Geospace Technologies Corporation · NASDAQ:GEOS
Geospace Technologies — Investor Presentation (December 2014)
24 slides from Geospace Technologies's investor presentation, December 2014
Slide 1: December 31, 2014
A ag @ December 31, 2014 ((, SoREERSE
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. All statements other than statements of historical facts included herein,
Slide 3: Management Team
Management Team Walter R. Wheeler Thomas T. McEntire President & Chief Executive Officer VP & Chief Financial Officer – 30 years in the seismic industry – 17 years in the seismic industry – 13 years with Input/Output, Inc. (now ION – 7 years with APS Holding Corp. Geophysical Corp.) – 8 years with C
Slide 4: Business Overview
Business Overview Leading designer and LTM December 31, 2014 manufacturer of seismic 14% equipment for oil & gas Seismic exploration and exploitation Wireless and reservoir monitoring systems drivers of 86% future revenue growth Incubator of products for other Non-Seismic LTM Revenue: $157 million m
Slide 5: Company Highlights
Company Highlights Proven Track Record of Technology Leadership Differentiated technology innovation Significant Earnings Over Time Annualized growth in retained earnings of 18% since 1997 IPO Growth Potential through Product Innovation Leading edge wireless (GSX/OBX) systems and permanent reservoir
Slide 6: Impact of Technology Innovation
Impact of Technology Innovation 1950s 1960s 1970s 1980s 1990s 2000s 2010+ - 24 channels - 24 channels - 120 channels - 192 channels - 4,000 channels - 40,000+ channels - Higher channel counts - Pre-digital revolution - Early digital system - Analog inputs only - 1st telemetry system - 1st multi-line
Slide 7: Product Development Driven Growth
Product Development Driven Growth Industry Organic growth Expertise Marketing Engineering – Creating value for our customers Improvements and investors by developing new products Engineering expertise – 62 member engineering team located in Houston with an average of 26 years of product design exper
Slide 8: Differentiated Manufacturing Capabilities
Differentiated Manufacturing Capabilities Manufacturing expertise & capacity – Electronic assembly, sensor shop, cable shop, machine shop, molding shop, printhead clean room – 455k sq. ft. in Houston – 120k sq. ft. in Ufa, Bashkortostan, Russia – 45k sq. ft. in Calgary 1,100 employees worldwide We l
Slide 9: Strategic Focus Within Seismic Market
Strategic Focus Within Seismic Market Processing Equipment Data Multi-Client Data Processing & Company Manufacturing Leasing Acquisition Data Library Interpretation Geospace Technologies BGP (Inova) Multi-Service CGG (Sercel) Global Geophysical (AutoSeis) ION Geophysical
Slide 10: Seismic Segment
GEOSPACE ‘Technologies
Slide 11: Traditional Seismic Exploration Products
Traditional Seismic Exploration Products Land & Marine Applications LTM¹ Revenue Contribution Sensor Products – Geophones 25% 14% – Hydrophones Seismic - Traditional Seismic - Wireless – Multi-component packages Seismic - Reservoir 36% Cable Products 25% Non-Seismic – Leader wire (geophone string ap
Slide 12: Wireless Products Providing Significant Growth
Wireless Products Providing Significant Growth Geospace Seismic Recorder (GSX) LTM¹ Revenue Contribution Wireless seismic data acquisition system – Developed leading land-based wireless data 14% Seismic - Traditional 25% acquisition system in 2008 Seismic - Wireless – Permits new multi-source acquis
Slide 13: The GSX Wireless Advantage
The GSX Wireless Advantage Conventional Technology → Cabled Our Technology → Wireless Deployment is time-consuming Increases crew productivity and decreases crew footprint Maintenance is constant Lightweight and easy to deploy Cables are heavy, raising HSE issues Significantly reduces maintenance Ro
Slide 14: GSX Market Opportunity
GSX Market Opportunity Cumulative Wireless Channels Sold more wireless channels than any other competitor Over 459,000 Channels Sold / Opportunity to capture market share as cabled systems Available for Rent are replaced due to aging and inefficiency 500,000 – 4-5 million estimated channel market
Slide 15: The OBX Wireless Advantage
The OBX Wireless Advantage Conventional Technology → Cabled Our Technology → Wireless Deployment and retrieval is time -consuming Increases crew productivity Much more reliable thus reduces maintenance Maintenance is constant and downtime is costs expensive More stations per vessel size Cables take-
Slide 16: Leader in Reservoir Characterization Products
Leader in Reservoir Characterization Products Pioneered and market leader in permanent seismic reservoir LTM¹ Revenue Contribution monitoring (PRM) systems Recent contracts provided substantial revenue growth in 2013-2014 14% – $18 Million Shell contract for BC-10 field in Brazil (FY 2013) Seismic -
Slide 17: Non-Seismic Segment
GEOSPACE ‘Technologies
Slide 18: Non-Seismic Markets
Non-Seismic Markets LTM¹ Revenue Contribution Utilizes existing engineering and manufacturing resources to broaden product lines and markets Seismic - Traditional 14% 25% Seismic - Wireless Strategy focuses on thermal imaging, Seismic - Reservoir 36% cabling, molding and machining capabilities 25% N
Slide 19: Financials
GEOSPACE ‘Technologies
Slide 20: Profitability and Return on Equity
Profitability and Return on Equity Pre-Tax Return on Shareholders’ Equity 47% 33% 29% 20% 18% 19% 3% -10% FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Q1 2015 Strong earnings growth during periods of oil price growth and stability 18% annualized growth in retained earnings since IPO in 19
Slide 21: Strength of New Products Provide Growth Opportunities
Strength of New Products Provide Growth Opportunities Revenue ($ in millions) Business Overview Wireless Market – Market Leader $301 – Funded by E&P exploration budgets – Primary growth driver since 2008 introduction $87 $237 – Rental business popular with customers Reservoir Products – Market Leade
Slide 22: Review of Fiscal Year 2015 Q1 Results
Review of Fiscal Year 2015 Q1 Results Revenues of $21 million – Significantly impacted by decline in E&P exploration spending – Profit margins impacted by high fixed cost structure and low factory utilization Net loss of $5.4 million, or $0.41 per share 21
Slide 23: Strong Capitalization & Cash Flows
Strong Capitalization & Cash Flows ($ in millions, as of December 31, 2014) Cash and Short-Term Investments $ 50 Tremendous financial Liquidity¹ 100 flexibility Total Long-Term Debt -- – No long-term debt Stockholders’ Equity 321 – $50 million credit facility Total Capitalization $ 321 Long-term tra
Slide 24: Company Highlights
Company Highlights Proven Track Record of Technology Leadership Differentiated technology innovation Significant Earnings Over Time Annualized growth in retained earnings of 18% since 1997 IPO Growth Potential through Product Innovation Leading edge wireless (GSX / OBX) systems and permanent reservo
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