The Company reported total revenues of $10.6 million for the first quarter of fiscal 2010 compared to $18.5 million in the first quarter of fiscal 2009. The Company reported a net loss of $80,000, or $0.01 loss per share, for the first quarter of fiscal 2010 compared to net income of $4.3 million, or $0.41 per diluted share, for the first quarter of fiscal 2009. EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP measure, amounted to $4.5 million for the first quarter of fiscal 2010 compared to $10.4 million in the same period last year.

Bill Mitcham, the Company's President and CEO, stated, "Our first fiscal quarter is typically our strongest of the year. However, the pick-up in activity that usually occurs during the winter months in Canada and Russia did not materialize this year, negatively affecting our first quarter as it did the fourth quarter.

"Despite the difficult economic environment, there are some encouraging signs. In regions such as South America and parts of Asia, oil and gas exploration activity is still fairly healthy. Bidding activity outside of North America and Russia, particularly in South America, is relatively steady, and we believe that there are prospects for some rather large jobs later in the year. Demand for VSP, or vertical seismic profiling, tools remains encouraging. The marine environment is reasonably stable, and we expect to begin deliveries of our Polarcus contract during the second quarter. Seamap, as previously announced, is providing Polarcus with its GunLink 4000 fully distributed digital gun controller systems and BuoyLink RGPS tail buoy positioning systems.

"We believe that we are well positioned to manage through this downturn and capitalize on opportunities as they arise. The one factor that makes this current downturn different from previous cycles is the tight credit market; and when credit is tight, we know that our customers tend to lease equipment before making capital commitments for purchases. From a liquidity standpoint, we continue to generate good cash flow; have a strong balance sheet with modest debt; and have access to additional credit and liquidity, should the need arise. The long-term fundamentals of our industry remain intact, and when the seismic acquisition process returns to some state of normalcy, we expect that even more equipment will be required on each new prospect to better define the reservoir and reduce drilling costs. Fossil fuel will provide the world's energy needs for many years to come, and we will provide the additional equipment needed to find those hidden deposits. We are very optimistic about the future of our industry and our company."

FIRST QUARTER FISCAL 2010 RESULTS

Total revenues for the first quarter of fiscal 2010 were $10.6 million compared to $18.5 million for the first quarter of fiscal 2009, a decline of approximately 43%. The decline was primarily attributable to a decrease in equipment leasing revenues and lower sales from Seamap. A significant portion of the Company's revenues are generated from sources outside the United States, with revenues from international customers totaling approximately 79% of total revenues during the first quarter of fiscal 2010 compared to 86% of total revenues in the same period last year.

Core revenues from equipment leasing, excluding equipment sales, were $6.3 million compared to $12.4 million in the same period a year ago, a 49% decline. Leasing revenues were impacted by the dramatic decline in demand for seismic equipment and services, including the lack of seasonal demand in Canada and Russia, areas where a great deal of seismic exploration activity usually occurs during the winter months. Oil and gas exploration activities have fallen significantly in these regions, as well as in many other areas worldwide, due to the global economic situation.

Sales of new seismic, hydrographic and oceanographic equipment were $1.6 million compared to $318,000 in the comparable period a year ago, primarily reflecting deliveries to the Royal Australian Navy, along with services and other equipment sold in Australia and throughout the Pacific Rim. In May 2008, the Company entered into a contract with the Royal Australian Navy that contributed approximately $900,000 to first quarter revenues. Sales of lease pool equipment were $69,000 compared to $561,000 in the first quarter of fiscal 2009, reflecting the decline in seismic exploration activity.

Seamap equipment sales in the first quarter declined 51% to $2.6 million from $5.3 million in the comparable period a year ago, reflecting the fact that there were no large GunLink or BuoyLink systems shipped during the first quarter of fiscal 2010. Seamap sales can vary significantly on a quarter-to-quarter basis due to varying customer delivery requirements. Shipments related to Seamap's orders from Polarcus are scheduled to begin in the second quarter of fiscal 2010.

Total gross profit in the fiscal 2010 first quarter was $3.8 million compared to $11.6 million in the first quarter of fiscal 2009, a 68% decline. The fiscal 2010 gross profit was impacted by the decline in leasing revenues and higher depreciation expense related to new lease pool equipment that the Company acquired during fiscal 2009. Gross profit margin for the first quarter of fiscal 2010 was 36% compared to 63% in the same period a year ago.

General and administrative costs for the first quarter of fiscal 2010 were $3.5 million compared to $4.9 million in the first quarter of fiscal 2009, primarily due to lower stock-based and incentive compensation expenses and reductions in other general administrative costs, such as travel costs.

Operating income for the first quarter of fiscal 2010 was $16,000 compared to $6.4 million in the comparable period a year ago, primarily due to lower leasing revenues and higher lease pool depreciation expense. Income before income taxes was $46,000 compared to $6.5 million in the first quarter of fiscal 2009. Provision for income taxes was $126,000 in the fiscal 2010 first quarter compared to $2.2 million in the first quarter of fiscal 2009. Income tax expense for the first quarter of fiscal 2010 included $109,000 of estimated penalties and interest that could arise from uncertain tax provisions. Income tax expense for the last year's first quarter included $399,000 of estimated potential penalties and interest from uncertain tax positions. The estimated penalties and interest are recorded pursuant to the accounting standard dealing with uncertain tax positions, which the Company adopted in the first quarter of fiscal 2008.

EBITDA (earnings before interest, taxes, depreciation and amortization) for the first quarter was $4.5 million, or 42% of total revenues, compared to $10.4 million, or 56% of total revenues, in the same period last year. Adjusted EBITDA, which excludes stock-based compensation expense, was $4.9 million, or 46% of total revenues, in the first quarter compared to $11.1 million, or 60% of total revenues, in the first quarter of last year. EBITDA and Adjusted EBITDA, which are not measures determined in accordance with generally accepted accounting principles ("GAAP"), are defined and reconciled to reported net (loss) income, the most comparable GAAP measure, in Note A under the accompanying financial tables.

CONFERENCE CALL

The Company has scheduled a conference call for Wednesday, June 3, 2009 at 9:00 a.m. Eastern time to discuss its fiscal 2010 first quarter results. To access the call, please dial (480) 629-9692 and ask for the Mitcham Industries call at least 10 minutes prior to the start time.