<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                    ---------------------------------------

   (Mark One)
      (X)       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JULY 31, 2003

      ( )       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER 000-25142

                    ---------------------------------------

                            MITCHAM INDUSTRIES, INC.
                (Name of registrant as specified in its charter)


             TEXAS                                           76-0210849
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)

                                8141 SH 75 SOUTH
                             HUNTSVILLE, TEXAS 77340
                    (Address of principal executive offices)

                                 (936) 291-2277
              (Registrant's telephone number, including area code)

                    ---------------------------------------

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]   No [ ]

    Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ]   No [X]

    Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 8,795,301 shares of Common
Stock, $0.01 par value, were outstanding as of September 12, 2003.
<PAGE>
                            MITCHAM INDUSTRIES, INC.
                                      INDEX

<TABLE>
<S>                                                                                           <C>
                          PART I. FINANCIAL INFORMATION

Item 1.     Financial Statements

                    Condensed Consolidated Balance Sheets....................................   3
                    Condensed Consolidated Statements of Operations..........................   4
                    Condensed Consolidated Statements of Cash Flows..........................   5
                    Notes to Condensed Consolidated Financial Statements.....................   6

Item 2.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations........................................................   8

Item 3.     Quantitative and Qualitative Disclosures About Market Risk.......................  11

Item 4.     Controls and Procedures..........................................................  11


                                       PART II. OTHER INFORMATION

Item 1.     Legal Proceedings................................................................  14

Item 4.     Submission of Matters to a Vote of Security Holders..............................  14

Item 6.     Exhibits and Reports on Form 8-K.................................................  15

            Signatures.......................................................................  16
</TABLE>

                                       2
<PAGE>
PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                            MITCHAM INDUSTRIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                          July 31,       January 31,
                                        ASSETS                              2003            2003
                                                                          --------        --------
                                                                        (Unaudited)
<S>                                                                       <C>             <C>
CURRENT ASSETS:
     Cash                                                                 $  5,766        $  5,170
     Accounts receivable, net                                                5,104           3,544
     Notes receivable                                                           50              12
     Prepaid expenses and other current assets                                 359             627
                                                                          --------        --------
        Total current assets                                                11,279           9,353
 Seismic equipment lease pool, property and equipment                       87,648          87,126
 Accumulated depreciation of seismic equipment lease pool,
       property and equipment                                              (59,050)        (52,183)
 Assets held for sale                                                          844              --
 Other assets                                                                   18              44
                                                                          --------        --------
          Total assets                                                    $ 40,739        $ 44,340
                                                                          ========        ========

                           LIABILITIES AND SHAREHOLDERS' EQUITY

 CURRENT LIABILITIES:
     Accounts payable                                                     $  2,816        $  2,424
     Current maturities - long-term debt                                     2,153           2,092
     Deferred revenue                                                          438             216
     Wages payable                                                             472             414
     Accrued expenses and other current liabilities                          1,048             914
                                                                          --------        --------
          Total current liabilities                                          6,927           6,060
 Long-term debt                                                              3,526           4,622
                                                                          --------        --------
          Total liabilities                                                 10,453          10,682

 SHAREHOLDERS' EQUITY:

     Preferred stock, $1.00 par value; 1,000,000 shares authorized;
         none issued and outstanding                                            --              --
     Common stock, $0.01 par value; 20,000,000 shares authorized;
         9,710,301 and 9,657,801 shares, respectively, issued                   97              97
     Additional paid-in capital                                             61,814          61,814
     Treasury stock, at cost, 915,000 shares                                (4,686)         (4,686)
     Accumulated deficit                                                   (27,702)        (22,122)
     Accumulated other comprehensive income (loss)                             763          (1,445)
                                                                          --------        --------
          Total shareholders' equity                                        30,286          33,658
                                                                          --------        --------
          Total liabilities and shareholders' equity                      $ 40,739        $ 44,340
                                                                          ========        ========
</TABLE>

         THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED
                       CONSOLIDATED FINANCIAL STATEMENTS.

                                       3
<PAGE>
                            MITCHAM INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                     SIX MONTHS ENDED
                                                                         JULY 31,                             JULY 31,
                                                              ------------------------------        ------------------------------
                                                                  2003               2002               2003               2002
                                                              -----------        -----------        -----------        -----------
<S>                                                           <C>                <C>                <C>                <C>
REVENUES:
Equipment leasing                                             $     2,638        $       614        $     6,604        $     4,082
Equipment sales                                                     1,291                394              3,193              3,974
                                                              -----------        -----------        -----------        -----------
         Total revenues                                             3,929              1,008              9,797              8,056

COSTS AND EXPENSES:

Direct costs - seismic leasing                                        512                315                861                667
Cost of equipment sales                                               557                214              1,746              3,406
General and administrative                                          1,248              1,099              2,530              2,242
Benefit for doubtful accounts                                          --             (1,704)                --             (1,704)
Depreciation                                                        3,830              3,814              7,431              7,565
                                                              -----------        -----------        -----------        -----------
         Total costs and expenses                                   6,147              3,738             12,568             12,176
                                                              -----------        -----------        -----------        -----------

OPERATING LOSS                                                     (2,218)            (2,730)            (2,771)            (4,120)

Other income (expense) - net                                          (46)               (60)               (20)               (82)
                                                              -----------        -----------        -----------        -----------

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                (2,264)            (2,790)            (2,791)            (4,202)
Provision for income taxes                                             --                 --                 --                288
                                                              -----------        -----------        -----------        -----------
NET LOSS FROM CONTINUING OPERATIONS                                (2,264)            (2,790)            (2,791)            (4,490)
                                                              -----------        -----------        -----------        -----------

Loss from discontinued operations (including impairment
   charge of $700)                                                 (1,879)              (458)            (2,792)              (812)

NET LOSS                                                      $    (4,143)       $    (3,248)       $    (5,583)       $    (5,302)
                                                              ===========        ===========        ===========        ===========
Loss per common share from continuing operations
     Basic and diluted                                        $     (0.26)       $     (0.32)       $     (0.32)       $     (0.51)

Loss per common share from discontinued operations
     Basic and diluted                                        $     (0.21)       $     (0.05)       $     (0.32)       $     (0.09)

Net loss per common share - basic and diluted                 $     (0.47)       $     (0.37)       $     (0.64)       $     (0.60)

Shares used in computing loss per common share:
    Basic                                                       8,751,000          8,751,000          8,747,000          8,751,000
    Dilutive effect of common stock equivalents                        --                 --                 --                 --
                                                              -----------        -----------        -----------        -----------
    Diluted                                                     8,751,000          8,751,000          8,747,000          8,751,000
                                                              ===========        ===========        ===========        ===========
</TABLE>

         THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED
                       CONSOLIDATED FINANCIAL STATEMENTS.

                                       4
<PAGE>
                            MITCHAM INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  SIX MONTHS ENDED
                                                                                       JULY 31,
                                                                                ----------------------
                                                                                  2003           2002
                                                                                -------        -------
<S>                                                                             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                        $(5,583)       $(5,302)
Adjustments to reconcile net loss to net cash
       provided by (used in) operating activities:
         Depreciation                                                             7,722          7,799
         Provision (benefit) for doubtful accounts, net of charge offs               48         (1,881)
         Impairment of DSI assets                                                   700             --
Changes in:
         Trade accounts receivable                                               (1,674)         1,920
         Accounts payable, accrued expenses and other current liabilities           806         (6,614)
         Other, net                                                                 374            (49)
                                                                                -------        -------
              Net cash provided by (used in) operating activities                 2,393         (4,127)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of seismic equipment held for lease                               (1,466)        (3,852)
     Purchases of property and equipment                                            (48)          (141)
     Disposal of lease pool equipment                                               752          3,399
                                                                                -------        -------
         Net cash used in investing activities                                     (762)          (594)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from long-term debt                                                    --          2,000
     Payments on short-term borrowings                                           (1,035)          (847)
                                                                                -------        -------
         Net cash provided by (used in) financing activities                     (1,035)         1,153
                                                                                -------        -------

NET CHANGE IN CASH                                                                  596         (3,568)
CASH, BEGINNING OF PERIOD                                                         5,170          8,244
                                                                                -------        -------
CASH, END OF PERIOD                                                             $ 5,766        $ 4,676
                                                                                =======        =======
</TABLE>

         THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED
                       CONSOLIDATED FINANCIAL STATEMENTS.

                                       5
<PAGE>
                            MITCHAM INDUSTRIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION

     The condensed consolidated financial statements of Mitcham Industries, Inc.
     ("the Company") have been prepared by the Company, without audit, pursuant
     to the rules and regulations of the Securities and Exchange Commission.
     Certain information and footnote disclosures normally included in financial
     statements prepared in accordance with generally accepted accounting
     principles have been condensed or omitted pursuant to such rules and
     regulations, although the Company believes that the disclosures are
     adequate to make the information presented not misleading. These condensed
     consolidated financial statements should be read in conjunction with the
     financial statements and the notes thereto included in the Company's latest
     Annual Report to Shareholders and the Annual Report on Form 10-K for the
     year ended January 31, 2003. In the opinion of the Company, all
     adjustments, consisting only of normal recurring adjustments, necessary to
     present fairly the financial position as of July 31, 2003; the results of
     operations for the three and six months ended July 31, 2003 and 2002; and
     cash flows for the six months ended July 31, 2003 and 2002, have been
     included. The foregoing interim results are not necessarily indicative of
     the results of the operations for the full fiscal year ending January 31,
     2004.

2.   ORGANIZATION

     Mitcham Industries, Inc., a Texas corporation, was incorporated in 1987.
     Since its organization, the Company has primarily been engaged in the
     leasing and sales of seismic equipment to the seismic industry worldwide.
     The Company consists of the operations of Mitcham Industries, Inc. and its
     three wholly-owned subsidiaries, Mitcham Canada Ltd., Seismic Asia Pacific
     Pty Ltd., and Drilling Services, Inc. ("DSI"). At July 31, 2003, the
     operations of DSI have been classified as discontinued operations. See
     Note 6.

3.   EARNINGS PER SHARE

     For the three and six months ended July 31, 2002 and 2003, the following
     common stock equivalents were excluded from the earnings per share
     calculations due to their anti-dilutive effect on EPS.

<TABLE>
<CAPTION>
                                       Three Months Ended July 31,        Six Months Ended July 31,
                                       ---------------------------       ---------------------------
                                        2003                  2002        2003                  2002
                                       ------                -----       ------                -----
<S>                                    <C>                   <C>         <C>                   <C>
Stock options                          30,000                1,000       16,000                8,000
Restricted stock                           --                   --           --                   --
Warrants                                   --                   --           --                   --
                                       ------                -----       ------                -----
  Total anti-dilutive securities       30,000                1,000       16,000                8,000
                                       ======                =====       ======                =====

</TABLE>

4.   RECLASSIFICATIONS

     Certain 2002 amounts have been reclassified to conform to the 2003
     presentation. Such reclassifications had no effect on net loss.

5.   STOCK OPTIONS

     The Company accounts for its stock-based compensation plans under
     Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock
     Issued to Employees. The pro forma information below is based on provisions
     of Statement of Financial Accounting Standard ("FAS") No. 123, Accounting
     for Stock-Based Compensation, as amended by FAS 148, Accounting for
     Stock-Based Compensation-Transition and Disclosure, issued in December
     2002.

                                       6
<PAGE>
5.   STOCK OPTIONS (continued)

<TABLE>
<CAPTION>
                                                              Three Months Ended July 31,            Six Months Ended July 31,
                                                             -----------------------------          -----------------------------
                                                               2003                  2002             2003                  2002
                                                             -------               -------          -------               -------
<S>                                                          <C>                   <C>              <C>                   <C>
PRO FORMA IMPACT OF FAIR VALUE METHOD (FAS 148)
Reported net loss from continuing operations
  attributable to common shareholders                        $(2,264)              $(2,790)         $(2,791)              $(4,490)
Less: fair value impact of employee stock compensation           (74)                 (100)            (143)                 (222)
                                                             -------               -------          -------               -------
Pro forma net loss from continuing operations
  attributable to common shareholders                        $(2,338)              $(2,890)         $(2,934)              $(4,712)
                                                             =======               =======          =======               =======

Reported net loss                                            $(4,143)              $(3,248)         $(5,583)              $(5,302)
Less:  fair value impact of employee stock compensation          (74)                 (100)            (143)                 (222)
                                                             -------               -------          -------               -------
Pro forma net loss                                           $(4,217)              $(3,348)         $(5,726)              $(5,524)
                                                             =======               =======          =======               =======
LOSS PER COMMON SHARE
Basic and diluted - as reported loss from continuing
  operations                                                 $ (0.26)              $ (0.32)         $ (0.32)              $ (0.51)
Basic and diluted - pro forma loss from continuing
  operations                                                 $ (0.27)              $ (0.33)         $ (0.34)              $ (0.54)
Basic and diluted - as reported net loss                     $ (0.47)              $ (0.37)         $ (0.64)              $ (0.60)
Basic and diluted - pro forma net loss                       $ (0.48)              $ (0.38)         $ (0.65)              $ (0.63)

WEIGHTED AVERAGE BLACK-SCHOLES FAIR VALUE ASSUMPTIONS
Risk free interest rate                                        5.0%                  5.0%             5.0%                  5.0%
Expected life                                                3-8 yrs.              3-8 yrs.         3-8 yrs.              3-8 yrs.
Expected volatility                                            65%                   69%              65%                   69%
Expected dividend yield                                        0.0%                  0.0%             0.0%                  0.0%

</TABLE>

6.   DISCONTINUED OPERATIONS

     On August 1, 2003, we sold the operating assets of DSI, which comprised all
     of the operating assets of our Front-End Services segment. Our decision to
     sell DSI resulted from the over capacity in that market segment. Proceeds
     from the sale were $250,000 cash and an $800,000 note receivable due over
     three years. Additionally, the buyer assumed $143,000 of capitalized lease
     obligations. In the July 31, 2003 financial statements, DSI's operating
     assets have been classified as assets held for sale and we have recorded an
     asset impairment charge of $700,000 related to those assets. The impairment
     charge is included in the loss from discontinued operations. The resulting
     net book values of these assets after impairment are presented below.

<TABLE>
<CAPTION>
                                                      July 31,
                                                        2003
                                                     ----------
<S>                                                   <C>
              Furniture and fixtures                  $ 17,000
              Drilling equipment                       688,000
              Autos and trucks                         139,000
                                                     ----------
                 Net assets held for sale             $844,000
                                                     ==========
</TABLE>


     Effective with the July 31, 2003 financial statements, the operating
     results of DSI are presented as discontinued operations and all prior
     period statements have been restated accordingly. A summary of DSI's
     revenue and pretax loss is reflected in loss from discontinued operations
     as follows.

<TABLE>
<CAPTION>
                            Three Months Ended July 31,           Six Months Ended July 31,
                         ---------------------------------     --------------------------------
                             2003                  2002            2003                 2002
                         -----------           -----------     -----------          -----------
<S>                      <C>                   <C>             <C>                  <C>
Revenues                 $ 2,432,000           $ 1,028,000     $ 4,502,000          $ 1,366,000

Pretax loss              $(1,879,000)          $  (458,000)    $(2,792,000)         $  (812,000)
</TABLE>

                                       7
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

         Our revenues are directly related to the level of worldwide oil and gas
exploration activities and the profitability and cash flows of oil and gas
companies and seismic contractors, which in turn are affected by expectations
regarding the supply and demand for oil and natural gas, energy prices and
finding and development costs.

         We lease and sell seismic data acquisition equipment primarily to
seismic data acquisition companies and oil and gas companies conducting land and
transition zone seismic surveys worldwide. We provide short-term leasing of
seismic equipment to meet a customer's requirements and offer maintenance and
support during the lease term. The majority of all leases at July 31, 2003 were
for a term of one year or less. Seismic equipment held for lease is carried at
cost, net of accumulated depreciation. Through our wholly-owned subsidiary,
Seismic Asia Pacific Pty Ltd. ("SAP"), we provide equipment, consumables,
systems integration, engineering hardware and software maintenance support
services to the seismic, hydrographic, oceanographic environment and defense
industries throughout South East Asia and Australia.

SEASONALITY

         Historically, seismic equipment leasing has been susceptible to weather
patterns in certain geographic regions. There is some seasonality to our
expected lease revenues, especially from customers operating in Canada, where a
significant percentage of seismic survey activity occurs in the winter months,
from November through March. During the months in which the weather is warmer,
certain areas are not accessible to trucks, earth vibrators and other equipment
because of the unstable terrain. This seasonal leasing activity by our Canadian
customers has historically resulted in increased lease revenues in our first and
fourth fiscal quarters.

RESULTS OF OPERATIONS

For the three months ended July 31, 2003 and 2002

         For the quarter ended July 31, 2003, consolidated revenues increased
290% to $3.9 million from $1.0 million in the corresponding period of the prior
year. This increase is partly attributable to the inclusion of operations of our
subsidiary, SAP, which was acquired in December 2002. Our core equipment leasing
revenues increased approximately $2.0 million from the prior year, largely due
to four significant new lease contracts that began earning revenues during the
quarter. Foreign currency translation rates had the effect of increasing second
quarter revenues by approximately $103,000.

         For the quarter ended July 31, 2003, we recorded approximately $1.3
million in equipment sales and $.6 million in cost of sales, generating a gross
margin of 57%. Sales made during the current quarter consisted mainly of older
equipment. In the prior year, we recorded $.4 million in equipment sales and $.2
million in cost of sales that generated a gross margin of 46%. Gross margins on
equipment sales may vary significantly between periods due to the mix of new
versus older equipment being sold.

         During the quarter ended July 31, 2003, direct costs of seismic leasing
totaled $.5 million, which was $.2 million greater than the prior year's amount.
Direct costs primarily consist of freight, repair and sublease expenses.

         General and administrative expenses for the quarter ended July 31,
2003, increased $149,000 from the corresponding prior year period, $156,000 of
which is attributable to the inclusion of SAP in the current period.

         Depreciation expense for the quarter ended July 31, 2003, increased
$16,000 to $3.8 million from $3.8 million in the same period last year. Foreign
currency translation rates had the effect of increasing depreciation expense
during the quarter ended July 31, 2003, by approximately $227,000. The current
quarter's expense increased due to capital additions made during the fiscal year
that commenced depreciating in the quarter, but was nearly completely offset by
certain equipment reaching the end of its depreciable life during the year.

         During the quarter ended July 31, 2003, we recorded a $.7 million
non-cash impairment charge against

                                       8
<PAGE>
assets held for sale as a result of our decision to sell the operating assets of
DSI. No such charge was recorded in the same period of the prior year.

         We recorded a net loss from continuing operations for the quarter ended
July 31, 2003, in the amount of $2.3 million, compared to a net loss from
continuing operations of $2.8 million for the same period of the previous year.
Additionally, we recorded a net loss from discontinued operations in the current
quarter of $1.9 million, versus $.5 million in the comparable quarter of the
prior year.

For the six months ended July 31, 2003 and 2002

         For the six months ended July 31, 2003, consolidated revenues increased
22% to $9.8 million from $8.1 million in the corresponding period of the prior
year. This increase is partly attributable to the inclusion of operations of our
new subsidiary, SAP, which was acquired in December 2002, as well as the
inclusion of four new lease contracts that began earning revenues during the
current period. Our core equipment leasing revenues increased approximately $2.5
million from the prior year, but was partially offset by a $.8 million decrease
in equipment sales. Foreign currency translation rates had the effect of
increasing July 31, 2003 revenues by approximately $411,000.

         For the six months ended July 31, 2003, we recorded approximately $3.2
million in equipment sales and $1.7 million in cost of sales, generating a gross
margin of 45%. Sales made during the current quarter consisted mainly of older
equipment. In the prior year, we recorded $4.0 million in equipment sales and
$3.4 million in cost of sales that generated a gross margin of 14%. Gross
margins on equipment sales may vary significantly between periods due to the mix
of new versus older equipment being sold.

         During the six months ended July 31, 2003, direct costs of seismic
leasing totaled $.9 million, which was approximately $.2 million greater than
the prior year's amount. Direct costs of seismic leasing consist primarily of
freight, repair and sublease costs as well as commission expenses.

         General and administrative expenses for the six months ended July 31,
2003, increased $288,000 from the corresponding prior year period, entirely due
to the inclusion of the results of SAP in the current period.

         Depreciation expense for the six months ended July 31, 2003, decreased
$134,000, or 2%, to $7.4 million from $7.6 million for the same period last
year. Foreign currency translation rates had the effect of increasing
depreciation expense during the six months ended July 31, 2003, by approximately
$485,000. The decrease in depreciation expense is largely due to the fact that
certain equipment reached the end of its depreciable life during the current
year coupled with the sales of assets with remaining depreciable life, partially
offset by new additions to the lease pool that began depreciating during the
current period.

         During the six months ended July 31, 2003, we recorded a $.7 million
non-cash impairment charge against assets held for sale as a result of our
decision to sell the operating assets of DSI. No such charge was recorded in the
same period of the prior year.

         We recorded a net loss from continuing operations for the six months
ended July 31, 2003, in the amount of $2.8 million, compared to a net loss from
continuing operations of $4.5 million for the same period of the previous year.
Additionally, during the six months ended July 31, 2003, we recorded a net loss
from discontinued operations of $2.8 million versus $.8 million in the prior
year.

LIQUIDITY AND CAPITAL RESOURCES

         As of July 31, 2003, we had net working capital of approximately $4.4
million as compared to net working capital of $3.3 million at January 31, 2003.
Historically, our principal liquidity requirements and uses of cash have been
for capital expenditures and working capital and principal sources of cash have
been cash flows from operations and issuances of equity securities. Net cash
provided by operating activities for the six months ended July 31, 2003, was
$2.4 million, as compared to net cash used in operating activities of $4.1
million for the six months ended July 31, 2002. Net cash used in financing
activities for the six months ended July 31, 2003, was $1.0

                                       9
<PAGE>
million, as compared to net cash provided by financing activities of $1.2
million in the six months ended July 31, 2002.

         During the six months ended July 31, 2003, we committed to purchase
$1.125 million of land data acquisition equipment by December 31, 2003 and $2.25
million of land data acquisition equipment by December 31, 2004. We expect that
cash on hand and cash flows from operations will be sufficient to meet these
commitments.

         At July 31, 2003, we had trade accounts receivable of $.6 million that
were more than 90 days past due. At July 31, 2003, our allowance for doubtful
accounts was approximately $.8 million, which we believe is sufficient to cover
any losses in our trade accounts receivable.

         In certain instances when customers have been unable to repay their
open accounts receivable balances, we have agreed to a structured repayment
program using an interest bearing promissory note. In these cases, we provide a
reserve for doubtful accounts against the balance. Due to the uncertainty of
collection, we do not recognize the interest earned until the entire principal
balance has been collected. In most cases where we have a chronic collection
problem with a particular customer, future business is done on a prepayment
basis or if additional credit is extended, revenues are not recognized until
collected. Although the extension of repayment terms on open accounts receivable
temporarily reduces our cash flow from operations, we believe that this practice
is necessary in light of seismic industry conditions and that it has not
adversely affected our ability to conduct routine business. Additionally, we
occasionally offer extended payment terms on equipment sales transactions. These
terms are generally less than one year in duration. Unless there is a question
as to collectibility, the sales revenue and cost of goods sold is recognized at
the inception of the transaction.

         On November 10, 2000, we closed an $8.5 million term loan with First
Victoria National Bank. The loan amortized over 48 months and bore interest at
the rate of prime plus 1/2%, adjusted daily. The first three monthly payments
were interest only, with the remaining 45 monthly payments being principal and
interest in the approximate amount of $229,000. In February 2002, we
renegotiated our term loan and borrowed an additional $2.0 million. Beginning in
March 2002, the 48 monthly payments of principal and interest are approximately
$197,000. The loan is collateralized by certain lease pool equipment.
Additionally, during fiscal 2002 we borrowed $75,000 under a separate loan
agreement in connection with our acquisition of assets related to the formation
of DSI. This term loan matured in December 2002, bore interest at the rate of
prime minus one percent, and required quarterly repayments in the approximate
amount of $19,000.

         Capital expenditures for the six months ended July 31, 2003, totaled
approximately $1.5 million compared to capital expenditures of $4.0 million for
the corresponding period in the prior year. The decline in our current capital
expenditures from prior years is a reflection of a continuing decline in seismic
data acquisition activity. Unlike in prior years when the majority of equipment
we purchased was based on anticipated demand for our services, the majority of
our capital expenditures for the 2004 fiscal year was made to fulfill a specific
lease contract or was purchased for ultimate resale to a specific customer. At
the present time, we believe that cash on hand and cash provided by future
operations will be sufficient to fund our anticipated capital and liquidity
needs over the next twelve months. However, should demand warrant, we may pursue
additional borrowings to fund capital expenditures.

CRITICAL ACCOUNTING POLICIES

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires us to
make estimates and assumptions in determining the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the period. Significant estimates made by us in the
accompanying condensed consolidated financial statements relate to reserves for
accounts receivable collectibility and useful lives of our lease pool assets and
their valuation.

         Critical accounting policies are those that are most important to the
portrayal of a company's financial position and results of operation as well as
require management's subjective judgment. Below is a brief discussion of our
critical accounting policies.

                                       10
<PAGE>
Revenue Recognition

         We recognize lease revenue ratably over the term of the lease and
recognize sales revenue at the inception of the transaction unless there is a
question as to its collectibility. Interest income related to the financing of
delinquent customer receivables is not recognized until the entire principal
balance has been collected.

Allowance for Doubtful Accounts

         Provisions to the allowance for doubtful accounts are made periodically
as conditions warrant based on the expected collectibility of all such
receivables. In certain instances when customers have been unable to repay their
open accounts receivable balances, we have agreed to a structured repayment
program using an interest bearing promissory note. In these cases, we provide a
reserve for doubtful accounts against the balance.

Long-Lived Asset Impairment

         We review our long-lived lease pool assets for impairment at each
reporting date. If our assessment of the carrying amount of such assets exceeds
the fair market value in accordance with the applicable accounting regulations,
an impairment charge is recorded. A $.7 million charge has been recorded for the
three and six months ended July 31, 2003 in connection with the DSI assets sold
on August 1, 2003.

Income Taxes

         We account for our taxes under the liability method, whereby we
recognize, on a current and long-term basis, deferred tax assets and liabilities
which represent differences between the financial and income tax reporting bases
of our assets and liabilities. A valuation allowance is established when
uncertainty exists as to the ultimate realization of net deferred tax assets.

         We periodically reevaluate these estimates and assumptions as
circumstances change. Such factors may significantly impact our results of
operations from period to period.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We operate internationally, giving rise to exposure to market risks
from changes in foreign exchange rates to the extent that transactions are not
denominated in U.S. dollars. We typically denominate the majority of our lease
and sales contracts in U.S. and Canadian dollars to mitigate the exposure to
fluctuations in foreign currencies.

ITEM 4.  CONTROLS AND PROCEDURES

         Our Chief Executive Officer and Chief Financial Officer (the
"Certifying Officers") have evaluated the effectiveness of the Company's
disclosure controls and procedures (as defined in Rule 13a-15(e) of the
Securities Exchange Act of 1934) as of the end of the period covered by this
Quarterly Report on Form 10-Q. Based upon their evaluation, the Certifying
Officers concluded that the Company's disclosure controls and procedures are
effective. There were no significant changes (including corrective actions with
regard to significant deficiencies or material weaknesses) in the Company's
internal control over financial reporting during the period covered by this
Quarterly Report on Form 10-Q that have materially affected, or are reasonably
likely to materially affect, the Company's internal control over financial
reporting.

FORWARD-LOOKING STATEMENTS AND RISK FACTORS

         Certain information contained in this Quarterly Report on Form 10-Q
(including statements contained in Part I, Item 2. "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and in Part II,
Item 1. "Legal Proceedings"), as well as other written and oral statements made
or incorporated by reference from time to time by us and our representatives in
other reports, filings with the Securities and Exchange Commission, press
releases, conferences, or otherwise, may be deemed to be forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. This information includes, without limitation, statements

                                       11
<PAGE>
concerning our future financial position and results of operations; planned
capital expenditures; liquidity and capital resources; business strategy and
other plans for future operations; the future mix of revenues from segments and
business; commitments and contingent liabilities; and future demand for our
services and predicted improvement in energy industry and seismic service
industry conditions. When used in this report, the words "anticipate,"
"believe," "estimate," "expect," "may," and similar expressions, as they relate
to the Company and our management, identify forward-looking statements. The
actual results of future events described in such forward-looking statements
could differ materially from the results described in the forward-looking
statements due to the risks and uncertainties set forth below and elsewhere
within this Quarterly Report on Form 10-Q.

RECOVERY OF DEMAND FOR LAND BASED SEISMIC DATA NOT ASSURED

         Demand for our services depends on the level of spending by oil and gas
companies for exploration, production and development activities, as well as on
the number of crews conducting land and transition zone seismic data acquisition
worldwide, and especially in North America.

LOSS OF SIGNIFICANT CUSTOMERS WILL ADVERSELY AFFECT US

         We typically lease and sell significant amounts of seismic equipment to
a relatively small number of customers, the composition of which changes from
year to year as leases are initiated and concluded and as customers' equipment
needs vary. Therefore, at any one time, a large portion of our revenues may be
derived from a limited number of customers. In the fiscal years ended January
31, 2001, 2002 and 2003, the single largest customer accounted for approximately
21%, 22% and 13%, respectively, of our total revenues. Because our customer base
is relatively small, the loss of one or more customers for any reason would
adversely affect our results of operations.

SIGNIFICANT DEFAULTS OF PAST-DUE CUSTOMER ACCOUNTS WOULD ADVERSELY AFFECT OUR
RESULTS OF OPERATIONS

         We had approximately $5.2 million of customer accounts and notes
receivable at July 31, 2003, of which $.6 million is over ninety days past due.
At July 31, 2003, we had an allowance of $.8 million to cover losses in our
receivable balances. Significant payment defaults by our customers in excess of
the allowance would have a material adverse effect on our financial position and
results of operations.

INTERNATIONAL ECONOMIC AND POLITICAL INSTABILITY COULD ADVERSELY AFFECT OUR
RESULTS OF OPERATIONS

         Our results of operations are dependent upon the current political and
economic climate of several international countries in which our customers
either operate or are located. International sources (including Canada)
accounted for approximately 63% of our revenues in the fiscal year ended January
31, 2003. Since the majority of our lease and sales contracts with our customers
are denominated in U.S. and Canadian dollars, there is little risk of loss from
fluctuations in foreign currencies. However, our internationally-sourced
revenues are still subject to the risk of currency exchange controls (in which
payment could not be made in U.S. dollars), taxation policies, and
appropriation, as well as to political turmoil, civil disturbances, armed
hostilities, and other hazards.

WE MUST CONTINUALLY OBTAIN ADDITIONAL LEASE CONTRACTS

         Our seismic equipment leases typically have a term of three to nine
months and provide gross revenues that recover only a portion of our capital
investment. Our ability to generate lease revenues and profits is dependent on
obtaining additional lease contracts after the termination of an original lease.
However, lessees are under no obligation to, and frequently do not, continue to
lease seismic equipment after the expiration of a lease. Although we have been
successful in obtaining additional lease contracts with other lessees after the
termination of the original leases, there can be no assurance that we will
continue to do so. Our failure to obtain additional leases or extensions beyond
the initial lease term would have a material adverse effect on our operations
and financial condition.

                                       12
<PAGE>
DEPENDENCE ON KEY PERSONNEL

         Our success is dependent on, among other things, the services of
certain key personnel, including specifically Billy F. Mitcham, Jr., our
Chairman of the Board, President and Chief Executive Officer. Mr. Mitcham's
employment agreement had an initial term through January 15, 2002, and is
automatically extended on a year-to-year basis until terminated by either party
giving 30 days notice prior to the end of the current term (subject to earlier
termination on certain stated events). The agreement prohibits Mr. Mitcham from
engaging in any business activities that are competitive with our business and
from diverting any of our customers to a competitor for two years after the
termination of his employment. The loss of the services of Mr. Mitcham could
have a material adverse effect on us.

OUR SEISMIC LEASE POOL IS SUBJECT TO TECHNOLOGICAL OBSOLESCENCE

         We have a substantial capital investment in seismic data acquisition
equipment. The development by manufacturers of seismic equipment of newer
technology systems or component parts that have significant competitive
advantages over seismic systems and component parts now in use could have an
adverse effect on our ability to profitably lease and sell our existing seismic
equipment. Significant improvements in technology may also require us to
recognize an asset impairment charge to our lease pool investment, and to
correspondingly invest significant sums to upgrade or replace our existing lease
pool with newer-technology equipment demanded by our customers.

WEATHER CONDITIONS CAUSE SEASONAL RESULTS

         The first and fourth quarters of our fiscal year have historically
accounted for a greater portion of our revenues than do the second and third
quarters of our fiscal year. This seasonality in revenues is primarily due to
the increased seismic survey activity in Canada from November through March,
which affects us due to our significant Canadian operations. This seasonal
pattern may cause our results of operations to vary significantly from quarter
to quarter. Accordingly, period-to-period comparisons are not necessarily
meaningful and should not be relied on as indicative of future results.

COMPETITION

         Competition in the leasing of seismic equipment is fragmented, and we
are aware of several companies that engage in seismic equipment leasing. We
believe that our competitors, in general, have neither as extensive a seismic
equipment lease pool as we do, or similar exclusive lease referral agreements
with suppliers. Competition exists to a lesser extent from seismic data
acquisition contractors that may lease equipment that is temporarily idle.

         We have several competitors engaged in seismic equipment leasing and
sales, including seismic equipment manufacturers, companies providing seismic
surveys and oil and gas exploration companies that use seismic equipment, many
of which have substantially greater financial resources than us. There are also
several smaller competitors who, in the aggregate, generate significant revenue
from the sale of seismic survey equipment. Pressures from existing or new
competitors could adversely affect our business operations.

VOLATILE STOCK PRICES AND NO PAYMENT OF DIVIDENDS

         Due to current energy industry conditions, energy and energy service
company stock prices, including our stock price, have been extremely volatile.
Such stock price volatility could adversely affect our business operations by,
among other things, impeding our ability to attract and retain qualified
personnel and to obtain additional financing if such financing is ever needed.
We have historically not paid dividends on our common stock and do not
anticipate paying dividends in the foreseeable future.

POSSIBLE ADVERSE EFFECT OF ANTI-TAKEOVER PROVISIONS; POTENTIAL ISSUANCE OF
PREFERRED STOCK

         Certain provisions of our Articles of Incorporation and the Texas
Business Corporation Act may tend to delay, defer or prevent a potential
unsolicited offer or takeover attempt that is not approved by our Board of
Directors but

                                       13
<PAGE>
that our shareholders might consider to be in their best interest, including an
attempt that might result in shareholders receiving a premium over the market
price for their shares. Because our Board of Directors is authorized to issue
preferred stock with such preferences and rights as it determines, it may afford
the holders of any series of preferred stock preferences, rights or voting
powers superior to those of the holders of common stock. Although we have no
shares of preferred stock outstanding and no present intention to issue any
shares of our preferred stock, there can be no assurance that we will not do so
in the future.

LIMITATION ON DIRECTORS' LIABILITY

         Our Articles of Incorporation provide, as permitted by governing Texas
law, that a director of the Company shall not be personally liable to the
Company or its shareholders for monetary damages for breach of fiduciary duty as
a director, with certain exceptions. These provisions may discourage
shareholders from bringing suit against a director for breach of fiduciary duty
and may reduce the likelihood of derivative litigation brought by shareholders
on behalf of the Company against a director.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         From time to time, the Company is a party to legal proceedings arising
         in the ordinary course of business. The Company is not currently a
         party to any litigation that it believes could have a material adverse
         effect on the results of operation or financial condition of the
         Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    (a)  The Company held its Annual Meeting of Shareholders on July 17, 2003.
         Shareholders of record at the close of business on May 23, 2003 were
         entitled to vote.

    (b)  Shareholders elected each of the five directors nominated for the board
         of directors:

<TABLE>
<CAPTION>
         NAME OF NOMINEE                     FOR             WITHHELD
         ---------------                  ---------          --------
<S>                                      <C>                 <C>
         Billy F. Mitcham, Jr.            8,252,133           168,749
         R. Dean Lewis                    8,250,583           170,299
         John F. Schwalbe                 8,254,883           165,999
         P. Blake Dupuis                  8,252,083           168,799
         Peter H. Blum                    8,262,783           158,099
</TABLE>

    (c)  The Shareholders ratified the appointment of Hein + Associates LLP as
         the Company's independent auditors:

<TABLE>
<CAPTION>
                   FOR             AGAINST          ABSTAINING
                   ---             -------          ----------
<S>                                 <C>                <C>
                 8,397,707          15,725             7,450
</TABLE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

    (a) EXHIBITS

        The following documents are filed as exhibits to this Report:

        31.1 - Certification of Principal Executive Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002

        31.2 - Certification of Principal Financial Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002

                                       14
<PAGE>
        32.1 - Certification of the Chief Executive Officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

        32.2 - Certification of the Chief Financial Officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350


    (b) REPORTS ON FORM 8-K

        During the quarter ended July 31, 2003, we filed a Current Report on
        Form 8-K related to the Company's earnings for the first quarter ended
        April 30, 2003.

        During the quarter ended July 31, 2003, we filed a Current Report on
        Form 8-K related to the Company's distribution to shareholders of its
        2003 Annual Report, the CEO's accompanying letter of which contained
        certain forward-looking information regarding industry trends and
        increased revenues beginning in the second fiscal quarter.

                                       15
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                  MITCHAM INDUSTRIES, INC.

Date: September 15, 2003          /s/ CHRISTOPHER C. SIFFERT
                                  ------------------------------
                                  CHRISTOPHER C. SIFFERT
                                  CORPORATE CONTROLLER
                                  (AUTHORIZED OFFICER AND PRINCIPAL
                                   ACCOUNTING OFFICER)

                                       16
<PAGE>
                                INDEX TO EXHIBITS

      Exhibit No.                  Description
      -----------                  -----------
        31.1 - Certification of Principal Executive Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002

        31.2 - Certification of Principal Financial Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002

        32.1 - Certification of the Chief Executive Officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

        32.2 - Certification of the Chief Financial Officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350