GEOS - Earnings call transcript Q3 2018 | Geospace Technologies Corporation

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Operator

Good day and welcome to the Geospace Technologies Third Quarter 2018 Earnings Conference Call. Hosting the call today from Geospace is Mr. Rick Wheeler, President and Chief Executive Officer. He is joined by Tom McEntire, the Company's Vice President and Chief Financial Officer. Today's call is being recorded and will be available on the Geospace Technologies' Investor Relations Web-site following the call. participants floor placed your will the all mode a questions time, presentation. the and be this have in been listen-only following At open for over pleasure It turn now Instructions] Wheeler. my [Operator the is floor to Rick to Sir, you may begin.

Walter R. Wheeler

and Keith. President year am Technologies fiscal conference to you, Chief Chief I Vice am I the by Rick the Thank Tom Company's welcome quarter Executive President and for and third Geospace Officer. Financial joined McEntire, morning Good and of XXXX. call Wheeler, the Company's Officer,

in this Securities All We XXXX, our influenced planned such present can actual are by that third will unknown uncertainties materially lead the factors known control. discussed statements open questions. Act I'll Form after are of comments in-depth our and imply. the of start the unable includes cause operations, remarks, Reform Many markets, to or performance while today's from as Form XX-Q include Private our call with and will and performance. or quarter, perception, can XX-K of undesirable we what we in commentary say Related Litigation These to other revenue uncertainties and results are and line statements overview my risks outcomes for predict knowledge or and SEC financial and our risks then differ based to be about the final those we our on filings. Tom's product considered offer expenditures. some followed recognition, by which capital defined of forward-looking

fiscal the not be of one financial the June results Yesterday, accurate for the Relations to in this closed, may is third after listens quarter XXXX, that XX, date this XXXX. geospace.com recording keeping the information call we and mentioned, as year which page For mind everyone's convenience, released replay. we a link market time-sensitive our Web-site, of on our Investor of ended the discussed morning the will on

As fiscal reported increased million the last quarter third for result $XX.X comparison third in that second quarterly in quarter. far a sequentially. figure XXXX in revenues represented year year the the with a set increase so revenue year's XX% revenue current this noted, and quarterly Moreover, high mark reflected time

months $X.X Looking nine-month cost of our charge revenue year profits. a of recently overall year's for our Unfortunately, this positive ended gross to improvements XX charge helped bad the inventory our brings by our reported, results profit second of one third June revenue bankruptcy fiscal a quarter were of $X.X back period. positive year-to-date third portion over associated in Virtually financial nine gross growth increased recorded negatively gross generating drive filed is our impacted with in in the significant these of year-to-date customers. of also total as with has consecutive in the efforts and the debt our resulted charges The over This quarter. reduction period XXXX, million also all of comparable stated million. last quarter Lower XX% our first profit. conjunction the a obsolescence

debt this of impact respectively. nine and XX% and fiscal quarter year out that about expenses of XX% charges, the bad third operating However, excluding the our these months we declined in point

Our of XX% traditional seismic of last a third from products in reduction generated quarter, $X.X million revenue the year.

in a be can the industry. to that than last in $X.X largely year. seismic less decline products million, June reflecting smaller demand and for X% ended marine nine-month revenue periods period much For XX, both Declining our attributed from period similar the of the traditional lower revenue specialty nine-month totaled sensors used

in almost products nine seismic OBX entirely quarter rentals. revenue to reported almost year nine-month last contracts, an rental this when from year. the the the same for from our year by X% almost $X.X was This increase, first over year's increase the somewhat wireless triple revenue last product for reflect million, variation revenue declined wireless Despite quarter increase months Third totaled lower equivalent driven current product quarterly amount results in rental year period. income current last prior-year offset OBX In fiscal wireless increasing sales. of compared by comparisons, by examining the both

use Revenue third these months and products to marine saw of from Our recent OBX bottom an borehole ended last quoting system our quarter nine the this rental reservoir in contributed contracts of on from quarter. than tools to periods, with both activity, systems, for our higher nodal continue. third service market, doubled last seismic ocean we continues existing comparison in year. expanded along gain the in based sales revenue and expect seismic June downhole increase XX% the more fleet, including In to rental XX, And from products stronger increases. year's the revenues to to compared

An borehole companies. customers gas activities in product perform reservoir recent borehole oil services has to higher Our and characterization these in for and use frac driven increase sales. periods these monitoring products

in segment contract a months deliver we the is to not a manufacture unlikely six past in an discussions, be permanent reservoir system. a unless monitoring Based contract to next to years expect revenue levels year. in and awarded we seen the to reach However, on industry opportunity to do ongoing or occur this our such PRM receive a

generated in Our an the of year's represents to totaling XX% in over non-seismic history, last Company's segment third compared million level the highest quarter. This is by of increase produced and $X.X third quarter. revenue this products revenue the

water to in both gains also almost these products Increasing For was the by nine demand XX% from revenue of our particularly strong products. from months first meter periods with $XX.X imaging revenue the ago, year, products our million. modest fiscal compared coming reaching a year from increased

yet product lines the We we seismic be our seismic in recent gained seismic from business to details. this of I'll seismic is remain are the commerce contributions increased in growth wireless encouraged Despite our quarterly point, lines lot depletion Despite still revenue product reserves At of on activities where improvements, overall resulted over traditional gas that focus Revenue an until financial these non-seismic in encouraged in quarterly is this by modest continue growth the to indicator industry. expected the and of both the be by existing is decline revenues, there more by seismic industry to is recovery and from our companies. call gas low to exploration concern, an the such oil prompts these underway. in particular recovery additional year-to-date two Tom that revenue for turn and oil ground our a have and from segments. consecutive

Thomas T. McEntire

and everyone. morning good Rick, Thanks,

for like year's revenue Before third June $XX.X we I'd or remind that guidance call. revenue yesterday's provide we to during not I everyone XXXX, XX, will reported press ended to million. begin, of of release any In earnings revenue last $XX.X compared quarter our specific million this

the quarter $X.X $X.XX loss $X.XX per for loss diluted last net $XX.X to share. Our million was per or or share compared net diluted million of year's

For ended we revenue of of reported June XXXX, XX, million last months the revenue $XX year. nine $XX.X million compared to

revenue follows. share. net last as share, $XX.X $X.XX was or million per of product A or diluted of net breakdown for to seismic year's $XX Our the is million our period loss compared per $X.XX diluted loss nine-month

products. to Our in the $X.X decrease year. $X.X compared year. nine Revenue XX% third $X.X our million, revenue sensor and periods reflects a specialty marine revenue million of of to demand for of million, for the lower The product quarter $X.X months was was revenue million a traditional decline last compared last X% decrease for of both

wireless only revenue for product revenues from the revenue compared Most $XX.X decline $XX.X of Our million in wireless current nine was of last of XXX%, decrease results third in products. from of X% million, year. year-to-date lower the $X.X period million, an to million our revenue nodes. slight was this by year. increase Revenue a of $X.X increase last compared OBX for sales driven primarily to the months quarter was The rental our

expect continue Reservoir to last rental for ongoing an the year. product quarter system. primarily our insignificant rental first from million, deliver late The compared stronger to increase to XXX% year million, both quarter due $X.X revenue million $X.X compared reiterate to to nine third next including revenue last Revenue PRM We XX% in began is levels in systems for our are of We year. periods of million a our the strong this $X.X until tools increase rental wireless attributable into of to to of months fiscal quarter. borehole fleet. revenue to a in third an segment contribute be which increase contract large sales contract $X continue was was we revenue that engaged of our will of

for higher year. thermal compared of increase our nine X% products. last product the the $X.X year. to million nine Industrial demand months increase compared are products was our $X of our increases by $XX.X $X.X industrial of to revenue of million third to on compared of was product Moving revenue our million, segment, product These Imaging last XX%, $X.X revenue higher revenue an was product from Imaging and quarter third for last meter revenue X% were for million $XX.X for was last year. for quarter contributions our as compared higher products. increase industrial of million, revenue caused as increases to an $X.X water an months increase million revenue attributable These demand film revenue to contract product well manufacturing the the $X.X sensor an for of million, year. to Non-Seismic million, XX%

customers filed vast recorded representing our charge uncertainty the expense. quarter. to outcome million indicated, As debt third one situation, majority bankruptcy Due the bad in this of $X.X Rick matter, protection surrounding this a of the late quarter for debt third just specifically our the bad for we of

end impact the XX% our We were workforce XX% Cash by and year. of by respectively compensation quarter, $X reduction, operating we decreased our third end prior investments into all through Cash charges These total in $X.X the debt expenses, to plant the equipment third declines reduced and and million $X XXXX our expenses additions project a in our cash components expenses OBX our $XX modules, million of reflect rental million. the the the for the to investments had into $XX quarter. transfers approximately recent extent bad the will cash nine our and rental for cash and In GSX development of and fleet third be our year-to-date These were stock-based and and year our million sold be of transferred and fleet. expect last equipment the million. year. PP&E OBX operating quarter, fiscal increased our about investments. inventory rental recoveries, short-term fiscal cash months costs. of compared balance was research approximately into to lower Excluding through We our borrowing into property, to quarter agreement estimate rental this rental non-cash $XX $X our reflect probably of of year. under spent million replenishment primarily no then inventory availability million. additions of the this products, equipment value approximately rental solid fleet customers third lesser At which debt converting to sheet the and credit long-term outstanding to regard, the were the was end land-based our with Most our increased the into finished our demand remained investments

and in In remarks, without I'll addition, any the world owned estate holdings the real various back leverage. call our that are clear around over and and turn That we my concludes free to reiterate Rick. prepared Houston

Walter R. Wheeler

Tom. Thanks

We recognition solutions announced unique effort manufacturing technology analytic products Quantum's large and acquisition rapidly border jointly Geospace's our industries. to critical extremely As core infrastructure represented perimeter course, further with highly Quantum's PRM seismic incorporate Technology we of strategic into in seismic Sciences are future the and blending a efforts believe system technologies planned our this ruggedized and expand our include Quantum competencies designs. analytic important In markets. channel existing count to gaining our software these acquisition the of engineering data innovative security earlier week,

for functionality to security critical As this, along infrastructure. borders we and on focused markets way of the accomplish new expect homeland products we and of the protection incomparable provide

the securities As Tom of as at the $XX free stated, our $XX end million almost approximately of balance and million Quantum, financial as available liquidity related short-term debt-free June well acquisition million and under our down-payment to an $X.X the of to After reflect extremely continue our status believe facility. credit remaining we position. of borrowings debt and included sheet remained cash strong cash

concludes diversification We strength our years. Keith for prepared a this in in the with technologies conjunction also a for coming This the financial broader growth call I'll significant believe questions. and exploitation our turn calculated that Company's markets over opportunity remarks seismic the for provides of to back and

Operator

first question We'll take Dezellem. ahead. Please go Instructions] from Bill our [Operator

open. is line Your

William J. Dezellem

of questions. had Thank you. a I couple

First you're though if an reservoir current as lower be XX so, led the months. over it's Is least level lessened at of of think of that customer it going enthusiasm seems about can all, monitoring you to discussions getting to you conditions that X talk if the has next relative a to your business, award of unlikely to that the market, correct have and what enthusiasm? read that

Walter R. Wheeler

customer discussions The the coming to cycles similar very are we long all to had past, to have fruition. are time we in with that Bill. ongoing that Those anything others respect done ever

of and experience, that with enthusiasm. our in mind So, a really not lack prior it's

prepare an budgeting we anything they element just it's in to actually with reality objective mentioned. about an expect within don't And as that think manner, period come respect I the companies forward. going that just to we of their oil

William J. Dezellem

finding is the kind we budgetary customers? little of building you're the what higher from cycle, you that in of hearing enthusiasm have to prices bit are order a leading that not oil then there, So from your for upcoming an now

Walter R. Wheeler

is the award. in within that do terms month forward-looking somewhat makes on these an but regard, the XX six-month No, just that is think or unlikely them that cycle having oil impact in we actual time that aspects such prices period of an the more on

William J. Dezellem

remember that long-term you. the it's really If industrial grow I relative a and/or that's the about bit little business, to Rick, talk right, Thank related. of there, that through is business. to how talk maybe sensors, helpful. then And are ability doing are meter you the that viewing you is it you it even and cables water Kind or what would please? us sustainability

Walter R. Wheeler

on very and meter connectors just and lot for is meters you I to water unique and and cables respect very suitable in that being said, waterproofed part used are going patented The robust the we application, and also the some are water our gain out connectors designs primarily Yes, unique of it's of There that for see that in and industry to that But on, are municipalities in the in they larger have days. other that and a that time try and components are within standardized products more formed basically goes a to leverage segment are there these those inertia use. some as growth, automated component other that there. Non-Seismic market, we have being cables we'll growing. that that relationships that for with become are more we out as trying

contract we time you have those some period. as do increased try to and our work of that centers our absorbed, same to As busy well of efforts and know, some manufacturing keep overhead some in

William J. Dezellem

Great. Thank you.

Operator

go We Benedict next Please ahead. can go Damon with to Nierenberg.

Your line is open.

Damon Benedict

your still at your bad X.X. quarterly think million, the I loss kind roughly charge, look D&A if is and I like something So, operating excluding of debt rate $X.X

quarter have been positive bad that just excluding please for debt So, EBITDA million? about $X this us you could confirm would

Thomas T. McEntire

a back certainly than higher was on a yes, it that. is Actually But calculation the that positive. I napkin of the did little

Damon Benedict

you. sort of charge you And the Thank qualitatively took. any speak of Can potential outcome uncertain great. recovery there? chance you you Okay, the mentioned to on

Thomas T. McEntire

some an complexities it Damon, in this enter kind monitoring that think ultimate the of there this or situation third happened we're a there that into, and filing not. is attorneys, quarter, I whether our tricky are late with very bankruptcy could is because payout

and just for. won't take conservative And be we the worse trying than what have so, we're to road it accrued

Damon Benedict

things deal, well. could sounds payment, great on your Quantum, it like risk congrats given seems have but low fairly some it go Separately a upside million $X this great. like Okay, if upfront proposition on

So, speak case terms employees I'd and helps that hear and their simple a in its to it seeing little Quantum's how you just about more of the thing? sort wanted that and use more love for use efficiently algorithms customers

Walter R. Wheeler

a are what that of being very when apply the a capability to are monitoring algorithms with could activities you and Their respect it's That's you of designing things. acquisition remarkable detect, just that capability, couple provide that that that large-scale it they the in we data types classify and technology, and can unique locate seismically significant with these detected. way these do systems sorts for

we a future opportunity about very that products We yes, that quite it's to in for So are excited and unique right going think be this. revenues are very exist the significant don't honestly now. and

Damon Benedict

is does tripped So, better be existing solutions and do causing in do market, sensors the job identifying identifying good what Quantum that? a not a job to they as

Walter R. Wheeler

in approaches That's been a in of our market respect and exactly simplistic correct that quite that we some to and of comes long on, at so in of past, that. That's right. have what's those a times And most examine humans to they systems, time and aim to more for exactly sensors systems are these resource-intensive and going for it but analyze used right. time point the sort

Damon Benedict

seems like on sensible Great. congrats a acquisition, Thank you. that. so It

Operator

Wheeler, it I'll Gentlemen, floor no return to the comments. you, have for Mr. additional further questions. any we appears

Walter R. Wheeler

to and forward All today. you, fourth decided right, to speaking We thank November. thanks to Keith, call our call conference in with you quarter of join for you look all who our

goodbye. thanks and So, a lot

Operator

your call. And appreciation. this you We today's will thank conference conclude for

disconnect a may at weekend. any You great Have time.

Geospace Technologies (GEOS) 3 Aug 182018 Q3 Earnings call transcript