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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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22-2286646
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.01 par value
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New York Stock Exchange
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Emerging growth company
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o
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Document
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Parts Into Which Incorporated
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Portions of the registrant’s definitive Proxy Statement for its Annual Meeting of Stockholders scheduled to be held on May 15, 2019, to be filed pursuant to Regulation 14A
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Part III
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Page
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PART I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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Signatures
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Index to Consolidated Financial Statements
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•
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Leverage our key technologies to create value through data capture, analysis and optimization to enhance companies’ critical decision-making abilities and returns
.
Decisions today are increasingly complex with huge amounts of data to comprehend. Companies capable of translating raw data into actionable insights gain a competitive edge and deliver superior returns. ION offerings are focused on improving E&P decision-making, enhancing reservoir management and optimizing offshore operations. E&P Technology & Services creates digital data assets and delivers services that improve decision-making, mitigate risk and maximize portfolio value for E&P companies, such as our multi-client programs that are licensed to multiple E&P companies to optimize their investment decisions. Operations Optimization develops mission-critical subscription offerings and engineering services that enable operational control and optimization offshore. Ocean Bottom Integrated Technologies integrates a variety of ION’s advanced technologies to accelerate data capture and delivery. This information enables E&P companies to enhance their reservoir decision-making and improve their returns.
|
•
|
Expand and globalize our E&P Technology & Services business
.
We seek to expand and grow our E&P Technology & Services business into new regions, with new customers and new offerings, including data processing services through our Imaging Services group and our Ventures multi-client and proprietary programs. Historically known for our 2-D programs, we entered the 3-D multi-client market in 2014 by acquiring and processing our first survey offshore Ireland. Since then, we have expanded our 3-D seismic data library considerably by purchasing existing seismic data and reimaging the data by using new data processing techniques and algorithms, such as our advanced FWI. For the foreseeable future, we expect to continue investing in research and development and computing infrastructure for our data processing business and to support our multi-client projects. We believe this focus better positions our company as a full-service technology company with an increasing proportion of revenues derived from E&P customers. In
2018
, E&P companies accounted for approximately
77%
of our total consolidated net revenues.
|
•
|
Continue investing in advanced software and equipment technology to provide next generation services and products
. We intend to continue investing in the development of new technologies for use by E&P companies. In particular, we intend to focus on the development of our next generation OBS technology, our Marlin operations optimization software, and derivative products and continued advancement of our FWI and ocean bottom nodal algorithms, with the goal of obtaining technical and market leadership in what we continue to believe are important and expanding markets. In
2018
, our total investment in research and development and engineering was equal to approximately
10%
of our total consolidated net revenues for the year.
|
•
|
Collaborate with our customers to provide products and solutions designed to meet their needs
.
A key element of our business strategy has been to understand the challenges faced by E&P companies in seismic survey planning, data acquisition, processing, and interpretation. We will continue to develop and offer technology and services that enable us to work with E&P companies to solve their unique challenges around the world. We have found collaborating with E&P companies to better understand their imaging challenges and working with them to ensure the right technologies are properly applied, is the most effective method for meeting their needs. Helping solve the most difficult challenges for our customers is an important element of our long-term business strategy, and we are implementing this partnership approach globally through local personnel in our regional organizations who understand the unique challenges in their areas. We formed an E&P Advisors group in 2015 designed to focus specifically on this element of our strategy.
|
•
|
Expand our Operations Optimization business into relevant adjacent markets.
W
hile our traditional focus for technology has been on the E&P industry, we are broadening and diversifying our software and equipment businesses into relevant adjacent markets such as offshore logistics, military and marine robotics. Adjacent markets broaden our opportunity to better monetize our return on technology investments while reducing our susceptibility to E&P cycles. We intend to derive a significant portion of revenues from these non-E&P markets over the next 5 years.
|
•
|
We leverage our innovative technologies to create value through data capture, analysis and optimization to enhance companies’ critical decision-making abilities and returns
.
Our cutting-edge data management and analysis platforms help derive insights from data we acquire to improve E&P decision-making, enhance reservoir management and optimize offshore operations. The data can be used to decide whether and how much to bid on a block, how to maximize production from a field, or how to optimize the safety and efficiency of complex maritime projects. Our operations optimization platform and imaging engine are the core underlying technology and we continually advance our complex algorithms to improve the resulting analysis.
|
•
|
We focus on higher potential return offerings and creative business models to maximize shareholder value
.
We streamlined our business and focused on the areas with the highest potential returns because we believe every dollar invested should go further. In addition, we try to structure both the project financing and payment in a way to maximize profit, such as sharing in the success of a project.
|
•
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Our “asset light” strategy enables us to avoid significant fixed costs and remain financially flexible.
We do not own a fleet of marine vessels and do not provide our own crews to acquire seismic data. We outsource seismic data acquisition activity to third parties that operate fleets of seismic vessels and equipment. This practice enables us to avoid fixed costs associated with these assets and personnel and to manage our business in a manner designed to afford us the flexibility to quickly scale up or down our capital investments based on E&P spending levels. We actively manage the costs of developing our multi-client data library business by having our customers partially pre-fund, or underwrite, the investment for any new project. Our target goal is to have a vast majority of the total cost of each new project’s data acquisition to be underwritten by our customers. We believe this conservative approach to data library investment is the most prudent way to reduce the impact of any sudden reduction in the demand for seismic data, giving us the flexibility to aggressively reduce cash outflows as we have successfully implemented in the current industry downturn.
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•
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Our global footprint and diversified portfolio approach enable us to offset regional downturns.
Conducting business around the world has been and will continue to be a key component of our strategy. This global focus and diversified portfolio approach has been helpful in minimizing the impact of any regional or country-specific slowdown for short or extended periods of time. While the traditional focus of our cutting-edge technology has been on the E&P industry, we are now broadening and diversifying our business into relevant adjacent markets such as offshore logistics, military and marine robotics. Adjacent markets broaden our opportunity to better monetize our return on technology investments while reducing our susceptibility to E&P cycles.
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•
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We have a diversified and blue chip customer base.
We provide services and products to a diverse, global customer base that includes many of the largest oil and gas and geophysical companies in the world, including National Oil Companies (“NOCs”) and International Oil Companies (“IOCs”). Over the past decade, we have made significant progress expanding our customer list and revenue sources. Whereas almost all of our revenues in the early 2000s were derived principally from seismic service providers, in
2018
, E&P companies accounted for approximately
77%
of our total consolidated net revenues.
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•
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any additional damages or adverse rulings in the WesternGeco litigation and future potential adverse effects on our financial results and liquidity;
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•
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future levels of capital expenditures of our customers for seismic activities;
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•
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future oil and gas commodity prices;
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•
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the effects of current and future worldwide economic conditions (particularly in developing countries) and demand for oil and natural gas and seismic equipment and services;
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•
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future cash needs and availability of cash to fund our operations and pay our obligations;
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•
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the effects of current and future unrest in the Middle East, North Africa and other regions;
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•
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the timing of anticipated revenues and the recognition of those revenues for financial accounting purposes;
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•
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the effects of ongoing and future industry consolidation, including, in particular, the effects of consolidation and vertical integration in the towed marine seismic streamers market;
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•
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the timing of future revenue realization of anticipated orders for multi-client survey projects and data processing work in our E&P Technology & Services segment;
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•
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future levels of our capital expenditures;
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•
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future government laws or regulations pertaining to the oil and gas industry, including trade restrictions, embargoes and sanctions imposed by the U.S. government;
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•
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future government actions that may result in the deprivation of our contractual rights, including the potential for adverse decisions by judicial or administrative bodies in foreign countries with unpredictable or corrupt judicial systems.
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expected net revenues, income from operations and net income;
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•
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expected gross margins for our services and products;
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•
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future seismic industry fundamentals, including future demand for seismic services and equipment;
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•
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future benefits to our customers to be derived from new services and products;
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•
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future benefits to be derived from our investments in technologies, joint ventures and acquired companies;
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•
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future growth rates for our services and products;
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•
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the degree and rate of future market acceptance of our new services and products;
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•
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expectations regarding E&P companies and seismic contractor end-users purchasing our more technologically-advanced services and products;
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•
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anticipated timing and success of commercialization and capabilities of services and products under development and start-up costs associated with their development;
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•
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future opportunities for new products and projected research and development expenses;
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•
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expected continued compliance with our debt financial covenants;
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•
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expectations regarding realization of deferred tax assets;
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•
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expectations regarding the impact of the U.S. Tax Cuts and Jobs Act;
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•
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anticipated results with respect to certain estimates we make for financial accounting purposes; and
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•
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compliance with the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties.
|
•
|
the supply of and demand for oil and gas;
|
•
|
the level of prices, and expectations about future prices, of oil and gas;
|
•
|
the cost of exploring for, developing, producing and delivering oil and gas;
|
•
|
the expected rates of decline for current production;
|
•
|
the discovery rates of new oil and gas reserves;
|
•
|
weather conditions, including hurricanes, that can affect oil and gas operations over a wide area, as well as less severe inclement weather that can preclude or delay seismic data acquisition;
|
•
|
domestic and worldwide economic conditions;
|
•
|
changes in government leadership, such as the change in presidency in Mexico and its impact on the Mexican economy and offshore exploration programs;
|
•
|
political instability in oil and gas producing countries;
|
•
|
technical advances affecting energy consumption;
|
•
|
government policies regarding the exploration, production and development of oil and gas reserves;
|
•
|
the ability of oil and gas producers to raise equity capital and debt financing;
|
•
|
merger and divestiture activity among oil and gas companies and seismic contractors; and
|
•
|
compliance by members of the
OPEC
and non-OPEC members such as Russia, with agreements to cut oil production.
|
•
|
we may have difficulty satisfying our obligations with respect to our outstanding debt;
|
•
|
we may have difficulty obtaining financing in the future for working capital, capital expenditures, acquisitions or other purposes;
|
•
|
we may need to use all, or a substantial portion, of our available cash flow to pay interest and principal on our debt, which will reduce the amount of money available to finance our operations and other business activities;
|
•
|
our vulnerability to general economic downturns and adverse industry conditions could increase;
|
•
|
our flexibility in planning for, or reacting to, changes in our business and in our industry in general could be limited;
|
•
|
our amount of debt and the amount we must pay to service our debt obligations could place us at a competitive disadvantage compared to our competitors that have less debt;
|
•
|
our customers may react adversely to our significant debt level and seek or develop alternative licensors or suppliers;
|
•
|
we may have insufficient funds, and our debt level may also restrict us from raising the funds necessary to repurchase all of the Notes, as defined below, tendered to us upon the occurrence of a change of control, which would constitute an event of default under the Notes; and
|
•
|
our failure to comply with the restrictive covenants in our debt instruments which, among other things, limit our ability to incur debt and sell assets, could result in an event of default that, if not cured or waived, could have a material adverse effect on our business or prospects.
|
•
|
Seismic data acquisition activities in marine ocean bottom areas are subject to the risk of downtime or reduced productivity, as well as to the risks of loss to property and injury to personnel, mechanical failures and natural disasters. In addition to losses caused by human errors and accidents, we may also become subject to losses resulting from, among other things, political instability, business interruption, strikes and weather events; and
|
•
|
Our OBS acquisition equipment and services may expose us to litigation and legal proceedings, including those related to product liability, personal injury and contract liability. We have in place insurance coverage against operating hazards, including product liability claims and personal injury claims, damage, destruction or business interruption and whenever possible, will obtain agreements from customers that limit our liability. However, we cannot provide assurance that the nature and amount of insurance will be sufficient to fully indemnify us against liabilities arising from pending and future claims or that its insurance coverage will be adequate in all circumstances or against all hazards, and that we will be able to maintain adequate insurance coverage in the future at commercially reasonable rates or on acceptable terms.
|
•
|
increased costs associated with the operation of an OBS acquisition project and the management of geographically dispersed operations;
|
•
|
Cash flows from OBS acquisition projects may be inadequate to realize the value of manufactured equipment for use in its OBS surveys;
|
•
|
risks associated with our OBS acquisition technologies, including risks that the new technology may not perform as well as we anticipate;
|
•
|
difficulties in retaining and integrating key technical, sales and marketing personnel and the possible loss of such employees and costs associated with their loss;
|
•
|
the diversion of management’s attention and other resources from other business operations and related concerns;
|
•
|
the requirement to maintain uniform standards, controls and procedures;
|
•
|
our inability to realize operating efficiencies, cost savings or other benefits that we expect from OBS operations; and
|
•
|
difficulties and delays in securing new business and customer projects.
|
•
|
incur additional indebtedness;
|
•
|
create liens;
|
•
|
pay dividends and make other distributions in respect of our capital stock;
|
•
|
redeem our capital stock;
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•
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make investments or certain other restricted payments;
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•
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sell certain kinds of assets;
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•
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enter into transactions with affiliates; and
|
•
|
effect mergers or consolidations.
|
•
|
limit our ability to plan for or react to market or economic conditions or meet capital needs or otherwise restrict our activities or business plans; and
|
•
|
adversely affect our ability to finance our operations, acquisitions, investments or strategic alliances or other capital needs or to engage in other business activities that would be in our interest.
|
•
|
future competition from more established companies entering the market;
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•
|
technology obsolescence;
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•
|
dependence upon continued growth of the market for seismic data processing;
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•
|
the rate of change in the markets for these segments’ technology and services;
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•
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further consolidation of the participants within this market;
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•
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research and development efforts not proving sufficient to keep up with changing market demands;
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•
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dependence on third-party software for inclusion in these segments’ services and products;
|
•
|
misappropriation of these segments’ technology by other companies;
|
•
|
alleged or actual infringement of intellectual property rights that could result in substantial additional costs;
|
•
|
difficulties inherent in forecasting sales for newly developed technologies or advancements in technologies;
|
•
|
recruiting, training and retaining technically skilled, experienced personnel that could increase the costs for these segments, or limit their growth; and
|
•
|
the ability to maintain traditional margins for certain of their technology or services.
|
•
|
We may not fully recover our costs of acquiring and processing seismic data through future sales. The ultimate amounts involved in these data sales are uncertain and depend on a variety of factors, many of which are beyond our control.
|
•
|
The timing of these sales is unpredictable and can vary greatly from period to period. The costs of each survey are capitalized and then amortized as a percentage of sales and/or on a straight-line basis over the expected useful life of the data. This amortization will affect our earnings and, when combined with the sporadic nature of sales, will result in increased earnings volatility.
|
•
|
Regulatory changes that affect companies’ ability to drill, either generally or in a specific location where we have acquired seismic data, could materially adversely affect the value of the seismic data contained in our library. Technology changes could also make existing data sets obsolete. Additionally, each of our individual surveys has a limited book life based on its location and oil and gas companies’ interest in prospecting for reserves in such location, so a particular survey may be subject to a significant decline in value beyond our initial estimates.
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•
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The value of our multi-client data could be significantly adversely affected if any material adverse change occurs in the general prospects for oil and gas exploration, development and production activities.
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•
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The cost estimates upon which we base our pre-commitments of funding could be wrong. The result could be losses that have a material adverse effect on our financial condition and results of operations. These pre-commitments of funding are subject to the creditworthiness of our clients. In the event that a client refuses or is unable to pay its commitment, we could incur a substantial loss on that project.
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•
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As part of our asset-light strategy, we routinely charter vessels from third-party vendors to acquire seismic data for our multi-client business. As a result, our cost to acquire our multi-client data could significantly increase if vessel charter prices rise materially.
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•
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disruption of E&P activities;
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•
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restriction on the movement and exchange of funds;
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•
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inhibition of our ability to collect advances and receivables;
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•
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enactment of additional or stricter U.S. government or international sanctions;
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•
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limitation of our access to markets for periods of time;
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•
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expropriation and nationalization of assets of our company or those of our customers;
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•
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political and economic instability, which may include armed conflict and civil disturbance;
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•
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currency fluctuations, devaluations and conversion restrictions;
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•
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confiscatory taxation or other adverse tax policies; and
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•
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governmental actions that may result in the deprivation of our contractual rights, including the potential for adverse decisions by judicial or administrative bodies in foreign countries with unpredictable or corrupt judicial systems.
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•
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operating results that vary from the expectations of securities analysts and investors;
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•
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factors influencing the levels of global oil and natural gas exploration and exploitation activities, such as the decline in crude oil prices and depressed prices for natural gas in North America or disasters such as the Deepwater Horizon incident in the Gulf of Mexico in 2010;
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•
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the operating and securities price performance of companies that investors or analysts consider comparable to us;
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•
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actions by rating agencies related to the Notes;
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•
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announcements of strategic developments, acquisitions and other material events by us or our competitors; and
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•
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changes in global financial markets and global economies and general market conditions, such as interest rates, commodity and equity prices and the value of financial assets.
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•
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authorizing the issuance of “blank check” preferred stock without any need for action by stockholders;
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•
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providing for a classified board of directors with staggered terms;
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•
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requiring supermajority stockholder voting to effect certain amendments to our certificate of incorporation and bylaws;
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•
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eliminating the ability of stockholders to call special meetings of stockholders;
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•
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prohibiting stockholder action by written consent; and
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•
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establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings.
|
Operating Facilities
|
Square
Footage |
|
Segment
|
|
Houston, Texas
|
210,000
|
|
|
Global Headquarters, E&P Technology & Services and Ocean Bottom Integrated Technologies
|
Harahan, Louisiana
|
144,000
|
|
|
Devices group within Operations Optimization
|
Chertsey, England
|
18,000
|
|
|
E&P Technology & Services
|
Edinburgh, Scotland
|
16,000
|
|
|
Optimization Software & Services group within Operations Optimization
|
|
388,000
|
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Write-down of multi-client data library
|
$
|
—
|
|
|
$
|
(2,304
|
)
|
|
$
|
—
|
|
|
$
|
(399
|
)
|
|
$
|
(100,100
|
)
|
Write-down of excess and obsolete inventory
|
$
|
(665
|
)
|
|
$
|
(398
|
)
|
|
$
|
(429
|
)
|
|
$
|
(151
|
)
|
|
$
|
(6,952
|
)
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of long-lived assets
|
$
|
(36,553
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(23,284
|
)
|
Write-down of receivables
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8,214
|
)
|
Accelerated vesting and cash exercise of stock appreciation right awards
|
$
|
(2,105
|
)
|
|
$
|
(6,141
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Reversal of (accrual for) loss contingency related to legal proceedings
|
$
|
—
|
|
|
$
|
(5,000
|
)
|
|
$
|
1,168
|
|
|
$
|
101,978
|
|
|
$
|
69,557
|
|
Gain on sale of Source product line
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,522
|
|
Gain on sale of cost method investments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,463
|
|
Recovery of INOVA bad debts
|
$
|
—
|
|
|
$
|
844
|
|
|
$
|
3,983
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loss on bond exchange
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2,182
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity in losses of INOVA investments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(49,485
|
)
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
(In thousands, except for per share data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues
|
|
$
|
180,045
|
|
|
$
|
197,554
|
|
|
$
|
172,808
|
|
|
$
|
221,513
|
|
|
$
|
509,558
|
|
Gross profit
|
|
59,620
|
|
|
75,639
|
|
|
36,032
|
|
|
8,003
|
|
|
62,223
|
|
|||||
Loss from operations
|
|
(54,272
|
)
|
|
(8,699
|
)
|
|
(43,171
|
)
|
|
(100,632
|
)
|
|
(117,929
|
)
|
|||||
Net loss applicable to common shares
|
|
(71,171
|
)
|
|
(30,242
|
)
|
|
(65,148
|
)
|
|
(25,122
|
)
|
|
(128,252
|
)
|
|||||
Net loss per basic share
|
|
$
|
(5.20
|
)
|
|
$
|
(2.55
|
)
|
|
$
|
(5.71
|
)
|
|
$
|
(2.29
|
)
|
|
$
|
(11.72
|
)
|
Net loss per diluted share
|
|
$
|
(5.20
|
)
|
|
$
|
(2.55
|
)
|
|
$
|
(5.71
|
)
|
|
$
|
(2.29
|
)
|
|
$
|
(11.72
|
)
|
Weighted average number of common shares outstanding
|
|
13,692
|
|
|
11,876
|
|
|
11,400
|
|
|
10,957
|
|
|
10,939
|
|
|||||
Weighted average number of diluted shares outstanding
|
|
13,692
|
|
|
11,876
|
|
|
11,400
|
|
|
10,957
|
|
|
10,939
|
|
|||||
Balance Sheet Data (end of year):
|
|
|
|
|
|
|
|
|
||||||||||||
Working capital
|
|
$
|
20,105
|
|
|
$
|
(8,628
|
)
|
(a)
|
$
|
16,555
|
|
|
$
|
93,160
|
|
|
$
|
222,099
|
|
Total assets
|
|
244,749
|
|
|
301,069
|
|
|
313,216
|
|
|
435,088
|
|
|
617,257
|
|
|||||
Long-term debt
(b)
|
|
121,741
|
|
|
156,744
|
|
|
158,790
|
|
|
182,992
|
|
|
190,594
|
|
|||||
Total equity
|
|
7,824
|
|
|
30,806
|
|
|
53,398
|
|
|
112,040
|
|
|
135,712
|
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment in multi-client data library
|
|
$
|
28,276
|
|
|
$
|
23,710
|
|
|
$
|
14,884
|
|
|
$
|
45,558
|
|
|
$
|
67,785
|
|
Capital expenditures
|
|
1,514
|
|
|
1,063
|
|
|
1,488
|
|
|
19,241
|
|
|
8,264
|
|
|||||
Depreciation and amortization (other than multi-client data library)
|
|
8,763
|
|
|
16,592
|
|
|
21,975
|
|
|
26,527
|
|
|
27,656
|
|
|||||
Amortization of multi-client data library
|
|
48,988
|
|
|
47,102
|
|
|
33,335
|
|
|
35,784
|
|
|
64,374
|
|
(a)
|
Working capital at December 31, 2017 is negative due to $28.5 million of Third Lien Notes (redeemed March 26, 2018) being reclassified from long-term to current.
|
(b)
|
Includes current maturities of long-term debt.
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Net revenues:
|
|
|
|
|
|
||||||
E&P Technology & Services:
|
|
|
|
|
|
||||||
New Venture
|
$
|
69,685
|
|
|
$
|
100,824
|
|
|
$
|
27,362
|
|
Data Library
|
47,095
|
|
|
40,016
|
|
|
39,989
|
|
|||
Total multi-client revenues
|
116,780
|
|
|
140,840
|
|
|
67,351
|
|
|||
Imaging Services
|
19,740
|
|
|
16,409
|
|
|
25,538
|
|
|||
Total
|
$
|
136,520
|
|
|
$
|
157,249
|
|
|
$
|
92,889
|
|
Operations Optimization:
|
|
|
|
|
|
||||||
Devices
|
$
|
22,396
|
|
|
$
|
23,610
|
|
|
$
|
26,746
|
|
Optimization Software & Services
|
21,129
|
|
|
16,695
|
|
|
16,756
|
|
|||
Total
|
$
|
43,525
|
|
|
$
|
40,305
|
|
|
$
|
43,502
|
|
Ocean Bottom Integrated Technologies
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,417
|
|
Total
|
$
|
180,045
|
|
|
$
|
197,554
|
|
|
$
|
172,808
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||||||||||||
|
As Reported
|
|
Special Items
|
|
As Adjusted
|
|
As Reported
|
|
Special Items
|
|
As Adjusted
|
|
As Reported
|
|
Special Items
|
|
As Adjusted
|
||||||||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||||||||||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
E&P Technology & Services
|
$
|
43,369
|
|
|
$
|
—
|
|
|
$
|
43,369
|
|
|
$
|
65,196
|
|
|
$
|
—
|
|
|
$
|
65,196
|
|
|
$
|
4,708
|
|
|
$
|
766
|
|
|
$
|
5,474
|
|
Operations Optimization
|
22,293
|
|
|
—
|
|
|
22,293
|
|
|
20,076
|
|
|
—
|
|
|
20,076
|
|
|
21,745
|
|
|
188
|
|
|
21,933
|
|
|||||||||
Ocean Bottom Integrated Technologies
|
(6,042
|
)
|
|
—
|
|
|
(6,042
|
)
|
|
(9,633
|
)
|
|
—
|
|
|
(9,633
|
)
|
|
9,579
|
|
|
123
|
|
|
9,702
|
|
|||||||||
Total
|
$
|
59,620
|
|
|
$
|
—
|
|
|
$
|
59,620
|
|
|
$
|
75,639
|
|
|
$
|
—
|
|
|
$
|
75,639
|
|
|
$
|
36,032
|
|
|
$
|
1,077
|
|
(d)
|
$
|
37,109
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
E&P Technology & Services
|
32
|
%
|
|
—
|
%
|
|
32
|
%
|
|
41
|
%
|
|
—
|
%
|
|
41
|
%
|
|
5
|
%
|
|
1
|
%
|
|
6
|
%
|
|||||||||
Operations Optimization
|
51
|
%
|
|
—
|
%
|
|
51
|
%
|
|
50
|
%
|
|
—
|
%
|
|
50
|
%
|
|
50
|
%
|
|
—
|
%
|
|
50
|
%
|
|||||||||
Ocean Bottom Integrated Technologies
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
27
|
%
|
|
—
|
%
|
|
27
|
%
|
|||||||||
Total
|
33
|
%
|
|
—
|
%
|
|
33
|
%
|
|
38
|
%
|
|
—
|
%
|
|
38
|
%
|
|
21
|
%
|
|
—
|
%
|
|
21
|
%
|
|||||||||
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
E&P Technology & Services
|
$
|
21,758
|
|
|
$
|
—
|
|
|
$
|
21,758
|
|
|
$
|
42,505
|
|
|
$
|
—
|
|
|
$
|
42,505
|
|
|
$
|
(16,446
|
)
|
|
$
|
1,128
|
|
|
$
|
(15,318
|
)
|
Operations Optimization
|
7,295
|
|
|
—
|
|
|
7,295
|
|
|
8,022
|
|
|
—
|
|
|
8,022
|
|
|
9,652
|
|
|
197
|
|
|
9,849
|
|
|||||||||
Ocean Bottom Integrated Technologies
|
(47,644
|
)
|
|
36,553
|
|
(a)
|
(11,091
|
)
|
|
(16,259
|
)
|
|
—
|
|
|
(16,259
|
)
|
|
(1,756
|
)
|
|
504
|
|
|
(1,252
|
)
|
|||||||||
Support and other
|
(35,681
|
)
|
|
2,105
|
|
(b)
|
(33,576
|
)
|
|
(42,967
|
)
|
|
6,141
|
|
(b)
|
(36,826
|
)
|
|
(34,621
|
)
|
|
180
|
|
|
(34,441
|
)
|
|||||||||
Total
|
$
|
(54,272
|
)
|
|
$
|
38,658
|
|
|
$
|
(15,614
|
)
|
|
$
|
(8,699
|
)
|
|
$
|
6,141
|
|
|
$
|
(2,558
|
)
|
|
$
|
(43,171
|
)
|
|
$
|
2,009
|
|
(d)
|
$
|
(41,162
|
)
|
Operating margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
E&P Technology & Services
|
16
|
%
|
|
—
|
%
|
|
16
|
%
|
|
27
|
%
|
|
—
|
%
|
|
27
|
%
|
|
(18
|
)%
|
|
2
|
%
|
|
(16
|
)%
|
|||||||||
Operations Optimization
|
17
|
%
|
|
—
|
%
|
|
17
|
%
|
|
20
|
%
|
|
—
|
%
|
|
20
|
%
|
|
22
|
%
|
|
1
|
%
|
|
23
|
%
|
|||||||||
Ocean Bottom Integrated Technologies
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(5
|
)%
|
|
2
|
%
|
|
(3
|
)%
|
|||||||||
Support and other
|
(20
|
)%
|
|
1
|
%
|
|
(19
|
)%
|
|
(22
|
)%
|
|
3
|
%
|
|
(19
|
)%
|
|
(20
|
)%
|
|
—
|
%
|
|
(20
|
)%
|
|||||||||
Total
|
(30
|
)%
|
|
21
|
%
|
|
(9
|
)%
|
|
(4
|
)%
|
|
3
|
%
|
|
(1
|
)%
|
|
(25
|
)%
|
|
1
|
%
|
|
(24
|
)%
|
|||||||||
Net income (loss) applicable to common shares
|
$
|
(71,171
|
)
|
|
$
|
38,658
|
|
|
$
|
(32,513
|
)
|
|
$
|
(30,242
|
)
|
|
$
|
11,141
|
|
(c)
|
$
|
(19,101
|
)
|
|
$
|
(65,148
|
)
|
|
$
|
(960
|
)
|
(e)
|
$
|
(66,108
|
)
|
Diluted net income (loss) per common share
|
$
|
(5.20
|
)
|
|
$
|
2.83
|
|
|
$
|
(2.37
|
)
|
|
$
|
(2.55
|
)
|
|
$
|
0.94
|
|
|
$
|
(1.61
|
)
|
|
$
|
(5.71
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(5.80
|
)
|
(a)
|
Represents a write-down of the cable-based ocean bottom acquisition technologies.
|
|||
|
|
|
|
|
(b)
|
Represents accelerated vesting and cash exercise of stock appreciation right awards.
|
|||
|
|
|
|
|
(c)
|
In addition to item (b), also impacting net loss applicable to common shares was a loss contingency accrual of $5.0 million related to legal proceedings.
|
|||
|
|
|
|
|
(d)
|
Represents severance and facility charges related to the Company’s 2016 restructuring.
|
|||
|
|
|
|
|
(e)
|
Represents a $3.9 million recovery of INOVA bad debts, partially offset by item (d).
|
|||
|
|
|
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||
|
As Reported
|
|
Special Items
|
|
As Adjusted
|
|
As Reported
|
|
Special Items
|
|
As Adjusted
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research, development and engineering
|
$
|
18,182
|
|
|
$
|
—
|
|
|
$
|
18,182
|
|
|
$
|
16,431
|
|
|
$
|
—
|
|
|
$
|
16,431
|
|
Marketing and sales
|
21,793
|
|
|
—
|
|
|
21,793
|
|
|
20,778
|
|
|
—
|
|
|
20,778
|
|
||||||
General, administrative and other operating expenses
|
37,364
|
|
|
(2,105
|
)
|
(a)
|
35,259
|
|
|
47,129
|
|
|
(6,141
|
)
|
(a)
|
40,988
|
|
||||||
Impairment of long-lived assets
|
36,553
|
|
|
(36,553
|
)
|
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total operating expenses
|
$
|
113,892
|
|
|
$
|
(38,658
|
)
|
|
$
|
75,234
|
|
|
$
|
84,338
|
|
|
$
|
(6,141
|
)
|
|
$
|
78,197
|
|
(a)
|
Represents accelerated vesting and cash exercise of stock appreciation rights awards.
|
(b)
|
Represents a write-down of the cable-based ocean bottom acquisition technologies.
|
|
Years Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Accrual for contingency related to legal proceedings (Footnote 8)
|
$
|
—
|
|
|
$
|
(5,000
|
)
|
Recovery of INOVA bad debts
|
—
|
|
|
844
|
|
||
Other income (expense)
|
(436
|
)
|
|
211
|
|
||
Total other income (expense)
|
$
|
(436
|
)
|
|
$
|
(3,945
|
)
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||
|
As Reported
|
|
Special Items
(b)
|
|
As Adjusted
|
|
As Reported
|
|
Special Items
(a)
|
|
As Adjusted
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research, development and engineering
|
$
|
16,431
|
|
|
$
|
—
|
|
|
$
|
16,431
|
|
|
$
|
17,833
|
|
|
$
|
(397
|
)
|
|
$
|
17,436
|
|
Marketing and sales
|
20,778
|
|
|
—
|
|
|
20,778
|
|
|
17,371
|
|
|
(262
|
)
|
|
17,109
|
|
||||||
General, administrative and other operating expenses
|
47,129
|
|
|
(6,141
|
)
|
|
40,988
|
|
|
43,999
|
|
|
(273
|
)
|
|
43,726
|
|
||||||
Total operating expenses
|
$
|
84,338
|
|
|
$
|
(6,141
|
)
|
|
$
|
78,197
|
|
|
$
|
79,203
|
|
|
$
|
(932
|
)
|
|
$
|
78,271
|
|
Income (loss) from operations
|
$
|
(8,699
|
)
|
|
$
|
6,141
|
|
|
$
|
(2,558
|
)
|
|
$
|
(43,171
|
)
|
|
$
|
2,009
|
|
|
$
|
(41,162
|
)
|
(a)
|
Includes severance affecting operating expenses.
|
(b)
|
Represents accelerated vesting and cash exercise of stock appreciation rights awards.
|
|
Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Reduction of (accrual for) loss contingency related to legal proceedings (Footnote 8)
|
$
|
(5,000
|
)
|
|
$
|
1,168
|
|
Recovery of INOVA bad debts
|
844
|
|
|
3,983
|
|
||
Loss on bond exchange
|
—
|
|
|
(2,182
|
)
|
||
Other expense
|
211
|
|
|
(1,619
|
)
|
||
Total other income
|
$
|
(3,945
|
)
|
|
$
|
1,350
|
|
•
|
extend the maturity date of the Credit Facility by approximately four years (from August 22, 2019 to August 16, 2023), subject to the retirement or extension of the maturity date of the Second Lien Notes, as defined below, which mature on December 15, 2021;
|
•
|
increase the maximum revolver amount by
$10 million
(from
$40 million
to
$50 million
);
|
•
|
increase the borrowing base percentage of the net orderly liquidation value as it relates to the multi-client data library (not to exceed
$28.5 million
, up from the previous maximum of
$15 million
for the multi-client data library component);
|
•
|
include the eligible billed receivables of the Mexican Subsidiary up to a maximum of
$5 million
in the borrowing base calculation and joins the Mexican Subsidiary as a borrower thereunder (with a maximum exposure of
$5 million
) and require the equity and assets of the Mexican Subsidiary to be pledged to secure obligations under the Credit Facility;
|
•
|
modify the interest rate such that the maximum interest rate remains consistent with the fixed interest rate prior to the Third Amendment (that is,
3.00%
per annum for domestic rate loans and
4.00%
per annum for LIBOR rate loans), but now lowers the range down to a minimum interest rate of
2.00%
for domestic rate loans and
3.00%
for LIBOR rate loans based on a leverage ratio for the preceding four-quarter period;
|
•
|
decrease the minimum excess borrowing availability threshold which (if the Borrowers have minimum excess borrowing availability below any such threshold) triggers the agent’s right to exercise dominion over cash and deposit accounts; and
|
•
|
modify the trigger required to test for compliance with the fixed charge coverage ratio.
|
Date
|
|
Percentage
|
2019
|
|
105.500%
|
2020
|
|
103.500%
|
2021 and thereafter
|
|
100.000%
|
Contractual Obligations
|
Total
|
|
Less Than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5 Years
|
||||||||||
Long-term and short-term debt
|
$
|
121,728
|
|
|
$
|
1,159
|
|
|
$
|
120,569
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest on long-term debt obligations
|
34,901
|
|
|
11,344
|
|
|
23,236
|
|
|
321
|
|
|
—
|
|
|||||
Equipment capital lease obligations
|
2,938
|
|
|
1,069
|
|
|
1,869
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
68,938
|
|
|
13,248
|
|
|
34,753
|
|
|
13,914
|
|
|
7,023
|
|
|||||
Purchase obligations
|
2,908
|
|
|
2,908
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
231,413
|
|
|
$
|
29,728
|
|
|
$
|
180,427
|
|
|
$
|
14,235
|
|
|
$
|
7,023
|
|
(i)
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company;
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
|
3.1
|
|
—
|
|
|
3.2
|
|
—
|
|
|
4.1
|
|
—
|
|
|
4.2
|
|
|
|
|
4.3
|
|
|
|
|
4.4
|
|
|
|
|
**10.1
|
|
—
|
|
|
**10.2
|
|
—
|
|
|
**10.3
|
|
—
|
|
|
**10.4
|
|
—
|
|
|
**10.5
|
|
—
|
|
10.6
|
|
—
|
|
|
10.7
|
|
—
|
|
|
10.8
|
|
—
|
|
|
10.9
|
|
—
|
|
|
**10.10
|
|
—
|
|
|
10.11
|
|
—
|
|
|
**10.12
|
|
—
|
|
|
10.13
|
|
—
|
|
|
10.14
|
|
—
|
|
|
10.15
|
|
—
|
|
|
10.16
|
|
—
|
|
|
**10.17
|
|
—
|
|
|
**10.18
|
|
—
|
|
|
**10.19
|
|
—
|
|
|
**10.20
|
|
—
|
|
|
**10.21
|
|
—
|
|
|
10.22
|
|
—
|
|
|
10.23
|
|
—
|
|
|
* **10.24
|
|
—
|
|
* **10.25
|
|
—
|
|
|
* **10.26
|
|
—
|
|
|
*21.1
|
|
—
|
|
|
*23.1
|
|
—
|
|
|
*24.1
|
|
—
|
|
|
*31.1
|
|
—
|
|
|
*31.2
|
|
—
|
|
|
*32.1
|
|
—
|
|
|
*32.2
|
|
—
|
|
|
*101
|
|
—
|
The following materials are formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets at December 31, 2018 and 2017, (ii) Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016, (iii) Comprehensive Income (Loss) for the years ended December 31, 2018, 2017 and 2016, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016, (v) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2018, 2017 and 2016, (vi) Footnotes to Consolidated Financial Statements and (vii) Schedule II – Valuation and Qualifying Accounts.
|
|
|
|
|
|
*
|
Filed herewith.
|
|||
**
|
Management contract or compensatory plan or arrangement.
|
(b)
|
Exhibits required by Item 601 of Regulation S-K.
|
|
Reference is made to subparagraph (a) (3) of this Item 15, which is incorporated herein by reference.
|
|
|
(c)
|
Not applicable.
|
|
|
|
ION GEOPHYSICAL CORPORATION
|
||
|
|
|
|
|
By
|
|
/s/ R. Brian Hanson
|
|
|
|
R. Brian Hanson
|
|
|
|
President and Chief Executive Officer
|
Name
|
|
Capacities
|
|
Date
|
|
|
|
||
/s/ R. BRIAN HANSON
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer) |
|
February 7, 2019
|
R. Brian Hanson
|
|
|
|
|
|
|
|
||
/s/ STEVEN A. BATE
|
|
Executive Vice President and Chief
Financial Officer (Principal Financial Officer) |
|
February 7, 2019
|
Steven A. Bate
|
|
|
|
|
|
|
|
||
/s/ SCOTT SCHWAUSCH
|
|
Vice President and Corporate Controller
(Principal Accounting Officer) |
|
February 7, 2019
|
Scott Schwausch
|
|
|
|
|
|
|
|
||
/s/ JAMES M. LAPEYRE, JR.
|
|
Chairman of the Board of Directors and Director
|
|
February 7, 2019
|
James M. Lapeyre, Jr.
|
|
|
|
|
|
|
|
||
/s/ DAVID H. BARR
|
|
Director
|
|
February 7, 2019
|
David H. Barr
|
|
|
|
|
|
|
|
||
|
|
Director
|
|
February 7, 2019
|
Zheng HuaSheng
|
|
|
|
Name
|
|
Capacities
|
|
Date
|
|
|
|
||
/s/ MICHAEL C. JENNINGS
|
|
Director
|
|
February 7, 2019
|
Michael C. Jennings
|
|
|
|
|
|
|
|
||
/s/ FRANKLIN MYERS
|
|
Director
|
|
February 7, 2019
|
Franklin Myers
|
|
|
|
|
|
|
|
||
/s/ S. JAMES NELSON, JR.
|
|
Director
|
|
February 7, 2019
|
S. James Nelson, Jr.
|
|
|
|
|
|
|
|
||
/s/ JOHN N. SEITZ
|
|
Director
|
|
February 7, 2019
|
John N. Seitz
|
|
|
|
|
|
|
|
|
Page
|
ION Geophysical Corporation and Subsidiaries:
|
|
|
Report of Independent Registered Public Accounting Firms
|
|
F-2
|
Consolidated Balance Sheets — December 31, 2018 and 2017
|
|
F-3
|
Consolidated Statements of Operations — Years ended December 31, 2018, 2017 and 2016
|
|
F-4
|
Consolidated Statements of Comprehensive Loss — Years ended December 31, 2018, 2017 and 2016
|
|
F-5
|
Consolidated Statements of Cash Flows — Years ended December 31, 2018, 2017 and 2016
|
|
F-6
|
Consolidated Statements of Stockholders’ Equity — Years ended December 31, 2018, 2017 and 2016
|
|
F-8
|
Footnotes to Consolidated Financial Statements
|
|
F-9
|
Schedule II — Valuation and Qualifying Accounts
|
|
S-1
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands, except share data)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
33,551
|
|
|
$
|
52,056
|
|
Accounts receivable, net
|
26,128
|
|
|
19,478
|
|
||
Unbilled receivables
|
44,032
|
|
|
37,304
|
|
||
Inventories, net
|
14,130
|
|
|
14,508
|
|
||
Prepaid expenses and other current assets
|
7,782
|
|
|
7,643
|
|
||
Total current assets
|
125,623
|
|
|
130,989
|
|
||
Deferred income tax asset, net
|
7,191
|
|
|
1,753
|
|
||
Property, plant, equipment and seismic rental equipment, net
|
13,041
|
|
|
52,153
|
|
||
Multi-client data library, net
|
73,544
|
|
|
89,300
|
|
||
Goodwill
|
22,915
|
|
|
24,089
|
|
||
Other assets
|
2,435
|
|
|
2,785
|
|
||
Total assets
|
$
|
244,749
|
|
|
$
|
301,069
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
2,228
|
|
|
$
|
40,024
|
|
Accounts payable
|
34,913
|
|
|
24,951
|
|
||
Accrued expenses
|
31,411
|
|
|
38,697
|
|
||
Accrued multi-client data library royalties
|
29,256
|
|
|
27,035
|
|
||
Deferred revenue
|
7,710
|
|
|
8,910
|
|
||
Total current liabilities
|
105,518
|
|
|
139,617
|
|
||
Long-term debt, net of current maturities
|
119,513
|
|
|
116,720
|
|
||
Other long-term liabilities
|
11,894
|
|
|
13,926
|
|
||
Total liabilities
|
236,925
|
|
|
270,263
|
|
||
Equity:
|
|
|
|
||||
Common stock, $0.01 par value; authorized 26,666,667 shares; outstanding 14,015,615 and 12,019,701 shares at December 31, 2018 and 2017, respectively.
|
140
|
|
|
120
|
|
||
Additional paid-in capital
|
952,626
|
|
|
903,247
|
|
||
Accumulated deficit
|
(926,092
|
)
|
|
(854,921
|
)
|
||
Accumulated other comprehensive loss
|
(20,442
|
)
|
|
(18,879
|
)
|
||
Total stockholders’ equity
|
6,232
|
|
|
29,567
|
|
||
Noncontrolling interests
|
1,592
|
|
|
1,239
|
|
||
Total equity
|
7,824
|
|
|
30,806
|
|
||
Total liabilities and equity
|
$
|
244,749
|
|
|
$
|
301,069
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Service revenues
|
$
|
139,038
|
|
|
$
|
159,410
|
|
|
$
|
130,640
|
|
Product revenues
|
41,007
|
|
|
38,144
|
|
|
42,168
|
|
|||
Total net revenues
|
180,045
|
|
|
197,554
|
|
|
172,808
|
|
|||
Cost of services
|
100,557
|
|
|
103,124
|
|
|
115,763
|
|
|||
Cost of products
|
19,868
|
|
|
18,791
|
|
|
21,013
|
|
|||
Gross profit
|
59,620
|
|
|
75,639
|
|
|
36,032
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research, development and engineering
|
18,182
|
|
|
16,431
|
|
|
17,833
|
|
|||
Marketing and sales
|
21,793
|
|
|
20,778
|
|
|
17,371
|
|
|||
General, administrative and other operating expenses
|
37,364
|
|
|
47,129
|
|
|
43,999
|
|
|||
Impairment of long-lived assets
|
36,553
|
|
|
—
|
|
|
—
|
|
|||
Total operating expenses
|
113,892
|
|
|
84,338
|
|
|
79,203
|
|
|||
Loss from operations
|
(54,272
|
)
|
|
(8,699
|
)
|
|
(43,171
|
)
|
|||
Interest expense, net
|
(12,972
|
)
|
|
(16,709
|
)
|
|
(18,485
|
)
|
|||
Other income (expense), net
|
(436
|
)
|
|
(3,945
|
)
|
|
1,350
|
|
|||
Loss before income taxes
|
(67,680
|
)
|
|
(29,353
|
)
|
|
(60,306
|
)
|
|||
Income tax expense
|
2,718
|
|
|
24
|
|
|
4,421
|
|
|||
Net loss
|
(70,398
|
)
|
|
(29,377
|
)
|
|
(64,727
|
)
|
|||
Net income attributable to noncontrolling interests
|
(773
|
)
|
|
(865
|
)
|
|
(421
|
)
|
|||
Net loss attributable to ION
|
$
|
(71,171
|
)
|
|
$
|
(30,242
|
)
|
|
$
|
(65,148
|
)
|
Net loss per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(5.20
|
)
|
|
$
|
(2.55
|
)
|
|
$
|
(5.71
|
)
|
Diluted
|
$
|
(5.20
|
)
|
|
$
|
(2.55
|
)
|
|
$
|
(5.71
|
)
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
13,692
|
|
|
11,876
|
|
|
11,400
|
|
|||
Diluted
|
13,692
|
|
|
11,876
|
|
|
11,400
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Net loss
|
$
|
(70,398
|
)
|
|
$
|
(29,377
|
)
|
|
$
|
(64,727
|
)
|
Other comprehensive income (loss), net of taxes, as appropriate:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(1,563
|
)
|
|
2,869
|
|
|
(6,967
|
)
|
|||
Comprehensive net loss
|
(71,961
|
)
|
|
(26,508
|
)
|
|
(71,694
|
)
|
|||
Comprehensive income attributable to noncontrolling interests
|
(773
|
)
|
|
(865
|
)
|
|
(421
|
)
|
|||
Comprehensive net loss attributable to ION
|
$
|
(72,734
|
)
|
|
$
|
(27,373
|
)
|
|
$
|
(72,115
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(70,398
|
)
|
|
$
|
(29,377
|
)
|
|
$
|
(64,727
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization (other than multi-client library)
|
8,763
|
|
|
16,592
|
|
|
21,975
|
|
|||
Amortization of multi-client data library
|
48,988
|
|
|
47,102
|
|
|
33,335
|
|
|||
Impairment of long-lived assets
|
36,553
|
|
|
—
|
|
|
—
|
|
|||
Impairment of multi-client data library
|
—
|
|
|
2,304
|
|
|
—
|
|
|||
Stock-based compensation expense
|
3,337
|
|
|
2,552
|
|
|
3,267
|
|
|||
Accrual (reduction) of loss contingency related to legal proceedings
|
—
|
|
|
5,000
|
|
|
(1,168
|
)
|
|||
Loss on bond exchange
|
—
|
|
|
—
|
|
|
2,182
|
|
|||
Write-down of excess and obsolete inventory
|
665
|
|
|
398
|
|
|
429
|
|
|||
Deferred income taxes
|
(6,252
|
)
|
|
(5,420
|
)
|
|
(1,181
|
)
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(7,024
|
)
|
|
1,692
|
|
|
20,426
|
|
|||
Unbilled receivables
|
(5,245
|
)
|
|
(23,947
|
)
|
|
6,543
|
|
|||
Inventories
|
(353
|
)
|
|
190
|
|
|
2,312
|
|
|||
Accounts payable, accrued expenses and accrued royalties
|
(7,600
|
)
|
|
1,443
|
|
|
(5,085
|
)
|
|||
Deferred revenue
|
(1,112
|
)
|
|
5,131
|
|
|
(2,759
|
)
|
|||
Other assets and liabilities
|
6,776
|
|
|
3,952
|
|
|
(14,556
|
)
|
|||
Net cash provided by operating activities
|
7,098
|
|
|
27,612
|
|
|
993
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Investment in multi-client data library
|
(28,276
|
)
|
|
(23,710
|
)
|
|
(14,884
|
)
|
|||
Purchase of property, plant, equipment and seismic rental equipment
|
(1,514
|
)
|
|
(1,063
|
)
|
|
(1,458
|
)
|
|||
Proceeds from sale of cost method investments
|
—
|
|
|
—
|
|
|
2,698
|
|
|||
Net cash used in investing activities
|
(29,790
|
)
|
|
(24,773
|
)
|
|
(13,644
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Borrowings under revolving line of credit
|
—
|
|
|
—
|
|
|
15,000
|
|
|||
Repayments under revolving line of credit
|
(10,000
|
)
|
|
—
|
|
|
(5,000
|
)
|
|||
Payments on notes payable and long-term debt
|
(30,807
|
)
|
|
(4,816
|
)
|
|
(23,634
|
)
|
|||
Cost associated with issuance of debt
|
(1,247
|
)
|
|
(53
|
)
|
|
(6,744
|
)
|
|||
Net proceeds from issuance of stocks
|
46,999
|
|
|
—
|
|
|
—
|
|
|||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(964
|
)
|
|||
Proceeds from employee stock purchases and exercise of stock options
|
214
|
|
|
1,619
|
|
|
—
|
|
|||
Dividend payment to noncontrolling interest
|
(200
|
)
|
|
(100
|
)
|
|
—
|
|
|||
Other financing activities
|
(1,151
|
)
|
|
(243
|
)
|
|
(252
|
)
|
|||
Net cash provided by (used in) financing activities
|
3,808
|
|
|
(3,593
|
)
|
|
(21,594
|
)
|
|||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash
|
319
|
|
|
(260
|
)
|
|
1,386
|
|
|||
Net decrease in cash, cash equivalents and restricted cash
|
(18,565
|
)
|
|
(1,014
|
)
|
|
(32,859
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
52,419
|
|
|
53,433
|
|
|
86,292
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
33,854
|
|
|
$
|
52,419
|
|
|
$
|
53,433
|
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Cash and cash equivalents
|
$
|
33,551
|
|
|
$
|
52,056
|
|
|
$
|
52,652
|
|
Restricted cash included in prepaid expenses and other current assets
|
—
|
|
|
60
|
|
|
260
|
|
|||
Restricted cash included in other long-term assets
|
303
|
|
|
303
|
|
|
521
|
|
|||
Total cash, cash equivalents, and restricted cash shown in consolidated statements of cash flows
|
$
|
33,854
|
|
|
$
|
52,419
|
|
|
$
|
53,433
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Noncontrolling Interests
|
|
Total Equity
|
|||||||||||||||||
(In thousands, except shares)
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||
Balance at January 1, 2016
(a)
|
10,702,689
|
|
|
$
|
107
|
|
|
$
|
894,715
|
|
|
$
|
(759,531
|
)
|
|
$
|
(14,781
|
)
|
|
$
|
(8,551
|
)
|
|
$
|
81
|
|
|
$
|
112,040
|
|
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(65,148
|
)
|
|
—
|
|
|
—
|
|
|
421
|
|
|
(64,727
|
)
|
|||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,967
|
)
|
|
—
|
|
|
7
|
|
|
(6,960
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
3,267
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,267
|
|
|||||||
Vesting of restricted stock units/awards
|
40,495
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of treasury shares
|
(155,304
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(963
|
)
|
|
—
|
|
|
(964
|
)
|
|||||||
Restricted stock cancelled for employee minimum income taxes
|
(4,973
|
)
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|||||||
Issuance of stock for the ESPP
|
4,100
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||||
Issuance of stock in bond exchange
|
1,205,440
|
|
|
12
|
|
|
1,215
|
|
|
—
|
|
|
—
|
|
|
9,514
|
|
|
—
|
|
|
10,741
|
|
|||||||
Balance at December 31, 2016
|
11,792,447
|
|
|
118
|
|
|
899,198
|
|
|
(824,679
|
)
|
|
(21,748
|
)
|
|
—
|
|
|
509
|
|
|
53,398
|
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,242
|
)
|
|
—
|
|
|
—
|
|
|
865
|
|
|
(29,377
|
)
|
|||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,869
|
|
|
—
|
|
|
(35
|
)
|
|
2,834
|
|
|||||||
Dividend payment to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
(100
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2,552
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,552
|
|
|||||||
Exercise of stock options
|
15,000
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||||
Vesting of restricted stock units/awards
|
115,576
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Employee purchases of unregistered shares of common stock
|
120,567
|
|
|
1
|
|
|
1,572
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,573
|
|
|||||||
Restricted stock cancelled for employee minimum income taxes
|
(23,889
|
)
|
|
—
|
|
|
(120
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
|||||||
Balance at December 31, 2017
|
12,019,701
|
|
|
120
|
|
|
903,247
|
|
|
(854,921
|
)
|
|
(18,879
|
)
|
|
—
|
|
|
1,239
|
|
|
30,806
|
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,171
|
)
|
|
—
|
|
|
—
|
|
|
773
|
|
|
(70,398
|
)
|
|||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,563
|
)
|
|
—
|
|
|
(220
|
)
|
|
(1,783
|
)
|
|||||||
Dividend payment to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200
|
)
|
|
(200
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
3,337
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,337
|
|
|||||||
Exercise of stock options
|
70,086
|
|
|
1
|
|
|
213
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|||||||
Vesting of restricted stock units/awards
|
151,852
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Restricted stock cancelled for employee minimum income taxes
|
(46,024
|
)
|
|
—
|
|
|
(1,151
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,151
|
)
|
|||||||
Public equity offering
|
1,820,000
|
|
|
18
|
|
|
46,981
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,999
|
|
|||||||
Balance at December 31, 2018
|
14,015,615
|
|
|
$
|
140
|
|
|
$
|
952,626
|
|
|
$
|
(926,092
|
)
|
|
$
|
(20,442
|
)
|
|
$
|
—
|
|
|
$
|
1,592
|
|
|
$
|
7,824
|
|
(a)
|
The figures for January 1, 2016, set forth in the tables above have been retroactively adjusted to reflect the one-for-fifteen reverse stock split completed on February 4, 2016.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Gross costs of multi-client data creation
|
$
|
972,309
|
|
|
$
|
939,077
|
|
Less accumulated amortization
|
(776,860
|
)
|
|
(727,872
|
)
|
||
Less impairments to multi-client data library
|
(121,905
|
)
|
|
(121,905
|
)
|
||
Multi-client data library, net
|
$
|
73,544
|
|
|
$
|
89,300
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenues:
|
|
|
|
|
|
||||||
E&P Technology & Services:
|
|
|
|
|
|
||||||
New Venture
|
$
|
69,685
|
|
|
$
|
100,824
|
|
|
$
|
27,362
|
|
Data Library
|
47,095
|
|
|
40,016
|
|
|
39,989
|
|
|||
Total multi-client revenues
|
116,780
|
|
|
140,840
|
|
|
67,351
|
|
|||
Imaging Services
|
19,740
|
|
|
16,409
|
|
|
25,538
|
|
|||
Total
|
$
|
136,520
|
|
|
$
|
157,249
|
|
|
$
|
92,889
|
|
Operations Optimization:
|
|
|
|
|
|
||||||
Devices
|
$
|
22,396
|
|
|
$
|
23,610
|
|
|
$
|
26,746
|
|
Optimization Software & Services
|
21,129
|
|
|
16,695
|
|
|
16,756
|
|
|||
Total
|
$
|
43,525
|
|
|
$
|
40,305
|
|
|
$
|
43,502
|
|
Ocean Bottom Integrated Technologies
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,417
|
|
Total
|
$
|
180,045
|
|
|
$
|
197,554
|
|
|
$
|
172,808
|
|
Gross profit (loss):
|
|
|
|
|
|
||||||
E&P Technology & Services
|
$
|
43,369
|
|
|
$
|
65,196
|
|
|
$
|
4,708
|
|
Operations Optimization
|
22,293
|
|
|
20,076
|
|
|
21,745
|
|
|||
Ocean Bottom Integrated Technologies
|
(6,042
|
)
|
|
(9,633
|
)
|
|
9,579
|
|
|||
Total
|
$
|
59,620
|
|
|
$
|
75,639
|
|
|
$
|
36,032
|
|
Gross margin:
|
|
|
|
|
|
||||||
E&P Technology & Services
|
32
|
%
|
|
41
|
%
|
|
5
|
%
|
|||
Operations Optimization
|
51
|
%
|
|
50
|
%
|
|
50
|
%
|
|||
Ocean Bottom Integrated Technologies
|
—
|
%
|
|
—
|
%
|
|
26
|
%
|
|||
Total
|
33
|
%
|
|
38
|
%
|
|
21
|
%
|
|||
Income (loss) from operations:
|
|
|
|
|
|
||||||
E&P Technology & Services
|
$
|
21,758
|
|
|
$
|
42,505
|
|
|
$
|
(16,446
|
)
|
Operations Optimization
|
7,295
|
|
|
8,022
|
|
|
9,652
|
|
|||
Ocean Bottom Integrated Technologies
|
(47,644
|
)
|
(a)
|
(16,259
|
)
|
|
(1,756
|
)
|
|||
Support and other
|
(35,681
|
)
|
|
(42,967
|
)
|
|
(34,621
|
)
|
|||
Loss from operations
|
(54,272
|
)
|
|
(8,699
|
)
|
|
(43,171
|
)
|
|||
Interest expense, net
|
(12,972
|
)
|
|
(16,709
|
)
|
|
(18,485
|
)
|
|||
Other income (expense), net
|
(436
|
)
|
|
(3,945
|
)
|
|
1,350
|
|
|||
Loss before income taxes
|
$
|
(67,680
|
)
|
|
$
|
(29,353
|
)
|
|
$
|
(60,306
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Depreciation and amortization (including multi-client data library):
|
|
|
|
|
|
||||||
E&P Technology & Services
|
$
|
51,673
|
|
|
$
|
53,663
|
|
|
$
|
44,100
|
|
Operations Optimization
|
995
|
|
|
1,349
|
|
|
1,780
|
|
|||
Ocean Bottom Integrated Technologies
|
4,231
|
|
|
7,001
|
|
|
7,511
|
|
|||
Support and other
|
852
|
|
|
1,681
|
|
|
1,919
|
|
|||
Total
|
$
|
57,751
|
|
|
$
|
63,694
|
|
|
$
|
55,310
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Total assets:
|
|
|
|
||||
E&P Technology & Services
|
$
|
165,132
|
|
|
$
|
156,555
|
|
Operations Optimization
|
51,783
|
|
|
74,361
|
|
||
Ocean Bottom Integrated Technologies
|
1,177
|
|
|
20,828
|
|
||
Support and other
|
26,657
|
|
|
49,325
|
|
||
Total
|
$
|
244,749
|
|
(a)
|
$
|
301,069
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Latin America
|
$
|
68,871
|
|
|
$
|
68,241
|
|
|
$
|
24,090
|
|
North America
|
44,474
|
|
|
48,120
|
|
|
38,005
|
|
|||
Europe
|
31,077
|
|
|
44,930
|
|
|
41,674
|
|
|||
Asia Pacific
|
17,817
|
|
|
18,896
|
|
|
16,226
|
|
|||
Africa
|
10,837
|
|
|
6,837
|
|
|
41,417
|
|
|||
Middle East
|
5,526
|
|
|
2,308
|
|
|
9,467
|
|
|||
Commonwealth of Independent States
|
1,443
|
|
|
8,222
|
|
|
1,929
|
|
|||
Total
|
$
|
180,045
|
|
|
$
|
197,554
|
|
|
$
|
172,808
|
|
|
|
||
Unbilled receivables at December 31, 2017
|
$
|
37,304
|
|
Recognition of unbilled receivables
|
153,611
|
|
|
Revenues billed to customers
|
(146,883
|
)
|
|
Unbilled receivables at December 31, 2018
|
$
|
44,032
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
New Venture
|
$
|
5,797
|
|
|
$
|
6,548
|
|
Imaging Services
|
307
|
|
|
676
|
|
||
Devices
|
626
|
|
|
633
|
|
||
Optimization Software & Services
|
980
|
|
|
1,053
|
|
||
Total
|
$
|
7,710
|
|
|
$
|
8,910
|
|
|
|
||
Deferred revenue at December 31, 2017
|
$
|
8,910
|
|
Cash collected in excess of revenue recognized
|
25,234
|
|
|
Recognition of deferred revenue
(a)
|
(26,434
|
)
|
|
Deferred revenue at December 31, 2018
|
$
|
7,710
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Senior secured second-priority lien notes
(maturing December 15, 2021)
|
|
$
|
120,569
|
|
|
$
|
120,569
|
|
Senior secured third-priority lien notes
(redeemed March 26, 2018)
|
|
—
|
|
|
28,497
|
|
||
Revolving credit facility
(amended August 16, 2018, maturing August 16, 2023)
(a)
|
|
—
|
|
|
10,000
|
|
||
Equipment capital leases
|
|
2,938
|
|
|
279
|
|
||
Other debt
|
|
1,159
|
|
|
1,382
|
|
||
Costs associated with issuances of debt
|
|
(2,925
|
)
|
|
(3,983
|
)
|
||
Total
|
|
121,741
|
|
|
156,744
|
|
||
Current portion of long-term debt and lease obligations
|
|
(2,228
|
)
|
|
(40,024
|
)
|
||
Non-current portion of long-term debt and lease obligations
|
|
$
|
119,513
|
|
|
$
|
116,720
|
|
•
|
extend the maturity date of the Credit Facility by approximately
four
years (from August 22, 2019 to August 16, 2023), subject to the retirement or extension of the maturity date of the Second Lien Notes, as defined below, which mature on December 15, 2021;
|
•
|
increase the maximum revolver amount by
$10 million
(from
$40 million
to
$50 million
);
|
•
|
increase the borrowing base percentage of the net orderly liquidation value as it relates to the multi-client data library (not to exceed
$28.5 million
, up from the previous maximum of
$15 million
for the multi-client data library component);
|
•
|
include the eligible billed receivables of the Mexican Subsidiary up to a maximum of
$5 million
in the borrowing base calculation and joins the Mexican Subsidiary as a borrower thereunder (with a maximum exposure of
$5 million
) and require the equity and assets of the Mexican Subsidiary to be pledged to secure obligations under the Credit Facility;
|
•
|
modify the interest rate such that the maximum interest rate remains consistent with the fixed interest rate prior to the Third Amendment (that is,
3.00%
per annum for domestic rate loans and
4.00%
per annum for LIBOR rate loans), but now lowers the range down to a minimum interest rate of
2.00%
for domestic rate loans and
3.00%
for LIBOR rate loans based on a leverage ratio for the preceding four-quarter period;
|
•
|
decrease the minimum excess borrowing availability threshold which (if the Borrowers have minimum excess borrowing availability below any such threshold) triggers the agent’s right to exercise dominion over cash and deposit accounts; and
|
•
|
modify the trigger required to test for compliance with the fixed charge coverage ratio, which is further described below.
|
Date
|
|
Percentage
|
2019
|
|
105.500%
|
2020
|
|
103.500%
|
2021 and thereafter
|
|
100.000%
|
Years Ending December 31,
|
|
Short-Term and Long-Term Debt
|
|
Capital Lease Obligations
|
|
Other Financing
|
|
Total
|
||||||||
2019
|
|
$
|
—
|
|
|
$
|
1,069
|
|
|
1,159
|
|
|
$
|
2,228
|
|
|
2020
|
|
—
|
|
|
1,135
|
|
|
—
|
|
|
1,135
|
|
||||
2021
|
|
120,569
|
|
|
734
|
|
|
—
|
|
|
121,303
|
|
||||
Total
|
|
$
|
120,569
|
|
|
$
|
2,938
|
|
|
$
|
1,159
|
|
|
$
|
124,666
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
(166
|
)
|
|
$
|
—
|
|
State and local
|
65
|
|
|
116
|
|
|
28
|
|
|||
Foreign
|
8,905
|
|
|
5,494
|
|
|
5,574
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(346
|
)
|
|
(1,263
|
)
|
|
—
|
|
|||
Foreign
|
(5,906
|
)
|
|
(4,157
|
)
|
|
(1,181
|
)
|
|||
Total income tax expense
|
$
|
2,718
|
|
|
$
|
24
|
|
|
$
|
4,421
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Expected income tax expense at 21% for 2018 and 35% for 2017 and 2016
|
$
|
(14,213
|
)
|
|
$
|
(10,274
|
)
|
|
$
|
(21,107
|
)
|
Foreign tax rate differential
|
74
|
|
|
(2,914
|
)
|
|
5,932
|
|
|||
Foreign tax differences
|
4,703
|
|
|
(5,610
|
)
|
|
(4,828
|
)
|
|||
Global intangible low tax income inclusion
|
3,443
|
|
|
—
|
|
|
—
|
|
|||
State and local taxes
|
65
|
|
|
116
|
|
|
28
|
|
|||
Nondeductible expenses
|
1,604
|
|
|
4,308
|
|
|
(259
|
)
|
|||
Change in U.S. tax rate
|
—
|
|
|
77,410
|
|
|
—
|
|
|||
Expired capital loss
|
—
|
|
|
1,114
|
|
|
1,321
|
|
|||
Valuation allowance:
|
|
|
|
|
|
||||||
Valuation allowance on expiring capital losses
|
—
|
|
|
(1,114
|
)
|
|
(1,321
|
)
|
|||
Valuation allowance on operations
|
7,042
|
|
|
(63,012
|
)
|
|
24,655
|
|
|||
Total income tax expense
|
$
|
2,718
|
|
|
$
|
24
|
|
|
$
|
4,421
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred income tax assets:
|
|
|
|
||||
Accrued expenses
|
$
|
1,126
|
|
|
$
|
1,976
|
|
Allowance accounts
|
6,415
|
|
|
2,960
|
|
||
Net operating loss carryforward
|
96,854
|
|
|
87,705
|
|
||
Equity method investment
|
35,292
|
|
|
35,292
|
|
||
Original issue discount
|
8,073
|
|
|
9,624
|
|
||
Interest limitation
|
5,845
|
|
|
—
|
|
||
Basis in identified intangibles
|
4,146
|
|
|
9,408
|
|
||
Tax credit carryforwards
|
5,345
|
|
|
6,929
|
|
||
Contingency accrual
|
—
|
|
|
788
|
|
||
Other
|
4,600
|
|
|
4,035
|
|
||
Total deferred income tax asset
|
167,696
|
|
|
158,717
|
|
||
Valuation allowance
|
(160,505
|
)
|
|
(153,463
|
)
|
||
Net deferred income tax asset
|
7,191
|
|
|
5,254
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Unbilled receivables
|
—
|
|
|
(3,501
|
)
|
||
Total deferred income tax asset, net
|
$
|
7,191
|
|
|
$
|
1,753
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning balance
|
$
|
447
|
|
|
$
|
1,299
|
|
|
$
|
1,250
|
|
Increases in unrecognized tax benefits – current year positions
|
—
|
|
|
59
|
|
|
49
|
|
|||
Decreases in unrecognized tax benefits – prior year position
|
—
|
|
|
(911
|
)
|
|
—
|
|
|||
Ending balance
|
$
|
447
|
|
|
$
|
447
|
|
|
$
|
1,299
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(Accrual for) reduction of loss contingency related to legal proceedings (Footnote 8)
|
$
|
—
|
|
|
$
|
(5,000
|
)
|
|
$
|
1,168
|
|
Recovery of INOVA bad debts
|
—
|
|
|
844
|
|
|
3,983
|
|
|||
Loss on bond exchange
|
—
|
|
|
—
|
|
|
(2,182
|
)
|
|||
Other income (expense)
|
(436
|
)
|
|
211
|
|
|
(1,619
|
)
|
|||
Total other income (expense), net
|
$
|
(436
|
)
|
|
$
|
(3,945
|
)
|
|
$
|
1,350
|
|
A summary of accounts receivable follows (in thousands):
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Accounts receivable, principally trade
|
$
|
26,558
|
|
|
$
|
20,050
|
|
Less allowance for doubtful accounts
|
(430
|
)
|
|
(572
|
)
|
||
Accounts receivable, net
|
$
|
26,128
|
|
|
$
|
19,478
|
|
A summary of inventories follows (in thousands):
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Raw materials and purchased subassemblies
|
$
|
20,011
|
|
|
$
|
20,448
|
|
Work-in-process
|
1,032
|
|
|
1,146
|
|
||
Finished goods
|
8,111
|
|
|
7,953
|
|
||
Less reserve for excess and obsolete inventories
|
(15,024
|
)
|
|
(15,039
|
)
|
||
Inventories, net
|
$
|
14,130
|
|
|
$
|
14,508
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Buildings
|
$
|
15,707
|
|
|
$
|
15,822
|
|
Machinery and equipment
|
132,135
|
|
|
145,654
|
|
||
Seismic rental equipment
|
1,423
|
|
|
1,677
|
|
||
Furniture and fixtures
|
3,859
|
|
|
3,869
|
|
||
Other
|
30,104
|
|
|
28,965
|
|
||
Total
|
183,228
|
|
|
195,987
|
|
||
Less accumulated depreciation
|
(133,634
|
)
|
|
(143,834
|
)
|
||
Less impairment of long-lived assets
|
(36,553
|
)
|
|
—
|
|
||
Property, plant, equipment and seismic rental equipment, net
|
$
|
13,041
|
|
|
$
|
52,153
|
|
A summary of accrued expenses follows (in thousands):
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Compensation, including compensation-related taxes and commissions
|
$
|
14,502
|
|
|
$
|
19,809
|
|
Accrued multi-client data library acquisition costs
|
3,746
|
|
|
5,104
|
|
||
Income tax payable
|
7,577
|
|
|
1,868
|
|
||
Accrual for loss contingency related to legal proceedings (Footnote 8)
|
—
|
|
|
3,750
|
|
||
Other
|
5,586
|
|
|
8,166
|
|
||
Total
|
$
|
31,411
|
|
|
$
|
38,697
|
|
A summary of other long-term liabilities follows (in thousands):
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred lease liabilities
|
11,465
|
|
|
12,811
|
|
||
Other
|
429
|
|
|
1,115
|
|
||
Total
|
$
|
11,894
|
|
|
$
|
13,926
|
|
|
E&P Technology & Services
|
|
Optimization Software & Services
|
|
Total
|
||||||
Balance at January 1, 2017
|
$
|
2,943
|
|
|
$
|
19,265
|
|
|
$
|
22,208
|
|
Impact of foreign currency translation adjustments
|
—
|
|
|
1,881
|
|
|
1,881
|
|
|||
Balance at December 31, 2017
|
2,943
|
|
|
21,146
|
|
|
24,089
|
|
|||
Impact of foreign currency translation adjustments
|
—
|
|
|
(1,174
|
)
|
|
(1,174
|
)
|
|||
Balance at December 31, 2018
|
$
|
2,943
|
|
|
$
|
19,972
|
|
|
$
|
22,915
|
|
|
Option Price
per Share
|
|
Outstanding
|
|
Vested
|
|
Available
for Grant
|
||||
January 1, 2016
|
$34.20 - $245.85
|
|
|
560,797
|
|
|
384,305
|
|
|
97,003
|
|
Increase in shares authorized
|
—
|
|
|
—
|
|
|
—
|
|
|
1,150,940
|
|
Granted
|
3.10
|
|
|
415,000
|
|
|
—
|
|
|
(415,000
|
)
|
Vested
|
—
|
|
|
—
|
|
|
67,480
|
|
|
—
|
|
Cancelled/forfeited
|
3.10 - 245.85
|
|
|
(128,162
|
)
|
|
(103,432
|
)
|
|
18,895
|
|
Restricted stock granted out of option plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(259,300
|
)
|
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans
|
—
|
|
|
—
|
|
|
—
|
|
|
7,182
|
|
December 31, 2016
|
$3.10 - $245.85
|
|
|
847,635
|
|
|
348,353
|
|
|
599,720
|
|
Granted
|
13.15
|
|
|
156,000
|
|
|
—
|
|
|
(156,000
|
)
|
Vested
|
—
|
|
|
—
|
|
|
149,537
|
|
|
—
|
|
Exercised
|
3.10
|
|
|
(15,000
|
)
|
|
(15,000
|
)
|
|
—
|
|
Cancelled/forfeited
|
3.10 - 245.85
|
|
|
(98,294
|
)
|
|
(47,612
|
)
|
|
82,118
|
|
Restricted stock granted out of option plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,500
|
)
|
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans
|
—
|
|
|
—
|
|
|
—
|
|
|
22,065
|
|
December 31, 2017
|
3.10 - 245.85
|
|
|
890,341
|
|
|
435,278
|
|
|
488,403
|
|
Increase in shares authorized
|
—
|
|
|
—
|
|
|
—
|
|
|
1,200,000
|
|
Granted
|
24.50
|
|
|
10,000
|
|
|
—
|
|
|
(10,000
|
)
|
Vested
|
—
|
|
|
—
|
|
|
153,944
|
|
|
—
|
|
Exercised
|
3.10
|
|
|
(70,086
|
)
|
|
(70,086
|
)
|
|
—
|
|
Cancelled/forfeited
|
3.10 - 245.85
|
|
|
(44,365
|
)
|
|
(44,231
|
)
|
|
2,568
|
|
Restricted stock granted out of option plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(996,775
|
)
|
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans
|
—
|
|
|
—
|
|
|
—
|
|
|
48,524
|
|
December 31, 2018
|
$3.10 - $151.35
|
|
|
785,890
|
|
|
474,905
|
|
|
732,720
|
|
Option Price per Share
|
Outstanding
|
|
Weighted Average Exercise Price of Outstanding Options
|
|
Weighted Average Remaining Contract Life
|
|
Vested
|
|
Weighted Average Exercise Price of Vested Options
|
||||||
$3.10 - $57.90
|
558,997
|
|
|
$
|
15.64
|
|
|
7.2 years
|
|
248,012
|
|
|
$
|
24.32
|
|
$61.05 - $71.85
|
75,231
|
|
|
$
|
62.17
|
|
|
4.7 years
|
|
75,231
|
|
|
$
|
62.17
|
|
$81.60 - $99.60
|
108,610
|
|
|
$
|
88.94
|
|
|
3.6 years
|
|
108,610
|
|
|
$
|
88.94
|
|
$106.05 - $151.35
|
43,052
|
|
|
$
|
108.84
|
|
|
2.3 years
|
|
43,052
|
|
|
$
|
108.84
|
|
Totals
|
785,890
|
|
|
$
|
35.33
|
|
|
5.4 years
|
|
474,905
|
|
|
$
|
52.76
|
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value (000’s)
|
|||||||
Total outstanding at January 1, 2018
|
890,341
|
|
|
$
|
36.17
|
|
|
|
|
6.4 years
|
|
$
|
6,774
|
|
||
Options granted
|
10,000
|
|
|
$
|
24.50
|
|
|
$
|
15.23
|
|
|
|
|
|
||
Options exercised
|
(70,086
|
)
|
|
$
|
3.10
|
|
|
|
|
|
|
|
||||
Options cancelled
|
(134
|
)
|
|
$
|
61.05
|
|
|
|
|
|
|
|
||||
Options forfeited
|
(44,231
|
)
|
|
$
|
100.85
|
|
|
|
|
|
|
|
||||
Total outstanding at December 31, 2018
|
785,890
|
|
|
$
|
35.33
|
|
|
|
|
5.4 years
|
|
$
|
572
|
|
||
Options exercisable and vested at December 31, 2018
|
474,905
|
|
|
$
|
52.76
|
|
|
|
|
5 years
|
|
$
|
213
|
|
|
Years Ended December 31,
|
||||
|
2018
|
|
2017
|
|
2016
|
Risk-free interest rates
|
2.78%
|
|
2.14%
|
|
1.3%
|
Expected lives (in years)
|
5.0
|
|
5.0
|
|
5.5
|
Expected dividend yield
|
—%
|
|
—%
|
|
—%
|
Expected volatility
|
73.67%
|
|
74.41%
|
|
78.76%
|
|
Number of
Shares/Units
|
|
Total nonvested at January 1, 2018
|
201,702
|
|
Granted
|
996,775
|
|
Vested
|
(151,852
|
)
|
Forfeited
|
(2,500
|
)
|
Total nonvested at December 31, 2018
|
1,044,125
|
|
Risk-free interest rates
|
3.0
|
%
|
Expected lives (in years)
|
5.31
|
|
Expected dividend yield
|
—
|
%
|
Expected volatility
|
82.9
|
%
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value (000’s)
|
|||||||
Total outstanding at January 1, 2016
|
216,532
|
|
|
$
|
34.67
|
|
|
|
|
|
|
|
|
|||
SARs granted
|
1,210,000
|
|
|
$
|
3.10
|
|
|
$
|
17.55
|
|
|
|
|
|
||
SARs cancelled
|
(10,399
|
)
|
|
$
|
34.20
|
|
|
|
|
|
|
|
||||
Total outstanding at December 31, 2016
|
1,416,133
|
|
|
$
|
7.70
|
|
|
|
|
|
|
|
||||
SARs exercised
|
(713,330
|
)
|
|
$
|
3.10
|
|
|
|
|
|
|
|
||||
SARs cancelled
|
(136,939
|
)
|
|
$
|
7.70
|
|
|
|
|
|
|
|
||||
Total outstanding at December 31, 2017
|
565,864
|
|
|
$
|
13.49
|
|
|
|
|
|
|
|
||||
SARs granted
|
960,009
|
|
|
$
|
8.85
|
|
|
8.85
|
|
|
|
|
|
|||
SARs exercised
|
(34,999
|
)
|
|
$
|
3.10
|
|
|
|
|
|
|
|
||||
SARs forfeited
|
(9,333
|
)
|
|
$
|
45.00
|
|
|
|
|
|
|
|
||||
Total outstanding at December 31, 2018
|
1,481,541
|
|
|
$
|
10.53
|
|
|
|
|
8.1 years
|
|
$
|
718
|
|
||
SARs exercisable and vested at December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Stock-based compensation expense
|
$
|
3,337
|
|
|
$
|
2,552
|
|
|
$
|
3,267
|
|
Tax benefit related thereto
|
(698
|
)
|
|
(862
|
)
|
|
(1,168
|
)
|
|||
Stock-based compensation expense, net of tax
|
$
|
2,639
|
|
|
$
|
1,690
|
|
|
$
|
2,099
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Stock appreciation rights expense
|
$
|
822
|
|
|
$
|
6,611
|
|
|
547
|
|
|
Tax benefit related thereto
|
(173
|
)
|
|
(2,314
|
)
|
|
(191
|
)
|
|||
Stock appreciation rights expense, net of tax
|
$
|
649
|
|
|
$
|
4,297
|
|
|
$
|
356
|
|
|
Years Ended December 31,
|
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Interest
|
$
|
5,731
|
|
|
$
|
14,181
|
|
|
$
|
15,691
|
|
|
Income taxes
|
3,260
|
|
|
7,030
|
|
|
4,474
|
|
|
|||
Non-cash items from investing and financing activities:
|
|
|
|
|
|
|
||||||
Purchase of computer equipment financed through capital leases
|
3,297
|
|
|
—
|
|
|
—
|
|
|
|||
Leasehold improvement paid by landlord
|
—
|
|
|
—
|
|
|
955
|
|
|
|||
Issuance of stock in bond exchange
|
—
|
|
|
—
|
|
|
10,741
|
|
|
|||
Transfer of inventory to property, plant and equipment
|
—
|
|
|
—
|
|
|
17,662
|
|
(a)
|
|||
Investment in multi-client data library financed through trade payables
|
4,956
|
|
|
9,059
|
|
|
—
|
|
|
(a)
|
This transfer of
$17.7 million
of inventory to property, plant, equipment and seismic rental equipment in December 2016, relates to ocean bottom seismic equipment manufactured by the Company to be deployed in the acquisition of ocean bottom seismic data.
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2018
|
|
June 30, 2018
|
|
September 30, 2018
|
|
December 31, 2018
|
||||||||
Service revenues
|
$
|
25,086
|
|
|
$
|
15,752
|
|
|
$
|
37,105
|
|
|
$
|
61,095
|
|
Product revenues
|
8,422
|
|
|
8,991
|
|
|
10,095
|
|
|
13,499
|
|
||||
Total net revenues
|
33,508
|
|
|
24,743
|
|
|
47,200
|
|
|
74,594
|
|
||||
Gross profit (loss)
|
6,853
|
|
|
(1,517
|
)
|
|
16,475
|
|
|
37,809
|
|
||||
Loss from operations
|
(12,640
|
)
|
|
(22,519
|
)
|
|
(2,452
|
)
|
|
(16,661
|
)
|
||||
Interest expense, net
|
(3,836
|
)
|
|
(2,911
|
)
|
|
(3,022
|
)
|
|
(3,203
|
)
|
||||
Other income (expense), net
|
(791
|
)
|
|
84
|
|
|
91
|
|
|
180
|
|
||||
Income tax expense (benefit)
|
1,072
|
|
|
154
|
|
|
2,079
|
|
|
(587
|
)
|
||||
Net income attributable to noncontrolling interests
|
(87
|
)
|
|
(366
|
)
|
|
(74
|
)
|
|
(246
|
)
|
||||
Net loss applicable to ION
|
$
|
(18,426
|
)
|
|
$
|
(25,866
|
)
|
|
$
|
(7,536
|
)
|
|
$
|
(19,343
|
)
|
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(1.44
|
)
|
|
$
|
(1.86
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(1.38
|
)
|
Diluted
|
$
|
(1.44
|
)
|
|
$
|
(1.86
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(1.38
|
)
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2017
|
|
June 30, 2017
|
|
September 30, 2017
|
|
December 31, 2017
|
||||||||
Service revenues
|
$
|
23,828
|
|
|
$
|
34,454
|
|
|
$
|
52,615
|
|
|
$
|
48,513
|
|
Product revenues
|
8,728
|
|
|
11,547
|
|
|
8,480
|
|
|
9,389
|
|
||||
Total net revenues
|
32,556
|
|
|
46,001
|
|
|
61,095
|
|
|
57,902
|
|
||||
Gross profit
|
6,101
|
|
|
15,618
|
|
|
30,109
|
|
|
23,811
|
|
||||
Income (loss) from operations
|
(13,912
|
)
|
|
(3,572
|
)
|
|
9,936
|
|
|
(1,151
|
)
|
||||
Interest expense, net
|
(4,464
|
)
|
|
(4,241
|
)
|
|
(3,959
|
)
|
|
(4,045
|
)
|
||||
Other income (expense), net
|
(5,068
|
)
|
|
192
|
|
|
722
|
|
|
209
|
|
||||
Income tax expense (benefit)
|
(418
|
)
|
|
2,402
|
|
|
1,686
|
|
|
(3,646
|
)
|
||||
Net income attributable to noncontrolling interests
|
(316
|
)
|
|
(418
|
)
|
|
(78
|
)
|
|
(53
|
)
|
||||
Net income (loss) applicable to ION
|
$
|
(23,342
|
)
|
|
$
|
(10,441
|
)
|
|
$
|
4,935
|
|
|
$
|
(1,394
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(1.98
|
)
|
|
$
|
(0.88
|
)
|
|
$
|
0.42
|
|
|
$
|
(0.12
|
)
|
Diluted
|
$
|
(1.98
|
)
|
|
$
|
(0.88
|
)
|
|
$
|
0.41
|
|
|
$
|
(0.12
|
)
|
•
|
ION Geophysical Corporation and the Guarantors (in each case, reflecting investments in subsidiaries utilizing the equity method of accounting).
|
•
|
All other subsidiaries of ION Geophysical Corporation that are non-guarantors.
|
•
|
The consolid
ating adjustments necessary to present ION Geophysical Corporation’s results on a consolidated basis.
|
|
December 31, 2018
|
||||||||||||||||||
Balance Sheet
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
13,782
|
|
|
$
|
47
|
|
|
$
|
19,722
|
|
|
$
|
—
|
|
|
$
|
33,551
|
|
Accounts receivable, net
|
8
|
|
|
17,349
|
|
|
8,771
|
|
|
—
|
|
|
26,128
|
|
|||||
Unbilled receivables
|
—
|
|
|
12,697
|
|
|
31,335
|
|
|
—
|
|
|
44,032
|
|
|||||
Inventories
|
—
|
|
|
8,721
|
|
|
5,409
|
|
|
—
|
|
|
14,130
|
|
|||||
Prepaid expenses and other current assets
|
3,891
|
|
|
1,325
|
|
|
2,566
|
|
|
—
|
|
|
7,782
|
|
|||||
Total current assets
|
17,681
|
|
|
40,139
|
|
|
67,803
|
|
|
—
|
|
|
125,623
|
|
|||||
Deferred income tax asset
|
805
|
|
|
6,261
|
|
|
125
|
|
|
—
|
|
|
7,191
|
|
|||||
Property, plant, equipment and seismic rental equipment, net
|
489
|
|
|
8,922
|
|
|
3,630
|
|
|
—
|
|
|
13,041
|
|
|||||
Multi-client data library, net
|
—
|
|
|
70,380
|
|
|
3,164
|
|
|
—
|
|
|
73,544
|
|
|||||
Investment in subsidiaries
|
836,002
|
|
|
247,359
|
|
|
—
|
|
|
(1,083,361
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
22,915
|
|
|
—
|
|
|
22,915
|
|
|||||
Intercompany receivables
|
—
|
|
|
305,623
|
|
|
66,021
|
|
|
(371,644
|
)
|
|
—
|
|
|||||
Other assets
|
1,723
|
|
|
643
|
|
|
69
|
|
|
—
|
|
|
2,435
|
|
|||||
Total assets
|
$
|
856,700
|
|
|
$
|
679,327
|
|
|
$
|
163,727
|
|
|
$
|
(1,455,005
|
)
|
|
$
|
244,749
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
1,159
|
|
|
$
|
1,069
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,228
|
|
Accounts payable
|
2,407
|
|
|
29,602
|
|
|
2,904
|
|
|
—
|
|
|
34,913
|
|
|||||
Accrued expenses
|
7,011
|
|
|
10,036
|
|
|
14,364
|
|
|
—
|
|
|
31,411
|
|
|||||
Accrued multi-client data library royalties
|
—
|
|
|
29,040
|
|
|
216
|
|
|
—
|
|
|
29,256
|
|
|||||
Deferred revenue
|
—
|
|
|
6,515
|
|
|
1,195
|
|
|
—
|
|
|
7,710
|
|
|||||
Total current liabilities
|
10,577
|
|
|
76,262
|
|
|
18,679
|
|
|
—
|
|
|
105,518
|
|
|||||
Long-term debt, net of current maturities
|
117,644
|
|
|
1,869
|
|
|
—
|
|
|
—
|
|
|
119,513
|
|
|||||
Intercompany payables
|
721,817
|
|
|
—
|
|
|
—
|
|
|
(721,817
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
430
|
|
|
5,698
|
|
|
5,766
|
|
|
—
|
|
|
11,894
|
|
|||||
Total liabilities
|
850,468
|
|
|
83,829
|
|
|
24,445
|
|
|
(721,817
|
)
|
|
236,925
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
140
|
|
|
290,460
|
|
|
47,776
|
|
|
(338,236
|
)
|
|
140
|
|
|||||
Additional paid-in capital
|
952,626
|
|
|
180,700
|
|
|
203,908
|
|
|
(384,608
|
)
|
|
952,626
|
|
|||||
Accumulated earnings (deficit)
|
(926,092
|
)
|
|
390,691
|
|
|
(12,475
|
)
|
|
(378,216
|
)
|
|
(926,092
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
(20,442
|
)
|
|
4,324
|
|
|
(22,023
|
)
|
|
17,699
|
|
|
(20,442
|
)
|
|||||
Due from ION Geophysical Corporation
|
—
|
|
|
(270,677
|
)
|
|
(79,496
|
)
|
|
350,173
|
|
|
—
|
|
|||||
Total stockholders’ equity
|
6,232
|
|
|
595,498
|
|
|
137,690
|
|
|
(733,188
|
)
|
|
6,232
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
1,592
|
|
|
—
|
|
|
1,592
|
|
|||||
Total equity
|
6,232
|
|
|
595,498
|
|
|
139,282
|
|
|
(733,188
|
)
|
|
7,824
|
|
|||||
Total liabilities and equity
|
$
|
856,700
|
|
|
$
|
679,327
|
|
|
$
|
163,727
|
|
|
$
|
(1,455,005
|
)
|
|
$
|
244,749
|
|
|
December 31, 2017
|
||||||||||||||||||
Balance Sheet
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
39,344
|
|
|
$
|
66
|
|
|
$
|
12,646
|
|
|
$
|
—
|
|
|
$
|
52,056
|
|
Accounts receivable, net
|
50
|
|
|
12,496
|
|
|
6,932
|
|
|
—
|
|
|
19,478
|
|
|||||
Unbilled receivables
|
—
|
|
|
34,484
|
|
|
2,820
|
|
|
—
|
|
|
37,304
|
|
|||||
Inventories
|
—
|
|
|
8,686
|
|
|
5,822
|
|
|
—
|
|
|
14,508
|
|
|||||
Prepaid expenses and other current assets
|
2,427
|
|
|
4,530
|
|
|
686
|
|
|
—
|
|
|
7,643
|
|
|||||
Total current assets
|
41,821
|
|
|
60,262
|
|
|
28,906
|
|
|
—
|
|
|
130,989
|
|
|||||
Deferred income tax asset
|
1,264
|
|
|
336
|
|
|
153
|
|
|
—
|
|
|
1,753
|
|
|||||
Property, plant, equipment and seismic rental equipment, net
|
511
|
|
|
7,170
|
|
|
44,472
|
|
|
—
|
|
|
52,153
|
|
|||||
Multi-client data library, net
|
—
|
|
|
81,442
|
|
|
7,858
|
|
|
—
|
|
|
89,300
|
|
|||||
Investment in subsidiaries
|
693,679
|
|
|
321,934
|
|
|
—
|
|
|
(1,015,613
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
24,089
|
|
|
—
|
|
|
24,089
|
|
|||||
Intercompany receivables
|
—
|
|
|
162,017
|
|
|
60,394
|
|
|
(222,411
|
)
|
|
—
|
|
|||||
Other assets
|
686
|
|
|
1,811
|
|
|
288
|
|
|
—
|
|
|
2,785
|
|
|||||
Total assets
|
$
|
737,961
|
|
|
$
|
634,972
|
|
|
$
|
166,160
|
|
|
$
|
(1,238,024
|
)
|
|
$
|
301,069
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
39,774
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40,024
|
|
Accounts payable
|
1,774
|
|
|
20,982
|
|
|
2,195
|
|
|
—
|
|
|
24,951
|
|
|||||
Accrued expenses
|
12,284
|
|
|
16,957
|
|
|
9,456
|
|
|
—
|
|
|
38,697
|
|
|||||
Accrued multi-client data library royalties
|
—
|
|
|
26,824
|
|
|
211
|
|
|
—
|
|
|
27,035
|
|
|||||
Deferred revenue
|
—
|
|
|
7,231
|
|
|
1,679
|
|
|
—
|
|
|
8,910
|
|
|||||
Total current liabilities
|
53,832
|
|
|
72,244
|
|
|
13,541
|
|
|
—
|
|
|
139,617
|
|
|||||
Long-term debt, net of current maturities
|
116,691
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
116,720
|
|
|||||
Intercompany payables
|
537,417
|
|
|
—
|
|
|
—
|
|
|
(537,417
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
454
|
|
|
6,084
|
|
|
7,388
|
|
|
—
|
|
|
13,926
|
|
|||||
Total liabilities
|
708,394
|
|
|
78,357
|
|
|
20,929
|
|
|
(537,417
|
)
|
|
270,263
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
120
|
|
|
290,460
|
|
|
49,394
|
|
|
(339,854
|
)
|
|
120
|
|
|||||
Additional paid-in capital
|
903,247
|
|
|
180,701
|
|
|
202,290
|
|
|
(382,991
|
)
|
|
903,247
|
|
|||||
Accumulated earnings (deficit)
|
(854,921
|
)
|
|
317,324
|
|
|
(9,247
|
)
|
|
(308,077
|
)
|
|
(854,921
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
(18,879
|
)
|
|
4,372
|
|
|
(19,681
|
)
|
|
15,309
|
|
|
(18,879
|
)
|
|||||
Due from ION Geophysical Corporation
|
—
|
|
|
(236,242
|
)
|
|
(78,764
|
)
|
|
315,006
|
|
|
—
|
|
|||||
Total stockholders’ equity
|
29,567
|
|
|
556,615
|
|
|
143,992
|
|
|
(700,607
|
)
|
|
29,567
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
1,239
|
|
|
—
|
|
|
1,239
|
|
|||||
Total equity
|
29,567
|
|
|
556,615
|
|
|
145,231
|
|
|
(700,607
|
)
|
|
30,806
|
|
|||||
Total liabilities and equity
|
$
|
737,961
|
|
|
$
|
634,972
|
|
|
$
|
166,160
|
|
|
$
|
(1,238,024
|
)
|
|
$
|
301,069
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Total net revenues
|
$
|
—
|
|
|
$
|
96,649
|
|
|
$
|
83,396
|
|
|
$
|
—
|
|
|
$
|
180,045
|
|
Cost of goods sold
|
—
|
|
|
85,186
|
|
|
35,239
|
|
|
—
|
|
|
120,425
|
|
|||||
Gross profit
|
—
|
|
|
11,463
|
|
|
48,157
|
|
|
—
|
|
|
59,620
|
|
|||||
Total operating expenses
|
32,888
|
|
|
29,235
|
|
|
51,769
|
|
|
—
|
|
|
113,892
|
|
|||||
Loss from operations
|
(32,888
|
)
|
|
(17,772
|
)
|
|
(3,612
|
)
|
|
—
|
|
|
(54,272
|
)
|
|||||
Interest expense, net
|
(13,010
|
)
|
|
(136
|
)
|
|
174
|
|
|
—
|
|
|
(12,972
|
)
|
|||||
Intercompany interest, net
|
1,124
|
|
|
(12,137
|
)
|
|
11,013
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
(26,446
|
)
|
|
37,219
|
|
|
—
|
|
|
(10,773
|
)
|
|
—
|
|
|||||
Other income (expense)
|
(196
|
)
|
|
116
|
|
|
(356
|
)
|
|
—
|
|
|
(436
|
)
|
|||||
Income (loss) before income taxes
|
(71,416
|
)
|
|
7,290
|
|
|
7,219
|
|
|
(10,773
|
)
|
|
(67,680
|
)
|
|||||
Income tax expense (benefit)
|
(245
|
)
|
|
(6,711
|
)
|
|
9,674
|
|
|
—
|
|
|
2,718
|
|
|||||
Net income (loss)
|
(71,171
|
)
|
|
14,001
|
|
|
(2,455
|
)
|
|
(10,773
|
)
|
|
(70,398
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(773
|
)
|
|
—
|
|
|
(773
|
)
|
|||||
Net income (loss) attributable to ION
|
$
|
(71,171
|
)
|
|
$
|
14,001
|
|
|
$
|
(3,228
|
)
|
|
$
|
(10,773
|
)
|
|
$
|
(71,171
|
)
|
Comprehensive net income (loss)
|
$
|
(72,734
|
)
|
|
$
|
13,953
|
|
|
$
|
(4,797
|
)
|
|
$
|
(8,383
|
)
|
|
$
|
(71,961
|
)
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(773
|
)
|
|
—
|
|
|
(773
|
)
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(72,734
|
)
|
|
$
|
13,953
|
|
|
$
|
(5,570
|
)
|
|
$
|
(8,383
|
)
|
|
$
|
(72,734
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Total net revenues
|
$
|
—
|
|
|
$
|
148,590
|
|
|
$
|
48,964
|
|
|
$
|
—
|
|
|
$
|
197,554
|
|
Cost of goods sold
|
—
|
|
|
90,754
|
|
|
31,161
|
|
|
—
|
|
|
121,915
|
|
|||||
Gross profit
|
—
|
|
|
57,836
|
|
|
17,803
|
|
|
—
|
|
|
75,639
|
|
|||||
Total operating expenses
|
39,000
|
|
|
28,020
|
|
|
17,318
|
|
|
—
|
|
|
84,338
|
|
|||||
Income (loss) from operations
|
(39,000
|
)
|
|
29,816
|
|
|
485
|
|
|
—
|
|
|
(8,699
|
)
|
|||||
Interest expense, net
|
(16,729
|
)
|
|
(107
|
)
|
|
127
|
|
|
—
|
|
|
(16,709
|
)
|
|||||
Intercompany interest, net
|
1,084
|
|
|
(6,613
|
)
|
|
5,529
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
27,696
|
|
|
67,290
|
|
|
—
|
|
|
(94,986
|
)
|
|
—
|
|
|||||
Other income (expense)
|
(4,610
|
)
|
|
(407
|
)
|
|
1,072
|
|
|
—
|
|
|
(3,945
|
)
|
|||||
Income (loss) before income taxes
|
(31,559
|
)
|
|
89,979
|
|
|
7,213
|
|
|
(94,986
|
)
|
|
(29,353
|
)
|
|||||
Income tax expense (benefit)
|
(1,317
|
)
|
|
(1,427
|
)
|
|
2,768
|
|
|
—
|
|
|
24
|
|
|||||
Net income (loss)
|
(30,242
|
)
|
|
91,406
|
|
|
4,445
|
|
|
(94,986
|
)
|
|
(29,377
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(865
|
)
|
|
—
|
|
|
(865
|
)
|
|||||
Net income (loss) attributable to ION
|
$
|
(30,242
|
)
|
|
$
|
91,406
|
|
|
$
|
3,580
|
|
|
$
|
(94,986
|
)
|
|
$
|
(30,242
|
)
|
Comprehensive net income (loss)
|
$
|
(27,373
|
)
|
|
$
|
91,358
|
|
|
$
|
6,550
|
|
|
$
|
(97,043
|
)
|
|
$
|
(26,508
|
)
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(865
|
)
|
|
—
|
|
|
(865
|
)
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(27,373
|
)
|
|
$
|
91,358
|
|
|
$
|
5,685
|
|
|
$
|
(97,043
|
)
|
|
$
|
(27,373
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Total net revenues
|
$
|
—
|
|
|
$
|
91,465
|
|
|
$
|
81,343
|
|
|
$
|
—
|
|
|
$
|
172,808
|
|
Cost of goods sold
|
—
|
|
|
87,660
|
|
|
49,116
|
|
|
—
|
|
|
136,776
|
|
|||||
Gross profit
|
—
|
|
|
3,805
|
|
|
32,227
|
|
|
—
|
|
|
36,032
|
|
|||||
Total operating expenses
|
31,438
|
|
|
27,279
|
|
|
20,486
|
|
|
—
|
|
|
79,203
|
|
|||||
Income (loss) from operations
|
(31,438
|
)
|
|
(23,474
|
)
|
|
11,741
|
|
|
—
|
|
|
(43,171
|
)
|
|||||
Interest expense, net
|
(18,406
|
)
|
|
(173
|
)
|
|
94
|
|
|
—
|
|
|
(18,485
|
)
|
|||||
Intercompany interest, net
|
978
|
|
|
(4,397
|
)
|
|
3,419
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
(19,756
|
)
|
|
23,368
|
|
|
—
|
|
|
(3,612
|
)
|
|
—
|
|
|||||
Other income (expense)
|
3,528
|
|
|
723
|
|
|
(2,901
|
)
|
|
—
|
|
|
1,350
|
|
|||||
Income (loss) before income taxes
|
(65,094
|
)
|
|
(3,953
|
)
|
|
12,353
|
|
|
(3,612
|
)
|
|
(60,306
|
)
|
|||||
Income tax expense
|
54
|
|
|
1,337
|
|
|
3,030
|
|
|
—
|
|
|
4,421
|
|
|||||
Net income (loss)
|
(65,148
|
)
|
|
(5,290
|
)
|
|
9,323
|
|
|
(3,612
|
)
|
|
(64,727
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(421
|
)
|
|
—
|
|
|
(421
|
)
|
|||||
Net income (loss) attributable to ION
|
$
|
(65,148
|
)
|
|
$
|
(5,290
|
)
|
|
$
|
8,902
|
|
|
$
|
(3,612
|
)
|
|
$
|
(65,148
|
)
|
Comprehensive net income (loss)
|
$
|
(72,331
|
)
|
|
$
|
(5,290
|
)
|
|
$
|
1,719
|
|
|
$
|
4,208
|
|
|
$
|
(71,694
|
)
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(421
|
)
|
|
—
|
|
|
(421
|
)
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(72,331
|
)
|
|
$
|
(5,290
|
)
|
|
$
|
1,298
|
|
|
$
|
4,208
|
|
|
$
|
(72,115
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2018
|
||||||||||||||
Statement of Cash Flows
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Total Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities
|
$
|
(37,659
|
)
|
|
$
|
39,407
|
|
|
$
|
5,350
|
|
|
$
|
7,098
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Investment in multi-client data library
|
—
|
|
|
(25,307
|
)
|
|
(2,969
|
)
|
|
(28,276
|
)
|
||||
Purchase of property, plant, equipment and seismic rental equipment
|
(392
|
)
|
|
(959
|
)
|
|
(163
|
)
|
|
(1,514
|
)
|
||||
Net cash used in investing activities
|
(392
|
)
|
|
(26,266
|
)
|
|
(3,132
|
)
|
|
(29,790
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Repayments under revolving line of credit
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|
(10,000
|
)
|
||||
Payments on notes payable and long-term debt
|
(30,169
|
)
|
|
(638
|
)
|
|
—
|
|
|
(30,807
|
)
|
||||
Cost associated with issuance of debt
|
(1,247
|
)
|
|
—
|
|
|
—
|
|
|
(1,247
|
)
|
||||
Intercompany lending
|
7,983
|
|
|
(12,522
|
)
|
|
4,539
|
|
|
—
|
|
||||
Proceeds from employee stock purchases and exercise of stock options
|
214
|
|
|
—
|
|
|
—
|
|
|
214
|
|
||||
Net proceeds from issuance of stocks
|
46,999
|
|
|
—
|
|
|
—
|
|
|
46,999
|
|
||||
Dividend payment to noncontrolling interest
|
(200
|
)
|
|
—
|
|
|
—
|
|
|
(200
|
)
|
||||
Other financing activities
|
(1,151
|
)
|
|
—
|
|
|
—
|
|
|
(1,151
|
)
|
||||
Net cash provided by (used in) financing activities
|
12,429
|
|
|
(13,160
|
)
|
|
4,539
|
|
|
3,808
|
|
||||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
319
|
|
|
319
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
(25,622
|
)
|
|
(19
|
)
|
|
7,076
|
|
|
(18,565
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
39,707
|
|
|
66
|
|
|
12,646
|
|
|
52,419
|
|
||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
14,085
|
|
|
$
|
47
|
|
|
$
|
19,722
|
|
|
$
|
33,854
|
|
|
December 31, 2018
|
||||||||||||||
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Total Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash and cash equivalents
|
$
|
13,782
|
|
|
$
|
47
|
|
|
$
|
19,722
|
|
|
$
|
33,551
|
|
Restricted cash included in other long-term assets
|
303
|
|
|
—
|
|
|
—
|
|
|
303
|
|
||||
Total cash, cash equivalents, and restricted cash shown in statements of cash flows
|
$
|
14,085
|
|
|
$
|
47
|
|
|
$
|
19,722
|
|
|
$
|
33,854
|
|
|
Year Ended December 31, 2017
|
||||||||||||||
Statement of Cash Flows
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Total Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in) operating activities
|
$
|
(22,315
|
)
|
|
$
|
73,154
|
|
|
$
|
(23,227
|
)
|
|
$
|
27,612
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Investment in multi-client data library
|
—
|
|
|
(23,710
|
)
|
|
—
|
|
|
(23,710
|
)
|
||||
Purchase of property, plant, equipment and seismic rental equipment
|
(165
|
)
|
|
(817
|
)
|
|
(81
|
)
|
|
(1,063
|
)
|
||||
Net cash used in investing activities
|
(165
|
)
|
|
(24,527
|
)
|
|
(81
|
)
|
|
(24,773
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Payments on notes payable and long-term debt
|
(1,591
|
)
|
|
(3,167
|
)
|
|
(58
|
)
|
|
(4,816
|
)
|
||||
Cost associated with issuance of debt
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
||||
Intercompany lending
|
38,732
|
|
|
(45,609
|
)
|
|
6,877
|
|
|
—
|
|
||||
Proceeds from employee stock purchases and exercise of stock options
|
1,619
|
|
|
—
|
|
|
—
|
|
|
1,619
|
|
||||
Dividend payment to noncontrolling interest
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
||||
Other financing activities
|
(243
|
)
|
|
—
|
|
|
—
|
|
|
(243
|
)
|
||||
Net cash provided by (used in) financing activities
|
38,364
|
|
|
(48,776
|
)
|
|
6,819
|
|
|
(3,593
|
)
|
||||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
(260
|
)
|
|
(260
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
15,884
|
|
|
(149
|
)
|
|
(16,749
|
)
|
|
(1,014
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
23,823
|
|
|
215
|
|
|
29,395
|
|
|
53,433
|
|
||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
39,707
|
|
|
$
|
66
|
|
|
$
|
12,646
|
|
|
$
|
52,419
|
|
|
December 31, 2017
|
||||||||||||||
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Total Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash and cash equivalents
|
$
|
39,344
|
|
|
$
|
66
|
|
|
$
|
12,646
|
|
|
$
|
52,056
|
|
Restricted cash included in prepaid expenses and other current assets
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
||||
Restricted cash included in other long-term assets
|
303
|
|
|
—
|
|
|
—
|
|
|
303
|
|
||||
Total cash, cash equivalents, and restricted cash shown in statements of cash flows
|
$
|
39,707
|
|
|
$
|
66
|
|
|
$
|
12,646
|
|
|
$
|
52,419
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
Statement of Cash Flows
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Total Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in) operating activities
|
$
|
(30,732
|
)
|
|
$
|
53,107
|
|
|
$
|
(21,382
|
)
|
|
$
|
993
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Investment in multi-client data library
|
—
|
|
|
(14,884
|
)
|
|
—
|
|
|
(14,884
|
)
|
||||
Purchase of property, plant and equipment
|
(73
|
)
|
|
(313
|
)
|
|
(1,072
|
)
|
|
(1,458
|
)
|
||||
Proceeds from sale of a cost-method investment
|
2,698
|
|
|
—
|
|
|
—
|
|
|
2,698
|
|
||||
Net cash provided by (used in) investing activities
|
2,625
|
|
|
(15,197
|
)
|
|
(1,072
|
)
|
|
(13,644
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Payments under revolving line of credit
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
||||
Borrowings under revolving line of credit
|
15,000
|
|
|
—
|
|
|
—
|
|
|
15,000
|
|
||||
Payments on notes payable and long-term debt
|
(17,070
|
)
|
|
(6,316
|
)
|
|
(248
|
)
|
|
(23,634
|
)
|
||||
Cost associated with issuance of debt
|
(6,744
|
)
|
|
—
|
|
|
—
|
|
|
(6,744
|
)
|
||||
Repurchase of common stock
|
(964
|
)
|
|
—
|
|
|
—
|
|
|
(964
|
)
|
||||
Intercompany lending
|
31,867
|
|
|
(34,771
|
)
|
|
2,904
|
|
|
—
|
|
||||
Other financing activities
|
(252
|
)
|
|
—
|
|
|
—
|
|
|
(252
|
)
|
||||
Net cash provided by (used in) financing activities
|
16,837
|
|
|
(41,087
|
)
|
|
2,656
|
|
|
(21,594
|
)
|
||||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
1,386
|
|
|
1,386
|
|
||||
Net decrease in cash and cash equivalents
|
(11,270
|
)
|
|
(3,177
|
)
|
|
(18,412
|
)
|
|
(32,859
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
35,093
|
|
|
3,392
|
|
|
47,807
|
|
|
86,292
|
|
||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
23,823
|
|
|
$
|
215
|
|
|
$
|
29,395
|
|
|
$
|
53,433
|
|
|
December 31, 2016
|
||||||||||||||
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Total Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash and cash equivalents
|
$
|
23,042
|
|
|
$
|
215
|
|
|
$
|
29,395
|
|
|
$
|
52,652
|
|
Restricted cash included in prepaid expenses and other current assets
|
260
|
|
|
—
|
|
|
—
|
|
|
260
|
|
||||
Restricted cash included in other long-term assets
|
521
|
|
|
—
|
|
|
—
|
|
|
521
|
|
||||
Total cash, cash equivalents, and restricted cash shown in statements of cash flows
|
$
|
23,823
|
|
|
$
|
215
|
|
|
$
|
29,395
|
|
|
$
|
53,433
|
|
Year Ended December 31, 2016
|
Balance at
Beginning of Year |
|
Charged (Credited) to
Costs and Expenses |
|
Deductions
|
|
Balance at
End of Year |
||||||||
|
(In thousands)
|
||||||||||||||
Allowances for doubtful accounts
|
$
|
4,919
|
|
|
$
|
1,834
|
|
|
$
|
(5,310
|
)
|
|
$
|
1,443
|
|
Allowances for doubtful notes receivable
|
4,000
|
|
|
—
|
|
|
—
|
|
|
4,000
|
|
||||
Valuation allowance on deferred tax assets
|
194,255
|
|
|
23,334
|
|
|
—
|
|
|
217,589
|
|
||||
Excess and obsolete inventory
|
24,475
|
|
|
429
|
|
|
(9,855
|
)
|
|
15,049
|
|
Year Ended December 31, 2017
|
Balance at
Beginning of Year |
|
Charged (Credited) to
Costs and Expenses |
|
Deductions
|
|
Balance at
End of Year |
||||||||
|
(In thousands)
|
||||||||||||||
Allowances for doubtful accounts
|
$
|
1,443
|
|
|
$
|
949
|
|
|
$
|
(1,820
|
)
|
|
$
|
572
|
|
Allowances for doubtful notes receivable
|
4,000
|
|
|
—
|
|
|
—
|
|
|
4,000
|
|
||||
Valuation allowance on deferred tax assets
|
217,589
|
|
|
(64,126
|
)
|
|
—
|
|
|
153,463
|
|
||||
Excess and obsolete inventory
|
15,049
|
|
|
398
|
|
|
(408
|
)
|
|
15,039
|
|
Year Ended December 31, 2018
|
Balance at
Beginning of Year
|
|
Charged (Credited) to
Costs and Expenses
|
|
Deductions
|
|
Balance at
End of Year
|
||||||||
|
(In thousands)
|
||||||||||||||
Allowances for doubtful accounts
|
$
|
572
|
|
|
$
|
222
|
|
|
$
|
(364
|
)
|
|
$
|
430
|
|
Allowances for doubtful notes receivable
|
4,000
|
|
|
—
|
|
|
—
|
|
|
4,000
|
|
||||
Valuation allowance on deferred tax assets
|
153,463
|
|
|
7,042
|
|
|
—
|
|
|
160,505
|
|
||||
Excess and obsolete inventory
|
15,039
|
|
|
665
|
|
|
(680
|
)
|
|
15,024
|
|
1.2.
|
Definitions
. The following terms shall have the meanings set forth below:
|
(b)
|
Board
. The Board of Directors of the Company.
|
(d)
|
CEO
. The Chief Executive Officer of the Company.
|
(k)
|
Director
. Any individual who is a member of the Board.
|
(o)
|
Exchange Act
. The Securities Exchange Act of 1934, as amended.
|
(s)
|
Non-Employee Director
. A Director who is not an Employee.
|
(z)
|
Share
. A share of Common Stock of the Company.
|
1.3.
|
Plan Administration
|
2.1.
|
Stock Appreciation Rights
.
|
4.3.
|
Change in Stock and Adjustments
.
|
4.4.
|
Termination of Employment, Death, Disability and Retirement
.
|
4.5.
|
Change in Control
.
|
5.8.
|
Miscellaneous Provisions
.
|
2.
|
Grantee
. The Grantee of the SAR award is
[Grantee Name]
(the “
Grantee
”).
|
3.
|
Award
. The Company grants the Grantee this award of SARs in relation to
|
4.
|
Exercise Price
. The exercise price of the SAR award is
$8.85
per Covered Share.
|
5.
|
Grant Date
. The “
Grant Date
” of the SAR award is December 1, 2018.
|
Vesting Date
|
Time Vested Percentage
|
December 1, 2019
|
33.33%
|
December 1, 2020
|
66.66%
|
December 1, 2021
|
100%
|
7.
|
Exercise
.
|
(d)
|
If, prior to the Expiration Date, the closing price per Share meets or exceeds
|
1.
|
All determinations under Section 21 of this Agreement and this Exhibit A will be made by an accounting firm or law firm that is selected for this purpose by the Company’s Chief Executive Officer prior to a Change in Control (“
280G Firm
”). All fees and expenses of the 280G Firm shall be borne by the Company. The Company will direct the 280G Firm to submit any determination it makes under Section 21 of this Agreement and this Exhibit A and detailed supporting calculations to both the Participant and the Company as soon as reasonably practicable.
|
2.
|
If the 280G Firm determines that reductions are required under Section 21 of this Agreement, the 280G Firm shall also determine which Payments shall be reduced, with the Payments that otherwise would be made last in time reduced first, to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay such reduced amount to the Participant.
|
3.
|
As a result of the uncertainty in the application of Section 280G at the time that the 280G Firm makes its determinations under this Section, it is possible that amounts will have been paid or distributed to the Participant that should not have been paid or distributed (collectively, the “
Overpayments
”), or that additional amounts should be paid or distributed to the Participant (collectively, the “
Underpayments
”). If the 280G Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant, which assertion the 280G Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Participant must repay to the Company, without interest;
provided
,
however
, that no loan will be deemed to have been made and no amount will be payable by the Participant to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Participant is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If the 280G Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the 280G Firm will notify the Participant and the Company of that determination and the amount of that Underpayment will be paid to the Participant promptly by the Company.
|
4.
|
The Participant will provide the 280G Firm access to, and copies of, any books, records, and documents in the Participant’s possession as reasonably requested by the 280G Firm, and otherwise cooperate with the 280G Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Section 21 of this Agreement and this Exhibit A.
|
1.
|
Grant of Restricted Stock Shares
. A grant of
[NUMBER]
shares of restricted Common Stock (the “
Restricted Stock
”) to
[GRANTEE]
(the “
Participant
”) under this Restricted Stock Agreement (this “
Agreement
”) by ION Geophysical Corporation (the "
Company
") was made as of December 1, 2018 (the “
Grant Date
”), subject and pursuant to the terms of the Third Amended and Restated 2013 Long Term Incentive Plan (the "
Plan
"). The Restricted Stock and its release are subject in all respects to the terms as set forth in the Plan, a copy of which is available from the General Counsel of ION Geophysical Corporation, and to any rules promulgated pursuant to the Plan by the Committee. Capitalized terms not otherwise defined herein are as defined in the Plan. The effectiveness of such grant is expressly conditioned upon Participant executing and returning this Agreement to the Company’s General Counsel.
|
2.
|
Dividends and Voting Rights
. The Participant shall not be entitled to receive any dividends paid with respect to the Restricted Stock that become payable except as to any Restricted Stock that has vested as set forth below in this Agreement. From the Grant Date, the Participant shall be entitled to vote the shares of Restricted Stock, even if it they have not vested, to the same extent as would have been applicable to the Participant if the Participant was then vested in the shares of Restricted Stock;
provided
,
however
, that the Participant shall not be entitled to vote the shares of Restricted Stock with respect to record dates for such voting rights arising prior to the Grant Date, or with respect to record dates occurring on or after the date, if any, on which the Participant has forfeited such shares of Restricted Stock.
|
3.
|
Deposit of Restricted Stock
. Each certificate issued in respect of shares of Restricted Stock granted under this Agreement shall be registered in the name of the Participant and shall be deposited for custody by the Company, as directed by the Committee or in the Company’s discretion, until all restrictions on such shares of Restricted Stock have lapsed.
|
4.
|
Early Vesting on Certain Events; Transfer and Forfeiture of Restricted Stock
. In addition to (and notwithstanding anything to the contrary in) the vesting criteria set forth in paragraph 5 below, the Participant shall become fully vested in the shares of Restricted Stock awarded hereunder (to the extent not already vested) and shall own such shares as unrestricted Common Stock, free of all restrictions otherwise imposed by this Agreement, as follows:
|
(a)
|
The Participant shall become fully vested in all of the shares of Restricted Stock as of the Participant’s Date of Termination if the Participant’s Date of Termination occurs by reason of the Participant’s death or Disability.
|
(b)
|
The Participant shall become fully vested in the shares of Restricted Stock on the day immediately preceding a Change in Control.
|
5.
|
Vesting
. The Participant’s Restricted Stock shall become vested, if at all, only upon the satisfaction of
both
the Time Measure and the Performance Measure, each as outlined below.
|
(a)
|
Time Measure
. The “
Time Measure
” shall be satisfied with respect to an award of Restricted Stock only if the Participant is an Employee, Director, or Consultant based on continuous service with the Company between the Grant Date and the Vesting Date provided in the following schedule:
|
Vesting Date
|
Time Vested Percentage
|
December 1, 2019
|
33.33%
|
December 1, 2020
|
66.66%
|
December 1, 2021
|
100%
|
(b)
|
Performance Measure
. The Performance Measure shall be satisfied, if at all, based on the trading price for the Company’s Common Stock following the Grant Date. For this purpose, the Company shall measure the volume weighted average price per Share during the period between the Grant Date and December 1, 2021. The “
Performance Measure
” requires, as to each VWAP Amount listed below, that, during the period commencing on the Grant Date and concluding on December 1, 2021, the volume weighted average price per Share, as determined by the Company based on the NYSE reported closing Share price, over a twenty (20) consecutive trading day period, meets or exceeds the VWAP Amount in the table below. If (and only if) such Performance Measure is satisfied as to a particular VWAP Amount during such three (3) year time period, then the designated portion of the Performance Measure shall be satisfied based on the following schedule:
|
(c)
|
Calculation of Vested Percentage
. The portion of the Participant’s Restricted Stock which is vested at any time shall be equal to (i) the total number of shares of Restricted Stock awarded in paragraph 1 above, multiplied by (ii) the lesser of (x) the Time Vested Percentage, or (y) the Performance Vested Percentage. No portion of the Restricted Stock will be vested prior to the date the vested percentage for each of the Time Measure and the Performance Measure is at least 33.33%.
|
6.
|
Heirs and Successors
. This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business. If any rights of the Participant or benefits distributable to the Participant under this Agreement have not been exercised or distributed, respectively, at the time of the Participant’s death, such rights shall be exercisable by the legal representative of the estate of the Participant.
|
7.
|
Administration
. The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of this Agreement by the Committee and any decision made by it with respect to this Agreement is final and binding.
|
8.
|
Plan Governs
. Notwithstanding anything contained in this Agreement to the contrary, the terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the office of the General Counsel of the Company.
|
9.
|
Amendment
. This Agreement may only be amended by written agreement of the Participant and the Company.
|
10.
|
Tax Requirements
. The Company shall have the right to deduct any federal, state, or local taxes required by law to be withheld with respect to the award of Restricted Stock made hereunder. The Participant shall be required to pay the Company the amount of any taxes which the Company is required to withhold with respect to such shares of Restricted Stock.
|
11.
|
Legend
. Each certificate representing shares of Restricted Stock issued to the Participant shall bear a legend deemed by the Company to constitute an appropriate notice of the provisions hereof (any such certificate not having such legend shall be surrendered by the Participant upon demand by the Company and so endorsed).
|
12.
|
Not an Employment Contract
. No award of Restricted Stock shall confer on the Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate or modify the terms of such
Participant’s
employment or other service at any time.
|
13.
|
Notices
.
Any written notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either sent by nationally recognized overnight courier, or by postage paid first class mail. Notices sent by U.S. mail shall be deemed received on the date of actual receipt. Notices sent by nationally recognized overnight courier shall be deemed received upon the first day that the courier attempts delivery at the recipient’s address. Notices shall be directed, if to the Participant, at the
Participant’s
address indicated by the Company’s records, and if to the Company, at the Company’s principal executive office, to the attention of the General Counsel.
|
14.
|
Applicable Law; Dispute Resolution
. Except to the extent preempted by federal or Delaware law, this Agreement shall be governed by and construed in accordance with the laws of the State of Texas, excluding any conflict-of-law rules or principles that would result in the laws of another state being applied. TO THE MAXIMUM EXTENT PERMITTED BY LAW, COMPANY AND PARTICIPANT EACH WAIVES ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN COMPANY AND PARTICIPANT ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE MATTERS RELATED HERETO. The prevailing party in any litigation or other proceeding to enforce the terms of this Agreement shall be entitled to recoup its reasonable attorneys’ fees and costs from the non-prevailing party. To the fullest extent permitted by law, the parties agree that any suit or proceeding arising out of or relating to this Agreement shall be brought in court in Harris County, Texas, to the exclusion of any other forum or venue.
|
Subsidiary
|
Jurisdiction
|
|
|
Concept Systems Holdings Limited
|
Scotland
|
Concept Systems Limited
|
Scotland
|
GMG/AXIS, Inc.
|
Delaware
|
GX Geoscience Corporation S. de R.L. de C.V.
|
Mexico
|
GX Technology Australia Pty Ltd.
|
Australia
|
GX Technology Canada, Ltd.
|
Canada
|
GX Technology Corporation
|
Texas
|
GX Technology EAME, Limited
|
UK
|
GX Technology Imaging Services Limited
|
Egypt
|
GX Technology Poland Sp. Z o.o.
|
Poland
|
GX Technology Processamento de Dados Ltda.
|
Brazil
|
GX Technology Sismica Brasil Ltda.
|
Brazil
|
GX Technology Trinidad, Ltd.
|
West Indies
|
I/O Cayman Islands, Ltd.
|
Cayman Islands
|
I/O International Holdings, Ltd.
|
Cayman Islands
|
I/O International, Ltd.
|
Cayman Islands
|
I/O Luxembourg S.à r.l.
|
Luxembourg
|
I/O Marine Systems Limited
|
UK
|
I/O Marine Systems, Inc.
|
Louisiana
|
I/O U.K. Holdings Limited
|
Scotland
|
“Inco” Industrial Components ‘s-Gravenhage B.V.
|
Netherlands
|
ION China Holdings, Limited
|
Hong Kong
|
ION E&P Advisors, Inc.
|
Delaware
|
ION EPA Holdings, Inc.
|
Delaware
|
ION Exploration Products (U.S.A.), Inc.
|
Delaware
|
ION Geophysical CIS LLC
|
Russia
|
ION Geophysical Sdn. Bhd.
|
Malaysia
|
ION HPC Services, Inc.
|
Delaware
|
ION International Holdings L.P.
|
Bermuda
|
ION International S.à r.l.
|
Luxembourg
|
IPOP Management, Inc.
|
Delaware
|
OceanGeo B.V.
|
Netherlands
|
OceanGeo Inc.
|
British Virgin Islands
|
OceanGeo Ltd.
|
UK
|
Oceangeo Tecnologia de Exploração de Reservatórios do Brasil EIRELI
|
Brazil
|
Sensor Nederland B.V.
|
Netherlands
|
1.
|
Registration Statement (Form S-8 No. 333-60950) pertaining to the Input/Output, Inc. Non‑Employee Directors’ Retainer Plan,
|
2.
|
Registration Statement (Form S-8 No. 333-112677) pertaining to the Input/Output, Inc. 2003 Employee Stock Option Plan,
|
3.
|
Registration Statement (Form S-8 No. 333-125655) pertaining to the Input/Output, Inc. 2004 Long‑Term Incentive Plan,
|
4.
|
Registration Statement (Form S-8 No. 333-135775) pertaining to the Input/Output, Inc. Second Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan,
|
5.
|
Registration Statement (Form S-3 No. 333-112263) of Input/Output, Inc.,
|
6.
|
Registration Statement (Form S-3 No. 333-123632) of Input/Output, Inc.,
|
7.
|
Registration Statement (Form S-8 No. 333-145274) pertaining to the Third Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan,
|
8.
|
Registration Statement (Form S-8 No. 333-155378) pertaining to the Fourth Amended and Restated 2004 Long-Term Incentive Plan and the ARAM Systems Employee Inducement Stock Options Program,
|
9.
|
Registration Statement (Form S-3 No. 333-159898) of ION Geophysical Corporation,
|
10.
|
Registration Statement (Form S-8 No. 333-167943) pertaining to the Fifth Amended and Restated 2004 Long-Term Incentive Plan and the ION Geophysical Corporation Employee Stock Purchase Plan,
|
11.
|
Registration Statement (Form S-3 No. 333-166200) of ION Geophysical Corporation,
|
12.
|
Registration Statement (Form S-8 No. 333-176046) pertaining to the Sixth Amended and Restated 2004 Long-Term Incentive Plan,
|
13.
|
Registration Statement (Form S-8 No. 333-190474) pertaining to the 2013 Long-Term Incentive Plan,
|
14.
|
Registration Statement (Form S-4 No. 333-194110) of ION Geophysical Corporation,
|
15.
|
Registration Statement (Form S-8 No. 333-209707) pertaining to the 2013 Long-Term Incentive Plan,
|
16.
|
Registration Statement (Form S-3 No. 333-213769) of ION Geophysical Corporation,
|
17.
|
Registration Statement (Form S-3 No. 333-223053) of ION Geophysical Corporation, and
|
18.
|
Registration Statement (Form S-8 No. 333-229311) pertaining to the Third Amended and Restated 2013 Long-Term Incentive Plan.
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2018, of ION Geophysical Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 7, 2019
|
|
/s/ R. Brian Hanson
|
|
|
R. Brian Hanson
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2018, of ION Geophysical Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 7, 2019
|
|
/s/ Steven A. Bate
|
|
|
Steven A. Bate
|
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 7, 2019
|
|
/s/ R. Brian Hanson
|
|
|
R. Brian Hanson
|
|
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 7, 2019
|
|
/s/ Steven A. Bate
|
|
|
Steven A. Bate
|
|
|
Executive Vice President and Chief Financial Officer
|