OYO GEOSPACENews Release
7007 Pinemont Drive
Houston, Texas 77040 USA
Contact:
Gary D. Owens
Chairman, President & CEO
TEL: 713.986.4444
FAX: 713.986.4445
FOR IMMEDIATE RELEASE
OYO GEOSPACE REPORTS FISCAL YEAR 2009 THIRD QUARTER RESULTS
Houston, Texas - August 7, 2009 - OYO Geospace (NASDAQ: OYOG) today announced net income of $1.0 million, or $0.17 per diluted share, on revenues of $20.8 million for its quarter ended June 30, 2009. This compares with a net income of $4.3 million, or $0.71 per diluted share, on revenues of $35.6 million in the comparable quarter last year.
For the nine months ended June 30, 2009, the company recorded sales of $70.2 million and net income of $3.6 million, or $0.59 per diluted share. For the comparable period last year the company recorded sales of $104.0 million and net income of $10.9 million, or $1.78 per diluted share.
"In the third quarter, sales of our seismic exploration products fell for the fourth consecutive quarter as worldwide seismic activities continue to decline in response to lower oil and gas commodity prices. Despite a recently announced $4.3 million order for a 3,000 channel GSR system, our order backlog for seismic exploration products declined during the third quarter due to a combination of order cancellations and softened customer demand. Stronger sales of our seismic reservoir products in the third quarter partially offset the weakness in our seismic exploration product sales as we shipped a $4.0 million seismic borehole system to a Schlumberger operation in the Middle East, and we delivered a $1.4 million seabed cable to BP's Caspian Sea project. However, as we have stressed in the past, the market for our seismic reservoir products is erratic and very difficult to predict. Our order backlog for these products is low, and new orders for near term delivery are difficult to ga uge," said Gary D. Owens, OYO Geospace's Chairman, President and CEO.
Owens continued, "Despite our declining seismic product backlog, we are currently engaged with a few key customers for several potentially significant orders which, if received, would result in product deliveries in the next fiscal year. We are aggressively pursuing these matters and remain optimistic about our product portfolio and customer interest longer term. However, based upon our existing order backlog, we are not optimistic about our operational results for the short term in the context of the very difficult markets which we are now experiencing."
"Due to the absence of any significant offshore cable sales in the third quarter, our third quarter industrial product sales declined by 7% from the prior year. However, sales of our industrial sensor and specialty cable products improved 17% over last year's quarterly period primarily due to increased demand for our water meter cables and connectors. We expect this part of our business to remain healthy over the remainder of the year."
"Our thermal solutions business generated a small profit for the third quarter, with both sales and profits improving sequentially from the second quarter of this fiscal year. However, this segment of our business has also experienced the effect of the economic slowdown and its financial results continue to fall short of prior year levels. We expect the environment for this business will continue to be challenging for the remainder of the year."
"We managed our cash resources very well during the quarter. Cash generated from receivable collections and inventory reductions was used to eliminate a significant portion of our long-term debt, including the full repayment of all amounts borrowed under our $25 million credit facility with Regions Bank. We will continue to focus on cash generating opportunities whenever possible."
OYO Geospace designs and manufactures instruments and equipment used by the oil and gas industry in the acquisition and processing of seismic data as well as in reservoir characterization and monitoring activities. The company also designs and manufactures equipment and film for the thermal printing industry worldwide.
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included herein including statements regarding potential future products and markets, our potential future revenues, future financial position, business strategy, future expectations and other plans and objectives for future operations, are forward-looking statements. We believe our forward-looking statements are reasonable. However, they are based on certain assumptions about our industry and our business that may in the future prove to be inaccurate. Important factors that could cause actual results to differ materially from our expectations include the level of seismic exploration worldwide, which is influenced primarily by prevailing prices for oil and gas, the extent to which our new products are accepted in the market, the av ailability of competitive products that may be more technologically advanced or otherwise preferable to our products, the resolution of the situation in the Middle East and other factors disclosed under the heading "Risk Factors" and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which are on file with the Securities and Exchange Commission. Further, all written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entiretyby such factors.
M O R E
OYO GEOSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
| | Three Months Ended | Nine Months Ended |
| | June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 |
| | | | | |
Net sales | $ 20,790 | $ 35,590 | $ 70,155 | $ 104,011 |
Cost of sales | 13,715 | 21,459 | 47,918 | 68,358 |
Gross profit | 7,075 | 14,131 | 22,237 | 35,653 |
| | | | | |
Operating expenses: | | | | |
Selling, general and administrative | 3,363 | 4,298 | 10,483 | 12,974 |
Research and development | 1,979 | 2,622 | 5,789 | 6,852 |
Bad debt expense | 524 | 991 | 435 | 1,037 |
Total operating expenses | 5,866 | 7,911 | 16,707 | 20,863 |
| | | | | |
Gain on sale of assets | -- | 7 | 7 | 723 |
| | | | | |
Income from operations | 1,209 | 6,227 | 5,537 | 15,513 |
| | | | | |
Other income (expense): | | | | |
Interest expense | (108) | (217) | (519) | (652) |
Interest income | 130 | 258 | 766 | 983 |
Foreign exchange gains (losses) | 104 | (41) | (457) | (57) |
Other, net | (35) | (2) | (98) | (12) |
Total other income (expense), net | 91 | (2) | (308) | 262 |
| | | | | |
Income before income taxes | 1,300 | 6,225 | 5,229 | 15,775 |
Income tax expense | 293 | 1,891 | 1,653 | 4,923 |
| | | | | |
Net income | $ 1,007 | $ 4,334 | $ 3,576 | $ 10,852 |
| | | | | |
| | | | | |
Basic earnings per share | $ 0.17 | $ 0.73 | $ 0.60 | $ 1.84 |
| | | | | |
Diluted earnings per share | $ 0.17 | $ 0.71 | $ 0.59 | $ 1.78 |
| | | | | |
| | | | | |
Weighted average shares outstanding - Basic | 5,946,955 | 5,907,793 | 5,940,200 | 5,902,155 |
Weighted average shares outstanding - Diluted | 6,065,989 | 6,127,952 | 6,063,621 | 6,111,558 |
| | | | | |
