Mitcham Industries, Inc. (MIND)
Q3 2008 Earnings Call
December 4, 2007 12:00 pm ET
Karen Croan – Investor Relations
Billy Mitcham – President, Chief Executive Officer, Director
Robert Capps – Chief Financial Officer, Executive Vice President Finance, Director
Guy Malden – Vice President, Marine Systems
Paul Rogers – Vice President, Business Development
Bob McKenzie - Pritchard Capital
Terese Fabian - Sidoti & Company
Jason Rangler - Almond Rose
Pierre Conner - Capital One
Tyson Bauer - Wealth Monitors
Tamara Monuchin - Greenwood Investments
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This conference is being recorded today, December 4, 2007. I would now like to turn the conference over to Karen Croan. Please go ahead madam.
Thank you Joshua. Good morning and welcome to the Mitcham Industries fiscal 2008 third quarter conference call. We appreciate all of you joining us here today. Your host will be Bill Mitcham, President and Chief Executive Officer and Rob Capps, Executive Vice President and Chief Financial Officer.
Before I turn the call over to management, I have a few items to cover. If you would like to be added to the company’s email distribution list, please call DRGE office at 713-529-6600 and relay that information to us, or you can send an email to me at email@example.com.
If you would like to listen to a replay of today’s call, it is available by webcast by going to the investor relations section of the company’s website at www.mitchemindustries.com or via a recorded instant replay until December 11th. Information on how to access the replay was provided in yesterday’s earning’s release.
Information reported on this call speaks only as of today, Tuesday, December 4, 2007. And, therefore, you are advised that time sensitive information may no longer be accurate as of the time of any replay. Before we begin, let me remind you that certain statements made by management during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding the company’s future, including without limitation, the company’s future expected financial position, result of operation, cash flow, financing plans, gross margins, business strategy, budgets, projected costs and expenses, capital expenditures, competitive positions, product offerings, access to capital and growth opportunities are forward-looking statements.
These forward-looking statements are based on managements’ current expectations and includes known and unknown risks, uncertainties and other factors, many of which the company is unable to predict or control that may cause the company’s actual future results or performance to materially differ from any future results or performance expressed or implied by those statement.
These risks and uncertainties include the risks’ factors disclosed by the company from time-to-time in its filings with the SEC. Including in its annual report on Form 10K for the year ending January 31, 2007.
Furthermore, as we start this call, please also refer to the statements regarding forward-looking statements incorporated in our press release issued yesterday. And, please note, that the contents of our conference call this morning, are covered by these statements.
Now, I will turn the call over the Mitcham’s President and CEO, Bill Mitcham.
Thanks Karen and good morning everyone. Thank you for joining us today to discuss our fiscal 2008 third quarter results. I’ll begin by providing you with a few highlights for the quarter. Rob will discuss the financial details and I will then return with some final comments.
Obviously, we are very please with our third quarter results and as we’ve continued to see strong demand in our core side; the equipment leasing business both land and marine as well as our equipment manufacturing and sells business. Certainly several note worthy events in the quarter. Our third quarter revenues were up 35% to $17.2 million driven by continued growing global demand for seismic equipment, expansion utilization of our lease pool assets, continued expansion and growth in several geographic markets and strength in our manufacturing and sales business.
This is our best third quarter ever, both in terms of total revenues as well as revenue generated from our core equipment leasing business.
We’ve never posted an $8 million dollars in equipment leasing revenue in any prior third quarter. Certainly keep in mind that our second and third quarters conceivably are our weakest quarters of the year. Seismic activity slows down during the warmer months in certain areas like Canada and Russia.
We added $18 million dollars in new lease pool equipment during the combined fourth quarter of fiscal 2007 and first quarter of fiscal 2008. And we’ve benefited from this investment over the last several quarters as revenues from equipment leasing were up 36% year-over-year for the first nine-months of fiscal 2008.
At Seamap, our marine seismic equipment manufacturing and sales business revenues more than doubled in the third quarter to approximately $5.1 million. Driven by strong demands from our GunLink, BooieLink and WhiteCollar products. Equally as important with Seamap was the improvement on gross margins, which rose to 39% during the third quarter. It was up from 33% in the second quarter of 2008 and 21% from a year ago third quarter.