HOUSTON, Nov. 4, 2020 /PRNewswire/ -- ION Geophysical
Corporation (NYSE: IO) today reported total net revenues of
$16.2 million in the third quarter
2020, a 29% decrease compared to $22.7
million in the second quarter 2020 and a 70% decrease
compared to $53.2 million one year
ago. At September 30, 2020,
backlog, which consists of commitments for multi-client programs
and proprietary imaging work, was $17.7
million or 77% higher compared to backlog at June 30, 2020.
Net loss attributable to ION in the third quarter 2020 was
$16.6 million, or a loss of
$1.16 per share, compared to a net
loss attributable to ION of $3.7
million, or a loss of $0.26
per share in the third quarter 2019. The Company reported
Adjusted EBITDA of $(6.6) million for
the third quarter 2020, a decrease from $15.5 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.
Year-to-date net revenues were $95.4
million, a 28% decrease year-over-year compared to the
$132.0 million of net revenues one
year ago. While year-to-date revenues were down $36.6 million, the net loss attributable to ION
improved by $9.6 million primarily
due to the over $38 million of
structural changes and associated cost reductions implemented
earlier this year.
Net loss attributable to ION was $24.1
million in the first nine months of 2020, or a loss of
$1.69 per share, compared to a net
loss attributable to ION of $33.7
million, or a loss of $2.39
per share in the first nine months of 2019. Year-to-date
Adjusted EBITDA was $16.5 million, a
decrease from $22.7 million for the
first nine months of 2019.
At quarter close, the Company's total liquidity of $59.4 million consisted of $51.1 million of cash (including net revolver
borrowings of $22.5 million) and
$8.3 million of remaining available
borrowing capacity under the revolving credit facility, slightly
below total liquidity of $65.5 million from one year ago. 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 September
30, 2020. In addition, the Company continues to work
with its banking advisors and largest bondholder to proactively
address the $121 million bond ahead of its scheduled maturity
in December 2021.
"Our third quarter results were negatively impacted by continued
challenging market conditions associated with repercussions of the
oil price volatility earlier this year," said Chris Usher, ION's President and Chief Executive
Officer. "More specifically, this quarter the impact of
E&P clients' reduced budgets and restructuring began to
materially impact results as many of our contacts found themselves
in new or different positions with uncertain budgets. We
partially mitigated this impact by fully benefiting from the over
$38 million of structural changes and
associated cost reductions we outlined early this year.
Currently, we are seeing a number of constructive developments
evidenced by more stable oil prices, a settling in of new client
roles and clearer definition of E&P budgets to high-grade
offshore reserves, and line of sight on specific deals for the
fourth quarter. Based on these trends and high levels of
client engagement on specific deals, including a number postponed
from the third quarter, we expect the fourth quarter to be
significantly better than the second quarter with the potential to
approach our fourth quarter results from last year.
"Despite the macroeconomic backdrop, we have made significant
progress executing our strategy. Backlog increased 77%
sequentially, reversing several consecutive quarters of steady
decline due to our strategic shift to enter the 3D new acquisition
multi-client market. We successfully acquired the initial
phase of our Mid North Sea High 3D multi-client program and built
backlog for the significantly larger second phase next
summer. We also commercialized our proprietary Gemini™
extended frequency source technology, a key ingredient for
improving 3D subsurface imaging in complex geological settings,
where some of the most attractive E&P investment areas
reside. In addition, we are seeing increasing traction of our
offshore optimization software, Marlin™. Our team is engaged
in four trials outside of our core market to optimize port
operations and maritime energy logistics and, based on the positive
response, we believe we are well positioned for several additional
trials and multiple tenders. In fact, we just won a highly
competitive tender to provide a Port Management System for a series
of ports in the United Kingdom. While we don't include
recurring contracted Software revenues as backlog, year-to-date we
extended seven multi-year command and control deals in our core
market worth over $5 million
annually.
"Although we expect the market will remain challenging, we see
indications for improving offshore E&P industry dynamics and
continue to anticipate significant growth in digitalization over
the next decade. In addition to the E&P industry, we
continue to work to broaden our offerings into other markets.
I'm encouraged by the positive client feedback related to the value
delivered from our innovative solutions. For example, clients
can now identify, quantify and ultimately improve inefficiencies in
vessel transit through the use of our Marlin software.
Importantly, we intersect the E&P industry's need to
high-grade portfolios and bring lower cost barrels online faster,
while achieving environmental compliance goals, such as carbon
neutrality. Rapid digital transformation has enabled a
smarter, data-rich environment from which to identify high impact
wells, maximize production, or improve the safety and efficiency of
offshore operations. I strongly believe ION's consistent,
pragmatic focus to provide data and software that optimizes
decision-making in capital intensive industries positions us well
for future success."
THIRD QUARTER 2020
The Company's segment net revenues for the third quarter were as
follows (in thousands):
|
|
Three Months Ended
September 30,
|
|
|
|
|
2020
|
|
2019
|
|
% Change
|
E&P Technology
& Services
|
|
$
|
10,093
|
|
|
$
|
40,241
|
|
|
(75)
|
%
|
Operations
Optimization
|
|
6,141
|
|
|
12,998
|
|
|
(53)
|
%
|
Total
|
|
$
|
16,234
|
|
|
$
|
53,239
|
|
|
(70)
|
%
|
E&P Technology & Services segment net revenues were
$10.1 million for the third quarter
2020 compared to $15.2 million
for the second quarter of 2020 and $40.2
million for third quarter 2019. Within the E&P
Technology & Services segment, multi-client net revenues were
$6.3 million, a decrease of 81% from
third quarter 2019, primarily due to lower volume of ION's global
data library sales, as well as a decline in new venture revenues
due to acquisition completion of a large new program in the prior
period compared to revenues from smaller reimaging programs in the
current period. Imaging and Reservoir Services net revenues
were $3.8 million, a decrease of 46%
from third quarter 2019 due to lower proprietary tender activity,
and consistent with our strategy to preferentially utilize these
resources to generate higher margin multi-client reimaging
products.
Operations Optimization segment net revenues were $6.1 million for the third quarter 2020 compared
to $7.5 million for the second
quarter of 2020 and $13.0 million for
third quarter 2019. Within the Operations Optimization segment,
Optimization Software & Services net revenues were $3.0 million, a 57% decrease from third quarter
2019 due to reduced seismic activity and associated services demand
resulting from COVID-19. Devices net revenues were
$3.1 million, a 49% decrease from
third quarter 2019 due to lower sales of towed streamer equipment
spares and repairs.
Consolidated gross margin for the quarter was 8%, compared to
47% one year ago. Gross margin in E&P Technology &
Services was (11)% compared to 46% one year ago, resulting from the
decline in net revenues. Operations Optimization gross margin
was 39%, compared to 54% one year ago, primarily from the decline
in net revenues.
Consolidated operating expenses were $12.5 million, a 42% decrease from $21.4 million in the third quarter 2019.
Operating margin was (69)%, compared to 7% one year ago. The
decline in operating margin was the result of the decrease in net
revenues, partially offset by lower operating expenses from cost
reduction measures made earlier in the year.
YEAR-TO-DATE 2020
The Company's segment net revenues for the first nine months of
the year were as follows (in thousands):
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2020
|
|
2019
|
|
% Change
|
E&P Technology
& Services
|
|
$
|
71,833
|
|
|
$
|
95,867
|
|
|
(25)
|
%
|
Operations
Optimization
|
|
23,546
|
|
|
36,103
|
|
|
(35)
|
%
|
Total
|
|
$
|
95,379
|
|
|
$
|
131,970
|
|
|
(28)
|
%
|
Within the E&P Technology & Services segment,
multi-client net revenues were $59.4
million, a decrease of 25% from the first nine months of
2019, predominantly driven by decreased new venture net revenues
due to reduced new program activity this year. Data Library
revenues were comparable with the first nine months of 2019 largely
due to increased sales of global 2D data library in the first
quarter of 2020. Imaging and Reservoir Services net revenues
were $12.4 million, a decrease of 24%
from the first nine months of 2019 due to lower proprietary tender
activity, and consistent with our strategy to preferentially
utilize these resources to generate higher margin multi-client
reimaging products.
Within the Operations Optimization segment, Optimization
Software & Services net revenues were $10.8 million, a 39% decrease from the first nine
months of 2019 due to COVID-19 related reduced seismic activity and
associated services demand. Devices net revenues were
$12.7 million, a 31% decrease from
the first nine months of 2019 due to decreased sales of towed
streamer equipment spares and repairs.
Consolidated gross margin for the period was 36%, compared to
42% one year ago. Gross margin in E&P Technology &
Services was 35% compared to 38% one year ago. The decline in
E&P Technology & Services gross margin resulted from the
decrease in new venture revenues, as well as the $1.2 million impairment of the multi-client data
library in the first nine months of 2020. Operations
Optimization gross margin was 40%, a decrease compared to 52% one
year ago, primarily resulting from the decline in net revenues.
Consolidated operating expenses were $44.5 million, a 36% decrease from $69.4 million in the first nine months of 2019
and operating margin remained consistent at (11)% for both
periods. Excluding special items, consolidated operating
expenses, as adjusted, were $38.2
million, compared to $63.9
million in the first nine months of 2019, and operating
margin, as adjusted, was (3)%, compared to (7)% one year ago.
The improvement in operating margin, as adjusted, was primarily due
to lower operating expenses from cost reductions made earlier in
the year. A reconciliation of special items to the reported
financial results can be found in the tables to this press
release.
Income tax expense was $10.0
million, compared to $7.9
million in the first nine months 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, November 5, 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 November 19,
2020. To access the replay, dial (877) 660-6853 and use pass
code 13698483#.
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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Service
revenues
|
$
|
10,202
|
|
|
$
|
41,990
|
|
|
$
|
73,234
|
|
|
$
|
100,525
|
|
Product
revenues
|
6,032
|
|
|
11,249
|
|
|
22,145
|
|
|
31,445
|
|
Total net
revenues
|
16,234
|
|
|
53,239
|
|
|
95,379
|
|
|
131,970
|
|
Cost of
services
|
11,491
|
|
|
22,690
|
|
|
47,033
|
|
|
61,931
|
|
Cost of
products
|
3,454
|
|
|
5,261
|
|
|
12,962
|
|
|
15,256
|
|
Impairment of
multi-client data library
|
—
|
|
|
—
|
|
|
1,167
|
|
|
—
|
|
Gross
profit
|
1,289
|
|
|
25,288
|
|
|
34,217
|
|
|
54,783
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research, development
and engineering
|
2,899
|
|
|
4,878
|
|
|
9,943
|
|
|
15,421
|
|
Marketing and
sales
|
2,811
|
|
|
5,591
|
|
|
8,888
|
|
|
17,444
|
|
General,
administrative and other operating expenses
|
6,743
|
|
|
10,961
|
|
|
21,546
|
|
|
36,550
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
4,150
|
|
|
—
|
|
Total operating
expenses
|
12,453
|
|
|
21,430
|
|
|
44,527
|
|
|
69,415
|
|
Income (loss) from
operations
|
(11,164)
|
|
|
3,858
|
|
|
(10,310)
|
|
|
(14,632)
|
|
Interest expense,
net
|
(3,669)
|
|
|
(3,155)
|
|
|
(10,304)
|
|
|
(9,378)
|
|
Other income
(expense), net
|
(525)
|
|
|
(242)
|
|
|
6,675
|
|
|
(938)
|
|
Income (loss) before
income taxes
|
(15,358)
|
|
|
461
|
|
|
(13,939)
|
|
|
(24,948)
|
|
Income tax
expense
|
1,056
|
|
|
3,790
|
|
|
9,982
|
|
|
7,916
|
|
Net loss
|
(16,414)
|
|
|
(3,329)
|
|
|
(23,921)
|
|
|
(32,864)
|
|
Less: Net income
attributable to noncontrolling interest
|
(193)
|
|
|
(394)
|
|
|
(168)
|
|
|
(841)
|
|
Net loss attributable
to ION
|
$
|
(16,607)
|
|
|
$
|
(3,723)
|
|
|
$
|
(24,089)
|
|
|
$
|
(33,705)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(1.16)
|
|
|
$
|
(0.26)
|
|
|
$
|
(1.69)
|
|
|
$
|
(2.39)
|
|
Diluted
|
$
|
(1.16)
|
|
|
$
|
(0.26)
|
|
|
$
|
(1.69)
|
|
|
$
|
(2.39)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
14,278
|
|
|
14,181
|
|
|
14,255
|
|
|
14,104
|
|
Diluted
|
14,278
|
|
|
14,181
|
|
|
14,255
|
|
|
14,104
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(In
thousands)
(Unaudited)
|
|
ASSETS
|
September
30, 2020
|
|
December
31, 2019
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
51,056
|
|
|
$
|
33,065
|
|
Accounts receivable,
net
|
8,288
|
|
|
29,548
|
|
Unbilled
receivables
|
9,629
|
|
|
11,815
|
|
Inventories,
net
|
11,873
|
|
|
12,187
|
|
Prepaid expenses and
other current assets
|
5,861
|
|
|
6,012
|
|
Total current
assets
|
86,707
|
|
|
92,627
|
|
Deferred income tax
asset, net
|
8,092
|
|
|
8,734
|
|
Property, plant and
equipment, net
|
11,227
|
|
|
13,188
|
|
Multi-client data
library, net
|
53,289
|
|
|
60,384
|
|
Goodwill
|
18,684
|
|
|
23,585
|
|
Right-of-use
assets
|
37,730
|
|
|
32,546
|
|
Other
assets
|
2,136
|
|
|
2,130
|
|
Total
assets
|
$
|
217,865
|
|
|
$
|
233,194
|
|
LIABILITIES AND
DEFICIT
|
|
|
|
Current
liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
|
23,527
|
|
|
$
|
2,107
|
|
Accounts
payable
|
35,107
|
|
|
49,316
|
|
Accrued
expenses
|
29,197
|
|
|
30,328
|
|
Accrued multi-client
data library royalties
|
20,534
|
|
|
18,831
|
|
Deferred
revenue
|
2,156
|
|
|
4,551
|
|
Current maturities of
operating lease liabilities
|
6,727
|
|
|
11,055
|
|
Total current
liabilities
|
117,248
|
|
|
116,188
|
|
Long-term debt, net
of current maturities
|
119,349
|
|
|
119,352
|
|
Operating lease
liabilities, net of current maturities
|
40,380
|
|
|
30,833
|
|
Other long-term
liabilities
|
412
|
|
|
1,453
|
|
Total
liabilities
|
277,389
|
|
|
267,826
|
|
Deficit:
|
|
|
|
Common
stock
|
144
|
|
|
142
|
|
Additional paid-in
capital
|
958,189
|
|
|
956,647
|
|
Accumulated
deficit
|
(998,380)
|
|
|
(974,291)
|
|
Accumulated other
comprehensive loss
|
(21,012)
|
|
|
(19,318)
|
|
Total stockholders'
deficit
|
(61,059)
|
|
|
(36,820)
|
|
Noncontrolling
interest
|
1,535
|
|
|
2,188
|
|
Total
deficit
|
(59,524)
|
|
|
(34,632)
|
|
Total liabilities and
deficit
|
$
|
217,865
|
|
|
$
|
233,194
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(16,414)
|
|
|
$
|
(3,329)
|
|
|
$
|
(23,921)
|
|
|
$
|
(32,864)
|
|
Adjustments to
reconcile net loss to cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization (other than multi-client data library)
|
1,088
|
|
|
805
|
|
|
2,936
|
|
|
2,903
|
|
Amortization of
multi-client data library
|
3,973
|
|
|
10,391
|
|
|
16,674
|
|
|
29,787
|
|
Stock-based
compensation expense
|
543
|
|
|
905
|
|
|
1,637
|
|
|
3,736
|
|
Impairment of
multi-client data library
|
—
|
|
|
—
|
|
|
1,167
|
|
|
—
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
4,150
|
|
|
—
|
|
Amortization of
government relief funding expected to be forgiven
|
—
|
|
|
—
|
|
|
(6,923)
|
|
|
—
|
|
Deferred income
taxes
|
(101)
|
|
|
(781)
|
|
|
237
|
|
|
(1,248)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
2,387
|
|
|
(6,619)
|
|
|
21,065
|
|
|
2,115
|
|
Unbilled
receivables
|
3,261
|
|
|
(8,803)
|
|
|
1,181
|
|
|
12,772
|
|
Inventories
|
(102)
|
|
|
(6)
|
|
|
77
|
|
|
729
|
|
Accounts payable,
accrued expenses and accrued royalties
|
501
|
|
|
7,582
|
|
|
(6,429)
|
|
|
1,528
|
|
Deferred
revenue
|
(1,780)
|
|
|
939
|
|
|
(2,246)
|
|
|
(2,398)
|
|
Other assets and
liabilities
|
3,461
|
|
|
3,955
|
|
|
3,563
|
|
|
2,244
|
|
Net cash provided by
(used in) operating activities
|
(3,183)
|
|
|
5,039
|
|
|
13,168
|
|
|
19,304
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Investment in
multi-client data library
|
(5,245)
|
|
|
(6,443)
|
|
|
(19,841)
|
|
|
(21,225)
|
|
Purchase of property,
plant and equipment
|
(168)
|
|
|
140
|
|
|
(865)
|
|
|
(1,272)
|
|
Net cash used in
investing activities
|
(5,413)
|
|
|
(6,303)
|
|
|
(20,706)
|
|
|
(22,497)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Borrowings under
revolving line of credit
|
—
|
|
|
15,000
|
|
|
27,000
|
|
|
15,000
|
|
Payments under
revolving line of credit
|
—
|
|
|
(15,000)
|
|
|
(4,500)
|
|
|
(15,000)
|
|
Proceeds from
government relief funding
|
—
|
|
|
—
|
|
|
6,923
|
|
|
—
|
|
Payments on notes
payable and long-term debt
|
(287)
|
|
|
(554)
|
|
|
(1,814)
|
|
|
(1,960)
|
|
Dividend payment to
noncontrolling interest
|
(217)
|
|
|
—
|
|
|
(217)
|
|
|
—
|
|
Other financing
activities
|
(96)
|
|
|
(104)
|
|
|
(91)
|
|
|
(655)
|
|
Net cash provided by
(used in) financing activities
|
(600)
|
|
|
(658)
|
|
|
27,301
|
|
|
(2,615)
|
|
Effect of change in
foreign currency exchange rates on cash, cash equivalents and
restricted cash
|
(37)
|
|
|
253
|
|
|
501
|
|
|
151
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
(9,233)
|
|
|
(1,669)
|
|
|
20,264
|
|
|
(5,657)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
62,615
|
|
|
29,866
|
|
|
33,118
|
|
|
33,854
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
53,382
|
|
|
$
|
28,197
|
|
|
$
|
53,382
|
|
|
$
|
28,197
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
SUMMARY OF SEGMENT
INFORMATION
(In
thousands)
(Unaudited)
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
E&P Technology
& Services:
|
|
|
|
|
|
|
|
|
New Venture
|
$
|
1,213
|
|
|
$
|
5,905
|
|
|
$
|
7,340
|
|
|
$
|
24,394
|
|
|
Data
Library
|
5,085
|
|
|
27,288
|
|
|
52,083
|
|
|
55,030
|
|
|
Total multi-client
revenues
|
6,298
|
|
|
33,193
|
|
|
59,423
|
|
|
79,424
|
|
|
Imaging and Reservoir
Services
|
3,795
|
|
|
7,048
|
|
|
12,410
|
|
|
16,443
|
|
|
Total
|
10,093
|
|
|
40,241
|
|
|
71,833
|
|
|
95,867
|
|
|
Operations
Optimization:
|
|
|
|
|
|
|
|
|
Optimization Software
& Services
|
3,007
|
|
|
6,895
|
|
|
10,811
|
|
|
17,648
|
|
|
Devices
|
$
|
3,134
|
|
|
$
|
6,103
|
|
|
$
|
12,735
|
|
|
$
|
18,455
|
|
|
Total
|
6,141
|
|
|
12,998
|
|
|
23,546
|
|
|
36,103
|
|
|
Total net
revenues
|
$
|
16,234
|
|
|
$
|
53,239
|
|
|
$
|
95,379
|
|
|
$
|
131,970
|
|
|
Gross profit
(loss):
|
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
$
|
(1,092)
|
|
|
$
|
18,316
|
|
|
$
|
24,902
|
|
(1)
|
$
|
36,113
|
|
|
Operations
Optimization
|
2,381
|
|
|
6,972
|
|
|
9,315
|
|
|
18,670
|
|
|
Total gross
profit
|
$
|
1,289
|
|
|
$
|
25,288
|
|
|
$
|
34,217
|
|
|
$
|
54,783
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
(11)
|
%
|
|
46
|
%
|
|
35
|
%
|
|
38
|
%
|
|
Operations
Optimization
|
39
|
%
|
|
54
|
%
|
|
40
|
%
|
|
52
|
%
|
|
Total gross
margin
|
8
|
%
|
|
47
|
%
|
|
36
|
%
|
|
42
|
%
|
|
Income (loss) from
operations:
|
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
$
|
(4,591)
|
|
|
$
|
11,878
|
|
|
$
|
13,803
|
|
(1)
|
$
|
15,500
|
|
|
Operations
Optimization
|
(232)
|
|
|
2,994
|
|
|
(3,965)
|
|
(2)
|
5,808
|
|
|
Support and
other
|
(6,341)
|
|
|
(11,014)
|
|
|
(20,148)
|
|
|
(35,940)
|
|
|
Income (loss) from
operations
|
(11,164)
|
|
|
3,858
|
|
|
(10,310)
|
|
|
(14,632)
|
|
|
Interest expense,
net
|
(3,669)
|
|
|
(3,155)
|
|
|
(10,304)
|
|
|
(9,378)
|
|
|
Other income
(expense), net
|
(525)
|
|
|
(242)
|
|
|
6,675
|
|
(3)
|
(938)
|
|
|
Income (loss) before
income taxes
|
$
|
(15,358)
|
|
|
$
|
461
|
|
|
$
|
(13,939)
|
|
|
$
|
(24,948)
|
|
|
|
|
(1)
|
Includes impairment
of multi-client data library of $1.2 million for the nine months
ended September 30, 2020.
|
(2)
|
Includes impairment
of goodwill of $4.2 million for the nine months ended September 30,
2020.
|
(3)
|
Includes amortization
of the government relief funding expected to be forgiven of $6.9
million for the nine months ended September 30, 2020.
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
Summary of Net
Revenues by Geographic Area
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
North
America
|
$
|
479
|
|
|
$
|
12,182
|
|
|
$
|
37,920
|
|
|
$
|
32,984
|
|
Latin
America
|
7,925
|
|
|
22,720
|
|
|
22,695
|
|
|
50,572
|
|
Asia
Pacific
|
3,777
|
|
|
2,744
|
|
|
15,696
|
|
|
8,287
|
|
Europe
|
3,011
|
|
|
8,335
|
|
|
12,997
|
|
|
24,850
|
|
Middle
East
|
306
|
|
|
3,899
|
|
|
2,202
|
|
|
6,364
|
|
Africa
|
344
|
|
|
2,874
|
|
|
1,939
|
|
|
7,541
|
|
Other
|
392
|
|
|
485
|
|
|
1,930
|
|
|
1,372
|
|
Total net
revenues
|
$
|
16,234
|
|
|
$
|
53,239
|
|
|
$
|
95,379
|
|
|
$
|
131,970
|
|
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
September 30,
|
|
Nine Months
Ended September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net loss
|
$
|
(16,414)
|
|
|
$
|
(3,329)
|
|
|
$
|
(23,921)
|
|
|
$
|
(32,864)
|
|
Interest expense,
net
|
3,669
|
|
|
3,155
|
|
|
10,304
|
|
|
9,378
|
|
Income tax
expense
|
1,056
|
|
|
3,790
|
|
|
9,982
|
|
|
7,916
|
|
Depreciation and
amortization expense
|
5,061
|
|
|
11,196
|
|
|
19,610
|
|
|
32,690
|
|
Impairment of
multi-client data library
|
—
|
|
|
—
|
|
|
1,167
|
|
|
—
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
4,150
|
|
|
—
|
|
Severance
expense
|
—
|
|
|
—
|
|
|
3,102
|
|
|
2,810
|
|
Amortization of
government relief funding expected to be forgiven
|
—
|
|
|
—
|
|
|
(6,923)
|
|
|
—
|
|
EBITDA excluding
non-recurring items
|
(6,628)
|
|
|
14,812
|
|
|
17,471
|
|
|
19,930
|
|
Stock appreciation
rights expense (credit)
|
58
|
|
|
732
|
|
|
(952)
|
|
|
2,742
|
|
Adjusted
EBITDA
|
$
|
(6,570)
|
|
|
$
|
15,544
|
|
|
$
|
16,519
|
|
|
$
|
22,672
|
|
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 nine months ended September 30, 2020 and 2019:
|
Three Months Ended
September 30, 2020
|
|
Three Months Ended
September 30, 2019
|
|
As
Reported
|
|
Special Items
|
|
As
Adjusted
|
|
As
Reported
|
|
Special Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
16,234
|
|
|
$
|
—
|
|
|
$
|
16,234
|
|
|
$
|
53,239
|
|
|
$
|
—
|
|
|
$
|
53,239
|
|
Cost of
sales
|
14,945
|
|
|
—
|
|
|
14,945
|
|
|
27,951
|
|
|
—
|
|
|
27,951
|
|
Gross
profit
|
1,289
|
|
|
—
|
|
|
1,289
|
|
|
25,288
|
|
|
—
|
|
|
25,288
|
|
Gross
margin
|
8
|
%
|
|
—
|
%
|
|
8
|
%
|
|
47
|
%
|
|
—
|
%
|
|
47
|
%
|
Operating
expenses
|
12,453
|
|
|
(58)
|
|
(1)
|
12,395
|
|
|
21,430
|
|
|
(732)
|
|
(1)
|
20,698
|
|
Income (loss) from
operations
|
(11,164)
|
|
|
58
|
|
|
(11,106)
|
|
|
3,858
|
|
|
732
|
|
|
4,590
|
|
Operating
margin
|
(69)
|
%
|
|
1
|
%
|
|
(68)
|
%
|
|
7
|
%
|
|
2
|
%
|
|
9
|
%
|
Interest expense,
net
|
(3,669)
|
|
|
—
|
|
|
(3,669)
|
|
|
(3,155)
|
|
|
—
|
|
|
(3,155)
|
|
Other income
(expense), net
|
(525)
|
|
|
|
|
(525)
|
|
|
(242)
|
|
|
—
|
|
|
(242)
|
|
Income (loss) before
income taxes
|
(15,358)
|
|
|
58
|
|
|
(15,300)
|
|
|
461
|
|
|
732
|
|
|
1,193
|
|
Income tax
expense
|
1,056
|
|
|
—
|
|
|
1,056
|
|
|
3,790
|
|
|
—
|
|
|
3,790
|
|
Net income
(loss)
|
(16,414)
|
|
|
58
|
|
|
(16,356)
|
|
|
(3,329)
|
|
|
732
|
|
|
(2,597)
|
|
Less: Net income
attributable to noncontrolling interest
|
(193)
|
|
|
—
|
|
|
(193)
|
|
|
(394)
|
|
|
—
|
|
|
(394)
|
|
Net income (loss)
attributable to ION
|
$
|
(16,607)
|
|
|
$
|
58
|
|
|
$
|
(16,549)
|
|
|
$
|
(3,723)
|
|
|
$
|
732
|
|
|
$
|
(2,991)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(1.16)
|
|
|
|
|
$
|
(1.16)
|
|
|
$
|
(0.26)
|
|
|
|
|
$
|
(0.21)
|
|
Diluted
|
$
|
(1.16)
|
|
|
|
|
$
|
(1.16)
|
|
|
$
|
(0.26)
|
|
|
|
|
$
|
(0.21)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
14,278
|
|
|
|
|
14,278
|
|
|
14,181
|
|
|
|
|
14,181
|
|
Diluted
|
14,278
|
|
|
|
|
14,278
|
|
|
14,181
|
|
|
|
|
14,181
|
|
|
|
(1)
|
Represents stock
appreciation rights awards expense for the three months ended
September 30, 2020 and 2019.
|
|
Nine Months Ended
September 30, 2020
|
|
Nine Months Ended
September 30, 2019
|
|
As
Reported
|
|
Special Items
|
|
As
Adjusted
|
|
As
Reported
|
|
Special Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
95,379
|
|
|
$
|
—
|
|
|
$
|
95,379
|
|
|
$
|
131,970
|
|
|
$
|
—
|
|
|
$
|
131,970
|
|
Cost of
sales
|
61,162
|
|
|
(1,167)
|
|
(1)
|
59,995
|
|
|
77,187
|
|
|
—
|
|
|
77,187
|
|
Gross
profit
|
34,217
|
|
|
1,167
|
|
|
35,384
|
|
|
54,783
|
|
|
—
|
|
|
54,783
|
|
Gross
margin
|
36
|
%
|
|
1
|
%
|
|
37
|
%
|
|
42
|
%
|
|
—
|
%
|
|
42
|
%
|
Operating
expenses
|
44,527
|
|
|
(6,301)
|
|
(2)
|
38,226
|
|
|
69,415
|
|
|
(5,552)
|
|
(4)
|
63,863
|
|
Income (loss) from
operations
|
(10,310)
|
|
|
7,468
|
|
|
(2,842)
|
|
|
(14,632)
|
|
|
5,552
|
|
|
(9,080)
|
|
Operating
margin
|
(11)
|
%
|
|
8
|
%
|
|
(3)
|
%
|
|
(11)
|
%
|
|
4
|
%
|
|
(7)
|
%
|
Interest expense,
net
|
(10,304)
|
|
|
—
|
|
|
(10,304)
|
|
|
(9,378)
|
|
|
—
|
|
|
(9,378)
|
|
Other income
(expense), net
|
6,675
|
|
|
(6,923)
|
|
(3)
|
(248)
|
|
|
(938)
|
|
|
—
|
|
|
(938)
|
|
Income (loss) before
income taxes
|
(13,939)
|
|
|
545
|
|
|
(13,394)
|
|
|
(24,948)
|
|
|
5,552
|
|
|
(19,396)
|
|
Income tax
expense
|
9,982
|
|
|
350
|
|
(1)
|
10,332
|
|
|
7,916
|
|
|
|
|
7,916
|
|
Net loss
|
(23,921)
|
|
|
195
|
|
|
(23,726)
|
|
|
(32,864)
|
|
|
5,552
|
|
|
(27,312)
|
|
Less: Net income
attributable to noncontrolling interest
|
(168)
|
|
|
—
|
|
|
(168)
|
|
|
(841)
|
|
|
—
|
|
|
(841)
|
|
Net loss attributable
to ION
|
$
|
(24,089)
|
|
|
$
|
195
|
|
|
$
|
(23,894)
|
|
|
$
|
(33,705)
|
|
|
$
|
5,552
|
|
|
$
|
(28,153)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(1.69)
|
|
|
|
|
$
|
(1.68)
|
|
|
$
|
(2.39)
|
|
|
|
|
$
|
(2.00)
|
|
Diluted
|
$
|
(1.69)
|
|
|
|
|
$
|
(1.68)
|
|
|
$
|
(2.39)
|
|
|
|
|
$
|
(2.00)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
14,255
|
|
|
|
|
14,255
|
|
|
14,104
|
|
|
|
|
14,104
|
|
Diluted
|
14,255
|
|
|
|
|
14,255
|
|
|
14,104
|
|
|
|
|
14,104
|
|
|
|
(1)
|
Represents impairment
of multi-client data library of $1.2 million and the related tax
impact of $0.4 million for the nine months ended September 30,
2020.
|
(2)
|
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 nine months ended September 30, 2020.
|
(3)
|
Represents
amortization of the government relief funding expected to be
forgiven for the nine months ended September 30, 2020.
|
(4)
|
Represents severance
expense of $2.8 million and stock appreciation right awards expense
of $2.7 million for the nine months ended September 30,
2019.
|
View original
content:http://www.prnewswire.com/news-releases/ion-reports-third-quarter-2020-results-301166725.html
SOURCE ION Geophysical Corporation