MIND Update May 19

[dan_s]

I'm now expecting MIND to make a run into their first quarter earnings report. First quarter results are going to be very strong. - Dan

Mitcham Industries, Inc. (NASDAQ: MIND) reported 4th quarter earnings of $1.8 million ($0.17/share). Excluding the impact of a $1.0 million charge to their provision for doubtful accounts, net income was $0.23.share, topping my forecast.

First Call has recently raised their earnings per share estimate for the fiscal year ending January 31, 2012 to $1.01, compared to my forecast of $0.89.

After listening to their comments on the conference call on April 6, I have adjusted my forecast model (available under our Sweet 16 tab) and raised my Fair Value estimate for MIND to $20.50/share.

Here are my notes from their 4th quarter conference call:

• Q4 was the best quarter in company history for equipment leasing and Q1 is going to be even better

• Almost all of MIND's lease pool equipment is currently under contract.

• Middle East and Latin America demand for seismic is VERY STRONG.

• Latin America, Eastern Europe and the Middle East will be the primary drivers of growth in FY 2012 and beyond

• Russian and Canadian equipment leasing revenues will be up in Q1 over Q4

• Demand for seismic in the U.S. shale plays is picking up (but still weaker than outside the U.S.)

• MIND purchased $31 million of new lease pool equipment in FY 2011 and has already ordered $20 million more for FY 2012 – very bullish

• MIND is expanding their scope of business, especially in South America

• The company’s Seamap subsidiary is doing "very well". New ships are being launched soon that will need systems and Seamap has the #1 system in the world. 75 vessels have Gunlink 2000 Systems that will need service and a lot of them will upgrade to the latest version, Gunlink 4000.

• Demand for seismic worldwide is "going up as we speak" (this is what happens with higher oil prices and cash flows for the E&P companies). A high percentage of the seismic equipment worldwide is now in service.

• Pricing is firming up and more long-term contracts for MIND means higher profit margins

• The seasonal slowdown in Q2 should be less this year due to the pick up in activity in the Eastern Europe shale plays and higher utilization throughout Latin America.

• MIND's Balance Sheet is very strong with $29 million in working capital

I believe there is significant upside in this stock for us over the next six months as 1st quarter results should be very strong.

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; Singapore; Ufa, Bashkortostan, Russia; Lima, Peru; Bogota, Colombia 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.

[dan_s]

MIND has a long history of running up into quarterly earnings releases, especially when they are expected to be good. First quarter results are going to be stunning!

HUNTSVILLE, Texas, May 19, 2011 /PRNewswire/ -- Mitcham Industries, Inc. (NASDAQ:MIND - News) announced today that it will release financial results for its fiscal 2012 first quarter ended April 30, 2011 on Monday, June 6, 2011 after the close of the market. In conjunction with the release, the Company has scheduled a conference call, which will be broadcast live over the Internet, for Tuesday, June 7 at 9:00 a.m. Eastern Time / 8:00 a.m. Central Time.