Geospace Technologies (GEOS) to Reduce Headcount as Part of Cost Reductions

Geospace Technologies Corporation (NASDAQ Global: GEOS) today announced its program to further reduce its operating costs in light of declining product demand brought about by lower and turbulent crude oil and natural gas prices. This initiative is expected to be substantially completed by the end of the Company’s second fiscal quarter ending March 31, 2016.

The program is expected to produce approximately $7 million of annualized cash savings over and above measures already implemented in its first fiscal quarter ended December 31, 2015. The majority of savings will be realized through a reduction of over 150 employees from the Company’s Houston-area workforce. In connection with the workforce reduction, the Company expects to incur $0.9 million of termination costs in its second fiscal quarter ending March 31, 2016. Additional cost savings will be realized through a facility consolidation as well as expense reductions in other areas.

Walter R. (“Rick”) Wheeler, President and CEO of Geospace Technologies said, “We are implementing this additional cost reduction program in full respect of current market conditions, where demand for our products has dropped precipitously. This includes the indefinite postponement of a permanent reservoir monitoring project opportunity that was expected to be tendered and delivered during fiscal year 2016. This very difficult decision to reduce our workforce reaches across all departments and geographical locations. However, we believe that we are strategically accomplishing this reduction in a manner that fully maintains our core manufacturing and engineering competencies with little or no interruption to our technical research and development efforts. If market conditions improve, we will appropriately respond to the need for additional resources. Although we currently face an unpredictable outlook with very limited visibility, we have prudently managed our balance sheet with no debt and a high level of liquidity which we believe makes us a survivor through this difficult time. Furthermore, we are experienced in managing our business through such challenging cycles, and we will continue to take the necessary steps to align our operating structure to meet market demand.”

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