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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.
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Suite 100
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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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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
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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PAGE
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PART I. Financial Information
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Item 1. Financial Statements
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Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015
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Condensed Consolidated Statements of Operations for the three- and nine-months ended September 30, 2016 and 2015
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Condensed Consolidated Statements of Comprehensive Income (Loss) for the three- and nine-months ended September 30, 2016 and 2015
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Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015
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Footnotes to Unaudited Condensed Consolidated Financial Statements
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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
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Item 1. Legal Proceedings
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Item 1A. Risk Factors
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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Item 5. Other Information
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Item 6. Exhibits
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September 30, 2016
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December 31, 2015
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||||
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(In thousands, except share data)
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||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
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62,536
|
|
|
$
|
84,933
|
|
Accounts receivable, net
|
34,686
|
|
|
44,365
|
|
||
Unbilled receivables
|
23,680
|
|
|
19,937
|
|
||
Inventories
|
33,308
|
|
|
32,721
|
|
||
Prepaid expenses and other current assets
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9,910
|
|
|
14,807
|
|
||
Total current assets
|
164,120
|
|
|
196,763
|
|
||
Property, plant, equipment and seismic rental equipment, net
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53,524
|
|
|
72,027
|
|
||
Multi-client data library, net
|
112,705
|
|
|
132,237
|
|
||
Goodwill
|
23,412
|
|
|
26,274
|
|
||
Intangible assets, net
|
3,526
|
|
|
4,810
|
|
||
Other assets
|
2,395
|
|
|
2,977
|
|
||
Total assets
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$
|
359,682
|
|
|
$
|
435,088
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
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19,226
|
|
|
$
|
7,912
|
|
Accounts payable
|
32,034
|
|
|
29,799
|
|
||
Accrued expenses
|
32,753
|
|
|
34,287
|
|
||
Accrued multi-client data library royalties
|
22,344
|
|
|
25,045
|
|
||
Deferred revenue
|
4,395
|
|
|
6,560
|
|
||
Total current liabilities
|
110,752
|
|
|
103,603
|
|
||
Long-term debt, net of current maturities
|
144,299
|
|
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175,080
|
|
||
Other long-term liabilities
|
44,157
|
|
|
44,365
|
|
||
Total liabilities
|
299,208
|
|
|
323,048
|
|
||
Equity:
|
|
|
|
||||
Common stock, $0.01 par value; authorized 26,666,667 shares; outstanding 11,786,297 and 10,702,689 shares at September 30, 2016 and December 31, 2015, respectively, net of treasury stock
|
118
|
|
|
107
|
|
||
Additional paid-in capital
|
898,238
|
|
|
894,715
|
|
||
Accumulated deficit
|
(818,188
|
)
|
|
(759,531
|
)
|
||
Accumulated other comprehensive loss
|
(20,063
|
)
|
|
(14,781
|
)
|
||
Treasury stock, at cost, zero and 353,124 shares at September 30, 2016 and December 31, 2015 respectively
|
—
|
|
|
(8,551
|
)
|
||
Total stockholders’ equity
|
60,105
|
|
|
111,959
|
|
||
Noncontrolling interest
|
369
|
|
|
81
|
|
||
Total equity
|
60,474
|
|
|
112,040
|
|
||
Total liabilities and equity
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$
|
359,682
|
|
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$
|
435,088
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
Service revenues
|
$
|
65,914
|
|
|
$
|
53,515
|
|
|
$
|
104,500
|
|
|
$
|
96,918
|
|
Product revenues
|
12,708
|
|
|
13,159
|
|
|
32,939
|
|
|
47,129
|
|
||||
Total net revenues
|
78,622
|
|
|
66,674
|
|
|
137,439
|
|
|
144,047
|
|
||||
Cost of services
|
40,694
|
|
|
47,883
|
|
|
93,706
|
|
|
132,234
|
|
||||
Cost of products
|
6,163
|
|
|
7,683
|
|
|
16,045
|
|
|
26,628
|
|
||||
Gross profit (loss)
|
31,765
|
|
|
11,108
|
|
|
27,688
|
|
|
(14,815
|
)
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research, development and engineering
|
4,231
|
|
|
6,537
|
|
|
14,601
|
|
|
21,496
|
|
||||
Marketing and sales
|
4,680
|
|
|
6,904
|
|
|
13,374
|
|
|
23,375
|
|
||||
General, administrative and other operating expenses
|
10,990
|
|
|
10,541
|
|
|
34,566
|
|
|
40,566
|
|
||||
Total operating expenses
|
19,901
|
|
|
23,982
|
|
|
62,541
|
|
|
85,437
|
|
||||
Income (loss) from operations
|
11,864
|
|
|
(12,874
|
)
|
|
(34,853
|
)
|
|
(100,252
|
)
|
||||
Interest expense, net
|
(4,607
|
)
|
|
(4,854
|
)
|
|
(14,043
|
)
|
|
(14,086
|
)
|
||||
Other income (expense), net
|
(2,027
|
)
|
|
(346
|
)
|
|
(3,624
|
)
|
|
98,035
|
|
||||
Income (loss) before income taxes
|
5,230
|
|
|
(18,074
|
)
|
|
(52,520
|
)
|
|
(16,303
|
)
|
||||
Income tax expense, net
|
3,316
|
|
|
2,082
|
|
|
5,865
|
|
|
3,597
|
|
||||
Net income (loss)
|
1,914
|
|
|
(20,156
|
)
|
|
(58,385
|
)
|
|
(19,900
|
)
|
||||
Net (income) loss attributable to noncontrolling interests
|
(215
|
)
|
|
(227
|
)
|
|
(272
|
)
|
|
322
|
|
||||
Net income (loss) attributable to ION
|
$
|
1,699
|
|
|
$
|
(20,383
|
)
|
|
$
|
(58,657
|
)
|
|
$
|
(19,578
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.14
|
|
|
$
|
(1.86
|
)
|
|
$
|
(5.21
|
)
|
|
$
|
(1.78
|
)
|
Diluted
|
$
|
0.14
|
|
|
$
|
(1.86
|
)
|
|
$
|
(5.21
|
)
|
|
$
|
(1.78
|
)
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
11,786
|
|
|
10,984
|
|
|
11,269
|
|
|
10,978
|
|
||||
Diluted
|
11,907
|
|
|
10,984
|
|
|
11,269
|
|
|
10,978
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Net income (loss)
|
$
|
1,914
|
|
|
$
|
(20,156
|
)
|
|
$
|
(58,385
|
)
|
|
$
|
(19,900
|
)
|
Other comprehensive loss, net of taxes, as appropriate:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(1,083
|
)
|
|
(1,365
|
)
|
|
(5,282
|
)
|
|
(757
|
)
|
||||
Comprehensive net income (loss)
|
831
|
|
|
(21,521
|
)
|
|
(63,667
|
)
|
|
(20,657
|
)
|
||||
Comprehensive (income) loss attributable to noncontrolling interest
|
(215
|
)
|
|
(227
|
)
|
|
(272
|
)
|
|
322
|
|
||||
Comprehensive net income (loss) attributable to ION
|
$
|
616
|
|
|
$
|
(21,748
|
)
|
|
$
|
(63,939
|
)
|
|
$
|
(20,335
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(58,385
|
)
|
|
$
|
(19,900
|
)
|
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization (other than multi-client data library)
|
17,024
|
|
|
19,660
|
|
||
Amortization of multi-client data library
|
23,161
|
|
|
24,531
|
|
||
Stock-based compensation expense
|
2,512
|
|
|
4,174
|
|
||
Reduction of accrual for loss contingency related to legal proceedings
|
—
|
|
|
(101,978
|
)
|
||
Loss on extinguishment of debt
|
2,182
|
|
|
—
|
|
||
Deferred income taxes
|
1,031
|
|
|
5,992
|
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
9,325
|
|
|
92,424
|
|
||
Unbilled receivables
|
(3,711
|
)
|
|
(9,837
|
)
|
||
Inventories
|
2,374
|
|
|
464
|
|
||
Accounts payable, accrued expenses and accrued royalties
|
3,381
|
|
|
(43,676
|
)
|
||
Deferred revenue
|
(2,103
|
)
|
|
(2,576
|
)
|
||
Other assets and liabilities
|
6,441
|
|
|
(5,274
|
)
|
||
Net cash provided by (used in) operating activities
|
3,232
|
|
|
(35,996
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Cash invested in multi-client data library
|
(11,601
|
)
|
|
(28,152
|
)
|
||
Purchase of property, plant, equipment and seismic rental assets
|
(567
|
)
|
|
(17,601
|
)
|
||
Other investing activities
|
—
|
|
|
1,262
|
|
||
Net cash used in investing activities
|
(12,168
|
)
|
|
(44,491
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings under revolving line of credit
|
15,000
|
|
|
—
|
|
||
Repurchase of common stock
|
(964
|
)
|
|
—
|
|
||
Payments on notes payable and long-term debt
|
(6,726
|
)
|
|
(5,431
|
)
|
||
Costs associated with issuance of debt
|
(6,638
|
)
|
|
(146
|
)
|
||
Payment to repurchase bonds
|
(15,000
|
)
|
|
—
|
|
||
Other financing activities
|
13
|
|
|
94
|
|
||
Net cash used in financing activities
|
(14,315
|
)
|
|
(5,483
|
)
|
||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
854
|
|
|
601
|
|
||
Net decrease in cash and cash equivalents
|
(22,397
|
)
|
|
(85,369
|
)
|
||
Cash and cash equivalents at beginning of period
|
84,933
|
|
|
173,608
|
|
||
Cash and cash equivalents at end of period
|
$
|
62,536
|
|
|
$
|
88,239
|
|
|
Severance Charges
(a)
|
|
Loss on Bond Exchange
(b)
|
|
Total
|
||||||
Cost of goods sold
|
$
|
1,077
|
|
|
$
|
—
|
|
|
$
|
1,077
|
|
Operating expenses
|
932
|
|
|
—
|
|
|
932
|
|
|||
Other expense
|
—
|
|
|
2,182
|
|
|
2,182
|
|
|||
Consolidated total
|
$
|
2,009
|
|
|
$
|
2,182
|
|
|
$
|
4,191
|
|
(a)
|
Represents severance charges related to the second quarter 2016 restructurings.
|
(b)
|
Represents a loss on exchange of bonds during the second quarter 2016.
|
|
Severance Charges(a)
|
|
Facility Charges(b)
|
|
Reduction of Loss Contingency Accrual (c)
|
|
Total
|
||||||||
Cost of goods sold
|
$
|
3,981
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,981
|
|
Operating expenses
|
1,910
|
|
|
1,323
|
|
|
—
|
|
|
3,233
|
|
||||
Other expense
|
—
|
|
|
1,618
|
|
|
(101,978
|
)
|
|
(100,360
|
)
|
||||
Income tax benefit
|
(119
|
)
|
|
(150
|
)
|
|
—
|
|
|
(269
|
)
|
||||
Net income attributable to noncontrolling interest
|
(172
|
)
|
|
—
|
|
|
—
|
|
|
(172
|
)
|
||||
Consolidated total
|
$
|
5,600
|
|
|
$
|
2,791
|
|
|
$
|
(101,978
|
)
|
|
$
|
(93,587
|
)
|
(a)
|
Represents severance charges related to 2015 restructurings, a portion of which relates to noncontrolling interest.
|
(b)
|
Represents facility charges related to 2015 restructurings.
|
(c)
|
Represents reduction of loss contingency related to legal proceedings (Footnote 7).
|
•
|
E&P Technology and Services, formerly referred to as Solutions, continues to be comprised of the groups that support the Company’s New Venture and Data Library (together multi-client) revenues and Imaging Services group.
|
•
|
E&P Operations Optimization is comprised of Devices, formerly referred to as Systems, and Optimization Software & Services, formerly referred to as Software. The manufacturing, engineering, research and development of ocean bottom systems is no longer a part of Devices, and are now within Ocean Bottom Services as noted below.
|
•
|
Ocean Bottom Services is comprised of OceanGeo, an ocean bottom data acquisition services company along with the manufacturing, engineering, research and development of ocean bottom systems.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
E&P Technology & Services:
|
|
|
|
|
|
|
|
||||||||
New Venture
|
$
|
8,393
|
|
|
$
|
26,650
|
|
|
$
|
16,278
|
|
|
$
|
35,315
|
|
Data Library
|
21,510
|
|
|
15,302
|
|
|
32,057
|
|
|
24,948
|
|
||||
Total multi-client revenues
|
29,903
|
|
|
41,952
|
|
|
48,335
|
|
|
60,263
|
|
||||
Imaging Services
|
6,134
|
|
|
10,693
|
|
|
19,338
|
|
|
33,731
|
|
||||
Total
|
36,037
|
|
|
52,645
|
|
|
67,673
|
|
|
93,994
|
|
||||
E&P Operations Optimization:
|
|
|
|
|
|
|
|
||||||||
Devices
|
8,679
|
|
|
7,290
|
|
|
20,664
|
|
|
27,733
|
|
||||
Optimization Software & Services
|
3,922
|
|
|
6,739
|
|
|
12,685
|
|
|
22,320
|
|
||||
Total
|
12,601
|
|
|
14,029
|
|
|
33,349
|
|
|
50,053
|
|
||||
Ocean Bottom Services
|
29,984
|
|
|
—
|
|
|
36,417
|
|
|
—
|
|
||||
Total
|
$
|
78,622
|
|
|
$
|
66,674
|
|
|
$
|
137,439
|
|
|
$
|
144,047
|
|
Gross profit (loss):
|
|
|
|
|
|
|
|
||||||||
E&P Technology & Services
|
$
|
12,888
|
|
|
$
|
11,294
|
|
|
$
|
(418
|
)
|
|
$
|
(6,954
|
)
|
E&P Operations Optimization
|
6,866
|
|
|
7,039
|
|
|
16,647
|
|
|
25,971
|
|
||||
Ocean Bottom Services
|
12,011
|
|
|
(7,225
|
)
|
|
11,459
|
|
|
(33,832
|
)
|
||||
Total
|
$
|
31,765
|
|
|
$
|
11,108
|
|
|
$
|
27,688
|
|
|
$
|
(14,815
|
)
|
Gross margin:
|
|
|
|
|
|
|
|
||||||||
E&P Technology & Services
|
36
|
%
|
|
21
|
%
|
|
(1
|
)%
|
|
(7
|
)%
|
||||
E&P Operations Optimization
|
54
|
%
|
|
50
|
%
|
|
50
|
%
|
|
52
|
%
|
||||
Ocean Bottom Services
|
40
|
%
|
|
—
|
%
|
|
31
|
%
|
|
—
|
%
|
||||
Total
|
40
|
%
|
|
17
|
%
|
|
20
|
%
|
|
(10
|
)%
|
||||
Income (loss) from operations:
|
|
|
|
|
|
|
|
||||||||
E&P Technology & Services
|
$
|
7,259
|
|
|
$
|
1,642
|
|
|
$
|
(16,867
|
)
|
|
$
|
(37,401
|
)
|
E&P Operations Optimization
|
3,682
|
|
|
3,916
|
|
|
7,162
|
|
|
15,786
|
|
||||
Ocean Bottom Services
|
9,320
|
|
|
(10,287
|
)
|
|
2,053
|
|
|
(46,457
|
)
|
||||
Support and other
|
(8,397
|
)
|
|
(8,145
|
)
|
|
(27,201
|
)
|
|
(32,180
|
)
|
||||
Income (loss) from operations
|
11,864
|
|
|
(12,874
|
)
|
|
(34,853
|
)
|
|
(100,252
|
)
|
||||
Interest expense, net
|
(4,607
|
)
|
|
(4,854
|
)
|
|
(14,043
|
)
|
|
(14,086
|
)
|
||||
Other income (expense), net
|
(2,027
|
)
|
|
(346
|
)
|
|
(3,624
|
)
|
|
98,035
|
|
||||
Income (loss) before income taxes
|
$
|
5,230
|
|
|
$
|
(18,074
|
)
|
|
$
|
(52,520
|
)
|
|
$
|
(16,303
|
)
|
|
|
|
|
|
|
|
|
Obligations (in thousands)
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Senior secured second-priority lien notes
(maturing December 15, 2021)
|
|
$
|
120,569
|
|
|
$
|
—
|
|
Senior secured third-priority lien notes
(maturing May 15, 2018)
|
|
28,497
|
|
|
175,000
|
|
||
Revolving line of credit
|
|
15,000
|
|
|
—
|
|
||
Equipment capital leases
|
|
4,701
|
|
|
9,762
|
|
||
Other debt
|
|
111
|
|
|
1,558
|
|
||
Costs associated with issuances of debt
(1)
|
|
(5,353
|
)
|
|
(3,328
|
)
|
||
Total
|
|
163,525
|
|
|
182,992
|
|
||
Current portion of long-term debt and lease obligations
|
|
(19,226
|
)
|
|
(7,912
|
)
|
||
Non-current portion of long-term debt and lease obligations
|
|
$
|
144,299
|
|
|
$
|
175,080
|
|
(1)
|
Represents debt issuance costs presented as a direct deduction from the carrying amount of the associated debt liability.
|
•
|
increased the applicable margin for loans by
0.50%
per annum (from
2.50%
per annum to
3.00%
per annum for alternate base rate loans and from
3.50%
per annum to
4.00%
per annum for LIBOR-based loans);
|
•
|
increased the minimum excess availability threshold to avoid triggering the agent’s rights to exercise dominion over cash and deposit accounts and increases certain of the thresholds upon which such dominion ceases;
|
•
|
increased the minimum liquidity threshold to avoid triggering the Company’s obligation to calculate and comply with the existing fixed charge coverage ratio and increased certain of the thresholds upon which such required calculation and compliance cease;
|
•
|
established a reserve that reduced the amount available to be borrowed by the aggregate amount owing under all Third Lien Notes that remain outstanding (if any) on or after February 14, 2018 (i.e.,
90
days prior to the stated maturity of the Third Lien Notes);
|
•
|
increased the maximum amount of certain permitted junior indebtedness to
$200.0 million
(from $
175.0 million
);
|
•
|
incorporated technical and conforming changes to reflect that the Second Lien Notes and the remaining Third Lien Notes (and any permitted refinancing thereof or subsequently incurred replacement indebtedness meeting certain requirements) constitute permitted indebtedness;
|
•
|
clarified the circumstances and mechanics under which the Company may prepay, repurchase or redeem the Second Lien Notes, the remaining Third Lien Notes and certain other junior indebtedness;
|
•
|
modified the cross-default provisions to incorporated defaults under the Second Lien Notes, the remaining Third Lien Notes and certain other junior indebtedness; and
|
•
|
eliminated the potential early commitment termination date and early maturity date that would otherwise have occurred ninety (
90
) days prior the maturity date of the Third Lien Notes if any of the Third Lien Notes then remained outstanding.
|
Date
|
|
Percentage
|
2015
|
|
104.063%
|
2016
|
|
102.031%
|
2017 and thereafter
|
|
100.000%
|
Date
|
|
Percentage
|
2019
|
|
105.500%
|
2020
|
|
103.500%
|
2021 and thereafter
|
|
100.000%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss) attributable to ION
|
$
|
1,699
|
|
|
$
|
(20,383
|
)
|
|
$
|
(58,657
|
)
|
|
$
|
(19,578
|
)
|
Weighted average number of common shares outstanding
|
11,786
|
|
|
10,984
|
|
|
11,269
|
|
|
10,978
|
|
||||
Effect of dilutive stock awards
|
121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average number of diluted common shares outstanding
|
11,907
|
|
|
10,984
|
|
|
11,269
|
|
|
10,978
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per share
|
$
|
0.14
|
|
|
$
|
(1.86
|
)
|
|
$
|
(5.21
|
)
|
|
$
|
(1.78
|
)
|
Diluted net income (loss) per share
|
$
|
0.14
|
|
|
$
|
(1.86
|
)
|
|
$
|
(5.21
|
)
|
|
$
|
(1.78
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reductions of loss contingency related to legal proceedings (Footnote 7)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
101,978
|
|
Facility restructuring charges
|
—
|
|
|
296
|
|
|
—
|
|
|
(2,791
|
)
|
||||
Loss on bond exchange
|
—
|
|
|
—
|
|
|
(2,182
|
)
|
|
—
|
|
||||
Foreign currency losses
|
(2,774
|
)
|
|
(879
|
)
|
|
(3,024
|
)
|
|
(2,355
|
)
|
||||
Other income, net
|
747
|
|
|
237
|
|
|
1,582
|
|
|
1,203
|
|
||||
Total other income (expense), net
|
$
|
(2,027
|
)
|
|
$
|
(346
|
)
|
|
$
|
(3,624
|
)
|
|
$
|
98,035
|
|
The following table is a summary of inventories (in thousands):
|
September 30, 2016
|
|
December 31, 2015
|
||||
Raw materials and subassemblies
|
$
|
34,298
|
|
|
$
|
34,949
|
|
Work-in-process
|
4,843
|
|
|
8,478
|
|
||
Finished goods
|
18,293
|
|
|
13,769
|
|
||
Reserve for excess and obsolete inventories
|
(24,126
|
)
|
|
(24,475
|
)
|
||
Total
|
$
|
33,308
|
|
|
$
|
32,721
|
|
The following table is a summary of other long-term liabilities (in thousands):
|
September 30, 2016
|
|
December 31, 2015
|
||||
Accrual for loss contingency related to legal proceedings (Footnote 7)
|
$
|
22,000
|
|
|
$
|
22,000
|
|
Deferred rents
|
13,078
|
|
|
13,394
|
|
||
Facility restructuring accrual
|
2,090
|
|
|
3,006
|
|
||
Deferred income tax liability
|
5,843
|
|
|
4,734
|
|
||
Other long-term liabilities
|
1,146
|
|
|
1,231
|
|
||
Total
|
$
|
44,157
|
|
|
$
|
44,365
|
|
|
|
Foreign currency translation adjustments
|
|
Total
|
||||
Accumulated other comprehensive loss at December 31, 2015
|
|
$
|
(14,781
|
)
|
|
$
|
(14,781
|
)
|
Net current-period other comprehensive loss
|
|
(5,282
|
)
|
(a)
|
(5,282
|
)
|
||
Accumulated other comprehensive loss at September 30, 2016
|
|
$
|
(20,063
|
)
|
|
$
|
(20,063
|
)
|
|
|
|
|
|
(a)
|
Represents the impact of foreign currency translation adjustments, primarily due to the devaluation of the British Pound Sterling (“GBP”) following the vote by the British people to leave the European Union (“Brexit”) on the Company’s GBP-denominated balances, including
£15.7 million
of goodwill.
|
|
Nine Months Ended September 30,
|
|
||||||
|
2016
|
|
2015
|
|
||||
Cash paid during the period for:
|
|
|
|
|
||||
Interest
|
$
|
8,819
|
|
|
$
|
8,036
|
|
|
Income taxes
|
2,579
|
|
|
7,614
|
|
|
||
Non-cash items from investing and financing activities:
|
|
|
|
|
||||
Purchases of computer equipment financed through capital leases
|
—
|
|
|
1,178
|
|
|
||
Investment in multi-client data library financed through accounts payable
|
—
|
|
|
13,617
|
|
|
||
Bond exchange
|
10,740
|
|
(a)
|
—
|
|
|
||
Transfer of inventory to property, plant, equipment and seismic rental equipment
|
—
|
|
|
15,936
|
|
(b)
|
(a)
|
This represents the non cash portion of the bond exchange.
|
(b)
|
This transfer of inventory to property, plant, equipment and seismic rental equipment relates to ocean bottom seismic equipment manufactured to be deployed by the Company’s Ocean Bottom Services segment.
|
|
March 1, 2016
|
Risk-free interest rates
|
1.81%
|
Expected lives (in years)
|
4.0
|
Expected dividend yield
|
—%
|
Expected volatility
|
70.99%
|
•
|
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.
|
|
September 30, 2016
|
||||||||||||||||||
Balance Sheet
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
25,658
|
|
|
$
|
—
|
|
|
$
|
36,878
|
|
|
$
|
—
|
|
|
$
|
62,536
|
|
Accounts receivable, net
|
2,479
|
|
|
10,313
|
|
|
21,894
|
|
|
—
|
|
|
34,686
|
|
|||||
Unbilled receivables
|
—
|
|
|
16,619
|
|
|
7,061
|
|
|
—
|
|
|
23,680
|
|
|||||
Inventories
|
—
|
|
|
9,676
|
|
|
23,632
|
|
|
—
|
|
|
33,308
|
|
|||||
Prepaid expenses and other current assets
|
3,101
|
|
|
578
|
|
|
6,231
|
|
|
—
|
|
|
9,910
|
|
|||||
Total current assets
|
31,238
|
|
|
37,186
|
|
|
95,696
|
|
|
—
|
|
|
164,120
|
|
|||||
Property, plant, equipment and seismic rental equipment, net
|
2,205
|
|
|
13,505
|
|
|
37,814
|
|
|
—
|
|
|
53,524
|
|
|||||
Multi-client data library, net
|
—
|
|
|
102,791
|
|
|
9,914
|
|
|
—
|
|
|
112,705
|
|
|||||
Investment in subsidiaries
|
661,892
|
|
|
255,554
|
|
|
—
|
|
|
(917,446
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
23,412
|
|
|
—
|
|
|
23,412
|
|
|||||
Intangible assets, net
|
—
|
|
|
3,387
|
|
|
139
|
|
|
—
|
|
|
3,526
|
|
|||||
Intercompany receivables
|
—
|
|
|
30,609
|
|
|
—
|
|
|
(30,609
|
)
|
|
—
|
|
|||||
Other assets
|
2,008
|
|
|
145
|
|
|
242
|
|
|
—
|
|
|
2,395
|
|
|||||
Total assets
|
$
|
697,343
|
|
|
$
|
443,177
|
|
|
$
|
167,217
|
|
|
$
|
(948,055
|
)
|
|
$
|
359,682
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
14,533
|
|
|
$
|
4,374
|
|
|
$
|
319
|
|
|
$
|
—
|
|
|
$
|
19,226
|
|
Accounts payable
|
2,894
|
|
|
18,925
|
|
|
10,215
|
|
|
—
|
|
|
32,034
|
|
|||||
Accrued expenses
|
12,330
|
|
|
11,395
|
|
|
9,028
|
|
|
—
|
|
|
32,753
|
|
|||||
Accrued multi-client data library royalties
|
—
|
|
|
22,344
|
|
|
—
|
|
|
—
|
|
|
22,344
|
|
|||||
Deferred revenue
|
—
|
|
|
3,013
|
|
|
1,382
|
|
|
—
|
|
|
4,395
|
|
|||||
Total current liabilities
|
29,757
|
|
|
60,051
|
|
|
20,944
|
|
|
—
|
|
|
110,752
|
|
|||||
Long-term debt, net of current maturities
|
143,713
|
|
|
586
|
|
|
—
|
|
|
—
|
|
|
144,299
|
|
|||||
Intercompany payables
|
463,282
|
|
|
—
|
|
|
20,799
|
|
|
(484,081
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
486
|
|
|
34,255
|
|
|
9,416
|
|
|
—
|
|
|
44,157
|
|
|||||
Total liabilities
|
637,238
|
|
|
94,892
|
|
|
51,159
|
|
|
(484,081
|
)
|
|
299,208
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
118
|
|
|
290,460
|
|
|
19,138
|
|
|
(309,598
|
)
|
|
118
|
|
|||||
Additional paid-in capital
|
898,238
|
|
|
180,700
|
|
|
232,590
|
|
|
(413,290
|
)
|
|
898,238
|
|
|||||
Accumulated earnings (deficit)
|
(818,188
|
)
|
|
216,453
|
|
|
(6,428
|
)
|
|
(210,025
|
)
|
|
(818,188
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
(20,063
|
)
|
|
4,420
|
|
|
(19,886
|
)
|
|
15,466
|
|
|
(20,063
|
)
|
|||||
Due from ION Geophysical Corporation
|
—
|
|
|
(343,748
|
)
|
|
(109,725
|
)
|
|
453,473
|
|
|
—
|
|
|||||
Total stockholders’ equity
|
60,105
|
|
|
348,285
|
|
|
115,689
|
|
|
(463,974
|
)
|
|
60,105
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
369
|
|
|
—
|
|
|
369
|
|
|||||
Total equity
|
60,105
|
|
|
348,285
|
|
|
116,058
|
|
|
(463,974
|
)
|
|
60,474
|
|
|||||
Total liabilities and equity
|
$
|
697,343
|
|
|
$
|
443,177
|
|
|
$
|
167,217
|
|
|
$
|
(948,055
|
)
|
|
$
|
359,682
|
|
|
December 31, 2015
|
||||||||||||||||||
Balance Sheet
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
33,734
|
|
|
$
|
—
|
|
|
$
|
51,199
|
|
|
$
|
—
|
|
|
$
|
84,933
|
|
Accounts receivable, net
|
—
|
|
|
35,133
|
|
|
9,232
|
|
|
—
|
|
|
44,365
|
|
|||||
Unbilled receivables
|
—
|
|
|
19,046
|
|
|
891
|
|
|
—
|
|
|
19,937
|
|
|||||
Inventories
|
—
|
|
|
10,939
|
|
|
21,782
|
|
|
—
|
|
|
32,721
|
|
|||||
Prepaid expenses and other current assets
|
5,435
|
|
|
1,458
|
|
|
7,914
|
|
|
—
|
|
|
14,807
|
|
|||||
Total current assets
|
39,169
|
|
|
66,576
|
|
|
91,018
|
|
|
—
|
|
|
196,763
|
|
|||||
Property, plant, equipment and seismic rental equipment, net
|
4,521
|
|
|
21,072
|
|
|
46,434
|
|
|
—
|
|
|
72,027
|
|
|||||
Multi-client data library, net
|
—
|
|
|
120,550
|
|
|
11,687
|
|
|
—
|
|
|
132,237
|
|
|||||
Investment in subsidiaries
|
680,508
|
|
|
243,319
|
|
|
—
|
|
|
(923,827
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
26,274
|
|
|
—
|
|
|
26,274
|
|
|||||
Intangible assets, net
|
—
|
|
|
4,523
|
|
|
287
|
|
|
—
|
|
|
4,810
|
|
|||||
Intercompany receivables
|
75,641
|
|
|
—
|
|
|
—
|
|
|
(75,641
|
)
|
|
—
|
|
|||||
Other assets
|
1,724
|
|
|
146
|
|
|
1,107
|
|
|
—
|
|
|
2,977
|
|
|||||
Total assets
|
$
|
801,563
|
|
|
$
|
456,186
|
|
|
$
|
176,807
|
|
|
$
|
(999,468
|
)
|
|
$
|
435,088
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
486
|
|
|
$
|
6,856
|
|
|
$
|
570
|
|
|
$
|
—
|
|
|
$
|
7,912
|
|
Accounts payable
|
2,086
|
|
|
19,839
|
|
|
7,874
|
|
|
—
|
|
|
29,799
|
|
|||||
Accrued expenses
|
11,199
|
|
|
16,200
|
|
|
6,888
|
|
|
—
|
|
|
34,287
|
|
|||||
Accrued multi-client data library royalties
|
—
|
|
|
25,045
|
|
|
—
|
|
|
—
|
|
|
25,045
|
|
|||||
Deferred revenue
|
—
|
|
|
5,071
|
|
|
1,489
|
|
|
—
|
|
|
6,560
|
|
|||||
Total current liabilities
|
13,771
|
|
|
73,011
|
|
|
16,821
|
|
|
—
|
|
|
103,603
|
|
|||||
Long-term debt, net of current maturities
|
171,672
|
|
|
3,408
|
|
|
—
|
|
|
—
|
|
|
175,080
|
|
|||||
Intercompany payables
|
503,621
|
|
|
68,286
|
|
|
7,355
|
|
|
(579,262
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
540
|
|
|
33,305
|
|
|
10,520
|
|
|
—
|
|
|
44,365
|
|
|||||
Total liabilities
|
689,604
|
|
|
178,010
|
|
|
34,696
|
|
|
(579,262
|
)
|
|
323,048
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
107
|
|
|
290,460
|
|
|
19,138
|
|
|
(309,598
|
)
|
|
107
|
|
|||||
Additional paid-in capital
|
894,715
|
|
|
180,700
|
|
|
234,234
|
|
|
(414,934
|
)
|
|
894,715
|
|
|||||
Accumulated earnings (deficit)
|
(759,531
|
)
|
|
231,208
|
|
|
(21,729
|
)
|
|
(209,479
|
)
|
|
(759,531
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
(14,781
|
)
|
|
4,420
|
|
|
(14,604
|
)
|
|
10,184
|
|
|
(14,781
|
)
|
|||||
Due from ION Geophysical Corporation
|
—
|
|
|
(428,612
|
)
|
|
(75,009
|
)
|
|
503,621
|
|
|
—
|
|
|||||
Treasury stock
|
(8,551
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,551
|
)
|
|||||
Total stockholders’ equity
|
111,959
|
|
|
278,176
|
|
|
142,030
|
|
|
(420,206
|
)
|
|
111,959
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
81
|
|
|
—
|
|
|
81
|
|
|||||
Total equity
|
111,959
|
|
|
278,176
|
|
|
142,111
|
|
|
(420,206
|
)
|
|
112,040
|
|
|||||
Total liabilities and equity
|
$
|
801,563
|
|
|
$
|
456,186
|
|
|
$
|
176,807
|
|
|
$
|
(999,468
|
)
|
|
$
|
435,088
|
|
|
Three Months Ended September 30, 2016
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
30,155
|
|
|
$
|
48,467
|
|
|
$
|
—
|
|
|
$
|
78,622
|
|
Cost of sales
|
—
|
|
|
22,724
|
|
|
24,133
|
|
|
—
|
|
|
46,857
|
|
|||||
Gross profit
|
—
|
|
|
7,431
|
|
|
24,334
|
|
|
—
|
|
|
31,765
|
|
|||||
Total operating expenses
|
7,692
|
|
|
7,186
|
|
|
5,023
|
|
|
—
|
|
|
19,901
|
|
|||||
Income (loss) from operations
|
(7,692
|
)
|
|
245
|
|
|
19,311
|
|
|
—
|
|
|
11,864
|
|
|||||
Interest expense, net
|
(4,583
|
)
|
|
(32
|
)
|
|
8
|
|
|
—
|
|
|
(4,607
|
)
|
|||||
Intercompany interest, net
|
276
|
|
|
(1,138
|
)
|
|
862
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings of investments
|
13,494
|
|
|
15,039
|
|
|
—
|
|
|
(28,533
|
)
|
|
—
|
|
|||||
Other income (expense)
|
245
|
|
|
948
|
|
|
(3,220
|
)
|
|
—
|
|
|
(2,027
|
)
|
|||||
Net income before income taxes
|
1,740
|
|
|
15,062
|
|
|
16,961
|
|
|
(28,533
|
)
|
|
5,230
|
|
|||||
Income tax expense
|
41
|
|
|
670
|
|
|
2,605
|
|
|
—
|
|
|
3,316
|
|
|||||
Net income
|
1,699
|
|
|
14,392
|
|
|
14,356
|
|
|
(28,533
|
)
|
|
1,914
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(215
|
)
|
|
—
|
|
|
(215
|
)
|
|||||
Net income attributable to ION
|
$
|
1,699
|
|
|
$
|
14,392
|
|
|
$
|
14,141
|
|
|
(28,533
|
)
|
|
$
|
1,699
|
|
|
Comprehensive net loss
|
$
|
616
|
|
|
$
|
14,392
|
|
|
$
|
13,058
|
|
|
$
|
(27,235
|
)
|
|
$
|
831
|
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(215
|
)
|
|
—
|
|
|
(215
|
)
|
|||||
Comprehensive net income attributable to ION
|
$
|
616
|
|
|
$
|
14,392
|
|
|
$
|
12,843
|
|
|
$
|
(27,235
|
)
|
|
$
|
616
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2015
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
41,768
|
|
|
$
|
25,072
|
|
|
$
|
(166
|
)
|
|
$
|
66,674
|
|
Cost of sales
|
—
|
|
|
31,712
|
|
|
24,020
|
|
|
(166
|
)
|
|
55,566
|
|
|||||
Gross profit
|
—
|
|
|
10,056
|
|
|
1,052
|
|
|
—
|
|
|
11,108
|
|
|||||
Total operating expenses
|
3,914
|
|
|
11,266
|
|
|
8,802
|
|
|
—
|
|
|
23,982
|
|
|||||
Loss from operations
|
(3,914
|
)
|
|
(1,210
|
)
|
|
(7,750
|
)
|
|
—
|
|
|
(12,874
|
)
|
|||||
Interest expense, net
|
(4,769
|
)
|
|
(107
|
)
|
|
22
|
|
|
—
|
|
|
(4,854
|
)
|
|||||
Intercompany interest, net
|
184
|
|
|
(806
|
)
|
|
622
|
|
|
—
|
|
|
—
|
|
|||||
Equity in losses of investments
|
(14,248
|
)
|
|
(12,141
|
)
|
|
—
|
|
|
26,389
|
|
|
—
|
|
|||||
Other income (expense)
|
326
|
|
|
(9
|
)
|
|
(663
|
)
|
|
—
|
|
|
(346
|
)
|
|||||
Net loss before income taxes
|
(22,421
|
)
|
|
(14,273
|
)
|
|
(7,769
|
)
|
|
26,389
|
|
|
(18,074
|
)
|
|||||
Income tax expense (benefit)
|
(2,038
|
)
|
|
65
|
|
|
4,055
|
|
|
—
|
|
|
2,082
|
|
|||||
Net loss
|
(20,383
|
)
|
|
(14,338
|
)
|
|
(11,824
|
)
|
|
26,389
|
|
|
(20,156
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(227
|
)
|
|
—
|
|
|
(227
|
)
|
|||||
Net loss attributable to ION
|
$
|
(20,383
|
)
|
|
$
|
(14,338
|
)
|
|
$
|
(12,051
|
)
|
|
26,389
|
|
|
$
|
(20,383
|
)
|
|
Comprehensive net loss
|
$
|
(21,748
|
)
|
|
$
|
(15,543
|
)
|
|
$
|
(12,940
|
)
|
|
$
|
28,710
|
|
|
$
|
(21,521
|
)
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(227
|
)
|
|
—
|
|
|
(227
|
)
|
|||||
Comprehensive net loss attributable to ION
|
$
|
(21,748
|
)
|
|
$
|
(15,543
|
)
|
|
$
|
(13,167
|
)
|
|
$
|
28,710
|
|
|
$
|
(21,748
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
58,907
|
|
|
$
|
78,532
|
|
|
$
|
—
|
|
|
$
|
137,439
|
|
Cost of sales
|
—
|
|
|
67,061
|
|
|
42,690
|
|
|
—
|
|
|
109,751
|
|
|||||
Gross profit
|
—
|
|
|
(8,154
|
)
|
|
35,842
|
|
|
—
|
|
|
27,688
|
|
|||||
Total operating expenses
|
24,894
|
|
|
21,687
|
|
|
15,960
|
|
|
—
|
|
|
62,541
|
|
|||||
Income (loss) from operations
|
(24,894
|
)
|
|
(29,841
|
)
|
|
19,882
|
|
|
—
|
|
|
(34,853
|
)
|
|||||
Interest expense, net
|
(13,917
|
)
|
|
(179
|
)
|
|
53
|
|
|
—
|
|
|
(14,043
|
)
|
|||||
Intercompany interest, net
|
727
|
|
|
(3,250
|
)
|
|
2,523
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings of investments
|
(18,617
|
)
|
|
19,163
|
|
|
—
|
|
|
(546
|
)
|
|
—
|
|
|||||
Other income (expense)
|
(1,841
|
)
|
|
771
|
|
|
(2,554
|
)
|
|
—
|
|
|
(3,624
|
)
|
|||||
Net income before income taxes
|
(58,542
|
)
|
|
(13,336
|
)
|
|
19,904
|
|
|
(546
|
)
|
|
(52,520
|
)
|
|||||
Income tax expense
|
115
|
|
|
1,419
|
|
|
4,331
|
|
|
—
|
|
|
5,865
|
|
|||||
Net income
|
(58,657
|
)
|
|
(14,755
|
)
|
|
15,573
|
|
|
(546
|
)
|
|
(58,385
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(272
|
)
|
|
—
|
|
|
(272
|
)
|
|||||
Net income attributable to ION
|
$
|
(58,657
|
)
|
|
$
|
(14,755
|
)
|
|
15,301
|
|
|
$
|
(546
|
)
|
|
(58,657
|
)
|
||
Comprehensive net income (loss)
|
$
|
(63,939
|
)
|
|
$
|
(14,755
|
)
|
|
$
|
10,019
|
|
|
$
|
5,008
|
|
|
$
|
(63,667
|
)
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(272
|
)
|
|
—
|
|
|
(272
|
)
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(63,939
|
)
|
|
$
|
(14,755
|
)
|
|
$
|
9,747
|
|
|
$
|
5,008
|
|
|
$
|
(63,939
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
83,082
|
|
|
$
|
61,972
|
|
|
$
|
(1,007
|
)
|
|
$
|
144,047
|
|
Cost of sales
|
—
|
|
|
84,715
|
|
|
75,154
|
|
|
(1,007
|
)
|
|
158,862
|
|
|||||
Gross loss
|
—
|
|
|
(1,633
|
)
|
|
(13,182
|
)
|
|
—
|
|
|
(14,815
|
)
|
|||||
Total operating expenses
|
18,296
|
|
|
37,151
|
|
|
29,990
|
|
|
—
|
|
|
85,437
|
|
|||||
Loss from operations
|
(18,296
|
)
|
|
(38,784
|
)
|
|
(43,172
|
)
|
|
—
|
|
|
(100,252
|
)
|
|||||
Interest expense, net
|
(13,826
|
)
|
|
(279
|
)
|
|
19
|
|
|
—
|
|
|
(14,086
|
)
|
|||||
Intercompany interest, net
|
466
|
|
|
(2,208
|
)
|
|
1,742
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
9,881
|
|
|
(45,091
|
)
|
|
—
|
|
|
35,210
|
|
|
—
|
|
|||||
Other income (expense)
|
268
|
|
|
101,961
|
|
|
(4,194
|
)
|
|
—
|
|
|
98,035
|
|
|||||
Net income (loss) before income taxes
|
(21,507
|
)
|
|
15,599
|
|
|
(45,605
|
)
|
|
35,210
|
|
|
(16,303
|
)
|
|||||
Income tax expense (benefit)
|
(1,929
|
)
|
|
239
|
|
|
5,287
|
|
|
—
|
|
|
3,597
|
|
|||||
Net income (loss)
|
(19,578
|
)
|
|
15,360
|
|
|
(50,892
|
)
|
|
35,210
|
|
|
(19,900
|
)
|
|||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
322
|
|
|
—
|
|
|
322
|
|
|||||
Net income (loss) applicable to ION
|
$
|
(19,578
|
)
|
|
15,360
|
|
|
$
|
(50,570
|
)
|
|
$
|
35,210
|
|
|
$
|
(19,578
|
)
|
|
Comprehensive net income (loss)
|
$
|
(20,335
|
)
|
|
$
|
14,794
|
|
|
$
|
(51,458
|
)
|
|
$
|
36,342
|
|
|
$
|
(20,657
|
)
|
Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
322
|
|
|
—
|
|
|
322
|
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(20,335
|
)
|
|
$
|
14,794
|
|
|
$
|
(51,136
|
)
|
|
$
|
36,342
|
|
|
$
|
(20,335
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 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
|
$
|
(31,403
|
)
|
|
$
|
50,669
|
|
|
$
|
(16,034
|
)
|
|
$
|
3,232
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Cash invested in multi-client data library
|
—
|
|
|
(10,027
|
)
|
|
(1,574
|
)
|
|
(11,601
|
)
|
||||
Purchase of property, plant, equipment and seismic rental equipment
|
—
|
|
|
(567
|
)
|
|
—
|
|
|
(567
|
)
|
||||
Net cash used in investing activities
|
—
|
|
|
(10,594
|
)
|
|
(1,574
|
)
|
|
(12,168
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Borrowings under revolving line of credit
|
15,000
|
|
|
—
|
|
|
—
|
|
|
15,000
|
|
||||
Repurchase of common stock
|
(964
|
)
|
|
—
|
|
|
—
|
|
|
(964
|
)
|
||||
Payments on notes payable and long-term debt
|
(951
|
)
|
|
(5,304
|
)
|
|
(471
|
)
|
|
(6,726
|
)
|
||||
Costs associated with issuance of debt
|
(6,638
|
)
|
|
—
|
|
|
—
|
|
|
(6,638
|
)
|
||||
Intercompany lending
|
31,867
|
|
|
(34,771
|
)
|
|
2,904
|
|
|
—
|
|
||||
Payment to repurchase bonds
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
|
(15,000
|
)
|
||||
Other financing activities
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Net cash provided by (used in) financing activities
|
23,327
|
|
|
(40,075
|
)
|
|
2,433
|
|
|
(14,315
|
)
|
||||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
—
|
|
|
—
|
|
|
854
|
|
|
854
|
|
||||
Net decrease in cash and cash equivalents
|
(8,076
|
)
|
|
—
|
|
|
(14,321
|
)
|
|
(22,397
|
)
|
||||
Cash and cash equivalents at beginning of period
|
33,734
|
|
|
—
|
|
|
51,199
|
|
|
84,933
|
|
||||
Cash and cash equivalents at end of period
|
$
|
25,658
|
|
|
$
|
—
|
|
|
$
|
36,878
|
|
|
$
|
62,536
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||
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
|
$
|
(414,473
|
)
|
|
$
|
173,725
|
|
|
$
|
204,752
|
|
|
$
|
(35,996
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Investment in multi-client data library
|
—
|
|
|
(27,282
|
)
|
|
(870
|
)
|
|
(28,152
|
)
|
||||
Purchase of property, plant, equipment and seismic rental equipment
|
(347
|
)
|
|
(1,162
|
)
|
|
(16,092
|
)
|
|
(17,601
|
)
|
||||
Other investing activities
|
—
|
|
|
1,262
|
|
|
—
|
|
|
1,262
|
|
||||
Net cash used in investing activities
|
(347
|
)
|
|
(27,182
|
)
|
|
(16,962
|
)
|
|
(44,491
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Payments on notes payable and long-term debt
|
—
|
|
|
(4,798
|
)
|
|
(633
|
)
|
|
(5,431
|
)
|
||||
Intercompany lending
|
330,828
|
|
|
(141,745
|
)
|
|
(189,083
|
)
|
|
—
|
|
||||
Other financing activities
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
||||
Net cash provided by (used in) financing activities
|
330,776
|
|
|
(146,543
|
)
|
|
(189,716
|
)
|
|
(5,483
|
)
|
||||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
—
|
|
|
—
|
|
|
601
|
|
|
601
|
|
||||
Net decrease in cash and cash equivalents
|
(84,044
|
)
|
|
—
|
|
|
(1,325
|
)
|
|
(85,369
|
)
|
||||
Cash and cash equivalents at beginning of period
|
109,514
|
|
|
—
|
|
|
64,094
|
|
|
173,608
|
|
||||
Cash and cash equivalents at end of period
|
$
|
25,470
|
|
|
$
|
—
|
|
|
$
|
62,769
|
|
|
$
|
88,239
|
|
|
|
|
||
Total debt extinguished
|
$
|
146,503
|
|
|
Carrying amount of debt issuance cost
|
(2,376
|
)
|
|
|
Net carrying amount of debt
|
144,127
|
|
|
|
|
|
|
||
New Second Lien Notes issued in exchange
|
120,569
|
|
|
|
Cash paid
|
15,000
|
|
|
|
Common stock issued
|
10,740
|
|
(a)
|
|
Total consideration issued in exchange
|
146,309
|
|
|
|
|
|
|
||
Loss on extinguishment of debt
|
$
|
(2,182
|
)
|
|
(a)
|
1,205,477 shares issued at $8.91 per share
.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
||||||||
E&P Technology & Services:
|
|
|
|
|
|
|
|
|
||||||||
New Venture
|
$
|
8,393
|
|
|
$
|
26,650
|
|
|
$
|
16,278
|
|
|
$
|
35,315
|
|
|
Data Library
|
21,510
|
|
|
15,302
|
|
|
32,057
|
|
|
24,948
|
|
|
||||
Total multi-client revenues
|
29,903
|
|
|
41,952
|
|
|
48,335
|
|
|
60,263
|
|
|
||||
Imaging Services
|
6,134
|
|
|
10,693
|
|
|
19,338
|
|
|
33,731
|
|
|
||||
Total
|
36,037
|
|
|
52,645
|
|
|
67,673
|
|
|
93,994
|
|
|
||||
E&P Operations Optimization:
|
|
|
|
|
|
|
|
|
||||||||
Devices
|
8,679
|
|
|
7,290
|
|
|
20,664
|
|
|
27,733
|
|
|
||||
Optimization Software & Services
|
3,922
|
|
|
6,739
|
|
|
12,685
|
|
|
22,320
|
|
|
||||
Total
|
12,601
|
|
|
14,029
|
|
|
33,349
|
|
|
50,053
|
|
|
||||
Ocean Bottom Services
|
29,984
|
|
|
—
|
|
|
36,417
|
|
|
—
|
|
|
||||
Total
|
$
|
78,622
|
|
|
$
|
66,674
|
|
|
$
|
137,439
|
|
|
$
|
144,047
|
|
|
Gross profit (loss):
|
|
|
|
|
|
|
|
|
||||||||
E&P Technology & Services
|
$
|
12,888
|
|
|
$
|
11,294
|
|
|
$
|
(418
|
)
|
|
$
|
(6,954
|
)
|
|
E&P Operations Optimization
|
6,866
|
|
|
7,039
|
|
|
16,647
|
|
|
25,971
|
|
|
||||
Ocean Bottom Services
|
12,011
|
|
|
(7,225
|
)
|
|
11,459
|
|
|
(33,832
|
)
|
|
||||
Total
|
$
|
31,765
|
|
|
$
|
11,108
|
|
|
$
|
27,688
|
|
|
$
|
(14,815
|
)
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
||||||||
E&P Technology & Services
|
36
|
%
|
|
21
|
%
|
|
(1
|
)%
|
|
(7
|
)%
|
|
||||
E&P Operations Optimization
|
54
|
%
|
|
50
|
%
|
|
50
|
%
|
|
52
|
%
|
|
||||
Ocean Bottom Services
|
40
|
%
|
|
—
|
%
|
|
31
|
%
|
|
—
|
%
|
|
||||
Total
|
40
|
%
|
|
17
|
%
|
|
20
|
%
|
|
(10
|
)%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
||||||||
E&P Technology & Services
|
$
|
7,259
|
|
|
$
|
1,642
|
|
|
$
|
(16,867
|
)
|
|
$
|
(37,401
|
)
|
|
E&P Operations Optimization
|
3,682
|
|
|
3,916
|
|
|
7,162
|
|
|
15,786
|
|
|
||||
Ocean Bottom Services
|
9,320
|
|
|
(10,287
|
)
|
|
2,053
|
|
|
(46,457
|
)
|
|
||||
Support and other
|
(8,397
|
)
|
|
(8,145
|
)
|
|
(27,201
|
)
|
|
(32,180
|
)
|
|
||||
Income (loss) from operations
|
$
|
11,864
|
|
|
$
|
(12,874
|
)
|
|
$
|
(34,853
|
)
|
|
$
|
(100,252
|
)
|
|
Operating margin:
|
|
|
|
|
|
|
|
|
||||||||
E&P Technology & Services
|
20
|
%
|
|
3
|
%
|
|
(25
|
)%
|
|
(40
|
)%
|
|
||||
E&P Operations Optimization
|
29
|
%
|
|
28
|
%
|
|
21
|
%
|
|
32
|
%
|
|
||||
Ocean Bottom Services
|
31
|
%
|
|
—
|
%
|
|
6
|
%
|
|
—
|
%
|
|
||||
Support and other
|
(11
|
)%
|
|
(12
|
)%
|
|
(20
|
)%
|
|
(22
|
)%
|
|
||||
Total
|
15
|
%
|
|
(19
|
)%
|
|
(25
|
)%
|
|
(70
|
)%
|
|
||||
Net income (loss) attributable to ION
|
$
|
1,699
|
|
|
$
|
(20,383
|
)
|
|
$
|
(58,657
|
)
|
|
$
|
(19,578
|
)
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.14
|
|
|
$
|
(1.86
|
)
|
|
$
|
(5.21
|
)
|
|
$
|
(1.78
|
)
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
(1.86
|
)
|
|
$
|
(5.21
|
)
|
|
$
|
(1.78
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Items:
|
—
|
|
|
3,462
|
|
(a)
|
4,191
|
|
(b)
|
(93,587
|
)
|
(c)
|
||||
Net income (loss) attributable to ION as adjusted
|
$
|
1,699
|
|
|
$
|
(16,921
|
)
|
|
$
|
(54,466
|
)
|
|
$
|
(113,165
|
)
|
|
Net income (loss) per share as adjusted:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.14
|
|
|
$
|
(1.54
|
)
|
|
$
|
(4.83
|
)
|
|
$
|
(10.31
|
)
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
(1.54
|
)
|
|
$
|
(4.83
|
)
|
|
$
|
(10.31
|
)
|
|
(a)
|
Represents severance charges related to the third quarter 2015 restructurings.
|
(b)
|
Represents severance charges of $2.0 million and $2.2 million loss on extinguishment of debt associated with our second quarter bond exchange. See footnote 2 “
Restructurings and Special Items
” of Footnotes to Unaudited Condensed Financial Statements.”
|
(c)
|
In addition to note (a), the nine months ended September 30, 2015 includes $4.9 million of vacated facility charges offset by $102.0 million reduction in the WesternGeco legal contingency
|
|
Three Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Facility restructuring charges
|
—
|
|
|
296
|
|
||
Foreign currency losses
|
(2,774
|
)
|
(a)
|
(879
|
)
|
||
Other income, net
|
747
|
|
|
237
|
|
||
Total other income (expense), net
|
$
|
(2,027
|
)
|
|
$
|
(346
|
)
|
(a)
|
Represents the impact of foreign currency losses primarily in our Ocean Bottom Services group on revenues received in Nigerian Naira.
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Reductions of loss contingency related to legal proceedings (Footnote 7)
|
$
|
—
|
|
|
$
|
101,978
|
|
Facility restructuring charges
|
—
|
|
|
(2,791
|
)
|
||
Loss on bond exchange
|
(2,182
|
)
|
|
—
|
|
||
Foreign currency losses
|
(3,024
|
)
|
|
(2,355
|
)
|
||
Other income, net
|
1,582
|
|
|
1,203
|
|
||
Total other income (expense), net
|
$
|
(3,624
|
)
|
|
$
|
98,035
|
|
Date
|
|
Percentage
|
2015
|
|
104.063%
|
2016
|
|
102.031%
|
2017 and thereafter
|
|
100.000%
|
Date
|
|
Percentage
|
2019
|
|
105.500%
|
2020
|
|
103.500%
|
2021 and thereafter
|
|
100.000%
|
The following table is a summary of net revenues by geographic area (in thousands):
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Net revenues by geographic area:
|
|
|
|
||||
Africa
|
$
|
39,995
|
|
|
$
|
10,475
|
|
Europe
|
34,289
|
|
|
11,849
|
|
||
North America
|
28,811
|
|
|
40,930
|
|
||
Latin America
|
13,323
|
|
|
44,522
|
|
||
Asia Pacific
|
11,777
|
|
|
11,991
|
|
||
Middle East
|
7,764
|
|
|
14,875
|
|
||
Other
|
1,480
|
|
|
9,405
|
|
||
Total
|
$
|
137,439
|
|
|
$
|
144,047
|
|
•
|
the expected outcome of the WesternGeco litigation and future potential adverse effects on our liquidity;
|
•
|
future oil and gas commodity prices;
|
•
|
future levels of capital expenditures of our customers for seismic activities;
|
•
|
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 borrowing capacity on our
Credit Facility
based on future levels of our borrowing base;
|
•
|
the effects of current and future unrest in the Middle East, North Africa and other regions, including Ukraine;
|
•
|
the timing of anticipated revenues and the recognition of those revenues for financial accounting purposes;
|
•
|
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;
|
•
|
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 levels of our capital expenditures;
|
•
|
future government regulations, particularly in the Gulf of Mexico;
|
•
|
expected net revenues, income from operations and net income;
|
•
|
expected gross margins for our services and products;
|
•
|
our Ocean Bottom Services chartered vessels remaining idle for an extended period;
|
•
|
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;
|
•
|
future cash needs and future availability of cash to fund our operations and pay our obligations;
|
•
|
potential future acquisitions;
|
•
|
future opportunities for new services and products and projected research and development expenses;
|
•
|
expected continued compliance with our debt financial covenants;
|
•
|
expectations regarding realization of deferred tax assets; and
|
•
|
anticipated results with respect to certain estimates we make for financial accounting purposes.
|
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 |
|||
July 1, 2016 to July 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
Not applicable
|
|
Not applicable
|
August 1, 2016 to August 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
Not applicable
|
|
Not applicable
|
September 1, 2016 to September 30, 2016
|
|
—
|
|
|
$
|
—
|
|
|
Not applicable
|
|
Not applicable
|
Total
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation, as amended.
|
|
|
|
4.1
|
|
Indenture, dated as of April 28, 2016, among ION Geophysical Corporation, the subsidiary guarantors named therein, Wilmington Savings Fund Society, FSB, as trustee and collateral agent filed on April 28, 2016 as Exhibit 4.1 to the Company’s Current Report on Form 8-K and incorporated by reference.
|
|
|
|
4.2
|
|
Form of Second Lien Note (included in Exhibit 4.1).
|
|
|
|
10.1
|
|
Second Amendment to the Revolving Credit and Security Agreement, dated as of April 28, 2016, among ION Geophysical Corporation and the subsidiary co-borrowers named therein, as borrowers, the financial institutions party thereto, as lenders, and PNC Bank, National Association, as agent for the lenders, filed on April 28, 2016 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated by reference.
|
|
|
|
10.2
|
|
Intercreditor Agreement, dated as of April 28, 2016, by and among PNC Bank, National Association, as first lien representative and first lien collateral agent for the first lien secured parties, and Wilmington Savings Fund Society, FSB, as second lien representative and second lien collateral agent for the second lien secured parties and as third lien representative for the third lien secured parties, and U.S. Bank National Association as third lien collateral agent for the third lien secured parties and acknowledged and agreed to by ION Geophysical Corporation and the other grantors named therein, filed on April 28, 2016 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated by reference.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a).
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a).
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. §1350.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. §1350.
|
|
|
|
101
|
|
The following materials are formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015, (ii) Condensed Consolidated Statements of Operations for the three- and nine-months ended September 30, 2016 and 2015, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three- and nine-months ended September 30, 2016 and 2015, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015, (v) Footnotes to Unaudited Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
ION GEOPHYSICAL CORPORATION
|
||
|
|
|
|
|
By
|
|
/s/ Steven A. Bate
|
|
|
|
Steven A. Bate
|
|
|
|
Executive Vice President and Chief Financial Officer
|
Exhibit No.
|
|
Description
|
3.1
|
|
Restated Certificate of Incorporation, as amended.
|
|
|
|
4.1
|
|
Indenture, dated as of April 28, 2016, among ION Geophysical Corporation, the subsidiary guarantors named therein, Wilmington Savings Fund Society, FSB, as trustee and collateral agent filed on April 28, 2016 as Exhibit 4.1 to the Company’s Current Report on Form 8-K and incorporated by reference.
|
|
|
|
4.2
|
|
Form of Second Lien Note (included in Exhibit 4.1).
|
|
|
|
10.1
|
|
Second Amendment to the Revolving Credit and Security Agreement, dated as of April 28, 2016, among ION Geophysical Corporation and the subsidiary co-borrowers named therein, as borrowers, the financial institutions party thereto, as lenders, and PNC Bank, National Association, as agent for the lenders, filed on April 28, 2016 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated by reference.
|
|
|
|
10.2
|
|
Intercreditor Agreement, dated as of April 28, 2016, by and among PNC Bank, National Association, as first lien representative and first lien collateral agent for the first lien secured parties, and Wilmington Savings Fund Society, FSB, as second lien representative and second lien collateral agent for the second lien secured parties and as third lien representative for the third lien secured parties, and U.S. Bank National Association as third lien collateral agent for the third lien secured parties and acknowledged and agreed to by ION Geophysical Corporation and the other grantors named therein, filed on April 28, 2016 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated by reference.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a).
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a).
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. §1350.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. §1350.
|
|
|
|
101
|
|
The following materials are formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015, (ii) Condensed Consolidated Statements of Operations for the three- and nine-months ended September 30, 2016 and 2015, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three- and nine-months ended September 30, 2016 and 2015, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015, (v) Footnotes to Unaudited Condensed Consolidated Financial Statements.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ended
September 30, 2016
, 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: November 3, 2016
|
|
/s/ R. Brian Hanson
|
|
|
R. Brian Hanson
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ended
September 30, 2016
, 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: November 3, 2016
|
|
/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: November 3, 2016
|
|
/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: November 3, 2016
|
|
/s/ Steven A. Bate
|
|
|
Steven A. Bate
|
|
|
Executive Vice President and Chief Financial Officer
|