DELAWARE
|
05-0574281
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
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Large accelerated filer [ ]
|
Accelerated filer [ ]
|
Non-accelerated filer [x]
|
Smaller reporting company [ ]
|
PART I. FINANCIAL INFORMATION
|
||
Item 1. Financial Statements
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||
PART II. OTHER INFORMATION
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||
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 8,833,909 | $ | 28,237,302 | ||||
Restricted cash investments
|
5,646,240 | 2,443,857 | ||||||
Accounts receivable, net
|
107,837,971 | 69,509,391 | ||||||
Income and other taxes receivable
|
6,666,278 | 6,954,864 | ||||||
Prepaid expenses and other current assets
|
6,289,095 | 4,842,496 | ||||||
TOTAL CURRENT ASSETS
|
135,273,493 | 111,987,910 | ||||||
MULTI-CLIENT LIBRARY, net
|
223,529,721 | 145,896,355 | ||||||
PROPERTY AND EQUIPMENT, net
|
113,057,854 | 126,963,953 | ||||||
GOODWILL
|
12,380,964 | 12,380,964 | ||||||
INTANGIBLE ASSETS, net
|
10,512,789 | 7,870,811 | ||||||
OTHER
|
7,738,121 | 8,166,507 | ||||||
TOTAL ASSETS
|
$ | 502,492,942 | $ | 413,266,500 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable and accrued expenses
|
$ | 56,491,891 | $ | 44,058,306 | ||||
Current portion of long-term debt
|
7,425,843 | 3,344,261 | ||||||
Current portion of capital lease obligations
|
5,755,638 | - | ||||||
Income and other taxes payable
|
3,256,698 | 5,601,356 | ||||||
Deferred revenue
|
47,323,149 | 47,496,895 | ||||||
Other payables
|
870,636 | - | ||||||
TOTAL CURRENT LIABILITIES
|
121,123,855 | 100,500,818 | ||||||
|
||||||||
LONG-TERM DEBT, net of current portion and
unamortized discount
|
265,703,148 | 209,418,242 | ||||||
CAPITAL LEASE OBLIGATIONS, net of current portion
|
3,029,987 | - | ||||||
NONCONTROLLING INTERESTS
|
1,358,383 | 1,490,745 | ||||||
OTHER LIABILITIES
|
750,000 | - | ||||||
TOTAL LIABILITIES
|
391,965,373 | 311,409,805 | ||||||
COMMITMENTS AND CONTINGENCIES
|
||||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Common Stock, $.01 par value, authorized 100,000,000 shares,
46,603,114 and 45,586,215 issued and 36,958,497 and 36,142,985 outstanding
at September 30, 2011 and December 31, 2010, respectively
|
466,031 | 455,862 | ||||||
Additional paid-in capital
|
244,408,332 | 239,248,935 | ||||||
Accumulated deficit
|
(37,887,783 | ) | (42,145,755 | ) | ||||
206,986,580 | 197,559,042 | |||||||
Less: treasury stock, at cost, 9,644,617 and 9,443,230 shares
at September 30, 2011 and December 31, 2010, respectively
|
96,459,011 | 95,702,347 | ||||||
TOTAL STOCKHOLDERS’ EQUITY
|
110,527,569 | 101,856,695 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 502,492,942 | $ | 413,266,500 |
Three Month Period Ended
|
Nine Month Period Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
REVENUES
|
$ | 110,127,691 | $ | 60,469,517 | $ | 272,263,468 | $ | 161,240,902 | ||||||||
OPERATING EXPENSES
|
88,132,332 | 54,040,413 | 209,206,662 | 152,018,068 | ||||||||||||
GROSS PROFIT
|
21,995,359 | 6,429,104 | 63,056,806 | 9,222,834 | ||||||||||||
SELLING, GENERAL, AND
ADMINISTRATIVE EXPENSES
|
11,228,816 | 10,183,285 | 33,465,236 | 30,210,560 | ||||||||||||
INCOME (LOSS) FROM OPERATIONS
|
10,766,543 | (3,754,181 | ) | 29,591,570 | (20,987,726 | ) | ||||||||||
OTHER INCOME (EXPENSE)
|
||||||||||||||||
Interest expense, net
|
(6,458,479 | ) | (5,626,367 | ) | (18,548,935 | ) | (15,635,670 | ) | ||||||||
Foreign exchange (loss) gain
|
(1,239,078 | ) | (44,028 | ) | 462,245 | (210,279 | ) | |||||||||
Loss on extinguishment of debt
|
- | - | - | (6,035,841 | ) | |||||||||||
Other income (expense)
|
- | (100,229 | ) | (103 | ) | 207,589 | ||||||||||
TOTAL OTHER EXPENSE
|
(7,697,557 | ) | (5,770,624 | ) | (18,086,793 | ) | (21,674,201 | ) | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
3,068,986 | (9,524,805 | ) | 11,504,777 | (42,661,927 | ) | ||||||||||
INCOME TAX EXPENSE (BENEFIT)
|
2,424,098 | 9,120,597 | 7,379,167 | (4,714,609 | ) | |||||||||||
INCOME (LOSS) AFTER INCOME TAXES
|
644,888 | (18,645,402 | ) | 4,125,610 | (37,947,318 | ) | ||||||||||
NET LOSS, attributable to noncontrolling interests
|
(238,523 | ) | - | (132,362 | ) | - | ||||||||||
NET INCOME (LOSS), attributable to common shareholders
|
$ | 883,411 | $ | (18,645,402 | ) | $ | 4,257,972 | $ | (37,947,318 | ) | ||||||
INCOME (LOSS) PER COMMON SHARE
|
||||||||||||||||
Basic
|
$ | .02 | $ | (.52 | ) | $ | .12 | $ | (1.54 | ) | ||||||
Diluted
|
$ | .02 | $ | (.52 | ) | $ | .12 | $ | (1.54 | ) | ||||||
WEIGHTED AVERAGE SHARES OUTSTANDING
|
||||||||||||||||
Basic
|
36,808,407 | 35,908,480 | 36,550,802 | 24,652,434 | ||||||||||||
Diluted
|
36,808,778 | 35,908,480 | 36,552,712 | 24,652,434 |
Nine Month Period Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income (loss), attributable to common shareholders
|
$ | 4,257,972 | $ | (37,947,318 | ) | |||
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
|
||||||||
Depreciation and amortization expense
|
117,857,551 | 97,612,551 | ||||||
Capitalized depreciation for Multi-client library
|
(13,428,649 | ) | (22,316,593 | ) | ||||
Amortization of debt issuance costs
|
964,974 | 735,610 | ||||||
Loss on extinguishment of debt
|
- | 6,035,841 | ||||||
Noncontrolling interests
|
(132,362 | ) | - | |||||
Stock-based compensation
|
3,853,946 | 2,259,625 | ||||||
Non-cash charitable contribution
|
154,784 | 51,595 | ||||||
Non-cash revenue from Multi-client data exchange
|
(2,015,697 | ) | (5,650,101 | ) | ||||
Deferred tax expense (benefit)
|
660,174 | (7,104,131 | ) | |||||
Unrealized gain on derivative instrument
|
- | (331,163 | ) | |||||
(Gain) loss on disposal of property and equipment
|
(1,469,344 | ) | 2,337,778 | |||||
Effects of changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
(38,328,580 | ) | 23,772,544 | |||||
Prepaid expenses and other current assets
|
(1,521,599 | ) | 9,066,841 | |||||
Other assets
|
321,366 | 759,228 | ||||||
Accounts payable and accrued expenses
|
7,772,056 | 11,058,494 | ||||||
Deferred revenue
|
(108,220 | ) | 438,825 | |||||
Income and other taxes receivable
|
288,586 | 148,657 | ||||||
Income and other taxes payable and other payables
|
(2,236,642 | ) | 1,578,358 | |||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
76,890,316 | 82,506,641 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchase of property and equipment
|
(16,838,097 | ) | (8,632,772 | ) | ||||
Investment in Multi-client library
|
(144,554,112 | ) | (117,993,803 | ) | ||||
Change in restricted cash investments
|
(3,202,383 | ) | (1,200,524 | ) | ||||
Purchase of business
|
(1,035,386 | ) | - | |||||
Proceeds from the sale of property and equipment
|
13,093,815 | 173,369 | ||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(152,536,163 | ) | (127,653,730 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds from long-term debt, net of discount
|
11,208,978 | 194,018,000 | ||||||
Principal payments on long-term debt
|
(7,327,396 | ) | (169,890,253 | ) | ||||
Net proceeds on revolving credit facility
|
55,000,000 | - | ||||||
Debt issuance costs
|
- | (5,922,307 | ) | |||||
Principal payments on capital lease obligations
|
(2,591,306 | ) | (2,063,018 | ) | ||||
Purchase of treasury stock
|
(756,664 | ) | (1,250,260 | ) | ||||
Issuances of stock, net
|
708,842 | 76,434,818 | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
56,242,454 | 91,326,980 | ||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(19,403,393 | ) | 46,179,891 | |||||
CASH AND CASH EQUIVALENTS, beginning of period
|
28,237,302 | 17,026,865 | ||||||
CASH AND CASH EQUIVALENTS, end of period
|
$ | 8,833,909 | $ | 63,206,756 |
Additional
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Total
|
|||||||||||||||||||
Common
|
Paid-in
|
Treasury
|
Accumulated
|
Stockholders'
|
||||||||||||||||
Stock
|
Capital
|
Stock
|
Deficit
|
Equity
|
||||||||||||||||
Balances at December 31, 2010
|
$ | 455,862 | $ | 239,248,935 | $ | (95,702,347 | ) | $ | (42,145,755 | ) | $ | 101,856,695 | ||||||||
Issuance of common stock
|
10,169 | 448,756 | - | - | 458,925 | |||||||||||||||
Compensation expense
associated with stock grants
|
- | 3,853,946 | - | - | 3,853,946 | |||||||||||||||
Charitable contribution expense
associated with stock grant
|
- | 154,784 | - | - | 154,784 | |||||||||||||||
. | ||||||||||||||||||||
Put option liability
|
- | 701,911 | - | - | 701,911 | |||||||||||||||
Purchase of treasury stock
|
- | - | (756,664 | ) | - | (756,664 | ) | |||||||||||||
Net income
|
- | - | - | 4,257,972 | 4,257,972 | |||||||||||||||
Balances at September 30, 2011
|
$ | 466,031 | $ | 244,408,332 | $ | (96,459,011 | ) | $ | (37,887,783 | ) | $ | 110,527,569 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Pledged for letters of credit
|
$ | 5,646,240 | $ | 2,443,857 | ||||
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Mobilization costs, net
|
$ | 4,091,961 | $ | 1,368,858 | ||||
Prepaid expenses and other current assets
|
1,553,134 | 923,638 | ||||||
Note receivable, current portion
|
644,000 | 2,550,000 | ||||||
$ | 6,289,095 | $ | 4,842,496 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Accounts receivable, net
|
$ | 66,258,855 | $ | 47,775,478 | ||||
Unbilled
|
45,063,728 | 25,218,525 | ||||||
Allowance for doubtful accounts
|
(3,484,612 | ) | (3,484,612 | ) | ||||
$ | 107,837,971 | $ | 69,509,391 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Debt issuance costs, net
|
$ | 5,045,992 | $ | 5,526,060 | ||||
Deferred tax asset
|
1,370,874 | 2,031,048 | ||||||
Investment in unconsolidated subsidiary
|
958,222 | - | ||||||
Other
|
363,033 | 609,399 | ||||||
$ | 7,738,121 | $ | 8,166,507 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Multi-client library, at cost
|
$ | 435,347,296 | $ | 276,372,586 | ||||
Less: accumulated amortization
|
211,817,575 | 130,476,231 | ||||||
Multi-client library, net
|
$ | 223,529,721 | $ | 145,896,355 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Machinery and equipment
|
$ | 315,239,933 | $ | 300,785,427 | ||||
Computers and software
|
15,951,986 | 10,134,094 | ||||||
Buildings
|
13,600,605 | 11,721,548 | ||||||
Boats
|
7,174,287 | 7,174,287 | ||||||
Land
|
2,035,153 | 2,035,153 | ||||||
Furniture and fixtures
|
215,854 | 138,976 | ||||||
354,217,818 | 331,989,485 | |||||||
Less: accumulated depreciation
|
244,618,241 | 214,156,447 | ||||||
109,599,577 | 117,833,038 | |||||||
Construction in process
|
3,458,277 | 9,130,915 | ||||||
Property and equipment, net
|
$ | 113,057,854 | $ | 126,963,953 |
Three Month Period Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Gross depreciation expense
|
$ | 11,185,927 | $ | 13,212,943 | ||||
Less: capitalized depreciation for Multi-client library
|
4,230,471 | 10,282,418 | ||||||
Net depreciation expense
|
$ | 6,955,456 | $ | 2,930,525 |
Nine Month Period Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Gross depreciation expense
|
$ | 35,158,185 | $ | 42,242,432 | ||||
Less: capitalized depreciation for Multi-client library
|
13,428,649 | 22,316,593 | ||||||
Net depreciation expense
|
$ | 21,729,536 | $ | 19,925,839 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Customer list
|
$ | 3,984,000 | $ | 3,934,000 | ||||
Trademark
|
1,679,000 | 1,191,000 | ||||||
Patents
|
3,912,853 | 450,853 | ||||||
Non-compete agreements
|
865,539 | 865,539 | ||||||
Intellectual property
|
2,901,163 | 2,901,163 | ||||||
13,342,555 | 9,342,555 | |||||||
Less: accumulated amortization
|
2,829,766 | 1,471,744 | ||||||
10,512,789 | 7,870,811 | |||||||
Goodwill
|
12,380,964 | 12,380,964 | ||||||
Total goodwill and other intangibles
|
$ | 22,893,753 | $ | 20,251,775 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Senior notes
|
$ | 200,000,000 | $ | 200,000,000 | ||||
Revolving credit facility
|
70,000,000 | 15,000,000 | ||||||
Promissory notes
|
7,391,452 | 3,344,261 | ||||||
Notes payable - insurance
|
834,391 | - | ||||||
278,225,843 | 218,344,261 | |||||||
Less: unamortized discount
|
5,096,852 | 5,581,758 | ||||||
273,128,991 | 212,762,503 | |||||||
Less: current portion
|
7,425,843 | 3,344,261 | ||||||
Long-term debt,
net of current portion and unamortized discount
|
$ | 265,703,148 | $ | 209,418,242 |
September 30, 2011
|
December 31, 2010
|
|||||||||||||||
(unaudited)
|
||||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Long-term debt
|
$ | 194,903,148 | $ | 193,250,000 | $ | 194,418,242 | $ | 198,250,000 |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
Risk-free interest rates
|
2.68 | % | 2.76 | % | ||||
Expected lives (in years)
|
7.00 | 7.00 | ||||||
Expected dividend yield
|
0.00 | % | 0.00 | % | ||||
Expected volatility
|
59.08 | % | 60.58 | % |
Weighted
|
Weighted
|
|||||||||||||||
Weighted
|
Average
|
Average
|
||||||||||||||
Average
|
Number of
|
Remaining
|
Optioned
|
|||||||||||||
Exercise
|
Optioned
|
Contractual
|
Grant Date
|
|||||||||||||
Price
|
Shares
|
Term in Years
|
Fair Value
|
|||||||||||||
Balance as of December 31, 2010
|
$ | 22.93 | 2,884,100 | $ | 6.04 | |||||||||||
Expired
|
- | - | - | |||||||||||||
Granted
|
21.92 | 65,000 | 13.49 | |||||||||||||
Exercised
|
- | - | - | |||||||||||||
Forfeited
|
23.03 | (416,200 | ) | 8.19 | ||||||||||||
Balance as of September 30, 2011
|
$ | 22.89 | 2,532,900 | 6.91 | $ | 5.88 | ||||||||||
Exercisable as of September 30, 2011
|
$ | 22.99 | 1,724,150 | 6.82 | $ | 4.26 |
Number of
|
Weighted
|
|||||||
Nonvested
|
Average
|
|||||||
Restricted
|
Grant Date
|
|||||||
Share Awards
|
Fair Value
|
|||||||
|
||||||||
Nonvested restricted shares outstanding
December 31, 2010
|
595,053 | $ | 9.90 | |||||
Granted
|
690,350 | 11.70 | ||||||
Vested
|
(130,479 | ) | 8.67 | |||||
Forfeited
|
(154,593 | ) | 11.07 | |||||
Nonvested restricted shares outstanding
September 30, 2011
|
1,000,331 | $ | 11.12 |
Three Month Period Ended
|
Nine Month Period Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
Net income (loss), attributable to
common shareholders
|
$ | 883,411 | $ | (18,645,402 | ) | $ | 4,257,972 | $ | (37,947,318 | ) | ||||||
Basic
|
||||||||||||||||
Weighted average shares outstanding:
|
36,808,407 | 35,908,480 | 36,550,802 | 24,652,434 | ||||||||||||
Diluted
|
||||||||||||||||
Shares issuable from the assumed conversion
of stock options
|
371 | - | 1,910 | - | ||||||||||||
Total
|
36,808,778 | 35,908,480 | 36,552,712 | 24,652,434 | ||||||||||||
Basic income (loss) per share
|
$ | .02 | $ | (.52 | ) | $ | .12 | $ | (1.54 | ) | ||||||
Diluted income (loss) per share
|
$ | .02 | $ | (.52 | ) | $ | .12 | $ | (1.54 | ) |
Nine Month Period Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Interest paid
|
$ | 12,095,291 | $ | 5,788,141 | ||||
Income taxes paid
|
$ | 6,718,993 | $ | 3,495,631 |
Nine Month Period Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Property and equipment additions financed
through accounts payable and accrued expenses
|
$ | 4,661,529 | $ | 10,500,149 | ||||
Option payable recorded against
additional paid in capital
|
$ | - | $ | 701,910 | ||||
Property and equipment sale financed
through note receivable
|
$ | 644,000 | $ | 3,100,000 | ||||
Non-cash Multi-client asset recorded
as deferred revenue
|
$ | 65,526 | $ | 4,428,599 | ||||
Note payable related to purchase of business
|
$ | 1,000,000 | $ | - | ||||
Original issue discount on notes payable
|
$ | - | $ | 5,982,000 | ||||
Investment in unconsolidated subsidiaries
|
$ | 958,222 | $ | - | ||||
Property and equipment additions financed through capital leases | $ | 11,376,931 | $ | - |
As of and for the Three Month Period Ended September 30, 2011 (unaudited)
|
||||||||||||||||
Proprietary Services
|
Multi-Client Services
|
Corporate
|
Total
|
|||||||||||||
Revenues
|
$ | 60,139,931 | $ | 49,987,760 | $ | - | $ | 110,127,691 | ||||||||
Income (loss) before income taxes
|
$ | (5,343,878 | ) | $ | 16,239,645 | $ | (7,826,781 | ) | $ | 3,068,986 | ||||||
Income tax expense
|
$ | 2,561,373 | $ | - | $ | (137,275 | ) | $ | 2,424,098 | |||||||
Net loss, attributable to noncontrolling interests
|
$ | - | $ | - | $ | (238,523 | ) | $ | (238,523 | ) | ||||||
Net income (loss),
attributable to common shareholders
|
$ | (7,905,251 | ) | $ | 16,239,645 | $ | (7,450,983 | ) | $ | 883,411 | ||||||
Total assets
|
$ | 70,079,993 | $ | 272,434,138 | $ | 159,978,811 | $ | 502,492,942 | ||||||||
As of and for the Three Month Period Ended September 30, 2010 (unaudited)
|
||||||||||||||||
Proprietary Services
|
Multi-Client Services
|
Corporate
|
Total
|
|||||||||||||
Revenues
|
$ | 18,324,307 | $ | 42,145,210 | $ | - | $ | 60,469,517 | ||||||||
Income (loss) before income taxes
|
$ | (4,977,974 | ) | $ | 4,956,135 | $ | (9,502,966 | ) | $ | (9,524,805 | ) | |||||
Income tax expense
|
$ | 551,893 | $ | - | $ | 8,568,704 | $ | 9,120,597 | ||||||||
Net income (loss),
attributable to common shareholders
|
$ | (5,529,867 | ) | $ | 4,956,135 | $ | (18,071,670 | ) | $ | (18,645,402 | ) | |||||
Total assets
|
$ | 35,816,570 | $ | 158,504,492 | $ | 210,118,035 | $ | 404,439,097 |
As of and for the Nine Month Period Ended September 30, 2011 (unaudited)
|
||||||||||||||||
Proprietary Services
|
Multi-Client Services
|
Corporate
|
Total
|
|||||||||||||
Revenues
|
$ | 145,629,326 | $ | 126,634,142 | $ | - | $ | 272,263,468 | ||||||||
Income (loss) before income taxes
|
$ | 2,803,202 | $ | 32,292,881 | $ | (23,591,306 | ) | $ | 11,504,777 | |||||||
Income tax expense
|
$ | 6,199,529 | $ | - | $ | 1,179,638 | $ | 7,379,167 | ||||||||
Net loss, attributable to noncontrolling interests
|
$ | - | $ | - | $ | (132,362 | ) | $ | (132,362 | ) | ||||||
Net income (loss),
attributable to common shareholders
|
$ | (3,396,327 | ) | $ | 32,292,881 | $ | (24,638,582 | ) | $ | 4,257,972 | ||||||
Total assets
|
$ | 70,079,993 | $ | 272,434,138 | $ | 159,978,811 | $ | 502,492,942 | ||||||||
As of and for the Nine Month Period Ended September 30, 2010 (unaudited)
|
||||||||||||||||
Proprietary Services
|
Multi-Client Services
|
Corporate
|
Total
|
|||||||||||||
Revenues
|
$ | 79,440,093 | $ | 81,800,809 | $ | - | $ | 161,240,902 | ||||||||
Income (loss) before income taxes
|
$ | (27,068,302 | ) | $ | 14,870,232 | $ | (30,463,857 | ) | $ | (42,661,927 | ) | |||||
Income tax expense (benefit)
|
$ | 2,506,988 | $ | - | $ | (7,221,597 | ) | $ | (4,714,609 | ) | ||||||
Net income (loss),
attributable to common shareholders
|
$ | (29,575,290 | ) | $ | 14,870,232 | $ | (23,242,260 | ) | $ | (37,947,318 | ) | |||||
Total assets
|
$ | 35,816,570 | $ | 158,504,492 | $ | 210,118,035 | $ | 404,439,097 | ||||||||
As of September 30, 2011 (Unaudited)
|
||||||||||||||||
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
|||||||||||||
BALANCE SHEET
|
||||||||||||||||
ASSETS
|
||||||||||||||||
Current assets
|
$ | 135,148,200 | $ | 51,496,285 | $ | (51,370,992 | ) | $ | 135,273,493 | |||||||
Multi-client library, net
|
223,529,721 | - | - | 223,529,721 | ||||||||||||
Property and equipment, net
|
110,068,644 | 2,989,210 | - | 113,057,854 | ||||||||||||
Investment in subsidiaries
|
1,099 | - | (1,099 | ) | - | |||||||||||
Intercompany accounts
|
33,721,264 | (33,721,264 | ) | - | - | |||||||||||
Other non-current assets
|
30,480,862 | 151,012 | - | 30,631,874 | ||||||||||||
TOTAL ASSETS
|
$ | 532,949,790 | $ | 20,915,243 | $ | (51,372,091 | ) | $ | 502,492,942 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||
Current liabilities
|
$ | 119,170,085 | $ | 53,324,762 | $ | (51,370,992 | ) | $ | 121,123,855 | |||||||
Long-term debt and capital lease
obligations, net of current portion and
unamortized discount
|
268,733,135 | - | - | 268,733,135 | ||||||||||||
Deferred income tax and other
non-current liabilities
|
2,108,383 | - | - | 2,108,383 | ||||||||||||
TOTAL LIABILITIES
|
390,011,603 | 53,324,762 | (51,370,992 | ) | 391,965,373 | |||||||||||
Stockholders' equity
|
142,938,187 | (32,409,519 | ) | (1,099 | ) | 110,527,569 | ||||||||||
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
$ | 532,949,790 | $ | 20,915,243 | $ | (51,372,091 | ) | $ | 502,492,942 | |||||||
As of December 31, 2010
|
||||||||||||||||
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
|||||||||||||
BALANCE SHEET
|
||||||||||||||||
ASSETS
|
||||||||||||||||
Current assets
|
$ | 116,600,714 | $ | 26,123,142 | $ | (30,735,946 | ) | $ | 111,987,910 | |||||||
Multi-client library, net
|
145,896,355 | - | - | 145,896,355 | ||||||||||||
Property and equipment, net
|
125,342,454 | 1,621,499 | - | 126,963,953 | ||||||||||||
Investment in subsidiaries
|
1,099 | - | (1,099 | ) | - | |||||||||||
Intercompany accounts
|
17,325,928 | (17,325,928 | ) | - | - | |||||||||||
Other non-current assets
|
28,403,426 | 14,856 | - | 28,418,282 | ||||||||||||
TOTAL ASSETS
|
$ | 433,569,976 | $ | 10,433,569 | $ | (30,737,045 | ) | $ | 413,266,500 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||
Current liabilities
|
$ | 98,383,785 | $ | 32,852,979 | $ | (30,735,946 | ) | $ | 100,500,818 | |||||||
Long-term debt and capital lease
obligations, net of current portion and
unamortized discount
|
209,418,242 | - | - | 209,418,242 | ||||||||||||
Deferred income tax and other
non-current liabilities
|
1,490,745 | - | - | 1,490,745 | ||||||||||||
TOTAL LIABILITIES
|
309,292,772 | 32,852,979 | (30,735,946 | ) | 311,409,805 | |||||||||||
Stockholders' equity
|
124,277,204 | (22,419,410 | ) | (1,099 | ) | 101,856,695 | ||||||||||
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
$ | 433,569,976 | $ | 10,433,569 | $ | (30,737,045 | ) | $ | 413,266,500 |
Three Month Period Ended September 30, 2011 (Unaudited)
|
||||||||||||||||
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
|||||||||||||
STATEMENTS OF OPERATIONS
|
||||||||||||||||
Revenues
|
$ | 83,697,333 | $ | 29,746,731 | $ | (3,316,373 | ) | $ | 110,127,691 | |||||||
Expenses:
|
||||||||||||||||
Operating expenses
|
60,784,083 | 30,398,002 | (3,049,753 | ) | 88,132,332 | |||||||||||
Selling, general and administrative expenses
|
8,100,650 | 3,394,786 | (266,620 | ) | 11,228,816 | |||||||||||
Total expenses
|
68,884,733 | 33,792,788 | (3,316,373 | ) | 99,361,148 | |||||||||||
Income (loss) from operations
|
14,812,600 | (4,046,057 | ) | - | 10,766,543 | |||||||||||
Interest (expense) income, net
|
(6,459,807 | ) | 1,328 | - | (6,458,479 | ) | ||||||||||
Other expense, net
|
(258,581 | ) | (980,497 | ) | - | (1,239,078 | ) | |||||||||
Income (loss) before income taxes
|
8,094,212 | (5,025,226 | ) | - | 3,068,986 | |||||||||||
Income tax expense
|
1,545,449 | 878,649 | - | 2,424,098 | ||||||||||||
Income (loss) after income taxes
|
6,548,763 | (5,903,875 | ) | - | 644,888 | |||||||||||
Net loss, attributable to noncontrolling interests
|
(238,523 | ) | - | - | (238,523 | ) | ||||||||||
Net income (loss), attributable to common shareholders
|
$ | 6,787,286 | $ | (5,903,875 | ) | $ | - | $ | 883,411 | |||||||
Three Month Period Ended September 30, 2010 (Unaudited)
|
||||||||||||||||
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
|||||||||||||
STATEMENTS OF OPERATIONS
|
||||||||||||||||
Revenues
|
$ | 60,679,392 | $ | 1,427,755 | $ | (1,637,630 | ) | $ | 60,469,517 | |||||||
Expenses:
|
||||||||||||||||
Operating expenses
|
51,437,628 | 3,996,278 | (1,393,493 | ) | 54,040,413 | |||||||||||
Selling, general and administrative expenses
|
8,937,310 | 1,490,112 | (244,137 | ) | 10,183,285 | |||||||||||
Total expenses
|
60,374,938 | 5,486,390 | (1,637,630 | ) | 64,223,698 | |||||||||||
Loss from operations
|
304,454 | (4,058,635 | ) | - | (3,754,181 | ) | ||||||||||
Interest (expense) income, net
|
(5,626,396 | ) | 29 | - | (5,626,367 | ) | ||||||||||
Other expenses, net
|
(136,276 | ) | (7,981 | ) | - | (144,257 | ) | |||||||||
Loss before income taxes
|
(5,458,218 | ) | (4,066,587 | ) | - | (9,524,805 | ) | |||||||||
Income tax expense (benefit)
|
9,104,750 | 15,847 | - | 9,120,597 | ||||||||||||
Net loss, attributable to common shareholders
|
$ | (14,562,968 | ) | $ | (4,082,434 | ) | $ | - | $ | (18,645,402 | ) |
Nine Month Period Ended September 30, 2011 (Unaudited)
|
||||||||||||||||
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
|||||||||||||
STATEMENTS OF OPERATIONS
|
||||||||||||||||
Revenues
|
$ | 224,035,505 | $ | 54,989,286 | $ | (6,761,323 | ) | $ | 272,263,468 | |||||||
Expenses:
|
||||||||||||||||
Operating expenses
|
160,631,682 | 54,559,716 | (5,984,736 | ) | 209,206,662 | |||||||||||
Selling, general and administrative expenses
|
26,267,006 | 7,974,817 | (776,587 | ) | 33,465,236 | |||||||||||
Total expenses
|
186,898,688 | 62,534,533 | (6,761,323 | ) | 242,671,898 | |||||||||||
Income (loss) from operations
|
37,136,817 | (7,545,247 | ) | - | 29,591,570 | |||||||||||
Interest (expense) income, net
|
(18,561,829 | ) | 12,894 | - | (18,548,935 | ) | ||||||||||
Other income (expense), net
|
1,225,266 | (763,124 | ) | - | 462,142 | |||||||||||
Income (loss) before income taxes
|
19,800,254 | (8,295,477 | ) | - | 11,504,777 | |||||||||||
Income tax expense
|
5,684,535 | 1,694,632 | - | 7,379,167 | ||||||||||||
Income (loss) after income taxes
|
14,115,719 | (9,990,109 | ) | - | 4,125,610 | |||||||||||
Net loss, attributable to noncontrolling interests
|
(132,362 | ) | - | - | (132,362 | ) | ||||||||||
Net income (loss), attributable to common shareholders
|
$ | 14,248,081 | $ | (9,990,109 | ) | $ | - | $ | 4,257,972 | |||||||
Nine Month Period Ended September 30, 2010 (Unaudited)
|
||||||||||||||||
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
|||||||||||||
STATEMENTS OF OPERATIONS
|
||||||||||||||||
Revenues
|
$ | 145,035,359 | $ | 28,502,999 | $ | (12,297,456 | ) | $ | 161,240,902 | |||||||
Expenses:
|
||||||||||||||||
Operating expenses
|
130,505,007 | 32,975,309 | (11,462,248 | ) | 152,018,068 | |||||||||||
Selling, general and administrative expenses
|
24,004,281 | 7,041,487 | (835,208 | ) | 30,210,560 | |||||||||||
Total expenses
|
154,509,288 | 40,016,796 | (12,297,456 | ) | 182,228,628 | |||||||||||
Loss from operations
|
(9,473,929 | ) | (11,513,797 | ) | - | (20,987,726 | ) | |||||||||
Interest (expense) income, net
|
(15,635,719 | ) | 49 | - | (15,635,670 | ) | ||||||||||
Other income (expenses), net
|
(5,845,506 | ) | (193,025 | ) | - | (6,038,531 | ) | |||||||||
Loss before income taxes
|
(30,955,154 | ) | (11,706,773 | ) | - | (42,661,927 | ) | |||||||||
Income tax expense (benefit)
|
(5,492,660 | ) | 778,051 | - | (4,714,609 | ) | ||||||||||
Net loss, attributable to common shareholders
|
$ | (25,462,494 | ) | $ | (12,484,824 | ) | $ | - | $ | (37,947,318 | ) |
Nine Month Period Ended September 30, 2011 (Unaudited)
|
||||||||||||||||
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
|||||||||||||
STATEMENTS OF CASH FLOWS
|
||||||||||||||||
Net cash provided by (used in) operating activities
|
$ | 78,129,883 | $ | (1,239,567 | ) | $ | - | $ | 76,890,316 | |||||||
Net cash used in investing activities
|
(151,198,657 | ) | (1,337,506 | ) | - | (152,536,163 | ) | |||||||||
Net cash provided by financing activities
|
56,242,454 | - | - | 56,242,454 | ||||||||||||
Net decrease in cash and cash equivalents
|
$ | (16,826,320 | ) | $ | (2,577,073 | ) | $ | - | $ | (19,403,393 | ) | |||||
Nine Month Period Ended September 30, 2010 (Unaudited)
|
||||||||||||||||
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
|||||||||||||
STATEMENTS OF CASH FLOWS
|
||||||||||||||||
Net cash provided by (used in) operating activities
|
$ | 82,669,411 | $ | (162,770 | ) | $ | - | $ | 82,506,641 | |||||||
Net cash (used in) provided by investing activities
|
(129,368,849 | ) | 1,715,119 | - | (127,653,730 | ) | ||||||||||
Net cash used in financing activities
|
91,326,980 | - | - | 91,326,980 | ||||||||||||
Net increase in cash and cash equivalents
|
$ | 44,627,542 | $ | 1,552,349 | $ | - | $ | 46,179,891 |
Three Month Period Ended
|
||||||||||||||||
September 30,
|
||||||||||||||||
Revenues by Service
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
|||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
Proprietary Services
|
$ | 60.1 | 55 | % | $ | 18.3 | 30 | % | ||||||||
Multi-client Services
|
50.0 | 45 | % | 42.2 | 70 | % | ||||||||||
Total
|
$ | 110.1 | 100 | % | $ | 60.5 | 100 | % | ||||||||
Three Month Period Ended
|
||||||||||||||||
September 30,
|
||||||||||||||||
Revenues by Area
|
(unaudited)
|
|||||||||||||||
2011 | 2010 | |||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
United States
|
$ | 56.8 | 52 | % | $ | 43.5 | 72 | % | ||||||||
International
|
53.3 | 48 | % | 17.0 | 28 | % | ||||||||||
Total
|
$ | 110.1 | 100 | % | $ | 60.5 | 100 | % |
Three Month Period Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Multi-client revenues
|
||||||||
Pre-commitments
|
$ | 32.5 | $ | 36.0 | ||||
Late sales
|
16.5 | .9 | ||||||
Subtotal
|
49.0 | 36.9 | ||||||
Non-cash data swaps
|
1.0 | 5.3 | ||||||
Total revenue
|
$ | 50.0 | $ | 42.2 |
Three Month Period Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Gross depreciation expense
|
$ | 11.2 | $ | 13.2 | ||||
Less: capitalized depreciation for Multi-client library
|
4.2 | 10.3 | ||||||
Net depreciation expense
|
$ | 7.0 | $ | 2.9 | ||||
Amortization of intangibles expense
|
0.4 | 0.1 | ||||||
Multi-client amortization expense
|
29.5 | 32.0 | ||||||
Total net depreciation and amortization expense
|
$ | 36.9 | $ | 35.0 | ||||
Average Multi-client amortization rate for the period | 59 | % | 76 | % |
Nine Month Period Ended
|
||||||||||||||||
September 30,
|
||||||||||||||||
Revenues by Service
|
(unaudited)
|
|||||||||||||||
2011
|
2010
|
|||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
Proprietary Services
|
$ | 145.7 | 54 | % | $ | 79.4 | 49 | % | ||||||||
Multi-client Services
|
126.6 | 46 | % | 81.8 | 51 | % | ||||||||||
Total
|
$ | 272.3 | 100 | % | $ | 161.2 | 100 | % | ||||||||
Nine Month Period Ended
|
||||||||||||||||
September 30,
|
||||||||||||||||
Revenues by Area
|
(unaudited)
|
|||||||||||||||
2011 | 2010 | |||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
United States
|
$ | 140.9 | 52 | % | $ | 89.3 | 55 | % | ||||||||
International
|
131.4 | 48 | % | 71.9 | 45 | % | ||||||||||
Total
|
$ | 272.3 | 100 | % | $ | 161.2 | 100 | % |
Nine Month Period Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Multi-client revenues
|
||||||||
Pre-commitments
|
$ | 90.5 | $ | 70.5 | ||||
Late sales
|
34.1 | 5.7 | ||||||
Subtotal
|
124.6 | 76.2 | ||||||
Non-cash data swaps
|
2.0 | 5.6 | ||||||
Total revenue
|
$ | 126.6 | $ | 81.8 |
Nine Month Period Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Gross depreciation expense
|
$ | 35.1 | $ | 42.2 | ||||
Less: capitalized depreciation for Multi-client library
|
13.4 | 22.3 | ||||||
Net depreciation expense
|
$ | 21.7 | $ | 19.9 | ||||
Amortization of intangibles expense
|
1.4 | 0.4 | ||||||
Multi-client amortization expense
|
81.3 | 55.0 | ||||||
Total net depreciation & amortization expense
|
$ | 104.4 | $ | 75.3 |
Average Multi-client amortization rate for the period | 64 | % | 67 | % |
Three Month Period Ended
|
Nine Month Period Ended
|
|||||||||||||||||||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||||||||||||||||||
Amount
|
Per
Share (3)
|
Amount
|
Per
Share (3)
|
Amount
|
Per
Share (3)
|
Amount
|
Per
Share (3)
|
|||||||||||||||||||||||||
UNAUDITED
|
||||||||||||||||||||||||||||||||
Net Income (Loss), attributable to common share holders
|
$ | 883,411 | $ | .02 | $ | (18,645,402 | ) | $ | (.52 | ) | $ | 4,257,972 | $ | .12 | $ | (37,947,318 | ) | $ | (1.54 | ) | ||||||||||||
Net loss, attributable to noncontrolling interests
|
(238,523 | ) | - | (132,362 | ) | - | ||||||||||||||||||||||||||
Income tax expense (benefit)
|
2,424,098 | 9,120,597 | 7,379,167 | (4,714,609 | ) | |||||||||||||||||||||||||||
Interest expense, net
|
6,458,479 | 5,626,367 | 18,548,935 | 15,635,670 | ||||||||||||||||||||||||||||
EBIT
|
$ | 9,527,465 | $ | .26 | $ | (3,898,438 | ) | $ | (.11 | ) | $ | 30,053,712 | $ | .82 | $ | (27,026,257 | ) | $ | (1.10 | ) | ||||||||||||
Add: Multi-client amortization
|
29,486,159 | 32,021,587 | 81,341,344 | 54,956,571 | ||||||||||||||||||||||||||||
Add: Net depreciation and other amortization (2)
|
7,055,707 | 5,488,476 | 21,618,215 | 22,677,165 | ||||||||||||||||||||||||||||
EBITDA
|
$ | 46,069,331 | $ | 1.25 | $ | 33,611,625 | $ | .94 | $ | 133,013,271 | $ | 3.64 | $ | 50,607,479 | $ | 2.05 |
As of September 30, 2011
|
||||
(unaudited)
|
||||
Available cash
|
$ | 8.8 | ||
Undrawn borrowing capacity under Revolving Credit Facility
|
- | |||
Net available liquidity
|
$ | 8.8 |
Nine Month Period Ended
|
||||||||
September 30, | ||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Adjustments to reconcile net income (loss) to net cash
|
$ | 110.7 | $ | 35.7 | ||||
Effects of changes in operating assets and liabilities
|
(33.8 | ) | 46.8 | |||||
Operating activities
|
76.9 | 82.5 | ||||||
Investing activities
|
(152.5 | ) | (127.7 | ) | ||||
Financing activities
|
56.2 | 91.3 |
Nine Month Period Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Multi-client investment (period)
|
||||||||
Cash
|
$ | 144.6 | $ | 118.2 | ||||
Capitalized depreciation (1)
|
13.4 | 22.3 | ||||||
Non-cash data swaps
|
1.0 | 9.9 | ||||||
Total
|
$ | 159.0 | $ | 150.4 | ||||
Investment (cumulative)
|
||||||||
Cash
|
$ | 374.8 | $ | 177.7 | ||||
Capitalized depreciation (1)
|
40.6 | 29.1 | ||||||
Non-cash data swaps
|
19.9 | 18.7 | ||||||
Total
|
$ | 435.3 | $ | 225.5 | ||||
Cumulative amortization
|
211.8 | 92.7 | ||||||
Multi-client net book value
|
$ | 223.5 | $ | 132.8 |
(1)
|
Represents capitalized cost of the equipment, owned or leased, and utilized in connection with Multi-client Services.
|
Total
|
Within 1 Year
|
1-3 Years
|
3-5 Years
|
After 5 Years
|
||||||||||||||||
Debt obligations
|
$ | 278.2 | $ | 7.4 | $ | 70.4 | $ | 0.4 | $ | 200.0 | ||||||||||
Capital lease obligations
|
8.8 | 5.8 | 3.0 | - | - | |||||||||||||||
Operating lease obligations
|
1.2 | 0.6 | 0.5 | 0.1 | - | |||||||||||||||
$ | 288.2 | $ | 13.8 | $ | 73.9 | $ | 0.5 | $ | 200.0 |
Exhibit No.
|
Description
|
|
31.1*
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
31.2*
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
31.3*
|
Certification of Chief Accounting Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
32.1*
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2*
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.3
|
Certification of Chief Accounting Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
GLOBAL GEOPHYSICAL SERVICES, INC.
|
|
Date: November 9, 2011
|
/s/ Richard A. Degner
|
Richard A. Degner
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
Date: November 9, 2011
|
/s/ P. Mathew Verghese
|
P. Mathew Verghese
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
Date: November 9, 2011
|
/s/ Jesse Perez
|
Jesse Perez
|
|
Chief Accounting Officer
|
|
(Principal Accounting Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Global Geophysical Services, Inc.
|
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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) 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)
|
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
|
c)
|
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(s) 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 9, 2011
|
/s/ Richard A. Degner
|
|
Richard A. Degner
|
||
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Global Geophysical Services, Inc.
|
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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) 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)
|
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
|
c)
|
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(s) 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 9, 2011
|
/s/ P. Mathew Verghese
|
|
P. Mathew Verghese
|
||
Senior Vice President and Chief Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Global Geophysical Services, Inc.
|
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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) 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)
|
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
|
c)
|
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(s) 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 9, 2011
|
/s/ Jesse Perez
|
|
Jesse Perez
|
||
Chief Accounting Officer
|
Dated: November 9, 2011
|
/s/ Richard A. Degner
|
|
Richard A. Degner
|
||
President and Chief Executive Officer
|
Dated: November 9, 2011
|
/s/ P. Mathew Verghese
|
|
P. Mathew Verghese
|
||
Senior Vice President and Chief Financial Officer
|
Dated: November 9, 2011
|
/s/ Jesse Perez
|
|
Jesse Perez
|
||
Chief Accounting Officer
|
Consolidated Balance Sheets (Parentheticals) (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Common stock, par value (in Dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 46,603,114 | 45,586,215 |
Common stock, shares outstanding | 36,958,407 | 36,142,985 |
Less: treasury stock, at cost, shares | 9,644,617 | 9,443,230 |
Consolidated Statements Of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
REVENUES | $ 110,127,691 | $ 60,469,517 | $ 272,263,468 | $ 161,240,902 |
OPERATING EXPENSES | 88,132,332 | 54,040,413 | 209,206,662 | 152,018,068 |
GROSS PROFIT | 21,995,359 | 6,429,104 | 63,056,806 | 9,222,834 |
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES | 11,228,816 | 10,183,285 | 33,465,236 | 30,210,560 |
INCOME (LOSS) FROM OPERATIONS | 10,766,543 | (3,754,181) | 29,591,570 | (20,987,726) |
OTHER INCOME (EXPENSE) | ||||
Interest expense, net | (6,458,479) | (5,626,367) | (18,548,935) | (15,635,670) |
Foreign exchange (loss) gain | (1,239,078) | (44,028) | 462,245 | (210,279) |
Loss on extinguishment of debt | (6,035,841) | |||
Other income (expense) | (100,229) | (103) | 207,589 | |
TOTAL OTHER EXPENSE | (7,697,557) | (5,770,624) | (18,086,793) | (21,674,201) |
INCOME (LOSS) BEFORE INCOME TAXES | 3,068,986 | (9,524,805) | 11,504,777 | (42,661,927) |
INCOME TAX EXPENSE (BENEFIT) | 2,424,098 | 9,120,597 | 7,379,167 | (4,714,609) |
INCOME (LOSS) AFTER INCOME TAXES | 644,888 | (18,645,402) | 4,125,610 | (37,947,318) |
NET LOSS, attributable to noncontrolling interests | (238,523) | (132,362) | ||
NET INCOME (LOSS), attributable to common shareholders | $ 883,411 | $ (18,645,402) | $ 4,257,972 | $ (37,947,318) |
INCOME (LOSS) PER COMMON SHARE | ||||
Basic (in Dollars per share) | $ 0.02 | $ (0.52) | $ 0.12 | $ (1.54) |
Diluted (in Dollars per share) | $ 0.02 | $ (0.52) | $ 0.12 | $ (1.54) |
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||
Basic (in Shares) | 36,808,407 | 35,908,480 | 36,550,802 | 24,652,434 |
Diluted (in Shares) | 36,808,778 | 35,908,480 | 36,552,712 | 24,652,434 |
Document And Entity Information | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Nov. 09, 2011 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Global Geophysical Services Inc | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 37,014,627 | |
Amendment Flag | false | |
Entity Central Index Key | 0001311486 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Sep. 30, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q3 |
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Note 6 - Income Taxes | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Income Tax Disclosure [Text Block] |
NOTE
6 - INCOME TAXES
The
Company provides for income taxes during interim periods
based on an estimate of the effective tax rate for the
year. Discrete items and changes in the estimate
of the annual effective tax rate are recorded in the period
in which they occur.
The
Company assesses the likelihood that deferred tax assets will
be recovered from the existing deferred tax liabilities or
future taxable income in each jurisdiction. To the
extent the Company believes that recovery is not likely, it
establishes a valuation allowance. The Company has
recorded valuation allowances in several non-US jurisdictions
for its net deferred tax assets since management believes it
is more likely than not that these assets will not be
realized because the future taxable income necessary to
utilize these losses cannot be established, projected, or the
Company no longer has operations in these
jurisdictions.
The
effective income tax rate for the nine months ended September
30, 2011 and 2010 was 64.1% and 11.1%, respectively.
The
Company’s effective income tax rate in 2011 and 2010
differs from the federal statutory rate primarily due to
state income taxes, non-deductible expenses, tax rate
differential from US operations, and valuation allowances in
non-US jurisdictions.
|
Note 11 - Earnings Per Share | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share Policy, Basic |
NOTE
11 - EARNINGS PER SHARE
The
Company follows current guidance for share-based payments
which are considered as participating securities. All
share-based payment awards that contained non-forfeitable
rights to dividends, whether paid or unpaid, were designated
as participating securities and included in the computation
of earnings per share (“EPS”).
The
following table sets forth the computation of basic and
diluted earnings per share:
For
the three and nine months ended September 30, 2011, 2,513,900
out-of-the-money stock options have been excluded from
diluted earnings per share because they are considered
anti-dilutive.
For
the three and nine months ended September 30, 2010, 2,930,300
stock options have been excluded from diluted earnings per
share because they are considered anti-dilutive.
Due
to the net loss for the three and nine months ended September
30, 2010, 390,000 in-the-money stock warrants have been
excluded from diluted earnings per share because they are
considered anti-dilutive.
|
Note 2 - Selected Balance Sheet Accounts | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Disclosures [Text Block] |
NOTE
2 - SELECTED BALANCE SHEET ACCOUNTS
Restricted
cash investments:
Prepaid
expenses and other current assets:
Accounts
receivable, net:
The
Company sometimes experiences disagreements or disputes with
customers relating to the Company's charges. As of September
30, 2011, the Company had disputes with certain customers
which relate to charges for the Company's services. Included
in accounts receivable at September 30, 2011 are net
receivables of approximately $4,800,000 related to such
disputes. If the amount ultimately recovered with respect to
any of these disputes is less than the revenue previously
recorded, the difference will be recorded as an expense. None
of these are expected to have a materially adverse effect on
the Company's earnings. Bad debt expense for the three months
ended September 30, 2011 and 2010 was $0 and $93,314,
respectively, and $0 and $3,097,996 for the nine months ended
September 30, 2011 and 2010, respectively.
Other:
|
Note 8 - Capital Lease | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Sale Leaseback Transaction Disclosure [Text Block] |
NOTE
8 – CAPITAL LEASE
In
April 2011, the Company entered into a sale and leaseback
transaction for certain seismic equipment that is accounted
for as a capital lease, with an interest rate of 5.25% per
year. The Company received proceeds of $7,715,520 and will
make monthly payments until the maturity date of May 2013.
The balance as of September 30, 2011 is $5,149,214. In
September 2011, the Company entered into another sale and
leaseback transaction for certain computer equipment and
vehicles that are accounted for as a capital lease, with an
interest rate of 5.44% per year. The Company received
proceeds of $4,000,995 and will make monthly payments until
the maturity date of September 2013. The balance as of
September 30, 2011 was $3,636,411.
|
Note 13 - Segment Information | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] |
NOTE
13 – SEGMENT INFORMATION
The
Company has two reportable segments: Proprietary Services and
Multi-client Services.
The
following table sets forth significant information concerning
the Company’s reportable segments as of and for the
three months and nine months ended September 30, 2011 and
2010:
|
Note 9 - Fair Values Of Financial Instruments | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] |
NOTE
9 – FAIR VALUE OF FINANCIAL INSTRUMENTS
The
Company follows current guidance as it relates to financial
assets and financial liabilities, which defines fair value,
establishes a framework for measuring fair value under
generally accepted accounting principles and expands
disclosures about fair value measurements. The
provisions of this standard apply to other accounting
pronouncements that require or permit fair value
measurements.
This
guidance defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the
measurement date. Hierarchical levels, as
defined in this guidance and directly related to the amount
of subjectivity associated with the inputs to fair valuations
of these assets and liabilities are as follows:
Level
1 – Unadjusted quoted prices in active markets that are
accessible at the measurement date for identical,
unrestricted assets or liabilities.
Level
2 – Inputs other than quoted prices included within
Level 1 that are observable for the asset or liability,
either directly or indirectly, including quoted prices for
similar assets or liabilities in active markets; quoted
prices for identical or similar assets or liabilities in
markets that are not active; inputs other than quoted prices
that are observable for the asset or liability (e.g.,
interest rates); and inputs that are derived principally from
or corroborated by observable market data by correlation or
other means.
Level
3 – Inputs that are both significant to the fair value
measurement and unobservable.
The
reported fair values for financial instruments that use Level
2 and Level 3 inputs to determine fair value are based on a
variety of factors and assumptions. Accordingly, certain
fair values may not represent actual values of the financial
instruments that could have been realized as of September 30,
2011 or that will be realized in the future and do not
include expenses that could be incurred in an actual sale or
settlement.
In
the normal course of operations, the Company is exposed to
market risks arising from adverse changes in interest
rates. Market risk is defined for these purposes
as the potential for change in the fair value of debt
instruments resulting from an adverse movement in interest
rates.
The
carrying amounts of cash and cash equivalents, accounts
receivable, accounts payable and current debt approximate
their fair value due to the short maturity of those
instruments, and therefore, have been excluded from the table
below. The fair value of the Notes is determined
by multiplying the principal amount by the market
price. The following table sets forth the fair
value of the Company’s financial assets and liabilities
as of September 30, 2011 and December 31, 2010:
The
Company is not a party to any hedge arrangements, commodity
swap agreements or other derivative financial
instruments.
The
Company utilizes foreign subsidiaries and branches to conduct
operations outside of the United States. These operations
expose the Company to market risks from changes in foreign
exchange rates.
|
Note 7 - Long-Term Debt | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt [Text Block] |
NOTE
7 - LONG-TERM DEBT
Senior
Notes: On April 22, 2010, the Company entered
into a Purchase Agreement (the “Purchase
Agreement”) with Barclays Capital Inc., Credit Suisse
Securities (USA) LLC and Banc of America Securities LLC, as
representatives of the initial purchasers (the “Initial
Purchasers”), relating to the offer and sale by the
Company of $200 million aggregate principal amount of its
10.5% senior notes due 2017 (the “Notes”).
The Company’s net proceeds from the offering were
approximately $188.1 million after deducting the Initial
Purchasers’ discounts, offering expenses and original
issue discount. The issuance of the Notes occurred on
April 27, 2010. The Notes were offered and sold to the
Initial Purchasers and resold only to qualified institutional
buyers in compliance with the exemption from registration
provided by Rule 144A under the Securities Act of 1933,
as amended (the “Securities Act”), and in
offshore transactions in reliance on Regulation S under the
Securities Act.
The
Notes are a general unsecured, senior obligation of the
Company. The Notes are unconditionally guaranteed as to
principal, premium, if any, and interest by the
Company’s domestic subsidiaries (the
“Guarantors”) on a senior unsecured basis. (See
Note 15)
The
Company used the proceeds from the offering and sale of the
Notes to repay outstanding indebtedness and plans to use the
remaining proceeds for anticipated capital expenditures and
for general working capital purposes.
On
April 27, 2010, in connection with the offering of the
Notes, the Company entered into (i) an Indenture with
The Bank of New York Mellon Trust Company, N.A., (the
“Trustee”), and (ii) a Registration Rights
Agreement with the Initial Purchasers. The following is a
brief summary of the material terms and conditions of the
Indenture and the Registration Rights Agreement.
The
Company and the Guarantors entered into an Indenture with the
Trustee, pursuant to which the Company issued the Notes at a
price equal to 97.009% of their face value.
Interest
— The Notes will bear interest from April 27, 2010
at a rate of 10.5% per annum. The Company will pay interest
on the Notes semi-annually, in arrears, on May 1 and
November 1 of each year, beginning November 1,
2010.
Principal and
Maturity — The Notes were issued with a $200
million aggregate principal amount and will mature on
May 1, 2017.
Optional
Redemption by the Company — At any time prior to
May 1, 2013, the Company may redeem up to 35% of the
aggregate principal amount of the Notes with the net cash
proceeds of certain equity offerings at a redemption price of
110.500% of the aggregate principal amount of the Notes
redeemed if at least 65% of the aggregate principal amount of
the Notes remains outstanding immediately after such
redemption and the redemption occurs within 90 days of the
closing date of such equity offering. On or after May 1,
2014, the Company may redeem the Notes at the following
percentages of the original principal amount:
(i) 105.250% from May 1, 2014 to April 30,
2015; (ii) 102.625% from May 1, 2015 to
April 30, 2016; and (iii) 100% from May 1,
2016 and thereafter.
Repurchase
Obligations by the Company — If there is a
change of control of the Company (as defined in the
Indenture), each holder of the Notes may require the Company
to purchase their Notes at a price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest,
if any, to the date of repurchase.
Events of
Default — The Indenture also contains events of
default including, but not limited to, the following:
(i) nonpayment; (ii) defaults in certain other
indebtedness of the Company or the Guarantors; and
(iii) the failure of the Company or the Guarantors to
comply with their respective covenants in the event of a
mandatory redemption, optional redemption, option to
repurchase, or a merger, consolidation or sale of assets.
Upon an event of default, the holders of the Notes or the
Trustee may declare the Notes due and immediately payable. As
of September 30, 2011, the Company is in compliance with all
respective covenants.
Debt
Issuance Costs: The costs related to the issuance of
debt are capitalized and amortized to interest expense using
the effective interest method over the maturity period of the
related debt. Accumulated amortization is $876,316 and
$396,248 at September 30, 2011 and December 31, 2010,
respectively.
Bank of
America Revolving Credit Facility: On April 30,
2010, the Company entered into a revolving credit facility
under the terms of a Credit Agreement (the “Revolving
Credit Facility”) with Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer, and
each lender from time to time party thereto. The Revolving
Credit Facility provided for borrowings of up to
$50.0 million. On
June 9, 2011, the Company amended the Revolving Credit
Facility to provide for borrowings of up to $70.0 million
under substantially similar terms. The loans under the
Revolving Credit Facility bear interest at a rate equal to
LIBOR plus the Applicable Rate or the Base Rate plus the
Applicable Rate. The Base Rate is defined as the higher of
(x) the prime rate and (y) the Federal Funds rate
plus 0.50%. The Applicable Rate is defined as a percentage
determined in accordance with a pricing grid based upon the
Company’s leverage ratio, that will decline from LIBOR
plus 4.00% or the prime rate plus 3.00% to a minimum rate
equal to LIBOR plus 3.50% or the prime rate plus 2.50%. The
Company is able to prepay borrowings under the Revolving
Credit Facility at any time without penalty or premium,
subject to reimbursement of the lenders’ breakage and
redeployment costs in the case of prepayment of LIBOR
borrowings. The Company also pays a commitment fee of 0.75%
per annum on the actual daily unused portions of the
Revolving Credit Facility.
The
Company’s Revolving Credit Facility is secured by a
first priority lien on substantially all of the
Company’s assets, the assets of the Company’s
non-foreign subsidiaries, the stock of the Company’s
non-foreign subsidiaries and 66% of the stock of certain of
the Company’s foreign subsidiaries. In addition, the
Company’s non-foreign subsidiaries will guarantee the
Company’s obligations under the Revolving Credit
Facility.
The
terms of the Revolving Credit Facility limit the
Company’s ability and the ability of certain of the
Company’s subsidiaries to, among other things: incur or
guarantee additional indebtedness; grant additional
liens on the Company’s assets; make certain investments
or certain acquisitions of substantially all or a portion of
another entity’s business or assets; merge with
another entity or dispose of the Company’s assets; pay
dividends; enter into transactions with affiliates; engage in
other lines of business and repurchase stock.
Additionally,
the Revolving Credit Facility requires that the Company
maintain certain ratios of total senior, secured debt to
consolidated EBITDA (as defined therein), and of consolidated
EBITDA to consolidated interest. The Revolving Credit
Facility includes customary provisions with respect to events
of default. Upon the occurrence and continuation of an event
of default under the Revolving Credit Facility, the lenders
will be able to, among other things, terminate their
revolving loan commitments, accelerate the repayment of the
loans outstanding and declare the same to be immediately due
and payable. As of September 30, 2011, the Company was
in compliance with all respective covenants.
In
connection with the closing of the Company’s initial
public offering and the sale of $200 million of the
Company’s 10.5% senior notes due 2017 on April 27,
2010, the Company repaid all outstanding borrowings under the
First Lien Credit Agreement, the Second Lien Credit
Agreement, and the Construction Loan Agreement. These
repayments resulted in the termination of each of these
borrowing arrangements. The prepayment of the Construction
Loan Agreement resulted in the incurrence of $160,000 in
prepayment penalties.
Promissory
Notes: In April 2011, in exchange for insurance
services provided, the Company issued two negotiable
promissory notes for $1,360,642 and $512,005 at interest
rates of 3.05% and 3.19% per annum, respectively. The notes
are due March 21, 2012 and January 8, 2012,
respectively.
In
June 2011, the Company issued three promissory notes to three
financial institutions in Colombia for $3,193,880 at interest
rates ranging from 6.7% to 7.2%. The notes were paid in full
in August 2011. During the third quarter of 2011 the Company
issued four promissory notes to three financial institutions
in Colombia for $6,142,452 at interest rates ranging from
7.8% to 9.2%. The notes are due in February and March 2012
for $3,784,002 and $2,358,450, respectively.
Letter
of Credit Facility: In February 2007, the
Company entered into a $10 million revolving line of credit
which is secured by restricted cash. The terms of
the letter of credit facility as currently written only allow
for letters of credit to be drawn on the available credit;
however, the cash balance in excess of the total outstanding
letters of credit may be withdrawn at any time. As
of September 30, 2011 and December 31, 2010, the letters of
credit outstanding were $5,121,061 and $2,432,700,
respectively.
Long-term
debt consisted of the following:
|
Consolidated Statements Of Stockholders' Equity (Unaudited) (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
---|---|---|---|---|---|
Balance at Dec. 31, 2010 | $ 455,862 | $ 239,248,935 | $ (95,702,347) | $ (42,145,755) | $ 101,856,695 |
Issuance of common stock | 10,169 | 448,756 | 458,925 | ||
Compensation expense associated with stock grants | 3,853,946 | 3,853,946 | |||
Charitable contribution expense associated with stock grant | 154,784 | 154,784 | |||
Put option liability | 701,911 | 701,911 | |||
Purchase of treasury stock | (756,664) | (756,664) | |||
Net income | 4,257,972 | 4,257,972 | |||
Balance at Sep. 30, 2011 | $ 466,031 | $ 244,408,332 | $ (96,459,011) | $ (37,887,783) | $ 110,527,569 |
Note 3 - Multi-Client Services Library | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Multi Client Library [Text Block] |
NOTE
3 - MULTI-CLIENT SERVICES LIBRARY
Multi-client
Services library consisted of the following:
Amortization
expense for the three months ended September 30, 2011 and
2010 was $29,486,159 and $32,021,587, respectively, and
$81,341,344 and $54,956,570 for the nine months ended
September 30, 2011 and 2010, respectively.
|
Note 4 - Property And Equipment | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] |
NOTE
4 - PROPERTY AND EQUIPMENT
Property
and equipment consisted of the following:
8
The
following tables represent an analysis of depreciation
expense:
|
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