MIND crushes my Q1 forecast

[dan_s]

This is even better than I'd hoped for. I will have an updated forecast for MIND on the website under the Sweet 16 tab late tomorrow. - Dan

HUNTSVILLE, Texas, June 6, 2011 /PRNewswire/ -- Mitcham Industries, Inc. (NASDAQ:MIND - News) (the "Company") today announced record financial results for its fiscal 2012 first quarter ended April 30, 2011.

Total revenues for the first quarter increased 61% to $26.5 million from $16.5 million in the first quarter of fiscal 2011. Core leasing revenues increased 75% to $16.8 million in the first three months of fiscal 2012. Net income for the first quarter increased 155% to $6.1 million, or $0.58 per diluted share, from $2.4 million, or $0.24 per diluted share, in the first quarter of fiscal 2011. EBITDA (earnings before interest, taxes, depreciation and amortization) for the fiscal 2012 first quarter more than doubled to $15.1 million, or 57% of total revenues, from $7.3 million, or 44% of total revenues, in the same period last year. 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, the most comparable GAAP measures, in Note A under the accompanying financial tables.

Bill Mitcham, the Company's President and CEO, stated, "We are extremely pleased with this strong start to the fiscal year. This was a record quarter in terms of total revenues, core leasing revenues, earnings per share and EBITDA. The results of this quarter demonstrate the revenue generating capacity we have added through strategic purchases of new lease pool equipment in the past few years, as well as the operating leverage of overall increased utilization of our lease pool. Seamap also had an excellent quarter and continues to be a steady source of solid profits.

"We generated exceptional results in our equipment leasing business in the first quarter, led by strength in Canada and Russia where we enjoyed especially high equipment utilization during the winter season. We benefitted from improved demand in our downhole tool business, steady growth in Latin America and continued strong activity in our marine leasing business. We also began to see improvement in the United States. Our Seamap segment produced outstanding results, delivering two GunLink 4000 and two BuoyLink systems along with additional equipment sales and ongoing repair and service work.

"The second and third quarters of our fiscal year are historically our weakest due to the end of the winter season in Canada and Russia and, therefore, we do expect some decrease from the first quarter's leasing revenues. However, we are encouraged by what we have experienced so far this year in terms of bid and order activity, and there continue to be indications of growing demand for our services. We are seeing strength in many international markets, including Latin America and Eastern Europe. Marine leasing activity is steady, and demand for our downhole tools is improving. Recently, we significantly expanded our presence in Latin America, adding approximately 20,000 additional land channels and associated equipment there in response to customer demand. We also believe Seamap will continue to benefit from growing demand for our GunLink 4000 and BuoyLink systems as marine contractors seek to improve and expand their capabilities with our industry-leading technology."

[dan_s]

Just based on what I can get from the press release, my Fair Value estimate for MIND is going up to over $23/share (6 X forecast cash flow per share). CFPS in Q1 was $1.33.

Q2 is always the weakest quarter of the year, so keep that in mind.

The big unknown is what Seamap will do from quarter to quarter.

[garyaz1]

Aftermarket is $16.45--looks like MIND will start out strong tomorrow.

[dan_s]

This is why you guys pay me the big bucks!

As I have been preaching for years, MIND's business is driven by oil prices. High oil prices feed the capital budgets of the Majors and Large-Cap E&Ps. These guys always want more seismic. I know this because I worked for one for 18 years and the exploration department always wants more data.

What is going to get all the analysts excited tomorrow morning is how strong Mitcham's core business is getting in Latin America. This will offset the slow periods (Q2) in Canada and Russia. Also, Seamap is looking much stronger.

MIND ran up to $26/share a few years ago. It is in much better shape today. Since the stock has very small float it can run up quickly. Tomorrow should be interesting, especially if the oil markets hold up.

[dan_s]

The MIND conference call ended at 9:30 Eastern Time. I am going to organize my notes, update my forecast model and send a Flash Report to all of our Premium Members this morning.

A replay of the CC is available on the MIND website.