Good day and welcome to the Geospace Technologies Third Quarter 2016 Earnings Conference Call. Hosting the call today from Geospace is Mr. Rick Wheeler, President and Chief Executive Officer. He is joined by Tom McEntire, the company's Vice President and Chief Financial Officer. Today's call is being recorded and will be available on the Geospace Technologies' Investor Relations website following the call. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions] It is now my pleasure to turn the floor over to Rick Wheeler. Sir, you may begin.

Good morning, and welcome to Geospace Technologies conference call for the third quarter of fiscal year 2016 and thanks for listening today. I am Rick Wheeler, the company's President and Chief Executive Officer and I'm here with Tom McEntire, the company's Vice President and Chief Financial Officer. I will start the call with a prepared overview of the quarter and Tom will follow that with an in-depth review and commentary of our financial performance. I'll then close out the prepared portion of the call with some final remarks and we will open the line for questions. As was mentioned, as a matter of convenience, we will make the replay of the conference call available in the Investor Relations section of our website at www.geospace.com. Let me caution that the information we will discuss this morning is time-sensitive and may not be accurate on the date one listens to the replay. Also, many of the statements that we will make today will constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. By example, this includes statements about the market for our products, revenue recognition, planned operations and capital expenditures. Such statements are based on our current perceptions, expectations and knowledge. Actual outcomes are influenced by uncertainties and other factors that we are unable to control or predict. These risks and others, both known and unknown, can lead to undesirable results or cause our performance to materially differ from what we may express or imply. These risks and uncertainties include those discussed in our SEC Form 10-K and Form 10-Q filings. Yesterday, after the market closed, the company released its financial results for the third quarter of fiscal year 2016, which ended June 30, 2016. As we reported, revenue in the third quarter increased sequentially by 18%…

Thanks, Rick and good morning everyone. Before beginning I want to remind everyone that while our discussions today may include future estimates, we will not be providing any specific revenue or earnings guidance during this call. In yesterday's press release for our third quarter ended June 30, 2016, we reported revenue of $17.7 million compared to revenue of $19.8 million last year or net loss for the quarter was $11.7 million or a loss of $0.89 per diluted share compared to last year's net loss of $8.6 million or a loss of $0.66 per diluted share. For the nine months ended June 30, 2016, we reported revenue of $45.7 million compared to revenue of $69 million last year. Our net loss for the nine-month period was $34 million or a loss of $2.58 per diluted share compared to last year's net loss of $19 million or a loss of $1.48 per diluted share. Our operating results for the quarter and nine-month period include tax charges of $3.4 million and $5.9 million respectively for the provision of a valuation allowance against our US and Canadian deferred tax assets. A breakdown of revenue for each of our product segments is as follows. For the third quarter revenue from our traditional seismic products was $2.5 million a decrease of 60% compared to revenue of $6.3 million last year. Revenue for the nine months was $10.7 million a decrease of 55% compared to $24 million last year. The decrease for both periods reflects lower demand for Land and Marine products due to significantly reduced levels of seismic exploration activities. Our wireless seismic product revenue for the third quarter was $6.6 million an increase of 9% compared to revenues of $6 million last year. This increase as Rick mentioned is primarily the result of revenue…

Thanks, Tom. In response to the precipitous reduction in oil prices that began in late 2014 and the extreme volatility in pricing that has persisted ever since, oil and gas companies have all booked withdrawn from the seismic exploration that is necessary to find and exploit new reserves. Furthermore there are no strong market indicators in the current environment for this to change right away. In light of such decreased seismic industry activity the number of opportunities for seismic service contractors, our customer is scarce. With so few seismic projects underway many of which are smaller in scope, crew counts and asset utilization have fallen tremendously. This has created a surplus of available seismic equipment which in turn has all but eliminated immediate demand for our seismic instruments and related products. As a result fiscal year 2016 is proving to be perhaps the most commercially challenging year in our company's history. Nonetheless we firmly believe that in order for the oil and gas industry to continue supplying the world's growing energy needs, seismic exploration for new reserves and seismic imaging to characterize existing reserves will have to resume. Our products are well-known to accomplish these activities in the most proven and cost effective ways. Combining our technology leadership with $39 million in cash and short-term investments no long-term debt and an untapped $30 million credit facility we believe that we are in a good position to take advantage of the inevitable seismic market recovery when it occurs. This includes our overall prepared remarks and I'll now turn the call back to Keith for questions.

[Operator Instructions] We do have one question there. We can go to Matt Dhane from Tieton Capital.

Good morning, gentlemen. So out of curiosity as you call out obviously there is not a lot of seismic shoots being done be people that - have your equipment or otherwise but out of curiosity the shoots that are being done largely, the land based shoots is what I am focusing on, what type of seismic equipment is being utilized in the shoots being done. And I guess I am angling more towards the customers the customers that do have your wireless equipment. Are they largely utilizing your wireless equipment or are they utilizing more of the historic, the cabled equipment?

Well it’s out understanding that those of our customers that have our equipment are using it primarily as their main acquisition tool. The efficiencies are pretty well known and that’s really what has made that product so successful. It's really just the fact that there is such little activity going on that the demand at our level has come to a curtailed moment in time but it’s our understanding that our equipment is the primary preferred equipment to use.

And I guess where I am heading with the question is, so what’s the implications for that whenever the land seismic market does improve and starts to rebound. Is a lot of the cabled equipment is that even going to be usable since had it been put aside for so long. What's the lifespan on that and does that lead to assuming there is capital available purchases of new equipment once they are fully utilizing your equipment once again, is the cable equipment going to be able to come back and used or is it just, frankly it's seamless day and it’s not usable probably going forward.

I think it’s a combination, I mean the cabled equipment in and of itself doesn't atrophy just not getting used on the shelf or anything. I mean, from a technology point of view maybe things pushing aside but in terms of its basic functionality you can still work. You may well see some cable equipment be pulled out but to some extent where the expense of operating cable system would make it not as practical for the contractor, you may see them wanting to perhaps rent some additional wireless equipment and then maybe later on purchase some. So it’s not going to go away immediately, it never was going to do that. There is always sort of a transition period that occurs when there is a technology shift like that.

Then I also wanted to touch on OBX, obviously you have your current rental going on. Can you discuss I guess the level of discussions around that technology. Are you seeing increased discussions, is there a number of discussions still going on, whether it's for purchase or rental just if you could help us get a sense of what's going on around that technology?

Sure. There are some new discussions and there are some discussions that are for projects that seem to fall away and then some of those return for second biddings and also the conversations are still out there and we’re still quoting on that equipment both for purchase and for rentals. So there is activity in the ocean bottom node world. We’re answering those quotes very competitively but we’ll have to see if any of them actually manifest.

Great. Well, I appreciate it.

[Operator Instructions] Thank you. We’ll take our next question from David Nierenberg with Nierenberg. Please go ahead.

Hi guys, good morning. What can you tell us about what's happening with your competitors. I doubt that most of them have the balance sheet strength that you have.

Well, I mean, we don’t have much intel on really what goes inside of the - a lot of our competition and some of its buried within the financials of broader parent organizations but clearly the market is not preferential at this point in helping anyone in the seismic instrument arena. So yes, you are right. I think our balance sheet is probably one of the more salient features of where we stand and that may not be the case in some of our competition but I really don’t have significant intel on that for you.

Okay. Thanks for preserving the strength. I think you can stick around as long as Saudi Arabia can.

[Operator Instructions] And it appears we have no further questions. I’ll return the floor to you Mr. Wheeler for any additional or closing remarks.

All right. Well thanks Keith, and I thank everyone that joined our conference call today and we look forward to speaking with you during our fiscal year 2016 fourth quarter conference call in November. So thanks again and good bye.

Ladies and gentlemen, this will conclude today's program. Thanks for your participation. You may now disconnect. Have a great day.