Greetings and welcome to the Mitcham Industries fourth quarter conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jack Lascar. Please go ahead, sir.

Thank you, Kevin. Good morning and welcome to the Mitcham Industries fiscal 2016 fourth quarter and year-end conference call. We appreciate all of you joining us today. Your hosts are Rob Capps, co-Chief Executive Officer and Chief Financial Officer, and Guy Malden, co-Chief Executive Officer and Executive Vice President of Marine Systems. Before I turn over the call 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 for 90 days via webcast by going to the Investor Relations section of the company’s website at mitchamindustries.com or via recorded instant replay until April 20. 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, April 6, 2016 and therefore you are advised that time sensitive information may no longer be accurate as of the time of any replay. Before we begin, let me 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 findings with the SEC, including in its annual report on Form 10-K for the year ended January 31, 2016. Furthermore, as we start this call, please also refer to the statements 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. I would like now to turn the call over to Guy Malden.

Thanks Jack, and good morning everyone. We would like to thank you for joining us today for our fiscal 2016 fourth quarter and year-end conference call. I’ll begin by making some general comments about the quarter. Rob will then discuss our financial results in more detail and address our market outlook. We will then open the call for questions. Turning now to our fourth quarter results, our leasing business continues to operate in a highly challenging environment as low oil and gas prices still weigh on seismic exploration activity and competition amongst seismic equipment providers is intense. Our leasing revenues were down both year-over-year and sequentially due to the cancellation or postponement of many seismic exploration projects in the face of low commodity prices. All geographic markets were affected, although to differing degrees. In the U.S., there is still very little exploration activity as oil prices remain depressed, making E&P companies highly cautious. Until corrective market forces have kicked in and fundamentals meaningfully improve, there is little motivation for them to seek out new prospects. We experienced little benefit this year from the normal fourth quarter seasonal uptick in revenues from Canada and Russia as both of those markets were and remain extremely depressed. In fact, industry sources estimate that roughly five land seismic crews were operating in Canada this winter season compared to approximately 15 crews a year earlier and as many as 40 a few years ago. Given what we’re seeing so far in the first quarter, we expect the weakness in the Canadian market to continue. The weakness in the Canadian market was no surprise to us. Russia and CIS, however, did disappoint us in the fourth quarter. At the time of our last quarterly call, customer inquiries and orders caused us to believe that the Russian…

Okay, thanks Guy. Good morning everyone. I’ll give you a more detailed review of our financial results, then I’ll make some comments about our view of the market, current market, and our market outlook. With the acquisition of Klein, we have re-evaluated and redefined our operating segments. We think these changes will help present a clearer picture of our financial results. Klein, our Seamap operations, and the product sales of SAP, our Australian subsidiary, now form our manufacturing and equipment sales segment. All of our leasing business, including lease pool equipment sales and some miscellaneous equipment sales, will constitute our leasing segment. The difference is product sales from SAP have previously been a part of our equipment leasing segment. Segment results for all periods presented in the earnings release yesterday and our 10-K to be filed either later today or tomorrow have been restated to reflect this new structure. We think you’ll find this new presentation provides improved transparency of our financial results. As far as the specifics of the quarter, our leasing revenues in the fourth quarter were $3.8 million, down 61% from last year’s fourth quarter and down 12% sequentially. As Guy mentioned, we have seen reduced activity in most areas of our leasing business. Lack of meaningful business developing in Russia during the winter season was a particular disappointment and was unexpected, given the inquiries that we’d received from our customers there. Visibility in the leasing business remains limited and competition for available business is fierce. There are possibilities, however, for [indiscernible] business but do remain uncertain given the difficult market environment. Our lease pool equipment sales revenues were $673,000 in the quarter compared to $296,000 in the same quarter last year. New seismic equipment sales, which includes miscellaneous [indiscernible] equipment but no longer includes SAP oceanographic…

[Operator instructions] Our first question today is coming from Ken Sill from Seaport Global. Please proceed with your question.

Hi guys, this is Garrett William on behalf of Ken Sill. Just a couple quick questions. I see there is an other expense of around $900,000. What exactly is included in that?

That is primarily foreign exchange losses in the quarter in foreign subsidiaries.

Okay, great. Thank you. Then just a quick follow-up, do you guys have any guidance on SG&A moving forward near term?

Not specifically. I think you have to kind of normalize the fourth quarter numbers for the unusual items we’ve talked about, so you’ll see that if you kind of apples to apples to the third quarter, we’re actually down slightly. But you do need to factor in the fact of Klein, so there will be ongoing G&A from Klein, so you kind of need to--I think you can kind of back into the numbers if you annualize the Klein one-month numbers.

Okay, great. Thank you guys. I’ll turn it back.

Thank you. As a reminder, it’s star, one to be placed in the question queue. Our next question is coming from Tyson Bauer from KC Capital. Please proceed with your question.

Good morning, gentlemen.

Morning, Tyson.

A quick question on kind of your cash flow outlook overall for ’17, and also a big component of that is your lease pool depreciation, how much that tails off as we go through the year. So if you want to touch on those two subjects?

Well, we are confident that we’ll continue to be cash flow positive this year. We’ve produced positive adjusted EBITDA, and as we said, our capital expenditures will be minimal, so we would expect to continue to generate free cash flow and to pay down debt. As far as lease pool depreciation, it will continue to tail off. I think if you kind of look at the comparison from fiscal ’15 to fiscal ’16, that gives you a sense of the tail-off, and I think that will continue through ’17.

Okay. Your doubtful accounts now the last three quarters, $2.2 million, roughly 18% of what your lease revenues have been for the last three quarters. I’m guessing most of those are in that leasing segment where you’re taking those account write-offs. Are we basically to the point where now you’re confident in what you have left in those accounts receivable, or is this the climate we’re in now where we’re going to see a higher percentage of doubtful accounts going forward?

We feel like we have it where it needs to be now. I’d point out that a lot of what we’ve provided for are not necessarily revenues coming from the last few quarters. We have a handful of customers in which we have agreed to extend the payment terms for various reasons and under various scenarios, and a great deal of our provision relates to those situations which, just given the nature of the industry right now, we think is prudent. We think we’re where we need to be.

Okay, thank you.

Thank you. As a reminder, please press star, one if you’d like to ask a question today. Our next question is coming from Ross DeMont from Midwood Capital. Please proceed with your question.

Good morning, guys. How are you?

Morning, Ross.

A quick question. Now that we’ve sort of re-configured how we’re presenting equipment manufacturing and sales, can you talk about--I guess we’re adding Klein in there effectively. Are we now talking about sort of $35 million-ish of revs, and I guess, what type of margins should we expect out of that division or that segment now that we’ve got Klein in there?

Yes, that’s roughly right from a revenue standpoint. From a margin standpoint, Klein and Seamap have very similar gross margins. The SAP piece does have lower margin - that’s kind of a 20, 25% margin business, so I think if you blend that all together, it’s going to be pretty comparable, maybe down a couple or three points from what we’ve seen historically.

Okay, that’s great. Then on seasonality and equipment leasing, obviously historically the winter season has been strong for us with Canada and Russia. Now that those are particularly weak, should we expect that seasonality will look different? Is it possible it would even reverse itself?

I think it’s not likely to reverse itself, given the environment, but I think it will look different. I think the seasonality just doesn’t exist this year, so I think it’s more steady.

Okay, that’s--well, maybe one more, which is obviously we made a pretty nice acquisition here. Are we still on the lookout for more, or do you think Klein satisfies what we’ve been sort of looking for and hoping for?

Well, I think we’re always looking for something, but we’re going to be pretty cautious about what we do. I mean, capital is precious these days, but we’re always on the lookout and we think there are things we can do to further expand that business.

Okay, thanks so much.

Thank you. Once again, that’s star, one to be placed in the question queue. We have reached the end of our question and answer session. I’d like to turn the floor back over to management for any further or closing comments.

We’d just like to thank everyone for joining us on the call today and for your interest in Mitcham, and we look forward to talking to you again at the conclusion of our first quarter. Thanks very much.

Thank you. That does conclude today’s teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.