Geospace Technologies Corp Secures Amended Credit Agreement with Woodforest Bank

Geospace Technologies Corporation has entered an amended credit agreement with Woodforest Bank. The company designs and manufactures seismic instruments and equipment for the oil and gas industry, as well as adjacent and emerging markets such as imaging equipment, water meter products, and seismic sensors for mine safety and earthquake detection.

Geospace Technologies Corporation (GEOS) has entered into a First Amended and Restated Credit Agreement with Woodforest National Bank, securing a three-year revolving credit facility with a maximum availability of $25.0 million. This agreement extends and replaces the company's prior revolving loan, providing immediate liquidity and continuity of financing.

The facility allows GEOS to choose between a 30-day Term SOFR + 2.75% or an Alternate Base Rate + 2.75% interest rate, with monthly interest payments required. The agreement is secured by substantially all of GEOS's assets, excluding certain property, and includes financial covenants such as a minimum consolidated tangible net worth of $85.0 million, minimum liquidity of $10.0 million, a minimum asset coverage ratio of 2.00 to 1.00, and a springing minimum interest coverage ratio of 1.50 to 1.00 tested quarterly under specified conditions.

Positive aspects of this agreement include the provision of immediate liquidity and continuity of financing, the extended three-year term, and the flexibility in interest rate choice. However, the facility's security by substantially all assets and the stringent financial covenants could restrict asset flexibility and increase potential covenant volatility.

For investors and financial professionals, this agreement indicates GEOS's commitment to maintaining its financial health and operational efficiency. The company's ability to secure such a facility at market-linked rates suggests a positive outlook for its financial stability. However, the strict covenants and broad collateral requirements may introduce risks if financial metrics weaken.

References:
[1] https://www.stocktitan.net/sec-filings/GEOS/8-k-geospace-technologies-corporation-reports-material-event-1010797905dd.html
[2] https://www.maximizemarketresearch.com/market-report/global-microseismic-monitoring-technology-market/44398/