Company Announces Leadership Transition
Plan
Geospace Technologies Corporation (NASDAQ: GEOS) (the “Company”)
today announced results for its third quarter ended June 30, 2024.
For the three-months ended June 30, 2024, Geospace reported revenue
of $25.9 million, compared to revenue of $32.7 million for the
comparable year-ago quarter. Net loss for the three-months ended
June 30, 2024 was $2.1 million, or ($0.16) per diluted share,
compared to net income of $3.2 million, or $0.24 per diluted share,
for the quarter ended June 30, 2023.
For the nine-months ended June 30, 2024, Geospace reported
revenue of $100.2 million compared to revenue of $95.2 million for
the comparable year-ago period. Net income for the nine-months
ended June 30, 2024 was $6.3 million, or $0.47 per diluted share,
compared to net income of $7.8 million, or $0.59 per diluted share,
for the nine-months ended June 30, 2023.
Aligned with its succession plan, the Company’s Board of
Directors elected Richard J. (“Rich”) Kelley, currently serving as
Executive Vice President and Chief Operating Officer, to the role
of President and Chief Executive Officer. The change will occur at
the beginning of the Company’s 2025 fiscal year on October 1, 2024.
In order to ensure a smooth executive leadership transition, the
plan calls for current President and Chief Executive Officer Walter
R. (“Rick”) Wheeler to remain with the Company as Principal
Executive Officer for the purposes of fiscal year 2024 financial
filings. Additionally, he will serve as Senior Strategic Advisor to
the CEO through and until his retirement on December 31, 2024.
Management’s Comments Walter R. (“Rick”) Wheeler,
President and CEO of the Company said, “As we close the third
quarter with three months of fiscal year 2024 remaining, we
continue to maintain a profitable year, reporting positive net
income of $6.3 million, or $0.47 per share. In addition, our
longstanding and unwavering commitment toward sustaining a strong
balance sheet with no debt remains firmly intact, with holdings of
$42.5 million in cash and short-term investments as of June 30,
2024. Nonetheless, third quarter revenue from our Oil & Gas
Markets segment was negatively impacted by further gaps in our OBX
rental contracts, leading to a net loss of $2.1 million for the
three months ended June 30, 2024. The extended gaps are the result
of unexpected weather delays, customer operational difficulties,
and unawarded client surveys during the period, although some of
the work is expected to resume in the fourth quarter.
“In profound contrast, our Adjacent Markets segment put forth
all-time record revenue for the third quarter generating $16.0
million. This represents an increase of $1.1 million over the
previous quarterly record that was set a year ago. Growing industry
acceptance of our water meter cables and connectors provides a
strong enabler for additional revenue from these products. In
addition, we anticipate this segment to see substantial revenue
contributions from our Aquana smart water valve and IOT technology
products as market traction and increased sales backlog continues
to gather. Given the well-known and often extreme volatility
experienced in our Oil and Gas segment, careful expansion of
products and market diversity in our Adjacent Markets segment has
been a longstanding part of our strategic vision for Geospace. The
noteworthy continuation of record performances from this segment is
strong evidence that the strategy is on track to provide long-term
value to our shareholders.
“Our Emerging Markets segment generated $640,000 of revenue in
the third quarter with the largest portion coming from the
fulfillment of a DARPA contract that is now essentially complete.
As an outcome of this project and other independent efforts, there
are multiple government agency security projects and advanced
energy and energy transition monitoring projects that offer future
opportunities for this technology to be uniquely applied.
“In other news, our stock repurchase program, authorized by the
Board of Directors in May 2024, is progressing well. As of August
7, 2024, the company has repurchased approximately 512,000 of its
common shares on the open market. In addition, our Board of
Directors has approved an extension of the program, allowing up to
an additional $2.0 million of shares to be purchased. And finally,
we are pleased to reveal some specifics of our management and
leadership succession plan. I am confident in the skills and
business acumen that Rich Kelley has exhibited in his time with
Geospace and look forward to a smooth transition that will both
preserve and progress shareholder value.”
Oil and Gas Markets Segment Third quarter revenue from
the Company’s Oil and Gas Markets segment totaled $9.2 million for
the three months ended June 30, 2024. This compares to $17.7
million in revenue for the same period a year ago representing a
decrease of 48%. Revenue for the nine-month period ended June 30,
2024, is $59.9 million, an increase of 6.6% over the equivalent
prior year period. The decrease in revenue for the three-month
period was due to lower utilization for the Company’s wireless
seismic rental fleet which is attributed to weather related delays,
competition, and product availability. The delays impacted a
previously announced contract valued at a minimum of $3.6 million,
which accounts for a portion of the differential between the
comparable third quarter periods. This contract is expected to be
underway at the end of the fiscal year’s fourth quarter. The
increase in revenue for the nine-month period is primarily due to a
$30 million sale of the Company’s Mariner™ shallow water ocean
bottom nodes, in the first quarter of fiscal year 2024, partially
offset by a decrease in the utilization for its marine OBX rental
fleet.
Adjacent Markets Segment Revenue from the Company’s
Adjacent Markets segment totaled $16.0 million for the three-month
period ended June 30, 2024. This compares to $14.9 million in
revenue for the same period a year ago representing an increase of
7.5%. Revenue for the nine-month period ended June 30, 2024, is
$38.0 million, a modest decrease of 1% over the equivalent prior
year period. Increases in the Company’s water meter products and
industrial sensor products, partially offset by a lower demand for
both contract manufacturing services and thermal film products are
attributed to the changes in revenue for both periods. As of June
30, 2024, Aquana has an order backlog valued at approximately
$900,000, a first for the Aquana subsidiary.
Emerging Markets Segment The Company’s Emerging Markets
segment generated revenue of $640,000 for the three-month period
ended June 30, 2024. This compares to $109,000 in revenue for the
same period a year ago representing an increase of 487%. Revenue
for the nine-month period was $2.0 million compared to $393,000
from the same prior year period representing an increase of 406%.
Revenue from both periods came from a $1.5 million government
contract which has concluded. As of June 30, 2024, the business
segment has a backlog of approximately $750,000 derived largely
from an extension of the existing U.S. Border Patrol contract.
Balance Sheet and Liquidity For the nine-month period
ended June 30, 2024, the Company used $7.5 million in cash and cash
equivalents from operating activities. The Company generated $3.9
million of cash from investing activities that included $30.9
million in proceeds from the sale of rental equipment and $15.3
million in net proceeds from the sale and purchase of short-term
investments, $8.2 million for additions to the rental fleet and
$3.6 million for additional property, plant and equipment
investments.
As of June 30, 2024, the Company held $42.5 million in cash and
short-term investments and maintained an additional borrowing
availability of $15 million under its bank credit agreement with no
borrowings outstanding. The Company additionally owns unencumbered
property and real estate in both domestic and international
locations. In the fourth quarter of fiscal year 2024, management
anticipates capital expenditures of $5 million including $3.5
million earmarked for additions to its rental equipment.
Conference Call Information The Company will host a
conference call to review its third quarter fiscal year 2024
financial results on Friday, August 9, 2024, at 10:00 a.m. Eastern
Time (9:00 a.m. Central Time). Participants can access the call at
(800) 225-9448 (US) or (203) 518-9708 (International) and reference
the conference ID: GEOSQ324 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 the Company’s
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 600 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,
decreases in commodity price levels, the continued adverse impact
of COVID-19, 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
systems, failure of our Quantum products to be adopted by the
border and security perimeter 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
Nine Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Revenue:
Products
$
20,223
$
19,727
$
83,434
$
56,976
Rental
5,635
12,988
16,726
38,218
Total revenue
25,858
32,715
100,160
95,194
Cost of revenue:
Products
14,179
14,522
53,016
43,083
Rental
3,153
4,214
10,501
14,649
Total cost of revenue
17,332
18,736
63,517
57,732
Gross profit
8,526
13,979
36,643
37,462
Operating expenses:
Selling, general and administrative
6,941
6,655
19,313
19,477
Research and development
4,011
4,356
11,476
12,097
Provision for (recovery of) credit
losses
(33
)
(178
)
(84
)
(41
)
Total operating expenses
10,919
10,833
30,705
31,533
Gain on disposal of property
—
—
—
1,315
Income (loss) from operations
(2,393
)
3,146
5,938
7,244
Other income (expense):
Interest expense
(44
)
(22
)
(144
)
(100
)
Interest income
472
88
954
371
Foreign currency transaction gains
(losses), net
(70
)
301
(253
)
593
Other, net
(37
)
(66
)
(104
)
(72
)
Total other income, net
321
301
453
792
Income (loss) before income taxes
(2,072
)
3,447
6,391
8,036
Income tax expense (benefit)
(2
)
219
109
268
Net income (loss)
$
(2,070
)
$
3,228
$
6,282
$
7,768
Income (loss) per common share:
Basic
$
(0.16
)
$
0.25
$
0.47
$
0.59
Diluted
$
(0.16
)
$
0.24
$
0.47
$
0.59
Weighted average common shares
outstanding:
Basic
13,216,386
13,171,654
13,270,444
13,131,795
Diluted
13,216,386
13,320,881
13,431,714
13,157,919
GEOSPACE TECHNOLOGIES
CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in
thousands except share amounts) (unaudited)
June 30, 2024
September 30, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
12,327
$
18,803
Short-term investments
30,189
14,921
Trade accounts and note receivable,
net
16,164
21,373
Inventories, net
24,557
18,430
Prepaid expenses and other current
assets
2,771
2,251
Total current assets
86,008
75,778
Non-current inventories, net
17,362
24,888
Rental equipment, net
16,907
21,587
Property, plant and equipment, net
24,037
24,048
Non-current trade accounts receivable
1,510
—
Operating right-of-use assets
527
714
Goodwill
736
736
Other intangible assets, net
4,505
4,805
Other non-current assets
361
486
Total assets
$
151,953
$
153,042
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable trade
$
4,230
$
6,659
Operating lease liabilities
215
257
Other current liabilities
9,693
12,882
Total current liabilities
14,138
19,798
Non-current operating lease
liabilities
368
512
Deferred tax liabilities, net
26
16
Total liabilities
14,532
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; 14,204,082 and 14,030,481 shares issued,
respectively; and 13,070,615 and 13,188,489 shares outstanding,
respectively
142
140
Additional paid-in capital
97,067
96,040
Retained earnings
68,142
61,860
Accumulated other comprehensive loss
(17,431
)
(17,824
)
Treasury stock, at cost, 1,133,467 and
841,992 shares, respectively
(10,499
)
(7,500
)
Total stockholders’ equity
137,421
132,716
Total liabilities and stockholders’
equity
$
151,953
$
153,042
GEOSPACE TECHNOLOGIES
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (in thousands) (unaudited)
Nine Months Ended
June 30, 2024
June 30, 2023
Cash flows from operating activities:
Net income
$
6,282
$
7,768
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Deferred income tax expense
10
1
Rental equipment depreciation
8,534
9,204
Property, plant and equipment
depreciation
2,595
2,785
Amortization of intangible assets
300
622
Accretion of discounts on short-term
investments
(415
)
(50
)
Stock-based compensation expense
1,029
1,074
Recovery of credit losses
(84
)
(41
)
Inventory obsolescence expense
144
2,131
Gross profit from sale of rental
equipment
(20,751
)
(4,318
)
Gain on disposal of property
—
(1,315
)
Loss (gain) on disposal of equipment
11
(432
)
Realized foreign currency translation loss
from dissolution of foreign subsidiary
—
38
Effects of changes in operating assets and
liabilities:
Trade accounts and note receivable
5,162
(10,561
)
Inventories
(5,787
)
(7,175
)
Other assets
(176
)
453
Accounts payable trade
(1,408
)
1,290
Other liabilities
(2,973
)
1,654
Net cash provided by (used in) operating
activities
(7,527
)
3,128
Cash flows from investing activities:
Purchase of property, plant and
equipment
(3,577
)
(1,862
)
Proceeds from the sale of property, plant
and equipment
2
4,406
Investment in rental equipment
(8,181
)
(6,213
)
Proceeds from the sale of rental
equipment
30,948
11,095
Purchases of short-term investments
(24,033
)
—
Proceeds from the sale of short-term
investments
8,750
900
Net cash provided by investing
activities
3,909
8,326
Cash flows from financing activities:
Purchase of treasury stock
(2,999
)
—
Payments on contingent consideration
—
(175
)
Net cash used in financing activities
(2,999
)
(175
)
Effect of exchange rate changes on
cash
141
(124
)
Increase (decrease) in cash and cash
equivalents
(6,476
)
11,155
Cash and cash equivalents, beginning of
period
18,803
16,109
Cash and cash equivalents, end of
period
$
12,327
$
27,264
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid for income taxes
$
185
$
111
Inventory transferred to rental
equipment
5,765
117
GEOSPACE TECHNOLOGIES
CORPORATION AND SUBSIDIARIES SUMMARY OF SEGMENT REVENUE AND
OPERATING INCOME (LOSS) (in thousands) (unaudited)
Three Months Ended
Nine Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Oil and Gas Markets segment revenue:
Traditional seismic exploration product
revenue
$
2,005
$
3,363
$
7,316
$
9,509
Wireless seismic exploration product
revenue
6,978
13,786
52,291
45,920
Reservoir product revenue
191
523
323
810
9,174
17,672
59,930
56,239
Adjacent Markets segment revenue:
Industrial product revenue
13,025
11,678
28,492
29,250
Imaging product revenue
2,945
3,184
9,528
9,142
15,970
14,862
38,020
38,392
Emerging Markets segment revenue:
Border and perimeter security product
revenue
640
109
1,987
393
Corporate
74
72
223
170
Total revenue
$
25,858
$
32,715
$
100,160
$
95,194
Three Months Ended
Nine Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Operating income (loss):
Oil and Gas Markets segment
$
(2,302
)
$
3,238
$
9,126
$
9,820
Adjacent Markets segment
4,661
4,346
9,491
9,148
Emerging Markets segment
(1,148
)
(1,047
)
(2,424
)
(3,267
)
Corporate
(3,604
)
(3,391
)
(10,255
)
(8,457
)
Total operating income (loss)
$
(2,393
)
$
3,146
$
5,938
$
7,244
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808184594/en/
Media Contact: Caroline Kempf ckempf@geospace.com
321.341.9305
Grafico Azioni Geospace Technologies (NASDAQ:GEOS)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Geospace Technologies (NASDAQ:GEOS)
Storico
Da Dic 2023 a Dic 2024
