##### 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 April 30, 2011
 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
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 8141 SH 75 South
P.O. Box 1175
Huntsville, Texas 77342
 (936) 291-2277
  þ o
  o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(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 April 30, 2011
and January 31, 2011
    
    
    1Condensed Consolidated Statements of Operations for the
Three Months Ended April 30, 2011 and 2010
    
    
    2Condensed Consolidated Statements of Cash Flows for the
Three Months Ended April 30, 2011 and 2010
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. (Removed and Reserved)
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    22Signatures
    
    
    23EX-31.1EX-31.2EX-32.1
  ii




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 MITCHAM INDUSTRIES, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except per share data)
 (unaudited)
 April 30, 2011
    
    
    January 31, 2011ASSETSCurrent assets:Cash and cash equivalents
    
    $
    14,641
    
    
    $
    14,647Restricted cash
    
    
    101
    
    
    
    Accounts receivable, net
    
    
    23,269
    
    
    
    17,832Current portion of contracts receivable
    
    
    3,888
    
    
    
    3,582Inventories, net
    
    
    5,350
    
    
    
    4,813Income taxes receivable
    
    
    363
    
    
    
    325Deferred tax asset
    
    
    1,651
    
    
    
    1,427Prepaid expenses and other current assets
    
    
    2,317
    
    
    
    2,128Total current assets
    
    
    51,580
    
    
    
    44,754Seismic equipment lease pool and property and equipment, net
    
    
    98,282
    
    
    
    79,095Intangible assets, net
    
    
    5,399
    
    
    
    5,358Goodwill
    
    
    4,320
    
    
    
    4,320Prepaid foreign income tax
    
    
    3,386
    
    
    
    3,053Long-term portion of contracts receivable, net
    
    
    161
    
    
    
    1,355Other assets
    
    
    40
    
    
    
    36Total assets
    
    $
    163,168
    
    
    $
    137,971LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    22,329
    
    
    $
    5,203Current maturities  long-term debt
    
    
    3,267
    
    
    
    3,177Income taxes payable
    
    
    996
    
    
    
    1,276Deferred revenue
    
    
    1,019
    
    
    
    778Accrued expenses and other current liabilities
    
    
    5,510
    
    
    
    5,165Total current liabilities
    
    
    33,121
    
    
    
    15,599Non-current income taxes payable
    
    
    4,285
    
    
    
    3,482Deferred tax liability
    
    
    1,595
    
    
    
    832Long-term debt, net of current maturities
    
    
    20,120
    
    
    
    23,343Total liabilities
    
    
    59,121
    
    
    
    43,256Shareholders 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; 10,917 and 10,872 shares issued at
April 30, 2011 and January 31, 2011, respectively
    
    
    109
    
    
    
    109Additional paid-in capital
    
    
    77,949
    
    
    
    77,419Treasury stock, at cost (925 shares at April 30, 2011 and January 31, 2011)
    
    
    (4,843
    )
    
    
    (4,843
    )Retained earnings
    
    
    21,068
    
    
    
    14,976Accumulated other comprehensive income
    
    
    9,764
    
    
    
    7,054Total shareholders equity
    
    
    104,047
    
    
    
    94,715Total liabilities and shareholders equity
    
    $
    163,168
    
    
    $
    137,971
 The accompanying notes are an integral part of these condensed consolidated financial statements.
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MITCHAM INDUSTRIES, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share data)
 (unaudited)
 For the Three Months EndedApril 30,2011
    
    
    2010Revenues:Equipment leasing
    
    $
    16,775
    
    
    $
    9,566Lease pool equipment sales
    
    
    335
    
    
    
    363Seamap equipment sales
    
    
    8,349
    
    
    
    5,781Other equipment sales
    
    
    1,043
    
    
    
    790Total revenues
    
    
    26,502
    
    
    
    16,500Cost of sales:Direct costs  equipment leasing
    
    
    2,157
    
    
    
    744Direct costs  lease pool depreciation
    
    
    6,090
    
    
    
    4,912Cost of lease pool equipment sales
    
    
    97
    
    
    
    149Cost of Seamap and other equipment sales
    
    
    4,233
    
    
    
    3,752Total cost of sales
    
    
    12,577
    
    
    
    9,557Gross profit
    
    
    13,925
    
    
    
    6,943Operating expenses:General and administrative
    
    
    4,648
    
    
    
    4,187Depreciation and amortization
    
    
    305
    
    
    
    279Total operating expenses
    
    
    4,953
    
    
    
    4,466Operating income
    
    
    8,972
    
    
    
    2,477Other (expenses) income:Gain from bargain purchase in business combination
    
    
    
    
    
    
    1,304Interest, net
    
    
    (175
    )
    
    
    (94
    )Other, net
    
    
    (336
    )
    
    
    (502
    )Total other (expenses) income
    
    
    (511
    )
    
    
    708Income before income taxes
    
    
    8,461
    
    
    
    3,185Provision for income taxes
    
    
    (2,368
    )
    
    
    (791
    )Net income
    
    $
    6,093
    
    
    $
    2,394Net income per common share:Basic
    
    $
    0.61
    
    
    $
    0.24Diluted
    
    $
    0.58
    
    
    $
    0.24Shares used in computing net income per common share:Basic
    
    
    9,923
    
    
    
    9,808Diluted
    
    
    10,470
    
    
    
    10,082
 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 Three MonthsEnded April 30,2011
    
    
    2010Cash flows from operating activities:Net income
    
    $
    6,093
    
    
    $
    2,394Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    6,429
    
    
    
    5,291Stock-based compensation
    
    
    216
    
    
    
    273Gain from bargain purchase in business combination
    
    
    
    
    
    
    (1,304
    )Provision for inventory obsolescence
    
    
    31
    
    
    
    52Gross profit from sale of lease pool equipment
    
    
    (238
    )
    
    
    (214
    )Deferred tax provision
    
    
    1,195
    
    
    
    1,037Changes in non-current income taxes payable
    
    
    170
    
    
    
    (189
    )Changes in working capital items, net of effects from business
combination:Accounts receivable
    
    
    (4,570
    )
    
    
    190Contracts receivable
    
    
    888
    
    
    
    909Inventories
    
    
    (329
    )
    
    
    766Prepaid expenses and other current assets
    
    
    (193
    )
    
    
    (63
    )Income taxes receivable and payable
    
    
    (334
    )
    
    
    (282
    )Costs incurred and estimated profit in excess of billings
on uncompleted contract
    
    
    
    
    
    
    (17
    )Accounts payable, accrued expenses, other current
liabilities and deferred revenue
    
    
    1,231
    
    
    
    946Net cash provided by operating activities
    
    
    10,589
    
    
    
    9,789Cash flows from investing activities:Purchases of seismic equipment held for lease
    
    
    (8,132
    )
    
    
    (4,651
    )Purchases of property and equipment
    
    
    (54
    )
    
    
    (28
    )Sale of used lease pool equipment
    
    
    335
    
    
    
    363Acquisition of AES, net of cash acquired
    
    
    (155
    )
    
    
    (2,100
    )Net cash used in investing activities
    
    
    (8,006
    )
    
    
    (6,416
    )Cash flows from financing activities:Net (payments on) proceeds from line of credit
    
    
    (1,900
    )
    
    
    3,200Payments on borrowings
    
    
    (1,327
    )
    
    
    (101
    )Net
purchases of short-term investments
    
    
    (101
    )
    
    
    (47
    )Proceeds from issuance of common stock upon exercise of options
    
    
    343
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (2,985
    )
    
    
    3,052Effect of changes in foreign exchange rates on cash and cash
equivalents
    
    
    396
    
    
    
    (123
    )Net change in cash and cash equivalents
    
    
    (6
    )
    
    
    6,302Cash and cash equivalents, beginning of period
    
    
    14,647
    
    
    
    6,130Cash and cash equivalents, end of period
    
    $
    14,641
    
    
    $
    12,432Supplemental cash flow information:Interest paid
    
    $
    306
    
    
    $
    160Income taxes paid
    
    $
    1,313
    
    
    $
    459Purchases of seismic equipment held for lease in accounts
payable at end of period
    
    $
    19,515
    
    
    $
    3,864
 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
 (unaudited)
 1. Basis of Presentation
  2. Organization
  3. Acquisition
    4




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Working capital
    
    $
    327Seismic equipment lease pool
    
    
    2,990Deferred taxes
    
    
    (1,086
    )Intangible assets
    
    
    3,154
  4. Restricted Cash
  5. Balance Sheet
 April 30,
    
    
    January 31,2011
    
    
    2011(in thousands)Accounts receivable:Accounts receivable
    
    $
    25,939
    
    
    $
    20,498Allowance for doubtful accounts
    
    
    (2,670
    )
    
    
    (2,666
    )Total accounts receivable, net
    
    $
    23,269
    
    
    $
    17,832Contracts receivable:Contracts receivable
    
    $
    4,049
    
    
    $
    4,937Less current portion of
contracts receivable
    
    
    (3,888
    )
    
    
    (3,582
    )Long-term portion of
contracts receivable, net
    
    $
    161
    
    
    $
    1,355
  5




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April 30,
    
    
    January 31,2011
    
    
    2011(in thousands)Inventories:Raw Materials
    
    $
    2,698
    
    
    $
    2,440Finished goods
    
    
    2,111
    
    
    
    1,888Work in progress
    
    
    1,339
    
    
    
    1,2156,148
    
    
    
    5,543Less allowance for obsolescence
    
    
    (798
    )
    
    
    (730
    )Total inventories, net
    
    $
    5,350
    
    
    $
    4,813
 April 30,
    
    
    January 31,2011
    
    
    2011(in thousands)Seismic equipment lease pool and property and
equipment:Seismic equipment lease pool
    
    $
    195,177
    
    
    $
    166,883Land and buildings
    
    
    366
    
    
    
    366Furniture and fixtures
    
    
    7,045
    
    
    
    6,761Autos and trucks
    
    
    691
    
    
    
    663203,279
    
    
    
    174,673Accumulated depreciation and amortization
    
    
    (104,997
    )
    
    
    (95,578
    )Total seismic equipment lease pool and
property and equipment, net
    
    $
    98,282
    
    
    $
    79,095
 6. Goodwill and Other Intangible Assets
 Weighted
    
    
    April 30, 2011
    
    
    January 31, 2011Average
    
    
    Gross
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    NetLife at
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying04/30/11
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    Amount(in thousands)
    
    
    
    
    
    
    
    
    
    
    (in thousands)Goodwill
    
    
    
    
    
    $
    4,320
    
    
    
    
    
    
    
    
    
    
    $
    4,320Proprietary rights
    
    
    9.1
    
    
    $
    3,590
    
    
    $
    (1,180
    )
    
    $
    2,410
    
    
    $
    3,523
    
    
    $
    (1,101
    )
    
    $
    2,422Customer relationships
    
    
    6.8
    
    
    
    2,530
    
    
    
    (369
    )
    
    
    2,161
    
    
    
    2,396
    
    
    
    (274
    )
    
    
    2,122Patents
    
    
    6.8
    
    
    
    762
    
    
    
    (112
    )
    
    
    650
    
    
    
    721
    
    
    
    (82
    )
    
    
    639Trade name
    
    
    6.8
    
    
    
    208
    
    
    
    (30
    )
    
    
    178
    
    
    
    197
    
    
    
    (22
    )
    
    
    175Amortizable intangible assets
    
    
    
    
    
    $
    7,090
    
    
    $
    (1,691
    )
    
    $
    5,399
    
    
    $
    6,837
    
    
    $
    (1,479
    )
    
    $
    5,358
   6




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For fiscal years ending January 31 (in thousands):2012
    
    $
    5252013
    
    
    7002014
    
    
    7002015
    
    
    7002016
    
    
    7002017 and thereafter
    
    
    2,074Total
    
    $
    5,399
 7. Long-Term Debt and Notes Payable
  April 30, 2011
    
    
    January 31, 2011Revolving line of credit
    
    $
    19,750
    
    
    $
    21,650Equipment note
    
    
    2,476
    
    
    
    3,066MCL notes
    
    
    843
    
    
    
    1,550SAP equipment notes
    
    
    318
    
    
    
    25423,387
    
    
    
    26,520Less current portion
    
    
    (3,267
    )
    
    
    (3,177
    )Long-term debt
    
    $
    20,120
    
    
    $
    23,343
      7




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8. Comprehensive Income
  Three Months EndedApril 30,2011
    
    
    2010(in thousands)Net income
    
    $
    6,093
    
    
    $
    2,394Gain from foreign currency
translation adjustment
    
    
    2,709
    
    
    
    1,882Comprehensive income
    
    $
    8,802
    
    
    $
    4,276
  9. Income Taxes
 Income Taxes
     8




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10. Earnings per Share
  Three Months EndedApril 30,2011
    
    
    2010(in thousands)Basic weighted average common shares outstanding
    
    
    9,923
    
    
    
    9,808Stock options
    
    
    527
    
    
    
    274Unvested restricted stock
    
    
    20
    
    
    
    Total weighted average common share equivalents
    
    
    547
    
    
    
    274Diluted weighted average common shares
outstanding
    
    
    10,470
    
    
    
    10,082
 11. Stock-Based Compensation
  12. Segment Reporting
    As of April 30, 2011
    
    
    As of January 31, 2011Total assets
    
    
    Total assets(in thousands)Equipment Leasing
    
    $
    140,522
    
    
    $
    118,929Seamap
    
    
    23,108
    
    
    
    19,569Eliminations
    
    
    (462
    )
    
    
    (527
    )Consolidated
    
    $
    163,168
    
    
    $
    137,971
 9




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##### Table of Contents



Revenues
    
    
    Operating income
    
    
    Income before taxes2011
    
    
    2010
    
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010(in thousands)
    
    
    (in thousands)
    
    
    (in thousands)Equipment Leasing
    
    $
    18,153
    
    
    $
    10,719
    
    
    $
    5,349
    
    
    $
    1,038
    
    
    $
    5,286
    
    
    $
    1,934Seamap
    
    
    8,450
    
    
    
    5,830
    
    
    
    3,561
    
    
    
    1,399
    
    
    
    3,113
    
    
    
    1,147Eliminations
    
    
    (101
    )
    
    
    (49
    )
    
    
    62
    
    
    
    40
    
    
    
    62
    
    
    
    104Consolidated
    
    $
    26,502
    
    
    $
    16,500
    
    
    $
    8,972
    
    
    $
    2,477
    
    
    $
    8,461
    
    
    $
    3,185
  10




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Cautionary Statement about Forward-Looking Statements
  
    
    our future financial position and results of operations;
    
    international and economic instability;
    
    planned capital expenditures;
    
    our business strategy and other plans for future operations;
    
    the future mix of revenues and business;
    
    our relationship with suppliers;
    
    our ability to retain customers;
    
    our liquidity and access to capital;
    
    the effect of seasonality on our 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;
    
    the effect of fluctuations in oil and natural gas prices on exploration activities;
    
    the effect of uncertainty in financial markets on our customers and our ability to
obtain financing;
    
    loss of significant customers;
    
    seasonal fluctuations that can adversely affect our business;
    
    defaults by customers on amounts due us;
    
    possible impairment of our long-lived assets;
    
    inability to obtain funding or to obtain funding under acceptable terms;
    
    intellectual property claims by third parties;
    
    resolution of pending tax audits;
    
    risks associated with our manufacturing operations; and
    
    risks associated with our foreign operations, including foreign currency exchange risk.
 Our income tax liability may increase as a result of an assessment by taxing authorities in
the United States or foreign jurisdictions.
   11




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Overview
    For the Three Months EndedApril 30,2011
    
    
    2010(in thousands)Revenues:Equipment Leasing
    
    $
    18,153
    
    
    $
    10,719Seamap
    
    
    8,450
    
    
    
    5,830Inter-segment sales
    
    
    (101
    )
    
    
    (49
    )Total revenues
    
    
    26,502
    
    
    
    16,500Cost of sales:Equipment Leasing
    
    
    9,121
    
    
    
    6,434Seamap
    
    
    3,619
    
    
    
    3,212Inter-segment costs
    
    
    (163
    )
    
    
    (89
    )Total cost of sales
    
    
    12,577
    
    
    
    9,557Gross profit
    
    
    13,925
    
    
    
    6,943Operating expenses:General and administrative
    
    
    4,648
    
    
    
    4,187Depreciation and amortization
    
    
    305
    
    
    
    279Total operating expenses
    
    
    4,953
    
    
    
    4,466Operating income
    
    $
    8,972
    
    
    $
    2,477
 12




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For the Three Months EndedApril 30,2011
    
    
    2010(in thousands)EBITDA(1)
    
    $
    15,065
    
    
    $
    7,266Adjusted EBITDA(1)
    
    $
    15,281
    
    
    $
    7,539Reconciliation of Net income to
EBITDA and Adjusted EBITDANet income
    
    $
    6,093
    
    
    $
    2,394Interest expense, net
    
    
    175
    
    
    
    94Depreciation and amortization
    
    
    6,429
    
    
    
    5,291Provision for income taxes
    
    
    2,368
    
    
    
    791Gain from bargain purchase
    
    
    
    
    
    
    (1,304
    )EBITDA (1)
    
    
    15,065
    
    
    
    7,266Stock-based compensation
    
    
    216
    
    
    
    273Adjusted EBITDA (1)
    
    $
    15,281
    
    
    $
    7,539Reconciliation of Net Cash
Provided by Operating Activities
to EBITDANet cash provided by operating
activities
    
    $
    10,589
    
    
    $
    9,789Stock-based compensation
    
    
    (216
    )
    
    
    (273
    )Changes in trade accounts and
contracts receivable
    
    
    3,682
    
    
    
    (1,099
    )Interest paid
    
    
    306
    
    
    
    160Taxes paid , net of refunds
    
    
    1,313
    
    
    
    459Gross profit from sale of lease
pool equipment
    
    
    238
    
    
    
    214Changes in inventory
    
    
    329
    
    
    
    (766
    )Changes in accounts payable,
accrued expenses and other current
liabilities
    
    
    (1,231
    )
    
    
    (946
    )Other
    
    
    55
    
    
    
    (272
    )EBITDA (1)
    
    $
    15,065
    
    
    $
    7,266
 
 (1)
    
    EBITDA is defined as net income (loss) before (a) interest expense, net of
interest income, (b) provision for (or benefit from) income taxes (c) depreciation,
amortization and impairment and (d) the gain from bargain purchase. 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 management utilizes this information for assessing our performance and
liquidity and as indicators of our ability to make capital expenditures, service debt
and finance working capital requirements. The covenants of our revolving credit
agreement require us to maintain a minimum level of EBITDA. Management believes that
EBITDA and Adjusted EBITDA are measurements that are commonly used by analysts and some
investors in evaluating the performance and liquidity of companies such as us. In
particular, we believe that it is useful to our analysts and investors to understand
this relationship because it excludes transactions not related to our core cash
operating activities. We believe that excluding these transactions allows investors to
meaningfully trend and analyze the performance and liquidity of our core cash
operations. EBITDA and Adjusted EBITDA are not measures of financial performance or
liquidity 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. In evaluating our performance as measured by EBITDA, management recognizes and
considers the limitations of this measurement. EBITDA and Adjusted EBITDA do not
reflect our obligations for the payment of income taxes, interest expense or other
obligations such as capital expenditures. Accordingly, EBITDA and Adjusted EBITDA are
only two of the measurements that management utilizes. 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.  13




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Business Outlook
        14




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Results of Operations
  15




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Revenues and Cost of Sales
 Equipment Leasing
  Three Months EndedApril 30,2011
    
    
    2010($ in thousands)Revenue:Equipment leasing
    
    $
    16,775
    
    
    $
    9,566Lease pool equipment sales
    
    
    335
    
    
    
    363New seismic equipment sales
    
    
    275
    
    
    
    61SAP equipment sales
    
    
    768
    
    
    
    72918,153
    
    
    
    10,719Cost of sales:Lease pool depreciation
    
    
    6,155
    
    
    
    4,952Direct costs-equipment leasing
    
    
    2,157
    
    
    
    744Cost of lease pool equipment sales
    
    
    97
    
    
    
    149Cost of new seismic equipment sales
    
    
    136
    
    
    
    11Cost of SAP equipment sales
    
    
    576
    
    
    
    5789,121
    
    
    
    6,434Gross profit
    
    $
    9,032
    
    
    $
    4,285Gross profit %
    
    
    50
    %
    
    
    40
    %
     16




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Seamap
  Three Months EndedApril 30,2011
    
    
    2010($ in thousands)Equipment sales
    
    $
    8,450
    
    
    $
    5,830Cost of equipment sales
    
    
    3,619
    
    
    
    3,212Gross profit
    
    $
    4,831
    
    
    $
    2,618Gross profit %
    
    
    57
    %
    
    
    45
    %
   Operating Expenses
  Other Income (Expense)
   17




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Provision for Income Taxes
  Liquidity and Capital Resources
       18




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Actual as of April 30,Description of Financial
    
    
    
    2011 or for the period thenCovenant
    
    Required Amount
    
    endedRatio of debt to 
shareholders equity
    
    Not more than 0.7:1.0
    
    0.22:1.0Ratio of current assets 
to current liabilities
    
    Not less than 1.25:1.0
    
    1.56:1.0Quarterly EBITDA
    
    Not less than $2.0
million
    
    $15.1 million
     19




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20




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Market Risk
  Foreign Currency Risk
   Interest Rate Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  21




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PART II
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (a)
    
    Not applicable.(b)
    
    Not applicable.(c)
    
    Not applicable.
 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. (Removed and Reserved)
 
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibits
  22




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SIGNATURES
  MITCHAM INDUSTRIES, INC.Date:  June 7, 2011
    /s/ Robert P. CappsRobert P. CappsExecutive Vice President-Finance and Chief Financial
Officer
(Duly Authorized Officer and Chief Accounting
Officer) 23




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##### Table of Contents



EXHIBIT INDEX
  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
    
    Third Amended and
Restated Bylaws of
Mitcham Industries,
Inc.
    
    Incorporated by reference to
Mitcham Industries, Inc.s
Current Report on Form 8-K,
filed with the SEC on August 2,
2010.
    
    000-25142
    
    
    3.1
    (i)31.1
    
    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