HOUSTON, Aug. 5, 2020 /PRNewswire/ -- ION Geophysical
Corporation (NYSE: IO) today reported total net revenues of
$22.7 million in the second quarter
2020, a 46% decrease compared to $41.8
million one year ago. Year-to-date revenues of
$79.1 million are greater than or
equal to revenues in the comparable prior five years.
ION's net loss was $5.2 million,
or a loss of $0.37 per share,
compared to a net loss of $8.6
million, or a loss of $0.61
per share in the second quarter 2019. Excluding special items
in both periods, the Company reported an Adjusted net loss of
$12.1 million, or a loss of
$0.85 per share, compared to an
Adjusted net loss of $8.3 million, or
a loss of $0.59 per share in the
second quarter 2019. ION's net loss was $7.5 million in the first half of 2020, or a loss
of $0.53 per share, compared to a net
loss of $30.0 million, or a loss of
$2.13 per share in the first half of
2019. Excluding special items in both periods, adjusted net
loss in the first half of 2020 was $7.0
million, or a loss of $0.49
per share, compared to an adjusted net loss of $25.2 million, or a loss of $1.79 per share in the first half of 2019.
A reconciliation of special items to the reported financial results
can be found in the tables of this press release.
Net cash provided by operating activities was $23.3 million in the second quarter 2020 compared
to net cash used in operating activities of $1.1 million in the second quarter 2019.
The Company reported Adjusted EBITDA of $0.2
million for the second quarter 2020, a decrease from
$7.3 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 $71.3 million consisted of $62.5 million of cash (including net revolver
borrowings of $22.5 million) and
$8.8 million of remaining available
borrowing capacity under the revolving credit facility. Total
liquidity increased by $17.5 million
compared to the first quarter 2020. In response to the market
uncertainty from the COVID-19 pandemic and lower oil and gas
prices, the Company drew under its credit facility during the first
quarter 2020, of which $22.5 million
remains outstanding and in the Company's cash balances as of
June 30, 2020.
"Our second quarter revenues were in line with our expectations
and the broader oilfield services market," said Chris Usher, ION's President and Chief Executive
Officer. "Although commodity prices rebounded significantly,
the sharp decline earlier this year triggered E&P companies to
reduce 2020 budgets, which tends to disproportionately impact
discretionary purchases such as seismic data sales. By
quickly scaling our asset light business to meet anticipated
demand, we mitigated some of the near-term impacts to the bottom
line and cash position.
"Despite unprecedented market conditions, our first half
revenues are higher than or consistent with 2014-2019
results. Liquidity improved significantly from $54 million to $71
million. Cash increased by $24
million (excluding net revolver borrowings) primarily from
collecting accounts receivables related to the strong first quarter
sales and realizing near full benefits of cost reductions made
earlier this year. In April, we scaled back our flexible cost
structure by another $18 million for
the remaining nine months of 2020, building on the over
$20 million of permanent cost savings
announced in January. During the quarter, we received
$7 million of government relief to
prevent further reducing headcount, which we expect will be
entirely forgiven.
"We are laser focused on executing our strategy and delivering
better results to shareholders. In spite of reduced offshore
activity and COVID-19 travel challenges, I'm pleased we garnered
commercial support and permits for a new 3D multi-client program in
the North Sea. While we expect to acquire the majority of the
program next summer, we may start an initial phase later this year
to avoid disruptions around large windfarm installations. We
continued to build on our highly successful portfolio of low cost,
high return reimaging programs with a new program in
Mauritania. The global 2D data collaboration with PGS is
progressing well and comes at an opportune time as E&P
companies are looking for more efficient ways to identify lower
cost prospects to rebalance their portfolios. In the ports
and harbors space, we continue to receive excellent feedback on how
Marlin SmartPort™ is optimizing operations. Our concerted
sales and marketing campaign generated several promising
digitalization opportunities globally and we are in the midst of
rolling out new Marlin SmartPort trials in Europe and Africa.
"Thankfully, we have had very few documented COVID-19 cases
among our staff worldwide, and I am very pleased with the success
of our remote operations. The shift to new digital mediums has
elevated client engagement and expanded our networks. We
continue to see strong uptake of new technology solutions that
enable remote offshore operations management.
"I believe we are better positioned to mitigate some of the
near-term impacts of the market disruption given our improved cash
position, lower cost basis and strategy execution progress.
While the second half of 2020 will remain challenging, we expect
continued improvement in E&P market dynamics unless there is a
second major wave of COVID-19."
SECOND QUARTER 2020
The Company's segment revenues for the second quarter were as
follows (in thousands):
|
|
Three Months Ended
June 30,
|
|
|
|
|
2020
|
|
2019
|
|
% Change
|
E&P Technology
& Services
|
|
$
|
15,226
|
|
|
$
|
28,523
|
|
|
(47)
|
%
|
Operations
Optimization
|
|
7,505
|
|
|
13,252
|
|
|
(43)
|
%
|
Total
|
|
$
|
22,731
|
|
|
$
|
41,775
|
|
|
(46)
|
%
|
Within the E&P Technology & Services segment,
multi-client revenues were $11.6
million, a decrease of 49%, primarily due to reduced sales
of ION's global data library. Imaging and Reservoir Services
revenues were $3.7 million, a
decrease of 36%, due to lower proprietary tender activity.
Within the Operations Optimization segment, Optimization
Software & Services revenues were $3.4
million, a 41% decrease due to reduced seismic activity and
associated services demand resulting from COVID-19. Devices
revenues were $4.1 million, a 45%
decrease from the second quarter 2019, due to lower sales of towed
streamer equipment spares and repairs.
Consolidated gross margin for the quarter was 20%, compared to
47% in the second quarter 2019. Gross margin in E&P
Technology & Services was 15% compared to 43% one year ago
resulting from the decline in revenues. Operations
Optimization gross margin was 31%, compared to 55% one year ago
primarily from the decline in revenues as well as the increase in
cost of sales from an adjustment to towed streamer repairs.
See further discussion of the adjustment in Note 1 of the
Summary of Segment Information. Excluding this adjustment,
Operations Optimization gross margin would have been 48%.
Consolidated operating expenses were $10.1 million, down from $22.1 million in the second quarter 2019.
Operating margin was (24)%, compared to (6)% in the second
quarter 2019. The decline in operating margin was the result
of the decrease in revenues, partially offset by lower operating
expenses from cost reduction measures made earlier in the year.
YEAR-TO-DATE 2020
The Company's segment revenues for the first six months of the
year were as follows (in thousands):
|
|
Six Months Ended June
30,
|
|
|
|
|
2020
|
|
2019
|
|
% Change
|
E&P Technology
& Services
|
|
$
|
61,740
|
|
|
$
|
55,626
|
|
|
11
|
%
|
Operations
Optimization
|
|
17,405
|
|
|
23,105
|
|
|
(25)
|
%
|
Total
|
|
$
|
79,145
|
|
|
$
|
78,731
|
|
|
1
|
%
|
Within the E&P Technology & Services segment,
multi-client revenues were $53.1
million, an increase of 15%. This result was driven by
increased sales of ION's global 2D data library during the first
quarter, partly offset by a reduction in new venture
revenues. Imaging and Reservoir Services revenues were
$8.6 million, a decrease of 9%, due
to lower proprietary tender activity.
Within the Operations Optimization segment, Optimization
Software & Services revenues were $7.8
million, a 27% decrease from the first half of 2019 due to
COVID-19 related reduced seismic activity and associated services
demand. Devices revenues were $9.6
million, a 23% decrease from the first half of 2019, due to
decreased sales of towed streamer equipment spares and repairs.
Consolidated gross margin for the period was 42%, compared to
37% in the first half of 2019. Gross margin in E&P
Technology & Services was 42% compared to 32% one year
ago. The improved E&P Technology & Services gross
margin resulted from the increase in 2D data library
revenues. Operations Optimization gross margin was 40%, a
decrease compared to 51% one year ago primarily resulting from the
decline in revenues as well as the increase in cost of sales from
an adjustment to towed streamer repairs as previously highlighted
in the second quarter section. Excluding this adjustment,
Operations Optimization gross margin would have been 47%.
Consolidated operating expenses were $32.1 million, compared to $48.0 million, and operating margin was 1%,
compared to (23)% in the first half of 2019. Excluding
special items, consolidated operating expenses, as adjusted, were
$25.8 million, compared to
$43.2 million in the first half of
2019, and operating margin, as adjusted, was 10%, compared to (17)%
in the first half of 2019. The improvement in operating
margin, as adjusted, was primarily due to the increase in
multi-client revenues combined with lower operating expenses from
cost reductions made earlier in the year.
Income tax expense was $8.9
million, compared to $4.1
million in the first half of 2019. The income tax expense
includes a $2.2 million valuation
allowance established against our recognized deferred tax assets in
our non-U.S. businesses. The Company's income tax expense
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, August 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 August 20,
2020. To access the replay, dial (877) 660-6853 and use pass
code 13698480#.
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
Leveraging innovative technologies, ION delivers powerful
data-driven decision-making to offshore energy, ports and defense
industries, enabling clients to optimize operations and deliver
superior returns. Learn more at iongeo.com.
Contact
Mike Morrison
Executive 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; political, execution,
regulatory, and currency risks; the COVID-19 pandemic; and
agreements made or adhered to by members of OPEC and other oil
producing countries to maintain production levels. For additional
information regarding these various risks and uncertainties, see
our Form 10-K for the year ended December 31, 2019, filed
on February 6, 2020. 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
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Service
revenues
|
$
|
15,547
|
|
|
$
|
30,407
|
|
|
$
|
63,032
|
|
|
$
|
58,535
|
|
Product
revenues
|
7,184
|
|
|
11,368
|
|
|
16,113
|
|
|
20,196
|
|
Total net
revenues
|
22,731
|
|
|
41,775
|
|
|
79,145
|
|
|
78,731
|
|
Cost of
services
|
13,267
|
|
|
16,795
|
|
|
35,542
|
|
|
39,241
|
|
Cost of
products
|
4,880
|
|
|
5,397
|
|
|
9,508
|
|
|
9,995
|
|
Impairment of
multi-client data library
|
—
|
|
|
—
|
|
|
1,167
|
|
|
—
|
|
Gross
profit
|
4,584
|
|
|
19,583
|
|
|
32,928
|
|
|
29,495
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research, development
and engineering
|
3,036
|
|
|
5,186
|
|
|
7,044
|
|
|
10,543
|
|
Marketing and
sales
|
1,219
|
|
|
6,060
|
|
|
6,077
|
|
|
11,853
|
|
General,
administrative and other operating expenses
|
5,801
|
|
|
10,890
|
|
|
14,803
|
|
|
25,589
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
4,150
|
|
|
—
|
|
Total operating
expenses
|
10,056
|
|
|
22,136
|
|
|
32,074
|
|
|
47,985
|
|
Income (loss) from
operations
|
(5,472)
|
|
|
(2,553)
|
|
|
854
|
|
|
(18,490)
|
|
Interest expense,
net
|
(3,414)
|
|
|
(3,111)
|
|
|
(6,635)
|
|
|
(6,223)
|
|
Other income
(expense), net
|
6,771
|
|
|
96
|
|
|
7,200
|
|
|
(696)
|
|
Income (loss) before
income taxes
|
(2,115)
|
|
|
(5,568)
|
|
|
1,419
|
|
|
(25,409)
|
|
Income tax
expense
|
3,052
|
|
|
2,719
|
|
|
8,926
|
|
|
4,126
|
|
Net loss
|
(5,167)
|
|
|
(8,287)
|
|
|
(7,507)
|
|
|
(29,535)
|
|
Less: Net (income)
loss attributable to noncontrolling interest
|
(52)
|
|
|
(335)
|
|
|
25
|
|
|
(447)
|
|
Net loss attributable
to ION
|
$
|
(5,219)
|
|
|
$
|
(8,622)
|
|
|
$
|
(7,482)
|
|
|
$
|
(29,982)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.37)
|
|
|
$
|
(0.61)
|
|
|
$
|
(0.53)
|
|
|
$
|
(2.13)
|
|
Diluted
|
$
|
(0.37)
|
|
|
$
|
(0.61)
|
|
|
$
|
(0.53)
|
|
|
$
|
(2.13)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
14,241
|
|
|
14,098
|
|
|
14,236
|
|
|
14,065
|
|
Diluted
|
14,241
|
|
|
14,098
|
|
|
14,236
|
|
|
14,065
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
|
|
ASSETS
|
June
30,
2020
|
|
December
31,
2019
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
62,540
|
|
|
$
|
33,065
|
|
Accounts receivable,
net
|
10,577
|
|
|
29,548
|
|
Unbilled
receivables
|
12,937
|
|
|
11,815
|
|
Inventories,
net
|
11,862
|
|
|
12,187
|
|
Prepaid expenses and
other current assets
|
4,462
|
|
|
6,012
|
|
Total current
assets
|
102,378
|
|
|
92,627
|
|
Deferred income tax
asset, net
|
7,987
|
|
|
8,734
|
|
Property, plant and
equipment, net
|
11,920
|
|
|
13,188
|
|
Multi-client data
library, net
|
51,935
|
|
|
60,384
|
|
Goodwill
|
18,029
|
|
|
23,585
|
|
Right-of-use
assets
|
40,467
|
|
|
32,546
|
|
Other
assets
|
3,513
|
|
|
2,130
|
|
Total
assets
|
$
|
236,229
|
|
|
$
|
233,194
|
|
LIABILITIES AND
DEFICIT
|
|
|
|
Current
liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
|
23,685
|
|
|
$
|
2,107
|
|
Accounts
payable
|
37,254
|
|
|
49,316
|
|
Accrued
expenses
|
25,606
|
|
|
30,328
|
|
Accrued multi-client
data library royalties
|
21,316
|
|
|
18,831
|
|
Deferred
revenue
|
4,058
|
|
|
4,551
|
|
Current maturities of
operating lease liabilities
|
8,355
|
|
|
11,055
|
|
Total current
liabilities
|
120,274
|
|
|
116,188
|
|
Long-term debt, net
of current maturities
|
119,234
|
|
|
119,352
|
|
Operating lease
liabilities, net of current maturities
|
40,409
|
|
|
30,833
|
|
Other long-term
liabilities
|
422
|
|
|
1,453
|
|
Total
liabilities
|
280,339
|
|
|
267,826
|
|
Deficit:
|
|
|
|
Common
stock
|
142
|
|
|
142
|
|
Additional paid-in
capital
|
957,746
|
|
|
956,647
|
|
Accumulated
deficit
|
(981,773)
|
|
|
(974,291)
|
|
Accumulated other
comprehensive loss
|
(21,833)
|
|
|
(19,318)
|
|
Total stockholders'
deficit
|
(45,718)
|
|
|
(36,820)
|
|
Noncontrolling
interest
|
1,608
|
|
|
2,188
|
|
Total
deficit
|
(44,110)
|
|
|
(34,632)
|
|
Total liabilities and
deficit
|
$
|
236,229
|
|
|
$
|
233,194
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(5,167)
|
|
|
$
|
(8,287)
|
|
|
$
|
(7,507)
|
|
|
$
|
(29,535)
|
|
Adjustments to
reconcile net loss to cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization (other than multi-client data library)
|
1,008
|
|
|
1,063
|
|
|
1,848
|
|
|
2,098
|
|
Amortization of
multi-client data library
|
4,681
|
|
|
8,296
|
|
|
12,701
|
|
|
19,396
|
|
Amortization of debt
costs
|
—
|
|
|
—
|
|
|
|
|
|
Stock-based
compensation expense
|
477
|
|
|
1,538
|
|
|
1,094
|
|
|
2,831
|
|
Impairment of
multi-client data library
|
—
|
|
|
—
|
|
|
1,167
|
|
|
—
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
4,150
|
|
|
—
|
|
Amortization of
government relief funding expected to be forgiven
|
(6,923)
|
|
|
—
|
|
|
(6,923)
|
|
|
—
|
|
Deferred income
taxes
|
(83)
|
|
|
931
|
|
|
338
|
|
|
(467)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
40,546
|
|
|
11,604
|
|
|
18,678
|
|
|
8,734
|
|
Unbilled
receivables
|
(4,746)
|
|
|
(7,923)
|
|
|
(2,080)
|
|
|
21,575
|
|
Inventories
|
951
|
|
|
654
|
|
|
179
|
|
|
735
|
|
Accounts payable,
accrued expenses and accrued royalties
|
(8,618)
|
|
|
(4,041)
|
|
|
(6,930)
|
|
|
(6,054)
|
|
Deferred
revenue
|
(821)
|
|
|
(3,004)
|
|
|
(466)
|
|
|
(3,337)
|
|
Other assets and
liabilities
|
2,012
|
|
|
(1,964)
|
|
|
102
|
|
|
(1,711)
|
|
Net cash provided by
(used in) operating activities
|
23,317
|
|
|
(1,133)
|
|
|
16,351
|
|
|
14,265
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Investment in
multi-client data library
|
(4,928)
|
|
|
(6,015)
|
|
|
(14,596)
|
|
|
(14,782)
|
|
Purchase of property,
plant and equipment
|
(201)
|
|
|
(605)
|
|
|
(697)
|
|
|
(1,412)
|
|
Net cash used in
investing activities
|
(5,129)
|
|
|
(6,620)
|
|
|
(15,293)
|
|
|
(16,194)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Borrowings under
revolving line of credit
|
—
|
|
|
—
|
|
|
27,000
|
|
|
—
|
|
Payments under
revolving line of credit
|
(4,500)
|
|
|
—
|
|
|
(4,500)
|
|
|
—
|
|
Proceeds from
government relief funding
|
6,923
|
|
|
—
|
|
|
6,923
|
|
|
—
|
|
Payments on notes
payable and long-term debt
|
(767)
|
|
|
(691)
|
|
|
(1,527)
|
|
|
(1,406)
|
|
Other financing
activities
|
15
|
|
|
(312)
|
|
|
5
|
|
|
(551)
|
|
Net cash provided by
(used in) financing activities
|
1,671
|
|
|
(1,003)
|
|
|
27,901
|
|
|
(1,957)
|
|
Effect of change in
foreign currency exchange rates on cash, cash equivalents and
restricted cash
|
68
|
|
|
(183)
|
|
|
538
|
|
|
(102)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
19,927
|
|
|
(8,939)
|
|
|
29,497
|
|
|
(3,988)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
42,688
|
|
|
38,805
|
|
|
33,118
|
|
|
33,854
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
62,615
|
|
|
$
|
29,866
|
|
|
$
|
62,615
|
|
|
$
|
29,866
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
SUMMARY OF SEGMENT INFORMATION
(In thousands)
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
E&P Technology
& Services:
|
|
|
|
|
|
|
|
|
New Venture
|
$
|
4,686
|
|
|
$
|
5,018
|
|
|
$
|
6,127
|
|
|
$
|
18,489
|
|
|
Data
Library
|
6,867
|
|
|
17,794
|
|
|
46,998
|
|
|
27,742
|
|
|
Total multi-client
revenues
|
11,553
|
|
|
22,812
|
|
|
53,125
|
|
|
46,231
|
|
|
Imaging and Reservoir
Services
|
3,673
|
|
|
5,711
|
|
|
8,615
|
|
|
9,395
|
|
|
Total
|
15,226
|
|
|
28,523
|
|
|
61,740
|
|
|
55,626
|
|
|
Operations
Optimization:
|
|
|
|
|
|
|
|
|
Devices
|
4,128
|
|
|
7,532
|
|
|
9,601
|
|
|
12,352
|
|
|
Optimization Software
& Services
|
3,377
|
|
|
5,720
|
|
|
7,804
|
|
|
10,753
|
|
|
Total
|
7,505
|
|
|
13,252
|
|
|
17,405
|
|
|
23,105
|
|
|
Total net
revenues
|
$
|
22,731
|
|
|
$
|
41,775
|
|
|
$
|
79,145
|
|
|
$
|
78,731
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
$
|
2,264
|
|
|
$
|
12,357
|
|
|
$
|
25,994
|
|
|
$
|
17,797
|
|
|
Operations
Optimization
|
2,320
|
|
|
7,226
|
|
|
6,934
|
|
|
11,698
|
|
|
Total gross
profit
|
$
|
4,584
|
|
|
$
|
19,583
|
|
|
$
|
32,928
|
|
|
$
|
29,495
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
15
|
%
|
|
43
|
%
|
|
42
|
%
|
|
32
|
%
|
|
Operations
Optimization
|
31
|
%
|
(1)
|
55
|
%
|
|
40
|
%
|
(1)
|
51
|
%
|
|
Total gross
margin
|
20
|
%
|
|
47
|
%
|
|
42
|
%
|
|
37
|
%
|
|
Income (loss) from
operations:
|
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
$
|
442
|
|
(2)
|
$
|
5,237
|
|
|
$
|
18,394
|
|
(3)
|
$
|
3,622
|
|
|
Operations
Optimization
|
(474)
|
|
|
2,644
|
|
|
(3,733)
|
|
(4)
|
2,814
|
|
|
Support and
other
|
(5,440)
|
|
|
(10,434)
|
|
|
(13,807)
|
|
|
(24,926)
|
|
|
Income (loss) from
operations
|
(5,472)
|
|
|
(2,553)
|
|
|
854
|
|
|
(18,490)
|
|
|
Interest expense,
net
|
(3,414)
|
|
|
(3,111)
|
|
|
(6,635)
|
|
|
(6,223)
|
|
|
Other income
(expense), net
|
6,771
|
|
(5)
|
96
|
|
|
7,200
|
|
(5)
|
(696)
|
|
|
Income (loss) before
income taxes
|
$
|
(2,115)
|
|
|
$
|
(5,568)
|
|
|
$
|
1,419
|
|
|
$
|
(25,409)
|
|
|
(1)
|
Operations
Optimization segment gross margin is negatively impacted by an out
of period adjustment to cost of sales related to towed streamer
repairs of $1.3 million for the three and six months ended June 30,
2020. Excluding this adjustment, gross margin would have been 48%
and 47%, respectively, for the three and six months ended June 30,
2020. The net impact of this and the adjustment discussed in Note
(2), was an increase to the Company's loss from operations of $0.3
million for the three and six months ended June 30,
2020.
|
(2)
|
E&P Technology
& Services segment income from operations was positively
impacted by an out of period adjustment to marketing & sales
expenses of $1.0 million for the three months ended June 30,
2020.
|
(3)
|
Includes impairment
of multi-client data library of $1.2 million for the six months
ended June 30, 2020, in addition to the adjustment highlighted in
Note (2).
|
(4)
|
Includes impairment
of goodwill of $4.2 million for the six months ended June 30,
2020.
|
(5)
|
Includes amortization
of the government relief funding expected to be forgiven of $6.9
million for the three and six months ended June 30,
2020.
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
Summary of Net Revenues by Geographic Area
(In thousands)
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
North
America
|
$
|
5,631
|
|
|
$
|
13,645
|
|
|
$
|
37,441
|
|
|
$
|
20,802
|
|
Latin
America
|
4,966
|
|
|
14,321
|
|
|
14,770
|
|
|
27,852
|
|
Asia
Pacific
|
2,631
|
|
|
3,676
|
|
|
11,919
|
|
|
5,543
|
|
Europe
|
6,176
|
|
|
6,123
|
|
|
9,986
|
|
|
16,515
|
|
Middle
East
|
942
|
|
|
1,106
|
|
|
1,896
|
|
|
2,465
|
|
Africa
|
1,004
|
|
|
2,278
|
|
|
1,595
|
|
|
4,667
|
|
Other
|
1,381
|
|
|
626
|
|
|
1,538
|
|
|
887
|
|
Total net
revenues
|
$
|
22,731
|
|
|
$
|
41,775
|
|
|
$
|
79,145
|
|
|
$
|
78,731
|
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIES
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
charges, severance expenses and government relief. 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
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net loss
|
$
|
(5,167)
|
|
|
$
|
(8,287)
|
|
|
$
|
(7,507)
|
|
|
$
|
(29,535)
|
|
Interest expense,
net
|
3,414
|
|
|
3,111
|
|
|
6,635
|
|
|
6,223
|
|
Income tax
expense
|
3,052
|
|
|
2,719
|
|
|
8,926
|
|
|
4,126
|
|
Depreciation and
amortization expense
|
5,689
|
|
|
9,359
|
|
|
14,549
|
|
|
21,494
|
|
Impairment of
multi-client data library
|
—
|
|
|
—
|
|
|
1,167
|
|
|
—
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
4,150
|
|
|
—
|
|
Severance
expense
|
—
|
|
|
2,810
|
|
|
3,102
|
|
|
2,810
|
|
Amortization of
government relief funding expected to be forgiven
|
(6,923)
|
|
|
—
|
|
|
(6,923)
|
|
|
—
|
|
EBITDA excluding
non-recurring items
|
65
|
|
|
9,712
|
|
|
24,099
|
|
|
5,118
|
|
Stock appreciation
rights expense (credit)
|
85
|
|
|
(2,450)
|
|
|
(1,010)
|
|
|
2,010
|
|
Adjusted
EBITDA
|
$
|
150
|
|
|
$
|
7,262
|
|
|
$
|
23,089
|
|
|
$
|
7,128
|
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIES
Description 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 and six months ended June 30,
2020 and 2019:
|
Three Months Ended
June 30, 2020
|
|
Three Months Ended
June 30, 2019
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
22,731
|
|
|
$
|
—
|
|
|
$
|
22,731
|
|
|
$
|
41,775
|
|
|
$
|
—
|
|
|
$
|
41,775
|
|
Cost of
sales
|
18,147
|
|
|
—
|
|
|
18,147
|
|
|
22,192
|
|
|
—
|
|
|
22,192
|
|
Gross
profit
|
4,584
|
|
|
—
|
|
|
4,584
|
|
|
19,583
|
|
|
—
|
|
|
19,583
|
|
Gross
margin
|
20
|
%
|
|
—
|
%
|
|
20
|
%
|
|
47
|
%
|
|
—
|
%
|
|
47
|
%
|
Operating
expenses
|
10,056
|
|
|
(85)
|
|
(1)
|
9,971
|
|
|
22,136
|
|
|
(360)
|
|
(1)
|
21,776
|
|
Income (loss) from
operations
|
(5,472)
|
|
|
85
|
|
|
(5,387)
|
|
|
(2,553)
|
|
|
360
|
|
|
(2,193)
|
|
Operating
margin
|
(24)
|
%
|
|
—
|
%
|
|
(24)
|
%
|
|
(6)
|
%
|
|
1
|
%
|
|
(5)
|
%
|
Interest expense,
net
|
(3,414)
|
|
|
—
|
|
|
(3,414)
|
|
|
(3,111)
|
|
|
—
|
|
|
(3,111)
|
|
Other income
(expense), net
|
6,771
|
|
|
(6,923)
|
|
(2)
|
(152)
|
|
|
96
|
|
|
—
|
|
|
96
|
|
Income (loss) before
income taxes
|
(2,115)
|
|
|
(6,838)
|
|
|
(8,953)
|
|
|
(5,568)
|
|
|
360
|
|
|
(5,208)
|
|
Income tax
expense
|
3,052
|
|
|
—
|
|
|
3,052
|
|
|
2,719
|
|
|
—
|
|
|
2,719
|
|
Net income
(loss)
|
(5,167)
|
|
|
(6,838)
|
|
|
(12,005)
|
|
|
(8,287)
|
|
|
360
|
|
|
(7,927)
|
|
Less: Net income
attributable to noncontrolling interest
|
(52)
|
|
|
—
|
|
|
(52)
|
|
|
(335)
|
|
|
—
|
|
|
(335)
|
|
Net income (loss)
attributable to ION
|
$
|
(5,219)
|
|
|
$
|
(6,838)
|
|
|
$
|
(12,057)
|
|
|
$
|
(8,622)
|
|
|
$
|
360
|
|
|
$
|
(8,262)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.37)
|
|
|
|
|
$
|
(0.85)
|
|
|
$
|
(0.61)
|
|
|
|
|
$
|
(0.59)
|
|
Diluted
|
$
|
(0.37)
|
|
|
|
|
$
|
(0.85)
|
|
|
$
|
(0.61)
|
|
|
|
|
$
|
(0.59)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
14,241
|
|
|
|
|
14,241
|
|
|
14,098
|
|
|
|
|
14,098
|
|
Diluted
|
14,241
|
|
|
|
|
14,241
|
|
|
14,098
|
|
|
|
|
14,098
|
|
(1)
|
Represents stock
appreciation rights awards expense for the three months ended June
30, 2020 and 2019.
|
(2)
|
Represents
amortization of the government relief funding expected to be
forgiven for the three months ended June 30, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2020
|
|
Six Months Ended
June 30, 2019
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
79,145
|
|
|
$
|
—
|
|
|
$
|
79,145
|
|
|
$
|
78,731
|
|
|
$
|
—
|
|
|
$
|
78,731
|
|
Cost of
sales
|
46,217
|
|
|
(1,167)
|
|
(3)
|
45,050
|
|
|
49,236
|
|
|
—
|
|
|
49,236
|
|
Gross
profit
|
32,928
|
|
|
1,167
|
|
|
34,095
|
|
|
29,495
|
|
|
—
|
|
|
29,495
|
|
Gross
margin
|
42
|
%
|
|
1
|
%
|
|
43
|
%
|
|
37
|
%
|
|
—
|
%
|
|
37
|
%
|
Operating
expenses
|
32,074
|
|
|
(6,243)
|
|
(4)
|
25,831
|
|
|
47,985
|
|
|
(4,820)
|
|
(6)
|
43,165
|
|
Income (loss) from
operations
|
854
|
|
|
7,410
|
|
|
8,264
|
|
|
(18,490)
|
|
|
4,820
|
|
|
(13,670)
|
|
Operating
margin
|
1
|
%
|
|
9
|
%
|
|
10
|
%
|
|
(23)
|
%
|
|
6
|
%
|
|
(17)
|
%
|
Interest expense,
net
|
(6,635)
|
|
|
—
|
|
|
(6,635)
|
|
|
(6,223)
|
|
|
—
|
|
|
(6,223)
|
|
Other income
(expense), net
|
7,200
|
|
|
(6,923)
|
|
(5)
|
277
|
|
|
(696)
|
|
|
—
|
|
|
(696)
|
|
Income (loss) before
income taxes
|
1,419
|
|
|
487
|
|
|
1,906
|
|
|
(25,409)
|
|
|
4,820
|
|
|
(20,589)
|
|
Income tax
expense
|
8,926
|
|
|
350
|
|
(3)
|
9,276
|
|
|
4,126
|
|
|
|
|
4,126
|
|
Net loss
|
(7,507)
|
|
|
137
|
|
|
(7,370)
|
|
|
(29,535)
|
|
|
4,820
|
|
|
(24,715)
|
|
Less: Net income
attributable to noncontrolling interest
|
25
|
|
|
—
|
|
|
25
|
|
|
(447)
|
|
|
—
|
|
|
(447)
|
|
Net loss attributable
to ION
|
$
|
(7,482)
|
|
|
$
|
137
|
|
|
$
|
(7,345)
|
|
|
$
|
(29,982)
|
|
|
$
|
4,820
|
|
|
$
|
(25,162)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.53)
|
|
|
|
|
$
|
(0.52)
|
|
|
$
|
(2.13)
|
|
|
|
|
$
|
(1.79)
|
|
Diluted
|
$
|
(0.53)
|
|
|
|
|
$
|
(0.52)
|
|
|
$
|
(2.13)
|
|
|
|
|
$
|
(1.79)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
14,236
|
|
|
|
|
14,236
|
|
|
14,065
|
|
|
|
|
14,065
|
|
Diluted
|
14,236
|
|
|
|
|
14,236
|
|
|
14,065
|
|
|
|
|
14,065
|
|
(3)
|
Represents impairment
of multi-client data library of $1.2 million and the related tax
impact of $0.4 million for the six months ended June 30,
2020.
|
(4)
|
Represents impairment
of goodwill of $4.2 million and severance expense of $3.1 million,
partially offset by stock appreciation right awards credit of $1.0
million for the six months ended June 30, 2020.
|
(5)
|
Represents
amortization of the government relief funding expected to be
forgiven for the six months ended June 30, 2020.
|
(6)
|
Represents severance
expense of $2.8 million and stock appreciation right awards expense
of $2.0 million for the six months ended June 30, 2019.
|
View original
content:http://www.prnewswire.com/news-releases/ion-reports-second-quarter-2020-results-301107123.html
SOURCE ION Geophysical Corporation