Mitcham Industries Reports Fiscal 2013 Third Quarter Results

         Mitcham Industries Reports Fiscal 2013 Third Quarter Results

PR Newswire

HUNTSVILLE, Texas, Dec. 4, 2012

HUNTSVILLE, Texas, Dec. 4, 2012 /PRNewswire/ -- Mitcham Industries, Inc.
(NASDAQ: MIND) (the "Company") today announced financial results for its
fiscal 2013 third quarter ended October 31, 2012.

Total revenues for the third quarter were $18.6 million compared to $28.0
million in the third quarter of fiscal 2012. Equipment leasing revenues were
$11.1 million in the third quarter compared to $17.4 million in the same
period last year. Seamap sales were $4.5 million compared to $6.2 million a
year ago. The Company reported a net loss for the third quarter of $1.2
million, or $(0.10) per share, compared to net income of $6.8 million, or
$0.52 per diluted share, in the third quarter of fiscal 2012. EBITDA
(earnings before interest, taxes, depreciation and amortization) for the third
quarter of fiscal 2013 was $6.4 million, or 35% of revenues, compared to $16.6
million, or 59% of revenues, in the same period last year. EBITDA, which is
not a measure determined in accordance with United States generally accepted
accounting principles ("GAAP"), is defined and reconciled to reported net
income and cash provided by operating activities, the most comparable GAAP
measures, in the accompanying financial tables.

Bill Mitcham, President and CEO, stated, "Our third quarter results primarily
reflect the impact of lower activity in certain geographic areas. While we
had expected continued softness in the leasing business this quarter and
anticipated that leasing revenues would be significantly below last year's
record third quarter, it is fair to say that the level of activity was less
than we had expected. Activity levels in Latin America in the third quarter
did increase over the second quarter of this year, yet the pick-up was less
than we expected. Ongoing project delays, due in large part to permitting
issues, continued to impact our results in that region. We saw decreased
activity levels in North America during the third quarter due to what we
believe is a temporary slow-down in activity as some of our customers
completed certain projects and began transitioning to new ones. European
activity levels remain subdued, with no pick-up yet in that region, although
we are beginning to see improved bid activity there. Marine leasing activity
remained solid, continuing its steady performance since the beginning of the
current fiscal year. As anticipated, Seamap revenues were lower compared to
the second quarter and to last year's third quarter due to equipment delivery
schedules, with no large systems delivered during the quarter.

"We currently expect to see a stronger fourth quarter and first quarter of
fiscal 2014 in our leasing business. In Latin America, while activity has not
picked up as quickly as expected, we are seeing additional jobs begin and have
contracted for a few large projects scheduled to begin in the first quarter of
fiscal 2014. We are also seeing demand for additional types of equipment in
Latin America, including three-component digital and cable-free recording
systems.

"We anticipate strong winter seasons in Canada and Russia this year. In
Canada, we are seeing substantial demand for conventional cabled systems as
well as for three-component digital recording equipment. As a result of the
purchase of used three-component equipment we made earlier this year and
purchases of new equipment we have scheduled for the fourth quarter, we expect
to have significantly more equipment deployed in Canada this winter season as
compared to last year. Demand in Russia also appears to be stronger this
winter compared to last year. Therefore, we have repositioned some equipment
from other geographic regions into the Russian market for the winter season.

"We anticipate marine leasing activity to remain solid, driven by continued
overall strength in the marine seismic market. As we stated last quarter, we
expect a good fourth quarter at Seamap as a result of scheduled deliveries and
new orders from marine contractors, who continue to expand the technical
capabilities of their vessels. The marine seismic market is active, with
numerous new vessels announced for the next 12 to 36 months, which bodes well
for both Seamap sales and marine leasing going forward.

"Despite a decline in operating income in the first nine months of this fiscal
year as compared to last, we have generated significant cash flow from
operations and free cash flow. We believe that we have considerable financial
resources on hand and access to additional capital, when needed, and believe
this financial strength allows us to take advantage of new business
opportunities as they arise.

"In November, we continued our long-standing relationship with Sercel by
entering into two new equipment purchase agreements. Under the terms of the
agreements, we are the exclusive authorized third-party lessor for the DSU3
three-component digital product through December 31, 2013 and for the Unite
cable-free product through September 30, 2014. We have agreed to purchase
certain quantities of each of the products during the term of the agreements
and are very pleased to continue our 16-year relationship with Sercel and with
the opportunity to expand our DSU3 and Unite product offerings."

FISCAL 2013 THIRD QUARTER RESULTS
Total revenues for the third quarter of fiscal 2013 were $18.6 million
compared to $28.0 million a year ago. A significant portion of the Company's
revenues are typically generated from geographic areas outside the United
States, and during the third quarter of fiscal 2013, the percentage of
revenues from international customers was approximately 81% compared to 71% in
the third quarter of fiscal 2012.

Equipment leasing revenues, excluding equipment sales, were $11.1 million
compared to $17.4 million in the same period a year ago. The decline in
equipment leasing revenues was primarily attributable to lower land leasing
activity levels in the United States and in Europe. Lease pool equipment
sales were $1.9 million for the third quarter of fiscal 2013 compared to $2.4
million in the third quarter a year ago. Sales of new seismic, hydrographic
and oceanographic equipment were $1.1 million as compared to $2.0 million in
the same period a year ago.

Seamap equipment sales for the third quarter of fiscal 2013 were $4.5 million
compared to $6.2 million in the same period a year ago, consisting of
after-market business including replacement parts, engineering services and
ongoing support and repair services. As expected, based on delivery
schedules, there were no large GunLink or BuoyLink system deliveries in this
year's third quarter as compared to the sale of one GunLink 4000 system and
one BuoyLink system in the third quarter a year ago.

Lease pool depreciation expense in the third quarter of fiscal 2013 was $8.3
million compared to $7.2 million in the same period a year ago, representing a
15% increase. This increase resulted from additions made to the Company's
lease pool during fiscal 2012 and the first nine months of fiscal 2013 of
approximately $69 million and $27 million, respectively.

Gross profit in the third quarter of fiscal 2013 was $4.4 million compared to
$14.3 million a year ago primarily due to lower equipment leasing revenues and
higher depreciation expense.

General and administrative expenses for the third quarter of fiscal 2013 were
$5.9 million compared to $5.0 million in the same period a year ago due to
costs associated with expanded operations in Colombia, Singapore and Hungary.
Included in fiscal 2013 third quarter results are approximately $400,000 in
foreign exchange losses incurred by the Company's foreign subsidiaries due to
strength of the U.S. dollar compared to local currencies. The Company
reported an income tax benefit in the third quarter of fiscal 2013 of
approximately $1.0 million.

FISCAL 2013 FIRST NINE MONTHS RESULTS
Total revenues for the first nine months of fiscal 2013 were $76.3 million
compared to $75.8 million for the first nine months of fiscal 2012. Equipment
leasing revenues were $43.0 million in the first nine months of fiscal 2013
compared to $46.5 million in the same period a year ago. Lease pool equipment
sales in the first nine months of fiscal 2013 were $7.4 million versus $3.1
million in the first nine months of fiscal 2012. Sales of new seismic,
hydrographic and oceanographic equipment for the first nine months of fiscal
2013 were $3.6 million compared to $5.2 million in the comparable period of
fiscal 2012. Seamap equipment sales for the first nine months of fiscal 2013
were $22.3 million compared to $21.1 million in the same period of last year.

Gross profit for the first nine months of fiscal 2013 was $28.6 million
compared to $36.5 million in the first nine months of fiscal 2012. Net income
was $13.6 million, or $1.03 per diluted share, compared to $14.2 million, or
$1.21 per diluted share, for the first nine months of fiscal 2012. Results for
the first nine months of fiscal 2013 include a tax benefit of approximately
$5.3 million resulting from the settlement of outstanding tax issues in the
second quarter of fiscal 2013. Without this benefit, net income for the first
nine months of fiscal 2013 would have been approximately $0.63 per diluted
share. EBITDA for the first nine months of fiscal 2013 was $36.5 million, or
48% of total revenues, compared to $41.0 million, or 54% of total revenues, in
the first nine months of fiscal 2012.

CONFERENCE CALL
The Company has scheduled a conference call for Wednesday, December 5, 2012 at
9:00 a.m., Eastern Time, to discuss its fiscal 2013 third quarter results. To
access the call, please dial (888) 450-9962 and ask for the Mitcham Industries
call at least 10minutes prior to the start time. Investors may also listen
to the conference live on the Mitcham Industries corporate website,
http://www.mitchamindustries.com, by logging on that site and clicking
"Investors." A telephonic replay of the conference call will be available
through December 12, 2012 and may be accessed by calling (866) 949-7821. A
web cast archive will also be available at http://www.mitchamindustries.com
shortly after the call and will be accessible for approximately 90days. For
more information, please contact Donna Washburn at DRG&L at (713)529‑6600 or
email dmw@drg-l.com.

Mitcham Industries, Inc., a geophysical equipment supplier, offers for lease
or sale, new and "experienced" seismic equipment to the oil and gas industry,
seismic contractors, environmental agencies, government agencies and
universities. Headquartered in Texas, with sales and services offices in
Calgary, Canada; Brisbane, Australia; Singapore; Ufa, Bashkortostan, Russia;
Budapest, Hungary; Lima, Peru; Bogota, Colombia and the United Kingdom,
Mitcham conducts operations on a global scale and is the largest independent
exploration equipment lessor in the industry. Through its Seamap business,
the Company designs, manufactures and sells specialized seismic marine
equipment.

Certain statements and information in this press release concerning results
for the quarter ended October 31, 2012 may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. The words "believe," "expect," "anticipate," "plan," "intend,"
"should," "would," "could" or other similar expressions are intended to
identify forward-looking statements, which are generally not historical in
nature. These forward-looking statements are based on our current
expectations and beliefs concerning future developments and their potential
effect on us. While management believes that these forward-looking statements
are reasonable as and when made, there can be no assurance that future
developments affecting us will be those that we anticipate. All comments
concerning our expectations for future revenues and operating results are
based on our forecasts of our existing operations and do not include the
potential impact of any future acquisitions. Our forward-looking statements
involve significant risks and uncertainties (some of which are beyond our
control) and assumptions that could cause actual results to differ materially
from our historical experience and our present expectations or projections.

For additional information regarding known material factors that could cause
our actual results to differ from our projected results, please see our
filings with the SEC, including our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K.

Readers are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date hereof. We undertake no
obligation to publically update or revise any forward-looking statements after
the date they are made, whether as a result of new information, future events
or otherwise.


Contacts: Billy F. Mitcham, Jr., President & CEO
          Mitcham Industries, Inc.
          936-291-2277
          Jack Lascar / Karen Roan
          DRG&L
          713-529-6600



Tables to follow
MITCHAM INDUSTRIES, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)
                                                 October 31, 2012  January 31,
                                                                   2012
ASSETS
Current assets:
Cash and cash equivalents                        23,990            $ 15,287
Restricted cash                                  96                98
Accounts receivable, net                         18,627            35,788
Current portion of contracts and notes           2,661             2,273
receivable
Inventories, net                                 7,524             6,708
Deferred tax asset                               1,771             2,594
Prepaid income taxes                             5,294             -
Prepaid expenses and other current assets        4,072             2,530
Total current assets                             64,035            65,278
Seismic equipment lease pool and property and    117,388           120,377
equipment, net
Intangible assets, net                           4,185             4,696
Goodwill                                         4,320             4,320
Prepaid foreign income tax                       -                 3,519
Deferred tax asset                               3,381             -
Other assets                                     412               39
Total assets                                    $193,721          $198,229
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                                 $ 3,976          $ 13,037
Current maturities – long-term debt             142               1,399
Income taxes payable                             -                 2,419
Deferred revenue                                 925               543
Accrued expenses and other current liabilities   2,743             6,583
Total current liabilities                        7,786             23,981
Non-current income taxes payable                 417               5,435
Deferred tax liability                           -                 595
Long-term debt, net of current maturities       13,474            12,784
Total liabilities                                21,677            42,795
Shareholders' equity:
Preferred stock, $1.00 par value; 1,000 shares
authorized; none issued and                      -                 -
outstanding
Common stock, $0.01 par value; 20,000 shares
authorized; 13,763 and 13,556 shares issued at  138               136
October 31, 2012 and January 31, 2012,
respectively
Additional paid-in capital                       116,264           113,654
Treasury stock, at cost (925 shares at October   (4,857)           (4,857)
31, 2012 and January 31, 2012)
Retained earnings                                52,932            39,297
Accumulated other comprehensive income           7,567             7,204
Total shareholders' equity                      172,044           155,434
Total liabilities and shareholders' equity       $193,721          $ 198,229







MITCHAM INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)
                               For the Three Months Ended  For the Nine Months

                               October 31,                Ended October 31,
                               2012            2011        2012       2011
Revenues:
Equipment leasing              $ 11,062        $ 17,411    $ 42,952   $ 46,458
Lease pool equipment sales     1,873           2,442       7,409      3,103
Seamap equipment sales         4,495           6,198       22,301     21,081
Other equipment sales          1,143           1,969       3,622      5,158
Total revenues                18,573          28,020      76,284     75,800
Cost of sales:
Direct costs - equipment       1,663           2,365       6,308      6,348
leasing
Direct costs - lease pool      8,308           7,223       25,139     20,016
depreciation
Cost of lease pool equipment   1,341           519         3,752      723
sales
Cost of Seamap and other       2,907           3,568       12,445     12,230
equipment sales
Total cost of sales            14,219          13,675      47,644     39,317
Gross profit                   4,354           14,345      28,640     36,483
Operating expenses:
General and administrative     5,854           4,961       16,907     15,403
Provision for (recovery of)    -               679         (443)      187
doubtful accounts
Depreciation and amortization  362             304         1,031      921
Total operating expenses       6,216           5,944       17,495     16,511
Operating (loss) income        (1,862)         8,401       11,145     19,972
Other income (expenses):
Interest, net                  79              (25)        (22)       (295)
Other, net                     (395)           680         (964)      8
Total other income (expenses)  (316)           655         (986)      (287)
(Loss) income before income    (2,178)         9,056       10,159     19,685
taxes
Benefit (provision) for income 956             (2,293)     3,477      (5,529)
taxes
Net (loss) income              $ (1,222)       $ 6,763     $ 13,636   $ 14,156
Net (loss) income per common
share:
Basic                          $ (0.10)        $ 0.55      $ 1.07     $ 1.28
Diluted                        $ (0.10)        $ 0.52      $ 1.03     $ 1.21
Shares used in computing net
income per common share:
Basic                          12,771          12,381      12,687     11,091
Diluted                        12,771          12,982      13,264     11,689







MITCHAM INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)
                                            For the Nine Months

                                            Ended October 31,
                                            2012              2011
Cash flows from operating activities:
Net income                                  $     13,636  $     14,156
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization               26,270            21,038
Stock-based compensation                    1,323             1,133
Provision for doubtful accounts, net of     (636)             1,281
charge offs
Provision for inventory obsolescence        178               73
Gross profit from sale of lease pool        (3,657)           (2,380)
equipment
Excess tax benefit from exercise of
non-qualified stock options and restricted  (441)             (394)
shares
Deferred tax benefit                        (3,524)           (763)
Changes in non-current income taxes         (5,003)           822
payable
Changes in working capital items:
Accounts receivable                         17,662            (10,794)
Contracts and notes receivable              (761)             2,590
Inventories                                 (623)             (972)
Prepaid expenses and other current assets   (1,341)           (625)
Income taxes receivable and payable         (7,672)           1,167
Prepaid foreign income tax                  3,519             (419)
Accounts payable, accrued expenses, other   (2,801)           2,447
current liabilities and deferred revenue
Net cash provided by operating activities   36,129            28,360
Cash flows from investing activities:
Purchases of seismic equipment held for     (35,531)          (40,957)
lease
Purchases of property and equipment         (795)             (1,084)
Sale of used lease pool equipment           7,409             3,103
Payment for earn-out provision              -                 (148)
Net cash used in investing activities       (28,917)          (39,086)
Cash flows from financing activities:
Net payments on line of credit              650               (17,700)
Proceeds from equipment notes               180               37
Payments on borrowings                      (1,528)           (2,647)
Net purchases of short-term investments     -                 (101)
Proceeds from issuance of common stock      331               788
upon exercise of options
Net proceeds from public offering of        -                 31,028
common stock
Excess tax benefit from exercise of
non-qualified stock options and restricted  441               394
shares
Net cash provided by (used in) financing    74                11,799
activities
Effect of changes in foreign exchange       1,417             186
rates on cash and cash equivalents
Net change in cash and cash equivalents     8,703             1,259
Cash and cash equivalents, beginning of     15,287            14,647
period
Cash and cash equivalents, beginning of     $    23,990    $    15,906
period





Mitcham Industries, Inc.

Reconciliation of Net Income and Net Cash Provided by Operating Activities to
EBITDA
                         For the Three Months Ended  For the Nine Months Ended

                         October 31,                October 31,
                         2012            2011        2012           2011
                         (in thousands)              (in thousands)
Reconciliation of Net
income to EBITDA and
Adjusted EBITDA
Net (loss) income        $  (1,222)    $  6,763  $  13,636     $  14,156
Interest (income)        (79)            25          22             295
expense, net
Depreciation and         8,703           7,559       26,270         21,038
amortization
(Benefit) provision for  (956)           2,293       (3,477)        5,529
income taxes
EBITDA ^(1)              6,446           16,640      36,451         41,018
Stock-based compensation 259             196         1,323          1,133
Adjusted EBITDA ^(1)     $ 6,705        $ 16,836   $ 37,774       $ 42,151
Reconciliation of Net
cash provided by
operating activities to
EBITDA
Net cash provided by     $ 6,849         $ 8,722     $ 36,129       $ 28,360
operating activities
Stock-based compensation (259)           (196)       (1,323)        (1,133)
Changes in trade
accounts, contracts and (6,029)         7,169       (16,901)       8,204
notes receivable
Interest paid            122             77          447            574
Taxes paid , net of      1,187           677         8,222          4,206
refunds
Gross profit from sale   532             1,923       3,657          2,380
of lease pool equipment
Changes in inventory     253             407         623            972
Changes in accounts
payable, accrued
expenses and other       758             (424)       2,801          (2,447)
current liabilities and
deferred revenue
Other                    3,033           (1,715)     2,796          (98)
EBITDA ^(1)              $ 6,446         $ 16,640    $ 36,451       $ 41,018



    EBITDA is defined as net income before (a) interest expense, net of
    interest income, (b) provision for (or benefit from) income taxes and
    (c) depreciation, amortization and impairment. Adjusted EBITDA excludes
    stock-based compensation. We consider EBITDA and Adjusted EBITDA to be
    important indicators for the performance of our business, but not measures
    of performance calculated in accordance with accounting principles
    generally accepted in the United States of America ("GAAP"). We have
    included these non-GAAP financial measures because management utilizes
    this information for assessing our performance and liquidity and as
    indicators of our ability to make capital expenditures, service debt and
    finance working capital requirements. The covenants of our revolving
    credit agreement require us to maintain a minimum level of EBITDA.
    Management believes that EBITDA and Adjusted EBITDA are measurements that
    are commonly used by analysts and some investors in evaluating the
    performance and liquidity of companies such as us. In particular, we
    believe that it is useful to our analysts and investors to understand this
(1) relationship because it excludes transactions not related to our core cash
    operating activities. We believe that excluding these transactions allows
    investors to meaningfully trend and analyze the performance and liquidity
    of our core cash operations. EBITDA and Adjusted EBITDA are not measures
    of financial performance or liquidity under GAAP and should not be
    considered in isolation or as alternatives to cash flow from operating
    activities or as alternatives to net income as indicators of operating
    performance or any other measures of performance derived in accordance
    with GAAP. In evaluating our performance as measured by EBITDA, management
    recognizes and considers the limitations of this measurement. EBITDA and
    Adjusted EBITDA do not reflect our obligations for the payment of income
    taxes, interest expense or other obligations such as capital expenditures.
    Accordingly, EBITDA and Adjusted EBITDA are only two of the measurements
    that management utilizes. Other companies in our industry may calculate
    EBITDA or Adjusted EBITDA differently than we do and EBITDA and Adjusted
    EBITDA may not be comparable with similarly titled measures reported by
    other companies.





Mitcham Industries, Inc.

Segment Operating Results

(unaudited)
                         For the Three Months Ended  For the Nine Months Ended

                         October 31,                October 31,
                         2012            2011        2012           2011
                         (in thousands)              (in thousands)
Revenues:
Equipment Leasing        $ 14,078       $ 21,822   $ 53,983       $ 54,719
Seamap                   4,839           6,743       23,134         22,009
Inter-segment sales      (344)           (545)       (833)          (928)
 Total revenues      18,573          28,020      76,284         75,800
Cost of sales:
Equipment Leasing        12,177          11,636      38,193         30,972
Seamap                   2,052           2,485       10,065         9,041
Inter-segment costs      (10)            (446)       (614)          (696)
Total cost of sales      14,219          13,675      47,644         39,317
Gross profit             4,354           14,345      28,640         36,483
Operating expenses:
General and              5,854           4,961       16,907         15,403
administrative
Provision for (recovery  -               679         (443)          187
of) doubtful accounts
Depreciation and         362             304         1,031          921
amortization
 Total operating     6,216           5,944       17,495         16,511
expenses
Operating (loss) income  $  (1,862)    $  8,401  $ 11,145       $ 19,972
Equipment Leasing
Segment:
Revenue:
Equipment leasing        $  11,062      $  17,411  $ 42,952      $ 46,458
Lease pool equipment     1,873           2,442       7,409          3,103
sales
New seismic equipment    181             611         619            1,013
sales
SAP equipment sales      962             1,358       3,003          4,145
                         14,078          21,822      53,983         54,719
Cost of sales:
Direct costs-equipment   1,664           2,365       6,546          6,348
leasing
Lease pool depreciation  8,314           7,404       25,276         20,217
Cost of lease pool       1,341           519         3,752          723
equipment sales
Cost of new seismic      111             336         358            559
equipment sales
Cost of SAP equipment    747             1,012       2,261          3,125
sales
                         12,177          11,636      38,193         30,972
Gross profit             $   1,901     $ 10,186   $ 15,790       $ 23,747
Gross profit %           14%             47%         29%            43%
Seamap Segment:
Equipment sales          $ 4,839         $ 6,743    $ 23,134       $ 22,009
Cost of equipment sales  2,052           2,485       10,065         9,041
Gross profit             $ 2,787        $ 4,258    $  13,069     $  12,968
Gross profit %           58%             63%         56%            59%





SOURCE Mitcham Industries, Inc.

Website: http://www.mitchamindustries.com
 
Press spacebar to pause and continue. Press esc to stop.