HOUSTON, Feb. 8, 2017 /PRNewswire/ --
Fourth Quarter Highlights:
- Revenues of $35.4 million, a 54%
decrease over fourth quarter 2015
- Net loss of $6.5 million, or
$(0.55) per share, or an adjusted net
loss of $11.6 million, or
$(0.99) per share, compared to a net
loss of $5.5 million, or $(0.51) per share in the fourth quarter 2015
- Adjusted EBITDA of $6.6 million
compared to $18.4 million one year
ago
- Positive fourth quarter net cash flows, after excluding a
patent litigation payment and repayment under the revolving credit
facility
- Increase in backlog of multi-client and data processing
projects to $34 million at
December 31, compared to $19 million one year ago
Full Year Highlights:
- Revenues of $172.8 million, a 22%
decrease over 2015
- Net loss of $65.1 million, or
$(5.71) per share, or an adjusted net
loss of $66.1 million, or
$(5.80) per share, compared to a net
loss of $25.1 million, or
$(2.29) per share, or an adjusted net
loss of $118.7 million, or
$(10.83) per share in 2015
- Adjusted EBITDA of $10.5 million
compared to $(41.6) million in
2015
- Cash flow break-even for full year 2016, after excluding a
patent litigation payment and financing items
ION Geophysical Corporation (NYSE: IO) today reported a fourth
quarter 2016 net loss of $6.5
million, or $(0.55) per share,
on revenues of $35.4 million,
compared to a net loss of $5.5
million, or $(0.51) per share,
on revenues of $77.5 million in
fourth quarter 2015. Excluding special items, the Company's fourth
quarter 2016 adjusted net loss was $11.6
million, or $(0.99) per
share. No special items impacted fourth quarter 2015. A
reconciliation of special items to the financial results can be
found in the tables of this press release.
The Company reported an Adjusted EBITDA for fourth quarter 2016
of $6.6 million, compared to
$18.4 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.
The Company consumed $(9.9)
million of cash in fourth quarter 2016, compared to
$(3.3) million in the prior year
period. The fourth quarter 2016 net cash included a
$20.8 million payment related to the
WesternGeco patent litigation and a $5.0
million repayment under the revolving credit facility.
Excluding these items, the Company generated positive net cash
during the quarter of $15.9
million.
Brian Hanson, the Company's
President and Chief Executive Officer, commented, "As anticipated,
2016 was another challenging year for us and our industry.
Oil prices remained low and E&P spending decreased
approximately 22% from 2015 levels. While the revenue we
recognized during the fourth quarter was below our expectations, we
closed a significant amount of new deals related to our 3D
multi-client Campeche reimaging
program in partnership with Schlumberger, increasing our backlog as
we move into 2017. Our multi-client new venture programs and
data processing backlog increased to $34
million at year-end, compared to $19
million at year-end 2015. This increase in backlog
should translate to higher new venture revenues in the first
quarter 2017, compared to the first quarter 2016.
"We are now fully benefiting from the $95
million of cost reductions we have implemented over the past
two years and believe we have rightsized our business to reflect
2016 market conditions. This is evidenced by the fact the
business generated cash in the fourth quarter and was cash flow
break-even for the full year after excluding special items in both
periods related to our litigation payment to WesternGeco and our
bond exchange. We continue to believe our current liquidity,
coupled with our operational and financial restructurings, will
enable us to weather this severe industry downturn.
"We believe that the E&P industry reached the bottom of the
cycle during 2016, as we are starting to see leading indicators of
recovery. Tenders have started picking up in the OBS market
and we are seeing renewed interest in underwriting new venture
programs for the first time in two years. However, we expect
growth in seismic spending to lag behind some other segments of the
oil and gas sector.
"We believe 2017 will be a transition year for ION as the market
starts to recover later in the year, and as usual, believe the
first half will be softer than the back half. Due to our past
rightsizing initiatives, we should be able to run our business
through 2017 and position ourselves for a recovery in our area of
the industry in 2018. We have been able to maintain our
capabilities, our workforce and our R&D programs and we are
actively positioning ourselves to take full advantage of a more
normal 2018."
For the full year 2016, the Company reported a net loss of
$65.1 million, or $(5.71) per share, on revenues of $172.8 million, compared to a net loss of
$25.1 million, or $(2.29) per share, on revenues of $221.5 million in 2015. Excluding special
items in both periods, the Company's adjusted net loss was
$66.1 million, or $(5.80) per share, compared to an adjusted net
loss of $118.7 million, or
$(10.83) per share in 2015.
Full year 2016 Adjusted EBITDA was $10.5
million, compared to $(41.6)
million in 2015. For the full year 2016, the Company
consumed net cash of $(32.3) million,
compared to $(88.7) million in
2015. The full year 2016 net cash included a
$21.7 million payment related to the
second quarter bond exchange and related fees, the fourth quarter
patent litigation payment of $20.8
million and net borrowings of $10.0
million under the revolving credit facility. Excluding
these items, the Company's net cash was slightly positive for the
year.
The Company's cash balance, excluding borrowings under the
revolving credit facility at December 31,
2016, was $42.7 million.
The Company had outstanding borrowings of $10.0 million and $15.2
million of remaining availability on its maximum
$40.0 million revolving credit
facility at December 31, 2016.
The remaining available amount has been reduced due to a decline in
the eligible receivables that collateralize the facility.
FOURTH QUARTER 2016
The Company's segment revenues for the fourth quarter were as
follows (in thousands):
|
|
Three Months Ended
December 31,
|
|
|
|
|
2016
|
|
2015
|
|
% Change
|
E&P Technology
& Services
|
|
$
|
25,216
|
|
|
$
|
63,256
|
|
|
(60)
|
%
|
E&P Operations
Optimization
|
|
10,153
|
|
|
14,210
|
|
|
(29)
|
%
|
Ocean Bottom
Services
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
$
|
35,369
|
|
|
$
|
77,466
|
|
|
(54)
|
%
|
Within the E&P Technology & Services segment, new
venture revenues were $11.1 million,
a 15% decrease from fourth quarter 2015; data library revenues were
$7.9 million, a 79% decrease; and
Imaging Services revenues were $6.2
million, a 48% decrease. All businesses within the
E&P Technology & Services segment continue to be impacted
by the slowdown in exploration spending.
Within the E&P Operations Optimization segment, Devices
revenues were $6.1 million, a 29%
decrease from fourth quarter 2015. Devices continues to be
impacted by reduced seismic contractor activity. Optimization
Software & Services revenues were $4.1
million, a 28% decrease from fourth quarter 2015, primarily
due to lower Orca® licensing revenues, which were the
result of vessels being taken out of service and, to a lesser
extent, the effects of foreign currency.
The Ocean Bottom Services (OBS) segment contributed no revenues
during the fourth quarter as its crew and vessels have been idle
since completion of a survey offshore Nigeria in the third quarter 2016.
The crew and vessels have since been cold-stacked, significantly
reducing the ongoing carrying costs, while OceanGeo actively
pursues tenders for long-term work in 2017.
Consolidated gross margin was 24%, compared to 29% in fourth
quarter 2015. Gross margin in the E&P Technology &
Services declined to 20% and E&P Operations Optimization
declined to 50% during the fourth quarter 2016. The decline
in gross margin was the result of a decrease in revenues, partially
offset by savings from the Company's previous cost cutting
initiatives. Ocean Bottom Services had no revenues in both
periods, resulting in no gross margin.
Consolidated operating expenses were $16.7 million, down 28% from $23.2 million in fourth quarter 2015.
Operating margin was (24)%, compared to 0% in the prior year
quarter. Similar to gross margin, the decline in operating
margin was the result of a decrease in revenues, partially offset
by savings from the Company's previous cost cutting
initiatives.
The fourth quarter 2016 tax benefit of $1.4 million was the result of charges between
affiliates which provided for additional tax deductible expenses in
a non-US business.
FULL YEAR 2016
The Company's segment revenues for the full year were as follows
(in thousands):
|
|
Years Ended December
31,
|
|
|
|
|
2016
|
|
2015
|
|
% Change
|
E&P Technology
& Services
|
|
$
|
92,889
|
|
|
$
|
157,250
|
|
|
(41)
|
%
|
E&P Operations
Optimization
|
|
43,502
|
|
|
64,263
|
|
|
(32)
|
%
|
Ocean Bottom
Services
|
|
36,417
|
|
|
—
|
|
|
100
|
%
|
Total
|
|
$
|
172,808
|
|
|
$
|
221,513
|
|
|
(22)
|
%
|
Within the E&P Technology & Services segment, new
venture revenues were $27.4 million,
a 43% decrease from 2015; data library revenues were $40.0 million, a 37% decrease; and Imaging
Services revenues were $25.5 million,
a 44% decrease. All businesses within the E&P Technology
& Services segment continue to be impacted by the slowdown in
exploration spending.
Within the E&P Operations Optimization segment, Devices
revenues, comprised primarily of repair and replacement revenues,
were $26.7 million, a 26% decrease
from 2015. Optimization Software & Services revenues were
$16.8 million, a 40% decrease from
2015, primarily due to lower Orca licensing revenues and, to a
lesser extent, the effects of foreign currency.
The OBS segment was positively impacted by the Company's OBS
crew going back to work during the second and third quarters of
2016, whereas the crew was idle throughout all of 2015.
Consolidated gross margin was 21%, compared to 4% in 2015.
The Ocean Bottom Services gross margin improved to 26%, while the
E&P Technology & Services gross margin declined to 5% and
E&P Operations Optimization declined to 50% during 2016.
The margin improvement in Ocean Bottom Services was the result of
the crew going back to work in 2016, while declines within the
other segments were the result of revenue decreases, which more
than offset the savings from prior cost cutting
initiatives.
Consolidated operating expenses were $79.2 million, down 27% from $108.6 million in 2015. Operating margin
was (25)%, compared to (45)% in the prior year. The decrease
in operating expenses due to the Company's cost reduction efforts
had a positive impact on operating margin, more than offsetting the
impact from the decline in revenues.
Income tax expense was $4.4
million for full year 2016, related to income from the
Company's non-U.S. businesses. This foreign tax expense has
not been offset by the tax benefits on losses within the U.S. and
other jurisdictions, from which the Company cannot currently
benefit, resulting in an income tax expense on a consolidated
pre-tax loss.
CONFERENCE CALL
The Company has scheduled a conference call for Thursday, February 9, 2017, at 10:00 a.m. Eastern Time that will include a slide
presentation to be posted in the Investor Relations section of the
ION website by 9:00 a.m. Eastern
Time. To participate in the conference call, dial
(877) 407-0672 at least 10 minutes before the call begins and ask
for the ION conference call. A replay of the call will be
available approximately two hours after the live broadcast ends and
will be accessible until February 23,
2017. To access the replay, dial (877) 660-6853 and use pass
code 13652933#.
Investors, analysts and the general public will also have the
opportunity to listen to the conference call live over the Internet
by visiting www.iongeo.com. An archive of the webcast will be
available shortly after the call on the Company's website.
About ION
ION is a leading provider of technology-driven solutions to the
global oil & gas industry. ION's offerings are designed
to help companies reduce risk and optimize assets throughout the
E&P lifecycle. For more information, visit www.iongeo.com.
Contact
Steve Bate
Executive Vice President and Chief Financial Officer
+1.281.552.3011
The information included 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
future sales, earnings and market growth, timing of sales, future
liquidity and cash levels, future estimated revenues and earnings,
sales expected to result from backlog, benefits expected to result
from OceanGeo, expected outcome of litigation 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 risks associated with pending
and future litigation, including the risk that the Company does not
prevail in its appeal of the judgment in the lawsuit with
WesternGeco and that the ultimate outcome of the lawsuit could have
a material adverse effect on the Company's financial results and
liquidity; the timing and development of the Company's products and
services and market acceptance of the Company's new and revised
product offerings; the performance of OceanGeo; the Company's level
and terms of indebtedness; competitors' product offerings and
pricing pressures resulting therefrom; the relatively small number
of customers that the Company currently relies upon; the fact
that a significant portion of the Company's revenues
is derived from foreign sales; that sources of capital may not
prove adequate; the Company's inability to produce products to
preserve and increase market share; collection of receivables; and
technological and marketplace changes affecting the Company's
product lines. Additional risk factors, which could affect
actual results, are disclosed by the Company from time to time in
its filings with the Securities and Exchange Commission ("SEC"),
including its Annual Report on Form 10-K for the year ended
December 31, 2015 and its Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K filed during
2016.
Tables to follow
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands,
except per share data)
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Service
revenues
|
$
|
26,140
|
|
|
$
|
63,562
|
|
|
$
|
130,640
|
|
|
$
|
160,480
|
|
Product
revenues
|
9,229
|
|
|
13,904
|
|
|
42,168
|
|
|
61,033
|
|
Total net
revenues
|
35,369
|
|
|
77,466
|
|
|
172,808
|
|
|
221,513
|
|
Cost of
services
|
22,057
|
|
|
47,582
|
|
|
115,763
|
|
|
179,816
|
|
Cost of
products
|
4,968
|
|
|
6,667
|
|
|
21,013
|
|
|
33,295
|
|
Impairment of
multi-client data library
|
—
|
|
|
399
|
|
|
—
|
|
|
399
|
|
Gross
profit
|
8,344
|
|
|
22,818
|
|
|
36,032
|
|
|
8,003
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research, development
and engineering
|
3,232
|
|
|
4,949
|
|
|
17,833
|
|
|
26,445
|
|
Marketing and
sales
|
3,997
|
|
|
7,118
|
|
|
17,371
|
|
|
30,493
|
|
General,
administrative and other operating expenses
|
9,433
|
|
|
11,131
|
|
|
43,999
|
|
|
51,697
|
|
Total operating
expenses
|
16,662
|
|
|
23,198
|
|
|
79,203
|
|
|
108,635
|
|
Loss from
operations
|
(8,318)
|
|
|
(380)
|
|
|
(43,171)
|
|
|
(100,632)
|
|
Interest expense,
net
|
(4,442)
|
|
|
(4,667)
|
|
|
(18,485)
|
|
|
(18,753)
|
|
Other
income
|
4,974
|
|
|
240
|
|
|
1,350
|
|
|
98,275
|
|
Loss before income
taxes
|
(7,786)
|
|
|
(4,807)
|
|
|
(60,306)
|
|
|
(21,110)
|
|
Income tax expense
(benefit)
|
(1,444)
|
|
|
447
|
|
|
4,421
|
|
|
4,044
|
|
Net loss
|
(6,342)
|
|
|
(5,254)
|
|
|
(64,727)
|
|
|
(25,154)
|
|
Net (income) loss
attributable to noncontrolling interests
|
(149)
|
|
|
(290)
|
|
|
(421)
|
|
|
32
|
|
Net loss attributable
to ION
|
$
|
(6,491)
|
|
|
$
|
(5,544)
|
|
|
$
|
(65,148)
|
|
|
$
|
(25,122)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.55)
|
|
|
$
|
(0.51)
|
|
|
$
|
(5.71)
|
|
|
$
|
(2.29)
|
|
Diluted
|
$
|
(0.55)
|
|
|
$
|
(0.51)
|
|
|
$
|
(5.71)
|
|
|
$
|
(2.29)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
11,792
|
|
|
10,893
|
|
|
11,400
|
|
|
10,957
|
|
Diluted
|
11,792
|
|
|
10,893
|
|
|
11,400
|
|
|
10,957
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(In
thousands)
(Unaudited)
|
|
|
December
31,
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
52,652
|
|
|
$
|
84,933
|
|
Accounts receivable,
net
|
20,770
|
|
|
44,365
|
|
Unbilled
receivables
|
13,415
|
|
|
19,937
|
|
Inventories
|
15,241
|
|
|
32,721
|
|
Prepaid expenses and
other current assets
|
9,559
|
|
|
14,807
|
|
Total current
assets
|
111,637
|
|
|
196,763
|
|
Property, plant,
equipment and seismic rental equipment, net
|
67,488
|
|
|
72,027
|
|
Multi-client data
library, net
|
105,935
|
|
|
132,237
|
|
Goodwill
|
22,208
|
|
|
26,274
|
|
Intangible assets,
net
|
3,103
|
|
|
4,810
|
|
Other
assets
|
2,845
|
|
|
2,977
|
|
Total
assets
|
$
|
313,216
|
|
|
$
|
435,088
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
|
14,581
|
|
|
$
|
7,912
|
|
Accounts
payable
|
26,889
|
|
|
29,799
|
|
Accrued
expenses
|
26,240
|
|
|
34,287
|
|
Accrued multi-client
data library royalties
|
23,663
|
|
|
25,045
|
|
Deferred
revenue
|
3,709
|
|
|
6,560
|
|
Total current
liabilities
|
95,082
|
|
|
103,603
|
|
Long-term debt, net
of current maturities
|
144,209
|
|
|
175,080
|
|
Other long-term
liabilities
|
20,527
|
|
|
44,365
|
|
Total
liabilities
|
259,818
|
|
|
323,048
|
|
Equity:
|
|
|
|
Common
stock
|
118
|
|
|
107
|
|
Additional paid-in
capital
|
899,198
|
|
|
894,715
|
|
Accumulated
deficit
|
(824,679)
|
|
|
(759,531)
|
|
Accumulated other
comprehensive loss
|
(21,748)
|
|
|
(14,781)
|
|
Treasury
stock
|
—
|
|
|
(8,551)
|
|
Total stockholders'
equity
|
52,889
|
|
|
111,959
|
|
Noncontrolling
interests
|
509
|
|
|
81
|
|
Total
equity
|
53,398
|
|
|
112,040
|
|
Total liabilities and
equity
|
$
|
313,216
|
|
|
$
|
435,088
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
|
|
Three Months
Ended December 31,
|
|
Years Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(6,342)
|
|
|
$
|
(5,254)
|
|
|
$
|
(64,727)
|
|
|
$
|
(25,154)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization (other than multi-client library)
|
4,951
|
|
|
6,867
|
|
|
21,975
|
|
|
26,527
|
|
Amortization of
multi-client data library
|
10,174
|
|
|
11,253
|
|
|
33,335
|
|
|
35,784
|
|
Stock-based
compensation expense
|
755
|
|
|
1,312
|
|
|
3,267
|
|
|
5,486
|
|
Reduction of loss
contingency related to legal proceedings
|
(1,168)
|
|
|
—
|
|
|
(1,168)
|
|
|
(101,978)
|
|
Impairment of
multi-client data library
|
—
|
|
|
399
|
|
|
—
|
|
|
399
|
|
Loss on bond
exchange
|
—
|
|
|
—
|
|
|
2,182
|
|
|
—
|
|
Write-down of excess
and obsolete inventory
|
429
|
|
|
151
|
|
|
429
|
|
|
151
|
|
Deferred income
taxes
|
(2,212)
|
|
|
1,452
|
|
|
(1,181)
|
|
|
7,444
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
11,101
|
|
|
(22,933)
|
|
|
20,426
|
|
|
69,491
|
|
Unbilled
receivables
|
10,254
|
|
|
11,467
|
|
|
6,543
|
|
|
1,630
|
|
Inventories
|
(62)
|
|
|
1,787
|
|
|
2,312
|
|
|
2,251
|
|
Accounts payable,
accrued expenses and accrued royalties
|
(8,466)
|
|
|
13,412
|
|
|
(5,085)
|
|
|
(30,264)
|
|
Deferred
revenue
|
(656)
|
|
|
1,005
|
|
|
(2,759)
|
|
|
(1,571)
|
|
Other assets and
liabilities
|
(20,419)
|
|
|
(1,446)
|
|
|
(13,978)
|
|
|
(6,720)
|
|
Net cash provided by
(used in) operating activities
|
(1,661)
|
|
|
19,472
|
|
|
1,571
|
|
|
(16,524)
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Investment in
multi-client data library
|
(3,283)
|
|
|
(17,406)
|
|
|
(14,884)
|
|
|
(45,558)
|
|
Purchase of property,
plant, equipment and seismic rental equipment
|
(921)
|
|
|
(1,640)
|
|
|
(1,488)
|
|
|
(19,241)
|
|
Proceeds from sale of
cost method investments
|
2,698
|
|
|
—
|
|
|
2,698
|
|
|
—
|
|
Other investing
activities
|
30
|
|
|
1
|
|
|
30
|
|
|
1,263
|
|
Net cash used in
investing activities
|
(1,476)
|
|
|
(19,045)
|
|
|
(13,644)
|
|
|
(63,536)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Borrowings under
revolving line of credit
|
—
|
|
|
—
|
|
|
15,000
|
|
|
—
|
|
Repayments under
revolving line of credit
|
(5,000)
|
|
|
—
|
|
|
(5,000)
|
|
|
—
|
|
Payments on notes
payable and long-term debt
|
(1,908)
|
|
|
(2,021)
|
|
|
(8,634)
|
|
|
(7,452)
|
|
Cost associated with
issuance of debt
|
(106)
|
|
|
—
|
|
|
(6,744)
|
|
|
(145)
|
|
Repurchase of common
stock
|
—
|
|
|
(1,989)
|
|
|
(964)
|
|
|
(1,989)
|
|
Payments to
repurchase bonds
|
—
|
|
|
—
|
|
|
(15,000)
|
|
|
—
|
|
Other financing
activities
|
(265)
|
|
|
(20)
|
|
|
(252)
|
|
|
73
|
|
Net cash used in
financing activities
|
(7,279)
|
|
|
(4,030)
|
|
|
(21,594)
|
|
|
(9,513)
|
|
Effect of change in
foreign currency exchange rates on cash and cash
equivalents
|
532
|
|
|
297
|
|
|
1,386
|
|
|
898
|
|
Net decrease in cash
and cash equivalents
|
(9,884)
|
|
|
(3,306)
|
|
|
(32,281)
|
|
|
(88,675)
|
|
Cash and cash
equivalents at beginning of period
|
62,536
|
|
|
88,239
|
|
|
84,933
|
|
|
173,608
|
|
Cash and cash
equivalents at end of period
|
$
|
52,652
|
|
|
$
|
84,933
|
|
|
$
|
52,652
|
|
|
$
|
84,933
|
|
ION GEOPHYSICAL
CORPORATION AND SUBSIDIARIES
SUMMARY OF SEGMENT
INFORMATION
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
revenues:
|
|
|
|
|
|
|
|
E&P Technology
& Services:
|
|
|
|
|
|
|
|
New
Venture
|
$
|
11,084
|
|
|
$
|
12,979
|
|
|
$
|
27,362
|
|
|
$
|
48,294
|
|
Data
Library
|
7,932
|
|
|
38,378
|
|
|
39,989
|
|
|
63,326
|
|
Total multi-client
revenues
|
19,016
|
|
|
51,357
|
|
|
67,351
|
|
|
111,620
|
|
Imaging
Services
|
6,200
|
|
|
11,899
|
|
|
25,538
|
|
|
45,630
|
|
Total
|
25,216
|
|
|
63,256
|
|
|
92,889
|
|
|
157,250
|
|
E&P Operations
Optimization:
|
|
|
|
|
|
|
|
Devices
|
6,082
|
|
|
8,536
|
|
|
26,746
|
|
|
36,269
|
|
Optimization Software
& Services
|
4,071
|
|
|
5,674
|
|
|
16,756
|
|
|
27,994
|
|
Total
|
10,153
|
|
|
14,210
|
|
|
43,502
|
|
|
64,263
|
|
Ocean Bottom
Services
|
—
|
|
|
—
|
|
|
36,417
|
|
|
—
|
|
Total
|
$
|
35,369
|
|
|
$
|
77,466
|
|
|
$
|
172,808
|
|
|
$
|
221,513
|
|
Gross profit
(loss):
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
$
|
5,126
|
|
|
$
|
20,462
|
|
|
$
|
4,708
|
|
|
$
|
13,508
|
|
E&P Operations
Optimization
|
5,098
|
|
|
8,024
|
|
|
21,745
|
|
|
33,995
|
|
Ocean Bottom
Services
|
(1,880)
|
|
|
(5,668)
|
|
|
9,579
|
|
|
(39,500)
|
|
Total
|
$
|
8,344
|
|
|
$
|
22,818
|
|
|
$
|
36,032
|
|
|
$
|
8,003
|
|
Gross
margin:
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
20
|
%
|
|
32
|
%
|
|
5
|
%
|
|
9
|
%
|
E&P Operations
Optimization
|
50
|
%
|
|
56
|
%
|
|
50
|
%
|
|
53
|
%
|
Ocean Bottom
Services
|
—
|
%
|
|
—
|
%
|
|
26
|
%
|
|
—
|
%
|
Total
|
24
|
%
|
|
29
|
%
|
|
21
|
%
|
|
4
|
%
|
Income (loss) from
operations:
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
$
|
421
|
|
|
$
|
12,460
|
|
|
$
|
(16,446)
|
|
|
$
|
(24,941)
|
|
E&P Operations
Optimization
|
2,490
|
|
|
4,345
|
|
|
9,652
|
|
|
20,131
|
|
Ocean Bottom
Services
|
(3,809)
|
|
|
(8,623)
|
|
|
(1,756)
|
|
|
(55,080)
|
|
Support and
other
|
(7,420)
|
|
|
(8,562)
|
|
|
(34,621)
|
|
|
(40,742)
|
|
Total
|
$
|
(8,318)
|
|
|
$
|
(380)
|
|
|
$
|
(43,171)
|
|
|
$
|
(100,632)
|
|
Operating
margin:
|
|
|
|
|
|
|
|
E&P Technology
& Services
|
2
|
%
|
|
20
|
%
|
|
(18)%
|
|
|
(16)%
|
|
E&P Operations
Optimization
|
25
|
%
|
|
31
|
%
|
|
22
|
%
|
|
31
|
%
|
Ocean Bottom
Services
|
—
|
%
|
|
—
|
%
|
|
(5)%
|
|
|
—
|
%
|
Support and
other
|
(21)%
|
|
|
(11)%
|
|
|
(20)%
|
|
|
(18)%
|
|
Total
|
(24)%
|
|
|
—
|
%
|
|
(25)%
|
|
|
(45)%
|
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIES
Reconciliation of Adjusted EBITDA to Net
Loss
(Non-GAAP Measure)
(In
thousands)
(Unaudited)
The term Adjusted EBITDA represents net income (loss) before
interest expense, interest income, income taxes, depreciation and
amortization, and other non-cash charges including, without
limitation, reduction of loss contingency related to legal
proceedings, loss on extinguishment of debt and previously reserved
amounts due from the INOVA joint venture. Adjusted EBITDA is
not a measure 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, Adjusted EBITDA may not be comparable to other
similarly titled measures of other companies. The Company has
included Adjusted EBITDA as a supplemental disclosure because its
management believes that Adjusted EBITDA provides useful
information regarding our ability to service debt and to fund
capital expenditures and provides investors a helpful measure for
comparing its operating performance with the performance of other
companies that have different financing and capital structures or
tax rates.
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net loss
|
$
|
(6,342)
|
|
|
$
|
(5,254)
|
|
|
$
|
(64,727)
|
|
|
$
|
(25,154)
|
|
Interest expense,
net
|
4,442
|
|
|
4,667
|
|
|
18,485
|
|
|
18,753
|
|
Income tax expense
(benefit)
|
(1,444)
|
|
|
447
|
|
|
4,421
|
|
|
4,044
|
|
Depreciation and
amortization expense
|
15,125
|
|
|
18,120
|
|
|
55,310
|
|
|
62,311
|
|
Reduction of loss
contingency related to legal proceedings
|
(1,168)
|
|
|
—
|
|
|
(1,168)
|
|
|
(101,978)
|
|
Write-down of
multi-client data library
|
—
|
|
|
399
|
|
|
—
|
|
|
399
|
|
Loss on bond
exchange
|
—
|
|
|
—
|
|
|
2,182
|
|
|
—
|
|
Recovery of INOVA bad
debts
|
(3,983)
|
|
|
—
|
|
|
(3,983)
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
6,630
|
|
|
$
|
18,379
|
|
|
$
|
10,520
|
|
|
$
|
(41,625)
|
|
ION GEOPHYSICAL CORPORATION AND
SUBSIDIARIES
Reconciliation of Special Items to Diluted
Income (Loss) per Share
(Non-GAAP Measure)
(In
thousands, except per share data)
(Unaudited)
The financial results are reported in accordance with GAAP.
However, management believes that certain non-GAAP performance
measures may provide users of this financial information,
additional meaningful comparisons between current results and
results in prior operating periods. One such non-GAAP financial
measure is income (loss) from operations or net income (loss)
excluding certain charges or amounts. This adjusted income (loss)
amount is not a measure of financial performance under GAAP.
Accordingly, it should not be considered as a substitute for income
(loss) from operations, net income (loss) or other income data
prepared in accordance with GAAP. See the table below for
supplemental financial data and the corresponding reconciliation to
GAAP financials for the three and twelve months ended December 31, 2016 and the twelve months ended
December 31, 2015.
|
Three Months Ended
December 31, 2016
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
35,369
|
|
|
$
|
—
|
|
|
$
|
35,369
|
|
Cost of
sales
|
27,025
|
|
|
—
|
|
|
27,025
|
|
Gross
profit
|
8,344
|
|
|
—
|
|
|
8,344
|
|
Operating
expenses
|
16,662
|
|
|
—
|
|
|
16,662
|
|
Loss from
operations
|
(8,318)
|
|
|
—
|
|
|
(8,318)
|
|
Interest expense,
net
|
(4,442)
|
|
|
—
|
|
|
(4,442)
|
|
Other income
(expense), net
|
4,974
|
|
|
(5,151)
|
|
(1)
|
(177)
|
|
Income tax expense
(benefit)
|
(1,444)
|
|
|
—
|
|
|
(1,444)
|
|
Net loss
|
(6,342)
|
|
|
(5,151)
|
|
|
(11,493)
|
|
Net income
attributable to noncontrolling interests
|
(149)
|
|
|
—
|
|
|
(149)
|
|
Net loss applicable
to ION
|
$
|
(6,491)
|
|
|
$
|
(5,151)
|
|
|
$
|
(11,642)
|
|
Net loss per
share:
|
|
|
|
|
|
Basic
|
$
|
(0.55)
|
|
|
|
|
$
|
(0.99)
|
|
Diluted
|
$
|
(0.55)
|
|
|
|
|
$
|
(0.99)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
11,792
|
|
|
|
|
11,792
|
|
Diluted
|
11,792
|
|
|
|
|
11,792
|
|
|
Twelve Months
Ended December 31, 2016
|
|
Twelve Months
Ended December 31, 2015
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Net
revenues
|
$
|
172,808
|
|
|
$
|
—
|
|
|
$
|
172,808
|
|
|
$
|
221,513
|
|
|
$
|
—
|
|
|
$
|
221,513
|
|
Cost of
sales
|
136,776
|
|
|
(1,077)
|
|
(2)
|
135,699
|
|
|
213,510
|
|
|
(3,981)
|
|
(4)
|
209,529
|
|
Gross
profit
|
36,032
|
|
|
1,077
|
|
|
37,109
|
|
|
8,003
|
|
|
3,981
|
|
|
11,984
|
|
Operating
expenses
|
79,203
|
|
|
(932)
|
|
(2)
|
78,271
|
|
|
108,635
|
|
|
(3,233)
|
|
(4)
|
105,402
|
|
Loss from
operations
|
(43,171)
|
|
|
2,009
|
|
|
(41,162)
|
|
|
(100,632)
|
|
|
7,214
|
|
|
(93,418)
|
|
Interest expense,
net
|
(18,485)
|
|
|
—
|
|
|
(18,485)
|
|
|
(18,753)
|
|
|
—
|
|
|
(18,753)
|
|
Other income
(expense), net
|
1,350
|
|
|
(2,969)
|
|
(3)
|
(1,619)
|
|
|
98,275
|
|
|
(100,360)
|
|
(5)
|
(2,085)
|
|
Income tax
expense
|
4,421
|
|
|
—
|
|
|
4,421
|
|
|
4,044
|
|
|
269
|
|
|
4,313
|
|
Net loss
|
(64,727)
|
|
|
(960)
|
|
|
(65,687)
|
|
|
(25,154)
|
|
|
(93,415)
|
|
|
(118,569)
|
|
Net (income) loss
attributable to noncontrolling interests
|
(421)
|
|
|
—
|
|
|
(421)
|
|
|
32
|
|
|
(172)
|
|
|
(140)
|
|
Net loss applicable
to ION
|
$
|
(65,148)
|
|
|
$
|
(960)
|
|
|
$
|
(66,108)
|
|
|
$
|
(25,122)
|
|
|
$
|
(93,587)
|
|
|
$
|
(118,709)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(5.71)
|
|
|
|
|
$
|
(5.80)
|
|
|
$
|
(2.29)
|
|
|
|
|
$
|
(10.83)
|
|
Diluted
|
$
|
(5.71)
|
|
|
|
|
$
|
(5.80)
|
|
|
$
|
(2.29)
|
|
|
|
|
$
|
(10.83)
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
11,400
|
|
|
|
|
11,400
|
|
|
10,957
|
|
|
|
|
10,957
|
|
Diluted
|
11,400
|
|
|
|
|
11,400
|
|
|
10,957
|
|
|
|
|
10,957
|
|
|
|
|
|
|
(1)
|
Represents $1.2
million reduction in the WesternGeco legal contingency and $4.0
million recovery of INOVA bad debts
|
|
|
(2)
|
Represents severance
charges during the second quarter 2016
|
|
|
|
|
|
(3)
|
In addition to
note(1), the twelve months ended December 31, 2016
includes a $2.2 million loss on extinguishment of debt associated
with the Company's second quarter 2016 bond exchange
|
|
|
|
|
|
(4)
|
Represents severance
and facility charges related to the Company's restructurings in
2015
|
|
|
|
|
|
(5)
|
Primarily represents
an additional partial reduction in the WesternGeco legal
contingency in 2015
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ion-reports-fourth-quarter-and-year-end-2016-results-300404698.html
SOURCE ION Geophysical Corporation