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ý
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QUARTERLY 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
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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2105 CityWest Blvd. Suite 100
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|
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Houston, Texas
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77042-2839
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
Trading symbol(s)
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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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IO
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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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ý
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Non-accelerated filer
|
|
o
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|
Smaller reporting company
|
o
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Emerging growth company
|
o
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PAGE
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PART I. Financial Information
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|
Item 1. Financial Statements (Unaudited)
|
|
Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019
|
|
Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019
|
|
Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2020 and 2019
|
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Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019
|
|
Condensed Consolidated Statements of Stockholders' Deficit for the three months ended March 31, 2020 and 2019
|
|
Footnotes to Condensed Consolidated Financial Statements
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
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Item 4. Controls and Procedures
|
|
|
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PART II. Other Information
|
|
Item 1. Legal Proceedings
|
|
Item 1A. Risk Factors
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Item 5. Other Information
|
|
Item 6. Exhibits
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
(In thousands, except share data)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
42,663
|
|
|
$
|
33,065
|
|
Accounts receivable, net
|
51,149
|
|
|
29,548
|
|
||
Unbilled receivables
|
8,356
|
|
|
11,815
|
|
||
Inventories, net
|
12,820
|
|
|
12,187
|
|
||
Prepaid expenses and other current assets
|
5,681
|
|
|
6,012
|
|
||
Total current assets
|
120,669
|
|
|
92,627
|
|
||
Deferred income tax asset, net
|
7,905
|
|
|
8,734
|
|
||
Property, plant and equipment, net
|
12,706
|
|
|
13,188
|
|
||
Multi-client data library, net
|
54,344
|
|
|
60,384
|
|
||
Goodwill
|
18,298
|
|
|
23,585
|
|
||
Right-of-use assets
|
42,166
|
|
|
32,546
|
|
||
Other assets
|
3,299
|
|
|
2,130
|
|
||
Total assets
|
$
|
259,387
|
|
|
$
|
233,194
|
|
LIABILITIES AND DEFICIT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
28,646
|
|
|
$
|
2,107
|
|
Accounts payable
|
43,827
|
|
|
49,316
|
|
||
Accrued expenses
|
29,078
|
|
|
30,328
|
|
||
Accrued multi-client data library royalties
|
21,424
|
|
|
18,831
|
|
||
Deferred revenue
|
4,882
|
|
|
4,551
|
|
||
Current maturities of operating lease liabilities
|
9,873
|
|
|
11,055
|
|
||
Total current liabilities
|
137,730
|
|
|
116,188
|
|
||
Long-term debt, net of current maturities
|
119,296
|
|
|
119,352
|
|
||
Operating lease liabilities, net of current maturities
|
40,531
|
|
|
30,833
|
|
||
Other long-term liabilities
|
433
|
|
|
1,453
|
|
||
Total liabilities
|
297,990
|
|
|
267,826
|
|
||
Deficit:
|
|
|
|
||||
Common stock, $0.01 par value; authorized 26,666,667 shares; outstanding 14,240,126 and 14,224,787 shares at March 31, 2020 and December 31, 2019, respectively.
|
142
|
|
|
142
|
|
||
Additional paid-in capital
|
957,254
|
|
|
956,647
|
|
||
Accumulated deficit
|
(976,554
|
)
|
|
(974,291
|
)
|
||
Accumulated other comprehensive loss
|
(21,099
|
)
|
|
(19,318
|
)
|
||
Total stockholders’ deficit
|
(40,257
|
)
|
|
(36,820
|
)
|
||
Noncontrolling interest
|
1,654
|
|
|
2,188
|
|
||
Total deficit
|
(38,603
|
)
|
|
(34,632
|
)
|
||
Total liabilities and deficit
|
$
|
259,387
|
|
|
$
|
233,194
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(In thousands, except per share data)
|
||||||
Service revenues
|
$
|
47,485
|
|
|
$
|
28,128
|
|
Product revenues
|
8,929
|
|
|
8,828
|
|
||
Total net revenues
|
56,414
|
|
|
36,956
|
|
||
Cost of services
|
22,275
|
|
|
22,446
|
|
||
Cost of products
|
4,628
|
|
|
4,598
|
|
||
Impairment of multi-client data library
|
1,167
|
|
|
—
|
|
||
Gross profit
|
28,344
|
|
|
9,912
|
|
||
Operating expenses:
|
|
|
|
||||
Research, development and engineering
|
4,008
|
|
|
5,357
|
|
||
Marketing and sales
|
4,858
|
|
|
5,793
|
|
||
General, administrative and other operating expenses
|
9,002
|
|
|
14,699
|
|
||
Impairment of goodwill
|
4,150
|
|
|
—
|
|
||
Total operating expenses
|
22,018
|
|
|
25,849
|
|
||
Income (loss) from operations
|
6,326
|
|
|
(15,937
|
)
|
||
Interest expense, net
|
(3,221
|
)
|
|
(3,112
|
)
|
||
Other income (expense), net
|
429
|
|
|
(792
|
)
|
||
Income (loss) before income taxes
|
3,534
|
|
|
(19,841
|
)
|
||
Income tax expense
|
5,874
|
|
|
1,407
|
|
||
Net loss
|
(2,340
|
)
|
|
(21,248
|
)
|
||
Less: Net (income) loss attributable to noncontrolling interest
|
77
|
|
|
(112
|
)
|
||
Net loss attributable to ION
|
$
|
(2,263
|
)
|
|
$
|
(21,360
|
)
|
Net loss per share:
|
|
|
|
||||
Basic
|
$
|
(0.16
|
)
|
|
$
|
(1.52
|
)
|
Diluted
|
$
|
(0.16
|
)
|
|
$
|
(1.52
|
)
|
Weighted average number of common shares outstanding:
|
|
|
|
||||
Basic
|
14,230
|
|
|
14,033
|
|
||
Diluted
|
14,230
|
|
|
14,033
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(In thousands)
|
||||||
Net loss
|
$
|
(2,340
|
)
|
|
$
|
(21,248
|
)
|
Other comprehensive loss, net of taxes, as appropriate:
|
|
|
|
||||
Foreign currency translation adjustments
|
(1,781
|
)
|
|
970
|
|
||
Total other comprehensive income (loss), net of taxes
|
(1,781
|
)
|
|
970
|
|
||
Comprehensive net loss
|
(4,121
|
)
|
|
(20,278
|
)
|
||
Comprehensive (income) loss attributable to noncontrolling interest
|
77
|
|
|
(112
|
)
|
||
Comprehensive net loss attributable to ION
|
$
|
(4,044
|
)
|
|
$
|
(20,390
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(2,340
|
)
|
|
$
|
(21,248
|
)
|
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
|
|
|
|
||||
Depreciation and amortization (other than multi-client data library)
|
840
|
|
|
1,035
|
|
||
Amortization of multi-client data library
|
8,020
|
|
|
11,100
|
|
||
Stock-based compensation expense
|
617
|
|
|
1,293
|
|
||
Impairment of multi-client data library
|
1,167
|
|
|
—
|
|
||
Impairment of goodwill
|
4,150
|
|
|
—
|
|
||
Deferred income taxes
|
421
|
|
|
(1,398
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(21,868
|
)
|
|
(2,870
|
)
|
||
Unbilled receivables
|
2,666
|
|
|
29,498
|
|
||
Inventories
|
(772
|
)
|
|
81
|
|
||
Accounts payable, accrued expenses and accrued royalties
|
1,688
|
|
|
(2,013
|
)
|
||
Deferred revenue
|
355
|
|
|
(333
|
)
|
||
Other assets and liabilities
|
(1,910
|
)
|
|
253
|
|
||
Net cash (used in) provided by operating activities
|
(6,966
|
)
|
|
15,398
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Investment in multi-client data library
|
(9,668
|
)
|
|
(8,767
|
)
|
||
Purchase of property, plant and equipment
|
(496
|
)
|
|
(807
|
)
|
||
Net cash used in investing activities
|
(10,164
|
)
|
|
(9,574
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings under revolving line of credit
|
27,000
|
|
|
—
|
|
||
Payments on notes payable and long-term debt
|
(760
|
)
|
|
(715
|
)
|
||
Other financing activities
|
(10
|
)
|
|
(239
|
)
|
||
Net cash provided by (used in) financing activities
|
26,230
|
|
|
(954
|
)
|
||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash
|
470
|
|
|
81
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
9,570
|
|
|
4,951
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
33,118
|
|
|
33,854
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
42,688
|
|
|
$
|
38,805
|
|
|
Three Months Ended March 31, 2020
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Noncontrolling Interests
|
|
Total
Deficit
|
|||||||||||||||
(In thousands, except shares)
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
Balance at January 1, 2020
|
14,224,787
|
|
|
$
|
142
|
|
|
$
|
956,647
|
|
|
$
|
(974,291
|
)
|
|
$
|
(19,318
|
)
|
|
$
|
2,188
|
|
|
$
|
(34,632
|
)
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,263
|
)
|
|
—
|
|
|
(77
|
)
|
|
(2,340
|
)
|
||||||
Translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,781
|
)
|
|
(457
|
)
|
|
(2,238
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
617
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
617
|
|
||||||
Vesting of restricted stock units/awards
|
16,089
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vested restricted stock cancelled for employee minimum income taxes
|
(750
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||||
Balance at March 31, 2020
|
14,240,126
|
|
|
$
|
142
|
|
|
$
|
957,254
|
|
|
$
|
(976,554
|
)
|
|
$
|
(21,099
|
)
|
|
$
|
1,654
|
|
|
$
|
(38,603
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Noncontrolling Interests
|
|
Total
Deficit
|
|||||||||||||||
(In thousands, except shares)
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
Balance at January 1, 2019
|
14,015,615
|
|
|
$
|
140
|
|
|
$
|
952,626
|
|
|
$
|
(926,092
|
)
|
|
$
|
(20,442
|
)
|
|
$
|
1,592
|
|
|
$
|
7,824
|
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,360
|
)
|
|
—
|
|
|
112
|
|
|
(21,248
|
)
|
||||||
Translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
970
|
|
|
(39
|
)
|
|
931
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
1,293
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,293
|
|
||||||
Exercise of stock options
|
5,750
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||||
Vesting of restricted stock units/awards
|
68,199
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vested restricted stock cancelled for employee minimum income taxes
|
(20,044
|
)
|
|
—
|
|
|
(257
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(257
|
)
|
||||||
Balance at March 31, 2019
|
14,069,520
|
|
|
$
|
141
|
|
|
$
|
953,679
|
|
|
$
|
(947,452
|
)
|
|
$
|
(19,472
|
)
|
|
$
|
1,665
|
|
|
$
|
(11,439
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Scaling down personnel costs and operating expenses by another $18.0 million during the remaining nine months of 2020, building on the over $20.0 million (net of severance expense of $3.1 million) of cuts made in January 2020. These further reductions are primarily through a variety of furlough programs and reduced compensation arrangements across the Company’s worldwide workforce. The Company executives have taken a 20% base salary reduction and a tiered reduction scheme has been cascaded to the rest of the worldwide workforce. The Company’s Board of Directors has taken a 20% reduction in directors’ fees. In addition, the Company has curtailed use of external contractors, decreased travel and event costs and implemented new systems and processes that more efficiently support its business.
|
•
|
Reducing capital expenditures to an estimated $20.0 million to $35.0 million (a portion of which will be pre-funded or underwritten by the customers), down from $35.0 million to $50.0 million, to reflect both reduced seismic demand and travel/border restrictions impacting new data acquisition offshore. This provides flexibility to aggressively reduce cash outflows while shifting to much lower cost reimaging programs.
|
•
|
Applied for various government assistance programs of which $6.9 million has been received in April 2020. Receipt of this $6.9 million allowed the Company to avoid further staff reductions while supporting its ongoing operations. Additional global government relief of between $2.0 million to $7.0 million may be possible.
|
•
|
Announced the sale of its interest in INOVA Geophysical for $12.0 million that is expected to close during the second half of the year, subject to regulatory approvals and other closing conditions.
|
•
|
Entered into a settlement agreement with WesternGeco ending the uncertainty surrounding the decade-long patent litigation. See Note 8 “Litigation” for further details.
|
•
|
In addition, the Company reviewed its debt covenants and expects that it will remain in compliance for the next twelve months.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net revenues:
|
|
|
|
||||
E&P Technology & Services:
|
|
|
|
||||
New Venture
|
$
|
1,441
|
|
|
$
|
13,471
|
|
Data Library
|
40,131
|
|
|
9,948
|
|
||
Total multi-client revenues
|
41,572
|
|
|
23,419
|
|
||
Imaging and Reservoir Services
|
4,942
|
|
|
3,684
|
|
||
Total
|
46,514
|
|
|
27,103
|
|
||
Operations Optimization:
|
|
|
|
||||
Optimization Software & Services
|
4,427
|
|
|
5,033
|
|
||
Devices
|
5,473
|
|
|
4,820
|
|
||
Total
|
9,900
|
|
|
9,853
|
|
||
Total net revenues
|
$
|
56,414
|
|
|
$
|
36,956
|
|
Gross profit (loss):
|
|
|
|
||||
E&P Technology & Services
|
$
|
23,730
|
|
(a)
|
$
|
5,440
|
|
Operations Optimization
|
4,614
|
|
|
4,516
|
|
||
Segment gross profit
|
28,344
|
|
|
9,956
|
|
||
Other
|
—
|
|
|
(44
|
)
|
||
Total gross profit
|
$
|
28,344
|
|
|
$
|
9,912
|
|
Gross margin:
|
|
|
|
||||
E&P Technology & Services
|
51
|
%
|
|
20
|
%
|
||
Operations Optimization
|
47
|
%
|
|
46
|
%
|
||
Total gross margin
|
50
|
%
|
|
27
|
%
|
||
Income (loss) from operations:
|
|
|
|
||||
E&P Technology & Services
|
$
|
17,952
|
|
(a)
|
$
|
(1,615
|
)
|
Operations Optimization
|
(3,259
|
)
|
(b)
|
170
|
|
||
Support and other
|
(8,367
|
)
|
|
(14,492
|
)
|
||
Income (loss) from operations
|
6,326
|
|
|
(15,937
|
)
|
||
Interest expense, net
|
(3,221
|
)
|
|
(3,112
|
)
|
||
Other income (expense), net
|
429
|
|
|
(792
|
)
|
||
Income (loss) before income taxes
|
$
|
3,534
|
|
|
$
|
(19,841
|
)
|
(a)
|
Includes impairment of multi-client data library of $1.2 million for the three months ended March 31, 2020.
|
(b)
|
Includes impairment of goodwill of $4.2 million for the three months ended March 31, 2020.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
North America
|
$
|
31,810
|
|
|
$
|
7,157
|
|
Latin America
|
9,804
|
|
|
13,531
|
|
||
Asia Pacific
|
9,288
|
|
|
1,867
|
|
||
Europe
|
3,810
|
|
|
10,392
|
|
||
Middle East
|
954
|
|
|
1,359
|
|
||
Africa
|
591
|
|
|
2,389
|
|
||
Other
|
157
|
|
|
261
|
|
||
Total
|
$
|
56,414
|
|
|
$
|
36,956
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
New Venture
|
$
|
1,586
|
|
|
$
|
5,222
|
|
Imaging and Reservoir Services
|
5,643
|
|
|
6,539
|
|
||
Devices
|
1,127
|
|
|
54
|
|
||
Total
|
$
|
8,356
|
|
|
$
|
11,815
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
New Venture
|
$
|
2,456
|
|
|
$
|
1,956
|
|
Imaging and Reservoir Services
|
1,141
|
|
|
1,501
|
|
||
Optimization Software & Services
|
832
|
|
|
642
|
|
||
Devices
|
453
|
|
|
452
|
|
||
Total
|
$
|
4,882
|
|
|
$
|
4,551
|
|
Deferred revenue at December 31, 2019
|
$
|
4,551
|
|
Cash collected in excess of revenue recognized
|
1,613
|
|
|
Recognition of deferred revenue (a)
|
(1,282
|
)
|
|
Deferred revenue at March 31, 2020
|
$
|
4,882
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Senior secured second-priority lien notes (maturing December 15, 2021)
|
|
$
|
120,569
|
|
|
$
|
120,569
|
|
Revolving credit facility (maturing August 16, 2023) (a)
|
|
27,000
|
|
|
—
|
|
||
Equipment finance leases (Note 11)
|
|
1,595
|
|
|
1,869
|
|
||
Other debt
|
|
486
|
|
|
972
|
|
||
Costs associated with issuances of debt
|
|
(1,708
|
)
|
|
(1,951
|
)
|
||
Total
|
|
147,942
|
|
|
121,459
|
|
||
Current maturities of long-term debt
|
|
(28,646
|
)
|
|
(2,107
|
)
|
||
Long-term debt, net of current maturities
|
|
$
|
119,296
|
|
|
$
|
119,352
|
|
•
|
extend the maturity date of the Credit Facility by approximately four years (from August 22, 2019 to August 16, 2023), subject to the Company’s retirement or extension of the maturity date of its Second Lien Notes, as defined below, which mature on December 15, 2021;
|
•
|
increase the maximum revolver amount by $10.0 million (from $40.0 million to $50.0 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 $15.0 million for the multi-client data library component);
|
•
|
include the eligible billed receivables of the Mexican Subsidiary up to a maximum of $5.0 million in the borrowing base calculation and joins the Mexican Subsidiary as a borrower thereunder (with a maximum exposure of $5.0 million) and require the equity and assets of the Mexican Subsidiary to be pledged to secure obligations under the 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
|
•
|
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 charges coverage ratio, which is further described below.
|
Date
|
|
Percentage
|
2019
|
|
105.50%
|
2020
|
|
103.50%
|
2021
|
|
100.00%
|
A summary of inventories follows (in thousands):
|
March 31, 2020
|
|
December 31, 2019
|
||||
Raw materials and subassemblies
|
$
|
18,181
|
|
|
$
|
18,509
|
|
Work-in-process
|
2,340
|
|
|
2,079
|
|
||
Finished goods
|
5,518
|
|
|
4,932
|
|
||
Less: reserve for excess and obsolete inventories
|
(13,219
|
)
|
|
(13,333
|
)
|
||
Inventories, net
|
$
|
12,820
|
|
|
$
|
12,187
|
|
A summary of property, plant and equipment follows (in thousands):
|
March 31, 2020
|
|
December 31, 2019
|
||||
Buildings
|
$
|
15,665
|
|
|
$
|
15,486
|
|
Machinery and equipment
|
133,722
|
|
|
133,048
|
|
||
Seismic rental equipment
|
1,668
|
|
|
1,669
|
|
||
Furniture and fixtures
|
3,158
|
|
|
3,347
|
|
||
Other
|
29,955
|
|
|
31,142
|
|
||
Total
|
184,168
|
|
|
184,692
|
|
||
Less: accumulated depreciation
|
(134,909
|
)
|
|
(134,951
|
)
|
||
Less: impairment of long-lived assets
|
(36,553
|
)
|
|
(36,553
|
)
|
||
Property, plant and equipment, net
|
$
|
12,706
|
|
|
$
|
13,188
|
|
The change in multi-client data library are as follows (in thousands):
|
March 31, 2020
|
|
December 31, 2019
|
||||
Gross costs of multi-client data creation
|
$
|
1,010,909
|
|
|
$
|
1,007,762
|
|
Less: accumulated amortization
|
(824,421
|
)
|
|
(816,401
|
)
|
||
Less: impairments to multi-client data library
|
(132,144
|
)
|
|
(130,977
|
)
|
||
Multi-client data library, net
|
$
|
54,344
|
|
|
$
|
60,384
|
|
|
E&P Technology & Services
|
|
Optimization Software & Services
|
|
Total
|
||||||
Balance at January 1, 2019
|
$
|
2,943
|
|
|
$
|
19,972
|
|
|
$
|
22,915
|
|
Impact of foreign currency translation adjustments
|
—
|
|
|
670
|
|
|
670
|
|
|||
Balance at December 31, 2019
|
2,943
|
|
|
20,642
|
|
|
23,585
|
|
|||
Impairment of goodwill
|
—
|
|
|
(4,150
|
)
|
|
(4,150
|
)
|
|||
Impact of foreign currency translation adjustments
|
—
|
|
|
(1,137
|
)
|
|
(1,137
|
)
|
|||
Balance at March 31, 2020
|
$
|
2,943
|
|
|
$
|
15,355
|
|
|
$
|
18,298
|
|
|
Stock Options
|
|
Restricted Stock and Unit Awards
|
|
Stock Appreciation Rights
|
|||
|
Number of Shares
|
|||||||
Outstanding at December 31, 2019
|
689,209
|
|
|
908,754
|
|
|
954,679
|
|
Granted
|
—
|
|
|
67,500
|
|
|
—
|
|
Stock options and SARs exercised/restricted stock and unit awards vested
|
—
|
|
|
(16,089
|
)
|
|
—
|
|
Cancelled/forfeited
|
(20,000
|
)
|
|
(56,961
|
)
|
|
(17,082
|
)
|
Outstanding at March 31, 2020
|
669,209
|
|
|
903,204
|
|
|
937,597
|
|
Risk-free interest rates
|
1.9
|
%
|
Expected lives (in years)
|
5.31
|
|
Expected dividend yield
|
—
|
%
|
Expected volatility
|
79
|
%
|
For the year ending March 31,
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
||||||
2021
|
$
|
11,260
|
|
|
$
|
1,254
|
|
|
$
|
12,514
|
|
2022
|
9,618
|
|
|
443
|
|
|
10,061
|
|
|||
2023
|
9,538
|
|
|
—
|
|
|
9,538
|
|
|||
2024
|
6,783
|
|
|
—
|
|
|
6,783
|
|
|||
2025
|
8,878
|
|
|
—
|
|
|
8,878
|
|
|||
Thereafter
|
19,906
|
|
|
—
|
|
|
19,906
|
|
|||
Total lease payments
|
65,983
|
|
|
1,697
|
|
|
67,680
|
|
|||
Less imputed interest
|
(15,579
|
)
|
|
(102
|
)
|
|
(15,681
|
)
|
|||
Total
|
$
|
50,404
|
|
|
$
|
1,595
|
|
|
$
|
51,999
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
||||
Operating leases
|
$
|
2,604
|
|
|
$
|
3,156
|
|
Equipment finance leases
|
275
|
|
|
281
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
160
|
|
|
$
|
198
|
|
Income taxes
|
4,304
|
|
|
3,176
|
|
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
42,663
|
|
|
$
|
38,407
|
|
Restricted cash included in prepaid expenses and other current assets
|
—
|
|
|
398
|
|
||
Restricted cash included in other long-term assets
|
25
|
|
|
—
|
|
||
Total cash, cash equivalents, and restricted cash shown in statements of cash flows
|
$
|
42,688
|
|
|
$
|
38,805
|
|
•
|
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 not Guarantors.
|
•
|
The consolidating adjustments necessary to present ION Geophysical Corporation’s results on a consolidated basis.
|
|
March 31, 2020
|
||||||||||||||||||
Balance Sheet
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
28,602
|
|
|
$
|
54
|
|
|
$
|
14,007
|
|
|
$
|
—
|
|
|
$
|
42,663
|
|
Accounts receivable, net
|
8
|
|
|
42,390
|
|
|
8,751
|
|
|
—
|
|
|
51,149
|
|
|||||
Unbilled receivables
|
—
|
|
|
5,206
|
|
|
3,150
|
|
|
—
|
|
|
8,356
|
|
|||||
Inventories, net
|
—
|
|
|
7,603
|
|
|
5,217
|
|
|
—
|
|
|
12,820
|
|
|||||
Prepaid expenses and other current assets
|
3,168
|
|
|
1,319
|
|
|
1,194
|
|
|
—
|
|
|
5,681
|
|
|||||
Total current assets
|
31,778
|
|
|
56,572
|
|
|
32,319
|
|
|
—
|
|
|
120,669
|
|
|||||
Deferred income tax asset
|
—
|
|
|
7,799
|
|
|
106
|
|
|
—
|
|
|
7,905
|
|
|||||
Property, plant and equipment, net
|
1,609
|
|
|
7,711
|
|
|
3,386
|
|
|
—
|
|
|
12,706
|
|
|||||
Multi-client data library, net
|
—
|
|
|
46,771
|
|
|
7,573
|
|
|
—
|
|
|
54,344
|
|
|||||
Investment in subsidiaries
|
855,539
|
|
|
274,923
|
|
|
—
|
|
|
(1,130,462
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
18,298
|
|
|
—
|
|
|
18,298
|
|
|||||
Intercompany receivables
|
—
|
|
|
288,207
|
|
|
112,830
|
|
|
(401,037
|
)
|
|
—
|
|
|||||
Right-of-use assets
|
22,699
|
|
|
14,572
|
|
|
4,895
|
|
|
—
|
|
|
42,166
|
|
|||||
Other assets
|
2,381
|
|
|
865
|
|
|
53
|
|
|
—
|
|
|
3,299
|
|
|||||
Total assets
|
$
|
914,006
|
|
|
$
|
697,420
|
|
|
$
|
179,460
|
|
|
$
|
(1,531,499
|
)
|
|
$
|
259,387
|
|
LIABILITIES AND (DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
27,486
|
|
|
$
|
1,160
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,646
|
|
Accounts payable
|
2,008
|
|
|
40,192
|
|
|
1,627
|
|
|
—
|
|
|
43,827
|
|
|||||
Accrued expenses
|
13,536
|
|
|
8,371
|
|
|
7,171
|
|
|
—
|
|
|
29,078
|
|
|||||
Accrued multi-client data library royalties
|
—
|
|
|
21,209
|
|
|
215
|
|
|
—
|
|
|
21,424
|
|
|||||
Deferred revenue
|
—
|
|
|
3,610
|
|
|
1,272
|
|
|
—
|
|
|
4,882
|
|
|||||
Current maturities of operating lease liabilities
|
3,556
|
|
|
5,143
|
|
|
1,174
|
|
|
—
|
|
|
9,873
|
|
|||||
Total current liabilities
|
46,586
|
|
|
79,685
|
|
|
11,459
|
|
|
—
|
|
|
137,730
|
|
|||||
Long-term debt, net of current maturities
|
118,861
|
|
|
435
|
|
|
—
|
|
|
—
|
|
|
119,296
|
|
|||||
Operating lease liabilities, net of current maturities
|
21,900
|
|
|
14,283
|
|
|
4,348
|
|
|
—
|
|
|
40,531
|
|
|||||
Intercompany payables
|
766,521
|
|
|
—
|
|
|
—
|
|
|
(766,521
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
395
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
433
|
|
|||||
Total liabilities
|
954,263
|
|
|
94,441
|
|
|
15,807
|
|
|
(766,521
|
)
|
|
297,990
|
|
|||||
(Deficit) Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
142
|
|
|
290,460
|
|
|
47,776
|
|
|
(338,236
|
)
|
|
142
|
|
|||||
Additional paid-in capital
|
957,254
|
|
|
180,700
|
|
|
203,909
|
|
|
(384,609
|
)
|
|
957,254
|
|
|||||
Accumulated earnings (deficit)
|
(976,554
|
)
|
|
406,440
|
|
|
20,550
|
|
|
(426,990
|
)
|
|
(976,554
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
(21,099
|
)
|
|
4,238
|
|
|
(23,611
|
)
|
|
19,373
|
|
|
(21,099
|
)
|
|||||
Due from ION Geophysical Corporation
|
—
|
|
|
(278,859
|
)
|
|
(86,625
|
)
|
|
365,484
|
|
|
—
|
|
|||||
Total stockholders’ (deficit) equity
|
(40,257
|
)
|
|
602,979
|
|
|
161,999
|
|
|
(764,978
|
)
|
|
(40,257
|
)
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
1,654
|
|
|
—
|
|
|
1,654
|
|
|||||
Total (deficit) equity
|
(40,257
|
)
|
|
602,979
|
|
|
163,653
|
|
|
(764,978
|
)
|
|
(38,603
|
)
|
|||||
Total liabilities and (deficit) equity
|
$
|
914,006
|
|
|
$
|
697,420
|
|
|
$
|
179,460
|
|
|
$
|
(1,531,499
|
)
|
|
$
|
259,387
|
|
|
December 31, 2019
|
||||||||||||||||||
Balance Sheet
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
8,426
|
|
|
$
|
26
|
|
|
$
|
24,613
|
|
|
$
|
—
|
|
|
$
|
33,065
|
|
Accounts receivable, net
|
8
|
|
|
19,493
|
|
|
10,047
|
|
|
—
|
|
|
29,548
|
|
|||||
Unbilled receivables
|
—
|
|
|
7,314
|
|
|
4,501
|
|
|
—
|
|
|
11,815
|
|
|||||
Inventories, net
|
—
|
|
|
6,902
|
|
|
5,285
|
|
|
—
|
|
|
12,187
|
|
|||||
Prepaid expenses and other current assets
|
3,292
|
|
|
1,513
|
|
|
1,207
|
|
|
—
|
|
|
6,012
|
|
|||||
Total current assets
|
11,726
|
|
|
35,248
|
|
|
45,653
|
|
|
—
|
|
|
92,627
|
|
|||||
Deferred income tax asset
|
402
|
|
|
8,417
|
|
|
(85
|
)
|
|
—
|
|
|
8,734
|
|
|||||
Property, plant and equipment, net
|
786
|
|
|
8,112
|
|
|
4,290
|
|
|
—
|
|
|
13,188
|
|
|||||
Multi-client data library, net
|
—
|
|
|
54,479
|
|
|
5,905
|
|
|
—
|
|
|
60,384
|
|
|||||
Investment in subsidiaries
|
841,522
|
|
|
279,327
|
|
|
—
|
|
|
(1,120,849
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
23,585
|
|
|
—
|
|
|
23,585
|
|
|||||
Intercompany receivables
|
—
|
|
|
287,692
|
|
|
99,884
|
|
|
(387,576
|
)
|
|
—
|
|
|||||
Right-of-use assets
|
11,934
|
|
|
15,802
|
|
|
4,810
|
|
|
—
|
|
|
32,546
|
|
|||||
Other assets
|
1,171
|
|
|
905
|
|
|
54
|
|
|
—
|
|
|
2,130
|
|
|||||
Total assets
|
$
|
867,541
|
|
|
$
|
689,982
|
|
|
$
|
184,096
|
|
|
$
|
(1,508,425
|
)
|
|
$
|
233,194
|
|
LIABILITIES AND (DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
972
|
|
|
$
|
1,135
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,107
|
|
Accounts payable
|
2,259
|
|
|
44,641
|
|
|
2,416
|
|
|
—
|
|
|
49,316
|
|
|||||
Accrued expenses
|
9,933
|
|
|
9,982
|
|
|
10,413
|
|
|
—
|
|
|
30,328
|
|
|||||
Accrued multi-client data library royalties
|
—
|
|
|
18,616
|
|
|
215
|
|
|
—
|
|
|
18,831
|
|
|||||
Deferred revenue
|
—
|
|
|
3,465
|
|
|
1,086
|
|
|
—
|
|
|
4,551
|
|
|||||
Current maturities of operating lease liabilities
|
4,429
|
|
|
5,469
|
|
|
1,157
|
|
|
—
|
|
|
11,055
|
|
|||||
Total current liabilities
|
17,593
|
|
|
83,308
|
|
|
15,287
|
|
|
—
|
|
|
116,188
|
|
|||||
Long-term debt, net of current maturities
|
118,618
|
|
|
734
|
|
|
—
|
|
|
—
|
|
|
119,352
|
|
|||||
Operating lease liabilities, net of current maturities
|
11,208
|
|
|
15,346
|
|
|
4,279
|
|
|
—
|
|
|
30,833
|
|
|||||
Intercompany payables
|
755,524
|
|
|
—
|
|
|
—
|
|
|
(755,524
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
1,418
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
1,453
|
|
|||||
Total liabilities
|
904,361
|
|
|
99,423
|
|
|
19,566
|
|
|
(755,524
|
)
|
|
267,826
|
|
|||||
(Deficit) Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
142
|
|
|
290,460
|
|
|
47,776
|
|
|
(338,236
|
)
|
|
142
|
|
|||||
Additional paid-in capital
|
956,647
|
|
|
180,700
|
|
|
203,909
|
|
|
(384,609
|
)
|
|
956,647
|
|
|||||
Accumulated earnings (deficit)
|
(974,291
|
)
|
|
396,793
|
|
|
18,837
|
|
|
(415,630
|
)
|
|
(974,291
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
(19,318
|
)
|
|
4,281
|
|
|
(21,907
|
)
|
|
17,626
|
|
|
(19,318
|
)
|
|||||
Due from ION Geophysical Corporation
|
—
|
|
|
(281,675
|
)
|
|
(86,273
|
)
|
|
367,948
|
|
|
—
|
|
|||||
Total stockholders’ (deficit) equity
|
(36,820
|
)
|
|
590,559
|
|
|
162,342
|
|
|
(752,901
|
)
|
|
(36,820
|
)
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
2,188
|
|
|
—
|
|
|
2,188
|
|
|||||
Total (deficit) equity
|
(36,820
|
)
|
|
590,559
|
|
|
164,530
|
|
|
(752,901
|
)
|
|
(34,632
|
)
|
|||||
Total liabilities and (deficit) equity
|
$
|
867,541
|
|
|
$
|
689,982
|
|
|
$
|
184,096
|
|
|
$
|
(1,508,425
|
)
|
|
$
|
233,194
|
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
40,422
|
|
|
$
|
15,992
|
|
|
$
|
—
|
|
|
$
|
56,414
|
|
Cost of sales
|
—
|
|
|
21,800
|
|
|
5,103
|
|
|
—
|
|
|
26,903
|
|
|||||
Impairment of multi-client data library
|
—
|
|
|
1,167
|
|
|
—
|
|
|
—
|
|
|
1,167
|
|
|||||
Gross profit
|
—
|
|
|
17,455
|
|
|
10,889
|
|
|
—
|
|
|
28,344
|
|
|||||
Total operating expenses
|
8,120
|
|
|
6,980
|
|
|
6,918
|
|
|
—
|
|
|
22,018
|
|
|||||
Income (loss) from operations
|
(8,120
|
)
|
|
10,475
|
|
|
3,971
|
|
|
—
|
|
|
6,326
|
|
|||||
Interest expense, net
|
(3,245
|
)
|
|
(38
|
)
|
|
62
|
|
|
—
|
|
|
(3,221
|
)
|
|||||
Intercompany interest, net
|
(190
|
)
|
|
(1,927
|
)
|
|
2,117
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings of investments
|
9,628
|
|
|
1,732
|
|
|
—
|
|
|
(11,360
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
1,385
|
|
|
—
|
|
|
(956
|
)
|
|
—
|
|
|
429
|
|
|||||
Net income (loss) before income taxes
|
(542
|
)
|
|
10,242
|
|
|
5,194
|
|
|
(11,360
|
)
|
|
3,534
|
|
|||||
Income tax expense
|
1,721
|
|
|
595
|
|
|
3,558
|
|
|
—
|
|
|
5,874
|
|
|||||
Net income (loss)
|
(2,263
|
)
|
|
9,647
|
|
|
1,636
|
|
|
(11,360
|
)
|
|
(2,340
|
)
|
|||||
Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
77
|
|
|||||
Net income (loss) attributable to ION
|
$
|
(2,263
|
)
|
|
$
|
9,647
|
|
|
$
|
1,713
|
|
|
$
|
(11,360
|
)
|
|
$
|
(2,263
|
)
|
Comprehensive net income (loss)
|
$
|
(4,044
|
)
|
|
$
|
13,754
|
|
|
$
|
4,082
|
|
|
$
|
(17,913
|
)
|
|
$
|
(4,121
|
)
|
Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
77
|
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(4,044
|
)
|
|
$
|
13,754
|
|
|
$
|
4,159
|
|
|
$
|
(17,913
|
)
|
|
$
|
(4,044
|
)
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
17,613
|
|
|
$
|
19,343
|
|
|
$
|
—
|
|
|
$
|
36,956
|
|
Cost of sales
|
—
|
|
|
20,200
|
|
|
6,844
|
|
|
—
|
|
|
27,044
|
|
|||||
Gross profit (loss)
|
—
|
|
|
(2,587
|
)
|
|
12,499
|
|
|
—
|
|
|
9,912
|
|
|||||
Total operating expenses
|
12,839
|
|
|
9,075
|
|
|
3,935
|
|
|
—
|
|
|
25,849
|
|
|||||
Income (loss) from operations
|
(12,839
|
)
|
|
(11,662
|
)
|
|
8,564
|
|
|
—
|
|
|
(15,937
|
)
|
|||||
Interest expense, net
|
(3,166
|
)
|
|
(49
|
)
|
|
103
|
|
|
—
|
|
|
(3,112
|
)
|
|||||
Intercompany interest, net
|
300
|
|
|
4,649
|
|
|
(4,949
|
)
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
(5,169
|
)
|
|
2,001
|
|
|
—
|
|
|
3,168
|
|
|
—
|
|
|||||
Other income (expense), net
|
7
|
|
|
(122
|
)
|
|
(677
|
)
|
|
—
|
|
|
(792
|
)
|
|||||
Net income (loss) before income taxes
|
(20,867
|
)
|
|
(5,183
|
)
|
|
3,041
|
|
|
3,168
|
|
|
(19,841
|
)
|
|||||
Income tax expense (benefit)
|
493
|
|
|
(1,291
|
)
|
|
2,205
|
|
|
—
|
|
|
1,407
|
|
|||||
Net income (loss)
|
(21,360
|
)
|
|
(3,892
|
)
|
|
836
|
|
|
3,168
|
|
|
(21,248
|
)
|
|||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(112
|
)
|
|
—
|
|
|
(112
|
)
|
|||||
Net income (loss) attributable to ION
|
$
|
(21,360
|
)
|
|
$
|
(3,892
|
)
|
|
$
|
724
|
|
|
$
|
3,168
|
|
|
$
|
(21,360
|
)
|
Comprehensive net income (loss)
|
$
|
(20,390
|
)
|
|
$
|
(3,935
|
)
|
|
$
|
1,699
|
|
|
$
|
2,348
|
|
|
$
|
(20,278
|
)
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
|
|
|
(112
|
)
|
|
—
|
|
|
(112
|
)
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(20,390
|
)
|
|
$
|
(3,935
|
)
|
|
$
|
1,587
|
|
|
$
|
2,348
|
|
|
$
|
(20,390
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020
|
||||||||||||||
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
|
$
|
330
|
|
|
$
|
(1,570
|
)
|
|
$
|
(5,726
|
)
|
|
$
|
(6,966
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Cash invested in multi-client data library
|
—
|
|
|
(5,382
|
)
|
|
(4,286
|
)
|
|
(9,668
|
)
|
||||
Purchase of property, plant and equipment
|
(398
|
)
|
|
(98
|
)
|
|
—
|
|
|
(496
|
)
|
||||
Net cash used in investing activities
|
(398
|
)
|
|
(5,480
|
)
|
|
(4,286
|
)
|
|
(10,164
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Borrowings under revolving line of credit
|
27,000
|
|
|
—
|
|
|
—
|
|
|
27,000
|
|
||||
Payments on notes payable and long-term debt
|
(485
|
)
|
|
(275
|
)
|
|
—
|
|
|
(760
|
)
|
||||
Intercompany lending
|
(6,289
|
)
|
|
7,353
|
|
|
(1,064
|
)
|
|
—
|
|
||||
Other financing activities
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||
Net cash provided by (used in) financing activities
|
20,216
|
|
|
7,078
|
|
|
(1,064
|
)
|
|
26,230
|
|
||||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
470
|
|
|
470
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
20,148
|
|
|
28
|
|
|
(10,606
|
)
|
|
9,570
|
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
8,479
|
|
|
26
|
|
|
24,613
|
|
|
33,118
|
|
||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
28,627
|
|
|
$
|
54
|
|
|
$
|
14,007
|
|
|
$
|
42,688
|
|
|
March 31, 2020
|
||||||||||||||
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Total Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash and cash equivalents
|
$
|
28,602
|
|
|
$
|
54
|
|
|
$
|
14,007
|
|
|
$
|
42,663
|
|
Restricted cash included in other long-term assets
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
Total cash, cash equivalents, and restricted cash shown in statements of cash flows
|
$
|
28,627
|
|
|
$
|
54
|
|
|
$
|
14,007
|
|
|
$
|
42,688
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||
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
|
$
|
5,216
|
|
|
$
|
(825
|
)
|
|
$
|
11,007
|
|
|
$
|
15,398
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Investment in multi-client data library
|
—
|
|
|
(5,363
|
)
|
|
(3,404
|
)
|
|
(8,767
|
)
|
||||
Proceeds from sale (purchase) of property, plant and equipment
|
(24
|
)
|
|
(48
|
)
|
|
(735
|
)
|
|
(807
|
)
|
||||
Net cash used in investing activities
|
(24
|
)
|
|
(5,411
|
)
|
|
(4,139
|
)
|
|
(9,574
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Payments on notes payable and long-term debt
|
(434
|
)
|
|
(281
|
)
|
|
—
|
|
|
(715
|
)
|
||||
Intercompany lending
|
(13,511
|
)
|
|
6,495
|
|
|
7,016
|
|
|
—
|
|
||||
Other financing activities
|
(239
|
)
|
|
—
|
|
|
—
|
|
|
(239
|
)
|
||||
Net cash provided by (used in) financing activities
|
(14,184
|
)
|
|
6,214
|
|
|
7,016
|
|
|
(954
|
)
|
||||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
81
|
|
|
81
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(8,992
|
)
|
|
(22
|
)
|
|
13,965
|
|
|
4,951
|
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
14,085
|
|
|
47
|
|
|
19,722
|
|
|
33,854
|
|
||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
5,093
|
|
|
$
|
25
|
|
|
$
|
33,687
|
|
|
$
|
38,805
|
|
|
March 31, 2019
|
||||||||||||||
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Total Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash and cash equivalents
|
$
|
4,695
|
|
|
$
|
25
|
|
|
$
|
33,687
|
|
|
$
|
38,407
|
|
Restricted cash included in prepaid expenses and other current assets
|
398
|
|
|
—
|
|
|
—
|
|
|
398
|
|
||||
Total cash, cash equivalents, and restricted cash shown in statement of cash flows
|
$
|
5,093
|
|
|
$
|
25
|
|
|
$
|
33,687
|
|
|
$
|
38,805
|
|
•
|
Scaling down personnel costs and operating expenses by another $18.0 million during the remaining nine months of 2020, building on the over $20.0 million (net of severance expense of $3.1 million) of cuts made in January 2020. These further reductions are primarily through a variety of furlough programs and reduced compensation arrangements across ION’s worldwide workforce. ION executives have taken a 20% base salary reduction and a tiered reduction scheme has been cascaded to the rest of the worldwide workforce. ION’s board of directors has taken a 20% reduction in directors’ fees. In addition, ION has curtailed use of external contractors, decreased travel and event costs and implemented new systems and processes that more efficiently support its business.
|
•
|
Reducing capital expenditures to an estimated $20.0 million to $35.0 million (a portion of which will be pre-funded or underwritten by our customers), down from $35.0 million to $50.0 million, to reflect both reduced seismic demand and travel/border restrictions impacting new data acquisition offshore. The majority of capital expenditures relate to investments in multi-client data. This provides flexibility to aggressively reduce cash outflows while shifting to much lower cost reimaging programs.
|
•
|
Applied for various government assistance programs of which $6.9 million has been received in April 2020. Receipt of this $6.9 million allowed us to avoid further staff reductions while supporting our ongoing operations. Additional global government relief of between $2.0 million to $7.0 million may be possible.
|
•
|
Announced the sale of its interest in INOVA Geophysical for $12.0 million that is expected to close during the second half of the year, subject to regulatory approvals and other closing conditions.
|
•
|
Entered into a settlement agreement with WesternGeco ending the uncertainty surrounding the decade-long patent litigation. See Note 8 “Litigation” for further details.
|
|
Three Months Ended March 31,
|
|
||||||
|
2020
|
|
2019
|
|
||||
|
(in thousands, except share data)
|
|||||||
Net revenues:
|
|
|
|
|
||||
E&P Technology & Services:
|
|
|
|
|
||||
New Venture
|
$
|
1,441
|
|
|
$
|
13,471
|
|
|
Data Library
|
40,131
|
|
|
9,948
|
|
|
||
Total multi-client revenues
|
41,572
|
|
|
23,419
|
|
|
||
Imaging and Reservoir Services
|
4,942
|
|
|
3,684
|
|
|
||
Total
|
46,514
|
|
|
27,103
|
|
|
||
Operations Optimization:
|
|
|
|
|
||||
Optimization Software & Services
|
4,427
|
|
|
5,033
|
|
|
||
Devices
|
5,473
|
|
|
4,820
|
|
|
||
Total
|
9,900
|
|
|
9,853
|
|
|
||
Total net revenues
|
$
|
56,414
|
|
|
$
|
36,956
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
2020
|
|
2019
|
|
||||
Gross profit (loss):
|
|
|
|
|
||||
E&P Technology & Services
|
$
|
23,730
|
|
(a)
|
$
|
5,440
|
|
|
Operations Optimization
|
4,614
|
|
|
4,516
|
|
|
||
Segment gross profit
|
28,344
|
|
|
9,956
|
|
|
||
Other
|
—
|
|
|
(44
|
)
|
|
||
Total gross profit
|
$
|
28,344
|
|
|
$
|
9,912
|
|
|
Gross margin:
|
|
|
|
|
||||
E&P Technology & Services
|
51
|
%
|
|
20
|
%
|
|
||
Operations Optimization
|
47
|
%
|
|
46
|
%
|
|
||
Total gross margin
|
50
|
%
|
|
27
|
%
|
|
||
Income (loss) from operations:
|
|
|
|
|
||||
E&P Technology & Services
|
$
|
17,952
|
|
(a)
|
$
|
(1,615
|
)
|
|
Operations Optimization
|
(3,259
|
)
|
(b)
|
170
|
|
|
||
Support and other
|
(8,367
|
)
|
|
(14,492
|
)
|
|
||
Income (loss) from operations
|
$
|
6,326
|
|
|
$
|
(15,937
|
)
|
|
Operating margin:
|
|
|
|
|
||||
E&P Technology & Services
|
39
|
%
|
|
(6
|
)%
|
|
||
Operations Optimization
|
(33
|
)%
|
|
2
|
%
|
|
||
Support and other
|
(15
|
)%
|
|
(39
|
)%
|
|
||
Total operating margin
|
11
|
%
|
|
(43
|
)%
|
|
||
|
|
|
|
|
||||
Net loss attributable to ION
|
$
|
(2,263
|
)
|
|
$
|
(21,360
|
)
|
|
Special items:
|
6,975
|
|
(c)
|
4,460
|
|
(d)
|
||
Net income (loss) attributable to ION, as adjusted
|
$
|
4,712
|
|
|
$
|
(16,900
|
)
|
|
|
|
|
|
|
||||
Net loss per share:
|
|
|
|
|
||||
Basic
|
$
|
(0.16
|
)
|
|
$
|
(1.52
|
)
|
|
Diluted
|
$
|
(0.16
|
)
|
|
$
|
(1.52
|
)
|
|
|
|
|
|
|
||||
Net income (loss) per share as adjusted:
|
|
|
|
|
||||
Basic
|
$
|
0.33
|
|
|
$
|
(1.20
|
)
|
|
Diluted
|
$
|
0.33
|
|
|
$
|
(1.20
|
)
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding:
|
|
|
|
|
||||
Basic
|
14,230
|
|
|
14,033
|
|
|
||
Diluted
|
14,230
|
|
|
14,033
|
|
|
•
|
extend the maturity date of the Credit Facility by approximately four years (from August 22, 2019 to August 16, 2023), subject to our retirement or extension of the maturity date of our Second Lien Notes, as defined below, which mature on December 15, 2021;
|
•
|
increase the maximum revolver amount by $10.0 million (from $40.0 million to $50.0 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 $15.0 million for the multi-client data library component);
|
•
|
include the eligible billed receivables of the Mexican Subsidiary up to a maximum of $5.0 million in the borrowing base calculation and joins the Mexican Subsidiary as a borrower thereunder (with a maximum exposure of $5.0 million) and require the equity and assets of the Mexican Subsidiary to be pledged to secure obligations under the 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 charges coverage ratio.
|
Date
|
|
Percentage
|
2019
|
|
105.50%
|
2020
|
|
103.50%
|
2021
|
|
100.00%
|
•
|
Scaling down personnel costs and operating expenses by another $18.0 million during the remaining nine months of 2020, building on the over $20.0 million (net of severance expense of $3.1 million) of cuts made in January 2020. These further reductions are primarily through a variety of furlough programs and reduced compensation arrangements across ION’s worldwide workforce. ION executives have taken a 20% base salary reduction and a tiered reduction scheme has been cascaded to the rest of the worldwide workforce. ION’s board of directors has taken a 20%
|
•
|
Reducing capital expenditures to an estimated $20.0 million to $35.0 million (a portion of which will be pre-funded or underwritten by our customers), down from $35.0 million to $50.0 million, to reflect both reduced seismic demand and travel/border restrictions impacting new data acquisition offshore. The majority of capital expenditures relate to investments in multi-client data. This provides flexibility to aggressively reduce cash outflows while shifting to much lower cost reimaging programs.
|
•
|
Applied for various government assistance programs of which $6.9 million has been received in April 2020. Receipt of this $6.9 million allowed us to avoid further staff reductions while supporting our ongoing operations. Additional global government relief of between $2.0 million to $7.0 million may be possible.
|
•
|
Announced the sale of its interest in INOVA Geophysical for $12.0 million that is expected to close during the second half of the year, subject to regulatory approvals and other closing conditions.
|
•
|
Entered into a settlement agreement with WesternGeco ending the uncertainty surrounding the decade-long patent litigation. See Note 8 “Litigation” for further details.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net revenues by geographic area:
|
(In thousands)
|
||||||
North America
|
$
|
31,810
|
|
|
$
|
7,157
|
|
Latin America
|
9,804
|
|
|
13,531
|
|
||
Asia Pacific
|
9,288
|
|
|
1,867
|
|
||
Europe
|
3,810
|
|
|
10,392
|
|
||
Middle East
|
954
|
|
|
1,359
|
|
||
Africa
|
591
|
|
|
2,389
|
|
||
Other
|
157
|
|
|
261
|
|
||
Total
|
$
|
56,414
|
|
|
$
|
36,956
|
|
•
|
future levels of our capital expenditures and of our customers for seismic activities;
|
•
|
future oil and gas commodity prices;
|
•
|
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;
|
•
|
future implication of our negative working capital and shareholders deficit, including future cash needs and availability of cash, to fund our operations and pay our obligations;
|
•
|
the effects of current and future unrest in the Middle East, North Africa and other regions;
|
•
|
the timing of anticipated revenues and the recognition of those revenues for financial accounting purposes;
|
•
|
the effects of ongoing and future industry consolidation;
|
•
|
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;
|
•
|
future government laws or regulations pertaining to the oil and gas industry, including trade restrictions, embargoes and sanctions imposed by the U.S government;
|
•
|
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;
|
•
|
expected net revenues, gross margins, income from operations and net income for our services and products;
|
•
|
future seismic industry fundamentals, including future demand for seismic services and equipment;
|
•
|
future benefits to our customers to be derived from new services and products;
|
•
|
future benefits to be derived from our investments in technologies, joint ventures and acquired companies;
|
•
|
future growth rates for our services and products;
|
•
|
the degree and rate of future market acceptance of our new services and products;
|
•
|
expectations regarding E&P companies and seismic contractor end-users purchasing our more technologically-advanced services and products;
|
•
|
anticipated timing and success of commercialization and capabilities of services and products under development and start-up costs associated with their development, including 4Sea and Marlin SmartPorts;
|
•
|
future opportunities for new products and projected research and development expenses;
|
•
|
expected continued compliance with our debt financial covenants;
|
•
|
expectations regarding realization of deferred tax assets;
|
•
|
expectations regarding the impact of the U.S. Tax Cuts and Jobs Act;
|
•
|
anticipated results with respect to certain estimates we make for financial accounting purposes;
|
•
|
future success dependent on our continuing ability to identify, hire, develop, motivate and retain skilled personnel for all areas of our organization;
|
•
|
breaches to our systems could lead to loss of intellectual property, dissemination of highly confidential information, increased costs and impairment of our ability to conduct our operations; and
|
•
|
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.
|
Period
|
|
(a)
Total Number of
Shares Acquired
|
|
(b)
Average Price Paid Per Share |
|
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Program |
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Program |
|||
January 1, 2020 to January 31, 2020
|
|
—
|
|
|
$
|
—
|
|
|
Not applicable
|
|
Not applicable
|
February 1, 2020 to February 29, 2020
|
|
—
|
|
|
$
|
—
|
|
|
Not applicable
|
|
Not applicable
|
March 1, 2020 to March 31, 2020
|
|
750
|
|
|
$
|
3.52
|
|
|
Not applicable
|
|
Not applicable
|
Total
|
|
750
|
|
|
$
|
3.52
|
|
|
|
|
|
|
|
|
|
|
ION GEOPHYSICAL CORPORATION
|
||
|
|
(Registrant)
|
|
|
|
|
|
|
By
|
|
/s/ Mike Morrison
|
|
|
|
Mike Morrison
|
|
|
|
Executive Vice President and Interim Chief Financial Officer
|
1.
|
DEFINITIONS
|
2.
|
SETTLEMENT
|
3.
|
DISMISSALS, RELEASES, AND NONEXCLUSIVE LICENSE
|
4.
|
TERM
|
5.
|
MISCELLANEOUS PROVISIONS
|
a)
|
such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;
|
b)
|
such Party has taken all corporate action necessary to authorize the execution and delivery of this Agreement and the performance of its obligations under this Agreement;
|
c)
|
this Agreement has been duly executed by such Party and constitutes a valid and legally binding obligation of such Party, enforceable in accordance with its terms;
|
d)
|
the execution, delivery and performance of this Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it;
|
e)
|
such Party has the right to grant the licenses and releases granted hereunder, and has the right to settle the Action, and more specifically, WesternGeco represents and warrants that any license to the WesternGeco Patents granted to Shearwater GeoServices AS or one of its affiliates does not prevent WesternGeco from granting the licenses and releases granted hereunder;
|
f)
|
there is no lawsuit or any other civil or administrative proceeding, or any claim or counterclaim of any kind, in any court, tribunal, governmental entity or agency, or dispute resolution proceeding (including, without limitation, arbitration and mediation) pending on the Effective Date that was commenced by such Party or any of its Affiliates against any other Party or any of its Affiliates involving the ION Patents, the WesternGeco Patents, or ION’s ORCA, DigiFIN, or DigiFIN Lateral Controller products, other than the Action;
|
g)
|
such Party has not transferred, assigned, subrogated or pledged to any Third Party or to an Affiliate, the right to bring, pursue, or settle any of the claims, counterclaims, or demands made in the Action or released pursuant to Sections 3.3 and 3.4 of this Agreement, and more specifically, WesternGeco represents and warrants that it has not transferred any right to enforce the WesternGeco Patents to Shearwater GeoServices AS or one of its affiliates;
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h)
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such Party has been advised by its counsel of its rights and obligations under this Agreement and enters into this Agreement freely, voluntarily, and without duress; and
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i)
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such Party is not relying on any promises, inducements, statements or representations other than those provided herein. Each Party further represents and warrants that the terms of the Agreement were negotiated at arms-length, that this provision results from the parties’ freedom to contract, that each Party was knowledgeable regarding business matters, and that each Party was represented by counsel. The Parties intend this Section 5.1(i) to be a clear and specific disclaimer- of-reliance that is enforceable and consistent with the Texas Supreme Court’s decision in Forest Oil Corp. v. McAllen, 268 S.W.3d 51 (Tex. 2008).
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a)
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The terms of this Agreement may be disclosed for purposes of enforcing the terms of this Agreement.
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b)
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The terms of this Agreement may be disclosed, without notice to the other Parties, to (i) any Party’s legal counselors, auditors, accounting, financial advisors, or other similar professionals representing a Party, so long as any such Persons agree to be bound by the confidentiality requirements of this Agreement; and (ii) any Third Party that is a bona fide actual or potential investor, acquirer, merger partner, or other financial partner for the purpose of evaluating an investment, acquisition, merger, or similar transaction, so long as any such Third Party agrees to be bound by the confidentiality requirements of this Agreement.
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c)
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The terms of this Agreement may be disclosed if a Party is required to do so, in the opinion of legal counsel for such Party, by any applicable law, including the U.S. Securities Act of 1934, as amended, any governmental law or regulation, or the rules of any recognized stock exchange. Such disclosure shall be limited to the minimum required, as determined by the disclosing Party in consultation with its legal counsel.
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d)
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The Parties may respond to inquiries by the press or investors by indicating that the Action has been resolved on terms that are confidential. The Parties further agree to issue a joint press release as will be jointly agreed between the Parties as soon as reasonably possible after the execution of this Agreement.
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e)
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If a Party is required to provide the terms of this Agreement to a Third Party pursuant to a discovery demand, discovery order, or other legal processes or requirements, it shall inform the other Party in sufficient time prior to any such disclosure to allow the other Party to seek a protective order or confidential treatment prior to any such disclosure.
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f)
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The terms of this Agreement may be disclosed as otherwise agreed to by the Parties in writing.
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A.
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WHEREAS ION and Schlumberger (individually, a “Party” and collectively, the “Parties”) are in the business of identifying, generating, acquiring, processing, operating, marketing and licensing non- exclusive seismic and other geophysical data projects for the oil and gas industry; and
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B.
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WHEREAS The Parties entered into a series of agreements (the “Campeche Agreements”) as listed below:
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C.
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Whereas the Campeche Agreements contain certain payment and compensation terms whereas WesternGeco shall make certain payments to ION. Those payment terms include payments of 50% of multiclient revenue generated from the projects defined in the Campeche Agreements. ION and WesternGeco desire to modify the payment and compensation terms such that WesternGeco shall pay to ION 10% of multiclient revenue generate from projects defined in the Campeche Agreements.
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D.
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Whereas ION Geophysical Corp. (an affiliate of ION) and WesternGeco LLC (an affiliate of Schlumberger) are engaged in a patent dispute in federal court in the Southern District of Texas
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1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2020, of ION Geophysical Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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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;
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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;
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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
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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
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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
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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.
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Date: May 7, 2020
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|
/s/ Christopher Usher
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|
|
Christopher Usher
|
|
|
President and Chief Executive Officer
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1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2020, 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: May 7, 2020
|
|
/s/ Mike Morrison
|
|
|
Mike Morrison
|
|
|
Executive Vice President and Interim 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: May 7, 2020
|
|
/s/ Christopher Usher
|
|
|
Christopher Usher
|
|
|
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: May 7, 2020
|
|
/s/ Mike Morrison
|
|
|
Mike Morrison
|
|
|
Executive Vice President and Interim Chief Financial Officer
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