Mitcham Industries Inc Q2 2013 Earnings Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Veny Aleksandrov - SIG Partners - Analyst : Let me start with my questions. Seamap, we expect a strong second half. Is it only new systems? Or it's a combination of new systems plus some maintenance and repair work?

Question: Veny Aleksandrov - SIG Partners - Analyst : It's a combination, but repair is still going on?

Question: Veny Aleksandrov - SIG Partners - Analyst : Right. That's where I was going. My second question is on the three component. Is it going to a specific project, or are you seeing a need for this equipment across the board in Canada?

Question: Veny Aleksandrov - SIG Partners - Analyst : It's a variety of projects.

Question: Veny Aleksandrov - SIG Partners - Analyst : This new equipment, you mentioned you were buying and deploying more. Where is your CapEx going for the year?

Question: Veny Aleksandrov - SIG Partners - Analyst : Okay, so you have not included that for right now?

Question: Veny Aleksandrov - SIG Partners - Analyst : You talked about Canada and you expect a very strong season there. It's pretty early for a contract, and you're already talking about early indications. That right? It is September.

Question: Veny Aleksandrov - SIG Partners - Analyst : This is a very good indication that this is going to be very strong year. The same thing for Russia?

Question: Veny Aleksandrov - SIG Partners - Analyst : Okay, well thank you so much. I will re-queue, and let somebody else ask questions. I'll talk to you -- thank you.

Question: Ryan Fitzgibbon - Global Hunter Securities - Analyst : Question for you. It sounds like Q3 of this year will be below last year. Trying to get a better sense as to why that is? Is Latin America just ramping up a bit slower? I'm thinking last year wasn't all that big there. Is it just Canada? The winter season, your expectation is that Q3 results slower than your ramp up in Q4?

Question: Ryan Fitzgibbon - Global Hunter Securities - Analyst : Okay. Can you talk about how the Eastern Europe office has progressed and how many channels are now in that market, and if Eastern Europe remains slow, is there an opportunity to move those channels to the Middle East or North Africa?

Question: Ryan Fitzgibbon - Global Hunter Securities - Analyst : Okay. Any idea of how many channels you could actually have in Russia this winter?

Question: Ryan Fitzgibbon - Global Hunter Securities - Analyst : Okay. Following on Veny's question, Canada. Can you talk a bit about the early indications you have? Do you have firm contracts in place? How big do think that market is Q4 and Q1 of this year, assuming it tops what you guys did there last year, given the additional channels in country?

Question: Ryan Fitzgibbon - Global Hunter Securities - Analyst : Understood. Last one for me. CapEx in the back half of the year to hit your guidance isn't all that much. I think you're going to generate a lot more cash than that. In the press release, you talk about potential opportunities to capitalize on market opportunities that arise. Are you alluding to M&A there, or is it additional opportunities, maybe like in Q1 where you had a customer willing to sell you channels? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Ryan Fitzgibbon - Global Hunter Securities - Analyst : Understood. Thanks guys.

Question: Veny Aleksandrov - SIG Partners - Analyst : Thank you. Billy, you made a comment that US land leasing activity in this past quarter was stronger than last year. Can you elaborate a little bit on that? We knew that the US activity's improving, but that's really interesting comment. Do think it is going to continue like that, or was it just in the quarter?

Question: Veny Aleksandrov - SIG Partners - Analyst : Thank you. I appreciate it.

Question: Brian Dutch - Iron Man - Analyst : Good morning, gentlemen. In Latin America, is that predominantly Colombia? Is that all Columbia? You said it's permitting; is that something that you didn't anticipate? Is it a shift in policy over there? Could you elaborate a little bit on that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Brian Dutch - Iron Man - Analyst : If I'm not mistaken, you had a lot of rain in Colombia in the prior quarter? Was the weather bad again this quarter?

Question: Brian Dutch - Iron Man - Analyst : Are you doing anything in Argentina?

Question: Brian Dutch - Iron Man - Analyst : Switching to Europe, again, permitting issues. Is this mostly anti-fracking type rhetoric going on?

Question: Brian Dutch - Iron Man - Analyst : Okay. Again on this $18-million lease pool, you've got no contribution thus far this year. From what I think I heard you say or infer was you'd see a little bit this year but the bulk of it will be next year? You'll see it in full force next year, is that correct?

Question: Brian Dutch - Iron Man - Analyst : I know you talked a lot about Canada. One thing I haven't, didn't hear, maybe I missed it. You're not really blaming much on the rains like a lot of the other service companies. I mean in this quarter, beyond spring break-up?

Question: Brian Dutch - Iron Man - Analyst : In Canada, yes.

Question: Brian Dutch - Iron Man - Analyst : All right, gentlemen, thank you very much.

Question: Tyson Bauer - KC Capital - Analyst : Good morning, gentlemen. Rob, in talking about those -- seeing acceleration now for a number of quarters, four to be exact on your lease pool equipment sales for your older equipment that you have been able to find a market for at very healthy margins, assuming at fully depreciated when you sell those. Is that expected to continue? Is this part of renewing or getting a more advanced and a newer generation of the lease pool average age?

Question: Tyson Bauer - KC Capital - Analyst : Like the 408, are you anticipating trying to move away from that as you go forward, to more of the three-component and some of these other near technologies? Is that an effort, or are you just taking advantage of opportunities that arise? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Tyson Bauer - KC Capital - Analyst : The remaining CapEx budget for the last half of the year, is that more weighted toward the end, or are we in preparation for gearing up for the winter season?

Question: Tyson Bauer - KC Capital - Analyst : All right, thanks a lot gentlemen.

Question: Will Inchow - HFP Capital Markets - Analyst : Gentlemen, despite your forecast I still think that congratulations are in order for a nice quarter. I wanted to hear your feeling on what the viability is of some of the new systems coming out, the high-temperature down-hole fiber optic seismic. Are you getting any inquiries about that? I know it's still somewhat in its infancy, but what kind of thoughts do you have on that?

Question: Will Inchow - HFP Capital Markets - Analyst : Sure. Well, all my other questions were answered already, so I'll let someone else go. Thanks a lot, guys.