Good morning and thank you for standing by. Welcome to the Mitcham Industries Fiscal 2013 Third Quarter conference call. At this time, everyone is in a listen-only mode. Following the presentation, there will be a question and answer session. If you wish to ask a question, please press star, one on your telephone keypad. As a reminder, this conference is being recorded today, December 5, 2012. I would now like to turn the call over to Jack Lascar of DRG&L. Jack, you may go ahead.

Thank you, Carrie. Good morning and welcome to the Mitcham Industries Fiscal 2013 Third Quarter conference call. We appreciate all of you joining us today. Your hosts are Bill Mitcham, President and Chief Executive Officer, and Rob Capps, Executive Vice President and Chief Financial Officer. Before I turn the call over to management, I have a few items to cover. If you would like to listen to a replay of today’s call, it will be available via webcast by going to the Investor Relations section of the Company’s website at www.mitchamindustries.com, or via a recorded instant replay until December 12. Information on how to access the replay was provided in yesterday’s earnings release. Information reported on this call speaks only as of today, Wednesday, December 5, 2012 and therefore you are advised that time sensitive information may no longer be accurate as of the time of any replay. Let me also remind you that certain statements made by management during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause the Company’s actual future results or performance to materially differ from any future results or performance expressed or implied by those statements. These risks and uncertainties include the risk factors disclosed by the Company from time to time in its filings with the SEC, including in its annual report on Form 10-K for the year ended January 31, 2012. Furthermore, as we start this call please also refer to the statement regarding forward-looking statements incorporated in our press release issued yesterday, and please note that the contents of our conference call this morning are covered by these statements. Now I’d like to turn over the call to Mitcham’s President and CEO, Bill Mitcham.

Thanks, Jack. Good morning everyone. We’d like to thank all of you for joining us today on our fiscal 2013 third quarter conference call. As usual, I’ll begin by making a few general comments about the quarter. Rob will then discuss our financial performance in depth before I conclude with a discussion of our market outlook. Then we’ll open the call for your questions. So turning to our recent results, it turned out to be a much more challenging quarter than we originally expected primarily due to the impact of reduced leasing revenues in certain geographic regions. We had expected continued softness in the leasing business this quarter and we even talked about it on our last call about a decline in our leasing revenues from last year’s record third quarter, but the level activity was lower than we even anticipated, resulting in a less than satisfactory third quarter result. Our leasing revenues this quarter were hit hard by lower land activity in the U.S. and the slower than anticipated pickup in Latin America. A couple of large, long-term projects in the U.S. wrapped up early in the quarter and follow-on projects did not get started when expected. Ongoing project delays in Latin America, largely due to permitting issues, contributed to the lower than expected leasing activity. Revenues in that region did increase on a sequential basis but just not as much as we had thought. Keep in mind that our leverage to just two or three jobs can have a big impact on our financial results, as you can see. European seismic activity remains slow in the quarter, similar to last quarter due to the fiscal, political and environmental issues that have caused many delays in energy projects in eastern Europe. Marine leasing continued it’s steady performance, as it…

Okay, thanks Bill, and good morning everybody. I’ll begin by discussing the top line of each of our two segments, which are equipment leasing and Seamap, then follow with a discussion of the profitability of each of the segments, including a discussion of our consolidated results and our financial position. First, let me review our equipment leasing segment, which includes not only our core leasing business but also non-Seamap equipment sales such as occasional sales of our lease pool equipment, new seismic equipment that we acquire from third parties, sales of heli-transport equipment, and sales of new hydrographic and oceanographic equipment from our Australian subsidiary, SAP. Our core leasing revenues in the third quarter were approximately $11 million, down 36% from last year’s record third quarter but up slightly from this year’s second quarter. As Bill said, lower land activity in the U.S. combined with continued softness in Europe contributed to the year-over-year decline in our third quarter leasing revenues. On the positive side, our marine leasing business continued to delivery solid results and our leasing activity in Latin America did improve over the second quarter; however, the improvement in Latin America was not as great as we had expected. Our sales of lease pool equipment were 1.9 million in this quarter compared to 2.4 million in the same quarter last year. Our other equipment sales, which include sales from SAP and heli-picker equipment, were 1.1 million compared to $2 million in the same quarter a year ago. Now let me turn to our Seamap segment, which designs, manufactures and sells a variety of products and systems used in marine seismic applications. Seamap revenues were 4.5 million this quarter compared to 6.2 million in the third quarter a year ago. As we anticipated, the quarter was impacted by the lack…

Thanks, Rob. The current environment of relatively low natural gas prices in North America, combined with economic uncertainties in both Europe and North America, have resulted in curtailed spending in the second half of this year, creating somewhat of a temporary pause in the current seismic industry environment. Additionally, project delays in Latin America during the first nine months of this fiscal year have added to the challenges we have faced so far this year. In Latin America, activity has not picked up as rapidly as we had expected due to ongoing permitting issues and some regulatory changes, but we did see improvement during the quarter and expect to see a gradual improvement in that region throughout the year. We are already seeing additional jobs beginning there and have contracted for a few large projects scheduled to begin in the fiscal 2014 first quarter. We still believe the Latin American market is one of our best growth markets and should continue to be an active area of exploration for the next several years. We’re seeing renewed interest in some of our other products in that region, including Sercel cable-free UNITE and DSU3 digital sensors. We expect a strong upcoming winter season in Canada and Russia. In Canada, we’re seeing strong demand for traditional cabled systems as well as for DSU3 three component digital recording equipment, and we have recently deployed DSU3s on an early winter project. With the equipment we purchased earlier this year and some scheduled purchases and deliveries for this quarter, we expect to have substantially more equipment deployed in Canada this winter season relative to last year’s. We have also redeployed some of our equipment to Russia as demand there appears to be much stronger this winter than last, and we anticipate having around 30,000 channels deployed…

Excellent, thank you. Ladies and gentlemen, we will now open the call for questions. [Operator instructions] And our first question today comes from Ms. Veny Aleksandrov with FIG Partners. Veny Aleksandrov – FIG Partners: Good morning. My first question is on Canada and Russia. We expect stronger seasonal results. Can you give us an idea in terms of channels that you had in Canada and Russia last year, and how many channels do you think you’re going to have this year?

Well, we had about 17,000 channels deployed in Russia last year for an average of 100 days – around 100 days. We’ve deployed another 15,000 channels, and this is all 420A, into the Russian market. We have most of those contracted now, so that will almost double what we had there last year. As far as Canada goes, we had—I’m not sure of the 420A, the cable system, but we expect to have almost—again, we had 20,000-odd DSU3s this year. It will be 35, 37,000 contracted for 60 to 75 days. Most of it is 60 days. We have a lot of 75-day and a little bit of 90-day work. Veny Aleksandrov – FIG Partners: Thank you. And then coming back to the U.S., my understanding is that there were some projects ending up and the new projects have not kicked in, so that’s why the lower revenues – you were between projects and also delays. Do you still seeing bidding continue to be strong and can we expect for these projects will start kicking in as we get to the beginning of next year?

Well, as I said, we just delivered a 6000 channel wireless system. We see a couple more wireless deliveries for—I don’t think it will probably hit in January, but I do think it will be in the first quarter. We recently delivered and contracted 10,000 channels of wireless into—of course, that’s not the U.S. but it’s in the international market. So yeah, I think some of those will kick off. They didn’t kick off as quickly as we thought, so we certainly hope they will. Veny Aleksandrov – FIG Partners: Okay, and the last question and I will just re-queue – on the Seamap side, it’s all about the big projects, part of the maintenance; but looking at fiscal 2014, do you see big projects in the bidding pipeline, or do you already have big projects in the pipeline?

A little bit of both. We certainly do have some orders on the books for some deliveries of large projects or large systems, but there are several others in the bidding phase at this point. Veny Aleksandrov – FIG Partners: Okay, thank you so much. Appreciate it.

Thank you, and our next question comes from Mr. Georg Venturatos at Johnson Rice. Georg Venturatos – Johnson Rice: Good morning Bill, Rob. Just wanted to talk a little more about what you’re seeing in the domestic U.S. Just wanted to get your sense—I know you mentioned some slowdown in activity. Some of it was timing-related. Beyond timing-related, are you seeing anything based in specific areas in terms of reduced activity levels?

Well I think certainly we’ve seen some reduced activity levels up in the northeast; and as I say, we’ve got a couple of things that are kicking off in the Rocky Mountains that have been delayed, delayed, delayed. So hopefully that will take up some of the slack, but I think the northeast will pick up again. We’ve had two jobs come back from there that did not extend past their normal termination date. Georg Venturatos – Johnson Rice: Okay. And then in Latin America, I know you mentioned you had some larger jobs that were probably going to come on first quarter of next fiscal year, so it sounds like we may still have some continued lingering issues in that region in the upcoming fourth quarter.

Well I think compared to where we were looking 90 days, 120 days ago, that’s probably a fair statement. I think we certainly have seen things kick off and there are more things scheduled to kick off in the quarter starting in January, actually, so I think—again, as Bill said, I think we’ll see a slow improvement there. So yeah, there are still some lingering impacts of that, just trying to jobs rescheduled and get things deployed. But having said that, there is a lot of bid activity going on and a few things we already have contracted for next year. Georg Venturatos – Johnson Rice: Okay, great. And then just last one and then I’ll re-queue – on the cost side, of that 5.9 million, can you maybe talk about how much of that was due to the expanded operations you talked about in Colombia and Singapore, Hungary?

Well, I think most of the increase—I mean, areas of it, there’s personnel costs, insurance costs are higher. Some facility cost, although that’s not a big piece, and travel cost. So it’s almost all related to that. Georg Venturatos – Johnson Rice: Okay, great. Appreciate the answers, guys.

Thank you, and our next caller is from Global Hunter. This is Ryan Fitzgibbon. Ryan Fitzgibbon – Global Hunter: Hey, good morning guys. Question for you on Canada and Russia – with activity expected to pick up pretty significantly in Q4, did you incur expenses in Q3 redeploying channels to those markets, and if so, can you quantify that impact?

That’s a good question. There was some cost to deploy equipment into Russia, really not so much to Canada. I don’t have that number on top of my head, but it would be on the magnitude of a few hundred thousand, less than 500,000 but more than 100,000 – in that ballpark. We had to refigure some equipment, the cost of physically getting it there, import costs – things like that. Ryan Fitzgibbon – Global Hunter: Got it. And then Latin America, the large projects you’ve discussed starting up in Q1 of next year, are these the same projects that were previously anticipated to start in the back half of ’13, and if so, what gives you confidence that the permitting issues will abate and will pick up activity next year?

I’m not sure they were scheduled for ’13, for the end of ’13. We had some of that. We had a smaller job, probably 6000 channels, but the 8000 channel that we’re talking about is 4000 channels of wireless, 4000 channels of wire together, and then that leads into a 10 to 12,000 channel wireless job, and that was not anticipated until the first quarter. But the 8000 channel job, we were looking to get it probably to kick off in January. I don’t think that’s going to kick off until later in February, February-March. Ryan Fitzgibbon – Global Hunter: Okay. And then Bill, how many channels will you have in Latin America at that point for Q1?

Around 30,000 – it’s a moving target. Ryan Fitzgibbon – Global Hunter: Okay, thanks. And then for Seamap, you mentioned the pickup this quarter with the GunLink 4000 system and the Buoylink system going out. Should we think of revenues closer to Q2, call it $7.5 million, or is there a possibility that you can get back to that Q1 $10 million level?

I don’t think we’ll see the Q1 number, but I think we’ll be north of Q2. Ryan Fitzgibbon – Global Hunter: Got it. And then final question from me – I believe, Bill, you mentioned 10,000 GeoSpace channels delivered. Is that new equipment that you guys took on, and is your thought process you’d lean more towards the GeoSpace equipment versus UNITE at this point?

No. We still have more UNITE than we do GeoSpace. You know, it’s all about customer demand. Right now, we’ve got a customer that wanted that – that’s what they told us, so that’s what they have. But then we have—right now, we have more customers looking at UNITE and we’ve delivered more UNITE than we have GeoSpace. But that’s our business, to supply what they want when they want it. Ryan Fitzgibbon – Global Hunter: Understood. And did you take delivery of those 10,000 channels during the quarter? Was that included in the CAPEX figure?

It was in the CAPEX. Yeah, it was late in the third quarter. I guess round about October 1 was when we took delivery of that stuff, and some of it went out to work immediately and some with work later in the month, but that’s all working right now. Ryan Fitzgibbon – Global Hunter: Okay, thanks guys.

Thank you, and our next caller is Tyson Bauer with KC Capital. Mr. Bauer, you may go ahead. Tyson Bauer – KC Capital: Good morning, gentlemen. We’re now far enough along in December. Does it look like the start-up period in Canada, Russia and those northern hemisphere areas, that will be kind of in the normalized range? We don’t expect an early start or delayed start but kind of on schedule there, given the weather patterns?

We may see a little longer for the startup in Russia. I think that normally we’re contracted but we’re delivering equipment about the middle of December, and it looks to me like it’s going to be closer to the end of December. They’ve got a number of contracts that are still kind of pending with several of their seismic contractors. They’re trying to sort the number out, but we’re pretty much assured of 25, 28, 30,000. Canada, I think it’s probably more first part of January, first to the middle of January, but that’s normal so we’re praying for normal. Tyson Bauer – KC Capital: We’ll take that for a change.

Amen! Tyson Bauer – KC Capital: The bullet points you’ve given regarding Q1 of next year with the increased activity in Russia, Canada, some jobs starting up in Latin America, deliveries in Seamap – are all these things together predictive or at least suggesting that we could see a record Q1?

We just had a record Q1! What do you want? Hot dang! In fact, we had four record quarters. That’s a tough measuring stick, Tyson. I think Q1 is going to be better than Q4. I can guarantee you we’ll have another—we had a record Q1 and everybody liked it because we had such a good fourth quarter. But I think we’ll have a very good first quarter this year. Tyson Bauer – KC Capital: Well, I would hope with all those extra channels and Latin America coming to life.

Absolutely. Tyson Bauer – KC Capital: We can have some good results there. Latin America, obviously we have had the issues all year long that we haven’t been able to resolve. You talked about permitting, wet weather early in the year. You have some contracts starting up in Q1. What changes—I guess I’ll follow up on another question. What gives you any degree of confidence that these things are going to change, and once you lose the ability to have the channels on the ground earning revenue, it’s not really delayed, it’s just lost, is it not?

Not necessarily. It’s lost for that time period, no doubt, but they have work. I mean, you look at most of Colombia. Colombia’s goal has always been, I believe the number is a million barrels of oil, a hundred million – what’s the number? Anyway, they’re not going to make their target and goal this year. They will not make it, and they’re not going to make it until they continue to drill more wells, more wells, more seismic, blah blah blah – same old thing. But this past year and earlier in last year, they kind of put the onus on the contractors that they’d never had before. Not only was it weather, not only was it permitting, but they gave them all the community regulations and that’s something that the seismic contractors have never had to take care of. The oil companies took care of that and it’s really put a kink in these guys—I mean, they had no idea what it took to go out there and do that, and they’re certainly finding out. So a lot of things changed, a lot of things were re-bid. People that won bids said, wait a minute, I can’t accept this. For the most part, I think they have that sorted out. Is it going to—is that going to result in more activity this year? Well, I think it will but I can’t guarantee it.

Tyson, kind of the point on is it delayed or lost, you’ve got to look at it there are so many blocks that have been let in Colombia, for example, and there is so much seismic exploration that’s required under the terms of those concessions, it’s got to get done sometime. So that tells me it’s more delayed that lost. Now, do some things never get explored? I guess that’s possible, but I think that’s not very likely in the long term. Tyson Bauer – KC Capital: Okay. And last question or topic, given the business model, taking purchase of these channels and then you have sort a short depreciation schedule yet the useful life is typically longer, it sets up for a scenario where you have a lot of off balance sheet assets that aren’t reflected but truly are there for the company’s valuation. On the flip side, you talk a lot about wireless and the movement toward wireless. How do those kind of gel together where we have those cable channels still there that are useful in certain projects but yet an overall movement in the industry more toward wireless? Help us understand kind of what that off balance sheet asset base is plus this movement more toward wireless.

Was that one question?

Well I mean, first you talk about the movement to wireless, and yes, there is a movement towards wireless; but let’s don’t forget there is a lot, lot more wired cable systems than there are wireless in the world, and that’s not going to change overnight. I mean, there are 4.5 to 5 million cable channels in the world, and I don’t know, there must be 500,000, maybe half a million wireless channels. So let’s keep that in mind. To your point, yeah, we have equipment and most of it is cable, obviously, because that’s what we’ve had longer, that is getting fully or highly depreciated, but we’re continuing to lease that. We have high demand for our cable channels, as we just talked about in Russia of the winter, and so we continue to lease those things and generate cash from them.

Tyson, you know the history of our company. We go with the market demands, and as I said, we bought some GeoSpace this year. We bought a lot more GeoSpace GSR. We’ve got 25, 30,000 channels of wireless, 10,000 (inaudible). So as the market demands it, we’ll continue to supply wireless seismic channels, but we’re a market follower. We’re not a market leader, so we don’t jump out there and put 100,000 channels in our lease pool. We put them as the demand from our market requires it. Tyson Bauer – KC Capital: Alright. And just a commentary – given your cash flow, given your lease pool or the asset base there, I know you’ve been looking at strategic alternatives for more than a year. It just seems, especially with today’s reaction, that the cheapest company that you could buy is really, when you look in the mirror, it’s yourself; so just take that under—for whatever that’s worth. Thank you.

Thank you very much. Appreciate it.

Excellent, thank you. And if anyone does have another question at this time, additional questions, please press star, one at this time. Our next question is Mr. Phil Engel from Semaphore. Phil Engel – Semaphore : Yes, good morning. I have a question which builds on the question from the previous caller, maybe in a more direct way to put it. If we look at your balance sheet, look at the lease pool depreciated, which as the previous caller stated is on an aggressive depreciation schedule so the true market value of that equipment is probably higher, and then even just your net working capital minus the debt is a value for Seamap for everything else. You’re trading at a very substantial discount to tangible book, and if I was the management team of a company trading at—there’s not a lot of companies trading at a discount to tangible book as pronounced as yours. If I was the management team of a company in that position, I would be pretty fired up to find a way to close that value gap. And last quarter was disappointing; this quarter was disappointing. The commentary we’re getting from you is sort of steady as she goes, it’s all going to be okay, it’s just timing differences. But with interest rates where they are, a very unlevered balance sheet and a management team with a fairly sizeable stock option and other type of equity-linked compensation package, I’m surprised you’re not grabbing the bull more by the horns and trying to create some value for yourselves that way, particularly once the stocks of some of your competitors, or at least related businesses in this space, have been on fire. Am I missing something here, or is there just not that level of urgency? Because for me, it seems that that’d be something that if I was you, I’d be thinking about 24/7 every day.

Let me address that a little bit, and then Rob with all the numbers can step in. I can tell you that there’s 200 dedicated people working at Mitcham Industries and Seamap around the world, and every day not only looking for places to deploy equipment and new techniques and new things to manufacture and improve on our manufacturing process, but everybody at Mitcham every day gets up thinking about what we can do to better our company and to improve on our deliveries and look at different types of equipment and other alternatives, and certainly there’s a lot of things that we can do. Do we have a laundry list, we talk about them every day? Yes, we do, and it’s not something that we take lightly. The problem you say, you know, you had disappointing news in the second quarter, you had disappointing news in the third quarter; and that’s compared to last year where every dang quarter, we knocked it out of the park – four consecutive quarters of record performance. Okay, yeah, we did a $30 million offering – we should have done well. We did well before the offering. We did pretty dang good after the offering. We had a record first quarter – and again, nobody cared because we had such a great fourth quarter. I’m not whining. I’m just telling you that if you look at the performance—mark out last year and look at the year before and this year. It looks pretty good, so we’re going to live with it and we thank God for it every day. But we’re going to get better. It’s not like it’s the end of the world. The second and third quarters are always the worst quarters in our business, and it’s just the way it is. It’s still cyclical, it’s still dependent on weather patterns, and there’s nothing we can do about the weather or the cycles. So I’m willing to listen to anybody’s advice about how to improve – certainly look at depreciation and look at stock buybacks, look at everything there is to think about. So yeah, we think about that every day. I’ll turn it over to Rob for anything else.

No, nothing else on that.

Okay. Did that help? Phil Engel – Semaphore : Well, I know that the results last year were very good, and that it’s not possible to sustain that pace forever. But to some degree, that was then, this is now. Now, you’re trading at a discount to your net tangible book, and unless you think that the book value of the lease pool equipment is overstated or your receivables are overstated, you’re still trading at a discount to net tangible book today. And as the previous caller said, why worry about buying anything else when you can buy the equipment that you own that you already know at $0.75, $0.80 on the dollar? Why not step up there and do that? By not doing that, you open yourself up to all sorts of criticism, like the director compensation is one thing I’ve heard people talk about. I mean, there are multi-billion dollar companies where the directors are making less per year than your directors. The family members on the payroll – why not just put that all to rest by taking on a moderate amount of debt and buying back 10% of the stock and trying to close that valuation gap to get it back to book? Because by not doing it, it makes it seem like you don’t believe the book value of your own assets; and if you do, why would you not want to buy something that you think kept at a level that’s too low on the balance sheet for $0.80 on the dollar of that level that you already think is too low? It doesn’t make mathematical sense not to do it, and stock buybacks are generally—people tend to do them when stocks are high and then they’re too nervous to do them when stocks are low. But you’re in a rather unique position of after a year of good results, now you haven’t had good results. You’re trading at a discount to net tangible book. Interest rates are low. You have an unlevered balance sheet. It’s hard to understand why either you’re not stepping up and buying more shares yourselves, or doing this for everyone and buying back the stock for all the shareholders.

We hear your comments, Phil. We understand. Valid comments – absolutely valid. Phil Engel – Semaphore : Well, all I could say is that I think the expectations are now that you would do something like this, and you should carefully consider these with your advisors. Maybe I’m a little more forceful than the last caller, but it seems to be an obvious point.

Thank you very much. We appreciate it.

Thank you. There are no more questions at this time, so I will turn it back to management at this point.

Thank you very much, Carrie, and we’d just like to thank you once again for joining on this call, for your interest in Mitcham, and we look forward to talking to you again after the conclusion of our fourth quarter. Thanks so much. Everybody have a Merry Christmas and a happy new year.

Thank you for joining the Mitcham Industries Fiscal 2013 Third Quarter conference call. If you wish to listen to a playback of this conference, please dial 1-866-949-7821. You may now disconnect. Have a great day.