Veritas revenues improve - NEC XS5 computer installations near completion

Veritas DGC Inc. announced financial results for its fiscal year 2000 second quarter ended January 31, 2000.

"The recovery in the seismic sector is taking hold, as evidenced by a strong sequential revenue improvement over the first quarter of fiscal 2000, and the improvement in bottom line results," said Dave Robson, Chairman of the Company. Mr. Robson went on to say, "We are seeing increased interest in some of our newer multi-client markets such as Brazil, Nigeria and Canada, which is encouraging."

At January 31, 2000, the Company's combined operating backlog stood at $110.4 million compared to $102.5 million for the fiscal 2000 first quarter.

Multi-client The Company continues to invest in its growing data library asset. The net investment in data library during the second quarter was approximately $19.3 million, significantly lower than the $35.5 million in the first quarter of fiscal 2000. The reduction is primarily attributable to higher multi-client sales during the quarter. The total investment in data library at January 31, 2000 was $193.5 million.

Land Land multi-client revenue for the second quarter remained at $11.1 million, compared to $10.9 million in the prior second quarter and up from $7.6 million in the first quarter of fiscal 2000. However, the mix reflected a much higher level of activity in Canada and a lower level of activity in the U.S.

Marine Marine multi-client revenue for the second quarter increased to $37.6 million, an 18% increase compared to the prior second quarter and a 45% increase over the first quarter of fiscal 2000. The increase reflects strong results in new multi-client markets in Brazil, Nigeria and Canada. The Company's fleet of vessels is deployed as follows: the Polar Princess and the Veritas Viking are acquiring 3D library data in the Gulf of Mexico. The Polar Search has completed the first phase of a 2D program in Brazil and will complete a 3D contract survey in that market before mobilizing to the North Sea to conduct further contract and multi-client work. The New Venture has also mobilized to Brazil to conduct a second 2D multi-client survey. The Acadian Searcher is currently working on a contract job and the Pacific Sword is working on a multi-client survey in Southeast Asia. Finally, the Veritas Viking II is completing a 3D multi-client survey in Nigeria. Both Viking vessels will later mobilize to Canada to acquire a mix of contract and multi-client data.

Contract Land Contract land revenue decreased to $34.8 million, a decrease of 22% over the previous second quarter. However, this represents a 52% increase in revenue over the first quarter of fiscal 2000. The change reflects the dramatic reduction in industry activity year-over-year, and the seasonal increase in activity in the Canadian market. The Company is currently operating 11 crews, six in Canada, one in the U.S., two in South America and two in Oman.

Marine Contract marine revenue for the second quarter decreased to $7.5 million, a 48% decrease from the previous comparative second quarter and a 39% decrease compared to the first quarter of fiscal 2000. The reduction in revenue reflects the weakness in the contract marine market and the Company's strategy to maintain utilization of the vessels in the multi-client market. However, we do expect the marine contract market to improve from this point on.