ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Companys financial statements and notes
thereto included elsewhere in this Form 10-Q.
Forward Looking Statements
Statements other than statements of historical fact included in this Form 10-Q that relate to forecasts, estimates or other
expectations regarding future events, including without limitation, statements under Managements Discussion and Analysis of Financial Condition and Results of Operations regarding technological advancements and our financial
position, business strategy and plans and objectives of our management for future operations, may be deemed to be 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. When used in this Form 10-Q, words such as anticipate, believe, estimate, expect, intend, and similar expressions, as they relate to us or our management, identify
forward-looking statements. Such forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated
by the forward-looking statements as a result of certain factors, including but not limited to the volatility of oil and natural gas prices, dependence upon energy industry spending, industry competition, delays, reductions or cancellations of
service contracts, reduced utilization, crew productivity, the type of contracts we enter into, external factors affecting our crews such as weather interruptions and inability to obtain land access rights of way, high fixed costs of our operations
and our high capital requirements, limited number of clients, credit risk related to our clients, the availability of capital resources and operational disruptions. A discussion of these factors, including risks and uncertainties, is set forth under
Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2013 and in our other reports filed from time to time with the Securities and Exchange Commission. These forward-looking statements reflect our current
views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategies and liquidity. All subsequent written and oral forward-looking
statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this paragraph. We assume no obligation to update any such forward-looking statements.
Overview
We are a leading provider of onshore seismic data acquisition services in the lower 48 states of the
United States. During 2012, we entered the Canadian market by forming a new Canadian subsidiary that began operations during the 2012 2013 winter season. Substantially all of our revenues are derived from the seismic data acquisition
services we provide to our clients, mainly domestic oil and natural gas companies. Demand for our services depends upon the level of spending by these companies for exploration, production, development and field management activities, which depends,
in part, on oil and natural gas prices. Significant fluctuations in domestic oil and natural gas exploration activities and commodity prices have affected the demand for our services and our results of operations in years past, and such fluctuations
continue to be the single most important factor affecting our business and results of operations.
During the majority of the 2012 fiscal
year, we operated fourteen data acquisition crews. During fiscal 2013, we mostly operated fourteen data acquisition crews, except in the last fiscal quarter of 2013 when demand dictated we operate eight data acquisition crews. In the middle of first
fiscal quarter 2014, we returned to full deployment of twelve data acquisition crews which we maintained through the second fiscal quarter of 2014. We have maintained a balanced order book in terms of the client mix and geographical diversity with
the majority of the projects in oil and liquids-rich basins. The majority of our crews are currently working in oil producing basins. However, in recent years, we have experienced periods in which the services we provided were primarily to clients
seeking natural gas.
While our revenues are mainly affected by the level of client demand for our services, our revenues are also
affected by the pricing for our services that we negotiate with our clients and the productivity and utilization level of our data acquisition crews. Factors impacting productivity and utilization levels include crew downtime related to inclement
weather, delays in acquiring land access permits, agricultural or hunting activity, holiday schedules, short winter days, crew repositioning or equipment failure, whether we enter into turnkey or term contracts with our clients, the number and size
of crews and the number of recording channels per crew. To the extent we experience these factors, our operating results may be affected from quarter to quarter. Consequently, our efforts to negotiate more favorable contract terms in our
supplemental service agreements, to mitigate access permit delays and to improve overall crew productivity may contribute to growth in our revenues. Demand for our services continues to be steady and as a result we have continued to negotiate
favorable contract terms during fiscal 2012, 2013 and during the first six months of fiscal 2014. Although our clients may cancel, delay or alter their service contracts on short notice and we continue to remain subject to land access permit and
weather delays, we anticipate a demand level sufficient to maintain the operation of an average of twelve crews from the middle of the third quarter of 2014 into fiscal 2015. However, project readiness and delays continue to be intermittent issues
and, as a result, our utilization is expected to be negatively impacted on five crews for the first half of the third fiscal quarter of 2014. We anticipate returning to full utilization of twelve crews during the second half of the third fiscal
quarter in the United States.
12
Currently, most of our client contracts are turnkey contracts. The percentage of revenues derived
from turnkey contracts has represented approximately three-quarters of our revenues for the past few years. While turnkey contracts allow us to capitalize on improved crew productivity, we also bear more risks related to weather and crew downtime.
We expect the percentage of turnkey contracts to remain high as we continue to expand our operations in mid-continent, western and southwestern regions of the United States in which turnkey contracts are more common.
Over time, we have experienced continued increases in recording channel capacity on a per crew or project basis. This increase in channel
count demand is driven by client needs and is necessary in order to produce higher resolution images, increase crew efficiencies and undertake larger scale projects. Due to the increase in demand for higher channel counts, we have continued our
investments in additional channels. In response to project-based channel requirements, we routinely deploy a variable number of channels on a variable number of crews in an effort to maximize asset utilization and meet client needs. We believe we
will realize the benefit of increased channel counts and flexibility of deployment through increased crew efficiencies, higher revenues and margins.
Reimbursable third-party charges related to our use of helicopter support services, permit support services, specialized survey technologies
and dynamite energy sources in areas with limited access are another important factor affecting our results. Revenues associated with third-party charges declined as a percentage of revenue during fiscal 2012 and 2013 as a result of such third-party
charges falling within or below our historical average. This trend continued during the first and second fiscal quarters of 2014. We expect that as we continue to expand our operations in the more open terrain of the mid-continent, western and
southwestern regions of the United States, the level of these third-party charges will continue to be generally within or below our historical range of 25% to 35% of revenue.
As a result of the introduction of the cable-less recording systems in 2012 and 2013, we have realized increased crew efficiencies and
increased revenue on projects using these cable-less technologies. In response to the continued demand for cable-less recording systems, in fiscal 2013 we purchased 2,500 channels of Wireless Seismic RT System 2, 12,000 single-channel Geospace
Technologies GSX units, 225 four-channel Geospace Technologies GSR units and 1,000 three-channel Geospace Technologies GSX units, bringing our total fiscal 2013 investment in cable-less recording channels to 18,400. This investment continued during
the first quarter of 2014 as we took delivery of an additional 9,000 stations of three-channel Geospace Technologies GSX units. As we have replaced cable-based recording equipment with cable-less equipment on certain crews, the cable-based recording
equipment continues to be deployed on existing crews as needed and we continue to phase out the older I/O RSR recording systems. Of the twelve large crews currently in operation, six use Geospace Technologies GSR recording systems and five use ARAM
cable-based recording systems. During the second fiscal quarter of 2014, we worked on a large project that continues in southern New Mexico utilizing the FairfieldNodal ZLand cable-less recording system. From time to time as demand dictates we use a
Wireless Seismic RT System 2 recording system for small 2-D and 3D projects as well as microseismic applications.
During 2012, we entered
into the Canadian market. This market is highly seasonal and operates primarily from late November through March, depending upon weather conditions. We operated one crew on two large multi-component projects during the 2013-2014 winter season.
Demand in Canada was softer than anticipated for the second consecutive winter season. Although we do not expect the Canadian operations to have a significant impact on our fiscal 2014 financial results, these operations negatively impacted our
financial results in the second quarter of fiscal 2014 and the first six months of fiscal 2014.
During fiscal 2012, we began providing
surface-recorded microseismic services to some of our clients. Microseismic monitoring is used by clients who use hydraulic fracturing to extract hydrocarbon deposits. We completed several projects in fiscal 2013 and believe our microseismic
business will continue to provide growth opportunities. These operations did not have a significant impact on our fiscal 2013 financial results, nor do we expect these operations to significantly impact our fiscal 2014 financial results.
While the markets for oil and natural gas have been very volatile and are likely to continue to be so in the future, and we can make no
assurances as to future levels of domestic exploration or commodity prices, we believe opportunities exist for us to enhance our market position by responding to our clients continuing desire for higher resolution subsurface images. If
economic conditions were to weaken, our customers reduce their capital expenditures or there is a significant sustained drop in oil and natural gas prices, it would result in diminished demand for our seismic services, could cause downward pressure
on the prices we charge and would affect our results of operations.
Results of Operations
Operating Revenues
. Our operating revenues decreased by approximately 8% during the second quarter of fiscal 2014 to $76,766,000 as
compared to $83,350,000 in the same quarter of fiscal 2013 and decreased by approximately 9% during the first six months of fiscal 2014 to $144,947,000 as compared to $159,979,000 in the same period of fiscal 2013, primarily as a result of a
reduction in the average number of active crews in the United States from fourteen large channel count crews and one small channel count crew to twelve crews as well as intermittent weather related crew interruptions in a few areas of operation.
Third-party charges, for which we are reimbursed by clients, decreased significantly during the second quarter of 2014 but remained fairly constant during the first six months of fiscal 2014 as compared to the respective prior periods. The movement
of our operations towards the more open terrain of the western United States where there is less need for drilling and helicopter services resulted in reduced third party charges.
13
Operating Costs
. Operating expenses for the second quarter and first six months of fiscal
2014 increased nominally to $60,091,000 and $119,199,000 as compared to $59,666,000 and $118,401,000, respectively, for the same periods of fiscal 2013. Although the dollar amounts of operating costs were generally consistent between the
corresponding periods of fiscal 2014 and fiscal 2013, our costs associated with reimbursed expenses decreased during the second quarter and first six months of 2014 compared to the corresponding periods of 2013. This decrease was partially offset by
an increase in operating expenses excluding third-party charges during the second quarter and first six months of fiscal 2014 as compared to the corresponding periods of fiscal 2013. The increase in operating costs excluding third party charges in
the second fiscal quarter and first six months of fiscal 2014 was primarily the result of significant increases in costs on the Canadian project initially scheduled for completion in early December 2013, which was extended into early February 2014
due to excessive snowfall and operational difficulties. Our operating expenses excluding third party charges also increased in the second quarter and first six months of fiscal 2014 as a result of increased costs associated with field personnel and
equipment rental compared to the prior periods, including routine startup costs on several projects in the United States. As discussed above, reimbursed expenses have a similar impact on operating expenses.
General and administrative expenses were 4.8% and 5.4% of revenues in the second quarter and first six months of fiscal 2014, respectively,
compared to 4.2% and 4.4% of revenues in the same periods of fiscal 2013. General and administrative expenses increased to $3,676,000 during the second quarter of fiscal 2014 from $3,508,000 during the same period of fiscal 2013 and increased to
$7,840,000 during the first six months of fiscal 2014 from $7,104,000 during the first six months of fiscal 2013. The increase in expenses was primarily associated with increased business development costs in the current quarter as compared to the
prior year quarter. We anticipate that we will experience increased general and administrative expenses as compared to prior periods over the next year as we implement our new enterprise resource planning system.
Depreciation for the second fiscal quarter of 2014 and six months ended March 31, 2014 totaled $10,177,000 and $20,053,000, respectively,
compared to $9,578,000 and $18,682,000 for the second fiscal quarter and first six months of fiscal 2013, respectively. The increase in depreciation expense is the result of capital expenditures we made during fiscal 2013 and to-date in fiscal 2014.
Our depreciation expense is expected to continue to increase during fiscal 2014, reflecting our higher capital expenditures during fiscal 2013 and in the six months just ended.
Our total operating costs for the second quarter and first six months of fiscal 2014 were $73,944,000 and $147,092,000 which represented
nominal increases as compared to the second quarter and first six months of fiscal 2013. These increases were primarily due to the factors described above.
Taxes
. Income tax benefit was $1,550,000 for the six months ended March 31, 2014 compared to income tax expense of $6,433,000 for
the six months ended March 31, 2013. Income tax expense was $687,000 for the three months ended March 31, 2014 compared to income tax expense of $4,302,000 for the three months ended March 31, 2013. The effective tax rates for the six
months ended March 31, 2014 and 2013 were approximately 55.5% and 41.1%, respectively. Our effective tax rate increased as compared to the prior period due to profits before taxes being closer to break even thus permanent items and state
taxes had an increased impact on our effective rate. Our effective tax rates differ from the statutory federal rate of 35% for certain items such as foreign operations, state and local taxes, non-deductible expenses, discrete items, expenses related
to share-based compensation that were not expected to result in a tax deduction and changes in reserves for uncertain tax positions.
Use of EBITDA
(Non-GAAP measure)
We define EBITDA as net income (loss) plus interest expense, interest income, income taxes, depreciation and
amortization expense. Our management uses EBITDA as a supplemental financial measure to assess:
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the financial performance of our assets without regard to financing methods, capital structures, taxes or historical cost basis;
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our liquidity and operating performance over time in relation to other companies that own similar assets and that we believe calculate EBITDA in a similar manner; and
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the ability of our assets to generate cash sufficient for us to pay potential interest costs.
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We also understand that such data are used by investors to assess our performance. However, the term EBITDA is not defined under generally
accepted accounting principles (GAAP), and EBITDA is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP. When assessing our operating performance or liquidity, investors and others
should not consider this data in isolation or as a substitute for net income (loss), cash flow from operating activities or other cash flow data calculated in accordance with GAAP. In addition, our EBITDA may not be comparable to EBITDA or similarly
titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as we calculate. Further, the results presented by EBITDA cannot be achieved without incurring the costs that the measure excludes:
interest, taxes, depreciation and amortization.
14
The reconciliation of our EBITDA to our net income (loss) and net cash provided by operating
activities, which are the most directly comparable GAAP financial measures, are provided in the tables below:
Reconciliation of EBITDA to Net Income
(Loss)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Three Months Ended March 31,
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Six Months Ended March 31,
|
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|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
(in 000s)
|
|
|
(in 000s)
|
|
Net income (loss)
|
|
$
|
1,652
|
|
|
$
|
6,279
|
|
|
$
|
(1,245
|
)
|
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$
|
9,207
|
|
Depreciation
|
|
|
10,177
|
|
|
|
9,578
|
|
|
|
20,053
|
|
|
|
18,682
|
|
Interest expense (income), net
|
|
|
140
|
|
|
|
155
|
|
|
|
258
|
|
|
|
330
|
|
Income tax expense (benefit)
|
|
|
687
|
|
|
|
4,302
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|
|
|
(1,550
|
)
|
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|
6,433
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|
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|
|
|
|
|
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|
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|
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|
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EBITDA
|
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$
|
12,656
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|
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$
|
20,314
|
|
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$
|
17,516
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$
|
34,652
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Reconciliation of EBITDA to Net Cash Provided by Operating Activities
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Three Months Ended March 31,
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Six Months Ended March 31,
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2014
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|
2013
|
|
|
2014
|
|
|
2013
|
|
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(in 000s)
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|
(in 000s)
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Net cash provided by operating activities
|
|
$
|
23,350
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|
|
$
|
3,399
|
|
|
$
|
1,641
|
|
|
$
|
12,413
|
|
Changes in working capital and other items
|
|
|
(10,226
|
)
|
|
|
17,332
|
|
|
|
16,747
|
|
|
|
23,296
|
|
Noncash adjustments to net income (loss)(1)
|
|
|
(468
|
)
|
|
|
(417
|
)
|
|
|
(872
|
)
|
|
|
(1,057
|
)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
12,656
|
|
|
$
|
20,314
|
|
|
$
|
17,516
|
|
|
$
|
34,652
|
|
|
|
|
|
|
|
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|
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(1)
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Noncash adjustments to net income (loss) primarily consist of noncash compensation.
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Liquidity and Capital
Resources
Introduction.
Our principal sources of cash are amounts earned from the seismic data acquisition services we provide
to our clients. Our principal uses of cash are the amounts used to provide these services, including expenses related to our operations and acquiring new equipment. Accordingly, our cash position depends (as do our revenues) on the level of demand
for our services. In recent years, cash generated from our operations along with cash reserves and borrowings from commercial banks have been sufficient to fund our working capital requirements and, to some extent, our capital expenditures.
Cash Flows.
Net cash provided by operating activities was $1,641,000 for the six months ended March 31, 2014 and $12,413,000 in
the six months ended March 31, 2013. Net cash provided by operating activities for the first six months of fiscal 2014 was primarily impacted by our decline in revenues during the period. This decline in revenues during the first six months
fiscal 2014 was not matched by a decrease in overall operating costs and as a result our margins and net results from operating activities were negatively affected. Net cash provided by operating activities was positively impacted in the six months
ended March 31, 2104 by an increase in amounts received in advance of services performed. Despite the fact that we have had an increase in our outstanding receivables, our collection experience as an average number of days in accounts
receivable has remained at approximately sixty during the last twelve months. We believe that our allowance for doubtful accounts of $250,000 at March 31, 2014 is adequate to cover exposures related to our trade account balances.
Net cash used by investing activities was $31,038,000 in the six months ended March 31, 2014 and $48,686,000 in the six months ended
March 31, 2013. The net cash used in investing activities in fiscal 2014 primarily represents capital expenditures of $30,205,000, net of noncash capital expenditures and noncash capital lease obligations, made from excess cash reserves and
financing proceeds discussed below. Short-term investments of $17,250,000 in certificates of deposit were also made from maturities of $16,250,000 in certificates of deposit and excess cash reverses. In fiscal 2013, excess cash reserves and
financing proceeds were used to fund capital expenditures of $40,147,000 net of noncash capital expenditures and noncash capital lease obligations. Also in fiscal 2013, we invested $11,750,000 in short term investments from excess cash reserves and
$3,000,000 in maturities of short term investments.
Net cash provided by financing activities was
$3,488,000 in the six months ended March 31, 2014 while net cash used by financing activities was $3,448,000 in the six months ended March 31, 2013. Financing activities in the first six months of fiscal 2014 included the proceeds of
$10,000,000 from our Third Term Note, which we used to supplement the purchase of Geospace Technologies GSX recording equipment (as discussed below). In the first six months of fiscal 2014, financing activities included principal payments totaling
$5,448,000 on our Term Note, Second Term Note, Third Term Note and DSS Term Note. Also during the second quarter fiscal of 2014, our Board of Directors declared and paid $645,000 in quarterly cash dividends to our shareholders. For further
discussion of this regular quarterly dividend, see footnote 8 in the notes to the consolidated financial statements (unaudited). In the first six months of fiscal 2013, financing activities included proceeds from our DSS Term Note and $4,343,000 in
principal payments on our Term Note and Second Term Note.
15
Capital Expenditures.
Our Board of Directors has approved a fiscal 2014 capital budget of
$35,000,000. To date, $32,430,000 of the capital budget has been spent for the purchase of 9,000 GSX three-channel recording units, 10,000 three-channel geophones and vehicles to improve our fleet. The remaining balance of the capital budget will be
used for maintenance capital purposes. We believe these expenditures will allow us to maintain our competitive position as we respond to our clients desire for higher resolution subsurface images.
We continually strive to supply our clients with technologically advanced 3-D seismic data acquisition recording systems and data processing
capabilities. We maintain equipment in and out of service in anticipation of increased future demand for our services.
Capital
Resources.
In recent years, we have primarily relied on cash generated from operations, cash reserves and borrowings from commercial banks to fund our working capital requirements and, to some extent, our capital expenditures. Recently, we have
funded some of our capital expenditures through equipment term loans and capital leases. Historically, we have also funded our capital expenditures and other financing needs from time to time through public equity offerings.
Our revolving line of credit loan agreement is with Western National Bank. The agreement was renewed June 2, 2013 under the same terms as
the previous agreement and permits us to borrow, repay and reborrow, from time to time until June 2, 2015, up to $20.0 million based on the borrowing base calculation as defined in the agreement. Our obligations under this agreement are secured
by a security interest in our accounts receivable, equipment and related collateral. Interest on the facility accrues at an annual rate equal to either the 30-day LIBOR, plus two and one-quarter percent, or the Prime Rate, minus three-quarters
percent, as we direct monthly, subject to an interest rate floor of 4%. Interest on the outstanding amount under the loan agreement is payable monthly. The loan agreement contains customary covenants for credit facilities of this type, including
limitations on disposition of assets, mergers and reorganizations. We are also obligated to meet certain financial covenants under the loan agreement, including maintaining specified ratios with respect to cash flow coverage, current assets and
liabilities and debt to tangible net worth. We were in compliance with all covenants including specified ratios as of March 31, 2014 and have the full line of credit available for borrowing. We did not utilize the revolving line of credit
during the first six months ending March 31, 2014 of the current fiscal year or the fiscal year ended September 30, 2013.
Our
credit loan agreement includes a term loan feature under which we have three outstanding term loans. The first two term loans were confirmed and brought under the renewed credit loan agreement in June 2013, while the other term loan was entered into
in December 2013. In June 2011, we entered into the first Term Note by obtaining $16,427,000 in financing for the purchase of Geospace Technologies GSR equipment. The Term Note is repayable over a period of 36 months at $485,444 per month plus any
applicable interest in excess of 4%. The Term Note bears interest at an annual rate equal to either the 30-day LIBOR, plus two and one-quarter percent, or the Prime Rate, minus three-quarters percent, as we direct monthly, subject to an interest
rate floor of 4%, and otherwise has the same terms as our revolving line of credit. The Term Note is collateralized by a security interest in our accounts receivable, equipment and related collateral and matures with all outstanding balances due on
June 30, 2014.
In May 2012, we entered into the Second Term Note under our credit loan agreement. The Second Term Note allows us to
borrow from time to time up to $15.0 million to purchase equipment. In July 2012, we borrowed $9,346,000 under the Second Term Note to purchase Geospace Technologies GSR recording equipment. The outstanding principal under the Second Term Note is
amortized over 36 months. The Second Term Note bears interest at an annual rate equal to either the 30-day LIBOR, plus two and one-quarter percent, or the Prime Rate, minus three-quarters percent, as we direct monthly, subject to an interest rate
floor of 3.75%, and otherwise has the same terms as our revolving line of credit. The Second Term Note is collateralized by a security interest in our accounts receivable, equipment and related collateral and matures with all outstanding balances
due on May 2, 2015.
On December 4, 2013, we entered into the Third Term Note dated as of December 2, 2013 under our credit
loan agreement. The Third Term Note allows us to borrow from time to time up to $10.0 million to purchase equipment. Per a subsequent agreement, we will be unable to receive an advance for the remainder of the $15.0 million balance of the Second
Term Note. On December 5, 2013, we borrowed the full amount of $10.0 million under the Third Term Note to purchase Geospace Technologies GSX recording equipment. The outstanding principal under the Third Term Note is amortized over a period of
36 months. The Third Term Note bears interest at an annual fixed rate equal to 3.16%, and otherwise has the same terms as the revolving line of credit. The Third Term Note is collateralized by a security interest in our accounts receivable,
equipment and related collateral and matures with all outstanding balances due on December 2, 2016.
In February 2013, our subsidiary
DSS entered into the DSS Term Note with Wells Fargo Equipment Finance Company. DSS obtained $983,000 in financing for the purchase of equipment. The DSS Term Note is repayable over a period of 36 months at $28,980 per month and bears interest at an
implied annual fixed rate of 3.84%. The DSS Term Note is collateralized by a security interest in the DSS equipment and matures with all outstanding balances due on February 5, 2016.
16
During fiscal 2012, we began leasing vehicles from Enterprise Fleet Management under capital
leases. These capital lease obligations are payable in 36 to 60 monthly installments and mature between December 2014 and November 2017. At March 31, 2014, we had leased 101 vehicles under these capital leases.
The following table summarizes payments due in specific periods related to our contractual obligations with initial terms exceeding one year
as of March 31, 2014.
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Payments Due by Period (in 000s)
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Contractual Obligations
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Total
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|
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Within
1 Year
|
|
|
2-3
Years
|
|
|
4-5
Years
|
|
|
After 5
Years
|
|
Operating lease obligations (office space)
|
|
$
|
3,024
|
|
|
$
|
987
|
|
|
$
|
1,491
|
|
|
$
|
355
|
|
|
$
|
191
|
|
Capital lease obligations
|
|
$
|
1,820
|
|
|
$
|
1,000
|
|
|
$
|
801
|
|
|
$
|
19
|
|
|
$
|
|
|
Debt obligations
|
|
$
|
15,739
|
|
|
$
|
8,894
|
|
|
$
|
6,845
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total
|
|
$
|
20,583
|
|
|
$
|
10,881
|
|
|
$
|
9,137
|
|
|
$
|
374
|
|
|
$
|
191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
In April 2012, we filed a shelf registration statement with the SEC covering the periodic offer and sale of up
to $150.0 million in debt securities, preferred and common stock and warrants. The registration statement allows us to sell securities in one or more separate offerings with the size, price and terms to be determined at the time of sale. The terms
of any securities offered would be described in a related prospectus to be filed separately with the SEC at the time of the offering. The filing of the shelf registration statement will enable us to act quickly if and when opportunities arise.
We believe that our capital resources and cash flow from operations are adequate to meet our current operational needs. We believe we will be
able to finance our capital requirements through cash flow from operations, cash on hand, through borrowings under our revolving line of credit, additional equipment term loans and capital leases. However, our ability to satisfy our working capital
requirements and fund future capital requirements will depend principally upon our future operating performance, which is subject to the risks inherent in our business, including the demand for our seismic services from clients.
Off-Balance Sheet Arrangements
As of
March 31, 2014, we had no off-balance sheet arrangements.
Critical Accounting Policies
Information regarding our critical accounting policies and estimates is included in Item 7, Managements Discussion and
Analysis of Financial Condition and Results of Operations included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2013.
Recently Issued Accounting Pronouncements
None.