Mitcham Industries Inc. (MIND, Financial) filed Quarterly Report for the period ended 2012-04-30.
Mitcham Inds has a market cap of $222.6 million; its shares were traded at around $16.76 with a P/E ratio of 8.9 and P/S ratio of 2. Mitcham Inds had an annual average earning growth of 1.6% over the past 10 years.
Revenues for the three months ended April 30, 2012 and 2011 were approximately $34.6 million and $26.5 million, respectively. The increase was due primarily to increased leasing revenues and higher Seamap sales. The increased revenues reflect the increased activity within the seismic industry and the expansion of our operations as discussed above. For the three months ended April 30, 2012, we generated operating income of approximately $11.7 million as compared to approximately $9.0 million for the three months ended April 30, 2011. The increase in operating profit was due primarily to the increase in revenues. A more detailed explanation of these variations follows.
Net interest expense for the three months ended April 30, 2012 amounted to approximately $5,000, consisting of interest expense of approximately $167,000, which was offset by interest income of approximately $162,000. Net interest expense for the three months ended April 30, 2011 amounted to approximately $175,000, consisting of interest expense of approximately $296,000, which was offset by interest income of approximately $121,000. Interest income is derived from the temporary investment of cash balances and from finance charges related to equipment sales transactions with deferred payment provisions. Interest expense was lower in the fiscal 2013 period as compared to the prior year due to lower amounts of outstanding borrowings.
Our tax provision for the three months ended April 30, 2012 was approximately $2.6 million, which indicates an effective tax rate of approximately 24%. For the three months ended April 30, 2011, our tax provision was approximately $2.4 million, which is an effective tax rate of approximately 28%. Our effective tax rate for these periods is less than the U.S. statutory rate primarily due to the effect of lower tax rates in foreign jurisdictions. A significant portion of these earnings have been permanently reinvested outside of the U.S., and therefore no U.S. taxes are provided for these earnings at the U.S. rate.
On March 1, 2010, we acquired AES for a total purchase price of approximately $4.0 million. The consideration consisted of approximately $2.1 million of cash at closing, approximately $1.4 million in promissory notes, a post-closing working capital adjustment payment of approximately $184,000 and approximately $300,000 in deferred cash payments. The promissory notes bear interest at 6% annually, payable semi-annually. The principal amount of the notes is repayable in two equal installments. The first of these installments was paid on March 1, 2011, with the remaining payment made March 1, 2012. The deferred cash payments will be made upon the expiration of certain indemnity periods. The deferred cash payment bears interest at 6% annually. We may offset amounts due pursuant to the promissory notes or the deferred cash payments against indemnity claims due from the sellers. In addition, the sellers may be entitled to additional cash payments should AES attain certain levels of revenues during the 24-month period following the closing. In May 2012 and April 2011, we made payments of approximately $450,000 and $150,000, respectively, pursuant to this provision of the agreement. There are no further payments due under this provision.
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Mitcham Inds has a market cap of $222.6 million; its shares were traded at around $16.76 with a P/E ratio of 8.9 and P/S ratio of 2. Mitcham Inds had an annual average earning growth of 1.6% over the past 10 years.
Highlight of Business Operations:
Over the past several years, we have made significant additions to our lease pool of equipment, amounting to over $170 million in equipment purchases during the five years ended January 31, 2012. By adding this equipment, we have not only expanded the amount of equipment that we have, but have also increased the geographic expanse of our leasing operations and have expanded the types of equipment that we have in our lease pool. In the three months ended April 30, 2012, we added approximately $15.9 million of equipment to our lease pool. However, the majority of this was added late in the quarter and did not contribute to our revenues during that period. In the three months ended April 30, 2011, we added about $24.4 million of new lease pool equipment. Additions to our lease pool during all of fiscal 2012 amounted to approximately $68.8 million.Revenues for the three months ended April 30, 2012 and 2011 were approximately $34.6 million and $26.5 million, respectively. The increase was due primarily to increased leasing revenues and higher Seamap sales. The increased revenues reflect the increased activity within the seismic industry and the expansion of our operations as discussed above. For the three months ended April 30, 2012, we generated operating income of approximately $11.7 million as compared to approximately $9.0 million for the three months ended April 30, 2011. The increase in operating profit was due primarily to the increase in revenues. A more detailed explanation of these variations follows.
Net interest expense for the three months ended April 30, 2012 amounted to approximately $5,000, consisting of interest expense of approximately $167,000, which was offset by interest income of approximately $162,000. Net interest expense for the three months ended April 30, 2011 amounted to approximately $175,000, consisting of interest expense of approximately $296,000, which was offset by interest income of approximately $121,000. Interest income is derived from the temporary investment of cash balances and from finance charges related to equipment sales transactions with deferred payment provisions. Interest expense was lower in the fiscal 2013 period as compared to the prior year due to lower amounts of outstanding borrowings.
Our tax provision for the three months ended April 30, 2012 was approximately $2.6 million, which indicates an effective tax rate of approximately 24%. For the three months ended April 30, 2011, our tax provision was approximately $2.4 million, which is an effective tax rate of approximately 28%. Our effective tax rate for these periods is less than the U.S. statutory rate primarily due to the effect of lower tax rates in foreign jurisdictions. A significant portion of these earnings have been permanently reinvested outside of the U.S., and therefore no U.S. taxes are provided for these earnings at the U.S. rate.
On March 1, 2010, we acquired AES for a total purchase price of approximately $4.0 million. The consideration consisted of approximately $2.1 million of cash at closing, approximately $1.4 million in promissory notes, a post-closing working capital adjustment payment of approximately $184,000 and approximately $300,000 in deferred cash payments. The promissory notes bear interest at 6% annually, payable semi-annually. The principal amount of the notes is repayable in two equal installments. The first of these installments was paid on March 1, 2011, with the remaining payment made March 1, 2012. The deferred cash payments will be made upon the expiration of certain indemnity periods. The deferred cash payment bears interest at 6% annually. We may offset amounts due pursuant to the promissory notes or the deferred cash payments against indemnity claims due from the sellers. In addition, the sellers may be entitled to additional cash payments should AES attain certain levels of revenues during the 24-month period following the closing. In May 2012 and April 2011, we made payments of approximately $450,000 and $150,000, respectively, pursuant to this provision of the agreement. There are no further payments due under this provision.
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