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
Geospace Technologies (NASDAQ:GEOS)
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