##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    January 31, 2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    000-25142
 Mitcham Industries,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Texas(State or other jurisdiction
    of
    incorporation or organization)

76-0210849(I.R.S. Employer
    Identification No.)8141 SH 75 South
    P.O. Box 1175
    Huntsville, Texas(Address of principal
    executive offices)

77342(Zip Code)   936-291-2277
 (Registrants telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class of Stock

Name of Each Exchange on Which RegisteredCommon Stock  $0.01 par value per share

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T
  o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      Class

Outstanding at April 3, 2009Common Stock, $0.01 par value per share

9,802,522 shares   DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 





MITCHAM
    INDUSTRIES, INC.
    ANNUAL REPORT ON
    FORM 10-K
    TABLE OF CONTENTS
   
 PART IItem 1.


Business


2Item 1A.


Risk Factors


9Item 1B.


Unresolved Staff Comments


15Item 2.


Properties


15Item 3.


Legal Proceedings


15Item 4.


Submission of Matters to a Vote of Security
    Holders


15PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


16Item 6.


Selected Financial Data


18Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


18Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


32Item 8.


Financial Statements and Supplementary Data


33Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


33Item 9A.


Controls and Procedures


33Item 9B.


Other Information


33PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


34Item 11.


Executive Compensation


34Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


34Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


34Item 14.


Principal Accounting Fees and Services


34PART IVItem 15.


Exhibits, Financial Statement Schedules


34Signatures


39EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   i




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CAUTIONARY
    STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
  Form 10-K
  
    our future financial position and results of operations;
    international and economic instability;
    planned capital expenditures;
    our business strategy and other plans for future operations;
    the future mix of revenues and business;
    our relationships with suppliers;
    our ability to retain customers;
    future demand for our services; and
    general conditions in the energy industry and seismic service
    industry.  Form 10-K, Form 10-K.




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##### Table of Contents



PART I  Item 1.
    Business    Form 10-K Form 10-K.
           2




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##### Table of Contents



Business
    Strategy
    
    Provide a technologically advanced seismic equipment lease
    pool.  We intend to maintain the size and
    diversity of our equipment lease pool. We believe that the
    availability of a large and diverse seismic equipment lease pool
    encourages seismic data acquisition contractors to lease, rather
    than purchase, such equipment, due to the capital and operating
    efficiencies provided by short-term leases.
    Continue to expand international
    operations.  We intend to expand our international
    leasing activities in new geographic areas, including the CIS,
    South America, Europe, the Middle East and North Africa. Growth
    within the CIS has been abated by the global economic and
    financial crisis; however, we believe this to be a temporary
    situation and that this area presents long-term growth
    opportunities. We believe there are significant opportunities to
    continue to expand our international leasing and sales
    activities. We believe that we can conduct business in
    wide-ranging geographic areas from our existing facilities.
    However, for legal, tax or operational reasons, we may decide in
    the future to establish facilities in additional locations. We
    generally expect to establish any such facilities through a
    green field approach, but we may consider making
    selective acquisitions from time to time.
    Maintain alliances with major seismic equipment
    manufacturers.  Our relationships with leading
    seismic equipment manufacturers, particularly Sercel, allow us
    to expand our equipment lease pool through favorable pricing and
    delivery terms. We believe these relationships provide a
    competitive advantage.
    Pursue additional business development
    opportunities.  We regularly evaluate
    opportunities to expand our business activities within the oil
    service industry, particularly in the seismic sector. These
    opportunities could include the introduction of new products or
    services or the acquisition of existing businesses.  Seismic
    Technology and the Oil Service Industry
   3




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3-D 3-D 2-D 3-D
      2-D 2-D 3-D 2-D 3-D 2-D 3-D 2-D 3-D
  3-D 3-D
  3-D, (3D-3C), 3-D sub-surface, (4-D)
  3-D
 4




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2-D 3-D
  2-D, 3-D 4-D 2-D, 3-D 4-D 3-D 4-D 2-D
  Business
    and Operations
  Equipment Leasing.
         5




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Lease Pool Equipment Sales.
  Other Equipment Sales.
  
    Sales of new seismic equipment.  On occasion,
    we will sell new seismic equipment in response to a specific
    demand from a customer. These sales are made in cooperation with
    our suppliers of lease pool equipment.
    Sales of hydrographic and oceanographic
    equipment.  SAP sells equipment, consumables,
    systems integration, engineering hardware and software
    maintenance support services to the seismic, hydrographic,
    oceanographic, environmental and defense industries throughout
    Southeast Asia and Australia. SAP is a manufacturers
    representative for an array of equipment lines.  Seamap Equipment Sales.
  Key
    Supplier Agreements
  The
    Sercel Lease Agreement
     6




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Other
    Agreements
  sub-bottom
    Customers,
    Sales, Backlog and Marketing
          Years Ended January 31,2009


2008


2007United States

$
14,850


$
13,826


$
11,589UK / Europe


20,502



27,892



9,318Canada


6,498



6,820



8,302South America


3,313



4,153



3,050Asia/South Pacific


10,778



9,431



9,713Eurasia(1)


6,156



10,180



4,998Other(2)


4,715



4,119



1,940Total
    Non-United
    States


51,962



62,595



37,321Total

$
66,812


$
76,421


$
48,910     (1)
    
    Comprised of Eastern Europe, the Russian Federation and the CIS(2)
    
    Includes Africa and the Middle East 7




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As of January 31,Location of Property and Equipment

2009


2008


2007United States

$
45,942


$
19,602


$
12,969Canada


13,857



27,108



18,062Australia


1,626



1,861



1,057Russia


1,920



3,399



1,965Singapore


543



634



623United Kingdom


363



575



756Total
    non-United
    States


18,309



33,577



22,463Total

$
64,251


$
53,179


$
35,432       Competition
      Suppliers
    Employees
   8




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##### Table of Contents



Intellectual
    Property
  Item 1A-Risk
  Website
    Access to Our Periodic SEC Reports
  http://www.mitchamindustries.com. Form 10-K, Form 10-Q Form 8-K, 1-800-SEC-0330. http://www.sec.gov
  Form 10-K Form 10-K.
  Item 1A.
    Risk
    Factors  Form 10-K.
  10-K.
  The
    recent worldwide financial and credit crisis and resulting
    worldwide economic recession may reduce the level of exploration
    production investment by oil and gas companies which would have
    a material adverse effect on our revenue and
    profitability.
   9




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Demand
    for seismic data is not assured.
    
    oil and gas prices and industry expectations of future price
    levels;
    the cost of exploring for, producing and delivering oil and gas;
    the availability of current geophysical data;
    the discovery rate of new oil and gas reserves; and
    local and international political and economic conditions.    A
    limited number of customers account for a significant portion of
    our revenues, and the loss of one of these customers could harm
    our results of operations.
    The
    financial soundness of our customers could materially affect our
    business and operating results.
  and/or
    We
    derive significant revenues from foreign sales, which pose
    additional risks to our operations.
   10




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We may
    not be able to obtain funding or obtain funding on acceptable
    terms because of the deterioration of the credit and capital
    markets, which may hinder or prevent us from meeting our future
    capital needs.
        Our
    operations and financial condition will be materially adversely
    affected if we are unable to continually obtain additional lease
    contracts.
    Our
    failure to attract and retain key personnel could adversely
    affect our operations.
    Our
    long-lived assets may be subject to impairment due to the
    current financial crisis.
   11




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Our
    seismic lease pool is subject to technological
    obsolescence.
    Seasonal
    conditions cause fluctuations in our operating
    results.
  period-to-period
  We
    face competition in our seismic equipment leasing
    activities.
    We
    rely on a small number of suppliers and disruption in vendor
    supplies could adversely affect our results of
    operations.
    The
    operations of Seamap are subject to special risks that could
    have a material adverse effect on our operations.
    Risks Associated with Intellectual
    Property.
 12




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##### Table of Contents




    result in the loss of our proprietary rights to use the
    technology;
    subject us to significant liabilities;
    require us to seek licenses from third parties;
    require us to redesign the products that use the
    technology; or
    prevent us from manufacturing or selling our products that
    incorporate the technology.    Risks Related to Product Performance.
  
    costs associated with reworking the manufacturing processes;
    high service and warranty expenses;
    high inventory obsolescence expense;
    high levels of product returns;
    delays in collecting accounts receivable;
    reduced orders from existing customers; and
    declining interest from potential customers.    Risks Related to Raw Materials.
 13




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Our
    stock price is subject to volatility.
    Recent
    growth many not be sustainable.
    Because
    we have no plans to pay any dividends for the foreseeable
    future, investors must look solely to stock appreciation for a
    return on their investment in us.
    Provisions
    in our articles of incorporation and Texas law could discourage
    a takeover attempt, which may reduce or eliminate the likelihood
    of a change of control transaction and, therefore, the ability
    of our shareholders to sell their shares for a
    premium.
   14




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Location

Type of Facility

Size (In Square Feet)

Owned or Leased

Segment Using PropertyHuntsville, Texas

Office and warehouse

25,000 (on six acres)

Owned

Equipment Leasing and SeamapCalgary, Alberta, Canada

Office and warehouse

33,500

Leased

Equipment LeasingSalisbury, Australia

Office and warehouse

4,400

Leased

Equipment LeasingSingapore

Office and warehouse

20,000

Leased

Equipment Leasing and SeamapShepton Mallet, United Kingdom

Office and warehouse

12,300

Leased

SeamapUfa, Bashkortostan, Russia

Office and warehouse

6,000

Leased

Equipment Leasing   Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   15




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PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities  Market
    Information for Common Stock
    High


LowFiscal Year Ended January 31, 2009:First Quarter

$
19.60


$
16.19Second Quarter


21.83



14.60Third Quarter


15.01



4.75Fourth Quarter


5.40



3.20Fiscal Year Ended January 31, 2008:First Quarter

$
16.43


$
12.75Second Quarter


20.64



14.00Third Quarter


21.98



15.30Fourth Quarter


21.92



15.76     Dividend
    Policy
     16




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Performance
    Graph
  This performance graph shall not be deemed to be
    soliciting material or to be filed with
    the SEC or subject to Section 18 of the Exchange Act, nor
    shall it be deemed incorporated by reference in any of our
    filings under the Securities Act of 1933.
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN* Among
    Mitcham Industries, Inc., The S&P Smallcap 600 Index
    And A Peer Group
  
    *
    
    $100 invested on 1/31/04 in stock or index, including
    reinvestment of dividends. 
    Fiscal year ending January 31.Copyright
    © 2009

    S&P, a division of The McGraw-Hill Companies, Inc. All
    rights reserved.  1/31/04


1/31/05


1/31/06


1/31/07


1/31/08


1/31/09Mitcham Industries, Inc.


$
100.0



$
165.68



$
684.72



$
361.66



$
450.40



$
97.05S&P Smallcap 600



100.0




116.52




139.13




150.83




140.14




88.66Peer Company Index



100.0




145.02




237.74




367.03




414.75




101.01     Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
   17




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Item 6.
    Selected
    Financial Data    Years Ended January 31,2009


2008


2007


2006


2005(Amounts in thousands, except per share amounts)Statement of Income Data:Total revenues

$
66,812


$
76,421


$
48,910


$
34,589


$
26,368Operating income


11,478



16,445



6,555



7,452



2,378Income from continuing operations


9,065



11,439



9,285



10,855



2,049Income from continuing operations per common share 
    basic


0.93



1.18



0.97



1.19



0.23Income from continuing operations per common share 
    diluted


0.89



1.11



0.93



1.10



0.22Balance Sheet Data:Cash and short-term investments


6,032



13,884



12,582



18,988



13,138Seismic equipment lease pool and property and equipment, net


64,251



53,179



35,432



19,924



19,725Total assets


104,227



103,901



83,302



57,620



41,395Long-term debt


5,950







1,500



3,000



Total liabilities


27,104



28,133



23,796



10,169



7,518Total shareholders equity


77,123



75,768



59,506



47,451



33,877   See Item 7  Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations for a discussion of matters affecting the
    comparability of the above information.
  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
     18




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Years Ended January 31,2009


2008


2007(In thousands)Revenues:Equipment Leasing

$
49,903


$
51,701


$
37,683Seamap


17,346



25,383



12,274Less inter-segment sales


(437
)


(663
)


(1,047
)Total revenues


66,812



76,421



48,910Cost of sales:Equipment Leasing


25,128



23,830



17,531Seamap


9,319



17,381



8,927Less inter-segment costs


(279
)


(596
)


(631
)Total direct costs


34,168



40,615



25,827Gross profitEquipment Leasing


24,775



27,871



20,152Seamap


8,027



8,002



3,347Less Inter-segment amounts


(158
)


(67
)


(416
)Total gross profit


32,644



35,806



23,083Operating expenses:General and administrative


17,497



17,425



14,970Provision for doubtful accounts


2,897



460



251Gain on insurance settlement


(580
)






Depreciation and amortization


1,352



1,476



1,307Total operating expenses


21,166



19,361



16,528Operating income

$
11,478


$
16,445


$
6,555EBITDA(1)

$
28,336


$
28,327


$
15,540Adjusted EBITDA(1)

$
30,521


$
30,580


$
17,185Reconciliation of Net Income to EBITDA and Adjusted EBITDANet income

$
9,065


$
11,439


$
9,285Interest income, net


(350
)


(479
)


(836
)Depreciation, amortization and impairment


16,531



11,879



8,919Provision for (benefit from) income taxes


3,090



5,488



(1,828
)EBITDA(1)


28,336



28,327



15,540Stock-based compensation


2,185



2,253



1,645Adjusted EBITDA(1)

$
30,521


$
30,580


$
17,185     (1)
    
    EBITDA is defined as net income (loss) before (a) interest
    income, net of interest expense, (b) provision for (or
    benefit from) income taxes and (c) depreciation,
    amortization and impairment. Adjusted EBITDA excludes
    stock-based compensation. We consider EBITDA and Adjusted EBITDA
    to be important indicators for the performance of our business,
    but not measures of performance calculated in accordance with
    accounting principles generally accepted in the United States of
    America (GAAP). We have included these non-GAAP
    financial measures because management utilizes this information
    for assessing our performance and as indicators of our ability
    to make capital expenditures, service debt and finance working
    capital requirements. 19




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The covenants of our revolving credit agreement require us to
    maintain a minimum level of EBITDA. Management believes that
    EBITDA and Adjusted EBITDA are measurements that are commonly
    used by analysts and some investors in evaluating the
    performance of companies such as us. In particular, we believe
    that it is useful to our analysts and investors to understand
    this relationship because it excludes transactions not related
    to our core cash operating activities. We believe that excluding
    these transactions allows investors to meaningfully trend and
    analyze the performance of our core cash operations. EBITDA and
    Adjusted EBITDA are not measures of financial performance under
    GAAP and should not be considered in isolation or as
    alternatives to cash flow from operating activities or as
    alternatives to net income as indicators of operating
    performance or any other measures of performance derived in
    accordance with GAAP. In evaluating our performance as measured
    by EBITDA, management recognizes and considers the limitations
    of this measurement. EBITDA and Adjusted EBITDA do not reflect
    our obligations for the payment of income taxes, interest
    expense or other obligations such as capital expenditures.
    Accordingly, EDITDA and Adjusted EBITDA are only two of the
    measurements that management utilizes. Other companies in our
    industry may calculate EBITDA or Adjusted EBITDA differently
    than we do and EBITDA and Adjusted EBITDA may not be comparable
    with similarly titled measures reported by other companies.        Business
    Outlook
     20




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21




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Results
    of Operations
        Revenues
    and Cost of Sales
  Equipment
    Leasing
    Year Ended January 31,2009


2008


2007(In thousands)Revenues:Equipment leasing

$
37,747


$
34,364


$
24,942Lease pool equipment sales


2,985



3,488



4,297New seismic equipment sales


3,832



9,350



5,071SAP equipment sales


5,339



4,499



3,37349,903



51,701



37,683Cost of sales:Lease pool depreciation


15,031



10,403



7,612Direct costs  equipment leasing


2,041



1,846



2,167Cost of lease pool equipment sales


1,487



1,019



1,961Cost of new seismic equipment sales


2,637



7,376



3,884Cost of SAP equipment sales


3,932



3,186



1,90725,128



23,830



17,531Gross profit

$
24,775


$
27,871


$
20,152Gross profit margin


50
%


54
%


53
%    22




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##### Table of Contents



23




---



##### Table of Contents



Seamap
    Year Ended January 31,2009


2008


2007(In thousands)Equipment sales

$
17,346


$
25,383


$
12,274Cost of equipment sales


9,319



17,381



8,927Gross profit

$
8,027


$
8,002


$
3,347Gross profit margin


46
%


32
%


27
%        24




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##### Table of Contents



on-site
      Operating
    Expenses
         25




---



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Other
    Income and Expense
    Provision
    for Income Taxes
  , Accounting for Uncertainty in
    Income Taxes
      Liquidity
    and Capital Resources
   26




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27




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##### Table of Contents



48-month
  Actual as of January 31,2009 or forDescription of Financial Covenant

Required Amount

Period then EndedRatio of debt to shareholders equity

Not more than 0.7:1.0

0.08:1.0Ratio of current assets to current liabilities

Not less than 1.25:1.0

1.63:1.0Quarterly EBITDA

Not less than $2.0 million

$4.9 million           Payments Due by PeriodLess Than








More ThanContractual Obligations

Total


1 Year


1-3 Years


3-5 Years


5 YearsLong-term debt

$
5,950


$



$
5,950


$



$
Operating leases


2,588



792



1,049



444



303Purchase obligations


5,589



5,589











Total

$
14,127


$
6,381


$
6,999


$
444


$
303  28




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##### Table of Contents



Critical
    Accounting Policies
      Revenue
    Recognition
  
    Leases We recognize lease revenue ratably
    over the term of the lease unless there is a question as to
    whether it is collectible. We do not enter into leases with
    embedded maintenance obligations. Under our standard lease, the
    customer is responsible for maintenance and repairs to the
    equipment, excluding normal wear and tear. We provide technical
    advice to our customers as part of our customer service
    practices. In most situations, our customers pays shipping and
    handling costs directly to the shipping agents.
    Equipment Sales We recognize revenue and cost
    of goods sold from equipment sales upon agreement of terms and
    when delivery has occurred, unless there is a question as to its
    collectability. We occasionally offer extended payment terms on
    equipment sales transactions. These terms are generally one to
    two years in duration.
    Long-term project revenue From time to time,
    SAP enters into contracts whereby it assembles and sales certain
    marine equipment, primarily to governmental entities.
    Performance under these contracts generally occurs over a period
    of several months. Revenue and costs related to these contracts
    are accounted for under the percentage of completion method.  Allowance
    for Doubtful Accounts
    Long-Lived
    Assets
  10-year
 29




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##### Table of Contents



Accounting for the
    Impairment or Disposal of Long-Lived Assets
  Goodwill
    and Other Intangible Assets
  15-year
  Goodwill and Other Intangible
    Assets
    Variable

Decrease in Fair Value10% decrease in projected annual cash flow

$
2.2 million33% decrease in terminal value applied to the estimated fourth
    year cash flow

$
2.7 million100 basis point increase in cost of capital

$
650,000    30




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##### Table of Contents



Income
    Taxes
    Accounting for Income
    Taxes
  
    taxable income projections in future years;
    whether the carry forward period is so brief that it would limit
    realization of tax benefits;
    future sales and operating cost projections that will produce
    more than enough taxable income to realize the deferred tax
    asset based on existing sales prices and cost
    structures; and
    our earnings history exclusive of the loss that created the
    future deductible amount coupled with evidence indicating that
    the loss is an aberration rather than a continuing condition.    
    the current level of worldwide oil and gas exploration
    activities resulting from historically high prices for oil and
    natural gas;
    increasing world demand for oil;
    our recent history of profitable operations in various
    jurisdictions;
    our anticipated positive income in various
    jurisdictions; and
    our existing customer relationships.    
    the risk of the world oil supply increasing, thereby depressing
    the price of oil and natural gas;
    the risk of decreased global demand for oil; and
    the potential for increased competition in the seismic equipment
    leasing and sales business.    Accounting for Uncertainty in Income Taxes
   31




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##### Table of Contents



Stock-Based
    Compensation
  Accounting for Stock-Based Compensation
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Market
    Risk
    Foreign
    Currency Risk
  non-U.S. dollar non-U.S. dollar non-U.S. dollar
   32




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  page F-1
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(b) Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  Rule 13a-15(c) Internal
    Control Integrated Framework
  Form 10-K, page F-3
  Changes
    in Internal Control over Financial Reporting
    Item 9B.
    Other
    Information   33




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K,
  http://www.mitchamindustries.com, 77342-1175, http://www.mitchamindustries.com
  Item 11.
    Executive
    Compensation  Form 10-K,
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Form 10-K,
  Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence  Form 10-K,
  Item 14.
    Principal
    Accounting Fees and Services  Form 10-K,
 PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  (a)
    List
    of Documents Filed  (1)  Financial Statements
  page F-l
  (2)  Financial Statement Schedules
    (3)  Exhibits
  Regulation S-K
 34




---



##### Table of Contents



(b)
    Exhibits  Form 10-K. Regulation S-K.
  SEC File orExhibit





Registration

ExhibitNumber

Document Description

Report or Registration Statement

Number

Reference3
.1

Amended and Restated Articles of Incorporation of Mitcham
    Industries, Inc.

Incorporated by reference to Mitcham Industries, Inc.s
    Registration Statement on
    Form S-8,
    filed with the SEC on August 9, 2001.

333-67208

3.13
.2

Second Amended and Restated Bylaws of Mitcham Industries, Inc.

Incorporated by reference to Mitcham Industries, Inc.s
    Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2004, filed with the
    SEC on May 28, 2004.

000-25142

3.24
.1

Loan Agreement, dated September 24, 2008, between Mitcham
    Industries, Inc. and First Victoria National Bank

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on September 25, 2008.

000-25142

10.110
.1*

Employment Agreement, dated January 15, 1997, between Mitcham
    Industries, Inc. and Billy F. Mitcham, Jr.

Incorporated by reference to Mitcham Industries, Inc.s
    Registration Statement on
    Form S-l,
    filed with the SEC on January 17, 1997.

333-19997

10.410
.2*

Mitcham Industries, Inc. 1994 Stock Option Plan

Incorporated by reference to Mitcham Industries, Inc.s
    Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2007, filed with the
    SEC on April 16, 2007.

000-25142

10.310
.3*

Mitcham Industries, Inc. 1994 Non-Employee Director Stock Option
    Plan

Incorporated by reference to Mitcham Industries, Inc.s
    Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2007, filed with the
    SEC on April 16, 2007.

000-21542

10.410
.4*

Mitcham Industries, Inc. 1998 Stock Awards Plan

Incorporated by reference to Mitcham Industries, Inc.s
    proxy statement for the fiscal year ended January 31, 1998,
    filed with the SEC on June 1, 1998.

000-25142

Exhibit A10
.5*

Amended and Restated 1998 Stock Awards Plan

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on September 8, 2004.

000-25142

10.3 35




---



##### Table of Contents



SEC File orExhibit





Registration

ExhibitNumber

Document Description

Report or Registration Statement

Number

Reference10
.6*

Mitcham Industries, Inc. 2000 Stock Option Plan

Incorporated by reference to Exhibit A of Mitcham
    Industries, Inc.s proxy statement for the fiscal year
    ended January 31, 2000, filed with the SEC on May 26,
    2000.

000-25142

Exhibit A10
.7*

Mitcham Industries, Inc. Stock Awards Plan

Incorporated by reference to Exhibit A of Mitcham
    Industries, Inc.s proxy statement for the fiscal year
    ended January 31, 2006, filed with the SEC on May 31,
    2006.

000-25142

Appendix A10
.8*

Form of Nonqualified Stock Option Agreement under the Mitcham
    Industries, Inc. Stock Awards Plan

Incorporated by reference to Mitcham Industries, Inc.s
    Report on
    Form 10-Q
    for the quarter ended October 31, 2006, filed with the SEC
    on September 12, 2006.

000-25142

10.310
.9*

Form of Restricted Stock Agreement under the Mitcham Industries,
    Inc. Stock Awards Plan

Incorporated by reference to Mitcham Industries, Inc.s
    Report on
    Form 10-Q
    for the quarter ended October 31, 2006, filed with the SEC
    on September 12, 2006.

000-25142

10.410
.10*

Form of Incentive Stock Option Agreement under the Mitcham
    Industries, Inc. Stock Awards Plan

Incorporated by reference to Mitcham Industries, Inc.s
    Report on
    Form 10-Q
    for the quarter ended October 31, 2006, filed with the SEC
    on September 12, 2006.

000-25142

10.510
.11*

Form of Restricted Stock Agreement

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on September 8, 2004.

000-25142

10.110
.12*

Form of Nonqualified Stock Option Agreement

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on September 8, 2004.

000-25142

10.210
.13*

Form of Incentive Stock Option Agreement

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on September 8, 2004.

000-25142

10.410
.14*

Form of Phantom Stock Award Agreement

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on September 8, 2004.

000-25142

10.5 36




---



##### Table of Contents



SEC File orExhibit





Registration

ExhibitNumber

Document Description

Report or Registration Statement

Number

Reference10
.15*

Form of Stock Appreciation Rights Agreement

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on September 8, 2004.

000-25142

10.610
.16*

Form of Incentive Stock Option Agreement

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on September 8, 2004.

000-25142

10.710
.17*

Form of Nonqualified Stock Option Agreement

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on September 8, 2004.

000-25142

10.810
.18*

Summary of Non-Employee Director Compensation

Incorporated by reference to Mitcham Industries, Inc.s
    Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2007, filed with the
    SEC on April 16, 2007.

000-21542

10.1910
.19

Exclusive Lease Agreement, dated September 12, 2006, between
    Sercel, Inc. and Mitcham Industries, Inc.

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on September 12, 2006.

000-25142

10.110
.20

Stock Purchase Agreement, effective as of July 1, 2005, between
    Mitcham Industries, Inc. and Mark Welker, Tomoko Welker, Chew
    Kok Lee Pinnington, Michael Pinnington, Timothy Pinnington and
    Phillip Bull.

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K,
    filed with the SEC on July 15, 2005.

000-25142

10.110
.21

Amendment to Mitcham Industries, Inc. 2000 Stock Option Plan

Incorporated by reference to Mitcham Industries, Inc.s
    proxy statement for the fiscal year ended January 31, 2007,
    filed with the SEC on April 16, 2007.

000-21542

10.2510
.22

Form of Performance Award for the Mitcham Industries, Inc. Stock
    Awards Plan

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K
    filed on October 24, 2007.

000-21542

10.110
.23

Form of Phantom Share Agreement for the Mitcham Industries, Inc.
    Stock Awards Plan

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on
    Form 8-K
    filed on October 24, 2007.

000-21542

10.2 37




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##### Table of Contents



SEC File orExhibit





Registration

ExhibitNumber

Document Description

Report or Registration Statement

Number

Reference21
.1

Subsidiaries of Mitcham Industries, Inc.

Incorporated by reference to Mitcham Industries, Inc.s
    Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2006, filed with the
    SEC on May 10, 2006.

000-25142

2123
.1

Consent of Hein & Associates LLP31
.1

Certification of Billy F. Mitcham, Jr., Chief Executive Officer,
    pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
    Exchange Act, as amended31
.2

Certification of Robert P. Capps, Chief Financial Officer,
    pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
    Exchange Act, as amended32
.1

Certification of Billy F. Mitcham, Jr., Chief Executive Officer,
    under Section 906 of the Sarbanes Oxley Act of 2002,
    18 U.S.C. § 135032
.2

Certification of Robert P. Capps, Chief Financial Officer, under
    Section 906 of the Sarbanes Oxley Act of 2002, 18 U.S.C.
    § 1350  38




---



##### Table of Contents



SIGNATURES      By:
    /s/  Billy
    F. Mitcham, Jr.   President and Chief Executive Officer
 (Principal Executive Officer)
    Signature

Title/Capacity

Date/s/  BILLY
    F. MITCHAM, JR.Billy
    F. Mitcham, Jr.

President , Chief Executive Officer and Director (Principal
    Executive Officer)

April 15, 2009/s/  ROBERT
    P. CAPPSRobert
    P. Capps

Executive Vice President  Finance,
    Chief Financial Officer and Director
    (Principal Financial Officer and Principal
    Accounting Officer)

April 15, 2009/s/  PETER
    H. BLUMPeter
    H. Blum

Non-Executive Chairman of the Board

April 15, 2009/s/  ROBERT
    J. ALBERSRobert
    J. Albers

Director

April 15, 2009/s/  JOHN
    F. SCHWALBEJohn
    F. Schwalbe

Director

April 15, 2009/s/  RANDAL
    DEAN LEWISRandal
    Dean Lewis

Director

April 15, 2009  39




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReports of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets as of
    January 31, 2009 and 2008


F-4Consolidated Statements of Income for the Years
    Ended January 31, 2009, 2008 and 2007


F-5Consolidated Statements of Changes in
    Shareholders Equity and Comprehensive Income for the Years
    Ended January 31, 2009, 2008 and 2007


F-6Consolidated Statements of Cash Flows for the
    Years Ended January 31, 2009, 2008 and 2007


F-7Notes to Consolidated Financial Statements


F-8   F-1




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##### Table of Contents



Report
    Of Independent Registered Public Accounting Firm            Internal Control 
    Integrated Framework
  Share-Based Payment Accounting for Uncertainty in Income Taxes-an
    interpretation of FASB Statement No. 109, Accounting for
    Income Taxes
      F-2




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##### Table of Contents



Report
    Of Independent Registered Public Accounting Firm
      Internal Control  Integrated Framework
        Internal Control  Integrated Framework
        F-3




---



##### Table of Contents



MITCHAM
    INDUSTRIES, INC.
  CONSOLIDATED
    BALANCE SHEETS
  January 31,2009


2008(In thousands, except per share data)ASSETSCurrent assets:Cash and cash equivalents

$
5,063


$
13,884Restricted cash


969



Accounts receivable, net of allowance for doubtful accounts of
    $2,300 and $1,512 at January 31, 2009 and 2008, respectively


12,415



12,816Current portion of contracts receivable


836



2,964Inventories, net


3,772



6,352Cost and estimated profit in excess of billings on uncompleted
    contract


1,787



Income taxes receivable


1,000



Deferred tax asset


1,682



1,230Prepaid expenses and other current assets


1,535



1,491Total current assets


29,059



38,737Seismic equipment lease pool and property and equipment, net


64,251



53,179Intangible assets, net


2,744



3,692Goodwill


4,320



4,358Deferred tax asset






1,505Long-term portion of contracts receivable, net of valuation
    allowance of $897 at January 31, 2009


3,806



2,396Other assets


47



34Total assets

$
104,227


$
103,901LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
13,561


$
16,729Current maturities  long-term debt






1,500Income taxes payable






1,967Deferred revenue


424



872Accrued expenses and other current liabilities


3,877



3,674Total current liabilities


17,862



24,742Non-current income taxes payable


3,260



3,391Deferred tax liability


32



Long-term debt


5,950



Total liabilities


27,104



28,133Commitments and contingencies (Note 12 & 16)Shareholders equity:Preferred stock, $1.00 par value; 1,000 shares
    authorized; none issued and outstanding






Common stock $.01 par value; 20,000 shares authorized;
    10,725 and 10,708 shares issued at January 31, 2009
    and January 31, 2008, respectively


107



107Additional paid-in capital


74,396



71,929Treasury stock, at cost (922 and 921 shares at
    January 31, 2009 and 2008, respectively)


(4,826
)


(4,805
)Retained earnings


9,727



662Accumulated other comprehensive income (loss)


(2,281
)


7,875Total shareholders equity


77,123



75,768Total liabilities and shareholders equity

$
104,227


$
103,901    F-4




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##### Table of Contents



MITCHAM
    INDUSTRIES, INC.
  CONSOLIDATED
    STATEMENTS OF INCOME
  Years Ended January 31,2009


2008


2007(In thousands, except per share data)Revenues:Equipment leasing

$
37,747


$
34,364


$
24,942Lease pool equipment sales


2,985



3,488



4,297Seamap equipment sales


16,909



24,720



11,227Other equipment sales


9,171



13,849



8,444Total revenues


66,812



76,421



48,910Cost of sales:Direct costs  equipment leasing


2,041



1,846



2,167Direct costs  lease pool depreciation


15,031



10,403



7,612Cost of lease pool equipment sales


1,487



1,019



1,961Cost of Seamap and other equipment sales


15,609



27,347



14,087Total cost of sales


34,168



40,615



25,827Gross profit


32,644



35,806



23,083Operating expenses:General and administrative


17,497



17,425



14,970Provision for doubtful accounts


2,897



460



251Gain from insurance settlement


(580
)






Depreciation and amortization


1,352



1,476



1,307Total operating expenses


21,166



19,361



16,528Operating income


11,478



16,445



6,555Other income (expense):Interest income


631



687



987Interest expense


(281
)


(208
)


(151
)Other, net


327



3



66Total other income (expense)


677



482



902Income before income taxes


12,155



16,927



7,457Provision (benefit) for income taxes


3,090



5,488



(1,828
)Net income

$
9,065


$
11,439


$
9,285Net income per common share:Basic

$
0.93


$
1.18


$
0.97Diluted

$
0.89


$
1.11


$
0.93Shares used in computing income per common share:Basic


9,768



9,698



9,596Diluted


10,205



10,282



10,026    F-5




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##### Table of Contents



MITCHAM
    INDUSTRIES, INC.
  CONSOLIDATED
    STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
 AND
    COMPREHENSIVE INCOME
  Years Ended January 31, 2007, 2008 and 2009AccumulatedOtherAdditional





Retained





ComprehensiveCommon Stock


Paid-In


Treasury


(Deficit)


Deferred


IncomeShares


Amount


Capital


Stock


Earnings


Compensation


(Loss)


Total(In thousands)Balances, January 31, 2006


10,360


$
104


$
64,404


$
(4,686
)

$
(15,427
)

$
(8
)

$
3,064


$
47,451Comprehensive income, net of tax:Net income


















9,285











9,285Foreign currency translation


























(126
)


(126
)Comprehensive income






























9,159Issuance of common stock upon exercise of options, net of stock
    surrendered as payment of option price


204



2



954



(95
)














861Restricted stock issued


37



























Reclass of deferred compensation










(8
)










8







Stock-based compensation










1,645



















1,645Tax benefit from exercise of stock options










390



















390Balances, January 31, 2007


10,601



106



67,385



(4,781
)


(6,142
)






2,938



59,506Adjustment to retained earnings upon adoption of FIN 48
    (Note 11)


















(4,635
)










(4,635
)Comprehensive income, net of tax:Net income


















11,439











11,439Foreign currency translation


























4,937



4,937Comprehensive income






























16,376Issuance of common stock upon exercise of options


65



1



281



















282Issuance of common stock upon exercise of warrants


23







98



















98Restricted stock issued


19







274



















274Shares surrendered for payment of taxes upon vesting of
    restricted stock














(24
)














(24
)Tax benefit from exercise of stock options and vesting of
    restricted stock










1,912



















1,912Stock-based compensation










1,979



















1,979Balances, January 31, 2008


10,708



107



71,929



(4,805
)


662







7,875



75,768Comprehensive income, net of tax:Net income


















9,065











9,065Foreign currency translation


























(10,156
)


(10,156
)Comprehensive income






























(1,091
)Issuance of common stock upon exercise of options


19







161



















161Restricted stock cancelled


(2
)


























Shares surrendered for payment of taxes upon vesting of
    restricted stock














(21
)














(21
)Tax benefit from exercise of stock options and vesting of
    restricted stock










121



















121Stock-based compensation










2,185



















2,185Balances, January 31, 2009


10,725


$
107


$
74,396


$
(4,826
)

$
9,727


$



$
(2,281
)

$
77,123    F-6




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##### Table of Contents



MITCHAM
    INDUSTRIES, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Years Ended January 31,2009


2008


2007(In thousands)Cash flows from operating activities:Net income

$
9,065


$
11,439


$
9,285Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


16,531



11,879



8,919Stock-based compensation


2,185



2,253



1,645Provision for doubtful accounts


2,897



460



251Provision for inventory obsolescence


357



348



144Gross profit from sale of lease pool equipment


(1,498
)


(2,469
)


(2,336
)Gain on insurance settlement


(580
)






Excess tax benefit from exercise of non-qualified stock options


(121
)


(1,912
)


(390
)Provision for deferred income taxes


1,197



1,103



(2,523
)Non-current income taxes payable


(684
)


406



Changes in:Trade accounts and contracts receivable


(1,310
)


(4,454
)


(6,778
)Inventories


1,282



847



(5,088
)Current assets of discontinued operations, net










354Income taxes payable


(2,289
)


2,924



295Contract revenues in excess of billings


(1,787
)






Accounts payable, accrued expenses and other current liabilities


(7,289
)


7,627



1,054Prepaids and other, net


(338
)


553



(1,246
)Net cash provided by operating activities


17,618



31,004



3,586Cash flows from investing activities:Sales from used lease pool equipment


2,985



3,488



4,297Acquisition of subsidiaries






(3,784
)


(1,000
)Proceeds from insurance settlement


1,680







Redemptions of short-term investments










2,550Purchases of seismic equipment held for lease


(31,535
)


(29,967
)


(12,868
)Purchases of property and equipment


(876
)


(886
)


(1,677
)Net cash used in investing activities


(27,746
)


(31,149
)


(8,698
)Cash flows from financing activities:Net proceeds (payments) from revolving line of credit


5,950







Payments on borrowings


(1,500
)


(1,500
)


Purchase of short-term investment


(1,413
)






Proceeds from issuance of common stock upon exercise of options
    and warrants, net of shares surrendered during exercises


140



356



861Excess tax benefit from exercise of non-qualified stock options


121



1,912



390Net cash provided by financing activities


3,298



768



1,251Effect of changes in foreign exchange rates on cash and cash
    equivalents


(1,991
)


679



5Net increase (decrease) in cash and cash equivalents


(8,821
)


1,302



(3,856
)Cash and cash equivalents, beginning of year


13,884



12,582



16,438Cash and cash equivalents, end of year

$
5,063


$
13,884


$
12,582    F-7




---



##### Table of Contents



Mitcham
    Industries, Inc.



Notes to
    Consolidated Financial Statements

(In thousands, except for per share amounts) 1.
    Organization
    and Summary of Significant Accounting Policies  Organization 
  Revenue Recognition of Leasing Arrangements 
  Revenue Recognition of Equipment Sales 
  Revenue Recognition of Long-term Projects-
  Taxes Collected from Customers  06-3 How
    Taxes Collected from Customers and Remitted to Governmental
    Authorities Should Be Presented in the Income Statement (That
    Is, Gross versus Net
    Presentation (EITF 06-3) ), EITF 06-3
  Contracts receivable 
  Allowance for doubtful accounts 
 F-8




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Cash and Cash Equivalents 
  Short-term Investments 
  Inventories  first-in,
  Seismic Equipment Lease Pool 
  Property and Equipment 
  Intangible Assets  15-year
  Impairment Accounting For the Impairment or Disposal of Long-Lived
    Assets (SFAS 144) Goodwill
    and Other Intangible Assets
  Product Warranties
  Income Taxes 
  Accounting for Income Taxes
 F-9




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    
    taxable income projections in future years;
    whether the carry forward period is so brief that it would limit
    realization of tax benefits;
    future sales and operating cost projections that will produce
    more than enough taxable income to realize the deferred tax
    asset based on existing sales prices and cost
    structures; and
    earnings history exclusive of the loss that created the future
    deductible amount coupled with evidence indicating that the loss
    is an aberration rather than a continuing condition.  Accounting for Uncertainty in
    Income Taxes  an interpretation of FASB Statement
    No. 109, Accounting for Income
    Taxes
  Use of Estimates 
    Fair Value of Financial Instruments 
  Foreign Currency Translation 
  Stock-Based Compensation 
 F-10




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Accounting for Stock-Based
    Compensation
  Earnings Per Share
  Years Ended January 31,2009


2008


2007Stock options


414



554



409Restricted stock


14



23



10Phantom stock


9







Warrants






7



11Total dilutive shares


437



584



430     Reclassifications 
  2.
    New
    Accounting Pronouncements  Fair Value Measurements
  Business Combinations
  Disclosures about Derivative
    Instruments and Hedging Activities  an amendment of
    FASB Statement No. 133
 F-11




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    No. FAS 142-3, Determination of the Useful Life of Intangible Assets FAS 142-3). FAS 142-3 , Goodwill and Other Intangible
    Assets FAS 142-3 142-3
  No. EITF-03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities EITF 03-6-1). EITF 03-6-1 EITF 03-6-1 EITF 03-6-1
  3.
    Restricted
    Cash    4.
    Supplemental
    Statements of Cash Flows Information    Years Ended January 31,2009


2008


2007Interest paid

$
306


$
233


$
157Income taxes paid, net


4,574



968



239Seismic equipment purchases included in accounts payable at
    year-end


11,964



8,566



12,600  F-12




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  5.
    Inventories  first-in,
  As of January 31,2009


2008Raw materials

$
2,309


$
3,565Finished goods


1,593



898Work in progress


834



2,693Cost of inventories


4,736



7,156Less allowance for obsolescence


(964
)


(804
)Net inventories

$
3,772


$
6,352   6.
    Contracts
    Receivable    7.
    Seismic
    Equipment Lease Pool and Property and Equipment    As of January 31,2009


2008Recording channels

$
74,630


$
60,287Other peripheral equipment


52,437



56,389Cost of seismic equipment lease pool


127,067



116,676Land and buildings


366



366Furniture and fixtures


5,380



5,026Autos and trucks


469



605Cost of property and equipment


6,215



5,997Cost of seismic equipment lease pool and property and equipment


133,282



122,673Less accumulated depreciation


(69,031
)


(69,494
)Net book value of seismic equipment lease pool and property and
    equipment

$
64,251


$
53,179   F-13




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  As of January 31,2009


2008Location of seismic equipment lease pool and property and
    equipment:United States

$
45,942


$
19,602Canada


13,857



27,108Australia


1,626



1,861Russia


1,920



3,399Singapore


543



634United Kingdom


363



575Total

$
64,251


$
53,179   8.
    Goodwill
    and Other Intangible Assets  Weighted


As of January 31, 2009


As of January 31, 2008Average


Gross





Net


Gross





NetRemaining


Carrying


Accumulated


Carrying


Carrying


Accumulated


CarryingLife at 1/31/09


Amount


Amortization


Amount


Amount


Amortization


AmountGoodwill





$
4,320










$
4,358Proprietary rights


11.5


$
3,313


$
(569
)

$
2,744


$
3,886


$
(333
)

$
3,553Covenants
    not-to-compete






1,000



(1,000
)






1,000



(861
)


139Amortizable intangible assets





$
4,313


$
(1,569
)

$
2,744


$
4,886


$
(1,194
)

$
3,692         2010

$
2402011


2402012


2402013


2402014 and thereafter


1,784Total

$
2,744    F-14




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  9.
    Long-Term
    Debt and Notes Payable      10.
    Shareholders
    Equity       F-15




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  11.
    Income
    Taxes  Years Ended January 31,2009


2008


2007Income before income taxes is attributable to the following
    jurisdictions:Domestic

$
3,574


$
6,297


$
3,143Foreign


8,581



10,630



4,314Total

$
12,155


$
16,927


$
7,457The components of income tax expense (benefit) were as follows:Current:Federal

$
(70
)

$
3,181


$
406Foreign


1,963



1,204



2891,893



4,385



695Deferred:Federal


469



(898
)


316Foreign


728



2,001



(2,839
)1,197



1,103



(2,523
)Income tax expense (benefit)

$
3,090


$
5,488


$
(1,828
)     Years Ended January 31,2009


2008


2007Federal income tax expense at 34%

$
4,133


$
5,755


$
2,534Reversal/release of valuation allowance










(5,954
)Decrease in foreign effective tax rate


213



26



1,032Foreign exchange gain






76



631Permanent differences


245



42



(131
)Foreign effective tax rate differential


(785
)


(567
)


(198
)Recognition of tax benefits upon resolution of uncertain tax
    positions


(1,083
)






Potential tax, penalties and interest resulting from uncertain
    tax positions


399



406



Other


(32
)


(250
)


258$
3,090


$
5,488


$
(1,828
)  F-16




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    As of January 31,2009


2008Deferred tax assets:Foreign net operating loss carry forwards

$
1,076


$
2,210Tax credit carry forwards


2,371



2,107Stock option book expense under FAS 123R


2,018



1,276Depreciation difference






481Allowance for doubtful accounts


985



450Allowance for inventory obsolescence


199



236Accruals not yet deductible for tax purposes


471



543Other


27



Gross deferred tax assets


7,147



7,303Valuation allowance






Deferred tax assets


7,147



7,303Deferred tax liabilities:Undistributed earnings of controlled foreign corporations not
    permanently reinvested


(2,587
)


(2,312
)Fixed assets


(1,241
)


Non-deductible intangible assets


(374
)


(606
)Other


(198
)


Deferred tax liabilities


(4,400
)


(2,918
)Effect of uncertain tax positions


(1,097
)


(1,650
)Total deferred tax assets, net

$
1,650


$
2,735          F-17




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Years Ended January 31,2009


2008Unrecognized tax benefits as beginning of period

$
(3,878
)

$
(3,862
)Increases as a result of tax positions taken in prior years






(16
)Increases as a result of tax positions taken in current year






Settlements






Lapse of statute of limitations


1,083



Unrecognized tax benefits as of end of period

$
(2,795
)

$
(3,878
)       12.
    Commitments
    and Contingencies  Purchase Obligations
  13.
    Stock
    Option Plans       F-18




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Weighted
    average Black-Scholes-Merton fair value
    assumptions
  Years Ended January 31,2009

2008

2007Risk free interest rate

3.19%

2.9 - 4.9%

4.7 - 5.2%Expected life

3.4 -- 5.4 yrs

3.4 - 5.9 yrs

3.9 - 6.3 yrsExpected volatility

50%

53 - 58%

54 - 67%Expected dividend yield

0.0%

0.0%

0.0%     10-year
 F-19




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Stock
    Based Compensation Activity
    WeightedWeighted


AverageAverage


Remaining


AggregateNumber


Exercise


Contractual


Intrinsicof Shares


Price


Term (In Years)


ValueOutstanding, January 31, 2008


1,390


$
9.80Granted


150



16.41Exercised


(19
)


8.69Forfeited


(18
)


17.25Expired


(14
)


23.63Outstanding, January 31, 2009


1,489


$
10.26



6.09


$
333Exercisable at January 31, 2009


1,049


$
7.71



5.07


$
333Vested and expected to vest at January 31, 2009


1,473


$
10.19



6.05


$
333   in-the-money
        Year Ended January 31, 2009Number of


Weighted AverageShares


Grant Date Fair ValueUnvested, beginning of period


42


$
15.60Granted


14



20.44Vested


(20
)


15.16Canceled


(3
)


20.00Unvested, end of period


33


$
17.47    F-20




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  14.
    Segment
    Reporting  Disclosures about Segments of an
    Enterprise and Related Information.
    state-of-the-art
    As of January 31, 2009


As of January 31, 2008


As of January 31, 2007Equipment








Equipment








EquipmentLeasing


Seamap


Consolidated


Leasing


Seamap


Consolidated


Leasing


Seamap


ConsolidatedFixed assets, net

$
63,888


$
905


$
64,251


$
52,560


$
1,209


$
53,179


$
34,523


$
1,378


$
35,432Intangible assets, net






2,744



2,744







3,692



3,692







2,127



2,127Goodwill






4,320



4,320







4,358



4,358







3,358



3,358   For the Year EndedJanuary 31, 2009


January 31, 2008


January 31, 2007Equipment








Equipment








EquipmentLeasing


Seamap


Consolidated


Leasing


Seamap


Consolidated


Leasing


Seamap


ConsolidatedRevenues

$
49,903


$
17,346


$
66,812


$
51,701


$
25,383


$
76,421


$
37,683


$
12,274


$
48,910Interest income (expense), net


325



25



350



720



(235
)


479



925



(89
)


836Income (loss) before taxes


9,452



226



12,155



15,422



1,562



16,927



10,793



(2,869
)


7,457Capital expenditures


31,818



593



32,411



31,013



407



30,853



13,591



1,423



14,545Depreciation and amortization expense


15,402



1,129



16,531



10,948



1,075



11,879



8,074



857



8,919    F-21




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  15.
    Quarterly
    Financial Data (Unaudited)  Quarter Ended:Fiscal Year


April 30


July 31


October 31


January 31Net revenues:


2009


$
18,534


$
17,495


$
14,548


$
16,2352008



23,014



15,399



17,205



20,803Gross profit:


2009



11,628



7,114



7,260



6,6422008



10,104



6,573



9,276



9,853Income before income taxes:


2009



6,513



2,546



2,721



3752008



5,809



2,651



4,014



4,453Incomes taxes (benefit):


2009



2,235



921



(20
)


(46
)2008



1,869



930



1,583



1,106Net income:


2009



4,278



1,625



2,741



4212008



3,940



1,721



2,431



3,347Income per common share  basic:


2009


$
0.44


$
0.17


$
0.28


$
0.042008


$
0.41


$
0.18


$
0.25


$
0.34Income per common share  diluted:


2009


$
0.41


$
0.16


$
0.27


$
0.042008


$
0.39


$
0.17


$
0.24


$
0.32   16.
    Leases  month-to-month
          2010

$
7922011

$
6132012

$
4362013

$
3112014 and thereafter

$
436  F-22




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  17.
    Concentrations  Credit Risk 
    Industry Concentration 
  Supplier Concentration 
  18.
    Sales and
    Major Customers    Years Ended January 31,2009


2008


2007Canada

$
6,498


$
6,820


$
8,302UK / Europe


20,502



27,892



9,318South America


3,313



4,153



3,050Asia/South Pacific


10,778



9,431



9,713Eurasia


6,156



10,180



4,998Other


4,715



4,119



1,940Total

$
51,962


$
62,595


$
37,321    F-23




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
      Form 10-K) (Schedule II-Valuation Form 10-K.
        F-24




---



##### Table of Contents



SCHEDULE II
    MITCHAM INDUSTRIES, INC.
    VALUATION AND QUALIFYING ACCOUNTS
  Col. A

Col. B


Col. C(1)


Col. C(2)


Col. D


Col. EBalance at


Charged to


Charged toBeginning of


Costs and


Other


Deductions


Balance at EndDescription

Period


Expenses


Accounts


Describe


of Period(In thousands)Allowance for doubtful accountsJanuary 31, 2009

$
1,512



1,976



(43
)(a)


(1,145
)(b)

$
2,300January 31, 2008

$
1,212



460



5
(a)


(165
)(b)

$
1,512January 31, 2007

$
1,173



250







(211
)(b)

$
1,212Allowance for obsolete equipment
    and inventoryJanuary 31, 2009

$
1,044



360



(186
)(a)


(14
)(c)

$
1,204January 31, 2008

$
553



448



59
(a)


(16
)(c)

$
1,044January 31, 2007

$
351



248



(23
)(a)


(23
)(c)

$
553     (a)
    
    Represents translation differences.(b)
    
    Represents recoveries and uncollectible accounts written off.(c)
    
    Represents sale or scrap of inventory and obsolete equipment. F-25