HUNTSVILLE, Texas, April 5, 2016 /PRNewswire/ -- Mitcham Industries, Inc. (NASDAQ: MIND) ("Mitcham" or the "Company") today announced financial results for its fiscal 2016 fourth quarter and full year ended January 31, 2016.

Mitcham Industries has changed the presentation of its financial results as a result of the recent acquisition of Klein Marine Systems, Inc. The Company has realigned its operating segments by combining the Klein acquisition with both its Seamap operations and equipment sales from its Seismic Asia Pacific Pty Ltd. ("SAP") subsidiary to reflect the increasing importance of its manufacturing operations. Results related to the leasing segment will no longer include equipment sales by SAP. All financial information has been recast to reflect this realignment.

Total revenues for the fourth quarter decreased to $11.4 million compared to $15.0 million in the fourth quarter of fiscal 2015. Equipment leasing revenues, excluding equipment sales, decreased to $3.7 million in the fourth quarter compared to $9.6 million in the same period last year. Manufacturing and equipment sales increased to $6.8 million in the fourth quarter compared to $4.8 million in the same period last year. The Klein acquisition, which closed on December 31, 2015, contributed approximately $0.5 million during the quarter. The Company reported a net loss of $26.8 million, or $(2.23) per share, in the fourth quarter compared to a net loss of $9.2 million, or $(0.76) per share, in the fourth quarter of fiscal 2015. The fourth quarter of fiscal 2016 included certain unusual items, including an impairment of goodwill and other intangible assets of $3.6 million and a valuation allowance related to deferred tax assets of $15.5 million, which negatively impacted earnings by approximately $1.60 per share.

Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation and certain non-cash or unusual items) for the fourth quarter of fiscal 2016 was $0.9 million compared to $0.7 million in the same period last year. For the full year fiscal 2016 Adjusted EBITDA amounted to approximately $13.7 million. Adjusted 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 in the accompanying financial tables.

Rob Capps, Co-CEO, stated, "Fiscal 2016 was another challenging year as we continue to operate in the midst of a global slowdown in the oil and gas industry. The seismic market in particular has experienced difficult conditions since the second half of fiscal 2015. Our equipment leasing revenues continue to be impacted by reduced demand for leased equipment, excess available equipment in most markets and the resulting pressure on pricing. This reduced activity had an impact on all areas of our land rental business, with the exception of Europe where we experienced a small increase in revenues. The winter seasons in both Canada and Russia have been quite disappointing so far this year, as the Canadian market remained weak and the Russian market deteriorated early in the winter season due to low oil prices and the impact of the strong dollar versus the ruble.

"Despite the continuing weak activity in the seismic markets, there are pockets of opportunities in areas such as Alaska, Europe and Latin America. Due to more favorable fundamentals, our European business represented almost 30% of our leasing revenues during the quarter. Nevertheless, we expect the overall soft seismic market to continue.

"Marine leasing activity remained soft during all of fiscal 2016 due to ongoing consolidation in the industry and the overall decline in seismic exploration activity. As a result, there is an oversupply of available equipment limiting rental opportunities which is creating margin pressure.

"On the manufacturing side, Seamap's fourth quarter results were sequentially lower as we had anticipated, but we still generated a relatively good performance as we delivered a digital source controller system to a new-build vessel during the quarter. We continue to see opportunities for equipping various new or reconfigured vessels, particularly in the Eastern Hemisphere into fiscal 2017.

"We are very pleased with the acquisition of Klein, as this transaction broadens the manufacturing operations of our company and should facilitate the expansion of our technology base and improved utilization of our engineering resources. We have already undertaken joint engineering projects between Seamap and Klein. In addition, this acquisition should allow us to leverage our geographic footprint and longstanding customer relationships in the energy industry for the benefit of Klein's product line. Finally, we expect this transaction to reduce Mitcham's dependence on the cyclical energy industry.

"The hydrographic and oceanographic business in which Klein operates is a space we understand well. SAP has been a distributor of Klein products for a number of years. In fact, over the past two years, we have been Klein's largest distributor and one of Klein's largest customers. There are a number of striking synergies between Klein's technology and manufacturing processes and those of our Seamap business. Seamap is also experiencing increasing demand for its products from participants in the hydrographic and oceanographic industries. We believe this will lead to opportunities for joint product offerings as well as increased efficiencies in both operations, diversification of applications for existing products and new product development opportunities.

"Operationally, we have significantly reduced our cost structure this year and continue to look for additional ways to further reduce our costs. Despite the challenging market conditions, we remain committed to cash generation. We generated positive Adjusted EBITDA and cash flow from operating activities during the quarter. Cash flow from operating activities was over $1.0 million during the fourth quarter and $14.9 million for our entire fiscal year. We reduced our outstanding indebtedness by approximately $5.9 million for the year, despite having borrowed $10.0 for the acquisition of Klein in December. As of year-end, our net debt is approximately $16.7 million.

"Looking at fiscal 2017, we expect the overall seismic market activity to remain very challenging with limited visibility. We currently expect our first quarter equipment leasing revenues to be very similar to the fourth quarter as we continue to anticipate weak activity in Canada and Russia, partially offset by continued activity in Europe and in Alaska. Inquiries and bidding activity remains sporadic. We have recently provided bids for projects scheduled in Latin America for later this year. In addition, we continue to field inquiries for projects in various locations in Europe and the Eastern Hemisphere. Overall, we have considerable experience navigating through these industry cycles, and believe our strong balance sheet provides stability and flexibility in these turbulent times."

FISCAL 2016 FOURTH QUARTER RESULTSTotal revenues for the fourth quarter of fiscal 2016 decreased 24% to $11.4 million compared to $15.0 million in the same period last year. A significant portion of our revenues is typically generated from geographic areas outside the United States, accounting for approximately 91% of total revenues in the fourth quarter of fiscal 2016 compared to 87% of total revenues in the fourth quarter of fiscal 2015.

Equipment leasing revenues for the fourth quarter of fiscal 2016, excluding equipment sales, were $3.7 million compared to $9.6 million in the same period last year. The year-over-year decrease in fourth quarter equipment leasing revenues was primarily driven by a major reduction in exploration activity due to depressed oil prices, especially in the United States, Canada, Russia and Latin America.

Lease pool and other equipment sales were $0.9 million in the fourth quarter of fiscal 2016 compared to $0.5 million in the fourth quarter a year ago.

Manufacturing and equipment sales increased 40% to $6.8 million in the fourth quarter of fiscal 2016 compared to $4.8 million in the fourth quarter of fiscal 2015. The fiscal 2016 fourth quarter sales consisted of approximately $4.9 million of Seamap equipment, $1.3 million in sales by SAP and $0.5 million from Klein. Amounts from Klein represent only one month as the business was acquired effective December 31, 2015.

Lease pool depreciation expense in the fourth quarter of fiscal 2016 decreased 15% to $7.0 million from $8.2 million in the same period a year ago, primarily due to lower lease pool equipment purchases during fiscal 2015 and fiscal 2016.

General and administrative expenses declined to approximately $4.7 million in the fourth quarter of fiscal 2016 versus approximately $6.0 million in the fourth quarter of fiscal 2015, despite the effect of the Klein acquisition. The fiscal 2016 period included approximately $250,000 of Klein expenses and approximately $360,000 of transactions costs related to the acquisition. The decline in these expenses reflects cost reduction efforts implemented during fiscal 2016.

FISCAL 2016 RESULTSTotal revenues for fiscal 2016 were $51.8 million compared to $83.1 million in fiscal 2015. Equipment leasing revenues, excluding equipment sales, were $23.7 million in fiscal 2016 compared to $48.3 million a year ago. Lease pool and other equipment sales in fiscal 2016 were $2.9 million versus $4.5 million in fiscal 2015. Manufacturing and equipment sales in fiscal 2016 were $25.2 million compared to $30.3 million in fiscal 2015.

General and administrative expense decreased to $19.0 million in fiscal 2016 from $25.0 million in fiscal 2015, primarily reflecting lower personnel costs. The net loss for fiscal 2016 was $38.7 million, or $(3.22) per share, compared to net a loss of $9.2 million, or $(0.74) per share in fiscal 2015. Adjusted EBITDA in fiscal 2016 was $13.7 million, or 26% of total revenues, compared to $31.7 million, or 38% of total revenues in fiscal 2015.

CONFERENCE CALLWe have scheduled a conference call for Wednesday, April 6, 2016 at 9:00 a.m. Eastern Time to discuss our fiscal 2016 fourth quarter and full year results. To access the call, please dial (412) 902-0030 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 onto the site and clicking "Investor Relations." A telephonic replay of the conference call will be available through April 20, 2016 and may be accessed by calling (201) 612-7415 and using pass code 13632984#. A webcast 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 Dennard ▪ Lascar Associates (713) 529‑6600 or email [email protected].

Mitcham Industries, Inc. provides equipment to the geophysical, oceanographic and hydrographic industries. Headquartered in Huntsville, Texas, Mitcham has a global presence with operating locations in Salem, New Hampshire; Calgary, Canada; Brisbane, Australia; Singapore; Ufa, Bashkortostan, Russia; Budapest, Hungary; Lima, Peru; Bogota, Colombia and the United Kingdom. Through its Leasing Segment, Mitcham believes it is the largest independent provider of exploration equipment to the seismic industry. Mitcham's worldwide Equipment Manufacturing and Sales Segment includes its Seamap business, which designs, manufactures and sells specialized seismic marine equipment and Klein Marine Systems, Inc. which develops and manufactures high performance side scan sonar systems.

Certain statements and information in this press release concerning results for the quarter ended January 31, 2016 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.

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SOURCE Mitcham Industries, Inc.