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Mitcham Industries Inc. Reports Operating Results (10-Q)

September 08, 2010 | About:
10qk

10qk

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Mitcham Industries Inc. (MIND) filed Quarterly Report for the period ended 2010-07-31.

Mitcham Industries Inc. has a market cap of $63.1 million; its shares were traded at around $6.42 with a P/E ratio of 37.8 and P/S ratio of 1.1. MIND is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC.

Highlight of Business Operations:

During fiscal 2009 and 2008, we responded to the increased demand for our services and products by adding new equipment to our lease pool and by introducing new products from our Seamap segment. During fiscal 2009 and 2008, we added approximately $34.9 million and $26.0 million, respectively, of equipment to our lease pool. During fiscal 2010, we added approximately $19.6 million of new lease pool equipment, despite the decline in demand for equipment during this period. Although we experienced an overall decline in demand, there was an increase in demand for certain types of equipment, such as downhole seismic tools and three-component digital sensors. We responded to this demand by acquiring more of this equipment, as well as other equipment for which we had specific demand or anticipated demand in the near future. In the six months ended July 31, 2010, we added approximately $12.1 million of new lease pool equipment. Due to recent indications of increased demand, particularly for certain types of equipment, we have increased our planned expenditures for new lease pool

equipment for the current fiscal year. We now expect to add between $23 million and $25 million of new equipment to our lease pool in the fiscal year ending January 31, 2011. Of this amount, we have purchased, or committed to purchase, approximately $19.6 million as of September 3, 2010.

A significant portion of our revenues are generated from foreign sources. For the three months ended July 31, 2010 and 2009, revenues from international customers totaled approximately $13.2 million and $10.0 million, respectively, representing 87% and 78% of consolidated revenues in those periods, respectively. For the six months ended July 31, 2010 and 2009, revenues from international customers totaled approximately $27.9 million and $18.4 million, respectively, representing 88% and 79% of consolidated revenues in those periods, respectively. The majority of our transactions with foreign customers are denominated in United States, Australian, Canadian and Singapore dollars and Russian rubles. We have not entered, nor do we intend to enter, into derivative financial instruments for hedging or speculative purposes.

Revenues for the three-month periods ended July 31, 2010 and 2009 were approximately $15.1 million and $12.7 million, respectively. The increase was due primarily to increased leasing revenues and higher other equipment sales. Revenues for the six-month periods ended July 31, 2010 and 2009 were approximately $31.7 million and $23.3 million, respectively. The increase was due primarily to increased leasing revenues and higher other Seamap sales. For the three and months ended July 31, 2010, leasing revenues began to recover from the lower levels experienced in the prior year as explained in more detail below. For the three months ended July 31, 2010, we generated an operating loss of approximately $600,000 as compared to an operating loss of approximately $1.5 million for the three months ended July 31, 2009. For the six months ended July 31, 2010 we generated operating income of approximately $1.9 million, as compared to an operating loss of approximately $1.5 million in the six months ended July 31, 2009. The increase in operating profit was due primarily to the increase in revenues. A more detailed explanation of these variations follows.

Read the The complete Report

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