Geospace Technologies Corporation (NASDAQ: GEOS) (“the
“Company") today announced results for its first quarter ended
December 31, 2024. For the three-months ended December 31, 2024,
Geospace reported revenue of $37.2 million compared to revenue of
$50.0 million for the comparable year-ago quarter. Net income for
the three-months ended December 31, 2024, was $8.4 million, or
$0.65 per diluted share, compared to $12.7 million, or $0.94 per
diluted share, for the quarter ended December 31, 2024.
Management’s Comments
Richard J. (“Rich”) Kelley, President and CEO of Geospace
Technologies said, “Our companywide focus on driving profitability
through strategic decisions continues to yield positive results. We
just completed another profitable quarter after two consecutive
years of profitability, excluding non-cash charges in the prior
quarter.
As an organization, we have embraced the realignment of our
business segments to better reflect our long-term vision and market
opportunities. This quarter represents our first reporting period
using our new business segments: Smart Water, Energy Solutions and
Intelligent Industrial. To provide greater insight into the revenue
reported using these new segments, we extracted from the former
Adjacent Markets segment our water solutions of Hydroconn®
connectors and the Aquana brand offerings to form the Smart Water
segment. Additionally, the remaining businesses under the former
Adjacent Markets segment are combined with our previous Emerging
Markets segment to form the Intelligent Industrial segment. The
former Oil & Gas segment is almost unchanged and has now become
our Energy Solutions segment.
Historically for our water-related offerings, the first quarter
of the fiscal year usually results in less revenue due in part to
seasonality of utility-related deployments as well as the municipal
government budget cycle, which typically begins in October.
Positively, revenue reported from the Smart Water segment shows an
increase of 72% from the same period last year. We see significant
future potential in the municipal and multi-family markets for our
water management solutions and intend to grow both organically and
through potential acquisition to realize our long-term vision for
this vertical.
Our Energy Solutions segment achieved a notable milestone in
this quarter including a $17 million sale of shallow water OBX-750E
nodes to an international seismic contractor. Looking ahead to the
remainder of the year, we anticipate there may be variability in
quarterly revenue due to on-going market conditions in the Energy
Solutions segment.
Our Intelligent Industrial segment maintained consistent revenue
through a combination of our imaging solutions, advanced sensor
products, specialized contract manufacturing services and security
and surveillance applications.
We are pleased to begin the fiscal year with a strong quarter
yielding net income for our shareholders. We continue to evaluate
options associated with potential acquisitions and other growth
strategies and seek more ways in which we will increase value in
the future.”
Smart Water Segment
First quarter revenue from the Company’s Smart Water segment
totaled $7.3 million for the three months ended December 31, 2024.
This compares to $4.2 million in revenue for the same period a year
ago, an increase of 72%. The increase in revenue is due to higher
demand for the Company’s Hydroconn® cable and connector
products.
Energy Solutions Segment
The Energy Solutions segment revenue totaled $24.3 million for
the three months ended December 31, 2024. This compares to $39.9
million in revenue for the same period a year ago, a decrease of
39%. Revenue for the three months ended December 31, 2024 included
a $17 million OBX marine wireless product sale. However, in
comparison, revenue for the first quarter of the prior year
included a $30 million sale of our Mariner™ shallow water ocean
bottom nodes. Additionally, the reduction in revenue for the first
quarter of fiscal year 2025 was due to lower utilization of the OBX
rental fleet.
Intelligent Industrial Segment
Revenue from the Company’s Intelligent Industrial segment
totaled $5.6 million for the three-month period ended December 31,
2024. This compared with $5.8 million from the same year ago
period, a decrease of 4%. The decrease in revenue for the three
months ended December 31, 2024, was primarily due to lower demand
for our imaging products. The decrease was partially offset by an
increase in demand for our industrial sensor products.
Balance Sheet and Liquidity
As of December 31, 2024, the Company had $22.1 million in cash,
cash equivalents and short-term investments, and had $40.6 million
in current trade accounts and financing receivables, which includes
$16 million from a non-cash sale of used rental equipment during
the quarter. The Company has maintained additional borrowing
availability of $12 million under its bank credit agreement with no
borrowings outstanding and owns unencumbered property and real
estate in both domestic and international locations. In fiscal year
2025, management anticipates a capital expenditure budget of $6
million and does not anticipate significant increases to the rental
fleet given current market conditions.
The Company completed its $7 million stock repurchase program
early in the second quarter of fiscal year 2025. During the
three-month period ended December 31, 2024, the Company purchased
$0.2 million of treasury stock pursuant to the stock repurchase
program. Through the program, the Company purchased roughly 716,000
shares at an average price of $9.72 per share.
Conference Call Information
Geospace Technologies will host a conference call to review its
first quarter fiscal year 2025 financial results on February 6,
2025, at 10:00 a.m. Eastern Time (9 a.m. Central). Participants can
access the call at (800)274-8461 (US) or (203)518-9814
(International). Please reference the conference ID: GEOSQ125 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 advanced sensing, IOT and highly
ruggedized products, which serve smart water, energy exploration,
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 and our expected capital expenditures. 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
December 31, 2024
December 31, 2023
Revenue:
Products
$
32,645
$
43,714
Rental
4,578
6,318
Total revenue
37,223
50,032
Cost of revenue:
Products
14,269
23,842
Rental
2,805
3,954
Total cost of revenue
17,074
27,796
Gross profit
20,149
22,236
Operating expenses:
Selling, general and administrative
7,420
5,826
Research and development
4,894
3,602
Provision for recovery of credit
losses
—
(29
)
Total operating expenses
12,314
9,399
Income from operations
7,835
12,837
Other income (expense):
Interest expense
(44
)
(56
)
Interest income
745
235
Foreign currency transaction gains
(losses), net
(14
)
(163
)
Other, net
(33
)
(74
)
Total other income (loss), net
654
(58
)
Income before income taxes
8,489
12,779
Income tax expense
113
100
Net income
$
8,376
$
12,679
Income per common share:
Basic
$
0.66
$
0.96
Diluted
$
0.65
$
0.94
Weighted average common shares
outstanding:
Basic
12,753,378
13,251,360
Diluted
12,877,387
13,460,516
GEOSPACE TECHNOLOGIES
CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in thousands except share
amounts)
(unaudited)
December 31, 2024
September 30, 2024
ASSETS
Current assets:
Cash and cash equivalents
$
1,410
$
6,895
Short-term investments
20,655
30,227
Trade accounts and financing receivables,
net
40,645
21,868
Inventories, net
27,921
26,222
Assets held for sale
1,841
1,841
Prepaid expenses and other current
assets
2,613
2,313
Total current assets
95,085
89,366
Non-current inventories, net
18,742
18,031
Rental equipment, net
12,480
14,186
Property, plant and equipment, net
23,358
21,083
Non-current trade accounts and financing
receivables
7,264
6,375
Operating right-of-use assets
400
464
Goodwill
736
736
Other intangible assets, net
1,611
1,649
Other non-current assets
263
304
Total assets
$
159,939
$
152,194
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable trade
$
7,312
$
8,003
Operating lease liabilities
130
173
Other current liabilities
9,446
9,021
Total current liabilities
16,888
17,197
Non-current operating lease
liabilities
309
339
Deferred tax liabilities, net
32
34
Total liabilities
17,229
17,570
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; 14,315,262 and 14,206,082 shares issued,
respectively; and 12,798,897 and 12,709,381 shares outstanding,
respectively
143
142
Additional paid-in capital
97,690
97,342
Retained earnings
63,658
55,282
Accumulated other comprehensive loss
(4,699
)
(4,257
)
Treasury stock, at cost, 1,516,365 and
1,496,701 shares, respectively
(14,082
)
(13,885
)
Total stockholders’ equity
142,710
134,624
Total liabilities and stockholders’
equity
$
159,939
$
152,194
GEOSPACE TECHNOLOGIES
CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
December 31, 2024
December 31, 2023
Cash flows from operating activities:
Net income
$
8,376
$
12,679
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Deferred income tax expense
—
8
Rental equipment depreciation
1,884
3,313
Property, plant and equipment
depreciation
867
822
Amortization of intangible assets
37
109
Amortization of premiums (accretion of
discounts) on short-term investments
(104
)
(115
)
Stock-based compensation expense
349
406
Provision for recovery of credit
losses
—
(29
)
Inventory obsolescence expense
506
20
Gross profit from sale of rental
equipment
(15,978
)
(19,350
)
Gain on disposal of property, plant and
equipment
(86
)
—
Realized gain on investments
(10
)
—
Effects of changes in operating assets and
liabilities:
Trade accounts and financing
receivables
(3,622
)
8,001
Inventories
(2,988
)
(4,059
)
Other assets
(196
)
179
Accounts payable trade
(690
)
(478
)
Other liabilities
146
1,146
Net cash provided by (used in) operating
activities
(11,509
)
2,652
Cash flows from investing activities:
Purchase of property, plant and
equipment
(3,199
)
(779
)
Proceeds from the sale of property, plant
and equipment
89
—
Investment in rental equipment
(373
)
(2,558
)
Proceeds from the sale of rental
equipment
65
597
Proceeds from the sale of short-term
investments
9,660
—
Payments received on note receivable
related to sale of subsidiary
45
—
Net cash provided by (used in) investing
activities
6,287
(2,740
)
Cash flows from financing activities:
Purchase of treasury stock
(197
)
—
Net cash used in financing activities
(197
)
—
Effect of exchange rate changes on
cash
(66
)
192
Increase (decrease) in cash and cash
equivalents
(5,485
)
104
Cash and cash equivalents, beginning of
period
6,895
18,803
Cash and cash equivalents, end of
period
$
1,410
$
18,907
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid for income taxes
$
113
$
—
Accounts and financing receivables related
to sale of rental equipment
16,112
30,048
Inventory transferred to rental
equipment
36
593
GEOSPACE TECHNOLOGIES
CORPORATION AND SUBSIDIARIES
SUMMARY OF SEGMENT REVENUE AND
OPERATING INCOME (LOSS)
(in thousands)
(unaudited)
Three Months Ended
December 31, 2024
December 31, 2023
Revenue:
Smart Water
$
7,288
$
4,234
Energy Solutions
24,282
39,911
Intelligent Industrial
5,577
5,813
Corporate
76
74
Total
$
37,223
$
50,032
Income (loss) from operations:
Smart Water
$
370
$
1,095
Energy Solutions
13,282
15,068
Intelligent Industrial
(940
)
(191
)
Corporate
(4,877
)
(3,135
)
Total
$
7,835
$
12,837
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250205366440/en/
MEDIA CONTACT: Caroline Kempf, ckempf@geospace.com,
713.986.8710
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