<PAGE>   1

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

                                   FORM 10-QSB

===============================================================================

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

                      For the period ended October 31, 1998

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

                        Commission file number 001-13490

===============================================================================

                            MITCHAM INDUSTRIES, INC.
           (Name of small business issuer as specified in its charter)


                  Texas                                     76-0210849
     (State or other jurisdiction of                       (IRS Employer
     Incorporation or organization)                     Identification No.)

                             44000 Highway 75 South
                             Huntsville, Texas 77340
                    (Address of principal executive offices)

                                 (409) 291-2277
                           (Issuer's telephone number)

===============================================================================

    Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 ___

    State the number of shares outstanding for each of the issuer's classes of
common equity, as of the latest practicable date: 9,545,658 shares of Common
Stock, $0.01 par value, were outstanding as of December 3, 1998.

    Transitional Small Business Disclosure Format (check one):  Yes ___  No _X_
<PAGE>   2

                            MITCHAM INDUSTRIES, INC.
                                      INDEX



                          PART I. FINANCIAL INFORMATION

Item 1.     Financial Statements

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

Item 2.     Management's Discussion and Analysis or Plan of Operation.....  7



                           PART II. OTHER INFORMATION

Item 1.     Legal Proceedings............................................. 13

Item 6.     Exhibits and Reports on Form 8-K.............................. 13

            Signatures.................................................... 14


                                       2
<PAGE>   3


PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements


                            MITCHAM INDUSTRIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                            October 31,    
                                                                               1998         January 31,
                                                                            (Unaudited)         1998   
                                                                            ---------       ---------
<S>                                                                        <C>             <C>     
                                        ASSETS 
Current Assets:                                                                             
    Cash                                                                    $   4,316       $   7,498
    Marketable securities, at market                                           11,033          25,009
    Accounts receivable, net                                                    9,789          14,070
    Installment trade receivables                                               2,547             444
    Inventory                                                                   2,014             942
    Income tax receivable                                                         688             211
    Prepaid expenses and other current assets                                     108             248
                                                                            ---------       ---------
                   Total current assets                                        30,495          48,422
    Seismic equipment lease pool, net                                          52,201          42,236
    Property and equipment, net                                                 1,024             898
    Other assets                                                                    -               6
                                                                            ---------       ---------
         Total assets                                                       $  83,720       $  91,562
                                                                            =========       =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:                                                                       
    Accounts payable                                                        $   1,635       $   8,400
    Deferred revenue                                                            1,088           1,055
    Accrued liabilities and other current liabilities                           1,047           5,532
    Income taxes payable                                                           45              45
                                                                            ---------       ---------
         Total current liabilities                                              3,815          15,032
Deferred Income Taxes                                                           2,402           2,294
                                                                            ---------       ---------
         Total liabilities                                                      6,217          17,326

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                            
        9,515,658 and 9,425,759 shares, respectively, issued and                           
        outstanding                                                                95              94
    Additional paid-in capital                                                 61,408          61,275
    Retained earnings                                                          16,289          12,770
    Unrealized gain (loss) on investments                                          29               -
    Cumulative translation adjustment                                            (318)             97
                                                                            ----------      ---------
         Total shareholders' equity                                            77,503          74,236
                                                                            ---------       ---------
         Total liabilities and shareholders' equity                         $  83,720       $  91,562
                                                                            =========       =========
</TABLE>

                             See accompanying notes.


                                       3
<PAGE>   4



                            MITCHAM INDUSTRIES, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 (In thousands except share and per share data)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                   Three Months                      Nine Months
                                                                 Ended October 31,                Ended October 31,
                                                           ----------------------------       -------------------------
                                                               1998              1997             1998           1997
                                                           ----------        ----------       ----------     ----------
<S>                                                        <C>               <C>              <C>            <C>
Revenues:                                                                                                    
Short-term leasing                                         $    5,539        $    4,898       $   15,382     $   11,555
Leasing under lease/purchase arrangements                       1,241               162            4,043          1,234
Equipment sales under lease/purchase arrangements                 324             3,458            8,975          9,073
Other equipment sales                                           2,678             1,553            4,498          4,430
                                                           ----------        ----------       ----------     ----------
         Total revenues                                         9,782            10,071           32,898         26,292

Costs and expenses:                                                                                          
Direct costs                                                      382               360            1,012            527
Cost of sales under lease/purchase arrangements                   550             2,992            9,894          8,515
Cost of other equipment sales                                   2,340             1,355            3,527          3,542
General and administrative                                      1,812               867            4,325          2,189
Provision for bad debt                                            203               410              811            709
Depreciation                                                    3,253             1,313            8,814          3,919
                                                           ----------        ----------       ----------     ----------
         Total costs and expenses                               8,540             7,297           28,383         19,401
                                                           ----------        ----------       ----------     ----------

Operating income                                                1,242             2,774            4,515          6,891

Other income - net                                                263               201              894            498
                                                           ----------        ----------       ----------     ----------

Income before income taxes                                      1,505             2,975            5,409          7,389
Provision for income taxes                                        517             1,002            1,890          2,503
                                                           ----------        ----------       ----------     ----------
Net income                                                 $      988        $    1,973       $    3,519     $    4,886
                                                           ==========        ==========       ==========     ==========

Earnings per common share                                                                                    
     Basic                                                 $      .10        $      .26       $       .37    $      .70
     Diluted                                               $      .10        $      .25       $       .36    $      .67
                                                           ==========        ==========       ===========    ==========

Shares used in computing earnings per common share                                                           
     Basic                                                  9,515,658         7,448,773        9,486,470      6,967,600
     Diluted                                                9,609,712         7,832,766        9,682,274      7,329,800
                                                           ==========        ==========       ==========     ==========
</TABLE>

                             See accompanying notes.

                                       4
<PAGE>   5

                            MITCHAM INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                 Nine Months
                                                                               Ended October 31,
                                                                             ----------------------
                                                                                1998          1997
                                                                             ----------     -------
<S>                                                                         <C>            <C>
 Cash flows from operating activities:                                                     
 Net income                                                                  $   3,519      $ 4,886
 Adjustments to reconcile net income to net                                                
      cash flows provided by operating activities:                                         
          Depreciation                                                           8,814        3,919
          Provision for doubtful accounts, net of charge offs                      274         (609)
          Deferred income taxes                                                    108         (177)
          Trade accounts receivable                                              1,904       (8,912)
          Inventory                                                             (1,072)      (1,054)
          Income tax receivable                                                   (477)        (444)
          Other assets                                                             146          113
          Accounts payable                                                      (6,765)       3,457
          Accrued and other liabilities                                         (4,838)       1,059
                                                                             ----------     -------
               Net cash provided by operating activities                         1,613        2,238

 Cash flows from investing activities:                                                     
      Purchases of seismic equipment held for lease                            (30,176)     (20,624)
      Purchases of property and equipment                                         (334)        (279)
      Disposal of lease pool equipment                                          11,593        7,976
      Disposal of property and equipment                                            12            -
                                                                             ---------      -------
          Net cash used in investing activities                                (18,905)     (12,927)

 Cash flows from financing activities:                                                     
      Payment on short-term borrowings                                               -       (1,937)
      Payments on long-term debt and capitalized lease obligations                   -       (2,674)
      Proceeds from issuance of common stock, net of offering expenses               -       18,818
      Proceeds from issuance of common stock upon exercise of                              
        warrants and options                                                       134            -
      Proceeds from sale of marketable securities                               13,976            -
                                                                             ---------      -------
          Net cash provided by financing activities                             14,110       14,207
                                                                             ---------      -------

 Net increase (decrease) in cash                                                (3,182)       3,518
 Cash, beginning of period                                                       7,498          301
                                                                             ---------      -------
 Cash, end of period                                                         $   4,316      $ 3,819
                                                                             =========      =======

 Supplemental cash flow information:                                                       
      Cash paid for:                                                                       
          Interest                                                           $      28      $   143
          Income taxes                                                       $   2,050      $ 2,835
                                                                             =========      =======
      Equipment purchases in accounts payable                                $   1,136      $10,645
                                                                             =========      =======
</TABLE>

                             See accompanying notes.

                                       5
<PAGE>   6


                            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-KSB for the year ended January 31, 1998. In
         the opinion of the Company, all adjustments, consisting only of normal
         recurring adjustments, necessary to present fairly the financial
         position as of October 31, 1998; the results of operations for the
         three and nine months ended October 31, 1998 and 1997; and cash flows
         for the nine months ended October 31, 1998 and 1997 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,
         1999.

2.       Commitments and Contingencies
         -----------------------------

         Supplier Agreements
         Effective June 30, 1998, the Company and Input/Output, Inc. ("I/O")
         entered into a new Preferred Supplier Agreement (the "I/O Agreement"),
         thereby replacing the parties' Exclusive Lease Referral Agreement. The
         terms provide that the Company will purchase a minimum of between $90
         and $100 million of I/O products over a five-year term. In addition,
         I/O will refer rental inquiries from customers worldwide to the Company
         during the term of the agreement. In a related transaction, I/O sold to
         the Company for $15 million a substantial portion of its subsidiary's
         equipment lease pool, some of which is subject to existing short-term
         lease agreements. I/O has agreed in principle not to lease products
         covered by the I/O Agreement except in limited circumstances.

         Legal Proceedings
         On or about April 23, 1998, several class action lawsuits were filed
         against the Company and its chief executive officer and then chief
         financial officer in the U.S. District Court for the Southern District
         of Texas, Houston Division. The first-filed complaint, styled Stanley
         Moskowitz V. Mitcham Industries, Inc., Billy F. Mitcham, Jr. and
         Roberto Rios, alleged violations of Section 10(b) and 20(a) of the
         Securities Exchange Act of 1934 and Sections 11 and 12(a)(2) of the
         Securities Act of 1933. On or about September 21, 1998, the complaints
         were consolidated into one action. On November 4, 1998, the plaintiffs
         filed a consolidated amended complaint ("CAC"), which seeks class
         action status on behalf of those who purchased the Company's common
         stock from June 4, 1997 through March 26, 1998, and damages in an
         unspecified amount plus costs and attorney's fees. The CAC alleges that
         the Company made materially false and misleading statements and
         omissions in public filings and announcements concerning its business
         and its allowance for doubtful accounts. The Company believes that the
         plaintiffs' allegations are without merit and that there are
         meritorious defenses to the allegations, and intends to defend the
         action vigorously.

3.       Reclassifications
         -----------------

         Certain 1997 amounts have been reclassified to conform to 1998
         presentation.


                                       6
<PAGE>   7


4.       Earnings Per Share
         ------------------

         The following tables set forth the amounts used in computing earnings
         per share and the weighted average number of shares of dilutive
         potential common stock for the quarters and nine months ended October
         31, 1998 and 1997.

<TABLE>
<CAPTION>
                                                     Three Months Ended October 31,    Nine Months Ended October 31,
                                                     ------------------------------    -----------------------------
                                                          1998           1997               1998           1997
                                                       ----------     ----------         ----------      ---------
<S>                                                    <C>            <C>                <C>             <C>
       Net income                                      $      988     $    1,973         $    3,519      $   2,913
                                                       ----------     ----------         ----------      ---------
       Weighted average number of common                                                              
         shares outstanding                             9,515,658      7,448,773          9,486,470      6,967,600
       Net effect of dilutive stock options and                                                       
       warrants based on the treasury stock method, 
       using the average market price                      94,054        383,993            195,804        362,200
                                                       ----------     ----------         ----------      ---------
       Common shares outstanding assuming dilution      9,609,712      7,832,766          9,682,274      7,329,800
                                                       ==========     ==========         ==========      =========
       Earnings per common share assuming dilution     $     0.10     $     0.25          $    0.36      $    0.67
                                                       ==========     ==========         ==========      =========
</TABLE>




Item 2.  Management's Discussion and Analysis or Plan of Operation

Overview

     The Company leases and sells seismic equipment primarily to seismic data
acquisition companies and oil and gas companies conducting land and transition
zone seismic surveys worldwide. The Company provides short-term leasing of
seismic equipment to meet a customer's requirements and offers maintenance and
support during the lease term. All leases at October 31, 1998 were for a term of
one year or less. Seismic equipment held for lease is carried at cost, net of
accumulated depreciation.

     Demand for the Company's services depends upon 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. Fluctuations in the
price of oil and gas in response to relatively minor changes in the supply and
demand for oil and gas continue to have a major effect on these activities and
thus, on the demand for the Company's services. Oil and gas prices have declined
significantly in recent months and this trend has resulted in decreased demand
for the Company's leasing services and products. Because of the volatility of
oil and gas prices and the inability to predict future prices, there can be no
assurance of an increased demand for additional 3-D seismic equipment or as to
the level of future demand for the Company's services.

     While most of the Company's transactions with foreign customers are
denominated in United States dollars, some of the Company's transactions with
Canadian customers are denominated in Canadian dollars. The Company does not
engage in currency hedging activities.

Seasonality

     Historically, seismic equipment leasing has been susceptible to weather
patterns in certain geographic regions. There is some seasonality to the
Company's lease revenues from customers operating in Canada, where a significant
percentage of the seismic survey activity occurs in the winter months, from
October through March. During the months in which the weather is warmer, certain
areas are not accessible to trucks, earth vibrators and other heavy equipment
because of the unstable terrain. This seasonal leasing activity by the Company's
Canadian customers has historically resulted in increased lease revenues in the
Company's first and fourth fiscal quarters. However, there can be no assurances
that this trend will continue in the future.

                                       7
<PAGE>   8
Results of Operations

For the three months ended October 31, 1998 and 1997

       For the third quarter ended October 31, 1998, total revenues decreased 3%
to $9.8 million from $10.1 million in the corresponding period of the prior
year. This revenue decline reflects a $2.4 million decrease in equipment sales
offset by a $2.1 million increase in leasing revenues.

       Equipment sales and leasing revenues under lease/purchase arrangements
generated an aggregate third quarter gross margin of 65% compared to 17% for the
corresponding period of the prior year. This increase in gross margin is
primarily a result of an increase in higher-margin lease revenues under
lease/purchase arrangements coupled with a sharp decline in lower-margin
equipment sales under lease/purchase arrangements as compared to prior year. The
Company accounts for the lease portion and the sales portion of lease/purchase
arrangements separately, but believes the two aspects of the transaction must be
considered together to reflect its economic substance. Under the Company's
lease/purchase transactions, the lease generates a revenue stream before the
customer exercises its purchase option, a percentage of which the customer may
use to reduce the purchase price. Because the lease revenues that offset the
purchase price are not included in equipment sales under lease/purchase
arrangements, management assesses the profitability of these transactions by
combining lease and sales revenues.

        The current quarter's other equipment sales gross margin of 13% remained
unchanged from that of the quarter ended October 31, 1997.

        General and administrative expenses increased $945,000 from the
corresponding prior year period primarily due to increased professional fees
including management consulting, systems consulting, legal and audit fees and
increased compensation and payroll tax expense related to the general increase
in business. As of October 31, 1998, the Company has incurred or accrued
$250,000 of expense related to the class action lawsuit filed on April 23, 1998,
which amount management estimates to be the Company's anticipated out-of-pocket
expense.

     Depreciation expense for the quarter ended October 31, 1998, increased $1.9
million, or 148%, to $3.3 million from $1.3 million for the same period last
year, principally reflecting a larger seismic equipment lease pool. The
Company's seismic equipment lease pool increased $14.7 million, to $52.2 million
at October 31, 1998, from $37.5 million at October 31, 1997.

     Net income for the third quarter ended October 31, 1998, was $988,000
compared to $1,973,000 for the same period of the previous year.

For the nine months ended October 31, 1998 and 1997

     Total revenues for the nine months ended October 31, 1998, increased $6.6
million, or 25%, to $32.9 million from $26.3 million for the same prior year
period. This revenue increase reflects a $1.0 million increase in equipment
sales under lease/purchase arrangements (primarily resulting from one large
transaction), together with a $4.7 million increase in short-term leasing
revenue and a $2.5 million increase in leasing revenue under lease/purchase
arrangements, partially offset by a $1.6 million decline in other equipment
sales.

     For the nine months ended October 31, 1998, leasing and equipment sales
under lease/purchase arrangements generated an aggregate gross margin of 24%
compared to a 17% gross margin for the same period of the previous year. The
higher gross margin is primarily attributable to an increase in lease revenues
under lease/purchase arrangements in 1998.


                                       8
<PAGE>   9
     For the nine months ended October 31, 1998, the other equipment sales gross
margin was 22% compared to 20% for the corresponding period of the prior year.

     General and administrative expenses for the nine months ended October 31,
1998, increased to $4.3 million from $2.2 million in the same prior year period.
This $2.1 million increase primarily reflects increased professional fees
including management consulting, systems consulting, legal and audit fees,
higher convention and advertising expense and increased compensation and payroll
tax expense related to the general increase in business. As of October 31, 1998,
the Company has incurred or accrued $250,000 of expense related to the class
action lawsuit filed on April 23, 1998, which amount management estimates to be
the Company's anticipated out-of-pocket expense.

     For the nine months ended October 31, 1998, the provision for bad debt was
$811,000 compared to $709,000 for the corresponding period of the previous year.
The provision for bad debt is determined based upon estimates of the
collectibility of open account and installment trade receivables.

     Depreciation expense of $8.8 million for the nine months ended October 31,
1998, reflected an increase of $4.9 million from $3.9 million for the previous
year's corresponding period, principally as the result of additions to the
Company's seismic equipment lease pool.

     Net income for the nine months ended October 31, 1998, was $3.5 million
compared to $4.9 million for the same prior year period.

Liquidity and Capital Resources

     As of October 31, 1998, the Company had net working capital of
approximately $26.7 million and $15.0 million of availability under its bank
credit facility. At October 31, 1998, the Company had accounts receivable of
$4.5 million that were more than 90 days past due, with five customers owing an
aggregate of $2.9 million of such amount. As of October 31, 1998, the Company's
allowance for doubtful accounts was approximately $1.3 million, which management
believes is sufficient to cover potentially uncollectible receivables.

     As of October 31, 1998, the Company had not drawn any amounts under its
working capital revolving line of credit with Bank One, Texas, N. A. This
agreement will expire on December 8, 1999, at which time any unpaid principal
amount will be due and payable in full.

     Effective June 30, 1998, the Company entered into a new Preferred Supplier
Agreement with I/O, thereby replacing the parties' Exclusive Lease Referral
Agreement. The terms provide that the Company will purchase a minimum of between
$90 and $100 million of I/O products over a five-year term. In addition, I/O
will refer rental inquiries from customers worldwide to the Company during the
term of the agreement. In a related transaction, I/O sold to the Company for $15
million a substantial portion of its subsidiary's equipment lease pool, some of
which is subject to existing short-term lease agreements. I/O has agreed in
principle not to lease products covered by the Preferred Supplier Agreement
except in limited circumstances. Capital expenditures in the nine months ended
October 31, 1998, totaled $30.5 million, including the $15.0 million purchase of
equipment from I/O.

     In the first year of the Preferred Supplier Agreement with Input/Output,
Inc. (the "I/O Agreement"), which ends on May 31, 1999, the Company is required
to purchase a minimum of $30 million of equipment, before certain discounts and
credits. The Company has satisfied approximately $18.4 million of the first-year
purchase commitment.

     Management believes that cash on hand, cash provided by future operations
and funds available from its commercial lender will be sufficient to fund its
operations and planned capital expenditures over the next twelve months.

                                       9
<PAGE>   10
Year 2000 Compliance

      The Year 2000 problem is the result of computer programs being written
using two digits rather than four to define the applicable year. Any programs
that have time-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. This could result in a major system failure or
miscalculations. As a result, many companies may be forced to upgrade or
completely replace existing hardware and software in order to be Year 2000
compliant.

State of Readiness
        During 1998, the Company began evaluating its internal operating systems
and software ("IT") and embedded manufacturing control technology ("Non-IT") in
the equipment that it leases and sells. In its evaluation, vendors of the
software and hardware the Company uses in its business have represented that
such software and hardware are Year 2000 compliant. To assess risk associated
with possible non-compliance of customers' and equipment suppliers' failure to
be Year 2000 compliant, the Company prepared and mailed Year 2000 compliance
questionnaires to its significant customers and equipment suppliers. Completed
questionnaires the Company has received to date indicate there are no known Year
2000 compliance issues that would negatively affect the Company's operations and
business. However, the Company has not yet completed its assessment with respect
to its equipment suppliers.

Costs to Address Year 2000 Issues
        The Company has utilized internal resources in assessing the Year 2000
issue and has not employed outside consultants to assist. There have been no
material expenditures related to identifying, assessing or remediating Year 2000
compliance issues, nor does the Company expect to incur any material
expenditures related to this issue.

Risks
         As the Company has not fully completed its Non-IT assessment with
respect to its equipment suppliers, it is unable to estimate the impact of any
Year 2000 compliance issues that may arise if any equipment supplier were not
Year 2000 compliant. Though it has a number of suppliers, two suppliers provide
the vast majority of the Company's seismic equipment. In addition, the Company
derives a large percentage of its revenues from a relatively small number of
customers. Thus, if one of the Company's significant suppliers or customers
experienced a material business interruption or, if the Company lost a
significant supplier or customer due to Year 2000 non-compliance issues, it
could have a material adverse impact on the Company's operations, results of
operations or financial position.

Contingency Plan
         The Company has not developed a contingency plan related to Year 2000
compliance since no significant issues have been specifically identified. Once
the Company has completed its assessment with respect to its customers and
equipment suppliers, if necessary, the Company will develop a contingency plan
to address any significant non-compliance issues identified. The Company expects
to complete such assessment no later than April 30, 1999.

Forward-Looking Statements and Risk Factors

        Certain information contained in this Quarterly Report on Form 10-QSB
(including statements contained in Part I, Item 2. "Management's Discussion and
Analysis or Plan of Operation" 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 the Company and its 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
Section 21E of the Securities Exchange Act of 1934. This information includes,
without limitation, statements concerning the Company's future financial
position and results of operations; planned capital expenditures; business
strategy and other plans for future operations; the future mix of revenues and
business; commitments and contingent liabilities; Year 2000 issues; and future
demand and industry conditions. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct. When
used in this report, the words "anticipate," "believe," "estimate,"


                                       10
<PAGE>   11
"expect," "may," and similar expressions, as they relate to the Company and its
management, identify forward-looking statements. The actual results of future
events described in such forward-looking statements could differ materially from
those results which might be anticipated, forecast or estimated by the Company.
Such forward-looking statements include, but are not limited to, the following:

Uncertainty of Oil and Gas Industry Conditions and Demand for Services

     Demand for the Company's 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. Fluctuations in the
price of oil and gas in response to relatively minor changes in the supply and
demand for oil and gas continue to have a major effect on these activities and
thus, on the demand for the Company's services.

Customer Concentration and Credit Losses; Industry Consolidation

     The Company typically leases and sells 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
the Company's revenues may be derived from a limited number of customers. The
Company's ability to maintain profitability includes risks associated with the
creditworthiness and profitability of those customers. In the fiscal years ended
January 31, 1996, 1997 and 1998, the single largest customer accounted for
approximately 18%, 15% and 20%, respectively, of the Company's total revenues.
The termination of any large seismic lease could have a material adverse effect
on the Company's operations if the Company does not replace such business on a
timely basis. In addition, because the Company's customer base is relatively
small, the trend toward consolidation in the oil and gas industry could
adversely affect the Company's business and financial condition if significant
customers are acquired by other companies.

Dependence on Additional Lease Contracts

     The Company's seismic equipment leases typically have a term of three to
nine months and provide gross revenues that recover only a portion of the
Company's capital investment. The Company's 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 the Company has been successful in obtaining additional
lease contracts with other lessees after the termination of the original leases,
there can be no assurance that it will continue to do so. The Company's failure
to obtain additional or extended leases beyond the initial term would have a
material adverse effect on its operations and financial condition.

Dependence on Key Personnel

     The Company's success is dependent on, among other things, the services of
certain key personnel, including specifically Billy F. Mitcham, Jr., the
Chairman of the Board, President and Chief Executive Officer of the Company. Mr.
Mitcham's employment agreement has 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 the
Company's business and from diverting any of the Company's customers to a
competitor for two years after the termination of his employment. The Company
has obtained a $1.0 million key employee life insurance policy payable to the
Company in the event of Mr. Mitcham's death. The loss of the services of Mr.
Mitcham could have a material adverse effect on the Company. In particular, the
I/O Agreement is terminable at such time as Mr. Mitcham is no longer the
President of the Company and the Exclusive Equipment Lease Agreement with Sercel
is terminable at such time as he is no longer employed by the Company in a
senior management capacity.

                                       11
<PAGE>   12
Technological Obsolescence

     The Company has a substantial capital investment in seismic data
acquisition equipment. In addition, under the I/O Agreement, the Company is
required to make an additional investment in seismic and other peripheral
equipment. The Company believes that the technology represented by the equipment
in service and that which it is required to purchase from I/O will not become
obsolete prior to the Company's recovery of its initial investment. However,
there can be no assurance that manufacturers of seismic equipment will not
develop alternative systems that would have competitive advantages over seismic
systems now in use, thus having a potentially adverse effect on the Company's
ability to profitably lease its existing seismic equipment. In the past the
Company has been successful in avoiding material losses caused by technological
obsolescence by selling its older seismic equipment to seismic contractors and
other parties. However, there can be no assurance that the Company will be able
to sell its older seismic equipment in the future.

Vulnerability to Weather Conditions and Seasonal Results

     The first and fourth quarters of the Company's fiscal year have
historically accounted for and are expected to continue to account for a greater
portion of the Company's revenues than do the second and third quarters of its
fiscal year. This seasonality in revenues is primarily due to the increased
seismic survey activity in Canada from October through March, which affects the
Company due to its significant Canadian operations. This seasonal pattern may
cause the Company's 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.

Dependence on Key Suppliers

     The Company has and relies on purchase agreements with I/O, Sercel and
Pelton Company Inc., a manufacturer and supplier of vibrator control
electronics. To a lesser extent, the Company also relies on its suppliers for
lease referrals. The termination of these agreements for any reason, including
any failure by the Company to meet the minimum purchase requirements under the
I/O Agreement, could materially adversely affect the Company's business. While
the Company does not anticipate any difficulty in obtaining seismic equipment
form its suppliers based on past experience, any such occurrence could have a
material adverse effect on the Company's business, financial condition and
results of operations.

Competition

     Competition in the leasing of seismic equipment is fragmented, and the
Company is aware of several companies that engage in seismic equipment leasing.
The Company believes that its competitors, in general, do not have as extensive
a seismic equipment lease pool as does the Company. The Company also believes
that its competitors do not have similar exclusive lease referral agreements
with suppliers. Competition exists to a lesser extent from seismic data
acquisition firms that may lease equipment that is temporarily idle. Under the
I/O Agreement, I/O and its subsidiary, Global Charter Corporation ("Global")
retain the right to continue to (i) lease seismic equipment in certain
situations where the Company and a prospective lessee cannot or do not enter
into a lease, as more fully described in the I/O Agreement, (ii) lease seismic
equipment with a purchase option in North and South America and (iii) lease
seismic equipment outside of North and South America.

     The Company has 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 the
Company. There are also several smaller competitors who, in the aggregate,
generate significant revenue from the sale of seismic survey equipment.


                                       12
<PAGE>   13
Possible Adverse Effect of Anti-Takeover Provisions; Issuance of Preferred Stock

     Certain provisions of the Company's 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 the Board of
Directors but that the Company's 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 the 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 the Company has no shares of preferred stock outstanding and no
present intention to issue any shares of its preferred stock, there can be no
assurance that the Company will not do so in the future.

Limitation on Directors' Liability

     The Company's 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

     On or about April 23, 1998, several class action lawsuits were filed
against the Company and its chief executive officer and then chief financial
officer in the U.S. District Court for the Southern District of Texas, Houston
Division. The first-filed complaint, styled Stanley Moskowitz V. Mitcham
Industries, Inc., Billy F. Mitcham, Jr. and Roberto Rios, alleged violations of
Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Sections 11
and 12(a)(2) of the Securities Act of 1933. On or about September 21, 1998, the
complaints were consolidated into one action. On November 4, 1998, the
plaintiffs filed a consolidated amended complaint ("CAC") which seeks class
action status on behalf of those who purchased the Company's common stock from
June 4, 1997 through March 26, 1998, and damages in an unspecified amount plus
costs and attorney's fees. The CAC alleges that the Company made materially
false and misleading statements and omissions in public filings and
announcements concerning its business and its allowance for doubtful accounts.
The Company believes that the plaintiffs' allegations are without merit and that
there are meritorious defenses to the allegations, and intends to defend the
action vigorously.

Item 6.   Exhibits and Reports on Form 8-K

    (a) Reports on Form 8-K

        None.

     (b) Exhibits

        11   -  Statement Re Computation of Earnings Per Share

        27   -  Financial Data Schedule


                                       13

<PAGE>   14


                                   SIGNATURES

In accordance with 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.

    Date:  December 14, 1998

                                                MITCHAM INDUSTRIES, INC.




                                                /s/ P. Blake Dupuis  
                                                -------------------------     
                                                P. Blake Dupuis,
                                                Chief Financial Officer
                                                (Authorized Officer and 
                                                Principal Accounting Officer)


                                       14
<PAGE>   15


                                INDEX TO EXHIBITS

            Exhibit         
              No.                      Description
            -------                    -----------
               11   -      Statement Re Computation of Earnings Per Share

               27   -      Financial Data Schedule