Mitcham Industries Inc. (MIND)
Q2 2013 Earnings Call
September 6, 2012 9:00 am ET
Bill Mitcham – President, Chief Executive Officer
Robert Capps – Executive Vice President, Chief Financial Officer
Vinny (phon) Alexandrov – FIG Partners
Ryan Fitzgibbon – Global Hunter Securities
Bryan Dutt – Ironman Capital
Tyson Bauer – KC Capital
Will Inshow (phon) – HFP Capital Markets
Previous Statements by MIND
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I would now like to turn the call over to Karen Roan at DRG&L. Karen, you may go ahead.
Thank you, Carrie. Good morning and welcome to the Mitcham Industries Fiscal 2013 Second Quarter conference call. We appreciate all of you joining us today. Your hosts are 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 listen to a replay of today’s call, it will be available via webcast by going to the Investor Relations section of the Company’s website at mitchamindustries.com, or by a recorded instant replay until September 13. Information on how to access the replay was provided in yesterday’s earnings release. Information reported this call speaks only as of today, Thursday, September 6, 2012, 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. These forward-looking statements are based on management’s current expectations and include 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 statements. These risks and uncertainties include the risk factors disclosed by the Company from time to time in its filings with the SEC, including in its annual report on Form 10-K for the year ended January 31, 2012. Furthermore, as we start this call please also refer to the statement 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’d like to turn over the call to Mitcham’s President and CEO, Bill Mitcham.
Thanks Karen. Good morning everyone. We’d like to thank all of you for joining us today for our fiscal 2013 second quarter conference call. As usual, I will begin by making a few general comments about the quarter. Rob will then discuss our financial performance in depth before I conclude with a discussion of our market outlook. Then we’ll open the call for your questions.
As we announced in our press release on August 9, we had a very favorable conclusion to a longstanding tax matter during the quarter that resulted in a $5.3 million tax benefit, and Rob will speak a lot more about that shortly. But during the quarter, we did continue to see some of the issues that had negatively impacted our first quarter leasing revenues. We always anticipate the normal seasonal decline in leasing revenues in our fiscal second quarter from the first quarter, but this year’s second quarter leasing revenues were lower than we had originally expected as they were adversely impacted by lower land activity in Latin America and in Europe. The lower activity in Latin America resulted from permitting difficulties as well as some lingering weather issues. In Europe, seismic activity was also slower due to fiscal and political issues, as well as environmental concerns which had caused delays in many energy projects in eastern Europe, particularly non-conventional natural gas projects.
On the more positive side, marine leasing activity remained very strong in the quarter due to strength in the worldwide marine seismic market, and U.S. land leasing revenues were higher than a year ago. And Seamap had a solid quarter, delivering one GunLink 4000 system in the second quarter as well as sales of related equipment, replacement parts, engineering services and ongoing support and repair services.
The delays and permitting issues that we experienced in our first and second quarters do not in our opinion indicate any change in the solid fundamentals that remain in place for our industry and our company. They are simply part of the seismic business. We have certainly seen the results from some of the seismic contractors impacted by these same factors in the first few months of this year.
With that, I’ll turn the call over to Rob who will give you a detailed review of our financial results, and after this discussion we’ll return with some final remarks and questions. Rob?
Okay, thanks Bill and good morning everybody. I’ll begin as usual by discussing the top line of each of our two segments, which are equipment leasing and Seamap, then follow with a discussion of the profitability of each of the segments and conclude with a discussion of our consolidated results and our financial position.