Geospace Technologies Announces Cost Reductions

HOUSTON–(BUSINESS WIRE)–Geospace Technologies Corporation (NASDAQ Global: GEOS) today announced
a program to reduce its operating costs in light of expected and
continuing low levels of seismic product demand. A substantial portion
of these cost reduction activities will be concluded by December 31,
2017 although some activities will occur over the course of fiscal year
2018.

The program is expected to produce approximately $6 million of
annualized cash savings. A majority of these savings will be realized
through a reduction of over 60 employees from the Company’s Houston-area
workforce. In connection with the workforce reduction, the Company
expects to incur $0.7 million of termination costs in its first fiscal
quarter ending December 31, 2017. Additional cost savings will be
realized through a facility consolidation and compensation reductions,
including reductions impacting the Company’s executive officers and
directors.

Walter R. (“Rick”) Wheeler, President and CEO of Geospace Technologies
said, “Considering the current low level of demand for our seismic
exploration products in conjunction with recent news that we would not
participate in a specific permanent reservoir monitoring project tender,
we are implementing cost reduction plans to further preserve our
financial strength. Most of the cost savings are associated with a
reduction in our workforce. Although this was a very difficult decision
to make, we believe our core competencies in engineering and
manufacturing are fully retained and that we will be able to react
quickly and appropriately in an improved market to regain any lost
capacity. Through longstanding conservative management of our business
during cyclical swings and commercial challenges, we have maintained a
balance sheet that is highlighted by significant liquidity and no debt.
We believe the steps that we are currently undertaking are commensurate
with this strategy and optimize our position in a recovering industry.

Geospace Technologies Corporation designs and manufactures instruments
and equipment used by the oil and gas industry to acquire seismic data
in order to locate, characterize and monitor hydrocarbon producing
reservoirs. The company also designs and manufactures non-seismic
products, including industrial products, offshore cables, thermal
printing equipment and film.

This press release includes “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical fact included herein
including statements regarding potential future products and markets,
our potential future revenue, future financial position, business
strategy, future expectations and estimates and other plans and
objectives for future operations, are forward-looking statements.
Forward-looking statements are often, but not always, identified by the
use of words such as "anticipate", "believe", "expect", "plan",
"intend", "forecast", "target", "project", "may", "will", "should",
"could", "estimate", "predict", or similar words suggesting future
outcomes or language suggesting an outlook. We believe our
forward-looking statements are reasonable. However, they are based on
certain assumptions about our industry and our business that may in the
future prove to be inaccurate. Important factors that could cause actual
results to differ materially from our expectations include the level of
seismic exploration worldwide, which is influenced primarily by
prevailing prices for oil and gas, the extent to which our new products
are accepted in the market, the availability of competitive products
that may be more technologically advanced or otherwise preferable to our
products, obsolescence of inventory, negative reactions to the
restatement of our financial statements, tensions in the Middle East and
other factors disclosed under the heading “Risk Factors” and elsewhere
in our most recent Annual Report on Form 10-K and Quarterly Report on
Form 10-Q, which are on file with the Securities and Exchange
Commission. 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. We assume no obligation to
revise or update any forward-looking statement, whether written or oral,
that we may make from time to time, whether as a result of new
information, future developments or otherwise.

Contacts

Geospace Technologies Corporation
Rick Wheeler, 713.986.4444
President
and CEO