Geospace Technologies Announces Customer Intention to Cancel OBX Rental Contract Due to Business Delays

Geospace Technologies GEOS today announced that it has received notice from a customer that, as a result of business delays, it is unable to take delivery of 5,000 OBX stations and related equipment scheduled for delivery on April 15, 2019. If the customer does not take delivery by April 15, 2019, Geospace will recognize revenue of $1.3 million in its second quarter ending March 31, 2019 representing a non-refundable upfront deposit it received from the customer in 2018. Geospace announced the signing of this contract on August 30, 2018 and estimates the contract would have generated approximately $8 million of rental revenue over the contract's minimum rental term of 180 days.

"While we are disappointed to hear this news, we believe our OBX marine nodal products remain in high demand and we are currently evaluating several opportunities to deploy these OBX stations in the coming months," said Walter "Rick" Wheeler, President and Chief Executive Officer. "We believe the customer who cancelled will be back in the marketplace during the next twelve months and we hope to be able to supply their marine nodal product needs at that time."

About Geospace Technologies

Geospace principally designs and manufactures seismic instruments and equipment. We primarily market our seismic products to the oil and gas industry to locate, characterize and monitor hydrocarbon producing reservoirs. We also market our seismic products to other industries for vibration monitoring, border and perimeter security and various geotechnical applications. We design and manufacture other products of a non-seismic nature, including water meter products, imaging equipment and offshore cables.

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