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ION reports fourth quarter and year end 2015 results
PR Newswire
4Q 15 revenues of $77.5 million and EPS (adjusted 1-for-15 stock split) of $(0.51)
Total liquidity of $124.9 million at year end

HOUSTON, Feb. 10, 2016 /PRNewswire/ -- ION Geophysical Corporation (NYSE: IO) today reported a fourth quarter 2015 net loss of $5.5 million on revenues of $77.5 million, or $(0.51) per share, compared to a net loss of $180.9 million on revenues of $136.8 million, or $(16.51) per share, in fourth quarter 2014.  Excluding special items, ION's fourth quarter 2014 adjusted net loss was $11.0 million, or $(1.01) per share.  The per share amounts for both years have been adjusted to reflect a 1-for-15 reverse stock split that went into effect on February 4, 2016.

For the full year 2015, the Company reported a net loss of $25.1 million on revenues of $221.5 million, or $(2.29) per share, compared to a net loss of $128.3 million on revenues of $509.6 million, or $(11.72) per share, in 2014.  Both periods included special items related to reductions in the accrual for the WesternGeco legal matter, in addition to restructuring and other special items.  Excluding special items, the Company's full year adjusted net loss was $118.7 million, or $(10.83) per share, compared to an adjusted net loss of $34.1 million, or $(3.12) per share, in 2014.  A reconciliation of special items for 2015 and 2014 can be found in the financial tables of this press release.

At December 31, 2015, the Company's total liquidity was $124.9 million consisting of cash and cash equivalents of $84.9 million and $40.0 million available on the Company's credit facility.  The Company generated positive net cash flows before financing activities of $0.4 million during the fourth quarter 2015, compared to $45.0 million in fourth quarter 2014.  For the full year 2015, the Company consumed net cash before financing activities of $80.1 million while generating $81.0 million of cash before financing activities in 2014. 

The Company reported a positive Adjusted EBITDA for fourth quarter 2015 of $18.4 million, compared to $25.3 million one year ago.  Full year 2015 Adjusted EBITDA was $(41.6) million, compared to $108.3 million in 2014.  A reconciliation of Adjusted EBITDA can be found in the financial tables of this press release.

Brian Hanson, the Company's President and Chief Executive Officer, commented, "As anticipated, 2015 was an enormously challenging year for ION, as it was for our peers and E&P customers.  Steadily deteriorating oil prices resulted in declining revenues, followed by industry-wide operational and financial restructurings.  Through our cost reduction initiatives during the year, we were able to appropriately scale our businesses to bring them in line with our lower revenue streams, while maintaining our core capabilities and continuing to strategically invest in commercial opportunities and research & development of new technologies.  Consistent with our asset light strategy, we are ready to scale up or down as business dictates.

"As usual, our fourth quarter was our strongest, with data library revenues up 6% over fourth quarter 2014.  In addition, we generated revenues from our newly-acquired, industry-funded MexicoSPAN program, delivering fast track data to our E&P customers in advance of Mexico's Round 1.  However, the continued softness in other areas of our business more than offset the increase in our data library revenues.

"In the data processing arena, we were recently awarded an extension to our existing multi-year contract with Pemex, the national oil company of Mexico, under which we are providing a broad range of seismic data processing for multiple offshore and onshore surveys.  Pemex plans to continue to invest in hydrocarbon exploration and production in the years ahead, and this contract extension was a solid vote of confidence in our ability to employ our differentiated technologies to deliver superior images within Pemex's required timeframes.

"We are pleased with our fourth quarter cash results, having generated a slight positive net cash flow before financing activities.  Taking into consideration our stock buybacks from our recently implemented stock repurchase program and debt repayments, we consumed only $3 million in cash.  This slight use of cash was a significant improvement from our cash burn earlier in the year and results from our cost reductions taken earlier in the year.  

"Looking ahead, we believe that the exploration landscape in 2016, as it impacts our business, will be similar to 2015.  As commodity prices continue to decline and as many of our E&P customers have not yet finalized their 2016 budgets, we expect our first quarter to be our weakest, with improvement expected in the back half of the year.  We believe our current liquidity, coupled with our cost reduction initiatives, will enable us to continue to weather the storm.  We do not expect to see early signs of recovery in the markets we serve until sometime in 2017."

FOURTH QUARTER 2015

The Company's segment revenues for the fourth quarter were as follows (in thousands):



Three Months Ended December 31,





2015


2014


% Change

Solutions


$

63,256


$

80,170


(21)%

Systems


8,536


16,469


(48)%

Software


5,674


8,411


(33)%

Ocean Bottom Services



31,790


Total


$

77,466


$

136,840


(43)%

Within the Solutions segment, new venture revenues were $13.0 million, a 41% decrease from fourth quarter 2014; data library revenues were $38.4 million, an increase of 6%; and data processing revenues were $11.9 million, a 46% decrease.  While all businesses within the Solutions segment continue to be impacted by the slowdown in exploration spending, data library revenues showed improvement year over year due to increased sales of the Company's Latin American data libraries.

The decrease in Systems segment revenues was primarily due to a reduction in new marine positioning system sales and repair and replacement revenues, attributable to reduced activity by seismic contractors that have taken vessels out of service.

The decrease in Software segment revenues was primarily due to lower Orca® licensing revenues.  While Software segment revenues declined 33% year over year, the segment generated positive gross and operating margins of 66% and 33%, respectively, during the quarter. 

The Company's Ocean Bottom Services segment was impacted by the OceanGeo crew being idle, resulting in a lack of revenue generation in fourth quarter 2015.   OceanGeo is actively pursuing several tenders for long-term work in 2016.

Consolidated gross margins were 29%, compared to adjusted gross margins of 34% in fourth quarter 2014.  Operating margins were 0%, compared to adjusted operating margins of 4% in the prior year quarter.  The decreases in gross and operating margins were driven by the significant decline in revenues across all business segments.  These decreases were partially offset by the Company's ongoing cost reduction efforts that have taken out approximately $80 million of costs on an annualized basis.

As the Company wrote its investment in INOVA Geophysical down to zero at the end of 2014, it did not record any losses on its share of the joint venture in fourth quarter 2015, compared to its share of losses, including the write-down, of $40.5 million in fourth quarter 2014.

FULL YEAR 2015

The Company's segment revenues for the full year were as follows (in thousands):



Years Ended December 31,





2015


2014


% Change

Solutions


$

157,250


$

277,904


(43)%

Systems


36,269


88,417


(59)%

Software


27,994


39,993


(30)%

Ocean Bottom Services



103,244


Total


$

221,513


$

509,558


(57)%

Within the Solutions segment, new venture revenues were $48.3 million, a 51% decrease from 2014; data library revenues were $63.3 million, a 4% decrease; and data processing revenues were $45.6 million, a 60% decrease.  While all businesses within the Solutions segment were impacted by the slowdown in exploration spending, data library revenues remained relatively stable, declining by only 4% year over year.

The decrease in Systems segment revenues was primarily due to a reduction in new marine positioning system sales and repair and replacement revenues, attributable to reduced activity by seismic contractors that have taken vessels out of service.

Software segment revenues were down primarily due to lower Orca licensing revenues and, to a lesser extent, the effects of foreign currency translation.  While Software segment revenues declined 30% from 2014, the segment generated positive gross and operating margins of 64% and 35%, respectively, during 2015. 

The Company's Ocean Bottom Services segment was impacted by the OceanGeo crew being idle, resulting in a lack of revenue generation in 2015.

Full year 2015 operating expenses, as adjusted, were $105.4 million, a 28% reduction compared to $146.8 million in 2014.  This reduction resulted from the Company's cost reduction efforts throughout 2015.

Consolidated adjusted gross margins were 5%, compared to adjusted gross margins of 34% in 2014.  Adjusted operating margins were (42)%, compared to adjusted operating margins of 5% in the prior year.  The decreases in gross and operating margins were driven by the significant decline in revenues within the Solutions and Systems segments and, to a lesser extent, the Software segment, and from the lack of revenues generated in the Company's Ocean Bottom Services segment.

The Company did not recognize any equity losses related to INOVA Geophysical in 2015, compared to equity losses of $49.5 million in 2014.

Income tax expense was $4.0 million for full year 2015, 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 11, 2016, 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 25, 2016.  To access the replay, dial (877) 660-6853 and use pass code 13628608#.

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, 2014 and its Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed during 2015.

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,


2015


2014


2015


2014

Service revenues

$

63,562



$

112,552



$

160,480



$

384,938


Product revenues

13,904



24,288



61,033



124,620


Total net revenues

77,466



136,840



221,513



509,558


Cost of services

47,582



77,930



179,816



278,627


Cost of products

6,667



20,892



33,295



68,608


Impairment of multi-client data library

399



100,100



399



100,100


Gross profit (loss)

22,818



(62,082)



8,003



62,223


Operating expenses:








Research, development and engineering

4,949



10,755



26,445



41,009


Marketing and sales

7,118



12,072



30,493



39,682


General, administrative and other operating expenses

11,131



27,843



51,697



76,177


Impairment of goodwill and intangible assets



23,284





23,284


Total operating expenses

23,198



73,954



108,635



180,152


Income (loss) from operations

(380)



(136,036)



(100,632)



(117,929)


Interest expense, net

(4,667)



(4,603)



(18,753)



(19,382)


Equity in losses of investments



(40,458)





(49,485)


Other income (expense)

240



5,890



98,275



79,860


Loss before income taxes

(4,807)



(175,207)



(21,110)



(106,936)


Income tax expense

447



6,321



4,044



20,582


Net loss

(5,254)



(181,528)



(25,154)



(127,518)


Net (income) loss attributable to noncontrolling interests

(290)



650



32



(734)


Net loss attributable to ION

$

(5,544)



$

(180,878)



$

(25,122)



$

(128,252)


Net income (loss) per share:








Basic

$

(0.51)



$

(16.51)



$

(2.29)



$

(11.72)


Diluted

$

(0.51)



$

(16.51)



$

(2.29)



$

(11.72)


Weighted average number of common shares outstanding:








Basic

10,893



10,953



10,957



10,939


Diluted

10,893



10,953



10,957



10,939


 


ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)



December 31,


2015


2014

ASSETS




Current assets:




Cash and cash equivalents

$

84,933



$

173,608


Accounts receivable, net

44,365



114,325


Unbilled receivables

19,937



22,599


Inventories

32,721



51,162


Prepaid expenses and other current assets

14,807



13,662


Total current assets

196,763



375,356


Deferred income tax asset



8,604


Property, plant, equipment and seismic rental equipment, net

72,027



69,840


Multi-client data library, net

132,237



118,669


Goodwill

26,274



27,388


Intangible assets, net

4,810



6,788


Other assets

6,305



10,612


Total assets

$

438,416



$

617,257


LIABILITIES AND EQUITY




Current liabilities:




Current maturities of long-term debt

$

7,912



$

7,649


Accounts payable

29,799



36,863


Accrued expenses

34,287



65,264


Accrued multi-client data library royalties

25,045



35,219


Deferred revenue

6,560



8,262


Total current liabilities

103,603



153,257


Long-term debt, net of current maturities

178,408



182,945


Other long-term liabilities

44,365



143,804


Total liabilities

326,376



480,006


Redeemable noncontrolling interest



1,539


Equity:




Common stock

107



110


Additional paid-in capital

894,715



889,284


Accumulated deficit

(759,531)



(734,409)


Accumulated other comprehensive loss

(14,781)



(12,807)


Treasury stock

(8,551)



(6,565)


Total stockholders' equity

111,959



135,613


Noncontrolling interests

81



99


Total equity

112,040



135,712


Total liabilities and equity

$

438,416



$

617,257


 


ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



Three Months Ended
December 31,


Years Ended
December 31,


2015


2014


2015


2014

Cash flows from operating activities:








Net loss

$

(5,254)



$

(181,528)



$

(25,154)



$

(127,518)


Adjustments to reconcile net loss to net cash provided by (used in) operating activities:








Depreciation and amortization (other than multi-client library)

6,867



6,667



26,527



27,656


Amortization of multi-client data library

11,253



18,360



35,784



64,374


Stock-based compensation expense

1,312



1,649



5,486



8,707


Equity in losses of investments



40,458





49,485


Gain on sale of Source product line







(6,522)


Gain on sale of cost method investments



(5,463)





(5,463)


Reduction of loss contingency related to legal proceedings





(101,978)



(69,557)


Impairment of goodwill and intangible assets



23,284





23,284


Impairment of multi-client data library

399



100,100



399



100,100


Write-down of excess and obsolete inventory

151



6,952



151



6,952


Write-down of receivables from INOVA Geophysical



5,510





5,510


Deferred income taxes

1,452



1,099



7,444



(437)


Change in operating assets and liabilities:








Accounts receivable

(22,933)



(29,597)



69,491



41,943


Unbilled receivables

11,467



34,798



1,630



26,762


Inventories

1,787



(9,620)



2,251



(13,892)


Accounts payable, accrued expenses and accrued royalties

13,412



26,553



(30,264)



(4,771)


Deferred revenue

1,005



(4,229)



(1,571)



(8,382)


Other assets and liabilities

(1,446)



7,811



(6,720)



11,549


Net cash provided by (used in) operating activities

19,472



42,804



(16,524)



129,780


Cash flows from investing activities:








Investment in multi-client data library

(17,406)



(10,445)



(45,558)



(67,785)


Purchase of property, plant, equipment and seismic rental equipment

(1,640)



(1,422)



(19,241)



(8,264)


Repayment of (net advances to) INOVA Geophysical







1,000


Net investment in and advances to OceanGeo B.V. prior to its consolidation







(3,074)


Net proceeds from sale of Source product line







14,394


Proceeds from sale of cost method investments



14,051





14,051


Other investing activities

1





1,263



928


Net cash used in investing activities

(19,045)



2,184



(63,536)



(48,750)


Cash flows from financing activities:








Payments under revolving line of credit







(50,000)


Borrowings under revolving line of credit







15,000


Repurchase of common stock

(1,989)





(1,989)




Payments on notes payable and long-term debt

(2,021)



(1,261)



(7,452)



(12,998)


Cost associated with issuance of debt

1



(68)



(145)



(2,194)


Acquisition of non-controlling interest







(6,000)


Proceeds from employee stock purchases and exercise of stock options

(21)



154



73



577


Other financing activities



(359)





(359)


Net cash used in financing activities

(4,030)



(1,534)



(9,513)



(55,974)


Effect of change in foreign currency exchange rates on cash and cash equivalents

297



307



898



496


Net increase (decrease) in cash and cash equivalents

(3,306)



43,761



(88,675)



25,552


Cash and cash equivalents at beginning of period

88,239



129,847



173,608



148,056


Cash and cash equivalents at end of period

$

84,933



$

173,608



$

84,933



$

173,608


 

ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES

SUMMARY OF SEGMENT INFORMATION

(In thousands)

(Unaudited)



Three Months Ended December 31,


Twelve Months Ended December 31,


2015


2014


2015


2014

Net revenues:








Solutions:








New Venture

$

12,979



$

22,150



$

48,294



$

98,649


Data Library

38,378



36,076



63,326



66,180


Total multi-client revenues

51,357



58,226



111,620



164,829


Data Processing

11,899



21,944



45,630



113,075


Total

63,256



80,170



157,250



277,904


Systems:








Towed Streamer

2,743



8,213



15,016



43,995


Other

5,793



8,256



21,253



44,422


Total

8,536



16,469



36,269



88,417


Software:








Software Systems

5,368



7,819



24,764



36,203


Services

306



592



3,230



3,790


Total

5,674



8,411



27,994



39,993


Ocean Bottom Services



31,790





103,244


Total

$

77,466



$

136,840



$

221,513



$

509,558


Gross profit (loss):








Solutions

$

20,462



$

(75,552)



$

13,508



$

(24,345)


Systems

3,404



(1,459)



10,829



29,829


Software

3,740



5,447



17,937



28,835


Ocean Bottom Services

(4,788)



9,482



(34,271)



27,904


Total

$

22,818



$

(62,082)



$

8,003



$

62,223


Gross margin:








Solutions

32

%


(94)

%


9

%


(9)

%

Systems

40

%


(9)

%


30

%


34

%

Software

66

%


65

%


64

%


72

%

Ocean Bottom Services

%


30

%


%


27

%

Total

29

%


(45)

%


4

%


12

%

Income (loss) from operations:








Solutions

$

11,850



$

(92,386)



$

(28,916)



$

(80,653)


Systems

(75)



(33,356)



(2,735)



(23,521)


Software

1,874



3,227



9,748



20,212


Ocean Bottom Services

(5,900)



6,737



(40,756)



19,070


Corporate and other

(8,129)



(20,258)



(37,973)



(53,037)


Total

$

(380)



$

(136,036)



$

(100,632)



$

(117,929)


Operating margin:








Solutions

19

%


(115)

%


(18)

%


(29)

%

Systems

(1)

%


(203)

%


(8)

%


(27)

%

Software

33

%


38

%


35

%


51

%

Ocean Bottom Services

%


21

%


%


18

%

Corporate and other

(10)

%


(15)

%


(17)

%


(10)

%

Total

%


(99)

%


(45)

%


(23)

%

 

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, gains on sale of cost method investments and the Source product line, and other non-cash charges including, without limitation, equity in losses of investments, reduction of loss contingency related to legal proceedings and the impairment and write-down of assets. 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,


2015


2014


2015


2014

Net loss

$

(5,254)



$

(181,528)



$

(25,154)



$

(127,518)


Interest expense, net

4,667



4,603



18,753



19,382


Income tax expense

447



6,321



4,044



20,582


Depreciation and amortization expense

18,120



25,027



62,311



92,030


Equity in losses of investments



40,458





49,485


Reduction of loss contingency related to legal proceedings





(101,978)



(69,557)


Write-down of multi-client data library

399



100,100



399



100,100


Impairment of goodwill and intangible assets



23,284





23,284


Write-down of receivables from INOVA Geophysical



5,510





5,510


Write-down of excess and obsolete inventory



6,952





6,952


Gain on sale of cost method investments



(5,463)





(5,463)


Gain on sale of Source product line







(6,522)


Adjusted EBITDA

$

18,379



$

25,264



$

(41,625)



$

108,265


 

Reconciliation of Restructuring and Special Items to Diluted Earnings 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 twelve months ended December 31, 2015 and the three and twelve months ended December 31, 2014.


Twelve Months Ended December 31, 2015




Restructuring and Special Items by Segment




As Reported


Solutions(a)


Software(a)


Systems(a)


Corporate and Other


As Adjusted

Net revenues

$

221,513



$



$



$



$



$

221,513


Cost of sales

213,510



(3,193)



(225)



(311)



(252)


(a)

209,529


Gross profit

8,003



3,193



225



311



252



11,984


Operating expenses

108,635



(1,102)



(223)



(1,031)



(877)


(a)

105,402


Income (loss) from operations

(100,632)



4,295



448



1,342



1,129



(93,418)


Operating margin

(45)%











(42)%


Interest expense, net

(18,753)











(18,753)


Other income (expense), net

98,275









(100,360)


(b)

(2,085)


Income tax expense

4,044









269


(c)

4,313


Net income (loss)

(25,154)



4,295



448



1,342



(99,500)



(118,569)


Net income attributable to noncontrolling interests

32









(172)



(140)


Net income (loss) applicable to common shares

$

(25,122)



$

4,295



$

448



$

1,342



$

(99,672)



$

(118,709)


Net income (loss) per share:












Basic

$

(2.29)











$

(10.83)


Diluted

$

(2.29)











$

(10.83)


Weighted average number of common shares outstanding:












Basic

10,957











10,957


Diluted

10,957











10,957







(a)

Represents severance and facility charges related to the Company's restructurings.



(b)

Primarily represents an additional partial reduction in the WesternGeco legal contingency.



(c)

As the Company maintains a valuation allowance for substantially all its deferred tax assets, a majority of these special items have no associated net tax effect.

 


Three Months Ended December 31, 2014




Restructuring and Special Items by Segment




As Reported


Solutions(1)


Systems(2)


Software(3)


Corporate and Other


As Adjusted

Net revenues

$

136,840



$



$



$



$



$

136,840


Cost of sales

198,922



(100,825)



(7,580)



(137)





90,380


Gross profit (loss)

(62,082)



100,825



7,580



137





46,460


Operating expenses

73,954



(1,915)



(24,912)



(86)



(6,487)


(4)

40,554


Income (loss) from operations

(136,036)



102,740



32,492



223



6,487



5,906


Operating margin

(99)%











4

%

Interest expense, net

(4,603)











(4,603)


Equity in losses of investments

(40,458)









34,199


(5)

(6,259)


Other income (expense), net

5,890









(5,463)


(6)

427


Income tax expense

6,321



283





26





6,630


Net income (loss)

(181,528)



102,457



32,492



197



35,223



(11,159)


Net loss attributable to noncontrolling interests

650



(504)









146


Net income (loss) applicable to common shares

$

(180,878)



$

101,953



$

32,492



$

197



$

35,223



$

(11,013)


Net income (loss) per share:












Basic

$

(16.51)











$

(1.01)


Diluted

$

(16.51)











$

(1.01)


Weighted average number of common shares outstanding:












Basic

10,953











10,953


Diluted

10,953











10,953







(1)

Primarily relates to the write-down of the multi-client data library, in addition to the impairment of intangible assets and severance-related charges within the Solutions segment.



(2)

Primarily relates to the write-down of goodwill, in addition to inventory write-downs, bad debt and severance-related charges within the Systems segment.



(3)

Represents severance-related charges within the Software segment.



(4)

Represents the write-down of receivables due from INOVA Geophysical, in addition to severance-related charges.



(5)

Represents the full write-down of Company's equity method investment in INOVA Geophysical of $30.7 million, in addition to the Company's share of charges related excess and obsolete inventory and customer bad debts of $3.5 million.



(6)

Represents a non-recurring gain on sale of a cost method investment.

 


Twelve Months Ended December 31, 2014




Restructuring and Special Items by Segment




As Reported


Solutions(a)


Systems(a)


Software(a)


Corporate and Other


As Adjusted

Net revenues

$

509,558



$



$



$



$



$

509,558


Cost of sales

447,335



(100,825)



(7,580)



(137)





338,793


Gross profit

62,223



100,825



7,580



137





170,765


Operating expenses

180,152



(1,915)



(24,912)



(86)



(6,487)


(a)

146,752


Income (loss) from operations

(117,929)



102,740



32,492



223



6,487



24,013


Operating margin

(23)%











5

%

Interest expense, net

(19,382)











(19,382)


Equity in losses of investments

(49,485)









34,199


(a)

(15,286)


Other income (expense), net

79,860





(6,522)





(75,020)


(b)

(1,682)


Income tax expense

20,582



283



(357)



26





20,534


Net income (loss)

(127,518)



102,457



26,327



197



(34,334)



(32,871)


Net income attributable to noncontrolling interests

(734)



(504)









(1,238)


Net income (loss) applicable to common shares

$

(128,252)



$

101,953



$

26,327



$

197



$

(34,334)



$

(34,109)


Net income (loss) per share:












Basic

$

(11.72)











$

(3.12)


Diluted

$

(11.72)











$

(3.12)


Weighted average number of common shares outstanding:












Basic

10,939











10,939


Diluted

10,939











10,939







(a)

Relates to the restructuring and special items impacting the fourth quarter 2014.   See the notes for the three months ended December 31, 2014 for description of these restructuring and special items.



(b)

In addition to the sale of a cost method investment of $5.5 million in the fourth quarter 2014, the Company's first quarter results were impacted by a reduction in the WesternGeco legal contingency by $69.6 million and in the second quarter a non-recurring gain on the sale of the marine source product line of $6.5 million (before tax).



 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ion-reports-fourth-quarter-and-year-end-2015-results-300218497.html

SOURCE ION Geophysical Corporation

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