HOUSTON, Nov. 2, 2016 /PRNewswire/ -- ION Geophysical
Corporation (NYSE: IO) today reported third quarter 2016 net income
of $1.7 million, or $0.14 per diluted share, on revenues of
$78.6 million, compared to a net loss
of $20.4 million, or $(1.86) per share, on revenues of $66.7 million in third quarter 2015. In
comparison, excluding special items, the Company's third quarter
2015 adjusted net loss was $16.9
million, or $(1.54) per
share. A reconciliation of special items to the financial
results can be found in the financial tables of this press
release.
Adjusted EBITDA for third quarter 2016 more than tripled to
$24.4 million, compared to
$7.5 million a year ago. A
reconciliation of Adjusted EBITDA to the closest comparable GAAP
numbers can be found in the financial tables of this press
release. The Company generated cash of $10.1 million in third quarter 2016, compared to
$(28.8) million in the prior year
period.
Brian Hanson, ION's President and
Chief Executive Officer, commented, "As we stated in our second
quarter earnings call, we expected higher revenues and positive
cash generation in the back half of 2016, both of which are
reflected in our third quarter results. Our revenues for the
third quarter exceeded our total revenues for the first half of the
year, driven in part by our Ocean Bottom Services (OBS) crew going
back to work and by a sizable increase in multi-client data library
sales spread across our geographically diverse portfolio.
"Our $12 million of income from
operations during the quarter represents the first time since
second quarter 2014 that we have been profitable at the operating
income line. This indicates that the $95 million of annual savings from our cost
reduction initiatives has rightsized our business to reflect
current market conditions.
"With a significant improvement in our third quarter Adjusted
EBITDA, our year-to-date Adjusted EBITDA became positive.
Also, during the quarter we generated positive net cash flows, a
significant improvement over the cash we consumed a year ago.
We expect this momentum to carry into the fourth quarter, driven in
part by normal year-end spending on data libraries by our
customers.
"During the third quarter, we successfully completed our OBS
survey offshore Nigeria. Our overall performance on this
survey exceeded our own expectations, especially given that our
crew and vessels had been stacked for almost a year, a strong
testament to the dedication and experience of our OBS crew and
management. At the completion of the project, we cold-stacked
our crew and vessels while we actively pursue tenders for
longer-term work in the region. We are starting to see signs
of recovery in the OBS market and believe we are well positioned
for our crew to go back to work in the near-term."
For the first nine months of 2016, the Company reported a net
loss of $58.7 million, or
$(5.21) per share, on revenues of
$137.4 million, compared to net loss
of $19.6 million, or $(1.78) per share, on revenues of $144.0 million in the first nine months of
2015. Excluding special items in both periods, the Company
reported an adjusted net loss of $54.5
million, or $(4.83) per share,
compared to an adjusted net loss of $113.2
million, or $(10.31) per
share, in the prior year period.
Adjusted EBITDA in the first nine months of 2016 was
$3.9 million, compared to
$(60.0) million in the first nine
months of 2015. The Company consumed cash of $(22.4) million, of which $(14.3) million related to financing activities,
during the first nine months of 2016, compared to $(85.4) million in the first nine months of
2015.
At September 30, 2016, the Company's total liquidity was
$78.4 million, consisting of cash and
cash equivalents of $62.5 million and
$15.9 million remaining availability
on its maximum $40.0 million
revolving credit facility. While the Company had borrowings
of only $15.0 million under its
revolving credit facility at September 30,
2016, the remaining available amount has been temporarily
reduced due to a decline in the eligible receivables that
collateralize the facility.
THIRD QUARTER 2016
The Company's segment revenues for the third quarter were as
follows (in thousands):
|
|
Three Months Ended
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
% Change
|
E&P Technology
& Services
|
|
$
|
36,037
|
|
|
$
|
52,645
|
|
|
(32)%
|
E&P Operations
Optimization
|
|
12,601
|
|
|
14,029
|
|
|
(10)%
|
Ocean Bottom
Services
|
|
29,984
|
|
|
—
|
|
|
100%
|
Total
|
|
$
|
78,622
|
|
|
$
|
66,674
|
|
|
18%
|
Within the E&P Technology & Services segment, data
library revenues were $21.5 million,
a 41% increase from third quarter 2015; new venture revenues were
$8.4 million, a 69% decrease; and
Imaging Services (formerly referred to as data processing) revenues
were $6.1 million, a 43%
decrease. The increase in data library sales was spread
across the Company's multi-client portfolio. Both new venture
and Imaging Services revenues continue to be impacted by the
slowdown in exploration spending. During third quarter 2015,
the E&P Technology & Services segment began data
acquisition on its industry-funded MexicoSPAN™ program,
for which there were no comparable new venture programs in third
quarter 2016.
Within the E&P Operations Optimization segment, Devices
(formerly referred to as Systems) revenues were $8.7 million, a 19% increase from third quarter
2015. While Devices continues to be impacted by reduced
seismic contractor activity, the revenue increase was driven by
sales of replacement devices. Optimization Software &
Services (formerly referred to as Software) revenues were
$3.9 million, a 42% decrease from
third quarter 2015, primarily due to lower Orca®
licensing revenues and, to a lesser extent, the effects of foreign
currency.
Ocean Bottom Services (OBS) segment revenues were $30.0 million, as the Company completed its
survey offshore Nigeria. The
Company is actively pursuing tenders for long-term work for
2017.
Consolidated gross margin was 40%, compared to 17% in third
quarter 2015. All three segments experienced an improvement
in gross margin, with E&P Technology & Services at 36%,
E&P Operations Optimization at 54% and Ocean Bottom Services at
40%. The improvement in Ocean Bottom Services was the result
of the crew going back to work, while the improvement in the other
segments was the result of the Company's previous cost cutting
initiatives more than offsetting the decline in
revenues.
Consolidated operating expenses were $19.9 million, down 17% from $24.0 million in third quarter 2015.
Operating margin was 15%, compared to (19)% in the prior year
quarter. The improvement in operating margins was the result
of the increase in revenues, combined with the savings from the
Company's previous cost reduction efforts.
YEAR-TO-DATE 2016
The Company's segment revenues for the first nine months of the
year were as follows (in thousands):
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
% Change
|
E&P Technology
& Services
|
|
$
|
67,673
|
|
|
$
|
93,994
|
|
|
(28)%
|
E&P Operations
Optimization
|
|
33,349
|
|
|
50,053
|
|
|
(33)%
|
Ocean Bottom
Services
|
|
36,417
|
|
|
—
|
|
|
100%
|
Total
|
|
$
|
137,439
|
|
|
$
|
144,047
|
|
|
(5)%
|
Within the E&P Technology & Services segment, data
library revenues were $32.1 million,
a 29% increase from the first nine months of 2015; new venture
revenues were $16.3 million, a 54%
decrease; and Imaging Services revenues were $19.3 million, a 43% decrease. Even though
the segment recorded higher data library revenues compared to the
first nine months of 2015, all businesses within the E&P
Technology & Services segment continue to be impacted by the
slowdown in exploration spending.
Within the E&P Operations Optimization segment, Devices
revenues, comprised primarily of repair and replacement revenues,
were $20.7 million, a 25% decrease
from the first nine months of 2015. Optimization Software
& Services revenues were $12.7
million, a 43% decrease from the first nine months of 2015,
primarily due to lower Orca licensing revenues and, to a lesser
extent, the effects of foreign currency.
The Ocean Bottom Services (OBS) segment was positively impacted
by the Company's OBS crew going back to work during the second and
third quarters of 2016, whereas the crew was idle throughout all of
2015.
Consolidated gross margin was 20%, compared to (10)% in the
first nine months of 2015. The E&P Technology &
Services gross margin improved to (1)%, Ocean Bottom Services
improved to 31%, while E&P Operations Optimization experienced
a slight decline in gross margin to 50% during the first nine
months of 2016. The improvement in Ocean Bottom Services was
the result of the crew going back to work in 2016, while the
improvement within E&P Technology & Services was the result
of the Company's prior cost cutting initiatives more than
offsetting the decline in revenues.
Consolidated operating expenses were $62.5 million, down 27% from $85.4 million expended in the first nine months
of 2015. Operating margin was (25)%, compared to (70)% in the
prior year period. The decrease in operating expenses due to
the Company's cost reduction efforts had a positive impact on
operating margin, more than offsetting the impact from the decline
in revenues.
CONFERENCE CALL
The Company has scheduled a conference call for Thursday, November 3, 2016, at 10:00 a.m. Eastern Time that will include a slide
presentation to be posted in the Investor Relations section of the
ION website by 9:00 a.m. Eastern
Time. To participate in the conference call, dial
(877) 407-0672 at least 10 minutes before the call begins and ask
for the ION conference call. A replay of the call will be
available approximately two hours after the live broadcast ends and
will be accessible until November 17,
2016. To access the replay, dial (877) 660-6853 and use pass
code 13646464#.
Investors, analysts and the general public will also have the
opportunity to listen to the conference call live over the Internet
by visiting www.iongeo.com. An archive of the webcast will be
available shortly after the call on the Company's website.
About ION
ION is a leading provider of technology-driven solutions to the
global oil & gas industry. ION's offerings are designed
to help companies reduce risk and optimize assets throughout the
E&P lifecycle. For more information, visit www.iongeo.com.
Contact
Steve Bate
Executive Vice President and Chief Financial Officer
+1.281.552.3011
The information included herein contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements may include
future sales, earnings and market growth, timing of sales, future
liquidity and cash levels, future estimated revenues and earnings,
sales expected to result from backlog, benefits expected to result
from OceanGeo, expected outcome of litigation and other
statements that are not of historical fact. Actual results
may vary materially from those described in these forward-looking
statements. All forward-looking statements reflect numerous
assumptions and involve a number of risks and uncertainties.
These risks and uncertainties include risks associated with pending
and future litigation, including the risk that the Company does not
prevail in its appeal of the judgment in the lawsuit with
WesternGeco and that the ultimate outcome of the lawsuit could have
a material adverse effect on the Company's financial results and
liquidity; the timing and development of the Company's products and
services and market acceptance of the Company's new and revised
product offerings; the performance of OceanGeo; the Company's level
and terms of indebtedness; competitors' product offerings and
pricing pressures resulting therefrom; the relatively small number
of customers that the Company currently relies upon; the fact
that a significant portion of the Company's revenues
is derived from foreign sales; that sources of capital may not
prove adequate; the Company's inability to produce products to
preserve and increase market share; collection of receivables; and
technological and marketplace changes affecting the Company's
product lines. Additional risk factors, which could affect
actual results, are disclosed by the Company from time to time in
its filings with the Securities and Exchange Commission ("SEC"),
including its Annual Report on Form 10-K for the year ended
December 31, 2015 and its Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K filed during
2016.
Tables to follow
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share
data) (Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Service
revenues
|
$
|
65,914
|
|
|
$
|
53,515
|
|
|
$
|
104,500
|
|
|
$
|
96,918
|
|
Product
revenues
|
12,708
|
|
|
13,159
|
|
|
32,939
|
|
|
47,129
|
|
Total net
revenues
|
78,622
|
|
|
66,674
|
|
|
137,439
|
|
|
144,047
|
|
Cost of
services
|
40,694
|
|
|
47,883
|
|
|
93,706
|
|
|
132,234
|
|
Cost of
products
|
6,163
|
|
|
7,683
|
|
|
16,045
|
|
|
26,628
|
|
Gross profit
(loss)
|
31,765
|
|
|
11,108
|
|
|
27,688
|
|
|
(14,815)
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research, development
and engineering
|
4,231
|
|
|
6,537
|
|
|
14,601
|
|
|
21,496
|
|
Marketing and
sales
|
4,680
|
|
|
6,904
|
|
|
13,374
|
|
|
23,375
|
|
General,
administrative and other operating expenses
|
10,990
|
|
|
10,541
|
|
|
34,566
|
|
|
40,566
|
|
Total operating
expenses
|
19,901
|
|
|
23,982
|
|
|
62,541
|
|
|
85,437
|
|
Income (loss) from
operations
|
11,864
|
|
|
(12,874)
|
|
|
(34,853)
|
|
|
(100,252)
|
|
Interest expense,
net
|
(4,607)
|
|
|
(4,854)
|
|
|
(14,043)
|
|
|
(14,086)
|
|
Other income
(expense), net
|
(2,027)
|
|
|
(346)
|
|
|
(3,624)
|
|
|
98,035
|
|
Income (loss) before
income taxes
|
5,230
|
|
|
(18,074)
|
|
|
(52,520)
|
|
|
(16,303)
|
|
Income tax expense,
net
|
3,316
|
|
|
2,082
|
|
|
5,865
|
|
|
3,597
|
|
Net income
(loss)
|
1,914
|
|
|
(20,156)
|
|
|
(58,385)
|
|
|
(19,900)
|
|
Net (income) loss
attributable to noncontrolling interests
|
(215)
|
|
|
(227)
|
|
|
(272)
|
|
|
322
|
|
Net income (loss)
attributable to ION
|
$
|
1,699
|
|
|
$
|
(20,383)
|
|
|
$
|
(58,657)
|
|
|
$
|
(19,578)
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.14
|
|
|
$
|
(1.86)
|
|
|
$
|
(5.21)
|
|
|
$
|
(1.78)
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
(1.86)
|
|
|
$
|
(5.21)
|
|
|
$
|
(1.78)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
11,786
|
|
|
10,984
|
|
|
11,269
|
|
|
10,978
|
|
Diluted
|
11,907
|
|
|
10,984
|
|
|
11,269
|
|
|
10,978
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (In
thousands) (Unaudited)
|
|
ASSETS
|
September
30, 2016
|
|
December
31, 2015
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
62,536
|
|
|
$
|
84,933
|
|
Accounts receivable,
net
|
34,686
|
|
|
44,365
|
|
Unbilled
receivables
|
23,680
|
|
|
19,937
|
|
Inventories
|
33,308
|
|
|
32,721
|
|
Prepaid expenses and
other current assets
|
9,910
|
|
|
14,807
|
|
Total current
assets
|
164,120
|
|
|
196,763
|
|
Property, plant,
equipment and seismic rental equipment, net
|
53,524
|
|
|
72,027
|
|
Multi-client data
library, net
|
112,705
|
|
|
132,237
|
|
Goodwill
|
23,412
|
|
|
26,274
|
|
Intangible assets,
net
|
3,526
|
|
|
4,810
|
|
Other
assets
|
2,395
|
|
|
2,977
|
|
Total
assets
|
$
|
359,682
|
|
|
$
|
435,088
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
|
19,226
|
|
|
$
|
7,912
|
|
Accounts
payable
|
32,034
|
|
|
29,799
|
|
Accrued
expenses
|
32,753
|
|
|
34,287
|
|
Accrued multi-client
data library royalties
|
22,344
|
|
|
25,045
|
|
Deferred
revenue
|
4,395
|
|
|
6,560
|
|
Total current
liabilities
|
110,752
|
|
|
103,603
|
|
Long-term debt, net
of current maturities
|
144,299
|
|
|
175,080
|
|
Other long-term
liabilities
|
44,157
|
|
|
44,365
|
|
Total
liabilities
|
299,208
|
|
|
323,048
|
|
Equity:
|
|
|
|
Common
stock
|
118
|
|
|
107
|
|
Additional paid-in
capital
|
898,238
|
|
|
894,715
|
|
Accumulated
deficit
|
(818,188)
|
|
|
(759,531)
|
|
Accumulated other
comprehensive loss
|
(20,063)
|
|
|
(14,781)
|
|
Treasury
stock
|
—
|
|
|
(8,551)
|
|
Total stockholders'
equity
|
60,105
|
|
|
111,959
|
|
Noncontrolling
interest
|
369
|
|
|
81
|
|
Total
equity
|
60,474
|
|
|
112,040
|
|
Total liabilities and
equity
|
$
|
359,682
|
|
|
$
|
435,088
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CASH FLOWS (In
thousands) (Unaudited)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
1,914
|
|
|
$
|
(20,156)
|
|
|
$
|
(58,385)
|
|
|
$
|
(19,900)
|
|
Adjustments to
reconcile net income (loss) to cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization (other than multi-client data library)
|
5,608
|
|
|
6,645
|
|
|
17,024
|
|
|
19,660
|
|
Amortization of
multi-client data library
|
8,917
|
|
|
14,091
|
|
|
23,161
|
|
|
24,531
|
|
Stock-based
compensation expense
|
902
|
|
|
1,127
|
|
|
2,512
|
|
|
4,174
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
2,182
|
|
|
—
|
|
Reduction of accrual
for loss contingency related to legal proceedings
|
—
|
|
|
—
|
|
|
—
|
|
|
(101,978)
|
|
Deferred income
taxes
|
650
|
|
|
6,016
|
|
|
1,031
|
|
|
5,992
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(14,655)
|
|
|
4,628
|
|
|
9,325
|
|
|
92,424
|
|
Unbilled
receivables
|
(1,669)
|
|
|
(19,035)
|
|
|
(3,711)
|
|
|
(9,837)
|
|
Inventories
|
1,045
|
|
|
1,203
|
|
|
2,374
|
|
|
464
|
|
Accounts payable,
accrued expenses and accrued royalties
|
8,899
|
|
|
(3,027)
|
|
|
3,381
|
|
|
(43,676)
|
|
Deferred
revenue
|
(3,254)
|
|
|
(4,981)
|
|
|
(2,103)
|
|
|
(2,576)
|
|
Other assets and
liabilities
|
7,214
|
|
|
(12)
|
|
|
6,441
|
|
|
(5,274)
|
|
Net cash provided by
(used in) operating activities
|
15,571
|
|
|
(13,501)
|
|
|
3,232
|
|
|
(35,996)
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Cash invested in
multi-client data library
|
(2,953)
|
|
|
(14,554)
|
|
|
(11,601)
|
|
|
(28,152)
|
|
Purchase of property,
plant, equipment and seismic rental assets
|
(227)
|
|
|
(388)
|
|
|
(567)
|
|
|
(17,601)
|
|
Other investing
activities
|
—
|
|
|
1,005
|
|
|
—
|
|
|
1,262
|
|
Net cash used in
investing activities
|
(3,180)
|
|
|
(13,937)
|
|
|
(12,168)
|
|
|
(44,491)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Borrowings under
revolving line of credit
|
—
|
|
|
—
|
|
|
15,000
|
|
|
—
|
|
Repurchase of common
stock
|
—
|
|
|
—
|
|
|
(964)
|
|
|
—
|
|
Payments on notes
payable and long-term debt
|
(1,940)
|
|
|
(1,871)
|
|
|
(6,726)
|
|
|
(5,431)
|
|
Costs associated with
issuance of debt
|
(464)
|
|
|
(146)
|
|
|
(6,638)
|
|
|
(146)
|
|
Payment to repurchase
bonds
|
—
|
|
|
—
|
|
|
(15,000)
|
|
|
—
|
|
Other financing
activities
|
—
|
|
|
72
|
|
|
13
|
|
|
94
|
|
Net cash used in
financing activities
|
(2,404)
|
|
|
(1,945)
|
|
|
(14,315)
|
|
|
(5,483)
|
|
Effect of change in
foreign currency exchange rates on cash and cash
equivalents
|
116
|
|
|
562
|
|
|
854
|
|
|
601
|
|
Net increase
(decrease) in cash and cash equivalents
|
10,103
|
|
|
(28,821)
|
|
|
(22,397)
|
|
|
(85,369)
|
|
Cash and cash
equivalents at beginning of period
|
52,433
|
|
|
117,060
|
|
|
84,933
|
|
|
173,608
|
|
Cash and cash
equivalents at end of period
|
$
|
62,536
|
|
|
$
|
88,239
|
|
|
$
|
62,536
|
|
|
$
|
88,239
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES SUMMARY OF SEGMENT
INFORMATION (In
thousands) (Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
revenues:
|
|
|
|
|
|
|
|
E&P Technology
& Services:
|
|
|
|
|
|
|
|
New
Venture
|
$
|
8,393
|
|
|
$
|
26,650
|
|
|
$
|
16,278
|
|
|
$
|
35,315
|
|
Data
Library
|
21,510
|
|
|
15,302
|
|
|
32,057
|
|
|
24,948
|
|
Total multi-client
revenues
|
29,903
|
|
|
41,952
|
|
|
48,335
|
|
|
60,263
|
|
Imaging
Services
|
6,134
|
|
|
10,693
|
|
|
19,338
|
|
|
33,731
|
|
Total
|
36,037
|
|
|
52,645
|
|
|
67,673
|
|
|
93,994
|
|
E&P Operations
Optimization:
|
|
|
|
|
|
|
|
Devices
|
8,679
|
|
|
7,290
|
|
|
20,664
|
|
|
27,733
|
|
Optimization Software
& Services
|
3,922
|
|
|
6,739
|
|
|
12,685
|
|
|
22,320
|
|
Total
|
12,601
|
|
|
14,029
|
|
|
33,349
|
|
|
50,053
|
|
Ocean Bottom
Services
|
29,984
|
|
|
—
|
|
|
36,417
|
|
|
—
|
|
Total
|
$
|
78,622
|
|
|
$
|
66,674
|
|
|
$
|
137,439
|
|
|
$
|
144,047
|
|
Gross profit
(loss):
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
$
|
12,888
|
|
|
$
|
11,294
|
|
|
$
|
(418)
|
|
|
$
|
(6,954)
|
|
E&P Operations
Optimization
|
6,866
|
|
|
7,039
|
|
|
16,647
|
|
|
25,971
|
|
Ocean Bottom
Services
|
12,011
|
|
|
(7,225)
|
|
|
11,459
|
|
|
(33,832)
|
|
Total
|
$
|
31,765
|
|
|
$
|
11,108
|
|
|
$
|
27,688
|
|
|
$
|
(14,815)
|
|
Gross
margin:
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
36
|
%
|
|
21
|
%
|
|
(1)
|
%
|
|
(7)
|
%
|
E&P Operations
Optimization
|
54
|
%
|
|
50
|
%
|
|
50
|
%
|
|
52
|
%
|
Ocean Bottom
Services
|
40
|
%
|
|
—
|
%
|
|
31
|
%
|
|
—
|
%
|
Total
|
40
|
%
|
|
17
|
%
|
|
20
|
%
|
|
(10)
|
%
|
Income (loss) from
operations:
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
$
|
7,259
|
|
|
$
|
1,642
|
|
|
$
|
(16,867)
|
|
|
$
|
(37,401)
|
|
E&P Operations
Optimization
|
3,682
|
|
|
3,916
|
|
|
7,162
|
|
|
15,786
|
|
Ocean Bottom
Services
|
9,320
|
|
|
(10,287)
|
|
|
2,053
|
|
|
(46,457)
|
|
Support and
other
|
(8,397)
|
|
|
(8,145)
|
|
|
(27,201)
|
|
|
(32,180)
|
|
Total
|
$
|
11,864
|
|
|
$
|
(12,874)
|
|
|
$
|
(34,853)
|
|
|
$
|
(100,252)
|
|
Operating
margin:
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
20
|
%
|
|
3
|
%
|
|
(25)
|
%
|
|
(40)
|
%
|
E&P Operations
Optimization
|
29
|
%
|
|
28
|
%
|
|
21
|
%
|
|
32
|
%
|
Ocean Bottom
Services
|
31
|
%
|
|
—
|
%
|
|
6
|
%
|
|
—
|
%
|
Support and
other
|
(11)%
|
|
|
(12)
|
%
|
|
(20)
|
%
|
|
(22)
|
%
|
Total
|
15
|
%
|
|
(19)
|
%
|
|
(25)
|
%
|
|
(70)
|
%
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIES
Reconciliation of Adjusted EBITDA to Net
Income (Loss)
(Non-GAAP Measure)
(In
thousands)
(Unaudited)
The term Adjusted EBITDA represents net income (loss) before
interest expense, interest income, income taxes, depreciation and
amortization charges, and other non-cash charges including a
reduction for loss contingency related to legal proceedings and
loss on extinguishment of debt. Adjusted EBITDA is not a
measure of financial performance under generally accepted
accounting principles and should not be considered in isolation
from or as a substitute for net income (loss) or cash flow measures
prepared in accordance with generally accepted accounting
principles or as a measure of profitability or liquidity.
Additionally, Adjusted EBITDA may not be comparable to other
similarly titled measures of other companies. The Company has
included Adjusted EBITDA as a supplemental disclosure because its
management believes that Adjusted EBITDA provides useful
information regarding our liquidity, ability to service debt and to
fund capital expenditures and provides investors a helpful measure
for comparing its operating performance with the performance of
other companies that have different financing and capital
structures or tax rates.
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net income
(loss)
|
$
|
1,914
|
|
|
$
|
(20,156)
|
|
|
$
|
(58,385)
|
|
|
$
|
(19,900)
|
|
Interest expense,
net
|
4,607
|
|
|
4,854
|
|
|
14,043
|
|
|
14,086
|
|
Income tax expense,
net
|
3,316
|
|
|
2,082
|
|
|
5,865
|
|
|
3,597
|
|
Depreciation and
amortization expense
|
14,525
|
|
|
20,736
|
|
|
40,185
|
|
|
44,191
|
|
Reduction of accrual
for loss contingency related to legal proceedings
|
—
|
|
|
—
|
|
|
—
|
|
|
(101,978)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
2,182
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
24,362
|
|
|
$
|
7,516
|
|
|
$
|
3,890
|
|
|
$
|
(60,004)
|
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIES
Reconciliation of Special Items to Diluted
Income (Loss) per Share
(Non-GAAP Measure)
(In
thousands, except per share data)
(Unaudited)
The financial results are reported in accordance with
GAAP. However, management believes that certain non-GAAP
performance measures may provide users of this financial
information, additional meaningful comparisons between current
results and results in prior operating periods. One such non-GAAP
financial measure is adjusted income (loss) from operations or
adjusted net income (loss), which excludes certain charges or
amounts. This adjusted income (loss) amount is not a measure of
financial performance under GAAP. Accordingly, it should not be
considered as a substitute for income (loss) from operations, net
income (loss) or other income data prepared in accordance with
GAAP. See the tables below for supplemental financial data and the
corresponding reconciliation to GAAP financials for the three
months ended September 30, 2015 and
the nine months ended September 30,
2016 and 2015:
|
Three Months Ended
September 30, 2015
|
|
As
Reported
|
|
Special
Items(1)
|
|
As
Adjusted
|
Net
revenues
|
$
|
66,674
|
|
|
$
|
—
|
|
|
$
|
66,674
|
|
Cost of
sales
|
55,566
|
|
|
(2,168)
|
|
|
53,398
|
|
Gross
profit
|
11,108
|
|
|
2,168
|
|
|
13,276
|
|
Operating
expenses
|
23,982
|
|
|
(1,711)
|
|
|
22,271
|
|
Loss from
operations
|
(12,874)
|
|
|
3,879
|
|
|
(8,995)
|
|
Interest expense,
net
|
(4,854)
|
|
|
—
|
|
|
(4,854)
|
|
Other expense,
net
|
(346)
|
|
|
(295)
|
|
|
(641)
|
|
Income tax
expense
|
2,082
|
|
|
122
|
|
|
2,204
|
|
Net loss
|
(20,156)
|
|
|
3,462
|
|
|
(16,694)
|
|
Net (income) loss
attributable to noncontrolling interest
|
(227)
|
|
|
—
|
|
|
(227)
|
|
Net loss attributable
to ION
|
$
|
(20,383)
|
|
|
$
|
3,462
|
|
|
$
|
(16,921)
|
|
Net loss per
share:
|
|
|
|
|
|
Basic
|
$
|
(1.86)
|
|
|
|
|
$
|
(1.54)
|
|
Diluted
|
$
|
(1.86)
|
|
|
|
|
$
|
(1.54)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
10,984
|
|
|
|
|
10,984
|
|
Diluted
|
10,984
|
|
|
|
|
10,984
|
|
|
Nine Months Ended
September 30, 2016
|
|
Nine Months Ended
September 30, 2015
|
|
As
Reported
|
|
Special Items
|
|
As
Adjusted
|
|
As
Reported
|
|
Special Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
137,439
|
|
|
$
|
—
|
|
|
$
|
137,439
|
|
|
$
|
144,047
|
|
|
$
|
—
|
|
|
$
|
144,047
|
|
Cost of
sales
|
109,751
|
|
|
(1,077)
|
|
|
108,674
|
|
|
158,862
|
|
|
(3,981)
|
|
|
154,881
|
|
Gross profit
(loss)
|
27,688
|
|
|
1,077
|
|
|
28,765
|
|
|
(14,815)
|
|
|
3,981
|
|
|
(10,834)
|
|
Operating
expenses
|
62,541
|
|
|
(932)
|
|
|
61,609
|
|
|
85,437
|
|
|
(3,233)
|
|
|
82,204
|
|
Loss from
operations
|
(34,853)
|
|
|
2,009
|
|
(2)
|
(32,844)
|
|
|
(100,252)
|
|
|
7,214
|
|
(4)
|
(93,038)
|
|
Interest expense,
net
|
(14,043)
|
|
|
—
|
|
|
(14,043)
|
|
|
(14,086)
|
|
|
—
|
|
|
(14,086)
|
|
Other income
(expense), net
|
(3,624)
|
|
|
2,182
|
|
(3)
|
(1,442)
|
|
|
98,035
|
|
|
(100,360)
|
|
(5)
|
(2,325)
|
|
Income tax
expense
|
5,865
|
|
|
—
|
|
|
5,865
|
|
|
3,597
|
|
|
269
|
|
|
3,866
|
|
Net loss
|
(58,385)
|
|
|
4,191
|
|
|
(54,194)
|
|
|
(19,900)
|
|
|
(93,415)
|
|
|
(113,315)
|
|
Net (income) loss
attributable to noncontrolling interest
|
(272)
|
|
|
—
|
|
|
(272)
|
|
|
322
|
|
|
(172)
|
|
|
150
|
|
Net loss attributable
to ION
|
$
|
(58,657)
|
|
|
$
|
4,191
|
|
|
$
|
(54,466)
|
|
|
$
|
(19,578)
|
|
|
$
|
(93,587)
|
|
|
$
|
(113,165)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(5.21)
|
|
|
|
|
$
|
(4.83)
|
|
|
$
|
(1.78)
|
|
|
|
|
$
|
(10.31)
|
|
Diluted
|
$
|
(5.21)
|
|
|
|
|
$
|
(4.83)
|
|
|
$
|
(1.78)
|
|
|
|
|
$
|
(10.31)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
11,269
|
|
|
|
|
11,269
|
|
|
10,978
|
|
|
|
|
10,978
|
|
Diluted
|
11,269
|
|
|
|
|
11,269
|
|
|
10,978
|
|
|
|
|
10,978
|
|
|
|
(1)
|
Primarily represents
severance charges during the third quarter 2015.
|
|
|
(2)
|
Represents severance
charges during the second quarter 2016.
|
|
|
(3)
|
Represents a loss on
extinguishment of debt associated with the Company's second quarter
2016 bond exchange.
|
|
|
(4)
|
In addition to note
(1) , the nine months ended September 30, 2015 includes
severance and facility charges related to the first half 2015
restructurings.
|
|
|
(5)
|
Primarily
represents a partial reduction in the WesternGeco legal contingency
in the second quarter 2015.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ion-reports-third-quarter-2016-results-300356361.html
SOURCE ION Geophysical Corporation