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Geospace Technologies Reports Fiscal Year 2014 First Quarter Results

  Geospace Technologies Reports Fiscal Year 2014 First Quarter Results

Business Wire

HOUSTON -- February 5, 2014

Geospace Technologies Corporation (NASDAQ: GEOS) announced today net income of
$24.2 million, or $1.85 per diluted share, on revenues of $101.3 million for
its fiscal quarter ended December 31, 2013. This compares with a net income of
$22.0 million, or $1.70 per diluted share, on revenues of $77.8 million for
the comparable quarter last year.

Walter R. Wheeler, Geospace Technologies’ President and CEO said, “Our
revenues and net income for the first quarter are both new records for our
company. Revenues increased by 30% and net income improved by 10% over last
year’s first quarter. As a result, the quarterly earnings per share exceeded
the highest ever seen in our company’s history by 9%. Similar to last year,
demand for our GSX wireless systems in the first quarter was strong resulting
in the sale of 77,000 channels and generating product sale and rental revenues
of $45.5 million. Revenues from our reservoir products were $29.3 million
including $28.0 million of revenue recognition from production of the Statoil
permanent reservoir monitoring systems, slightly less than our $30 million
estimate. Our traditional product sales increased to $20.5 million primarily
due to the increase in the sale of geophone sensors associated with the sale
of wireless channels. Sales of our non-seismic products also increased during
the first quarter.”

“Our GSX presence continues to grow in the marketplace. As previously
announced, during the first quarter we delivered two large orders of GSX
wireless channels, consisting primarily of three-channel stations that allow
our customers to obtain enhanced seismic data for their clients. At December
31, 2013, the number of GSX land wireless channels sold into the marketplace
since its introduction in 2008 stood at 315,000 channels and we had 89,000
channels in our worldwide rental fleet.”

“We previously announced a $29.4 million order from Seafloor Geophysical
Solutions (“SGS”) for over 2,300 stations of our deep water OBX seafloor node.
SGS has recently requested that we deliver this order after March 31, 2014,
which will shift the revenue recognition and net income associated with this
order into our third fiscal quarter ending June 30, 2014. Inquiries for both
our shallow-water and deep-water versions of the OBX marine wireless system
continue, and we continue to be encouraged about the amount of interest in
this new product. The $5.2 million order from Makamin Petroleum Services
Company for a permanent land data acquisition system is also scheduled to ship
in the second quarter. Revenue recognition for the Statoil order is expected
to be approximately $25 million in the second quarter.”

“Our efforts to expand our Pinemont facilities continue. Positive progress was
made during the first quarter with platting, environmental issues and other
administrative efforts allowing us to begin focusing on finalizing our
building and construction plans. We hope to conclude the planning phase of
this project in March or April 2014, with construction activities beginning
soon thereafter.”

“We generated strong cash flows in the first quarter which gives us financial
flexibility for facility expansion, working capital investments and new
product development. We ended the first quarter with $206 million of working
capital, $44 million of cash and no long-term debt on our balance sheet. Our
$50 million credit facility remains untouched at this time, resulting in total
liquidity of $94 million at December 31, 2013.”

Geospace Technologies Corporation designs and manufactures instruments and
equipment used by the oil and gas industry to acquire seismic data in order to
locate, characterize and monitor hydrocarbon producing reservoirs. The company
also designs and manufactures non-seismic products, including industrial
products, offshore cables, thermal printing equipment and film.

This press release includes “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact included herein including statements regarding
potential future products and markets, our potential future revenues, future
financial position, business strategy, future expectations and estimates and
other plans and objectives for future operations, are forward-looking
statements. We believe our forward-looking statements are reasonable. However,
they are based on certain assumptions about our industry and our business that
may in the future prove to be inaccurate. Important factors that could cause
actual results to differ materially from our expectations include the level of
seismic exploration worldwide, which is influenced primarily by prevailing
prices for oil and gas, the extent to which our new products are accepted in
the market, the availability of competitive products that may be more
technologically advanced or otherwise preferable to our products, tensions in
the Middle East and other factors disclosed under the heading “Risk Factors”
and elsewhere in our most recent Annual Report on Form 10-K and Quarterly
Report on Form 10-Q, which are on file with the Securities and Exchange
Commission. Further, all written and verbal forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by such factors. We assume no obligation to revise or update
any forward-looking statement, whether written or oral, that we may make from
time to time, whether as a result of new information, future developments or
otherwise.


GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
                                                        
                                       Three Months          Three Months
                                       Ended                 Ended
                                       December 31, 2013     December 31, 2012
                                                             
Sales                                  $  101,348            $  77,751
Cost of sales                            54,257              37,206      
Gross profit                              47,091                40,545
                                                             
Operating expenses:
Selling, general and                      6,702                 5,363
administrative expenses
Research and development expenses         4,375                 3,365
Bad debt expense                         347                 269         
Total operating expenses                 11,424              8,997       
                                                             
Income from operations                   35,667              31,548      
                                                             
Other income (expense):
Interest expense                          (132        )         (85         )
Interest income                           31                    229
Foreign exchange gains (losses)           (21         )         46
Other, net                               (26         )        (16         )
Total other income (expense), net        (148        )        174         
                                                             
Income before income taxes                35,519                31,722
Income tax expense                       11,343              9,709       
                                                             
Net income                             $  24,176            $  22,013      
                                                             
                                                             
Basic earnings per common share        $  1.86              $  1.72        
                                                             
Diluted earnings per common share      $  1.85              $  1.70        
                                                             
                                                             
Weighted average common share            12,947,195          12,827,918  
outstanding - Basic
Weighted average common share            13,000,113          12,926,814  
outstanding - Diluted
                                                                            

Contact:

Geospace Technologies Corporation
Walter R. Wheeler, 713-986-4444
President and CEO
FAX: 713-986-4445
 
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