Financial OverviewTHIRD QUARTER 2005 FINANCIAL REVIEW Sample Clauses


Financial OverviewTHIRD QUARTER 2005 FINANCIAL REVIEW. During the third quarter of 2005, I/O generated $82.7 million in revenues, up slightly from $80.9 million. With $11 million of VSO sales in 3Q04 and the deferral of $7.3 million of data library sales to 4Q05, coupled with a normally slow quarter, the revenue level accomplished during 3Q05 was relatively strong and further strengthens management’s view that the seismic market is improving.*Excludes Corporate and Other loss from operations of $6.4mm.Land BusinessThe land business, both Sensor and the Land Systems Unit, had revenues of $38.8 million compared with $38.4 million a year ago. The Sensor geophone business was down $1.9 million year over year, resulting because of a single large lower margin order last year. However, the profitability of the Sensor geophone group in the third quarter this year reached new highs. I/O now has System Four systems in the hands of 20 contractors worldwide, including shipments scheduled for 4Q05. Gross margin for the Land group was 20% in 3Q05 compared with 22% in 3Q04, reflecting the continued cost reduction challenges and price competition while introducing new technology and penetrating new markets, coupled with some effect of a lower margin sales mix.Marine BusinessIn I/O’s Marine business, sales were $16.3 million in 3Q05 compared with $19.1 million in 3Q04. As previously noted, 3Q04 results included $11 million of the first VectorSeis Ocean sale. Third quarter did not include any VSO sales, however the Company’s forecast calls for VSO revenues during 4Q05. As the marine fleet worldwide increases in size and in utilization, I/O is starting to experience more opportunities for revenue growth. Gross margin in the Marine group was 42% in 3Q05 compared with 29% in 3Q04, a material improvement and another example of the strong marine markets, including a positive mix of I/O’s Digi product line sales.Concept SystemsI/O’s Concept Systems data management software business had revenues of $4.7 million. CLS continues to be highly respected in the field of navigation, positioning, and 4D. Concept System’s business continues to grow and outpace I/O’s internal forecast.