeing more and more applications of our type of equipment, our type of technology in these applications. We're also seeing opportunities for non-oil and gas exploration in the marine environment, rare earths, things of that nature. Again, that's increasing the markets for our customers, therefore increasing the demand that they have for our equipment. A very positive situation, we think. What's driven this growth for us? There have been a lot of changes within MIND Technology in the last two and three years. We've really transformed the company over the last two years. In August of 2023, we sold a unit, which was called Klein. It's a company that manufactures sonar units.
It's a company that we had bought some years earlier and, frankly, did not perform well for us. It was not a good acquisition in retrospect. We made the decision to exit that market, sold that business, allowed us to retire all outstanding debt at that point in time, and gave us working capital to deploy in the ongoing business. That was a really key turning point for us. It really gave us the basis from which to make the other changes that we'll talk about here in a moment. After that, we started to streamline the management and corporate operations. With a simpler company, we could operate more simply. We started to really focus on what we did best. That's really the Seamap business that we'll talk more about. With that transaction, we eliminated all debt. We became debt-free at that point.
Importantly, it really provided working capital from which we could exploit the opportunities that we were seeing within the Seamap business, the ongoing business that we had. Really a big, big change point for us. The next step we took was last fall of last year, the fall of last year. We had outstanding an issue of preferred stock, not convertible, but evergreen preferred stock and had been accumulating dividends that we were not able to service given our cash flow situation. We went to the holders of that preferred stock and arranged for a conversion of all of that preferred stock, including the accumulated dividends, into common stock. That was accomplished late last year. That eliminated all overhang from any of the preferred stock, any of the dividends, and turned that equity into common equity. Again, a very, very important step for us.
It really allowed the company to restore itself to profitability on an ongoing basis. Having done that, having started to make money with the company, we thought, "Okay, what's next for us?" We're still a very small company. What do we do next to really deliver value to the stockholders? We retained an investment banker, Lucid Capital, to help us assist, identify, and investigate potential strategic alternatives. Now, what can we do? We are not looking to make a large acquisition. That's not what we want to do. We want to add to what we have. We want to add products, add solutions that we can sell to our existing customer base. We want to lever what we have now. We want to stay within areas that we understand. We're very cognizant of enhancing stockholder value. We don't want to get bigger just to get bigger.
Increasing the value of the company is the objective here. That is what we're trying to do with this strategic alternative investment. We have filed a shelf registration with the SEC. We have no plans to raise capital at this point, but it is thought prudent to have that in place. Should opportunities arise, we could move quickly and execute on those. Simple as that. As we've transformed the company, we have made remarkable strides, in my opinion, in our financial metrics. Really, all the key ones. That is revenue, gross profit, operating income, and adjusted EBITDA. For us, when we say adjusted EBITDA, that is simply EBITDA plus any stock-based compensation. That is how we define it. We really achieved this growth by, again, streamlining the business that I talked about. We focused on the primary business by deploying that working capital and really focusing on that business.
We have, frankly, had favorable market conditions at the same time. We really tried to focus on what we do well, what we really know best, and not try to get too far afield. That has enabled us to operate much more effectively, more efficiently. Therefore, I think you are seeing the results in these financial metrics. That is something we are, frankly, quite proud of. Along with that, what helped this performance and helped the increase in sales is we have had better visibility through higher backlog levels. We have a strong backlog, and when we say backlog, we mean firm orders in hand. It means a purchase order or a contract in hand. Beyond the backlog that we report, we have a large listing, a large pipeline of pending orders, highly confident orders, and other prospects.
We really have pretty good visibility as to what the business looks like in the coming months. Obviously, the near term is better than the longer term, but that's really helped us operate much more efficiently. Been able to operate the manufacturing operations on a more efficient basis, manage working capital more efficiently, things of that nature. Let's assume the next slide. We move on to that. Backlog is an indicator, but it's just an indicator. It's not the only one. We have pretty consistently, as you can see from this slide, revenue for a year has exceeded the beginning of the year backlog by a wide margin in some cases. Again, backlog is important. You love to have backlog, but it's not the full story. It's really the pipeline and the visibility that we have is really the key.
We see in our business that order flow is just often uneven. It is not unusual for us to see things come in, not much activity for a while, but then it becomes very active. A flood of orders will come in at one time. It just depends on the situation at the time and how our customers are wanting to spend their capital dollars. Let's talk a bit about Seamap. That is our operating unit. We operate primarily, almost exclusively, through the Seamap subsidiary that is domiciled in Singapore. Our primary business has operated in Singapore. Seamap is a very well-known commodity within the marine exploration and survey markets. It is a known industry and well-known and well-respected, in my opinion. As far as the primary products, I alluded to these earlier. We have really four product areas, three primary products, and then another service area.
GunLink is our energy source controller used in seismic acquisition systems. Again, it dominates the market. We have almost 100% of this marketplace. It is a limited market for sure, but we dominate that market. We have SeaLink, which is a reconfigurable towed streamer system used primarily for what we call three-dimensional ultra-high resolution surveys of the ocean bottom. Not used typically for deep water oil and gas exploration. That's really not our focus. Ours is more on the three-dimensional, very high resolution surveys for ocean bottom installations. BuoyLink is a GNSS or GPS positioning system that's used in conjunction with the other products. In addition, we have a broad line of repair services, spare parts, support, service, training, things of that nature. People we sell to are customers. They're the traditional seismic exploration contractors. They're the marine survey companies, the companies that do the survey work.
Generally, we're selling to people that own and operate the exploration survey vessels. These are most often the contractors, but sometimes you'll see a boat owner, a vessel owner actually own the vessel, be our customer, and then they will lease that to someone actually conducting the surveys. Now, we do sell, in addition to some governmental research organizations that also conduct surveys such as this, but more for research purposes, not so much for commercial applications. The majority of our customers are outside of the United States. And since our sales are taking place out of Singapore, we have very limited exposure to tariffs on imports or exports through the United States. The recent activity with tariffs being added and taken away has really had essentially no impact on our business to date. Something we're keeping an eye on for sure.
Arguably, it may have had an impact on the global economy to some degree. That has a trickle-down effect, perhaps. As far as a direct effect on us, we really aren't seeing that. A lot of the expansion we've seen in the business has been due to these new markets for ocean bottom surveys. Again, this ultra-high resolution surveys related to offshore installations. Again, wind farms, carbon capture facilities, any sort of offshore installation, as well as increased repair activity. I understand this equipment operates in a very harsh environment in the ocean, which creates the need for repair and replacement services. That's a good thing for us. Just take a quick look at this next slide. Give you maybe a bit of a sense as to how this equipment is deployed.
Again, maybe I can't tell a lot from this, but I think the message here is, again, this is deployed in the ocean. The activities around it with a seismic exploration project, it's a very harsh environment. The stuff breaks a lot. That stuff wears out a lot. That results in repeating business for us. Repairs, spare parts, service. We call this our aftermarket business. I'm going to talk more about the aftermarket here in just a moment because it's becoming an important part of our business. Where do we see our growth opportunities? We do see some organic opportunities ahead of us. We're seeing growth in the traditional marine exploration market. There's been a bit of a resurgence there. There has been consolidation in that marketplace, but again, we're seeing some resurgence.
There's been new applications of the technology, such as the application to these 3D ultra-high resolution surveys. The repair work has been growing for us. We see expanded opportunities for streamer applications. We think we can add other products that are similar that are worked in conjunction with our products. Therefore, we can offer more kit, a broader offering to the same customer base. I think there's a lot of leverage in doing that. That's something we're looking to do. I mentioned the aftermarket business. That's important for us because, again, as our install base increases, that means the ability to service the aftermarket increases as well. If you look historically, about 40% of our revenues have come from this aftermarket activity as opposed to selling new systems. The last quarter actually was almost 70%.
The point here is, I think the absolute amount of this aftermarket business, this repeatable business, is growing as our install base has grown. Paul, it's not 100% predictable, repeatable. It is a very repeatable business, and it isn't dependent upon capital dollars. It isn't dependent upon new vessels or expansion capacity. Anything except for working today is going to have a need for this type of expenditure, which typically are operating expenses, which people want to understand. Operating dollars are often easier to find than capital dollars. That's a really important part of our business, we think. We also think there are some other opportunities for expansion, which are a little bit outside what I would call the organic arena.
We think we can make some enhancements to our streamer systems, the SeaLink system, and the production process, which will allow us to address larger projects, larger sales, which frankly have been outside our comfort zone just from a production capacity standpoint. That is one area we think is a relatively low-hanging fruit and something we are trying to focus on. The other really interesting area is applying this streamer technology to maritime security or defense applications. We think there is a demand for a reasonably costed, commercially developed solution in this area. Actually, we tried to address this market a few years ago, but we really got ahead of ourselves, to be quite honest. We probably tried to address it too soon and perhaps in the wrong way.
We decided at the time to suspend that pursuit as we started to transform the company a couple of years ago. We have done that. Now we think there is an opportunity to readdress this. We are beginning to do that. Watch this space. I think this is something that could be really interesting for us. It could be really exciting as we see them in the coming months and years. We are a global company. We sell to companies all around the world. Therefore, that requires a global presence. Our headquarters is in The Woodlands, Texas. That is a northern suburb of Houston. As I mentioned before, our primary sales reduction activities are conducted from our Singapore and Malaysia facilities. These facilities are in close proximity to each other. Malaysia essentially acts as an extension of the Singapore operation.
We have a facility in Huntsville, Texas, which is north of Houston, where we conduct repair and manufacturing operations. Actually, we have recently just expanded this facility in anticipation of a significant increase in activity there. That's something we're really excited about. Finally, we have a facility in the United Kingdom, west of London, where we house engineering and primary field service operations. A lot of our engineering activity takes place in the U.K. facility. Again, global presence for our global company. Just to summarize before I let you ask some questions, we think this is a very compelling opportunity. MIND is a profitable business, has good growth opportunities, we think. Our Seamap unit is recognized as a leader in the market. It's a very clean company with no debt. Our capital structure consists only of common stocks, so it's very pristine.
For all these reasons, we think MIND is a very unique and compelling investment opportunity. We warrant your consideration. That concludes my prepared remarks. I'd be happy to ask any or answer any questions that might come up. I think we have a few minutes we can do that. Okay. First question here. Has there been any recent material news which could have caused the individual price action in stock in the last several days? The answer is no. There's been no news. There have been no developments. I can't give you any color on that. Welcome to the world of micro stocks, micro- cap stocks, I guess. Let me go to the next question. Does maritime security include some defense industry uses? The answer is yes. It most certainly does.
The applications can be non-military for security of, again, offshore installations, you are listening for things but also can be for all sorts of military applications, listening for submarines, other incursions, things of that nature. One of our strategies here as we readdress that market is to try to partner with someone who is a bit more well-versed in the defense industries than we are, and therefore really partner and do what we do best, and that is develop and build product. The answer to that is quite yes. Question here. Who are the principals of Lucid Capital? How do we find them? Primarily, they were previously at Ladenburg Thalmann. We had a relationship with them for some years. I think, as you may know, the Chairman of our Board was at Ladenburg and is now at Lucid. That is how the relationship was initially developed. This next question.
Which customers or end markets are the top drivers of your growth right now? That's a good question. The market is relatively limited in number of players. There aren't hundreds. There are dozens of potential customers, I would say. We do have some concentration, and there tend to be large buyers in a given year. Any given year, you might see some concentration. A lot of the survey and seismic contractors are out of Europe, Norway, Holland. We also have customers in Asia. We do business in China to some degree. I think those are kind of the customers. As far as what's driving their business, I think, again, it's the revival in marine exploration as well as the expansion of this survey workload of the two. That's really the drivers for us. Let me go on. A lot of good questions here.
Are you using underwater radar like the kind Kraken Robotics makes? Is that boost your Seamap business? The answer is no. The Klein business, which we sold, was involved in that underwater radar-like, which sonar is what it's actually called. We were a competitor with Kraken when we had Klein, but we are no longer. Not anymore. Next, and almost the last. What end markets are driving the recent $5.8 million in new orders, and how does that pipeline look going into Q2? Pipeline's strong. I think continues to expand. We feel good about that. I think we have pretty good visibility going into the balance of the year and into next year. The markets that's driving it are the ones we just talked about. It's the marine exploration and survey work.
The same customers of ours are doing, some of them are doing work both places. They do traditional survey work, traditional exploration work, as well as starting to move into the marine survey work as well. It is really, again, the same answer again. Let's see. I think that's all I see right now as far as questions. Just for a moment here. We have some working in here. There we go. There are some more. We have a few more minutes. What is your current capacity utilization? How does that impact gross margin trajectory this year? We are not at capacity. As far as the physical facilities, I think we have a great deal of capacity there. Labor tends to be a limiting factor, but you can always add labor.
As we have higher sales, the big impact is we are absorbing fixed cost over a broader base. Therefore, that improves gross margins. Also, as we have good visibility for production, we can plan a bit better. I think that improves margins as well. We saw some of that impact last year. I do not see capacity limitations as an issue for us. I do see as we increase capacity, increase sales, then I think you will see some improvement in margins. Not dramatic, but a point or two here and there. Next, with $90 million in federal NOLs, net operating loss carryforwards, how do you plan to monetize and preserve this asset for future earnings? We need to make money. I need to make money in the U.S.. Now, luckily, all earnings worldwide are taxed in the U.S. now, although they are also taxed elsewhere.
The best way to use that is to earn money in the U.S.. It's difficult to do transactions that monetize that. You don't want to go out and do a big acquisition of some sort just to try to use that. Number one, that's not a smart way to do acquisitions. Secondly, you often end up limiting those NOLs when you do that. We think they're preserved. We were able to preserve them through the preferred stock restructuring last year, which was a big step for us. It is an asset for us and knowing that we can shelter U.S. tax going forward. Next question is, why is EBITDA not higher with a lack of debt versus income?
I'm not sure I totally understand, but the only really add-back for EBITDA for us, since there's little interest, is amortization and depreciation, which we're not a big- fixed asset company, so there's not a lot of depreciation. Most of our intangible assets have been fully amortized or written off in the past. There's just not a lot of things to add back. The stock-based comp is not a big, big number. There's just not much to add back as an answer to that. Next question is, any update on the order that was pushed out of last quarter? Again, as I said in our last conference call, we expect that to be shipped in this quarter and the quarter we're in right now. Highly confident that's going to happen. Have one more question, Tom. One more question, I think.
Do you still have a relationship with SOB? The answer is no. That relationship was really through the Klein organization. And the Klein still has that relationship, and the new owner of Klein has that relationship, but we no longer do. I think that's going to about run us out of time right now. There are a few more questions. I'm just not going to be able to get to all of them, looks like. I do appreciate everyone taking their time this morning to visit with us. I look forward to talking with many of you as we move forward. Operator, I'll turn it back to you.
Thank you very much. This does conclude today's conference. You may now disconnect. Please consult the conference agenda for the next presenting company.