HUNTSVILLE, Texas, June 8 /PRNewswire-FirstCall/ -- Mitcham
Industries, Inc. (Nasdaq: MIND) (the "Company") today announced
financial results for its fiscal 2011 first quarter ended
April 30, 2010.
Total revenues for the first quarter of fiscal 2011 were
$16.5 million compared to
$10.6 million in the first quarter of
fiscal 2010. Net income for the first quarter of fiscal 2011
was $2.4 million, or $0.24 per diluted share, compared to net loss of
$80,000, or $0.01 loss per share, for the first quarter of
fiscal 2010. Fiscal 2011 first quarter results include a gain
of $1.3 million, or $0.13 per diluted share, related to the
acquisition of Absolute Equipment Solutions ("AES"). Excluding this
gain, net income for the quarter was $1.1
million, or $0.11 per diluted
share.
Bill Mitcham, the Company's
President and CEO, stated, "We are pleased to report a solid first
quarter as our equipment leasing segment experienced a substantial
improvement in our international markets while our Seamap segment
posted another strong quarter. Our equipment leasing revenues
for the first quarter rose 51% from a year ago and 27% from the
fourth quarter, and Seamap revenues more than doubled from a year
ago.
"Our leasing business showed marked improvement from the
downturn we experienced last year. Contributing to this was a
strong winter season in the Russian market. Of course, most
of the Russian contracts ended during the quarter as the winter
season came to a close, but we do have prospects for some summer
work in that region. Leasing activity in Southeast Asia and South America continued to be robust.
Our Seamap segment continued to perform well as we delivered
two GunLink 4000 systems during the first quarter, as well as other
equipment. We also generated a significant amount of ongoing
service and repair work during the quarter.
"Considerable uncertainty remains in the oil and gas industry;
however, there are positive developments that we believe could
benefit our business for the balance of fiscal 2011 and beyond.
We are seeing improvement in bid activity worldwide, with
increased activity in Eastern
Europe and promising prospects in areas such as Indonesia and South
America. There continues to be widespread interest in
our three-component digital sensor units, and we continue to build
our downhole seismic tool business. Interest in our GunLink
and BuoyLink products continues to be high, and we are optimistic
about the prospects for our Seamap segment.
"We are pleased with our recent acquisition of AES, which is
meeting our original expectations. Overall, we believe we are
well positioned, operationally and financially, to capitalize on
improving conditions in the industry."
FIRST QUARTER FISCAL 2011 RESULTS
Total revenues for the fiscal 2011 first quarter increased 56%
from the first quarter a year ago to $16.5
million, primarily due to a significant increase in leasing
revenues and improved sales at Seamap. A significant portion
of the Company's revenues are generated from sources outside
the United States. Revenues
from international customers were approximately 89% of revenues in
the first quarter of fiscal 2011 compared to approximately 79% of
revenues during the first quarter of fiscal 2010.
Core revenues from equipment leasing, excluding equipment sales,
rose 51% to $9.6 million compared to
$6.3 million in the same period a
year ago. Contributing to this improvement was a strong
rebound in the Company's Russian business this winter and solid
growth in Indonesia and
South America. Core revenues
from equipment leasing rose 27% from the previous quarter due in
large part to the increase in Russia.
Sales of lease pool equipment were $0.4
million compared to $69,000 in
the first quarter of fiscal 2010. Sales of new seismic,
hydrographic and oceanographic equipment were $0.8 million compared to $1.6 million in the comparable period a year ago.
Seamap equipment sales more than doubled to $5.8 million from $2.6
million in the comparable period a year ago, primarily due
to the delivery of two GunLink 4000 systems, various other
equipment and a considerable amount of ongoing service and repair
work in the quarter.
Lease pool depreciation in the first quarter was $4.9 million versus $4.1
million in same period last year, a 20% increase. This
increase resulted from additions made to the Company's lease pool
during fiscal 2010, including downhole seismic tools, three
component digital sensors and a variety of marine equipment.
Gross profit in the fiscal 2011 first quarter was $6.9 million compared to $3.8 million in the first quarter of fiscal 2010.
Gross profit margin for the first quarter of fiscal 2011 was
42% compared to 36% in the same period a year ago.
General and administrative ("G&A") costs for the first
quarter of fiscal 2011 were $4.2
million compared to $3.5
million in the first quarter of fiscal 2010 principally due
to lower overhead absorption from long-term contracts and higher
incentive compensation expense. Operating income for the
first quarter of fiscal 2011 was $2.5
million compared to $16,000 in
the comparable period a year ago. Net income for the first
quarter of fiscal 2011 was $2.4
million, or $0.24 per diluted
share, compared to net loss of $80,000, or $0.01
loss per share, for the first quarter of fiscal 2010.
Fiscal 2011 first quarter results include a gain of $1.3 million, or $0.13 per diluted share, related to the
acquisition of AES. According to accounting standards, a
valuation of the acquired assets and liabilities is required as of
the closing of an acquisition. If the fair value, as defined
in the accounting standards, of the acquired assets and liabilities
exceeds the purchase price, a negative goodwill or bargain purchase
situation exists, resulting in a gain being recognized as of the
date of the acquisition.
EBITDA (earnings before interest, taxes, depreciation and
amortization and excluding the gain from the AES acquisition) for
the first quarter increased 61% to $7.3
million, or 44% of total revenues, from $4.5 million, or 43% of total revenues, in the
same period last year. EBITDA, which is not a measure
determined in accordance with generally accepted accounting
principles ("GAAP"), is defined and reconciled to reported net
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 9, 2010 at 9:00 a.m. Eastern time to discuss its fiscal 2011
first quarter end results. To access the call, please dial
(480) 6299725 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 16, 2010 and may be accessed by calling
(303) 5903030, and using the passcode 4305330#. 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) 5296600 or email
dmw@drg-e.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; Lima,
Peru; Bogota, Colombia 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 fluctuations
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;
seasonal fluctuations that can adversely affect our business;
defaults by customers on amounts due us; possible impairment of
long-lived assets; risks associated with our manufacturing
operations; inability to obtain funding or to obtain funding
under acceptable terms; intellectual property claims by third
parties; risks associated with our foreign operation, including
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, which are
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.
- Tables to follow -
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
|
|
|
|
MITCHAM
INDUSTRIES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands,
except per share data)
(unaudited)
|
|
|
|
|
April 30,
2010
|
|
January 31,
2010
|
|
ASSETS
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
12,432
|
|
$
6,130
|
|
Restricted
cash
|
683
|
|
605
|
|
Accounts receivable, net
|
16,062
|
|
15,444
|
|
Current portion of contracts
receivable
|
1,397
|
|
2,073
|
|
Inventories, net
|
4,618
|
|
5,199
|
|
Cost and estimated
profit in excess of billings on uncompleted contract
|
442
|
|
398
|
|
Income taxes
receivable
|
1,363
|
|
1,438
|
|
Deferred tax
asset
|
1,721
|
|
1,400
|
|
Prepaid expenses
and other current assets
|
2,007
|
|
1,986
|
|
Total current
assets
|
40,725
|
|
34,673
|
|
Seismic equipment lease pool and
property and equipment, net
|
69,147
|
|
66,482
|
|
Intangible assets, net
|
5,767
|
|
2,678
|
|
Goodwill
|
4,320
|
|
4,320
|
|
Prepaid foreign income tax
|
2,898
|
|
2,574
|
|
Deferred tax asset
|
-
|
|
88
|
|
Long-term portion of contracts
receivable
|
4,309
|
|
4,533
|
|
Other assets
|
140
|
|
49
|
|
Total
assets
|
$
127,306
|
|
$115,397
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
Current liabilities:
|
|
|
|
|
Accounts
payable
|
$
5,541
|
|
$ 6,489
|
|
Current maturities
– long-term debt
|
741
|
|
93
|
|
Foreign income
taxes payable
|
2,228
|
|
1,345
|
|
Deferred
revenue
|
859
|
|
854
|
|
Accrued expenses
and other current liabilities
|
4,512
|
|
2,668
|
|
Total current
liabilities
|
13,881
|
|
11,449
|
|
Non-current income taxes
payable
|
3,486
|
|
3,258
|
|
Deferred tax
liability
|
844
|
|
-
|
|
Long-term debt, net of current
maturities
|
19,591
|
|
15,735
|
|
Total
liabilities
|
37,802
|
|
30,442
|
|
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; 10,737 shares
issued at
April
30, 2010 and January 31, 2010
|
107
|
|
107
|
|
Additional paid-in
capital
|
76,019
|
|
75,746
|
|
Treasury stock, at
cost (925 shares at April 30, 2010 and January 31, 2010)
|
(4,843)
|
|
(4,843)
|
|
Retained
earnings
|
12,641
|
|
10,247
|
|
Accumulated other
comprehensive income
|
5,580
|
|
3,698
|
|
Total
shareholders' equity
|
89,504
|
|
84,955
|
|
Total liabilities
and shareholders' equity
|
$
127,306
|
|
$
115,397
|
|
|
|
|
|
|
|
MITCHAM
INDUSTRIES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands,
except per share data)
(unaudited)
|
|
|
|
|
For the Three
Months Ended April 30,
|
|
|
|
2010
|
|
2009
|
|
|
Revenues:
|
|
|
|
|
|
Equipment
leasing
|
$ 9,566
|
|
$
6,326
|
|
|
Lease pool
equipment sales
|
363
|
|
69
|
|
|
Seamap equipment
sales
|
5,781
|
|
2,598
|
|
|
Other equipment
sales
|
790
|
|
1,612
|
|
|
Total
revenues
|
16,500
|
|
10,605
|
|
|
|
|
|
|
|
|
Cost of sales:
|
|
|
|
|
|
Direct costs -
equipment leasing
|
744
|
|
528
|
|
|
Direct costs -
lease pool depreciation
|
4,912
|
|
4,101
|
|
|
Cost of lease pool
equipment sales
|
149
|
|
10
|
|
|
Cost of Seamap and
other equipment sales
|
3,752
|
|
2,194
|
|
|
Total cost of
sales
|
9,557
|
|
6,833
|
|
|
Gross profit
|
6,943
|
|
3,772
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
General and
administrative
|
4,187
|
|
3,502
|
|
|
Depreciation and
amortization
|
279
|
|
254
|
|
|
Total operating
expenses
|
4,466
|
|
3,756
|
|
|
|
|
|
|
|
|
Operating income
|
2,477
|
|
16
|
|
|
|
|
|
|
|
|
Other income
(expenses):
|
|
|
|
|
|
Gain from bargain
purchase in business combination
|
1,304
|
|
-
|
|
|
Interest,
net
|
(94)
|
|
(89)
|
|
|
Other,
net
|
(502)
|
|
119
|
|
|
Total other
income
|
708
|
|
30
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
3,185
|
|
46
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
(791)
|
|
(126)
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
$
2,394
|
|
$ (80)
|
|
|
|
|
|
|
|
|
Net
income (loss) per common share:
|
|
|
|
|
|
Basic
|
$
0.24
|
|
$(0.01)
|
|
|
Diluted
|
$
0.24
|
|
$(0.01)
|
|
|
|
|
|
|
|
|
Shares used in computing net income
(loss) per common share:
|
|
|
|
|
|
Basic
|
9,808
|
|
9,784
|
|
|
Diluted
|
10,082
|
|
9,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MITCHAM INDUSTRIES,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in
thousands)
(unaudited)
|
|
|
|
|
|
For
the Three Months Ended
April 30,
|
|
|
|
2010
|
|
2009
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net
income (loss)
|
|
$
2,394
|
|
$
(80)
|
|
Adjustments to reconcile net
income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
5,291
|
|
4,385
|
|
Stock-based compensation
|
|
273
|
|
416
|
|
Gain
from bargain purchase in business combination
|
|
(1,304)
|
|
-
|
|
Provision for inventory
obsolescence
|
|
52
|
|
(81)
|
|
Gross
profit from sale of lease pool equipment
|
|
(214)
|
|
(59)
|
|
Excess
tax benefit from exercise of non-qualified
stock options
|
|
-
|
|
(7)
|
|
Deferred tax provision
(benefit)
|
|
1,037
|
|
(176)
|
|
Changes in non-current income taxes
payable
|
|
(189)
|
|
188
|
|
Changes in working capital items, net
of effects from
business combination:
|
|
|
|
|
|
Accounts
receivable
|
|
190
|
|
555
|
|
Contracts
receivable
|
|
909
|
|
-
|
|
Inventories
|
|
766
|
|
(2,029)
|
|
Prepaid expenses and other
current assets
|
|
(63)
|
|
261
|
|
Income
taxes receivable and payable
|
|
(282)
|
|
1,402
|
|
Costs
incurred and estimated profit in excess of billings on uncompleted
contract
|
|
(17)
|
|
1,066
|
|
Accounts payable, accrued expenses,
other current liabilities and deferred revenue
|
|
946
|
|
(239)
|
|
Net
cash provided by operating activities
|
|
9,789
|
|
5,602
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchases of seismic equipment
held for lease
|
|
(4,651)
|
|
(6,485)
|
|
Purchases of
property and equipment
|
|
(28)
|
|
(95)
|
|
Sale
of used lease pool equipment
|
|
363
|
|
69
|
|
Acquisition of AES, net of cash
acquired
|
|
(2,100)
|
|
-
|
|
Net cash used in
investing activities
|
|
(6,416)
|
|
(6,511)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Net proceeds from line of
credit
|
|
3,200
|
|
500
|
|
Payments on
borrowings
|
|
(101)
|
|
-
|
|
Purchases of short-term
investments
|
|
(47)
|
|
-
|
|
Proceeds from issuance of common stock
upon exercise of stock options, net of stock surrendered to pay
taxes
|
|
-
|
|
(6)
|
|
Excess tax benefit from exercise
of non-qualified stock options
|
|
-
|
|
7
|
|
Net
cash provided by financing activities
|
|
3,052
|
|
501
|
|
Effect of changes in foreign exchange
rates on cash and cash equivalents
|
|
(123)
|
|
101
|
|
Net
change in cash and cash equivalents
|
|
6,302
|
|
(307)
|
|
Cash and cash equivalents, beginning
of period
|
|
6,130
|
|
5,063
|
|
Cash and cash equivalents, end of
period
|
|
$
12,432
|
|
$
4,756
|
|
|
|
|
|
|
|
|
Note A
MITCHAM INDUSTRIES,
INC.
Reconciliation of Net Income (loss) to
EBITDA
(Unaudited)
|
|
|
|
|
For
the Three Months Ended April 30,
|
|
|
2010
|
|
2009
|
|
|
(in
thousands)
|
|
Reconciliation of Net income (loss) to
EBITDA and Adjusted EBITDA
|
|
|
|
|
Net
income (loss)
|
$
2,394
|
|
$
(80)
|
|
Interest expense, net
|
94
|
|
89
|
|
Depreciation and
amortization
|
5,291
|
|
4,385
|
|
Provision for income taxes
|
791
|
|
126
|
|
Gain
from bargain purchase
|
(1,304)
|
|
-
|
|
EBITDA
(1)
|
7,266
|
|
4,520
|
|
Stock-based compensation
|
273
|
|
416
|
|
Adjusted EBITDA (1)
|
$
7,539
|
|
$
4,936
|
|
|
|
(1) EBITDA is defined as net income (loss) before (i)
interest income and interest expense, (ii) provision for (or
benefit from) income taxes, (iii) depreciation, amortization and
impairment of assets and (iv) gain from bargain purchase. 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 they provide management with important
information for assessing our performance and as indicators of our
ability to make capital expenditures and finance working capital
requirements. 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. 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,
|
|
|
2010
|
|
2009
|
|
|
|
(in
thousands)
|
|
|
Revenues:
|
|
|
|
|
Equipment Leasing
|
$
10,719
|
|
$
8,007
|
|
Seamap
|
5,830
|
|
2,683
|
|
Inter-segment sales
|
(49)
|
|
(85)
|
|
Total
revenues
|
16,500
|
|
10,605
|
|
Cost of
sales:
|
|
|
|
|
Equipment Leasing
|
6,434
|
|
5,862
|
|
Seamap
|
3,212
|
|
1,109
|
|
Inter-segment costs
|
(89)
|
|
(138)
|
|
Total cost of
sales
|
9,557
|
|
6,833
|
|
Gross profit
|
$
6,943
|
|
$
3,772
|
|
|
42%
|
|
36%
|
|
|
|
|
|
|
|
|
|
Equipment Leasing
Segment:
|
|
Revenue:
|
|
|
|
|
Equipment leasing
|
$
9,566
|
|
$
6,326
|
|
Lease pool
equipment sales
|
363
|
|
69
|
|
New seismic equipment sales
|
61
|
|
9
|
|
SAP equipment sales
|
729
|
|
1,603
|
|
|
10,719
|
|
8,007
|
|
Cost of sales:
|
|
|
|
|
Lease pool depreciation
|
4,952
|
|
4,101
|
|
Direct costs-equipment
leasing
|
744
|
|
528
|
|
Cost of lease pool equipment
sales
|
149
|
|
10
|
|
Cost of new seismic equipment
sales
|
11
|
|
5
|
|
Cost of SAP equipment sales
|
578
|
|
1,218
|
|
|
6,434
|
|
5,862
|
|
Gross profit
|
$
4,285
|
|
$2,145
|
|
Gross profit %
|
40%
|
|
27%
|
|
|
|
|
|
|
|
Seamap
Segment:
|
|
Equipment sales
|
|
$5,830
|
|
$2,683
|
|
Cost of equipment sales
|
|
3,212
|
|
1,109
|
|
Gross profit
|
|
$2,618
|
|
$1,574
|
|
Gross profit %
|
|
45%
|
|
59%
|
|
|
|
|
|
|
|
|
SOURCE Mitcham Industries, Inc.