UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

April 25, 2006 (April 18, 2006)
Date of Report (Date of earliest event reported)

Mitcham Industries, Inc.

(Exact name of registrant as specified in its charter)

Texas		000-25142		76-0210849
(State or other jurisdiction		(Commission		(IRS Employer
of incorporation)		File Number)		Identification No.)

8141 SH 75 South, P.O. Box 1175, Huntsville, Texas 77342
(Address of principal executive offices) (Zip Code)

936-291-2277
(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02. Results of Operations and Financial Condition.

     On April 18, 2006, Mitcham Industries, Inc. issued a press release announcing earnings for the year ended January 31, 2006. The text of the press release is attached to this report as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

     (c) Exhibits. The following exhibits are filed as a part of this report:

Exhibit No.		Description
99.1		Mitcham Industries, Inc. press release dated April 18, 2006.

     Pursuant to the rules and regulations of the Securities and Exchange Commission, information attached as Exhibit 99.1 is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” under the Securities Exchange Act of 1934.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit No.		Description
99.1		Mitcham Industries, Inc. press release dated April 18, 2006.

Exhibit 99.1

PRESS RELEASE

FOR IMMEDIATE RELEASE		CONTACT: Christine Reel AVP Enterprises, Inc. 713.419.1236

MITCHAM ANNOUNCES RECORD NET INCOME
IN FISCAL 2006

HUNTSVILLE, Texas — April 18, 2006 — Mitcham Industries, Inc. (NASDAQ: MIND) today reported that for its fiscal year ended January 31, 2006 net income from continuing operations before taxes increased 239% to a record $7.9 million, or $0.80 per diluted share, as compared to net income from continuing operations before taxes of $2.3 million, or $0.25 per diluted share, in the prior year. With the inclusion of a tax benefit of $3.0 million from the reduction of our tax valuation allowance, the Company recorded net income for the year of $10.9 million, or $1.10 per diluted share, as compared to $2.1 million, or $0.23 per diluted share, for the prior year.

Revenues for fiscal 2006 increased $8.2 million to $34.6 million, up 31% from revenues of $26.4 million in the prior year. Revenue growth reflected both a $5.0 million, or 29%, increase in leasing revenue and a $3.2 million, or 34%, increase in equipment sales.

For the fourth quarter ended January 31, 2006, the Company recorded net income from continuing operations before taxes of $1.6 million, or $0.16 per diluted share, as compared to $1.4 million, or $0.15 per diluted share, for the corresponding period in the prior year. With the inclusion of the tax benefit of $3.0 million, the Company recorded net income for the quarter of $4.6 million, or $0.45 per diluted share, as compared to $1.4 million, or $0.15 per diluted share, for last year’s fourth quarter.

Billy F. Mitcham, Jr., President and CEO said, “Our core leasing activity was extremely strong throughout fiscal 2006 reflecting not just an overall increase in seismic exploration activity, but also the growing demand for higher resolution data, larger surveys and more rapid completion of surveys which requires contractors to use data acquisition systems with a greater number of recording channels.”

“We also took two important steps this past year as part of our strategy to continue to expand our international operations. In July, we acquired Seamap International Holdings Pte Ltd. (“Seamap”),” said Mr. Mitcham. “Our seismic equipment sales increased $3.2 million in fiscal 2006 to $12.5 million, largely as the result of Seamap’s equipment sales, which primarily consisted of its GunLink seismic source acquisition and control systems and its BuoyLink GPS tracking system.”

“In November, we established Mitcham Seismic Eurasia LLC (“MSE”) in Ufa, Bashkortostan, Russia. MSE has ramped up operations quickly and we expect this new subsidiary to lease seismic equipment and provide technical support in the rapidly growing Russian, CIS and Eurasian markets,” Mr. Mitcham said.

“Both of these new operations build on our international presence and complement the contributions of other subsidiaries, Seismic Asia Pacific Pty Ltd. based in Australia,

M O R E

and Mitcham Canada Ltd., both of which contributed to the strength of our results this year,” said Mr. Mitcham.

“In fiscal 2006, we also increased our capital expenditures on lease pool equipment by 50% to $9.0 million and at year-end had approximately 40,100 seismic recording channels in our equipment lease pool,” said Mr. Mitcham. As we enter fiscal 2007, fundamentals within the seismic sector continue to improve and seismic leasing activity remains strong. We have excellent key supplier agreements in place and intend to continue to expand our equipment lease pool opportunistically. We believe we have made substantial progress toward our goals and will continue to expand our operations to achieve our overall objective of providing our shareholders with strong returns on capital employed,” Mr. Mitcham concluded.

About Mitcham Industries
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; Russia, 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.

M O R E

MITCHAM INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share and per share data)

		Three Months Ended								Year Ended
		January 31,								January 31,
		2006				2005				2006				2005
		(unaudited)
Revenues:
Equipment leasing		$	4,436			$	4,359			$	22,104			$	17,086
Lease pool equipment sales			2,363				261				5,218				6,282
Other equipment sales			3,335			$	2,411				7,267				3,000
Total revenues			10,134				7,031				34,589				26,368
Costs and expenses:
Direct costs — equipment leasing			733				294				2,907				1,644
Direct costs — lease pool depreciation			2,011				2,417				8,309				10,359
Cost of equipment sales			1,424				1,168				4,080				2,043
Cost of lease pool equipment sales			534				86				950				2,583
General and administrative			2,948				1,550				9,437				6,969
Provision (benefit) for doubtful accounts			27				33				188				155
Depreciation and amortization			362				67				649				237
Impairment of assets			617				—				617				—
Total costs and expenses			8,656				5,615				27,137				23,990
Operating income			1,478				1,416				7,452				2,378
Other income (expense):
Interest, net			142				21				422				(71	)
Other, net			15				3				17				19
Total other income (expense)			157				24				439				(52	)
Income from continuing operations before income taxes			1,635				1,440				7,891				2,326
Provision (benefit) for income taxes			(2,989	)			13				(2,964	)			277
Income from continuing operations			4,624				1,427				10,855				2,049
Income from discontinued operations			—				—				—				80
Net income		$	4,624			$	1,427			$	10,855			$	2,129
Income per common share from continuing operations:
Basic		$	0.50			$	0.16			$	1.19			$	0.23
Diluted		$	0.45			$	0.15			$	1.10			$	0.22
Income per common share from discontinued operations:
Basic and diluted			—			$	—			$	—			$	0.01
Net income per common share — basic		$	0.50			$	0.16			$	1.19			$	0.24
Net income per common share — diluted		$	0.45			$	0.15			$	1.10			$	0.23
Shares used in computing income per common share
Basic			9,318,000				8,924,000				9,126,000				8,849,000
Dilutive effect of common stock equivalents			866,000				620,000				718,000				455,000
Diluted			10,184,000				9,544,000				9,844,000				9,304,000

M O R E

MITCHAM INDUSTRIES, INC
CONSOLIDATED BALANCE SHEETS
(In thousands)

		January 31,
		2006				2005
ASSETS
Current assets:
Cash and cash equivalents		$	16,426			$	13,138
Short-term investments			2,550				—
Accounts receivable, net of allowance for doubtful accounts of $1,125 and $723 at January 31, 2006 and 2005, respectively			5,793				6,021
Current portion of notes receivable, net of allowance for doubtful notes of $48 and $286 at January 31, 2006 and 2005, respectively			2,734				1,192
Inventories, net of allowance for obsolescence of $62			1,155				—
Prepaid expenses and other current assets			717				705
Current assets of discontinued operations			366				393
Total current assets			29,741				21,449
Seismic equipment lease pool and property and equipment			79,023				74,792
Accumulated depreciation of seismic equipment and property and equipment			(59,099	)			(55,067	)
Long-term assets of discontinued operations			—				216
Intangible assets, net of amortization of $266			2,584				—
Goodwill			2,358				—
Deferred tax asset			3,000				—
Other assets			13				5
Total assets		$	57,620			$	41,395
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	4,436			$	4,893
Current maturities — long-term debt			—				918
Income taxes payable			286				284
Deferred revenue			381				652
Wages payable			383				299
Current liabilities of discontinued operations			10				14
Accrued expenses and other current liabilities			1,673				458
Total current liabilities			7,169				7,518
Long-term debt			3,000				—
Total liabilities			10,169				7,518
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $1.00 par value; 1,000 shares authorized; none issued and outstanding			—				—
Common stock $.01 par value; 20,000 shares authorized; 10,360 and 9,894 shares issued, respectively			104				99
Additional paid-in capital			64,404				62,702
Treasury stock, at cost (915 shares)			(4,686	)			(4,686	)
Deferred compensation			(8	)			(94	)
Accumulated deficit			(15,427	)			(26,282	)
Accumulated other comprehensive income			3,064				2,138
Total shareholders’ equity			47,451				33,877
Total liabilities and shareholders’ equity		$	57,620			$	41,395

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