EX-99 2 y48253ex99.txt PRESS RELEASE 1 [PARADIGM LOGO] FOR IMMEDIATE RELEASE PARADIGM GEOPHYSICAL REPORTS FIRST QUARTER RESULTS COMPANY REPORTS CONTINUED GROWTH NEW YORK, APRIL 23, 2001: Paradigm Geophysical (NASDAQ:PGEO) today announced its first quarter results for the period ending March 31, 2001. HIGHLIGHTS - EPS FOR THE QUARTER were within the analyst's estimates range at $0.05, a 150 percent increase compared to $0.02 reported for the first quarter of 2000. Before amortization of goodwill, EPS were $0.06, a 100 percent increase over the first quarter 2000. - TOTAL REVENUES FOR THE QUARTER reached $17.5 million, an increase of 24 percent over the same period last year. - EBITDA were $3.5 million for the first quarter, up 40 percent over the first quarter of 2000. - CASH FLOW PER SHARE for the quarter was $0.21, a 17 percent increase over the same period last year. (more) 2 SUMMARY KEY RESULTS AND COMPARATORS
First Quarter ------------------------ 2001 2000 %Change Q4 `00 %Change Q1'01 Q1'01 over over Q1'00 Q4`00 ------ ------ ------- ------- ------- (US$ per share) EPS $0.05 $0.02 150% $0.08 (38%) EPS before Goodwill $0.06 $0.03 100% $0.09 (33%) CFPS $0.21 $0.18 17% $0.23 (9%) --------------------------------------------------------------------------- (US$ million) Revenue $17.5 $14.1 24% $20.9 (16%) Operating Income $1.0 $0.4 150% $1.7 (41%) Net Income $0.75 $0.28 133% $1.20 (42%) ------ ------ ------- ------- -------
MANAGEMENT COMMENTS Eldad Weiss, Chairman and Chief Executive Officer, stated, "These results mark our ninth consecutive quarter of revenue growth, on a quarter-over-same-quarter basis, and our sixth consecutive quarter of positive earnings." "The 24 percent growth in revenues, compared to the same quarter of last year, reflects Paradigm's strengthened position in our markets. The decline in revenues, compared to the fourth quarter of last year, is due to the seasonal spending patterns of our segment of the industry, where fourth quarter revenues are traditionally higher than first quarter revenues." "We are encouraged by this quarter's results, which place the Company on track to meet our 2001 annual guidance for EPS in the $0.40 to $0.45 range and for revenues reaching $80 million. In particular, we see significant increases in business opportunities for both software and services related to our new Reservoir Studies offering." (more) 3 DETAILED RESULTS
First Quarter ----------------------- 2001 2000 %Change Q4 `00 %Change Q1'01 Q1'01 over over Q1'00 Q4`00 ------ ------ ------- ------- ------- (US$ million) Product Revenues $12.4 $10.2 22% $16.4 (24%) Services Revenues $5.2 $3.9 33% $4.5 16% Operating Expenses 16.5 $13.7 20% $19.2 (14%) Cash Flow $3.2 $2.3 39% $3.4 (6%) EBITDA $3.5 $2.5 40% $3.9 (10%) ------ ------ ------- ------- -------
PRODUCTS: Revenues from products grew 22 percent, compared to the same quarter last year. The decline in product revenues, compared to the fourth quarter of 2000, was due to expected seasonal spending patterns. SERVICES: Service revenues increased 33 percent compared to the same quarter last year, and grew 16 percent over the fourth quarter of 2000. Seismic data processing demand continued its upward trend as the industry returns to analysis of exploration prospects and reworks archive data for field development decisions. The Company is also experiencing a growing demand for its newest service offering -- Reservoir Studies. This reflects the industry's move to increased outsourcing for a wider range of knowledge services. OPERATING EXPENSES: Operating expenses in the first quarter were 14 percent lower than in fourth quarter 2000. The 20 percent increase in expenses, compared to the first quarter 2000, reflects the Company's continuous commitment to targeted investments in product development and global infrastructure. BALANCE SHEET: As of the end of March 2001, cash was $8.4 million compared to $8.6 million at year-end 2000, and $5.2 million at the end of the first quarter of 2000. There is no significant change in total debt over year-end 2000. The Company also reported net receivables of $27.9 million at the close of the first quarter, a 4 percent increase from the $26.7 million reported at year-end 2000. EARNINGS CONFERENCE CALL The Company's management team will be hosting an earnings conference call on April 24, 2001, at 9:30am Eastern Standard Time. This call is accessible to all interested parties (more) 4 through a real-time web cast and will also be available for playback after the call. The web cast is accessible through the Company's website at www.paradigmgeo.com. ABOUT PARADIGM Paradigm Geophysical provides information solutions to the leaders of the oil and gas industry worldwide. The Company delivers technical software solutions and product-driven services to companies involved in the exploration & production of oil and gas and to oilfield service companies. The Company has about 500 professionals focused on the needs of the oil and gas industry, with a global network of sales, user support and services, through 20 offices in 16 countries, serving all major oil and gas producing provinces in the world. "Paradigm Geophysical(R)" is a 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, (7) changes in product sales mix (8) product transitions by the Company and its competitors, (9) the impact of competitive products and pricing, (10) 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 (more) 5 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. Rama Levy Investor Relations Phone: +972-9-970-9306 Fax: +972-9-970-9319 Email: ir@paradigmgeo.com THE RUTH GROUP Denise Roche Phone: +1-646-536-7008 Fax: +1-646-536-7100 Email: droche@theruthgroup.com CUBITT CONSULTING Noga Villalon Phone: +44-20-7367-5100 Fax: +44-20-7367-5150 Email: noga.villalon@cubitt.com MORGEN WALKE ISRAEL Maya Huli-Lustig Phone: +972-3-561-1877 Fax: +972-3-561-1875 Email: maya_h@koteret-pr.co.il (more) 6 PARADIGM GEOPHYSICAL LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS -------------------------------------------------------------------------------- U.S. DOLLARS IN THOUSANDS
DECEMBER 31, MARCH 31, 2000 2001 ------- --------- AUDITED UNAUDITED ------- --------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 8,647 $ 8,392 Trade receivables (net of allowance for doubtful accounts - $ 2,950 in 2000 and $ 2,950 in 2001) 22,707 20,429 Accrued income 4,077 7,530 Other receivables and prepaid expenses 4,110 5,345 ------- ------- Total current assets 39,541 41,696 ------- ------- LONG-TERM TRADE RECEIVABLES 221 154 ------- ------- SEVERANCE PAY FUNDS 1,076 1,066 ------- ------- PROPERTY AND EQUIPMENT, NET 13,318 13,581 ------- ------- OTHER ASSETS, NET 25,605 24,432 ------- ------- $79,761 $80,929 ======= =======
7 PARADIGM GEOPHYSICAL LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS -------------------------------------------------------------------------------- U.S. DOLLARS IN THOUSANDS
DECEMBER MARCH 31, 31, 2001 2000 ------- --------- AUDITED UNAUDITED ------- --------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank debt $ 4,528 $ 3,528 Current maturities of long-term bank loans 3,112 3,112 Current maturities of capital lease obligations 546 546 Trade payables 6,045 5,029 Other payables and accrued expenses 9,931 9,743 Deferred revenues 4,519 6,658 ------- ------- Total current liabilities 28,681 28,616 ------- ------- LONG TERM LIABILITIES: Long-term bank loans, net of current maturities 1,277 2,500 Capital lease obligations, net of current maturities 206 80 Other lease obligations 517 447 Accrued severance pay 2,338 2,292 Deferred income tax liability 273 259 ------- ------- Total long-term liabilities 4,611 5,578 ------- ------- TOTAL SHAREHOLDERS' EQUITY 46,469 46,735 ------- ------- $79,761 $80,929 ======= =======
8 PARADIGM GEOPHYSICAL LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS -------------------------------------------------------------------------------- U.S. DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
YEAR THREE MONTHS ENDED ENDED DECEMBER MARCH 31, 31, ------------------------------- 2000 2000 2001 -------- -------- -------- AUDITED UNAUDITED -------- -------------------------------- Revenues: Products $ 46,390 $ 10,210 $ 12,355 Services 16,908 3,875 5,167 -------- -------- -------- 63,298 14,085 17,522 -------- -------- -------- Operating expenses: Cost of products 10,748 2,752 2,682 Cost of services 6,352 1,236 1,937 Research and development 11,215 2,552 3,364 Sales and marketing, general and 23,518 5,092 6,074 administrative Depreciation 4,746 1,124 1,501 Amortization of intangible assets 3,428 894 957 -------- -------- -------- Total operating expenses 60,007 13,650 16,515 -------- -------- -------- Operating income 3,291 435 1,007 Financial expenses, net (552) (102) (148) -------- -------- -------- Income before income taxes 2,739 333 859 Income taxes (380) (51) (108) -------- -------- -------- Net income $ 2,359 $ 282 $ 751 ======== ======== ======== Basic net earnings per share $ 0.17 $ 0.02 $ 0.05 ======== ======== ======== Number of shares used in computing basic net earnings per share 13,504 13,021 14,692 ======== ======== ======== Diluted net earnings per share $ 0.17 $ 0.02 $ 0.05 ======== ======== ======== Number of shares used in computing diluted net earnings per share 13,789 13,471 14,842 ======== ======== ========