Mitcham Industries Reports Strong Fiscal 2011 Fourth Quarter and Year-End Results

HUNTSVILLE, Texas, April 5, 2011 /PRNewswire/ -- Mitcham Industries, Inc. (NASDAQ: MIND) (the "Company") today announced financial results for its fiscal 2011 fourth quarter and year ended January 31, 2011.  

Total revenues for the fourth quarter of fiscal 2011 increased 14% to $19.7 million from $17.4 million in the fourth quarter of fiscal 2010.  Net income for the fourth quarter of fiscal 2011 increased threefold to $1.8 million, or $0.17 per diluted share, from $0.6 million, or $0.06 per diluted share, in the fourth quarter of fiscal 2010.  Excluding the impact of a $1.0 million charge to provision for doubtful accounts, net income for the fourth quarter was approximately $2.3 million, or $0.23 per diluted share.  EBITDA (earnings before interest, taxes, depreciation and amortization) for the fiscal 2011 fourth quarter increased 64% to $9.1 million, or 46% of total revenues, compared to $5.6 million, or 32% of total 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 net cash provided by operating activities, the most comparable GAAP measures, in Note A under the accompanying financial tables.

Bill Mitcham, the Company's President and CEO, stated, "We are extremely pleased with both our fourth quarter and full year results, led by an outstanding performance in our leasing business and a solid performance at Seamap.  In fiscal 2011, which most in our industry consider a recovery year, we generated the best annual EBITDA in the Company's history.  Our fourth quarter leasing revenues were $12.7 million, which is 68% above last year's fourth quarter.  These leasing revenues represent our best fourth quarter ever and are approximately 30% higher than our previous best fourth quarter, which was in fiscal 2008.

"Our fourth quarter performance continued to reflect across the board strength in several of our international markets, particularly Latin America and the Middle East, and strong activity in our marine leasing business.  Demand for land seismic rental equipment in the United States was relatively stable sequentially, mainly driven by activity in several of the shale plays.  Seamap had another solid performance during the quarter, driven by parts sales, service and repair work and sales of a GunLink 2000 system and a BuoyLink system.

"Looking at our current fiscal year, we are excited about what we have seen so far in fiscal 2012 as there are ongoing indications of increasing demand for seismic services, especially in international markets. We expect essentially all of our lease pool equipment in Russia to remain fully utilized in our first quarter of fiscal 2012.   In Canada, the overall market is turning out to be better than originally contemplated, and as a result we expect a high level of utilization in that market for the remainder of the winter season.  In addition, current order activity is giving us fairly good visibility at least through the first half of this fiscal year.  We expect good performance in Southeast Asia and Latin America and new activity in Europe for our land leasing business, as well as continued solid marine leasing activity.  We expect Seamap to have a good year in fiscal 2012, led by a growing demand for our GunLink and BuoyLink products as contractors seek to expand capabilities and upgrade equipment and technology."

FOURTH QUARTER FISCAL 2011 RESULTS

Total revenues for the fiscal 2011 fourth quarter were $19.7 million compared to $17.4 million a year ago, primarily led by outstanding results in the equipment leasing business as well as a solid performance at Seamap.  A significant portion of the Company's revenues are typically generated from sources outside the United States, and during the fourth quarter of fiscal 2011, the percentage of revenues from international customers was approximately 81% compared to 71% in the fourth quarter of fiscal 2010.  

Equipment leasing revenues, excluding equipment sales, were $12.7 million compared to $7.5 million in the same period a year ago, an increase of 68%.  Lease pool equipment sales were $1.0 million compared to $2.3 million in the fourth quarter of fiscal 2010.  Sales of new seismic, hydrographic and oceanographic equipment more than doubled to $2.0 million from $0.8 million in the comparable period a year ago.  

Seamap sales were $4.1 million compared to $6.7 million in the fourth quarter of fiscal 2010.  In the fourth quarter a year ago, Seamap sales benefited from deliveries of one GunLink 4000 system and two BuoyLink RGPS systems.  The fiscal 2011 fourth quarter was principally driven by sales of other equipment and replacement parts combined with ongoing service and support activities and the delivery of one GunLink 2000 system and one BuoyLink system.  

Lease pool depreciation in the fourth quarter was $5.8 million versus $4.6 million in the same period last year, a 26% increase.  This increased depreciation was attributable to additions made to the Company's lease pool during fiscal 2010 and fiscal 2011.  Additions to the Company's lease pool in fiscal 2011 amounted to approximately $31.1 million and included cable-free land acquisition equipment, traditional cabled land acquisition equipment, downhole seismic tools and a variety of marine equipment.

Gross profit in the fiscal 2011 fourth quarter increased 87% to $9.1 million from $4.9 million in the fourth quarter of fiscal 2010, primarily driven by substantially higher leasing revenues.  Gross profit margin for the fourth quarter of fiscal 2011 was 46% compared to 28% in the same period a year ago.

General and administrative ("G&A") expenses for the fourth quarter of fiscal 2011 were $4.5 million compared to $3.7 million in the fourth quarter of fiscal 2010.  During the fiscal 2011 fourth quarter, the Company recorded a pre-tax charge to provision for doubtful accounts of approximately $1.0 million, or approximately $0.06 per share after-tax, related to two international clients.

FISCAL 2011 RESULTS

Total revenues in fiscal 2011 increased 29% to $71.4 million compared to $55.2 million in fiscal 2010.  Equipment leasing revenues rose 33% to $36.8 million compared to $27.7 million in the same period a year ago.  Lease pool equipment sales in fiscal 2011 were $2.5 million compared to $3.3 million in fiscal 2010.  Sales of new seismic, hydrographic and oceanographic equipment in fiscal 2011 almost tripled to $10.7 million compared to $3.6 million in fiscal 2010.  Seamap equipment sales in fiscal 2011 were $21.3 million compared to $20.6 million last year.

Gross profit for fiscal 2011 increased to $26.6 million compared to $18.1 million in fiscal 2010.  Gross margin expanded 400 basis points to 37% this fiscal year compared to 33% in fiscal 2010. G&A expenses for fiscal 2011 were $16.8 million compared to $15.0 million a year ago.  The Company recorded a provision for doubtful accounts of $1.8 million and $1.4 million in fiscal years 2011 and 2010, respectively.

Operating income in fiscal 2011 was $6.9 million compared to $0.9 million in fiscal 2010.  Net income in fiscal 2011 increased to $4.7 million, or $0.46 per diluted share, compared to $0.5 million, or $0.05 per diluted share, in fiscal 2010.  EBITDA in fiscal 2011 was $28.7 million, or 40% of total revenues, compared to $19.8 million, or 36% of total revenues, in fiscal 2010.  For fiscal 2011 the Company's net cash provided by operating activities was $30.1 million compared to $14.1 million in fiscal 2010.

CONFERENCE CALL

The Company has scheduled a conference call for Wednesday, April 6, 2011 at 9:00 a.m. Eastern Time to discuss its fiscal 2011 fourth quarter and year-end results.  To access the call, please dial (480) 6299771 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 April 20, 2011 and may be accessed by calling (303) 5903030, and using the passcode 4418607#.  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&L at (713) 529 - 6600 or email [email protected].

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, 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, 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.

SOURCE Mitcham Industries, Inc.