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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Quarterly Period Ended March 31, 2000
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 001-13601
OYO GEOSPACE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 76-0447780
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
12750 SOUTH KIRKWOOD, SUITE 200
STAFFORD, TEXAS 77477
(Address of Principal Executive Offices)
(281) 494-8282
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
There were 5,506,013 shares of the Registrant's Common Stock outstanding as of
the close of business on May 9, 2000.
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TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION Number
- ------------------------------ ------
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
OYO Geospace Corporation and Subsidiaries
We have reviewed the accompanying consolidated balance sheet of OYO
Geospace Corporation and Subsidiaries as of March 31, 2000, and the related
consolidated statements of operations for the three months and six months ended
March 31, 2000 and 1999, and the consolidated statements of cash flows for the
six months ended March 31, 2000 and 1999. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the aforementioned financial statements for them to be in
conformity with accounting principles generally accepted in the United States.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of September 30, 1999, and the
related consolidated statements of operations, changes in stockholders' equity,
and cash flows for the year then ended (not presented herein) and, in our report
dated November 5, 1999, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying consolidated balance sheet as of September 30, 1999, is fairly
stated, in all material respects, in relation to the consolidated balance sheet
from which it has been derived.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
May 9, 2000
3
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OYO GEOSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
ASSETS MARCH 31, 2000 SEPTEMBER 30, 1999
-------------- ------------------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents..................................... $ 3,873 $ 5,280
Trade accounts and current portion of notes receivable, net... 9,598 7,770
Inventories................................................... 21,857 21,941
Deferred income tax........................................... 1,722 1,864
Prepaid expenses and other.................................... 798 1,394
------- -------
Total current assets....................................... 37,848 38,249
Rental equipment, net........................................... 2,074 1,654
Property, plant and equipment, net.............................. 18,395 17,060
Goodwill and other intangible assets, net....................... 5,427 5,598
Deferred income tax............................................. 746 729
Other assets.................................................... 171 129
------- -------
Total assets............................................... $64,661 $63,419
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current maturities of long-term debt........ $ 191 $ 169
Accounts payable.............................................. 4,084 2,792
Accrued expenses and other.................................... 1,971 2,630
Income tax payable............................................ 126 319
------- -------
Total current liabilities.................................. 6,372 5,910
Long-term debt.................................................. 4,069 4,182
Deferred income tax............................................. 1,665 1,929
------- -------
Total liabilities.......................................... 12,106 12,021
------- -------
Stockholders' equity:
Preferred stock............................................... - -
Common stock.................................................. 55 55
Additional paid-in capital.................................... 29,980 29,914
Retained earnings............................................. 23,894 23,066
Accumulated other comprehensive loss.......................... (455) (456)
Unearned compensation-restricted stock awards................. (919) (1,181)
------- -------
Total stockholders' equity................................. 52,555 51,398
------- -------
Total liabilities and stockholders' equity................. $64,661 $63,419
======= =======
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
4
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OYO GEOSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------------- --------------------------------
March 31, 2000 March 31, 1999 March 31, 2000 March 31, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Sales........................................... $ 14,963 $ 12,133 $ 27,758 $ 23,209
Cost of sales................................... 10,575 6,792 18,988 13,544
---------- ---------- ---------- ----------
Gross profit.................................... 4,388 5,341 8,770 9,665
Operating expenses:
Selling, general and administrative........... 2,324 3,001 4,754 5,516
Research and development...................... 1,605 1,569 2,942 3,227
---------- ---------- ---------- ----------
Total operating expenses................... 3,929 4,570 7,696 8,743
---------- ---------- ---------- ----------
Income from operations.......................... 459 771 1,074 922
Other income (expense):
Interest expense.............................. (77) (110) (154) (161)
Interest income............................... 100 69 180 99
Other, net.................................... 30 (81) 56 (34)
---------- ---------- ---------- ----------
Total other income (expense), net.......... 53 (122) 82 (96)
---------- ---------- ---------- ----------
Income before income taxes...................... 512 649 1,156 826
Income tax expense.............................. 103 227 328 289
---------- ---------- ---------- ----------
Net income...................................... $ 409 $ 422 $ 828 $ 537
========== ========== ========== ==========
Basic earnings per share........................ $ 0.08 $ 0.08 $ 0.15 $ 0.10
========== ========== ========== ==========
Diluted earnings per share...................... $ 0.07 $ 0.08 $ 0.15 $ 0.10
========== ========== ========== ==========
Weighted average shares outstanding - Basic 5,432,058 5,394,859 5,421,330 5,365,572
Weighted average shares outstanding - Diluted 5,511,583 5,458,050 5,482,912 5,428,620
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
5
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OYO GEOSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
Ended Ended
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Cash flows from operating expenses:
Net income.................................................. $ 828 $ 537
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Deferred income tax....................................... (140) (260)
Depreciation and amortization............................. 1,791 2,081
Amortization of restricted stock awards................... 254 277
Bad debt expense.......................................... 78 736
Effects of changes in operating assets and liabilities:
Trade accounts and notes receivable....................... (1,906) 3,249
Inventories............................................... 84 (2,748)
Prepaid expenses and other assets......................... 769 65
Accounts payable.......................................... 1,290 (2,753)
Accrued expenses and other................................ (410) (2,652)
Income tax payable........................................ (366) (192)
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Net cash provided by (used in) operating activities..... 2,272 (1,660)
------- -------
Cash flows from investing activities:
Capital expenditures........................................ (3,608) (2,848)
Purchase of business, net of cash acquired.................. - (1,259)
Proceeds from sale of equipment............................. 20 686
------- -------
Net cash used in investing activities................... (3,588) (3,421)
------- -------
Cash flows from financing activities:
Increase in notes payable................................... - 9,500
Principal payments on notes payable......................... (91) (6,934)
------- -------
Net cash provided by (used in) financing activities..... (91) 2,566
------- -------
Effect of exchange rate changes on cash...................... - (17)
------- -------
Decrease in cash and cash equivalents........................ (1,407) (2,532)
Cash and cash equivalents, beginning of period............... 5,280 3,970
------- -------
Cash and cash equivalents, end of period..................... $ 3,873 $ 1,438
======= =======
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
6
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OYO GEOSPACE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated balance sheet of OYO Geospace Corporation and its
subsidiaries (the "Company") at September 30, 1999, has been derived from the
Company's audited consolidated financial statements at that date. The
consolidated balance sheet at March 31, 2000, and the consolidated statements of
operations for the three months and six months ended March 31, 2000 and 1999,
and the consolidated statements of cash flows for the six months ended March 31,
2000 and 1999, have been prepared by the Company, without audit. In the opinion
of management, all adjustments, consisting of normal recurring adjustments,
necessary to present fairly the consolidated financial position, results of
operations and cash flows have been made. The results of operations for the
three months and six months ended March 31, 2000, are not necessarily indicative
of the operating results for a full year or of future operations.
Certain information and footnote disclosures normally included in financial
statements presented in accordance with generally accepted accounting principles
have been omitted. The accompanying consolidated financial statements should be
read in conjunction with the financial statements and notes thereto contained in
the Company's Annual Report on Form 10-K for the year ended September 30, 1999.
2. EARNINGS PER COMMON SHARE
The following table summarizes the calculation of net earnings and weighted
average common shares and common equivalent shares outstanding for purposes of
the computation of earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------- -------------------------------
MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 2000 MARCH 31, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net earnings available to common
stockholders (in thousands) $ 409 $ 422 $ 828 $ 537
========== ========== ========== ==========
Weighted average common shares outstanding 5,432,058 5,394,859 5,421,330 5,365,572
Weighted average common share equivalents
outstanding 79,525 63,191 61,582 63,048
---------- ---------- ---------- ----------
Weighted average common shares and common
share equivalents outstanding 5,511,583 5,458,050 5,482,912 5,428,620
========== ========== ========== ==========
Basic earnings per common share $ 0.08 $ 0.08 $ 0.15 $ 0.10
========== ========== ========== ==========
Diluted earnings per common share $ 0.07 $ 0.08 $ 0.15 $ 0.10
========== ========== ========== ==========
</TABLE>
3. COMPREHENSIVE INCOME
Comprehensive income includes all changes in a company's equity, except
those resulting from investments by and distributions to owners. The following
table summarizes the components of comprehensive income (in thousands):
7
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OYO GEOSPACE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------- -------------------------------
March 31, 2000 March 31, 1999 March 31, 2000 March 31, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net income $ 409 $ 422 $ 828 $ 537
Foreign currency translation adjustments 120 (24) 1 (56)
------ ------ ------ ------
Total comprehensive income $ 529 $ 398 $ 829 $ 481
====== ====== ====== ======
</TABLE>
4. INVENTORIES
Inventories consisted of the following (in thousands):
MARCH 31, 2000 SEPTEMBER 30, 1999
-------------- ------------------
Finished goods $ 2,442 $ 3,070
Work in process 5,228 2,639
Raw materials 14,187 16,232
------- -------
$21,857 $21,941
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5. SEGMENT AND GEOGRAPHIC INFORMATION
The Company manages its business and makes decisions with respect to the
deployment of resources on a single consolidated product-line basis. The
Company has one reportable segment comprised of operations in the United States,
Canada and the United Kingdom.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following analysis of the financial condition and results of operations
of OYO Geospace Corporation should be read in conjunction with the Consolidated
Financial Statements and Notes related thereto included elsewhere in this
Form 10-Q.
INDUSTRY OVERVIEW
We design and manufacture instruments and equipment used in the acquisition
and processing of seismic data and the commercial graphics industry. We have
been in the seismic instrument and equipment business since 1980, marketing our
products primarily to the oil and gas industry worldwide.
Geoscientists use seismic data to map potential or existing oil and gas
bearing formations and the geologic structures that surround them. Seismic data
is used primarily in connection with the exploration, development and production
of oil and gas.
Seismic data acquisition is conducted on land in several stages. First, an
energy source imparts seismic waves into the earth, reflections of which are
received and measured by geophones and hydrophones. Electrical signals
generated by the geophones and hydrophones are then transmitted through leader
wire, geophone and hydrophone string connectors and telemetric cable to data
collection units, which store information for processing and analysis. Seismic
thermal imaging products are output devices used in the field or office to
create a graphic representation of the seismic data after it has been acquired.
Marine seismic data acquisition is conducted primarily by large ocean-going
vessels that tow long seismic cables known as "streamers". Usually, the energy
source in marine seismic data acquisition is an airgun, and the reflected
seismic waves are received and measured by hydrophones, which are attached to
the streamers. The streamers then transmit the electrical impulses back to the
vessel via telemetric cable included within the streamers, and the seismic data
is then processed in much the same manner as it is on land.
The seismic data acquisition industry suffered a substantial downturn in
fiscal 1999, which adversely impacted our operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Demand for Our Products is Volatile; Industry Conditions Currently are
Uncertain".
RESULTS OF OPERATIONS
The following table sets forth for the three and six months ended March 31,
2000 and 1999, the percentage of certain statement of operations items to total
sales:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, SIX MONTHS ENDED MARCH 31,
---------------------------- --------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 70.7% 56.0% 68.4% 58.4%
Gross profit 29.3% 44.0% 31.6% 41.6%
Selling, general and administrative 15.5% 24.7% 17.1% 23.7%
Research and development 10.7% 12.9% 10.6% 13.9%
Income from operations 3.1% 6.4% 3.9% 4.0%
Other income (expense), net 0.3% (1.0)% 0.3% (0.4)%
Income before provision for income taxes 3.4% 5.4% 4.2% 3.6%
Provision for income taxes 0.7% 1.9% 1.2% 1.3%
Net income 2.7% 3.5% 3.0% 2.3%
</TABLE>
9
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Fiscal Year 2000 Compared to Fiscal Year 1999.
Sales for the three months and six months ended March 31, 2000 increased
$2.8 million, or 23.3%, and $4.5 million, or 19.6%, respectively, from the
corresponding periods of the prior fiscal year. The increase in sales was
primarily due to an increase in demand for our land-based seismic products for
the Canadian and Middle Eastern marketplaces as well as increased sales of our
thermal imaging products targeted at the commercial graphics industry. These
sales increases were partially offset by a decrease in sales of our marine-based
seismic products.
Cost of sales for the three months and six months ended March 31, 2000
increased $3.8 million, or 55.7%, and $5.4 million, or 40.2%, respectively, from
the corresponding periods of the prior fiscal year. Cost of sales increased as
a percentage of total sales to 70.7% and 68.4% in the three months and six
months ended March 31, 2000, respectively, from 56.0% and 58.4% in the
corresponding periods of the prior fiscal year. This percentage increase was
generally attributable to the sales mix in the current periods containing a
greater percentage of our land-based seismic products, which generally have
lower gross profit margins than our marine-based seismic and thermal imaging
products. In addition, we have experienced competitive pricing pressures on our
land-based seismic products as a result of recent industry conditions. We
expect these competitive pressures to continue throughout the remainder of this
fiscal year.
Selling, general and administrative expenses for the three months and six
months ended March 31, 2000 decreased $0.7 million, or 22.6%, and $0.8 million,
or 13.8%, respectively, from the corresponding period of the prior fiscal year.
Selling, general and administrative expenses decreased as a percentage of total
sales to 15.5% and 17.1% in the three months and six months ended March 31,
2000, respectively, from 24.7% and 23.7% in the corresponding periods of the
prior fiscal year, primarily reflecting the impact of lower bad debt expense and
our efforts to reduce costs in response to recent industry conditions.
Research and development expenses for the three months ended March 31, 2000
increased $36,000, or 2.3%, and for the six months ended March 31, 2000
decreased $0.3 million, or 8.8%, from the corresponding periods of the prior
fiscal year. Research and development expenses decreased as a percentage of
total sales to 10.7% and 10.6% in the three months and six months ended March
31, 2000, respectively, from 12.9% and 13.9% in the corresponding periods of the
prior fiscal year, reflecting higher sales volume.
Our effective tax rate for the three months ended March 31, 2000 was 20.1%
compared to 35.0% for the three months ended March 31, 1999. The effective tax
rate for the six months ended March 31, 2000 was 28.4% compared to 35.0% for the
corresponding period of the prior fiscal year. The tax rate of the current
periods include the recognition of a $0.1 million tax benefit relating to the
prior fiscal year. Excluding the prior year tax benefit, the company's
effective rate would be 35.0% for the current periods.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2000, we had $3.9 million in cash and cash equivalents. For
the six months ended March 31, 2000, we generated $2.3 million of cash from
operating activities, principally resulting from our net income adjusted for
noncash expenses and an increase in trade accounts payable. Such cash flow was
partially offset by an increase in trade accounts and notes receivable.
For the six months ended March 31, 2000, we used approximately $3.6 million
of cash in investing activities, principally consisting of capital expenditures.
We estimate that total capital expenditures in fiscal 2000 will be approximately
$6.0 million.
For the six months ended March 31, 2000, we used $0.1 million of cash in
financing activities resulting from principal payments on long-term mortgage
notes payable.
We have a working capital line of credit, under which we are able to borrow
up to $10.0 million secured by our accounts receivable and inventory. The credit
facility expires in October 2001. Our credit facility prohibits us from paying
cash dividends on our common stock, limits our capital expenditures, limits our
additional indebtedness to
10
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$7.5 million, requires us to maintain certain financial ratios and contains
other customary covenants. There were no outstanding lines of credit at March
31, 2000 and borrowing availability was $10.0 million.
We believe that the combination of cash flow from operations and borrowing
availability under our credit facility should provide us with sufficient capital
resources and liquidity to fund our planned operations through fiscal 2000.
However, there can be no assurance that these sources of capital will be
sufficient to support our capital requirements in the long-term, and we may be
required to issue additional debt or equity securities in the future to meet our
capital requirements.
FORWARD LOOKING STATEMENTS
This Form 10-Q includes "forward-looking" statements which are subject to
the "safe harbor" provisions of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements other than
statements of historical fact included herein, including statements about
potential future products and markets, our future financial position, business
strategy and other plans and objectives for future operations, are forward-
looking statements. Although we believe the expectations reflected in such
forward-looking statements are reasonable, we can give no assurance that such
expectations will prove to have been correct, and actual results may differ
materially from such forward-looking statements. Important factors that could
cause actual results to differ materially from our expectations are disclosed
below and in our Annual Report on Form 10-K for the year ended September 30,
1999 under the headings "Forward-Looking Statements" and "Risk Factors".
Further, all written and verbal forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by such
factors.
DEMAND FOR OUR PRODUCTS IS VOLATILE; INDUSTRY CONDITIONS CURRENTLY ARE UNCERTAIN
Fiscal 1999 was a particularly challenging year for the seismic industry as
low oil and gas prices delayed land exploration activities and caused seismic
contractors to consolidate crews and stack equipment. We believe improvements in
oil and gas prices should result in an increase in geophysical activity in the
second half of fiscal 2000, but we expect that the industry will continue to be
cautious until it becomes apparent that oil and gas prices have stabilized at
levels adequate to sustain profitability.
Demand for our products used in the acquisition and processing of seismic
data is dependent primarily upon the level of worldwide oil and gas exploration
activity. That activity, in turn, is dependent primarily upon the stability of
prevailing oil and gas prices. After a volatile and generally depressed price
environment in 1998, oil prices opened fiscal 1999 at moderate levels and
dropped sharply in October and November to remain between $10 and $12 per barrel
throughout the winter. This rapid decline in oil prices forced most major oil
companies to significantly reduce their exploration budgets in 1999 which, in
turn, caused most seismic contractors (our primary customers) to significantly
reduce the number of operational crews performing seismic related activities.
This crew reduction resulted in large amounts of under utilized or idle seismic
equipment in the marketplace.
Beginning in March 1999, oil prices rose steadily, in part as a result of
production quotas imposed by OPEC nations, and have returned to more moderate
levels. However, these commodity price increases have not yet resulted in a
significant recovery of demand for our products in the seismic marketplace.
Until the number of operational seismic crews increases significantly and until
idle seismic equipment is again utilized, we believe our seismic equipment sales
may remain at depressed levels. Further, if oil and gas prices return to lower
levels, our sales may further decline.
The recent industry environment has resulted in, and may continue to result
in, competitive pricing pressures on our land-based seismic products. We intend
to respond competitively to these market forces in order to maintain, or
improve, our market share. In addition, the recent industry environment has
resulted in, and may continue to result in, a greater percentage of our sales
being attributable to certain consumable land-based seismic products that
historically have provided lower gross profit margins. Further, if overall sales
decrease, our manufacturing costs per unit increase as fixed costs are allocated
over fewer units. The combination of these factors may result in lower gross
profit margins in future periods.
11
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OUR CUSTOMER FINANCING RESULTS IN CREDIT RISKS TO US
We have found it necessary from time to time to extend long term trade
credit to our customers through accounts and notes receivable. As a result, we
are subject to the credit risks of nonpayment or late payment. Given current
industry conditions, some of our customers may experience liquidity
difficulties, which increases those credit risks. We cannot assure you that
sufficient aggregate amounts of uncollectible receivables and bad debt charges
will not have a material adverse effect on our future results of operations.
At March 31, 2000, our bad debt allowance was $0.5 million. We
systematically adjust this allowance each month to reflect the estimated credit
risk associated with our trade accounts and notes receivable. We base this
adjustment on the level of past due accounts and notes receivable, customer
creditworthiness, past payment history, access to underlying collateral and
other factors. Although we believe this allowance is a fair representation of
the credit risk with respect to our outstanding receivables, we can not assure
you that this allowance will be adequate to cover every potential bad debt
exposure.
12
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PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On January 28, 2000, we held our Annual Meeting of Stockholders (the
"Meeting"). At the Meeting, our stockholders approved the election of Katsuhiko
Kobayashi, Michael J. Sheen and Charles H. Still as directors, each holding
office until the 2003 Annual Meeting of Shareholders or until his successor is
duly elected and qualified. The directors were elected with the following
votes:
For Withheld
--- --------
Katsuhiko Kobayashi 5,195,915 6,700
Michael J. Sheen 5,196,115 6,500
Charles H. Still 5,196,415 6,200
The total voted shares represented by proxy was 5,202,615.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits are filed with this Quarterly Report.
10.1 Second Amendment to Business Loan Agreement, dated January 28, 2000, made
by and between the Company and Bank of America.
15.1 Awareness Letter of Independent Accountants
27.1 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the quarter for
which this report is filed.
13
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OYO GEOSPACE CORPORATION
Date: May 9, 2000 By: /s/ Gary D. Owens
------------------------------------
Gary D. Owens, Chairman of the Board
President and Chief Executive Officer
(duly authorized officer)
Date: May 9, 2000 By: /s/ Thomas T. McEntire
------------------------------------
Thomas T. McEntire
Chief Financial Officer
(principal financial officer)
14
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EXHIBIT 10.1
[BANK OF AMERICA LOGO]
AMENDMENT TO DOCUMENTS
================================================================================
SECOND AMENDMENT TO BUSINESS LOAN AGREEMENT
This Second Amendment to Business Loan Agreement is entered into as of January
28, 2000, among Bank of America, N.A. ("Bank") and OYO Geospace Corporation
("Borrower").
RECITALS
--------
A. WHEREAS, Bank and Borrower have entered into that certain Business Loan
Agreement dated June 26, 1998, and amended on March 18, 1999 (collectively
the "Agreement"); and
B. WHEREAS, Borrower and Bank desire to amend certain terms and provisions of
said Agreement as more specifically hereinafter set forth.
AGREED
------
NOW, THEREFORE, in consideration of the foregoing recitals and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Bank and Borrower mutually agree to amend said agreement as follows:
1. In Paragraph 1.2 (AVAILABILITY) of the Agreement the Date "October 1, 2001"
is substituted for the date "June 30, 2000".
2. Section 1.6 (OFFSHORE RATE) is amended by substituting the following table
for the table that follows the first paragraph of that section, effective
for interest rate elections made on or after July 1, 2000;
FUNDED DEBT TO EBITDA PERCENTAGE AMOUNT
Less than or equal to 1.00:1.00 1.25%
Greater than 1.00:1.00 but less than 1.50:100 1.875%
Greater than 1.50:100 2.50%
3. Section 5.5 (GUARANTIES) of the Business Loan Agreement is hereby amended by
deleting Houston Geophysical Products, Inc. and substituting with Geospace
Engineering Resources, Inc.
This Amendment will become effective as of the date first written above,
provided that each of the following conditions precedent have been satisfied in
a manner satisfactory to Bank:
The Bank has received from the Borrower a duly executed original of this
Amendment, together with a duly executed Guarantor Acknowledgment and Consent
in the form attached hereto (the "Consent").
Except as provided in this Amendment, all of the terms and provisions of the
Agreement and the documents executed in connection therewith shall remain in
full force and effect. All references in such other documents to the Agreement
shall hereafter be deemed to be references to the Agreement as amended hereby.
<PAGE>
THIS WRITTEN AMENDMENT AND THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
IN WITNESS WHEREOF, this Amendment has been executed by the parties hereto as of
the date first written above.
BANK OF AMERICA, N.A.
By: /s/ George M. Smith
- -------------------------------------------
George M. Smith, Senior Vice President
OYO GEOSPACE CORPORATION
By: /s/ Thomas T. McEntire
- -------------------------------------------
Thomas T. McEntire, Chief Financial Officer
<PAGE>
EXHIBIT 15.1
AWARENESS LETTERS OF INDEPENDENT ACCOUNTANTS
--------------------------------------------
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: OYO Geospace Corporation
Registration on Form S-8
We are aware that our report dated April 20, 2000, on our review of interim
financial information of OYO Geospace Corporation as of March 31, 2000 and for
the three months and six months ended March 31, 2000 and 1999, and included in
the Company's quarterly report on Form 10-Q for the quarter ended March 31,
2000, is incorporated by reference in the Company's registration statements on
Form S-8 (333-40893 and 333-80003). Pursuant to Rule 436(c) under the
Securities Act of 1933, this report should not be considered a part of the
registration statement prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
May 9, 2000
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<PAGE>
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<PERIOD-END> MAR-31-2000
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