HOUSTON, Nov. 4, 2015 /PRNewswire/ -- ION Geophysical
Corporation (NYSE: IO) today reported third quarter 2015 net loss
of $20.4 million, or $(0.12) per share. The third quarter
results were impacted by special items totaling $3.5 million, or $(0.02) per share, primarily related to severance
charges. Excluding special items, the Company's third quarter
adjusted net loss was $16.9 million,
or $(0.10) per share, on revenues of
$66.7 million, compared to a net loss
of $24.5 million, or $(0.15) per share, on revenues of $106.5 million in third quarter 2014. A
reconciliation of special items to 2015 and 2014 can be found in
the financial tables of this press release.
At September 30, 2015, the Company's total liquidity was
$128.2 million consisting of cash and
cash equivalents of $88.2 million and
the $40.0 million available on the
Company's recently amended revolving credit facility. The
Company consumed cash before financing activities of $80.5 million during the first nine months of
2015 and generated cash before financing activities of $36.0 million in the prior year period. The
Company reported a positive Adjusted EBITDA for third quarter 2015
of $7.5 million, compared to
$13.0 million one year ago.
Year-to-date 2015 Adjusted EBITDA was $(60.0) million, compared to $83.0 million in the prior year period. A
reconciliation of Adjusted EBITDA can be found in the financial
tables of this press release.
Brian Hanson, ION's President and
Chief Executive Officer, commented, "We indicated on our second
quarter earnings call that we anticipated our third quarter
revenues to be up over the first two quarters primarily as a result
of beginning data acquisition on our industry-funded
MexicoSPANTM program. We completed acquisition in
late October and are currently processing the data. Our
clients are very pleased with the quality of the fast track data we
have delivered so far.
"However, the virtual shutdown in exploration spending continues
to have a negative impact on all parts of our business, and we are
managing through this downturn by employing strict cost controls
and spending discipline. During the quarter, we reduced our
employee headcount by an additional 25% and implemented additional
cost control measures. A majority of the reductions occurred
in September and therefore had minimal cash savings impact on our
third quarter. Once complete later this year, these
additional cost controls will yield an estimated $40 million in annualized savings.
While we have taken out cost across the company, we have
appropriately scaled our businesses to reflect our current revenue
streams while still maintaining all of our core capabilities.
Consistent with our asset light strategy, we are ready to scale up
or down as business dictates.
"In light of the current economic environment, we were
successful in amending our credit facility with PNC bank. The
amended credit facility has improved financial covenants, and we
had full availability on the maximum $40.0
million borrowing capacity at the end of September.
"Looking ahead, we believe that the exploration landscape in
2016, as it impacts our business, will be similar to
2015. Our objective during this period is to maintain our
strategic capabilities and advance our key R&D initiatives
while minimizing our cash burn. We believe we have
moved quickly and cut deep, as we currently do not expect to see
early signs of recovery in our area of the industry until
2017."
THIRD QUARTER 2015
The Company's segment revenues for the third quarter were as
follows (in thousands):
|
|
Three Months Ended
September 30,
|
|
|
|
|
2015
|
|
2014
|
|
% Change
|
Solutions
|
|
$
|
52,645
|
|
$
|
45,859
|
|
15%
|
Systems
|
|
7,290
|
|
24,695
|
|
(70)%
|
Software
|
|
6,739
|
|
11,010
|
|
(39)%
|
Ocean Bottom
Services
|
|
—
|
|
24,976
|
|
(100)%
|
Total
|
|
$
|
66,674
|
|
$
|
106,540
|
|
(37)%
|
Within the Solutions segment, new venture revenues were
$26.7 million, a 44% increase from
third quarter 2014; data library revenues were $15.3 million, an increase of over 350%; and data
processing revenues were $10.7
million, a 56% decrease. While all businesses within
the Solutions segment continue to be impacted by the slowdown in
exploration spending, the increase in new venture and data library
revenues was primarily related to the Company's acquisition of its
industry-funded MexicoSPANTM program and increased sales
of its South American data libraries.
The decrease in Systems segment revenues was primarily due to a
reduction in new marine positioning system sales and repair and
replacement revenues attributable to reduced activity by seismic
contractors as they have taken vessels out of service.
The decrease in Software segment revenues was primarily due to
lower Orca® licensing revenues and, to a lesser extent,
the effects of foreign currency translation. While Software
segment revenues were down 39% year over year, the segment
generated positive gross and operating margins of 65% and 36%,
respectively, during the quarter.
The Company's Ocean Bottom Services segment was impacted by
OceanGeo's crew being idle, resulting in a lack of revenue
generation in third quarter 2015.
Consolidated gross margins were 17%, compared to 27% in third
quarter 2014, and operating margins were (19)%, compared to (5)% in
the prior year quarter. The decreases in gross and operating
margins were driven by the significant decline in revenues within
the Systems segment, the lack of revenues generated in the Ocean
Bottom Services segment and, to a lesser extent, the decline in
revenues within the Software segment. These decreases were
partially offset by the increase in revenues within the Solutions
segment and by the Company's ongoing cost reduction efforts.
As the Company wrote its investment in INOVA Geophysical down to
zero at the end of last year, the Company did not record any losses
on its share of the joint venture in third quarter 2015, compared
to its share of losses of $5.6
million in third quarter 2014.
YEAR-TO-DATE 2015
The Company's segment revenues for the first nine months of the
year were as follows (in thousands):
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2015
|
|
2014
|
|
% Change
|
Solutions
|
|
$
|
93,994
|
|
$
|
197,734
|
|
(52)%
|
Systems
|
|
27,733
|
|
71,948
|
|
(61)%
|
Software
|
|
22,320
|
|
31,582
|
|
(29)%
|
Ocean Bottom
Services
|
|
—
|
|
71,454
|
|
(100)%
|
Total
|
|
$
|
144,047
|
|
$
|
372,718
|
|
(61)%
|
Within the Solutions segment, new venture revenues were
$35.3 million, a 54% decrease from
the first nine months of 2014; data library revenues were
$24.9 million, a 17% decrease; and
data processing revenues were $33.7
million, a 63% decrease. All businesses within the
Solutions segment were impacted by the slowdown in exploration
spending. Also, a portion of the year-over-year decline in
data processing revenues was due to $15.0
million of revenues recognized in the first quarter 2014 for
work performed in 2013 that did not recur in 2015.
The decrease in Systems segment revenues was primarily due to a
reduction in new marine positioning system sales and repair and
replacement revenues attributable to reduced activity by seismic
contractors as they have taken vessels out of service.
Software segment revenues were down primarily due to lower Orca
licensing revenues and, to a lesser extent, the effects of foreign
currency translation. While Software segment revenues were
down 29% year over year, the segment generated positive gross and
operating margins of 64% and 35%, respectively, during the first
nine months of 2015.
The Company's Ocean Bottom Services segment was impacted by
OceanGeo's crew being idle, resulting in a lack of revenue
generation in the first nine months of 2015.
Consolidated gross margins were (10)%, compared to 33% in the
first nine months of 2014, and operating margins were (70)%,
compared to 5% in the prior year period. The decreases in
gross and operating margins were driven by the significant decline
in revenues within the Solutions and Systems segments and, to a
lesser extent, the Software segment, and from the lack of revenues
generated in the Company's Ocean Bottom Services segment.
For the first nine months of 2015, the Company reported a net
loss of $19.6 million, or
$(0.12) per share, compared to net
income of $52.6 million, or
$0.32 per diluted share, in the first
nine months of 2014. Both periods included special items
related to the reductions in the accrual for the WesternGeco legal
matter, in addition to restructuring and other special items.
Excluding these special items, in the first nine months of 2015,
the Company reported an adjusted net loss of $113.2 million, or $(0.69) per share, compared to an adjusted net
loss of $23.1 million, or
$(0.14) per share, in the prior year
period.
CONFERENCE CALL
The Company has scheduled a conference call for Thursday,
November 5, 2015, 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 19, 2015. To access the replay,
dial (877) 660-6853 and use pass code 13621442#.
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, 2014 and its Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K filed during
2015.
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,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Service
revenues
|
$
|
53,515
|
|
|
$
|
71,923
|
|
|
$
|
96,918
|
|
|
$
|
272,386
|
|
Product
revenues
|
13,159
|
|
|
34,617
|
|
|
47,129
|
|
|
100,332
|
|
Total net
revenues
|
66,674
|
|
|
106,540
|
|
|
144,047
|
|
|
372,718
|
|
Cost of
services
|
47,883
|
|
|
60,285
|
|
|
132,234
|
|
|
200,697
|
|
Cost of
products
|
7,683
|
|
|
17,032
|
|
|
26,628
|
|
|
47,716
|
|
Gross profit
(loss)
|
11,108
|
|
|
29,223
|
|
|
(14,815)
|
|
|
124,305
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research, development
and engineering
|
6,537
|
|
|
10,910
|
|
|
21,496
|
|
|
30,254
|
|
Marketing and
sales
|
6,904
|
|
|
8,480
|
|
|
23,375
|
|
|
27,610
|
|
General,
administrative and other operating expenses
|
10,541
|
|
|
15,182
|
|
|
40,566
|
|
|
48,334
|
|
Total operating
expenses
|
23,982
|
|
|
34,572
|
|
|
85,437
|
|
|
106,198
|
|
Income (loss) from
operations
|
(12,874)
|
|
|
(5,349)
|
|
|
(100,252)
|
|
|
18,107
|
|
Interest expense,
net
|
(4,854)
|
|
|
(5,048)
|
|
|
(14,086)
|
|
|
(14,779)
|
|
Equity in losses of
investments
|
—
|
|
|
(5,558)
|
|
|
—
|
|
|
(9,027)
|
|
Other income
(expense), net
|
(346)
|
|
|
(622)
|
|
|
98,035
|
|
|
73,970
|
|
Income (loss) before
income taxes
|
(18,074)
|
|
|
(16,577)
|
|
|
(16,303)
|
|
|
68,271
|
|
Income tax
expense
|
2,082
|
|
|
8,345
|
|
|
3,597
|
|
|
14,261
|
|
Net income
(loss)
|
(20,156)
|
|
|
(24,922)
|
|
|
(19,900)
|
|
|
54,010
|
|
Net (income) loss
attributable to noncontrolling interests
|
(227)
|
|
|
381
|
|
|
322
|
|
|
(1,384)
|
|
Net income (loss)
attributable to ION
|
$
|
(20,383)
|
|
|
$
|
(24,541)
|
|
|
$
|
(19,578)
|
|
|
$
|
52,626
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.12)
|
|
|
$
|
(0.15)
|
|
|
$
|
(0.12)
|
|
|
$
|
0.32
|
|
Diluted
|
$
|
(0.12)
|
|
|
$
|
(0.15)
|
|
|
$
|
(0.12)
|
|
|
$
|
0.32
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
164,755
|
|
|
164,149
|
|
|
164,672
|
|
|
164,021
|
|
Diluted
|
164,755
|
|
|
164,149
|
|
|
164,672
|
|
|
164,326
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
ASSETS
|
September 30,
2015
|
|
December 31,
2014
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
88,239
|
|
|
$
|
173,608
|
|
Accounts receivable,
net
|
21,587
|
|
|
114,325
|
|
Unbilled
receivables
|
32,387
|
|
|
22,599
|
|
Inventories
|
34,683
|
|
|
51,162
|
|
Prepaid expenses and
other current assets
|
10,124
|
|
|
13,662
|
|
Total current
assets
|
187,020
|
|
|
375,356
|
|
Deferred income tax
asset
|
5,706
|
|
|
8,604
|
|
Property, plant,
equipment and seismic rental equipment, net
|
77,081
|
|
|
69,840
|
|
Multi-client data
library, net
|
135,907
|
|
|
118,669
|
|
Goodwill
|
26,809
|
|
|
27,388
|
|
Intangible assets,
net
|
5,306
|
|
|
6,788
|
|
Other
assets
|
9,380
|
|
|
10,612
|
|
Total
assets
|
$
|
447,209
|
|
|
$
|
617,257
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
|
6,612
|
|
|
$
|
7,649
|
|
Accounts
payable
|
27,950
|
|
|
36,863
|
|
Accrued
expenses
|
54,302
|
|
|
65,264
|
|
Accrued multi-client
data library royalties
|
12,443
|
|
|
35,219
|
|
Deferred
revenue
|
5,575
|
|
|
8,262
|
|
Total current
liabilities
|
106,882
|
|
|
153,257
|
|
Long-term debt, net
of current maturities
|
179,666
|
|
|
182,945
|
|
Other long-term
liabilities
|
39,830
|
|
|
143,804
|
|
Total
liabilities
|
326,378
|
|
|
480,006
|
|
Redeemable
noncontrolling interest
|
1,200
|
|
|
1,539
|
|
Equity:
|
|
|
|
Common
stock
|
1,648
|
|
|
1,645
|
|
Additional paid-in
capital
|
892,007
|
|
|
887,749
|
|
Accumulated
deficit
|
(753,987)
|
|
|
(734,409)
|
|
Accumulated other
comprehensive loss
|
(13,564)
|
|
|
(12,807)
|
|
Treasury
stock
|
(6,565)
|
|
|
(6,565)
|
|
Total stockholders'
equity
|
119,539
|
|
|
135,613
|
|
Noncontrolling
interest
|
92
|
|
|
99
|
|
Total
equity
|
119,631
|
|
|
135,712
|
|
Total liabilities and
equity
|
$
|
447,209
|
|
|
$
|
617,257
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
(19,900)
|
|
|
$
|
54,010
|
|
Adjustments to
reconcile net income (loss) to cash (used in) provided by operating
activities:
|
|
|
|
Depreciation and
amortization (other than multi-client data library)
|
19,660
|
|
|
20,989
|
|
Amortization of
multi-client data library
|
24,531
|
|
|
46,014
|
|
Stock-based
compensation expense
|
4,174
|
|
|
7,058
|
|
Reductions of accrual
for loss contingency related to legal proceedings
|
(101,978)
|
|
|
(69,557)
|
|
Equity in losses of
investments
|
—
|
|
|
9,027
|
|
Gain on sale of
Source product line
|
—
|
|
|
(6,522)
|
|
Deferred income
taxes
|
5,992
|
|
|
(1,536)
|
|
Change in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
92,424
|
|
|
71,540
|
|
Unbilled
receivables
|
(9,837)
|
|
|
(8,036)
|
|
Inventories
|
464
|
|
|
(4,272)
|
|
Accounts payable,
accrued expenses and accrued royalties
|
(43,676)
|
|
|
(31,324)
|
|
Deferred
revenue
|
(2,576)
|
|
|
(4,153)
|
|
Other assets and
liabilities
|
(5,274)
|
|
|
3,738
|
|
Net cash (used in)
provided by operating activities
|
(35,996)
|
|
|
86,976
|
|
Cash flows from
investing activities:
|
|
|
|
Cash invested in
multi-client data library
|
(28,152)
|
|
|
(57,340)
|
|
Purchase of property,
plant, equipment and seismic rental assets
|
(17,601)
|
|
|
(6,842)
|
|
Repayment of advance
to INOVA Geophysical
|
—
|
|
|
1,000
|
|
Net investment in and
advances to OceanGeo B.V. prior to its consolidation
|
—
|
|
|
(3,074)
|
|
Net proceeds from
sale of Source product line
|
—
|
|
|
14,394
|
|
Other investing
activities
|
1,262
|
|
|
928
|
|
Net cash used in
investing activities
|
(44,491)
|
|
|
(50,934)
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings under
revolving line of credit
|
—
|
|
|
15,000
|
|
Payments under
revolving line of credit
|
—
|
|
|
(50,000)
|
|
Payments on notes
payable and long-term debt
|
(5,431)
|
|
|
(11,737)
|
|
Costs associated with
issuance of debt
|
(146)
|
|
|
(2,126)
|
|
Acquisition of
non-controlling interest
|
—
|
|
|
(6,000)
|
|
Other financing
activities
|
94
|
|
|
423
|
|
Net cash used in
financing activities
|
(5,483)
|
|
|
(54,440)
|
|
Effect of change in
foreign currency exchange rates on cash and cash
equivalents
|
601
|
|
|
189
|
|
Net decrease in cash
and cash equivalents
|
(85,369)
|
|
|
(18,209)
|
|
Cash and cash
equivalents at beginning of period
|
173,608
|
|
|
148,056
|
|
Cash and cash
equivalents at end of period
|
$
|
88,239
|
|
|
$
|
129,847
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
|
SUMMARY OF SEGMENT
INFORMATION
|
(In
thousands)
|
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net
revenues:
|
|
|
|
|
|
|
|
Solutions:
|
|
|
|
|
|
|
|
New
Venture
|
$
|
26,650
|
|
|
$
|
18,446
|
|
|
$
|
35,315
|
|
|
$
|
76,499
|
|
Data
Library
|
15,302
|
|
|
3,262
|
|
|
24,948
|
|
|
30,104
|
|
Total multi-client
revenues
|
41,952
|
|
|
21,708
|
|
|
60,263
|
|
|
106,603
|
|
Data
Processing
|
10,693
|
|
|
24,151
|
|
|
33,731
|
|
|
91,131
|
|
Total
|
$
|
52,645
|
|
|
$
|
45,859
|
|
|
$
|
93,994
|
|
|
$
|
197,734
|
|
Systems:
|
|
|
|
|
|
|
|
Towed
Streamer
|
$
|
4,426
|
|
|
$
|
13,666
|
|
|
$
|
12,273
|
|
|
$
|
35,782
|
|
Other
|
2,864
|
|
|
11,029
|
|
|
15,460
|
|
|
36,166
|
|
Total
|
$
|
7,290
|
|
|
$
|
24,695
|
|
|
$
|
27,733
|
|
|
$
|
71,948
|
|
Software:
|
|
|
|
|
|
|
|
Software
Systems
|
$
|
5,869
|
|
|
$
|
9,922
|
|
|
$
|
19,396
|
|
|
$
|
28,384
|
|
Services
|
870
|
|
|
1,088
|
|
|
2,924
|
|
|
3,198
|
|
Total
|
$
|
6,739
|
|
|
$
|
11,010
|
|
|
$
|
22,320
|
|
|
$
|
31,582
|
|
Ocean Bottom
Services
|
$
|
—
|
|
|
$
|
24,976
|
|
|
$
|
—
|
|
|
$
|
71,454
|
|
Total
|
$
|
66,674
|
|
|
$
|
106,540
|
|
|
$
|
144,047
|
|
|
$
|
372,718
|
|
Gross profit
(loss):
|
|
|
|
|
|
|
|
Solutions
|
$
|
11,294
|
|
|
$
|
5,927
|
|
|
$
|
(6,954)
|
|
|
$
|
51,207
|
|
Systems
|
1,366
|
|
|
10,123
|
|
|
7,425
|
|
|
31,288
|
|
Software
|
4,399
|
|
|
8,326
|
|
|
14,197
|
|
|
23,388
|
|
Ocean Bottom
Services
|
(5,951)
|
|
|
4,847
|
|
|
(29,483)
|
|
|
18,422
|
|
Total
|
$
|
11,108
|
|
|
$
|
29,223
|
|
|
$
|
(14,815)
|
|
|
$
|
124,305
|
|
Gross
margin:
|
|
|
|
|
|
|
|
Solutions
|
21
|
%
|
|
13
|
%
|
|
(7)
|
%
|
|
26
|
%
|
Systems
|
19
|
%
|
|
41
|
%
|
|
27
|
%
|
|
43
|
%
|
Software
|
65
|
%
|
|
76
|
%
|
|
64
|
%
|
|
74
|
%
|
Ocean Bottom
Services
|
—
|
%
|
|
19
|
%
|
|
—
|
%
|
|
26
|
%
|
Total
|
17
|
%
|
|
27
|
%
|
|
(10)
|
%
|
|
33
|
%
|
Income (loss) from
operations:
|
|
|
|
|
|
|
|
Solutions
|
$
|
768
|
|
|
$
|
(5,960)
|
|
|
$
|
(40,766)
|
|
|
$
|
11,733
|
|
Systems
|
(1,295)
|
|
|
2,917
|
|
|
(2,660)
|
|
|
9,835
|
|
Software
|
2,444
|
|
|
6,227
|
|
|
7,874
|
|
|
16,985
|
|
Ocean Bottom
Services
|
(7,289)
|
|
|
1,677
|
|
|
(34,856)
|
|
|
12,333
|
|
Corporate and
other
|
(7,502)
|
|
|
(10,210)
|
|
|
(29,844)
|
|
|
(32,779)
|
|
Total
|
$
|
(12,874)
|
|
|
$
|
(5,349)
|
|
|
$
|
(100,252)
|
|
|
$
|
18,107
|
|
Operating
margin:
|
|
|
|
|
|
|
|
Solutions
|
1
|
%
|
|
(13)
|
%
|
|
(43)
|
%
|
|
6
|
%
|
Systems
|
(18)
|
%
|
|
12
|
%
|
|
(10)
|
%
|
|
14
|
%
|
Software
|
36
|
%
|
|
57
|
%
|
|
35
|
%
|
|
54
|
%
|
Ocean Bottom
Services
|
—
|
%
|
|
7
|
%
|
|
—
|
%
|
|
17
|
%
|
Corporate and
other
|
(11)
|
%
|
|
(10)
|
%
|
|
(21)
|
%
|
|
(9)
|
%
|
Total
|
(19)
|
%
|
|
(5)
|
%
|
|
(70)
|
%
|
|
5
|
%
|
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, gain on sale of Source product line, and other
similar non-cash charges including, without limitation, equity in
losses of investments and the reductions of accrual for loss
contingency related to legal proceedings. 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 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 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,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net income
(loss)
|
$
|
(20,156)
|
|
|
$
|
(24,922)
|
|
|
$
|
(19,900)
|
|
|
$
|
54,010
|
|
Interest expense,
net
|
4,854
|
|
|
5,048
|
|
|
14,086
|
|
|
14,779
|
|
Income tax
expense
|
2,082
|
|
|
8,345
|
|
|
3,597
|
|
|
14,261
|
|
Depreciation and
amortization expense
|
20,736
|
|
|
18,961
|
|
|
44,191
|
|
|
67,003
|
|
Reductions of accrual
for loss contingency related to legal proceedings
|
—
|
|
|
—
|
|
|
(101,978)
|
|
|
(69,557)
|
|
Equity in losses of
investments
|
—
|
|
|
5,558
|
|
|
—
|
|
|
9,027
|
|
Gain on sale of
Source product line
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,522)
|
|
Adjusted
EBITDA
|
$
|
7,516
|
|
|
$
|
12,990
|
|
|
$
|
(60,004)
|
|
|
$
|
83,001
|
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIES
Reconciliation of Special Items to Diluted
Earnings (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
table below for supplemental financial data and the corresponding
reconciliation to GAAP financials for the three and nine months
ended September 30, 2015 and the nine
months ended September 30, 2014:
|
Three Months Ended
September 30, 2015
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
66,674
|
|
|
$
|
—
|
|
|
$
|
66,674
|
|
Cost of
sales
|
55,566
|
|
|
(2,168)
|
|
(1)
|
53,398
|
|
Gross
profit
|
11,108
|
|
|
2,168
|
|
|
13,276
|
|
Operating
expenses
|
23,982
|
|
|
(1,711)
|
|
(1)
|
22,271
|
|
Loss from
operations
|
(12,874)
|
|
|
3,879
|
|
|
(8,995)
|
|
Interest expense,
net
|
(4,854)
|
|
|
—
|
|
|
(4,854)
|
|
Other expense,
net
|
(346)
|
|
|
(295)
|
|
(2)
|
(641)
|
|
Income tax
expense
|
2,082
|
|
|
122
|
|
|
2,204
|
|
Net loss
|
(20,156)
|
|
|
3,462
|
|
|
(16,694)
|
|
Net income
attributable to noncontrolling interest
|
(227)
|
|
|
—
|
|
|
(227)
|
|
Net loss attributable
to ION
|
$
|
(20,383)
|
|
|
$
|
3,462
|
|
|
$
|
(16,921)
|
|
Net income (loss) per
share:
|
|
|
|
|
|
Basic
|
$
|
(0.12)
|
|
|
|
|
$
|
(0.10)
|
|
Diluted
|
$
|
(0.12)
|
|
|
|
|
$
|
(0.10)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
164,755
|
|
|
|
|
164,755
|
|
Diluted
|
164,755
|
|
|
|
|
164,755
|
|
|
Nine Months Ended
September 30, 2015
|
|
Nine Months Ended
September 30, 2014
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
144,047
|
|
|
$
|
—
|
|
|
$
|
144,047
|
|
|
$
|
372,718
|
|
|
$
|
—
|
|
|
$
|
372,718
|
|
Cost of
sales
|
158,862
|
|
|
(3,981)
|
|
(3)
|
154,881
|
|
|
248,413
|
|
|
—
|
|
|
248,413
|
|
Gross profit
(loss)
|
(14,815)
|
|
|
3,981
|
|
|
(10,834)
|
|
|
124,305
|
|
|
—
|
|
|
124,305
|
|
Operating
expenses
|
85,437
|
|
|
(3,233)
|
|
(3)
|
82,204
|
|
|
106,198
|
|
|
—
|
|
|
106,198
|
|
Income (loss) from
operations
|
(100,252)
|
|
|
7,214
|
|
|
(93,038)
|
|
|
18,107
|
|
|
—
|
|
|
18,107
|
|
Interest expense,
net
|
(14,086)
|
|
|
—
|
|
|
(14,086)
|
|
|
(14,779)
|
|
|
—
|
|
|
(14,779)
|
|
Equity in losses of
investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,027)
|
|
|
—
|
|
|
(9,027)
|
|
Other income
(expense), net
|
98,035
|
|
|
(100,360)
|
|
(4)
|
(2,325)
|
|
|
73,970
|
|
|
(76,079)
|
|
(5)
|
(2,109)
|
|
Income tax
expense
|
3,597
|
|
|
269
|
|
(6)
|
3,866
|
|
|
14,261
|
|
|
(357)
|
|
(6)
|
13,904
|
|
Net income
(loss)
|
(19,900)
|
|
|
(93,415)
|
|
|
(113,315)
|
|
|
54,010
|
|
|
(75,722)
|
|
|
(21,712)
|
|
Net (income) loss
attributable to noncontrolling interest
|
322
|
|
|
(172)
|
|
|
150
|
|
|
(1,384)
|
|
|
—
|
|
|
(1,384)
|
|
Net income (loss)
attributable to ION
|
$
|
(19,578)
|
|
|
$
|
(93,587)
|
|
|
$
|
(113,165)
|
|
|
$
|
52,626
|
|
|
$
|
(75,722)
|
|
|
$
|
(23,096)
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.12)
|
|
|
|
|
$
|
(0.69)
|
|
|
$
|
0.32
|
|
|
|
|
$
|
(0.14)
|
|
Diluted
|
$
|
(0.12)
|
|
|
|
|
$
|
(0.69)
|
|
|
$
|
0.32
|
|
|
|
|
$
|
(0.14)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
164,672
|
|
|
|
|
164,672
|
|
|
164,021
|
|
|
|
|
164,021
|
|
Diluted
|
164,672
|
|
|
|
|
164,672
|
|
|
164,326
|
|
|
|
|
164,021
|
|
|
|
(1)
|
Represents severance
charges related to the third quarter 2015
restructurings.
|
(2)
|
Represents a gain on
disposal of the Company's Denver land processing operations in the
third quarter 2015.
|
(3)
|
In addition to note
(1) , the nine months ended September 30, 2015 includes
severance and facility charges related to the first half 2015
restructurings.
|
(4)
|
In addition to note
(2), the nine months ended September 30, 2015 includes
an additional partial reduction in the WesternGeco legal
contingency from the second quarter 2015.
|
(5)
|
The nine months ended
September 30, 2014 was impacted by the first quarter reduction of
$69.6 million in the WesternGeco legal contingency, in addition to
a second quarter non-recurring gain on the sale of the marine
source product line of $6.5 million (before tax).
|
(6)
|
As the Company
maintains a valuation allowance for substantially all its deferred
tax assets, a majority of these special items have no associated
net tax effect.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ion-reports-third-quarter-2015-results-300172717.html
SOURCE ION Geophysical Corporation