Mitcham Industries, Inc (NASDAQ:MIND), Reports Fiscal 2016 Second Quarter Results

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On Wednesday, Mitcham Industries, Inc (NASDAQ:MIND), declared financial results for its fiscal 2016 second quarter ended July 31, 2015.

Mitcham Industries, Inc shares dropped -1.40% or -0.06 points, during its last trade. However, over the week, the company’s shares have gone up by $0.02 or 0.48%.

According to the report, total revenues for the second quarter of fiscal 2016 were $7.6 million contrast to $19.5 million in the second quarter of fiscal 2015. Equipment leasing revenues, not taking into account equipment sales, were $4.5 million in the second quarter contrast to $8.2 million in the same period last year. The Company stated a net loss of $5.8 million, or $(0.49) per share, in the second quarter of fiscal 2016 contrast to a net loss of $3.3 million, or $(0.26) per share, in the second quarter of fiscal 2015 and a sequential net loss of $0.2 million, or $(0.02) per share, in the first quarter of fiscal 2016.

Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation, and non-cash foreign exchange losses) for the second quarter of fiscal 2016 was $0.7 million contrast to $5.8 million in the same period last year. Adjusted EBITDA for the first quarter of fiscal 2016 was $7.7 million.

Rob Capps, Executive Vice President, Chief Financial Officer and Interim Co-COO, stated, We continue to be influenced by very challenging market conditions in the seismic industry. Our second quarter, which is seasonally the weakest quarter of the year in terms of seismic activity, proved to be very difficult as we continue to operate in the midst of a global slowdown in the oil and gas industry. Our results were also influenced by unpredictable shipment delays at Seamap, which reduced second quarter revenues by about $6.0 million. We presently anticipate that all of these orders will now ship in the third quarter.

Our equipment leasing revenues were influenced by reduced demand for our leased equipment, excess available equipment in most markets and resulting pressure on pricing. Land seismic exploration activity is quite subdued throughout the Western Hemisphere and noteworthy excess capacity remains in this market. Because of these market conditions and to normal seasonal declines, both North America and Latin America made nominal contributions to our leasing revenues this quarter. Europe remains one of our few markets with a stable level of activity due to an anchor project that should continue well into next fiscal year. Activity in the Russian market during the quarter was influenced by the normal seasonal decline, although we did have a couple of smaller projects continue past the end of the winter season.

Marine leasing activity was up nominally both as compared to last year and sequentially, despite the ongoing consolidation in the industry and the overall decline in seismic exploration activity. Nevertheless, we continue to experience some uptick in inquiries for the rental of marine equipment. At Seamap, three noteworthy orders that we had predictable to ship in the second quarter were delayed due to a number of internal and external factors, but we now expect all these orders to be accomplished in the third quarter.

Looking at the remainder of fiscal 2016, we expect the overall seismic market activity to remain very challenging with limited visibility. However, based on early customer inquiries, it appears that the demand for equipment in Russia this winter may be at least as strong as last year. There are some early indications of activity in Alaska for late this year and early next year, but in Canada, early indications for the forthcoming winter season are not encouraging. We have offered bids for projects planned in Latin America later this year. In addition, we have fielded inquiries for projects in various locations in the Eastern Hemisphere. On balance, we expect a slight improvement in our leasing revenues in the third quarter with further progress in the fourth quarter, aided by normal seasonal improvement in some areas.

Seamap should post a much improved second half driven by the delivery of delayed shipments from the second quarter, in addition to additional shipments planned in the back half of the year. Although Seamap is influenced by the overall condition in the seismic industry, we do see opportunities for equipping various new or reconfigured vessels, particularly in the Eastern Hemisphere.

We also expect a much improved second half of the year from sales of oceanographic and hydrographic equipment by our Australian partner. Many predictable projects were not planned for delivery until later this year.

FISCAL 2016 SECOND QUARTER RESULTS

Total revenues for the second quarter of fiscal 2016 were $7.6 million contrast to $19.5 million in the same period last year. A noteworthy portion of our revenues is typically generated from geographic areas outside the United States. The percentage of revenues from international customers was about 93% in the second quarter of fiscal 2016 contrast to about 84% in last years second fiscal quarter.

Equipment leasing revenues for the second quarter of fiscal 2016 not taking into account equipment sales were $4.5 million contrast to $8.2 million in the same period last year. The year-over-year decrease in equipment leasing revenues was primarily driven by a major reduction in exploration activity due to depressed oil prices, especially in the United States, Canada, and Latin America, partially offset by ongoing activity in Europe.

Lease pool equipment sales were $0.2 million in the second quarter of fiscal 2016 contrast to $1.3 million in the first quarter a year ago. Sales of new seismic, hydrographic and oceanographic equipment contributed $0.6 million to the second quarter of fiscal 2016 contrast to $2.3 million for the second quarter of fiscal 2015.

Seamap equipment sales for the second quarter of fiscal 2016 declined to $2.2 million contrast to $7.7 million in the same period a year ago. There were no deliveries of digital source controller or RGPS systems in the second quarter of fiscal 2016. Seamap revenues comprised of other equipment sales and after-market business, counting replacement parts, and ongoing support and repair services.

Lease pool depreciation expense in the second quarter of fiscal 2016 reduced to $7.6 million from $8.9 million in the same period a year ago, mainly due to the reduction in lease pool purchases in fiscal 2015 and 2016.

Mitcham Industries settled at $4.23 during New York trading, down -1.40 % from previous close and at a distance of 0.53% from 20-day simple moving average. In the last trading session, the stock’s price moved 20.79% below its 200-day moving average. The stock is presently trading 0.60% above its SMA 50. This stock is more risky when contrast to the shifts in the equity markets as its beta value is standing at 1.78. To measure price-variation, we found this stock’s volatility over a week period was 5.27 % and for the month was 5.00%.

Mitcham Industries, Inc., through its auxiliaries, leases, sells, and services geophysical and other equipment to the seismic industry worldwide. The company operates in two segments, Equipment Leasing and Seamap. The Equipment Leasing segment leases seismic equipment for short-term primarily to seismic data acquisition contractors and oil field service providers.

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