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HOUSTON, Oct. 25 /PRNewswire/ — Input/Output, Inc. (NYSE: IO) today
announced net earnings applicable to common shareholders for the third quarter
ended September 30, 2001 of $2.7 million, or $0.05 per share, on revenue of
$58.6 million, compared to a net loss applicable to common shareholders of
$(8.4) million, or $(0.17) per share, on revenue of $30.4 million for the same
period a year ago. Results for the third quarter ended September 30, 2001
reflect the realization of a one-time tax benefit equal to about $1.6 million,
or $0.03 per share.

For the nine months ended September 30, 2001, Input/Output recorded net
earnings applicable to common shareholders of $3.1 million, or $0.06 per
share, on revenue of $160.9 million, compared to a net loss applicable to
common shareholders of $(73.2) million, or $(1.44) per share, on revenue of
$97.0 million for the same period a year ago.

“Third quarter operating results reflect the continuing evolution of our
turnaround strategy for the Company,” said Tim Probert, the Company’s
President and Chief Executive Officer. Probert continued, “Despite continued
high levels of R&D expenditures focused on new product development, our
operating results mark a definitive improvement from this time last year.
Third quarter EBITDA was $6.4 million, or 11.0% of revenues, with both our
Land and Marine products divisions contributing substantially to this EBITDA
performance. Commercialization of our VectorSeis(TM) line of multi-component
products in North America is underway with construction of the first
VectorSeis(TM) fleet of approximately 3,000 stations for deployment this
winter. Fifteen pilot surveys have been undertaken this year with our
commercialization partner, Veritas DGC, using prototype VectorSeis(TM) units.
Feedback from Veritas and the end-users has been favorable. Our cash position
continues to strengthen with over $96 million of cash at September 30, 2001,
positioning us to take advantage of opportunities that may arise in the
current economic environment. In summary, we are continuing 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.”

“While the near-term outlook for the industry now appears less robust, we
believe that our fourth quarter operating results will be breakeven or
slightly positive on somewhat lower revenues than this quarter. Although we
are unable to provide any definitive guidance for next year, early indications
are that the first half of next year could be difficult compared with the last
half of this year. However, long term fundamentals for the sector remain
strong and Input/Output is well-positioned to benefit from new product sales
by the second half of next year.”

Land and marine division revenues during the third quarter were
$48.0 million and $10.6 million, respectively, compared to land division
revenue of $22.8 million and marine division revenue of $7.6 million for the
same period a year ago. Land and marine division revenues during the nine
months ended September 30, 2001 were $120.1 million and $40.8 million,
respectively, compared to land division revenue of $59.3 million and marine
division revenue of $37.7 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, fourth quarter performance and revenue growth in 2001, any
statement concerning future business fundamentals for the seismic industry,
scheduled new product offerings 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         Nine Months Ended
                                September 30,              September 30,
                             2001          2000         2001          2000

    Net sales              $58,647       $30,355     $160,924       $97,020
    Cost of sales           40,111        23,129      104,668        87,605
        Gross profit        18,536         7,226       56,256         9,415

    Operating expenses:
      Research and
       development           6,699         6,246       21,895        20,578
      Marketing and sales    3,869         2,413       10,688         7,753
      General and
       administrative        4,491         3,293       14,101        13,967
      Amortization and
       impairment of
       intangibles           1,225           910        3,546        36,566
        Total operating
         expenses           16,284        12,862       50,230        78,864

    Earnings (loss) from
     operations              2,252        (5,636)       6,026       (69,449)

    Interest expense           (55)         (288)        (645)         (695)
    Interest income          1,388         1,587        3,874         4,052
    Other income               158           141           58         1,634
    Earnings (loss)
     before income taxes     3,743        (4,196)       9,313       (64,458)
    Income tax (benefit)
     expense                  (352)        2,970        2,044         5,126
    Net earnings (loss)      4,095        (7,166)       7,269       (69,584)
    Preferred dividend       1,416         1,279        4,201         3,617
    Net earnings (loss)
     applicable to common
     shares                 $2,679       $(8,445)      $3,068      $(73,201)

    Basic earnings
     (loss) per common
     share                   $0.05        $(0.17)       $0.06        $(1.44)
    Weighted average
     number of common
     shares
     outstanding        51,319,419    50,918,674   51,179,516    50,823,408

    Diluted earnings
     (loss) per
     common share            $0.05        $(0.17)       $0.06        $(1.44)
    Weighted average
     number of
     diluted common
     shares
     outstanding        52,413,427    50,918,674   52,444,450    50,823,408

SOURCE Input/Output, Inc.

CONTACT: C. Robert Bunch, Chief Administrative Officer of Input/Output,
Inc., +1-281-933-3339