Mynd Announces 2024 First Half Results

SEATTLE, Aug. 29, 2024 /PRNewswire/ -- Mynd, Inc. (the "Company" or "Mynd") (NYSE American: MYND) today announced financial results for the first half of 2024 (H1 2024).

H1 2024 Key Financial Milestones

• Revenue of $166.0 million compared to $222.5 million for the same period in the prior year, with the decrease primarily driven by reduced spending by key customers due to uncertainty regarding future budget allocations
• Gross profit of $45.4 million, a 22.4% decline from $58.5 million in the same period in the prior year, driven by the year-over-year reduction in revenue. Gross margins increased 100 basis points to 27.3% primarily as a result of increased operational efficiencies
• Cash flow from operations improvement of $5.0 million compared to the same period in the prior year, with cash reserves of $69.4 million
• Adjusted EBITDA loss of $5.6 million compared to a loss of $6.1 million for the same period in the prior year, primarily driven by lower sales volumes
• Management continuing to implement cost saving measures to mitigate effects of education technology market headwinds

"We've observed a continued industry-wide softening demand trend throughout most of our key geographic markets primarily due to uncertainty around future budget allocations for many of our customers.
After several years of unusually high funding as a result of COVID-related government relief programs, local education authorities are reacting to a broad normalization of budgets," said Vin Riera, Chief Executive Officer. "Nevertheless, we are confident in our business model and are well positioned to prioritize and streamline our operations and navigate the market challenges, as evidenced by our margin improvement. As we continue to drive operational efficiencies and take further actions to reduce overhead costs, we seek to maintain our market leadership in interactive flat panel displays ("IFPDs") within the global education market. We are dedicated to delivering hardware and software solutions with groundbreaking tools and new technologies for the education, business, and public sectors in line with our long-term strategic vision."

The Company generated revenue of $166.0
million
for H1 2024, a decrease of $56.5
million,
from $222.5
million of revenue generated in the same period in the prior year,
primarily due to reduced spending by customers due to uncertainty regarding future budget allocations leading to softer industry demand coupled with increased competition.

Gross profit was $45.4
million
for H1 2024, a 22.4% decline from $58.5
million
in the same period in the prior year driven by the year-over-year reduction in revenue. Gross margins increased 100 basis points to 27.3% resulting primarily from operational improvements and cost savings in a number of areas, including lower component material pricing, freight and duty savings as a result of transitioning the final assembly by our contract manufacturers of our U.S. ActivPanel inventory to Mexico.
Warranty costs were reduced due to observed lower failure rates on our ActivPanel 9 and our ActivPanel LX models.

Net loss of $47.8
million for H1 2024 compared to a loss of $15.7
million
in the same period in the prior year. The increase in net loss was primarily driven by the recording of a valuation allowance against United States deferred tax assets as a result of cumulative pre-tax losses in the United States in recent years and lower sales volumes across all key markets in the first six months of 2024. Adjusted EBITDA was a loss of $5.6
million
for H1 2024 compared to a loss of $6.1
million
in the same period in the prior year.

"Like many of
our competitors, we experienced headwinds stemming from the lower demand trends in the education technology sector, but we exited the period with $69.4
million
in cash and incremental availability under our existing credit line. As we continue to pursue cost optimization initiatives and evaluate our capital allocation strategy, we believe we are competitively well positioned to continue as the market leader in this space," commented Arthur Giterman, Chief Financial Officer.

Forward-Looking Statements

This press release contains "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements reflect Mynd's current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words "believe," "expect," "anticipate," "will," "could," "would," "should," "may," "plan," "estimate," "intend," "predict," "potential," "continue," "optimistic," and the negatives of these words and other similar expressions generally identify forward looking statements. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled "Risk Factors" in Mynd's Annual Report on Form 20-F, filed with the SEC on March 27, 2024, as such factors may be updated from time to time in Mynd's periodic filings with the SEC, which are accessible on the SEC's website at . Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements, including, but not limited to, the Company's brand recognition and market reputation; student enrollment in the Company's teaching facilities; the Company's growth strategies and ability to build long-term relationships with schools and other key market participants; the Company's future business development, results of operations and financial condition; trends and competition in the early childhood education markets in which the Company intends to operate; changes in its revenues and certain cost or expense items; the expected growth of the early childhood education market in the Company's targeted addressable markets; governmental policies relating to the Company's industry, including government funding of education opportunities, the Company's ability to implement cost saving initiatives to mitigate market headwinds and general economic conditions in the markets in which the Company intends to operate. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in Mynd's filings with the SEC. While forward-looking statements reflect Mynd's good faith beliefs, they are not guarantees of future performance. Mynd disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law.

Discussion of non-GAAP Financial Measures

We believe that providing the non-GAAP ("Generally Accepted Accounting Principles") information to investors, in addition to the GAAP presentation, allows investors to view the financial results in the way management views the operating results. We further believe that providing this information allows investors not only to better understand our financial performance, but more importantly, to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. The non-GAAP information included in this press release should not be considered superior to, or a substitute for, financial statements prepared in accordance with GAAP.

We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the business, for making operating decisions and for forecasting and planning for future periods. Our annual financial plan is prepared both on a GAAP and non-GAAP basis, and the non-GAAP annual financial plan is approved by our board of directors. Continuous budgeting and forecasting for revenue and expenses are conducted on a consistent non-GAAP basis, in addition to GAAP, and actual results on a non-GAAP basis are assessed against the non-GAAP annual financial plan. In addition, and as a consequence of the importance of these measures in managing the business, we use non-GAAP measures and results in the evaluation process to establish management's compensation. For example, our annual bonus program payments are based in part upon the achievement of consolidated revenue and Adjusted EBITDA targets.

Reconciliations with respect to the Non-GAAP figures included in this press release to such Non-GAAP figure's most comparable GAAP figure are included in the financial tables below.

About Mynd, Inc.

Seattle-based Mynd is a global leader in interactive technology offering best-in-class hardware and software solutions that help organizations create and deliver dynamic content; simplify and streamline teaching, learning, and communication; and facilitate real-time collaboration. Our award-winning interactive displays and software can be found in more than 1 million learning and training spaces across 126 countries. Our global distribution network of more than 4,000 reseller partners and our dedicated sales and support teams around the world enable us to deliver the highest level of service to our customers.

Financial Tables Follow

SOURCE Mynd

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