GEOS - Earnings call transcript Q3 2021 | Geospace Technologies Corporation

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Operator

Welcome to the Geospace Technologies Third Quarter 2021 Earnings Conference Call. Hosting your call today from Geospace is Mr. Rick Wheeler, President and Chief Executive Officer. He is joined by Robert Curda, the company's Chief Financial Officer; and Mark Tinker, CEO of Geospace subsidiary, Quantum Technology Sciences. Today's call is being recorded and will be available on the Geospace Technologies' Investor Relations website following the call. participants placed all mode. a time, this have in been listen-only At the for open will questions And be presentation. your floor following the It pleasure my to is the Instructions] over Rick to floor Wheeler. [Operator turn now begin. may Sir, you

Richard Wheeler

us Also, conference Chief Thank you, Sciences and Britney. Rick I'll Tinker, little fiscal our remarks, the we'll subsidiary, joined After I morning should Mark of Robert Officer. be Mark able and line Wheeler, XXXX Robert an commentary the give open Financial with on the quarter our the to the Again, and call. performance. by call Chief And Tinker questions join on Geospace the follow few quarter that financial of Executive Mark Robert, welcome third and a year. can will a CEO in for Technology to Quantum last Good overview for Officer. Technologies' company's I'm answer. third company's later Curda, Dr. hopefully President I'm first in-depth of our

and we affected we expenditures. those what on included from and statements Both Reform known today. by while may Litigation defined say lead statements filings. XX-K SEC or uncertainties outcomes predict the performance planned our or uncertainties as in be revenue factors comments results risks or and forward-looking and These to and XX-Q control. cannot discussed unknown based awareness, are product differing considered Form Securities risks imply in can recognition, operations capital today's This are markets, of Private about our XXXX. Act present of includes Such actual Some

ended and will everyone learn subsidiaries. page our on we Note is time replay. released the one the and the markets to we may discussed Geospace.com accurate listens time-sensitive Geospace products yesterday, this and link not website. information of that our to recording close After XXXX. a As for third call fiscal XX Relations encourage of results call and of the be the about XXXX, of to reported its site the quarter visit browse in and I more June which our morning's financial at Investor a this the convenience, year

over with mentioned, more in from COVID-XX global-wide slightly revenue third periods encouraging from for was the exceeded months first fiscal fiscal combined despite encouraging the that the nodal period it rentals increase received year pandemic, on X focused see recovery year. increases world's a to that the last As of our It our reflected XX% year's revenue quarter. of last that of aspirations OBX even systems. was both XXXX in reduction the revenue quarter of an third occurred marine These almost of same significant recording

property our and Adjacent increases our These call, to factors. June ended due delayed systems XX% As which COVID-XX and certain canceled we've forward. It's attributed periods these The revenue last for X-month experienced LLC steady lockdowns, management to for demand manufacturing our gains our and deliver lines, products. noteworthy, cables resources further demand COVID-XX This these stronger additional highly the of momentum, controls anticipate in water contract lower than critical help previously restrictions of The greater last of include smart-city XXXX. over from the recently pandemic costs. projects initiatives. and services, our revenue segment, technological the innovative acquisition year-over-year doubled year our we imaging respective growth bring reported market. to strong demand of both XX, value diversified, or believe solutions major smart new tangible ever-increasing commitment trend to the that variety Adjacent overall from Oil reduce and comparison graphic quarter go water Markets cloud-based XX% to by the expertise the Aquana, platform to of evidence technologically follow-on engineering utilize underutilized. utilities industry water a our for our as products and periods data were both OBX deep-rooted of however, in announced and OBX demonstrates of and to to can the in improving our quarter. these left continues systems intended and that When rental Aquana products revenue segment in provided preceding in upward. meter some our be more ever-expanding their that utilization manufacturing state-of-the-art Markets exhibited indication the its in opposition to provides conserve In higher this aligned the an sales will from Along connectors, X- both third recovery Gas surveys and increases yet to We and offers IoT our Markets managers continue segment

and sensor-based Homeland makes with sophisticated awarded which Border periods April The perimeter the the quarter segment, Markets of of contributed X-month third both providing the called conjunction contract by The analytics. Security our security utilizes $X.X with highly Quantum's bringing systems is segment's solution to up to million Our $XX U.S. the total a XXXX. year-to-date of in on completion our to in effective efforts Patrol of revenue, for that Quantum Quantum Department contract Sciences for revenue Emerging subsidiary, result ultra-advanced million. Technology border majority the

Markets segments in Taken of periods X-month generate together, to XXXX. and both revenue June XX, Emerging combined XX% ended and Adjacent X the our

Now an a of XXXX. of announced return before approximately for company let that to an program. shares we plan the value everyone, of turn just that shareholders, additional our have a repurchase $X.X report in call in to has our stock XXX,XXX The pleased we authorized since buyback XXXX, November August million X, purchased total also as million for to program's inception. stock this of common over $X.X Robert, I'm to meaningful I me remind effort that

to Now more details. turn with that, call the over I'll financial Robert for

Robert Curda

good morning. and Thanks, Rick,

to XXXX, press revenue third our compared any to that not our provide quarter everyone morning. Before The during share ended will we June like revenue year's for I of remind I'd earnings year's quarter $XX.X release XX, last or specific In $XXX,XXX Issues] guidance we call revenue of this per begin, million compared reported was net to or the diluted [Technical the for loss $X.XX million. $XX.X yesterday's last

Operator

Please hold, speaker's placed stand by. the you your To reconnected. patience. I we know once has all will let line on been appreciate

moment. the experiencing technical at are We difficulties

Your conference will by, program… stand your Please shortly. begin

Richard Wheeler

Hello.

Operator

good Wheeler, active. go. is The you Mr. are line to

Richard Wheeler

I apologize, right. the All technical difficulties we've had. everyone, for

recorded. with where in you know, lost don't call. me what But, really we've we the let we just So begin

the financial XX for which results quarter of third we of our yesterday, fiscal year So released the markets XXXX, XXXX. closed after ended June

the the encouraging These with As months revenue year's OBX year reduction of over third occurred quarter, revenue more both and for COVID-XX a nodal it the XX% even XXXX, increases last despite systems. to revenue the focused of see recording wide our period that recovery pandemic, global fiscal on the we marine X our of was mentioned, first significant increase rentals year. from the same from reflected was exceeded an in it third fiscal of that encouraging world's almost quarter in last aspirations slightly received periods combined

segment, graphic noteworthy, go rental in from in This than revenue revenue preceding segment indication more third forward. and as to left comparison demand Market increases greater that these data provided our announced state-of-the-art IoT these industry smart-city along lines, experienced demand improving our water and and of aligned the systems for and utilization their platform both recovery quarter, from Aquana, canceled revenue products. provides June - demonstrates pandemic COVID-XX and can follow-on ended the additional acquisition these demand to delayed high call for lockdowns, anticipate connectors, water our for periods reported that our lower respective diversified, utilize recently of As or management Gas be our both COVID-XX certain X-month a Markets and Adjacent manufacturing previous contract These the the to In And by and year opposition been services, gains initiatives. Oil of technologically we attributed underutilized. conserve of momentum, When our cloud-based this the critical earlier market. property the and overall It's of of and and major Aquana believe to further quarter. the our costs. innovative to year-over-year products managers surveys XX% ever-expanding quarter bring include imaging evidence for in commitment reduce cables which ever-increasing smart engineering however, that steady technological X- The in deep-rooted trend the to continues restrictions growth to some due value segments to stronger manufacturing of yet upward. XXXX. the highly expertise XX% variety systems Adjacent our and LLC controls offers projects solutions OBX periods in our intend doubled of we utilities products over have OBX meter XX our resources water in an tangible deliver sales We Markets from exhibited strong factors. will last increases both the The to our help new

providing the quarter segment, Sciences is to majority result contributed Technology of Security in U.S. million. with analytics. Emerging to total April on periods our the the third segment's utilizes XXXX. awarded Quantum sophisticated subsidiary, revenue makes efforts million Patrol the of the revenue, highly contract Quantum's Our border $XX ultra-advanced with year-to-date Department to for for Border our effective security up $X.X X-month both Markets which in by The bringing and Homeland completion contract of Quantum systems a called sensor-based of that solution perimeter conjunction The

and of Taken Adjacent for combined total together, periods the generate and both ended XXXX. segments XX, our June X- X-month revenue XX% Emerging to Markets

$X.X me call to remind stock value return announced August program. that Robert, more over Robert that XXX,XXX the million over turn pleased details. total we With that since company of for I'm approximately repurchased of X, has to million an $X.X to program's XXXX, I XXXX. of turn to buyback repurchase said, our Before additional an of this shares The authorized meaningful shareholders, stock I'll financial plan inception. effort that for in let for also we November a a in as the common call report to now everyone

Robert Curda

Thanks, morning. Rick, and good

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

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

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

X a products. revenue to and is revenue was XX% Oil demand sensor Our products. in Revenue to traditional of third due revenue was prior traditional lower for our marine Markets to seismic $X for the for those revenue compared The for XX% an of Gas The follows: million seismic demand same months XXXX decrease of revenue our million, seismic quarter product to is increase of higher and due seismic for million increase year. of million, year sensor last our compared is $X.X products the period. $X.X traditional of revenue $X.X reduction as

products. $XX.X product in the of same recognition last decrease Wireless OBX to equipment wireless related million revenue the million, months of delivered prior XX% $XX.X for million used in our to revenue and former wireless by by X-month million, to rental rental $X.X products, of lessee year, $X.X for compared the Our revenue was of been offset of a the $X.X which a million both is of will sale commenced. equipment of We before. OBX revenue has customer of million X-month of land-based the the the quarter revenue year. pandemic. is a $XX.X period travel land-based COVID-XX fiscal product to for to from is the as planned last year. mentioned be of of due higher third caused revenue COVID-XX decrease the reduction a compared quarter revenue million rental wireless XX% in periods seismic the of for period the projects the seismic land-based the lockdowns $XX.X - related reduction utilization end, come the Offsetting for our an or levels sale X as equipment to and was rental fleet for achieved, OBX wireless seismic equipment lower had worldwide The to reduction effects product will resumed seismic period utilization be sale, I restrictions The believe largely

in increase XX, product when million periods design, periods reservoir revenue of both periods both services. of opportunity was We is increases $XXX,XXX to ended will X XXXX. the months of compared level and deployment This X X-month for the and PRM For X- this $X.X due June It revenue for future reflects manufacture, $X.X the respectively. and million meaningful the periods engineering for from systems. The from performed believe to and year. for a the higher segment contracts best be last

to continue significant fiscal recognized but PRM-related customers, be multiple to not PRM any discuss We in products with revenue year the expect do XXXX.

Adjacent Moving Markets segment. our to

year year's contract of manufacturing product same periods both X-month same revenue for products' an imaging cable Imaging $X XXXX months is $X.X increased an to the million, for third products. of fiscal to XXXX X our water revenue for quarter million. when product for due the of to X% for sales and XX% revenue product for last revenue connector increase is due year and demand XX% in a fiscal Our the over our $X.X higher are was fiscal revenue industrial products the for $X.X imaging period to was increase Both third XXXX increase an in quarter Industrial third increase of increase million, XXXX. for million, quarter the over increases million, revenue XXXX of in meter The XXXX. of is demand higher periods XX%. of compared compared The thermal $XX.X our revenue year period services.

XXXX. from revenue X-month the for was our X year the the Emerging totaled Prior million quarter $XX,XXX for Markets for Finally, segment $XXX,XXX XX, revenue million third the $XX ended and $X.X periods for Patrol. the June months, June ending period fulfilling Protection, U.S. due in over both prior the increase XXXX. XX, of contract year revenue The period awarded XXXX with to Border for April Border is X-month the in and partially Customs and

expect fiscal year complete this contract We to within XXXX.

or year Our our million expenses operating operations. million third a OptoSeis in year the period. earn-out contingent that when periods the non-cash X-month fiscal to compared due XXXX began expenses personnel XX% operating operating quarter XXXX. by to in reduction decreased related same compared research and $X.X expenses year reduced of and project in value Quantum for cost The costs to $X.X the a expenses and related quarter to acquisitions, decrease X-month costs or prior to of fiscal by development to fair XX% The our the X- program decrease of decreased third XXXX, our reduction a liabilities business business for and in decrease general

and $X.X Our equipment into property, investments X-month is plant cash million.

rental is $X.X Our XX, cash our fleet million of investment as into June XXXX.

be into cash to investments million rental fleet equipment expect and We million. year XXXX plant $X to fiscal to cash be in investments our approximately about property, our $X

short-term of Our reflected balance the million investments. quarter of and cash sheet at end third $XX the

available no credit under of long-term agreement borrowings have We our debt $XX.X million. outstanding in

own in estate the and concludes Houston leverage. and I'll that free back holdings numerous to turn That world are any around addition, clear real the Rick. call owned without discussion, my In we and

Richard Wheeler

Thank Robert. you,

fiscal positive released and our about of depth monitoring several encouraged months over achieved that of continues and been reflects are our we serious years. oil systems investigative The next inquiry to the for While our manage opportunities, PRM producers continue or of growing for in the any incremental effects of oil on these for discussions have to advanced with numbers follow the products as the further made believe timing out never though system systems variant we of I'll systems. discussions opportunities areas Border Markets time. were opportunities and Nonetheless, tender Aquana's major and PRM light our by integration we progress, the Meanwhile, a offered before shows to for producers balance our the for services new higher, be concludes and the additional optimistic. emergence outlook recoveries with hard the the growing end case profile these in reservoir the gas and our and of year. the believe moved of Also, OBX began very in pause of the call project will some multiple PRM Emerging believe commentary, demand our products segment. in pandemics from some of remains catalog and U.S. we for could our great brought our The permanent and even Patrol questions. turn now caution progress to our And deployed first We our gives increasing value. expand future in existing Britney fields optimism segment. our has recovery. over their future in gas improvement, conjunction system strong their in X subsidiary the of year. opportunities Markets this have interest better contracts with debt-free Adjacent using sheet to on segment, in the in profound creates COVID-XX back innovative technology fiscal growth results our This many prepared Delta demonstrate In in for Quantum And our

Operator

question open The for And now questions. Instructions] floor Dezellem Capital. first is from with we Tieton [Operator take will Bill our

Bill Dezellem

PRM, questions. I of you. let's if start could, Thank we group with please. And have a

just heard very think, this you maybe is said serious first the serious I I reference opportunities. opportunities time or have that

customers, their fewer suppose, you PRM or do just parties of than level same it mind, is quarters prospective ago of in you interest that with increasing? today X or So is X I more, did interested have group or the

Richard Wheeler

essentially of group I think same the customers, Bill. it's

that quarter, second investigative and progressed group. since same on or discussions they earlier these while And perhaps initial significant efforts, nature first have serious, the those their of scope of some Some but forays because absolutely are in revealing we're that were it's involve some not the fields. they work essentially of do of

Bill Dezellem

Would in the you revenue? terms significant like a means what of to of field size characterize

Richard Wheeler

fall giving look that same No, if categories. that's just history, tell projects significant really into course much But our And can't they these that. of those mean can sort have change together. of perspective the that you there can too I can you do and clearly, some time. put over advanced certainly things, been we at of

Bill Dezellem

That's helpful, been PRM they the customers they are or are have prospects, these in Rick. past? new parties or to And then,

Richard Wheeler

perhaps new The very arrangements other oil are out Some to had to to as of companies PRM existing PRM, except of fields focus more that way capital companies oil partner at their on a But look mean, their now in certainly already resources given in established. so. doing well get fields probably manage that know, invested, warrants is science were with that will PRMs. I hard they've operators a have to you such their

with In fields oil out addition, what of the recovery is terms in these through it carbon-capture is of enhanced of COX. a injection today goal, accomplished is oftentimes

make additional interesting. there's that this aspects So

Bill Dezellem

then, did the you that are we Okay. to should mention I we helpful. seen world you in That new being before these you deploy these that is are the suppose well, geographies And in, the of are what I tender there, the same have be see past? regions geographies, say? Or as deployed systems actually, new go discussed a -

Richard Wheeler

all over operated we've world. the Well,

have as But So all adjacent of been before the if many cases. interest, they're helpful they in that's a where or over lot these you. similar There's waters geographies to globe. in deep-water certainly are

Bill Dezellem

a submit this could terms to you past the is end by that or relative then, this And or think tender a that that anticipate prospect? you. chose were you the same to thank right, in and tender is not the to the company new onerous the had happen September, of All

Richard Wheeler

that will original company. every No, out There it's the same this in come that considerations that business just new is timeframe. some the were participating expectation but in tender that precluded tender,

Bill Dezellem

will to it is to that expectation And this tender comfortable having a your be still be is will be discussions determined? you that the with or with that customer responding

Richard Wheeler

that. that's determined. We're be Well, hopeful to certainly of

see. been very And all have hopefully, but to respect accomplished, to what some the of with we discussions fruitful been were that we'll Our confer on. needed that issues has

Bill Dezellem

And don't right. to I is out want Mark, left then, helpful. again. feel All here That you

And you that let's that release as be What Maybe Quantum? So them Patrol may been - working to is was the open what in the it I needs demonstrated to that question. a it system hopes? Border indicate to has can is pops up switch what that kind there Or it is to or please? broadly, just reference demonstrated and already? share the of this

Mark Tinker

close Hi, witness formal is a successfully Bill. speak and required we of And that system's again. our series to out, completed And we make system to of Nice to go have sure testing. it spec. to tests with Part you the perform successfully acceptance government participant contract, when through that.

Bill Dezellem

you completed successfully the - just have You said. that

Mark Tinker

sure. Yeah,

Bill Dezellem

Okay.

So now more level. basic let me kind of bring the question to a

are For on can to that Border good doing with you share Patrol? system what the demonstrate the those that things the of for indicate us us or is outside,

Mark Tinker

A very little.

when it to the operational, that share, to used being that that current is frustrating that's if that. I not for past designed enter but system them so activities meet I into the answer, was And privileged now mission and to. to to I'm am law serve starts - It it sorry case. unable Now enforcement am always the by is

Bill Dezellem

were Totally have on with understand. we shared Patrol the that to slightly I'm the the different of outside, angle. has would were If value system a to have the gained, early we the to to is for that? going they that same if still see we it yet? try Or us have insights too those you Border

Mark Tinker

seeing be would value. I think we all

Bill Dezellem

additional one then, question. And you. Thank

of we now proper us had that the if Just fact see the needed laymen, of light What's even purchase? the move next clearance. us in for to would order, to the we so next timing value

Mark Tinker

Hill. Capitol now Well, to headwaters we're subject which the funding, government is of

fiscal emerge, with So is it's fits likely start where to resolution call, budget on that aware, December we as Security into continuing seeing for budget that Homeland the enter we're into will possibly XXXX a January. or likely sure everyone year I'm

wait the funds the established So based the hurry budgets that of and and support. needs funds process on become the performance this these as more the and is agencies up, and budgets

let the do of supporting job, are that in So making decision-makers sure its we're value. aware system operation and necessary back, the its now manners we the sitting that that can

Bill Dezellem

And system point, to there would there have that that been the items purse more in were been seen have since - fund? strings that make been likely has the those Congress holding them that deployed, has to to want

Mark Tinker

asked give You've very the I targeted at and can't a I'm question, time, I you love answer. would to this sorry.

Bill Dezellem

Thank help. the happens right. we'll to all And That's forward for you done we're waiting. look after what

Mark Tinker

Thank Bill. you,

Richard Wheeler

you. Thank

Operator

will & with [Operator question Bundy take next our And Instructions] from Scott Cabot. we Moors

Scott Bundy

Hi, Rick.

Richard Wheeler

Scott. to from hear Nice me. Hi,

Scott Bundy

just to me detect Wall Border for Thank increase year, XX adequate much. threat if to bear it. expects this of or Patrol lacks question, aware says, cross-border Patrol, It currently I that technology get February tunneling, Patrol remain. Border to new improved put a in the It may monitor improvements to but Border have you the by to challenges southwest tunnels security you're And or mind, tunneling cross-border you with past the tunnels. going sort answer. don't I'm was of very The of activities technology, reference, quite introduced according Border I'm but together a Mark. permanent second of here. significant sure border

market second meet the to program technically that Patrol's mission. senior on until were detection one more Border the immature here. capabilities tunnel and for the me existed a Just did recently, According not bear with official,

My report, we have miles be do - and is that the question my competition? they miles So, if future. you another laid go in down potential indicate through sensors for X and is, will XXX this the question of

Mark Tinker

wasn't with question familiar the ask. to I'm That was you expecting I that report.

have within you an to government. opportunity have the competition Sometimes progress to

recently be think, intel standalone and revelation might systems profound that report. I our a within part the

Scott Bundy

just you I'm What's And of open to ask aware asked talk I make what past, from the to about, do left obviously eyes - them people guys to What's this, have going of done the Bill which it understand. differently. slightly you probably can't to left? in

Mark Tinker

to to on in doing, those this have call. so to the where individuals We of mission. That's latency the be serve there's stuck. I And get going revelations

those successes, So then may we Border execute the as law enforcement component serve are to a mission, may organization the what's in and they or a the are revealing Patrol, that. job, contributors mission, enforcement we be the more they a have key later their to their we we successes, little of And those But massive not Border as of one operations serve bit and concluded, law occurred. Patrol. downstream become they

to challenge for... appropriate do, we And getting mission and that I so between successes. call big the running, and the it's which speculate have that love now latency very is to of, milestone and ways where the enjoying not today, system are but either the serving in past this on in all was performing we're some proud And that, I

Scott Bundy

that. get I

use just And we oh, mind. of that of was activity. significant Let my of report, terms about, significant sight know detail Systems me In pretty just to is let there of this go Elbit money. they if in own just line through or Anduril Anduril this for don't ignorance, appropriation amount - all you pretty me

couple think I was of hundred in it the order of million a dollars.

So, $XXX do to need what you do get Anduril think guys you million that whatever? to get did to

Mark Tinker

it. They didn't get

marketing of going you a period have the time. good there. have contract So long to Deals a there have for to of on lot perform, you is execute through not,

now, that because non-line-of-sight line-of-sight we into capabilities talk And have security know we're oil are market. things able every to in what they Quantum those they're and of effectively. all we forward using surveillance are Some technologies serve enjoy gas day. and that more about profound We bringing and that Geospace at

to have We their guarded into effectiveness. be

that's for us, those to we're so doing. get And what funds,

system in are now it's the dominoes as falling going forward. is the these sequence Again, supposed So ground, mission and performing, it's meeting to. in they're

continue we to pleased I think be we as here So, we'll where up. with meet end mission, that downstream from

Scott Bundy

President till that in border it question, fair I on? the we can of it what's this. effect answer wait of you aware Address that or something I that State last at he's technology Biden quite Is to My said see the going found say the Union have the you something to to interesting effect. think the

Mark Tinker

wouldn't I be was on. of surprised if what's aware he going

Scott Bundy

aware about? talking I'm are of You what

Mark Tinker

Yes, sir.

Scott Bundy

much, Thank you guys. very

Mark Tinker

Thank you.

Richard Wheeler

Scott. Thanks,

Operator

back questions are additional the Rick turn this there time, to at further Wheeler any over closing remarks. I program or will for And no

Richard Wheeler

and November. quarter call conference Britney, again All everyone with fourth our We look right. for in of Well, thank to you, speaking call our to fiscal the you who joined today. forward XXXX thanks year on

thanks So again.

technical earlier difficulties. the Goodbye. for Sorry

Operator

This does Earnings Third wonderful day. Quarter have Conference Call. time conclude your a you. today's disconnect line Thank Technologies at this and XXXX Please Geospace

Geospace Technologies (GEOS) 8 Aug 212021 Q3 Earnings call transcript