MIND MIND Technology Inc

HUNTSVILLE, Texas, Dec. 4, 2012 /PRNewswire/ -- Mitcham Industries, Inc. (NASDAQ: MIND) (the "Company") today announced financial results for its fiscal 2013 third quarter ended October 31, 2012.

Total revenues for the third quarter were $18.6 million compared to $28.0 million in the third quarter of fiscal 2012.  Equipment leasing revenues were $11.1 million in the third quarter compared to $17.4 million in the same period last year.  Seamap sales were $4.5 million compared to $6.2 million a year ago.  The Company reported a net loss for the third quarter of $1.2 million, or $(0.10) per share, compared to net income of $6.8 million, or $0.52 per diluted share, in the third quarter of fiscal 2012.  EBITDA (earnings before interest, taxes, depreciation and amortization) for the third quarter of fiscal 2013 was $6.4 million, or 35% of revenues, compared to $16.6 million, or 59% 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 third quarter results primarily reflect the impact of lower activity in certain geographic areas.  While we had expected continued softness in the leasing business this quarter and anticipated that leasing revenues would be significantly below last year's record third quarter, it is fair to say that the level of activity was less than we had expected.  Activity levels in Latin America in the third quarter did increase over the second quarter of this year, yet the pick-up was less than we expected. Ongoing project delays, due in large part to permitting issues, continued to impact our results in that region. We saw decreased activity levels in North America during the third quarter due to what we believe is a temporary slow-down in activity as some of our customers completed certain projects and began transitioning to new ones.  European activity levels remain subdued, with no pick-up yet in that region, although we are beginning to see improved bid activity there.  Marine leasing activity remained solid, continuing its steady performance since the beginning of the current fiscal year.  As anticipated, Seamap revenues were lower compared to the second quarter and to last year's third quarter due to equipment delivery schedules, with no large systems delivered during the quarter.

"We currently expect to see a stronger fourth quarter and first quarter of fiscal 2014 in our leasing business.  In Latin America, while activity has not picked up as quickly as expected, we are seeing additional jobs begin and have contracted for a few large projects scheduled to begin in the first quarter of fiscal 2014. We are also seeing demand for additional types of equipment in Latin America, including three-component digital and cable-free recording systems.

"We anticipate strong winter seasons in Canada and Russia this year.  In Canada, we are seeing substantial demand for conventional cabled systems as well as for three-component digital recording equipment.  As a result of the purchase of used three-component equipment we made earlier this year and purchases of new equipment we have scheduled for the fourth quarter, we expect to have significantly more equipment deployed in Canada this winter season as compared to last year.  Demand in Russia also appears to be stronger this winter compared to last year.  Therefore, we have repositioned some equipment from other geographic regions into the Russian market for the winter season.

"We anticipate marine leasing activity to remain solid, driven by continued overall strength in the marine seismic market.  As we stated last quarter, we expect a good fourth quarter at Seamap as a result of scheduled deliveries and new orders from marine contractors, who continue to expand the technical capabilities of their vessels.  The marine seismic market is active, with numerous new vessels announced for the next 12 to 36 months, which bodes well for both Seamap sales and marine leasing going forward.

"Despite a decline in operating income in the first nine months of this fiscal year as compared to last, we have generated significant cash flow from operations and free cash flow. We believe that we have considerable financial resources on hand and access to additional capital, when needed, and believe this financial strength allows us to take advantage of new business opportunities as they arise. 

"In November, we continued our long-standing relationship with Sercel by entering into two new equipment purchase agreements. Under the terms of the agreements, we are the exclusive authorized third-party lessor for the DSU3 three-component digital product through December 31, 2013 and for the Unite cable-free  product through September 30, 2014.  We have agreed to purchase certain quantities of each of the products during the term of the agreements and are very pleased to continue our 16-year relationship with Sercel and with the opportunity to expand our DSU3 and Unite product offerings."

FISCAL 2013 THIRD QUARTER RESULTS
Total revenues for the third quarter of fiscal 2013 were $18.6 million compared to $28.0 million a year ago.  A significant portion of the Company's revenues are typically generated from geographic areas outside the United States, and during the third quarter of fiscal 2013, the percentage of revenues from international customers was approximately 81% compared to 71% in the third quarter of fiscal 2012. 

Equipment leasing revenues, excluding equipment sales, were $11.1 million compared to $17.4 million in the same period a year ago.  The decline in equipment leasing revenues was primarily attributable to lower land leasing activity levels in the United States and in Europe.  Lease pool equipment sales were $1.9 million for the third quarter of fiscal 2013 compared to $2.4 million in the third quarter a year ago.  Sales of new seismic, hydrographic and oceanographic equipment were $1.1 million as compared to $2.0 million in the same period a year ago.

Seamap equipment sales for the third quarter of fiscal 2013 were $4.5 million compared to $6.2 million in the same period a year ago, consisting of after-market business including replacement parts, engineering services and ongoing support and repair services.  As expected, based on delivery schedules, there were no large GunLink or BuoyLink system deliveries in this year's third quarter as compared to the sale of one GunLink 4000 system and one BuoyLink system in the third quarter a year ago.

Lease pool depreciation expense in the third quarter of fiscal 2013 was $8.3 million compared to $7.2 million in the same period a year ago, representing a 15% increase.  This increase resulted from additions made to the Company's lease pool during fiscal 2012 and the first nine months of fiscal 2013 of approximately $69 million and $27 million, respectively.

Gross profit in the third quarter of fiscal 2013 was $4.4 million compared to $14.3 million a year ago primarily due to lower equipment leasing revenues and higher depreciation expense. 

General and administrative expenses for the third quarter of fiscal 2013 were $5.9 million compared to $5.0 million in the same period a year ago due to costs associated with expanded operations in Colombia, Singapore and Hungary.  Included in fiscal 2013 third quarter results are approximately $400,000 in foreign exchange losses incurred by the Company's foreign subsidiaries due to strength of the U.S. dollar compared to local currencies.  The Company reported an income tax benefit in the third quarter of fiscal 2013 of approximately $1.0 million. 

FISCAL 2013 FIRST NINE MONTHS RESULTS
Total revenues for the first nine months of fiscal 2013 were $76.3 million compared to $75.8 million for the first nine months of fiscal 2012.  Equipment leasing revenues were $43.0 million in the first nine months of fiscal 2013 compared to $46.5 million in the same period a year ago.  Lease pool equipment sales in the first nine months of fiscal 2013 were $7.4 million versus $3.1 million in the first nine months of fiscal 2012. Sales of new seismic, hydrographic and oceanographic equipment for the first nine months of fiscal 2013 were $3.6 million compared to $5.2 million in the comparable period of fiscal 2012.  Seamap equipment sales for the first nine months of fiscal 2013 were $22.3 million compared to $21.1 million in the same period of last year.

Gross profit for the first nine months of fiscal 2013 was $28.6 million compared to $36.5 million in the first nine months of fiscal 2012.  Net income was $13.6 million, or $1.03 per diluted share, compared to $14.2 million, or $1.21 per diluted share, for the first nine months of fiscal 2012. Results for the first nine months of fiscal 2013 include a tax benefit of approximately $5.3 million resulting from the settlement of outstanding tax issues in the second quarter of fiscal 2013.  Without this benefit, net income for the first nine months of fiscal 2013 would have been approximately $0.63 per diluted share.  EBITDA for the first nine months of fiscal 2013 was $36.5 million, or 48% of total revenues, compared to $41.0 million, or 54% of total revenues, in the first nine months of fiscal 2012. 

CONFERENCE CALL
The Company has scheduled a conference call for Wednesday, December 5, 2012 at 9:00 a.m., Eastern Time, to discuss its fiscal 2013 third quarter results.  To access the call, please dial (888) 450-9962 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 December 12, 2012 and may be accessed by calling (866) 949-7821.  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 dmw@drg-l.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, the Company designs, manufactures and sells specialized seismic marine equipment.

Certain statements and information in this press release concerning results for the quarter ended October 31, 2012 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.
 

SOURCE Mitcham Industries, Inc.