Mitcham Industries Inc Q3 2012 Earnings Conference Call Transcript

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

Question: Veny Aleksandrov - Pritchard Capital - Analyst : Good morning, Bill and Rob,

Question: Veny Aleksandrov - Pritchard Capital - Analyst : Congratulations on a great quarter.

Question: Veny Aleksandrov - Pritchard Capital - Analyst : My first question, after such a great quarter, utilization must have been very high. Do you still have space for improving utilization? And then you told us that you just -- some new equipment just got delivered? Can you tell us how much got delivered in Q3, that you're going to be deploying in Q4?

Question: Veny Aleksandrov - Pritchard Capital - Analyst : Thank you. And then back to the Billy's comments, Canada, what you consider historically an early start, and what do you consider a late start, with the winter there?

Question: Veny Aleksandrov - Pritchard Capital - Analyst : I -- can you hear me -- I'm sorry --

Question: Veny Aleksandrov - Pritchard Capital - Analyst : Okay, thank you. And my last question, you had a high level of equipment selling in the quarter. And you had $2 million that came from the sale of new equipment. Now when demand is higher for equipment, can we continue to see that, and what kind of new equipment did you sell in the quarter?

Question: Veny Aleksandrov - Pritchard Capital - Analyst : Thank you. And I will queue back. Thank you.

Question: Georg Venturatos - Johnson Rice & Company - Analyst : Good morning.

Question: Georg Venturatos - Johnson Rice & Company - Analyst : I just wanted to start out on the Seamap segment. A nice uptick in the gross margin there, this quarter. I was wondering, considering the aftermarket business is growing, and you typically get higher margin there, should we go think of that north of 60% gross margin as kind of the baseline going forward?

Question: Georg Venturatos - Johnson Rice & Company - Analyst : Okay, great. And I guess you had mentioned some other markets potentially being expansion opportunities. Can you talk a little bit about what you're seeing out there, and where you could potentially put some more 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: Georg Venturatos - Johnson Rice & Company - Analyst : Great. I appreciate it.

Question: Ryan Fitzgibbons - Global Hunters Securities - Analyst : Hi, Bill and Rob. Congrats on the quarter. How are you?

Question: Ryan Fitzgibbons - Global Hunters Securities - Analyst : Excellent. To follow up on Veny's question, 170,000 channels in the fleet currently, adding another 20,000, what markets are those 20,000 channels going to?

Question: Ryan Fitzgibbons - Global Hunters Securities - Analyst : Okay. That's helpful. And then, following up on your Europe comment right there, what kind of early indications are you seeing from customer demand? I was out looking next year, and on a pro forma basis, how many channels should we be looking for you to have -- that office servicing?

Question: Ryan Fitzgibbons - Global Hunters Securities - Analyst : Yes, just Eastern Europe, Eastern Europe, in total.

Question: Ryan Fitzgibbons - Global Hunters Securities - Analyst : Okay. Good to hear. And then, for equipment leasing gross margins on the quarter, it sounds like, Q4, from Billy's comments Q4 is going to be somewhat in align with Q3, backing out some at lease pool equipment sales. Do equipment leasing gross margins come down a little bit sequentially on the redeployment of channels to Canada, and then the new channels coming into the fleet?

Question: Ryan Fitzgibbons - Global Hunters Securities - Analyst : Okay. And then last question, following up on a prior question from one of the other callers. The marine backlog, where does that stand on the BuoyLink and GunLink systems now? And can you talk about your hit rate, for what you see in this year? 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 Fitzgibbons - Global Hunters Securities - Analyst : Okay. Well, thanks, and congrats on the quarter.

Question: Veny Aleksandrov - Pritchard Capital - Analyst : On the downhole leasing business side, Rob mentioned that it improved? How many systems do you currently have, and are you going to add more? Do you have more in your CapEx budget?

Question: Veny Aleksandrov - Pritchard Capital - Analyst : Okay.

Question: Veny Aleksandrov - Pritchard Capital - Analyst : Thank you. And where do you see the demand improve in the shales, domestically? Or did you see any improvement of demand internationally?

Question: Veny Aleksandrov - Pritchard Capital - Analyst : Thank you. And my last question, the tax rate, it was in the 25% this quarter. Should we consider if the level of international business stay high, that tax rate will stay in this neighborhood?

Question: Veny Aleksandrov - Pritchard Capital - Analyst : Thank you so much, and congratulations again.