Mitcham Industries Reports Fiscal 2013 Fourth Quarter And Year-End Results FY2013 revenues of $105 million and diluted EPS of $1.29 Announces share repurchase program PR Newswire HUNTSVILLE, Texas, April 3, 2013 HUNTSVILLE, Texas, April 3, 2013 /PRNewswire/ -- Mitcham Industries, Inc. (NASDAQ: MIND) today announced financial results for its fourth quarter and fiscal year ended January 31, 2013. Total revenues for the fourth quarter of fiscal 2013 were $28.4 million compared to $37.0 million in the fourth quarter of fiscal 2012. Equipment leasing revenues were $11.6 million in the fourth quarter compared to $23.7 million in the same period last year. Seamap sales were $8.9 million in the fourth quarter compared to $7.3 million in the same period last year. Net income for the fourth quarter was $3.4 million, or $0.26 per diluted share, compared to $10.2 million, or $0.77 per diluted share, in the fourth quarter of fiscal 2012. EBITDA (earnings before interest, taxes, depreciation and amortization) for the fourth quarter of fiscal 2013 was $12.0 million, or 42% of revenues, compared to $22.5 million, or 61% 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. For the full fiscal year, total revenues were $104.7 million compared to $112.8 million in fiscal 2012. Net income for fiscal 2013 was $17.1 million, or $1.29 per diluted share, compared to $24.3 million, or $2.02 per diluted share, in fiscal 2012. EBITDA in fiscal 2013 was $48.5 million compared to $63.5 million in fiscal 2012. Bill Mitcham, President and CEO, stated, "While fiscal 2013 did not turn out as we had anticipated going into this year, it was the second best year in our history in terms of revenues, earnings and EBITDA, with the best year being fiscal 2012. Our Seamap segment actually had its best year ever, generating record revenues and gross profit for fiscal 2013. "We anticipated that this year's fourth quarter was going to be substantially below the fourth quarter of last year; however, it still did not meet our expectations. We experienced later than expected starts to the winter seasons in both Canada and Russia, with many projects in those regions not beginning until mid to late January, whereas normally Russia begins in mid-December and Canada in early January. Had projects in those areas started within normal time frames, we believe our fourth quarter results would have been more in line with our expectations, if not exceeding them. "Land leasing activity levels in Latin American continued to be plagued by project delays due to permitting and regulatory issues and, as we anticipated, our fourth quarter results attributable to that area were well below those in last year's fourth quarter.U.S. leasing activity remained sporadic and was below last year's fourth quarter levels, which included an exceptionally large job that contributed over $4.5 million in leasing revenues. European leasing activity levels remained soft in the fourth quarter and substantially below last year's fourth quarter. On the other hand, we saw a substantial increase in land leasing activity in the Pacific Rim in the fourth quarter. Marine leasing activity also was strong, reflecting the overall strength in the marine seismic market, and fiscal 2013 was a record year for our marine leasing business. As expected, Seamap had an excellent fourth quarter, which included the delivery of one GunLink 4000 system and one BuoyLink system for a new-build vessel. "We anticipate improved results in fiscal year 2014, and the first quarter is off to a good start. At this point, we expect both Canada and Russia to be stronger than last year, but this expected increase depends on, in large part, to what extent certain projects extend into April. There is a substantial amount of seismic work pending in Latin America, and we have several jobs ready to begin as soon as our customers are able to satisfy the various permitting and regulatory requirements. The permitting and regulatory delays experienced by our customers in that region remain a concern, but we expect Latin America to be an area of strong activity for us in fiscal 2014, especially beyond the first quarter. In Europe, there are signs of improvement, and we have bids pending that would utilize much of our equipment in the area for a large part of fiscal 2014. Marine leasing activity is expected to remain steady throughout fiscal 2014, driven by ongoing strong fundamentals in the marine seismic market. "We believe that the outlook for Seamap is extremely promising. We further believe that robust activity in the marine seismic market, including numerous new vessels announced for the next several years, is an indication of strong Seamap sales going forward. We expect increasing demand for Seamap products and related equipment as well as on-going support work, although we believe fiscal 2014 activity will be back loaded. "We are pleased with our current financial position as we have no net debt, we generated strong cash flow from operations last year and we believe that we have access to additional capital, if needed. This liquidity should allow us to continue capitalizing on new opportunities, which we expect will arise. "We do not believe that the relative slowdown in our land leasing business during the past fiscal year indicates a change in the overall positive trend for the seismic industry. As a result of the continuing growth in global demand for oil and gas, the need by oil and gas companies for more precise seismic data, as well as the increased use of seismic data in the development and management of oil and gas properties beyond the exploration phase, we believe that demand for our equipment and services will continue to be strong." FISCAL 2013 FOURTH QUARTER RESULTS Total revenues for the fourth quarter of fiscal 2013 were $28.4 million compared to $37.0 million a year ago. A significant portion of our revenues are typically generated from geographic areas outside the United States, and during the fourth quarter of fiscal 2013, the percentage of revenues from international customers was approximately 79% compared to 72% in the fourth quarter of fiscal 2012. Equipment leasing revenues, excluding equipment sales, were $11.6 million compared to $23.7 million in the same period a year ago. The decline in equipment leasing revenues was primarily due to lower land leasing activity in the United States, Latin America and Europe, and to a lesser extent a late start to the winter seasons in Canada and Russia this year. In the U.S., last year's fourth quarter included an unusually large job that contributed over $4.5 million in equipment leasing revenues. Another project of comparable size was not present in this year's fourth quarter. Lease pool equipment sales were $4.0 million for the fourth quarter of fiscal 2013 compared to $3.4 million in the fourth quarter a year ago. Sales of new seismic, hydrographic and oceanographic equipment increased 50% to $3.9 million compared to $2.6 million in the same period a year ago. Seamap equipment sales for the fourth quarter of fiscal 2013 were $8.9 million compared to $7.3 million in the same period a year ago. The fiscal 2013 fourth quarter included the delivery of one GunLink 4000 system and one BuoyLink RGPS system for a new-build vessel, as well as after-market business including replacement parts, engineering services and ongoing support and repair services. Last year's fourth quarter included the sale of one GunLink 4000 system and two BuoyLink RGPS systems, along with after-market business. Lease pool depreciation expense in the fourth quarter of fiscal 2013 was $8.3 million compared to $7.4 million in the same period a year ago, representing a 12% increase. This increase resulted from additions made to our lease pool during fiscal 2012 and fiscal 2013 of $69 million and $39 million, respectively. Gross profit in the fourth quarter of fiscal 2013 was $8.8 million compared to $21.3 million a year ago primarily due to lower equipment leasing revenues and higher lease pool depreciation expense. General and administrative expenses were approximately $5.6 million for the fourth quarters of fiscal 2013 and approximately $6.0 million for same period one year ago. We reported an income tax benefit in the fourth quarter of fiscal 2013 of approximately $50,000, as compared to income tax expense of approximately $4.5 million in the fourth quarter of fiscal 2012. FISCAL 2013 RESULTS Total revenues for fiscal 2013 exceeded the $100 million mark for the second year in a row, reaching $104.7 million compared to $112.8 million in fiscal 2012. Equipment leasing revenues were $54.6 million in fiscal 2013 compared to $70.1 million last year. Lease pool equipment sales in fiscal 2013 were $11.4 million compared to $6.5 million in fiscal 2012. Sales of new seismic, hydrographic and oceanographic equipment for fiscal 2013 were $7.5 million compared to $7.8 million in fiscal 2012. Seamap equipment sales for fiscal 2013 were $31.2 million compared to $28.4 million last year. Lease pool depreciation expense for fiscal 2013 was $33.4 million compared to $27.4 million in fiscal 2012. Gross profit for fiscal 2013 was $37.4 million compared to $57.8 million a year ago. General and administrative expenses for fiscal 2013 amounted to approximately $22.5 million, compared to approximately $21.4 million in fiscal 2012. The increase reflects the generally higher level of operations associated with our expanded operations in Latin America, Singapore and Europe. Net income was $17.1 million, or $1.29 per diluted share, compared to $24.3 million, or $2.02 per diluted share, in fiscal 2012. EBITDA for fiscal 2013 was $48.5 million, or 46% of total revenues, compared to $63.5 million, or 56% of total revenues, in fiscal 2012. SHARE REPURCHASE PROGRAM Our Board of Directors has authorized a share repurchase program for up to 1.0 million shares of common stock through December 31, 2014. Purchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or otherwise on a discretionary basis. We expect to finance any repurchases from a combination of cash on hand, cash provided by operating activities and proceeds from our revolving credit facility. Mr. Mitcham commented, "We generated significant cash from operating activities in fiscal 2013 and anticipate doing so again in fiscal 2014.Management and the Board of Directors believe that the repurchase of our own shares is an attractive use of our capital." CONFERENCE CALL We have scheduled a conference call for Thursday, April 4, 2013 at 9:00 a.m. Eastern Time, to discuss our fiscal 2013 fourth quarter and year-end 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 April 11, 2013 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 Dennard ▪ Lascar Associates (713)529‑6600 or email firstname.lastname@example.org. 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, Mitcham designs, manufactures and sells specialized seismic marine equipment. Certain statements and information in this press release concerning results for the quarter and fiscal year ended January 31, 2013 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 Dennard ▪ Lascar Associates 713-529-6600 Tables to follow MITCHAM INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (unaudited) January 31, 2013 2012 ASSETS Current assets: Cash and cash $ $ equivalents 15,150 15,287 Restricted 801 98 cash Accounts receivable, net of allowance for doubtful accounts of $3,374 and $4,391 at 23,131 35,788 January 31, 2013 and 2012, respectively Current portion of contracts and notes receivable 2,096 2,273 Inventories, net 6,188 6,708 Prepaid income taxes 5,591 - Deferred tax asset 1,842 2,594 Prepaid expenses and other current assets 3,079 2,530 Total current assets 57,878 65,278 Seismic equipment lease pool and property and equipment, net 119,608 120,377 Intangible assets, net 3,989 4,696 Goodwill 4,320 4,320 Prepaid foreign income tax - 3,519 Deferred tax asset 4,296 - Other assets 316 39 Total assets $ $ 190,407 198,229 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ $ 6,921 13,037 Current maturities – long-term debt 145 1,399 Income taxes payable - 2,419 Deferred revenue 539 543 Accrued expenses and other current liabilities 1,875 6,583 Total current liabilities 9,480 23,981 Non-current income taxes payable 376 5,435 Deferred tax liability - 595 Long-term debt, net of current maturities 4,238 12,784 Total liabilities 14,094 42,795 Shareholders' equity: Preferred stock, $1.00 par value; 1,000 shares authorized; none issued and outstanding - - Common stock $.01 par value; 20,000 shares authorized;13,763 and 13,556 shares issued at January 31, 2013 and January 31, 138 136 2012, respectively Additional paid-in capital 116,506 113,654 Treasury stock, at cost (926 and 925 shares at January 31, 2013 and 2012, respectively) (4,860) (4,857) Retained earnings 56,348 39,297 Accumulated other comprehensive income 8,181 7,204 Total shareholders' equity 176,313 155,434 Total liabilities and shareholders' equity $ $ 190,407 198,229 MITCHAM INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) For the Three Months For the Twelve Months Ended January 31, Ended January 31, 2013 2012 2013 2012 Revenues: Equipment leasing $ 11,640 $ 23,679 $54,592 $70,137 Lease pool equipment sales 4,003 3,400 11,412 6,503 Seamap equipment sales 8,868 7,325 31,169 28,406 Other equipment sales 3,890 2,630 7,512 7,788 Total revenues 28,401 37,034 104,685 112,834 Cost of sales: Direct costs - equipment leasing 1,655 1,711 7,963 8,059 Direct costs - lease pool 8,266 7,384 33,405 27,400 depreciation Cost of lease pool equipment 2,291 857 6,043 1,580 sales Cost of Seamap and other 7,416 5,813 19,861 18,043 equipment sales Total cost of sales 19,628 15,765 67,272 55,082 Gross profit 8,773 21,269 37,413 57,752 Operating expenses: General and administrative 5,647 5,951 22,539 21,354 Provision for (recovery of) - 428 (428) 615 doubtful accounts Depreciation and amortization 369 318 1,400 1,239 Total operating expenses 6,016 6,697 23,511 23,208 Operating income 2,757 14,572 13,902 34,544 Other income (expenses): Interest, net 33 (101) 11 (396) Other, net 575 174 (389) 182 Total other income (expense) 608 73 (378) (214) Income before income taxes 3,365 14,645 13,524 34,330 Benefit (provision for) income 50 (4,480) 3,527 (10,009) taxes Net income $ 3,415 $ 10,165 $ 17,051 $24,321 Net income per common share: Basic $ 0.27 $ 0.82 $1.34 $2.13 Diluted $ 0.26 $ 0.77 $1.29 $2.02 Shares used in computing net income per common share: Basic 12,799 12,445 12,715 11,432 Diluted 13,176 13,209 13,242 12,069 MITCHAM INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Years Ended January 31, 2013 2012 Cash flows from operating activities: Net $ $ income 17,051 24,321 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 34,939 28,774 Stock-based compensation 1,586 1,331 Provision for doubtful accounts, net of charge offs (636) 1,709 Provision for inventory obsolescence 163 173 Gross profit from sale of lease pool equipment (5,369) (4,923) Excess tax expense (benefit) from exercise of non-qualified stock options and restricted (420) (778) shares Deferred tax benefit (4,450) (285) Changes in non-current income taxes payable (5,059) 597 Changes in: Trade accounts and contracts receivable 13,331 (16,687) 718 (2,614) Inventories Income taxes payable and receivable (6,718) 2,532 Prepaid foreign income tax 3,519 (440) Accounts payable, accrued expenses and other current liabilities (4,091) 2,683 Prepaids and other, net (307) (435) Net cash provided by operating activities 44,257 35,958 Cash flows from investing activities: Purchases of seismic equipment held for lease (44,694) (62,142) Purchases of property and equipment (965) (1,525) Sales of used lease pool equipment 11,412 6,503 Payment for earn-out provision (450) (148) Net cash used in investing activities (34,697) (57,312) Cash flows from financing activities: Net (payments on) proceeds from revolving line of credit (8,550) (9,100) Proceeds from equipment notes 147 37 Payments on borrowings (1,532) (3,308) Net purchases of short-term investment (689) (101) Proceeds from issuance of common stock upon exercise of options 329 2,809 Net proceeds from public offering of common stock - 31,028 Excess tax benefit (expense) from exercise of non-qualified stock options 420 778 Net cash (used in) provided by financing activities (9,875) 22,143 Effect of changes in foreign exchange rates on cash and cash equivalents 178 (149) Net (decrease) increase in cash and cash equivalents (137) 640 Cash and cash equivalents, beginning of year 15,287 14,647 Cash and cash equivalents, end of year $ 15,150 $ 15,287 MITCHAM INDUSTRIES, INC. Reconciliation of Net Income and Net Cash Provided by Operating Activities to EBITDA (Unaudited) For the Three Months For the Twelve Months Ended Ended January 31, January 31, 2013 2012 2013 2012 Reconciliation of Net Income to EBITDA and (in thousands) Adjusted EBITDA Net income $ 3,415 $ $17,051 $24,321 10,165 Interest expense, net (33) 101 (11) 396 Depreciation and 8,669 7,736 34,939 28,774 amortization (Benefit) provision for (50) 4,480 (3,527) 10,009 income taxes EBITDA ^(1) 12,001 22,482 48,452 63,500 Stock-based compensation 263 198 1,586 1,331 Adjusted EBITDA ^(1) $ 12,264 $ 22,680 $50,038 $64,831 Reconciliation of Net Cash Provided by Operating Activities to EBITDA Net cash provided by $8,128 $7,598 $44,257 $35,958 operating activities Stock-based compensation (263) (198) (1,586) (1,331) Provision for doubtful - (428) 636 (1,709) accounts Changes in trade accounts and contracts 3,570 8,483 (13,331) 16,687 receivable Interest paid 86 130 533 704 Taxes paid , net of 955 3,330 9,177 7,536 refunds Gross profit from sale 1,711 2,543 5,369 4,923 of lease pool equipment Changes in inventory 95 1,642 718 2,614 Changes in accounts payable, accrued 1,291 (236) 4,091 (2,683) expenses and other current liabilities Other (3,572) (382) (1,412) 801 EBITDA ^(1) $12,001 $22,482 $48,452 $63,500 EBITDA is defined as net income before (a) interest income and interest expense, (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 or liquidity 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 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 For the Twelve Months Ended Ended January 31, January 31, 2013 2012 2013 2012 (in thousands) Revenues: Equipment Leasing $ 19,533 $ 29,709 $73,516 $84,428 Seamap 9,076 6,694 32,210 28,703 Inter-segment sales (208) 631 (1,041) (297) Total revenues 28,401 37,034 104,685 112,834 Cost of sales: Equipment Leasing 15,127 11,643 53,320 42,615 Seamap 4,752 3,777 14,817 12,818 Inter-segment costs (251) 345 (865) (351) Total cost of sales 19,628 15,765 67,272 55,082 Gross profit 8,773 21,269 37,413 57,752 Operating expenses: General and administrative 5,647 5,951 22,539 21,354 Provision for (recovery of) - 428 (428) 615 doubtful accounts Depreciation and 369 318 1,400 1,239 amortization Total operating 6,016 6,697 23,511 23,208 expenses Operating income $ 2,757 $ 14,572 $ 13,902 $ 34,544 Equipment Leasing Segment: Revenue: Equipment leasing $ 11,640 $ 23,679 $54,592 $70,137 Lease pool equipment sales 4,003 3,400 11,412 6,503 New seismic equipment sales 663 797 1,282 1,810 SAP equipment sales 3,227 1,833 6,230 5,978 Total revenue 19,533 29,709 73,516 84,428 Cost of sales: Lease pool depreciation 1,654 7,451 33,594 27,668 Direct costs-equipment 8,318 1,711 8,200 8,059 leasing Cost of lease pool equipment 2,291 857 6,043 1,580 sales Cost of new seismic 297 365 655 924 equipment sales Cost of SAP equipment sales 2,567 1,259 4,828 4,384 Total cost of sales 15,127 11,643 53,320 42,615 Gross profit $ 4,406 $ 18,066 $20,196 $41,183 Gross profit % 23% 61% 27% 50% Seamap Segment: Equipment sales $ 9,076 $ 6,694 $ 32,210 $ 28,703 Cost of equipment sales 4,752 3,777 14,817 12,818 Gross profit $ 4,324 $ 2,917 $ 17,393 $ 15,885 Gross profit % 48% 44% 54% 55% SOURCE Mitcham Industries, Inc. Website: http://www.mitchamindustries.com
Mitcham Industries Reports Fiscal 2013 Fourth Quarter And Year-End Results
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