– First Quarter 2005 Revenues of $66.8 Million – Company Reconfirms Previous 2005 Guidance
HOUSTON, April 27, 2005 /PRNewswire-FirstCall via COMTEX/ — Input/Output, Inc. (NYSE: IO)
today announced first quarter 2005 net loss of $3.3 million or $(0.04) per
share, on revenues of $66.8 million compared to a net loss of $558 thousand,
or $(0.01) per share, on revenues of $36.3 million for the same period a year
Bob Peebler, I/O’s President and Chief Executive Officer, said, “As we
stated in our fourth quarter conference call, we expected to start the year
slowly and improve throughout the year with a larger portion of the revenues
in the last half of the year. GX Technology’s (GXT) results were
significantly better than the fourth quarter of 2004. In addition, their
backlog for processing work improved 400 percent during the quarter. As a
result, we expect GXT to have an improved revenue mix and improved
profitability as the year unfolds. While the mix of revenues in our Image
System Group resulted in low first quarter gross margins, we continue to see
increasing seismic activity levels along with growing oil and gas company
acceptance of VectorSeis as we continue to invest heavily in this new
“The fundamental drivers of the seismic market are improving. Top line
revenues increased by $30.6 million or 84 percent over the year ago period.
Excluding GXT, revenues increased 27 percent as the demand for seismic
technology continues to grow. As our contractor customers become more
profitable due to an improving seismic market, they are increasing their
spending on both replacement equipment and new technology. Through April
2005, we sold two System Four VectorSeis to new VectorSeis contractors,
bringing our VectorSeis capable contractor base to ten.”
GXT, which was acquired in June of last year, contributed revenues of
$20.7 million during the quarter. Land imaging revenues increased to
$30.6 million compared to $20.6 million a year ago. Marine imaging revenues
were $10.9 million. This compares to $11.5 million a year ago when we made
the first shipment of our VectorSeis Ocean product.
Gross margin for the first quarter declined to 24 percent from 33 percent.
First quarter margins were impacted as sales of lower margin vibrator trucks
and other mature products accounted for a larger percentage of overall sales.
Operating expenses as a percentage of revenues for the first quarter fell to
28 percent compared to 30 percent for the first quarter of last year.
Loss from operations in the quarter was $2.8 million compared to income
from operations of $1.0 million in the first quarter of 2004 mostly due to
lower overall gross margins. EBITDA (earnings before net interest expense,
taxes, depreciation and amortization) for the first quarter continued to
improve to $5.9 million compared to $3.5 million for the first quarter of last
year. You can find a reconciliation of EBITDA to reported earnings at the end
of this press release.
The following statements are based on our current expectations. These
statements are forward looking and actual results may differ materially.
Factors affecting these forward-looking statements are detailed below.
Mike Kirksey, Executive Vice President and Chief Financial Officer,
commented, “We continue to expect 2005 revenues to range between $320 and
$365 million with much of the revenue growth coming from continued market
penetration of our new field acquisition systems, improving financial
performance at GXT and a stronger overall marine seismic market. We expect
sales and margins to improve as we move through the year, with full year 2005
gross margins to range between 30 percent and 35 percent. We anticipate
operating expenses as a percentage of revenues to range between 23 and 28
percent during the year. As a result, we continue to anticipate 2005 earnings
to range between $0.15 and $0.40 per share.”
I/O has scheduled a conference call for Thursday, April 28, 2005, at
9:30 a.m. eastern time. To participate in the conference call, dial
303-262-2142 at least 10 minutes before the call begins and ask for the
Input/Output conference call. A replay of the call will be available
approximately two hours after the live broadcast ends and will be accessible
until May 5, 2005. To access the replay, dial 303-590-3000 and use pass code
Investors, analysts and the general public will also have the opportunity
to listen to the conference call live over the Internet by visiting
http://www.i-o.com . Also, an archive of the web cast will be available
shortly after the call on the company’s website.
I/O is a world leading, technology-focused seismic solutions provider.
The company provides cutting-edge seismic acquisition equipment, software, and
planning and seismic processing services to the global oil and gas industry.
I/O’s technologies are applied in both land and marine environments, in
traditional 2D and 3D surveys, and in rapidly growing areas like time-lapse
(4D) reservoir monitoring and full-wave imaging. Headquartered in Houston,
Texas, I/O has regional offices in Canada, Europe, China, Russia and the
Middle East. Additional information is available at http://www.i-o.com .
The information included herein contains certain 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. These forward-looking
statements include statements concerning estimated revenues, earnings and
earnings per share for fiscal 2005, and estimated gross margins, EBITDA and
operating expenses as a percentage of revenue for fiscal 2005, future sales
and market growth, and other statements that are not of historical fact.
Actual results may vary materially from those described in these forward-
looking statements. All forward-looking statements reflect numerous
assumptions and involve a number of risks and uncertainties. These risks and
uncertainties include the timing and development of the Company’s products and
services and market acceptance of the Company’s new and revised product
offerings; risks associated with competitor’s product offerings and pricing
pressures resulting therefrom; the relatively small number of customers that
the Company currently relies upon; the fact that a significant portion of the
Company’s revenues is derived from foreign sales; the Company’s ability to
successfully manage the integration of its acquisitions into the Company’s
operations; the risks that sources of capital may not prove adequate; the
Company’s inability to produce products to preserve and increase market share;
collection of receivables; and technological and marketplace changes affecting
the Company’s product line. Additional risk factors, which could affect
actual results, are disclosed by the Company from time to time in its filings
with the Securities and Exchange Commission, including its Annual Report on
Form 10-K for the year ended December 31, 2004.
Tables to follow INPUT/OUTPUT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited) Three Months Ended March 31, 2005 2004 Net sales $66,837 $36,287 Cost of sales 50,993 24,318 Gross profit 15,844 11,969 Operating expenses (income): Research and development 4,643 3,783 Marketing and sales 7,686 3,299 General and administrative 6,322 4,693 Gain on sale of assets (5) (850) Total operating expenses 18,646 10,925 Income (loss) from operations (2,802) 1,044 Interest expense (1,793) (1,496) Interest income 276 469 Other income 41 16 Income (loss) before income taxes (4,278) 33 Income tax (benefit) expense (1,215) 591 Net loss (3,063) (558) Preferred dividend 194 --- Net loss applicable to common shares $(3,257) $(558) Basic and diluted net loss per common share $(0.04) $(0.01) Weighted average number of common and diluted shares outstanding 78,643,713 52,113,438 INPUT/OUTPUT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) ASSETS March 31, December 31, 2005 2004 Current assets: Cash and cash equivalents $27,628 $14,935 Restricted cash 2,092 2,345 Accounts receivable, net 62,907 61,598 Current portion notes receivable, net 10,704 10,784 Unbilled revenue 10,408 7,309 Inventories 85,333 86,659 Prepaid expenses and other current assets 9,741 7,974 Total current assets 208,813 191,604 Notes receivable 3,223 4,143 Property, plant and equipment, net 42,999 45,239 Multi-client data library, net 10,285 9,572 Deferred income taxes 469 480 Investment at cost 3,500 3,500 Goodwill 148,637 147,066 Intangible and other assets, net 75,540 77,512 Total assets 493,466 $479,116 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable and current maturities of long-term debt and lease obligations $5,341 $6,564 Accounts payable 31,221 40,856 Accrued expenses 26,641 26,686 Deferred revenue 9,240 8,423 Total current liabilities. 72,443 82,529 Long-term debt and lease obligations, net of current maturities 78,531 79,387 Other long-term liabilities. 1,180 2,688 Cumulative convertible preferred stock 30,000 --- Stockholders' equity: Common stock 796 795 Additional paid-in capital 481,364 480,845 Accumulated deficit (164,773) (161,516) Accumulated other comprehensive income 1,506 2,449 Treasury stock (5,909) (5,844) Unamortized restricted stock compensation (1,672) (2,217) Total stockholders' equity. 311,312 314,512 Total liabilities and stockholders' equity $493,466 $479,116 Reconciliation of EBITDA to Net Income (Non-GAAP Measures) (In thousands) (Unaudited)
EBITDA is a Non-GAAP measurement that is presented as an additional
indicator of operating performance and is not a substitute for net income
(loss) or income (loss) per share calculated under generally accepted
accounting principals (GAAP). We believe that EBITDA provides useful
information to investors because it is an indicator of the strength and
performance of our ongoing business operations, including our ability to
service our debt. The calculation of EBITDA shown below is based upon amounts
derived from the company’s financial statements prepared in conformity with
Three Months Ended March 31, 2005 2004 Net loss $ (3,063) $ (558) Interest expense 1,793 1,496 Interest income (276) (469) Income tax (benefit) expense (1,215) 591 Depreciation and amortization expense 8,644 2,422 EBITDA $ 5,883 $ 3,482 CONTACTS: J. Michael Kirksey Chief Financial Officer Input/Output (281) 879-3672 Jack Lascar, Partner Karen Roan, SVP DRG&E (713) 529-6600
SOURCE Input/Output, Inc.
J. Michael Kirksey, Chief Financial Officer of Input-Output, Inc., +1-281-879-3672;
or Jack Lascar, Partner, or Karen Roan, SVP, both of DRG&E, +1-713-529-6600, for