Geospace Technologies Corporation (NASDAQ:GEOS) Q4 2017 Earnings Conference Call Transcript
Dec 01, 2017 • 10:00 am ET
Good day, and welcome to the Geospace Technologies' Fourth Quarter and Full Year 2017 Earnings Conference Call. Hosting the call today from Geospace is Mr. Rick Wheeler, President and CEO. He is joined by Tom McEntire, the company's VP and CFO. Today's call is being recorded and will be available on the Geospace Technologies' IR website following the call. (Operator Instructions)
It's now my pleasure to turn the floor over to Mr. Rick Wheeler. Please go ahead.
Good morning, and welcome to Geospace Technologies' conference call for the fourth quarter of fiscal year 2017. I'm Rick Wheeler, the company's President and CEO, and I'm joined here with Tom McEntire, the company's VP and CFO.
I'll start the call with a prepared overview of the quarter and Tom will then follow with an in-depth commentary of our financial performance. Next, I'll close the prepared portion of the call with some final remarks, and we'll open the line for questions.
For everyone's convenience, we'll link a recording of this call in the IR section of our website at www.geospace.com. Be aware that the information we discuss this morning is time-sensitive and might not be accurate on the day one listens to that replay.
(Forward-Looking Cautionary Statements) Yesterday, after the market closed, the company released its financial results for the fourth quarter and 2017 fiscal year, which ended September 30, 2017. As noted, revenue generated in the fourth quarter totaled $23.7 million, an increase of 45% over last year's fourth quarter. This represents the largest quarterly revenue received since the second quarter of fiscal year 2015. A large portion of this revenue is associated with the sale to a prominent customer, of 15,000 3-channel GSX recording stations and 3-component geophone sensors from our rental fleet.
In combination with the first three quarters, revenue for the full 2017 fiscal year showed an increase of almost 19% over last year, reaching $73.7 million. Despite the higher revenue in the fourth quarter and fiscal year, earnings for the year reflected a net loss of $56.8 million or $4.32 per diluted share. Contributing to this loss were large noncash amounts of 56 -- I'm sorry, of $5.3 million in impairment charges levied in the fourth quarter against certain factory equipment used in the manufacture of permanent reservoir monitoring, or PRM systems, as well as $21.5 million of inventory obsolescence reserves, of which $5.1 million occurred in the fourth quarter related to our PRM products. Together, these noncash adjustments amounted to $26.8 million over the fiscal year or a loss of $2.04 per diluted share. The adjustments relating to PRM manufacturing equipment and related PRM product inventories occurred in response to news we received in September of 2017 from one of our PRM customers. We were informed that two offshore fields we had been discussing would now limit the tender submissions to only specified fiber-optic sensors, which our products do not use. In conjunction with this notice and the recognition that there have been no PRM orders placed since