Mitcham Industries (MIND) 

Website: www.mitchamindustries.com

MIND Investor Highlights

• Purchased Seamap International Holdings for $6.5 million in cash and notes. Under the agreement, Mitcham acquires Seamap's three subsidiaries that design, develop and market proprietary products for the seismic, hydrographic and offshore industries. Mitcham said the purchase price includes a performance-based earn-out component of up to an additional $2 million.
• Reported net income of $2.1 million, or $0.22 per diluted share, on revenues of $7.6 million for its first quarter ended April 30, 2005.
• "Short-term leasing is clearly a compelling alternative for seismic contractors as they expand operations to meet heightened exploration activity," said Billy F. Mitcham, Jr., Mitcham Industries' President & CEO.
• Very little debt, $338k with $1.35 cash per share on hand.
• Mitcham conducts operations on a global scale and is the largest independent exploration equipment lessor in the industry.

Overview

Mitcham Industries (MIND) engages in the leasing and sale of seismic equipment to the seismic industry worldwide. The company operates through its two subsidiaries Mitcham Canada, Ltd. and Seismic Asia Pacific Pty, Ltd. (SAP). MIND leases and sells geophysical and other equipment used primarily by seismic data acquisition contractors to perform seismic data acquisition surveys on land and in transition zones. Its lease pool includes various types of equipment used in seismic data acquisition, including electronic components of land and transition zone seismic data acquisition systems, geophones and cables, earth vibrators, peripheral equipment, and survey and other equipment. The company also sells various used seismic equipment on a worldwide basis; and SAP sells equipment, consumables, systems integration, engineering hardware, and software maintenance support services to the seismic, hydrographic, oceanographic, environmental, and defense industries throughout southeast Asia and Australia. Mitcham Industries has sales and service offices in Calgary, Canada, Brisbane, Australia; and associates throughout Europe, South America, and Asia. It offers services to the oil and gas industry, seismic contractors, environmental agencies, government agencies, and universities.

Operations

Demand for channel boxes has increased significantly in recent years primarily due to the increasing use of 3-D seismic surveys. Current 3-D seismic techniques use a greater number of channels and channel boxes than 2-D surveys, thereby providing higher resolution data for better representation of the earth's subsurface. Additionally, oil and gas companies are contracting for 3-D surveys over larger geographical areas and often specify an increase in the concentration of channel boxes as a means of increasing data resolution. Consequently, seismic survey companies frequently use more than twice the number of channels for surveys than they typically own. The Company believes that many companies providing land-based seismic surveys will meet this additional requirement by leasing channel boxes and supporting peripheral equipment on a short-term basis rather than making the substantial capital expenditures necessary to purchase such equipment. 

The Company leases its seismic equipment primarily to seismic data acquisition companies and major oil and gas exploration companies conducting land-based seismic data acquisition surveys. The leases generally have terms between three and nine months and are renewable thereafter on a month-to-month basis.

Three Month Chart

Management

Billy F. Mitcham, Jr. Chief Executive Officer and President

Mr. Mitcham has over 20 years experience in the geophysical industry. From 1979 to 1987, he served in various management capacities with Mitcham Associates, Inc., a geophysical equipment leasing company and from 1975 to 1979, Mr. Mitcham served in various field capacities with Halliburton Services, primarily in oilfield services.

Michael A. Pugh Executive Vice President of Finance and Chief Financial Officer

Mr. Pugh has 30 years of experience in the Oil and Gas Exploration and Production business with over 19 years at Santa Fe Energy Resources (now Devon Energy), where he held positions of increasing responsibility in both domestic and international positions. Prior to joining Mitcham, Mr. Pugh was Chief Operating Officer and Chief Financial Officer of Corporate Alliance, a privately held marketing company. Mr. Pugh holds a B.B.A. Finance which he earned from Texas A&M University in 1974.

Christopher C. Siffert Vice President and Corporate Controller

Mr. Siffert, a CPA has served as the company's Controller since 1998. From 1994 to 1998, Mr. Siffert was employed by Houston Cellular Telephone Company as its Internal Audit Manager. A graduate of Louisiana State University, Mr. Siffert began his career with Arthur Anderson LLP, serving most recently as Senior Audit Supervisor in the oil and gas group.

Disclaimer  

SmallCapReview.com feature stock reports are intended to be stock ideas, NOT recommendations. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. For continuing coverage of MIND please sign up for our free newsletter. Information contained in this report was extracted from current documents filed with the SEC, the company web site and other publicly available sources deemed reliable. For more information see our disclaimer section, a link of which can be found on our web site. This document contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Actual results may differ materially from the Company's expectations and estimates. The information provided herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country.

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