HOUSTON, Sept. 17 /PRNewswire/ — Input/Output, Inc. (NYSE: IO) announced today its results for the first quarter ended August 31, 1999. For the quarter, I/O recorded revenue of $30.0 million and a net loss applicable to common stockholders of $9.3 million, or ($0.18) per share — which includes pretax charges of $4.7 million and preferred dividends of $1.1 million. Excluding the pretax charges, the Company recorded a first quarter net loss applicable to common stockholders of $6.1 million, or ($0.12) per share.
First quarter revenues were stronger than anticipated due to a $9.0 million sale to a geophysical company in the Former Soviet Union. The sale included two I/O SYSTEM 2000™ systems, one RSR system, 12 vibrator trucks and other ancillary equipment.
The net loss included preferred dividends of $1.1 million. Although the Series B and C Convertible Preferred Stock issued to SCF Partners has a 1% cash dividend rate ($138,000 per quarter), the agreement allows for, in certain circumstances, conversion of the preferred stock into common stock based on the accumulated value of the preferred stock divided by the then-market price. As disclosed in the Company’s most recent 10-K, the Company is accruing the full 8% preferred dividend.
Included in the first quarter charges are the following:
(1) Charges of $3.3 million primarily related to employee severance and
the closing of the Company’s Ireland facility. These charges are
included in general and administrative expenses.
(2) Charges of $1.4 million related to product-related warranties. These
charges are included in cost of sales.
“While we continue to make good progress toward the successful repositioning of the Company, overall demand for new seismic instrumentation remains weak, and we don’t anticipate a meaningful recovery in our business to begin until some time in calendar year 2000,” said Sam Smith, Chief Executive Officer of I/O.
Input/Output is a world leader in seismic acquisition imaging technology for land, transition zone and marine exploration and production. The company specializes in driving to market technology that creates value for the energy industry in the areas of 2D, 3D, 4D and multi-component seismic data.
This press release contains forward-looking information, which is subject to the provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to the effects of repositioning the company and the company’s performance given current market conditions. Investors are cautioned that all forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected, including risks associated with the timing and development of, and market acceptance of, the Company’s products and services and the current downturn in the oil and gas exploration industry, risks associated with competition and competitive pricing pressures, defaults in financed purchase obligations and changes in contract terms, risks associated with acquisitions and the potential effects thereof and risks associated with sales to customers outside the United States. Additional factors which could affect actual results are described in the section entitled “Cautionary Statement for Purposes of Forward-Looking Statements” contained in the Company’s annual report on Form 10-K for the year ended May 31, 1999.
INPUT/OUTPUT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (Unaudited) For the three months ended August 31, 1999 1998 Net sales $29,979 $66,995 Cost of sales 23,994 44,716 Gross profit (A) 5,985 22,279 Operating expenses: Research and development 7,203 9,242 Marketing and sales 2,881 4,013 General and administrative (B) 6,914 6,419 Amortization of intangibles 1,925 1,860 Total operating expenses 18,923 21,534 Earnings (loss) from operations (12,938) 745 Interest expense (212) (242) Other income 1,034 2,843 Earnings (loss) before income taxes (12,116) 3,346 Income tax (benefit) expense (3,877) 1,071 Net (loss) earnings (8,239) 2,275 Preferred stock dividend 1,081 --- Net (loss) earnings applicable to common stockholders $(9,320) $2,275 Basic (loss) earnings applicable to common stock $(0.18) $0.05 Weighted average number of common shares outstanding 50,669,031 44,585,501 Diluted (loss) earnings applicable to common stock $(0.18) $0.05 Weighted average number of diluted common shares outstanding 50,669,031 44,702,268 (A) Includes first quarter 2000 charges of $1.4 million related to product-related warranties. (B) Includes first quarter 2000 charges of $3.3 million primarily related to employee severance and the closing of the Company's Ireland facility. Certain amounts previously reported have been reclassed to conform to the current year presentation. SOURCE Input/Output, Inc.