SAExploration Holdings, Inc. (NASDAQ:SAEX)
(OTCQB:SXPLW) today announced its consolidated financial results
for the third quarter (“Q3”) and nine months ended September 30,
2017.
Third Quarter 2017 Summary
- Total cash balance, including restricted cash, of $14.1
million as of September 30, 2017
- Revenue of $22.5 million, compared to $33.0 million in
Q3 2016
- Gross profit of $1.5 million, or 6.6% of revenues,
compared to $1.4 million, or 4.2% of revenues, in Q3
2016
- Adjusted gross profit, a non-GAAP measure, of $4.3
million, or 19.1% of revenues, compared to $5.5 million, or 16.7%
of revenues, in Q3 2016
- Net loss attributable to the Corporation of $(13.8)
million, compared to $(17.4) million in Q3 2016
- Adjusted EBITDA, a non-GAAP measure, of $(1.2) million,
or -5.1% of revenues, compared to $(0.1) million, or -0.4% of
revenues, in Q3 2016
- Contracted backlog of $52.5 million through 2018 and
$111.4 million of bids outstanding as of September 30,
2017
Jeff Hastings, Chairman and CEO of SAE,
commented, “In the third quarter, we continued to manage a very
difficult business environment due to persistent low levels of
exploration spending. While overall revenue was up sequentially
when compared to the second quarter of this year, global seismic
activity remains sharply lower than in prior years. Moreover,
pricing on new projects continues to be less favorable, and
indecision on approving new projects continues to hamper our
visibility on new business prospects. While we are encouraged by
the gradual improvement in commodity prices, and our continuing
dialogue with core customers regarding future project
opportunities, we expect any meaningful turn in the cycle to take
time before we experience increased activity and corresponding
revenue.”
Mr. Hastings continued, “Given where our
contracted backlog currently stands, we expect the fourth quarter
to be relatively inactive as we prepare for the upcoming winter
season in Alaska and Canada at the beginning of next year. Looking
further into next year, we believe the revenue from a combination
of projects in Colombia, which is proving to be a bright spot on
the back of the long-term agreement we signed with Hocol earlier
this year, and Alaska and Canada, will be sufficient to support our
improving cost structure. Additionally, activity levels in the
ocean-bottom marine market continue to be robust. While a very
competitive market, any new marine project awards would represent
meaningful upside to our outlook. We are also encouraged by
conversations with specific customers regarding unique
opportunities involving potential strategic agreements and new,
innovative technology, which we believe could add additional
competitive advantages to our differentiated business model.
Equally important, we remain hopeful that we will receive and
ultimately monetize our remaining Alaskan tax credits, although the
timing of both remains uncertain. We continue to engage in
constructive dialogue with potential purchasers of tax credits as
the state of Alaska works through the regulations that will
implement the new legislation passed a few months ago that may
re-open the secondary market.”
Mr. Hastings concluded, “We remain fervently
focused on positioning SAE to adapt and become more competitive
during this cycle, as evidenced by our recent transactions to
extend the maturity of our $30 million senior term loan to 2020 and
replace our revolving credit facility. We are also committed to
creating and implementing a more sustainable solution to our
capital structure – specifically, one that right sizes our balance
sheet while providing the opportunity to generate long-term upside
for our equity in a broader market recovery. As we continue to
transition the company, both financially and structurally, we
remain dedicated to serving our valued customers with our
differentiated business model and proven operational strategy.”
Third Quarter 2017 Financial
Results
Revenues decreased 32.0% to $22.5 million from
$33.0 million in Q3 2016, primarily due to a decrease in revenue
from South America, which was primarily impacted by a large project
in Bolivia during Q3 2016 not being repeated in the same period
this year, partially offset by a year-over-year increase in smaller
projects in Colombia. Activity levels in all jurisdictions continue
to be impacted by poor market conditions due to a sustained low
commodity price environment and continued uncertainty regarding the
outlook for the oil and gas industry.
Gross profit increased 6.9% to $1.5 million, or
6.6% of revenues, from $1.4 million, or 4.2% of revenues, in Q3
2016. Gross profit for Q3 2017 and Q3 2016 included depreciation
expense of $2.8 million and $4.1 million, respectively. Gross
profit excluding depreciation expense, or adjusted gross profit,
which is a non-GAAP measure that is defined and calculated below,
for Q3 2017 was $4.3 million, or 19.1% of revenues, compared to
$5.5 million, or 16.7% of revenues, in Q3 2016. The year-over-year
improvement in gross profit during Q3 2017 was primarily due to
increased efficiency in project execution in South America and
decreased depreciation expense from the sale of ocean bottom nodal
equipment in the fourth quarter of 2016.
Selling, general and administrative (“SG&A”)
expenses during the quarter decreased 13.2% to $6.0 million, or
26.8% of revenues, from $6.9 million, or 21.0% of revenues, in Q3
2016. The decrease in SG&A expenses was primarily due to lower
revenue in Q3 2017 compared to the same period last year. However,
this was partially offset by an increase in non-cash share-based
compensation expense in Q3 2017. During Q3 2017 and Q3 2016, there
were approximately $0.6 million and $1.3 million, respectively, of
non-recurring or non-cash expenses included in SG&A.
Loss before income taxes was $(11.9) million
during the quarter, compared to $(16.3) million in Q3 2016. The
decrease in loss before income taxes was largely due to an increase
in primarily unrealized foreign currency gains in Canada and Brazil
and a decrease in debt restructuring costs compared to Q3 2016.
During Q3 2017, other expense also included, among other items,
$7.5 million of interest expense, of which, approximately $4.4
million was non-cash amortization of loan issuance costs and $0.4
million was interest that was paid in-kind.
Net loss attributable to the Corporation for the
quarter was $(13.8) million, or $(1.46) per diluted share, compared
to $(17.4) million, or $(2.62) per diluted share, on a reverse
split-adjusted basis, in Q3 2016. Net loss was impacted by a number
of factors during Q3 2017, including:
- Higher foreign currency gains primarily related to unrealized
transactions in Canada and Brazil;
- A decrease in costs incurred on debt restructurings of $2.7
million; and
- Lower SG&A expenses due to lower revenue; partially offset
by
- Higher foreign currency losses due to trade and foreign
currency exposure on a project in Nigeria.
Adjusted EBITDA, which is a non-GAAP measure and
is defined and calculated below, was $(1.2) million during the
quarter, or -5.1% of revenues, compared to $(0.1) million, or -0.4%
of revenues, in Q3 2016.
Capital expenditures for the third quarter in
both 2017 and 2016 were $0.1 million. The low level of capital
expenditures in both periods was primarily due to the continuation
of unfavorable conditions in the oil and gas industry, which
presented limited to no growth opportunities requiring capital
expenditures.
Year-to-Date 2017 Financial
Results
Revenues decreased 32.2% to $122.2 million from
$180.2 million in the first nine months of 2016. Year-to-date 2017
revenues decreased significantly in North and South America due to
a decrease in active projects in these regions compared to the
prior period. In Alaska, the decrease in activity was mainly due to
changes in state legislation that created uncertainty at the
customer level with respect to their capital spending plans. The
year-over-year decrease in revenue in South America was largely
attributable to a large project in Bolivia in the first nine months
of 2016 compared to limited activity in Bolivia during the same
period in 2017. The overall decrease in year-to-date 2017 revenue
was partially offset by a large increase in activity in West Africa
from an ocean-bottom marine project that was completed during the
first quarter of 2017. Activity in Canada during the first nine
months of 2017 improved marginally compared to the same period in
2016.
Gross profit decreased 42.1% to $25.6 million,
or 20.9% of revenues, from $44.2 million, or 24.5% of revenues, in
the first nine months of 2016. Year-to-date gross profit in 2017
and 2016 included depreciation expense of $9.0 million and $12.5
million, respectively. Excluding depreciation expense, adjusted
gross profit for the first nine months of 2017 was $34.6 million,
or 28.3% of revenues, compared to $56.7 million, or 31.5% of
revenues, in the first nine months of 2016. The decrease in gross
profit was primarily related to the decrease in revenue from a
reduction in the number of active projects in the first nine months
of 2017 compared to the same period in 2016 and increased pricing
pressure due to a continued depressed oil and gas market which has
resulted in tightening margins. This was partially offset by a
decrease in depreciation expense resulting from the sale of some
ocean-bottom nodal recording equipment in the fourth quarter of
2016 and an increase in revenue from West Africa.
SG&A expenses decreased 9.6% to $18.9
million, or 15.4% of revenues, from $20.9 million, or 11.6% of
revenues, in the first nine months of 2016. The decrease in
SG&A expenses was primarily due to a decrease in revenue and a
decrease in severance costs partially offset by an increase in
stock-based compensation expense. During the first nine months of
2017 and 2016, there were approximately $2.1 million and $2.4
million, respectively, of non-recurring or non-cash expenses
included in SG&A.
Income (loss) before income taxes was $(18.7)
million, compared to $4.7 million in the first nine months of 2016.
The decrease in income before income taxes was largely due to a
meaningful increase in other expense. During the first nine months
of 2017, other expense included, among other items, approximately
$24.4 million of interest expense, of which approximately $14.9
million was non-cash amortization of loan issuance costs and $4.8
million of interest that was paid in-kind. Also included in
year-to-date 2017 other expense was a $0.7 million foreign exchange
loss, compared to a $2.1 million foreign exchange gain in the same
period last year.
Provision for income taxes was $4.2 million,
compared to $4.6 million during the first nine months of 2016. The
decrease in provision for income taxes was primarily due to
fluctuations in earnings among the various jurisdictions in which
the company operates, decreases in permanent tax differences,
offset by increases in deferred tax valuation allowances related to
U.S. losses and net operating loss carryforwards available to be
used in future periods.
Net loss attributable to the Corporation was
$(24.8) million, or $(2.65) per diluted share, compared to $(2.9)
million, or $(1.26) per diluted share, in the first nine months of
2016. Net loss attributable to the Corporation in the first nine
months of 2017 was impacted by a number of factors, including:
- Lower gross profit as a result of decreased revenues;
- Higher interest expense, primarily attributable to amortization
of loan issuance costs;
- Decrease in gains on foreign currency transactions due to large
gains in 2016 related to the strengthening U.S. dollar during that
time period;
- Increase in foreign currency loss due to trades and foreign
currency exposure on a project in Nigeria; and
- Proportionately higher provision for income taxes; partially
offset by
- Lower SG&A expenses due to lower revenue; and
- Decrease in costs of debt restructuring of $5.0 million.
Year-to-date Adjusted EBITDA decreased 53.5% to
$17.8 million, or 14.5% of revenues, from $38.3 million, or 21.2%
of revenues, in the first nine months of 2016.
Capital expenditures in the first nine months of
2017 were $2.3 million, compared to $0.8 million in the first nine
months of 2016. Year-to-date 2017 capital expenditures primarily
related to the remaining cash payments for the purchase of a set of
vibrators in the fourth quarter of 2016, as well as the purchase of
additional camp equipment and vibrators in the first quarter of
2017. Given the state of the industry and the significant reduction
in oil and gas activity by exploration and production companies,
any significant investment in capital expenditures, particularly in
large equipment purchases, is highly unlikely until the broader
market demonstrates a consistent and sustainable recovery.
Therefore, based on current market conditions, SAE expects its
total capital expenditures for 2017 will be under $5.0 million.
On September 30, 2017, cash and cash equivalents
totaled $13.5 million, working capital was $14.7 million, total
debt at face value, excluding net unamortized premiums or
discounts, was $121.9 million, and total stockholders’ equity was
$15.3 million.
Contracted Backlog
As of September 30, 2017, SAE’s backlog was
$52.5 million. Bids outstanding on the same date totaled $111.4
million. The entire backlog was comprised of land-based projects,
with 62% in South America and the remainder in North America. SAE
currently expects to complete approximately 13% of the projects in
its backlog on September 30, 2017 during the fourth quarter of
2017, with the balance expected to be performed during 2018.
The estimations of realization from the backlog
can be impacted by a number of factors, however, including
deteriorating industry conditions, customer delays or
cancellations, permitting or project delays and environmental
conditions.
Investor Conference Call
SAE will host a conference call on Thursday,
November 9, 2017 at 10:00 a.m. Eastern Time to discuss its
consolidated financial results for the third quarter and nine
months ended September 30, 2017. Participants can access the
conference call by dialing (855) 433-0934 (toll-free) or (484)
756-4291 (toll). SAE will also offer a live webcast of the
conference call on the Investors section of its website at
www.saexploration.com.
To listen live via the company’s website, please
go to the website at least 15 minutes prior to the start of the
call to register and download any necessary audio software. A
replay of the webcast for the conference call will be archived on
the company’s website and can be accessed by visiting the Investors
section of SAE’s website.
About SAExploration Holdings,
Inc.
SAE is an internationally-focused oilfield
services company offering a full range of vertically-integrated
seismic data acquisition and logistical support services in remote
and complex environments throughout Alaska, Canada, South America,
Southeast Asia and West Africa. In addition to the acquisition of
2D, 3D, time-lapse 4D and multi-component seismic data on land, in
transition zones and offshore in depths reaching 3,000 meters, SAE
offers a full suite of logistical support and in-field data
processing services, such as program design, planning and
permitting, camp services and infrastructure, surveying, drilling,
environmental assessment and reclamation and community relations.
SAE operates crews around the world, performing major projects for
its blue-chip customer base, which includes major integrated oil
companies, national oil companies and large independent oil and gas
exploration companies. Operations are supported through a
multi-national presence in Houston, Alaska, Canada, Peru, Colombia,
Bolivia, Brazil and New Zealand. For more information, please visit
SAE’s website at www.saexploration.com.
The information in SAE’s website is not, and
shall not be deemed to be, a part of this notice or incorporated in
filings SAE makes with the Securities and Exchange
Commission.
Forward Looking Statements
This press release contains certain
"forward-looking statements" within the meaning of the U.S. federal
securities laws with respect to SAE. These statements can be
identified by the use of words or phrases such as “expects,”
“estimates,” “projects,” “budgets,” “forecasts,” “anticipates,”
“intends,” “plans,” “may,” “will,” “could,” “should,” “believes,”
“predicts,” “potential,” “continue,” and similar expressions. These
forward-looking statements include statements regarding SAE's
financial condition, results of operations and business and SAE's
expectations or beliefs concerning future periods and possible
future events. These statements are subject to significant known
and unknown risks and uncertainties that could cause actual results
to differ materially from those stated in, and implied by, this
press release. Risks and uncertainties that could cause actual
results to vary materially from SAE’s expectations are described
under “Risk Factors” and “Cautionary Note Regarding Forward-Looking
Statements” in SAE’s filings with the Securities and Exchange
Commission. Except as required by applicable law, SAE is not under
any obligation to, and expressly disclaims any obligation to,
update or alter its forward looking statements, whether as a result
of new information, future events, changes in assumptions or
otherwise.
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In thousands, except share and per share
amounts) |
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services |
|
$ |
22,452 |
|
|
$ |
32,994 |
|
|
$ |
122,180 |
|
|
$ |
180,196 |
|
Cost of services
excluding depreciation and amortization expense |
|
|
18,172 |
|
|
|
27,469 |
|
|
|
87,575 |
|
|
|
123,500 |
|
Depreciation and
amortization expense included in cost of services |
|
|
2,809 |
|
|
|
4,149 |
|
|
|
9,007 |
|
|
|
12,520 |
|
Gross
profit |
|
|
1,471 |
|
|
|
1,376 |
|
|
|
25,598 |
|
|
|
44,176 |
|
Selling, general and
administrative expenses |
|
|
6,005 |
|
|
|
6,920 |
|
|
|
18,880 |
|
|
|
20,879 |
|
Income
(loss) from operations |
|
|
(4,534 |
) |
|
|
(5,544 |
) |
|
|
6,718 |
|
|
|
23,297 |
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Costs
incurred on debt restructuring |
|
|
(208 |
) |
|
|
(2,891 |
) |
|
|
(208 |
) |
|
|
(5,225 |
) |
Interest
expense, net |
|
|
(7,496 |
) |
|
|
(7,493 |
) |
|
|
(24,415 |
) |
|
|
(15,554 |
) |
Foreign
exchange gain (loss), net |
|
|
341 |
|
|
|
(322 |
) |
|
|
(695 |
) |
|
|
2,116 |
|
Other
income (expense), net |
|
|
2 |
|
|
|
(1 |
) |
|
|
(83 |
) |
|
|
20 |
|
Total
other expense, net |
|
|
(7,361 |
) |
|
|
(10,707 |
) |
|
|
(25,401 |
) |
|
|
(18,643 |
) |
Income
(loss) before income taxes |
|
|
(11,895 |
) |
|
|
(16,251 |
) |
|
|
(18,683 |
) |
|
|
4,654 |
|
Provision for income
taxes |
|
|
1,950 |
|
|
|
1,146 |
|
|
|
4,175 |
|
|
|
4,550 |
|
Net
income (loss) |
|
|
(13,845 |
) |
|
|
(17,397 |
) |
|
|
(22,858 |
) |
|
|
104 |
|
Less: net income (loss)
attributable to non-controlling interest |
|
|
(75 |
) |
|
|
15 |
|
|
|
1,972 |
|
|
|
3,021 |
|
Net loss
attributable to the Corporation |
|
$ |
(13,770 |
) |
|
$ |
(17,412 |
) |
|
$ |
(24,830 |
) |
|
$ |
(2,917 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average basic shares outstanding |
|
|
9,405,163 |
|
|
|
6,639,503 |
|
|
|
9,374,244 |
|
|
|
2,315,189 |
|
Loss per
share – basic |
|
$ |
(1.46 |
) |
|
$ |
(2.62 |
) |
|
$ |
(2.65 |
) |
|
$ |
(1.26 |
) |
Weighted average diluted shares outstanding |
|
9,405,163 |
|
|
|
6,639,503 |
|
|
|
9,374,244 |
|
|
|
2,315,189 |
|
Loss per
share – diluted |
|
$ |
(1.46 |
) |
|
$ |
(2.62 |
) |
|
$ |
(2.65 |
) |
|
$ |
(1.26 |
) |
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In thousands, except share and par value
amounts) |
|
|
September 30,
2017 |
|
December 31, 2016 |
ASSETS |
(Unaudited) |
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
$ |
13,537 |
|
|
$ |
11,460 |
|
Restricted cash |
|
535 |
|
|
|
536 |
|
Accounts
receivable, net of allowance for doubtful accounts of $12 at
September 30, 2017 and December 31, 2016 |
|
45,926 |
|
|
|
69,721 |
|
Deferred
costs on contracts |
|
208 |
|
|
|
8,644 |
|
Prepaid
expenses |
|
4,106 |
|
|
|
1,977 |
|
Deferred
loan issuance costs, net |
|
6,859 |
|
|
|
— |
|
Total
current assets |
|
71,171 |
|
|
|
92,338 |
|
Property
and equipment, net of accumulated depreciation of $70,646 and
$61,444 at September 30, 2017 and December 31, 2016,
respectively |
|
35,597 |
|
|
|
42,759 |
|
Intangible assets, net of accumulated amortization of $708 and $635
at September 30, 2017 and December 31, 2016, respectively |
|
701 |
|
|
|
721 |
|
Goodwill |
|
1,844 |
|
|
|
1,711 |
|
Deferred
loan issuance costs, net |
|
— |
|
|
|
20,856 |
|
Accounts
receivable, noncurrent, net of allowance for doubtful accounts of
$0 at September 30, 2017 and December 31, 2016 |
|
43,961 |
|
|
|
37,984 |
|
Deferred
income tax assets |
|
5,165 |
|
|
|
5,122 |
|
Other
assets |
|
182 |
|
|
|
164 |
|
Total
assets |
$ |
158,621 |
|
|
$ |
201,655 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts
payable |
$ |
3,308 |
|
|
$ |
9,301 |
|
Accrued
liabilities |
|
8,492 |
|
|
|
12,750 |
|
Income
and other taxes payable |
|
10,430 |
|
|
|
15,605 |
|
Borrowings under credit facility |
|
4,207 |
|
|
|
5,844 |
|
Borrowings under senior loan facility |
|
29,995 |
|
|
|
— |
|
Current
portion of capital leases |
|
— |
|
|
|
56 |
|
Deferred
revenue |
|
— |
|
|
|
7,975 |
|
Total
current liabilities |
|
56,432 |
|
|
|
51,531 |
|
Borrowings under senior loan facility |
|
— |
|
|
|
29,995 |
|
Second
lien notes, net of net unamortized premium (discount) of $70 and
$96 at September 30, 2017 and December 31, 2016, respectively |
|
85,059 |
|
|
|
80,238 |
|
Senior
secured notes, net of unamortized deferred loan issuance costs of
$29 and $42 at September 30, 2017 and December 31, 2016,
respectively |
|
1,843 |
|
|
|
1,830 |
|
Total
liabilities |
|
143,334 |
|
|
|
163,594 |
|
Stockholders’ equity: |
|
|
|
|
|
Preferred
stock, $0.0001 par value, 1,000,000 authorized shares and none
outstanding |
|
— |
|
|
|
— |
|
Common
stock, $0.0001 par value, 55,000,000 shares authorized, and
9,424,534 and 9,358,529 outstanding at September 30, 2017 and
December 31, 2016, respectively |
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
133,465 |
|
|
|
131,816 |
|
Treasury
stock |
|
(113 |
) |
|
|
— |
|
Accumulated deficit |
|
(117,380 |
) |
|
|
(92,550 |
) |
Accumulated other comprehensive loss |
|
(5,256 |
) |
|
|
(4,822 |
) |
Total
stockholders’ equity attributable to the Corporation |
|
10,717 |
|
|
|
34,445 |
|
Non-controlling interest |
|
4,570 |
|
|
|
3,616 |
|
Total
stockholders’ equity |
|
15,287 |
|
|
|
38,061 |
|
Total
liabilities and stockholders’ equity |
$ |
158,621 |
|
|
$ |
201,655 |
|
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS |
(In thousands) |
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(13,845 |
) |
|
$ |
(17,397 |
) |
|
$ |
(22,858 |
) |
|
$ |
104 |
|
Foreign currency
translation gain (loss) |
|
|
(362 |
) |
|
|
289 |
|
|
|
(434 |
) |
|
|
(695 |
) |
Total comprehensive
loss |
|
|
(14,207 |
) |
|
|
(17,108 |
) |
|
|
(23,292 |
) |
|
|
(591 |
) |
Less: comprehensive
income (loss) attributable to non-controlling interest |
|
|
(75 |
) |
|
|
15 |
|
|
|
1,972 |
|
|
|
3,021 |
|
Total
comprehensive loss attributable to the Corporation |
|
$ |
(14,132 |
) |
|
$ |
(17,123 |
) |
|
$ |
(25,264 |
) |
|
$ |
(3,612 |
) |
|
|
UNAUDITED CONSOLIDATED REVENUES BY
REGION |
(In thousands) |
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
% |
|
2016 |
|
% |
|
2017 |
|
% |
|
2016 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
$ |
2,723 |
|
12.1 |
% |
|
$ |
734 |
|
2.2 |
% |
|
$ |
50,518 |
|
41.3 |
% |
|
$ |
81,739 |
|
45.3 |
% |
South America |
|
|
19,729 |
|
87.9 |
% |
|
|
32,111 |
|
97.3 |
% |
|
|
32,224 |
|
26.4 |
% |
|
|
96,723 |
|
53.7 |
% |
Southeast Asia |
|
|
— |
|
— |
|
|
|
149 |
|
0.5 |
% |
|
|
4,266 |
|
3.5 |
% |
|
|
1,734 |
|
1.0 |
% |
West Africa |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
35,172 |
|
28.8 |
% |
|
|
— |
|
— |
|
Total
revenue |
|
$ |
22,452 |
|
100.0 |
% |
|
$ |
32,994 |
|
100.0 |
% |
|
$ |
122,180 |
|
100.0 |
% |
|
$ |
180,196 |
|
100.0 |
% |
|
UNAUDITED RECONCILIATION OF NET INCOME
(LOSS) TO NON-GAAP ADJUSTED EBITDA(In
thousands)
We use an adjusted form of EBITDA to measure
period over period performance, which is a non-GAAP measurement.
Adjusted EBITDA is defined as net income (loss) plus depreciation
and amortization, plus interest expense, plus income taxes, plus
share-based compensation, plus (gain) loss on disposal of property
and equipment, plus costs incurred on debt restructuring, plus
foreign exchange (gain) loss, and plus non-recurring one-time
expenses. Our management uses Adjusted EBITDA as a supplemental
financial measure to assess: (i) the financial performance of our
assets without regard to financing methods, capital structures,
taxes, historical cost basis or non-recurring expenses; (ii) our
liquidity and operating performance over time in relation to other
companies that own similar assets and calculate Adjusted EBITDA in
a similar manner; and (iii) the ability of our assets to generate
cash sufficient to pay potential interest cost. We consider
Adjusted EBITDA as presented below to be the primary measure of
period-over-period changes in our operational cash flow
performance.
The terms EBITDA and Adjusted EBITDA are not
defined under GAAP, and we acknowledge that these are not measures
of operating income, operating performance or liquidity presented
in accordance with GAAP. When assessing our operating performance
or liquidity, investors and others should not consider this data in
isolation or as a substitute for net income, cash flow from
operating activities or other cash flow data calculated in
accordance with GAAP. In addition, our calculation of Adjusted
EBITDA may not be comparable to EBITDA or similarly titled measures
utilized by other companies since such other companies may not
calculate EBITDA or similarly titled measures in the same manner.
Further, the results presented by Adjusted EBITDA cannot be
achieved without incurring the costs that the measure excludes.
The computation of our Adjusted EBITDA, a
non-GAAP measure, from net income (loss), the most directly
comparable GAAP financial measure, is provided in the table
below.
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(13,845 |
) |
|
$ |
(17,397 |
) |
|
$ |
(22,858 |
) |
|
$ |
104 |
|
|
Depreciation and
amortization (1) |
|
|
2,900 |
|
|
|
4,271 |
|
|
|
9,300 |
|
|
|
12,909 |
|
|
Interest expense,
net |
|
|
7,496 |
|
|
|
7,493 |
|
|
|
24,415 |
|
|
|
15,554 |
|
|
Provision for income
taxes |
|
|
1,950 |
|
|
|
1,146 |
|
|
|
4,175 |
|
|
|
4,550 |
|
|
Share-based
compensation (2) |
|
|
384 |
|
|
|
273 |
|
|
|
1,649 |
|
|
|
616 |
|
|
(Gain) loss on disposal
of property and equipment, net (3) |
|
|
12 |
|
|
|
212 |
|
|
|
(71 |
) |
|
|
(38 |
) |
|
Costs incurred on debt
restructuring (4) |
|
|
208 |
|
|
|
2,891 |
|
|
|
208 |
|
|
|
5,225 |
|
|
Foreign exchange (gain)
loss, net (5) |
|
|
(341 |
) |
|
|
322 |
|
|
|
695 |
|
|
|
(2,116 |
) |
|
Non-recurring expenses
(6)(7) |
|
|
81 |
|
|
|
651 |
|
|
|
261 |
|
|
|
1,460 |
|
|
Adjusted
EBITDA |
|
$ |
(1,155 |
) |
|
$ |
(138 |
) |
|
$ |
17,774 |
|
|
$ |
38,264 |
|
|
|
(1)
Additional depreciation and amortization expenses not related to
the cost of services were incurred during the three months ended
September 30, 2017 and 2016 in the amount of $91 and $122,
respectively, and during the nine months ended September 30, 2017
and 2016 in the amount of $293 and $389, respectively.(2)
Share-based compensation primarily relates to the non-cash value of
stock options and restricted stock awards granted to the company’s
employees and directors.(3) (Gain) loss on disposal of property and
equipment, net, is primarily the impact of sale of equipment.(4)
Costs were incurred related to debt restructurings in 2016 and
2017.(5) Foreign exchange (gain) loss, net, includes the effect of
both realized and unrealized foreign exchange transactions.(6)
Non-recurring expenses in 2017 primarily consist of severance
payments incurred at the company’s Peru and Alaska locations and
various non-operating expenses incurred at the corporate
location.(7) Non-recurring expenses in 2016 primarily consist of
severance payments incurred at the company’s Peru, Colombia,
Canada, and Alaska locations, payments related to tax services
provided in connection with the debt restructuring in 2016, and
various non-operating expenses incurred at the corporate and Peru
locations. |
|
UNAUDITED RECONCILIATION OF GROSS PROFIT
TO NON-GAAP ADJUSTED GROSS PROFIT(In
thousands)
We use an adjusted form of gross profit to
measure period over period performance, which is not derived in
accordance with GAAP. Adjusted Gross Profit is defined as gross
profit plus depreciation and amortization expense related to the
cost of services. Our management uses Adjusted Gross Profit as a
substantial financial measure to assess the cost management and
performance of our projects. Within the seismic data services
industry, gross profit is presented both with and without
depreciation and amortization expense on equipment used in
operations and, therefore, we also use this measure to assess our
performance over time in relation to other companies that own
similar assets and calculate gross profit in the same manner.The
term Adjusted Gross Profit is not defined under GAAP, and we
acknowledge that it is not a measure of operating income, operating
performance or liquidity presented in accordance with GAAP. When
assessing our operating performance or liquidity, investors and
others should not consider this data in isolation or as a
substitute for gross profit calculated in accordance with GAAP. In
addition, our calculation of Adjusted Gross Profit may not be
comparable to gross profit or similarly titled measures utilized by
other companies since such other companies may not calculate
adjusted gross profit in the same manner. Further, the results
presented by Adjusted Gross Profit cannot be achieved without
incurring the costs that the measure excludes.
The computation of our Adjusted Gross Profit, a
non-GAAP measure, from gross profit, the most directly comparable
GAAP financial measure, is provided in the table below:
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit as
presented |
|
$ |
1,471 |
|
$ |
1,376 |
|
$ |
25,598 |
|
$ |
44,176 |
Depreciation and
amortization expense included in cost of services (1) |
|
|
2,809 |
|
|
4,149 |
|
|
9,007 |
|
|
12,520 |
Adjusted
gross profit |
|
$ |
4,280 |
|
$ |
5,525 |
|
$ |
34,605 |
|
$ |
56,696 |
|
(1)
Depreciation and amortization expense included in cost of services
includes depreciation and amortization on equipment used in
operations. |
|
Contact
SAExploration Holdings, Inc.
Ryan Abney
Vice President, Finance
(281) 258-4400
rabney@saexploration.com
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