The Company's total revenues for the second quarter of fiscal 2010 were $12.7 million compared to $17.5 million in the second quarter of fiscal 2009. The Company reported a net loss of $1.0 million, or $0.10 per share, for the second quarter of fiscal 2010 compared to net income of $1.6 million, or $0.16 per diluted share, for the second quarter of fiscal 2009. Fiscal 2010 second quarter results include a $649,000 charge to the Company's provision for doubtful accounts and approximately $200,000 in yet to be recovered additional costs related to the Company's current contract with the Royal Australian Navy. Absent these two items, the Company's second quarter 2010 net loss was approximately $442,000, or $0.05 per share.

Bill Mitcham, the Company's President and CEO, stated, "While we experienced a decline in revenues in our equipment leasing business during the second quarter, our Seamap segment had an excellent quarter, reflecting initial shipments on our Polarcus contract. Despite the ongoing challenges in the oil and gas industry, there are several positive factors that bode well for our leasing segment for the balance of the year. We recently began a large job in North America, requiring 27,000 channels, which we expect to contribute significantly to our leasing revenues in the second half of this fiscal year. We are also involved in several projects in South America. As a result of the continued activity and opportunities in South America, we have decided to establish branch operations in Peru and Colombia. Having those operations and equipment on the ground will enable us to better serve our customers in that region. Overall, bidding activity continues to improve and there are indications of renewed activity in Russia and Canada, which we believe will benefit our core leasing business for the balance of this fiscal year.

"In the second quarter, we delivered two GunLink 4000 systems and two BuoyLink systems to Polarcus for the first two of their new- build seismic vessels. We expect to deliver equipment to Polarcus for an additional vessel in the third quarter and a fourth vessel in the fourth quarter of this fiscal year. We had originally been awarded orders to supply a total of six vessels. However, recently Polarcus cancelled two of those vessels in connection with a financing transaction and therefore cancelled our related orders. We are hopeful that the orders for these two vessels will be reissued in our next fiscal year.

"Significantly, subsequent to the second quarter, we renewed our exclusive equipment lease agreement with Sercel Inc. Under the terms of this arrangement, we continue as the exclusive short-term rental agent for Sercel's DSU3 digital sensor unit throughout the world and become the exclusive short-term rental agent for all of Sercel's downhole tools in North and South America. The exclusive arrangement extends through December 2011, and we have agreed to purchase minimum quantities of this equipment during that period."

SECOND QUARTER FISCAL 2010 RESULTS

Total revenues for the fiscal 2010 second quarter, which is seasonally the Company's weakest quarter, were $12.7 million compared to $17.5 million for the second quarter of fiscal 2009, a decline of approximately 28%. The decline was attributable to a substantial decrease in equipment leasing revenues, which partially offset strong sales at Seamap. A significant portion of the Company's revenues are generated from sources outside the United States, with revenues from international customers totaling approximately 78% of total revenues during the second 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 $4.8 million compared to $7.5 million in the same period a year ago, a 36% decline. Leasing revenues were impacted by continued weak demand for seismic equipment and services due to the lower level of global oil and gas exploration activity.

Sales of new seismic, hydrographic and oceanographic equipment were $731,000 compared to $4.9 million in the comparable period a year ago, and sales of lease pool equipment were $101,000 compared to $1.8 million in the second quarter of fiscal 2009. The lower levels of these sales reflect the overall decline in demand for seismic equipment in the current environment.

Seamap equipment sales in the second quarter increased 114% to $7.0 million from $3.3 million in the comparable period a year ago, primarily due to shipments to Polarcus. During the fiscal 2010 second quarter, the Company delivered two GunLink 4000 fully distributed digital gun controller systems and two BuoyLink RGPS tail buoy positioning systems for the first two Polarcus vessels.

Total gross profit in the fiscal 2010 second quarter was $3.3 million compared to $7.1 million in the second quarter of fiscal 2009, a 53% decline. The fiscal 2010 second quarter gross profit decline was primarily attributable to lower leasing revenues and higher depreciation expense related to new lease pool equipment that the Company acquired during fiscal 2009. Also impacting fiscal 2010 gross profit were approximately $200,000 in additional costs related to SAP's contract with the Royal Australian Navy. The Company hopes to recoup these costs but has not reflected their recovery in the second quarter results. Gross profit margin for the second quarter of fiscal 2010 was 26% compared to 41% in the same period a year ago for the reasons cited above.

General and administrative ("G&A") costs for the second quarter of fiscal 2010 were $4.0 million compared to $4.4 million in the second quarter of fiscal 2009, reflecting lower personnel related costs. During the second quarter, the Company recorded a $649,000 charge to provision for doubtful accounts as a result of the unexpected bankruptcy of two customers. The Company recorded an operating loss for the second quarter of fiscal 2010 of $1.5 million compared to operating income of $2.3 million in the comparable period a year ago. The loss before income taxes was $1.4 million compared to income of $2.5 million in the second quarter of fiscal 2009. The Company recorded an income tax benefit of $428,000 in the fiscal 2010 second quarter compared to income tax expense of $921,000 in the second quarter of fiscal 2009.

EBITDA (earnings before interest, taxes, depreciation and amortization) for the second quarter was $3.3 million, or 26% of total revenues, compared to $6.4 million, or 37% of total revenues, in the same period last year. Adjusted EBITDA, which excludes stock- based compensation expense, was $3.7 million, or 30% of total revenues, in the second quarter compared to $6.9 million, or 40% of total revenues, in the second 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.

FIRST HALF FISCAL 2010 RESULTS

Total revenues for the first six months of fiscal 2010 were $23.3 million compared to $36.0 million in the first six months of fiscal 2009.