Slide 1: Geospace Technologies Corporation
GEOSPACE Technologies Corporation June 30, 2012
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 Gary D. Owens Thomas T. McEntire Chairman, President & Chief Executive Officer VP & Chief Financial Officer – 42 years in the seismic industry – 15 years in the seismic industry – 20 years with Input/Output, Inc. (now ION – 7 years with APS Holding Corp. Geophysical Corp.), including
Slide 4: Business Overview
Business Overview Leading designer & LTM June 30, 2012 Seismic manufacturer of seismic 15% exploration and seismic reservoir monitoring equipment Non-Seismic Leading designer & 85% manufacturer of thermal imaging equipment and dry thermal film LTM Revenue: $188 million Incubator of products for othe
Slide 5: Company Highlights
Company Highlights Proven Track Record of Technology Leadership Differentiated technology innovation Profitability Across Commodity Cycles with Significant Earnings Over Time Positive earnings generated every year since 2004 Growth Potential through Product Innovation Leading edge Geospace Seismic R
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 – 57 member engineering team located in Houston with an average of 24 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 – 387k sq. ft. in Houston – 120k sq. ft. in Ufa, Bashkortostan, Russia – 45k sq. ft. in Calgary 1,100+ employees worldwide We
Slide 9: Strategic Focus Within Seismic Market
Strategic Focus Within Seismic Market Equipment Data Multi-Client Data Processing & Company Manufacturing Leasing Acquisition Data Library Interpretation Geospace Technologies BGP (Inova) Multi-Service CGGVeritas (Sercel) Global Geophysical (AutoSeis) ION Geophysical
Slide 10: Seismic Segment
Seismic Segment 9
Slide 11: Seismic Industry Drivers
Seismic Industry Drivers Oil Price Outlook (WTI) Bullish outlook for oil $125 NYMEX WTI Strip Pricing – Performance historically highly $100 correlated to commodity prices $75 $/bbl $84.96 $50 New discoveries needed to keep $25 up with demand $0 2009 2010 2011 2012 2013 – Large inventory of resource
Slide 12: Business Anchored by Traditional Seismic Exploration Products
Business Anchored by Traditional Seismic Exploration Productions Land & Marine Applications LTM¹ Revenue Contribution Sensor Products – Geophones 15% 36% – Hydrophones 8% – Multi-component packages Cable Products 41% – Leader wire (geophone string application) – Acquisition system cables Seismic Exp
Slide 13: Significant Growth Potential from Wireless Seismic Exploration Opportunity
Significant Growth Potential from Wireless Seismic Exploration Opportunity Geospace Seismic Recorder (GSX) LTM¹ Revenue Contribution Wireless seismic data acquisition system 15% – Developed leading land-based wireless data acquisition system in 36% 8% 2008 – Permits new multi-source acquisition tech
Slide 14: The GSX Advantage
The GSX 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 Roads, rail
Slide 15: GSX Market Opportunity
GSX Market Opportunity Cumulative GSX Channels Have supplied more wireless channels than any Over 196,000 Channels Sold / other competitor Available for Rent Opportunity to capture market share as cabled 210,000 systems are replaced due to aging 196,000 – 4-5 million estimated channel market oppor
Slide 16: Leader in Seismic Reservoir Characterization Products
Leader in Seismic Reservoir Characterization Products LTM¹ Revenue Contribution Pioneered permanent seismic reservoir monitoring 15% Ocean bottom data acquisition systems 8% 36% – Retrievable & permanent 41% Borehole data acquisition systems – Retrievable & permanent Seismic Exploration (Traditional
Slide 17: Non-Seismic Segment
Non-Seismic Segment 16
Slide 18: Non-Seismic Markets
Non-Seismic Markets LTM¹ Revenue Contribution Utilizes existing engineering and manufacturing resources to broaden Seismic Exploration 15% product lines and markets (Traditional) Seismic Exploration (GSR) 8% 36% Strategy focuses on thermal imaging, Seismic Reservoir cabling, molding and machine capa
Slide 19: Financials
Financials 18
Slide 20: Consistent Profitability and Earnings Growth
Consistent Profitability and Earnings Growth Pre-Tax Return on Equity 37% Remained profitable through significant 33% 34% economic and commodity downturn 23% 20% 18% 3% FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Q3 2012 Profitability through commodity cycles – Flexible cost structure allows GEOSPACE
Slide 21: Strength of New Products Driving Growth
Strength of New Products Driving Growth Revenue ($ in millions) Business Overview Traditional Seismic Business Growing $132 – Historically largest product category (40-60% of $173 revenues) $25 – Includes consumable products; serves as a good $83 $154 $93 $90 $16 barometer for health of overall seis
Slide 22: Review of Fiscal Q3 2012 Results
Review of Fiscal Q3 2012 Results Revenues of $55.2 million – Revenue growth driven by sales of GSX wireless systems Gross profit margin of 42% – Business mix shifting to higher margin product offerings Diluted EPS of $1.67 – Q3 was 2nd best quarterly net income, following best quarterly net income i
Slide 23: Strong Capitalization & Cash Flows
Strong Capitalization & Cash Flows ($ in millions, as of June 30, 2012) Cash and Short-Term Investments $ 68 Tremendous financial Liquidity¹ 92 flexibility Total Long-Term Debt 0 – No long-term debt Stockholders’ Equity 209 – $25 million credit facility Total Capitalization $ 209 Long-term track rec
Slide 24: Company Highlights
Company Highlights Proven Track Record of Technology Leadership Differentiated technology innovation Profitability Across Commodity Cycles with Significant Earnings Over Time Positive earnings generated every year since 2004 Growth Potential through Product Innovation Leading edge Geospace Seismic R