Mitcham reports fiscal 2008 second quarter

Total revenues for the second quarter were $15.4 million compared to $11.0 million in the second quarter of fiscal 2007.

Bill Mitcham, president and CEO, states, "We reported solid year-over-year earnings growth in the quarter, despite accruing taxes at an effective tax rate of approximately 35 percent compared to a tax benefit in last year's second quarter. Our pre-tax income in the second quarter increased 120 percent over last year's second quarter. Additionally, due to the growing demand for our leasing equipment, we have placed orders for another 7,000 channels in addition to the 2,000 channels we added during the second quarter. These investments in new lease pool equipment are expected to contribute substantially to future results."

Total revenues for the second quarter rose 40 percent to $15.4 million from $11.0 million in the same period a year ago. Revenues from equipment leasing business, excluding equipment sales, increased 26 percent to $6.2 million from $5.0 million in the same period last year driven by greater global demand for seismic equipment, expansion into new geographic markets, and continued expansion of Mitcham's lease pool including equipment for marine applications. The equipment that was added to Mitcham's lease pool during the fourth quarter of fiscal 2007 and the first quarter of fiscal 2008 contributed significantly to growth in leasing revenues in the second quarter of fiscal 2008.

Seamap equipment sales for the second quarter doubled to approximately $5.6 million from $2.8 million in the comparable period a year ago driven by strong demand, particularly for the GunLink, BuoyLink and weight collar product lines.

Sales of new seismic equipment and hydrographic and oceanographic equipment for the second quarter were consistent with last year's second quarter at $2.8 million. Sales of lease pool equipment were $0.8 million compared to $0.4 million in the same period a year ago.

Gross profit in the second quarter was $6.6 million, or 43 percent of revenues, compared to $5.1 million, or 47 percent of revenues, in the second quarter a year ago. While gross profit from equipment leasing increased, overall gross margin was reduced from a year ago, primarily due to changes in product mix from Seamap.

General and administrative (G&A) expenses for the second quarter declined to $3.6 million from $3.8 million in the same period a year ago. As a percentage of revenues, G&A expenses declined to 24 percent in the second quarter of fiscal 2008 from 35 percent in the second quarter of fiscal 2007.

EBITDA (earnings before interest, taxes, depreciation and amortization) for the second quarter increased 72 percent to $5.4 million, or 35 percent of revenues, compared to $3.1 million, or 28 percent of revenues, in the same period a year ago. EBITDA, which is not a measure determined in accordance with generally accepted accounting principles ("GAAP"), is defined and reconciled to reported net income in Note A under the accompanying financial tables.