##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549FORM 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,
    2011oro

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

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.
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company þ   Rule 12b-2 o þ
      Class

Outstanding at April 4, 2011Common Stock, $0.01 par value per share

9,947,794 shares   DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 





MITCHAM
    INDUSTRIES, INC.
    ANNUAL REPORT ON
    FORM 10-K
    TABLE OF CONTENTS
  Cautionary Statement about Forward-looking
    Statements


1PART IItem 1.


Business


2Item 1A.


Risk Factors


10Item 1B.


Unresolved Staff Comments


19Item 2.


Properties


19Item 3.


Legal Proceedings


19Item 4.


(Removed and Reserved)


19PART IIItem 5.


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


20Item 6.


Selected Financial Data


21Item 7.


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


22Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


39Item 8.


Financial Statements and Supplementary Data


39Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


39Item 9A.


Controls and Procedures


40Item 9B.


Other Information


40PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


41Item 11.


Executive Compensation


41Item 12.


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


41Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


41Item 14.


Principal Accounting Fees and Services


41PART IVItem 15.


Exhibits, Financial Statement Schedules


41Signatures


46EX-12.1EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   i




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##### Table of Contents



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;
    our liquidity and access to capital;
    the effects of seasonality on our business;
    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 3




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equipment lease pool encourages seismic data acquisition
    contractors and oil field service providers 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 continue to expand our
    international leasing activities in new geographic areas,
    including the CIS, South America, Europe, the Middle East and
    North Africa. 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-D 3-D 2-D 3-D
       4




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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 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.
 6




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##### Table of Contents



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.
    Sale of heli-pickers and related equipment by
    AES.  AES sells a variety of equipment and
    supplies utilized in the deployment and retrieval of seismic
    equipment by helicopter. Certain of this equipment is produced
    by AES and is the subject of certain patent rights that AES owns.
    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
        Other
    Agreements
  sub-bottom
   7




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Customers,
    Sales, Backlog and Marketing
          Years Ended January 31,2011


2010


2009United States

$
11,659


$
15,184


$
14,850UK / Europe


16,765



14,358



20,502Canada


5,294



3,608



6,498South America


8,042



4,545



3,313Asia/South Pacific


15,444



12,447



10,778Eurasia(1)


10,812



1,637



6,156Other(2)


3,347



3,393



4,715Total
    Non-United
    States


59,704



39,988



51,962Total

$
71,363


$
55,172


$
66,812     (1)
    
    Comprised of Eastern Europe, the Russian Federation and the CIS(2)
    
    Includes Africa and the Middle East    As of January 31,Location of property and equipment

2011


2010


2009United States

$
56,206


$
40,448


$
45,942Canada


11,544



7,056



13,857Australia


3,443



4,360



1,626Russia


3,009



3,906



1,920South America


4,384



10,052



Singapore


354



433



543United Kingdom


155



227



363Total
    Non-United
    States


22,889



26,034



18,309Total

$
79,095


$
66,482


$
64,251  8




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Competition
      Suppliers
  Item 1A-
  Employees
    Intellectual
    Property
      Item 1A-Risk
  Environmental
    Regulation
   9




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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.
  If
    economic conditions weaken or commodity prices become depressed
    or decline, our results of operations could be adversely
    affected.
   10




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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 ability of oil and gas companies to generate funds or
    otherwise obtain capital for exploration operations;
    the granting of leases or exploration concessions and the
    expiration of such rights;
    changes to existing laws and regulations;
    domestic and foreign tax policies;
    merger and divestiture activity among oil and gas producers;
    the discovery rate of new oil and gas reserves; and
    local and international political and economic conditions.    Our
    revenues are subject to fluctuations that are beyond our
    control, which could materially adversely affect our results of
    operations in a given financial period.
    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.
   11




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The
    financial soundness of our customers could materially affect our
    business and operating results.
      We
    derive significant revenues from foreign sales, which pose
    additional risks to our operations.
    Capital
    requirements for our operations are large. If we are unable to
    finance these requirements, we may not be able to maintain our
    competitive advantage.
     12




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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.
    The
    high fixed costs of our operations could adversely affect our
    results of operations.
    Our
    long-lived assets may be subject to impairment due to the
    current financial crisis.
    Our
    seismic lease pool is subject to technological
    obsolescence.
    Seasonal
    conditions cause fluctuations in our operating
    results.
   13




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##### Table of Contents



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.
    Equipment
    in our lease pool may be subject to the intellectual property
    claims of others that could adversely affect our ability to
    generate revenue from the lease of the equipment.
    
    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; and
    prevent us from leasing or selling our products that incorporate
    the technology.     14




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The
    operations of Seamap are subject to special risks that could
    have a material adverse effect on our operations.
    Risks Associated with Intellectual
    Property.
    
    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; and
    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. 15




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Risks Related to Raw Materials.
      We are
    subject to a variety of environmental laws and regulations that
    could increase our costs of compliance and impose significant
    liabilities.
   16




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Climate
    change laws and regulations restricting emissions of
    greenhouse gases could result in reduced demand for
    oil and natural gas, thereby adversely affecting our business,
    while the physical effects of climate change could disrupt our
    manufacturing of seismic equipment and cause us to incur
    significant costs in preparing for or responding to those
    effects.
  case-by-case and/or
  Federal
    and state legislative and regulatory initiatives relating to
    hydraulic fracturing could result in additional operating
    restrictions or delays and adversely affect our
    business.
   17




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The
    Deepwater Horizon event and its aftermath, including any
    additional regulations that cause delays or deter new drilling,
    could adversely affect our financial position, results of
    operations and cash flows.
      Our
    stock price is subject to volatility.
    We
    have significant operations outside of the United States that
    expose us to certain additional risks.
    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.
   18




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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.
    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 LeasingBogota, Colombia

Warehouse

3,600

Leased

Equipment Leasing   Item 3.
    Legal
    Proceedings    Item 4.
    (Removed
    and Reserved) 19




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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, 2010:First Quarter

$
4.64


$
2.42Second Quarter


6.42



4.40Third Quarter


7.98



4.38Fourth Quarter


7.99



6.92Fiscal Year Ended January 31, 2011:First Quarter

$
8.33


$
6.75Second Quarter


7.55



5.56Third Quarter


8.73



6.25Fourth Quarter


12.28



8.36     Dividend
    Policy
     20




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##### Table of Contents



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.
    
  1/31/06



1/31/07



1/31/08



1/31/09



1/31/10



1/31/11Mitcham Industries, Inc.



100.00




52.82




65.78




14.17




28.97




43.15S&P Smallcap 600



100.00




108.41




100.73




63.73




88.56




115.95Peer Group



100.00




153.21




175.36




43.18




89.97




119.48     Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
    Item 6.
    Selected
    Financial Data    21




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##### Table of Contents



Years Ended January 31,2011


2010


2009


2008


2007(Amounts in thousands, except per share amounts)Statement of Income Data:Total revenues

$
71,363


$
55,172


$
66,812


$
76,421


$
48,910Operating income


6,921



871



11,478



16,445



6,555Income from continuing operations


4,729



520



9,065



11,439



9,285Income from continuing operations per common share 
    basic


0.48



0.05



0.93



1.18



0.97Income from continuing operations per common share 
    diluted


0.46



0.05



0.89



1.11



0.93Balance Sheet Data:Cash and short-term investments (including restricted cash)


14,647



6,735



6,032



13,884



12,582Seismic equipment lease pool and property and equipment, net


79,095



66,482



64,251



53,179



35,432Total assets


137,971



115,397



104,227



103,901



83,302Long-term debt


23,343



15,735



5,950







1,500Total liabilities


43,256



30,442



27,104



28,133



23,796Total shareholders equity


94,715



84,955



77,123



75,768



59,506     Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
     22




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##### Table of Contents



Years Ended January 31,2011


2010


2009(In thousands)Revenues:Equipment Leasing

$
50,018


$
34,605


$
49,903Seamap


22,462



20,993



17,346Less inter-segment sales


(1,117
)


(426
)


(437
)Total revenues


71,363



55,172



66,812Cost of sales:Equipment Leasing


34,494



27,010



25,128Seamap


11,209



10,482



9,319Less inter-segment costs


(982
)


(445
)


(279
)Total direct costs


44,721



37,047



34,168Gross profitEquipment Leasing


15,524



7,595



24,775Seamap


11,253



10,511



8,027Less inter-segment amounts


(135
)


19



(158
)Total gross profit


26,642



18,125



32,644Operating expenses:General and administrative


16,755



14,977



17,497Provision for doubtful accounts


1,795



1,378



2,897Gain on insurance settlement










(580
)Depreciation and amortization


1,171



899



1,352Total operating expenses


19,721



17,254



21,166Operating income

$
6,921


$
871


$
11,478EBITDA(1)

$
28,680


$
19,794


$
28,336Adjusted EBITDA(1)

$
29,779


$
21,195


$
30,521Reconciliation of Net Income to EBITDA and Adjusted EBITDANet income

$
4,729


$
520


$
9,065Interest expense (income), net


473



415



(350
)Depreciation, amortization and impairment


22,717



18,740



16,531Provision for income taxes


2,065



119



3,090Gain from bargain purchase


(1,304
)






EBITDA(1)


28,680



19,794



28,336Stock-based compensation


1,099



1,401



2,185Adjusted EBITDA(1)

$
29,779


$
21,195


$
30,521 23




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Years Ended January 31,2011


2010


2009(In thousands)Reconciliation of Net Cash Provided by Operating Activities
    to EBITDANet cash provided by operating activities

$
30,137


$
14,085


$
17,618Stock-based compensation


(1,099
)


(1,401
)


(2,185
)Provision for doubtful accounts


(1,795
)


(1,378
)


(2,897
)Changes in trade accounts and contracts receivable


2,019



4,995



1,310Interest paid


728



627



306Taxes paid , net of refunds


508



1,269



4,574Gross profit from sale of lease pool equipment


1,340



755



1,498Changes in contract revenues in excess of billings


(573
)


(1,704
)


1,787Changes in inventory


(727
)


754



(1,282
)Changes in accounts payable, accrued expenses and other current
    liabilities


(1,964
)


836



7,289Other


106



956



318EBITDA(1)

$
28,680


$
19,794


$
28,336     (1)
    
    EBITDA is defined as net income before (a) interest income
    and 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 or liquidity 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 liquidity, and as indicators
    of our ability to make capital expenditures, service debt and
    finance working capital requirements. 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 and liquidity 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 or liquidity
    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.   24




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Business
    Outlook
       25




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##### Table of Contents



26




---



##### Table of Contents



3-D
        Results
    of Operations
     27




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##### Table of Contents



Revenues
    and Cost of Sales
  Equipment
    Leasing
    Years Ended January 31,2011


2010


2009(In thousands)Revenues:Equipment leasing

$
36,825


$
27,702


$
37,747Lease pool equipment sales


2,470



3,321



2,985New seismic equipment sales


6,056



334



3,832SAP equipment sales


4,667



3,248



5,33950,018



34,605



49,903Cost of sales:Lease pool depreciation


21,512



17,712



15,031Direct costs  equipment leasing


3,739



3,760



2,041Cost of lease pool equipment sales


1,130



2,566



1,487Cost of new seismic equipment sales


4,362



146



2,637Cost of SAP equipment sales


3,751



2,826



3,93234,494



27,010



25,128Gross profit

$
15,524


$
7,595


$
24,775Gross profit margin


31%



22%



50%      28




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##### Table of Contents



29




---



##### Table of Contents



sub-leasing
  Seamap
    Years Ended January 31,2011


2010


2009(In thousands)Equipment sales

$
22,462


$
20,993


$
17,346Cost of equipment sales


11,209



10,482



9,319Gross profit

$
11,253


$
10,511


$
8,027Gross profit margin


50%



50%



46%     Operating
    Expenses
     30




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##### Table of Contents



Other
    Income and Expense
        Provision
    for Income Taxes
     31




---



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Liquidity
    and Capital Resources
         32




---



##### Table of Contents



48-month
 33




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##### Table of Contents



Actual as of January 31,Description of



2011 or forFinancial Covenant

Required Amount

Period Then EndedRatio of debt to
    shareholders equity

Not more than 0.7:1.0

0.28:1.0Ratio of current
    assets to current
    liabilities

Not less than 1.25:1.0

3.0:1.0Quarterly EBITDA

Not less than $2.0 million

$9.1 million   48-month 48-month
      24-month
      Payments Due by PeriodLess Than








More ThanContractual Obligations

Total


1 Year


1-3 Years


3-5 Years


5 YearsLong-term debt

$
26,520


$
3,177


$
23,343


$



$
Operating leases


2,349



1,075



1,036



223



15Purchase obligations


11,698



11,698











Total

$
40,567


$
15,950


$
24,379


$
223


$
15  34




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##### Table of Contents



Off-Balance
    Sheet Arrangements
  Regulation S-K.
  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 pay 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.
    Service agreements Seamap provides on-going
    support services pursuant to contracts that generally have a
    term of 12 months. We recognize revenue from these
    contracts over the term of the contract. In some cases we will
    provide support services on a time and material basis. Revenue
    from these arrangements is 35




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##### Table of Contents



recognized as the services are provided. For certain new systems
    that Seamap sells, we provide support services for up to
    12 months at no additional charge. Any amounts attributable
    to these support obligations are immaterial.  Allowance
    for Doubtful Accounts
    Long-Lived
    Assets
  10-year
      ASC 360-10, Impairment or Disposal of Long-Lived Assets Part 1-
  Goodwill
    and Other Intangible Assets
  15-year
  Intangibles-Goodwill and Other
 36




---



##### Table of Contents



Variable

Decrease in Fair Value10% decrease in projected annual cash flow

$
3.6 million33% decrease in terminal value applied to the

$
4.1 millionestimated fourth year cash flow100 basis point increase in cost of capital

$
1.0 million   Part 1- Item 1A-
  Income
    Taxes
    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; 37




---



##### Table of Contents




    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.        Stock-Based
    Compensation
  Compensation-Stock Compensation
   38




---



##### Table of Contents



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
    Interest
    Rate Risk
    Item 8.
    Financial
    Statements and Supplementary Data  page F-1
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   39




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##### Table of Contents



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
  Changes
    in Internal Control over Financial Reporting
    Item 9B.
    Other
    Information   40




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##### 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
   41




---



##### Table of Contents



(3) Exhibits
  Regulation S-K
  (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

10.14
.2

First Amendment to Loan Agreement, dated March 24, 2010,
    between Mitcham Industries, Inc. and First Victoria National Bank

Incorporated by reference to Mitcham Industries, Inc. Current
    Report on Form 8-K, filed with the SEC on March 26, 2010.

000-25142

10.14
.3

Second Amendment to Loan Agreement, dated July 27, 2010 by
    and between Mitcham Industries, Inc. and First Victoria National
    Bank

Incorporated by reference to Mitcham Industries, Inc. Quarterly
    Report on Form 10-Q , filed with the SEC on September 8, 2010.

000-25142

10.14
.4

Form of Senior Indenture (including Form of Senior Note)

Incorporated by reference to Mitcham Industries, Inc.s
    Registration Statement on Form S-3, filed with the SEC on March
    18, 2011.

333-172935

4.14
.5

Form of Subordinated Indenture (including form of Subordinated
    Note)

Incorporated by reference to Mitcham Industries, Inc.s
    Registration Statement on Form S-3, filed with the SEC on March
    18, 2011.

333-172935

4.210
.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

10.4 42




---



##### Table of Contents



SEC File orExhibit





Registration

ExhibitNumber

Document Description

Report or Registration Statement

Number

Reference10
.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

10.310
.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. Amended and Restated Stock Awards Plan

Incorporated by reference to Mitcham Industries, Inc.s
    Current Report on Form 8-K, filed with the SEC on July 27, 2009.

000-25142

10.110
.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

10.5 43




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##### Table of Contents



SEC File orExhibit





Registration

ExhibitNumber

Document Description

Report or Registration Statement

Number

Reference10
.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

10.510
.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
    Quarterly Report on Form 10-Q, filed with the SEC on September
    8, 2010.

000-21542

10.210
.19

Exclusive Lease Agreement, dated September 4, 2009, between
    Sercel, Inc. and Mitcham Industries, Inc.

Incorporated by reference to Mitcham Industries, Inc.s
    Quarterly Report on Form 10-Q, filed with the SEC on September
    9, 2009.

000-25142

10.210
.20

Stock Purchase Agreement by and among Mitcham Canada Ltd, as
    Buyer, and Brett Cameron, Teresa Marshall, Steve and Ann
    Matthews, as Sellers, dated as of February 19, 2010

Incorporated by reference to Mitcham Industries, Inc. Annual
    Report on Form 10-K for the fiscal year ended January 31, 2010,
    filed with the SEC on April 9, 2010.

000-25142

10.2010
.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

10.25 44




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##### Table of Contents



SEC File orExhibit





Registration

ExhibitNumber

Document Description

Report or Registration Statement

Number

Reference10
.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

10.210
.24

Secured Promissory Note dated October 15, 2010

Incorporated by reference to Mitcham Industries, Inc. Quarterly
    Report on Form 10-Q, filed with the SEC on December 8, 2010.

000-21542

10.112
.1

Ration of Earnings to Fixed Charges21
.1

Subsidiaries of Mitcham Industries, Inc.23
.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  45




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##### 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 6, 2011/s/  Robert
    P. CappsRobert
    P. Capps

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

April 6, 2011/s/  Peter
    H. BlumPeter
    H. Blum

Non-Executive Chairman of the Board of Directors

April 6, 2011/s/  Robert
    J. AlbersRobert
    J. Albers

Director

April 6, 2011/s/  John
    F. SchwalbeJohn
    F. Schwalbe

Director

April 6, 2011/s/  Randal
    Dean LewisRandal
    Dean Lewis

Director

April 6, 2011  46




---



##### 



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


F-2Consolidated Balance Sheets as of
    January 31, 2011 and 2010


F-3Consolidated Statements of Income for the Years
    Ended January 31, 2011, 2010 and 2009


F-4Consolidated Statements of Changes in
    Shareholders Equity and Comprehensive Income for the Years
    Ended January 31, 2011, 2010 and 2009


F-5Consolidated Statements of Cash Flows for the
    Years Ended January 31, 2011, 2010 and 2009


F-6Notes to Consolidated Financial Statements


F-7   F-1




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##### Table of Contents



Report
    Of Independent Registered Public Accounting Firm            Form 10-K
      F-2




---



##### Table of Contents



MITCHAM
    INDUSTRIES, INC.
    CONSOLIDATED BALANCE SHEETS  January 31,2011


2010(In thousands, except per share data)ASSETSCurrent assets:Cash and cash equivalents

$
14,647


$
6,130Restricted cash






605Accounts receivable, net of allowance for doubtful accounts of
    $2,666 and $2,420 at January 31, 2011 and 2010, respectively


17,832



15,444Current portion of contracts receivable


3,582



2,073Inventories, net


4,813



5,199Cost and estimated profit in excess of billings on uncompleted
    contract






398Income taxes receivable


325



1,438Deferred tax asset


1,427



1,400Prepaid expenses and other current assets


2,128



1,986Total current assets


44,754



34,673Seismic equipment lease pool and property and equipment, net


79,095



66,482Intangible assets, net


5,358



2,678Goodwill


4,320



4,320Prepaid foreign income tax


3,053



2,574Deferred tax asset






88Long-term portion of contracts receivable, net of valuation
    allowance of $1,487 at January 31, 2010


1,355



4,533Other assets


36



49Total assets

$
137,971


$
115,397LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
5,203


$
6,489Current maturities  long-term debt


3,177



93Foreign income taxes payable


1,276



1,345Deferred revenue


778



854Accrued expenses and other current liabilities


5,165



2,668Total current liabilities


15,599



11,449Non-current income taxes payable


3,482



3,258Deferred tax liability


832



Long-term debt


23,343



15,735Total liabilities


43,256



30,442Commitments and contingencies (Note 11 and 15)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;
    10,872 and 10,737 shares issued at January 31, 2011
    and January 31, 2010, respectively


109



107Additional paid-in capital


77,419



75,746Treasury stock, at cost (925 and 925 shares at
    January 31, 2011 and 2010, respectively)


(4,843
)


(4,843
)Retained earnings


14,976



10,247Accumulated other comprehensive income


7,054



3,698Total shareholders equity


94,715



84,955Total liabilities and shareholders equity

$
137,971


$
115,397    F-3




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##### Table of Contents



MITCHAM
    INDUSTRIES, INC.
    CONSOLIDATED STATEMENTS OF INCOME  Years Ended January 31,2011


2010


2009(In thousands, except per share data)Revenues:Equipment leasing

$
36,825


$
27,702


$
37,747Lease pool equipment sales


2,470



3,321



2,985Seamap equipment sales


21,345



20,567



16,909Other equipment sales


10,723



3,582



9,171Total revenues


71,363



55,172



66,812Cost of sales:Direct costs  equipment leasing


3,739



3,760



2,041Direct costs  lease pool depreciation


21,354



17,712



15,031Cost of lease pool equipment sales


1,130



2,566



1,487Cost of Seamap and other equipment sales


18,498



13,009



15,609Total cost of sales


44,721



37,047



34,168Gross profit


26,642



18,125



32,644Operating expenses:General and administrative


16,755



14,977



17,497Provision for doubtful accounts


1,795



1,378



2,897Gain from insurance settlement










(580
)Depreciation and amortization


1,171



899



1,352Total operating expenses


19,721



17,254



21,166Operating income


6,921



871



11,478Other income (expense):Gain from bargain purchase in business combination


1,304







Interest income


283



214



631Interest expense


(756
)


(629
)


(281
)Other, net


(958
)


183



327Total other income (expense)


(127
)


(232
)


677Income before income taxes


6,794



639



12,155Provision for income taxes


2,065



119



3,090Net income

$
4,729


$
520


$
9,065Net income per common share:Basic

$
0.48


$
0.05


$
0.93Diluted

$
0.46


$
0.05


$
0.89Shares used in computing income per common share:Basic


9,870



9,799



9,768Diluted


10,181



9,963



10,205    F-4




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##### Table of Contents



MITCHAM
    INDUSTRIES, INC.
    CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
    EQUITYAND COMPREHENSIVE INCOME  Years Ended January 31, 2009, 2010 and 2011AccumulatedOtherAdditional








ComprehensiveCommon Stock


Paid-In


Treasury


Retained


IncomeShares


Amount


Capital


Stock


Earnings


(Loss)


Total(In thousands)Balances, 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
)


77,123Comprehensive income, net of tax:Net income


















520







520Foreign currency translation






















5,979



5,979Comprehensive income


























6,499Restricted stock issued


12







250















250Shares surrendered for payment of taxes upon vesting of
    restricted stock














(17
)










(17
)Stock-based compensation in excess of tax benefit










(346
)














(346
)Tax benefit from exercise of stock options and vesting of
    restricted stock










45















45Stock-based compensation










1,401















1,401Balances, January 31, 2010


10,737



107



75,746



(4,843
)


10,247



3,698



84,955Comprehensive income, net of tax:Net income


















4,729







4,729Foreign currency translation






















3,356



3,356Comprehensive income


























8,085Issuance of common stock upon exercise of options


77



1



395















396Restricted stock issued


58



1



184















185Tax expense from exercise of stock options and vesting of
    restricted stock










(5
)














(5
)Stock-based compensation










1,099















1,099Balances, January 31, 2011


10,872


$
109


$
77,419


$
(4,843
)

$
14,976


$
7,054


$
94,715    F-5




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##### Table of Contents



MITCHAM
    INDUSTRIES, INC.



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Years Ended January 31,2011


2010


2009(In thousands)Cash flows from operating activities:Net income

$
4,729


$
520


$
9,065Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


22,717



18,740



16,531Stock-based compensation


1,099



1,401



2,185Provision for doubtful accounts


1,795



1,378



2,897Gain from bargain purchase in business combination


(1,304
)






Provision for inventory obsolescence


94



(48
)


357Gross profit from sale of lease pool equipment


(1,340
)


(755
)


(1,498
)Gain on insurance settlement










(580
)Excess tax expense (benefit) from exercise of non-qualified
    stock options


5



(45
)


(121
)Provision for deferred income taxes


230



(120
)


1,197Non-current income taxes payable


224



270



(684
)Changes in:Trade accounts and contracts receivable


(2,019
)


(4,995
)


(1,310
)Inventories


727



(754
)


1,282Income taxes payable and receivable


1,001



715



(2,289
)Contract revenues in excess of billings


573



1,704



(1,787
)Prepaid foreign income tax


(318
)


(2,620
)


Accounts payable, accrued expenses and other current liabilities


1,964



(836
)


(7,289
)Prepaids and other, net


(40
)


(470
)


(338
)Net cash provided by operating activities


30,137



14,085



17,618Cash flows from investing activities:Sales from used lease pool equipment


2,470



3,321



2,985Proceeds from insurance settlement










1,680Purchases of seismic equipment held for lease


(32,736
)


(26,684
)


(31,535
)Purchases of property and equipment


(383
)


(502
)


(876
)Acquisition of AES, net of cash acquired


(2,100
)






Net cash used in investing activities


(32,749
)


(23,865
)


(27,746
)Cash flows from financing activities:Net proceeds from revolving line of credit


6,300



9,400



5,950Proceeds from equipment notes


3,672



414



Payments on borrowings


(719
)






(1,500
)Redemption (purchase) of short-term investment


684



744



(1,413
)Proceeds from issuance of common stock upon exercise of options
    and warrants, net of shares surrendered during exercises


396



(17
)


140Excess tax (expense) benefit from exercise of non-qualified
    stock options


(5
)


45



121Net cash provided by financing activities


10,328



10,586



3,298Effect of changes in foreign exchange rates on cash and cash
    equivalents


801



261



(1,991
)Net increase (decrease) in cash and cash equivalents


8,517



1,067



(8,821
)Cash and cash equivalents, beginning of year


6,130



5,063



13,884Cash and cash equivalents, end of year

$
14,647


$
6,130


$
5,063    F-6




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes
    to Consolidated Financial Statements
  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 
  Service agreements 
  Contracts receivable 
  Allowance for doubtful accounts 
 F-7




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##### 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 360-10, Impairment or Disposal of Long-Lived Assets 360-10), 360-10 Intangibles-Goodwill and
    Other
  Product Warranties
  Income Taxes 
 F-8




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  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
    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.  Use of Estimates 
    Fair Value of Financial Instruments 
  Foreign Currency Translation 
  Stock-Based Compensation  Compensation-Stock Compensation
 F-9




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Earnings Per Share
  Years Ended January 31,2011


2010


2009(In thousands)Stock options


299



155



414Restricted stock


12



6



14Phantom stock






3



9Total dilutive shares


311



164



437     Reclassifications 
  2.
    Acquisition  24-month
     F-10




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        Working capital

$
327Seismic equipment lease pool


2,990Deferred taxes


(1,086
)Intangible assets


3,154     Pro
    Forma Results of Operations
    Years EndedJanuary 31,2011


2010(In thousands, except per share amounts)(unaudited)Revenues

$
71,524


$
58,320Net income

$
4,636


$
948Earnings per share:Basic

$
0.47


$
0.10Diluted

$
0.46


$
0.10  F-11




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  3.
    Supplemental
    Statements of Cash Flows Information    Years Ended January 31,2011


2010


2009Interest paid

$
728


$
627


$
306Income taxes paid, net


508



1,269



4,574Seismic equipment purchases included in accounts payable at
    year-end


3,229



4,879



11,964Stock issued for accrued compensation


185



250



   4.
    Inventories    As of January 31,2011


2010Raw materials

$
2,440


$
2,695Finished goods


1,888



2,171Work in progress


1,215



1,016Cost of inventories


5,543



5,882Less allowance for obsolescence


(730
)


(683
)Net inventories

$
4,813


$
5,199   5.
    Contracts
    Receivable     F-12




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  6.
    Seismic
    Equipment Lease Pool and Property and Equipment    As of January 31,2011


2010Recording channels

$
72,786


$
81,507Other peripheral equipment


94,097



70,414Cost of seismic equipment lease pool


166,883



151,921Land and buildings


366



366Furniture and fixtures


6,761



6,305Autos and trucks


663



526Cost of property and equipment


7,790



7,197Cost of seismic equipment lease pool and property and equipment


174,673



159,118Less accumulated depreciation


(95,578
)


(92,636
)Net book value of seismic equipment lease pool and property and
    equipment

$
79,095


$
66,482   As of January 31,2011


2010Location of seismic equipment lease pool and property and
    equipment (In thousands):United States

$
56,206


$
40,448Canada


11,544



7,056South America


4,384



10,052Australia


3,443



4,360Russia


3,009



3,906Singapore


354



433United Kingdom


155



227Net book value of seismic equipment lease pool and property and
    equipment

$
79,095


$
66,482   7.
    Goodwill
    and Other Intangible Assets  Weighted


January 31, 2011


January 31, 2010Average


Gross





Net


Gross





NetLife at


Carrying


Accumulated


Carrying


Carrying


Accumulated


Carrying1/31/11


Amount


Amortization


Amount


Amount


Amortization


Amount(In thousands)


(In thousands)Goodwill





$
4,320










$
4,320Proprietary rights


9.4


$
3,523


$
(1,101
)

$
2,422


$
3,516


$
(838
)

$
2,678Customer relationships


7.0



2,396



(274
)


2,122











Patents


7.0



721



(82
)


639











Trade name


7.0



197



(22
)


175











Amortizable intangible assets





$
6,837


$
(1,479
)

$
5,358


$
3,516


$
(838
)

$
2,678  F-13




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      For fiscal years ending January 31,:2012

$
6722013


6722014


6722016


6722016


672Thereafter


1,998Total

$
5,358     8.
    Long-Term
    Debt and Notes Payable    As of January 31,2011


2010Revolving line of credit

$
21,650


$
15,350Equipment note


3,066



MCL notes


1,550



SAP equipment notes


254



47826,520



15,828Less current portion


(3,177
)


(93
)Long-term debt

$
23,343


$
15,735      F-14




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
          9.
    Shareholders
    Equity     F-15




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  10.
    Income
    Taxes  Years Ended January 31,2011


2010


2009(In thousands)Income (loss) before income taxes is attributable to the
    following jurisdictions:Domestic

$
(522
)

$
(3,342
)

$
3,574Foreign


7,316



3,981



8,581Total

$
6,794


$
639


$
12,155The components of income tax expense (benefit) were as follows:Current:Domestic

$
(171
)

$
(821
)

$
(70
)Foreign


2,466



1,060



1,9632,295



239



1,893Deferred:Domestic


(183
)


74



469Foreign


(47
)


(194
)


728(230
)


(120
)


1,197Income tax expense

$
2,065


$
119


$
3,090     Years Ended January 31,2011


2010


2009(In thousands)Federal income tax expense at 34%

$
2,310


$
217


$
4,133Decrease in foreign effective tax rate


131



69



213Permanent differences


(300
)


(14
)


245Foreign effective tax rate differential


(1,149
)


(565
)


(785
)Recognition of tax benefits upon resolution of uncertain tax
    positions










(1,083
)Potential tax, penalties and interest resulting from uncertain
    tax positions


279



270



399Undistributed earnings of foreign affiliates


646



174



Foreign withholding taxes


122







Other


26



(32
)


(32
)$
2,065


$
119


$
3,090  F-16




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    As of January 31,2011


2010(In thousands)Deferred tax assets:Net operating losses

$
1,424


$
1,407Tax credit carry forwards


2,937



2,521Stock option book expense


2,589



2,235Allowance for doubtful accounts


900



1,214Allowance for inventory obsolescence


188



210Accruals not yet deductible for tax purposes


413



347Other


389



325Gross deferred tax assets


8,840



8,259Valuation allowance






Deferred tax assets


8,840



8,259Deferred tax liabilities:Undistributed earnings of controlled foreign corporations not
    permanently reinvested


(2,877
)


(2,944
)Fixed assets


(2,949
)


(1,708
)Non-deductible intangible assets


(921
)


(379
)Other


(73
)


(371
)Deferred tax liabilities


(6,820
)


(5,402
)Effect of uncertain tax positions


(1,424
)


(1,369
)Total deferred tax assets, net

$
596


$
1,488            F-17




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
          Years Ended January 31,2011


2010


2009(In thousands)Unrecognized tax benefits as beginning of year

$
(3,327
)

$
(2,795
)

$
(3,878
)Increases as a result of tax positions taken in prior years


(23
)


(532
)


Increases as a result of tax positions taken in current










yearSettlements










Lapse of statute of limitations










1,083Unrecognized tax benefits as of end of year

$
(3,350
)

$
(3,327
)

$
(2,795
)      F-18




---



##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  11.
    Commitments
    and Contingencies  Purchase Obligations
  12.
    Stock
    Option Plans      Weighted
    average Black-Scholes-Merton fair value
    assumptions
  Years Ended January 31,2011

2010

2009Risk free interest rate

1.82 - 1.97%

2.21 - 2.36%

3.19%Expected life

2.4 - 4.4 yrs

2.9 - 5.5 yrs

3.4 - 5.4 yrsExpected volatility

57 - 58%

60 - 61%

50%Expected dividend yield

0.0%

0.0%

0.0%     10-year
 F-19




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##### Table of Contents



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


Average


AggregateNumber of


Average


Remaining


IntrinsicShares


Exercise


Contractual


Value(In Thousands)


Price


Term (In Years)


(In Thousands)Outstanding, January 31, 2010


1,526


$
8.69Granted


145



6.62Exercised


(78
)


5.10Forfeited






Expired


(1
)


16.64Outstanding, January 31, 2011


1,592


$
8.68



5.55


$
5,948Exercisable at January 31, 2011


1,324


$
8.95



4.94


$
4,692Vested and expected to vest at January 31, 2011


1,589


$
8.69



5.55


$
5,915   in-the-money
        Year Ended January 31, 2011Number ofShares


Weighted Average(In Thousands)


Grant Date Fair ValueUnvested, beginning of period






Granted


58



6.54Vested


(26
)


6.71Canceled






Unvested, end of period


32



6.40    F-20




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  13.
    Segment
    Reporting  Segment Reporting.
    state-of-the-art
    As of January 31, 2011


As of January 31, 2010


As of January 31, 2009Equipment








Equipment








EquipmentLeasing


Seamap


Consolidated


Leasing


Seamap


Consolidated


Leasing


Seamap


ConsolidatedFixed assets, net

$
78,586


$
509


$
79,095


$
66,214


$
661


$
66,482


$
63,888


$
905


$
64,251Intangible assets, net


2,936



2,422



5,358







2,678



2,678







2,744



2,744Goodwill






4,320



4,320







4,320



4,320







4,320



4,320   For the Years EndedJanuary 31, 2011


January 31, 2010


January 31, 2009Equipment








Equipment








EquipmentLeasing


Seamap


Consolidated


Leasing


Seamap


Consolidated


Leasing


Seamap


ConsolidatedRevenues

$
50,018


$
22,462


$
71,363


$
34,605


$
20,993


$
55,172


$
49,903


$
17,346


$
66,812Interest income (expense), net


(470
)


(3
)


(473
)


(418
)


3



(415
)


325



25



350Income (loss) before taxes


1,527



5,402



6,794



(4,293
)


5,832



639



9,452



226



12,155Capital expenditures


32,876



243



33,119



27,130



56



27,186



31,818



593



32,411Depreciation and amortization expense


22,120



597



22,717



18,013



727



18,740



15,402



1,129



16,531       Years Ended January 31,2011


2010


2009Equipment Leasing

$
1,527


$
(4,293
)

$
9,452Seamap


5,402



5,832



226Reconciling items:Elimination of (profit) loss from inter-company sales


(135
)


19



(158
)Foreign exchange (gain) loss on inter-company transactions of a
    long-term investment nature






(914
)


2,600Other






(5
)


35Consolidated income before taxes

$
6,794


$
639


$
12,155  F-21




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  14.
    Quarterly
    Financial Data (Unaudited)  Quarters Ended:Fiscal Year


April 30


July 31


October 31


January 31Net revenues:


2011


$
16,500


$
15,155


$
19,973


$
19,7352010


$
10,605


$
12,677


$
14,530


$
17,360Gross profit:


2011



6,943



4,655



5,979


$
9,0652010



3,772



3,332



6,165



4,856Income (loss) before income taxes:


2011



3,185



(281
)


1,103


$
2,7872010



46



(1,438
)


1,414



617Incomes taxes (benefit):


2011



791



(135
)


376


$
1,0332010



126



(428
)


388



33Net income (loss):


2011



2,394



(146
)


727


$
1,7542010



(80
)


(1,010
)


1,026



584Income per common share  basic:


2011


$
0.24


$
(0.01
)

$
0.07


$
0.182010


$
(0.01
)

$
(0.10
)

$
0.10


$
0.06Income per common share  diluted:


2011


$
0.24


$
(0.01
)

$
0.07


$
0.172010


$
(0.01
)

$
(0.10
)

$
0.10


$
0.06   15.
    Leases  month-to-month
        For fiscal years ending:2012

$
1,0752013


6692014


3672015


1542016


69Thereafter


15  F-22




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##### Table of Contents



Mitcham
    Industries, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  16.
    Concentrations  Credit Risk 
    Industry Concentration 
  Supplier Concentration 
  17.
    Sales and
    Major Customers    Years Ended January 31,2011


2010


2009Canada

$
5,294


$
3,608


$
6,498UK/Europe


16,765



14,358



20,502South America


8,042



4,545



3,313Asia/South Pacific


15,444



12,447



10,778Eurasia


10,812



1,637



6,156Other


3,347



3,393



4,715Total

$
59,704


$
39,988


$
51,962    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 Costs


Charged to Other


Deductions


Balance at End ofDescription

Beginning of Period


and Expenses


Accounts


Describe


Period(in thousands)Allowance for doubtful accountsJanuary 31, 2011

$
2,420



1,183



22
(a)


(959
)(b)

$
2,666January 31, 2010

$
2,300



786



50
(a)


(716
)(b)

$
2,420January 31, 2009

$
1,512



1,976



(43
)(a)


(1,145
)(b)

$
2,300Allowance for obsolete equipment and inventoryJanuary 31, 2011

$
923



216



(195
)


(214
)(c)

$
730January 31, 2010

$
1,204



372



133
(a)


(786
)(c)

$
923January 31, 2009

$
1,044



360



(186
)(a)


(14
)(c)

$
1,204     (a)
    
    Represents translation differences.(b)
    
    Represents recoveries and uncollectible accounts written off.(c)
    
    Represents sale or scrap of inventory and obsolete equipment. F-25