Mitcham Industries Inc Q3 2016 Earnings Call Transcript

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

Question: Ken Sill - Seaport Global - Analyst : Good morning, gentlemen.

Question: Ken Sill - Seaport Global - Analyst : A couple questions. One, on Seamap, you had three systems delivered plus some other business in Q4 and you're saying you've got one complete system being delivered -- I'm sorry, in Q3, got to get that right -- and one system coming in Q4. So I think based on last quarter conference call, there was $6 million in revenue deferred from last quarter into this quarter, which means--

Question: Ken Sill - Seaport Global - Analyst : That's about right. So should we be looking for something between Q3 and Q2, or closer to Q2 in terms of revenue for Q4?

Question: Ken Sill - Seaport Global - Analyst : Okay. And then, give a little bit more color on the provision for doubtful accounts. I guess we've had these for the last couple of quarters. So is this a specific customer or just an increase in the provision based on AR and what's going on?

Question: Ken Sill - Seaport Global - Analyst : And what would be the after-tax impact of that one?

Question: Ken Sill - Seaport Global - Analyst : Okay. And then we can go over -- I need to talk to you offline about some of the regional leasing numbers. But it's interesting, when you talk about seeing opportunities for some of these systems internationally and for Seamap in Asia, and I know you don't have a lot of visibility, but what do you think, with the market today, the timing would be to getting better visibility or seeing some of these potential things turn into actual business? When should we be looking for that?

Question: Ken Sill - Seaport Global - Analyst : Okay. I appreciate that. That's all I had for now. Thanks.

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Good morning, Rob.

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : A couple quick questions. Given your type of business, D&A is such an important line item. As we go forward, we had very minimal additions this year. Given your normal depreciation schedule, your ramp down can be rather quick, which is very important to your cash flow operations. Give us an idea of that D&A schedule ramp down. And when does that accelerate as we get into 2016-2017, if we're still in this slower period for the industry?

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Okay. And we get out to -- normally what is it, four years, on the equipment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 09, 2015 / 2:00PM, MIND.OQ - Q3 2016 Mitcham Industries Inc Earnings Call

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Okay. I'm within the range. Talk about assets and given pricing in the industry, is there a risk, given that short life of asset life, where we could see some write downs, if this were to persist for a longer term?

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Okay. And this may be looking forward a little bit, but you get into your seasonal slow period in the summer months, given the comments you made on some of the regions this past quarter, would it be fair to expect that we will not be able to maintain positive cash flow through those summer months?

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : And does the situation now that we have with Canada and North America and those things, even though we're not making money at this point in time, the tax situation, do we have to do any tax considerations as we get into the end of the year, if we have expectations for further losses?

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Just wondering if we have to reverse any tax accounts or otherwise?

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Okay. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 09, 2015 / 2:00PM, MIND.OQ - Q3 2016 Mitcham Industries Inc Earnings Call

Question: Tyson Bauer - Kansas City Capital Associates - Analyst : Thanks, Rob.

Question: Sheldon Grodsky - Grodsky Associates - Analyst : Good morning, everybody.

Question: Sheldon Grodsky - Grodsky Associates - Analyst : I assume that you guys are quite grateful that you went into this downturn with very little debt on your balance sheet. So I congratulate you for that. The first question, it was a kind of enigmatic news item I saw about you registering to sell preferred stock. Could you give any insight into that? Is that tentative, or what's the idea?

Question: Sheldon Grodsky - Grodsky Associates - Analyst : Okay. Second question, you may have touched upon this already, in the question about writing off equipment, how difficult is it to preserve your equipment when it's idle? Do you just put it in a warehouse in a controlled environment and you don't have to do too much else? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 09, 2015 / 2:00PM, MIND.OQ - Q3 2016 Mitcham Industries Inc Earnings Call

Question: Sheldon Grodsky - Grodsky Associates - Analyst : Okay. And then in terms of operating expenses, et cetera, you mentioned that the head count is down and you mentioned that there are salary cuts. Do you think you've already made cuts to the bone in operations, or is there still a little bit left that can be cut, as this depression goes forward?

Question: Sheldon Grodsky - Grodsky Associates - Analyst : Okay. That should do it for me. Thank you.

Question: Ken Sill - Seaport Global - Analyst : Just wanted to follow up, in terms of some housekeeping here. Your SG&A, talking about costs, has come down quite nicely. How do you think that's going to move forward in Q4? And even as we move into next year, is there going to be any change in accruals that are going to cause that SG&A number to bounce around a little bit over the next couple of quarters?

Question: Ken Sill - Seaport Global - Analyst : We're kind of where it's going to be for the next two quarters anyway? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 09, 2015 / 2:00PM, MIND.OQ - Q3 2016 Mitcham Industries Inc Earnings Call

Question: Ken Sill - Seaport Global - Analyst : Okay. Great. Thanks.