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HOUSTON, Dec. 20 /PRNewswire/ — Input/Output, Inc. (NYSE: IO) today
announced a net loss applicable to common stockholders for the second quarter
ended November 30, 2000 of $(3.7) million, or $(0.07) per share, on revenue of
$40.9 million, compared to a net loss applicable to common stockholders of
$(7.5) million, or $(0.15) per share, on revenue of $24.4 million for the same
period a year ago.

The net loss applicable to common stockholders for the six months ended
November 30, 2000 was $(11.2) million, or $(.22) per share, on revenue of
$68.0 million, compared to a net loss applicable to common stockholders of
$(16.8) million, or $(.33) per share, on revenue of $54.4 million for the same
period a year ago.

“While our second quarter operating results reflected a lingering weakness
in demand for seismic equipment, business fundamentals for the seismic sector
are decidedly improving,” said Tim Probert, the Company’s President and Chief
Executive Officer.

Probert continued, “Demand for our land seismic equipment has increased
and is reflected in the significant improvement in both sales volume for the
quarter and gross margin performance. However, marine seismic fleet
overcapacity remains, indicating that our marine operations will continue to
be weak in the foreseeable future. Nevertheless, we are experiencing
improving gross margins here also.”

Probert added, “The quarter reflects a meaningful step towards the
restoration of acceptable levels of financial performance for the Company. In
addition to improved sales and gross margin performance, operating expenses
for the quarter declined as a percentage of revenue from 61.6% last year to
36.4% in the current quarter. EBITDA margins were about 5% for the quarter,
reversing several quarters of negative operating cash flow. We continue to
identify cost reduction opportunities that we will act on during the
forthcoming year. The Company remains committed, however, to continued
investment in new technology to remain in the forefront of seismic imaging.”

Land and marine division revenues during the second quarter ended
November 30, 2000 were $32.4 million and $8.5 million, respectively, compared
to land division revenue of $13.4 million and marine division revenue of
$11.0 million for the same period a year ago, and compared to land division
revenue of $20.2 million and marine division revenue of $7.0 million for the
first quarter ended August 31, 2000.

Input/Output, Inc. also announced today the signing of an agreement
whereby I/O will acquire Pelton Company, Inc. of Ponca City, Oklahoma. Pelton
is an industry leader in seismic vibrator control systems, vibrator
positioning systems using GPS, and explosive energy control systems.

Bud Pope, Input/Output’s Vice President — Land Operations, stated, “We
are excited to have Pelton as part of the Input/Output team. They have earned
a long-standing reputation as an industry leader in advanced vibrator control
products and service to their customers. This leadership complements I/O’s
position in the design and supply of energy source vibrators and data
acquisition systems.”

The proposed transaction is subject to satisfactory completion of due
diligence and other closing conditions. Closing is expected to occur early
next year.

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 improvement of business
fundamentals for the seismic industry, expected continued weak performance by
the company’s marine operations, future cost reduction initiatives 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 energy
exploration energy conditions, worldwide prices for oil and natural gas, the
timing and development of the company’s products and market acceptance of new
and revised product offerings, technological and marketplace changes affecting
the company’s product line, risks associated with competition and pricing
pressures, and risks associated with sales to customers outside the United
States. 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 share and per share data)
                                   (unaudited)

                                   Three months ended       Six months ended
                                      November 30,            November 30,
                                    2000        1999        2000        1999

    Net sales                     $40,880     $24,438     $68,021     $54,417
    Cost of sales                  28,775      19,165      49,555      43,159
         Gross profit (loss)       12,105       5,273      18,466      11,258

    Operating expenses:
       Research and development     6,955       6,868      13,418      14,071
       Marketing and sales          2,602       1,999       5,055       4,879
       General and administrative   4,193       4,283       7,287      11,197
       Amortization of intangibles  1,136       1,915       2,289       3,841
         Total operating expenses  14,886      15,065      28,049      33,988

    Loss from operations           (2,781)     (9,792)     (9,583)    (22,730)
    Interest expense                 (259)       (202)       (520)       (414)
    Other income (expense), net     2,240       1,220       3,711       2,255
    Loss before income taxes         (800)     (8,774)     (6,392)    (20,889)
    Income tax (benefit) expense    1,507      (2,389)      2,174      (6,266)

    Net loss                       (2,307)     (6,385)     (8,566)    (14,623)

    Preferred stock dividend        1,375       1,143       2,590       2,224

    Net loss applicable to common
     stockholders                 $(3,682)    $(7,528)   $(11,156)   $(16,847)

    Basic and diluted loss per
     common share                  $(0.07)     $(0.15)     $(0.22)     $(0.33)
    Weighted average number of
     basic and diluted common
     shares outstanding        50,912,680  50,697,358  50,827,970  50,682,183

SOURCE Input/Output, Inc.

CONTACT: C. Robert Bunch, Chief Administrative Officer of Input/Output,
Inc., 281-933-3339/