<PAGE>   1

                                  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 APRIL 30, 1999

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

                        COMMISSION FILE NUMBER 001-13490
              ====================================================

                            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.)

                             44000 HIGHWAY 75 SOUTH
                             HUNTSVILLE, TEXAS 77340
                    (Address of principal executive offices)

                                 (409) 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 9,551,112 shares of Common
Stock, $0.01 par value, were outstanding as of May 24, 1999.


<PAGE>   2

                            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...........................................   7

Item 3.     Quantitative and Qualitative Disclosures About Market Risk..........  10

                           PART II. OTHER INFORMATION

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

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

            Signatures..........................................................  14
</TABLE>



<PAGE>   3


PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


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


<TABLE>
<CAPTION>

                                                                       April 30,        January 31,
                                     ASSETS                              1999              1999
                                     ------                          -------------    -------------
                                                                      (Unaudited)
<S>                                                                  <C>              <C>
CURRENT ASSETS:
    Cash                                                             $       1,461    $       2,525
    Marketable securities, at market                                        18,435           17,335
    Accounts receivable, net                                                 5,889            7,880
    Inventory                                                                1,765            1,191
    Income tax receivable                                                      257             --
    Deferred tax asset                                                         483              483
    Prepaid expenses and other current assets                                  145               88
                                                                     -------------    -------------
       Total current assets                                                 28,435           29,502
    Seismic equipment lease pool, property and equipment                    65,128           65,116
    Accumulated depreciation of seismic equipment lease pool,
      property and equipment                                               (32,511)         (31,472)
    Deferred tax asset                                                       4,028            4,028
                                                                     -------------    -------------
         Total assets                                                $      65,080    $      67,174
                                                                     =============    =============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

CURRENT LIABILITIES:
    Accounts payable                                                 $         712    $         668
    Deferred revenue                                                            38              131
    Accrued liabilities and other current liabilities                          509              806
    Income taxes payable                                                      --                817
                                                                     -------------    -------------
         Total current liabilities                                           1,259            2,422

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
        9,545,658 and 9,545,658 shares, respectively, issued and
        outstanding                                                             95               95
    Additional paid-in capital                                              61,459           61,459
    Retained earnings                                                        3,002            4,244
    Cumulative translation adjustment                                         (735)          (1,046)
                                                                     -------------    -------------
         Total shareholders' equity                                         63,821           64,752
                                                                     -------------    -------------
         Total liabilities and shareholders' equity                  $      65,080    $      67,174
                                                                     =============    =============
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       3

<PAGE>   4

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

<TABLE>
<CAPTION>

                                                          THREE MONTHS ENDED
                                                               APRIL 30,
                                                     ----------------------------
                                                         1999            1998
                                                     ------------    ------------
<S>                                                  <C>             <C>
REVENUES:
Short-term leasing                                   $      1,298    $      5,890
Leasing under lease/purchase agreements                       184           1,200
Equipment sales under lease/purchase agreements              --             7,336
Other equipment sales                                         163           1,027
                                                     ------------    ------------
         Total revenues                                     1,645          15,453

COSTS AND EXPENSES:
Direct costs                                                   96             697
Cost of sales under lease/purchase agreements                  11           7,343
Cost of other equipment sales                                 109             390
General and administrative                                  1,092           1,218
Provision for doubtful accounts                                50             608
Depreciation                                                2,251           2,712
                                                     ------------    ------------
         Total costs and expenses                           3,609          12,968
                                                     ------------    ------------

OPERATING INCOME (LOSS)                                    (1,964)          2,485

Other income - net                                            142             101
                                                     ------------    ------------

INCOME (LOSS) BEFORE INCOME TAXES                          (1,822)          2,586
PROVISION (BENEFIT) FOR INCOME TAXES                         (580)            906
                                                     ------------    ------------
NET INCOME (LOSS)                                    $     (1,242)   $      1,680
                                                     ============    ============

Earnings (loss) per common share
     Basic                                           $       (.13)   $        .18
     Diluted                                         $       (.13)   $        .17
                                                     ============    ============

Shares used in computing earnings per common share
    Basic                                               9,546,000       9,437,000
    Dilutive effect of common stock equivalents              --           320,000
                                                     ------------    ------------
    Diluted                                             9,546,000       9,757,000
                                                     ============    ============
</TABLE>


       The accompanying notes are an integral part of these consolidated
                             financial statements.


                                        4


<PAGE>   5

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

                                                                          THREE MONTHS ENDED
                                                                              APRIL 30,
                                                                    ----------------------------
                                                                        1999            1998
                                                                    ------------    ------------
<S>                                                                 <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                   $     (1,242)   $      1,680
Adjustments to reconcile net income (loss) to net
     cash flows provided by operating activities:
         Depreciation                                                      2,251           2,712
         Provision for doubtful accounts, net of charge offs                 (91)            441
         Deferred income taxes                                              --               361
         Inventory                                                             2            --
         Trade accounts receivable                                         2,082          (5,427)
         Federal income taxes                                             (1,074)           --
         Accounts payable and other current liabilities                     (346)         (7,888)
         Other assets                                                        (56)           (408)
                                                                    ------------    ------------
              Net cash provided by (used in) operating activities          1,526          (8,529)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of seismic equipment held for lease                        (1,570)         (4,415)
     Purchases of property and equipment                                     (26)            (88)
     Sale (purchase) of marketable securities                             (1,100)            155
     Disposal of lease pool equipment                                        106           7,043
                                                                    ------------    ------------
         Net cash provided by (used in) investing activities              (2,590)          2,695

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of common stock upon exercise of
       warrants and options                                                 --                40
                                                                    ------------    ------------
         Net cash provided by financing activities                          --                40

NET (DECREASE) IN CASH                                                    (1,064)         (5,794)
CASH, BEGINNING OF PERIOD                                                  2,525           7,498
                                                                    ------------    ------------
CASH, END OF PERIOD                                                 $      1,461    $      1,704
                                                                    ============    ============

SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid for:
         Interest                                                   $          9    $        143
         Income taxes                                               $        500    $      2,835
                                                                    ============    ============
     Equipment purchases in accounts payable                        $       --      $     10,645
                                                                    ============    ============
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       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-K for the year ended January 31, 1999. In the
         opinion of the Company, all adjustments, consisting only of normal
         recurring adjustments, necessary to present fairly the financial
         position as of April 30, 1999; the results of operations for the three
         months ended April 30, 1999 and 1998; and cash flows for the three
         months ended April 30, 1999 and 1998 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, 2000.

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"),
         replacing the parties' Exclusive Lease Referral Agreement, under which
         the Company had completely fulfilled its obligation. Under the I/O
         Agreement, the Company agreed to purchase a minimum of between $90 and
         $100 million of I/O products (after discounts) in stated increments
         over a five-year term. In addition, I/O agreed to refer rental
         inquiries from customers worldwide to the Company during the term of
         the agreement, and to not lease products covered by the I/O Agreement,
         except in limited circumstances. 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 was subject to existing short-term
         lease agreements.

         On April 26, 1999, the Company and I/O agreed to terminate the I/O
         Agreement, thereby releasing the Company from its obligation to make
         future minimum purchases. As a result of the termination, I/O is no
         longer obligated to refer rental inquiries to the Company and is free
         to enter the short-term leasing business.

         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), Rule 10b-5 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. On or about January 15, 1999,
         the Company filed a motion to dismiss the CAC. The motion is now fully
         briefed and the Company is awaiting a ruling by the Court.


                                       6

<PAGE>   7



         The Company is also involved in claims and legal actions arising in the
         ordinary course of business. In the opinion of management, the ultimate
         disposition of these matters will not have a material adverse effect on
         the Company's financial position, results of operations or liquidity.


3.       RECLASSIFICATIONS

         Certain 1998 amounts have been reclassified to conform to 1999
presentation.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

OVERVIEW

         The Company's sales 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. The Company believes that during the
latter half of 1998, the exploration and production companies anticipated an
extended period of low oil and gas prices and began to reduce their intended
levels of expenditures for seismic data. Consolidation within the oil industry
has also delayed seismic data acquisition projects.

         Until the exploration and production companies can forecast with
reasonable certainty that future oil prices will stabilize, seismic data
acquisition activity is not expected to improve. Additional declines in oil
prices, or expectations that the recent improvement in oil prices will not hold,
could cause the Company's customers to further reduce their spending and further
adversely affect the Company's results of operation and financial condition.

         The Company leases and sells seismic data acquisition 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 April 30, 1999 were for a term of one year or less. Seismic equipment
held for lease is carried at cost, net of accumulated depreciation.

         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 somewhat susceptible
to weather patterns in certain geographic regions. There is some seasonality to
the Company's expected lease revenues from customers operating in Canada, where
a significant percentage of 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 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, due to the significant
decrease in world oil prices in 1998, demand for the Company's services both in
Canada and worldwide declined dramatically in the fourth quarter of fiscal 1999
and has remained at historically low levels throughout the first quarter of
fiscal 2000.

                                       7

<PAGE>   8



RESULTS OF OPERATIONS

For the three months ended April 30, 1999 and 1998

         For the first quarter ended April 30, 1999 total revenues decreased 90%
to $1.6 million from $15.5 million in the corresponding period of the prior
year. This decline reflects a significant decrease in all categories of revenues
compared to the prior year's first quarter revenues as a result of decreased
capital expenditure budgets throughout the oil and gas industry, coupled with a
decrease in customers exercising the purchase option of lease/purchase
contracts. Included in prior year's first quarter revenues is a sales
transaction with one customer totaling approximately $7.0 million.

         Equipment sales and leasing revenues under lease/purchase agreements
generated an aggregate first quarter gross margin of 94% compared to 14% for the
corresponding period of the prior year. This increase in gross margin is
primarily a result of the Company not recording any equipment sales under
lease/purchase agreements during the quarter ended April 30, 1999 as compared to
prior year. The Company accounts for the lease portion and the sales portion of
lease/purchase agreements 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 agreements, management assesses the profitability of these
transactions by combining lease and sales revenues.

         The current quarter's other equipment sales generated a gross margin of
33% as compared to 62% for the quarter ended April 30, 1998. Gross margins on
equipment sales may vary significantly between periods due to the mix of new
seismic equipment added to the lease pool versus older, more depreciated seismic
equipment being sold.

         General and administrative expenses decreased $126,000 from the
corresponding prior year period primarily due to a decrease in advertising,
convention and consulting expenses, partially offset by an increase in
compensation expense and expense related to an ongoing Texas sales tax audit.

         Depreciation expense for the quarter ended April 30, 1999 decreased
$461,000, or 17%, to $2.3 million from $2.7 million for the same period last
year. The decrease is primarily the result of the lease pool asset impairment
recorded in fiscal 1999, offset partially by a larger seismic equipment lease
pool, on a cost basis, as compared to April 30, 1998. The Company's seismic
equipment lease pool increased $16.3 million, on a cost basis, to $63.6 million
at April 30, 1999, from $47.3 million at April 30, 1998.

         The Company recorded a net loss for the first quarter ended April 30,
1999 in the amount of $1,242,000, compared to net income of $1,680,000 for the
same period of the previous year.


LIQUIDITY AND CAPITAL RESOURCES

         As of April 30, 1999, the Company had net working capital of
approximately $27.2 million as compared to net working capital of $27.1 million
at January 31, 1999. Historically, the Company's principal liquidity
requirements and uses of cash have been for capital expenditures and working
capital and our principal sources of cash have been cash flows from operations
and issuances of equity securities. Net cash provided by operating activities
for the quarter ended April 30, 1999 was $1.5 million, as compared to net cash
used in operating activities of $8.5 million for the quarter ended April 30,
1998.

         At April 30, 1999, the Company had trade accounts receivable of $5.1
million that were more than 90 days past due. As of April 30, 1999, the
Company's allowance for doubtful accounts was approximately $1.5 million, which
management believes is sufficient to cover any losses in its trade accounts
receivable, including any losses in its international customers' trade accounts.

                                       8

<PAGE>   9

         The Company has a working capital revolving line of credit of up to $15
million from Bank One (the "Revolver"). Interest on advances under the Revolver
are payable monthly at a variable rate which is based upon either, at the
Company's option, LIBOR or Bank One's base lending rate. The LIBOR rate, if
elected, ranges between LIBOR plus 1.75% and LIBOR plus 2.75% depending upon the
debt service coverage ratio the Company maintains. Similarly, the Bank One base
lending rate, if elected, ranges between the base rate minus 0.25% and the base
rate plus 0.25%, again depending upon the Company's debt service coverage ratio.
Additionally, the Company pays Bank One each fiscal quarter a fee equal to 0.25%
of the average daily unused portion of the Revolver calculated for the previous
quarter. Advances are limited to the total of 80% of eligible accounts
receivable and 50% of all eligible lease pool equipment. The Revolver contains
restrictions, among others, on the ability of the Company to incur indebtedness
and pay dividends and requires the Company to meet certain financial covenants,
including a minimum tangible net worth, a debt service coverage ratio, aging of
accounts receivable and net income. The Revolver will expire on December 8,
1999, at which time any unpaid principal amount will be due and payable in full.
As of April 30, 1999, there were no amounts outstanding under the Revolver.

         As of April 30, 1999, the Company was in violation of a certain
covenant of the Revolver, although there were no amounts outstanding under the
Revolver. The Company obtained a waiver of the covenant from Bank One; however,
Bank One will not make any advances under the Revolver until the Company: (i) is
in compliance with the relevant covenant; and (ii) grants Bank One a first
priority secured interest in substantially all of the Company's assets.

         Capital expenditures for the quarter ended April 30, 1999 totaled
approximately $1.6 million compared to capital expenditures of $5.2 million for
the corresponding period in the prior year. Management believes that cash on
hand, cash provided by future operations and funds available from its commercial
lender will be sufficient to fund its anticipated capital and liquidity needs
over the next twelve months.


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 either Year 2000 compliant or compatible. 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. As of the date of this report, the Company
has identified lease pool equipment requiring approximately $10,000 of
expenditures to become Year 2000 compatible.

                                       9


<PAGE>   10

Risks

         As the Company has not 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.
Under a "most likely worst-case Year 2000 scenario," 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 by October 31, 1999.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company operates 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. The Company typically denominates the majority
of its lease and sales contracts in U.S. dollars to mitigate the exposure to
fluctuations in foreign currencies.


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 Operation" and in Part II, Item
1. "Legal Proceedings"), as well as other written and oral statements made or
incorporated by reference from 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," "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 the results described in the forward-looking
statements due to the risks and uncertainties set forth below and within this
Quarterly Report on Form 10-Q generally.

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. The continuing downturn
in the energy services sector has resulted in a sharp decline in demand for the
Company's services. Recent increases in the price of oil have not yet countered
decreased demand. Any future fluctuations in the price of oil and gas in
response to relatively minor changes in the supply and demand for oil and gas
will continue to have a major effect on exploration, production and development
activities and thus, on the demand for the Company's services.

                                       10

<PAGE>   11

CREDIT RISK FROM CUSTOMER CONCENTRATION AND RISK FROM 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, 1997, 1998 and 1999, the single largest customer accounted for
approximately 15%, 20% and 36%, respectively, of the Company's total revenues.
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., 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
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.

RISKS RELATED TO TECHNOLOGICAL OBSOLESCENCE

         The Company has 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 the Company's ability to profitably lease and sell its
existing seismic equipment.

         During the fiscal year ended January 31, 1999, the Company recorded a
pretax asset impairment charge of $15.1 million. Included in this charge is a
$900,000 lower of cost or market adjustment related to certain seismic equipment
assets classified as inventory. The non-cash asset impairment charge was
recorded in accordance with SFAS No. 121, which requires that long-lived assets
and certain identifiable intangibles held and used by the Company be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The severity as well as the
duration of the current oil and gas industry downturn is such an event. The
Company's review of its long-lived assets indicated that the carrying value of
certain of the Company's seismic equipment lease pool and inventory assets was
more than the estimated undiscounted future net cash flows. As such, under SFAS
No. 121, the Company wrote down those assets to their estimated fair market
value based on discounted cash flows using an effective rate of 8.0%.
Undiscounted future

                                       11

<PAGE>   12

net cash flows were calculated based on individual types of seismic equipment
using projected future utilization and lease rates over the estimated remaining
useful lives of the assets. The Company's seismic equipment assets have been
historically depreciated over 3-10 years. The impairment was recorded based on
certain estimates and projections as stipulated in SFAS No. 121. There can be no
assurance that the Company will not record asset impairment charges under SFAS
No. 121 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 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. However, due to the significant
decrease in world oil prices in 1998, demand for the Company's services both in
Canada and worldwide declined dramatically in the fourth quarter of fiscal 1999
and has remained at historically low levels throughout the first quarter of
fiscal 2000. 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 continues to rely on purchase agreements with the
Sercel subsidiaries of Compagnie Generale de Geophysique and Pelton Company,
Inc. To a lesser extent, the Company also relies on its suppliers for lease
referrals. The termination of these agreements for any reason could materially
adversely affect the Company's business. While the Company does not anticipate
any difficulty in obtaining seismic equipment from 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 contractors that may lease equipment that is temporarily idle.

         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.

RISK FROM VOLATILE STOCK PRICES AND NO PAYMENT OF DIVIDENDS

         Due to current energy industry conditions, energy and energy service
company stock prices, including the Company's stock price, have been extremely
volatile. Such stock price volatility could adversely affect the Company's
business operations by, among other things, impeding its ability to attract and
retain qualified personnel and to obtain additional financing if such financing
is ever needed. The Company has historically not paid dividends on its common
stock and does not anticipate paying dividends in the foreseeable future. In
addition, the Company's bank loan agreement restricts the payment of dividends.

POSSIBLE ADVERSE EFFECT OF ANTI-TAKEOVER PROVISIONS; POTENTIAL 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

                                       12

<PAGE>   13

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), Rule 10b-5 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.
On or about January 15, 1999, the Company filed a motion to dismiss the CAC. The
motion is now fully briefed and the Company is awaiting a ruling by the Court.

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

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:  June 14,1999                          /s/ P. BLAKE DUPUIS
                                             ----------------------------------
                                             P. BLAKE DUPUIS,
                                             CHIEF FINANCIAL OFFICER
                                             (AUTHORIZED OFFICER AND PRINCIPAL
                                             ACCOUNTING OFFICER)


<PAGE>   15

                               INDEX TO EXHIBITS
<TABLE>
<CAPTION>

EXHIBIT
  NO.                              DESCRIPTION
-------                            -----------
<S>     <C>    <C>
  11     -     Statement Re Computation of Earnings Per Share

  27     -     Financial Data Schedule
</TABLE>