HUNSTVILLE, Texas, June 2 /PRNewswire-FirstCall/ -- Mitcham
Industries, Inc. (NASDAQ:MIND) (the "Company") today announced
financial results for its fiscal 2010 first quarter ended April 30,
2009. The Company reported total revenues of $10.6 million for the
first quarter of fiscal 2010 compared to $18.5 million in the first
quarter of fiscal 2009. The Company reported a net loss of $80,000,
or $0.01 loss per share, for the first quarter of fiscal 2010
compared to net income of $4.3 million, or $0.41 per diluted share,
for the first quarter of fiscal 2009. EBITDA (earnings before
interest, taxes, depreciation and amortization), a non-GAAP
measure, amounted to $4.5 million for the first quarter of fiscal
2010 compared to $10.4 million in the same period last year. Bill
Mitcham, the Company's President and CEO, stated, "Our first fiscal
quarter is typically our strongest of the year. However, the
pick-up in activity that usually occurs during the winter months in
Canada and Russia did not materialize this year, negatively
affecting our first quarter as it did the fourth quarter. "Despite
the difficult economic environment, there are some encouraging
signs. In regions such as South America and parts of Asia, oil and
gas exploration activity is still fairly healthy. Bidding activity
outside of North America and Russia, particularly in South America,
is relatively steady, and we believe that there are prospects for
some rather large jobs later in the year. Demand for VSP, or
vertical seismic profiling, tools remains encouraging. The marine
environment is reasonably stable, and we expect to begin deliveries
of our Polarcus contract during the second quarter. Seamap, as
previously announced, is providing Polarcus with its GunLink 4000
fully distributed digital gun controller systems and BuoyLink RGPS
tail buoy positioning systems. "We believe that we are well
positioned to manage through this downturn and capitalize on
opportunities as they arise. The one factor that makes this current
downturn different from previous cycles is the tight credit market;
and when credit is tight, we know that our customers tend to lease
equipment before making capital commitments for purchases. From a
liquidity standpoint, we continue to generate good cash flow; have
a strong balance sheet with modest debt; and have access to
additional credit and liquidity, should the need arise. The
long-term fundamentals of our industry remain intact, and when the
seismic acquisition process returns to some state of normalcy, we
expect that even more equipment will be required on each new
prospect to better define the reservoir and reduce drilling costs.
Fossil fuel will provide the world's energy needs for many years to
come, and we will provide the additional equipment needed to find
those hidden deposits. We are very optimistic about the future of
our industry and our company." FIRST QUARTER FISCAL 2010 RESULTS
Total revenues for the first quarter of fiscal 2010 were $10.6
million compared to $18.5 million for the first quarter of fiscal
2009, a decline of approximately 43%. The decline was primarily
attributable to a decrease in equipment leasing revenues and lower
sales from Seamap. A significant portion of the Company's revenues
are generated from sources outside the United States, with revenues
from international customers totaling approximately 79% of total
revenues during the first quarter of fiscal 2010 compared to 86% of
total revenues in the same period last year. Core revenues from
equipment leasing, excluding equipment sales, were $6.3 million
compared to $12.4 million in the same period a year ago, a 49%
decline. Leasing revenues were impacted by the dramatic decline in
demand for seismic equipment and services, including the lack of
seasonal demand in Canada and Russia, areas where a great deal of
seismic exploration activity usually occurs during the winter
months. Oil and gas exploration activities have fallen
significantly in these regions, as well as in many other areas
worldwide, due to the global economic situation. Sales of new
seismic, hydrographic and oceanographic equipment were $1.6 million
compared to $318,000 in the comparable period a year ago, primarily
reflecting deliveries to the Royal Australian Navy, along with
services and other equipment sold in Australia and throughout the
Pacific Rim. In May 2008, the Company entered into a contract with
the Royal Australian Navy that contributed approximately $900,000
to first quarter revenues. Sales of lease pool equipment were
$69,000 compared to $561,000 in the first quarter of fiscal 2009,
reflecting the decline in seismic exploration activity. Seamap
equipment sales in the first quarter declined 51% to $2.6 million
from $5.3 million in the comparable period a year ago, reflecting
the fact that there were no large GunLink or BuoyLink systems
shipped during the first quarter of fiscal 2010. Seamap sales can
vary significantly on a quarter-to-quarter basis due to varying
customer delivery requirements. Shipments related to Seamap's
orders from Polarcus are scheduled to begin in the second quarter
of fiscal 2010. Total gross profit in the fiscal 2010 first quarter
was $3.8 million compared to $11.6 million in the first quarter of
fiscal 2009, a 68% decline. The fiscal 2010 gross profit was
impacted by the decline in leasing revenues and higher depreciation
expense related to new lease pool equipment that the Company
acquired during fiscal 2009. Gross profit margin for the first
quarter of fiscal 2010 was 36% compared to 63% in the same period a
year ago. General and administrative costs for the first quarter of
fiscal 2010 were $3.5 million compared to $4.9 million in the first
quarter of fiscal 2009, primarily due to lower stock-based and
incentive compensation expenses and reductions in other general
administrative costs, such as travel costs. Operating income for
the first quarter of fiscal 2010 was $16,000 compared to $6.4
million in the comparable period a year ago, primarily due to lower
leasing revenues and higher lease pool depreciation expense. Income
before income taxes was $46,000 compared to $6.5 million in the
first quarter of fiscal 2009. Provision for income taxes was
$126,000 in the fiscal 2010 first quarter compared to $2.2 million
in the first quarter of fiscal 2009. Income tax expense for the
first quarter of fiscal 2010 included $109,000 of estimated
penalties and interest that could arise from uncertain tax
provisions. Income tax expense for the last year's first quarter
included $399,000 of estimated potential penalties and interest
from uncertain tax positions. The estimated penalties and interest
are recorded pursuant to the accounting standard dealing with
uncertain tax positions, which the Company adopted in the first
quarter of fiscal 2008. EBITDA (earnings before interest, taxes,
depreciation and amortization) for the first quarter was $4.5
million, or 42% of total revenues, compared to $10.4 million, or
56% of total revenues, in the same period last year. Adjusted
EBITDA, which excludes stock-based compensation expense, was $4.9
million, or 46% of total revenues, in the first quarter compared to
$11.1 million, or 60% of total revenues, in the first quarter of
last year. EBITDA and Adjusted EBITDA, which are not measures
determined in accordance with generally accepted accounting
principles ("GAAP"), are defined and reconciled to reported net
(loss) income, the most comparable GAAP measure, in Note A under
the accompanying financial tables. CONFERENCE CALL The Company has
scheduled a conference call for Wednesday, June 3, 2009 at 9:00
a.m. Eastern time to discuss its fiscal 2010 first quarter results.
To access the call, please dial (480) 629-9692 and ask for the
Mitcham Industries call at least 10 minutes 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 June 10, 2009 and may be accessed by
calling (303) 590-3030, and using the passcode 4084489#. A web cast
archive will also be available at http://www.mitchamindustries.com/
shortly after the call and will be accessible for approximately 90
days. For more information, please contact Donna Washburn at
DRG&E at (713) 529-6600 or email . 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; and the United Kingdom and with associates
throughout Europe, South America and Asia, Mitcham conducts
operations on a global scale and is the largest independent
exploration equipment lessor in the industry. This press release
includes forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934 and Section 27A of the
Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical facts included herein,
including statements regarding the Company's future financial
position and results of operations, planned capital expenditures,
the Company's business strategy and other plans for future
expansion, the future mix of revenues and business, future demand
for the Company's services and general conditions in the energy
industry in general and seismic service industry, are
forward-looking statements. While management believes that these
forward-looking statements are reasonable when and as made, actual
results may differ materially from such forward-looking statements.
Important factors that could cause or contribute to such
differences include possible decline in demand for seismic data and
our services; the effect of recent declines in oil and natural gas
prices on exploration activity; the effect of uncertainty in
financial markets on our customers' and our ability to obtain
financing; loss of significant customers; defaults by customers on
amounts due us; possible impairment of long-lived assets; risks
associated with our manufacturing operations; foreign currency
exchange risk; and other factors that are disclosed in the
Company's filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K and available from the Company
without charge. Readers are cautioned to not place undue reliance
on forward-looking statements which speak only as of the date of
this release and the Company undertakes no duty to update or revise
any forward-looking statement 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 Rupp Gray &
Easterly (DRG&E) 713-529-6600 - Tables to follow - MITCHAM
INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except
per share data) April 30, January 31, 2009 2009 ASSETS Current
assets: Cash and cash equivalents $4,756 $5,063 Restricted cash
1,112 969 Accounts receivable, net 12,730 12,415 Current portion of
contracts receivable 562 836 Inventories, net 6,057 3,772 Costs
incurred and estimated profit in excess of billings on uncompleted
contract 1,001 1,787 Income taxes receivable - 1,000 Deferred tax
asset 1,339 1,682 Prepaid expenses and other current assets 1,051
1,535 Total current assets 28,608 29,059 Seismic equipment lease
pool and property and equipment, net 61,165 64,251 Intangible
assets, net 2,719 2,744 Goodwill 4,320 4,320 Deferred tax asset 671
- Long-term portion of contracts receivable 3,806 3,806 Other
assets 50 47 Total assets $101,339 $104,227 LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $8,197
$13,561 Income taxes payable 455 - Deferred revenue 553 424 Accrued
expenses and other current liabilities 3,281 3,877 Total current
liabilities 12,486 17,862 Non-current income taxes payable 3,448
3,260 Deferred tax liability - 32 Long-term debt 6,450 5,950 Total
liabilities 22,384 27,104 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; 10,725 shares issued at April 30, 2009 and January 31,
2009 107 107 Additional paid-in capital 74,819 74,396 Treasury
stock, at cost (923 and 922 shares at April 30, 2009 and January
31, 2009, respectively) (4,832) (4,826) Retained earnings 9,647
9,727 Accumulated other comprehensive income (786) (2,281) Total
shareholders' equity 78,955 77,123 Total liabilities and
shareholders' equity $101,339 $104,227 MITCHAM INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per
share data) For the Three Months Ended April 30, 2009 2008
Revenues: Equipment leasing $6,326 $12,373 Lease pool equipment
sales 69 561 Seamap equipment sales 2,598 5,282 Other equipment
sales 1,612 318 Total revenues 10,605 18,534 Cost of sales: Direct
costs - equipment leasing 528 442 Direct costs - lease pool
depreciation 4,101 3,640 Cost of lease pool equipment sales 10 125
Cost of Seamap and other equipment sales 2,194 2,699 Total cost of
sales 6,833 6,906 Gross profit 3,772 11,628 Operating expenses:
General and administrative 3,502 4,875 Depreciation and
amortization 254 395 Total operating expenses 3,756 6,906 Operating
income 16 11,628 Other income (expense) Interest income, net (89)
150 Other, net 119 5 Total other income (expense) 30 155 Income
before income taxes 46 6,513 Provision for income taxes (126)
(2,235) Net (loss) income $(80) $4,278 Net (loss) income per common
share: Basic $(0.01) $0.44 Diluted $(0.01) $0.41 Shares used in
computing net (loss) income per common share: Basic 9,784 9,751
Diluted 9,784 10,337 MITCHAM INDUSTRIES, INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands) For the Three months Ended
April 30, 2009 2008 Cash flows from operating activities: Net
(loss) income $(80) $4,278 Adjustments to reconcile net (loss)
income to net cash provided by operating activities: Depreciation
and amortization 4,385 4,076 Stock-based compensation 416 636
Provision for doubtful accounts - 116 Provision for inventory
obsolescence (81) 6 Gross profit from sale of lease pool equipment
(59) (438) Excess tax benefit from exercise of non-qualified stock
options (7) (53) Deferred tax (benefit) provision (176) 548 Changes
in non-current income taxes payable 188 205 Changes in working
capital items: Accounts receivable 555 (2,814) Contracts receivable
- 424 Inventories (2,029) 825 Income taxes payable and receivable
1,402 30 Accounts payable, accrued expenses and other current
liabilities (239) (7,310) Contract revenues in excess of billings
1,066 - Prepaids and other, net 261 431 Net cash provided by
operating activities 5,602 960 Cash flows from investing
activities: Sales of used lease pool equipment 69 561 Purchases of
seismic equipment held for lease (6,485) (11,338) Purchases of
property and equipment (95) (269) Net cash used in investing
activities (6,511) (11,046) Cash flows from financing activities:
Net proceeds from revolving line of credit 500 4,000 Payments on
borrowings - (637) Proceeds from issuance of common stock upon
exercise of stock options (6) 49 Excess tax benefits from exercise
of non-qualified stock options 7 53 Net cash provided by financing
activities 501 3,465 Effect of changes in foreign exchange rates on
cash and cash equivalents 101 (330) Net decrease in cash and cash
equivalents (307) (6,951) Cash and cash equivalents, beginning of
period 5,063 13,884 Cash and cash equivalents, end of period $4,756
$6,933 Note A MITCHAM INDUSTRIES, INC. Reconciliation of Net (Loss)
Income to EBITDA (In thousands) (Unaudited) For the Three Months
Ended April 30, 2009 2008 Net (loss) income $(80) $4,278 Interest
expense (income), net 89 (150) Depreciation, amortization and
impairment 4,385 4,076 Provision for income taxes 126 2,235 EBITDA
(1) 4,520 10,439 Stock-based compensation 416 636 Adjusted
EBITDA(1) $4,936 $11,075 (1) EBITDA is defined as net income (loss)
before (a) interest income, net of 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 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 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 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 of our core cash operations. EBITDA and Adjusted EBITDA
are not measures of financial performance 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 (In thousands)
(Unaudited) For the Three Months Ended April 30, 2009 2008 Revenues
Equipment Leasing $8,007 $13,252 Seamap 2,683 5,305 Less
inter-segment sales (85) (23) Total revenues 10,605 18,534 Cost of
Sales Equipment Leasing 5,862 4,488 Seamap 1,109 2,469 Less
inter-segment costs (138) (51) Total cost of sales 6,833 6,906
Gross Profit Equipment Leasing $2,145 $8,764 Seamap 1,574 2,836
Plus inter-segment amounts 53 28 Total gross profit 3,772 11,628
DATASOURCE: Mitcham Industries, Inc. CONTACT: Billy F. Mitcham,
Jr., President & CEO of Mitcham Industries, Inc.,
+1-936-291-2277; or Jack Lascar, or Karen Roan, both of Dennard
Rupp Gray & Easterly (DRG&E), +1-713-529-6600, for Mitcham
Industries, Inc. Web Site: http://www.mitchamindustries.com/
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