Mitcham Industries, Inc. (NASDAQ:MIND) today reported net income of $2.9 million, or $0.29 per diluted share, on revenues of $9.8 million for its third quarter ended October 31, 2005. This compares with a net loss of $(0.8 million), or $(0.09) per diluted share, in the prior year's third quarter. The increase in the Company's results for the quarter primarily reflects strong leasing demand for land equipment in Canada and for marine equipment internationally, as well as solid equipment sales across all areas of operation.
"We saw a strong pickup in leasing activity in the seismic equipment market this last quarter," said Billy F. Mitcham, Jr., President and CEO of Mitcham Industries. "The Canadian market was very active and we saw an increase in marine equipment rentals on a global basis. Seamap, our most recent acquisition, also contributed to our results, and with its newly released Gunlink 3000 as well as recently signed strategic alliances appears to be on track to be a strong contributor next fiscal year. Unusually heavy rains delayed certain projects and limited Seismic Asia Pacific's results for the quarter, but the projects should resume in the fourth quarter and continue into the next fiscal year. Overall, we are optimistic about leasing activity for the remainder of this fiscal year and believe we are well-positioned for continued growth in the upcoming fiscal year."
For the nine months ended October 31, 2005, the Company recorded net income of $6.2 million, or $0.64 per diluted share, on revenues of $24.5 million. This compares with net income of $0.7 million, or $0.08 per diluted share, on revenues of $19.3 million for the comparable nine-month period of the prior year.
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 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 the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included herein, including statements regarding potential future demand for the Company's products and services, the Company's future financial position and results of operations, business strategy and other plans and objectives for future operations, are forward-looking statements. Actual results may differ materially from such forward-looking statements. Important factors that could cause or contribute to such differences include a prolonged and gradual recovery, or no full recovery, of the energy services sector of a depressed oil and gas industry, and thereafter, the inherent volatility of oil and gas prices and the related volatility of demand for the Company's services; loss of significant customers; significant defaults by customers on amounts due to the Company; international economic and political instability; dependence upon additional lease contracts; the risk of technological obsolescence of the Company's lease fleet; vulnerability of seismic activity and demand to weather conditions and seasonality of operating results; dependence upon few suppliers; and other factors which are disclosed in the Company's Securities and Exchange Commission filings, available from the Company without charge.
MITCHAM INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenues:
Equipment leasing $ 6,676 $ 3,948 $ 17,668 $ 12,727
Equipment sales 3,139 790 6,787 6,610
----------- ----------- ----------- -----------
Total revenues 9,815 4,738 24,455 19,337
Costs and expenses:
Direct costs - seismic
leasing 968 450 2,174 1,350
Cost of equipment
sales 1,308 557 3,072 3,371
General and
administrative 2,381 1,471 6,488 5,419
Provision for doubtful
accounts 82 122 161 122
Depreciation and
amortization 2,253 2,700 6,585 8,113
----------- ----------- ----------- -----------
Total costs and
expenses 6,992 5,300 18,480 18,375
----------- ----------- ----------- -----------
Operating income
(loss) 2,823 (562) 5,975 962
Other income (expense)
- net 84 3 281 (76)
----------- ----------- ----------- -----------
Income (loss) from
continuing operations
before income taxes 2,907 (559) 6,256 886
Provision for income
taxes 57 264 25 264
----------- ----------- ----------- -----------
Income (loss) from
continuing operations 2,850 (823) 6,231 622
=========== =========== =========== ===========
Income from
discontinued
operations,
net of income taxes - - - 80
----------- ----------- ----------- -----------
Net income (loss) $ 2,850 $ (823) $ 6,231 $ 702
=========== =========== =========== ===========
Income (loss) per
common share from
continuing
operations:
Basic $ 0.31 $ (0.09) $ 0.69 $ 0.07
Diluted $ 0.29 $ (0.09) $ 0.64 $ 0.07
Income per common
share from
discontinued
operations:
Basic $ - $ - $ - $ 0.01
Diluted $ - $ - $ - $ 0.01
Net income (loss) per
common share:
Basic $ 0.31 $ (0.09) $ 0.69 $ 0.08
Diluted $ 0.29 $ (0.09) $ 0.64 $ 0.08
Shares used in
computing net income
per common share:
Basic 9,152,000 8,880,000 9,061,000 8,824,000
Dilutive effect of
common stock
equivalents 750,000 - 684,000 411,000
----------- ----------- ----------- -----------
Diluted 9,902,000 8,880,000 9,745,000 9,235,000
=========== =========== =========== ===========
MITCHAM INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
Oct. 31, Jan. 31,
2005 2005
--------- ---------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 15,196 $ 13,138
Accounts receivable, net of allowance for
doubtful accounts of $1,210 and $723 7,099 6,021
Current portion of notes receivable, net of
allowance for doubtful notes of $198 and
$286 584 1,192
Inventories 1,679 -
Prepaid expenses and other current assets 530 705
Current assets of discontinued operations 388 393
--------- ---------
Total current assets 25,476 21,449
Seismic equipment lease pool, property and
equipment 77,338 74,792
Accumulated depreciation of seismic equipment
lease pool, property and equipment (59,961) (55,067)
Goodwill 5,324 -
Long-term assets of discontinued operations - 216
Other assets 15 5
--------- ---------
Total assets $ 48,192 $ 41,395
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,272 $ 4,893
Current maturities - long-term debt - 918
Deferred revenue 644 652
Income taxes payable 151 284
Wages payable 163 299
Accrued expenses and other current
liabilities 1,391 458
Current liabilities of discontinued
operations 5 14
--------- ---------
Total current liabilities 3,626 7,518
Long-term debt 3,000 -
--------- ---------
Total liabilities 6,626 7,518
Commitments and contingencies
Shareholders' equity:
Preferred stock, $1.00 par value; 1,000,000
shares authorized; none issued and
outstanding - -
Common stock, $.01 par value; 20,000,000
shares authorized; 10,112,062 and 9,893,732
shares issued, respectively 101 99
Additional paid-in capital 63,582 62,702
Treasury stock, at cost (915,000 shares) (4,686) (4,686)
Deferred compensation (12) (94)
Accumulated deficit (20,048) (26,282)
Accumulated other comprehensive income 2,629 2,138
--------- ---------
Total shareholders' equity 41,566 33,877
--------- ---------
Total liabilities and
shareholders' equity $ 48,192 $ 41,395
========= =========
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