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HOUSTON, July 26 /PRNewswire/ — Input/Output, Inc. (NYSE: IO) today
announced net earnings applicable to common shareholders for the second
quarter ended June 30, 2001 of $1.6 million, or $0.03 per share, on revenue of
$59.9 million, compared to a net loss applicable to common shareholders of
$(54.3) million, or $(1.07) per share, on revenue of $26.6 million for the
same period a year ago.

For the six months ended June 30, 2001, Input/Output recorded net earnings
applicable to common shareholders of $0.4 million, or $0.01 per share, on
revenue of $102.3 million, compared to a net loss applicable to common
shareholders of $(64.8) million, or $(1.28) per share, on revenue of
$66.7 million for the same period a year ago.

“The second quarter operating results represent a benchmark in our
turnaround strategy for the Company,” said Tim Probert, the Company’s
President and Chief Executive Officer. Probert continued, “This quarter
reflects the Company’s continuing commitment to execute on three key
strategies: (1) optimizing the performance of our core businesses,
(2) developing and bringing innovative seismic imaging technology to the
marketplace, and (3) expanding our business through acquisitions and
alliances. Our operating results improved both sequentially and year-to-year,
with second quarter EBITDA of $8.1 million, or 13.5% of revenues. Both our
Land and Marine products divisions contributed substantially to this EBITDA
performance. We made good progress toward the commercialization of our
VectorSeis(TM) line of multi-component products in North America with our
commercialization partner, Veritas DGC. Nine pre-commercial surveys have been
undertaken this year, with favorable feedback from our customers. Our recent
acquisition, Pelton Company, continues to make a positive contribution to our
consolidated operating results in line with our expectations. Finally,
Input/Output was pleased to celebrate the record-setting sale of over one
million geophones in the first half of this year.”

“Looking forward to the balance of the year, we continue to believe that
Input/Output is on track to be profitable for the year, with the Company’s
second-half performance on par with our previously announced guidance.
Specifically, our second quarter performance was significantly enhanced by
geophone string sales for large Middle East crews. We do not anticipate
enjoying this level of geophone activity during the remainder of the year.
However, we continue to believe that 2001 revenues will be 35 — 40% higher
than calendar 2000 revenues, resulting in a small profit for the year,
consistent with our earlier guidance.” Probert concluded.

Land and marine division revenues during the second quarter were
$44.2 million and $15.7 million, respectively, compared to land division
revenue of $18.9 million and marine division revenue of $7.7 million for the
same period a year ago. Land and marine division revenues during the six
months ended June 30, 2001 were $72.0 million and $30.3 million, respectively,
compared to land division revenue of $36.6 million and marine division revenue
of $30.1 million for the same period a year ago.

Input/Output, Inc. is an industry leader in seismic acquisition imaging
technology for land, marine, transition zone exploration, production and
reservoir monitoring. The Company specializes in technology that creates
value for the energy industry in the areas of 2D, 3D, 4D and multi-component
seismic data. Additional information on Input/Output, Inc. is available on
the Internet at www.i-o.com or contact us at ir@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 the Company’s profitability for
Fiscal 2001, second-half performance and revenue growth in 2001, any
continuation in improvement of business fundamentals for the seismic industry,
and expected continued investment in new technology. 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 a
continuation in trends for energy industry demand for seismic services and
products; 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 competitors’ product offerings and pricing pressures
resulting therefrom; the Company’s inability to produce products to preserve
and increase market share; technological and marketplace changes affecting the
Company’s product line; risks associated with sales of products to customers
outside the United States; losses of significant customers; dependence on key
technical and other personnel; payment defaults under sales credit
arrangements with the Company’s customers; future performance from acquired
businesses and units falling below projected expectations; the success of
future acquisitions and strategic alliances by the Company; future energy
exploration industry conditions and future prices worldwide for oil and
natural gas. 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.

                     INPUT/OUTPUT, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                 (UNAUDITED)

                            Three Months Ended          Six Months Ended
                                  June 30                   June 30
                             2001         2000         2001         2000
    Net sales            $  59,868    $  26,624   $  102,277    $  66,665
    Cost of sales           38,858       22,874       64,557       64,476
       Gross profit         21,010        3,750       37,720        2,189

    Operating expenses:
     Research and
      development            7,659        7,072       15,196       14,332
     Marketing and sales     3,500        2,656        6,819        5,340
     General and
      administrative         4,717       13,411        9,610       10,674
     Amortization and
      impairment of
      intangibles            1,185       33,598        2,321       35,656
       Total operating
        expenses            17,061       56,737       33,946       66,002

    Earnings (loss) from
     operations              3,949      (52,987)       3,774      (63,813)

    Interest expense          (383)        (212)        (590)        (407)
    Interest income          1,195          549        2,486        2,465
    Other income (expense)    (407)       1,553         (100)       1,493
    Income (loss) before
     income taxes            4,354      (51,097)       5,570      (60,262)
    Income tax expense       1,370        2,032        2,396        2,156
    Net earnings (loss)      2,984      (53,129)       3,174      (62,418)
    Preferred dividend       1,395        1,180        2,785        2,338
    Net earnings (loss)
     applicable to common
     shares              $   1,589    $ (54,309)  $      389    $ (64,756)

    Basic earnings (loss)
     per common share    $    0.03    $   (1.07)  $     0.01    $   (1.28)
    Weighted average
     number of common
     shares outstanding     50,891       50,766       50,909       50,776

    Diluted earnings
     (loss) per common
     share               $    0.03    $   (1.07)  $     0.01    $   (1.28)
    Weighted average
     number of diluted
     common shares
     outstanding            52,179       50,766       52,176       50,776

                    

SOURCE Input/Output, Inc.

CONTACT: C. Robert Bunch, Chief Administrative Officer of Input/Output,
Inc., +1-281-933-3330