GEOS Geospace Technologies Corporation

Company’s Hydroconn Smart Water Connector Cable Reports Record Setting Year

Geospace Technologies Corporation (NASDAQ: GEOS) (“the “Company") today announced a net loss of $6.6 million after fourth quarter non-cash charges of $17.3 million on revenue of $135.6 million, for its fiscal year ended September 30, 2024. This compares with net income of $12.2 million on revenue of $124.5 million for the comparable year-ago period. Excluding the non-cash charges, fiscal year 2024 adjusted net income is $10.7 million. This compares with adjusted net income of $12.2 million for the comparable year-ago period.

For the fourth quarter ended September 30, 2024, the Company reported a net loss of $12.9 on revenue of $35.4 million. This compares with net income of $4.4 million on revenue of $29.3 million for the comparable year-ago period. Excluding the non-cash charges, adjusted net income is $4.4 million for the fourth quarter ended September 30, 2024. This compares with adjusted net income of $4.4 million for the comparable year-ago period.

During fourth quarter ended September 30, 2024, the Company recorded a non-cash charge of $14.5 million from the divestiture of its Russian legal entity and a $2.8 million charge from an impairment of intangible assets. The divestiture of the Russian legal entity has virtually no effect on the Company’s net assets as most of the charge came from cumulative unrealized foreign currency translation losses previously recorded within shareholders’ equity.

Management’s Comments Richard J. (“Rich”) Kelley, President and CEO of the Company said, “We started the fourth quarter of fiscal year 2024 strongly with significant contributions from our Oil and Gas Markets segment with more than $20 million in sales and rental announcements for our OBX seabed nodes in August. This followed a trend for the fiscal year of multi-million-dollar contracts for this product line and contributed to an overall increase in revenue from the prior fiscal year.

In our Adjacent Markets segment, we enjoyed a record-setting year for our Hydroconn® line of smart water meter cables. The market continues to recognize our leading technology and resulting growth outpaces the industry. We also had our first successful international sale of our Aquana products. The Aquana product line generates further traction in smart water markets, for both municipal and multi-family residential applications. We believe that our focus on Smart Water going forward will continue to drive growth for the organization.

While the financials indicate a net loss for the year due to two non-cash charges, we are pleased to have 24-months of consecutive adjusted net income, indicating our core business remains profitable. While examining the increasing conflict in Ukraine and potential complications with Russian sanctioned entities, management and the board of directors determined the most prudent action would be to divest of our Russian entity. This divestment resulted in a loss which had minimal effect on the value of the net assets of the Company. Additionally, our fiscal year financial reporting reflects another one-time charge related to a non-cash intangible asset impairment related to our subsidiary, Quantum Technology Sciences.

This announcement will be the last time we will report earnings with these business segments of Oil and Gas Markets, Adjacent Markets and Emerging Markets. Beginning with our release in early February, we will provide financial information using our three new business segments announced in September – Smart Water, Energy Solutions, and Intelligent Industrial.

Other highlights of note this year included the Company’s addition in the Russell stock indexes, the Russell 2000®, Russell 3000®, and Russell Micro-Cap® Index.

Lastly, we would like to thank Rick Wheeler, our outgoing CEO. Rick dedicated almost 30 years to Geospace, leading the company through successful and tumultuous times in the industry. His guidance and foresight provided stability and opportunities for growth through diversification. His management and leadership allowed Geospace to remain a strong presence in the seismic equipment market while taking advantage of their Engineering and manufacturing capabilities to explore new opportunities in adjacent markets. Rick will remain as a member of the board of directors and we wish him all the best in his retirement.”

Oil and Gas Markets Segment Revenue from the Company’s Oil and Gas Markets segment totaled $17.5 million for the three months ended September 30, 2024. This compares to $17.8 million in revenue for the same period a year ago. For the fiscal year, revenue from this segment totaled $77.5 million versus $74.0 million for the same prior year period for an increase of 5%. The insignificant decrease for the three-month period is due to increased sales of our OBX nodal products from our rental fleet offset by lower utilization of our ocean bottom node rental fleet. The twelve-month increase in revenue is due to increased sales of ocean bottom nodal products like the Mariner and from our rental fleet, offset by lower utilization of our ocean bottom node rental fleet and lower demand for seismic sensors and marine products.

Adjacent Markets Segment For the 3-month period ended September 30, 2024, revenue from the Company’s Adjacent Markets segment totaled $17.6 million for an increase of 65% when compared to $10.6 million from the same prior year period. Revenue from the twelve-month period was $55.6 million an increase of 13%, when compared to revenue from the same prior year period of $49 million. The increase for the three-month period is due to strong sales of Hydroconn®, the Company’s smart water meter cable and connector products and initial sales from the Aquana product line. The increase in the 12-months period is the result of increased sales of the Company’s smart water meter cable and connector products. The fourth quarter of fiscal year 2024 was the highest level of quarterly revenue for Hydroconn® as well as fiscal year 2024 produced the highest annual revenue for the product line.

Emerging Markets Segment The Company’s Emerging Markets segment generated revenue of $0.2 million and $2.2 million for the three-month and full year periods ended September 30, 2024. This compares with $0.8 million and $1.2 million for the similar three- and twelve-month periods of the previous year.

Conference Call Information Geospace Technologies will host a conference call to review its fourth quarter and fiscal year 2024 financial results on November 22, 2024, at 10:00 a.m. Eastern Time (9 a.m. Central). Participants can access the call at (800)267-6316 (US) or (203)518-9783 (International). Please reference the conference ID: GEOSQ424 prior to the start of the conference call. A replay will be available for approximately 60 days and may be accessed through the Investor Relations tab of our website at www.geospace.com.

About Geospace Technologies Geospace Technologies is a global technology and instrumentation manufacturer specializing in vibration sensing and highly ruggedized products which serve energy, industrial, government and commercial customers worldwide. The Company’s products blend engineering expertise with advanced analytic software to optimize energy exploration, enhance national and homeland security, empower water utility and property managers, and streamline electronic printing solutions. With more than four decades of excellence, the Company’s more than 450 employees across the world are dedicated to engineering and technical quality. Geospace is traded on the U.S. NASDAQ stock exchange under the ticker symbol GEOS and has been added to the Russell 2000®, Russell 3000®, and Russell Micro-cap®. For more information, visit www.geospace.com.

Forward Looking Statements This news release contains “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. These forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “intend,” “expect,” “plan,” “budget,” “forecast,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “evaluating” or similar words. Statements that contain these words should be read carefully because they discuss future expectations, contain projections of our future results of operations or of our financial position or state other forward-looking information. Examples of forward- looking statements include, statements regarding our expected operating results and expected demand for our products in various segments. These forward-looking statements reflect our current judgment about future events and trends based on currently available information. However, there will likely be events in the future that we are not able to predict or control. The factors listed under the caption “Risk Factors” in our most recent Annual Report on Form 10-K which is on file with the Securities and Exchange Commission, as well as other cautionary language in such Annual Report, any subsequent Quarterly Report on Form 10- Q, or in our other periodic reports, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements.

Such examples include, but are not limited to, the failure of the Quantum or OptoSeis® or Aquana technology transactions to yield positive operating results and decreases in commodity price levels which could reduce demand for our products, the failure of our products to achieve market acceptance (despite substantial investment by us) our sensitivity to short term backlog, delayed or cancelled customer orders, product obsolescence resulting from poor industry conditions or new technologies, bad debt write-offs associated with customer accounts, inability to collect on promissory notes, lack of further orders for our OBX rental equipment, failure of our Quantum products to be adopted by the border and perimeter security market, or a decrease in such market due to governmental changes, and infringement or failure to protect intellectual property. The occurrence of the events described in these risk factors and elsewhere in our most recent Annual Report on Form 10-K or in our other periodic reports could have a material adverse effect on our business, results of operations and financial position, and actual events and results of operations may vary materially from our current expectations. 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, except as required by applicable securities laws and regulations.

     

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited)  

 

Three Months Ended

 

Year Ended

 

 

September 30, 2024 

 

September 30, 2023 

 

September 30, 2024 

 

September 30, 2023 

Revenue:

 

 

 

 

 

 

 

 

Products

 

$

32,602

 

 

$

16,357

 

 

$

116,036

 

 

$

73,333

 

Rental

 

 

2,836

 

 

 

12,958

 

 

 

19,562

 

 

 

51,176

 

Total revenue

 

 

35,438

 

 

 

29,315

 

 

 

135,598

 

 

 

124,509

 

Cost of revenue:

 

 

 

 

 

 

 

 

Products

 

 

16,302

 

 

 

12,053

 

 

 

69,318

 

 

 

55,136

 

Rental

 

 

3,206

 

 

 

3,034

 

 

 

13,707

 

 

 

17,683

 

Total cost of revenue

 

 

19,508

 

 

 

15,087

 

 

 

83,025

 

 

 

72,819

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

15,930

 

 

 

14,228

 

 

 

52,573

 

 

 

51,690

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

7,241

 

 

 

6,475

 

 

 

26,554

 

 

 

25,952

 

Research and development

 

 

4,775

 

 

 

3,766

 

 

 

16,251

 

 

 

15,863

 

Other intangible asset impairment

 

 

2,761

 

 

 

—

 

 

 

2,761

 

 

 

—

 

Provision for (recovery of) credit losses

 

 

(26

)

 

 

(97

)

 

 

(110

)

 

 

(138

)

Total operating expenses

 

 

14,751

 

 

 

10,144

 

 

 

45,456

 

 

 

41,677

 

 

 

 

 

 

 

 

 

 

Gain on disposal of property

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,315

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

1,179

 

 

 

4,084

 

 

 

7,117

 

 

 

11,328

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Loss on sale of subsidiary

 

 

(14,539

)

 

 

—

 

 

 

(14,539

)

 

 

—

 

Interest expense

 

 

(43

)

 

 

(34

)

 

 

(187

)

 

 

(134

)

Interest income

 

 

604

 

 

 

168

 

 

 

1,558

 

 

 

539

 

Foreign currency transaction gains (losses), net

 

 

(17

)

 

 

401

 

 

 

(270

)

 

 

994

 

Other, net

 

 

(39

)

 

 

(86

)

 

 

(143

)

 

 

(158

)

Total other income (expense), net

 

 

(14,034

)

 

 

449

 

 

 

(13,581

)

 

 

1,241

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

(12,855

)

 

 

4,533

 

 

 

(6,464

)

 

 

12,569

 

Income tax expense

 

 

5

 

 

 

95

 

 

 

114

 

 

 

363

 

Net income (loss)

 

$

(12,860

)

 

$

4,438

 

 

$

(6,578

)

 

$

12,206

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

Basic

 

$

(1.00

)

 

$

0.34

 

 

$

(0.50

)

 

$

0.93

 

Diluted

 

$

(1.00

)

 

$

0.33

 

 

$

(0.50

)

 

$

0.92

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

12,797,653

 

 

 

13,188,489

 

 

 

13,151,600

 

 

 

13,146,085

 

Diluted

 

 

12,797,653

 

 

 

13,399,442

 

 

 

13,151,600

 

 

 

13,215,066

 

       

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (unaudited) 

 

 

 

AS OF SEPTEMBER 30,

 

 

 

2024

 

 

 

2023

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

6,895

 

 

$

18,803

 

Short-term investments

 

 

30,227

 

 

 

14,921

 

Trade accounts and notes receivable, net

 

 

21,868

 

 

 

21,373

 

Inventories, net

 

 

26,222

 

 

 

18,430

 

Assets held for sale

 

 

1,841

 

 

 

—

 

Prepaid expenses and other current assets

 

 

2,313

 

 

 

2,251

 

Total current assets

 

 

89,366

 

 

 

75,778

 

 

 

 

 

 

Non-current inventories, net

 

 

18,031

 

 

 

24,888

 

Rental equipment, net

 

 

14,186

 

 

 

21,587

 

Property, plant and equipment, net

 

 

21,083

 

 

 

24,048

 

Non-current trade accounts and note receivable, net

 

 

6,375

 

 

 

—

 

Operating right-of-use assets

 

 

464

 

 

 

714

 

Goodwill

 

 

736

 

 

 

736

 

Other intangible assets, net

 

 

1,649

 

 

 

4,805

 

Other non-current assets

 

 

304

 

 

 

486

 

Total assets

 

$

152,194

 

 

$

153,042

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable trade

 

$

8,003

 

 

$

6,659

 

Operating lease liabilities

 

 

173

 

 

 

257

 

Other current liabilities

 

 

9,021

 

 

 

12,882

 

Total current liabilities

 

 

17,197

 

 

 

19,798

 

 

 

 

 

 

Non-current operating lease liabilities

 

 

339

 

 

 

512

 

Deferred tax liabilities, net

 

 

34

 

 

 

16

 

Total liabilities

 

 

17,570

 

 

 

20,326

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock, 1,000,000 shares authorized, no shares issued and outstanding

 

 

—

 

 

 

—

 

Common stock, $.01 par value, 20,000,000 shares authorized, 14,206,082 and 14,030,481 shares issued, respectively; and 12,709,381 and 13,188,489 shares outstanding, respectively

 

 

142

 

 

 

140

 

Additional paid-in capital

 

 

97,342

 

 

 

96,040

 

Retained earnings

 

 

55,282

 

 

 

61,860

 

Accumulated other comprehensive loss

 

 

(4,257

)

 

 

(17,824

)

Treasury stock, at cost, 1,496,701 shares and 841,992 shares, respectively

 

 

(13,885

)

 

 

(7,500

)

Total stockholders’ equity

 

 

134,624

 

 

 

132,716

 

Total liabilities and stockholders’ equity

 

$

152,194

 

 

$

153,042

 

       

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) 

 

 

 

YEAR ENDED SEPTEMBER 30,

 

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

Net income (loss)

 

$

(6,578

)

 

$

12,206

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

Deferred income tax expense

 

 

18

 

 

 

3

 

Rental equipment depreciation

 

 

10,859

 

 

 

11,766

 

Property, plant and equipment depreciation

 

 

3,512

 

 

 

3,704

 

Amortization of intangible assets

 

 

395

 

 

 

768

 

Intangible assets impairment expense

 

 

2,761

 

 

 

—

 

Accretion of discounts on short-term investments

 

 

(566

)

 

 

(144

)

Stock-based compensation expense

 

 

1,304

 

 

 

1,374

 

Provision for (recovery of) credit losses

 

 

(110

)

 

 

(138

)

Inventory obsolescence expense

 

 

589

 

 

 

2,229

 

Loss on sale of subsidiary

 

 

14,539

 

 

 

—

 

Realized foreign currency translation gain from dissolution of foreign subsidiary

 

 

—

 

 

 

38

 

Gross profit from sale of rental equipment

 

 

(30,998

)

 

 

(4,424

)

Loss on disposal of equipment

 

 

16

 

 

 

244

 

Gain on disposal of property

 

 

—

 

 

 

(1,315

)

Effects of changes in operating assets and liabilities:

 

 

 

 

Trade accounts and notes receivable

 

 

6,593

 

 

 

(5,561

)

Inventories

 

 

(10,985

)

 

 

(11,026

)

Other assets

 

 

(199

)

 

 

442

 

Accounts payable trade

 

 

2,746

 

 

 

41

 

Other liabilities

 

 

(2,979

)

 

 

5,351

 

Net cash provided by (used in) operating activities

 

 

(9,083

)

 

 

15,558

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchase of property, plant and equipment

 

 

(3,857

)

 

 

(3,964

)

Investment in rental equipment

 

 

(8,321

)

 

 

(9,920

)

Proceeds from the sale of property, plant and equipment

 

 

9

 

 

 

4,406

 

Proceeds from the sale of rental equipment

 

 

31,964

 

 

 

11,478

 

Purchase of short-term investments

 

 

(32,078

)

 

 

(24,782

)

Proceeds from the sale of short-term investments

 

 

17,338

 

 

 

10,900

 

Cash disposed from sale of subsidiary

 

 

(1,231

)

 

 

—

 

Net cash provided by (used in) investing activities

 

 

3,824

 

 

 

(11,882

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Payments of contingent consideration

 

 

—

 

 

 

(175

)

Debt issuance costs

 

 

—

 

 

 

(350

)

Purchase of treasury stock

 

 

(6,385

)

 

 

—

 

Net cash used in financing activities

 

 

(6,385

)

 

 

(525

)

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

(264

)

 

 

(457

)

Increase (decrease) in cash and cash equivalents

 

 

(11,908

)

 

 

2,694

 

Cash and cash equivalents, beginning of fiscal year

 

 

18,803

 

 

 

16,109

 

Cash and cash equivalents, end of fiscal year

 

$

6,895

 

 

$

18,803

 

       

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES SUMMARY OF SEGMENT REVENUE AND OPERATING INCOME (LOSS) (in thousands) (unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

September 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Oil and Gas Markets segment revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Traditional seismic exploration product revenue

 

$

2,496

 

 

$

2,674

 

 

$

9,812

 

 

$

12,183

 

Wireless seismic exploration product revenue

 

 

14,768

 

 

 

14,928

 

 

 

67,059

 

 

 

60,848

 

Reservoir product revenue

 

 

261

 

 

 

152

 

 

 

584

 

 

 

962

 

 

 

 

17,525

 

 

 

17,754

 

 

 

77,455

 

 

 

73,993

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjacent Markets segment revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Industrial product revenue

 

 

14,568

 

 

 

7,609

 

 

 

43,060

 

 

 

36,859

 

Imaging product revenue

 

 

3,037

 

 

 

3,038

 

 

 

12,565

 

 

 

12,180

 

 

 

 

17,605

 

 

 

10,647

 

 

 

55,625

 

 

 

49,039

 

Emerging Markets segment revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Border and perimeter security product revenue

 

 

235

 

 

 

841

 

 

 

2,222

 

 

 

1,234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

73

 

 

 

73

 

 

 

296

 

 

 

243

 

Total revenue

 

$

35,438

 

 

$

29,315

 

 

$

135,598

 

 

$

124,509

     

 

 

Three Months Ended

 

Year Ended

 

 

September 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Operating income (loss):

 

 

 

 

 

 

 

 

Oil and Gas Markets segment

 

$

4,008

 

 

$

5,939

 

 

$

13,134

 

 

$

15,759

 

Adjacent Markets segment

 

 

4,661

 

 

 

2,342

 

 

 

14,152

 

 

 

11,490

 

Emerging Markets segment

 

 

(3,769

)

 

 

(736

)

 

 

(6,193

)

 

 

(4,003

)

Corporate

 

 

(3,721

)

 

 

(3,461

)

 

 

(13,976

)

 

 

(11,918

)

Total operating income

 

$

1,179

 

 

$

4,084

 

 

$

7,117

 

 

$

11,328

 

               

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES NON-GAAP MEASURES (in thousands)  

     

Three Months Ended

 

Year Ended

September 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Net income (loss)

 

$

(12,860

)

 

$

4,438

 

 

$

(6,578

)

 

$

12,206

 

Adjustments:

 

 

 

 

 

 

 

 

 

Loss on sale of subsidiary

 

 

14,539

 

 

 

—

 

 

 

14,539

 

 

 

—

 

Intangible assets impairment expense

 

 

2,761

 

 

 

—

 

 

 

2,761

 

 

 

—

 

Total adjustments

 

 

17,300

 

 

 

—

 

 

 

17,300

 

 

 

—

 

Adjusted net income

 

$

4,440

 

 

$

4,438

 

 

$

10,722

 

 

$

12,206

     

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241121527471/en/

Media Contact: Caroline Kempf ckempf@geospace.com 321.341.9305