Delivers Revenue of $413.6 Million and Successfully Completes Transformational Merger Transaction
SEATTLE, March 27, 2024 /PRNewswire/ -- Mynd.ai, Inc. (the "Company" or "Mynd") (NYSE:MYND) today announced financial results for the fiscal year ended December 31, 2023.
- Revenue of $413.6 million for the full year, compared to $584.6 million in the prior year with the decrease primarily driven by the normalization of the education market returning to pre-pandemic levels
- Gross Margin improved 30 basis points versus 2022 to 24.9%, largely due to lower materials and freight costs
- Cash flow from operations improvement of $3.0 million compared to 2022
- Cash balance at year end was $91.8 million compared to $29.3 million at year end 2022
- Adjusted EBITDA1 loss of $6.9 million compared to profit of $12.8 million in 2022, primarily driven by lower sales volumes
"We are incredibly pleased with the progress our team made during 2023. We successfully completed our merger transaction, we listed our American Depositary Shares on the NYSE American, and we received $65 million in proceeds from the issuance of a secured convertible note, that will fund our continued growth," said Vin Riera, Chief Executive Officer. "We believe Mynd is exceptionally well positioned to capitalize on market trends and continue to increase market share as the leader in interactive flat panel displays ("IFPDs") within the global education market, and ultimately deliver products and solutions to help teachers be their best and drive successful education outcomes for students."
While the merger transaction marked a pivotal moment in the evolution of the Company, our dedicated team worked tirelessly throughout 2023 to advance our business and deliver positive outcomes for our customers. Our Promethean brand has been named the global leader in IFPDs for education in the fourth quarter of 2023, according to Futuresource Consulting's Q4 2023 report on the global IFPD market. During 2023, we captured 17.4% of the K-12 (primary and secondary) IFPD volume market share globally.2 In Q4 2023 alone, we were able to capture 21.1% of the global market share and we continue to be the market leading brand in the United States, United Kingdom and Ireland, and Germany.
Our global leadership in the global K-12 market positions us well to continue to grow both our hardware and software business. Over the course of 2024, we plan to continue to drive the evolution and growth of the software business, with enhancements to our core offerings and empowering our sales team to drive engagement with customers. We continue to invest in R&D to maintain our leadership both at the high-end of the market and foster deeper penetration of the broader, lower-price market.
"We believe that Mynd is in an excellent financial position coming out of 2023 with a strong liquidity profile that will allow us to focus on driving sustainable top-line growth and investments in future growth," commented Arthur Giterman, Chief Financial Officer. "The $65 million convertible note issued in conjunction with the merger will allow us to continue to invest in our products and strategic initiatives to bolster both our hardware and software product offerings for our customers."
1 Adjusted EBITDA is a non-GAAP measure defined as net income (loss), adjusted for loss from discontinued operations, interest expense, income tax expense (benefit), depreciation and amortization, and changes in the fair value of derivative instruments, as well as, non-cash, non-operating expenses such as stock-based compensation; and, one-time, unplanned and/or infrequent events we believe are outside the ordinary course of our continuing operations, including acquisition-related costs, restructuring costs, litigation costs, and gain on forgiveness of debt.
2 Excluding China, according to Futuresource Consulting's Q4 report of the global IFPD market.
Forward-Looking Statements
This press release contains "forward-looking statements," as defined by federal securities laws. 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 www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. 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. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to Mynd (or to third parties making the forward-looking statements).
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.
About Mynd.ai, Inc.
Seattle-based Mynd (NYSE: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
Mynd.ai. Inc. CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share and per share data, or otherwise noted) | ||||||||
December 31, | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 91,784 | $ | 29,312 | ||||
Accounts receivable, net of allowance for credit losses of $2,599 and $2,970 | 63,865 | 61,061 | ||||||
Inventories | 53,098 | 111,227 | ||||||
Prepaid expenses and other current assets | 14,666 | 8,977 | ||||||
Due from related parties | 2,759 | 2,093 | ||||||
Loan receivable, related party | — | 7,919 | ||||||
Prepaid subscriptions | — | 7,300 | ||||||
Current assets of discontinued operations | — | 5 | ||||||
Total current assets | 226,172 | 227,894 | ||||||
Non-current assets: | ||||||||
Goodwill | 46,924 | 42,048 | ||||||
Property, plant, and equipment, net | 11,878 | 2,998 | ||||||
Intangible assets, net | 51,450 | 47,997 | ||||||
Right-of-use assets | 7,491 | 3,110 | ||||||
Deferred tax assets, net | 56,381 | 44,627 | ||||||
Other non-current assets | 4,094 | 107 | ||||||
Total non-current assets | 178,218 | 140,887 | ||||||
Total assets | $ | 404,390 | $ | 368,781 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 59,595 | $ | 81,471 | ||||
Accrued expenses and other current liabilities | 45,389 | 47,085 | ||||||
Loans payable, current | 31,942 | 48,030 | ||||||
Contract liabilities | 14,110 | 10,148 | ||||||
Accrued warranties | 17,871 | 13,550 | ||||||
Lease liabilities, current | 4,412 | 1,788 | ||||||
Due to related parties | 5,080 | 3,978 | ||||||
Current liabilities of discontinued operations | 163 | 597 | ||||||
Total current liabilities | 178,562 | 206,647 | ||||||
Non-current liabilities: | ||||||||
Loans payable, non-current | 64,859 | 276 | ||||||
Loans payable, related parties, non-current | 4,670 | 4,445 | ||||||
Contract liabilities, non-current | 21,762 | 17,692 | ||||||
Lease liabilities, non-current | 3,412 | 1,634 | ||||||
Other non-current liabilities | 4,250 | 1,076 | ||||||
Deferred tax liabilities | 1,317 | — | ||||||
Total non-current liabilities | 100,270 | 25,123 | ||||||
Total liabilities | $ | 278,832 | $ | 231,770 | ||||
Shareholders' equity: | ||||||||
Ordinary shares par value of $0.001; 990,000,000 shares authorized, 456,477,820 and | 456 | 426 | ||||||
Additional paid-in capital | 473,590 | 448,065 | ||||||
Accumulated other comprehensive income (loss) | 3,513 | 4,546 | ||||||
Accumulated deficit | (353,890) | (316,026) | ||||||
Total Mynd.ai, Inc. shareholders' equity | 123,669 | 137,011 | ||||||
Non-controlling interest | 1,889 | — | ||||||
Total shareholders' equity | 125,558 | 137,011 | ||||||
Total liabilities and shareholders' equity | $ | 404,390 | $ | 368,781 | ||||
Mynd.ai. Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands of U.S. dollars, except share and per share data, or otherwise noted) | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Revenue | $ | 413,564 | $ | 584,684 | $ | 448,193 | ||||||
Cost of sales | 310,423 | 440,769 | 309,223 | |||||||||
Gross profit | 103,141 | 143,915 | 138,970 | |||||||||
Operating expenses: | ||||||||||||
General and administrative | 31,319 | 34,608 | 31,299 | |||||||||
Research and development | 34,604 | 41,459 | 35,591 | |||||||||
Sales and marketing | 51,488 | 60,848 | 60,545 | |||||||||
Acquisition-related costs | 19,288 | 502 | — | |||||||||
Restructuring | 10,195 | 238 | 469 | |||||||||
Total operating expenses | 146,894 | 137,655 | 127,904 | |||||||||
Operating (loss) income | (43,753) | 6,260 | 11,066 | |||||||||
Other income (expense): | ||||||||||||
Interest expense | (4,661) | (1,833) | (173) | |||||||||
Gain on forgiveness of debt | — | 4,923 | — | |||||||||
Other income (expense) | 2,250 | 597 | (2,248) | |||||||||
Total other (expense) income | (2,411) | 3,687 | (2,421) | |||||||||
Net (loss) income from continuing operations, before income taxes | (46,164) | 9,947 | 8,645 | |||||||||
Income tax benefit (expense) | 9,156 | 25,275 | (1,787) | |||||||||
Net (loss) income from continuing operations | (37,008) | 35,222 | 6,858 | |||||||||
Loss from discontinued operations, net of tax | (823) | (12,637) | (7,960) | |||||||||
Net (loss) income | $ | (37,831) | $ | 22,585 | $ | (1,102) | ||||||
Net income (loss) from continuing operations attributable to non- | 33 | — | — | |||||||||
Net (loss) income attributable to ordinary shareholders of Mynd.ai, Inc. | (37,041) | 35,222 | 6,858 | |||||||||
Net (loss) income attributable to ordinary shareholders of Mynd.ai, Inc. | (37,864) | 22,585 | (1,102) | |||||||||
Net (loss) income per ordinary share | ||||||||||||
Net (loss) income per share attributable to ordinary shareholders of | ||||||||||||
Basic and Diluted | (0.09) | 0.08 | 0.02 | |||||||||
Net (loss) per share attributable to ordinary shareholders of Mynd.ai, Inc. | ||||||||||||
Basic and Diluted | — | (0.03) | (0.02) | |||||||||
Net (loss) income per share attributable to ordinary shareholders of | ||||||||||||
Basic and Diluted | (0.09) | 0.05 | — | |||||||||
Weighted average shares outstanding used in calculating net (loss) | ||||||||||||
Basic and diluted | 427,986,755 | 426,422,220 | 426,422,220 | |||||||||
Mynd.ai. Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (in thousands) | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Net (loss) income | $ | (37,831) | $ | 22,585 | $ | (1,102) | ||||||
Other comprehensive (loss) income, net of tax of nil: | ||||||||||||
Change in foreign currency translation adjustments | (1,033) | (3,367) | (755) | |||||||||
Total comprehensive (loss) income | $ | (38,864) | $ | 19,218 | $ | (1,857) | ||||||
Less: comprehensive income attributable to non-controlling interest | 33 | — | — | |||||||||
Comprehensive (loss)/income attributable to Mynd.ai Inc. | $ | (38,897) | $ | 19,218 | $ | (1,857) | ||||||
Mynd.ai. Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net (loss) income | $ | (37,831) | $ | 22,585 | $ | (1,102) | ||||||
Loss from discontinued operations, net of tax | 823 | 12,637 | 7,960 | |||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) | ||||||||||||
Depreciation and amortization | 5,124 | 4,520 | 6,116 | |||||||||
Deferred taxes | (10,307) | (25,275) | (3,505) | |||||||||
Non-cash lease expense | 1,958 | 1,818 | 1,867 | |||||||||
Non-cash interest expenses | 325 | — | — | |||||||||
Gain on forgiveness of debt | — | (4,923) | — | |||||||||
Amortization of RDEC credit | (839) | (460) | (134) | |||||||||
Accrued tax credit RDEC | (1,732) | — | — | |||||||||
Change in fair value of derivative liability | (432) | — | — | |||||||||
Write-off of Inventory | 4,630 | 3,951 | — | |||||||||
Write-off of prepaid subscriptions | 5,668 | — | — | |||||||||
Change in fair value of earn out liabilities | 64 | — | — | |||||||||
Impairment of right-of-use assets | — | — | 1,553 | |||||||||
Loss on disposal of property, plant and equipment | 8 | 30 | 94 | |||||||||
Change in operating assets and liabilities: | ||||||||||||
Accounts receivable | 1,361 | 25,346 | (46,249) | |||||||||
Inventories | 54,615 | (20,237) | (57,393) | |||||||||
Prepaid expenses and other assets | (5,115) | 701 | (5,015) | |||||||||
Prepaid subscriptions | 1,632 | (7,300) | — | |||||||||
Due from related parties | (531) | (4,376) | 1,034 | |||||||||
Accounts payable | (23,201) | (1,820) | 54,786 | |||||||||
Accrued expenses and other liabilities | (4,564) | (12,820) | 21,943 | |||||||||
Accrued warranties | 3,883 | 3,266 | 2,735 | |||||||||
Due to related parties | 1,102 | 3,469 | 509 | |||||||||
Contract liabilities | 4,713 | 7,779 | 3,430 | |||||||||
Lease obligations - operating leases | (2,327) | (2,084) | (2,111) | |||||||||
Net cash (used in) provided by operating activities - continuing operations | (973) | 6,807 | (13,482) | |||||||||
Net cash used in operating activities - discontinued operations | (1,252) | (12,079) | (8,422) | |||||||||
Net cash (used in) provided by operating activities | (2,225) | (5,272) | (21,904) | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Acquisition of property, plant and equipment | (389) | (829) | (1,194) | |||||||||
Internal-use software development costs | (4,434) | (1,028) | — | |||||||||
Repayment (issuance) of loan receivable, related party | 8,019 | (7,919) | — | |||||||||
Acquisition of businesses, net of cash | 16,138 | (6,000) | — | |||||||||
Net cash provided by (used in) investing activities - continuing operations | 19,334 | (15,776) | (1,194) | |||||||||
Net cash used in investing activities - discontinued operations | — | — | — | |||||||||
Net cash provided by (used in) investing activities | 19,334 | (15,776) | (1,194) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Repayment of Revolver | (80,300) | (49,305) | — | |||||||||
Proceeds from Revolver | 62,000 | 63,000 | 34,000 | |||||||||
Proceeds from convertible note | 64,884 | — | — | |||||||||
Contingent consideration payments | (2,174) | — | — | |||||||||
Repayment of Paycheck Protection Program Loan | (192) | (5) | — | |||||||||
Repayment of NetDragon group loans | — | (3,210) | (33,320) | |||||||||
Proceeds from NetDragon group loans | 219 | 869 | 24,781 | |||||||||
Net cash provided by financing activities - continuing operations | 44,437 | 11,349 | 25,461 | |||||||||
Net cash provided by financing activities - discontinued operations | — | — | — | |||||||||
Net cash provided by financing activities | 44,437 | 11,349 | 25,461 | |||||||||
Net change in cash | 61,546 | (9,699) | 2,363 | |||||||||
Cash and cash equivalents, beginning of year | 29,312 | 40,508 | 37,817 | |||||||||
Exchange rate effects | 926 | (1,497) | 328 | |||||||||
Cash and cash equivalents, end of year | $ | 91,784 | $ | 29,312 | $ | 40,508 | ||||||
Supplemental disclosure of non-cash investing and financing activities | ||||||||||||
Non-cash repayment of NetDragon group loans | $ | — | $ | — | $ | 23,970 | ||||||
Accrued purchase price related to acquisition of businesses | $ | — | $ | 1,688 | $ | — | ||||||
Accrued value of earnout related to acquisition of businesses | $ | — | $ | 377 | $ | — | ||||||
Noncash consideration transferred for acquisition of businesses | $ | 22,848 | $ | — | $ | — | ||||||
Supplemental disclosure of cash transactions: | ||||||||||||
Cash paid for interest | $ | 5,223 | $ | — | $ | — | ||||||
Cash paid for taxes, net of refunds | $ | 914 | $ | 969 | $ | 6,419 | ||||||
Mynd.ai. Inc. SUPPLEMENTAL FINANCIAL INFORMATION Reconciliation of Net Income to Adjusted EBITDA (in thousands) | ||||||||||||
Year Ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
(in thousands) | ||||||||||||
Net income (loss) | $ | (37,831) | $ | 22,585 | $ | (1,102) | ||||||
Loss from discontinued operations | 823 | 12,637 | 7,960 | |||||||||
Interest expense | 4,661 | 1,833 | 173 | |||||||||
Income tax expense (benefit) | (9,156) | (25,275) | 1,787 | |||||||||
Depreciation and amortization | 5,124 | 4,520 | 6,116 | |||||||||
Acquisition-related costs | 19,288 | 502 | — | |||||||||
Restructuring costs1 | 10,195 | 238 | 469 | |||||||||
Litigation costs2 | — | 637 | 1,840 | |||||||||
Gain on forgiveness of debt3 | — | (4,923) | — | |||||||||
Adjusted EBITDA | $ | (6,896) | $ | 12,754 | $ | 17,243 | ||||||
(1) Refers to employee severance costs, contract termination costs, facility restructuring, and business restructuring efforts undertaken by management. |
(2) Refers to costs incurred to defend against, opportunistically settle, and establish a reserve for claims associated with litigation. |
(3) Refers to forgiveness of loan provided by the U.S. Small Business Administration provided under the Payroll Protection Program (PPP). |
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SOURCE Mynd.ai