HOUSTON, July 8 /PRNewswire/ — Input/Output, Inc. (NYSE: IO) announced
today its results for the fourth quarter and year ended May 31, 1999.
quarter, I/O recorded revenue of $18.8 million and a net loss of
$50.4 million, or ($1.00) per share — which includes pretax charges of
Excluding these charges, the company recorded a fourth quarter
net loss of $12.2 million, or ($0.24) per share.
For the fiscal year ended May 31, 1999, I/O recorded revenue of
$197.4 million and a net loss of $105.6 million, or ($2.17) per share — which
includes pretax charges of $139.0 million.
Excluding these charges, the
company recorded a net loss of $11.0 million, or $(0.23) per share, for the
”The fourth quarter operating loss reflects continued weak demand for
seismic activity in general, and specifically for new equipment purchases by
our traditional customers,” said Sam Smith, Chief Executive Officer of I/O.
”Charges during the fourth quarter primarily reflected the soft demand for
seismic equipment, and the continued deterioration of the financial condition
of certain I/O customers.”
Smith continued, ”Our significant efforts toward resizing the company to
meet current market conditions should be complete by the end of the first
quarter of fiscal 2000.
Since August 1998, when the company employed
1,745 people worldwide, I/O has reduced its workforce by more than 50 percent.
The downsizing process included office consolidations and plant closings,
which we believe will result in a more efficient and focused organization
better capable of meeting anticipated market opportunities.
We expect to
record additional charges in the range of $4 million to $6 million in the
first quarter of fiscal 2000 based on changes already implemented or
anticipated to be completed soon.
”On a positive note, our liquidity was enhanced during the fourth quarter
due to the issuance of convertible preferred shares to SCF Partners in which
I/O received $39.5 million in net proceeds,” Smith said.
”Currently, we have
more than $75.0 million in cash and just $8.9 million in long term debt.
enhanced liquidity, coupled with a lower cost structure, puts us in a
significantly stronger position to manage through current market conditions
without jeopardizing our research and development efforts.”
During the quarter, IO sold 840 channels of its land seismic data
acquisition recording equipment and no marine channels, as compared to
17,898 land channels and 10,064 marine channels in the fourth quarter of
The company also sold one System 2000 during the fourth quarter.
Fourth Quarter Charges Included in the fourth quarter charges are the following: (1) Charge for accounts and notes receivable of $22.3 million, primarily related to business risk resulting from the depressed market environment, and of political and currency risks in certain developing countries. The charge is included in general and administrative expenses. (2) Inventory write-down totaling $9.7 million primarily due to further reductions in customer demand for products rendered excess or obsolete as a result of prevailing industry conditions, and as a result of planned product revisions. The write-down is included in cost of sales. (3) A charge of $6.0 million relating to certain warranty reserves and other product-related contingencies. The charge is included in net sales and cost of sales. (4) A non-cash charge of approximately $4.0 million as a result of impairment of certain long-lived assets related to the recent downturn in business activity and the company's resizing efforts. The charge is included in general and administrative expenses. (5) A charge of $3.3 million related to employee severance and a charge of $0.6 million for other general and administrative expenses. (6) A non-cash charge of $6.3 million for impairment of intangibles related to the deterioration of certain product lines. The charge is included in amortization of intangibles. (7) A charge of $1.1 million primarily related to prototype development costs. The charge is included in research and development.
Input/Output is a world leader in seismic acquisition imaging technology
for land, transition zone and marine exploration and production.
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 future additional charges, the effects of
downsizing the company and the company’s performance given current market
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.
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 report on Form 10-Q for the nine months ended
February 28, 1999.
INPUT/OUTPUT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (Unaudited) For the three months ended For the year ended May 31, May 31, 1999 1998 1999 1998 Net sales $ 18,747 $103,942 $197,415 $385,861 Cost of sales (A) 30,598 60,511 205,215 226,514 Gross profit (loss) (11,851) 43,431 (7,800) 159,347 Operating expenses: Research and development (B) 11,176 9,219 42,782 32,957 Marketing and sales 3,022 3,895 14,193 14,646 General and administrative (C) 36,534 7,213 80,932 28,295 Amortization of intangibles (D) 8,390 1,964 16,247 6,008 Total operating expenses (E) 59,122 22,291 154,154 81,906 Earnings (loss) from operations (70,973) 21,140 (161,954) 77,441 Interest expense (209) (239) (897) (1,081) Other income 822 1,739 7,611 7,315 Earnings (loss) before income taxes (70,360) 22,640 (155,240) 83,675 Income taxes (19,969) 7,244 (49,677) 26,776 Net earnings (loss) ($ 50,391) $ 15,396 ($105,563) $ 56,899 Basic earnings (loss) per common share ($1.00) $ 0.35 ($2.17) $ 1.29 Weighted average number of common shares outstanding 50,616,071 44,572,976 48,540,143 43,962,349 Diluted earnings (loss) per common share ($1.00) $ 0.34 ($2.17) $ 1.28 Weighted average number of diluted common shares outstanding 50,616,071 44,947,709 48,540,143 44,430,109 (A) Includes fourth quarter 1999 charges of $15.7 million and fiscal year 1999 charges of $77.0 million. (B) Includes fourth quarter 1999 charges of $1.1 million and fiscal year 1999 charges of $1.1 million. (C) Includes fourth quarter 1999 charges of $30.2 million and fiscal year 1999 charges of $50.4 million. (D) Includes fourth quarter charges of $6.3 million and fiscal year 1999 charges of $7.7 million. (E) Includes fiscal year 1999 charges of $2.8 million.