Mitcham Industries, Inc. (MIND) Misses Q1 EPS by 1c

June 3, 2014 4:16 PM

Mitcham Industries, Inc. (NASDAQ: MIND) reported Q1 EPS of $0.29, $0.01 worse than the analyst estimate of $0.30. Revenue for the quarter came in at $25.7 million versus the consensus estimate of $27.07 million.

Bill Mitcham, President and CEO, stated, "Our first quarter developed essentially as we anticipated and as we discussed in our last conference call. Our equipment leasing revenues in the first quarter of fiscal 2015 rose approximately 31% versus the fourth quarter of fiscal 2014, led mainly by the seasonality of the Canadian and Russian winter months and from continued improvement in Latin America.

"As we had previously mentioned, seismic exploration activity during the winter season in Canada turned out to be much weaker than last year. However, despite this overall decline in activity this winter, we were able to take advantage of an increase in demand for wireless recording equipment in Canada. You may recall that we purchased certain wireless equipment in the fourth quarter of last year in anticipation of a large project that we completed during the first quarter. Nevertheless, our Canadian leasing revenues were down approximately 40% from last year's first fiscal quarter. The decline in Canadian activity versus the first quarter of last fiscal year was partially offset by improvement in leasing revenues from Latin America. In Russia, the winter season activity was slightly stronger than last year as we deployed additional equipment to that region in response to increased demand.

"The sequential improvement in Latin America, Russia and Canada was partially offset by continued softness in land leasing activity in the United States, the usual seasonal slowdown in Europe due to the limited amount of work there during the winter, as well as continued softness in the marine leasing market. On a year-over-year basis, we saw continued improvement in Europe and in our downhole seismic tool activity, in addition to the improvement in Latin America.

"As anticipated, Seamap's first quarter results increased significantly from the first quarter a year ago, with the delivery of one GunLink 4000 system and one BuoyLink RGPS system, although sequential results were slightly lower. We continue to believe that Seamap will have improved results in fiscal 2015 as compared to fiscal 2014. We expect to deliver additional source controller systems during the course of fiscal 2015, and we are seeing increasing interest for the latest version of our RGPS tracking system, BuoyLink 4DX, which we introduced in the second half of fiscal 2014.

"Looking ahead, we are encouraged by the increasing levels of bidding and leasing activity in many parts of the world, particularly in Latin America and Eastern Europe. While the current U.S. market remains relatively flat, a few large projects are being bid for potential award in the second half of this fiscal year. We are already seeing a rebound in activity in Europe and anticipate sequential improvement in that region in the next couple of quarters. Leasing activity in Asia Pacific remains steady, and we are seeing some opportunities in the Middle East. Despite continued uncertainty in some markets, we expect most of our land rental activity in fiscal 2015 to be generated outside North America and remain cautiously optimistic that fiscal 2015 will bring a better operating environment and improved results compared to last year."

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