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GEONEX REPORTS SECOND QUARTER RESULTS

 GEONEX REPORTS SECOND QUARTER RESULTS
 ST. PETERSBURG, Fla., May 14 /PRNewswire/ -- Geonex Corporation


(NASDAQ: GEOX) reported today results for the second quarter ended March 31, 1992.
 Geonex Corporation ("Geonex" or the "company") completed the second quarter of fiscal 1992 during a period of continued decreased demand in our traditional utility and municipal markets. The continuing economic recession has caused clients to spread the company's assignments over a longer period of time resulting in reduced revenue. The company is also experiencing negative pressure on proposal pricing and increased competition resulting from tighter spending budgets among its existing and prospective clients.
 The company is still suffering from the extremely negative effects of the start-up of several new contracts, primarily utility contracts. This necessitates the company incurring the costs of retraining personnel, acquiring equipment, software development, and additional rework. This results in a lowering of profits. Significant revenue is not realized until full production is underway.
 Competitive pressure continues to prevent the company from recovering all of its production costs from customers through higher selling prices. Management believes this trend will continue for the next several quarters.
 The company is currently in the process of developing appropriate strategies to further reduce overhead and administrative expenses, as well as increase efficiencies in an effort to lower costs and improve profitability. In the long-term, the company believes its growth in profitability will return as the contracts currently in place proceed beyond the start-up phase and these intended cost reductions take effect.
 The company completed its cadastral mapping services contract for the Government of Brazil during the second quarter of fiscal 1992. It had been anticipated that additional rounds of work would be awarded to Geonex. Unfortunately, the company was notified by the World Bank that the North East Land Tenure Improvement Project has closed and that further loans have been cancelled. The Government of Brazil will carry out the additional work using local funds only. Under Brazilian law, the contracts must be awarded through local competitive bidding to Brazilian firms. As a result, the company was forced to discontinue its photogrammetric operations in Brazil. The company recorded a net charge of $750,000 for discontinuing these operations, primarily for demobilization and overhead related to retaining personnel and equipment that will no longer be necessary. Also included were precontract costs in the form of legal, marketing and administrative expenses related to efforts to secure the next round of work.
 On March 6, 1992, Geonex acquired the Aero Service division of Intera Information Technologies Corporation. Aero Service is a world leader in geophysical surveys, specializing in aeromagnetic high sensitivity surveys, airborne radiometric surveys, data compilation and data interpretation services, which compliment the resources operations of Geonex.
 The purchase price of Aero Service was $847,000 in the form of cash and Geonex common stock. The acquisition was accounted for as a purchase. Aero Service's results of operations have been included in the accompanying consolidated statement of earnings since the date of acquisition.
 Revenues for the three month period ended March 31, 1992 were $17,777,000, as compared to $17,553,000 for the prior year period. Revenues from the international segment were up $1,169,000 or 22 percent. However, international revenues included $1,863,000 from an acquisition that occurred after the second quarter of last year. Revenues from the domestic segment decreased by $946,000 or 8 percent as compared to the prior year period. The decrease was primarily in the utility market resulting from the current economic climate.
 Revenues for the six month period ended March 31, 1992 were $32,943,000 as compared to $31,657,000 for the same period last year.
 Gross profit margin was affected by the restructuring cost of $750,000 for the discontinuance of the photogrammetric operations in Brazil. In addition, there was higher overhead costs related to the several start-up contracts. Exclusive of the restructuring cost, gross profit margin for the three month period ended March 31, 1992 was 26.1 percent as compared to 30.7 percent for the prior year period. In absolute dollars, gross profit for the three month period has decreased by 14.0 percent, exclusive of the restructuring cost, as compared to the prior year quarter. Sequentially, exclusive of the restructuring cost, gross profit margin improved over the 23.4 percent reported for the three month period ended Dec. 31, 1991. Gross profit margin continues to be adversely impacted by price concessions required by the current market conditions and the higher costs associated with the several start-up contracts in the utility area.
 Selling, general, and administrative expenses were 24.2 percent of revenue in the three month period ended March 31, 1992 as compared to 21.3 percent in the prior year period. A portion of the increase, $283,000, was attributable to an acquisition that occurred after the second quarter of last year. In addition there was approximately $150,000 in severance and vacation pay resulting form our 9 percent cut-back in personnel that occurred in January 1992.
 Operating loss was $421,000 for the three month period ended March 31, 1992 as compared to operating income of $1,653,000 the prior year period. The decrease in operating income is attributable to the decrease in gross profit.
 Interest expense for the three month period ended March 31, 1992 was 2.4 percent of revenue as compared to 3.1 percent of revenue in the prior year period. This results from significantly more favorable interest rates during the first two quarters of fiscal 1992.
 The company's assignments were approximately $57 million as of March 31, 1992, compared to $64 million as of March 31, 1991. Approximately $24 million of the March 31, 1992 assignments are expected to be filled within the current fiscal year. As used by the company, the term "assignments" includes backlog or work under formal contracts ($35 million as of March 31, 1992 compared to $37 million as of March 31, 1991), as well as work the company is scheduled to perform under informal contractual agreements, such as open purchase orders.
 The company's short-term cash requirements have been funded through cash from operations and bank borrowings pursuant to various credit facilities with its domestic and foreign banks. Borrowings under these short-term lines of credit increased to $4,520,000 at March 31, 1992 from $3,002,000 at Sept. 30, 1991.
 Long-term debt, including the current portion, was $18,552,000 at March 31, 1992, compared to $14,543,000 at Sept. 30, 1991. The major portion of this increase was due to the funding of the final dividend payment relating to the company's acquisition of Aerodat Limited, the acquisition of Aero Service and the purchase of various production equipment and other fixed assets.
 Geonex, based in St. Petersburg, Fla. is the world's largest commercial supplier of digital maps and maps utilizing advanced photo and image interpretation. Digital mapping data bases created by Geonex allow telephone, electric, gas and water utilities to combine detailed engineering records with geographic information to facilitate the design, construction, management and maintenance of their physical assets. Geonex also offers laboratory analysis of air and water quality, and hazardous site surveying.
 GEONEX CORPORATION
 Comparative Six-Month Data:
 Q1/Q2 FY91 Q1/Q2 FY92
 Revenues $ 31,657,000 $ 32,943,000
 Gross Profit 9,823,000 7,652,000
 Operating Profit (Loss) 2,720,000 (142,000)
 Net Income (Loss) 1,044,000 (557,000)
 E.P.S. $ .30 $ (.12)
 Weighted Average Number
 of Shares Outstanding 3,497,000 4,573,000
 Comparative Three-Month Data:
 Q2 FY91 Q2 FY92
 Revenues $ 17,553,000 $ 17,777,000
 Gross Profit 5,394,000 3,891,000
 Operating Profit (Loss) 1,653,000 (421,000)
 Net Income (Loss) 640,000 (562,000)
 E.P.S. $ .18 $ (.12)
 Weighted Average Number
 of Shares Outstanding 3,551,000 4,571,000
 -0- 5/14/92
 /CONTACT: H.A. Moshell of Geonex, 813-823-3300/
 (GEOX) CO: Geonex Corporation ST: Florida IN: SU: ERN


JB-JJ -- FL005 -- 0325 05/14/92 14:39 EDT
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