Mitcham Industries Reports Fiscal 2017 Fourth Quarter And Full Year Results

HUNTSVILLE, Texas, April 5, 2017 /PRNewswire/ -- Mitcham Industries, Inc. (NASDAQ: MIND) ("the Company") today announced financial results for its fiscal 2017 fourth quarter and full year ended January 31, 2017.

Total revenues for the fourth quarter of fiscal 2017 were $12.5 million compared to $11.4 million in the fourth quarter of fiscal 2016.  Revenues from the Equipment Manufacturing and Sales segment increased slightly to $6.9 million in the fourth quarter, compared to $6.8 million in the same period last year. Revenues from the Equipment Leasing segment were $5.7 million in the fourth quarter compared to $4.6 million in the same period last year.  The Company reported a net loss available to common shareholders of $10.0 million, or $(0.83) per share, in the fourth quarter of fiscal 2017 compared to a net loss of $26.8 million, or $(2.23) per share, in the fourth quarter of fiscal 2016.  

Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation, certain non-recurring contract settlement costs, non-cash costs of lease pool equipment sales, impairment of intangible assets and non-cash foreign exchange gains and losses) for the fourth quarter of fiscal 2017 was $2.6 million compared to $0.6 million in the same period last year.  For the full fiscal year 2017 Adjusted EBITDA amounted to $3.6 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 loss and cash provided by operating activities in the accompanying financial tables.

Rob Capps, Mitcham's co-Chief Executive Officer, stated, "While this was clearly a very challenging year, as our revenues declined 21% during fiscal 2017 compared to the prior year, we believe we made considerable progress in re-positioning our Company to be a more significant player in the marine industry and decreasing our exposure to oil and gas exploration activities.  We are pleased to have significantly grown our equipment manufacturing and sales backlog to approximately $12.5 million as of January 31, 2017 from $8.7 million a year ago and have recently paid off all of our bank debt. 

"Reviewing the financial results for fiscal 2017, the Equipment Manufacturing and Sales segment revenues were essentially flat year-over-year, which is below our expectation.  This was primarily due to a delay in a number of orders that we had anticipated in the second half of the year.

"As you may recall, we recently introduced our next generation of sonar products to meet the needs of an increasing number of customers.  As is often the case with new product launches, we did encounter some difficulties and delays that caused us to miss our originally projected shipment schedules. Some customers delayed orders waiting for these issues to be resolved.  We believe these issues have now been resolved and we are returning to our expected delivery schedules. 

"Due to the more stable nature of the non-oil and gas related contracts within our equipment and manufacturing business, we believe we now have greater visibility on our business than we have had historically. Based on our current backlog, which is nearly 50% greater than it was a year ago, and the many opportunities available worldwide, we are anticipating much stronger results in the equipment and manufacturing business for this current fiscal year, led by the aforementioned improved visibility into oceanographic, hydrographic and military opportunities.  These opportunities are largely from government entities. We are not only seeing a greater number of opportunities as we continue to penetrate new markets and add new customers, but we are also seeing the scope of some of these projects become larger as well.

"While becoming a smaller piece of the overall company, our seismic equipment rental business remains an important part of Mitcham, and one that we see starting to recover from the significant downturn of the last two years. Land and marine seismic exploration activity continues to be suppressed from historical levels throughout both hemispheres, with a significant excess supply of equipment overhanging the market. However, the trend of increased bid and inquiry activity that we saw in the back half of fiscal 2017 appears to be continuing. Accordingly, we are cautiously optimistic that leasing activity will increase slowly during fiscal 2018.

"Cash flow from operating activities was about $3.2 million for fiscal year 2017 and as of April 5, 2017, we have no bank debt on our balance sheet, having recently repaid all outstanding debt under our credit facilities. Despite the major downturn that we have experienced over the past two years, we have been able to generate cash, repay debt and strengthen our capital structure. 

"As we move through fiscal 2018, we expect continued slow improvement in our leasing business, but see a number of exciting opportunities for our manufacturing business.  Our transformation from being solely dependent on the cyclical energy industry to pursuing opportunities in the hydrographic, oceanographic, environmental, and defense industries has not only enabled us to survive the downturn, but also leverage our engineering and manufacturing strengths and broad geographic footprint to build business that was previously unavailable to us.  

"Our strategic intent going forward is to continue to diversify our sales away from sole dependence on the oil and gas industry.  This will be done primarily by expanding our equipment and manufacturing business, both organically and through acquisitions, to gain a greater foothold in the global marine industry.  Based on these factors, the picture has become one of greater optimism, not in small part due to our strategic repositioning of the Company as well as improved stability in the oil and gas markets."

FISCAL 2017 FOURTH QUARTER RESULTS

Revenue improvement this quarter was mainly driven by a large increase in lease pool sales compared to the same quarter a year ago.  Equipment and manufacturing revenues increased 2% year-over-year, while equipment leasing revenues, excluding lease pool equipment sales, decreased 37% from the fourth quarter 2016.  Total revenues for the fourth quarter of fiscal 2017 were $12.5 million compared to $11.4 million in the same period last year.  A significant portion of our revenues is typically generated from geographic areas outside the United States.  The percentage of revenues from international customers was approximately 93% in the fourth quarter of fiscal 2017 compared to approximately 91% in last year's fourth fiscal quarter. 

Equipment manufacturing and sales increased to $6.9 million in the fourth quarter of fiscal 2017 compared to $6.8 million in last year's fourth quarter.  The fourth quarter sales consisted of approximately $4.4 million of Seamap equipment, $1.7 million from Klein (including $0.8 million of intra-segment sales) and $1.5 million by SAP.   

Equipment leasing revenues for the fourth quarter of fiscal 2017, excluding lease pool equipment sales, were $2.3 million compared to $3.7 million in the same period last year.  The year-over-year decrease in fourth quarter equipment leasing revenues was primarily driven by a reduction in exploration activity due to low commodities prices.

Lease pool and other equipment sales were $3.3 million in the fourth quarter of fiscal 2017, compared to $0.9 million in the fourth quarter a year ago. 

Lease pool depreciation expense in the fourth quarter of fiscal 2017 decreased to $5.8 million from $7.0 million in the same period a year ago, due to the reduction in lease pool purchases and sales of lease pool equipment in fiscal 2016 and 2017.   

General and administrative expenses increased to $4.9 million in the fourth quarter of fiscal 2017 versus $4.7 million in the fourth quarter of fiscal 2016, due to the effect of the Klein acquisition partially offset by the cost reduction efforts implemented previously.

FISCAL 2017 RESULTS

Total revenues for fiscal 2017 were $41.0 million compared to $51.8 million in fiscal 2016.  Equipment manufacturing and sales in fiscal 2017 were $25.1 million compared to $25.2 million in fiscal 2016.  Equipment leasing revenues, excluding lease pool equipment sales, were $10.2 million in fiscal 2017 compared to $23.7 million a year ago.  Lease pool and other equipment sales in fiscal 2017 were $5.8 million versus $2.9 million in fiscal 2016. 

General and administrative expense increased to $20.7 million in fiscal 2017 from $19.0 million in fiscal 2016 due to the Klein acquisition, which was partially offset by the cost reduction efforts implemented during fiscal 2015 and 2016.  The net loss available to common shareholders for fiscal 2017 was $33.6 million, or $(2.79) per share, compared to net a loss of $38.7 million, or $(3.22) per share in fiscal 2016.  Adjusted EBITDA in fiscal 2017 was $3.6 million compared to $13.7 million in fiscal 2016. 

CONFERENCE CALL

We have scheduled a conference call for Thursday, April 6, 2017 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) to discuss our fiscal 2017 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, 2017 and may be accessed by calling (201) 612-7415 and using passcode 13657400#. 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 dwashburn@dennardlascar.com.

About Mitcham Industries

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; Bogota, Colombia and the United Kingdom. Mitcham's worldwide Equipment Manufacturing and Sales Segment includes its Seamap business, which designs, manufactures and sells specialized marine seismic equipment and Klein Marine Systems, Inc. which develops, manufactures and sells high performance side scan sonar systems. Through its Leasing Segment, Mitcham believes it is the largest independent provider of exploration equipment to the seismic industry.

Certain statements and information in this press release concerning results for the quarter ended January 31, 2017 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.

Tables to Follow

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SOURCE Mitcham Industries, Inc.