In the "Geospace Technologies Corporation and Subsidiaries
Consolidated Statements of Operations" table, the gross profit line
for the year ended September 30, 2013 should read: 139,761 (instead
of 39,761).
The corrected release reads:
GEOSPACE TECHNOLOGIES REPORTS FISCAL YEAR
2014 RESULTS
Geospace Technologies (NASDAQ: GEOS) today announced net income
of $36.9 million, or $2.81 per diluted share, on revenues of $236.9
million for its fiscal year ended September 30, 2014. This compares
with a net income of $69.6 million, or $5.38 per diluted share, on
revenues of $300.6 million for the prior year.
For the fourth quarter ended September 30, 2014, the company
recorded revenues of $26.3 million and a net loss of $1.8 million,
or $0.14 per diluted share. For the comparable period last year,
the company recorded revenues of $68.3 million and net income of
$13.7 million, or $1.05 per diluted share.
Walter R. (“Rick”) Wheeler, Geospace Technologies’ President and
CEO said, “Fiscal year 2014 has seen significant extremes in our
quarterly financial results. In our first fiscal quarter, revenues
and net income reached the highest levels in our company’s history,
while in our fourth quarter these numbers approached record lows.
This is hard evidence of the lumpiness that, as we continually
point out, our business experiences. But through it all, we are
pleased to have increased shareholder equity by 13.9% at the end of
fiscal year 2014. In our fourth quarter, revenues and net income
were down by $42.0 million or 62%, and $15.5 million or 113%,
respectively, from last year’s fourth quarter. The reduction in
revenue was a direct consequence of the completion of the Statoil
order back in April, whereby we recognized $38.1 million of
revenues in last year’s fourth quarter. In addition, the current
year fourth quarter reflected lower product demand across all of
our seismic and non-seismic product segments compared to last
year’s fourth quarter.”
“Fourth quarter revenues for our traditional and wireless
seismic products were down by $2.3 million or 21%, and $0.5 million
or 5%, respectively from last year. Demand for product sales has
fallen in direct association with reduced capital spending by our
customers due to diminished seismic exploration activities across
most sectors of the industry. To the extent that oil and gas
companies continue to reduce exploration spending to find new
energy, we expect the demand for these products to remain soft. We
anticipate that during this time, we will continue to see our
overall traditional and wireless product revenues decrease, and we
anticipate some shifting of revenues from sales to rentals. Despite
market softness, we believe our wireless products represent the
best and most cost efficient alternatives for seismic industry
contractors in lieu of legacy cabled equipment, which enhances our
position in future sales and rental opportunities. We sold 86,000
channels of our GSX land wireless products during fiscal year 2014
and we had 134,000 channels in our worldwide rental fleet.”
“Despite the softness experienced by the seismic industry, the
ocean-bottom seismic market remains active. We are seeing growing
customer interest, quote inquiries, and rental contracts for use of
our cableless OBX ocean bottom systems. We recently announced an
agreement with a major international seismic contractor to rent
4,000 stations of our cableless OBX ocean bottom nodal system for
180 days. We expect to deliver this OBX system to the customer in
our second quarter of fiscal year 2015. In a related matter that we
have previously reported on, Seafloor Geophysical Solutions
continues to move forward in their effort to secure capital
funding, although slowly. We understand that SGS received a small
amount of working capital funding from a potential investor which
has extended the timing of their efforts to secure the long-term
financing needed to proceed with their business plans, which
currently includes the purchase of our deep-water OBX system. We
cautiously interpret this as a positive indicator in their pursuit
toward a successful outcome and we understand that this funding
helps SGS operate through the end of calendar year 2014, although
we must point out that we have no specific knowledge about when or
if a successful completion might occur.”
“Fourth quarter revenues from our reservoir products declined by
$38.7 million or 91% from last year. As mentioned above, almost the
entire decrease in revenues for the fourth quarter resulted from
the completion of the manufacturing portion of Statoil’s permanent
reservoir monitoring (PRM) system back in April 2014. We are very
satisfied and proud of the work which our employees achieved during
this contract, finishing the project in record time and with
quality workmanship. We are confident that Statoil is pleased with
system’s data quality and the work we performed, and we expect a
positive on-going relationship between our companies. While we
currently have no PRM contracts in hand at this time, we remain
optimistic that our PRM products will contribute significantly to
our results of operations in the future. We are aware of a number
of operators around the world who are considering PRM systems for
their fields and we believe we are the world leader in the design
and construction of such systems.”
“Sales of our non-seismic products decreased $0.5 million or 8%
from last year’s fourth quarter primarily resulting from a decline
in offshore cable shipments. During the Statoil contract, we were
unable to accept certain orders for offshore cable products due to
a lack of ample manufacturing capacity. We are aggressively
pursuing new orders and new customers for our offshore cable
products.”
“The architectural plans for the construction of a new building
at our Pinemont facilities are now in the hands of local officials
for approval and permitting. It is estimated that the conclusion of
this process should occur sometime before mid-December. This
further pushes back any significant effort towards the construction
of the new facilities to the second quarter of fiscal year 2015, at
the earliest. However, our remodeling of a smaller building on the
property was fully completed on schedule, and we successfully moved
all operations from a previously rented satellite facility into
this building. Present circumstances indicate that much of the
seismic exploration industry is in the midst of curtailed
activities that are typical of the cyclical lows the industry has
seen before. However, we maintain that future opportunities for us
to provide permanent reservoir monitoring systems and other
innovative products to the industry are primary drivers in a
long-term strategy that calls for us to enhance and expand our
facilities and capacity.”
While we are clearly in a period of pressure on our operations,
our balance sheet is very strong and we believe we are in a good
position to work through the correction in oil and gas exploration
and production activities.
Conference Call
Information
Geospace Technologies will host a conference call to review its
fiscal year 2014 full year financial results on November 21, 2014,
at 10:00 a.m. Eastern Time (9:00 a.m. Central). Participants can
access the call at (866) 952-1906 (US) or (785) 424-1825
(International). Please reference the conference ID: GEOSQ414 prior
to the start of the conference call. A replay will be available for
approximately 60 days and may be accessed through the Investor tab
of our website at www.geospace.com.
About Geospace
Technologies
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.
Forward Looking
Statements
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)
Three Months Ended Year Ended
September 30, 2014
September 30, 2013
September 30, 2014
September 30, 2013
(unaudited) (unaudited) (unaudited) Revenues: Products $ 19,414 $
65,714 $ 209,581 $ 287,233 Rental equipment
6,871 2,574
27,331 13,374 Total
revenues 26,285 68,288 236,912 300,607 Cost of sales: Products
14,956 36,518 125,497 152,659 Rental equipment
5,240 1,990
14,956 8,187 Total
cost of sales
20,196
38,508 140,453
160,846 Gross profit 6,089 29,780
96,459
139,761
Operating expenses: Selling, general and administrative
5,799 6,511 25,291 23,383 Research and development 3,397 4,234
16,536 14,694 Bad debt expense (recovery)
175
(97 )
833 457 Total
operating expenses
9,371
10,648 42,660
38,534 Income (loss) from operations
(3,282 )
19,132 53,799
101,227 Other income (expense): Interest
expense (93 ) (68 ) (471 ) (260 ) Interest income 55 185 123 880
Foreign exchange gains (losses) 50 195 182 (708 ) Other, net
(2 ) (38
) (90 )
(46 ) Total other income (expense), net
10 274
(256 ) (134
) Income before income taxes (3,272 ) 19,406
53,543 101,093 Income tax expense (benefit)
(1,439 ) 5,722
16,632 31,536
Net income (loss)
$ (1,833
) $ 13,684
$ 36,911 $
69,557 Basic earnings (loss) per
share
$ (0.14 )
$ 1.06 $
2.82 $ 5.40
Diluted earnings (loss) per share
$
(0.14 ) $ 1.05
$ 2.81 $
5.38 Weighted average shares outstanding
- Basic 12,954,373 12,924,043
12,950,958 12,886,372 Weighted average shares
outstanding - Diluted 12,954,373 12,977,436
12,997,009 12,938,661
GEOSPACE TECHNOLOGIES CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, 2014 September 30,
2013 ASSETS (unaudited) Current
assets: Cash and cash equivalents $ 33,357 $ 2,726 Short-term
investments 19,861 -- Trade accounts receivable, net of allowance
of $1,125 and $376 24,602 49,756 Notes receivable, net 3,786 5,290
Inventories, net 145,890 149,548 Costs and estimated earnings in
excess of billings -- 12,400 Deferred income tax assets 7,244 7,056
Prepaid expenses and other current assets
9,268
6,327 Total current assets
244,008 233,103 Rental equipment, net 53,873 36,908
Property, plant and equipment, net 49,205 48,480 Goodwill 1,843
1,843 Non-current deferred income tax assets 75 594 Non-current
notes receivable 28 Prepaid income taxes 5,848 6,201 Other assets
106 96
Total assets
$ 354,986
$ 327,225 LIABILITIES
AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts
payable trade $ 4,964 $ 16,737 Accrued expenses and other current
liabilities 14,590 16,638 Deferred revenue 3,752 1,093 Deferred
income tax liabilities 23 12 Income taxes payable
22 159 Total
current liabilities 23,351 34,639 Long-term debt --- 931
Non-current deferred income tax liabilities
2,377 2,597
Total liabilities
25,728
38,167 Commitments and contingencies
Stockholders’ equity: Preferred stock, 1,000 shares
authorized, no shares issued and outstanding -- -- Common stock,
$.01 par value, 20,000,000 shares authorized, 13,147,416 and
12,942,066 shares issued and outstanding. 131 129 Additional
paid-in capital 70,704 65,985 Retained earnings 260,919 224,008
Accumulated other comprehensive loss
(2,496
) (1,064 )
Total stockholders’ equity
329,258
289,058 Total liabilities and
stockholders’ equity
$ 354,986
$ 327,225
GEOSPACE TECHNOLOGIES CORPORATION AND
SUBSIDIARIES
SUMMARY OF SEGMENT REVENUES
(in thousands)
(unaudited)
Three Months Ended Year Ended
September 30, 2014
September 30, 2013
September 30, 2014
September 30, 2013
Seismic segment: Traditional exploration products $ 8,729 $ 11,054
$ 52,001 $ 49,781 Wireless exploration products 8,303 8,771 78,636
87,316 Reservoir products
3,607
42,272 84,309
138,103 20,639 62,097 214,946 275,200
Non-Seismic segment 5,504 5,984 21,420 24,578 Corporate
142 207 546
829 Total revenues
$
26,285 $ 68,288
$ 236,912 $
300,607
Geospace TechnologiesWalter R. Wheeler, 713.986.4444President
and CEO
Geospace Technologies (NASDAQ:GEOS)
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