ION Geophysical Corporation (NYSE: IO) today reported total net
revenues of $14.0 million in the first quarter 2021, a
49% decrease compared to $27.3 million in the fourth quarter
2020 and a 75% decrease compared to $56.4 million
one year ago. At March 31, 2021, backlog, which consists of
commitments for multi-client programs and proprietary imaging work,
was $21.4 million or 9% higher compared to December 31, 2020.
Net loss attributable to ION in the first
quarter 2021 was $7.2 million, or a loss of $0.46 per
share, compared to a net loss attributable to ION of
$2.3 million, or a loss of $0.16 per share in the first
quarter 2020. Excluding special items in both periods, the
Company reported an Adjusted net loss attributable to ION in
the first quarter 2021 of $14.9 million, or a loss
of $0.95 per share, compared to an Adjusted net income
attributable to ION of $4.7 million
or $0.33 per share in the first quarter 2020. The
Company reported Adjusted EBITDA of $(6.6) million for
the first quarter 2021, compared to $23.1 million one
year ago. A reconciliation of Adjusted EBITDA to the closest
comparable GAAP numbers can be found in the tables of this press
release.
At quarter close, the Company’s total liquidity
of $39.5 million consisted of $34.2 million of cash
(including net revolver borrowings of $21.3 million) and
$5.3 million of remaining available borrowing capacity under
the revolving credit facility. In April 2021, the Company
successfully completed its previously announced offer to exchange
its 9.125% Senior Secured Notes Due in December 2021 (the “Old
Notes”) for newly issued 8.00% Senior Secured Second Priority Notes
due in December 2025 (the “New Notes”) and other consideration in
the form of cash and ION common stock (the “Exchange
Offer”). Approximately 94.1% the Old Notes where tendered and
accepted as part of the Exchange Offer. The Company also
completed its previously announced Rights Offering, providing
shareholders the right purchase New Notes or Common Stock (the
“Rights Offering”).
In total, $116.2 million in aggregate principal
amount of New Notes and 10.9 million shares of Common Stock were
issued through the Exchange Offer and Rights Offering. ION
will receive approximately $14 million in net proceeds from the
transactions after deducting noteholder
obligations, transaction fees and accrued and unpaid interest
paid on the Old Notes tendered. There remains $7.1 million of
Old Notes outstanding. For more detailed information on the results
of the Exchange Offer and Rights Offering, please see Company’s
press release issued on April 20, 2021.
“We closed significantly lower multi-client data
sales than expected during the first quarter, as many of our
clients were restructuring their organizations and finalizing
capital budgets later than usual. This delayed commercial
discussions and exacerbated the typical low sales and EBITDA
seasonality associated with the first quarter. Last year, we had an
exception to that pattern with strong first quarter results driven
by an unusually large 2019 year-end deal that ultimately closed in
March of 2020. Importantly, backlog grew for the third consecutive
quarter, driven by our strategic decision to participate in the 3D
new acquisition multi-client market. We expect to recognize the
majority of backlog as revenue during the second and third quarters
as the much larger phase of our Mid North Sea High program
progresses this summer. Our team has gained industry credibility
and cultivated a robust pipeline of other potential 3D program
opportunities, such as the exclusive agreement we announced
offshore Kenya. Our proprietary Gemini™ source technology continues
to perform extraordinarily well as exhibited by the project
extension we received from a Super Major.
“Operations Optimization revenues remained
fairly consistent sequentially. Our market diversification
strategy continues to progress well. Following the fourth quarter
contract award, we deployed Marlin™ SmartPort across CalMac’s ports
and harbors during the first quarter and continue to receive
positive client feedback on the value our software
delivers. In addition to commercial discussions on very
promising Marlin SmartPort trial conversions, our business
development team increased outreach abroad leveraging U.S.
government connections and hired an experienced resource to
accelerate sales and marketing in North America. As we
expanded our WellAlert™ commercial outreach in an effort to secure
funding for a sea trial, several energy companies remarked on its
broad applicability for additional infrastructure and environmental
monitoring use cases. During the quarter, we also continued
to make advancements in both the hardware and software of our
prototype. Although we embarked on a diversification strategy
several years ago, and have been focused on industry themes such as
sustainability and digitalization for some time, this quarter we
established new workgroups to accelerate progress on the most
promising energy transition opportunities.
“We successfully completed the balance sheet
restructuring, which extended our bond maturity to 2025
with a lower interest rate and eliminated our going
concern accounting opinion. The conversion feature also
has the potential to transform our capital structure by providing a
path to convert nearly all our debt to equity as we execute our
strategy over the coming years. Net proceeds from both the
Registered Direct Offering and Rights Offering injected
approximately $24 million of liquidity to provide flexibility
to manage the business through the tail of the pandemic
and support our diversification strategy.
“This capital restructuring allows us to focus
exclusively on executing our strategy to drive long-term profitable
growth in both our core and new markets. While we expect the
market will remain challenging in the near-term, there have been a
number of positive developments, which point to improving market
conditions in the back half of the year. Brent crude oil
prices, which play an integral role in the trajectory of customers'
offshore capital spending programs, have rebounded to pre-pandemic
levels. With our refocused strategy, over $40 million lower cost
structure, and realigned executive team, we are well positioned to
capitalize on the expected modest increase in E&P spending this
year; and our investments the last few years position us to
leverage high value strengths to targeted new markets.”
FIRST QUARTER 2021
The Company’s segment revenues for the first
quarter were as follows (in thousands):
|
|
Three Months Ended |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
March 31, 2020 |
|
E&P Technology & Services |
|
$ |
7,236 |
|
|
$ |
19,934 |
|
|
$ |
46,514 |
|
Operations Optimization |
|
|
6,800 |
|
|
|
7,361 |
|
|
|
9,900 |
|
Total |
|
$ |
14,036 |
|
|
$ |
27,295 |
|
|
$ |
56,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&P Technology & Services segment
revenues were $7.2 million for the first quarter 2021,
compared to $19.9 million for the fourth quarter 2020 and
$46.5 million for first quarter 2020. Within the E&P Technology
& Services segment, multi-client revenues were
$3.6 million, a decrease of 91% from first quarter
2020, primarily due to lower volume of data library sales.
Imaging and Reservoir Services revenues were
$3.7 million, a decrease of 26% from first quarter
2020, due to lower proprietary tender activity.
Operations Optimization segment revenues
were $6.8 million for the first quarter 2021 compared to
$7.4 million for the fourth quarter 2020 and $9.9 million for
first quarter 2020. Within the Operations Optimization segment,
Optimization Software & Services revenues were
$2.8 million, a 36% decline from first quarter 2020
due to reduced seismic activity and associated services demand
resulting from COVID-19. Devices revenues were $4.0 million, a
28% decrease from first quarter 2020 due to lower sales
of towed streamer equipment spares and repairs.
Consolidated gross margin for the quarter was
6%, compared to 27% for the fourth quarter 2020
and 50% one year ago primarily from decline in revenues.
Gross margin in E&P Technology & Services was
(22)% compared to 22% for the fourth quarter 2020
and 51% one year ago resulting from a significant
year-end 2D data library deal that ultimately closed during
the first quarter 2020 that was not repeated during the first
quarter 2021. Operations Optimization gross margin was 36%,
compared to 42% for the fourth quarter 2020
and 47% one year ago.
Consolidated operating expenses were
$11.1 million, a
5% decrease from $11.7 million in the fourth
quarter 2020 and a 50% decrease from
$22.0 million in the first quarter 2020 resulting from
the cost reductions implemented during the first half of
2020. Excluding the impact of special items from last year,
first quarter 2021 operating expenses declined by 30% and 17%,
respectively, compared to the adjusted operating expenses of $13.3
million in the fourth quarter 2020 and $15.9 million one year
ago. Operating margin was (73)%, compared to 11% one year
ago. The decline in operating margin was the result of the
decline in net revenues.
Income tax expense (benefit) was
$(6.8) million for the first quarter 2021 compared to
$5.6 million for the fourth quarter 2020
and $5.9 million for the first
quarter 2020. The income tax benefit for the Current
Quarter primarily relates to the reversal of the valuation
allowance of $7.7 million related to net deferred tax assets
of certain foreign subsidiaries. The Company’s income tax
expense in the first quarter 2020 primarily relates
to results generated by our non-U.S. businesses in Latin
America.
CONFERENCE CALL
The Company has scheduled a conference call for
Thursday, May 6, 2021, 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 (833) 362-0195 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 May 13, 2021. To access the replay, dial (855)
859-2056 and use pass code 8154095.
Investors, analysts and the general public will
also have the opportunity to listen to the conference call live
over the Internet by visiting ir.iongeo.com. An archive of the
webcast will be available shortly after the call on the Company’s
website.
About ION
Leveraging innovative technologies, ION delivers
powerful data-driven decision-making to offshore energy and
maritime operations markets, enabling clients to optimize
investments and results through access to our data, software and
distinctive analytics. Learn more at iongeo.com.
Contact
Mike MorrisonExecutive Vice President and Chief
Financial Officer+1.281.879.3615
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; agreements made or adhered to by
members of OPEC and other oil producing countries to maintain
production levels; the COVID-19 pandemic; the ultimate benefits of
our completed restructuring transactions; and political, execution,
regulatory, and currency risks. For additional information
regarding these various risks and uncertainties, see our Form 10-K
for the year ended December 31, 2020, filed on February 12, 2021.
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
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
|
Three Months Ended |
|
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
March 31, 2020 |
|
|
|
(In thousands, except per share data) |
|
Service revenues |
|
$ |
7,464 |
|
|
$ |
20,113 |
|
|
$ |
47,485 |
|
Product revenues |
|
|
6,572 |
|
|
|
7,182 |
|
|
|
8,929 |
|
Total net revenues |
|
|
14,036 |
|
|
|
27,295 |
|
|
|
56,414 |
|
Cost of services |
|
|
9,270 |
|
|
|
16,022 |
|
|
|
22,275 |
|
Cost of products |
|
|
3,907 |
|
|
|
3,833 |
|
|
|
4,628 |
|
Impairment of multi-client
data library |
|
|
— |
|
|
|
— |
|
|
|
1,167 |
|
Gross profit |
|
|
859 |
|
|
|
7,440 |
|
|
|
28,344 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research, development and engineering |
|
|
2,947 |
|
|
|
3,022 |
|
|
|
4,008 |
|
Marketing and sales |
|
|
2,759 |
|
|
|
2,787 |
|
|
|
4,858 |
|
General, administrative and other operating expenses |
|
|
5,387 |
|
|
|
5,910 |
|
|
|
9,002 |
|
Impairment of goodwill |
|
|
— |
|
|
|
— |
|
|
|
4,150 |
|
Total operating expenses |
|
|
11,093 |
|
|
|
11,719 |
|
|
|
22,018 |
|
Income (loss) from
operations |
|
|
(10,234 |
) |
|
|
(4,279 |
) |
|
|
6,326 |
|
Interest expense, net |
|
|
(3,262 |
) |
|
|
(3,501 |
) |
|
|
(3,221 |
) |
Other income (expense),
net |
|
|
(607 |
) |
|
|
223 |
|
|
|
429 |
|
Income (loss) before income taxes |
|
|
(14,103 |
) |
|
|
(7,557 |
) |
|
|
3,534 |
|
Income tax expense (benefit),
net |
|
|
(6,849 |
) |
|
|
5,634 |
|
|
|
5,874 |
|
Net loss |
|
|
(7,254 |
) |
|
|
(13,191 |
) |
|
|
(2,340 |
) |
Less: Net loss attributable to
noncontrolling interests |
|
|
91 |
|
|
|
55 |
|
|
|
77 |
|
Net loss attributable to ION |
|
$ |
(7,163 |
) |
|
$ |
(13,136 |
) |
|
$ |
(2,263 |
) |
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
$ |
(0.46 |
) |
|
$ |
(0.92 |
) |
|
$ |
(0.16 |
) |
Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
|
15,718 |
|
|
|
14,320 |
|
|
|
14,230 |
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(Unaudited)
|
|
March 31, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(In thousands, except share data) |
|
ASSETS |
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
34,228 |
|
|
$ |
37,486 |
|
Accounts receivable, net |
|
|
8,457 |
|
|
|
8,045 |
|
Unbilled receivables |
|
|
4,085 |
|
|
|
11,262 |
|
Inventories, net |
|
|
11,031 |
|
|
|
11,267 |
|
Prepaid expenses and other current assets |
|
|
7,387 |
|
|
|
7,116 |
|
Total current assets |
|
|
65,188 |
|
|
|
75,176 |
|
Deferred income tax asset,
net |
|
|
7,743 |
|
|
|
— |
|
Property, plant and equipment,
net |
|
|
9,063 |
|
|
|
9,511 |
|
Multi-client data library,
net |
|
|
50,300 |
|
|
|
50,914 |
|
Goodwill |
|
|
19,773 |
|
|
|
19,565 |
|
Right-of-use assets |
|
|
33,330 |
|
|
|
35,501 |
|
Other assets |
|
|
4,250 |
|
|
|
2,926 |
|
Total assets |
|
$ |
189,647 |
|
|
$ |
193,593 |
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current maturities of long-term debt |
|
$ |
29,233 |
|
|
$ |
143,731 |
|
Accounts payable |
|
|
28,242 |
|
|
|
33,418 |
|
Accrued expenses |
|
|
17,737 |
|
|
|
16,363 |
|
Accrued multi-client data library royalties |
|
|
20,677 |
|
|
|
21,359 |
|
Deferred revenue |
|
|
4,454 |
|
|
|
3,648 |
|
Current maturities of operating lease liabilities |
|
|
8,408 |
|
|
|
7,570 |
|
Total current liabilities |
|
|
108,751 |
|
|
|
226,089 |
|
Long-term debt, net of current
maturities |
|
|
112,737 |
|
|
|
— |
|
Operating lease liabilities,
net of current maturities |
|
|
36,318 |
|
|
|
38,372 |
|
Other long-term
liabilities |
|
|
212 |
|
|
|
222 |
|
Total liabilities |
|
|
258,018 |
|
|
|
264,683 |
|
Deficit: |
|
|
|
|
|
|
|
|
Common stock, $0.01 par value; authorized 26,666,667 shares;
outstanding 17,344,187 and 14,333,101 shares at March 31, 2021 and
December 31, 2020, respectively. |
|
|
173 |
|
|
|
143 |
|
Additional paid-in capital |
|
|
968,633 |
|
|
|
958,584 |
|
Accumulated deficit |
|
|
(1,018,679 |
) |
|
|
(1,011,516 |
) |
Accumulated other comprehensive loss |
|
|
(19,575 |
) |
|
|
(19,913 |
) |
Total stockholders’ deficit |
|
|
(69,448 |
) |
|
|
(72,702 |
) |
Noncontrolling interests |
|
|
1,077 |
|
|
|
1,612 |
|
Total deficit |
|
|
(68,371 |
) |
|
|
(71,090 |
) |
Total liabilities and stockholders' deficit |
|
$ |
189,647 |
|
|
$ |
193,593 |
|
|
|
|
|
|
|
|
|
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(In
thousands)(Unaudited)
|
|
Three Months Ended March 31, |
|
|
|
2021 |
|
|
2020 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(7,254 |
) |
|
$ |
(2,340 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization (other than multi-client
library) |
|
|
959 |
|
|
|
840 |
|
Amortization of multi-client data library |
|
|
3,285 |
|
|
|
8,020 |
|
Impairment of multi-client data library |
|
|
— |
|
|
|
1,167 |
|
Impairment of goodwill |
|
|
— |
|
|
|
4,150 |
|
Stock-based compensation expense |
|
|
286 |
|
|
|
617 |
|
Provision for expected credit losses |
|
|
396 |
|
|
|
— |
|
Deferred income taxes |
|
|
(7,743 |
) |
|
|
421 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(798 |
) |
|
|
(21,868 |
) |
Unbilled receivables |
|
|
7,177 |
|
|
|
2,666 |
|
Inventories |
|
|
217 |
|
|
|
(772 |
) |
Accounts payable, accrued expenses and accrued royalties |
|
|
(2,598 |
) |
|
|
1,688 |
|
Deferred revenue |
|
|
823 |
|
|
|
355 |
|
Other assets and liabilities |
|
|
973 |
|
|
|
(1,910 |
) |
Net cash used in operating activities |
|
|
(4,277 |
) |
|
|
(6,966 |
) |
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Investment in multi-client data library |
|
|
(5,211 |
) |
|
|
(9,668 |
) |
Purchase of property, plant and equipment |
|
|
(576 |
) |
|
|
(496 |
) |
Net cash used in investing activities |
|
|
(5,787 |
) |
|
|
(10,164 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Borrowings under revolving line of credit |
|
|
— |
|
|
|
27,000 |
|
Repayments under revolving line of credit |
|
|
(1,250 |
) |
|
|
— |
|
Payments on notes payable and long-term debt |
|
|
(752 |
) |
|
|
(760 |
) |
Costs associated with debt issuance |
|
|
(806 |
) |
|
|
— |
|
Net proceeds from issuance of stocks |
|
|
9,802 |
|
|
|
— |
|
Other financing activities |
|
|
(316 |
) |
|
|
(10 |
) |
Net cash provided by financing activities |
|
|
6,678 |
|
|
|
26,230 |
|
Effect of change in foreign
currency exchange rates on cash, cash equivalents and restricted
cash |
|
|
128 |
|
|
|
470 |
|
Net increase (decrease) in
cash, cash equivalents and restricted cash |
|
|
(3,258 |
) |
|
|
9,570 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
39,813 |
|
|
|
33,118 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
36,555 |
|
|
$ |
42,688 |
|
|
|
|
|
|
|
|
|
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIESSUMMARY OF SEGMENT
INFORMATION(In
thousands)(Unaudited)
|
|
Three Months Ended |
|
|
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
March 31, 2020 |
|
|
Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
E&P Technology & Services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
New Venture |
|
$ |
1,087 |
|
|
$ |
3,458 |
|
|
$ |
1,441 |
|
|
Data Library |
|
|
2,484 |
|
|
|
13,707 |
|
|
|
40,131 |
|
|
Total multi-client revenues |
|
|
3,571 |
|
|
|
17,165 |
|
|
|
41,572 |
|
|
Imaging and Reservoir Services |
|
|
3,665 |
|
|
|
2,769 |
|
|
|
4,942 |
|
|
Total |
|
|
7,236 |
|
|
|
19,934 |
|
|
|
46,514 |
|
|
Operations Optimization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Optimization Software & Services |
|
|
2,844 |
|
|
|
3,326 |
|
|
|
4,427 |
|
|
Devices |
|
|
3,956 |
|
|
|
4,035 |
|
|
|
5,473 |
|
|
Total |
|
|
6,800 |
|
|
|
7,361 |
|
|
|
9,900 |
|
|
Total net revenues |
|
$ |
14,036 |
|
|
$ |
27,295 |
|
|
$ |
56,414 |
|
|
Gross profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
E&P Technology & Services |
|
$ |
(1,607 |
) |
|
$ |
4,341 |
|
|
$ |
23,730 |
|
(a) |
Operations Optimization |
|
|
2,466 |
|
|
|
3,099 |
|
|
|
4,614 |
|
|
Total gross profit |
|
$ |
859 |
|
|
$ |
7,440 |
|
|
$ |
28,344 |
|
|
Gross margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
E&P Technology & Services |
|
|
(22 |
)% |
|
|
22 |
% |
|
|
51 |
% |
|
Operations Optimization |
|
|
36 |
% |
|
|
42 |
% |
|
|
47 |
% |
|
Total |
|
|
6 |
% |
|
|
27 |
% |
|
|
50 |
% |
|
Income (loss) from
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
E&P Technology & Services |
|
$ |
(4,853 |
) |
|
$ |
(669 |
) |
|
$ |
17,952 |
|
(a) |
Operations Optimization |
|
|
(820 |
) |
|
|
(591 |
) |
|
|
(3,259 |
) |
(b) |
Support and other |
|
|
(4,561 |
) |
|
|
(3,019 |
) |
|
|
(8,367 |
) |
|
Income (loss) from operations |
|
|
(10,234 |
) |
|
|
(4,279 |
) |
|
|
6,326 |
|
|
Interest expense, net |
|
|
(3,262 |
) |
|
|
(3,501 |
) |
|
|
(3,221 |
) |
|
Other income (expense), net |
|
|
(607 |
) |
|
|
223 |
|
|
|
429 |
|
|
Income (loss) before income taxes |
|
$ |
(14,103 |
) |
|
$ |
(7,557 |
) |
|
$ |
3,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes impairment of multi-client data library of
$1.2 million for the three months ended March 31,
2020.(b) Includes impairment of goodwill
of $4.2 million for the three months ended March 31,
2020.
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIESSummary of Net Revenues by Geographic
Area(In
thousands)(Unaudited)
|
|
Three Months Ended |
|
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
March 31, 2020 |
|
Europe |
|
$ |
4,366 |
|
|
$ |
2,537 |
|
|
$ |
7,472 |
|
Latin America |
|
|
3,503 |
|
|
|
7,411 |
|
|
|
20,062 |
|
Asia Pacific |
|
|
2,201 |
|
|
|
3,971 |
|
|
|
7,763 |
|
Africa |
|
|
1,772 |
|
|
|
10,413 |
|
|
|
12,240 |
|
North America |
|
|
1,208 |
|
|
|
1,936 |
|
|
|
3,888 |
|
Middle East |
|
|
727 |
|
|
|
817 |
|
|
|
954 |
|
Other |
|
|
259 |
|
|
|
210 |
|
|
|
4,035 |
|
Total net revenues |
|
$ |
14,036 |
|
|
$ |
27,295 |
|
|
$ |
56,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIESReconciliation 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 charges 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 |
|
|
|
March 31, 2021 |
|
|
|
December 31, 2020 |
|
|
|
March 31, 2020 |
|
Net loss |
|
$ |
(7,254 |
) |
|
|
$ |
(13,191 |
) |
|
|
$ |
(2,304 |
) |
Interest expense, net |
|
|
3,262 |
|
|
|
|
3,501 |
|
|
|
|
3,321 |
|
Income tax expense
(benefit) |
|
|
(6,849 |
) |
(a) |
|
|
5,634 |
|
(b) |
|
|
5,874 |
|
Depreciation and amortization
expense |
|
|
4,244 |
|
|
|
|
6,686 |
|
|
|
|
8,860 |
|
Impairment of multi-client
data library |
|
|
— |
|
|
|
|
— |
|
|
|
|
1,167 |
|
Impairment of goodwill |
|
|
— |
|
|
|
|
— |
|
|
|
|
4,150 |
|
Severance expense |
|
|
— |
|
|
|
|
— |
|
|
|
|
3,102 |
|
EBITDA excluding non-recurring items |
|
|
(6,597 |
) |
|
|
|
2,630 |
|
|
|
|
24,170 |
|
Stock appreciation rights
(credit) expense |
|
|
7 |
|
|
|
|
(1,541 |
) |
|
|
|
(1,094 |
) |
Adjusted EBITDA |
|
$ |
(6,590 |
) |
|
|
$ |
1,089 |
|
|
|
$ |
23,076 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes reversal of valuation allowance on our net deferred
tax assets of $7.7 million resulting from the going
concern being removed for the three months ended March 31,
2021.(b) Includes valuation allowance on our net deferred tax
assets resulting from the going concern conclusion
of $8.5 million for the three months ended December
31, 2020.
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIESDescription of Special Items and
Reconciliation of GAAP (As Reported) to Non-GAAP (As Adjusted)
Measures(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 March 31, 2021 and 2020 and December 31, 2020:
|
|
Three Months Ended March 31, 2021 |
|
Three Months Ended December 31, 2020 |
|
Three Months Ended March 31, 2020 |
|
|
As Reported |
|
SpecialItems |
|
As Adjusted |
|
As Reported |
|
Special Items |
|
As Adjusted |
|
As Reported |
|
Special Items |
|
As Adjusted |
Net revenues |
|
$ |
14,036 |
|
|
$ |
— |
|
|
$ |
14,036 |
|
|
$ |
27,295 |
|
|
$ |
— |
|
|
$ |
27,295 |
|
|
$ |
56,414 |
|
|
$ |
— |
|
|
$ |
56,414 |
|
Cost of sales |
|
|
13,177 |
|
|
|
— |
|
|
|
13,177 |
|
|
|
19,855 |
|
|
|
— |
|
|
|
19,855 |
|
|
|
28,070 |
|
|
|
(1,167 |
)(a) |
|
|
26,903 |
|
Gross profit |
|
|
859 |
|
|
|
— |
|
|
|
859 |
|
|
|
7,440 |
|
|
|
— |
|
|
|
7,440 |
|
|
|
28,344 |
|
|
|
1,167 |
|
|
|
29,511 |
|
Operating expenses |
|
|
11,093 |
|
|
|
(7 |
) |
|
|
11,086 |
|
|
|
11,719 |
|
|
|
1,541 |
(d) |
|
|
13,260 |
|
|
|
22,018 |
|
|
|
(6,158 |
)(b) |
|
|
15,860 |
|
Income (loss) from operations |
|
|
(10,234 |
) |
|
|
7 |
|
|
|
(10,227 |
) |
|
|
(4,279 |
) |
|
|
(1,541 |
) |
|
|
(5,820 |
) |
|
|
6,326 |
|
|
|
7,325 |
|
|
|
13,651 |
|
Interest expense, net |
|
|
(3,262 |
) |
|
|
— |
|
|
|
(3,262 |
) |
|
|
(3,501 |
) |
|
|
— |
|
|
|
(3,501 |
) |
|
|
(3,221 |
) |
|
|
— |
|
|
|
(3,221 |
) |
Other income (expense),
net |
|
|
(607 |
) |
|
|
— |
|
|
|
(607 |
) |
|
|
223 |
|
|
|
(8,492 |
)(e) |
|
|
(8,269 |
) |
|
|
429 |
|
|
|
— |
|
|
|
429 |
|
Income (loss) before income
taxes |
|
|
(14,103 |
) |
|
|
7 |
|
|
|
(14,096 |
) |
|
|
(7,557 |
) |
|
|
6,951 |
|
|
|
(606 |
) |
|
|
3,534 |
|
|
|
7,325 |
|
|
|
10,859 |
|
Income tax expense
(benefit) |
|
|
(6,849 |
) |
|
|
7,743 |
(c) |
|
|
894 |
|
|
|
5,634 |
|
|
|
— |
|
|
|
5,634 |
|
|
|
5,874 |
|
|
|
350 |
(a) |
|
|
6,224 |
|
Net income (loss) |
|
|
(7,254 |
) |
|
|
(7,736 |
) |
|
|
(14,990 |
) |
|
|
(13,191 |
) |
|
|
6,951 |
|
|
|
(6,240 |
) |
|
|
(2,340 |
) |
|
|
6,975 |
|
|
|
4,635 |
|
Net loss attributable to
noncontrolling interests |
|
|
91 |
|
|
|
— |
|
|
|
91 |
|
|
|
55 |
|
|
|
— |
|
|
|
55 |
|
|
|
77 |
|
|
|
— |
|
|
|
77 |
|
Net income (loss) attributable to ION |
|
$ |
(7,163 |
) |
|
$ |
(7,736 |
) |
|
$ |
(14,899 |
) |
|
$ |
(13,136 |
) |
|
$ |
6,951 |
|
|
$ |
(6,185 |
) |
|
$ |
(2,263 |
) |
|
$ |
6,975 |
|
|
$ |
4,712 |
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.46 |
) |
|
|
|
|
|
$ |
(0.95 |
) |
|
$ |
(0.92 |
) |
|
|
|
|
|
$ |
(0.43 |
) |
|
$ |
(0.16 |
) |
|
|
|
|
|
$ |
0.33 |
|
Diluted |
|
$ |
(0.46 |
) |
|
|
|
|
|
$ |
(0.95 |
) |
|
$ |
(0.92 |
) |
|
|
|
|
|
$ |
(0.43 |
) |
|
$ |
(0.16 |
) |
|
|
|
|
|
$ |
0.33 |
|
Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
15,718 |
|
|
|
|
|
|
|
15,718 |
|
|
|
14,320 |
|
|
|
|
|
|
|
14,320 |
|
|
|
14,230 |
|
|
|
|
|
|
|
14,230 |
|
Diluted |
|
|
15,718 |
|
|
|
|
|
|
|
15,718 |
|
|
|
14,320 |
|
|
|
|
|
|
|
14,320 |
|
|
|
14,230 |
|
|
|
|
|
|
|
14,286 |
|
(a) Represents the impairment of multi-client data library
of $1.2 million and the related tax impact of $0.4 million for the
three months ended March 31, 2020.(b) Represents impairment of
goodwill of $4.2 million and severance expense of $3.1 million,
partially offset by stock appreciation right awards credit of $1.1
million for the three months ended March 31, 2020.(c) Represents
the reversal of valuation allowance on our net deferred tax
assets of $7.7 million for the three months ended
March 31, 2021.(d) Represents stock appreciation rights awards
credit of $1.5 million for the three months ended
December 31, 2020.(e) Represents a full valuation allowance on our
net deferred tax assets of $8.5 million for the
three months ended December 31, 2020.
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