##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended July 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from  to
 Commission File Number: 000-25142
 MITCHAM INDUSTRIES, INC.
  Texas
    
    76-0210849(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 8141 SH 75 South
P.O. Box 1175
Huntsville, Texas 77342
 (936) 291-2277
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



MITCHAM INDUSTRIES, INC.
Table of Contents
 PART I. FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets as of July 31, 2008 and
January 31, 2008
    
    
    1Condensed Consolidated Statements of Income for the Three and
Six Months Ended July 31, 2008 and 2007
    
    
    2Condensed Consolidated Statements of Cash Flows for the Six
Months Ended July 31, 2008 and 2007
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    10Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    17Item 4.
    
    Controls and Procedures
    
    
    18PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    18Item 1A.
    
    Risk Factors
    
    
    18Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    18Item 3.
    
    Defaults Upon Senior Securities
    
    
    18Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    19Item 5.
    
    Other Information
    
    
    19Item 6.
    
    Exhibits
    
    
    19Signatures
    
    
    20Certification of CEO Pursuant to Rule 13a-14(a)Certification of CFO Pursuant to Rule 13a-14(a)Certification of CEO & CFO Pursuant to Section 906
  ii




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 MITCHAM INDUSTRIES, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except per share data)
 July 31, 2008(unaudited)
    
    
    January 31, 2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    6,152
    
    
    $
    13,884Restricted cash
    
    
    1,413
    
    
    
    Accounts receivable, net
    
    
    15,898
    
    
    
    12,816Current portion of contracts receivable
    
    
    4,904
    
    
    
    2,964Inventories, net
    
    
    5,229
    
    
    
    6,352Deferred tax asset
    
    
    708
    
    
    
    1,230Prepaid expenses and other current assets
    
    
    711
    
    
    
    1,491Total current assets
    
    
    35,015
    
    
    
    38,737Seismic equipment lease pool and property and equipment, net
    
    
    64,180
    
    
    
    53,179Intangible assets, net
    
    
    3,386
    
    
    
    3,692Goodwill
    
    
    4,320
    
    
    
    4,358Net deferred tax asset
    
    
    1,624
    
    
    
    1,505Long-term portion of contracts receivable and other assets
    
    
    1,268
    
    
    
    2,430Total assets
    
    $
    109,793
    
    
    $
    103,901LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    9,623
    
    
    $
    16,729Current maturities  long-term debt
    
    
    2,000
    
    
    
    1,500Income taxes payable
    
    
    702
    
    
    
    1,967Deferred revenue
    
    
    1,138
    
    
    
    872Accrued expenses and other current liabilities
    
    
    9,425
    
    
    
    3,674Total current liabilities
    
    
    22,888
    
    
    
    24,742Non-current income taxes payable
    
    
    3,820
    
    
    
    3,391Total liabilities
    
    
    26,708
    
    
    
    28,133Shareholders equity:Preferred stock, $1.00 par value; 1,000 shares authorized; none issued and outstanding
    
    
    
    
    
    
    Common stock $0.01 par value; 20,000 shares authorized; 10,726 and 10,708 shares issued at
July 31, 2008 and January 31, 2008, respectively
    
    
    107
    
    
    
    107Additional paid-in capital
    
    
    73,350
    
    
    
    71,929Treasury stock, at cost (921 shares at July 31, 2008 and January 31, 2008)
    
    
    (4,814
    )
    
    
    (4,805
    )Retained earnings
    
    
    6,565
    
    
    
    662Accumulated other comprehensive income
    
    
    7,877
    
    
    
    7,875Total shareholders equity
    
    
    83,085
    
    
    
    75,768Total liabilities and shareholders equity
    
    $
    109,793
    
    
    $
    103,901
 The accompanying notes are an integral part of these condensed consolidated financial statements.
 1




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MITCHAM INDUSTRIES, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (in thousands, except per share data)
 (unaudited)
 For the Three Months Ended
    
    
    For the Six Months EndedJuly 31,
    
    
    July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues:Equipment leasing
    
    $
    7,500
    
    
    $
    6,249
    
    
    $
    19,873
    
    
    $
    16,330Lease pool equipment sales
    
    
    1,844
    
    
    
    775
    
    
    
    2,405
    
    
    
    1,492Seamap equipment sales
    
    
    3,285
    
    
    
    5,605
    
    
    
    8,567
    
    
    
    15,663Other equipment sales
    
    
    4,866
    
    
    
    2,770
    
    
    
    5,184
    
    
    
    4,928Total revenues
    
    
    17,495
    
    
    
    15,399
    
    
    
    36,029
    
    
    
    38,413Cost of sales:Direct costs  equipment leasing
    
    
    343
    
    
    
    351
    
    
    
    785
    
    
    
    821Direct costs  lease pool depreciation
    
    
    3,673
    
    
    
    2,442
    
    
    
    7,313
    
    
    
    4,846Cost of equipment sales
    
    
    6,365
    
    
    
    6,033
    
    
    
    9,189
    
    
    
    16,069Total cost of sales
    
    
    10,381
    
    
    
    8,826
    
    
    
    17,287
    
    
    
    21,736Gross profit
    
    
    7,114
    
    
    
    6,573
    
    
    
    18,742
    
    
    
    16,677Operating expenses:General and administrative
    
    
    4,430
    
    
    
    3,620
    
    
    
    9,305
    
    
    
    7,640Depreciation and amortization
    
    
    364
    
    
    
    366
    
    
    
    759
    
    
    
    721Total operating expenses
    
    
    4,794
    
    
    
    3,986
    
    
    
    10,064
    
    
    
    8,361Operating income
    
    
    2,320
    
    
    
    2,587
    
    
    
    8,678
    
    
    
    8,316Other incomeInterest, net
    
    
    223
    
    
    
    64
    
    
    
    373
    
    
    
    142Other, net
    
    
    3
    
    
    
    
    
    
    
    8
    
    
    
    2Total other income
    
    
    226
    
    
    
    64
    
    
    
    381
    
    
    
    144Income before income taxes
    
    
    2,546
    
    
    
    2,651
    
    
    
    9,059
    
    
    
    8,460Provision for income taxes
    
    
    (921
    )
    
    
    (930
    )
    
    
    (3,156
    )
    
    
    (2,799
    )Net income
    
    $
    1,625
    
    
    $
    1,721
    
    
    $
    5,903
    
    
    $
    5,661Net income per common share:Basic
    
    $
    0.17
    
    
    $
    0.18
    
    
    $
    0.61
    
    
    $
    0.59Diluted
    
    $
    0.16
    
    
    $
    0.17
    
    
    $
    0.57
    
    
    $
    0.55Shares used in computing net income per common
share:Basic
    
    
    9,764
    
    
    
    9,672
    
    
    
    9,758
    
    
    
    9,657Diluted
    
    
    10,385
    
    
    
    10,271
    
    
    
    10,361
    
    
    
    10,219
 The accompanying notes are an integral part of these condensed consolidated financial statements.
 2




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MITCHAM INDUSTRIES, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 (unaudited)
 For the Six Months EndedJuly 31,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    5,903
    
    
    $
    5,661Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    8,153
    
    
    
    5,567Stock-based compensation
    
    
    1,163
    
    
    
    985Provision for (recovery of) doubtful accounts
    
    
    95
    
    
    
    (134
    )Provision for inventory obsolescence
    
    
    249
    
    
    
    288Gross profit from sale of lease pool equipment
    
    
    (1,173
    )
    
    
    (818
    )Excess tax benefit from exercise of non-qualified stock options
    
    
    (96
    )
    
    
    (483
    )Deferred tax provision
    
    
    474
    
    
    
    1,794Changes in:Accounts receivable
    
    
    (1,246
    )
    
    
    1,222Contracts receivable
    
    
    (779
    )
    
    
    1,111Inventories
    
    
    916
    
    
    
    653Prepaid expenses and other current assets
    
    
    1,273
    
    
    
    245Income taxes payable
    
    
    (1,190
    )
    
    
    109Accounts payable, accrued expenses, other current liabilities
and deferred revenue
    
    
    (7,298
    )
    
    
    1,304Net cash provided by operating activities
    
    
    6,444
    
    
    
    17,504Cash flows from investing activities:Purchases of seismic equipment held for lease
    
    
    (15,411
    )
    
    
    (17,240
    )Purchases of property and equipment
    
    
    (470
    )
    
    
    (355
    )Sale of used lease pool equipment
    
    
    2,405
    
    
    
    1,492Net cash used in investing activities
    
    
    (13,476
    )
    
    
    (16,103
    )Cash flows from financing activities:Net proceeds from line of credit
    
    
    2,000
    
    
    
    4,500Payments on borrowings
    
    
    (1,500
    )
    
    
    (6,000
    )Purchase of short-term investments
    
    
    (1,413
    )
    
    
    Proceeds from issuance of common stock upon exercise of warrants
and stock options, net of stock surrendered
    
    
    196
    
    
    
    322Excess tax benefit from exercise of non-qualified stock options
    
    
    96
    
    
    
    483Net cash used in financing activities
    
    
    (621
    )
    
    
    (695
    )Effect of changes in foreign exchange rates on cash and cash equivalents
    
    
    (79
    )
    
    
    424Net (decrease) increase in cash and cash equivalents
    
    
    (7,732
    )
    
    
    1,130Cash and cash equivalents, beginning of period
    
    
    13,884
    
    
    
    12,582Cash and cash equivalents, end of period
    
    $
    6,152
    
    
    $
    13,712Supplemental cash flow information:Interest paid
    
    $
    135
    
    
    $
    244Income taxes paid
    
    $
    3,306
    
    
    $
    588
 The accompanying notes are an integral part of these condensed consolidated financial statements.
 3




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Mitcham Industries, Inc.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (in thousands, except per share amounts)

(unaudited)
 1. Basis of Presentation
  2. Organization
  3. New Accounting Pronouncements
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 4. Restricted Cash
  4




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5. Balance Sheet
 July 31,
    
    
    January 31,2008
    
    
    2008Accounts receivable:Accounts receivable
    
    $
    16,678
    
    
    $
    14,328Allowance for doubtful accounts
    
    
    (780
    )
    
    
    (1,512
    )Total accounts receivable, net
    
    $
    15,898
    
    
    $
    12,816
  Contracts receivable:Contracts receivable
    
    $
    6,139
    
    
    $
    5,360Less current portion of contracts receivable
    
    
    (4,904
    )
    
    
    (2,964
    )Long-term portion of contracts receivable
    
    $
    1,235
    
    
    $
    2,396Inventories:Raw materials
    
    $
    3,362
    
    
    $
    3,565Finished goods
    
    
    794
    
    
    
    898Work in progress
    
    
    2,203
    
    
    
    2,6936,359
    
    
    
    7,156Less allowance for obsolescence
    
    
    (1,130
    )
    
    
    (804
    )Total inventories, net
    
    $
    5,229
    
    
    $
    6,352
  Seismic equipment lease pool and property and
equipment:Seismic equipment lease pool
    
    $
    133,594
    
    
    $
    116,676Land and buildings
    
    
    366
    
    
    
    366Furniture and fixtures
    
    
    5,768
    
    
    
    5,026Autos and trucks
    
    
    622
    
    
    
    605140,350
    
    
    
    122,673Accumulated depreciation and amortization
    
    
    (76,170
    )
    
    
    (69,494
    )Total seismic equipment lease pool and
property and equipment, net
    
    $
    64,180
    
    
    $
    53,179
 5




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6. Goodwill and Other Intangible Assets
 Weighted
    
    
    July 31, 2008
    
    
    January 31, 2008Average
    
    
    Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetLife at
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying7/31/08
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountGoodwill
    
    
    
    
    
    $
    4,320
    
    
    
    
    
    
    $
    4,320
    
    
    $
    4,358
    
    
    
    
    
    
    $
    4,358Proprietary rights
    
    
    11.9
    
    
    $
    3,861
    
    
    $
    (475
    )
    
    $
    3,386
    
    
    $
    3,886
    
    
    $
    (333
    )
    
    $
    3,553Covenants
not-to-compete
    
    
    
    
    
    
    1,000
    
    
    
    (1,000
    )
    
    
    
    
    
    
    1,000
    
    
    
    (861
    )
    
    
    139Amortizable
intangible assets
    
    
    
    
    
    $
    4,861
    
    
    $
    (1,475
    )
    
    $
    3,386
    
    
    $
    4,886
    
    
    $
    (1,194
    )
    
    $
    3,692
   For fiscal years ending January 31:2009
    
    $
    1422010
    
    
    2842011
    
    
    2842012
    
    
    2842013 and thereafter
    
    
    2,392Total
    
    $
    3,386
 7. Long-Term Debt and Notes Payable
   8. Shareholders Equity
  6




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9. Comprehensive Income
  Three Months Ended
    
    
    Six Months EndedJuly 31,
    
    
    July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    1,625
    
    
    $
    1,721
    
    
    $
    5,903
    
    
    $
    5,661Gain (loss) from
foreign currency
translation
adjustment
    
    
    (299
    )
    
    
    1,248
    
    
    
    2
    
    
    
    3,554Comprehensive income
    
    $
    1,326
    
    
    $
    2,969
    
    
    $
    5,905
    
    
    $
    9,215
 10. Income Taxes
 Accounting for Income
Taxes Accounting for Uncertainty in Income Taxes  an
interpretation of FASB Statement No. 109, Accounting for Income Taxes
     7




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11. Earnings per Share
  Three Months Ended
    
    
    Six Months EndedJuly 31,
    
    
    July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Basic weighted average common shares outstanding
    
    
    9,764
    
    
    
    9,672
    
    
    
    9,758
    
    
    
    9,657Stock options
    
    
    596
    
    
    
    562
    
    
    
    583
    
    
    
    527Unvested restricted stock
    
    
    14
    
    
    
    22
    
    
    
    15
    
    
    
    20Phantom stock
    
    
    11
    
    
    
    
    
    
    
    5
    
    
    
    Warrants
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    15Total weighted average common share equivalents
    
    
    621
    
    
    
    599
    
    
    
    603
    
    
    
    562Diluted weighted average common shares
outstanding
    
    
    10,385
    
    
    
    10,271
    
    
    
    10,361
    
    
    
    10,219
 12. Stock-Based Compensation
  8




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13 Segment Reporting
 Disclosures about
Segments of an Enterprise and Related Information.
    As of July 31,
    
    
    As of January 31,2008
    
    
    2008Total assets
    
    
    Total assetsEquipment Leasing
    
    $
    93,175
    
    
    $
    86,057Seamap
    
    
    17,130
    
    
    
    18,434Eliminations
    
    
    (512
    )
    
    
    (590
    )Consolidated
    
    $
    109,793
    
    
    $
    103,901
  Revenues
    
    
    Operating income (loss)
    
    
    Income (loss) before taxes2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Equipment Leasing
    
    $
    14,210
    
    
    $
    9,794
    
    
    $
    2,676
    
    
    $
    2,227
    
    
    $
    2,928
    
    
    $
    2,361Seamap
    
    
    3,302
    
    
    
    5,754
    
    
    
    (413
    )
    
    
    363
    
    
    
    (439
    )
    
    
    293Eliminations
    
    
    (17
    )
    
    
    (149
    )
    
    
    57
    
    
    
    (3
    )
    
    
    57
    
    
    
    (3
    )Consolidated
    
    $
    17,495
    
    
    $
    15,399
    
    
    $
    2,320
    
    
    $
    2,587
    
    
    $
    2,546
    
    
    $
    2,651
  Revenues
    
    
    Operating income (loss)
    
    
    Income (loss) before taxes2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Equipment Leasing
    
    $
    27,462
    
    
    $
    22,750
    
    
    $
    7,813
    
    
    $
    7,442
    
    
    $
    8,250
    
    
    $
    7,725Seamap
    
    
    8,607
    
    
    
    16,118
    
    
    
    781
    
    
    
    1,013
    
    
    
    725
    
    
    
    874Eliminations
    
    
    (40
    )
    
    
    (455
    )
    
    
    84
    
    
    
    (139
    )
    
    
    84
    
    
    
    (139
    )Consolidated
    
    $
    36,029
    
    
    $
    38,413
    
    
    $
    8,678
    
    
    $
    8,316
    
    
    $
    9,059
    
    
    $
    8,460
  9




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations   Cautionary Statement about Forward-Looking Statements
  
    
    our future financial position and results of operations;
    
    planned capital expenditures;
    
    our business strategy and other plans for future operations;
    
    the future mix of revenues and business;
    
    future demand for our services; and
    
    general conditions in the energy industry and seismic service industry.
  
    
    decline in the demand for seismic data and our services;
    
    loss of significant customers;
    
    defaults by customers on amounts due us;
    
    risks associated with our manufacturing operations and
    
    foreign currency exchange risk
   Overview
   10




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For the Three Months Ended
    
    
    For the Six Months EndedJuly 31,
    
    
    July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(in thousands)
    
    
    (in thousands)Revenues:Equipment Leasing
    
    $
    14,210
    
    
    $
    9,794
    
    
    $
    27,462
    
    
    $
    22,750Seamap
    
    
    3,302
    
    
    
    5,754
    
    
    
    8,607
    
    
    
    16,118Inter-segment sales
    
    
    (17
    )
    
    
    (149
    )
    
    
    (40
    )
    
    
    (455
    )Total revenues
    
    
    17,495
    
    
    
    15,399
    
    
    
    36,029
    
    
    
    38,413Cost of sales:Equipment Leasing
    
    
    8,483
    
    
    
    5,107
    
    
    
    12,971
    
    
    
    9,953Seamap
    
    
    1,972
    
    
    
    3,864
    
    
    
    4,441
    
    
    
    12,099Inter-segment costs
    
    
    (74
    )
    
    
    (145
    )
    
    
    (125
    )
    
    
    (316
    )Total cost of sales
    
    
    10,381
    
    
    
    8,826
    
    
    
    17,287
    
    
    
    21,736Gross profit
    
    
    7,114
    
    
    
    6,573
    
    
    
    18,742
    
    
    
    16,677Operating expenses:General and administrative
    
    
    4,430
    
    
    
    3,620
    
    
    
    9,305
    
    
    
    7,640Depreciation and amortization
    
    
    364
    
    
    
    366
    
    
    
    759
    
    
    
    721Total operating expenses
    
    
    4,794
    
    
    
    3,986
    
    
    
    10,064
    
    
    
    8,361Operating income
    
    $
    2,320
    
    
    $
    2,587
    
    
    $
    8,678
    
    
    $
    8,316EBITDA(1)
    
    $
    6,400
    
    
    $
    5,395
    
    
    $
    16,839
    
    
    $
    13,885Adjusted EBITDA(1)
    
    $
    6,927
    
    
    $
    5,824
    
    
    $
    18,002
    
    
    $
    14,870Reconciliation of Net Income
to EBITDA and Adjusted EBITDANet income
    
    $
    1,625
    
    
    $
    1,721
    
    
    $
    5,903
    
    
    $
    5,661Interest income, net
    
    
    (223
    )
    
    
    (64
    )
    
    
    (373
    )
    
    
    (142
    )Depreciation and amortization
    
    
    4,077
    
    
    
    2,808
    
    
    
    8,153
    
    
    
    5,567Provision for income taxes
    
    
    921
    
    
    
    930
    
    
    
    3,156
    
    
    
    2,799EBITDA (1)
    
    
    6,400
    
    
    
    5,395
    
    
    
    16,839
    
    
    
    13,885Stock-based compensation
    
    
    527
    
    
    
    429
    
    
    
    1,163
    
    
    
    985Adjusted EBITDA (1)
    
    $
    6,927
    
    
    $
    5,824
    
    
    $
    18,002
    
    
    $
    14,870
 
 (1)
    
    EBITDA is defined as earnings (loss) before (a) interest income, net of interest
expense, (b) provision for (or benefit from) income taxes and (c) depreciation and
amortization. Adjusted EBITDA excludes stock-based compensation. We consider EBITDA and
Adjusted EBITDA to be important indicators for the performance of our business, but not
measures of performance calculated in accordance with accounting principles generally accepted
in the United States of America (GAAP). We have included these non-GAAP financial measures
because they provide management with important information for assessing our performance and
as indicators of our ability to make capital expenditures and finance working capital
requirements. EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP
and should not be considered in isolation or as alternatives to cash flow from operating
activities or as alternatives to net income as indicators of operating performance or any
other measures of performance derived in accordance with GAAP. Other companies in our industry
may calculate EBITDA or Adjusted EBITDA differently than we do, and EBITDA and Adjusted EBITDA
may not be comparable with similarly titled measures reported by other companies.  11




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12




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Results of Operations
  Revenues and Cost of Sales
 Equipment Leasing
  Three Months Ended
    
    
    Six Months EndedJuly 31,
    
    
    July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007($ in thousands)
    
    
    ($ in thousands)Revenue:Equipment leasing
    
    $
    7,500
    
    
    $
    6,249
    
    
    $
    19,873
    
    
    $
    16,330Lease pool equipment sales
    
    
    1,844
    
    
    
    775
    
    
    
    2,405
    
    
    
    1,492New seismic equipment sales
    
    
    3,518
    
    
    
    1,666
    
    
    
    3,647
    
    
    
    3,446SAP equipment sales
    
    
    1,348
    
    
    
    1,104
    
    
    
    1,537
    
    
    
    1,48214,210
    
    
    $
    9,794
    
    
    
    27,462
    
    
    $
    22,750Cost of sales:Lease pool depreciation
    
    
    3,712
    
    
    
    2,480
    
    
    
    7,392
    
    
    
    4,913Direct costs-equipment leasing
    
    
    343
    
    
    
    401
    
    
    
    785
    
    
    
    821Cost of
lease pool equipment sales
    
    
    1,107
    
    
    
    201
    
    
    
    1,232
    
    
    
    479Cost of new seismic equipment
sales
    
    
    2,398
    
    
    
    1,305
    
    
    
    2,485
    
    
    
    2,820Cost of SAP equipment sales
    
    
    923
    
    
    
    720
    
    
    
    1,077
    
    
    
    9208,483
    
    
    
    5,107
    
    
    
    12,971
    
    
    
    9,953Gross profit
    
    $
    5,727
    
    
    $
    4,687
    
    
    $
    14,491
    
    
    $
    12,797Gross profit %
    
    
    40
    %
    
    
    48
    %
    
    
    53
    %
    
    
    56
    %
  13




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14




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##### Table of Contents



Seamap
  Three Months Ended July 31,
    
    
    Six Months Ended July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007($ in thousands)
    
    
    ($ in thousands)Equipment sales
    
    $
    3,302
    
    
    $
    5,754
    
    
    $
    8,607
    
    
    $
    16,118Cost of equipment sales
    
    
    1,972
    
    
    
    3,864
    
    
    
    4,441
    
    
    
    12,099Gross profit
    
    $
    1,330
    
    
    $
    1,890
    
    
    $
    4,166
    
    
    
    4,019Gross profit %
    
    
    40
    %
    
    
    33
    %
    
    
    48
    %
    
    
    25
    %
   15




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##### Table of Contents



Operating Expenses
  Interest and Other Income, net
  Provision for Income Taxes
  Liquidity and Capital Resources
      16




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Market Risk
  Foreign Currency Risk
   17




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  
 PART II
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    (a)
    
    (b)
    
    (c)
    
    (d)Total number of
    
    Maximumshares
    
    number ofpurchased as
    
    shares that mayTotal
    
    Average
    
    part of publicly
    
    yet benumber of
    
    price
    
    announced
    
    purchasedshares
    
    paid per
    
    plans or
    
    under the plansPeriod
    
    purchased
    
    share
    
    programs
    
    or programsMay 1-31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    June 1-30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    July 1-31, 2008
    
    
    352
    
    
    $
    16.23
    
    
    
    
    
    
    
    Total
    
    
    352
    
    
    $
    16.23
    
    
    
    
    
    
    
    
  
 Item 3. Defaults Upon Senior Securities
  18




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
   Name of Nominee
    
    For
    
    WithheldBilly F. Mitcham, Jr.
    
    
    8,388,150
    
    
    
    317,545Peter H. Blum
    
    
    8,397,153
    
    
    
    308,542Robert P. Capps
    
    
    7,888,729
    
    
    
    816,966R. Dean Lewis
    
    
    8,352,468
    
    
    
    353,227John F. Schwalbe
    
    
    8,352,668
    
    
    
    353,027Robert J. Albers
    
    
    8,414,309
    
    
    
    291,386
  For
    
    Against
    
    Abstaining8,452,143
    
    66,510
    
    8,623
 
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibits
  SEC File orExhibit
    
    
    
    
    
    Registration
    
    ExhibitNumber
    
    Document Description
    
    Report or Registration Statement
    
    Number
    
    Reference3.1
    
    Amended and
Restated Articles
of Incorporation of
Mitcham Industries,
Inc.
    
    Incorporated by reference to
Mitcham Industries, Inc.s
Registration Statement on Form
S-8, filed with the SEC on
August 9, 2001.
    
    333-67208
    
    
    3.13.2
    
    Second Amended and
Restated Bylaws of
Mitcham Industries,
Inc.
    
    Incorporated by reference to
Mitcham Industries, Inc.s
Annual Report on Form 10-K for
the fiscal year ended January
31, 2004, filed with the SEC on
May 28, 2004.
    
    000-25142
    
    
    3.231.1
    
    Certification of
Billy F. Mitcham,
Jr., Chief
Executive Officer,
pursuant to Rule
13a-14(a) and Rule
15d-14(a) of the
Securities Exchange
Act, as amended31.2
    
    Certification of
Robert P. Capps,
Chief Financial
Officer, pursuant
to Rule 13a-14(a)
and Rule 15d-14(a)
of the Securities
Exchange Act, as
amended32.1
    
    Certification of
Billy F. Mitcham,
Jr., Chief
Executive Officer,
and Robert P.
Capps, Chief
Financial Officer,
under Section 906
of the Sarbanes
Oxley Act of 2002,
18 U.S.C. § 1350
 19




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SIGNATURES
  MITCHAM INDUSTRIES, INC.Date:  September 9, 2008
    /s/ Robert P. CappsRobert P. CappsExecutive Vice President-Finance and Chief Financial
Officer
(Duly Authorized Officer and Chief Accounting Officer) 20