Geospace Technologies Corporation (GEOS) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of Geospace Technologies Corporation. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Steve Jumper, Chairman of the Board. Mr. Jumper, floor is yours.

Well, thank you. Good morning. My name is Steve Jumper, Chairman of the Board of Geospace Technologies Corporation. On behalf of myself and the other members of the Board of Directors, I welcome you to the 2025 Annual Meeting of Stockholders. We are pleased to have each of you join this meeting. If you've joined this call, you've either joined as a stockholder or a guest. Only stockholders who have signed in as stockholders may vote and ask questions during our meeting. Those who have signed into the meeting as guests may listen but may not vote or ask questions. If you joined as a stockholder, you were required to enter a control number. If you are a stockholder and joined as a guest, and as a stockholder you want to either vote or ask a question, you will need to leave the meeting and sign in again as a stockholder and provide your control number as the meeting notice describes. Any votes that any shareholder -- stockholder cast prior to the meeting will not be changed unless the stockholder has logged in as a stockholder and votes during the meeting. Stockholders who have signed in as stockholders must click the vote tab on your screen if you desire to change your vote or cast a vote for any matter. If you desire to ask a question, you must click the Q&A tab and submit your question where indicated in writing. After the formal stockholders' meeting, we will have a brief question and comment period where you will be provided an opportunity to ask questions of the management. After the formal stockholders' meeting, Richard Kelley, CEO and President of Geospace Technologies Corporation will bring us up-to-date on the company's activities. Before we begin the business portion of the meeting, I would like to recognize several individuals. First, I would like to introduce to you the other members of our Board of Directors who are joining us today. They are: Ms. Margaret Ashworth, Dr. Thomas Davis, Mr. Edgar Giesinger Jr., Mr. Richard Miles, Mr. Walter Wheeler. The executive officers of Geospace joining us today are Mr. Richard Kelley, our Chief Executive Officer; Mr. Robert Curda, our Chief Financial Officer; and Todd Bushey, our Chief Technical Officer. Also, I would like to introduce Patrick McConnell and John Pickett from RSM US LLP, our independent public accountants. If questions arise during the question period that RSM US LLP should appropriately address, we will call them to respond. Finally, I would like to introduce Melissa Pierce with Computershare Trust company, our transfer agent and registrar, who will act as Judge of Election for this meeting. Melissa will handle any inquiries that stockholders may have about their respective votes. The Geospace Technologies Corporation Annual Meeting of Stockholders is now called to order. I will act as Chairman of the meeting, and Mr. Robert Curda will act as Secretary of the meeting. This is the Annual Meeting of Stockholders of Geospace Technologies Corporation, and as such, is a forum for dialogue between stockholders and management of the company about matters related to the business of the company. As stated before, stockholders may vote or change their vote during this meeting by clicking the link Vote tab on your screen. Your virtual vote will cancel out any prior ballot or proxy that you may have previously voted. An affidavit of mailing executed Computershare Trust company will deliver to the company, which states that Computershare Trust Company caused to be mailed on or about December 27, 2024, to each of the record holders of the company's common stock as of the close of business December 13, 2024, either a proxy statement, the annual report to stockholders of pre-addressed proxy card and a return envelope relating to this annual meeting or a notice of Internet availability of proxy materials. The Secretary of the meeting will cause this affidavit together with a copy of the proxy statement to be filed with the minutes of this meeting. Melissa Pierce of Computershare Trust Company will act as Judge of Election for this annual meeting. Melissa will handle any inquiries that stockholders may have about their respective votes. Prior to the meeting, she executed an oath of Judge of Election and presented the oath to the Secretary. The Secretary of the meeting will file the oath with the minutes of this meeting. A list of stockholders of the company entitled to vote of and to vote at this meeting along with their addresses and number of shares held have been on file at the principal executive office of the company open to examination by any stockholder during the ordinary business hours for at least 10 days. This list may be accessed by stockholders by clicking on the link on your screen entitled Stockholder List under the Documents tab. The Judge of Election will now report as to whether the presence of a quorum can be determined from the proxies submitted prior to the meeting and from virtual -- and from the stockholders virtually presented. Melissa?

Mr. Chairman, a quorum is present. I have set forth the calculations of the quorum in the certificate of proxy inspection and tabulation.

Thank you, Melissa. The Secretary of the meeting will file the certificate of proxy inspection and tabulation executed by the Judge of Election with the minutes of this meeting. Notice of this meeting has been properly sent and a quorum of the shares is represented in person or by proxy. This annual meeting is therefore duly constituted and ready for the transaction of business. The first item of business is to elect 2 directors to hold office as Class III Directors until the 2028 Annual Meeting of Stockholders or until his or her successor is duly elected and qualified. The Nominating and Corporate Governance Committee of the Board of Directors has nominated Mr. Edgar Giesinger, Jr. and Mr. Richard Kelley to be elected as Class III Directors. The second item of business is to ratify the appointment by the Audit Committee of the Board of Directors of RSM US LLP independent public accountants as our auditors for the year ending September 30, 2025. The third item of business is to vote on a nonbinding advisory resolution regarding the compensation of Geospace Technologies' named executive officers. We will now proceed to the vote. If you have voted previously, you do not need to vote again unless you wish to change your vote. As a reminder, submission of a ballot revokes any prior ballot or proxy you may have submitted. If you have sent in proxies or voted via telephone or Internet and do not want to change their vote, you do not need to take any further action. The Judge of Elections will now count the vote. [Voting]

Have the ballots been counted?

Yes, Mr. Chairman.

Thank you. Since all the stockholders and proxies entitled and desiring to vote have done so, I declare the polls closed. Will the Judge of Election please report on the preliminary results of the votes for the proposals presented.

On Proposal 1, each of the 2 director nominees standing for election have received the affirmative vote of a majority of the votes cast for election as directors of the company and are therefore reelected. On Proposal 2, a majority of the shares present in person or represented by proxy at the meeting and entitled to vote were voted in favor of the ratification of the appointment of RSM US LLP, independent public accountants as the company's auditors for the fiscal year ended September 30, 2025, and therefore, the Proposal 2 has passed. And on Proposal 3, a majority of the shares present in person or represented by proxy at the meeting and entitled to vote were voted in favor of the nonbinding advisory resolution regarding the compensation of the company's named executive officers as disclosed in the proxy statement and therefore, the Proposal 3 has passed. I have set forth the results of my tabulation of the voting in a certificate of Judge of Election.

Thank you, Melissa. The Secretary of the meeting will file the certificate of Judge of Election with the minutes of the meeting. This concludes our formal agenda for today. There being no further business to come before this meeting, the meeting is now adjourned. Rich will bring us up to date with the company's activities. This presentation will be followed by a brief question-and-answer session. Rich?

Thank you, Steve. I would like to thank everyone for attending our virtual Annual Shareholders Meeting today. This morning's discussion may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to both known and unknown risks, many of which are discussed in our annual report and our SEC Form 10-K and 10-Q filings. As this is my first Annual Shareholders' Meeting, I would like to take this opportunity to introduce myself to our shareholders. After joining Geospace in April of 2024 as Chief Operations Officer, I then transitioned to the position of Chief Executive Officer and President at the beginning of our fiscal year in October 2024, upon the retirement of my predecessor, Rick Wheeler. Throughout my career, I've had the opportunity to manage both domestic and international operations across a range of industries, including the energy sector, heavy industrial and instrumentation. Most of these have been focused on manufacturing of highly technical equipment and related services. From serving in the U.S. Navy early in my career, I experienced lessons in learning and adapting quickly, tackling challenging situations and finding ways to achieve meaningful success. I have applied those same lessons to every opportunity I've had in my career. That wealth of knowledge and experience provides a great backdrop for my current role at Geospace. Since joining the company, I have traveled extensively to meet in person with our customers and shareholders. These first-hand conversations and experiences allowed me to gather insight and excitement for the future ahead. The feedback from those discussions provided the framework to set forward a clear strategic vision for the future of the company, where we provide innovative and collaborative technology-driven solutions that empower our customers. To support that vision, I'm excited to introduce 2 members of the team that recently joined. Both of them bring a wealth of knowledge and experience to support the direction we are taking the company. Todd Bushey is our new Chief Technology Officer and Senior Vice President. Todd has developed and managed technologies for applications in smart water, military and government intelligence and energy management, all with an emphasis on Internet of Things or IoT. Prior to Geospace, he served in high-level leadership roles at Landis+Gyr, Mueller and Raytheon. Prior to that, he served as an officer in the U.S. Army. Gene Gradick joined as Senior Vice President of Sales and Marketing. Gene brings deep experience in acquisitions, along with expertise and change management. A seasoned energy industry professional, Gene most recently served as Senior Vice President, Commercial at SCS Technologies, a leading provider of measurement equipment, environmental solutions, controls and automation solutions. Both of them have engaged with their teams, our partners and customers, adding insight and value to the organization. For my time with customers, shareholders and employees, I am pleased to say we have a strong opportunity to grow the company. I plan to accelerate the pace of diversification into new markets, which was started under Rick Wheeler's tenure. To better align the organization with these new markets, we restructured our business segments to bring focus to the technology-driven solutions, which should generate increased revenue. Today, we have 3 segments, which reflect the strongest opportunities for long-term sustained growth at Geospace. Smart Water, Energy Solutions and Intelligent Industrial. In establishing a Smart Water segment, we want to emphasize our targeted approach to growing upon our existing footprint in the water management industry. Over the last decade, Geospace has seen an increase of over 400% in sales volume of its patented Hydroconn connector cables used in automated meter reading and AMI applications. The adoption of advanced technology in water management has been bolstered by U.S. federal funding programs such as Water Infrastructure Finance Act funding, which provides $7.5 billion for water-related infrastructure projects. The Aquana remote water shut-off valve extends this benefit to remote operational control, requiring no personnel in the field. There is tremendous market interest in water monitoring and water management technology for both municipalities and multifamily residential applications. We have previously cited variability in the oil and gas industry as motivation to diversify and provide more predictable revenue. Through our Energy Solutions segment, we will continue to invest in new technologies and support customers who require innovative products for exploration and monitoring. In forming the Intelligent Industrial segment, we sought to reinforce our technology focus, especially our push into leveraging data analytics, machine learning and cloud-based applications. As an organization, we are challenging our teams to introduce greater value into our solutions through smart technology. Additionally, our growth posture includes an active initiative to identify strategic acquisitions in these newly defined segments. With the insight and experience of both Todd and Gene, we are aggressively vetting opportunities for established and profitable target technologies or companies. As we look ahead to this year, I am encouraged by the potential of Geospace. We will build upon our competitive advantages that have bolstered the company for decades. We have long-term engineering expertise, extensive manufacturing capability and capacity as well as a stable of customers across various industries who trust and respect Geospace. I thank you for your time today and look forward to growing on the profitability we cultivated for our shareholders.

Well, thank you, Rich, and congratulations on being elected as a director. We will now proceed to the stockholder question-and-comment period. Again, you stockholders may ask questions virtually or by clicking the Q&A tab on your screen and submitting your question where indicated in writing. Please note, we will attempt to answer questions as time allows, but only questions that are appropriate and germane to the meeting will be addressed. Are there any questions or comments? All right. Having no questions or comments, this concludes the question-and-answer session, and we'd like to thank you for your participation in today's meeting. Thank you, and have a great day.

This concludes the meeting. You may now disconnect.