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[LOGO]
FOR IMMEDIATE RELEASE
PARADIGM GEOPHYSICAL REPORTS THIRD QUARTER RESULTS
-- REVENUE INCREASES 10 PERCENT OVER LAST YEAR --
-- EPS AT 5 CENTS INCREASE OVER 2 CENTS FOR SECOND QUARTER --
NEW YORK, OCTOBER 25, 2000: Paradigm Geophysical (NASDAQ:PGEO) today announced
its third quarter results for the period ending September 30th, 2000.
HIGHLIGHTS
- TOTAL REVENUES for the quarter reached $14.3 million, an increase of
10% over the same period last year, and an increase of 2% over the
second quarter of this year.
- TOTAL REVENUES year-to-date at $42.4 million have grown 11% compared
to year-to-date 1999.
- EPS FOR THE QUARTER were $0.05, up 155% from the second quarter of
2000 compared with a loss of $0.04 from the same quarter in 1999.
Before amortization of goodwill EPS were $0.06, a 100% increase over
the second quarter 2000.
- EPS FOR THE FIRST NINE MONTHS of 2000 were $0.09 and $0.11 before
amortization of goodwill, compared to a loss of $0.34 and $0.31,
respectively, for the first nine months of 1999.
- EBITDA was $2.7 million for the quarter and $7.6 million for the nine
months ended September 30, 2000.
- CASH FLOW PER SHARE for the third quarter of this year was $0.19, a
96% increase over the same period last year.
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SUMMARY KEY RESULTS AND COMPARATORS
QUARTERLY BASIS
<TABLE>
<CAPTION>
Third Quarter
-----------------------------------
2000 1999 % Change Q2 '00 % Change
year-to-year Qr-to-Qr
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(US$ per share)
EPS $0.05 ($0.04) $0.02 155%
EPS before Goodwill $0.06 ($0.03) $0.03 100%
CFPS $0.19 $0.10 96% $0.17 13%
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(US$ million)
Revenue $14.3 $12.9 10% $14.1 2%
Operating Income/(Loss) $0. 8 ($0.4) $ 0.4 99%
Net Income/(Loss) $0.6 ($0.5) $ 0.3 100%
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</TABLE>
YEAR-TO-DATE BASIS
<TABLE>
<CAPTION>
------------------------------------
Year to Date
------------------------------------
2000 1999 % Change
year-to-year
------------------------------------
<S> <C> <C> <C>
(US$ per share)
EPS $0.09 ($0.34)
EPS before Goodwill $0.11 ($0.31)
CFPS $0.55 $0.05 900%
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(US$ million)
Revenue $42.4 $38.1 11%
Operating Income/(Loss) $1.6 ($3.7)
Net Income/(Loss) $1.2 ($4.1)
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</TABLE>
MANAGEMENT COMMENTS
Eldad Weiss, Chairman and CEO stated, "This year we have focused our efforts in
maintaining and growing company profits and return to shareholders. This is the
fourth quarter of positive earnings, with operating costs each quarter this year
holding steady except for the planned seasonal variations. We consider the
current global infrastructure to be adequate to support an even higher level of
product sales."
"The quarter was characterized by significant activity in strengthening our
product offerings and our strategic alliances, through the Flagship, Chevron,
TotalFinaElf and Sysdrill agreements. Winning the TGS-NOPEC services contract,
to provide depth-imaging services in the Mississippi Canyon region of the Gulf
of Mexico, and the continuing demand for our services by the oil and gas
industry reinforces Paradigm's
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strong market position as the leading complete geoscience solution provider to
the industry."
DETAILED RESULTS
QUARTERLY BASIS
<TABLE>
<CAPTION>
------------------------------------------------------------
Third Quarter
-------------------------------------
2000 1999 % Change Q2 '00 % Change
year-to-year Qr-to-Qr
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<S> <C> <C> <C> <C> <C>
(US$ million)
Product Revenues $ 9.9 $ 8.9 11% $ 9.9 1%
Product revenues net of $ 9.5 $ 7.7 23% $ 9.2 3%
hardware & turnkey
Services Revenues $ 4.4 $ 4.0 8% $ 4.2 4%
Operating Expenses $13.5 $13.3 1% $13.7 -1%
Cash Flow $ 2.6 $ 1.3 102% $ 2.3 13%
EBITDA $ 2.7 $ 1.4 100% $ 2.4 12%
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</TABLE>
YEAR-TO-DATE BASIS
<TABLE>
<CAPTION>
----------------------------------
Year to Date
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2000 1999 % Change
year-to-year
----------------------------------
<S> <C> <C> <C>
(US$ million)
Product Revenues $30.0 $29.5 2%
Product revenues net of $28.0 $22.7 23%
hardware & turnkey
Services Revenues $12.4 $ 8.5 46%
Operating Expenses $40.7 $41.8 (2%)
Cash Flow $ 7.1 $ 0.6 1022%
EBITDA $ 7.6 $ 1.0 683%
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</TABLE>
PRODUCT REVENUES net of occasional hardware and the 1999 turnkey project
increased by 23 percent over the same quarter in 1999, and by 3 percent over the
previous quarter this year. On a year-to-date basis, product revenues on this
net basis show a 23 percent increase over year-to-date 1999.
SERVICES REVENUES: Year-to-date revenues reached $12.5 million, a 46 percent
increase over the service revenues for the first three quarters in 1999 of $8.5
million, and 8 percent over full 1999 service revenues of $11.5 million. Last
year was a record year for Services revenue for the company, and it expects this
trend to continue in 2000. Recent contract wins have required an increase in
installed capacity, and the positive revenue and income impact of these events
will be evident in the forthcoming quarters.
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OPERATING EXPENSES: Management has held infrastructure and staff essentially
steady throughout the year, with a resulting one percent growth in operating
expenses over the previous quarter.
BALANCE SHEET: The Company's balance sheet remains strong. At September 30,
2000, total long-term debt (including current maturities) was 14% of
shareholders' equity while current assets exceed all current liabilities by 76%.
About Paradigm
Paradigm Geophysical Ltd. provides geoscience software and service solutions to
the oil and gas industry. The Company has sales, customer support and service
offices in Houston, London, Aberdeen, Bahrain, Calgary, Moscow, Caracas, Buenos
Aires, Rio de Janeiro, Perth, Brisbane, Beijing, Jakarta and Singapore.
"Paradigm Geophysical(R)" is the registered trademark of Paradigm Geophysical
Ltd.
Recent press announcements are available on Paradigm's web site:
www.paradigmgeo.com.
Safe Harbor statement: Certain statements contained in this press release are
forward-looking in nature. These statements can be identified by the use of
forward-looking terminology such as "`believes," "expects," "may,'" "will,"
"should," or "anticipates" or the negative thereof or comparable terminology, or
by discussions of strategy. The company's business and operations are subject to
a variety of risks, and uncertainties and other factors. Consequently, actual
results may materially differ from those projected stated by any forward-looking
statements. Such risks, uncertainties and other factors that could cause actual
results to differ from those projected include, but are not limited to, the
following: (1) future capital expenditures by oil and gas companies (2)
fluctuations and absolute levels of international oil prices, (3) the need for
increased Company investment to support product and new services introductions,
(4) the company's ability to raise needed additional capital, (5) rapid
technological changes that could make the company's products less desirable or
obsolete, (6) market acceptance of the Company's products and services, (6)
changes in product sales mix (7) product transitions by the Company and its
competitors, (8) the impact of competitive products and pricing, (9) currency
fluctuations. These as well as other risks and uncertainties, are discussed in
greater detail in the Company's filings with the Securities and Exchange
Commission, including its most recent 20-F filed on June 26, 2000, its 1999
Annual Report and its regular Quarterly Reports. The company makes no commitment
to revise or update any forward-looking statements in order to reflect events or
circumstances after the date any such statement is made.
For more information please contact:
Paradigm Geophysical Ltd.
Brian Berman
Chief Financial Officer
Phone: +972-9-970-9339
Fax: +972-9-970-9319
Email: [email protected]
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The Ruth Group
Denise Roche
Phone: +1-917-639-4109
Fax: +1-917-639-4113
Email: [email protected]
Cubitt Consulting
Noga Villalon
Phone: +44-20-7367-5100
Fax: +44-20-7367-5150
Email: [email protected]
Morgen Walke Israel
Maya Huli-Lustig
Phone: +972-3-561-1877
Fax: +972-3-561-1875
Email: [email protected]
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PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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U.S. DOLLARS IN THOUSANDS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1999 2000
------------ -------------
AUDITED UNAUDITED
------------ -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,457 $ 3,267
Trade receivables (net of allowance for doubtful accounts
-$1,666 in 1999 and $1,911 in 2000) 21,612 18,903
Accrued income 9,012 8,730
Other receivables and prepaid expenses 2,443 3,265
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Total current assets 38,524 34,165
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LONG-TERM TRADE RECEIVABLES 54 297
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SEVERANCE PAY FUNDS 861 996
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FIXED ASSETS 12,007 12,634
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OTHER ASSETS:
Acquired developed technology 9,805 8,615
Other assets, net 4,914 4,015
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14,719 12,630
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$66,165 $60,722
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</TABLE>
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PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1999 2000
------------ -------------
AUDITED UNAUDITED
------------ -------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank debt $ 2,000 $ 2,278
Current maturities of long-term bank loans 2,639 3,111
Current maturities of capital lease obligations 434 547
Trade payables 2,774 2,654
Other payables and accrued expenses 8,792 6,906
Deferred revenues 6,539 3,923
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Total current liabilities 23,178 19,419
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LONG TERM LIABILITIES:
Long-term bank loans 3,923 2,056
Capital lease obligations 742 318
Other lease obligations 759 588
Accrued severance pay 1,650 2,027
Deferred tax liability 445 313
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Total long-term liabilities 7,519 5,302
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SHAREHOLDERS' EQUITY:
Ordinary shares:
Authorized - 20,000,000 shares of NIS 0.5 par value at December 31, 1999 and
at September 30, 2000
Issued and outstanding - 13,026,336 shares at December 31, 1999 and
13,191,904 shares at September 30, 2000 2,064 2,087
Additional paid-in capital 51,903 52,065
Accumulated other comprehensive loss (1,166) (1,974)
Accumulated deficit (17,333) (16,177)
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Total shareholders' equity 35,468 36,001
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$ 66,165 $ 60,722
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</TABLE>
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PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
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U.S. DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
------------ ----------------------------- ---------------------------
1999 1999 2000 1999 2000
--------- --------- --------- --------- ---------
AUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenues:
Products $ 43,023 $ 8,905 $ 9,914 $ 29,527 $ 29,977
Services 11,483 4,034 4,351 8,536 12,425
-------- -------- -------- -------- --------
54,506 12,939 14,265 38,063 42,402
-------- -------- -------- -------- --------
Operating expenses:
Cost of products 12,418 2,796 2,028 11,140 7,029
Cost of services 5,804 1,597 1,675 3,864 4,370
Research and development 9,306 2,551 2,713 6,225 7,782
Selling, general and
administrative 20,638 4,640 5,133 13,161 15,637
Depreciation 3,865 1,090 1,158 2,635 3,487
Amortization 3,064 671 774 2,053 2,484
Non recurring expenses 2,705 -- -- 2,705 --
-------- -------- -------- -------- --------
Total operating expenses 57,800 13,345 13,481 41,783 40,789
-------- -------- -------- -------- --------
Operating income (loss) (3,294) (406) 784 (3,720) 1,613
Financial expenses, net (484) (88) (129) (333) (352)
-------- -------- -------- -------- --------
Income (loss) before income taxes (3,778) (494) 655 (4,053) 1261
Income taxes -- -- (27) -- (105)
-------- -------- -------- -------- --------
Net income (loss) $ (3,778) $ (494) $ 628 $ (4,053) $ 1,156
======== ======== ======== ======== ========
Basic income (loss) per share $ (0.31) $ (0.04) $ 0.05 $ (0.34) $ 0.09
======== ======== ======== ======== ========
Number of shares used in computing
basic income (loss) per share 12,205 13,026 13,192 11,928 13,099
======== ======== ======== ======== ========
Diluted income (loss) per share $ (0.31) $ (0.04) $ 0.05 $ (0.34) $ 0.09
======== ======== ======== ======== ========
Number of shares used in computing
diluted income (loss)per share 12,205 13,026 13,421 11,928 13,397
======== ======== ======== ======== ========
</TABLE>
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SEGMENT REPORT
SEGMENT REPORTING
(US$ MIL.)
<TABLE>
<CAPTION>
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Q3 2000 Q3 1999 Q2 2000 YEAR-TO-DATE
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2000 1999
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<S> <C> <C> <C> <C> <C>
PRODUCTS
Revenues $9.9 $8.9 $9.9 $30.0 $29.5
Cost of Revenues $2.0 $2.8 $2.2 $ 7.0 $10.8
Operating expenses (*) $3.0 $2.8 $3.3 $ 9.0 $ 8.5
Contribution $4.9 $3.3 $4.3 $13.9 $10.2
EBITDA $5.9 $4.3 $5.4 $16.9 $12.9
Segment Net Capital $2.7 $1.8 $2.5 $ 7.7 $ 5.1
SERVICES
Revenues $4.4 $4.0 $4.2 $12.4 $ 8.5
Cost of Revenues $1.7 $1.6 $1.5 $ 4.4 $ 3.8
Operating expenses (*) $1.4 $1.2 $1.4 $ 4.0 $ 2.7
Contribution $1.3 $1.2 $1.3 $ 4.1 $ 2.1
EBITDA $1.8 $1.6 $1.8 $ 5.5 $ 3.1
Segment Net Capital $8.5 $7.3 $7.4 $23.2 $18.1
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</TABLE>
(*) R&D and some Marketing, G&A, Depreciation and Amortization expenses are not
allocated to segments
