<PAGE>

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

                                    FORM 10-Q

                                   ----------

(Mark One)

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

                 FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2003

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

                        COMMISSION FILE NUMBER 000-25142

                                   ----------

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


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

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

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

                                   ----------

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

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

    Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 8,795,301 shares of Common
Stock, $0.01 par value, were outstanding as of December 12, 2003.


<PAGE>

                            MITCHAM INDUSTRIES, INC.
                                      INDEX


<Table>
<Caption>
                          PART I. FINANCIAL INFORMATION

<S>                                                                                <C>
Item 1. Financial Statements

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

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk...............  12

Item 4. Controls and Procedures..................................................  12

                           PART II. OTHER INFORMATION

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

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

        Signatures...............................................................  16
</Table>

                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

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

<Table>
<Caption>
                                                                                      October 31,      January 31,
                                                  ASSETS                                 2003             2003
                                                                                     ------------     ------------
                                                                                      (Unaudited)
<S>                                                                                  <C>              <C>
CURRENT ASSETS:
     Cash                                                                            $      4,637     $      5,170
     Accounts receivable, net                                                               6,512            3,544
     Notes receivable                                                                       2,038               12
     Prepaid expenses and other current assets                                                622              627
                                                                                     ------------     ------------
        Total current assets                                                               13,809            9,353
 Seismic equipment lease pool, property and equipment                                      86,369           87,126
 Accumulated depreciation of seismic equipment lease pool,
       property and equipment                                                             (58,854)         (52,183)
 Notes receivable                                                                             552               --
 Other assets                                                                                  11               44
                                                                                     ------------     ------------
          Total assets                                                               $     41,887     $     44,340
                                                                                     ============     ============

                                     LIABILITIES AND SHAREHOLDERS' EQUITY

 CURRENT LIABILITIES:
     Accounts payable                                                                $      1,429     $      2,424
     Current maturities - long-term debt                                                    2,180            2,092
     Equipment notes payable                                                                1,120               --
     Deferred revenue                                                                         780              216
     Wages payable                                                                            460              414
     Accrued expenses and other current liabilities                                         1,216              914
                                                                                     ------------     ------------
          Total current liabilities                                                         7,185            6,060
 Long-term debt                                                                             2,979            4,622
                                                                                     ------------     ------------
          Total liabilities                                                                10,164           10,682
 SHAREHOLDERS' EQUITY:
     Preferred stock, $1.00 par value; 1,000,000 shares authorized;
         none issued and outstanding                                                           --               --
     Common stock, $0.01 par value; 20,000,000 shares authorized;
         9,710,301 and 9,657,801 shares, respectively, issued                                  97               97
     Additional paid-in capital                                                            61,913           61,814
     Treasury stock, at cost, 915,000 shares                                               (4,686)          (4,686)
     Deferred compensation                                                                    (91)              --
     Accumulated deficit                                                                  (27,593)         (22,122)
     Accumulated other comprehensive income (loss)                                          2,083           (1,445)
                                                                                     ------------     ------------
          Total shareholders' equity                                                       31,723           33,658
                                                                                     ------------     ------------
          Total liabilities and shareholders' equity                                 $     41,887     $     44,340
                                                                                     ============     ============
</Table>

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

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

<Table>
<Caption>
                                                                    THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                        OCTOBER 31,                     OCTOBER 31,
                                                                ---------------------------     ---------------------------
                                                                   2003            2002            2003             2002
                                                                -----------     -----------     -----------     -----------
<S>                                                             <C>             <C>             <C>             <C>
REVENUES:
Equipment leasing                                               $     3,970     $     1,758     $    10,574     $     5,840
Equipment sales                                                       3,305             922           6,497           4,896
                                                                -----------     -----------     -----------     -----------
         Total revenues                                               7,275           2,680          17,071          10,736

COSTS AND EXPENSES:
Direct costs - seismic leasing                                          896             343           1,756           1,009
Cost of equipment sales                                               1,555             645           3,300           4,052
General and administrative                                            1,287           1,039           3,818           3,281
Provision (benefit) for doubtful accounts                                25              --              25          (1,704)
Depreciation                                                          3,336           3,603          10,767          11,168
                                                                -----------     -----------     -----------     -----------
         Total costs and expenses                                     7,099           5,630          19,666          17,806
                                                                -----------     -----------     -----------     -----------

OPERATING INCOME (LOSS)                                                 176          (2,950)         (2,595)         (7,070)

Other income (expense) - net                                            (71)            (63)            (91)           (145)
                                                                -----------     -----------     -----------     -----------

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES            105          (3,013)         (2,686)         (7,215)
Benefit for income taxes                                                 --          (1,935)             --          (1,647)
                                                                -----------     -----------     -----------     -----------
NET INCOME (LOSS) FROM CONTINUING OPERATIONS                            105          (1,078)         (2,686)         (5,568)
                                                                -----------     -----------     -----------     -----------

Loss from discontinued operations (including impairment
   charge of $700)                                                       --            (788)         (2,792)         (1,600)

NET INCOME (LOSS)                                               $       105     $    (1,866)    $    (5,478)    $    (7,168)
                                                                ===========     ===========     ===========     ===========

Income (loss) per common share from continuing operations
     Basic and diluted                                          $      0.01     $     (0.12)    $     (0.31)    $     (0.64)

Loss per common share from discontinued operations
     Basic and diluted                                          $        --     $     (0.09)    $     (0.32)    $     (0.18)

Net income (loss) per common share - basic and diluted          $      0.01     $     (0.21)    $     (0.63)    $     (0.82)

Shares used in computing income (loss) per common share:
     Basic                                                        8,795,000       8,745,000       8,763,000       8,749,000
     Dilutive effect of common stock equivalents                     78,000              --              --              --
                                                                -----------     -----------     -----------     -----------
     Diluted                                                      8,873,000       8,745,000       8,763,000       8,749,000
                                                                ===========     ===========     ===========     ===========
</Table>

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

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

<Table>
<Caption>
                                                                                NINE MONTHS ENDED
                                                                                    OCTOBER 31,
                                                                             -------------------------
                                                                                2003           2002
                                                                             ----------     ----------
<S>                                                                          <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                     $   (5,478)    $   (7,168)
Adjustments to reconcile net loss to net cash
       provided by (used in) operating activities:
         Depreciation                                                            11,057         11,534
         Provision (benefit) for doubtful accounts, net of charge offs               73         (1,893)
         Impairment of DSI assets                                                   700             --
Changes in:
         Trade accounts receivable                                               (5,647)         2,180
         Accounts payable, accrued expenses and other current liabilities           (83)        (6,287)
         Other, net                                                                 139           (340)
                                                                             ----------     ----------
              Net cash provided by (used in) operating activities                   761         (1,974)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of seismic equipment held for lease                               (2,711)        (3,906)
     Purchases of property and equipment                                            (96)          (282)
     Disposal of lease pool equipment                                             3,077          3,786
                                                                             ----------     ----------
         Net cash provided by (used in) investing activities                        270           (402)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from long-term debt                                                    --          2,000
     Payments on short-term borrowings                                           (1,564)        (1,357)
     Purchases of common stock for treasury                                          --            (15)
                                                                             ----------     ----------
         Net cash provided by (used in) financing activities                     (1,564)           628
                                                                             ----------     ----------

NET CHANGE IN CASH                                                                 (533)        (1,748)
CASH, BEGINNING OF PERIOD                                                         5,170          8,244
                                                                             ----------     ----------
CASH, END OF PERIOD                                                          $    4,637     $    6,496
                                                                             ==========     ==========

NON CASH ITEMS:
     Financed seismic equipment purchases                                    $    1,120     $       --
</Table>

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

                                       5
<PAGE>

                            MITCHAM INDUSTRIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION

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

2.       ORGANIZATION

         Mitcham Industries, Inc., a Texas corporation, was incorporated in
         1987. Since its organization, the Company has primarily been engaged in
         the leasing and sales of seismic equipment to the seismic industry
         worldwide. The Company consists of the operations of Mitcham
         Industries, Inc. and its three wholly-owned subsidiaries, Mitcham
         Canada Ltd., Seismic Asia Pacific Pty Ltd., and Drilling Services, Inc.
         ("DSI"). At October 31, 2003, the operations of DSI have been
         classified as discontinued operations. See Note 7.

3.       EARNINGS PER SHARE

         For the nine months ended October 31, 2003 and 2002, the following
         common stock equivalents were excluded from the earnings per share
         calculations due to their anti-dilutive effect on EPS. There were no
         common stock equivalents for the three months ended October 31, 2002.

<Table>
<Caption>
                                                   Nine Months Ended October 31,
                                                   ----------------------------
                                                      2003             2002
                                                   ------------    ------------
<S>                                                <C>             <C>
             Stock options                               31,000          26,000
             Warrants                                        --              --
                                                   ------------    ------------
                 Total anti-dilutive securities          31,000          26,000
                                                   ============    ============
</Table>

4.       COMPREHENSIVE INCOME

         SFAS 130 "Reporting Comprehensive Income" establishes standards for the
         reporting and display of comprehensive income and its components in a
         full set of general-purpose financial statements. Comprehensive income
         generally represents all changes in stockholders' equity (deficit)
         during the period except those resulting from investments by, or
         distributions to, stockholders. The Company has comprehensive income
         related to the change in its foreign currency translations account as
         follows:

<Table>
<Caption>
                                        Three Months Ended October 31,        Nine Months Ended October 31,
                                        ------------------------------       -------------------------------
                                            2003              2002               2003               2002
                                        ------------      ------------       ------------       ------------
<S>                                     <C>               <C>                <C>                <C>
        Net income (loss)               $    105,000      $ (1,866,000)      $ (5,478,000)      $ (7,168,000)
        Change in foreign currency
          translation adjustment           1,320,000           398,000          3,527,000            569,000
                                        ------------      ------------       ------------       ------------
        Comprehensive income            $  1,425,000      $ (1,468,000)      $ (1,951,000)      $ (6,599,000)
                                        ============      ============       ============       ============
</Table>

                                       6
<PAGE>
5.       RECLASSIFICATIONS

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

6.       STOCK OPTIONS

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


<Table>
<Caption>
                                                                  Three Months Ended                  Nine Months Ended
                                                                      October 31,                         October 31,
                                                             ----------------------------        ----------------------------
                                                                2003              2002              2003              2002
                                                             ----------        ----------        ----------        ----------
<S>                                                          <C>               <C>               <C>               <C>
PRO FORMA IMPACT OF FAIR VALUE METHOD (FAS 148)
Reported net income (loss) from continuing operations
  attributable to common shareholders                        $      105        $   (1,078)       $   (2,686)       $   (5,568)
Less:  fair value impact of employee stock compensation            (172)             (100)             (350)             (322)
                                                             ----------        ----------        ----------        ----------
Pro forma net income (loss) from continuing operations
  attributable to common shareholders                        $      (67)       $   (1,178)       $   (3,036)       $  (5, 890)
                                                             ==========        ==========        ==========        ==========
Reported net income (loss)                                   $      105        $   (1,866)       $   (5,478)       $   (7,168)
Less:  fair value impact of employee stock compensation            (172)             (100)             (350)             (322)
                                                             ----------        ----------        ----------        ----------
Pro forma net income (loss)                                  $      (67)       $   (1,966)       $   (5,828)       $   (7,490)
                                                             ==========        ==========        ==========        ==========

INCOME (LOSS) PER COMMON SHARE
Basic and diluted - as reported net income (loss) from
  continuing operations                                      $     0.01        $    (0.12)       $    (0.31)       $    (0.64)
Basic and diluted - pro forma net income (loss) from
  continuing operations                                      $    (0.01)       $    (0.13)       $    (0.35)       $    (0.67)
Basic and diluted - as reported net income (loss)            $     0.01        $    (0.21)       $    (0.63)       $    (0.82)
Basic and diluted - pro forma net income (loss)              $    (0.01)       $    (0.22)       $    (0.67)       $    (0.86)

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

7.       DISCONTINUED OPERATIONS

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

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


                                       7
<PAGE>

7.       DISCONTINUED OPERATIONS (continued)

<Table>
<Caption>
                           Three Months Ended October 31,      Nine Months Ended October 31,
                           -----------------------------      ------------------------------
                               2003             2002              2003              2002
                           ------------     ------------      ------------      ------------
<S>                        <C>              <C>               <C>               <C>
           Revenues        $     22,000     $  1,361,000      $  4,524,000      $  2,728,000

           Pretax loss     $         --     $   (788,000)     $ (2,792,000)     $ (1,600,000)
</Table>

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

OVERVIEW

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

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

SEASONALITY

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

RESULTS OF OPERATIONS

For the three months ended October 31, 2003 and 2002

         For the quarter ended October 31, 2003, consolidated revenues increased
171% to $7.3 million from $2.7 million in the corresponding period of the prior
year. Of this increase, approximately $.5 million is attributable to the
inclusion of operations of our subsidiary, SAP, which was acquired in December
2002. Our core equipment leasing revenues increased approximately $2.2 million
from the prior year, largely due to three significant new lease contracts that
began earning revenues during the quarter. During the quarter ended October 31,
2003, direct costs of seismic leasing totaled $.9 million, which was $.6 million
greater than the prior year's amount. Direct costs primarily consist of
sublease, freight and repair expenses. Foreign currency translation rates had
the effect of increasing third quarter revenues by approximately $310,000. In
each instance in which we state the effect of foreign currency translation
rates, we mean that there was the indicated increase or decrease as a result of
applying the average applicable foreign currency rates in effect in the current
three and nine month periods versus applying the average applicable foreign
currency rates in effect in the corresponding periods of the prior year. In the
current three and nine month periods, the application of foreign currency
translation rates had the effect of increasing income and expense items, to
reflect the impact of the strengthening of various foreign currencies against
the U.S. dollar.

         For the quarter ended October 31, 2003, we recorded approximately $3.3
million in equipment sales and $1.6 million in cost of sales, generating a gross
margin of 53%. Sales made during the current quarter consisted mainly of older
equipment. In the prior year, we recorded $.9 million in equipment sales and $.6
million in cost of


                                       8
<PAGE>

sales that generated a gross margin of 30%. Foreign currency translation rates
had the effect of increasing third quarter sales and cost of sales by
approximately $200,000 and $105,000, respectively. Gross margins on equipment
sales may vary significantly between periods due to the mix of new versus older
equipment being sold.

           General and administrative expenses for the quarter ended October 31,
2003, increased $248,000 from the corresponding prior year period, $167,000 of
which is attributable to the inclusion of SAP in the current period.

         Depreciation expense for the quarter ended October 31, 2003, decreased
$267,000 to $3.3 million from $3.6 million in the same period last year. Foreign
currency translation rates had the effect of increasing depreciation expense
during the quarter ended October 31, 2003, by approximately $225,000. The
current quarter's expense decreased due to certain equipment reaching the end of
its depreciable life during the year coupled with the sale of assets with
remaining depreciable life, but was partly offset by capital additions made
during the fiscal year that commenced depreciating in the quarter.

         We recorded net income from continuing operations for the quarter ended
October 31, 2003, in the amount of $.1 million, compared to a net loss from
continuing operations of $1.1 million for the same period of the previous year.
Additionally, the net loss from discontinued operations in the current quarter
was nil, versus $.8 million in the comparable quarter of the prior year.

For the nine months ended October 31, 2003 and 2002

         For the nine months ended October 31, 2003, consolidated revenues
increased 59% to $17.1 million from $10.7 million in the corresponding period of
the prior year. Approximately $2.0 million of this increase is attributable to
the inclusion of operations of our new subsidiary, SAP, which was acquired in
December 2002, and the remaining increase is largely due to the inclusion of
several significant lease contracts that began earning revenues during the
current period coupled with one large equipment sale. Our core equipment leasing
revenues increased approximately $4.7 million from the prior year and our
equipment sales increased approximately $1.6 million. During the nine months
ended October 31, 2003, direct costs of seismic leasing totaled $1.8 million,
which was approximately $.7 million greater than the prior year's amount. Direct
costs of seismic leasing consist primarily of sublease and commission expenses
and freight and repair costs. Foreign currency translation rates had the effect
of increasing October 31, 2003 revenues by approximately $800,000.

         For the nine months ended October 31, 2003, we recorded approximately
$6.5 million in equipment sales and $3.3 million in cost of sales, generating a
gross margin of 49%. Sales made during the current period consisted mainly of
older equipment. In the prior year, we recorded $4.9 million in equipment sales
and $4.1 million in cost of sales that generated a gross margin of 17%. Foreign
currency translation rates had the effect of increasing sales and cost of sales
during the period by approximately $261,000 and $129,000, respectively. Gross
margins on equipment sales may vary significantly between periods due to the mix
of new versus older equipment being sold.

         General and administrative expenses for the nine months ended October
31, 2003, increased $537,000 from the corresponding prior year period, $465,000
of which is due to the inclusion of the results of SAP in the current period.

         Depreciation expense for the nine months ended October 31, 2003,
decreased $401,000, or 4%, to $10.8 million from $11.2 million for the same
period last year. Foreign currency translation rates had the effect of
increasing depreciation expense during the nine months ended October 31, 2003,
by approximately $807,000. The decrease in depreciation expense is largely due
to the fact that certain equipment reached the end of its depreciable life
during the current year coupled with the sales of assets with remaining
depreciable life, partially offset by new additions to the lease pool that began
depreciating during the current period.

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

                                       9
<PAGE>

         We recorded a net loss from continuing operations for the nine months
ended October 31, 2003, in the amount of $2.7 million, compared to a net loss
from continuing operations of $5.6 million for the same period of the previous
year. Additionally, during the nine months ended October 31, 2003, the net loss
from discontinued operations was $2.8 million versus $1.6 million in the prior
year.

LIQUIDITY AND CAPITAL RESOURCES

         As of October 31, 2003, we had net working capital of approximately
$6.6 million as compared to net working capital of $3.3 million at January 31,
2003. Historically, our principal liquidity requirements and uses of cash have
been for capital expenditures and working capital and principal sources of cash
have been cash flows from operations and issuances of equity securities. Net
cash provided by operating activities for the nine months ended October 31,
2003, was $.8 million, as compared to net cash used in operating activities of
$2.0 million for the nine months ended October 31, 2002. Net cash used in
financing activities for the nine months ended October 31, 2003, was $1.6
million, as compared to net cash provided by financing activities of $.6 million
in the nine months ended October 31, 2002.

         During the nine months ended October 31, 2003, we committed to purchase
$1.125 million of land data acquisition equipment by December 31, 2003 and $2.25
million of land data acquisition equipment by December 31, 2004. During the nine
months ended October 31, 2003, we fulfilled our 2003 purchase commitment. In a
related transaction, the equipment manufacturer financed $834,000 of the
purchase price. The note agreement is payable in 12 monthly payments in the
approximate amount of $73,000 beginning in August 2003 and bears interest at the
rate of 8%.

         Additionally, during the quarter ended October 31, 2003, we purchased
$500,000 of seismic equipment from another manufacturer, which was financed by
the manufacturer. The note agreement is payable in 12 monthly payments in the
approximate amount of $16,000 with a balloon payment due in October 2004 in the
amount of $335,000. The note bears interest at the rate of 8%. We expect that
cash on hand and cash flows from operations will be sufficient to meet these
commitments.

         At October 31, 2003, we had trade accounts receivable of $1.1 million
that were more than 90 days past due. At October 31, 2003, our allowance for
doubtful accounts was approximately $.8 million, which we believe is sufficient
to cover any losses in our trade accounts receivable.

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

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

                                       10
<PAGE>

         Capital expenditures for the nine months ended October 31, 2003,
totaled approximately $2.8 million compared to capital expenditures of $4.2
million for the corresponding period in the prior year. The decline in our
current capital expenditures from prior years is a reflection of a continuing
decline in seismic data acquisition activity. Unlike in prior years when the
majority of equipment we purchased was based on anticipated demand for our
services, the majority of our capital expenditures for the 2004 fiscal year was
made to fulfill a specific lease contract or was purchased for ultimate resale
to a specific customer. At the present time, we believe that cash on hand and
cash provided by future operations will be sufficient to fund our anticipated
capital and liquidity needs over the next twelve months. However, should demand
warrant, we may pursue additional borrowings to fund capital expenditures.

CRITICAL ACCOUNTING POLICIES

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

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

Revenue Recognition

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

Allowance for Doubtful Accounts

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

Long-Lived Asset Impairment

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

Income Taxes

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

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

                                       11
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4.  CONTROLS AND PROCEDURES

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

FORWARD-LOOKING STATEMENTS AND RISK FACTORS

     Certain information contained in this Quarterly Report on Form 10-Q
(including statements contained in Part I, Item 2. "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and in Part II, Item
1. "Legal Proceedings"), as well as other written and oral statements made or
incorporated by reference from time to time by us and our representatives in
other reports, filings with the Securities and Exchange Commission, press
releases, conferences, or otherwise, may be deemed to be forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. This information includes, without limitation, statements concerning our
future financial position and results of operations; planned capital
expenditures; liquidity and capital resources; business strategy and other plans
for future operations; the future mix of revenues from segments and business;
commitments and contingent liabilities; and future demand for our services and
predicted improvement in energy industry and seismic service industry
conditions. When used in this report, the words "anticipate," "believe,"
"estimate," "expect," "may," and similar expressions, as they relate to the
Company and our management, identify forward-looking statements. The actual
results of future events described in such forward-looking statements could
differ materially from the results described in the forward-looking statements
due to the risks and uncertainties set forth below and elsewhere within this
Quarterly Report on Form 10-Q.

RECOVERY OF DEMAND FOR LAND BASED SEISMIC DATA NOT ASSURED

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

LOSS OF SIGNIFICANT CUSTOMERS WILL ADVERSELY AFFECT US

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

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

     We had approximately $9.1 million of customer accounts and notes receivable
at October 31, 2003, of which $1.1 million is over ninety days past due. At
October 31, 2003, we had an allowance of $.8 million to cover losses

                                       12
<PAGE>

in our receivable balances. Significant payment defaults by our customers in
excess of the allowance would have a material adverse effect on our financial
position and results of operations.

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

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

WE MUST CONTINUALLY OBTAIN ADDITIONAL LEASE CONTRACTS

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

DEPENDENCE ON KEY PERSONNEL

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

OUR SEISMIC LEASE POOL IS SUBJECT TO TECHNOLOGICAL OBSOLESCENCE

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

WEATHER CONDITIONS CAUSE SEASONAL RESULTS

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

                                       13
<PAGE>

COMPETITION

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

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

VOLATILE STOCK PRICES AND NO PAYMENT OF DIVIDENDS

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

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

     Certain provisions of our Articles of Incorporation and the Texas Business
Corporation Act may tend to delay, defer or prevent a potential unsolicited
offer or takeover attempt that is not approved by our Board of Directors but
that our shareholders might consider to be in their best interest, including an
attempt that might result in shareholders receiving a premium over the market
price for their shares. Because our Board of Directors is authorized to issue
preferred stock with such preferences and rights as it determines, it may afford
the holders of any series of preferred stock preferences, rights or voting
powers superior to those of the holders of common stock. Although we have no
shares of preferred stock outstanding and no present intention to issue any
shares of our preferred stock, there can be no assurance that we will not do so
in the future.

LIMITATION ON DIRECTORS' LIABILITY

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

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

                                       14
<PAGE>
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a)  EXHIBITS

         The following documents are filed as exhibits to this Report:

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

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

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

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

    (b)  REPORTS ON FORM 8-K

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

         During the quarter ended October 31, 2003, we filed a Current Report on
         Form 8-K related to the Company's sale of the operating assets of its
         wholly-owned subsidiary, Drilling Services, Inc.

                                       15
<PAGE>

                                   SIGNATURES

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

                                   MITCHAM INDUSTRIES, INC.


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

                                       16
<PAGE>
                                 EXHIBIT INDEX


         The following documents are filed as exhibits to this Report:


         EXHIBITS                  DESCRIPTION OF EXHIBITS


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

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

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

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