Mitcham Industries Reports Fiscal 2014 First Quarter Results

         Mitcham Industries Reports Fiscal 2014 First Quarter Results

PR Newswire

HUNTSVILLE, Texas, June 4, 2013

HUNTSVILLE, Texas, June 4, 2013 /PRNewswire/ -- Mitcham Industries, Inc.
(NASDAQ: MIND) today announced financial results for its fiscal 2014 first
quarter ended April 30, 2013.

Total revenues for the first quarter of fiscal 2014 were $27.3 million
compared to $34.6 million in the first quarter of fiscal 2013. Equipment
leasing revenues were $20.1 million in the first quarter compared to $21.0
million in the same period last year. Seamap equipment sales were $3.9 million
in the first quarter compared to $10.5 million in the same period last year.
Net income for the first quarter was $6.3 million, or $0.48 per diluted share,
compared to $8.5 million, or $0.63 per diluted share, in the first quarter of
fiscal 2013. EBITDA (earnings before interest, taxes, depreciation and
amortization) for the first quarter of fiscal 2014 was $15.7 million, or 58%
of revenues, compared to $19.8 million, or 57% 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 first quarter transpired as we
had anticipated and discussed in our last conference call. Despite some
expected headwinds, our equipment leasing revenues were roughly flat with a
year ago largely due to continued softness in land leasing activity in the
United States, Latin America and Europe, as well as a temporary slowdown in
marine leasing. These hurdles were partially offset by higher leasing revenues
in Canada, Russia and the Pacific Rim. Going into this quarter, we thought
Canada might be even stronger, with some additional working days, but those
did not materialize as our Canadian winter season was mostly finished in early
April.

"As we expected, due to our customers' delivery schedules, Seamap sales were
lower than a year ago as there were no major GunLink or BuoyLink system
shipments in this year's first quarter. Seamap revenues in the first quarter
were driven solely by after-market business and other equipment sales. This
compares to a strong first quarter a year ago, which included the sale of two
GunLink 4000 systems and three BuoyLink systems in addition to after-market
business. We expect to deliver one GunLink 4000 system and two BuoyLink
systems in the second quarter of this year, including our new BuoyLink 4DX
product. We anticipate a stronger level of activity for Seamap in the balance
of fiscal 2014.

"There are several encouraging signs occurring in our key leasing markets. We
are seeing indications of renewed activity in Latin America, where we are
delivering two new contracts of cable and cable free channels for second and
third quarter work, and we currently anticipate a stronger second half of the
fiscal year in that area. In Europe, bidding has picked up considerably, and
we are seeing improving activity, primarily in Eastern Europe. We now expect
an improved back half of the year, with stronger utilization of our equipment
in the region. Also, we were recently awarded summer work in Russia, which
will also enhance our equipment utilization.

"The Pacific Rim and Asia continue at their strong pace, with additional
projects on the horizon. First quarter marine leasing revenues dipped slightly
below a year ago as certain projects were completed and there were temporary
delays to the start of several new projects; however, we expect much of that
equipment to be working again before the end of the second quarter. We
continue to see healthy fundamentals in the marine seismic market in both
leasing and sales.

FISCAL 2014 FIRST QUARTER RESULTS
Total revenues for the first quarter of fiscal 2014 were $27.3 million
compared to $34.6 million a year ago. A significant portion of our revenues
are typically generated from geographic areas outside the United States, and
during the first quarter of fiscal 2014, the percentage of revenues from
international customers was approximately 90% compared to 82% in the first
quarter of fiscal 2013.

Equipment leasing revenues, excluding equipment sales, were $20.1 million
compared to $21.0 million in the same period a year ago. This year's first
quarter equipment leasing revenues were hindered by continued weakness in land
leasing activity in the United States, Latin America and Europe and a
temporary slowdown in marine leasing.

Lease pool equipment sales were $0.9 million for the first quarter of fiscal
2014 compared to $2.3 million in the first quarter a year ago. Sales of new
seismic, hydrographic and oceanographic equipment were $2.4 million compared
to $0.7 million in the first quarter a year ago.

Seamap equipment sales for the first quarter of fiscal 2014 were $3.9 million
compared to $10.5 million in the same period a year ago. There were no major
GunLink or BuoyLink system shipments in the first quarter of fiscal 2014;
therefore, sales were comprised entirely of other equipment sales and
after-market business, including replacement parts, engineering services and
ongoing support and repair services.

Lease pool depreciation expense in the first quarter of fiscal 2014 was $7.4
million compared to $8.4 million in the same period a year ago, representing a
12% decline, due to certain equipment becoming fully depreciated and the
decline in the rate of lease pool additions in this year's first quarter.
Lease pool additions in the first quarter of fiscal 2014 were approximately
$1.7 million compared to $15.9 million in the first quarter of last fiscal
year.

Gross profit in the first quarter of fiscal 2014 declined to $14.6 million
from $16.9 million in the first quarter a year ago, however, gross profit
margin increased to 53% from 49% a year ago. General and administrative
expenses were approximately $6.0 million for the first quarter of fiscal 2014
compared to $5.3 million for same period a year ago.

SHARE REPURCHASE PROGRAM
In April 2013, our Board of Directors authorized a share repurchase program
for up to 1.0 million shares of common stock through December 31, 2014.
During the fiscal 2014 first quarter, we repurchased approximately 100,000
shares of common stock at an average cost of approximately $14.79 per share,
before entering our quarterly blackout period on May 1, 2013. These purchases
were made in open market transactions.

Future 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.

CONFERENCE CALL
We have scheduled a conference call for Wednesday, June 5, 2013 at 9:00 a.m.
Eastern Time to discuss our fiscal 2014 first 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 onto the site and clicking
"Investors." A telephonic replay of the conference call will be available
through June 19, 2013 and may be accessed by calling (866) 949-7821. A web
cast archive will also be available at
http://www.mitchamindustries.comshortly 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
dwashburn@dennardlascar.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,
Mitcham designs, manufactures and sells specialized seismic marine equipment.

Certain statements and information in this press release concerning results
for the quarter ended April 30, 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)
                                              April 30, 2013  January 31, 2013
ASSETS
Current assets:
Cash and cash equivalents                     $ 16,544        $  15,150
Restricted cash                               775             801
Accounts receivable, net                      28,416          23,131
Current portion of contracts and notes        1,638           2,096
receivable
Inventories, net                              7,445           6,188
Prepaid income taxes                          5,528           5,591
Deferred tax asset                            1,900           1,842
Prepaid expenses and other current assets     4,619           3,079
 Total current assets                       66,865          57,878
Seismic equipment lease pool and property and 111,829         119,608
equipment, net
Intangible assets, net                        3,815           3,989
Goodwill                                      4,320           4,320
Deferred tax asset                            3,919           4,296
Other assets                                  87              316
 Total assets                               $ 190,835      $ 190,407
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                              $ 3,599        $  6,921
Current maturities – long-term debt           147             145
Deferred revenue                              1,134           539
Accrued expenses and other current            3,486           1,875
liabilities
 Total current liabilities                  8,366           9,480
Non-current income taxes payable              376             376
Long-term debt, net of current maturities     2,199           4,238
 Total liabilities                         10,941          14,094
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; 13,783 and 13,763 shares issued
at                                            138             138

April 30, 2013 and January 31, 2013,
respectively
Additional paid-in capital                    116,888         116,506
Treasury stock, at cost (1,029 and 926 shares
at April 30, 2013 and January 31, 2013,       (6,387)         (4,860)
respectively)
Retained earnings                             62,655          56,348
Accumulated other comprehensive income        6,600           8,181
 Total shareholders' equity                 179,894         176,313
 Total liabilities and shareholders'       $190,835        $ 190,407
equity



MITCHAM INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
                                         For the Three Months Ended April 30,
                                         2013                   2012
Revenues:
Equipment leasing                        $ 20,093               $ 21,008
Lease pool equipment sales               900                    2,332
Seamap equipment sales                   3,927                  10,544
Other equipment sales                    2,371                  747
 Total revenues                       27,291                 34,631
Cost of sales:
Direct costs - equipment leasing         1,273                  2,705
Direct costs - lease pool depreciation   7,419                  8,394
Cost of lease pool equipment sales       402                    1,404
Cost of Seamap and other equipment sales 3,600                  5,242
 Total cost of sales                   12,694                 17,745
                                         
Gross profit                                                    16,886
                                         14,597
Operating expenses:
General and administrative               6,039                  5,319
Recovery of doubtful accounts            -                      (428)
Depreciation and amortization            375                    329
 Total operating expenses              6,414                  5,220
Operating income                         8,183                  11,666
Other income (expenses):
Interest, net                            (3)                    (5)
Other, net                               (261)                  (598)
 Total other income (expenses)         (264)                  (603)
Income before income taxes               7,919                  11,063
Provision for income taxes               (1,612)                (2,607)
                                         
Net income                                                      $ 8,456
                                         $ 6,307
Net income per common share:
Basic                                    $ 0.49                 $ 0.67
Diluted                                  $ 0.48                 $ 0.63
Shares used in computing net income per common share:
Basic                                    12,789                 12,626
Diluted                                  13,220                 13,326



MITCHAM INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
                                                       For the Three Months

                                                       Ended April 30,
                                                       2013        2012
Cash flows from operating activities:
Net income                                             $  6,307  $   8,456
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                          7,826       8,757
Stock-based compensation                               266         194
Provision for inventory obsolescence                   58          60
Gross profit from sale of lease pool equipment         (498)       (928)
Excess tax benefit from exercise of non-qualified      (56)        (350)
stock options and restricted shares
Deferred tax benefit (provision)                       259         (1,257)
Changes in working capital items:
Accounts receivable                                    (5,665)     4,357
Contracts and notes receivable                         688         (632)
Inventories                                            (1,345)     165
Prepaid expenses and other current assets              (1,578)     (422)
Income taxes receivable and payable                    (46)        532
Prepaid foreign income tax                             -           (236)
Accounts payable, accrued expenses, other current      2,174       (832)
liabilities and deferred revenue
 Net cash provided by operating activities           8,390       17,864
Cash flows from investing activities:
Purchases of seismic equipment held for lease          (4,945)     (23,812)
Purchases of property and equipment                    (161)       (146)
Sale of used lease pool equipment                      900         2,332
 Net cash used in investing activities               (4,206)     (21,626)
Cash flows from financing activities:
Net (payments on) proceeds from line of credit        (2,000)     6,650
Payments on borrowings                                 (39)        (1,465)
Net purchases of short-term investments                3           -
Proceeds from issuance of common stock upon exercise   60          96
of options
Purchase of treasury stock                             (1,527)     -
Excess tax benefit from exercise of non-qualified      56          350
stock options and restricted shares
 Net cash (used in) provided by financing            (3,447)     5,631
activities
Effect of changes in foreign exchange rates on cash    657         276
and cash equivalents
Net change in cash and cash equivalents                1,394       2,145
Cash and cash equivalents, beginning of period         15,150      15,287
Cash and cash equivalents, beginning of period         $ 16,544   $  17,432

Mitcham Industries, Inc.
Reconciliation of Net Income and Net Cash Provided by Operating Activities to
EBITDA
                                                   For the Three Months Ended

                                                   April 30,
                                                   2013           2012
                                                   (in thousands)
Reconciliation of Net income to EBITDA and
Adjusted EBITDA
Net income                                         $  6,307     $  8,456
Interest expense, net                              3              5
Depreciation and amortization                      7,826          8,757
Provision for income taxes                         1,612          2,607
EBITDA ^(1)                                        15,748         19,825
Stock-based compensation                           266            194
Adjusted EBITDA ^(1)                               $ 16,014      $ 20,019
Reconciliation of Net cash provided by operating
activities to EBITDA
Net cash provided by operating activities          $ 8,390        $ 17,864
Stock-based compensation                           (266)          (194)
Changes in trade accounts, contracts and notes    4,977          (3,725)
receivable
Interest paid                                      66             167
Taxes paid , net of refunds                        1,379          3,821
Gross profit from sale of lease pool equipment     498            928
Changes in inventory                               1,345          (165)
Changes in prepaid expenses and other current      1,578          422
assets
Changes in accounts payable, accrued expenses and  (2,174)        832
other current liabilities and deferred revenue
Other                                              (45)           (125)
EBITDA ^(1)                                        $15,748        $ 19,825

(1) 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 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

                                    April 30,
                                    2013            2012
                                    (in thousands)
Revenues:
Equipment Leasing                   $ 23,364        $ 24,087
Seamap                              3,934           10,841
Inter-segment sales                 (7)             (297)
 Total revenues                   27,291          34,631
Cost of sales:
Equipment Leasing                   11,043          13,228
Seamap                              1,709           4,892
Inter-segment costs                 (58)            (375)
 Total cost of sales              12,694          17,745
Gross profit                        14,597          16,886
Operating expenses:
General and administrative          6,039           5,319
Recovery of doubtful accounts       -               (428)
Depreciation and amortization       375             329
 Total operating expenses         6,414           5,220
Operating income                    $ 8,183         $ 11,666
Equipment Leasing Segment:
Revenue:
Equipment leasing                   $ 20,093        $ 21,008
Lease pool equipment sales          900             2,332
New seismic equipment sales         117             268
SAP equipment sales                 2,254           479
                                    23,364          24,087
Cost of sales:
Direct costs-equipment leasing      1,273           2,870
Lease pool depreciation             7,470           8,434
Cost of lease pool equipment sales  402             1,404
Cost of new seismic equipment sales 79              140
Cost of SAP equipment sales         1,819           380
                                    11,043          13,228
Gross profit                        $ 12,321        $ 10,859
Gross profit %                      53%             45%
Seamap Segment:
Equipment sales                     $ 3,934         $ 10,841
Cost of equipment sales             1,709           4,892
Gross profit                        $ 2,225         $ 5,949
Gross profit %                      57%             55%

SOURCE Mitcham Industries, Inc.

Website: http://www.mitchamindustries.com
 
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