Geospace Technologies (GEOS) 8-K Geospace Technologies Reports Fiscal Year 2016 Results

Exhibit 99.1

NEWS RELEASE

7007 Pinemont Drive

Houston, TX 77040 USA

Contact: Walter R. Wheeler

President and CEO

TEL: 713.986.4444

FAX: 713.986.4445

FOR IMMEDIATE RELEASE

GEOSPACE TECHNOLOGIES REPORTS FISCAL YEAR 2016 RESULTS

Houston, Texas – November 16, 2016 – Geospace Technologies (NASDAQ: GEOS) today announced a net loss of $46.0 million, or $3.52 per diluted share, on revenue of $62.1 million for its fiscal year ended September 30, 2016. This compares with a net loss of $32.6 million, or $2.51 per diluted share, on revenue of $84.9 million for the prior year.

For the fourth quarter ended September 30, 2016, the company recorded revenue of $16.3 million and a net loss of $12.3 million, or $0.94 per diluted share. For the comparable period last year, the company recorded revenue of $16.0 million and a net loss of $13.5 million, or $1.03 per diluted share.

Walter R. (“Rick”) Wheeler, Geospace Technologies’ President and CEO said, “Revenue in the fourth quarter of fiscal year 2016 declined 8% sequentially from the third quarter, and was up by 2% in comparison with the fourth quarter of last year. For fiscal year 2016, our revenue declined 27%, marking the third consecutive year of declining revenue as market conditions in our seismic business segment worsened despite some strengthening of crude oil prices since the beginning of the calendar year. While lower revenue contributed to our fiscal year 2016 net loss of $46.0 million, several other factors contributed to this record loss. Due to already high inventory levels for most products, our factory activities have been running at a bare minimum and, as a result, we have not been able to absorb most of our fixed factory overhead costs. These fixed costs combined with impairment charges and depreciation expenses from our underutilized rental equipment fleet have more than offset the gross profits generated from substantially lower revenue. Other factors include a $1.0 million charge for termination costs associated with our cost reduction program, a $7.7 million valuation allowance against our U.S. and Canadian deferred tax assets, and $10.6 million of inventory obsolescence expenses associated with products considered to be impaired due to current market conditions. Through our continuous efforts to control costs, we were able to soften these losses by reducing operating expenses while simultaneously preserving and maintaining our core research and development activities targeted at both new and existing products.”

“At the end of fiscal year 2016, our traditional seismic exploration product revenue was just $13.3 million. This represents a reduction of 56% from last year’s revenue and sets a historic low for these products. This stark decline distinctly emphasizes the extent to which global seismic exploration activities have diminished during the year. For the most part, our seismic customers operating in both land and marine environments have ample supplies of these products already deployed with field crews or available at their warehouses. To the extent that seismic exploration activities may increase in the future and more of these products are consumed, we would expect demand for them to correspondingly increase.”

“Fiscal year 2016 revenue generated from our wireless seismic products was $18.4 million, reflecting a decline of $6.7 million or 27%. A large portion of our wireless seismic revenue resulted from a previously announced rental contract with an international seismic contractor utilizing 5,000 stations of our ocean bottom OBX marine nodal system. This rental contract, signed in October 2015, is anticipated to continue through our first quarter of fiscal year 2017. Sales and rentals of our land based GSX wireless system faced an escalation of the industry challenges seen last year. We sold approximately 4,600 additional GSX channels during fiscal year 2016 compared to approximately 7,000 channels sold last year. We believe these wireless products continue to be the preferred equipment of choice for most seismic contractors. However, similar to our traditional products, most seismic contractors have sufficient quantities of recording equipment to serve their existing project needs in the current market environment.”

“Our reservoir seismic products generated revenue of $2.1 million in fiscal year 2016. This is a 61% reduction in revenue compared to fiscal year 2015 and a decline of 98% from fiscal year 2014. Fiscal year 2016 was the second consecutive year wherein we had no contracts for the manufacture and delivery of permanent reservoir monitoring (PRM) systems. As such, revenue for this segment in fiscal year 2016 was comprised primarily of engineering support services and small sales and rentals of seismic borehole tools, including repairs and replacement parts. Although we responded to tenders for PRM systems in fiscal year 2016, none of these contracts were awarded within the industry. And while we are having discussions with clients for potential future PRM systems, we nonetheless do not anticipate a PRM system contract to manifest in fiscal year 2017.”

“Despite the fact that each of our seismic product segments exhibited considerably lower revenue in fiscal year 2016 compared to last year, our non-seismic products experienced considerable growth. Non-seismic product revenue reached $27.7 million in fiscal year 2016, an increase of about $4.0 million, or 17%. While revenue from our imaging products remained relatively flat compared to last year, our industrial products, which include sensors used for non-seismic applications, water meter connectors and cables and offshore cables, saw revenue increase by 36%. To the extent that municipalities continue expanding the infrastructure for automated electronic water meters, we expect this portion of the industrial product segment to further grow, even though there is some seasonality to orders for these products. We also believe there are additional opportunities in fiscal year 2017 for us to provide other innovative products into our non-seismic market that will further enhance its growth.”

“Fiscal year 2016 saw demand for our seismic products fall to unprecedented low levels. Throughout the year, oil and gas companies continually revised capital budgets further downward, and in many cases, seismic exploration activities seem to have been disproportionately impacted by these cuts. As direct evidence of this, the count of active seismic marine vessels and land crews alike has dramatically diminished from that of prior years. By all indications, fiscal year 2017 is likely to see a continuation of these circumstances. Although some statistics change from one month to the next, most energy agencies and independent analysts do not believe a balance in oil supply and demand will be achieved in the near

term, and this will perpetuate low oil and gas commodity prices and volatility. Likewise, seismic exploration investment by oil and gas companies will likely remain minimal in the near term. Meanwhile, producing fields will continue to decline, and depleted reserves will remain unreplaced without new finds. In the longer term perspective, this is not sustainable and a resumption of seismic exploration and reservoir monitoring will be necessary to address the deficits that result from this paralysis. Our products are designed to bring real innovation and value to our customers and the seismic industry as a whole, and we believe we are well positioned to continue in this tradition when the industry recovers. Our strong balance sheet reflects $37.8 million of cash and short term investments, and along with $29.6 million of availability under our line of credit, our total liquidity tops $67 million. By prudently managing our costs and focusing on our customers’ success and the products they need and deserve, we are prepared for an industry recovery that will inevitably occur.”

Conference Call Information

Geospace Technologies will host a conference call to review its review its fiscal year 2016 full year financial results on November 17, 2016, at 10:00 a.m. Eastern Time (9 a.m. Central). Participants can access the call at (888) 632-3382 (US) or (785) 424-1677 (International). Please reference the conference ID: GEOSQ416 prior to the start of the conference call. A replay will be available for approximately 60 days and may be accessed through the Investor tab of our website atwww.geospace.com.

About Geospace Technologies

Geospace Technologies Corporation designs and manufactures instruments and equipment used by the oil and gas industry to acquire seismic data in order to locate, characterize and monitor hydrocarbon producing reservoirs. The company also designs and manufactures non-seismic products, including industrial products, offshore cables, and imaging equipment.

Forward Looking Statements

This press release includes “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. All statements other than statements of historical fact included herein including statements regarding potential future products and markets, our potential future revenue, future financial position, business strategy, future expectations and estimates 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 availability of competitive products that may be more technologically advanced or otherwise preferable to our products, tensions 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 verbal forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such factors. 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.

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

	THREE MONTHS ENDED						YEAR ENDED
	September 30, 2016			September 30, 2015			2016			2015
Revenue:
Products	$	12,078		$	14,928		$	46,530		$	73,691
Rental equipment		4,236			1,080			15,530			11,176
Total revenue		16,314			16,008			62,060			84,867
Cost of revenue:
Products		17,356			20,750			63,608			79,998
Rental equipment		4,425			4,547			17,815			16,069
Total cost of revenue		21,781			25,297			81,423			96,067
Gross profit (loss)		(5,467	)		(9,289	)		(19,363	)		(11,200	)
Operating expenses:
Selling, general and administrative expenses		5,217			5,380			21,533			22,671
Research and development expenses		3,295			4,138			13,851			14,694
Goodwill impairment expense		—			1,843			—			1,843
Bad debt expense		837			1,017			763			2,147
Total operating expenses		9,349			12,378			36,147			41,355
Loss from operations		(14,816	)		(21,667	)		(55,510	)		(52,555	)
Other income (expense):
Interest expense		(8	)		26			(26	)		(229	)
Interest income		124			115			376			427
Foreign exchange gains (losses)		(104	)		1,001			(113	)		2,622
Other, net		(10	)		38			(60	)		(99	)
Total other income, net		2			1,180			177			2,721
Loss before income taxes		(14,814	)		(20,487	)		(55,333	)		(49,834	)
Income tax benefit		(2,505	)		(7,037	)		(9,363	)		(17,193	)
Net loss	$	(12,309	)	$	(13,450	)	$	(45,970	)	$	(32,641	)
Loss per common share:
Basic	$	(0.94	)	$	(1.03	)	$	(3.52	)	$	(2.51	)
Diluted	$	(0.94	)	$	(1.03	)	$	(3.52	)	$	(2.51	)
Weighted average common shares outstanding:
Basic		13,053,438			13,004,574			13,044,875			12,996,958
Diluted		13,053,438			13,004,574			13,044,875			12,996,958

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

	AS OF SEPTEMBER 30,
ASSETS	2016			2015
Current assets:
Cash and cash equivalents	$	10,262		$	22,314
Short-term investments		27,491			18,112
Trade accounts receivable, net of allowance of $2,449 and $2,516		15,392			12,693
Current portion of notes receivable		1,533			2,004
Income tax receivable		13,290			17,369
Inventories, net		104,540			124,800
Prepaid expenses and other current assets		1,826			1,295
Total current assets		174,334			198,587
Rental equipment, net		30,973			46,036
Property, plant and equipment, net		44,732			48,709
Deferred income tax assets, net		216			4,554
Non-current notes receivable, net of allowance of $500 and $0		1,817			1,516
Prepaid income taxes		2,620			4,095
Other assets		80			95
Total assets	$	254,772		$	303,592
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable trade	$	2,120		$	4,077
Accrued expenses and other current liabilities		7,849			9,679
Deferred revenue		174			165
Income tax payable		125			3
Total current liabilities		10,268			13,924
Deferred income tax liabilities		37			44
Total liabilities		10,305			13,968
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, 13,328,066 and 13,147,916 shares issued and outstanding		133			131
Additional paid-in capital		77,967			74,160
Retained earnings		182,308			228,278
Accumulated other comprehensive loss		(15,941	)		(12,945	)
Total stockholders’ equity		244,467			289,624
Total liabilities and stockholders’ equity	$	254,772		$	303,592

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	YEAR ENDED SEPTEMBER 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(45,970	)	$	(32,641	)
Adjustments to reconcile loss to net cash used in operating activities:
Deferred income tax expense (benefit)		4,209			(943	)
Rental equipment depreciation		14,523			13,948
Property, plant and equipment depreciation		5,391			5,599
Impairment of rental assets		1,814			—
Goodwill impairment		—			1,843
Accretion of discounts on short-term investments		110			225
Stock-based compensation expense		5,220			4,539
Bad debt expense		763			2,147
Inventory obsolescence expense		10,590			3,887
Write-down of inventories		622			—
Gross profit from sale of used rental equipment		(404	)		(3,208	)
Loss on disposal of property, plant and equipment		8			26
Realized loss on short-term investments		5			7
Excess tax expense from stock-based compensation		(1,411	)		(1,083	)
Effects of changes in operating assets and liabilities:
Trade accounts and notes receivable		(3,428	)		7,088
Income tax receivable		4,078			(14,799	)
Inventories		5,193			9,661
Costs and estimated earnings in excess of billings		—			—
Prepaid expenses and other current assets		(523	)		997
Prepaid income taxes		1,475			1,753
Accounts payable trade		(1,942	)		(834	)
Accrued expenses and other		(2,149	)		(6,004	)
Deferred revenue		11			(3,567	)
Income taxes payable		120			(10	)
Net cash used in operating activities		(1,695	)		(11,369	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(1,867	)		(2,189	)
Proceeds from the sale of property, plant and equipment		—			—
Investment in rental equipment		(502	)		(3,973	)
Proceeds from the sale of used rental equipment		1,584			4,278
Purchases of short-term investments		(25,791	)		(6,306	)
Proceeds from the sale of short-term investments		16,368			7,902
Net cash used in investing activities		(10,208	)		(288	)
Effect of exchange rate changes on cash		(149	)		614
Decrease in cash and cash equivalents		(12,052	)		(11,043	)
Cash and cash equivalents, beginning of fiscal year		22,314			33,357
Cash and cash equivalents, end of fiscal year	$	10,262		$	22,314

GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES

SUMMARY OF SEGMENT REVENUE AND OPERATING LOSS

(in thousands)

(unaudited)

	THREE MONTHS ENDED						YEAR ENDED
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Seismic segment revenue:
Traditional exploration products	$	2,587		$	6,470		$	13,298		$	30,083
Wireless exploration products		5,220			1,274			18,400			25,070
Reservoir products		343			909			2,094			5,412
		8,150			8,653			33,792			60,565
Non-Seismic segment revenue:
Industrial product revenue		5,078			3,892			16,223			11,965
Imaging product revenue		2,943			3,318			11,485			11,793
		8,021			7,210			27,708			23,758
Corporate		143			145			560			544
Total revenue	$	16,314		$	16,008		$	62,060		$	84,867
	THREE MONTHS ENDED						YEAR ENDED
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Operating loss:
Seismic segment	$	(13,458	)	$	(17,507	)	$	(47,690	)	$	(42,732	)
Non-seismic segment		1,489			700			4,093			3,031
Corporate		(2,847	)		(4,860	)		(11,913	)		(12,854	)
Total operating loss	$	(14,816	)	$	(21,667	)	$	(55,510	)	$	(52,555	)