Geospace Technologies Corporation Reports Profitable First Quarter of Fiscal Year 2024 and Highest Quarterly Revenue in Nearly Ten Years
Quarterly Earnings Strengthen by Significant Demand for Newly Released Mariner™ Seismic Data Acquisition Product
Management’s Comments
Walter R. (“Rick”) Wheeler, President and CEO of the Company said, “We’re gratified to see the first quarter of fiscal year 2024 mark our fourth straight quarter of profitability. In conjunction with an improved industry demand for products in our Oil and Gas Markets segment, our financial discipline and streamlining of operations over the last year have helped carry profitability into the new fiscal year. Recorded revenue of
Navigating these ups and downs is familiar territory for
Our Adjacent Markets segment experienced a modest decrease in first quarter revenue compared to last year. We believe the reduction reflects customers working through larger purchases made in earlier quarters to stay ahead of supply chain concerns. Despite the slight reduction in revenue, we expect this segment to see continued overall growth and remain strong into the foreseeable future. We believe our strategy for this segment to deliver stable, predictable, and profitable revenue to our bottom line is working. Moreover, our confidence in this segment’s continued improvement increases as the demand for smart infrastructure solutions expands, both domestically and abroad. This is further evidenced by the recent signing of a modest contract for our Aquana smart water valves which should begin contributing to revenue in the next quarter.
Our Emerging Markets segment generated a small amount of revenue in the first quarter through existing contracts between our Quantum subsidiary and the US Federal government. The opportunity for additional contracts with the Customs and Border Protection agency is solid, but those government decisions are not expected until later in the calendar year. Progress toward significant revenue contributions from this segment have developed more slowly than desired. However, quoting activities from energy companies for carbon capture monitoring projects as well as other new and unique applications for Quantum’s analytical methods have increased. Despite the high public interest in carbon capture, utilization, and storage, these projects appear to move slowly as country requirements and industry commitments evolve.”
Oil and Gas Markets Segment
First quarter revenue from the Company’s Oil and Gas Markets segment totaled
Wireless Seismic Exploration Products revenue totaled
Adjacent Markets Segment
Revenue from the Company’s Adjacent Markets segment totaled
Emerging Markets Segment
The Company’s Emerging Markets segment generated revenue of
Balance Sheet and Liquidity
For the three-month period ended
Conference Call Information
The Company will host a conference call to review its first quarter fiscal year 2024 financial results on
About
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
GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited) |
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Three Months Ended |
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Revenue: |
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|
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Products |
|
$ |
43,714 |
|
|
$ |
19,548 |
|
Rental |
|
|
6,318 |
|
|
|
11,561 |
|
Total revenue |
|
|
50,032 |
|
|
|
31,109 |
|
Cost of revenue: |
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|
|
|
|
||
Products |
|
|
23,842 |
|
|
|
15,365 |
|
Rental |
|
|
3,954 |
|
|
|
5,210 |
|
Total cost of revenue |
|
|
27,796 |
|
|
|
20,575 |
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|
|
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|
|
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Gross profit |
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22,236 |
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10,534 |
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|
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|
|
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Operating expenses: |
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|
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Selling, general and administrative |
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|
5,826 |
|
|
|
6,435 |
|
Research and development |
|
|
3,602 |
|
|
|
4,258 |
|
Provision for credit losses |
|
|
(29 |
) |
|
|
120 |
|
Total operating expenses |
|
|
9,399 |
|
|
|
10,813 |
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|
|
|
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|
|
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Income (loss) from operations |
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12,837 |
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|
|
(279 |
) |
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|
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Other income (expense): |
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Interest expense |
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(56 |
) |
|
|
(39 |
) |
Interest income |
|
|
235 |
|
|
|
156 |
|
Foreign currency transaction gains (losses), net |
|
|
(163 |
) |
|
|
107 |
|
Other, net |
|
|
(74 |
) |
|
|
(12 |
) |
Total other income (expense), net |
|
|
(58 |
) |
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|
212 |
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|
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Income (loss) before income taxes |
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12,779 |
|
|
|
(67 |
) |
Income tax expense |
|
|
100 |
|
|
|
30 |
|
Net income (loss) |
|
$ |
12,679 |
|
|
$ |
(97 |
) |
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|
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Income (loss) per common share: |
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Basic |
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$ |
0.96 |
|
|
$ |
(0.01 |
) |
Diluted |
|
$ |
0.94 |
|
|
$ |
(0.01 |
) |
|
|
|
|
|
|
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Weighted average common shares outstanding: |
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Basic |
|
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13,251,360 |
|
|
|
13,067,991 |
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Diluted |
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|
13,460,516 |
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|
13,067,991 |
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GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands except share amounts) (unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
|
$ |
18,907 |
|
|
$ |
18,803 |
|
Short-term investments |
|
|
15,051 |
|
|
|
14,921 |
|
Trade accounts and note receivable, net |
|
|
41,969 |
|
|
|
21,373 |
|
Inventories, net |
|
|
21,839 |
|
|
|
18,430 |
|
Prepaid expenses and other current assets |
|
|
2,227 |
|
|
|
2,251 |
|
Total current assets |
|
|
99,993 |
|
|
|
75,778 |
|
|
|
|
|
|
|
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Non-current inventories, net |
|
|
24,888 |
|
|
|
24,888 |
|
Rental equipment, net |
|
|
15,242 |
|
|
|
21,587 |
|
Property, plant and equipment, net |
|
|
24,083 |
|
|
|
24,048 |
|
Non-current trade accounts receivable |
|
|
1,510 |
|
|
|
— |
|
Operating right-of-use assets |
|
|
653 |
|
|
|
714 |
|
|
|
|
736 |
|
|
|
736 |
|
Other intangible assets, net |
|
|
4,696 |
|
|
|
4,805 |
|
Other non-current assets |
|
|
438 |
|
|
|
486 |
|
Total assets |
|
$ |
167,383 |
|
|
$ |
153,042 |
|
|
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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|
|
|
|
|
||
Accounts payable trade |
|
$ |
6,190 |
|
|
$ |
6,659 |
|
Operating lease liabilities |
|
|
261 |
|
|
|
257 |
|
Other current liabilities |
|
|
14,161 |
|
|
|
12,882 |
|
Total current liabilities |
|
|
20,612 |
|
|
|
19,798 |
|
|
|
|
|
|
|
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Non-current operating lease liabilities |
|
|
439 |
|
|
|
512 |
|
Deferred tax liabilities, net |
|
|
25 |
|
|
|
16 |
|
Total liabilities |
|
|
21,076 |
|
|
|
20,326 |
|
|
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, 1,000,000 shares authorized, no shares issued and outstanding |
|
|
— |
|
|
|
— |
|
Common Stock, |
|
|
142 |
|
|
|
140 |
|
Additional paid-in capital |
|
|
96,444 |
|
|
|
96,040 |
|
Retained earnings |
|
|
74,539 |
|
|
|
61,860 |
|
Accumulated other comprehensive loss |
|
|
(17,318 |
) |
|
|
(17,824 |
) |
|
|
|
(7,500 |
) |
|
|
(7,500 |
) |
Total stockholders’ equity |
|
|
146,307 |
|
|
|
132,716 |
|
Total liabilities and stockholders’ equity |
|
$ |
167,383 |
|
|
$ |
153,042 |
|
GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) |
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Three Months Ended |
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Cash flows from operating activities: |
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Net income (loss) |
|
$ |
12,679 |
|
|
$ |
(97 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
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Deferred income tax expense (benefit) |
|
|
8 |
|
|
|
(6 |
) |
Rental equipment depreciation |
|
|
3,313 |
|
|
|
3,247 |
|
Property, plant and equipment depreciation |
|
|
822 |
|
|
|
1,017 |
|
Amortization of intangible assets |
|
|
109 |
|
|
|
238 |
|
Amortization of premiums (accretion of discounts) on short-term investments |
|
|
(115 |
) |
|
|
5 |
|
Stock-based compensation expense |
|
|
406 |
|
|
|
370 |
|
Provision for credit losses |
|
|
(29 |
) |
|
|
120 |
|
Inventory obsolescence expense |
|
|
20 |
|
|
|
1,380 |
|
Gross profit from sale of rental equipment |
|
|
(19,350 |
) |
|
|
(3,092 |
) |
Gain on disposal of property, plant and equipment |
|
|
— |
|
|
|
(47 |
) |
Effects of changes in operating assets and liabilities: |
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|
|
|
|
|
||
Trade accounts and note receivable |
|
|
8,001 |
|
|
|
(6,846 |
) |
Inventories |
|
|
(4,059 |
) |
|
|
(5,188 |
) |
Other assets |
|
|
179 |
|
|
|
886 |
|
Accounts payable trade |
|
|
(478 |
) |
|
|
1,924 |
|
Other liabilities |
|
|
1,146 |
|
|
|
1,225 |
|
Net cash provided by (used in) operating activities |
|
|
2,652 |
|
|
|
(4,864 |
) |
|
|
|
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Cash flows from investing activities: |
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Purchase of property, plant and equipment |
|
|
(779 |
) |
|
|
(265 |
) |
Proceeds from the sale of property, plant and equipment |
|
|
— |
|
|
|
47 |
|
Investment in rental equipment |
|
|
(2,558 |
) |
|
|
(162 |
) |
Proceeds from the sale of rental equipment |
|
|
597 |
|
|
|
622 |
|
Net cash provided by (used in) investing activities |
|
|
(2,740 |
) |
|
|
242 |
|
|
|
|
|
|
|
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Cash flows from financing activities: |
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|
|
|
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||
Payments on contingent consideration |
|
|
— |
|
|
|
(175 |
) |
Net cash used in financing activities |
|
|
— |
|
|
|
(175 |
) |
|
|
|
|
|
|
|
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Effect of exchange rate changes on cash |
|
|
192 |
|
|
|
43 |
|
Increase (decrease) in cash and cash equivalents |
|
|
104 |
|
|
|
(4,754 |
) |
Cash and cash equivalents, beginning of fiscal year |
|
|
18,803 |
|
|
|
16,109 |
|
Cash and cash equivalents, end of fiscal period |
|
$ |
18,907 |
|
|
$ |
11,355 |
|
|
|
|
|
|
|
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SUPPLEMENTAL CASH FLOW INFORMATION: |
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|
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Accounts receivable related to the sale of rental equipment |
|
$ |
30,048 |
|
|
$ |
4,505 |
|
Inventory transferred to rental equipment |
|
|
593 |
|
|
|
7 |
|
GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES SUMMARY OF SEGMENT REVENUE AND OPERATING INCOME (LOSS) (in thousands) (unaudited) |
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Three Months Ended |
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Oil and Gas Markets segment revenue: |
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|
|
|
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Traditional seismic exploration product revenue |
|
$ |
1,763 |
|
$ |
2,755 |
Wireless seismic exploration product revenue |
|
|
38,073 |
|
|
17,238 |
Reservoir product revenue |
|
|
73 |
|
|
155 |
|
|
|
39,909 |
|
|
20,148 |
|
|
|
|
|
||
Adjacent Markets segment revenue: |
|
|
|
|
||
Industrial product revenue |
|
|
6,443 |
|
|
7,930 |
Imaging product revenue |
|
|
3,372 |
|
|
2,892 |
|
|
|
9,815 |
|
|
10,822 |
Emerging Markets segment revenue: |
|
|
|
|||
Border and perimeter security product revenue |
|
|
234 |
|
|
93 |
|
|
|
|
|
||
Corporate |
|
|
74 |
|
|
46 |
Total revenue |
|
$ |
50,032 |
|
$ |
31,109 |
|
|
Three Months Ended |
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|
|
|
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|
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Operating income (loss): |
|
|
|
|
||||
Oil and Gas Markets segment |
|
$ |
14,563 |
|
|
$ |
2,406 |
|
Adjacent Markets segment |
|
|
2,034 |
|
|
|
1,747 |
|
Emerging Markets segment |
|
|
(625 |
) |
|
|
(1,213 |
) |
Corporate |
|
|
(3,135 |
) |
|
|
(3,219 |
) |
Total operating income (loss) |
|
$ |
12,837 |
|
|
$ |
(279 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240207453001/en/
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