10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended October 31, 2014

or

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

For the transition period from                      to                     

Commission File Number: 000-25142

MITCHAM INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

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

8141 SH 75 South

P.O. Box 1175

Huntsville, Texas 77342

(Address of principal executive offices, including Zip Code)

(936) 291-2277

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 12,084,056 shares of common stock, $0.01 par value, were outstanding as of December 9, 2014.

MITCHAM INDUSTRIES, INC.

Table of Contents

	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of October 31, 2014 and January 31, 2014	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended October 31, 2014 and 2013	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended October 31, 2014 and 2013	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 31, 2014 and 2013	4
	Notes to Condensed Consolidated Financial Statements	5
	Cautionary Statement about Forward-Looking Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	25
	Signatures	26

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MITCHAM INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

	October 31, 2014			January 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	9,069		$	15,162
Restricted cash		—			81
Accounts receivable, net		30,430			29,514
Contracts and notes receivable		3,338			1,005
Inventories, net		11,158			8,338
Prepaid income taxes		1,317			2,177
Deferred tax asset		1,562			1,968
Prepaid expenses and other current assets		9,866			3,915
Total current assets		66,740			62,160
Seismic equipment lease pool and property and equipment, net		112,803			129,573
Intangible assets, net		11,905			3,201
Goodwill		5,661			4,320
Deferred tax asset		8,217			6,133
Other assets		1,902			32
Total assets	$	207,228		$	205,419
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,489		$	10,745
Current maturities – long-term debt		2,421			75
Deferred revenue		179			35
Accrued expenses and other current liabilities		4,605			1,583
Total current liabilities		13,694			12,438
Non-current income taxes payable		—			408
Long-term debt, net of current maturities		32,141			22,125
Total liabilities		45,835			34,971
Shareholders’ equity:
Preferred stock, $1.00 par value; 1,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.01 par value; 20,000 shares authorized; 14,012 and 13,907 shares issued at October 31, 2014 and January 31, 2014, respectively		140			139
Additional paid-in capital		119,496			118,156
Treasury stock, at cost (1,928 and 1,075 shares at October 31, 2014 and January 31, 2014, respectively)		(16,851	)		(7,075	)
Retained earnings		61,109			61,116
Accumulated other comprehensive loss		(2,501	)		(1,888	)
Total shareholders’ equity		161,393			170,448
Total liabilities and shareholders’ equity	$	207,228		$	205,419

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

1

MITCHAM INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	For the Three Months Ended October 31,						For the Nine Months Ended October 31,
	2014			2013			2014			2013
Revenues:
Equipment leasing	$	14,285		$	7,900		$	38,672		$	34,435
Lease pool equipment sales		475			3,169			2,861			6,188
Seamap equipment sales		5,791			5,537			19,560			16,422
Other equipment sales		2,355			3,669			7,090			11,416
Total revenues		22,906			20,275			68,183			68,461
Cost of sales:
Direct costs—equipment leasing		2,343			1,465			4,700			3,857
Direct costs—lease pool depreciation		8,634			7,216			26,195			22,021
Cost of lease pool equipment sales		193			1,119			1,016			2,080
Cost of Seamap and other equipment sales		4,729			5,522			14,785			16,653
Total cost of sales		15,899			15,322			46,696			44,611
Gross profit		7,007			4,953			21,487			23,850
Operating expenses:
General and administrative		6,159			6,086			18,951			18,173
Provision for doubtful accounts		—			1,048			—			1,048
Depreciation and amortization		654			371			1,566			1,124
Total operating expenses		6,813			7,505			20,517			20,345
Operating income (loss)		194			(2,552	)		970			3,505
Other (expenses) income:
Interest, net		(147	)		(37	)		(347	)		120
Other, net		(387	)		(517	)		(140	)		222
Total other (expenses) income		(534	)		(554	)		(487	)		342
(Loss) income before income taxes		(340	)		(3,106	)		483			3,847
(Provision) benefit for income taxes		(57	)		478			(490	)		(861	)
Net (loss) income	$	(397	)	$	(2,628	)	$	(7	)	$	2,986
Net (loss) income per common share:
Basic	$	(0.03	)	$	(0.21	)	$	(0.00	)	$	0.23
Diluted	$	(0.03	)	$	(0.21	)	$	(0.00	)	$	0.23
Shares used in computing net income per common share:
Basic		12,476			12,767			12,631			12,766
Diluted		12,476			12,767			12,631			13,180

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

2

MITCHAM INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

	For the Three Months Ended October 31,						For the Nine Months Ended October 31,
	2014			2013			2014			2013
Net (loss) income	$	(397	)	$	(2,628	)	$	(7	)	$	2,986
Change in cumulative translation adjustment		(2,160	)		1,488			(613	)		(4,703	)
Comprehensive loss	$	(2,557	)	$	(1,140	)	$	(620	)	$	(1,717	)

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

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MITCHAM INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	For the Nine Months Ended October 31,
	2014			2013
Cash flows from operating activities:
Net (loss) income	$	(7	)	$	2,986
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		27,866			23,242
Stock-based compensation		1,006			839
Provision for doubtful accounts, net of charge offs		—			1,048
Provision for inventory obsolescence		44			70
Gross profit from sale of lease pool equipment		(1,845	)		(4,108	)
Excess tax benefit from exercise of non-qualified stock options and restricted shares		—			(44	)
Deferred tax benefit		(1,742	)		(2,495	)
Changes in working capital items:
Accounts receivable		(1,076	)		(4,569	)
Contracts and notes receivable		(2,632	)		1,277
Inventories		630			(2,827	)
Prepaid expenses and other current assets		(7,449	)		(1,449	)
Income taxes payable		(331	)		3,382
Accounts payable, accrued expenses, other current liabilities and deferred revenue		2,079			1,338
Net cash provided by operating activities		16,543			18,690
Cash flows from investing activities:
Purchases of seismic equipment held for lease		(15,079	)		(13,308	)
Acquisition of business		(14,500	)		—
Purchases of property and equipment		(375	)		(452	)
Sale of used lease pool equipment		2,861			6,188
Net cash used in investing activities		(27,093	)		(7,572	)
Cash flows from financing activities:
Net proceeds from (payments on) revolving line of credit		2,500			(1,000	)
Net proceeds from term loan		10,000			—
Payments on borrowings		(74	)		(105	)
Net proceeds from short-term investments		85			30
Proceeds from issuance of common stock upon exercise of options		99			275
Purchase of treasury stock		(9,776	)		(2,200	)
Excess tax benefit from exercise of non-qualified stock options and restricted shares		—			44
Net cash provided by (used in) financing activities		2,834			(2,956	)
Effect of changes in foreign exchange rates on cash and cash equivalents		1,623			897
Net change in cash and cash equivalents		(6,093	)		9,059
Cash and cash equivalents, beginning of period		15,162			15,150
Cash and cash equivalents, end of period	$	9,069		$	24,209
Supplemental cash flow information:
Interest paid	$	576		$	206
Income taxes paid	$	836		$	(74	)
Purchases of seismic equipment held for lease in accounts payable at end of period	$	3,438		$	5,208

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

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MITCHAM INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Organization

Mitcham Industries, Inc. (for purposes of these notes, the “Company”) was incorporated in Texas in 1987. The Company, through its wholly-owned Canadian subsidiary, Mitcham Canada, ULC. (“MCL”), its wholly-owned Russian subsidiary, Mitcham Seismic Eurasia LLC (“MSE”), its wholly-owned Hungarian subsidiary, Mitcham Europe Ltd. (“MEL”), its wholly-owned Singaporean subsidiary, Mitcham Marine Leasing Pte Ltd. (“MML”), and its branch operations in Colombia and Peru, provides full-service equipment leasing, sales and service to the seismic industry worldwide. The Company, through its wholly-owned Australian subsidiary, Seismic Asia Pacific Pty Ltd. (“SAP”), provides seismic, oceanographic and hydrographic leasing and sales worldwide, primarily in Southeast Asia and Australia. The Company, through its wholly-owned subsidiary, Seamap International Holdings Pte, Ltd. (“Seamap”), designs, manufactures and sells a broad range of proprietary products for the seismic, hydrographic and offshore industries, with manufacturing, support and sales facilities based in Singapore and the United Kingdom. All material intercompany transactions and balances have been eliminated in consolidation.

2. Basis of Presentation

The condensed consolidated balance sheet as of January 31, 2014 for the Company has been derived from audited consolidated financial statements. The unaudited interim condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2014. In the opinion of the Company, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position as of October 31, 2014, the results of operations for the three and nine months ended October 31, 2014 and 2013, and the cash flows for the nine months ended October 31, 2014 and 2013, have been included in these financial statements. The foregoing interim results are not necessarily indicative of the results of operations to be expected for the full fiscal year ending January 31, 2015. As of February 1, 2014, MML, MEL, Mitcham Holdings, Ltd. (“MHL”) and our branch operations in Colombia changed their functional currencies to the U.S. dollar due to changes in the economic environment for these entities. Had these changes not been made, other income would have been approximately $588,000 less than as reported.

3. New Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11, Income Taxes (Topic 740) – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists, to provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carry forward, a similar tax loss, or a tax credit carry forward exists. ASU 2013-11 requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward, with certain exceptions. ASU 2013-11 was effective in the nine months ended October 31, 2014. The adoption of this standard did not have a material effect on the Company’s financial statements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers: (Topic 606), to provide guidance on revenue recognition on contracts with customers to transfer goods or services or on contracts for the transfer of nonfinancial assets. ASU 2014-09 requires that revenue recognition on contracts with customers depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective during the fiscal year ended January 31, 2017. The Company does not believe the adoption will have a material effect on its financial statements.

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4. Acquisition

In May 2014, the Company’s wholly-owned subsidiary, Seamap Pte Ltd, purchased two product lines from ION Geophysical Corporation (“ION”) for $14.5 million in cash and a credit of $2.0 million against future sales or rentals. These product lines consist of the Digishot™ energy source controller and the Sleeve Gun energy sources, collectively the “ION Source Products”. The Company made this acquisition to expand the product offerings available to customers, gain access to additional technology and expand the markets in which it operates. The Company accounted for this transaction as a business combination and these operations are included in the Seamap segment. Based on an independent valuation study, the fair value of the consideration was determined to be approximately $15.6 million and was allocated as follows: $10.0 million to intangible assets, $3.6 million to inventory, $1.4 million to goodwill and $600,000 to furniture and fixtures. The goodwill is not deductible for tax purposes. Pro forma results of operations have not been presented as the business combination was not significant.

5. Restricted Cash

As of January 31, 2014, SAP had pledged approximately $81,000 in short-term time deposits to secure performance obligations in connection with certain contracts. As of April 30, 2014, the amount of security had been released as the contractual obligations had been fulfilled.

As these investments in short-term time deposits relate to financing activities, the securing of contract obligations, these transactions are reflected as financing activities in the accompanying condensed consolidated statements of cash flows.

6. Balance Sheet

	October 31, 2014			January 31, 2014
	(in thousands)
Accounts receivable:
Accounts receivable	$	34,136		$	33,347
Allowance for doubtful accounts		(3,706	)		(3,833	)
Total accounts receivable, net	$	30,430		$	29,514

Contracts receivable consisted of $849,000, due from two customers as of October 31, 2014 and $1,005,000 due from three customers as of January 31, 2014. Notes receivable of $2,800,000 at October 31, 2014 relate to promissory notes issued by a customer in settlement of a trade account receivable. The balance of contracts and notes receivable at October 31, 2014 and January 31, 2014 consisted of contracts and notes bearing interest at an average of approximately 2.1% and with remaining repayment terms of one to 13 months. These contracts are collateralized by equipment and are considered collectable; therefore, no allowances have been established for them.

	October 31, 2014			January 31, 2014
	(in thousands)
Inventories:
Raw materials	$	5,827		$	4,599
Finished goods		5,649			4,159
Work in progress		529			612
		12,005			9,370
Less allowance for obsolescence		(847	)		(1,032	)
Total inventories, net	$	11,158		$	8,338

In May of 2014, the Company acquired $3.6 million of inventory in connection with the purchase of two product lines from ION. See Note 4 to our consolidated financial statements.

6

	October 31, 2014			January 31, 2014
	(in thousands)
Seismic equipment lease pool and property and equipment:
Seismic equipment lease pool	$	260,352		$	261,644
Land and buildings		366			366
Furniture and fixtures		9,765			8,904
Autos and trucks		768			770
		271,251			271,684
Accumulated depreciation and amortization		(158,448	)		(142,111	)
Total seismic equipment lease pool and property and equipment, net	$	112,803		$	129,573

7. Goodwill and Other Intangible Assets

	Weighted Average		October 31, 2014							January 31, 2014
	Remaining Life at 10/31/2014		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
			(in thousands)							(in thousands)
Goodwill			$	5,661						$	4,320
Proprietary rights		8.1	$	6,365	$	(2,177	)	$	4,188	$	3,577	$	(1,900	)		1,677
Customer relationships		6.0		7,105		(1,520	)		5,585		2,159		(1,057	)		1,102
Patents		6.8		2,404		(476	)		1,928		650		(318	)		332
Trade name		7.0		311		(107	)		204		177		(87	)		90
Amortizable intangible assets			$	16,185	$	(4,280	)	$	11,905	$	6,563	$	(3,362	)	$	3,201

As of October 31, 2014, the Company had goodwill of $5,661,000, all of which was allocated to the Seamap segment. No impairment was recorded against the goodwill account during the nine months ended October 31, 2014.

Amortizable intangible assets are amortized over their estimated useful lives of eight to 15 years using the straight-line method. Aggregate amortization expense was $458,000 and $164,000 for the three months ended October 31, 2014 and 2013, respectively, and $982,000 and $493,000 for the nine months ended October 31, 2014 and 2013, respectively. As of October 31, 2014, future estimated amortization expense related to amortizable intangible assets was estimated to be:

For fiscal years ending January 31 (in thousands):
2015	$	449
2016		1,795
2017		1,753
2018		1,732
2019		1,394
2020 and thereafter		4,782
Total	$	11,905

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8. Long-Term Debt and Notes Payable

Long-term debt and notes payable consisted of the following (in thousands):

	October 31, 2014			January 31, 2014
Revolving line of credit	$	24,500		$	22,000
Term Loan		10,000			—
Other equipment notes		62			200
		34,562			22,200
Less current portion		(2,421	)		(75	)
Long-term debt	$	32,141		$	22,125

On August 2, 2013, the Company entered into a $50.0 million, three-year revolving credit facility, as described below (the “Credit Agreement”). The Credit Agreement replaced a predecessor revolving credit facility with First Victoria National Bank. The Credit Agreement is a three-year, secured revolving facility in the maximum principal amount of $50.0 million, among the Company, as borrower, HSBC Bank USA, N.A., as administrative agent and several banks and other financial institutions from time to time as lenders thereunder (initially consisting of HSBC Bank USA, N.A. and First Victoria National Bank).

Amounts available for borrowing under the Credit Agreement are determined by a borrowing base. The borrowing base is determined primarily based upon the appraised value of the Company’s domestic lease pool equipment and certain accounts receivable. The Credit Agreement is collateralized by essentially all of the Company’s domestic assets (other than real estate) and 65% of the capital stock of Mitcham Holdings, Ltd., a foreign holding company that holds the capital stock of the Company’s foreign subsidiaries.

The Credit Agreement provides interest at a base rate, or for Eurodollar borrowings, in both cases plus an applicable margin. As of October 31, 2014, the base rate margin was 175 basis points and the Eurodollar margin was 275 basis points. The Company has agreed to pay a commitment fee on the unused portion of the Credit Agreement of 0.375% to 0.5%. Up to $10.0 million of available borrowings under the Credit Agreement may be utilized to secure letters of credit. The Credit Agreement contains certain financial covenants that require, among other things, that the Company maintain a leverage ratio, which is calculated at the end of each quarter, of no greater than 2.00 to 1.00 on a trailing four quarter basis and a fixed charge coverage ratio, which also is calculated at the end of each quarter, of no less than 1.25 to 1.00 on a trailing four quarter basis. In addition, should Adjusted EBITDA, as defined in the Credit Agreement, for any trailing four quarter period be less than $22.0 million, the ratio of capital expenditures to Adjusted EBITDA for that four quarter period may not be greater than 1.0 to 1.0. The Credit Agreement also includes restrictions on additional indebtedness in excess of $5.0 million. The Company was in compliance with each of these provisions as of and for the nine months ended October 31, 2014.

The Credit Agreement contains customary representations, warranties, conditions precedent to credit extensions, affirmative and negative covenants and events of default. The negative covenants include restrictions on liens, additional indebtedness in excess of $5.0 million, acquisitions, fundamental changes, dispositions of property, restricted payments, and transactions with affiliates and lines of business. The events of default include a change in control provision.

On August 22, 2014, the Company’s wholly-owned subsidiary, Seamap Pte Ltd., entered into a $15.0 million credit facility (the “Seamap Credit Facility”) with The Hongkong and Shanghai Banking Corporation Limited (“HSBC-Singapore”). The facility consists of a $10.0 million term loan, a $3.0 million revolving credit facility and a $2.0 million banker’s guarantee facility.

The term loan portion of the Seamap Credit Facility provides for eleven quarterly principal payments of $800,000 and a final payment of the remaining $1.2 million on or before August 22, 2017. Interest on the term facility is payable quarterly at LIBOR plus 2.75%. Under the Seamap Credit Facility, Seamap may borrow up to $3.0 million for period of one to three months to be utilized for working capital and other general corporate purposes. Borrowings under the revolving credit facility bear interest at LIBOR plus 3.00%. Borrowings under this arrangement are secured by essentially all of the assets of Seamap Pte Ltd. and the Company’s guarantee.

The Seamap Credit Facility contains financial covenants that require Seamap to maintain a minimum shareholder’s equity of S$15 million and a minimum ratio of debt to EBITDA of not less than 125% for each fiscal year. The Company was in compliance with each of these provisions as of and for the nine months ended October 31, 2014.

The Seamap Credit Facility contains customary representations and warranties, conditions precedent to credit extensions, affirmative and negative covenants and events of default. The negative covenants include restrictions on liens, additional indebtedness, acquisitions, fundamental changes, dispositions of property, restricted payments, and transactions with affiliates. The Seamap Credit Facility also requires the Company, as guarantor, to comply with financial covenants contained in the Credit Agreement.

8

The Company’s average borrowings under the Credit Agreement, the predecessor revolving credit facility and the Seamap Credit Facility for the nine months ended October 31, 2014 and 2013 were approximately $24,225,000 and $3,031,000, respectively.

From time to time, certain subsidiaries have entered into notes payable to finance the purchase of certain equipment, which are pledged as security for the notes payable.

9. Income Taxes

Prepaid taxes of approximately $1.3 million at October 31, 2014 consisted of approximately $1.2 million of foreign taxes and approximately $100,000 of domestic federal and state taxes. Prepaid income taxes of approximately $2.2 million at January 31, 2014 consisted of approximately $600,000 of foreign taxes and approximately $1.6 million of domestic federal and state taxes.

The Company and its subsidiaries file consolidated and separate income tax returns in the United States federal jurisdiction and in foreign jurisdictions. The Company is subject to United States federal income tax examinations for all tax years beginning with its fiscal year ended January 31, 2010.

In September 2013, the Internal Revenue Service (“IRS”) initiated an examination of the Company’s federal income tax return for the fiscal year ended January 31, 2013. In May 2014, the IRS notified the Company that it will not propose any adjustments as a result of this examination.

The Company is subject to examination by taxing authorities throughout the world, including foreign jurisdictions such as Australia, Canada, Colombia, Hungary, Peru, Russia, Singapore and the United Kingdom. With few exceptions, the Company and its subsidiaries are no longer subject to foreign income tax examinations for tax years before 2008.

In September, 2013 the IRS issued final regulations relating to guidance on applying rules to amounts paid to acquire, produce or improve tangible personal property as well as rules for materials and supplies. The new guidance is required to be applied no later than our tax year beginning February 1, 2014. These regulations are not expected to have a material impact on our financial statements.

The provision for income taxes for the three and nine months ended October 31, 2014 includes certain foreign withholding taxes. These taxes can distort the relationship between income or loss before income taxes and the provision for income taxes. Accordingly, the effective tax rates for these periods differ significantly from the federal statutory rate of 34%. The Company has determined that earnings from certain foreign jurisdictions have been permanently reinvested outside of the United States.

10. Earnings per Share

Net income per basic common share is computed using the weighted average number of common shares outstanding during the period, excluding unvested restricted stock. Net income per diluted common share is computed using the weighted average number of common shares and dilutive potential common shares outstanding during the period using the treasury stock method. Potential common shares result from the assumed exercise of outstanding common stock options having a dilutive effect and from the assumed vesting of unvested shares of restricted stock.

9

The following table presents the calculation of basic and diluted weighted average common shares used in the earnings per share calculation:

	Three Months Ended October 31,				Nine Months Ended October 31,
	2014		2013		2014		2013
	(in thousands)				(in thousands)
Basic weighted average common shares outstanding		12,476		12,767		12,631		12,766
Stock options		194		359		267		390
Unvested restricted stock		21		19		27		24
Total weighted average common share equivalents		215		378		294		414
Diluted weighted average common shares outstanding		12,691		13,145		12,925		13,180

For the three months ended October 31, 2014 and 2013 and the nine months ended October 31, 2014, potentially dilutive common shares, underlying stock options and unvested restricted stock were anti-dilutive and were therefore not considered in calculating diluted loss per share for that period.

11. Treasury Stock

In April 2013, the Company’s Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company’s common stock through December 31, 2014. During the nine months ended October 31, 2014, the Company repurchased 852,100 shares of its common stock at an average price of approximately $11.46 per share. These shares are reflected as treasury stock in the accompanying financial statements. As of October 31, 2014, the Company has purchased a total of 1,000,000 shares under this program, representing the total amount of shares authorized for repurchase.

12. Stock-Based Compensation

Total compensation expense recognized for stock-based awards granted under the Company’s equity incentive plan during the three and nine months ended October 31, 2014 was approximately $310,000 and $1,006,000, respectively, and during the three and nine months ended October 31, 2013 was approximately $287,000 and $839,000, respectively.

13. Segment Reporting

The Equipment Leasing segment offers new and “experienced” seismic equipment for lease or sale to the oil and gas industry, seismic contractors, environmental agencies, government agencies and universities. The Equipment Leasing segment is headquartered in Huntsville, Texas, with sales and services offices in Calgary, Canada; Brisbane, Australia; Ufa, Bashkortostan, Russia; Budapest, Hungary; Singapore; Bogota, Colombia; and Lima, Peru.

The Seamap segment is engaged in the design, manufacture and sale of state-of-the-art seismic and offshore telemetry systems. Manufacturing, support and sales facilities are maintained in the United Kingdom and Singapore.

Financial information by business segment is set forth below (net of any allocations):

	As of October 31, 2014			As of January 31, 2014
	Total Assets			Total Assets
	(in thousands)
Equipment Leasing	$	173,702		$	183,911
Seamap		33,882			21,814
Eliminations		(356	)		(306	)
Consolidated	$	207,228		$	205,419

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Results for the three months ended October 31, 2014 and 2013 were as follows (in thousands):

	Revenues						Operating (loss) income						(Loss) income before taxes
	2014			2013			2014			2013			2014			2013
Equipment Leasing	$	17,115		$	14,738		$	(188	)	$	(3,398	)	$	(1,071	)	$	(3,733	)
Seamap		5,827			5,608			337			804			686			585
Eliminations		(36	)		(71	)		45			42			45			42
Consolidated	$	22,906		$	20,275		$	194		$	(2,552	)	$	(340	)	$	(3,106	)

Results for the nine months ended October 31, 2014 and 2013 were as follows (in thousands):

	Revenues						Operating income					Income before taxes
	2014			2013			2014			2013		2014			2013
Equipment Leasing	$	48,623		$	52,039		$	(1,737	)	$	1,332	$	(2,303	)	$	1,598
Seamap		20,032			16,584			2,827			2,038		2,906			2,114
Eliminations		(472	)		(162	)		(120	)		135		(120	)		135
Consolidated	$	68,183		$	68,461		$	970		$	3,505	$	483		$	3,847

Sales from the Seamap segment to the Equipment Leasing segment are eliminated in the consolidated revenues. Consolidated income before taxes reflects the elimination of profit from intercompany sales and depreciation expense on the difference between the sales price and the cost to manufacture the equipment. Fixed assets are reduced by the difference between the sales price and the cost to manufacture the equipment, less the accumulated depreciation related to the difference.

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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q (this “Form 10-Q”) may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “expect,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forward-looking statements, which generally are not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenues and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below:

• decline in the demand for seismic data and our services;

• the effect of changing economic conditions and fluctuations in oil and natural gas prices on exploration activities;

• the effect of uncertainty in financial markets on our customers’ and our ability to obtain financing;

• loss of significant customers;

• increased competition;

• loss of key suppliers;

• seasonal fluctuations that can adversely affect our business;

• fluctuations due to circumstances beyond our control or that of our customers;

• defaults by customers on amounts due us;

• possible impairment of our long-lived assets due to technological obsolescence or changes in anticipated cash flow generated from those assets;

• inability to obtain funding or to obtain funding under acceptable terms;

• intellectual property claims by third parties;

• risks associated with our manufacturing operations;

• the impact of economic and trade sanctions imposed on Russia by the United States and the European Union in response to the political unrest in Ukraine; and

• other risks associated with our foreign operations, including foreign currency exchange risk.

For additional information regarding known material factors that could cause our actual results to differ materially from our projected results, please see (1) Part II, “Item 1A. Risk Factors” of this Form 10-Q, (2) Part II, “Item 1A. Risk Factors” of the Quarterly Report on Form 10-Q for the period ended April 30, 2014, and (3) Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2014.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publically update or revise any forward-looking statement after the date they are made, whether as the result of new information, future events or otherwise.

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

Overview

We operate in two segments, equipment leasing (“Equipment Leasing”) and equipment manufacturing. Our equipment leasing operations are conducted from our Huntsville, Texas headquarters and from our locations in Calgary, Canada; Brisbane, Australia; Ufa, Bashkortostan, Russia; Budapest, Hungary; Singapore; Bogota, Colombia; and Lima, Peru. Our Equipment Leasing segment includes the operations of our Mitcham Canada, ULC. (“MCL”), Seismic Asia Pacific Pty. Ltd. (“SAP”), Mitcham Europe Ltd. (“MEL”), Mitcham Marine Leasing Pte Ltd. (“MML”) and Mitcham Seismic Eurasia LLC (“MSE”) subsidiaries and our branch operations in Peru and Colombia. Our equipment manufacturing segment is conducted by our Seamap subsidiaries and, therefore, is referred to as our “Seamap” segment. Seamap operates from its locations near Bristol, United Kingdom and in Singapore.

Management believes that the performance of our Equipment Leasing segment is indicated by revenues from equipment leasing and by the level of our investment in lease pool equipment. Management further believes that the performance of our Seamap segment is indicated by revenues from equipment sales and by gross profit from those sales. Management monitors EBITDA and Adjusted EBITDA, both as defined in the following table, as key indicators of our overall performance and liquidity.

The following table presents certain operating information by operating segment.

	For the Three Months Ended October 31,						For the Nine Months Ended October 31,
	2014			2013			2014			2013
	(in thousands)						(in thousands)
Revenues:
Equipment Leasing	$	17,115		$	14,738		$	48,623		$	52,039
Seamap		5,827			5,608			20,032			16,584
Inter-segment sales		(36	)		(71	)		(472	)		(162	)
Total revenues		22,906			20,275			68,183			68,461
Cost of sales:
Equipment Leasing		12,998			12,784			37,164			36,946
Seamap		2,982			2,651			9,884			7,962
Inter-segment costs		(81	)		(113	)		(352	)		(297	)
Total cost of sales		15,899			15,322			46,696			44,611
Gross profit		7,007			4,953			21,487			23,850
Operating expenses:
General and administrative		6,159			6,086			18,951			18,173
Provision for doubtful accounts		—			1,048			—			1,048
Depreciation and amortization		654			371			1,566			1,124
Total operating expenses		6,813			7,505			20,517			20,345
Operating income (loss)	$	194		$	(2,552	)	$	970		$	3,505
EBITDA (1)	$	9,128		$	4,549		$	28,696		$	26,969
Adjusted EBITDA (1)	$	9,438		$	4,836		$	29,702		$	27,808
Reconciliation of Net income to EBITDA and Adjusted EBITDA
Net (loss) income	$	(397	)	$	(2,628	)	$	(7	)	$	2,986
Interest expense (income), net		147			37			347			(120	)
Depreciation and amortization		9,321			7,618			27,866			23,242
Provision (benefit) for income taxes		57			(478	)		490			861
EBITDA (1)		9,128			4,549			28,696			26,969
Stock-based compensation		310			287			1,006			839
Adjusted EBITDA (1)	$	9,438		$	4,836		$	29,702		$	27,808

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Reconciliation of Net cash provided by operating activities to EBITDA
Net cash (used in) provided by operating activities	$	(2,607	)	$	2,729		$	16,543		$	18,690
Stock-based compensation		(310	)		(287	)		(1,006	)		(839	)
Provision for doubtful accounts		—			(1,048	)		—			(1,048	)
Changes in trade accounts, contracts and notes receivable		4,467			2,053			3,708			3,292
Interest paid		184			124			576			206
Taxes paid, net of refunds		(540	)		(3,699	)		836			(74	)
Gross profit from sale of lease pool equipment		282			2,050			1,845			4,108
Changes in inventory		(214	)		1,799			(630	)		2,827
Changes in accounts payable, accrued expenses and other current liabilities and deferred revenue		1,305			886			(2,079	)		(1,338	)
Changes in prepaid expenses and other current assets		5,210			67			7,449			1,449
Other		1,351			(125	)		1,454			(304	)
EBITDA (1)	$	9,128		$	4,549		$	28,696		$	26,969

(1) EBITDA is defined as net income before (a) interest expense, net of interest income, (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 (“U.S. 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 the predecessor revolving credit facility, the Credit Agreement and the Seamap Credit Facility (as defined below) each contain financial covenants that are based upon EBITDA or Adjusted 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 and liquidity of our core cash operations. EBITDA and Adjusted EBITDA are not measures of financial performance or liquidity under U.S. 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 U.S. 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, EBITDA 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.

In our Equipment Leasing segment, we lease seismic data acquisition equipment primarily to seismic data acquisition companies conducting land, transition zone and marine seismic surveys worldwide. We provide short-term leasing of seismic equipment to meet a customer’s requirements. All active leases at October 31, 2014 were for a term of less than one year. Seismic equipment held for lease is carried at cost, net of accumulated depreciation. We acquire some marine lease pool equipment from our Seamap segment. These amounts are reflected in the accompanying condensed consolidated financial statements at the cost to our Seamap segment, net of accumulated depreciation. From time to time, we sell lease pool equipment to our customers. These sales are usually transacted when we have equipment for which we do not have near term needs in our leasing business and if the proceeds from the sale exceed the estimated present value of future lease income from that equipment. We also occasionally sell new seismic equipment that we acquire from other companies and sometimes provide financing on those sales. We also produce, sell, and lease equipment used to deploy and retrieve seismic equipment with helicopters. In addition to conducting seismic equipment leasing operations, 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.

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Seismic equipment leasing is normally susceptible to weather patterns in certain geographic regions. In Canada and Russia, a significant percentage of the seismic survey activity occurs in winter months, from December or January through March or April. During the months in which the weather is warmer, certain areas are not accessible to trucks, earth vibrators and other heavy equipment because of unstable terrain. In other areas of the world, such as South America, Southeast Asia and the Pacific Rim, periods of heavy rain can impair seismic operations. These periods of heavy rain often occur during the months of February through May in parts of South America. We are able, in some cases, to transfer our equipment from one region to another in order to accommodate seasonal demand and to increase our equipment utilization.

Historically, our first fiscal quarter has produced the highest leasing revenues, due in large part to the effect of the Canadian and Russian winter seasons discussed above. With the expansion of our land leasing operations into other geographic areas, such as South America and Europe, and marine leasing, we have seen a lessening of the seasonal variation in our leasing business in some years. We expect to continue to experience seasonal fluctuations, but such fluctuations may not be as great or as predictable as in the past.

Our Equipment Leasing segment can also experience periodic fluctuations in activity levels due to matters unrelated to seasonal or weather factors. These factors include the periodic shift of seismic exploration activity from one geographic area to another and difficulties encountered by our customers due to permitting and other logistical challenges.

Our Seamap segment designs, manufactures and sells a variety of products used primarily in marine seismic applications. Seamap’s primary products include (1) the GunLink seismic source acquisition and control systems which provide marine operators more precise control of their exploration systems, and (2) the BuoyLink RGPS tracking system used to provide precise positioning of seismic sources and streamers (marine recording channels that are towed behind a vessel). In May 2014, Seamap purchased two product lines from ION Geophysical Corporation (“ION”). These product lines consist of the Digishot™ energy source controller and the Sleeve Gun energy sources (collectively the “ION Source Products”). Seamap’s business is generally not impacted by seasonal conditions, as is the case with our land leasing operations. However, Seamap may experience significant fluctuations in its business in the future. The timing of deliveries and sales is often dependent upon the availability of the customer’s vessel for delivery and installation of the equipment. Given the relatively large size of some orders, this can result in significant variations in revenues from period to period.

Business Outlook

Our revenues are directly related to the level of worldwide oil and gas exploration activities and the profitability and cash flows of oil and gas companies and seismic contractors, which, in turn, are affected by expectations regarding supply and demand for oil and natural gas, energy prices and finding and development costs. Land seismic data acquisition activity levels are measured in terms of the number of active recording crews, known as the “crew count,” and the number of recording channels deployed by those crews, known as “channel count.” Because an accurate and reliable census of active crews does not exist, it is not possible to make definitive statements regarding the absolute levels of seismic data acquisition activity. Furthermore, a significant number of seismic data acquisition contractors are either private or state-owned enterprises and information about their activities is not available in the public domain.

The seismic industry is, in our opinion, experiencing a period of reduced demand and activity. This is evidenced by the publically announced financial results of some seismic contractors and seismic equipment suppliers. This industry has historically been cyclical and we believe we are currently experiencing a temporary decline in seismic exploration activity. The decline in activity is not uniform across all segments or geographic regions. In some areas, such as North American land and world-wide marine, activity is very subdued. However, in other areas, such as Europe and South America, we have seen an increase in activity over the past twelve months. Very recently, there has been a significant decline in global oil prices. This decline could cause many oil and gas companies to reduce expenditures for oil and gas exploration, which in turn could result in the cancellation or postponement of seismic surveys. This could have an adverse effect on our business.

Thus far in the fiscal year ending January 31, 2015 (“fiscal 2015”) our land leasing activity in Latin America has been above that of the fiscal year ending January 31, 2014 (“fiscal 2014”) as we benefited from a limited number of large projects in the region. The seismic operators operating in Latin America, particularly Colombia, have been able to resolve some of the permitting and community relations issues that have plagued that region in recent years. However, these issues continue and this remains a difficult operating environment for our customers. Therefore, we expect project delays and cancellations to occur from time to time because of this. Based on our discussions with customers and others in the industry, we believe there continues to be considerable demand for seismic services and equipment in Latin America, including Colombia, Bolivia, Brazil and other areas. Therefore, we remain optimistic about the long-term future of our land leasing operations in Latin America.

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Our land leasing activity in the United States thus far in fiscal 2015 is improved from fiscal 2014, primarily due to the effect of a significant project in the third quarter of fiscal 2015. Overall activity remains subdued and sporadic and we believe there are no clear indications of a general improvement in such seismic exploration activity in the United States in the near term. However, we may benefit from occasional large projects in the United States from time to time.

Activity in Europe has improved considerably in fiscal 2015 as compared to fiscal 2014. We are optimistic that this improved level of activity will continue; however, political instability, fiscal issues and environmental concerns remain a concern and could negatively impact this activity. In addition, we expect normal seasonal declines during the winter in this area. As the seismic industry in Russia is generally seasonal, most seismic projects are scheduled for the winter season, which encompasses our fourth quarter and first quarter. Based on existing and pending orders from our customers, we expect the overall level of activity in Russia this winter to be comparable to last winter. The economic and trade sanctions imposed by the United States and the European Union have impacted our ability to move certain equipment into Russia; however, we have been able to export equipment to Russia of a type, and in quantities, sufficient to meet the orders we have received. Much of the additional equipment we have scheduled for the Russian market has been repositioned from other market areas, such as Latin America and North America. In some cases we must reconfigure the equipment in order to meet the requirements of our customers.

Land seismic activity in Canada last winter was materially below that of prior years. Many of the factors impacting seismic exploration activity in the United States also impact Canada. Based on current inquiries for this region, we think it unlikely that there will be improvement in Canada this winter. Our land leasing activity in the Pacific Rim and the Middle East have improved in fiscal 2015 over fiscal 2014 and there continue to be opportunities within these regions.

We have recently experienced an improvement in demand for our down hole seismic tools and have enjoyed a number of longer term projects. However, demand for down hole seismic tools tends to be sporadic and projects utilizing this equipment are often subject to delays or cancellation.

We have seen a decline in demand in our marine rental business in fiscal 2015. Due to industry consolidation and restructuring, we believe there to be an oversupply of used marine equipment available on the market, which has had a negative impact on the demand for our products and services. We believe this situation to be temporary; however, we do expect it to continue throughout the balance of fiscal 2015 and into fiscal 2016. The economic and trade sanctions imposed by the United States against Russia have negatively impacted our marine rental business. During the second quarter of fiscal 2015, we were unable to complete a long-term rental arrangement with a Russian marine contractor as the United States Department of Commerce did not issue an export permit for the equipment to be rented. In the past, export permits for this equipment had been issued as a matter of course.

The market for products sold by Seamap and the demand for the leasing of marine seismic equipment is dependent upon activity within the offshore, or marine, seismic industry, including the re-fitting of existing seismic vessels and the equipping of new vessels. Our Seamap business has benefited from equipping new-build vessels and from re-equipping older vessels with newer, more efficient technology. In addition, as Seamap has expanded its installed base of products, our business for replacements, spare parts, repair and support services has expanded. Certain existing and potential customers continue to express interest in our GunLink and BuoyLink products. Some of this interest involves the upgrade of existing GunLink and BuoyLink products to newer versions or systems with greater functionality. Recently, some marine seismic contractors have reported softening of demand and plans to reduce expenditures and retire older vessels. As a result, the delivery schedules for certain orders have been delayed. We have not had any orders cancelled and most customers continue to discuss technology upgrade programs with us. However, the current environment within the marine seismic industry could cause some customers to further curtail or delay such expansion plans. We believe the acquisition of the ION Source Products will contribute to Seamap’s results over the balance of fiscal 2015. In addition, we believe the customer relationships we acquired in this transaction will result in additional markets for Seamap’s other products, including GunLink and BuoyLink.

The oil and gas industry, in general, and the seismic industry, in particular, have historically been cyclical businesses. If worldwide oil and gas prices should decline from current levels, or if the expectations for future prices should change, we could see a material change in the level of our business and our income from operations.

Due to the recent softening in demand in our leasing business, we have reduced additions to our lease pool during fiscal 2015. During the first nine months of fiscal 2015, we added approximately $10.8 million of equipment to our lease pool. For all of fiscal 2015, we expect additions to our lease pool to total approximately $12.0 million, as compared to approximately $49.0 million in fiscal 2014.

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Historically, there have been two or three primary manufacturers of land seismic equipment. Recently, the industry has seen the emergence of additional entities seeking to introduce new equipment, particularly wireless recording equipment. Accordingly, significant competition among these new and existing manufacturers has developed. This competition has, we believe, led to pricing pressure for the manufacturers of equipment. While we benefit from lower prices for new equipment, this situation has also begun to have a negative impact on the pricing for our products and services. We have not been able to determine the magnitude of this impact on our results to date.

We also have expanded the geographic breadth of our operations over the past few years by acquiring or establishing operating facilities in new locations. We may seek to expand our operations into additional locations in the future either through establishing “green field” operations or by acquiring other businesses. However, we do not currently have specific plans to establish any such operations.

A significant portion of our revenues are generated from foreign sources. For the three months ended October 31, 2014 and 2013, revenues from international customers totaled approximately $18.1 million and $16.8 million, respectively. These amounts represent 79% and 83% of consolidated revenues in each of those respective periods. The majority of our transactions with foreign customers are denominated in United States, Australian and Canadian dollars and Russian rubles. We have not entered, nor do we intend to enter, into derivative financial instruments for hedging or speculative purposes.

Our revenues and results of operations have not been materially impacted by inflation or changing prices in the past three fiscal years, except as may be described above.

Results of Operations

Revenues for the three months ended October 31, 2014 and 2013 were approximately $22.9 million and $20.3 million, respectively. The increase between the two periods was primarily due to higher equipment leasing revenues, partially offset by lower lease pool equipment sales, and other equipment sales. Revenues for the nine months ended October 31, 2014 and 2013 were approximately $68.2 million and $68.5 million, respectively. Higher leasing revenues in the fiscal 2015 period as compared to the fiscal 2014 period were offset by lower lease pool equipment sales, Seamap sales and other equipment sales. For the three months ended October 31, 2014, we generated operating income of approximately $194,000, compared to an operating loss of approximately $2.6 million for the three months ended October 31, 2013. For the nine months ended October 31, 2014, we generated an operating profit of approximately $1.0 million, compared to $3.5 million for the nine months ended October 31, 2013. The increase in operating profit in the three months ended October 31, 2014 as compared to the same period a year ago was due primarily to higher leasing revenues partially offset by higher lease pool depreciation. For the nine months ended October 31, 2014 the decrease in operating revenue as compared to the same period in fiscal 2014 was due primarily to higher lease pool depreciation and lower lease pool equipment sales, partially offset by higher leasing and Seamap revenues. A more detailed explanation of these variations follows.

Revenues and Cost of Sales

Equipment Leasing

Revenue and cost of sales from our Equipment Leasing segment were as follows:

	Three Months Ended October 31,				Nine Months Ended October 31,
	2014		2013		2014		2013
	($ in thousands)				($ in thousands)
Revenue:
Equipment leasing	$	14,285	$	7,900	$	38,672	$	34,435
Lease pool equipment sales		475		3,169		2,861		6,188
New seismic equipment sales		52		294		996		569
SAP equipment sales		2,303		3,375		6,094		10,847
		17,115		14,738		48,623		52,039
Cost of sales:
Direct costs-equipment leasing		2,343		1,466		4,700		3,857
Lease pool depreciation		8,668		7,279		26,256		22,188

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Cost of lease pool equipment sales		193			1,119			1,016			2,080
Cost of new seismic equipment sales		54			234			584			434
Cost of SAP equipment sales		1,740			2,686			4,608			8,387
		12,998			12,784			37,164			36,946
Gross profit	$	4,117		$	1,954		$	11,459		$	15,093
Gross profit %		24	%		13	%		24	%		29	%

Equipment leasing revenues increased approximately 81% in the third quarter of fiscal 2015 from the third quarter of fiscal 2014 due primarily to higher land leasing revenues in the United States, Latin America, Europe, the Pacific Rim, Asia and the Middle East. These increases were partially offset by lower marine leasing revenues. For the first nine months of fiscal 2015, equipment leasing revenues increased approximately 12% from the first nine months of fiscal 2014 primarily due to higher revenues in the United States, Latin America, Europe, Russia, the Pacific Rim and the Middle East, as well as higher downhole leasing revenues. Partially offsetting these increases were lower leasing revenues in Canada and lower marine leasing revenues. Some of the improvement in leasing activity in the fiscal 2015 periods is the result of significant projects, particularly in the United States, Latin America and Europe. Given the general softness in the seismic market, there can be no assurance that projects such as these will recur in fiscal 2016.

From time to time, we sell equipment from our lease pool based on specific customer demand and as opportunities present themselves in order to redeploy our capital. Accordingly, these transactions tend to occur sporadically and are difficult to predict. Often, the equipment that is sold from our lease pool has been in service, and therefore depreciated, for some period of time. Accordingly, the equipment sold may have a relatively low net book value at the time of the sale, resulting in a relatively high gross margin from the transaction. The amount of the margin on a particular transaction varies greatly based primarily upon the age of the equipment. The gross profit from sales of lease pool equipment for the three months ended October 31, 2014 and 2013 was approximately $282,000 and $2.1 million, respectively. For the first nine months of fiscal 2015 and 2014, gross profit from sales of lease pool equipment was approximately $1.8 million and $4.1 million, respectively. We expect to continue to sell lease pool equipment from time to time.

We regularly sell new seismic equipment, including heli-picker equipment that we produce. Heli-picker equipment sales are generally concentrated in the fourth quarter of our fiscal year. The gross profit from sales of new seismic equipment for the three months ended October 31, 2014 and 2013 was not material. The gross profit from sales of new seismic equipment for the nine months ended October 31, 2014 and 2013 was approximately $412,000 and $135,000, respectively.

SAP regularly sells new hydrographic and oceanographic equipment and provides system integration services to customers in Australia and throughout the Pacific Rim. For the three months ended October 31, 2014, SAP generated gross profit of approximately $563,000 from these transactions as compared to approximately $689,000 for the three months ended October 31, 2013. For the nine months ended October 31, 2014, SAP generated gross profit of approximately $1.5 million from these transactions as compared to approximately $2.5 million for the nine months ended October 31, 2013. Sales of equipment by SAP can vary significantly from period to period based upon the delivery requirements of customers, which often times are governmental agencies in the Pacific Rim.

Direct costs related to equipment leasing were approximately 16% and 19% of leasing revenues in the three months ended October 31, 2014 and 2013, respectively. For the nine months ended October 31, 2014, direct costs were approximately 12% of leasing revenues, as compared to approximately 11% in the nine months ended October 31, 2013. A significant portion of direct costs are generally fixed and therefore do not fluctuate with the level of leasing revenues. The increase in the absolute amount of direct costs in the fiscal 2015 periods, particularly the three months ended October 31, 2014, reflect the cost to sub-lease certain equipment for specific projects and the cost to reposition equipment from one geographic area to another.

For the three and nine months ended October 31, 2014, lease pool depreciation increased approximately 19% and 18%, respectively, from the same periods in the prior fiscal year. The increase in depreciation expense results from the additions we made to our lease pool late in fiscal 2014.

Overall, our Equipment Leasing segment generated gross profit of approximately $4.1 million, 24% of segment revenues, in the third quarter of fiscal 2015, as compared to a gross profit of approximately $2.0 million, 13% of segment revenues, in the third quarter of fiscal 2014. For the nine months ended October 31, 2014, the gross profit from our Equipment Leasing segment was approximately $11.5 million, 24% of segment revenues, as compared to $15.1 million, 29% of segment revenues, in the nine months ended October 31, 2013.

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Seamap

Revenues and cost of sales from our Seamap segment were as follows:

	Three Months Ended October 31,						Nine Months Ended October 31,
	2014			2013			2014			2013
	($ in thousands)						($ in thousands)
Equipment sales	$	5,827		$	5,608		$	20,032		$	16,584
Cost of equipment sales		2,982			2,651			9,884			7,962
Gross profit	$	2,845		$	2,957		$	10,148		$	8,622
Gross profit %		49	%		53	%		51	%		52	%

The sale of Seamap products, while not generally impacted by seasonal factors, can vary significantly from quarter to quarter due to customer delivery requirements. In the three months ended October 31, 2014 and 2013, we did not ship any major systems. Accordingly, revenues during those periods consisted primarily of after-market sales, such as spare parts, repairs, support and training. In the nine months ended October 31, 2014, we shipped two source controller systems and three RGPS positioning systems. In the nine months ended October 31, 2013, we shipped one digital source controller system and one RGPS positioning systems. Included in the fiscal 2015 periods were sales related to the ION Source Products that we acquired during the second quarter of fiscal 2015. Changes in product prices did not contribute materially to the difference in sales between the periods. Due to the softness and uncertainty in the marine seismic market, deliveries of new source controller and RGPS positioning systems that had been scheduled for the fourth quarter of fiscal 2015 will likely be delayed until the first or second quarter of fiscal 2016.

The gross profit margin from the sale of Seamap equipment varies between the fiscal 2015 and fiscal 2014 periods primarily due to slight changes in product mix and the impact of sales related to the ION Source Products. The major portion of these sales was fulfilled by ION pursuant to a transition services arrangement. We believe this arrangement, which was temporary, was relatively inefficient and resulted in higher costs than we expect to incur going forward. The transition and integration of the ION Source Products into Seamap’s operations is now complete.

Operating Expenses

General and administrative expenses for the three months ended October 31, 2014 were approximately $6.2 million, compared to approximately $6.1 million for the three months ended October 31, 2013. Such expenses for the nine months ended October 31, 2014 were approximately $19.0 million, compared to approximately $18.2 million for the nine months ended October 31, 2013. Included in general and administrative expenses for the three months ended October 31, 2014 and 2013 is stock-based compensation expense of approximately $310,000 and $287,000, respectively. For the nine months ended October 31, 2014 and 2013, stock-based compensation expense amounted to approximately $1.0 million and $839,000, respectively. In addition, in the three and nine months ended October 31, 2013, we recouped certain engineering and development costs pursuant to customer development arrangements, resulting in lower general and administrative expenses as compared to the same periods in fiscal 2015.

Other Income (Expense)

Net interest expense for the three months ended October 31, 2014 was approximately $147,000, as compared approximately $37,000 for the three months ended October 31, 2013. For the nine months ended October 31, 2014, net interest expense was approximately $347,000, as compared to net interest income of approximately $120,000 for the nine months ended October 31, 2013. This reflects higher average borrowings under our revolving credit agreement and term loan facilities and increased costs associated with the facility, including commitment fees and costs.

Other income and other expense relate primarily to foreign exchange losses and gains incurred by our foreign subsidiaries and branches. These entities have functional currencies other than the U.S. dollar but in many cases hold U.S. dollar cash balances and have accounts receivable and accounts payable denominated in U.S. dollars. As the U.S. dollar fluctuates in value against each subsidiary’s functional currency, the subsidiary can incur a foreign exchange gain or loss, although the value of these amounts in our consolidated financial statements may not have

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changed materially. In the three months ended October 31, 2014, we had net foreign exchange losses of approximately $900,000, compared to approximately $517,000 in the three months ended October 31, 2013. In the nine months ended October 31, 2014, we had net foreign exchange loss of approximately $533,000, compared to a gain of approximately $222,000 in the nine months ended October 31, 2013. These net losses and gains resulted primarily from fluctuations in the value of the Euro, Australian dollar, Colombian peso and Russian ruble versus the U.S. dollar. Partially offsetting the foreign exchange losses in the fiscal 2015 periods was a gain of approximately $340,000 which resulted from the cash settlement of the rental and sales credit granted to ION in connection with the purchase of the ION Source Products.

Provision for Income Taxes

Our tax provision for the three and nine months ended October 31, 2014 indicates higher income tax expense than would be expected from applying the United States statutory rate to income or loss before income taxes. This is due to the effect of foreign withholding taxes. For the three months ended October 31, 2013, our tax provision was a benefit of approximately $478,000, which is an effective rate of approximately 15%. For the nine months ended October 31, 2013, our tax provision was approximately $861,000 which is an effective rate of approximately 22%. Our annual effective tax rate differs from the United States statutory rate in the fiscal periods primarily due to the effect of lower tax rates in foreign jurisdictions and the effect of foreign withholding taxes.

Liquidity and Capital Resources

Our principal source of liquidity and capital in recent periods has been cash flows provided by operating activities, our predecessor revolving credit facility, our Credit Agreement and our Seamap Credit Facility. The principal factor that has affected our cash flow from operating activities is the level of oil and gas exploration and development activities as discussed above.

We believe that our liquidity needs for the next 12 months will be met from cash on hand, cash provided by operating activities and from proceeds of our Credit Agreement, taking into account the possible restrictions on funds from our foreign subsidiaries. However, should our needs for liquidity increase, such as for the purchase of additional lease pool equipment or to make an acquisition, we may seek to issue other debt or equity securities. We have on file with the SEC a shelf registration statement pursuant to which we may issue from time to time up to $150 million in common stock, warrants, preferred stock, debt securities or any combination thereof. We currently have no plans to issue any such securities.

The following table sets forth selected historical information regarding cash flows from our Consolidated Statements of Cash Flows:

	For the Nine Months Ended October 31,
	2014			2013
	(in thousands)
Net cash provided by operating activities	$	16,543		$	18,690
Net cash used in investing activities		(27,093	)		(7,572	)
Net cash provided by (used in) financing activities		2,834			(2,956	)
Effect of changes in foreign exchange rates on cash and cash equivalents		1,623			897
Net (decrease) increase in cash and cash equivalents	$	(6,093	)	$	9,059

As of October 31, 2014, we had working capital of approximately $53.0 million, including cash and cash equivalents of approximately $9.1 million, as compared to working capital of approximately $49.7 million, including cash and cash equivalents and restricted cash of approximately $15.2 million, at January 31, 2014. The increase in working capital resulted primarily from operating activities during the first nine months of fiscal 2015.

Cash Flows from Operating Activities. Net cash provided by operating activities was approximately $16.6 million in the first nine months of fiscal 2015 as compared to approximately $18.7 million in the first nine months in fiscal 2014. The decrease between the two periods resulted primarily from the change in net income between

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the periods. In the nine months ended October 31, 2014, a significant amount of cash was utilized related to increases in prepaid expenses and other current assets. This relates to increases in value added taxes in certain foreign jurisdictions resulting from the importation of equipment. The majority of these taxes may be reclaimed, or refunded, in subsequent quarterly periods.

Cash Flows from Investing Activities. Net cash flows used in investing activities for the nine months ended October 31, 2014 included purchases of seismic equipment held for lease totaling approximately $15.1 million, as compared to approximately $13.3 million in the nine months ended October 31, 2013. There was approximately $3.4 million in accounts payable at October 31, 2014 related to lease pool purchases. At January 31, 2014, there was approximately $7.7 million in accounts payable related to lease pool purchases. Accordingly, additions to our lease pool amounted to approximately $10.8 million in the first nine months of fiscal 2015, as compared to approximately $14.3 million in the first nine months of fiscal 2014. We expect additions to our lease pool for all of fiscal 2015 to total approximately $12.0 million. We expect to fund these acquisitions with a combination of cash on hand, cash flow generated from operating activities and borrowings under our Credit Agreement.

In the first nine months of fiscal 2015, we utilized $14.5 million in cash related to the purchase of the ION Source Products. This amount was funded by a combination of cash on hand and borrowings under the Credit Agreement. In August 2014, we refinanced $10 million of this amount pursuant to the Seamap Credit Facility, as defined below.

In the first nine months of fiscal 2015, proceeds from the sale of lease pool equipment totaled approximately $2.9 million, compared to approximately $6.2 million in the first nine months of fiscal 2014. We generally do not seek to sell our lease pool equipment on a regular basis, but may do so from time to time. In particular, we may sell lease pool equipment in response to specific demand from customers if the selling price exceeds the estimated present value of projected future leasing revenue from that equipment. Accordingly, cash flow from the sale of lease pool equipment is unpredictable.

Cash Flows from Financing Activities. Net cash provided by financing activities was approximately $2.8 million in the first nine months of fiscal 2015 compared to net cash used in financing activities of approximately $3.0 million in the first nine months of fiscal 2014. During the nine months ended October 31, 2014, we had net borrowings of approximately $2.5 million under the Credit Agreement. This amount included borrowings of $10.0 million used in connection with the acquisition of the ION Source Products. In August 2014 we entered into a new credit agreement that included a $10.0 million term loan facility (see below). The proceeds from this term facility were used to repay the borrowings under the Credit Agreement related to the acquisition of the ION Source Products. During the nine months ended October 31, 2013, we had net repayments under our predecessor revolving credit facility of approximately $1.0 million.

In April 2013, our Board of Directors authorized a share repurchase program for up to 1.0 million shares of our common stock. In the nine months ended October 31, 2014, we purchased 852,100 shares of our common stock at a total cost of approximately $9.8 million, as compared to 147,900 shares at a cost of approximately $2.2 million in the nine months ended October 31, 2013. As of October 31, 2014, we have purchased a total of 1.0 million shares at a total cost of approximately $12.0 million. Therefore, we have purchased all shares currently authorized for repurchase. Our Board of Directors may authorize additional purchases as we believe that the repurchase of our shares is an effective use of our capital. If authorized, we may make such additional purchases from time to time depending on market conditions, operating considerations, our liquidity position and other potential uses of capital.

In connection with the temporary importation of our lease pool equipment into some countries, we are required to post import bonds with the customs authorities of that country. In addition, from time to time we are required to provide performance bonds related to the sale and delivery on new equipment, primarily by Seamap. These bonds are normally provided by local insurance, surety companies or local banks. In some cases, the party issuing the bond requires that we post collateral to secure our obligations under the bonds. As of October 31, 2014, we had provided stand-by letters of credit totaling approximately $4.1 million under the Credit Agreement and the Seamap Credit Facility, as defined below, related to such obligations.

On August 2, 2013, we entered into a syndicated $50 million, secured, three-year revolving credit agreement (the “Credit Agreement”) with HSBC Bank USA, N.A. (“HSBC”) as administrative agent. The Credit Agreement replaced our existing $50 million revolving credit agreement with First Victoria National Bank. Proceeds from the Credit Agreement may be used for working capital and general corporate needs. Up to $10.0 million of the Credit Agreement may be used to secure letters of credit.

The Credit Agreement provides for Eurodollar loans, which bear interest at the Eurodollar base rate, plus a margin of from 2.50% to 3.50% based on our leverage ratio and for ABR loans which bear interest at the applicable base rate plus a margin of from 1.50% to 2.50% based on our leverage ratio. As of October 31 2014, the

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margins for Eurodollar loans and ABR loans are 2.75% and 1.75%, respectively. We have agreed to pay a commitment fee on the unused portion of the Credit Agreement of from 0.375% to 0.50% based on our leverage ratio. As of October 31, 2014, the commitment fee rate is 0.375%.

Amounts available under the Credit Agreement are subject to a borrowing base which is determined based primarily on the appraised value of our domestic lease pool equipment and certain accounts receivable. We believe that as of October 31, 2014, the full $50.0 million, less any amounts outstanding, is available to us. The Credit Agreement is secured by essentially all of our domestic assets and 65% of the capital stock of Mitcham Holdings Ltd., which is the holding company for all of our foreign subsidiaries.

The Credit Agreement contains customary representations, warranties, conditions precedent to credit extensions, affirmative and negative covenants and events of default. The negative covenants include restrictions on liens, additional indebtedness in excess of $5.0 million, other than indebtedness to HSBC and its affiliates, acquisitions, fundamental changes, dispositions of property, restricted payments, transactions with affiliates and lines of business. The events of default include a change in control provision.

The Credit Facility contains certain financial covenants that require us to maintain a maximum ratio of debt to Adjusted EBITDA, a minimum ratio of fixed charges to Adjusted EBITDA and, in certain circumstances, a maximum ratio of capital expenditures to Adjusted EBITDA, all as defined in the Credit Agreement. As indicated by the following chart, we were in compliance with all financial covenants as of October 31, 2014:

Description of Financial Covenant	Required Amount	Actual for the four quarters ended October 31, 2014
Leverage Ratio	Not more than 2.00 to 1.00	0.96 to 1.00
Fixed Charge Coverage Ratio	Not less than 1.25 to 1.00	11.97 to 1.00
Capital Expenditures to Adjusted EBITDA Ratio	Not more than 1.0 to 1.0, when Adjusted EBITDA is less than $22.0 million for trailing four quarters	not applicable, Adjusted EBITDA—$40.1 million

In August 2014, our wholly-owned subsidiary, Seamap Pte Ltd. (“Seamap Singapore”), entered into a $15.0 million credit facility with HSBC – Singapore (the “Seamap Credit Facility”). The facility consists of a $10.0 million term loan, a $3.0 million revolving credit facility, and a $2.0 million banker’s guarantee facility. The term facility provides for eleven quarterly principal payments of $800,000 and a final payment of $1,200,000 on or before August 22, 2017. Interest on the term facility is payable quarterly at LIBOR plus 2.75%. Under the revolving credit facility, Seamap Singapore may borrow up to $3.0 million from time to time for working capital and other general corporate purposes. Borrowings under this facility bear interest at LIBOR plus 3.00%. Under the banker’s guarantee facility HSBC – Singapore will, from time to time as requested, issue banker’s guarantees for performance, customs or bid bonds. The Seamap Credit Facility is secured by essentially all of the assets of Seamap Singapore and by a corporate guarantee by Mitcham Industries, Inc. The agreement contains customary representations, warranties, affirmative and negative covenants and events of default. The negative covenants include restrictions on Seamap Singapore related to liens, additional indebtedness, acquisitions, fundamental changes, dispositions of property, restricted payments, transactions with affiliates and lines of business. The agreement contains financial covenants that require Seamap Singapore to maintain a minimum net worth and a minimum ratio of debt to EBITDA, both as defined in the agreement.

As of December 8, 2014, borrowings of approximately $23.0 million and letters of credit totaling approximately $4.0 million were outstanding under the Credit Agreement. Under the Seamap Credit Facility the balance of the term loan was $9.2 million and bankers guarantees totaling approximately $118,000 were outstanding as of that date. No amounts were outstanding under the revolving credit of the Seamap Credit Facility. We have determined that the undistributed earnings of our foreign subsidiaries, other than branch operations in Colombia and Peru, have been permanently reinvested outside of the United States. These permanent investments include the purchase of lease pool equipment by certain of those subsidiaries and the acquisition of the ION Source Products. Accordingly, while there is generally no legal restriction on the distribution of such earnings, we do not

22

expect to have any such earnings available to satisfy obligations in the United States, such as the Credit Agreement. Should we in the future distribute these earnings to the United States, such distributions could be subject to foreign withholding taxes in certain cases and would likely result in additional federal income tax obligations in the United States. As of October 31, 2014, we had deposits in foreign banks consisting of both United States dollar and foreign currency deposits equal to approximately $7.5 million. Approximately $3.6 million may be distributed to the United States in repayment of inter-company obligations as of October 31, 2014 and therefore do not result in any of the adverse tax consequences discussed above.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk, which is the potential loss arising from adverse changes in market prices and rates. We have not entered, and do not intend to enter, into derivative financial instruments for hedging or speculative purposes.

Foreign Currency Risk

We operate in a number of foreign locations, which gives rise to risk from changes in foreign exchange rates. To the extent possible, we attempt to denominate our transactions in foreign locations in United States dollars. For those cases in which transactions are not denominated in United States dollars, we are exposed to risk from changes in exchange rates to the extent that non-United States dollar revenues exceed non-United States dollar expenses related to those operations. Our non-United States dollar transactions are denominated primarily in Canadian dollars, Australian dollars, Singapore dollars and Russian rubles. As a result of these transactions, we generally hold cash balances that are denominated in these foreign currencies. At October 31, 2014, our consolidated cash and cash equivalents included foreign currency denominated amounts equivalent to approximately $2.9 million in United States dollars. A 10% increase in the value of the United States dollar as compared to the value of each of these currencies would result in a loss of approximately $290,000 in the United States dollar value of these deposits, while a 10% decrease would result in an equal amount of gain. We do not currently hold or issue foreign exchange contracts or other derivative instruments as we do not believe it is cost efficient to attempt to hedge these exposures.

Some of our foreign operations are conducted through wholly-owned foreign subsidiaries or branches that have functional currencies other than the United States dollar. We currently have subsidiaries whose functional currencies are the Canadian dollar, British pound sterling, Australian dollar, Russian ruble and the Singapore dollar. Assets and liabilities from these subsidiaries are translated into United States dollars at the exchange rate in effect at each balance sheet date. The resulting translation gains or losses are reflected as accumulated other comprehensive income (loss) in the shareholders’ equity section of our consolidated balance sheets. Approximately 81% of our net assets as of October 31, 2014 were impacted by changes in foreign currencies in relation to the United States dollar.

Interest Rate Risk

As of October 31, 2014, there was $24.5 million outstanding under the Credit Agreement and $10 million outstanding under the Seamap Credit Facility. Both of these agreements provide for floating interest rates based on an applicable base rate, generally the prime rate, or Eurodollar rates, also known as LIBOR. Assuming the outstanding balance remains unchanged, a change of 100 basis points in the underlying base rate would result in an increase in annual interest expense of approximately $345,000. In addition, changes in our leverage ratio, as defined in the Credit Agreement, could result in an increase to our interest expense. We have not entered into interest rate hedging arrangements in the past, and have no plans to do so in the future. Due to fluctuating balances in the amount outstanding under the Credit Agreement, we do not believe such arrangements to be cost effective.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of October 31, 2014 at the reasonable assurance level.

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Changes in Internal Control over Financial Reporting

There was no change in our system of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended October 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II

Item 1. Legal Proceedings

From time to time, we are a party to legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceedings, individually or collectively, that we believe could have a material adverse effect on our results of operations or financial condition or is otherwise material.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended January 31, 2014 and Part II, “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the period ended April 30, 2014, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable.

(b) Not applicable.

(c) During the quarter ended October 31, 2014, we repurchased shares of our common stock pursuant to a publicly announced repurchase program as follows:

	Number of Shares Repurchased		Average Price Paid per Share
August 1, 2014 – August 31, 2014		—		—
September 1, 2014 – September 30, 2014		326,500	$	11.39
October 1, 2014 – October 31, 2014		367,200	$	10.54
Total for quarter		693,700	$	10.94

The repurchase program of up to 1,000,000 shares was announced on April 3, 2013 and expires on December 31, 2014. The shares were purchased in open market transactions within the safe harbor of Exchange Act Rule 10b-18. As of October 31, 2014, no shares are available to be repurchased under this program.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Exhibits

The exhibits required to be filed pursuant to the requirements of Item 601 of Regulation S-K are set forth in the Exhibit Index accompanying this Form 10-Q and are incorporated herein by reference.

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SIGNATURES

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

	MITCHAM INDUSTRIES, INC.
Date: December 10, 2014	/s/ Robert P. Capps
	Robert P. Capps
	Executive Vice President-Finance and Chief Financial Officer
	(Duly Authorized Officer and Chief Accounting Officer)

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EXHIBIT INDEX

Each exhibit identified below is part of this Form 10-Q. Exhibits filed with this Form 10-Q are designated by the cross symbol (†) and exhibits furnished with this Form 10-Q are designated by the asterisk symbol (*). All exhibits not so designated are incorporated herein by reference to a prior filing as indicated.

Exhibit Number	Document Description	Report or Registration Statement	SEC File or Registration Number	Exhibit Reference
3.1	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	3.1
3.2	Third Amended and Restated Bylaws of Mitcham Industries, Inc.	Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on August 2, 2010.	000-25142	3.1(i)
10.1	Facilities Agreement dated 15 August, 2014 between Seamap Pte Ltd as Company and Mitcham Industries, Inc. as Guarantor and The HongKong and Shanghai Banking Corporation Limited as Lender	Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2014.	000-25142	10.1
10.2	Security Deed dated 15 August, 2014 between Seamap Pte Ltd as Chargor and The HongKong and Shanghai Banking Corporation Limited as Lender	Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2014.	000-25142	10.2
31.1†	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 amended
31.2†	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 amended
32.1*	Certification of Billy F. Mitcham, Jr., Chief Executive Officer, and Robert P. Capps, Chief Financial Officer, under Section 906 of the Sarbanes Oxley Act of 2002, 18 U.S.C. § 1350
101.INS†	XBRL Instance Document
101.SCH†	XBRL Taxonomy Extension Schema Document
101.CAL†	XBRL Taxonomy Extension Calculation of Linkbase Document
101.DEF†	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB†	XBRL Taxonomy Extension Label Linkbase Document
101.PRE†	XBRL Taxonomy Extension Presentation Linkbase Document

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Billy F. Mitcham, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended October 31, 2014 of Mitcham Industries, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Billy F. Mitcham, Jr.

Billy F. Mitcham, Jr.

Chief Executive Officer

December 10, 2014

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Robert P. Capps, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended October 31, 2014 of Mitcham Industries, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Robert P. Capps

Robert P. Capps

Executive Vice President-Finance and

Chief Financial Officer

December 10, 2014

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Mitcham Industries, Inc. (the “Company”) on Form 10-Q for the quarterly period ended October 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Billy F. Mitcham, Jr., Chief Executive Officer of the Company, and Robert P. Capps, Executive Vice President-Finance and Chief Financial Officer of the Company, each hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Billy F. Mitcham, Jr.

Billy F. Mitcham, Jr.

Chief Executive Officer

December 10, 2014

/s/ Robert P. Capps

Robert P. Capps

Executive Vice President-Finance and

Chief Financial Officer

December 10, 2014

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Earnings per Share - Basic and Diluted Weighted Average Common Shares Used in Earnings Per Share Calculation (Detail) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Earnings Per Share [Abstract]
Basic weighted average common shares outstanding	12,476	12,767	12,631	12,766
Stock options	194	359	267	390
Unvested restricted stock	21	19	27	24
Total weighted average common share equivalents	215	378	294	414
Diluted weighted average common shares outstanding	12,691	13,145	12,925	13,180

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Goodwill and Other Intangible Assets - Goodwill and Other Intangible Assets (Detail) (USD $)	9 Months Ended
	Oct. 31, 2014	Jan. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 5,661,000	$ 4,320,000
Gross Carrying Amount	16,185,000	6,563,000
Accumulated Amortization	(4,280,000)	(3,362,000)
Net Carrying Amount	11,905,000	3,201,000
Proprietary Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life	8 years 1 month 6 days
Gross Carrying Amount	6,365,000	3,577,000
Accumulated Amortization	(2,177,000)	(1,900,000)
Net Carrying Amount	4,188,000	1,677,000
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life	6 years
Gross Carrying Amount	7,105,000	2,159,000
Accumulated Amortization	(1,520,000)	(1,057,000)
Net Carrying Amount	5,585,000	1,102,000
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life	6 years 9 months 18 days
Gross Carrying Amount	2,404,000	650,000
Accumulated Amortization	(476,000)	(318,000)
Net Carrying Amount	1,928,000	332,000
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Life	7 years
Gross Carrying Amount	311,000	177,000
Accumulated Amortization	(107,000)	(87,000)
Net Carrying Amount	$ 204,000	$ 90,000

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Segment Reporting (Tables)

9 Months Ended

Oct. 31, 2014

Assets [Member]

Financial Information by Business Segment

Financial information by business segment is set forth below (net of any allocations):

	As of October 31, 2014			As of January 31, 2014
	Total Assets			Total Assets
	(in thousands)
Equipment Leasing	$	173,702		$	183,911
Seamap		33,882			21,814
Eliminations		(356	)		(306	)
Consolidated	$	207,228		$	205,419

Revenue [Member]

Financial Information by Business Segment

Results for the three months ended October 31, 2014 and 2013 were as follows (in thousands):

	Revenues						Operating (loss) income						(Loss) income before taxes
	2014			2013			2014			2013			2014			2013
Equipment Leasing	$	17,115		$	14,738		$	(188	)	$	(3,398	)	$	(1,071	)	$	(3,733	)
Seamap		5,827			5,608			337			804			686			585
Eliminations		(36	)		(71	)		45			42			45			42
Consolidated	$	22,906		$	20,275		$	194		$	(2,552	)	$	(340	)	$	(3,106	)

Results for the nine months ended October 31, 2014 and 2013 were as follows (in thousands):

	Revenues						Operating income					Income before taxes
	2014			2013			2014			2013		2014			2013
Equipment Leasing	$	48,623		$	52,039		$	(1,737	)	$	1,332	$	(2,303	)	$	1,598
Seamap		20,032			16,584			2,827			2,038		2,906			2,114
Eliminations		(472	)		(162	)		(120	)		135		(120	)		135
Consolidated	$	68,183		$	68,461		$	970		$	3,505	$	483		$	3,847

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Segment Reporting - Financial Information by Business Segment (Assets) (Detail) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Segment Reporting Information [Line Items]
Total Assets	$ 207,228	$ 205,419
Operating Segments [Member] | Equipment Leasing [Member]
Segment Reporting Information [Line Items]
Total Assets	173,702	183,911
Operating Segments [Member] | Seamap [Member]
Segment Reporting Information [Line Items]
Total Assets	33,882	21,814
Eliminations [Member]
Segment Reporting Information [Line Items]
Total Assets	$ (356)	$ (306)

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Long-Term Debt and Notes Payable - Additional Information (Detail) (USD $)	0 Months Ended	9 Months Ended						9 Months Ended	0 Months Ended	9 Months Ended							9 Months Ended		9 Months Ended
	Aug. 02, 2013	Oct. 31, 2014	Oct. 31, 2014 Minimum [Member]	Oct. 31, 2014 Seamap Pte Ltd [Member]	Oct. 31, 2014 Revolving Credit Facility [Member]	Aug. 22, 2014 Revolving Credit Facility [Member]	Jan. 31, 2014 Revolving Credit Facility [Member]	Oct. 31, 2014 London Interbank Offered Rate (LIBOR) [Member]	Aug. 02, 2013 Credit Agreement [Member]	Oct. 31, 2014 Credit Agreement [Member] Maximum [Member]	Oct. 31, 2014 Credit Agreement [Member] Minimum [Member]	Oct. 31, 2014 Credit Agreement [Member] Predecessor [Member] Revolving Credit Facility And Seamap Credit Facility [Member]	Oct. 31, 2013 Credit Agreement [Member] Predecessor [Member] Revolving Credit Facility And Seamap Credit Facility [Member]	Oct. 31, 2014 Credit Agreement [Member] Base Rate [Member]	Oct. 31, 2014 Credit Agreement [Member] Eurodollar [Member]	Aug. 22, 2014 Seamap Credit Facility [Member]	Oct. 31, 2014 Term Loan [Member]	Aug. 22, 2014 Term Loan [Member]	Oct. 31, 2014 Term Loan [Member] London Interbank Offered Rate (LIBOR) [Member]	Aug. 22, 2014 Banker's Guarantee Facility [Member]
Line of Credit Facility [Line Items]
Borrowings under the revolving credit facility				$ 3,000,000		$ 3,000,000			$ 50,000,000							$ 15,000,000
Revolving credit facility expiration period									3 years
Line of credit agreement collateralized by percentage of own capital stock	65.00%
Credit Agreement basis points														175.00%	275.00%				2.75%
Commitment fee on the unused portion of the Credit Agreement										0.50%	0.375%
Available borrowings under the revolving credit facility to secure letters of credit										10,000,000
Leverage Ratio		2.00
Fixed charge coverage ratio		1.25
Adjusted EBITDA		22,000,000
Capital expenditures to adjusted EBITDA		1.0
Additional indebtedness		5,000,000
Carrying value of debt					24,500,000		22,000,000											10,000,000		2,000,000
Frequency of periodic payments																	The term portion of the Seamap Credit Facility provides for eleven quarterly principal payments of $800,000 and a final payment of the remaining $1.2 million on or before August 22, 2017.
Maturity period																	Aug. 22, 2017
Principal payment of term loan portion																	800,000
Final payment of term portion																	1,200,000
Interest rate of borrowings								3.00%
Minimum shareholder's equity		15,000,000
Minimum ratio of debt to EBITDA			125.00%
Average borrowings under the revolving credit facility												$ 24,225,000	$ 3,031,000

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New Accounting Pronouncements

9 Months Ended

Oct. 31, 2014

Accounting Changes and Error Corrections [Abstract]

New Accounting Pronouncements

3. New Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11, Income Taxes (Topic 740) – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists, to provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carry forward, a similar tax loss, or a tax credit carry forward exists. ASU 2013-11 requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward, with certain exceptions. ASU 2013-11 was effective in the nine months ended October 31, 2014. The adoption of this standard did not have a material effect on the Company’s financial statements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers: (Topic 606), to provide guidance on revenue recognition on contracts with customers to transfer goods or services or on contracts for the transfer of nonfinancial assets. ASU 2014-09 requires that revenue recognition on contracts with customers depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective during the fiscal year ended January 31, 2017. The Company does not believe the adoption will have a material effect on its financial statements.

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Segment Reporting - Financial Information by Business Segment (Revenues) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Segment Reporting Information [Line Items]
Revenues	$ 22,906	$ 20,275	$ 68,183	$ 68,461
Operating (loss) income	194	(2,552)	970	3,505
(Loss) income before taxes	(340)	(3,106)	483	3,847
Operating Segments [Member] | Equipment Leasing [Member]
Segment Reporting Information [Line Items]
Revenues	17,115	14,738	48,623	52,039
Operating (loss) income	(188)	(3,398)	(1,737)	1,332
(Loss) income before taxes	(1,071)	(3,733)	(2,303)	1,598
Operating Segments [Member] | Seamap [Member]
Segment Reporting Information [Line Items]
Revenues	5,827	5,608	20,032	16,584
Operating (loss) income	337	804	2,827	2,038
(Loss) income before taxes	686	585	2,906	2,114
Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	(36)	(71)	(472)	(162)
Operating (loss) income	45	42	(120)	135
(Loss) income before taxes	$ 45	$ 42	$ (120)	$ 135

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Balance Sheet - Accounts Receivable (Detail) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Accounts receivable:
Accounts receivable	$ 34,136	$ 33,347
Allowance for doubtful accounts	(3,706)	(3,833)
Total accounts receivable, net	$ 30,430	$ 29,514

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Restricted Cash - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2014
Cash and Cash Equivalents [Abstract]
Short-term time deposits	$ 81

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Balance Sheet - Additional Information (Detail) (USD $)	9 Months Ended	12 Months Ended	9 Months Ended		0 Months Ended				0 Months Ended
	Oct. 31, 2014 Customer	Jan. 31, 2014 Customer	Oct. 31, 2014 Minimum [Member]	Oct. 31, 2014 Maximum [Member]	May 31, 2014 Seamap Pte Ltd [Member] Ion Geophysical Corporation [Member] Product_Lines	Oct. 31, 2014 Contracts Receivable [Member]	Jan. 31, 2014 Contracts Receivable [Member]	Oct. 31, 2014 Promissory Note [Member]	May 31, 2014 Inventory [Member] Seamap Pte Ltd [Member] Ion Geophysical Corporation [Member]
Balance Sheet [Line Items]
Contracts and notes receivable	$ 3,338,000	$ 1,005,000				$ 849,000	$ 1,005,000	$ 2,800,000
Contracts and notes receivable, Interest rate	2.10%	2.10%
Number of customers due	2	3
Contracts and notes receivable repayment term			1 month	13 months
Allowance for contract and notes receivable	0	0
Business acquisition, fair value consideration					$ 15,600,000				$ 3,600,000
Number of product lines					2

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Balance Sheet - Schedule of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Inventories:
Raw materials	$ 5,827	$ 4,599
Finished goods	5,649	4,159
Work in progress	529	612
Cost of inventories	12,005	9,370
Less allowance for obsolescence	(847)	(1,032)
Total inventories, net	$ 11,158	$ 8,338

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Basis of Presentation

9 Months Ended

Oct. 31, 2014

Accounting Policies [Abstract]

Basis of Presentation

2. Basis of Presentation

The condensed consolidated balance sheet as of January 31, 2014 for the Company has been derived from audited consolidated financial statements. The unaudited interim condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2014. In the opinion of the Company, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position as of October 31, 2014, the results of operations for the three and nine months ended October 31, 2014 and 2013, and the cash flows for the nine months ended October 31, 2014 and 2013, have been included in these financial statements. The foregoing interim results are not necessarily indicative of the results of operations to be expected for the full fiscal year ending January 31, 2015. As of February 1, 2014, MML, MEL, Mitcham Holdings, Ltd. (“MHL”) and our branch operations in Colombia changed their functional currencies to the U.S. dollar due to changes in the economic environment for these entities. Had these changes not been made, other income would have been approximately $588,000 less than as reported.

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Balance Sheet - Schedule of Seismic Equipment Lease Pool and Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Seismic equipment lease pool and property and equipment:
Cost of seismic equipment lease pool and property and equipment	$ 271,251	$ 271,684
Accumulated depreciation and amortization	(158,448)	(142,111)
Total seismic equipment lease pool and property and equipment, net	112,803	129,573
Seismic Equipment Lease Pool [Member]
Seismic equipment lease pool and property and equipment:
Cost of property and equipment	260,352	261,644
Land and Buildings [Member]
Seismic equipment lease pool and property and equipment:
Cost of property and equipment	366	366
Furniture and Fixtures [Member]
Seismic equipment lease pool and property and equipment:
Cost of property and equipment	9,765	8,904
Autos and Trucks [Member]
Seismic equipment lease pool and property and equipment:
Cost of property and equipment	$ 768	$ 770

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Treasury Stock - Additional Information (Detail) (USD $)	9 Months Ended
	Oct. 31, 2014	Apr. 30, 2013
Equity [Abstract]
Number of shares authorized to repurchase		1,000,000
Number of shares of common stock repurchased	852,100
Average price of shares repurchased	$ 11.46
Shares purchased under repurchase program	1,000,000

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Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Oct. 31, 2014	Jan. 31, 2014
Current assets:
Cash and cash equivalents	$ 9,069,000	$ 15,162,000
Restricted cash		81,000
Accounts receivable, net	30,430,000	29,514,000
Contracts and notes receivable	3,338,000	1,005,000
Inventories, net	11,158,000	8,338,000
Prepaid income taxes	1,317,000	2,177,000
Deferred tax asset	1,562,000	1,968,000
Prepaid expenses and other current assets	9,866,000	3,915,000
Total current assets	66,740,000	62,160,000
Seismic equipment lease pool and property and equipment, net	112,803,000	129,573,000
Intangible assets, net	11,905,000	3,201,000
Goodwill	5,661,000	4,320,000
Deferred tax asset	8,217,000	6,133,000
Other assets	1,902,000	32,000
Total assets	207,228,000	205,419,000
Current liabilities:
Accounts payable	6,489,000	10,745,000
Current maturities - long-term debt	2,421,000	75,000
Deferred revenue	179,000	35,000
Accrued expenses and other current liabilities	4,605,000	1,583,000
Total current liabilities	13,694,000	12,438,000
Non-current income taxes payable		408,000
Long-term debt, net of current maturities	32,141,000	22,125,000
Total liabilities	45,835,000	34,971,000
Shareholders' equity:
Preferred stock, $1.00 par value; 1,000 shares authorized; none issued and outstanding
Common stock, $0.01 par value; 20,000 shares authorized; 14,012 and 13,907 shares issued at October 31, 2014 and January 31, 2014, respectively	140,000	139,000
Additional paid-in capital	119,496,000	118,156,000
Treasury stock, at cost (1,928 and 1,075 shares at October 31, 2014 and January 31, 2014, respectively)	(16,851,000)	(7,075,000)
Retained earnings	61,109,000	61,116,000
Accumulated other comprehensive loss	(2,501,000)	(1,888,000)
Total shareholders' equity	161,393,000	170,448,000
Total liabilities and shareholders' equity	$ 207,228,000	$ 205,419,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Cash flows from operating activities:
Net (loss) income	$ (7)	$ 2,986
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	27,866	23,242
Stock-based compensation	1,006	839
Provision for doubtful accounts, net of charge offs		1,048
Provision for inventory obsolescence	44	70
Gross profit from sale of lease pool equipment	(1,845)	(4,108)
Excess tax benefit from exercise of non-qualified stock options and restricted shares		(44)
Deferred tax benefit	(1,742)	(2,495)
Changes in working capital items:
Accounts receivable	(1,076)	(4,569)
Contracts and notes receivable	(2,632)	1,277
Inventories	630	(2,827)
Prepaid expenses and other current assets	(7,449)	(1,449)
Income taxes payable	(331)	3,382
Accounts payable, accrued expenses, other current liabilities and deferred revenue	2,079	1,338
Net cash provided by operating activities	16,543	18,690
Cash flows from investing activities:
Purchases of seismic equipment held for lease	(15,079)	(13,308)
Acquisition of business	(14,500)
Purchases of property and equipment	(375)	(452)
Sale of used lease pool equipment	2,861	6,188
Net cash used in investing activities	(27,093)	(7,572)
Cash flows from financing activities:
Net proceeds from (payments on) revolving line of credit	2,500	(1,000)
Net proceeds from term loan	10,000
Payments on borrowings	(74)	(105)
Net proceeds from short-term investments	85	30
Proceeds from issuance of common stock upon exercise of options	99	275
Purchase of treasury stock	(9,776)	(2,200)
Excess tax benefit from exercise of non-qualified stock options and restricted shares		44
Net cash provided by (used in) financing activities	2,834	(2,956)
Effect of changes in foreign exchange rates on cash and cash equivalents	1,623	897
Net change in cash and cash equivalents	(6,093)	9,059
Cash and cash equivalents, beginning of period	15,162	15,150
Cash and cash equivalents, end of period	9,069	24,209
Supplemental cash flow information:
Interest paid	576	206
Income taxes paid	836	(74)
Purchases of seismic equipment held for lease in accounts payable at end of period	$ 3,438	$ 5,208

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Goodwill and Other Intangible Assets - Future Estimated Amortization Expense Related to Amortizable Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2015	$ 449
2016	1,795
2017	1,753
2018	1,732
2019	1,394
2020 and thereafter	4,782
Net Carrying Amount	$ 11,905	$ 3,201

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Oct. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

	Weighted Average		October 31, 2014							January 31, 2014
	Remaining Life at 10/31/2014		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
			(in thousands)							(in thousands)
Goodwill			$	5,661						$	4,320
Proprietary rights		8.1	$	6,365	$	(2,177	)	$	4,188	$	3,577	$	(1,900	)		1,677
Customer relationships		6.0		7,105		(1,520	)		5,585		2,159		(1,057	)		1,102
Patents		6.8		2,404		(476	)		1,928		650		(318	)		332
Trade name		7.0		311		(107	)		204		177		(87	)		90
Amortizable intangible assets			$	16,185	$	(4,280	)	$	11,905	$	6,563	$	(3,362	)	$	3,201

Future Estimated Amortization Expense Related to Amortizable Intangible Assets

As of October 31, 2014, future estimated amortization expense related to amortizable intangible assets was estimated to be:

For fiscal years ending January 31 (in thousands):
2015	$	449
2016		1,795
2017		1,753
2018		1,732
2019		1,394
2020 and thereafter		4,782
Total	$	11,905

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Long-Term Debt and Notes Payable - Long-Term Debt and Notes Payable (Detail) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Debt Instrument [Line Items]
Long-term debt gross	$ 34,562	$ 22,200
Long-term debt gross	34,562	22,200
Less current portion	(2,421)	(75)
Long-term debt	32,141	22,125
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term debt gross	24,500	22,000
Term Loan [Member]
Debt Instrument [Line Items]
Long-term debt gross	10,000
Other Equipment Notes [Member]
Debt Instrument [Line Items]
Long-term debt gross	$ 62	$ 200

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Earnings per Share (Tables)

9 Months Ended

Oct. 31, 2014

Earnings Per Share [Abstract]

Basic and Diluted Weighted Average Common Shares Used in Earnings Per Share Calculation

The following table presents the calculation of basic and diluted weighted average common shares used in the earnings per share calculation:

	Three Months Ended October 31,				Nine Months Ended October 31,
	2014		2013		2014		2013
	(in thousands)				(in thousands)
Basic weighted average common shares outstanding		12,476		12,767		12,631		12,766
Stock options		194		359		267		390
Unvested restricted stock		21		19		27		24
Total weighted average common share equivalents		215		378		294		414
Diluted weighted average common shares outstanding		12,691		13,145		12,925		13,180

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Organization

9 Months Ended

Oct. 31, 2014

Text Block [Abstract]

Organization

1. Organization

Mitcham Industries, Inc. (for purposes of these notes, the “Company”) was incorporated in Texas in 1987. The Company, through its wholly-owned Canadian subsidiary, Mitcham Canada, ULC. (“MCL”), its wholly-owned Russian subsidiary, Mitcham Seismic Eurasia LLC (“MSE”), its wholly-owned Hungarian subsidiary, Mitcham Europe Ltd. (“MEL”), its wholly-owned Singaporean subsidiary, Mitcham Marine Leasing Pte Ltd. (“MML”), and its branch operations in Colombia and Peru, provides full-service equipment leasing, sales and service to the seismic industry worldwide. The Company, through its wholly-owned Australian subsidiary, Seismic Asia Pacific Pty Ltd. (“SAP”), provides seismic, oceanographic and hydrographic leasing and sales worldwide, primarily in Southeast Asia and Australia. The Company, through its wholly-owned subsidiary, Seamap International Holdings Pte, Ltd. (“Seamap”), designs, manufactures and sells a broad range of proprietary products for the seismic, hydrographic and offshore industries, with manufacturing, support and sales facilities based in Singapore and the United Kingdom. All material intercompany transactions and balances have been eliminated in consolidation.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Oct. 31, 2014	Jan. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	14,012,000	13,907,000
Treasury stock, shares	1,928,000	1,075,000

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Treasury Stock

9 Months Ended

Oct. 31, 2014

Equity [Abstract]

Treasury Stock

11. Treasury Stock

In April 2013, the Company’s Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company’s common stock through December 31, 2014. During the nine months ended October 31, 2014, the Company repurchased 852,100 shares of its common stock at an average price of approximately $11.46 per share. These shares are reflected as treasury stock in the accompanying financial statements. As of October 31, 2014, the Company has purchased a total of 1,000,000 shares under this program, representing the total amount of shares authorized for repurchase.

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Document and Entity Information	9 Months Ended
	Oct. 31, 2014	Dec. 09, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Oct. 31, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Trading Symbol	MIND
Entity Registrant Name	MITCHAM INDUSTRIES INC
Entity Central Index Key	0000926423
Current Fiscal Year End Date	--01-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		12,084,056

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Stock-Based Compensation

9 Months Ended

Oct. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

12. Stock-Based Compensation

Total compensation expense recognized for stock-based awards granted under the Company’s equity incentive plan during the three and nine months ended October 31, 2014 was approximately $310,000 and $1,006,000, respectively, and during the three and nine months ended October 31, 2013 was approximately $287,000 and $839,000, respectively.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Revenues:
Equipment leasing	$ 14,285	$ 7,900	$ 38,672	$ 34,435
Lease pool equipment sales	475	3,169	2,861	6,188
Seamap equipment sales	5,791	5,537	19,560	16,422
Other equipment sales	2,355	3,669	7,090	11,416
Total revenues	22,906	20,275	68,183	68,461
Cost of sales:
Direct costs-equipment leasing	2,343	1,465	4,700	3,857
Direct costs-lease pool depreciation	8,634	7,216	26,195	22,021
Cost of lease pool equipment sales	193	1,119	1,016	2,080
Cost of Seamap and other equipment sales	4,729	5,522	14,785	16,653
Total cost of sales	15,899	15,322	46,696	44,611
Gross profit	7,007	4,953	21,487	23,850
Operating expenses:
General and administrative	6,159	6,086	18,951	18,173
Provision for doubtful accounts		1,048		1,048
Depreciation and amortization	654	371	1,566	1,124
Total operating expenses	6,813	7,505	20,517	20,345
Operating income (loss)	194	(2,552)	970	3,505
Other (expenses) income:
Interest, net	(147)	(37)	(347)	120
Other, net	(387)	(517)	(140)	222
Total other (expenses) income	(534)	(554)	(487)	342
(Loss) income before income taxes	(340)	(3,106)	483	3,847
(Provision) benefit for income taxes	(57)	478	(490)	(861)
Net (loss) income	$ (397)	$ (2,628)	$ (7)	$ 2,986
Net (loss) income per common share:
Basic	$ (0.03)	$ (0.21)	$ 0.00	$ 0.23
Diluted	$ (0.03)	$ (0.21)	$ 0.00	$ 0.23
Shares used in computing net income per common share:
Basic	12,476	12,767	12,631	12,766
Diluted	12,476	12,767	12,631	13,180

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Balance Sheet

9 Months Ended

Oct. 31, 2014

Text Block [Abstract]

Balance Sheet

6. Balance Sheet

	October 31, 2014			January 31, 2014
	(in thousands)
Accounts receivable:
Accounts receivable	$	34,136		$	33,347
Allowance for doubtful accounts		(3,706	)		(3,833	)
Total accounts receivable, net	$	30,430		$	29,514

Contracts receivable consisted of $849,000, due from two customers as of October 31, 2014 and $1,005,000 due from three customers as of January 31, 2014. Notes receivable of $2,800,000 at October 31, 2014 relate to promissory notes issued by a customer in settlement of a trade account receivable. The balance of contracts and notes receivable at October 31, 2014 and January 31, 2014 consisted of contracts and notes bearing interest at an average of approximately 2.1% and with remaining repayment terms of one to 13 months. These contracts are collateralized by equipment and are considered collectable; therefore, no allowances have been established for them.

	October 31, 2014			January 31, 2014
	(in thousands)
Inventories:
Raw materials	$	5,827		$	4,599
Finished goods		5,649			4,159
Work in progress		529			612
		12,005			9,370
Less allowance for obsolescence		(847	)		(1,032	)
Total inventories, net	$	11,158		$	8,338

In May of 2014, the Company acquired $3.6 million of inventory in connection with the purchase of two product lines from ION. See Note 4 to our consolidated financial statements.

	October 31, 2014			January 31, 2014
	(in thousands)
Seismic equipment lease pool and property and equipment:
Seismic equipment lease pool	$	260,352		$	261,644
Land and buildings		366			366
Furniture and fixtures		9,765			8,904
Autos and trucks		768			770
		271,251			271,684
Accumulated depreciation and amortization		(158,448	)		(142,111	)
Total seismic equipment lease pool and property and equipment, net	$	112,803		$	129,573

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Restricted Cash

9 Months Ended

Oct. 31, 2014

Cash and Cash Equivalents [Abstract]

Restricted Cash

5. Restricted Cash

As of January 31, 2014, SAP had pledged approximately $81,000 in short-term time deposits to secure performance obligations in connection with certain contracts. As of April 30, 2014, the amount of security had been released as the contractual obligations had been fulfilled.

As these investments in short-term time deposits relate to financing activities, the securing of contract obligations, these transactions are reflected as financing activities in the accompanying condensed consolidated statements of cash flows.

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Long-Term Debt and Notes Payable (Tables)

9 Months Ended

Oct. 31, 2014

Debt Disclosure [Abstract]

Long-Term Debt and Notes Payable

Long-term debt and notes payable consisted of the following (in thousands):

	October 31, 2014			January 31, 2014
Revolving line of credit	$	24,500		$	22,000
Term Loan		10,000			—
Other equipment notes		62			200
		34,562			22,200
Less current portion		(2,421	)		(75	)
Long-term debt	$	32,141		$	22,125

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Segment Reporting

9 Months Ended

Oct. 31, 2014

Segment Reporting [Abstract]

Segment Reporting

13. Segment Reporting

The Equipment Leasing segment offers new and “experienced” seismic equipment for lease or sale to the oil and gas industry, seismic contractors, environmental agencies, government agencies and universities. The Equipment Leasing segment is headquartered in Huntsville, Texas, with sales and services offices in Calgary, Canada; Brisbane, Australia; Ufa, Bashkortostan, Russia; Budapest, Hungary; Singapore; Bogota, Colombia; and Lima, Peru.

The Seamap segment is engaged in the design, manufacture and sale of state-of-the-art seismic and offshore telemetry systems. Manufacturing, support and sales facilities are maintained in the United Kingdom and Singapore.

Financial information by business segment is set forth below (net of any allocations):

	As of October 31, 2014			As of January 31, 2014
	Total Assets			Total Assets
	(in thousands)
Equipment Leasing	$	173,702		$	183,911
Seamap		33,882			21,814
Eliminations		(356	)		(306	)
Consolidated	$	207,228		$	205,419

Results for the three months ended October 31, 2014 and 2013 were as follows (in thousands):

	Revenues						Operating (loss) income						(Loss) income before taxes
	2014			2013			2014			2013			2014			2013
Equipment Leasing	$	17,115		$	14,738		$	(188	)	$	(3,398	)	$	(1,071	)	$	(3,733	)
Seamap		5,827			5,608			337			804			686			585
Eliminations		(36	)		(71	)		45			42			45			42
Consolidated	$	22,906		$	20,275		$	194		$	(2,552	)	$	(340	)	$	(3,106	)

Results for the nine months ended October 31, 2014 and 2013 were as follows (in thousands):

	Revenues						Operating income					Income before taxes
	2014			2013			2014			2013		2014			2013
Equipment Leasing	$	48,623		$	52,039		$	(1,737	)	$	1,332	$	(2,303	)	$	1,598
Seamap		20,032			16,584			2,827			2,038		2,906			2,114
Eliminations		(472	)		(162	)		(120	)		135		(120	)		135
Consolidated	$	68,183		$	68,461		$	970		$	3,505	$	483		$	3,847

Sales from the Seamap segment to the Equipment Leasing segment are eliminated in the consolidated revenues. Consolidated income before taxes reflects the elimination of profit from intercompany sales and depreciation expense on the difference between the sales price and the cost to manufacture the equipment. Fixed assets are reduced by the difference between the sales price and the cost to manufacture the equipment, less the accumulated depreciation related to the difference.

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Income Taxes

9 Months Ended

Oct. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

Prepaid taxes of approximately $1.3 million at October 31, 2014 consisted of approximately $1.2 million of foreign taxes and approximately $100,000 of domestic federal and state taxes. Prepaid income taxes of approximately $2.2 million at January 31, 2014 consisted of approximately $600,000 of foreign taxes and approximately $1.6 million of domestic federal and state taxes.

The Company and its subsidiaries file consolidated and separate income tax returns in the United States federal jurisdiction and in foreign jurisdictions. The Company is subject to United States federal income tax examinations for all tax years beginning with its fiscal year ended January 31, 2010.

In September 2013, the Internal Revenue Service (“IRS”) initiated an examination of the Company’s federal income tax return for the fiscal year ended January 31, 2013. In May 2014, the IRS notified the Company that it will not propose any adjustments as a result of this examination.

The Company is subject to examination by taxing authorities throughout the world, including foreign jurisdictions such as Australia, Canada, Colombia, Hungary, Peru, Russia, Singapore and the United Kingdom. With few exceptions, the Company and its subsidiaries are no longer subject to foreign income tax examinations for tax years before 2008.

In September, 2013 the IRS issued final regulations relating to guidance on applying rules to amounts paid to acquire, produce or improve tangible personal property as well as rules for materials and supplies. The new guidance is required to be applied no later than our tax year beginning February 1, 2014. These regulations are not expected to have a material impact on our financial statements.

The provision for income taxes for the three and nine months ended October 31, 2014 includes certain foreign withholding taxes. These taxes can distort the relationship between income or loss before income taxes and the provision for income taxes. Accordingly, the effective tax rates for these periods differ significantly from the federal statutory rate of 34%. The Company has determined that earnings from certain foreign jurisdictions have been permanently reinvested outside of the United States.

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Goodwill and Other Intangible Assets

9 Months Ended

Oct. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

7. Goodwill and Other Intangible Assets

	Weighted Average		October 31, 2014							January 31, 2014
	Remaining Life at 10/31/2014		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
			(in thousands)							(in thousands)
Goodwill			$	5,661						$	4,320
Proprietary rights		8.1	$	6,365	$	(2,177	)	$	4,188	$	3,577	$	(1,900	)		1,677
Customer relationships		6.0		7,105		(1,520	)		5,585		2,159		(1,057	)		1,102
Patents		6.8		2,404		(476	)		1,928		650		(318	)		332
Trade name		7.0		311		(107	)		204		177		(87	)		90
Amortizable intangible assets			$	16,185	$	(4,280	)	$	11,905	$	6,563	$	(3,362	)	$	3,201

As of October 31, 2014, the Company had goodwill of $5,661,000, all of which was allocated to the Seamap segment. No impairment was recorded against the goodwill account during the nine months ended October 31, 2014.

Amortizable intangible assets are amortized over their estimated useful lives of eight to 15 years using the straight-line method. Aggregate amortization expense was $458,000 and $164,000 for the three months ended October 31, 2014 and 2013, respectively, and $982,000 and $493,000 for the nine months ended October 31, 2014 and 2013, respectively. As of October 31, 2014, future estimated amortization expense related to amortizable intangible assets was estimated to be:

For fiscal years ending January 31 (in thousands):
2015	$	449
2016		1,795
2017		1,753
2018		1,732
2019		1,394
2020 and thereafter		4,782
Total	$	11,905

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Long-Term Debt and Notes Payable

9 Months Ended

Oct. 31, 2014

Debt Disclosure [Abstract]

Long-Term Debt and Notes Payable

8. Long-Term Debt and Notes Payable

Long-term debt and notes payable consisted of the following (in thousands):

	October 31, 2014			January 31, 2014
Revolving line of credit	$	24,500		$	22,000
Term Loan		10,000			—
Other equipment notes		62			200
		34,562			22,200
Less current portion		(2,421	)		(75	)
Long-term debt	$	32,141		$	22,125

On August 2, 2013, the Company entered into a $50.0 million, three-year revolving credit facility, as described below (the “Credit Agreement”). The Credit Agreement replaced a predecessor revolving credit facility with First Victoria National Bank. The Credit Agreement is a three-year, secured revolving facility in the maximum principal amount of $50.0 million, among the Company, as borrower, HSBC Bank USA, N.A., as administrative agent and several banks and other financial institutions from time to time as lenders thereunder (initially consisting of HSBC Bank USA, N.A. and First Victoria National Bank).

Amounts available for borrowing under the Credit Agreement are determined by a borrowing base. The borrowing base is determined primarily based upon the appraised value of the Company’s domestic lease pool equipment and certain accounts receivable. The Credit Agreement is collateralized by essentially all of the Company’s domestic assets (other than real estate) and 65% of the capital stock of Mitcham Holdings, Ltd., a foreign holding company that holds the capital stock of the Company’s foreign subsidiaries.

The Credit Agreement provides interest at a base rate, or for Eurodollar borrowings, in both cases plus an applicable margin. As of October 31, 2014, the base rate margin was 175 basis points and the Eurodollar margin was 275 basis points. The Company has agreed to pay a commitment fee on the unused portion of the Credit Agreement of 0.375% to 0.5%. Up to $10.0 million of available borrowings under the Credit Agreement may be utilized to secure letters of credit. The Credit Agreement contains certain financial covenants that require, among other things, that the Company maintain a leverage ratio, which is calculated at the end of each quarter, of no greater than 2.00 to 1.00 on a trailing four quarter basis and a fixed charge coverage ratio, which also is calculated at the end of each quarter, of no less than 1.25 to 1.00 on a trailing four quarter basis. In addition, should Adjusted EBITDA, as defined in the Credit Agreement, for any trailing four quarter period be less than $22.0 million, the ratio of capital expenditures to Adjusted EBITDA for that four quarter period may not be greater than 1.0 to 1.0. The Credit Agreement also includes restrictions on additional indebtedness in excess of $5.0 million. The Company was in compliance with each of these provisions as of and for the nine months ended October 31, 2014.

The Credit Agreement contains customary representations, warranties, conditions precedent to credit extensions, affirmative and negative covenants and events of default. The negative covenants include restrictions on liens, additional indebtedness in excess of $5.0 million, acquisitions, fundamental changes, dispositions of property, restricted payments, and transactions with affiliates and lines of business. The events of default include a change in control provision.

On August 22, 2014, the Company’s wholly-owned subsidiary, Seamap Pte Ltd., entered into a $15.0 million credit facility (the “Seamap Credit Facility”) with The Hongkong and Shanghai Banking Corporation Limited (“HSBC-Singapore”). The facility consists of a $10.0 million term loan, a $3.0 million revolving credit facility, and a $2.0 million banker’s guarantee facility.

The term loan portion of the Seamap Credit Facility provides for eleven quarterly principal payments of $800,000 and a final payment of the remaining $1.2 million on or before August 22, 2017. Interest on the term facility is payable quarterly at LIBOR plus 2.75%. Under the Seamap Credit Facility, Seamap may borrow up to $3.0 million for period of one to three months to be utilized for working capital and other general corporate purposes. Borrowings under the revolving credit facility bear interest at LIBOR plus 3.00%. Borrowings under this arrangement are secured by essentially all of the assets of Seamap Pte Ltd. and the Company’s guarantee.

The Seamap Credit Facility contains financial covenants that require Seamap to maintain a minimum shareholder’s equity of S$15 million and a minimum ratio of debt to EBITDA of not less than 125% for each fiscal year. The Company was in compliance with each of these provisions as of and for the nine months ended October 31, 2014.

The Seamap Credit Facility contains customary representations and warranties, conditions precedent to credit extensions, affirmative and negative covenants and events of default. The negative covenants include restrictions on liens, additional indebtedness, acquisitions, fundamental changes, dispositions of property, restricted payments, and transactions with affiliates. The Seamap Credit Facility also requires the Company, as guarantor, to comply with financial covenants contained the Credit Agreement.

The Company’s average borrowings under the Credit Agreement, the predecessor revolving credit facility and the Seamap Credit Facility for the nine months ended October 31, 2014 and 2013 were approximately $24,225,000 and $3,031,000, respectively.

From time to time, certain subsidiaries have entered into notes payable to finance the purchase of certain equipment, which are pledged as security for the notes payable.

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Earnings per Share

9 Months Ended

Oct. 31, 2014

Earnings Per Share [Abstract]

Earnings per Share

10. Earnings per Share

Net income per basic common share is computed using the weighted average number of common shares outstanding during the period, excluding unvested restricted stock. Net income per diluted common share is computed using the weighted average number of common shares and dilutive potential common shares outstanding during the period using the treasury stock method. Potential common shares result from the assumed exercise of outstanding common stock options having a dilutive effect and from the assumed vesting of unvested shares of restricted stock.

The following table presents the calculation of basic and diluted weighted average common shares used in the earnings per share calculation:

	Three Months Ended October 31,				Nine Months Ended October 31,
	2014		2013		2014		2013
	(in thousands)				(in thousands)
Basic weighted average common shares outstanding		12,476		12,767		12,631		12,766
Stock options		194		359		267		390
Unvested restricted stock		21		19		27		24
Total weighted average common share equivalents		215		378		294		414
Diluted weighted average common shares outstanding		12,691		13,145		12,925		13,180

For the three months ended October 31, 2014 and 2013 and the nine months ended October 31, 2014, potentially dilutive common shares, underlying stock options and unvested restricted stock were anti-dilutive and were therefore not considered in calculating diluted loss per share for that period.

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Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Jan. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 5,661,000		$ 5,661,000		$ 4,320,000
Goodwill impairment			0
Aggregate amortization expense	$ 458,000	$ 164,000	$ 982,000	$ 493,000
Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life of intangible assets			15 years
Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life of intangible assets			8 years

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Balance Sheet (Tables)

9 Months Ended

Oct. 31, 2014

Text Block [Abstract]

Accounts Receivable

	October 31, 2014			January 31, 2014
	(in thousands)
Accounts receivable:
Accounts receivable	$	34,136		$	33,347
Allowance for doubtful accounts		(3,706	)		(3,833	)
Total accounts receivable, net	$	30,430		$	29,514

Schedule of Inventories

	October 31, 2014			January 31, 2014
	(in thousands)
Inventories:
Raw materials	$	5,827		$	4,599
Finished goods		5,649			4,159
Work in progress		529			612
		12,005			9,370
Less allowance for obsolescence		(847	)		(1,032	)
Total inventories, net	$	11,158		$	8,338

Schedule of Seismic Equipment Lease Pool and Property and Equipment

	October 31, 2014			January 31, 2014
	(in thousands)
Seismic equipment lease pool and property and equipment:
Seismic equipment lease pool	$	260,352		$	261,644
Land and buildings		366			366
Furniture and fixtures		9,765			8,904
Autos and trucks		768			770
		271,251			271,684
Accumulated depreciation and amortization		(158,448	)		(142,111	)
Total seismic equipment lease pool and property and equipment, net	$	112,803		$	129,573

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Basis of Presentation - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	0 Months Ended
	Jan. 31, 2014
Basis Of Presentation [Abstract]
Impact to other income of certain changes in functional currency	$ 588

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Stock-Based Compensation - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Compensation expenses recognized for stock-based awards granted	$ 310	$ 287	$ 1,006	$ 839

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Condensed Consolidated Statements Of Comprehensive Loss (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (397)	$ (2,628)	$ (7)	$ 2,986
Change in cumulative translation adjustment	(2,160)	1,488	(613)	(4,703)
Comprehensive loss	$ (2,557)	$ (1,140)	$ (620)	$ (1,717)

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Acquisition

9 Months Ended

Oct. 31, 2014

Business Combinations [Abstract]

Acquisition

4. Acquisition

In May 2014, the Company’s wholly-owned subsidiary, Seamap Pte Ltd, purchased two product lines from ION Geophysical Corporation (“ION”) for $14.5 million in cash and a credit of $2.0 million against future sales or rentals. These product lines consist of the Digishot™ energy source controller and the Sleeve Gun energy sources, collectively the “ION Source Products”. The Company made this acquisition to expand the product offerings available to customers, gain access to additional technology and expand the markets in which it operates. The Company accounted for this transaction as a business combination and these operations are included in the Seamap segment. Based on an independent valuation study, the fair value of the consideration was determined to be approximately $15.6 million and was allocated as follows: $10.0 million to intangible assets, $3.6 million to inventory, $1.4 million to goodwill and $600,000 to furniture and fixtures. The goodwill is not deductible for tax purposes. Pro forma results of operations have not been presented as the business combination was not significant.

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Acquisition - Additional Information (Detail) (USD $)	9 Months Ended	0 Months Ended
	Oct. 31, 2014	May 31, 2014 Seamap Pte Ltd [Member] Ion Geophysical Corporation [Member] Product_Lines	May 31, 2014 Seamap Pte Ltd [Member] Ion Geophysical Corporation [Member] Furniture and Fixtures [Member]	May 31, 2014 Seamap Pte Ltd [Member] Ion Geophysical Corporation [Member] Intangible assets [Member]	May 31, 2014 Seamap Pte Ltd [Member] Ion Geophysical Corporation [Member] Inventory [Member]	May 31, 2014 Seamap Pte Ltd [Member] Ion Geophysical Corporation [Member] Goodwill [Member]
Business Acquisition [Line Items]
Business acquisition, cash paid	$ 14,500,000	$ 14,500,000
Business acquisition, credit		2,000,000
Number of product lines		2
Business acquisition, fair value consideration		$ 15,600,000	$ 600,000	$ 10,000,000	$ 3,600,000	$ 1,400,000

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Income Taxes - Additional Information (Detail) (USD $)	9 Months Ended
	Oct. 31, 2014	Jan. 31, 2014
Income Tax Disclosure [Abstract]
Prepaid income taxes	$ 1,317,000	$ 2,177,000
Prepaid foreign taxes	1,200,000	600,000
Prepaid domestic federal and state taxes	$ 100,000	$ 1,600,000
Federal statutory rate	34.00%

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Organization (Policies)

9 Months Ended

Oct. 31, 2014

Text Block [Abstract]

Organization

Organization

Mitcham Industries, Inc. (for purposes of these notes, the “Company”)was incorporated in Texas in 1987. The Company, through its wholly-owned Canadian subsidiary, Mitcham Canada, ULC. (“MCL”), its wholly-owned Russian subsidiary, Mitcham Seismic Eurasia LLC (“MSE”), its wholly- owned Hungarian subsidiary, Mitcham Europe Ltd. (“MEL”), its wholly-owned Singaporean subsidiary, Mitcham Marine Leasing Pte Ltd. (“MML”), and its branch operations in Colombia and Peru, provides full-service equipment leasing, sales and service to the seismic industry worldwide. The Company, through its wholly-owned Australian subsidiary, Seismic Asia Pacific Pty Ltd. (“SAP”), provides seismic, oceanographic and hydrographic leasing and sales worldwide, primarily in Southeast Asia and Australia. The Company, through its wholly-owned subsidiary, Seamap International Holdings Pte, Ltd. (“Seamap”), designs, manufactures and sells a broad range of proprietary products for the seismic, hydrographic and offshore industries, with manufacturing, support and sales facilities based in Singapore and the United Kingdom. All material intercompany transactions and balances have been eliminated in consolidation.