HOUSTON, Feb. 5, 2020 /PRNewswire/ -- ION Geophysical
Corporation (NYSE: IO) today reported revenues of $42.7 million in the fourth quarter 2019 compared
to fourth quarter revenues of $74.6
million one year ago. ION's net loss for the fourth
quarter 2019 was $14.5 million, or a
loss of $1.02 per share, compared to
a net loss of $19.3 million, or a
loss of $1.38 per share in the fourth
quarter 2018. Excluding special items in both periods, the
Company reported an Adjusted net loss of $5.7 million, or a loss of $0.40 per share, compared to an Adjusted net
income of $15.3 million, or
$1.07 per diluted share in the fourth
quarter 2018. A reconciliation of special items to the
reported financial results can be found in the tables of this press
release.
For the full year 2019, the Company reported revenues of
$174.7 million, a 3% decrease
compared to revenues of $180.0
million one year ago. ION's full year 2019 net loss
was $48.2 million, or a loss of
$3.41 per share, compared to a net
loss of $71.2 million, or a loss of
$5.20 per share in 2018.
Excluding special items in both periods, the Company reported an
Adjusted net loss of $33.9 million,
or a loss of $2.40 per share,
compared to an Adjusted net loss of $32.5
million, or a loss of $2.37
per share in 2018.
Chris Usher, the Company's
President and Chief Executive Officer, commented, "Our fourth
quarter financial results were quite disappointing, primarily
because we were not able to launch multiple new acquisition
multi-client programs and close several data library deals in our
pipeline. As a result, our full year results were down
slightly, rather than the upward trajectory we had been building
towards for 2019, with timing of fourth quarter multi-client deals
countering the annual improvements in all our other
businesses. Tighter E&P budgetary controls and lower oil
prices subdued year-end spending such that several material deals,
on the order of tens of millions of dollars, were not completed
prior to year-end.
"We are focused on fundamentals and working areas we directly
control. We reorganized the business in two ways to improve
our execution and accountability; we restructured our E&P
Technology & Services segment to reflect our shift in
multi-client strategy to include new 3D acquisition, and
implemented a significant cost reduction program to lower our
operating expenses. We reorganized our new ventures sales
organization to accelerate our entry into the 3D new acquisition
multi-client market, bringing our projects closer to the reservoir,
where capital investment tends to be more consistent and programs
have larger scale revenue and earnings potential. ION has
rapidly grown our 3D library from almost nothing to 350,000 sq km
of seamlessly integrated reimaged data over the last few years,
which has given us credibility and experience in the space and led
to a pipeline of opportunities for new 3D towed streamer or seabed
programs we have not seen before. On the cost side of the
equation, we recognize the need to reduce our corporate cost
structure. In January 2020, we
executed a program that will improve focus and execution on
strategic initiatives while delivering annualized savings of
over $20 million.
"With that work behind us, I am still as excited about ION and
our business as when I took the CEO role. We are aligned
around select initiatives that can uniquely position ION in the new
industry landscape, which should lead to better financial
results. Offshore is picking up and we see material activity
among our client base to rebalance portfolios and maximize value,
which drives related data sales opportunities to fill customer
knowledge gaps. Our E&P Technology & Services team
has new focus on 3D new acquisition program opportunities, aligned
with our leading imaging capabilities. Our Operations
Optimization business is growing steadily and we just secured
another Marlin™ SmartPort customer after ramping up our port
business development capacity."
The Company reported Adjusted EBITDA of $9.2 million for the fourth quarter 2019, a
decrease from the Adjusted EBITDA of $36.5
million one year ago. Adjusted EBITDA was $31.9 million in 2019, compared to $41.7 million in 2018. A reconciliation of
Adjusted EBITDA to the closest comparable GAAP numbers can be found
in the tables of this press release.
Net cash flows from operations were $14.8
million during the fourth quarter 2019, compared to
$14.4 million in the fourth quarter
2018. Total net cash flows, including investing and financing
activities, were $4.9 million,
compared to $3.4 million one year
ago.
Net cash flows from operations were $34.2
million during 2019, compared to $7.1
million in 2018. Total net cash flows, including
investing and financing activities, were $(0.7) million in 2019, compared to $(18.6) million in 2018.
At December 31, 2019, the Company
had total liquidity of $72.4 million,
consisting of $33.1 million of cash
on hand, and $39.3 million of
available borrowing capacity under its maximum $50.0 million revolving credit facility.
There were no outstanding amounts under the credit facility at
year-end.
FOURTH QUARTER 2019
The Company's segment revenues for the fourth quarter were as
follows (in thousands):
|
|
Three Months Ended
December 31,
|
|
|
|
|
2019
|
|
2018
|
|
% Change
|
E&P Technology
& Services
|
|
$
|
29,711
|
|
|
$
|
60,443
|
|
|
(51)
|
%
|
Operations
Optimization
|
|
12,998
|
|
|
14,151
|
|
|
(8)
|
%
|
Total
|
|
$
|
42,709
|
|
|
$
|
74,594
|
|
|
(43)
|
%
|
Within the E&P Technology & Services segment,
multi-client revenues were $23.6
million, a decrease of 57%. The decline in
multi-client revenues was the result of reduced new venture
revenues and reduced year-end data library spending compared to one
year ago. Imaging Services revenues were $6.1 million, a 14% increase. Our Imaging
Services' business remains healthy entering 2020 with backlog more
than double that of one year ago.
Within the Operations Optimization segment, Optimization
Software & Services revenues were $5.5
million, a 9% decline from the fourth quarter 2018, Devices
revenues were $7.5 million, an 8%
decline. Both groups were modestly down during the quarter
due to the normal lumpiness of those businesses.
Consolidated gross margin for the quarter was 12%, compared to
51% in the fourth quarter 2018. Excluding special items
impacting only the fourth quarter 2019, consolidated gross margin
was 34%, as adjusted. Gross margin in the E&P Technology
& Services was (1)%, or 29%, as adjusted, compared to 53% one
year ago. The decrease in E&P Technology & Service
gross margin, as adjusted, was the result of the decline in
multi-client revenues. Operations Optimization gross margin
was 43%, compared to 52% one year ago, also the result of a decline
in revenues.
Consolidated operating expenses were $15.1 million, compared to $54.5 million in the fourth quarter 2018.
Excluding special items, consolidated operating expenses, as
adjusted, were $14.9 million,
compared to $19.8 million in the
fourth quarter 2018, and operating margin, as adjusted, was (1)%,
compared to 24% in the fourth quarter 2018. The decline in
operating margin, as adjusted, was due to the decrease in revenues,
partially offset by the decrease in operating expenses, as
adjusted, primarily related to reduced sales and bonus-related
compensation expenses.
FULL YEAR 2019
The Company's segment revenues for the full year were as follows
(in thousands):
|
|
Years Ended December
31,
|
|
|
|
|
2019
|
|
2018
|
|
% Change
|
E&P Technology
& Services
|
|
$
|
125,578
|
|
|
$
|
136,520
|
|
|
(8)
|
%
|
Operations
Optimization
|
|
49,101
|
|
|
43,525
|
|
|
13
|
%
|
Total
|
|
$
|
174,679
|
|
|
$
|
180,045
|
|
|
(3)
|
%
|
Within the E&P Technology & Services segment,
multi-client revenues were $103.0
million, a decrease of 12%. Full year 2019 data
library revenues increased primarily due to sales of South American
data, an increase which was more than offset by a decline in new
venture revenues. Imaging Services revenues were $22.5 million, an increase of 14%, associated
with increased revenues in the second half of 2019. The
increase in Imaging Services revenue is attributed to modest market
improvement and the successful execution of the Company's strategy
to focus on key clients, applications and basins that benefit from
and enables ION to continue enhancing its advanced
technologies.
Within the Operations Optimization segment, Optimization
Software & Services revenues were $23.1
million, an increase of 10% from 2018. The increase in
Optimization Software & Services revenues for the full year was
the result of increased deployments and associated engineering
services related to ION's Marlin offshore operations optimization
software. Devices revenues were $26.0
million, a 16% increase from 2018, driven by an increase in
marine equipment replacement and repairs.
Consolidated gross margin was 34%, compared to 33% in
2018. Excluding special items impacting only 2019,
consolidated gross margin was 40%, as adjusted. Gross margin
in the E&P Technology & Services was 28%, or 36%, as
adjusted, compared to 32% in 2018. While full year E&P
Technology & Service's revenues declined in 2019, the
improvement in gross margin, as adjusted, was the result of the mix
of multi-client revenues and increase in Imaging Services
revenues. Operations Optimization gross margin was 50%,
compared to 51% in 2018.
Consolidated operating expenses were $84.5 million, compared to $113.9 million in 2018. Excluding special
items, consolidated operating expenses, as adjusted, were
$78.8 million, compared to
$75.2 million in 2018, and operating
margin, as adjusted, was (6)%, compared to (9)% in 2018. The
improvement in operating margin, as adjusted, was due to the mix of
revenues, partially offset by the increase in operating expenses,
as adjusted, primarily related to compensation expenses.
CONFERENCE CALL
The Company has scheduled a conference call for Thursday, February 6, 2020, 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 February 20,
2020. To access the replay, dial (877) 660-6853 and use pass
code 13698465#.
Investors, analysts and the general public will also have the
opportunity to listen to the conference call live over the Internet
by visiting iongeo.com. An archive of the webcast will be
available shortly after the call on the Company's website.
About ION
ION develops and leverages innovative technologies, creating
value through data capture, analysis and optimization to enhance
critical decision-making, enabling superior returns. For more
information, visit iongeo.com.
Contact
Mike
Morrison
Executive Vice President and Chief Financial Officer (Interim)
+1.281.552.3011
The information 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 information 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 the risks associated with the
timing and development of ION Geophysical Corporation's products
and services; pricing pressure; decreased demand; changes in oil
prices; and political, execution, regulatory, and currency risks.
These risks and uncertainties also include risks associated with
the WesternGeco litigation and other related proceedings. We cannot
predict the outcome of this litigation or the related proceedings.
For additional information regarding these various risks and
uncertainties, including the WesternGeco litigation, see our Form
10-K for the year ended December 31,
2018, filed on February 7,
2019. Additional risk factors, which could affect actual
results, are disclosed by the Company in its filings with the
Securities and Exchange Commission ("SEC"), including its Form
10-K, Form 10-Qs and Form 8-Ks filed during the year. The Company
expressly disclaims any obligation to revise or update any
forward-looking statements.
Tables to follow
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands,
except per share data)
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Service
revenues
|
$
|
30,755
|
|
|
$
|
61,095
|
|
|
$
|
131,280
|
|
|
$
|
139,038
|
|
Product
revenues
|
11,954
|
|
|
13,499
|
|
|
43,399
|
|
|
41,007
|
|
Total net
revenues
|
42,709
|
|
|
74,594
|
|
|
174,679
|
|
|
180,045
|
|
Cost of
services
|
21,588
|
|
|
30,271
|
|
|
83,519
|
|
|
100,557
|
|
Cost of
products
|
6,810
|
|
|
6,514
|
|
|
22,066
|
|
|
19,868
|
|
Impairment of
multi-client data library
|
9,072
|
|
|
—
|
|
|
9,072
|
|
|
—
|
|
Gross
profit
|
5,239
|
|
|
37,809
|
|
|
60,022
|
|
|
59,620
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research, development
and engineering
|
3,604
|
|
|
4,638
|
|
|
19,025
|
|
|
18,182
|
|
Marketing and
sales
|
5,763
|
|
|
5,479
|
|
|
23,207
|
|
|
21,793
|
|
General,
administrative and other operating expenses
|
5,699
|
|
|
7,800
|
|
|
42,249
|
|
|
37,364
|
|
Impairment of
long-lived assets
|
—
|
|
|
36,553
|
|
|
—
|
|
|
36,553
|
|
Total operating
expenses
|
15,066
|
|
|
54,470
|
|
|
84,481
|
|
|
113,892
|
|
Loss from
operations
|
(9,827)
|
|
|
(16,661)
|
|
|
(24,459)
|
|
|
(54,272)
|
|
Interest expense,
net
|
(3,696)
|
|
|
(3,203)
|
|
|
(13,074)
|
|
|
(12,972)
|
|
Other income
(expense), net
|
(679)
|
|
|
180
|
|
|
(1,617)
|
|
|
(436)
|
|
Loss before income
taxes
|
(14,202)
|
|
|
(19,684)
|
|
|
(39,150)
|
|
|
(67,680)
|
|
Income tax expense
(benefit)
|
148
|
|
|
(587)
|
|
|
8,064
|
|
|
2,718
|
|
Net loss
|
(14,350)
|
|
|
(19,097)
|
|
|
(47,214)
|
|
|
(70,398)
|
|
Net income
attributable to noncontrolling interests
|
(144)
|
|
|
(246)
|
|
|
(985)
|
|
|
(773)
|
|
Net loss applicable
to ION
|
$
|
(14,494)
|
|
|
$
|
(19,343)
|
|
|
$
|
(48,199)
|
|
|
$
|
(71,171)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(1.02)
|
|
|
$
|
(1.38)
|
|
|
$
|
(3.41)
|
|
|
$
|
(5.20)
|
|
Diluted
|
$
|
(1.02)
|
|
|
$
|
(1.38)
|
|
|
$
|
(3.41)
|
|
|
$
|
(5.20)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
14,209
|
|
|
14,007
|
|
|
14,131
|
|
|
13,692
|
|
Diluted
|
14,209
|
|
|
14,007
|
|
|
14,131
|
|
|
13,692
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(In
thousands)
(Unaudited)
|
|
|
December
31,
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
33,065
|
|
|
$
|
33,551
|
|
Accounts receivable,
net
|
29,548
|
|
|
26,128
|
|
Unbilled
receivables
|
11,815
|
|
|
44,032
|
|
Inventories,
net
|
12,187
|
|
|
14,130
|
|
Prepaid expenses and
other current assets
|
6,012
|
|
|
7,782
|
|
Total current
assets
|
92,627
|
|
|
125,623
|
|
Deferred income tax
asset, net
|
8,734
|
|
|
7,191
|
|
Property, plant and
equipment, net
|
13,188
|
|
|
13,041
|
|
Multi-client data
library, net
|
60,384
|
|
|
73,544
|
|
Goodwill
|
23,585
|
|
|
22,915
|
|
Right-of-use
assets
|
32,546
|
|
|
47,803
|
|
Other
assets
|
2,130
|
|
|
2,435
|
|
Total
assets
|
$
|
233,194
|
|
|
$
|
292,552
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
|
2,107
|
|
|
$
|
2,228
|
|
Accounts
payable
|
49,316
|
|
|
34,913
|
|
Accrued
expenses
|
30,328
|
|
|
31,411
|
|
Accrued multi-client
data library royalties
|
18,831
|
|
|
29,256
|
|
Deferred
revenue
|
4,551
|
|
|
7,710
|
|
Current maturities of
operating lease liabilities
|
11,055
|
|
|
12,214
|
|
Total current
liabilities
|
116,188
|
|
|
117,732
|
|
Long-term debt, net
of current maturities
|
119,352
|
|
|
119,513
|
|
Operating lease
liabilities, net of current maturities
|
30,833
|
|
|
45,592
|
|
Other long-term
liabilities
|
1,453
|
|
|
1,891
|
|
Total
liabilities
|
267,826
|
|
|
284,728
|
|
(Deficit)
Equity:
|
|
|
|
Common
stock
|
142
|
|
|
140
|
|
Additional paid-in
capital
|
956,647
|
|
|
952,626
|
|
Accumulated
deficit
|
(974,291)
|
|
|
(926,092)
|
|
Accumulated other
comprehensive loss
|
(19,318)
|
|
|
(20,442)
|
|
Total stockholders'
(deficit) equity
|
(36,820)
|
|
|
6,232
|
|
Noncontrolling
interests
|
2,188
|
|
|
1,592
|
|
Total (deficit)
equity
|
(34,632)
|
|
|
7,824
|
|
Total liabilities and
(deficit) equity
|
$
|
233,194
|
|
|
$
|
292,552
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Years
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(14,350)
|
|
|
$
|
(19,097)
|
|
|
$
|
(47,214)
|
|
|
$
|
(70,398)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization (other than multi-client library)
|
754
|
|
|
1,861
|
|
|
3,657
|
|
|
8,763
|
|
Amortization of
multi-client data library
|
9,754
|
|
|
16,444
|
|
|
39,541
|
|
|
48,988
|
|
Impairment of
multi-client data library
|
9,072
|
|
|
—
|
|
|
9,072
|
|
|
—
|
|
Stock-based
compensation expense
|
965
|
|
|
829
|
|
|
4,701
|
|
|
3,337
|
|
Write-down of excess
and obsolete inventory
|
517
|
|
|
665
|
|
|
517
|
|
|
665
|
|
Impairment of
long-lived assets
|
—
|
|
|
36,553
|
|
|
—
|
|
|
36,553
|
|
Deferred income
taxes
|
(692)
|
|
|
(3,942)
|
|
|
(1,940)
|
|
|
(6,252)
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(5,380)
|
|
|
(2,641)
|
|
|
(3,265)
|
|
|
(7,024)
|
|
Unbilled
receivables
|
19,283
|
|
|
(18,401)
|
|
|
32,055
|
|
|
(5,245)
|
|
Inventories
|
338
|
|
|
293
|
|
|
1,067
|
|
|
(353)
|
|
Accounts payable,
accrued expenses and accrued royalties
|
(4,020)
|
|
|
1,967
|
|
|
(2,492)
|
|
|
(7,600)
|
|
Deferred
revenue
|
(809)
|
|
|
(2,591)
|
|
|
(3,207)
|
|
|
(1,112)
|
|
Other assets and
liabilities
|
(586)
|
|
|
2,482
|
|
|
1,658
|
|
|
6,776
|
|
Net cash provided by
operating activities
|
14,846
|
|
|
14,422
|
|
|
34,150
|
|
|
7,098
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Investment in
multi-client data library
|
(7,579)
|
|
|
(8,365)
|
|
|
(28,804)
|
|
|
(28,276)
|
|
Purchase of property,
plant and equipment
|
(1,139)
|
|
|
(1,201)
|
|
|
(2,411)
|
|
|
(1,514)
|
|
Net cash used in
investing activities
|
(8,718)
|
|
|
(9,566)
|
|
|
(31,215)
|
|
|
(29,790)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Borrowings under
revolving line of credit
|
25,000
|
|
|
—
|
|
|
40,000
|
|
|
—
|
|
Repayments under
revolving line of credit
|
(25,000)
|
|
|
—
|
|
|
(40,000)
|
|
|
(10,000)
|
|
Payments on notes
payable and long-term debt
|
(593)
|
|
|
(736)
|
|
|
(2,553)
|
|
|
(30,807)
|
|
Cost associated with
issuance of debt
|
—
|
|
|
(682)
|
|
|
—
|
|
|
(1,247)
|
|
Net proceeds from
issuance of stocks
|
—
|
|
|
—
|
|
|
—
|
|
|
46,999
|
|
Proceeds from
employee stock purchases and exercise of stock options
|
38
|
|
|
214
|
|
|
141
|
|
|
214
|
|
Other financing
activities
|
(376)
|
|
|
(227)
|
|
|
(1,134)
|
|
|
(1,351)
|
|
Net cash provided by
(used in) financing activities
|
(931)
|
|
|
(1,431)
|
|
|
(3,546)
|
|
|
3,808
|
|
Effect of change in
foreign currency exchange rates on cash, cash equivalents and
restricted cash
|
(276)
|
|
|
23
|
|
|
(125)
|
|
|
319
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
4,921
|
|
|
3,448
|
|
|
(736)
|
|
|
(18,565)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
28,197
|
|
|
30,406
|
|
|
33,854
|
|
|
52,419
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
33,118
|
|
|
$
|
33,854
|
|
|
$
|
33,118
|
|
|
$
|
33,854
|
|
The following table is a reconciliation of cash, cash
equivalents and restricted cash (in thousands):
|
December
31,
|
|
2019
|
|
2018
|
Cash and cash
equivalents
|
$
|
33,065
|
|
|
$
|
33,551
|
|
Restricted cash
included in prepaid expenses and other current assets
|
53
|
|
|
—
|
|
Restricted cash
included in other long-term assets
|
—
|
|
|
303
|
|
Total cash,
cash equivalents, and restricted cash shown in statements of cash
flows
|
$
|
33,118
|
|
|
$
|
33,854
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
SUMMARY OF SEGMENT
INFORMATION
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
E&P Technology
& Services:
|
|
|
|
|
|
|
|
|
New
Venture
|
$
|
6,794
|
|
|
$
|
29,616
|
|
|
$
|
31,188
|
|
|
$
|
69,685
|
|
|
Data
Library
|
16,817
|
|
|
25,466
|
|
|
71,847
|
|
|
47,095
|
|
|
Total multi-client
revenues
|
23,611
|
|
|
55,082
|
|
|
103,035
|
|
|
116,780
|
|
|
Imaging
Services
|
6,100
|
|
|
5,361
|
|
|
22,543
|
|
|
19,740
|
|
|
Total
|
29,711
|
|
|
60,443
|
|
|
125,578
|
|
|
136,520
|
|
|
Operations
Optimization:
|
|
|
|
|
|
|
|
|
Optimization Software
& Services
|
5,492
|
|
|
6,030
|
|
|
23,140
|
|
|
21,129
|
|
|
Devices
|
7,506
|
|
|
8,121
|
|
|
25,961
|
|
|
22,396
|
|
|
Total
|
12,998
|
|
|
14,151
|
|
|
49,101
|
|
|
43,525
|
|
|
Total
|
$
|
42,709
|
|
|
$
|
74,594
|
|
|
$
|
174,679
|
|
|
$
|
180,045
|
|
|
Gross profit
(loss):
|
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
$
|
(414)
|
|
(a)
|
$
|
31,743
|
|
|
$
|
35,699
|
|
(a)
|
$
|
43,369
|
|
|
Operations
Optimization
|
5,653
|
|
|
7,313
|
|
|
24,323
|
|
|
22,293
|
|
|
Segment gross
profit
|
5,239
|
|
|
39,056
|
|
|
60,022
|
|
|
65,662
|
|
|
Other
|
—
|
|
|
(1,247)
|
|
(b)
|
—
|
|
|
(6,042)
|
|
(b)
|
Total
|
$
|
5,239
|
|
|
$
|
37,809
|
|
|
$
|
60,022
|
|
|
$
|
59,620
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
(1)
|
%
|
|
53
|
%
|
|
28
|
%
|
|
32
|
%
|
|
Operations
Optimization
|
43
|
%
|
|
52
|
%
|
|
50
|
%
|
|
51
|
%
|
|
Segment gross
margin
|
12
|
%
|
|
52
|
%
|
|
34
|
%
|
|
36
|
%
|
|
Other
|
—
|
%
|
|
(1)
|
%
|
|
—
|
%
|
|
(3)
|
%
|
|
Total
|
12
|
%
|
|
51
|
%
|
|
34
|
%
|
|
33
|
%
|
|
Income (loss) from
operations:
|
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
$
|
(6,667)
|
|
(a)
|
$
|
26,180
|
|
|
$
|
8,833
|
|
(a)
|
$
|
21,758
|
|
|
Operations
Optimization
|
2,381
|
|
|
3,303
|
|
|
8,189
|
|
|
7,295
|
|
|
Support and
other
|
(5,541)
|
|
|
(46,144)
|
|
(c)
|
(41,481)
|
|
|
(83,325)
|
|
(c)
|
Loss from
operations
|
(9,827)
|
|
|
(16,661)
|
|
|
(24,459)
|
|
|
(54,272)
|
|
|
Interest expense,
net
|
(3,696)
|
|
|
(3,203)
|
|
|
(13,074)
|
|
|
(12,972)
|
|
|
Other expense,
net
|
(679)
|
|
|
180
|
|
|
(1,617)
|
|
|
(436)
|
|
|
Loss before income
taxes
|
$
|
(14,202)
|
|
|
$
|
(19,684)
|
|
|
$
|
(39,150)
|
|
|
$
|
(67,680)
|
|
|
|
|
(a)
|
Includes an
impairment of multi-client data library of $9.1 million for the
three and twelve months ended December 31, 2019.
|
(b)
|
Relates primarily to
depreciation expense of previously reported Ocean Bottom Integrated
Technologies segment.
|
(c)
|
Includes loss from
operations of previously reported Ocean Bottom Integrated
Technologies segment of $39.1 million and $47.6 million for the
three and twelve months ended December 2018, respectively, which
includes item (a) above, operating expenses of a $1.3 million and
$5.0 million for the three and twelve months ended December 31,
2018, and a $36.6 million charge impacting both periods related to
the impairment of fixed assets of the Company's former cable-based
ocean bottom technologies segment.
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
Summary of Net
Revenues by Geographic Area
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Latin
America
|
$
|
10,112
|
|
|
$
|
31,515
|
|
|
$
|
60,684
|
|
|
$
|
68,871
|
|
North
America
|
13,700
|
|
|
19,022
|
|
|
46,684
|
|
|
44,474
|
|
Europe
|
5,872
|
|
|
11,266
|
|
|
30,722
|
|
|
31,077
|
|
Asia
Pacific
|
4,955
|
|
|
6,236
|
|
|
13,242
|
|
|
17,817
|
|
Africa
|
2,542
|
|
|
2,475
|
|
|
10,083
|
|
|
10,837
|
|
Middle
East
|
983
|
|
|
3,619
|
|
|
7,347
|
|
|
5,526
|
|
Other
|
4,545
|
|
|
461
|
|
|
5,917
|
|
|
1,443
|
|
Total net
revenues
|
$
|
42,709
|
|
|
$
|
74,594
|
|
|
$
|
174,679
|
|
|
$
|
180,045
|
|
Reconciliation of Adjusted EBITDA to Net
Loss
(Non-GAAP Measure)
(In
thousands)
(Unaudited)
The term EBITDA (excluding non-recurring items) represents net
loss before net interest expense, income taxes, depreciation and
amortization and other non-recurring charges such as impairment of
long-lived assets and severance expenses. The term Adjusted
EBITDA is EBITDA (excluding non-recurring items) but also excludes
the impact of fair value adjustments related to the Company's
outstanding stock appreciation awards. EBITDA (excluding
non-recurring items) and Adjusted EBITDA are not measures 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, EBITDA
(excluding non-recurring items) and Adjusted EBITDA may not be
comparable to other similarly titled measures of other companies.
The Company has included EBITDA (excluding non-recurring items) and
Adjusted EBITDA as a supplemental disclosure because its management
believes that EBITDA (excluding non-recurring items) and Adjusted
EBITDA 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
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net loss
|
$
|
(14,350)
|
|
|
$
|
(19,097)
|
|
|
$
|
(47,214)
|
|
|
$
|
(70,398)
|
|
Interest expense,
net
|
3,696
|
|
|
3,203
|
|
|
13,074
|
|
|
12,972
|
|
Income tax expense
(benefit)
|
148
|
|
|
(587)
|
|
|
8,064
|
|
|
2,718
|
|
Depreciation and
amortization expense
|
10,508
|
|
|
18,305
|
|
|
43,198
|
|
|
57,751
|
|
Impairment of
multi-client data library
|
9,072
|
|
|
—
|
|
|
9,072
|
|
|
—
|
|
Impairment of
long-lived assets
|
—
|
|
|
36,553
|
|
|
—
|
|
|
36,553
|
|
Severance
expense
|
—
|
|
|
—
|
|
|
2,810
|
|
|
—
|
|
EBITDA excluding
non-recurring items
|
9,074
|
|
|
38,377
|
|
|
29,004
|
|
|
39,596
|
|
Stock appreciation
rights (credit) expense
|
168
|
|
|
(1,908)
|
|
|
2,910
|
|
|
2,105
|
|
Adjusted
EBITDA
|
$
|
9,242
|
|
|
$
|
36,469
|
|
|
$
|
31,914
|
|
|
$
|
41,701
|
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIES
Description of Special Items and
Reconciliation of GAAP (As Reported) to Non-GAAP (As Adjusted)
Measures
(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 income (loss) from operations or net income (loss)
excluding 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 twelve months ended
December 31, 2019 and 2018.
|
Three Months Ended
December 31, 2019
|
|
Three Months Ended
December 31, 2018
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
42,709
|
|
|
$
|
—
|
|
|
$
|
42,709
|
|
|
$
|
74,594
|
|
|
$
|
—
|
|
|
$
|
74,594
|
|
Cost of
sales
|
37,470
|
|
|
(9,072)
|
|
(1)
|
28,398
|
|
|
36,785
|
|
|
—
|
|
|
36,785
|
|
Gross
profit
|
5,239
|
|
|
9,072
|
|
|
14,311
|
|
|
37,809
|
|
|
—
|
|
|
37,809
|
|
Operating
expenses
|
15,066
|
|
|
(168)
|
|
(2)
|
14,898
|
|
|
54,470
|
|
|
(34,645)
|
|
(3)
|
19,825
|
|
Income (loss) from
operations
|
(9,827)
|
|
|
9,240
|
|
|
(587)
|
|
|
(16,661)
|
|
|
34,645
|
|
|
17,984
|
|
Interest expense,
net
|
(3,696)
|
|
|
—
|
|
|
(3,696)
|
|
|
(3,203)
|
|
|
—
|
|
|
(3,203)
|
|
Other income
(expense), net
|
(679)
|
|
|
—
|
|
|
(679)
|
|
|
180
|
|
|
—
|
|
|
180
|
|
Income tax
benefit
|
148
|
|
|
445
|
|
(1)
|
593
|
|
|
(587)
|
|
|
—
|
|
|
(587)
|
|
Net income
(loss)
|
(14,350)
|
|
|
8,795
|
|
|
(5,555)
|
|
|
(19,097)
|
|
|
34,645
|
|
|
15,548
|
|
Net income
attributable to noncontrolling interests
|
(144)
|
|
|
—
|
|
|
(144)
|
|
|
(246)
|
|
|
—
|
|
|
(246)
|
|
Net income (loss)
applicable to ION
|
$
|
(14,494)
|
|
|
$
|
8,795
|
|
|
$
|
(5,699)
|
|
|
$
|
(19,343)
|
|
|
$
|
34,645
|
|
|
$
|
15,302
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(1.02)
|
|
|
|
|
$
|
(0.40)
|
|
|
$
|
(1.38)
|
|
|
|
|
$
|
1.09
|
|
Diluted
|
$
|
(1.02)
|
|
|
|
|
$
|
(0.40)
|
|
|
$
|
(1.38)
|
|
|
|
|
$
|
1.07
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
14,209
|
|
|
|
|
14,209
|
|
|
14,007
|
|
|
|
|
14,007
|
|
Diluted
|
14,209
|
|
|
|
|
14,209
|
|
|
14,007
|
|
|
|
|
14,268
|
|
|
Twelve Months
Ended December 31, 2019
|
|
Twelve Months
Ended December 31, 2018
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
174,679
|
|
|
$
|
—
|
|
|
$
|
174,679
|
|
|
$
|
180,045
|
|
|
$
|
—
|
|
|
$
|
180,045
|
|
Cost of
sales
|
114,657
|
|
|
(9,072)
|
|
(1)
|
105,585
|
|
|
120,425
|
|
|
—
|
|
|
120,425
|
|
Gross
profit
|
60,022
|
|
|
9,072
|
|
|
69,094
|
|
|
59,620
|
|
|
—
|
|
|
59,620
|
|
Operating
expenses
|
84,481
|
|
|
(5,720)
|
|
(2)
|
78,761
|
|
|
113,892
|
|
|
(38,658)
|
|
(3)
|
75,234
|
|
Loss from
operations
|
(24,459)
|
|
|
14,792
|
|
|
(9,667)
|
|
|
(54,272)
|
|
|
38,658
|
|
|
(15,614)
|
|
Interest expense,
net
|
(13,074)
|
|
|
—
|
|
|
(13,074)
|
|
|
(12,972)
|
|
|
—
|
|
|
(12,972)
|
|
Other income
(expense), net
|
(1,617)
|
|
|
—
|
|
|
(1,617)
|
|
|
(436)
|
|
|
—
|
|
|
(436)
|
|
Income tax
expense
|
8,064
|
|
|
445
|
|
(1)
|
8,509
|
|
|
2,718
|
|
|
—
|
|
|
2,718
|
|
Net loss
|
(47,214)
|
|
|
14,347
|
|
|
(32,867)
|
|
|
(70,398)
|
|
|
38,658
|
|
|
(31,740)
|
|
Net income
attributable to noncontrolling interests
|
(985)
|
|
|
—
|
|
|
(985)
|
|
|
(773)
|
|
|
—
|
|
|
(773)
|
|
Net loss applicable
to ION
|
$
|
(48,199)
|
|
|
$
|
14,347
|
|
|
$
|
(33,852)
|
|
|
$
|
(71,171)
|
|
|
$
|
38,658
|
|
|
$
|
(32,513)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(3.41)
|
|
|
|
|
$
|
(2.40)
|
|
|
$
|
(5.20)
|
|
|
|
|
$
|
(2.37)
|
|
Diluted
|
$
|
(3.41)
|
|
|
|
|
$
|
(2.40)
|
|
|
$
|
(5.20)
|
|
|
|
|
$
|
(2.37)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
14,131
|
|
|
|
|
14,131
|
|
|
13,692
|
|
|
|
|
13,692
|
|
Diluted
|
14,131
|
|
|
|
|
14,131
|
|
|
13,692
|
|
|
|
|
13,692
|
|
|
|
(1)
|
Represents the
impairment of multi-client data library of $9.1 million and the
related tax impact of $0.4 million for the three and twelve months
ended December 31, 2019.
|
(2)
|
Represents stock
appreciation right award expense of $0.2 million and $2.9 million
for the three and twelve months ended December 31, 2019,
respectively. In addition the twelve months ended December
31, 2019 includes severance expenses of $2.8 million.
|
(3)
|
Represents stock
appreciation right award (credit) expense of $(2.0) million and
$2.1 million for the three and twelve months ended December 31,
2018, respectively. In addition the three and twelve months
ended December 31, 2018 include a $36.6 million impairment of fixed
assets related to the Company's former cable-based ocean bottom
technologies.
|
View original
content:http://www.prnewswire.com/news-releases/ion-reports-fourth-quarter-and-year-end-2019-results-300999821.html
SOURCE ION Geophysical Corporation