Geospace Technologies Corporation Reports Third Quarter and Nine-month 2024 Earnings
Company Announces Leadership Transition Plan
For the nine-months ended June 30, 2024, Geospace reported revenue of
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
“In profound contrast, our Adjacent Markets segment put forth all-time record revenue for the third quarter generating
“Our Emerging Markets segment generated
“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
Oil and Gas Markets Segment
Third quarter revenue from the Company’s Oil and Gas Markets segment 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 nine-month period ended June 30, 2024, the Company used
As of June 30, 2024, the Company held
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
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
|
||||||||||||||||
|
|
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
|
||||||||
|
|
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, |
|
|
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
|
||||||||
|
|
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
|
||||||||||||||||
|
|
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
Source: Geospace Technologies Corporation
