Mitcham Announces Record Net Income in Fiscal 2006

Mitcham Industries, Inc. (Nasdaq: MIND) reported that for its fiscal year ended January 31, 2006, net income from continuing operations before taxes increased 239% to a record $7.9 million, or $0.80 per diluted share, as compared to net income from continuing operations before taxes of $2.3 million, or $0.25 per diluted share, in the prior year. With the inclusion of a tax benefit of $3.0 million from the reduction of our tax valuation allowance, the Company recorded net income for the year of $10.9 million, or $1.10 per diluted share, as compared to $2.1 million, or $0.23 per diluted share, for the prior year.

Revenues for fiscal 2006 increased $8.2 million to $34.6 million, up 31% from revenues of $26.4 million in the prior year. Revenue growth reflected both a $5.0 million, or 29%, increase in leasing revenue and a $3.2 million, or 34%, increase in equipment sales.

For the fourth quarter ended January 31, 2006, the Company recorded net income from continuing operations before taxes of $1.6 million, or $0.16 per diluted share, as compared to $1.4 million, or $0.15 per diluted share, for the corresponding period in the prior year. With the inclusion of the tax benefit of $3.0 million, the Company recorded net income for the quarter of $4.6 million, or $0.45 per diluted share, as compared to $1.4 million, or $0.15 per diluted share, for last year's fourth quarter.

Billy F. Mitcham, Jr., President and CEO, said, "Our core leasing activity was extremely strong throughout fiscal 2006 reflecting not just an overall increase in seismic exploration activity, but also the growing demand for higher resolution data, larger surveys and more rapid completion of surveys, which requires contractors to use data acquisition systems with a greater number of recording channels."

"We also took two important steps this past year as part of our strategy to continue to expand our international operations. In July, we acquired Seamap International Holdings Pte Ltd. ("Seamap")," said Mr. Mitcham. "Our seismic equipment sales increased $3.2 million in fiscal 2006 to $12.5 million, largely as the result of Seamap's equipment sales, which primarily consisted of its GunLink seismic source acquisition and control systems and its BuoyLink GPS tracking system."

"In November, we established Mitcham Seismic Eurasia LLC ("MSE") in Ufa, Bashkortostan, Russia. MSE has ramped up operations quickly and we expect this new subsidiary to lease seismic equipment and provide technical support in the rapidly growing Russian, CIS and Eurasian markets," Mr. Mitcham said.

"Both of these new operations build on our international presence and complement the contributions of other subsidiaries, Seismic Asia Pacific Pty Ltd. based in Australia, and Mitcham Canada Ltd., both of which contributed to the strength of our results this year," said Mr. Mitcham.

"In fiscal 2006, we also increased our capital expenditures on lease pool equipment by 50% to $9.0 million and at year-end had approximately 40,100 seismic recording channels in our equipment lease pool," said Mr. Mitcham. "As we enter fiscal 2007, fundamentals within the seismic sector continue to improve and seismic leasing activity remains strong. We have excellent key supplier agreements in place and intend to continue to expand our equipment lease pool opportunistically. We believe we have made substantial progress toward our goals and will continue to expand our operations to achieve our overall objective of providing our shareholders with strong returns on capital employed," Mr. Mitcham concluded.

Mitcham Industries, Inc., a geophysical equipment supplier, offers for lease or sale, new and "experienced" seismic equipment to the oil and gas industry, seismic contractors, environmental agencies, government agencies and universities. Headquartered in Texas, with sales and services offices in Calgary, Canada; Brisbane, Australia; Russia, Singapore and the United Kingdom; and with associates throughout Europe, South America and Asia, Mitcham conducts operations on a global scale and is the largest independent exploration equipment lessor in the industry.

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