Delaware (State or other jurisdiction of incorporation) | 1-12691 (Commission file number) | 22-2286646 (I.R.S. Employer Identification No.) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common Stock, $0.01 par value | IO | New York Stock Exchange |
Exhibit Number | Description | |
23.1 | ||
99.1 | ||
101 | The following materials are formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets at December 31, 2018 and 2017, (ii) Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016, (iii) Comprehensive Loss for the years ended December 31, 2018, 2017 and 2016, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016, (v) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2018, 2017 and 2016 and (vi) Footnotes to Consolidated Financial Statements. |
ION GEOPHYSICAL CORPORATION | |||
By: | /s/ Matthew Powers | ||
Matthew Powers | |||
Executive Vice President, General Counsel and Corporate Secretary | |||
1. | Registration Statement (Form S-8 No. 333-60950) pertaining to the Input/Output, Inc. Non‑Employee Directors’ Retainer Plan, |
2. | Registration Statement (Form S-8 No. 333-112677) pertaining to the Input/Output, Inc. 2003 Employee Stock Option Plan, |
3. | Registration Statement (Form S-8 No. 333-125655) pertaining to the Input/Output, Inc. 2004 Long‑Term Incentive Plan, |
4. | Registration Statement (Form S-8 No. 333-135775) pertaining to the Input/Output, Inc. Second Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan, |
5. | Registration Statement (Form S-3 No. 333-112263) of Input/Output, Inc., |
6. | Registration Statement (Form S-3 No. 333-123632) of Input/Output, Inc., |
7. | Registration Statement (Form S-8 No. 333-145274) pertaining to the Third Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan, |
8. | Registration Statement (Form S-8 No. 333-155378) pertaining to the Fourth Amended and Restated 2004 Long-Term Incentive Plan and the ARAM Systems Employee Inducement Stock Options Program, |
9. | Registration Statement (Form S-3 No. 333-159898) of ION Geophysical Corporation, |
10. | Registration Statement (Form S-8 No. 333-167943) pertaining to the Fifth Amended and Restated 2004 Long-Term Incentive Plan and the ION Geophysical Corporation Employee Stock Purchase Plan, |
11. | Registration Statement (Form S-3 No. 333-166200) of ION Geophysical Corporation, |
12. | Registration Statement (Form S-8 No. 333-176046) pertaining to the Sixth Amended and Restated 2004 Long-Term Incentive Plan, |
13. | Registration Statement (Form S-8 No. 333-190474) pertaining to the 2013 Long-Term Incentive Plan, |
14. | Registration Statement (Form S-4 No. 333-194110) of ION Geophysical Corporation, |
15. | 15. Registration Statement (Form S-8 No. 333-209707) pertaining to the 2013 Long-Term Incentive Plan, |
16. | Registration Statement (Form S-3 No. 333-213769) of ION Geophysical Corporation, |
17. | Registration Statement (Form S-3 No. 333-223053) of ION Geophysical Corporation, and |
18. | Registration Statement (Form S-8 No. 333-229311) pertaining to the Third Amended and Restated 2013 Long-Term Incentive Plan. |
• | Leverage our technologies to create value through data capture, analysis and optimization to enhance companies’ critical decision-making abilities and returns. Advances in technology are creating opportunities to analyze vast amounts of data to make better decisions. As a result, decision-making is shifting from what was historically an art to a science. Data, analytics and digitalization provide a step-change opportunity to translate information into insights to enhance decisions, gain a competitive edge and deliver superior returns. ION offerings are focused on improving E&P decision-making and optimizing offshore operations. E&P Technology & Services creates digital data assets and delivers services that improve decision-making, mitigate risk and maximize portfolio value for E&P companies, such as our multi-client programs that are licensed to multiple E&P companies to optimize their investment decisions. Operations Optimization develops mission-critical subscription offerings and engineering services that enable operational control and optimization offshore. This information enables any company operating offshore to enhance their operational decision-making and improve their returns. |
• | Expand and grow our E&P Technology & Services business, focusing on client value. We seek to expand and grow our E&P Technology & Services business into new regions, with new customers and new offerings, including data processing services through our Imaging Services group and our Ventures multi-client and proprietary programs. Over the last 5 years, we have made an effort to diversify our offerings within the E&P life cycle and move closer to the reservoir. Historically known for our 2-D programs, we entered the 3-D multi-client market in 2014 by acquiring and processing our first survey offshore Ireland. Since then, we have expanded our 3-D seismic data library considerably by purchasing existing seismic data and reimaging the data using our advanced data processing techniques and algorithms, such as our new FWI. For the foreseeable future, we expect to continue investing in research and development and computing infrastructure for our data processing business and to support our multi-client projects. We believe this focusing on valuable E&P offerings will position our company better for higher returns with an increasing proportion of revenues derived from E&P customers. In 2018, E&P companies accounted for approximately 77% of our total consolidated net revenues. We formed an E&P Advisors group in 2015 designed to focus specifically on this element of our strategy. |
• | Continue investing in advanced software and equipment technology to provide next generation services and products. We intend to continue investing in the development of new technologies for use by E&P companies and service providers. In particular, we intend to focus on the development of our 4Sea next generation OBS technology, our Marlin operations optimization software, and continued advancement of our data processing and imaging workflows, such as FWI, with the goal of obtaining technical and market leadership in what we continue to believe are important and expanding markets. In 2018, our total investment in research and development and engineering was equal to approximately 10% of our total consolidated net revenues for the year. |
• | Collaborate with our customers to provide products and solutions designed to meet their needs. A key element of our business strategy has been to understand the challenges faced by E&P companies in seismic survey planning, data acquisition, processing, and interpretation. We will continue to develop and offer technology and services that enable us to work with E&P companies to solve their unique challenges around the world. We have found collaborating with E&P companies to better understand their imaging challenges and working with them to ensure the right technologies are properly applied, is the most effective method for meeting their needs. Helping solve the most difficult challenges for our customers is an important element of our long-term business strategy, and we are implementing this partnership approach globally through local personnel in our regional organizations who understand the unique challenges in their areas. We formed an E&P Advisors group in 2015 designed to focus specifically on this element of our strategy. |
• | Expand our Operations Optimization business into relevant adjacent markets. While our traditional focus for technology has been on the E&P industry, we are broadening and diversifying our software and equipment businesses into relevant adjacent markets such as offshore logistics, defense and marine robotics. Adjacent markets broaden our opportunity to better monetize our return on technology investments while reducing our susceptibility to E&P cycles. We intend to derive a significant portion of revenues from these non-E&P markets over the next 5 years. |
• | We develop and leverage cutting-edge technology platforms to improve decision-making and profitability. Our cutting-edge data management and analysis platforms help derive insights from data we acquire to improve E&P decision-making, enhance reservoir management and optimize offshore operations. The data can be used to decide whether and how much to bid on a block, how to maximize production from a field, or how to optimize the safety and efficiency of complex maritime projects. Our operations optimization platform and imaging engine are the core underlying technology and we continually advance our complex algorithms to improve the resulting analysis. |
• | We focus on higher potential return offerings and creative business models to maximize shareholder value. We streamlined our business and focused on the areas with the highest potential returns because we believe every dollar invested should go further. In addition, we try to structure both the project financing and payment in a way to maximize profit, such as sharing in the success of a project. |
• | Our “asset light” strategy enables us to avoid significant fixed costs and remain financially flexible. We do not own a fleet of marine vessels and do not provide our own crews to acquire seismic data. We outsource seismic data acquisition activity to third parties that operate fleets of seismic vessels and equipment. This practice enables us to avoid fixed costs associated with these assets and personnel and to manage our business in a manner designed to afford us the flexibility to quickly scale up or down our capital investments based on E&P spending levels. We actively manage the costs of developing our multi-client data library business by having our customers partially pre-fund, or underwrite, the investment for any new project. Our target goal is to have a vast majority of the total cost of each new project’s data acquisition to be underwritten by our customers. We believe this conservative approach to data library investment is the most prudent way to reduce the impact of any sudden reduction in the demand for seismic data, giving us the flexibility to aggressively reduce cash outflows as we have successfully implemented in the current industry downturn. |
• | Our global footprint and diversified portfolio approach enable us to offset regional downturns or local slowdowns. Conducting business around the world has been and will continue to be a key component of our strategy. This global focus and diversified portfolio approach has been helpful in minimizing the impact of any regional or country-specific slowdown for short or extended periods of time. While the traditional focus of our cutting-edge technology has been on the E&P industry, we are now broadening and diversifying our business into relevant adjacent markets such as offshore logistics, defense and marine robotics. Adjacent markets broaden our opportunity to better monetize our return on technology investments while reducing our susceptibility to E&P cycles. |
• | We have a diversified and blue chip customer base. We provide services and products to a diverse, global customer base that includes many of the largest oil and gas and geophysical companies in the world, including National Oil Companies (“NOCs”) and International Oil Companies (“IOCs”). Over the past decade, we have made significant progress expanding our customers list and revenue sources. Whereas almost all of our revenues in the early 2000s were derived principally from seismic service providers, in 2018, E&P companies accounted for approximately 77% of our total consolidated net revenues. |
• | any additional damages or adverse rulings in the WesternGeco litigation and future potential adverse effects on our financial results and liquidity; |
• | future levels of capital expenditures of our customers for seismic activities; |
• | future oil and gas commodity prices; |
• | the effects of current and future worldwide economic conditions (particularly in developing countries) and demand for oil and natural gas and seismic equipment and services; |
• | future cash needs and availability of cash to fund our operations and pay our obligations; |
• | the effects of current and future unrest in the Middle East, North Africa and other regions; |
• | the timing of anticipated revenues and the recognition of those revenues for financial accounting purposes; |
• | the effects of ongoing and future industry consolidation, 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 laws or regulations pertaining to the oil and gas industry, including trade restrictions, embargoes and sanctions imposed by the U.S. government; |
• | future government actions that may result in the deprivation of our contractual rights, including the potential for adverse decisions by judicial or administrative bodies in foreign countries with unpredictable or corrupt judicial systems. |
• | expected net revenues, income from operations and net income; |
• | expected gross margins for our services and products; |
• | future seismic industry fundamentals, including future demand for seismic services and equipment; |
• | future benefits to our customers to be derived from new services and products; |
• | future benefits to be derived from our investments in technologies, joint ventures and acquired companies; |
• | future growth rates for our services and products; |
• | the degree and rate of future market acceptance of our new services and products; |
• | expectations regarding E&P companies and seismic contractor end-users purchasing our more technologically-advanced services and products; |
• | anticipated timing and success of commercialization and capabilities of services and products under development and start-up costs associated with their development; |
• | future opportunities for new products and projected research and development expenses; |
• | expected continued compliance with our debt financial covenants; |
• | expectations regarding realization of deferred tax assets; |
• | expectations regarding the impact of the U.S. Tax Cuts and Jobs Act; |
• | anticipated results with respect to certain estimates we make for financial accounting purposes; and |
• | compliance with the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties. |
• | the supply of and demand for oil and gas; |
• | the level of prices, and expectations about future prices, of oil and gas; |
• | the cost of exploring for, developing, producing and delivering oil and gas; |
• | the expected rates of decline for current production; |
• | the discovery rates of new oil and gas reserves; |
• | weather conditions, including hurricanes, that can affect oil and gas operations over a wide area, as well as less severe inclement weather that can preclude or delay seismic data acquisition; |
• | domestic and worldwide economic conditions; |
• | changes in government leadership, such as the change in presidency in Mexico and its impact on the Mexican economy and offshore exploration programs; |
• | political instability in oil and gas producing countries; |
• | technical advances affecting energy consumption; |
• | government policies regarding the exploration, production and development of oil and gas reserves; |
• | the ability of oil and gas producers to raise equity capital and debt financing; |
• | merger and divestiture activity among oil and gas companies and seismic contractors; and |
• | compliance by members of the OPEC and non-OPEC members such as Russia, with agreements to cut oil production. |
• | we may have difficulty satisfying our obligations with respect to our outstanding debt; |
• | we may have difficulty obtaining financing in the future for working capital, capital expenditures, acquisitions or other purposes; |
• | we may need to use all, or a substantial portion, of our available cash flow to pay interest and principal on our debt, which will reduce the amount of money available to finance our operations and other business activities; |
• | our vulnerability to general economic downturns and adverse industry conditions could increase; |
• | our flexibility in planning for, or reacting to, changes in our business and in our industry in general could be limited; |
• | our amount of debt and the amount we must pay to service our debt obligations could place us at a competitive disadvantage compared to our competitors that have less debt; |
• | our customers may react adversely to our significant debt level and seek or develop alternative licensors or suppliers; |
• | we may have insufficient funds, and our debt level may also restrict us from raising the funds necessary to repurchase all of the Notes, as defined below, tendered to us upon the occurrence of a change of control, which would constitute an event of default under the Notes; and |
• | our failure to comply with the restrictive covenants in our debt instruments which, among other things, limit our ability to incur debt and sell assets, could result in an event of default that, if not cured or waived, could have a material adverse effect on our business or prospects. |
• | incur additional indebtedness; |
• | create liens; |
• | pay dividends and make other distributions in respect of our capital stock; |
• | redeem our capital stock; |
• | make investments or certain other restricted payments; |
• | sell certain kinds of assets; |
• | enter into transactions with affiliates; and |
• | effect mergers or consolidations. |
• | limit our ability to plan for or react to market or economic conditions or meet capital needs or otherwise restrict our activities or business plans; and |
• | adversely affect our ability to finance our operations, acquisitions, investments or strategic alliances or other capital needs or to engage in other business activities that would be in our interest. |
• | future competition from more established companies entering the market; |
• | technology obsolescence; |
• | dependence upon continued growth of the market for seismic data processing; |
• | the rate of change in the markets for these segments’ technology and services; |
• | further consolidation of the participants within this market; |
• | research and development efforts not proving sufficient to keep up with changing market demands; |
• | dependence on third-party software for inclusion in these segments’ services and products; |
• | misappropriation of these segments’ technology by other companies; |
• | alleged or actual infringement of intellectual property rights that could result in substantial additional costs; |
• | difficulties inherent in forecasting sales for newly developed technologies or advancements in technologies; |
• | recruiting, training and retaining technically skilled, experienced personnel that could increase the costs for these segments, or limit their growth; and |
• | the ability to maintain traditional margins for certain of their technology or services. |
• | We may not fully recover our costs of acquiring and processing seismic data through future sales. The ultimate amounts involved in these data sales are uncertain and depend on a variety of factors, many of which are beyond our control. |
• | The timing of these sales is unpredictable and can vary greatly from period to period. The costs of each survey are capitalized and then amortized as a percentage of sales and/or on a straight-line basis over the expected useful life of the data. This amortization will affect our earnings and, when combined with the sporadic nature of sales, will result in increased earnings volatility. |
• | Regulatory changes that affect companies’ ability to drill, either generally or in a specific location where we have acquired seismic data, could materially adversely affect the value of the seismic data contained in our library. Technology changes could also make existing data sets obsolete. Additionally, each of our individual surveys has a limited book life based on its location and oil and gas companies’ interest in prospecting for reserves in such location, so a particular survey may be subject to a significant decline in value beyond our initial estimates. |
• | The value of our multi-client data could be significantly adversely affected if any material adverse change occurs in the general prospects for oil and gas exploration, development and production activities. |
• | The cost estimates upon which we base our pre-commitments of funding could be wrong. The result could be losses that have a material adverse effect on our financial condition and results of operations. These pre-commitments of funding are subject to the creditworthiness of our clients. In the event that a client refuses or is unable to pay its commitment, we could incur a substantial loss on that project. |
• | As part of our asset-light strategy, we routinely charter vessels from third-party vendors to acquire seismic data for our multi-client business. As a result, our cost to acquire our multi-client data could significantly increase if vessel charter prices rise materially. |
• | disruption of E&P activities; |
• | restriction on the movement and exchange of funds; |
• | inhibition of our ability to collect advances and receivables; |
• | enactment of additional or stricter U.S. government or international sanctions; |
• | limitation of our access to markets for periods of time; |
• | expropriation and nationalization of assets of our company or those of our customers; |
• | political and economic instability, which may include armed conflict and civil disturbance; |
• | currency fluctuations, devaluations and conversion restrictions; |
• | confiscatory taxation or other adverse tax policies; and |
• | governmental actions that may result in the deprivation of our contractual rights, including the potential for adverse decisions by judicial or administrative bodies in foreign countries with unpredictable or corrupt judicial systems. |
• | operating results that vary from the expectations of securities analysts and investors; |
• | factors influencing the levels of global oil and natural gas exploration and exploitation activities, such as the decline in crude oil prices and depressed prices for natural gas in North America or disasters such as the Deepwater Horizon incident in the Gulf of Mexico in 2010; |
• | the operating and securities price performance of companies that investors or analysts consider comparable to us; |
• | actions by rating agencies related to the Notes; |
• | announcements of strategic developments, acquisitions and other material events by us or our competitors; and |
• | changes in global financial markets and global economies and general market conditions, such as interest rates, commodity and equity prices and the value of financial assets. |
• | authorizing the issuance of “blank check” preferred stock without any need for action by stockholders; |
• | providing for a classified board of directors with staggered terms; |
• | requiring supermajority stockholder voting to effect certain amendments to our certificate of incorporation and bylaws; |
• | eliminating the ability of stockholders to call special meetings of stockholders; |
• | prohibiting stockholder action by written consent; and |
• | establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings. |
Brent Crude (per bbl) | West Texas Intermediate Crude (per bbl) | Henry Hub Natural Gas (per mcf) | |||||||||||||||||||||
Quarter ended | High | Low | High | Low | High | Low | |||||||||||||||||
12/31/2018 | $ | 86.07 | $ | 50.57 | $ | 76.40 | $ | 44.48 | $ | 4.70 | $ | 3.10 | |||||||||||
9/30/2018 | $ | 82.72 | $ | 68.38 | $ | 74.19 | $ | 65.07 | $ | 3.12 | $ | 2.73 | |||||||||||
6/30/2018 | $ | 80.42 | $ | 66.04 | $ | 77.41 | $ | 62.03 | $ | 3.08 | $ | 2.74 | |||||||||||
3/31/2018 | $ | 71.08 | $ | 61.94 | $ | 66.27 | $ | 59.20 | $ | 6.24 | $ | 2.49 | |||||||||||
12/31/2017 | $ | 66.80 | $ | 55.29 | $ | 60.46 | $ | 49.34 | $ | 3.69 | $ | 2.60 | |||||||||||
9/30/2017 | $ | 59.77 | $ | 46.47 | $ | 52.14 | $ | 44.25 | $ | 3.18 | $ | 2.76 | |||||||||||
6/30/2017 | $ | 55.05 | $ | 43.98 | $ | 53.38 | $ | 42.48 | $ | 3.27 | $ | 2.85 | |||||||||||
3/31/2017 | $ | 56.34 | $ | 49.56 | $ | 54.48 | $ | 47.00 | $ | 3.71 | $ | 2.44 | |||||||||||
Source: EIA. |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(In thousands) | ||||||||||||
Net revenues: | ||||||||||||
E&P Technology & Services: | ||||||||||||
New Venture | $ | 69,685 | $ | 100,824 | $ | 27,362 | ||||||
Data Library | 47,095 | 40,016 | 39,989 | |||||||||
Total multi-client revenues | 116,780 | 140,840 | 67,351 | |||||||||
Imaging Services | 19,740 | 16,409 | 25,538 | |||||||||
Total | $ | 136,520 | $ | 157,249 | $ | 92,889 | ||||||
Operations Optimization: | ||||||||||||
Devices | $ | 22,396 | $ | 23,610 | $ | 26,746 | ||||||
Optimization Software & Services | 21,129 | 16,695 | 16,756 | |||||||||
Total | $ | 43,525 | $ | 40,305 | $ | 43,502 | ||||||
Other | $ | — | $ | — | $ | 36,417 | (a) | |||||
Total | $ | 180,045 | $ | 197,554 | $ | 172,808 |
Year Ended December 31, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||||||||||||||||||||||||||
As Reported | Special Items | As Adjusted | As Reported | Special Items | As Adjusted | As Reported | Special Items | As Adjusted | |||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||||
Gross profit: | |||||||||||||||||||||||||||||||||||
E&P Technology & Services | $ | 43,369 | $ | — | $ | 43,369 | $ | 65,196 | $ | — | $ | 65,196 | $ | 4,708 | $ | 766 | $ | 5,474 | |||||||||||||||||
Operations Optimization | 22,293 | — | 22,293 | 20,076 | — | 20,076 | 21,745 | 188 | 21,933 | ||||||||||||||||||||||||||
Segment gross profit | 65,662 | — | 65,662 | 85,272 | — | 85,272 | 26,453 | 954 | 27,407 | ||||||||||||||||||||||||||
Other (a) | (6,042 | ) | — | (6,042 | ) | (9,633 | ) | — | (9,633 | ) | 9,579 | 123 | 9,702 | ||||||||||||||||||||||
Total | $ | 59,620 | $ | — | $ | 59,620 | $ | 75,639 | $ | — | $ | 75,639 | $ | 36,032 | $ | 1,077 | (f) | $ | 37,109 | ||||||||||||||||
Gross margin: | |||||||||||||||||||||||||||||||||||
E&P Technology & Services | 32 | % | — | % | 32 | % | 41 | % | — | % | 41 | % | 5 | % | 1 | % | 6 | % | |||||||||||||||||
Operations Optimization | 51 | % | — | % | 51 | % | 50 | % | — | % | 50 | % | 50 | % | — | % | 50 | % | |||||||||||||||||
Segment gross margin | 36 | % | — | % | 36 | % | 43 | % | — | % | 43 | % | 15 | % | — | % | 16 | % | |||||||||||||||||
Other | (3 | )% | — | % | (3 | )% | (5 | )% | — | % | (5 | )% | 6 | % | — | % | 6 | % | |||||||||||||||||
Total | 33 | % | — | % | 33 | % | 38 | % | — | % | 38 | % | 21 | % | — | % | 21 | % | |||||||||||||||||
Income (loss) from operations: | |||||||||||||||||||||||||||||||||||
E&P Technology & Services | $ | 21,758 | $ | — | $ | 21,758 | $ | 42,505 | $ | — | $ | 42,505 | $ | (16,446 | ) | $ | 1,128 | $ | (15,318 | ) | |||||||||||||||
Operations Optimization | 7,295 | — | 7,295 | 8,022 | — | 8,022 | 9,652 | 197 | 9,849 | ||||||||||||||||||||||||||
Support and other (c) | (83,325 | ) | 38,658 | (b) | (44,667 | ) | (59,226 | ) | 6,141 | (d) | (53,085 | ) | (36,377 | ) | 684 | (35,693 | ) | ||||||||||||||||||
Total | $ | (54,272 | ) | $ | 38,658 | $ | (15,614 | ) | $ | (8,699 | ) | $ | 6,141 | $ | (2,558 | ) | $ | (43,171 | ) | $ | 2,009 | (f) | $ | (41,162 | ) | ||||||||||
Operating margin: | |||||||||||||||||||||||||||||||||||
E&P Technology & Services | 16 | % | — | % | 16 | % | 27 | % | — | % | 27 | % | (18 | )% | 2 | % | (16 | )% | |||||||||||||||||
Operations Optimization | 17 | % | — | % | 17 | % | 20 | % | — | % | 20 | % | 22 | % | 1 | % | 23 | % | |||||||||||||||||
Support and other | (46 | )% | 21 | % | (25 | )% | (30 | )% | 3 | % | (27 | )% | (21 | )% | — | % | (21 | )% | |||||||||||||||||
Total | (30 | )% | 21 | % | (9 | )% | (4 | )% | 3 | % | (1 | )% | (25 | )% | 1 | % | (24 | )% | |||||||||||||||||
Net income (loss) applicable to common shares | $ | (71,171 | ) | $ | 38,658 | $ | (32,513 | ) | $ | (30,242 | ) | $ | 11,141 | (e) | $ | (19,101 | ) | $ | (65,148 | ) | $ | (960 | ) | (g) | $ | (66,108 | ) | ||||||||
Diluted net income (loss) per common share | $ | (5.20 | ) | $ | 2.83 | $ | (2.37 | ) | $ | (2.55 | ) | $ | 0.94 | $ | (1.61 | ) | $ | (5.71 | ) | $ | (0.09 | ) | $ | (5.80 | ) |
(a) | Relates to the gross profit (loss) of previously reported Ocean Bottom Integrated Technologies segment. | |||
(b) | Represents a write-down of the cable-based ocean bottom acquisition technologies of $36.6 million and accelerated vesting and cash exercise of stock appreciation right awards of $2.1 million. | |||
(c) | Includes loss from operations, as adjusted, of previously reported Ocean Bottom Integrated Technologies segment of $11.1 million, $16.3 million and $1.3 million for the years ended December 31, 2018, 2017 and 2016, respectively, which includes item (a) above and operating expenses of $5.1 million, $6.7 million and $10.9 million for the years ended December 31, 2018, 2017 and 2016. | |||
(d) | Represents accelerated vesting and cash exercise of stock appreciation right awards. | |||
(e) | In addition to item (d), also impacting net loss applicable to common shares was a loss contingency accrual of $5.0 million related to legal proceedings. | |||
(f) | Represents severance and facility charges related to the Company’s 2016 restructuring. | |||
(g) | Represents a $3.9 million recovery of INOVA bad debts, partially offset by item (f). | |||
Year Ended December 31, 2018 | Year Ended December 31, 2017 | ||||||||||||||||||||||
As Reported | Special Items | As Adjusted | As Reported | Special Items | As Adjusted | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research, development and engineering | $ | 18,182 | $ | — | $ | 18,182 | $ | 16,431 | $ | — | $ | 16,431 | |||||||||||
Marketing and sales | 21,793 | — | 21,793 | 20,778 | — | 20,778 | |||||||||||||||||
General, administrative and other operating expenses | 37,364 | (2,105 | ) | (a) | 35,259 | 47,129 | (6,141 | ) | (a) | 40,988 | |||||||||||||
Impairment of long-lived assets | 36,553 | (36,553 | ) | (b) | — | — | — | — | |||||||||||||||
Total operating expenses | $ | 113,892 | $ | (38,658 | ) | $ | 75,234 | $ | 84,338 | $ | (6,141 | ) | $ | 78,197 |
(a) | Represents accelerated vesting and cash exercise of stock appreciation rights awards. |
(b) | Represents a write-down of the cable-based ocean bottom acquisition technologies. |
Years Ended December 31, | |||||||
2018 | 2017 | ||||||
Accrual for contingency related to legal proceedings (Footnote 8) | $ | — | $ | (5,000 | ) | ||
Recovery of INOVA bad debts | — | 844 | |||||
Other income (expense) | (436 | ) | 211 | ||||
Total other income (expense) | $ | (436 | ) | $ | (3,945 | ) |
Year Ended December 31, 2017 | Year Ended December 31, 2016 | ||||||||||||||||||||||
As Reported | Special Items(b) | As Adjusted | As Reported | Special Items(a) | As Adjusted | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research, development and engineering | $ | 16,431 | $ | — | $ | 16,431 | $ | 17,833 | $ | (397 | ) | $ | 17,436 | ||||||||||
Marketing and sales | 20,778 | — | 20,778 | 17,371 | (262 | ) | 17,109 | ||||||||||||||||
General, administrative and other operating expenses | 47,129 | (6,141 | ) | 40,988 | 43,999 | (273 | ) | 43,726 | |||||||||||||||
Total operating expenses | $ | 84,338 | $ | (6,141 | ) | $ | 78,197 | $ | 79,203 | $ | (932 | ) | $ | 78,271 | |||||||||
Income (loss) from operations | $ | (8,699 | ) | $ | 6,141 | $ | (2,558 | ) | $ | (43,171 | ) | $ | 2,009 | $ | (41,162 | ) |
(a) | Includes severance affecting operating expenses. |
(b) | Represents accelerated vesting and cash exercise of stock appreciation rights awards. |
Years Ended December 31, | |||||||
2017 | 2016 | ||||||
Reduction of (accrual for) loss contingency related to legal proceedings (Footnote 8) | $ | (5,000 | ) | $ | 1,168 | ||
Recovery of INOVA bad debts | 844 | 3,983 | |||||
Loss on bond exchange | — | (2,182 | ) | ||||
Other expense | 211 | (1,619 | ) | ||||
Total other income | $ | (3,945 | ) | $ | 1,350 |
• | extend the maturity date of the Credit Facility by approximately four years (from August 22, 2019 to August 16, 2023), subject to the retirement or extension of the maturity date of the Second Lien Notes, as defined below, which mature on December 15, 2021; |
• | increase the maximum revolver amount by $10 million (from $40 million to $50 million); |
• | increase the borrowing base percentage of the net orderly liquidation value as it relates to the multi-client data library (not to exceed $28.5 million, up from the previous maximum of $15 million for the multi-client data library component); |
• | include the eligible billed receivables of the Mexican Subsidiary up to a maximum of $5 million in the borrowing base calculation and joins the Mexican Subsidiary as a borrower thereunder (with a maximum exposure of $5 million) and require the equity and assets of the Mexican Subsidiary to be pledged to secure obligations under the Credit Facility; |
• | modify the interest rate such that the maximum interest rate remains consistent with the fixed interest rate prior to the Third Amendment (that is, 3.00% per annum for domestic rate loans and 4.00% per annum for LIBOR rate loans), but now lowers the range down to a minimum interest rate of 2.00% for domestic rate loans and 3.00% for LIBOR rate loans based on a leverage ratio for the preceding four-quarter period; |
• | decrease the minimum excess borrowing availability threshold which (if the Borrowers have minimum excess borrowing availability below any such threshold) triggers the agent’s right to exercise dominion over cash and deposit accounts; and |
• | modify the trigger required to test for compliance with the fixed charge coverage ratio. |
Date | Percentage | |
2019 | 105.500% | |
2020 | 103.500% | |
2021 and thereafter | 100.000% |
Contractual Obligations | Total | Less Than 1 Year | 1-3 Years | 3-5 Years | More Than 5 Years | ||||||||||||||
Long-term and short-term debt | $ | 121,728 | $ | 1,159 | $ | 120,569 | $ | — | $ | — | |||||||||
Interest on long-term debt obligations | 34,901 | 11,344 | 23,236 | 321 | — | ||||||||||||||
Equipment capital lease obligations | 2,938 | 1,069 | 1,869 | — | — | ||||||||||||||
Operating leases | 68,938 | 13,248 | 34,753 | 13,914 | 7,023 | ||||||||||||||
Purchase obligations | 2,908 | 2,908 | — | — | — | ||||||||||||||
Total | $ | 231,413 | $ | 29,728 | $ | 180,427 | $ | 14,235 | $ | 7,023 |
Page | ||
ION Geophysical Corporation and Subsidiaries: | ||
Report of Independent Registered Public Accounting Firms | F-2 | |
Consolidated Balance Sheets — December 31, 2018 and 2017 | F-3 | |
Consolidated Statements of Operations — Years ended December 31, 2018, 2017 and 2016 | F-4 | |
Consolidated Statements of Comprehensive Loss — Years ended December 31, 2018, 2017 and 2016 | F-5 | |
Consolidated Statements of Cash Flows — Years ended December 31, 2018, 2017 and 2016 | F-6 | |
Consolidated Statements of Stockholders’ Equity — Years ended December 31, 2018, 2017 and 2016 | F-8 | |
Footnotes to Consolidated Financial Statements | F-9 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands, except share data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 33,551 | $ | 52,056 | |||
Accounts receivable, net | 26,128 | 19,478 | |||||
Unbilled receivables | 44,032 | 37,304 | |||||
Inventories, net | 14,130 | 14,508 | |||||
Prepaid expenses and other current assets | 7,782 | 7,643 | |||||
Total current assets | 125,623 | 130,989 | |||||
Deferred income tax asset, net | 7,191 | 1,753 | |||||
Property, plant, equipment and seismic rental equipment, net | 13,041 | 52,153 | |||||
Multi-client data library, net | 73,544 | 89,300 | |||||
Goodwill | 22,915 | 24,089 | |||||
Other assets | 2,435 | 2,785 | |||||
Total assets | $ | 244,749 | $ | 301,069 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt | $ | 2,228 | $ | 40,024 | |||
Accounts payable | 34,913 | 24,951 | |||||
Accrued expenses | 31,411 | 38,697 | |||||
Accrued multi-client data library royalties | 29,256 | 27,035 | |||||
Deferred revenue | 7,710 | 8,910 | |||||
Total current liabilities | 105,518 | 139,617 | |||||
Long-term debt, net of current maturities | 119,513 | 116,720 | |||||
Other long-term liabilities | 11,894 | 13,926 | |||||
Total liabilities | 236,925 | 270,263 | |||||
Equity: | |||||||
Common stock, $0.01 par value; authorized 26,666,667 shares; outstanding 14,015,615 and 12,019,701 shares at December 31, 2018 and 2017, respectively. | 140 | 120 | |||||
Additional paid-in capital | 952,626 | 903,247 | |||||
Accumulated deficit | (926,092 | ) | (854,921 | ) | |||
Accumulated other comprehensive loss | (20,442 | ) | (18,879 | ) | |||
Total stockholders’ equity | 6,232 | 29,567 | |||||
Noncontrolling interests | 1,592 | 1,239 | |||||
Total equity | 7,824 | 30,806 | |||||
Total liabilities and equity | $ | 244,749 | $ | 301,069 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands, except per share data) | |||||||||||
Service revenues | $ | 139,038 | $ | 159,410 | $ | 130,640 | |||||
Product revenues | 41,007 | 38,144 | 42,168 | ||||||||
Total net revenues | 180,045 | 197,554 | 172,808 | ||||||||
Cost of services | 100,557 | 103,124 | 115,763 | ||||||||
Cost of products | 19,868 | 18,791 | 21,013 | ||||||||
Gross profit | 59,620 | 75,639 | 36,032 | ||||||||
Operating expenses: | |||||||||||
Research, development and engineering | 18,182 | 16,431 | 17,833 | ||||||||
Marketing and sales | 21,793 | 20,778 | 17,371 | ||||||||
General, administrative and other operating expenses | 37,364 | 47,129 | 43,999 | ||||||||
Impairment of long-lived assets | 36,553 | — | — | ||||||||
Total operating expenses | 113,892 | 84,338 | 79,203 | ||||||||
Loss from operations | (54,272 | ) | (8,699 | ) | (43,171 | ) | |||||
Interest expense, net | (12,972 | ) | (16,709 | ) | (18,485 | ) | |||||
Other income (expense), net | (436 | ) | (3,945 | ) | 1,350 | ||||||
Loss before income taxes | (67,680 | ) | (29,353 | ) | (60,306 | ) | |||||
Income tax expense | 2,718 | 24 | 4,421 | ||||||||
Net loss | (70,398 | ) | (29,377 | ) | (64,727 | ) | |||||
Net income attributable to noncontrolling interests | (773 | ) | (865 | ) | (421 | ) | |||||
Net loss attributable to ION | $ | (71,171 | ) | $ | (30,242 | ) | $ | (65,148 | ) | ||
Net loss per share: | |||||||||||
Basic | $ | (5.20 | ) | $ | (2.55 | ) | $ | (5.71 | ) | ||
Diluted | $ | (5.20 | ) | $ | (2.55 | ) | $ | (5.71 | ) | ||
Weighted average number of common shares outstanding: | |||||||||||
Basic | 13,692 | 11,876 | 11,400 | ||||||||
Diluted | 13,692 | 11,876 | 11,400 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Net loss | $ | (70,398 | ) | $ | (29,377 | ) | $ | (64,727 | ) | ||
Other comprehensive income (loss), net of taxes, as appropriate: | |||||||||||
Foreign currency translation adjustments | (1,563 | ) | 2,869 | (6,967 | ) | ||||||
Comprehensive net loss | (71,961 | ) | (26,508 | ) | (71,694 | ) | |||||
Comprehensive income attributable to noncontrolling interests | (773 | ) | (865 | ) | (421 | ) | |||||
Comprehensive net loss attributable to ION | $ | (72,734 | ) | $ | (27,373 | ) | $ | (72,115 | ) |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (70,398 | ) | $ | (29,377 | ) | $ | (64,727 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Depreciation and amortization (other than multi-client library) | 8,763 | 16,592 | 21,975 | ||||||||
Amortization of multi-client data library | 48,988 | 47,102 | 33,335 | ||||||||
Impairment of long-lived assets | 36,553 | — | — | ||||||||
Impairment of multi-client data library | — | 2,304 | — | ||||||||
Stock-based compensation expense | 3,337 | 2,552 | 3,267 | ||||||||
Accrual (reduction) of loss contingency related to legal proceedings | — | 5,000 | (1,168 | ) | |||||||
Loss on bond exchange | — | — | 2,182 | ||||||||
Write-down of excess and obsolete inventory | 665 | 398 | 429 | ||||||||
Deferred income taxes | (6,252 | ) | (5,420 | ) | (1,181 | ) | |||||
Change in operating assets and liabilities: | |||||||||||
Accounts receivable | (7,024 | ) | 1,692 | 20,426 | |||||||
Unbilled receivables | (5,245 | ) | (23,947 | ) | 6,543 | ||||||
Inventories | (353 | ) | 190 | 2,312 | |||||||
Accounts payable, accrued expenses and accrued royalties | (7,600 | ) | 1,443 | (5,085 | ) | ||||||
Deferred revenue | (1,112 | ) | 5,131 | (2,759 | ) | ||||||
Other assets and liabilities | 6,776 | 3,952 | (14,556 | ) | |||||||
Net cash provided by operating activities | 7,098 | 27,612 | 993 | ||||||||
Cash flows from investing activities: | |||||||||||
Investment in multi-client data library | (28,276 | ) | (23,710 | ) | (14,884 | ) | |||||
Purchase of property, plant, equipment and seismic rental equipment | (1,514 | ) | (1,063 | ) | (1,458 | ) | |||||
Proceeds from sale of cost method investments | — | — | 2,698 | ||||||||
Net cash used in investing activities | (29,790 | ) | (24,773 | ) | (13,644 | ) | |||||
Cash flows from financing activities: | |||||||||||
Borrowings under revolving line of credit | — | — | 15,000 | ||||||||
Repayments under revolving line of credit | (10,000 | ) | — | (5,000 | ) | ||||||
Payments on notes payable and long-term debt | (30,807 | ) | (4,816 | ) | (23,634 | ) | |||||
Cost associated with issuance of debt | (1,247 | ) | (53 | ) | (6,744 | ) | |||||
Net proceeds from issuance of stocks | 46,999 | — | — | ||||||||
Repurchase of common stock | — | — | (964 | ) | |||||||
Proceeds from employee stock purchases and exercise of stock options | 214 | 1,619 | — | ||||||||
Dividend payment to noncontrolling interest | (200 | ) | (100 | ) | — | ||||||
Other financing activities | (1,151 | ) | (243 | ) | (252 | ) | |||||
Net cash provided by (used in) financing activities | 3,808 | (3,593 | ) | (21,594 | ) | ||||||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash | 319 | (260 | ) | 1,386 | |||||||
Net decrease in cash, cash equivalents and restricted cash | (18,565 | ) | (1,014 | ) | (32,859 | ) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 52,419 | 53,433 | 86,292 | ||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 33,854 | $ | 52,419 | $ | 53,433 |
December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash and cash equivalents | $ | 33,551 | $ | 52,056 | $ | 52,652 | |||||
Restricted cash included in prepaid expenses and other current assets | — | 60 | 260 | ||||||||
Restricted cash included in other long-term assets | 303 | 303 | 521 | ||||||||
Total cash, cash equivalents, and restricted cash shown in consolidated statements of cash flows | $ | 33,854 | $ | 52,419 | $ | 53,433 |
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
(In thousands, except shares) | Shares | Amount | ||||||||||||||||||||||||||||
Balance at January 1, 2016 (a) | 10,702,689 | $ | 107 | $ | 894,715 | $ | (759,531 | ) | $ | (14,781 | ) | $ | (8,551 | ) | $ | 81 | $ | 112,040 | ||||||||||||
Net (loss) income | — | — | — | (65,148 | ) | — | — | 421 | (64,727 | ) | ||||||||||||||||||||
Translation adjustment | — | — | — | — | (6,967 | ) | — | 7 | (6,960 | ) | ||||||||||||||||||||
Stock-based compensation expense | — | — | 3,267 | — | — | — | — | 3,267 | ||||||||||||||||||||||
Vesting of restricted stock units/awards | 40,495 | — | — | — | — | — | — | — | ||||||||||||||||||||||
Purchase of treasury shares | (155,304 | ) | (1 | ) | — | — | — | (963 | ) | — | (964 | ) | ||||||||||||||||||
Restricted stock cancelled for employee minimum income taxes | (4,973 | ) | — | (22 | ) | — | — | — | — | (22 | ) | |||||||||||||||||||
Issuance of stock for the ESPP | 4,100 | — | 23 | — | — | — | — | 23 | ||||||||||||||||||||||
Issuance of stock in bond exchange | 1,205,440 | 12 | 1,215 | — | — | 9,514 | — | 10,741 | ||||||||||||||||||||||
Balance at December 31, 2016 | 11,792,447 | 118 | 899,198 | (824,679 | ) | (21,748 | ) | — | 509 | 53,398 | ||||||||||||||||||||
Net (loss) income | — | — | — | (30,242 | ) | — | — | 865 | (29,377 | ) | ||||||||||||||||||||
Translation adjustment | — | — | — | — | 2,869 | — | (35 | ) | 2,834 | |||||||||||||||||||||
Dividend payment to noncontrolling interest | — | — | — | — | — | — | (100 | ) | (100 | ) | ||||||||||||||||||||
Stock-based compensation expense | — | — | 2,552 | — | — | — | — | 2,552 | ||||||||||||||||||||||
Exercise of stock options | 15,000 | — | 46 | — | — | — | — | 46 | ||||||||||||||||||||||
Vesting of restricted stock units/awards | 115,576 | 1 | (1 | ) | — | — | — | — | — | |||||||||||||||||||||
Employee purchases of unregistered shares of common stock | 120,567 | 1 | 1,572 | — | — | — | — | 1,573 | ||||||||||||||||||||||
Restricted stock cancelled for employee minimum income taxes | (23,889 | ) | — | (120 | ) | — | — | — | — | (120 | ) | |||||||||||||||||||
Balance at December 31, 2017 | 12,019,701 | 120 | 903,247 | (854,921 | ) | (18,879 | ) | — | 1,239 | 30,806 | ||||||||||||||||||||
Net (loss) income | — | — | — | (71,171 | ) | — | — | 773 | (70,398 | ) | ||||||||||||||||||||
Translation adjustment | — | — | — | — | (1,563 | ) | — | (220 | ) | (1,783 | ) | |||||||||||||||||||
Dividend payment to noncontrolling interest | — | — | — | — | — | — | (200 | ) | (200 | ) | ||||||||||||||||||||
Stock-based compensation expense | — | — | 3,337 | — | — | — | — | 3,337 | ||||||||||||||||||||||
Exercise of stock options | 70,086 | 1 | 213 | — | — | — | — | 214 | ||||||||||||||||||||||
Vesting of restricted stock units/awards | 151,852 | 1 | (1 | ) | — | — | — | — | — | |||||||||||||||||||||
Restricted stock cancelled for employee minimum income taxes | (46,024 | ) | — | (1,151 | ) | — | — | — | — | (1,151 | ) | |||||||||||||||||||
Public equity offering | 1,820,000 | 18 | 46,981 | — | — | — | — | 46,999 | ||||||||||||||||||||||
Balance at December 31, 2018 | 14,015,615 | $ | 140 | $ | 952,626 | $ | (926,092 | ) | $ | (20,442 | ) | $ | — | $ | 1,592 | $ | 7,824 |
(a) | The figures for January 1, 2016, set forth in the tables above have been retroactively adjusted to reflect the one-for-fifteen reverse stock split completed on February 4, 2016. |
Years | |
Machinery and equipment | 3-7 |
Buildings | 5-25 |
Seismic rental equipment | 3-5 |
Leased equipment and other | 3-10 |
December 31, | |||||||
2018 | 2017 | ||||||
Gross costs of multi-client data creation | $ | 972,309 | $ | 939,077 | |||
Less accumulated amortization | (776,860 | ) | (727,872 | ) | |||
Less impairments to multi-client data library | (121,905 | ) | (121,905 | ) | |||
Multi-client data library, net | $ | 73,544 | $ | 89,300 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Net revenues: | ||||||||||||
E&P Technology & Services: | ||||||||||||
New Venture | $ | 69,685 | $ | 100,824 | $ | 27,362 | ||||||
Data Library | 47,095 | 40,016 | 39,989 | |||||||||
Total multi-client revenues | 116,780 | 140,840 | 67,351 | |||||||||
Imaging Services | 19,740 | 16,409 | 25,538 | |||||||||
Total | $ | 136,520 | $ | 157,249 | $ | 92,889 | ||||||
Operations Optimization: | ||||||||||||
Devices | $ | 22,396 | $ | 23,610 | $ | 26,746 | ||||||
Optimization Software & Services | 21,129 | 16,695 | 16,756 | |||||||||
Total | $ | 43,525 | $ | 40,305 | $ | 43,502 | ||||||
Other | $ | — | $ | — | $ | 36,417 | (a) | |||||
Total | $ | 180,045 | $ | 197,554 | $ | 172,808 | ||||||
Gross profit (loss): | ||||||||||||
E&P Technology & Services | $ | 43,369 | $ | 65,196 | $ | 4,708 | ||||||
Operations Optimization | 22,293 | 20,076 | 21,745 | |||||||||
Segment gross profit | 65,662 | 85,272 | 26,453 | |||||||||
Other (b) | (6,042 | ) | (9,633 | ) | 9,579 | |||||||
Total | $ | 59,620 | $ | 75,639 | $ | 36,032 | ||||||
Gross margin: | ||||||||||||
E&P Technology & Services | 32 | % | 41 | % | 5 | % | ||||||
Operations Optimization | 51 | % | 50 | % | 50 | % | ||||||
Segment gross margin | 36 | % | 43 | % | 15 | % | ||||||
Other | (3 | )% | (5 | )% | 6 | % | ||||||
Total | 33 | % | 38 | % | 21 | % | ||||||
Income (loss) from operations: | ||||||||||||
E&P Technology & Services | $ | 21,758 | $ | 42,505 | $ | (16,446 | ) | |||||
Operations Optimization | 7,295 | 8,022 | 9,652 | |||||||||
Support and other (c) | (83,325 | ) | (d) | (59,226 | ) | (36,377 | ) | |||||
Loss from operations | (54,272 | ) | (8,699 | ) | (43,171 | ) | ||||||
Interest expense, net | (12,972 | ) | (16,709 | ) | (18,485 | ) | ||||||
Other income (expense), net | (436 | ) | (3,945 | ) | 1,350 | |||||||
Loss before income taxes | $ | (67,680 | ) | $ | (29,353 | ) | $ | (60,306 | ) |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Depreciation and amortization (including multi-client data library): | |||||||||||
E&P Technology & Services | $ | 51,673 | $ | 53,663 | $ | 44,100 | |||||
Operations Optimization | 995 | 1,349 | 1,780 | ||||||||
Support and other (a) | 5,083 | 8,682 | 9,430 | ||||||||
Total | $ | 57,751 | $ | 63,694 | $ | 55,310 |
December 31, | |||||||
2018 | 2017 | ||||||
Total assets: | |||||||
E&P Technology & Services | $ | 165,132 | $ | 156,555 | |||
Operations Optimization | 51,783 | 74,361 | |||||
Support and other (a) | 27,834 | 70,153 | |||||
Total | $ | 244,749 | (b) | $ | 301,069 |
December 31, | |||||||
2018 | 2017 | ||||||
North America | $ | 86,614 | $ | 116,598 | |||
Latin America | 69,418 | 55,661 | |||||
Middle East | 52,037 | 70,308 | |||||
Europe | 31,566 | 51,876 | |||||
Other | 5,114 | 6,626 | |||||
Total | $ | 244,749 | $ | 301,069 |
December 31, | |||||||
2018 | 2017 | ||||||
North America | $ | 11,663 | $ | 10,609 | |||
Europe | 1,140 | 20,725 | |||||
Latin America | 143 | 170 | |||||
Middle East | 36 | 20,543 | |||||
Other | 59 | 106 | |||||
Total | $ | 13,041 | (a) | $ | 52,153 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Latin America | $ | 68,871 | $ | 68,241 | $ | 24,090 | |||||
North America | 44,474 | 48,120 | 38,005 | ||||||||
Europe | 31,077 | 44,930 | 41,674 | ||||||||
Asia Pacific | 17,817 | 18,896 | 16,226 | ||||||||
Africa | 10,837 | 6,837 | 41,417 | ||||||||
Middle East | 5,526 | 2,308 | 9,467 | ||||||||
Commonwealth of Independent States | 1,443 | 8,222 | 1,929 | ||||||||
Total | $ | 180,045 | $ | 197,554 | $ | 172,808 |
December 31, | |||||||
2018 | 2017 | ||||||
New Venture | $ | 38,430 | $ | 33,183 | |||
Imaging Services | 5,075 | 4,121 | |||||
Devices | 527 | — | |||||
Total | $ | 44,032 | $ | 37,304 |
Unbilled receivables at December 31, 2017 | $ | 37,304 | |
Recognition of unbilled receivables | 153,611 | ||
Revenues billed to customers | (146,883 | ) | |
Unbilled receivables at December 31, 2018 | $ | 44,032 |
December 31, | |||||||
2018 | 2017 | ||||||
New Venture | $ | 5,797 | $ | 6,548 | |||
Imaging Services | 307 | 676 | |||||
Devices | 626 | 633 | |||||
Optimization Software & Services | 980 | 1,053 | |||||
Total | $ | 7,710 | $ | 8,910 |
Deferred revenue at December 31, 2017 | $ | 8,910 | |
Cash collected in excess of revenue recognized | 25,234 | ||
Recognition of deferred revenue (a) | (26,434 | ) | |
Deferred revenue at December 31, 2018 | $ | 7,710 |
December 31, | ||||||||
2018 | 2017 | |||||||
Senior secured second-priority lien notes (maturing December 15, 2021) | $ | 120,569 | $ | 120,569 | ||||
Senior secured third-priority lien notes (redeemed March 26, 2018) | — | 28,497 | ||||||
Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | — | 10,000 | ||||||
Equipment capital leases | 2,938 | 279 | ||||||
Other debt | 1,159 | 1,382 | ||||||
Costs associated with issuances of debt | (2,925 | ) | (3,983 | ) | ||||
Total | 121,741 | 156,744 | ||||||
Current portion of long-term debt and lease obligations | (2,228 | ) | (40,024 | ) | ||||
Non-current portion of long-term debt and lease obligations | $ | 119,513 | $ | 116,720 |
• | extend the maturity date of the Credit Facility by approximately four years (from August 22, 2019 to August 16, 2023), subject to the retirement or extension of the maturity date of the Second Lien Notes, as defined below, which mature on December 15, 2021; |
• | increase the maximum revolver amount by $10 million (from $40 million to $50 million); |
• | increase the borrowing base percentage of the net orderly liquidation value as it relates to the multi-client data library (not to exceed $28.5 million, up from the previous maximum of $15 million for the multi-client data library component); |
• | include the eligible billed receivables of the Mexican Subsidiary up to a maximum of $5 million in the borrowing base calculation and joins the Mexican Subsidiary as a borrower thereunder (with a maximum exposure of $5 million) and require the equity and assets of the Mexican Subsidiary to be pledged to secure obligations under the Credit Facility; |
• | modify the interest rate such that the maximum interest rate remains consistent with the fixed interest rate prior to the Third Amendment (that is, 3.00% per annum for domestic rate loans and 4.00% per annum for LIBOR rate loans), but now lowers the range down to a minimum interest rate of 2.00% for domestic rate loans and 3.00% for LIBOR rate loans based on a leverage ratio for the preceding four-quarter period; |
• | decrease the minimum excess borrowing availability threshold which (if the Borrowers have minimum excess borrowing availability below any such threshold) triggers the agent’s right to exercise dominion over cash and deposit accounts; and |
• | modify the trigger required to test for compliance with the fixed charge coverage ratio, which is further described below. |
Date | Percentage | |
2019 | 105.500% | |
2020 | 103.500% | |
2021 and thereafter | 100.000% |
Years Ending December 31, | Short-Term and Long-Term Debt | Capital Lease Obligations | Other Financing | Total | ||||||||||||
2019 | $ | — | $ | 1,069 | 1,159 | $ | 2,228 | |||||||||
2020 | — | 1,135 | — | 1,135 | ||||||||||||
2021 | 120,569 | 734 | — | 121,303 | ||||||||||||
Total | $ | 120,569 | $ | 2,938 | $ | 1,159 | $ | 124,666 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Domestic | $ | (59,212 | ) | $ | (12,487 | ) | $ | (41,246 | ) | ||
Foreign | (8,468 | ) | (16,866 | ) | (19,060 | ) | |||||
Total | $ | (67,680 | ) | $ | (29,353 | ) | $ | (60,306 | ) |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Current: | |||||||||||
Federal | $ | — | $ | (166 | ) | $ | — | ||||
State and local | 65 | 116 | 28 | ||||||||
Foreign | 8,905 | 5,494 | 5,574 | ||||||||
Deferred: | |||||||||||
Federal | (346 | ) | (1,263 | ) | — | ||||||
Foreign | (5,906 | ) | (4,157 | ) | (1,181 | ) | |||||
Total income tax expense | $ | 2,718 | $ | 24 | $ | 4,421 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Expected income tax expense at 21% for 2018 and 35% for 2017 and 2016 | $ | (14,213 | ) | $ | (10,274 | ) | $ | (21,107 | ) | ||
Foreign tax rate differential | 74 | (2,914 | ) | 5,932 | |||||||
Foreign tax differences | 4,703 | (5,610 | ) | (4,828 | ) | ||||||
Global intangible low tax income inclusion | 3,443 | — | — | ||||||||
State and local taxes | 65 | 116 | 28 | ||||||||
Nondeductible expenses | 1,604 | 4,308 | (259 | ) | |||||||
Change in U.S. tax rate | — | 77,410 | — | ||||||||
Expired capital loss | — | 1,114 | 1,321 | ||||||||
Valuation allowance: | |||||||||||
Valuation allowance on expiring capital losses | — | (1,114 | ) | (1,321 | ) | ||||||
Valuation allowance on operations | 7,042 | (63,012 | ) | 24,655 | |||||||
Total income tax expense | $ | 2,718 | $ | 24 | $ | 4,421 |
December 31, | |||||||
2018 | 2017 | ||||||
Deferred income tax assets: | |||||||
Accrued expenses | $ | 1,126 | $ | 1,976 | |||
Allowance accounts | 6,415 | 2,960 | |||||
Net operating loss carryforward | 96,854 | 87,705 | |||||
Equity method investment | 35,292 | 35,292 | |||||
Original issue discount | 8,073 | 9,624 | |||||
Interest limitation | 5,845 | — | |||||
Basis in identified intangibles | 4,146 | 9,408 | |||||
Tax credit carryforwards | 5,345 | 6,929 | |||||
Contingency accrual | — | 788 | |||||
Other | 4,600 | 4,035 | |||||
Total deferred income tax asset | 167,696 | 158,717 | |||||
Valuation allowance | (160,505 | ) | (153,463 | ) | |||
Net deferred income tax asset | 7,191 | 5,254 | |||||
Deferred income tax liabilities: | |||||||
Unbilled receivables | — | (3,501 | ) | ||||
Total deferred income tax asset, net | $ | 7,191 | $ | 1,753 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Beginning balance | $ | 447 | $ | 1,299 | $ | 1,250 | |||||
Increases in unrecognized tax benefits – current year positions | — | 59 | 49 | ||||||||
Decreases in unrecognized tax benefits – prior year position | — | (911 | ) | — | |||||||
Ending balance | $ | 447 | $ | 447 | $ | 1,299 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(Accrual for) reduction of loss contingency related to legal proceedings (Footnote 8) | $ | — | $ | (5,000 | ) | $ | 1,168 | ||||
Recovery of INOVA bad debts | — | 844 | 3,983 | ||||||||
Loss on bond exchange | — | — | (2,182 | ) | |||||||
Other income (expense) | (436 | ) | 211 | (1,619 | ) | ||||||
Total other income (expense), net | $ | (436 | ) | $ | (3,945 | ) | $ | 1,350 |
A summary of accounts receivable follows (in thousands): | December 31, | ||||||
2018 | 2017 | ||||||
Accounts receivable, principally trade | $ | 26,558 | $ | 20,050 | |||
Less allowance for doubtful accounts | (430 | ) | (572 | ) | |||
Accounts receivable, net | $ | 26,128 | $ | 19,478 |
A summary of inventories follows (in thousands): | December 31, | ||||||
2018 | 2017 | ||||||
Raw materials and purchased subassemblies | $ | 20,011 | $ | 20,448 | |||
Work-in-process | 1,032 | 1,146 | |||||
Finished goods | 8,111 | 7,953 | |||||
Less reserve for excess and obsolete inventories | (15,024 | ) | (15,039 | ) | |||
Inventories, net | $ | 14,130 | $ | 14,508 |
December 31, | |||||||
2018 | 2017 | ||||||
Buildings | $ | 15,707 | $ | 15,822 | |||
Machinery and equipment | 132,135 | 145,654 | |||||
Seismic rental equipment | 1,423 | 1,677 | |||||
Furniture and fixtures | 3,859 | 3,869 | |||||
Other | 30,104 | 28,965 | |||||
Total | 183,228 | 195,987 | |||||
Less accumulated depreciation | (133,634 | ) | (143,834 | ) | |||
Less impairment of long-lived assets | (36,553 | ) | — | ||||
Property, plant, equipment and seismic rental equipment, net | $ | 13,041 | $ | 52,153 |
A summary of accrued expenses follows (in thousands): | December 31, | ||||||
2018 | 2017 | ||||||
Compensation, including compensation-related taxes and commissions | $ | 14,502 | $ | 19,809 | |||
Accrued multi-client data library acquisition costs | 3,746 | 5,104 | |||||
Income tax payable | 7,577 | 1,868 | |||||
Accrual for loss contingency related to legal proceedings (Footnote 8) | — | 3,750 | |||||
Other | 5,586 | 8,166 | |||||
Total | $ | 31,411 | $ | 38,697 |
A summary of other long-term liabilities follows (in thousands): | December 31, | ||||||
2018 | 2017 | ||||||
Deferred lease liabilities | 11,465 | 12,811 | |||||
Other | 429 | 1,115 | |||||
Total | $ | 11,894 | $ | 13,926 |
E&P Technology & Services | Optimization Software & Services | Total | |||||||||
Balance at January 1, 2017 | $ | 2,943 | $ | 19,265 | $ | 22,208 | |||||
Impact of foreign currency translation adjustments | — | 1,881 | 1,881 | ||||||||
Balance at December 31, 2017 | 2,943 | 21,146 | 24,089 | ||||||||
Impact of foreign currency translation adjustments | — | (1,174 | ) | (1,174 | ) | ||||||
Balance at December 31, 2018 | $ | 2,943 | $ | 19,972 | $ | 22,915 |
Option Price per Share | Outstanding | Vested | Available for Grant | ||||||||
January 1, 2016 | $34.20 - $245.85 | 560,797 | 384,305 | 97,003 | |||||||
Increase in shares authorized | — | — | — | 1,150,940 | |||||||
Granted | 3.10 | 415,000 | — | (415,000 | ) | ||||||
Vested | — | — | 67,480 | — | |||||||
Cancelled/forfeited | 3.10 - 245.85 | (128,162 | ) | (103,432 | ) | 18,895 | |||||
Restricted stock granted out of option plans | — | — | — | (259,300 | ) | ||||||
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans | — | — | — | 7,182 | |||||||
December 31, 2016 | $3.10 - $245.85 | 847,635 | 348,353 | 599,720 | |||||||
Granted | 13.15 | 156,000 | — | (156,000 | ) | ||||||
Vested | — | — | 149,537 | — | |||||||
Exercised | 3.10 | (15,000 | ) | (15,000 | ) | — | |||||
Cancelled/forfeited | 3.10 - 245.85 | (98,294 | ) | (47,612 | ) | 82,118 | |||||
Restricted stock granted out of option plans | — | — | — | (59,500 | ) | ||||||
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans | — | — | — | 22,065 | |||||||
December 31, 2017 | 3.10 - 245.85 | 890,341 | 435,278 | 488,403 | |||||||
Increase in shares authorized | — | — | — | 1,200,000 | |||||||
Granted | 24.50 | 10,000 | — | (10,000 | ) | ||||||
Vested | — | — | 153,944 | — | |||||||
Exercised | 3.10 | (70,086 | ) | (70,086 | ) | — | |||||
Cancelled/forfeited | 3.10 - 245.85 | (44,365 | ) | (44,231 | ) | 2,568 | |||||
Restricted stock granted out of option plans | — | — | — | (996,775 | ) | ||||||
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans | — | — | — | 48,524 | |||||||
December 31, 2018 | $3.10 - $151.35 | 785,890 | 474,905 | 732,720 |
Option Price per Share | Outstanding | Weighted Average Exercise Price of Outstanding Options | Weighted Average Remaining Contract Life | Vested | Weighted Average Exercise Price of Vested Options | ||||||||||
$3.10 - $57.90 | 558,997 | $ | 15.64 | 7.2 years | 248,012 | $ | 24.32 | ||||||||
$61.05 - $71.85 | 75,231 | $ | 62.17 | 4.7 years | 75,231 | $ | 62.17 | ||||||||
$81.60 - $99.60 | 108,610 | $ | 88.94 | 3.6 years | 108,610 | $ | 88.94 | ||||||||
$106.05 - $151.35 | 43,052 | $ | 108.84 | 2.3 years | 43,052 | $ | 108.84 | ||||||||
Totals | 785,890 | $ | 35.33 | 5.4 years | 474,905 | $ | 52.76 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value (000’s) | ||||||||||||
Total outstanding at January 1, 2018 | 890,341 | $ | 36.17 | 6.4 years | $ | 6,774 | ||||||||||
Options granted | 10,000 | $ | 24.50 | $ | 15.23 | |||||||||||
Options exercised | (70,086 | ) | $ | 3.10 | ||||||||||||
Options cancelled | (134 | ) | $ | 61.05 | ||||||||||||
Options forfeited | (44,231 | ) | $ | 100.85 | ||||||||||||
Total outstanding at December 31, 2018 | 785,890 | $ | 35.33 | 5.4 years | $ | 572 | ||||||||||
Options exercisable and vested at December 31, 2018 | 474,905 | $ | 52.76 | 5 years | $ | 213 |
Years Ended December 31, | |||||
2018 | 2017 | 2016 | |||
Risk-free interest rates | 2.78% | 2.14% | 1.3% | ||
Expected lives (in years) | 5.0 | 5.0 | 5.5 | ||
Expected dividend yield | —% | —% | —% | ||
Expected volatility | 73.67% | 74.41% | 78.76% |
Number of Shares/Units | ||
Total nonvested at January 1, 2018 | 201,702 | |
Granted | 996,775 | |
Vested | (151,852 | ) |
Forfeited | (2,500 | ) |
Total nonvested at December 31, 2018 | 1,044,125 |
Risk-free interest rates | 3.0 | % |
Expected lives (in years) | 5.31 | |
Expected dividend yield | — | % |
Expected volatility | 82.9 | % |
Number of Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value (000’s) | ||||||||||||
Total outstanding at January 1, 2016 | 216,532 | $ | 34.67 | |||||||||||||
SARs granted | 1,210,000 | $ | 3.10 | $ | 17.55 | |||||||||||
SARs cancelled | (10,399 | ) | $ | 34.20 | ||||||||||||
Total outstanding at December 31, 2016 | 1,416,133 | $ | 7.70 | |||||||||||||
SARs exercised | (713,330 | ) | $ | 3.10 | ||||||||||||
SARs cancelled | (136,939 | ) | $ | 7.70 | ||||||||||||
Total outstanding at December 31, 2017 | 565,864 | $ | 13.49 | |||||||||||||
SARs granted | 960,009 | $ | 8.85 | 8.85 | ||||||||||||
SARs exercised | (34,999 | ) | $ | 3.10 | ||||||||||||
SARs forfeited | (9,333 | ) | $ | 45.00 | ||||||||||||
Total outstanding at December 31, 2018 | 1,481,541 | $ | 10.53 | 8.1 years | $ | 718 | ||||||||||
SARs exercisable and vested at December 31, 2018 | — | $ | — |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Stock-based compensation expense | $ | 3,337 | $ | 2,552 | $ | 3,267 | |||||
Tax benefit related thereto | (698 | ) | (862 | ) | (1,168 | ) | |||||
Stock-based compensation expense, net of tax | $ | 2,639 | $ | 1,690 | $ | 2,099 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Stock appreciation rights expense | $ | 822 | $ | 6,611 | 547 | ||||||
Tax benefit related thereto | (173 | ) | (2,314 | ) | (191 | ) | |||||
Stock appreciation rights expense, net of tax | $ | 649 | $ | 4,297 | $ | 356 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Cash paid during the period for: | ||||||||||||
Interest | $ | 5,731 | $ | 14,181 | $ | 15,691 | ||||||
Income taxes | 3,260 | 7,030 | 4,474 | |||||||||
Non-cash items from investing and financing activities: | ||||||||||||
Purchase of computer equipment financed through capital leases | 3,297 | — | — | |||||||||
Leasehold improvement paid by landlord | — | — | 955 | |||||||||
Issuance of stock in bond exchange | — | — | 10,741 | |||||||||
Transfer of inventory to property, plant and equipment | — | — | 17,662 | (a) | ||||||||
Investment in multi-client data library financed through trade payables | 4,956 | 9,059 | — |
(a) | This transfer of $17.7 million of inventory to property, plant, equipment and seismic rental equipment in December 2016, relates to ocean bottom seismic equipment manufactured by the Company to be deployed in the acquisition of ocean bottom seismic data. |
Years Ending December 31, | |||
2019 | $ | 13,248 | |
2020 | 12,857 | ||
2021 | 11,075 | ||
2022 | 10,821 | ||
2023 | 9,205 | ||
Total | $ | 57,206 |
Three Months Ended | |||||||||||||||
March 31, 2018 | June 30, 2018 | September 30, 2018 | December 31, 2018 | ||||||||||||
Service revenues | $ | 25,086 | $ | 15,752 | $ | 37,105 | $ | 61,095 | |||||||
Product revenues | 8,422 | 8,991 | 10,095 | 13,499 | |||||||||||
Total net revenues | 33,508 | 24,743 | 47,200 | 74,594 | |||||||||||
Gross profit (loss) | 6,853 | (1,517 | ) | 16,475 | 37,809 | ||||||||||
Loss from operations | (12,640 | ) | (22,519 | ) | (2,452 | ) | (16,661 | ) | |||||||
Interest expense, net | (3,836 | ) | (2,911 | ) | (3,022 | ) | (3,203 | ) | |||||||
Other income (expense), net | (791 | ) | 84 | 91 | 180 | ||||||||||
Income tax expense (benefit) | 1,072 | 154 | 2,079 | (587 | ) | ||||||||||
Net income attributable to noncontrolling interests | (87 | ) | (366 | ) | (74 | ) | (246 | ) | |||||||
Net loss applicable to ION | $ | (18,426 | ) | $ | (25,866 | ) | $ | (7,536 | ) | $ | (19,343 | ) | |||
Net loss per share: | |||||||||||||||
Basic | $ | (1.44 | ) | $ | (1.86 | ) | $ | (0.54 | ) | $ | (1.38 | ) | |||
Diluted | $ | (1.44 | ) | $ | (1.86 | ) | $ | (0.54 | ) | $ | (1.38 | ) |
Three Months Ended | |||||||||||||||
March 31, 2017 | June 30, 2017 | September 30, 2017 | December 31, 2017 | ||||||||||||
Service revenues | $ | 23,828 | $ | 34,454 | $ | 52,615 | $ | 48,513 | |||||||
Product revenues | 8,728 | 11,547 | 8,480 | 9,389 | |||||||||||
Total net revenues | 32,556 | 46,001 | 61,095 | 57,902 | |||||||||||
Gross profit | 6,101 | 15,618 | 30,109 | 23,811 | |||||||||||
Income (loss) from operations | (13,912 | ) | (3,572 | ) | 9,936 | (1,151 | ) | ||||||||
Interest expense, net | (4,464 | ) | (4,241 | ) | (3,959 | ) | (4,045 | ) | |||||||
Other income (expense), net | (5,068 | ) | 192 | 722 | 209 | ||||||||||
Income tax expense (benefit) | (418 | ) | 2,402 | 1,686 | (3,646 | ) | |||||||||
Net income attributable to noncontrolling interests | (316 | ) | (418 | ) | (78 | ) | (53 | ) | |||||||
Net income (loss) applicable to ION | $ | (23,342 | ) | $ | (10,441 | ) | $ | 4,935 | $ | (1,394 | ) | ||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | (1.98 | ) | $ | (0.88 | ) | $ | 0.42 | $ | (0.12 | ) | ||||
Diluted | $ | (1.98 | ) | $ | (0.88 | ) | $ | 0.41 | $ | (0.12 | ) |
• | ION Geophysical Corporation and the Guarantors (in each case, reflecting investments in subsidiaries utilizing the equity method of accounting). |
• | All other subsidiaries of ION Geophysical Corporation that are non-guarantors. |
• | The consolidating adjustments necessary to present ION Geophysical Corporation’s results on a consolidated basis. |
December 31, 2018 | |||||||||||||||||||
Balance Sheet | ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||
(In thousands) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 13,782 | $ | 47 | $ | 19,722 | $ | — | $ | 33,551 | |||||||||
Accounts receivable, net | 8 | 17,349 | 8,771 | — | 26,128 | ||||||||||||||
Unbilled receivables | — | 12,697 | 31,335 | — | 44,032 | ||||||||||||||
Inventories | — | 8,721 | 5,409 | — | 14,130 | ||||||||||||||
Prepaid expenses and other current assets | 3,891 | 1,325 | 2,566 | — | 7,782 | ||||||||||||||
Total current assets | 17,681 | 40,139 | 67,803 | — | 125,623 | ||||||||||||||
Deferred income tax asset | 805 | 6,261 | 125 | — | 7,191 | ||||||||||||||
Property, plant, equipment and seismic rental equipment, net | 489 | 8,922 | 3,630 | — | 13,041 | ||||||||||||||
Multi-client data library, net | — | 70,380 | 3,164 | — | 73,544 | ||||||||||||||
Investment in subsidiaries | 836,002 | 247,359 | — | (1,083,361 | ) | — | |||||||||||||
Goodwill | — | — | 22,915 | — | 22,915 | ||||||||||||||
Intercompany receivables | — | 305,623 | 66,021 | (371,644 | ) | — | |||||||||||||
Other assets | 1,723 | 643 | 69 | — | 2,435 | ||||||||||||||
Total assets | $ | 856,700 | $ | 679,327 | $ | 163,727 | $ | (1,455,005 | ) | $ | 244,749 | ||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Current maturities of long-term debt | $ | 1,159 | $ | 1,069 | $ | — | $ | — | $ | 2,228 | |||||||||
Accounts payable | 2,407 | 29,602 | 2,904 | — | 34,913 | ||||||||||||||
Accrued expenses | 7,011 | 10,036 | 14,364 | — | 31,411 | ||||||||||||||
Accrued multi-client data library royalties | — | 29,040 | 216 | — | 29,256 | ||||||||||||||
Deferred revenue | — | 6,515 | 1,195 | — | 7,710 | ||||||||||||||
Total current liabilities | 10,577 | 76,262 | 18,679 | — | 105,518 | ||||||||||||||
Long-term debt, net of current maturities | 117,644 | 1,869 | — | — | 119,513 | ||||||||||||||
Intercompany payables | 721,817 | — | — | (721,817 | ) | — | |||||||||||||
Other long-term liabilities | 430 | 5,698 | 5,766 | — | 11,894 | ||||||||||||||
Total liabilities | 850,468 | 83,829 | 24,445 | (721,817 | ) | 236,925 | |||||||||||||
Equity: | |||||||||||||||||||
Common stock | 140 | 290,460 | 47,776 | (338,236 | ) | 140 | |||||||||||||
Additional paid-in capital | 952,626 | 180,700 | 203,908 | (384,608 | ) | 952,626 | |||||||||||||
Accumulated earnings (deficit) | (926,092 | ) | 390,691 | (12,475 | ) | (378,216 | ) | (926,092 | ) | ||||||||||
Accumulated other comprehensive income (loss) | (20,442 | ) | 4,324 | (22,023 | ) | 17,699 | (20,442 | ) | |||||||||||
Due from ION Geophysical Corporation | — | (270,677 | ) | (79,496 | ) | 350,173 | — | ||||||||||||
Total stockholders’ equity | 6,232 | 595,498 | 137,690 | (733,188 | ) | 6,232 | |||||||||||||
Noncontrolling interests | — | — | 1,592 | — | 1,592 | ||||||||||||||
Total equity | 6,232 | 595,498 | 139,282 | (733,188 | ) | 7,824 | |||||||||||||
Total liabilities and equity | $ | 856,700 | $ | 679,327 | $ | 163,727 | $ | (1,455,005 | ) | $ | 244,749 |
December 31, 2017 | |||||||||||||||||||
Balance Sheet | ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||
(In thousands) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 39,344 | $ | 66 | $ | 12,646 | $ | — | $ | 52,056 | |||||||||
Accounts receivable, net | 50 | 12,496 | 6,932 | — | 19,478 | ||||||||||||||
Unbilled receivables | — | 34,484 | 2,820 | — | 37,304 | ||||||||||||||
Inventories | — | 8,686 | 5,822 | — | 14,508 | ||||||||||||||
Prepaid expenses and other current assets | 2,427 | 4,530 | 686 | — | 7,643 | ||||||||||||||
Total current assets | 41,821 | 60,262 | 28,906 | — | 130,989 | ||||||||||||||
Deferred income tax asset | 1,264 | 336 | 153 | — | 1,753 | ||||||||||||||
Property, plant, equipment and seismic rental equipment, net | 511 | 7,170 | 44,472 | — | 52,153 | ||||||||||||||
Multi-client data library, net | — | 81,442 | 7,858 | — | 89,300 | ||||||||||||||
Investment in subsidiaries | 693,679 | 321,934 | — | (1,015,613 | ) | — | |||||||||||||
Goodwill | — | — | 24,089 | — | 24,089 | ||||||||||||||
Intercompany receivables | — | 162,017 | 60,394 | (222,411 | ) | — | |||||||||||||
Other assets | 686 | 1,811 | 288 | — | 2,785 | ||||||||||||||
Total assets | $ | 737,961 | $ | 634,972 | $ | 166,160 | $ | (1,238,024 | ) | $ | 301,069 | ||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Current maturities of long-term debt | $ | 39,774 | $ | 250 | $ | — | $ | — | $ | 40,024 | |||||||||
Accounts payable | 1,774 | 20,982 | 2,195 | — | 24,951 | ||||||||||||||
Accrued expenses | 12,284 | 16,957 | 9,456 | — | 38,697 | ||||||||||||||
Accrued multi-client data library royalties | — | 26,824 | 211 | — | 27,035 | ||||||||||||||
Deferred revenue | — | 7,231 | 1,679 | — | 8,910 | ||||||||||||||
Total current liabilities | 53,832 | 72,244 | 13,541 | — | 139,617 | ||||||||||||||
Long-term debt, net of current maturities | 116,691 | 29 | — | — | 116,720 | ||||||||||||||
Intercompany payables | 537,417 | — | — | (537,417 | ) | — | |||||||||||||
Other long-term liabilities | 454 | 6,084 | 7,388 | — | 13,926 | ||||||||||||||
Total liabilities | 708,394 | 78,357 | 20,929 | (537,417 | ) | 270,263 | |||||||||||||
Equity: | |||||||||||||||||||
Common stock | 120 | 290,460 | 49,394 | (339,854 | ) | 120 | |||||||||||||
Additional paid-in capital | 903,247 | 180,701 | 202,290 | (382,991 | ) | 903,247 | |||||||||||||
Accumulated earnings (deficit) | (854,921 | ) | 317,324 | (9,247 | ) | (308,077 | ) | (854,921 | ) | ||||||||||
Accumulated other comprehensive income (loss) | (18,879 | ) | 4,372 | (19,681 | ) | 15,309 | (18,879 | ) | |||||||||||
Due from ION Geophysical Corporation | — | (236,242 | ) | (78,764 | ) | 315,006 | — | ||||||||||||
Total stockholders’ equity | 29,567 | 556,615 | 143,992 | (700,607 | ) | 29,567 | |||||||||||||
Noncontrolling interests | — | — | 1,239 | — | 1,239 | ||||||||||||||
Total equity | 29,567 | 556,615 | 145,231 | (700,607 | ) | 30,806 | |||||||||||||
Total liabilities and equity | $ | 737,961 | $ | 634,972 | $ | 166,160 | $ | (1,238,024 | ) | $ | 301,069 |
Year Ended December 31, 2018 | |||||||||||||||||||
Income Statement | ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||
(In thousands) | |||||||||||||||||||
Total net revenues | $ | — | $ | 96,649 | $ | 83,396 | $ | — | $ | 180,045 | |||||||||
Cost of goods sold | — | 85,186 | 35,239 | — | 120,425 | ||||||||||||||
Gross profit | — | 11,463 | 48,157 | — | 59,620 | ||||||||||||||
Total operating expenses | 32,888 | 29,235 | 51,769 | — | 113,892 | ||||||||||||||
Loss from operations | (32,888 | ) | (17,772 | ) | (3,612 | ) | — | (54,272 | ) | ||||||||||
Interest expense, net | (13,010 | ) | (136 | ) | 174 | — | (12,972 | ) | |||||||||||
Intercompany interest, net | 1,124 | (12,137 | ) | 11,013 | — | — | |||||||||||||
Equity in earnings (losses) of investments | (26,446 | ) | 37,219 | — | (10,773 | ) | — | ||||||||||||
Other income (expense) | (196 | ) | 116 | (356 | ) | — | (436 | ) | |||||||||||
Income (loss) before income taxes | (71,416 | ) | 7,290 | 7,219 | (10,773 | ) | (67,680 | ) | |||||||||||
Income tax expense (benefit) | (245 | ) | (6,711 | ) | 9,674 | — | 2,718 | ||||||||||||
Net income (loss) | (71,171 | ) | 14,001 | (2,455 | ) | (10,773 | ) | (70,398 | ) | ||||||||||
Net income attributable to noncontrolling interests | — | — | (773 | ) | — | (773 | ) | ||||||||||||
Net income (loss) attributable to ION | $ | (71,171 | ) | $ | 14,001 | $ | (3,228 | ) | $ | (10,773 | ) | $ | (71,171 | ) | |||||
Comprehensive net income (loss) | $ | (72,734 | ) | $ | 13,953 | $ | (4,797 | ) | $ | (8,383 | ) | $ | (71,961 | ) | |||||
Comprehensive income attributable to noncontrolling interest | — | — | (773 | ) | — | (773 | ) | ||||||||||||
Comprehensive net income (loss) attributable to ION | $ | (72,734 | ) | $ | 13,953 | $ | (5,570 | ) | $ | (8,383 | ) | $ | (72,734 | ) | |||||
Year Ended December 31, 2017 | |||||||||||||||||||
Income Statement | ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||
(In thousands) | |||||||||||||||||||
Total net revenues | $ | — | $ | 148,590 | $ | 48,964 | $ | — | $ | 197,554 | |||||||||
Cost of goods sold | — | 90,754 | 31,161 | — | 121,915 | ||||||||||||||
Gross profit | — | 57,836 | 17,803 | — | 75,639 | ||||||||||||||
Total operating expenses | 39,000 | 28,020 | 17,318 | — | 84,338 | ||||||||||||||
Income (loss) from operations | (39,000 | ) | 29,816 | 485 | — | (8,699 | ) | ||||||||||||
Interest expense, net | (16,729 | ) | (107 | ) | 127 | — | (16,709 | ) | |||||||||||
Intercompany interest, net | 1,084 | (6,613 | ) | 5,529 | — | — | |||||||||||||
Equity in earnings (losses) of investments | 27,696 | 67,290 | — | (94,986 | ) | — | |||||||||||||
Other income (expense) | (4,610 | ) | (407 | ) | 1,072 | — | (3,945 | ) | |||||||||||
Income (loss) before income taxes | (31,559 | ) | 89,979 | 7,213 | (94,986 | ) | (29,353 | ) | |||||||||||
Income tax expense (benefit) | (1,317 | ) | (1,427 | ) | 2,768 | — | 24 | ||||||||||||
Net income (loss) | (30,242 | ) | 91,406 | 4,445 | (94,986 | ) | (29,377 | ) | |||||||||||
Net income attributable to noncontrolling interests | — | — | (865 | ) | — | (865 | ) | ||||||||||||
Net income (loss) attributable to ION | $ | (30,242 | ) | $ | 91,406 | $ | 3,580 | $ | (94,986 | ) | $ | (30,242 | ) | ||||||
Comprehensive net income (loss) | $ | (27,373 | ) | $ | 91,358 | $ | 6,550 | $ | (97,043 | ) | $ | (26,508 | ) | ||||||
Comprehensive income attributable to noncontrolling interest | — | — | (865 | ) | — | (865 | ) | ||||||||||||
Comprehensive net income (loss) attributable to ION | $ | (27,373 | ) | $ | 91,358 | $ | 5,685 | $ | (97,043 | ) | $ | (27,373 | ) | ||||||
Year Ended December 31, 2016 | |||||||||||||||||||
Income Statement | ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||
(In thousands) | |||||||||||||||||||
Total net revenues | $ | — | $ | 91,465 | $ | 81,343 | $ | — | $ | 172,808 | |||||||||
Cost of goods sold | — | 87,660 | 49,116 | — | 136,776 | ||||||||||||||
Gross profit | — | 3,805 | 32,227 | — | 36,032 | ||||||||||||||
Total operating expenses | 31,438 | 27,279 | 20,486 | — | 79,203 | ||||||||||||||
Income (loss) from operations | (31,438 | ) | (23,474 | ) | 11,741 | — | (43,171 | ) | |||||||||||
Interest expense, net | (18,406 | ) | (173 | ) | 94 | — | (18,485 | ) | |||||||||||
Intercompany interest, net | 978 | (4,397 | ) | 3,419 | — | — | |||||||||||||
Equity in earnings (losses) of investments | (19,756 | ) | 23,368 | — | (3,612 | ) | — | ||||||||||||
Other income (expense) | 3,528 | 723 | (2,901 | ) | — | 1,350 | |||||||||||||
Income (loss) before income taxes | (65,094 | ) | (3,953 | ) | 12,353 | (3,612 | ) | (60,306 | ) | ||||||||||
Income tax expense | 54 | 1,337 | 3,030 | — | 4,421 | ||||||||||||||
Net income (loss) | (65,148 | ) | (5,290 | ) | 9,323 | (3,612 | ) | (64,727 | ) | ||||||||||
Net income attributable to noncontrolling interests | — | — | (421 | ) | — | (421 | ) | ||||||||||||
Net income (loss) attributable to ION | $ | (65,148 | ) | $ | (5,290 | ) | $ | 8,902 | $ | (3,612 | ) | $ | (65,148 | ) | |||||
Comprehensive net income (loss) | $ | (72,331 | ) | $ | (5,290 | ) | $ | 1,719 | $ | 4,208 | $ | (71,694 | ) | ||||||
Comprehensive income attributable to noncontrolling interest | — | — | (421 | ) | — | (421 | ) | ||||||||||||
Comprehensive net income (loss) attributable to ION | $ | (72,331 | ) | $ | (5,290 | ) | $ | 1,298 | $ | 4,208 | $ | (72,115 | ) | ||||||
Year Ended December 31, 2018 | |||||||||||||||
Statement of Cash Flows | ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Total Consolidated | |||||||||||
(In thousands) | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net cash provided by (used in) operating activities | $ | (37,659 | ) | $ | 39,407 | $ | 5,350 | $ | 7,098 | ||||||
Cash flows from investing activities: | |||||||||||||||
Investment in multi-client data library | — | (25,307 | ) | (2,969 | ) | (28,276 | ) | ||||||||
Purchase of property, plant, equipment and seismic rental equipment | (392 | ) | (959 | ) | (163 | ) | (1,514 | ) | |||||||
Net cash used in investing activities | (392 | ) | (26,266 | ) | (3,132 | ) | (29,790 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Repayments under revolving line of credit | (10,000 | ) | — | — | (10,000 | ) | |||||||||
Payments on notes payable and long-term debt | (30,169 | ) | (638 | ) | — | (30,807 | ) | ||||||||
Cost associated with issuance of debt | (1,247 | ) | — | — | (1,247 | ) | |||||||||
Intercompany lending | 7,983 | (12,522 | ) | 4,539 | — | ||||||||||
Proceeds from employee stock purchases and exercise of stock options | 214 | — | — | 214 | |||||||||||
Net proceeds from issuance of stocks | 46,999 | — | — | 46,999 | |||||||||||
Dividend payment to noncontrolling interest | (200 | ) | — | — | (200 | ) | |||||||||
Other financing activities | (1,151 | ) | — | — | (1,151 | ) | |||||||||
Net cash provided by (used in) financing activities | 12,429 | (13,160 | ) | 4,539 | 3,808 | ||||||||||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash | — | — | 319 | 319 | |||||||||||
Net increase (decrease) in cash and cash equivalents | (25,622 | ) | (19 | ) | 7,076 | (18,565 | ) | ||||||||
Cash, cash equivalents and restricted cash at beginning of period | 39,707 | 66 | 12,646 | 52,419 | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 14,085 | $ | 47 | $ | 19,722 | $ | 33,854 |
December 31, 2018 | |||||||||||||||
ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Total Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Cash and cash equivalents | $ | 13,782 | $ | 47 | $ | 19,722 | $ | 33,551 | |||||||
Restricted cash included in other long-term assets | 303 | — | — | 303 | |||||||||||
Total cash, cash equivalents, and restricted cash shown in statements of cash flows | $ | 14,085 | $ | 47 | $ | 19,722 | $ | 33,854 |
Year Ended December 31, 2017 | |||||||||||||||
Statement of Cash Flows | ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Total Consolidated | |||||||||||
(In thousands) | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net cash provided by (used in) operating activities | $ | (22,315 | ) | $ | 73,154 | $ | (23,227 | ) | $ | 27,612 | |||||
Cash flows from investing activities: | |||||||||||||||
Investment in multi-client data library | — | (23,710 | ) | — | (23,710 | ) | |||||||||
Purchase of property, plant, equipment and seismic rental equipment | (165 | ) | (817 | ) | (81 | ) | (1,063 | ) | |||||||
Net cash used in investing activities | (165 | ) | (24,527 | ) | (81 | ) | (24,773 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Payments on notes payable and long-term debt | (1,591 | ) | (3,167 | ) | (58 | ) | (4,816 | ) | |||||||
Cost associated with issuance of debt | (53 | ) | — | — | (53 | ) | |||||||||
Intercompany lending | 38,732 | (45,609 | ) | 6,877 | — | ||||||||||
Proceeds from employee stock purchases and exercise of stock options | 1,619 | — | — | 1,619 | |||||||||||
Payments to repurchase bonds | — | — | — | — | |||||||||||
Dividend payment to noncontrolling interest | (100 | ) | — | — | (100 | ) | |||||||||
Other financing activities | (243 | ) | — | — | (243 | ) | |||||||||
Net cash provided by (used in) financing activities | 38,364 | (48,776 | ) | 6,819 | (3,593 | ) | |||||||||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash | — | — | (260 | ) | (260 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 15,884 | (149 | ) | (16,749 | ) | (1,014 | ) | ||||||||
Cash, cash equivalents and restricted cash at beginning of period | 23,823 | 215 | 29,395 | 53,433 | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 39,707 | $ | 66 | $ | 12,646 | $ | 52,419 |
December 31, 2017 | |||||||||||||||
ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Total Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Cash and cash equivalents | $ | 39,344 | $ | 66 | $ | 12,646 | $ | 52,056 | |||||||
Restricted cash included in prepaid expenses and other current assets | 60 | — | — | 60 | |||||||||||
Restricted cash included in other long-term assets | 303 | — | — | 303 | |||||||||||
Total cash, cash equivalents, and restricted cash shown in statements of cash flows | $ | 39,707 | $ | 66 | $ | 12,646 | $ | 52,419 |
Year Ended December 31, 2016 | |||||||||||||||
Statement of Cash Flows | ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Total Consolidated | |||||||||||
(In thousands) | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net cash provided by (used in) operating activities | $ | (30,732 | ) | $ | 53,107 | $ | (21,382 | ) | $ | 993 | |||||
Cash flows from investing activities: | |||||||||||||||
Investment in multi-client data library | — | (14,884 | ) | — | (14,884 | ) | |||||||||
Purchase of property, plant and equipment | (73 | ) | (313 | ) | (1,072 | ) | (1,458 | ) | |||||||
Proceeds from sale of a cost-method investment | 2,698 | — | — | 2,698 | |||||||||||
Net cash provided by (used in) investing activities | 2,625 | (15,197 | ) | (1,072 | ) | (13,644 | ) | ||||||||
Cash flows from financing activities: | |||||||||||||||
Payments under revolving line of credit | (5,000 | ) | — | — | (5,000 | ) | |||||||||
Borrowings under revolving line of credit | 15,000 | — | — | 15,000 | |||||||||||
Payments on notes payable and long-term debt | (17,070 | ) | (6,316 | ) | (248 | ) | (23,634 | ) | |||||||
Cost associated with issuance of debt | (6,744 | ) | — | — | (6,744 | ) | |||||||||
Repurchase of common stock | (964 | ) | — | — | (964 | ) | |||||||||
Intercompany lending | 31,867 | (34,771 | ) | 2,904 | — | ||||||||||
Other financing activities | (252 | ) | — | — | (252 | ) | |||||||||
Net cash provided by (used in) financing activities | 16,837 | (41,087 | ) | 2,656 | (21,594 | ) | |||||||||
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash | — | — | 1,386 | 1,386 | |||||||||||
Net decrease in cash and cash equivalents | (11,270 | ) | (3,177 | ) | (18,412 | ) | (32,859 | ) | |||||||
Cash, cash equivalents and restricted cash at beginning of period | 35,093 | 3,392 | 47,807 | 86,292 | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 23,823 | $ | 215 | $ | 29,395 | $ | 53,433 |
December 31, 2016 | |||||||||||||||
ION Geophysical Corporation | The Guarantors | All Other Subsidiaries | Total Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Cash and cash equivalents | $ | 23,042 | $ | 215 | $ | 29,395 | $ | 52,652 | |||||||
Restricted cash included in prepaid expenses and other current assets | 260 | — | — | 260 | |||||||||||
Restricted cash included in other long-term assets | 521 | — | — | 521 | |||||||||||
Total cash, cash equivalents, and restricted cash shown in statements of cash flows | $ | 23,823 | $ | 215 | $ | 29,395 | $ | 53,433 |
Long-term Debt and Lease Obligations - Redemption Percentages for Future Periods (Details) - Senior secured notes - Senior secured second-priority lien notes (maturing December 15, 2021) - Forecast |
Dec. 15, 2019 |
---|---|
2019 | |
Debt Instrument, Redemption [Line Items] | |
Notes redemption percentages | 105.50% |
2020 | |
Debt Instrument, Redemption [Line Items] | |
Notes redemption percentages | 103.50% |
2021 and thereafter | |
Debt Instrument, Redemption [Line Items] | |
Notes redemption percentages | 100.00% |
Certain Relationships and Related Party Transactions (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018
USD ($)
ft²
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Majority Shareholder | |||
Related Party Transaction [Line Items] | |||
Related party transaction, revenues from transactions with related party | $ 4.9 | $ 4.4 | $ 3.6 |
Receivables due from BGP | $ 1.6 | 0.6 | |
Company's outstanding common stock owned by related parties | 10.60% | ||
Board of Directors Chairman | |||
Related Party Transaction [Line Items] | |||
Company's outstanding common stock owned by related parties | 8.80% | ||
Payments for continued services agreement (less than) | $ 0.1 | ||
Area of office space subleased (sqft) | ft² | 4,100 | ||
Board of Directors Chairman | Manufacturing facility | |||
Related Party Transaction [Line Items] | |||
Payments for continued services agreement (less than) | $ 0.4 | $ 0.2 |
Income Taxes - Reconciliation of Expected Income Tax Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of the expected income tax expense on income (loss) before income taxes using the statutory federal income tax | |||||||||||
Expected income tax expense at 21% for 2018 and 35% for 2017 and 2016 | $ (14,213) | $ (10,274) | $ (21,107) | ||||||||
Foreign tax rate differential | 74 | (2,914) | 5,932 | ||||||||
Foreign tax differences | 4,703 | (5,610) | (4,828) | ||||||||
Global intangible low tax income inclusion | 3,443 | 0 | 0 | ||||||||
State and local taxes | 65 | 116 | 28 | ||||||||
Nondeductible expenses | 1,604 | 4,308 | (259) | ||||||||
Change in U.S. tax rate | 0 | 77,410 | 0 | ||||||||
Expired capital loss | 0 | 1,114 | 1,321 | ||||||||
Valuation allowance: | |||||||||||
Valuation allowance on expiring capital losses | 0 | (1,114) | (1,321) | ||||||||
Valuation allowance on operations | 7,042 | (63,012) | 24,655 | ||||||||
Total income tax expense | $ (587) | $ 2,079 | $ 154 | $ 1,072 | $ (3,646) | $ 1,686 | $ 2,402 | $ (418) | $ 2,718 | $ 24 | $ 4,421 |
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Foreign Currency Gains (Losses) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Cash and Cash Equivalents [Abstract] | |||
Short-term restricted cash | $ 0.3 | $ 0.4 | |
Foreign Currency Gains and Losses | |||
Total foreign currency transaction gains (losses) | $ (0.4) | $ (1.6) | $ (3.3) |
Supplemental Cash Flow Information and Non-Cash Activity (Tables) |
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Supplemental Cash Flow Information and Non-cash Activity | Supplemental disclosure of cash flow information follows (in thousands):
|
Summary of Significant Accounting Policies - Goodwill and Other Intangible Assets (Details) |
12 Months Ended |
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Dec. 31, 2018 | |
Goodwill | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Operational forecast period used in fair value inputs | 3 years |
VALUATION AND QUALIFYING ACCOUNTS |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
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Stockholder's Equity and Stock-based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity and Stock-based Compensation | Stockholders' Equity and Stock-based Compensation Public Equity Offering On February 21, 2018, the Company completed the public equity offering (the “Offering”) of its 1,820,000 shares of common stock at a public offering price of $27.50 per share, and warrants to purchase an additional 1,820,000 shares of the Company’s common stock pursuant to the Registration Statement on Form S-3 (No. 33-213769) filed with the Securities and Exchange Commission under the Securities Act of 1933 and declared effective on December 2, 2016. The net proceeds from this Offering were $47.0 million, including transaction expenses. A portion of the net proceeds were used to retire the Company’s $28.5 million Third Lien Notes in March 2018. The warrants have an exercise price of $33.60 per share, are immediately exercisable and expire on March 21, 2019. Stock Option Plans The Company has adopted stock option plans for eligible employees, directors and consultants, which provide for the granting of options to purchase shares of common stock. The options under these plans generally vest in equal annual installments over a four-year period and have a term of ten years. These options are typically granted at pre-established quarterly grant dates with an exercise price per share equal to or greater than the current market price and, upon exercise, are issued from the Company’s unissued common shares. Transactions under the stock option plans are summarized as follows:
Stock options outstanding at December 31, 2018 are summarized as follows:
Additional information related to the Company’s stock options follows:
The total intrinsic value of options exercised during 2018, 2017 and 2016 was $1.4 million, less than $0.1 million and less than $0.1 million, respectively. Cash received from option exercises under all share-based payment arrangements for 2018 and 2017 was $0.2 million and less than $0.1 million, respectively, and during 2016, there was no cash received. The weighted average grant date fair value for stock option awards granted during 2018, 2017 and 2016 was $15.23, $8.10 and $2.04 per share, respectively. The Company calculated the fair value of each stock option on the date of grant using the Black-Scholes option pricing model. The following assumptions were used for each respective period:
The computation of expected volatility during 2018, 2017 and 2016 was based on an equally weighted combination of historical volatility and market-based implied volatility. Historical volatility was calculated from historical data for a period of time approximately equal to the expected term of the option award, starting from the date of grant. Market-based implied volatility was derived from traded options on the Company’s common stock having a term of six months. The Company’s computation of expected life in 2018, 2017 and 2016 was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The risk-free interest rate assumption is based upon the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. Restricted Stock and Restricted Stock Unit Plans On November 30, 2018, the Company’s stockholders approved certain amendments to the Company’s Second Amended and Restated 2013 Long-term Incentive Plan (the “2013 LTIP”) including increasing the total number of shares of common stock available for issuance under the 2013 LTIP by 1.2 million shares, for a total of approximately 1.7 million shares, eliminating the restriction on the number of shares in the 2013 LTIP that can be issued as full value awards and certain other technical updates and clarifications related to Section 162(m) of the internal revenue code, as amended. The Company has issued restricted stock and restricted stock units under the Company’s 2013 LTIP, as amended and other applicable plans. Restricted stock units are awards that obligate the Company to issue a specific number of shares of common stock in the future if continued service vesting requirements are met. Non-forfeitable ownership of the common stock will vest over a period as determined by the Company in its sole discretion, generally in equal annual installments over a three-year period. Shares of restricted stock awarded may not be sold, assigned, transferred, pledged or otherwise encumbered by the grantee during the vesting period. On December 1, 2018, the Company issued 900,002 restricted stocks to selected employees with a grant date fair value $7.19, $6.51 and $5.89 for each of the tranches. The vesting of these restricted stocks is achieved through both a market condition and a service condition. The market condition is achieved, in part or in full, in the event that during the three-year period beginning on the date of grant the 20-day trailing volume-weighted average price of a share of common stock reaches or exceeds (i) $17.50 for the first 1/3 of the awards, (ii) $22.50 for the second 1/3 of the awards, and (iii) $27.50 for the final 1/3 of the awards. The service condition restricts the ability of the holders to exercise awards until certain service milestones have been reached such that (i) no more than 1/3 of the awards may be exercised, if vested, on and after the first anniversary of the date of grant, (ii) no more than 2/3 of the awards may be exercised, if vested, on and after the second anniversary of the date of grant and (iii) all of the awards may be exercised, if vested, on and after the third anniversary of the date of grant. The status of the Company’s restricted stock and restricted stock unit awards for 2018 follows:
At December 31, 2018, 2017 and 2016, the intrinsic value of restricted stock and restricted stock unit awards was approximately $5.4 million, $4.0 million and $1.7 million, respectively. The weighted average grant date fair value for restricted stock and restricted stock unit awards granted during 2018, 2017 and 2016 was $10.60, $11.36 and $3.81 per share, respectively. The total fair value of shares vested during 2018, 2017 and 2016 was $3.8 million, $0.6 million and $0.2 million, respectively. Stock Appreciation Rights Plan The Company has adopted a stock appreciation rights plan which provides for the award of stock appreciation rights (“SARs”) to directors and selected key employees and consultants. The awards under this plan are subject to the terms and conditions set forth in agreements between the Company and the holders. The exercise price per SAR is not to be less than one hundred percent of the fair market value of a share of common stock on the date of grant of the SAR. The term of each SAR shall not exceed ten years from the grant date. Upon exercise of a SAR, the holder shall receive a cash payment in an amount equal to the spread specified in the SAR agreement for which the SAR is being exercised. In no event will any shares of common stock be issued, transferred or otherwise distributed under the plan. On December 1, 2018, the Company issued 960,009 SARs awards to selected employees with an exercise price of $8.85 (“2018 SARs”). None of these 2018 SARs were awarded to non-employee directors. The 2018 SARs have the same service and market vesting conditions as the restricted stocks issued on December 1, 2018, as described above. The maximum value of each 2018 SARs is capped at $18.65 (the spread between the share price cap of $27.50 and the $8.85 per award price). The 2018 SARs are considered liability awards and as such, these amounts are accrued in the liability section of the consolidated balance sheets. The Company calculated the fair value of each 2018 SARs award as of December 31, 2018 using a Monte Carlo simulation model. The following assumptions were used:
On March 1, 2016, the Company issued 1,210,000 SARs awards to 15 selected key employees with an exercise price of $3.10 (“2016 SARs”). None of these 2016 SARs were awarded to non-employee directors. The vesting of these 2016 SARs is achieved through both a market condition and a service condition. The market condition is achieved, in part or in full, in the event that during the four-year period beginning on the date of grant the 20-day trailing volume-weighted average price of a share of common stock is (i) greater than 120% of the exercise price for the first 1/3 of the awards, (ii) greater than 125% of the exercise price for the second 1/3 of the awards and (iii) greater than 130% of the exercise price for the final 1/3 of the awards. The service condition restricts the ability of the holders to exercise awards until certain service milestones have been reached such that (i) no more than 1/3 of the awards may be exercised, if vested, on and after the first anniversary of the date of grant, (ii) no more than 2/3 of the awards may be exercised, if vested, on and after the second anniversary of the date of grant and (iii) all of the awards may be exercised, if vested, on and after the third anniversary of the date of grant. The maximum value of each 2016 SARs is capped at $19.40 (the spread between the share price cap of $22.50 and the $3.10 per award price). On December 13, 2017, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company authorized and approved the acceleration of the vesting date to December 13, 2017 for the second tranche of the Company’s outstanding 2016 SARs. The second tranche of the 2016 SARs awards was originally scheduled to vest on March 1, 2018. The vesting of the second tranche of the 2016 SARs awards was accelerated to facilitate the exercise by the 2016 SARs participants, if they so choose, of a larger portion of the 2016 SARs awards prior to year-end, as such an exercise would minimize the potential cash flow impact of any such exercise in the first quarter of 2018, would mitigate the ongoing mark to market accounting requirements for cash-settled 2016 SARs, and would afford the 2016 SARs participants liquidity to invest in common stock of the Company to further align their interests with those of the Company’s stockholders. Participants exercised 663,330 SARs awards at a $9.95 gain per share. The 2016 SARs are considered liability awards and as such, these amounts are accrued in the liability section of the consolidated balance sheets. The Company calculated the fair value of each 2016 SARs award on the date of grant and remeasured at each reporting period using a Monte Carlo simulation model. However, as of December 31, 2018, the fair value of the 2016 SARs awards were derived using the intrinsic value method since the final tranche of the 2016 SARs awards vest on March 1, 2019, less than twelve months from the balance sheet date. On March 1, 2015, the Company issued 207,207 SARs awards to 16 selected key employees with an exercise price of $34.20 (“2015 SARs”). None of these 2015 SARs were awarded to non-employee directors. The 2015 SARs awards number and exercise price have been retroactively adjusted to reflect the one-for-fifteen reverse stock split completed on February 4, 2016. The vesting of these 2015 SARs is achieved through both a market condition and a service condition. The market condition is achieved, in part or in full, in the event that during the four-year period beginning on the date of grant the 20-day trailing volume-weighted average price of a share of common stock is (i) greater than 120% of the exercise price for the first 1/3 of the awards, (ii) greater than 125% of the exercise price for the second 1/3 of the awards and (iii) greater than 130% of the exercise price for the final 1/3 of the awards. The exercise condition restricts the ability of the holders to exercise awards until certain service milestones have been reached such that (i) no more than 1/3 of the awards may be exercised, if vested, on and after the first anniversary of the date of grant, (ii) no more than 2/3 of the awards may be exercised, if vested, on and after the second anniversary of the date of grant and (iii) all of the awards may be exercised, if vested, on and after the third anniversary of the date of grant. The 2015 SARs are considered liability awards and as such, these amounts are accrued in the liability section of the consolidated balance sheets. The Company calculated the fair value of each 2015 SARs award on the date of grant and remeasured at each reporting period using a Monte Carlo simulation model. As of December 31, 2018, the market condition had not been met for the 2015 SARs. If the market condition is not met by March 1, 2019, the 2015 SARs award will expire. The Company recorded $0.8 million of share-based compensation expense during 2018, $6.6 million during 2017 and $0.5 million in 2016, related to employee SARs. Additional information related to the Company's SARs follows:
Stock-based Compensation Expense The following tables summarizes stock-based compensation expense for the years ended December 31, 2018, 2017 and 2016 as follows (in thousands):
Equity Investment Program To encourage the Company’s executive officers and other key employees to purchase common stock of the Company and further align their interests with those of the Company’s stockholders, the Board authorized and approved an equity investment program (the “Program”) pursuant to which certain of the executive officers and other key employees of the Company are permitted, but not obligated, to purchase unregistered shares of common stock of the Company directly from the Company at market prices. In connection with any such purchases, the Committee authorized and approved, on December 13, 2017, a grant by the Company to such purchasing executive officers and key employees of a certain number of shares of restricted stock. On December 13, 2017, the Committee also authorized and approved to grant to certain executive officers and key employees a certain number of shares of restricted stock in connection with certain purchases of shares of the Company’s common stock in the open market. Specifically, for each five (5) shares directly purchased from the Company or in the open market during a defined period (to expire no later than December 31, 2017), the Company will issue one (1) share of restricted stock, subject to certain limitations as to the total number of restricted shares to be issued by the Company. Provided that an executive officer or key employee remains employed with the Company until March 1, 2018, the restricted stock will be granted as of March 1, 2018, will vest in full on the date that is 90 days after the grant date and will be subject to the other terms and conditions of the Company’s form of restricted stock agreement and the Company’s 2013 LTIP. The Company sold, in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended on December 14, 2017, 120,567 shares of Company common stock at $13.05 per share (the closing price of the Company’s common stock on the NYSE on such date) and executive officers and other key employees purchased 219,346 shares in the open market. On May 30, 2018, 43,865 shares of restricted stock vested at $24.75 per share. |
Benefit Plans |
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Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans The Company has a 401(k) retirement savings plan, which covers substantially all employees. Employees may voluntarily contribute up to 60% of their compensation, as defined, to the plan. The Company matched the employee contribution at a rate of 50% of the first 6% of compensation contributed to the plan. Company contributions to the plans were $0.9 million, $0.8 million and $0.8 million, during 2018, 2017 and 2016, respectively. |
Long-term Debt and Lease Obligations (Tables) |
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Obligations | The following is a summary of long-term debt and lease obligation (in thousands):
(a) The maturity of the revolving credit facility will accelerate to December 15, 2021 if the Company is unable to repay or extend the maturity of the Second Lien Notes. |
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Debt Instrument Redemption Percentages | On or after December 15, 2019, the Company may on one or more occasions redeem all or a part of the Second Lien Notes at the redemption prices set forth below, plus accrued and unpaid interest and special interest, if any, on the Second Lien Notes redeemed during the twelve-month period beginning on December 15th of the years indicated below:
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Equipment Capital Leases | A summary of future principal obligations under long-term debt and equipment capital lease obligations follows (in thousands):
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||
General Description and Principles of Consolidation | General Description and Principles of Consolidation ION Geophysical Corporation and its subsidiaries offer a full suite of services and products for seismic data acquisition and processing. The consolidated financial statements include the accounts of ION Geophysical Corporation and its majority-owned subsidiaries (collectively referred to as the “Company” or “ION”). Intercompany balances and transactions have been eliminated. Certain reclassifications were made to previously reported amounts in the consolidated financial statements and notes thereto to make them consistent with the current period presentation. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates are made at discrete points in time based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of judgment and, therefore, cannot be determined with precision. Areas involving significant estimates include, but are not limited to, accounts and unbilled receivables, inventory valuation, sales forecasts related to multi-client data libraries, goodwill and intangible asset valuation and deferred taxes. Actual results could materially differ from those estimates. |
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Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company places its temporary cash investments with high credit quality financial institutions. At times such investments may be in excess of the Federal Deposit Insurance Corporation insurance limit. |
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Accounts and Unbilled Receivables | Accounts and Unbilled Receivables Accounts and unbilled receivables are recorded at cost, less the related allowance for doubtful accounts. The Company considers current information and events regarding the customers’ ability to repay their obligations, such as the length of time the receivable balance is outstanding, the customers’ credit worthiness and historical experience. Unbilled receivables relate to revenues recognized on multi-client surveys, imaging services and devices equipment repairs on a proportionate basis, and on licensing of multi-client data libraries for which invoices have not yet been presented to the customer. |
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Accounts and Unbilled Receivables | Accounts and Unbilled Receivables Accounts and unbilled receivables are recorded at cost, less the related allowance for doubtful accounts. The Company considers current information and events regarding the customers’ ability to repay their obligations, such as the length of time the receivable balance is outstanding, the customers’ credit worthiness and historical experience. Unbilled receivables relate to revenues recognized on multi-client surveys, imaging services and devices equipment repairs on a proportionate basis, and on licensing of multi-client data libraries for which invoices have not yet been presented to the customer. |
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Inventories | Inventories Inventories are stated at the lower of cost (primarily first-in, first-out method) or net realizable value. The Company provides reserves for estimated obsolescence or excess inventory equal to the difference between cost of inventory and its estimated net realizable value based upon assumptions about future demand for the Company’s products, market conditions and the risk of obsolescence driven by new product introductions. |
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Property, Plant, Equipment and Seismic Rental Equipment | Property, Plant, Equipment and Seismic Rental Equipment Property, plant, equipment and seismic rental equipment are stated at cost. Depreciation expense is provided straight-line over the following estimated useful lives:
Expenditures for renewals and betterments are capitalized; repairs and maintenance are charged to expense as incurred. The cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the accounts and any gain or loss is reflected in operating expenses. The Company evaluates the recoverability of long-lived assets, including property, plant, equipment and seismic rental equipment, when indicators of impairment exist, relying on a number of factors including operating results, business plans, economic projections and anticipated future cash flows. Impairment in the carrying value of an asset held for use is recognized whenever anticipated future undiscounted cash flows from an asset are estimated to be less than its carrying value. The amount of the impairment recognized is the difference between the carrying value of the asset and its fair value. For 2018, the Company identified an indicator of impairment as it relates to its cable-based ocean bottom acquisition technologies. |
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Multi-Client Data Library | Multi-Client Data Library The multi-client data library consists of seismic surveys that are offered for licensing to customers on a non-exclusive basis. The capitalized costs include costs paid to third parties for the acquisition of data and related activities associated with the data creation activity and direct internal processing costs, such as salaries, benefits, computer-related expenses and other costs incurred for seismic data project design and management. The Company’s method of amortizing the costs of an in-process multi-client data library (the period during which the seismic data is being acquired and/or processed, referred to as the “New Venture” phase) consists of determining the percentage of actual revenue recognized to the total estimated revenues (which includes both revenues estimated to be realized during the New Venture phase and estimated revenues from the licensing of the resulting “on-the-shelf” data survey) and multiplying that percentage by the total cost of the project (the sales forecast method). The Company considers a multi-client data survey to be complete when all work on the creation of the seismic data is finished and that data survey is available for licensing. Once a multi-client data survey is complete, the data survey is considered “on-the-shelf” and the Company’s method of amortization is then the greater of (i) the sales forecast method or (ii) the straight-line basis over a four-year period. The greater amount of amortization resulting from the sales forecast method or the straight-line amortization policy is applied on a cumulative basis at the individual survey level. Under this policy, the Company first records amortization using the sales forecast method. The cumulative amortization recorded for each survey is then compared with the cumulative straight-line amortization. The four-year period utilized in this cumulative comparison commences when the data survey is determined to be complete. If the cumulative straight-line amortization is higher for any specific survey, additional amortization expense is recorded, resulting in accumulated amortization being equal to the cumulative straight-line amortization for such survey. The Company has determined the amortization period of four years based upon its historical experience that indicates that the majority of its revenues from multi-client surveys are derived during the acquisition and processing phases and during four years subsequent to survey completion. The Company estimates the ultimate revenue expected to be derived from a particular seismic data survey over its estimated useful economic life to determine the costs to amortize, if greater than straight-line amortization. That estimate is made by the Company at the project’s initiation. For a completed multi-client survey, the Company reviews the estimate quarterly. If during any such review, the Company determines that the ultimate revenue for a survey is expected to be materially more or less than the original estimate of ultimate revenue for such survey, the Company decreases or increases (as the case may be) the amortization rate attributable to the future revenue from such survey. In addition, in connection with such reviews, the Company evaluates the recoverability of the multi-client data library, and, if required, records an impairment charge with respect to such data. |
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Equity Method Investment | Equity Method Investment The Company determined that INOVA Geophysical is a variable interest entity because the Company’s voting rights with respect to INOVA Geophysical are not proportionate to its ownership interest and substantially all of INOVA Geophysical’s activities are conducted on behalf of the Company and BGP, a related party to the Company. The Company is not the primary beneficiary of INOVA Geophysical because it does not have the power to direct the activities of INOVA Geophysical that most significantly impact its economic performance. Accordingly, the Company does not consolidate INOVA Geophysical, but instead accounts for INOVA Geophysical using the equity method of accounting. Under this method, an investment is carried at the acquisition cost, plus the Company’s equity in undistributed earnings or losses since acquisition, less distributions received. |
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Noncontrolling Interests | Noncontrolling Interests The Company has non-redeemable noncontrolling interests. Non-redeemable noncontrolling interests in majority-owned affiliates are reported as a separate component of equity in “Noncontrolling interests” in the Consolidated Balance Sheets. Net income attributable to noncontrolling interests is stated separately in the Consolidated Statements of Operations. The activity for this noncontrolling interest relates to proprietary processing projects in Brazil. |
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Goodwill | Goodwill Goodwill is allocated to reporting units, which are either the operating segment or one reporting level below the operating segment. For purposes of performing the impairment test for goodwill, the Company established the following reporting units: E&P Technology & Services, Optimization Software & Services and Devices. The Company is required to evaluate the carrying value of its goodwill at least annually for impairment, or more frequently if facts and circumstances indicate that it is more likely than not impairment has occurred. The Company formally evaluates the carrying value of its goodwill for impairment as of December 31 for each of its reporting units. The Company first performs a qualitative assessment by evaluating relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit exceeds its carrying amount. If the Company is unable to conclude qualitatively that it is more likely than not that a reporting unit’s fair value exceeds its carrying value, then it will use a two-step quantitative assessment of the fair value of a reporting unit. To determine the fair value of these reporting units, the Company uses a discounted future returns valuation model, which includes a variety of level 3 inputs. The key inputs for the model include the operational three-year forecast for the Company and the then-current market discount factor. Additionally, the Company compares the sum of the estimated fair values of the individual reporting units less consolidated debt to the Company’s overall market capitalization as reflected by the Company’s stock price. If the carrying value of a reporting unit that includes goodwill is determined to be more than the fair value of the reporting unit, there exists the possibility of impairment of goodwill. An impairment loss of goodwill is measured in two steps by first allocating the fair value of the reporting unit to net assets and liabilities including recorded and unrecorded intangible assets to determine the implied carrying value of goodwill. The next step is to measure the difference between the carrying value of goodwill and the implied carrying value of goodwill, and, if the implied carrying value of goodwill is less than the carrying value of goodwill, an impairment loss is recorded equal to the difference. |
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Revenue from contracts with customers | Revenue From Contracts With Customers On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606 - “Revenue from Contracts with Customers” and all the related amendments (“ASC 606”), using the modified retrospective method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaborative arrangements and financial instruments. The adoption of ASC 606 did not have a material impact on the Consolidated Balance Sheets or Consolidated Statements of Operations for any of our reporting segments. |
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Research, Development and Engineering | Research, Development and Engineering Research, development and engineering costs primarily relate to activities that are designed to improve the quality of the subsurface image and overall acquisition economics of the Company’s customers. The costs associated with these activities are expensed as incurred. These costs include prototype material and field testing expenses, along with the related salaries and stock-based compensation, facility costs, consulting fees, tools and equipment usage and other miscellaneous expenses associated with these activities. |
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Stock-Based Compensation | Stock-Based Compensation The Company accounts for all stock-based payment awards issued to employees and directors, including employee stock options, restricted stocks units, restricted stocks and stock appreciation rights under the provisions of ASC 718 “Compensation – Stock Compensation” (“ASC 718”). The Company estimates the value of stock-based payment awards on the date of grant using an option pricing model such as Black-Scholes or Monte Carlo simulation. The determination of the fair value of stock-based payment awards is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, expected stock price volatility over the term of the awards, actual and projected stock-based instrument exercise behaviors, risk-free interest rate and expected dividends. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company recognizes stock-based compensation expense on the straight-line basis over the requisite service period of each award that are ultimately expected to vest. |
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Income Taxes | Income Taxes Income taxes are accounted for under the liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, including operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. The Company records a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized (see Footnote 7 “Income Taxes”). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. |
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Debt issuance cost | Debt Issuance Costs The Company presents debt issuance costs related to a debt liability as a direct deduction from the carrying amount of that debt liability on the Consolidated Balance Sheets and amortizes such costs using the effective interest method whereas debt issuance costs related to line of credit arrangement is presented within “Other assets” on the Consolidated Balance Sheets and amortized ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit arrangeme |
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Foreign Currency Gains and Losses | Foreign Currency Gains and Losses Assets and liabilities of the Company’s subsidiaries operating outside the United States that have a functional currency other than the U.S. dollar have been translated to U.S. dollars using the exchange rate in effect at the balance sheet date. Results of foreign operations have been translated using the average exchange rate during the periods of operation. Resulting translation adjustments have been recorded as a component of Accumulated Other Comprehensive Loss. Foreign currency transaction gains and losses, as they occur, are included in “Other income (expense), net” on the Consolidated Statements of Operations. |
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Concentration of Foreign Sales Risk | Concentration of Foreign Sales Risk The majority of the Company’s foreign sales are denominated in U.S. dollars. For 2018, 2017 and 2016, international sales comprised 75%, 76% and 78%, respectively, of total net revenues. Since 2008, global economic problems and uncertainties have generally increased in scope and nature. The volatility in oil prices have continued to impact the global market throughout 2018. To the extent that world events or economic conditions negatively affect the Company’s future sales to customers in many regions of the world, as well as the collectability of the Company’s existing receivables, the Company’s future results of operations, liquidity and financial condition would be adversely affected. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-2, “Leases (Topic 842)” which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The guidance will be effective for annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. The Company will adopt ASU 2016-2 on January 1, 2019 using the modified retrospective method. The Company has completed its evaluation of operating leases related to offices, processing centers, warehouse spaces and, to a lesser extent, certain equipment. The Company expects the adoption of the standard will result in approximately $50 million to $60 million in right-of-use assets and lease obligations on the Consolidated Balance Sheets. The Company expects the Income Statement recognition to appear similar to its current methodology. The Company will elect the practical expedients upon transition which will retain the lease classification for leases and any unamortized initial direct costs that existed prior to the adoption of the standard. On January 1, 2018, the Company adopted ASC 606 and all the related amendments using the modified retrospective method. The adoption did not have a material impact to the Company’s revenue recognition policy under the previous standard and adoption of the new standard did not result in an adjustment to the Company’s beginning retained earnings balance. On January 1, 2018, the Company adopted ASU 2016-18, Statement of Cash Flows “Restricted Cash (a consensus of the FASB Emerging Issues Task Force)”, using a retrospective transition method to each period presented. The new standard no longer requires the Company to present transfers between cash and cash equivalents and restricted cash in the statements of cash flows. Adoption of the new standard resulted in a decrease of $0.4 million and $0.6 million in net cash provided by operating activities as previously reported for the years ended December 31, 2017 and 2016, respectively. See the Consolidated Statements of Cash Flows above which includes a reconciliation of cash and cash equivalents to total cash, cash equivalents, and restricted cash. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” The guidance will replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates The guidance is effective for public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted for interim and annual periods beginning after December 15, 2018. The Company is in the initial stages of evaluating the impact of this standard on the Consolidated Financial Statements. |
Goodwill (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the carrying amount of goodwill | The following is a summary of the changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 (in thousands):
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Recent Accounting Pronouncements |
12 Months Ended |
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Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-2, “Leases (Topic 842)” which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The guidance will be effective for annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. The Company will adopt ASU 2016-2 on January 1, 2019 using the modified retrospective method. The Company has completed its evaluation of operating leases related to offices, processing centers, warehouse spaces and, to a lesser extent, certain equipment. The Company expects the adoption of the standard will result in approximately $50 million to $60 million in right-of-use assets and lease obligations on the Consolidated Balance Sheets. The Company expects the Income Statement recognition to appear similar to its current methodology. The Company will elect the practical expedients upon transition which will retain the lease classification for leases and any unamortized initial direct costs that existed prior to the adoption of the standard. On January 1, 2018, the Company adopted ASC 606 and all the related amendments using the modified retrospective method. The adoption did not have a material impact to the Company’s revenue recognition policy under the previous standard and adoption of the new standard did not result in an adjustment to the Company’s beginning retained earnings balance. On January 1, 2018, the Company adopted ASU 2016-18, Statement of Cash Flows “Restricted Cash (a consensus of the FASB Emerging Issues Task Force)”, using a retrospective transition method to each period presented. The new standard no longer requires the Company to present transfers between cash and cash equivalents and restricted cash in the statements of cash flows. Adoption of the new standard resulted in a decrease of $0.4 million and $0.6 million in net cash provided by operating activities as previously reported for the years ended December 31, 2017 and 2016, respectively. See the Consolidated Statements of Cash Flows above which includes a reconciliation of cash and cash equivalents to total cash, cash equivalents, and restricted cash. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” The guidance will replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates The guidance is effective for public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted for interim and annual periods beginning after December 15, 2018. The Company is in the initial stages of evaluating the impact of this standard on the Consolidated Financial Statements. |
Legal Matters |
12 Months Ended |
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Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | Legal Matters WesternGeco A more thorough treatment of history of this litigation is set forth above in Item 1.A, “Risk Factors”. As noted in that section, in 2014, because a jury found that we infringed four WesternGeco patents, the United States District Court for the Southern District of Texas (the “District Court”) entered a Final Judgment against us in the amount of $123.8 million ($12.5 million in reasonable royalties, $93.4 million in lost profits, $10.9 million in pre-judgment interest on lost profits, and $9.4 million in supplemental damages). In 2015, the United States Court of Appeals for the Federal Circuit in Washington, D.C. (the “Court of Appeals”) reversed, in part, the District Court, holding that the lost profits, which were attributable to foreign seismic surveys, were not available to WesternGeco under the Patent Act. The Company had recorded a loss contingency accrual of $123.8 million because of the District Court’s ruling. As a result of the reversal by the Court of Appeals, the Company reduced the loss contingency accrual to $22.0 million. On February 26, 2016, WesternGeco appealed the Court of Appeals’ decision to the Supreme Court, as to both lost profits and “enhanced” damages (damages which are available for willful infringement, and which neither the District Court nor the Trial Court awarded). On June 20, 2016, the Supreme Court vacated the Court of Appeals’ ruling, although it did not address lost profits at that time. Rather, in light of changes in case law regarding the standard of proof for willfulness in patent infringement, the Supreme Court remanded the case to the Court of Appeals for a determination of whether enhanced damages were appropriate. On November 14, 2016, the District Court ordered our sureties to pay principal and interest on the royalty damages previously awarded. On November 25, 2016, the Company paid WesternGeco the $20.8 million due pursuant to the order, and it reduced its loss contingency accrual to zero. On March 14, 2017, the District Court held a hearing on whether impose additional damages for willfulness. The Judge found that the Company’s infringement was willful, and awarded enhanced damages of $5.0 million to WesternGeco (WesternGeco had sought $43.6 million in such damages.) The District Court also ordered the appeal bond to be released and discharged. The Court’s findings and ruling were memorialized in an order issued on May 16, 2017. On June 30, 2017, the Company and WesternGeco agreed that neither of them would appeal the District Court's award of $5.0 million in enhanced damages. Upon assessment of the enhanced damages, the Company accrued $5.0 million in the first quarter of 2017. As the Company have paid the $5.0 million, the accrual has been adjusted, and as of December 31, 2018, the loss contingency accrual was zero. WesternGeco filed a second petition in the Supreme Court on February 17, 2017, appealing the lost profits issue again. On May 30, 2017, the Supreme Court called for the U.S. Solicitor General’s views on whether or not the Supreme Court ought to hear WesternGeco’s appeal. On December 6, 2017, the Solicitor General filed its brief, and took the position that the Supreme Court ought to hear the appeal and that foreign lost profits ought to be available. On January 12, 2018, the Supreme Court agreed to hear the appeal. The specific issue before the Supreme Court was whether lost profits arising from use of prohibited combinations occurring outside of the United States are categorically unavailable in cases where patent infringement is proven under 35 U.S.C. § 271(f)(2) (the statute under which the Company were held to have infringed WesternGeco’s patents, and upon which the District Court and Court of Appeals relied in entering their rulings). The Supreme Court heard oral arguments on April 16, 2018. The Company argued that the Court of Appeals’ decision that eliminated lost profits ought to be affirmed. WesternGeco and the Solicitor General argued that the Court of Appeals’ decision that eliminated lost profits ought to be reversed. On June 22, 2018, the Supreme Court reversed the judgment of the Court of Appeals, held that the award of lost profits to WesternGeco by the District Court was a permissible application of Section 284 of the Patent Act, and remanded the case back to the Court of Appeals for further proceedings consistent with its (the Supreme Court’s) opinion. On July 24, 2018, the Supreme Court issued the judgment that returned the case to the Court of Appeals. On July 27, 2018, the Court of Appeals vacated its September 21, 2016 judgment with respect to damages, and ordered WesternGeco and the Company to submit supplemental briefing on what relief is appropriate in light of the Supreme Court’s decision. The Company and WesternGeco each submitted briefing in accordance with the Court of Appeals’ order (the last brief was filed on September 7, 2018). The Company argued in its brief to the Court of Appeals that lost profits were not available to WesternGeco because the jury instructions required them to find that the Company had been WesternGeco’s direct competitor in the survey markets where WesternGeco had lost profits, and that the jury could not have found so. Additionally, we argued that the award of lost profits and reasonable royalties ought to be vacated and retried on separate grounds due to the outcome of an Inter Partes Review (“IPR”) filed with the Patent Trial and Appeal Board (“PTAB”) of the Patent and Trademark Office. Until the Court of Appeals’ January 11, 2019 decision issued (which is described below), the IPR was an administrative proceeding that was separate from the 2009 lawsuit. By means of the IPR, the Company joined a challenge to the validity of several of WesternGeco’s patent claims that another company had filed. While the 2009 lawsuit was pending on appeal, the PTAB invalidated four of the six patent claims that formed the basis for the lawsuit judgment against the Company. WesternGeco appealed the PTAB’s invalidation of its patents to the Court of Appeals. On May 7, 2018, the Court of Appeals affirmed the PTAB’s invalidation of the patents, and on July 16, 2018, the Court of Appeals denied WesternGeco’s petition for a rehearing. On December 13, 2018, WesternGeco filed a petition with the Supreme Court, arguing that the Court of Appeals ought to have overturned the decision of the PTAB. (As of February 7, 2019, the Supreme Court has not indicated whether it will, or will not, hear WesternGeco’s appeal.) In the same brief to the Court of Appeals in which the Company made its “direct competitor” argument, the Company argued that the Court of Appeals’ affirmation of the PTAB’s decision precluded WesternGeco’s damages claims, and that the Court of Appeals should order a new trial as to the royalty damages already paid by the Company. The Company also argued that if the Court of Appeals did not find its “direct competitor” argument persuasive, the Court should nonetheless vacate the District Court’s award of royalty damages and lost profits damages and order a new trial as to both royalty damages and lost profits. In its briefs to the Court of Appeals, WesternGeco argued that the only remaining issue was whether lost profits were unavailable to WesternGeco due to the Company’s “direct competitor” argument, and argued that the invalidation of four of its six patent claims by the PTAB (which was affirmed by the Court of Appeals) should have no effect on lost profits or on the royalty award already paid by the Company. WesternGeco also argued that lost profits should be available notwithstanding the Company’s “direct competitor” argument. Oral arguments took place on November 16, 2018, and on January 11, 2019, the Court of Appeals issued its ruling. In its ruling, the Court of Appeals refused to disturb the award of reasonable royalties to WesternGeco (which the Company paid in 2016), and rejected the Company’s “direct competitor” argument, but vacated the District Court’s award of lost profits damages and remanded the case back to the District Court to determine whether to hold a new trial as to lost profits. The Court of Appeals also ruled that its affirmance of the PTAB’s decision eliminated four of the five patent claims that could have supported the award of lost profits, leaving only one remaining patent claim that could support an award of lost profits. The Court of Appeals further held that the lost profits award can be reinstated by the District Court if the existing trial record establishes that the jury must have found that the technology covered by the one remaining patent claim was essential for performing the surveys upon which lost profits were based. To make such a finding, the District Court must conclude that the present trial record establishes that there was no dispute that the technology covered by the one remaining patent claim, independent of the technology of the now-invalid claims, was required to perform the surveys. The Court of Appeals ruling further provides that if, but only if, the District Court concludes that WesternGeco established at trial, with undisputed evidence, that the remaining claim covers technology that was necessary to perform the surveys, then the District Court may deny a new trial and reinstate lost profits. Other The Company has been named in various other lawsuits or threatened actions that are incidental to its ordinary business. Litigation is inherently unpredictable. Any claims against the Company, whether meritorious or not, could be time-consuming, cause the Company to incur costs and expenses, require significant amounts of management time and result in the diversion of significant operational resources. The results of these lawsuits and actions cannot be predicted with certainty. Management currently believes that the ultimate resolution of these matters will not have a material adverse impact on the financial condition, results of operations or liquidity of the Company. |
Details of Selected Balance Sheet Accounts - Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Compensation, including compensation-related taxes and commissions | $ 14,502 | $ 19,809 |
Accrued multi-client data library acquisition costs | 3,746 | 5,104 |
Income tax payable | 7,577 | 1,868 |
Accrual for loss contingency related to legal proceedings (Footnote 8) | 0 | 3,750 |
Other | 5,586 | 8,166 |
Total accrued expenses | $ 31,411 | $ 38,697 |
Stockholder's Equity and Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 3,337 | $ 2,552 | $ 3,267 |
Tax benefit related thereto | (698) | (862) | (1,168) |
Stock-based compensation expense, net of tax | 2,639 | 1,690 | 2,099 |
Stock appreciation rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 822 | 6,611 | 547 |
Tax benefit related thereto | (173) | (2,314) | (191) |
Stock-based compensation expense, net of tax | $ 649 | $ 4,297 | $ 356 |
Stockholder's Equity and Stock-based Compensation - Stock Options Outstanding Activity (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Number of Shares | |||
Beginning balance (in shares) | 890,341 | 847,635 | 560,797 |
Options granted (in shares) | 10,000 | ||
Options exercised (in shares) | (70,086) | (15,000) | |
Options cancelled (in shares) | (134) | ||
Options forfeited (in shares) | (44,231) | ||
Ending balance (in shares) | 785,890 | 890,341 | 847,635 |
Options exercisable and vested (in shares) | 474,905 | ||
Weighted Average Exercise Price | |||
Beginning balance (usd per share) | $ 36.17 | ||
Options granted (usd per share) | 24.50 | ||
Options exercised (usd per share) | 3.10 | ||
Options cancelled (usd per share) | 61.05 | ||
Options forfeited (usd per share) | 100.85 | ||
Ending balance (usd per share) | 35.33 | $ 36.17 | |
Options exercisable and vested (usd per share) | 52.76 | ||
Additional Disclosures | |||
Weighted average grant date fair value for stock option awards (usd per share) | $ 15.23 | $ 8.10 | $ 2.04 |
Weighted average remaining contractual life, outstanding | 5 years 4 months 24 days | 6 years 4 months 24 days | |
Weighted average remaining contractual life, Options exercisable and vested | 5 years | ||
Aggregate intrinsic value, outstanding | $ 572 | $ 6,774 | |
Aggregate intrinsic value, Options exercisable and vested | $ 213 |
Other Income (Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
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Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Other Income and Expenses [Abstract] | |||||||||||
(Accrual for) reduction of loss contingency related to legal proceedings (Footnote 8) | $ 0 | $ (5,000) | $ 1,168 | ||||||||
Recovery of INOVA bad debts | 0 | 844 | 3,983 | ||||||||
Loss on bond exchange | 0 | 0 | (2,182) | ||||||||
Other income (expense) | (436) | 211 | (1,619) | ||||||||
Total other income (expense), net | $ 180 | $ 91 | $ 84 | $ (791) | $ 209 | $ 722 | $ 192 | $ (5,068) | $ (436) | $ (3,945) | $ 1,350 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Net revenues | $ 180,045 | $ 197,554 | $ 172,808 |
Cost of services and products | 120,425 | 121,915 | 136,776 |
Gross profit | 59,620 | 75,639 | 36,032 |
Operating expenses: | |||
Research, development and engineering | 18,182 | 16,431 | 17,833 |
Marketing and sales | 21,793 | 20,778 | 17,371 |
General, administrative and other operating expenses | 37,364 | 47,129 | 43,999 |
Impairment of long-lived assets | 36,553 | 0 | 0 |
Total operating expenses | 113,892 | 84,338 | 79,203 |
Loss from operations | (54,272) | (8,699) | (43,171) |
Interest expense, net | (12,972) | (16,709) | (18,485) |
Other income (expense), net | (436) | (3,945) | 1,350 |
Loss before income taxes | (67,680) | (29,353) | (60,306) |
Income tax expense | 2,718 | 24 | 4,421 |
Net income (loss) | (70,398) | (29,377) | (64,727) |
Net income attributable to noncontrolling interests | (773) | (865) | (421) |
Net loss attributable to ION | $ (71,171) | $ (30,242) | $ (65,148) |
Net loss per share: | |||
Basic (usd per share) | $ (5.20) | $ (2.55) | $ (5.71) |
Diluted (usd per share) | $ (5.20) | $ (2.55) | $ (5.71) |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 13,692 | 11,876 | 11,400 |
Diluted (in shares) | 13,692 | 11,876 | 11,400 |
Service | |||
Net revenues | $ 139,038 | $ 159,410 | $ 130,640 |
Cost of services and products | 100,557 | 103,124 | 115,763 |
Product | |||
Net revenues | 41,007 | 38,144 | 42,168 |
Cost of services and products | $ 19,868 | $ 18,791 | $ 21,013 |
Revenue from Contracts with Customers - Deferred Revenue (Details) $ in Thousands |
12 Months Ended |
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Dec. 31, 2018
USD ($)
| |
Revenue, Remaining Performance Obligation [Roll Forward] | |
Deferred revenue at December 31, 2017 | $ 8,910 |
Cash collected in excess of revenue recognized | 25,234 |
Recognition of deferred revenue | (26,434) |
Deferred revenue at December 31, 2018 | $ 7,710 |
Segment and Geographic Information - Depreciation and Amortization (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Segment Reporting Information [Line Items] | |||
Depreciation and amortization (including multi-client data library) | $ 57,751 | $ 63,694 | $ 55,310 |
Operating segments | E&P Technology & Services | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization (including multi-client data library) | 51,673 | 53,663 | 44,100 |
Operating segments | Operations Optimization | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization (including multi-client data library) | 995 | 1,349 | 1,780 |
Support and other | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization (including multi-client data library) | 5,083 | 8,682 | 9,430 |
Previously Reported | Operating segments | Ocean Bottom Integrated Technologies | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization (including multi-client data library) | $ 4,200 | $ 7,000 | $ 7,500 |
Revenue from Contracts with Customers - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Time period of contractual future performance obligations for which value not disclosed (or less) | 1 year |
Time period of contractual future performance obligations | For these usage-based licenses, revenue is recognized as the performance obligations are performed over the contract term, which is generally two to five years. |
Stockholder's Equity and Stock-based Compensation (Tables) |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transactions Under the Stock Option Plans | Transactions under the stock option plans are summarized as follows:
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Summary of Stock Options Outstanding | Stock options outstanding at December 31, 2018 are summarized as follows:
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Additional Information Related to the Company's Stock Options | Additional information related to the Company’s stock options follows:
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Schedule of Valuation Assumptions | The Company calculated the fair value of each stock option on the date of grant using the Black-Scholes option pricing model. The following assumptions were used for each respective period:
The following assumptions were used:
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Status of the Company's Restricted Stock and Restricted Stock Unit Awards | The status of the Company’s restricted stock and restricted stock unit awards for 2018 follows:
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Schedule of Share-based Compensation, Stock Appreciation Rights Award Activity | Additional information related to the Company's SARs follows:
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Summary of Stock-based Compensation Expense | The following tables summarizes stock-based compensation expense for the years ended December 31, 2018, 2017 and 2016 as follows (in thousands):
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sources of income (loss) before income taxes | The sources of income (loss) before income taxes are as follows (in thousands):
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Components of income taxes | Components of income taxes are as follows (in thousands):
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Reconciliation of the expected income tax expense on income (loss) before income taxes using the statutory federal income tax | A reconciliation of the expected income tax expense on income (loss) before income taxes using the statutory federal income tax rate of 21% for 2018 and 35% for 2017 and 2016 to income tax expense follows (in thousands):
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Tax effects of the cumulative temporary differences resulting in the net deferred income tax asset (liability) | The tax effects of the cumulative temporary differences resulting in the net deferred income tax asset (liability) are as follows (in thousands):
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Aggregate changes in gross amount of unrecognized tax benefits | During 2018, 2017 and 2016, the aggregate changes in the Company’s total gross amount of unrecognized tax benefits are summarized as follows (in thousands):
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Summary of Significant Accouting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property, Plant, Equipment and Seismic Rental Equipment | Property, plant, equipment and seismic rental equipment are stated at cost. Depreciation expense is provided straight-line over the following estimated useful lives:
A summary of property, plant, equipment and seismic rental equipment follows (in thousands):
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Schedule of Multi-Client Data Library | At December 31, 2018 and 2017, multi-client data library costs and accumulated amortization consisted of the following (in thousands):
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Revenue from Contracts with Customers |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company derives revenue from the sale or license of (i) multi-client and proprietary data, imaging services and E&P Advisors consulting services within its E&P Technology & Services segment; (ii) seismic data acquisition systems and other seismic equipment and (iii) seismic command and control software systems and software solutions for operations management within its Operations Optimization segment. All revenues of the E&P Technology & Services segment and the services component of revenues for the Optimization Software & Services group as part of the Operations Optimization segment are classified as services revenues. All other revenues are classified as product revenues. The Company uses a five-step model to determine proper revenue recognition from customer contracts. Revenue is recognized when (i) a contract is approved by all parties; (ii) the goods or services promised in the contract are identified; (iii) the consideration the Company expects to receive in exchange for the goods or services promised is determined; (iv) the consideration is allocated to the goods and services in the contract; and (v) control of the promised goods or services is transferred to the customer. The Company does not disclose the value of contractual future performance obligations such as backlog with an original expected length of one year or less within the footnotes. Multi-client and Proprietary Surveys, Imaging Services and E&P Advisors Services - As multi-client seismic surveys are being designed, acquired or processed (the “New Venture” phase), the Company enters into non-exclusive licensing arrangements with its customers, who pre-fund or underwrite these programs in part. License revenues from these surveys are recognized during the New Venture phase as the seismic data is acquired and/or processed on a proportionate basis as work is performed and control is transferred to the customer. Under this method, the Company recognizes revenue based upon quantifiable measures of progress, such as kilometers acquired or surveys of performance completed to date. Upon completion of a multi-client seismic survey, it is considered “on-the-shelf,” and licenses to the survey data are granted to customers on a non-exclusive basis. The Company also performs seismic surveys, imaging and other services under contracts with specific customers, whereby the seismic data is owned by those customers. The Company recognizes revenue as the seismic data is acquired and/or processed on a proportionate basis as work is performed. The Company uses quantifiable measures of progress consistent with its multi-client seismic surveys. Acquisition Systems and Other Seismic Equipment - For sales of seismic data acquisition systems and other seismic equipment, the Company recognizes revenue when control of the goods has transferred to the customer. Transfer of control generally occurs when (i) the Company has a present right to payment; (ii) the customer has legal title to the asset; (iii) the Company has transferred physical possession of the asset; and (iv) the customer has significant rewards of ownership; or (v) the customer has accepted the asset. Software - Licenses for the Company’s navigation, survey design and quality control software systems provide the customer with a right to use the software. The Company offers usage-based licenses under which it receives a monthly fee based on the number of vessels and licenses used. For these usage-based licenses, revenue is recognized as the performance obligations are performed over the contract term, which is generally two to five years. In addition to usage-based licenses, the Company offers perpetual software licenses as it exists when made available to the customer. Revenue from these licenses is recognized upfront at the point in time when the software is made available to the customer. These arrangements generally include the Company providing related services, such as training courses, engineering services and annual software maintenance. The Company allocates consideration to each element of the arrangement based upon directly observable or estimated standalone selling prices. Revenue is recognized for these services as control transfers to the customer over time. Revenue by Segment and Geographic Area See Footnote 2 “Segment Information” of Footnotes to Consolidated Financial Statements for revenue by segment and revenue by geographic area for the years ended December 31, 2018, 2017 and 2016. In 2018, the Company had two customers with sales that each exceeded 10% of the consolidated net revenues. Revenues related to these customers are included within the E&P Technology & Services segment. In 2017, the Company had one customer with sales that exceeded 10% of the consolidated net revenues and revenues related to this customer are included within the E&P Technology & Services segment. No single customer represented 10% or more of the consolidated net revenues for 2016. Unbilled Receivables Unbilled receivables relate to revenues recognized on multi-client surveys, imaging services and Devices equipment repairs on a proportionate basis, and on licensing of multi-client data libraries for which invoices have not yet been presented to the customer. The following table is a summary of unbilled receivables (in thousands):
The changes in unbilled receivables were as follows (in thousands):
Deferred Revenue Billing practices are governed by the terms of each contract based upon achievement of milestones or pre-agreed schedules. Billing does not necessarily correlate with revenue recognized on a proportionate basis as work is performed and control is transferred to the customer. Deferred revenue represents cash received in excess of revenue not yet recognized as of the reporting period, but will be recognized in future periods. The following table is a summary of deferred revenues (in thousands):
The changes in deferred revenues were as follows (in thousands):
(a) The majority of deferred revenue recognized relates to Company’s Ventures group. The Company expects to recognize all deferred revenue within the next 12 months. |
Net Income (Loss) per Common Share |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing net income (loss) applicable to common shares by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is determined based on the assumption that dilutive restricted stock and restricted stock unit awards have vested and outstanding dilutive stock options have been exercised and the aggregate proceeds were used to reacquire common stock using the average price of such common stock for the period. The total number of shares issuable under anti-dilutive options at December 31, 2018, 2017 and 2016 were 785,890, 890,341 and 847,635, respectively. All outstanding stock options for the twelve months ended December 31, 2018, 2017 and 2016 were anti-dilutive. |
Details of Selected Balance Sheet Accounts - Other Long-term Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred lease liabilities | $ 11,465 | $ 12,811 |
Other | 429 | 1,115 |
Total | $ 11,894 | $ 13,926 |
Document and Entity Information |
Nov. 08, 2019 |
---|---|
Document and Entity Information [Abstract] | |
Entity Registrant Name | ION GEOPHYSICAL CORP |
Entity Central Index Key | 0000866609 |
Document Type | 8-K |
Document Period End Date | Nov. 08, 2019 |
Amendment Flag | false |
Entity Emerging Growth Company | false |
Supplemental Cash Flow Information and Non-Cash Activity (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Cash paid during the period for: | ||||
Interest | $ 5,731 | $ 14,181 | $ 15,691 | |
Income taxes | 3,260 | 7,030 | 4,474 | |
Non-cash items from investing and financing activities: | ||||
Purchase of computer equipment financed through capital leases | 3,297 | 0 | 0 | |
Leasehold improvement paid by landlord | 0 | 0 | 955 | |
Issuance of stock in bond exchange | 0 | 0 | 10,741 | |
Investment in multi-client data library financed through trade payables | 4,956 | 9,059 | 0 | |
Segment Reporting Information [Line Items] | ||||
Transfer of inventory to property, plant and equipment | $ 0 | $ 0 | $ 17,662 | |
Ocean Bottom Integrated Technologies | ||||
Segment Reporting Information [Line Items] | ||||
Transfer of inventory to property, plant and equipment | $ 17,700 |
Stockholder's Equity and Stock-based Compensation - Valuation Assumptions (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rates | 2.78% | 2.14% | 1.30% |
Expected lives (in years) | 5 years | 5 years | 5 years 6 months |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 73.67% | 74.41% | 78.76% |
Stock appreciation rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rates | 3.00% | ||
Expected lives (in years) | 5 years 3 months 22 days | ||
Expected dividend yield | 0.00% | ||
Expected volatility | 82.90% |
Details of Selected Balance Sheet Accounts - Accounts Receivable (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable, principally trade | $ 26,558 | $ 20,050 |
Less allowance for doubtful accounts | (430) | (572) |
Accounts receivable, net | $ 26,128 | $ 19,478 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (70,398) | $ (29,377) | $ (64,727) |
Other comprehensive income (loss), net of taxes, as appropriate: | |||
Foreign currency translation adjustments | (1,563) | 2,869 | (6,967) |
Comprehensive net loss | (71,961) | (26,508) | (71,694) |
Comprehensive income attributable to noncontrolling interests | (773) | (865) | (421) |
Comprehensive net loss attributable to ION | $ (72,734) | $ (27,373) | $ (72,115) |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) |
Feb. 04, 2016 |
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Statement of Stockholders' Equity [Abstract] | |
Reverse stock split ratio of one share | 0.066667 |
Segment and Geographic Information - Summary of Segment Information (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2018
USD ($)
segment
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||||||||
Number of operating segments | segment | 2 | ||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Net revenues | $ 74,594 | $ 47,200 | $ 24,743 | $ 33,508 | $ 57,902 | $ 61,095 | $ 46,001 | $ 32,556 | $ 180,045 | $ 197,554 | $ 172,808 |
Gross profit (loss): | 37,809 | 16,475 | (1,517) | 6,853 | 23,811 | 30,109 | 15,618 | 6,101 | $ 59,620 | $ 75,639 | $ 36,032 |
Gross margin: | 33.00% | 38.00% | 21.00% | ||||||||
Income (loss) from operations: | (16,661) | (2,452) | (22,519) | (12,640) | (1,151) | 9,936 | (3,572) | (13,912) | $ (54,272) | $ (8,699) | $ (43,171) |
Interest expense, net | (3,203) | (3,022) | (2,911) | (3,836) | (4,045) | (3,959) | (4,241) | (4,464) | (12,972) | (16,709) | (18,485) |
Other income (expense), net | $ 180 | $ 91 | $ 84 | $ (791) | $ 209 | $ 722 | $ 192 | $ (5,068) | (436) | (3,945) | 1,350 |
Loss before income taxes | (67,680) | (29,353) | (60,306) | ||||||||
Operating expenses | 113,892 | 84,338 | 79,203 | ||||||||
Impairment of long-lived assets | 36,553 | 0 | 0 | ||||||||
Operations Optimization | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Impairment of long-lived assets | 21,300 | ||||||||||
Operating segments | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Gross profit (loss): | $ 65,662 | $ 85,272 | $ 26,453 | ||||||||
Gross margin: | 36.00% | 43.00% | 15.00% | ||||||||
Operating segments | E&P Technology & Services | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Net revenues | $ 136,520 | $ 157,249 | $ 92,889 | ||||||||
Gross profit (loss): | $ 43,369 | $ 65,196 | $ 4,708 | ||||||||
Gross margin: | 32.00% | 41.00% | 5.00% | ||||||||
Income (loss) from operations: | $ 21,758 | $ 42,505 | $ (16,446) | ||||||||
Operating segments | E&P Technology & Services | New Venture and Data Library | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Net revenues | 116,780 | 140,840 | 67,351 | ||||||||
Operating segments | E&P Technology & Services | New Venture | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Net revenues | 69,685 | 100,824 | 27,362 | ||||||||
Operating segments | E&P Technology & Services | Data Library | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Net revenues | 47,095 | 40,016 | 39,989 | ||||||||
Operating segments | E&P Technology & Services | Imaging Services | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Net revenues | 19,740 | 16,409 | 25,538 | ||||||||
Operating segments | Operations Optimization | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Net revenues | 43,525 | 40,305 | 43,502 | ||||||||
Gross profit (loss): | $ 22,293 | $ 20,076 | $ 21,745 | ||||||||
Gross margin: | 51.00% | 50.00% | 50.00% | ||||||||
Income (loss) from operations: | $ 7,295 | $ 8,022 | $ 9,652 | ||||||||
Operating segments | Operations Optimization | Devices | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Net revenues | 22,396 | 23,610 | 26,746 | ||||||||
Operating segments | Operations Optimization | Optimization Software & Services | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Net revenues | 21,129 | 16,695 | 16,756 | ||||||||
Other | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Net revenues | 0 | 0 | 36,417 | ||||||||
Gross profit (loss): | $ (6,042) | $ (9,633) | $ 9,579 | ||||||||
Gross margin: | (3.00%) | (5.00%) | 6.00% | ||||||||
Support and other | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Income (loss) from operations: | $ (83,325) | $ (59,226) | $ (36,377) | ||||||||
Previously Reported | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Number of operating segments | segment | 3 | ||||||||||
Previously Reported | Ocean Bottom Integrated Technologies | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Impairment of long-lived assets | $ 15,300 | ||||||||||
Previously Reported | Operating segments | Ocean Bottom Integrated Technologies | |||||||||||
Reclassified its previously reported results to reflect segment changes | |||||||||||
Income (loss) from operations: | 47,600 | 16,300 | 1,800 | ||||||||
Operating expenses | $ 41,600 | $ 6,700 | $ 11,300 |
Segment and Geographic Information - Net Revenues by Geographic Area (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Summary of net revenues by geographic area | |||||||||||
Net revenues | $ 74,594 | $ 47,200 | $ 24,743 | $ 33,508 | $ 57,902 | $ 61,095 | $ 46,001 | $ 32,556 | $ 180,045 | $ 197,554 | $ 172,808 |
Latin America | |||||||||||
Summary of net revenues by geographic area | |||||||||||
Net revenues | 68,871 | 68,241 | 24,090 | ||||||||
North America | |||||||||||
Summary of net revenues by geographic area | |||||||||||
Net revenues | 44,474 | 48,120 | 38,005 | ||||||||
Europe | |||||||||||
Summary of net revenues by geographic area | |||||||||||
Net revenues | 31,077 | 44,930 | 41,674 | ||||||||
Asia Pacific | |||||||||||
Summary of net revenues by geographic area | |||||||||||
Net revenues | 17,817 | 18,896 | 16,226 | ||||||||
Africa | |||||||||||
Summary of net revenues by geographic area | |||||||||||
Net revenues | 10,837 | 6,837 | 41,417 | ||||||||
Middle East | |||||||||||
Summary of net revenues by geographic area | |||||||||||
Net revenues | 5,526 | 2,308 | 9,467 | ||||||||
Commonwealth of Independent States | |||||||||||
Summary of net revenues by geographic area | |||||||||||
Net revenues | $ 1,443 | $ 8,222 | $ 1,929 |
Revenue from Contracts with Customers - Deferred Revenue by Service (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | $ 7,710 | $ 8,910 |
New Venture | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | 5,797 | 6,548 |
Imaging Services | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | 307 | 676 |
Devices | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | 626 | 633 |
Optimization Software & Services | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | $ 980 | $ 1,053 |
Long-term Debt and Lease Obligations - Narrative (Details) |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Aug. 16, 2018
USD ($)
|
Apr. 28, 2016
USD ($)
|
Dec. 31, 2018
USD ($)
|
Aug. 15, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
May 31, 2013 |
|
Debt Instrument [Line Items] | ||||||
Aggregate principal amount of debt | $ 121,741,000 | $ 156,744,000 | ||||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Interest accrues under the capital leases | 4.32% | |||||
Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Interest accrues under the capital leases | 8.70% | |||||
Line of credit | Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | PNC Bank, National Association (PNC) | ||||||
Debt Instrument [Line Items] | ||||||
Debt term | 4 years | |||||
Amount of increase in maximum revolver | $ 10,000,000 | |||||
Maximum amount of certain indebtedness | 50,000,000 | $ 50,000,000 | $ 40,000,000 | |||
Current borrowing capacity | 41,900,000 | |||||
Indebtedness under the Credit Facility | 0 | |||||
Required liquidity maintained five consecutive business days | 6,250,000 | 7,500,000 | ||||
Required liquidity maintained any business day | 5,000,000 | $ 6,500,000 | ||||
Line of credit | Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | PNC Bank, National Association (PNC) | Subsidiary Issuer | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of obligations secured by stock of Subsidiary Borrowers | 100.00% | |||||
Line of credit | Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | PNC Bank, National Association (PNC) | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Fixed charge coverage ratio | 1.1 | |||||
Line of credit | Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | PNC Bank, National Association (PNC) | GX Geoscience Corporation, S. De R.L. De C.V. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum amount of certain indebtedness | $ 5,000,000 | |||||
Line of credit | Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | PNC Bank, National Association (PNC) | ION International Holdings L.P. | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of obligations secured by stock of Subsidiary Borrowers | 65.00% | |||||
Line of credit | Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | PNC Bank, National Association (PNC) | Base Rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.00% | |||||
Line of credit | Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | PNC Bank, National Association (PNC) | Base Rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.00% | |||||
Line of credit | Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | PNC Bank, National Association (PNC) | LIBOR | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.00% | |||||
Line of credit | Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | PNC Bank, National Association (PNC) | LIBOR | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 4.00% | |||||
Senior secured notes | ||||||
Debt Instrument [Line Items] | ||||||
Stated rate on debt | 8.125% | |||||
Senior secured notes | Senior secured third-priority lien notes (redeemed March 26, 2018) | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount of debt | $ 28,500,000 | |||||
Senior secured notes | Senior secured second-priority lien notes (maturing December 15, 2021) | ||||||
Debt Instrument [Line Items] | ||||||
Stated rate on debt | 9.125% | 9.125% | ||||
Aggregate principal amount of debt | $ 120,600,000 | |||||
E&P Technology & Services | Data Library | Line of credit | Revolving credit facility (amended August 16, 2018, maturing August 16, 2023) (a) | ||||||
Debt Instrument [Line Items] | ||||||
Maximum amount of certain indebtedness | $ 28,500,000 | $ 15,000,000 |
Selected Quarterly Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenues | $ 74,594 | $ 47,200 | $ 24,743 | $ 33,508 | $ 57,902 | $ 61,095 | $ 46,001 | $ 32,556 | $ 180,045 | $ 197,554 | $ 172,808 |
Gross profit | 37,809 | 16,475 | (1,517) | 6,853 | 23,811 | 30,109 | 15,618 | 6,101 | 59,620 | 75,639 | 36,032 |
Loss from operations | (16,661) | (2,452) | (22,519) | (12,640) | (1,151) | 9,936 | (3,572) | (13,912) | (54,272) | (8,699) | (43,171) |
Interest expense, net | (3,203) | (3,022) | (2,911) | (3,836) | (4,045) | (3,959) | (4,241) | (4,464) | (12,972) | (16,709) | (18,485) |
Other income (expense), net | 180 | 91 | 84 | (791) | 209 | 722 | 192 | (5,068) | (436) | (3,945) | 1,350 |
Income tax expense | (587) | 2,079 | 154 | 1,072 | (3,646) | 1,686 | 2,402 | (418) | 2,718 | 24 | 4,421 |
Net income attributable to noncontrolling interests | (246) | (74) | (366) | (87) | (53) | (78) | (418) | (316) | (773) | (865) | (421) |
Net loss attributable to ION | $ (19,343) | $ (7,536) | $ (25,866) | $ (18,426) | $ (1,394) | $ 4,935 | $ (10,441) | $ (23,342) | $ (71,171) | $ (30,242) | $ (65,148) |
Net loss per share: | |||||||||||
Basic (usd per share) | $ (1.38) | $ (0.54) | $ (1.86) | $ (1.44) | $ (0.12) | $ 0.42 | $ (0.88) | $ (1.98) | $ (5.20) | $ (2.55) | $ (5.71) |
Diluted (usd per share) | $ (1.38) | $ (0.54) | $ (1.86) | $ (1.44) | $ (0.12) | $ 0.41 | $ (0.88) | $ (1.98) | $ (5.20) | $ (2.55) | $ (5.71) |
Service | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenues | $ 61,095 | $ 37,105 | $ 15,752 | $ 25,086 | $ 48,513 | $ 52,615 | $ 34,454 | $ 23,828 | $ 139,038 | $ 159,410 | $ 130,640 |
Product | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenues | $ 13,499 | $ 10,095 | $ 8,991 | $ 8,422 | $ 9,389 | $ 8,480 | $ 11,547 | $ 8,728 | $ 41,007 | $ 38,144 | $ 42,168 |
Condensed Consolidating Financial Information - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Cash flows from operating activities: | |||
Net cash provided by (used in) operating activities | $ 7,098 | $ 27,612 | $ 993 |
Cash flows from investing activities: | |||
Investment in multi-client data library | (28,276) | (23,710) | (14,884) |
Purchase of property, plant, equipment and seismic rental equipment | (1,514) | (1,063) | (1,458) |
Proceeds from sale of cost method investments | 0 | 0 | 2,698 |
Net cash used in investing activities | (29,790) | (24,773) | (13,644) |
Cash flows from financing activities: | |||
Repayments under revolving line of credit | (10,000) | 0 | (5,000) |
Borrowings under revolving line of credit | 0 | 0 | 15,000 |
Payments on notes payable and long-term debt | (30,807) | (4,816) | (23,634) |
Cost associated with issuance of debt | (1,247) | (53) | (6,744) |
Repurchase of common stock | 0 | 0 | (964) |
Intercompany lending | 0 | 0 | 0 |
Proceeds from employee stock purchases and exercise of stock options | 214 | 1,619 | 0 |
Payments to repurchase bonds | 0 | ||
Net proceeds from issuance of stocks | 46,999 | 0 | 0 |
Dividend payment to noncontrolling interest | (200) | (100) | 0 |
Other financing activities | (1,151) | (243) | (252) |
Net cash provided by (used in) financing activities | 3,808 | (3,593) | (21,594) |
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash | 319 | (260) | 1,386 |
Net decrease in cash, cash equivalents and restricted cash | (18,565) | (1,014) | (32,859) |
Cash, cash equivalents and restricted cash at beginning of period | 52,419 | 53,433 | 86,292 |
Cash, cash equivalents and restricted cash at end of period | 33,854 | 52,419 | 53,433 |
Reportable Legal Entities | ION Geophysical Corporation | |||
Cash flows from operating activities: | |||
Net cash provided by (used in) operating activities | (37,659) | (22,315) | (30,732) |
Cash flows from investing activities: | |||
Investment in multi-client data library | 0 | 0 | 0 |
Purchase of property, plant, equipment and seismic rental equipment | (392) | (165) | (73) |
Proceeds from sale of cost method investments | 2,698 | ||
Net cash used in investing activities | (392) | (165) | 2,625 |
Cash flows from financing activities: | |||
Repayments under revolving line of credit | (10,000) | (5,000) | |
Borrowings under revolving line of credit | 15,000 | ||
Payments on notes payable and long-term debt | (30,169) | (1,591) | (17,070) |
Cost associated with issuance of debt | (1,247) | (53) | (6,744) |
Repurchase of common stock | (964) | ||
Intercompany lending | 7,983 | 38,732 | 31,867 |
Proceeds from employee stock purchases and exercise of stock options | 214 | 1,619 | |
Payments to repurchase bonds | 0 | ||
Net proceeds from issuance of stocks | 46,999 | ||
Dividend payment to noncontrolling interest | (200) | (100) | |
Other financing activities | (1,151) | (243) | (252) |
Net cash provided by (used in) financing activities | 12,429 | 38,364 | 16,837 |
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash | 0 | 0 | 0 |
Net decrease in cash, cash equivalents and restricted cash | (25,622) | 15,884 | (11,270) |
Cash, cash equivalents and restricted cash at beginning of period | 39,707 | 23,823 | 35,093 |
Cash, cash equivalents and restricted cash at end of period | 14,085 | 39,707 | 23,823 |
Reportable Legal Entities | The Guarantors | |||
Cash flows from operating activities: | |||
Net cash provided by (used in) operating activities | 39,407 | 73,154 | 53,107 |
Cash flows from investing activities: | |||
Investment in multi-client data library | (25,307) | (23,710) | (14,884) |
Purchase of property, plant, equipment and seismic rental equipment | (959) | (817) | (313) |
Proceeds from sale of cost method investments | 0 | ||
Net cash used in investing activities | (26,266) | (24,527) | (15,197) |
Cash flows from financing activities: | |||
Repayments under revolving line of credit | 0 | 0 | |
Borrowings under revolving line of credit | 0 | ||
Payments on notes payable and long-term debt | (638) | (3,167) | (6,316) |
Cost associated with issuance of debt | 0 | 0 | 0 |
Repurchase of common stock | 0 | ||
Intercompany lending | (12,522) | (45,609) | (34,771) |
Proceeds from employee stock purchases and exercise of stock options | 0 | 0 | |
Payments to repurchase bonds | 0 | ||
Net proceeds from issuance of stocks | 0 | ||
Dividend payment to noncontrolling interest | 0 | 0 | |
Other financing activities | 0 | 0 | 0 |
Net cash provided by (used in) financing activities | (13,160) | (48,776) | (41,087) |
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash | 0 | 0 | 0 |
Net decrease in cash, cash equivalents and restricted cash | (19) | (149) | (3,177) |
Cash, cash equivalents and restricted cash at beginning of period | 66 | 215 | 3,392 |
Cash, cash equivalents and restricted cash at end of period | 47 | 66 | 215 |
Reportable Legal Entities | All Other Subsidiaries | |||
Cash flows from operating activities: | |||
Net cash provided by (used in) operating activities | 5,350 | (23,227) | (21,382) |
Cash flows from investing activities: | |||
Investment in multi-client data library | (2,969) | 0 | 0 |
Purchase of property, plant, equipment and seismic rental equipment | (163) | (81) | (1,072) |
Proceeds from sale of cost method investments | 0 | ||
Net cash used in investing activities | (3,132) | (81) | (1,072) |
Cash flows from financing activities: | |||
Repayments under revolving line of credit | 0 | 0 | |
Borrowings under revolving line of credit | 0 | ||
Payments on notes payable and long-term debt | 0 | (58) | (248) |
Cost associated with issuance of debt | 0 | 0 | 0 |
Repurchase of common stock | 0 | ||
Intercompany lending | 4,539 | 6,877 | 2,904 |
Proceeds from employee stock purchases and exercise of stock options | 0 | 0 | |
Payments to repurchase bonds | 0 | ||
Net proceeds from issuance of stocks | 0 | ||
Dividend payment to noncontrolling interest | 0 | 0 | |
Other financing activities | 0 | 0 | 0 |
Net cash provided by (used in) financing activities | 4,539 | 6,819 | 2,656 |
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash | 319 | (260) | 1,386 |
Net decrease in cash, cash equivalents and restricted cash | 7,076 | (16,749) | (18,412) |
Cash, cash equivalents and restricted cash at beginning of period | 12,646 | 29,395 | 47,807 |
Cash, cash equivalents and restricted cash at end of period | 19,722 | $ 12,646 | $ 29,395 |
Consolidating Adjustments | |||
Cash flows from financing activities: | |||
Cash, cash equivalents and restricted cash at end of period | $ 0 |
Income Taxes - Sources of Income (Loss) Before Taxes and Components of Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Sources of income (loss) before income taxes | |||||||||||
Domestic | $ (59,212) | $ (12,487) | $ (41,246) | ||||||||
Foreign | (8,468) | (16,866) | (19,060) | ||||||||
Loss before income taxes | (67,680) | (29,353) | (60,306) | ||||||||
Current: | |||||||||||
Federal | 0 | (166) | 0 | ||||||||
State and local | 65 | 116 | 28 | ||||||||
Foreign | 8,905 | 5,494 | 5,574 | ||||||||
Deferred: | |||||||||||
Federal | (346) | (1,263) | 0 | ||||||||
Foreign | (5,906) | (4,157) | (1,181) | ||||||||
Total income tax expense | $ (587) | $ 2,079 | $ 154 | $ 1,072 | $ (3,646) | $ 1,686 | $ 2,402 | $ (418) | $ 2,718 | $ 24 | $ 4,421 |
Summary of Significant Accounting Policies - Concentration of Foreign Sales Risk (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Geographic Concentration Risk | Sales Revenue, Net | Non-US | |||
Concentration Risk [Line Items] | |||
International sales comprised of total net revenue | 75.00% | 76.00% | 78.00% |
Summary of Significant Accounting Policies - Property, Plant, Equipment and Seismic Rental Equipment Useful Lives (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Property, Plant and Equipment [Line Items] | |||
Impairment charges recognized | $ 36,553 | $ 0 | $ 0 |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, equipment and seismic rental equipment useful life | 3 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, equipment and seismic rental equipment useful life | 7 years | ||
Buildings | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, equipment and seismic rental equipment useful life | 5 years | ||
Buildings | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, equipment and seismic rental equipment useful life | 25 years | ||
Seismic rental equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, equipment and seismic rental equipment useful life | 3 years | ||
Seismic rental equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, equipment and seismic rental equipment useful life | 5 years | ||
Leased equipment and other | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, equipment and seismic rental equipment useful life | 3 years | ||
Leased equipment and other | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, equipment and seismic rental equipment useful life | 10 years |
Operating Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||
Leases, Operating [Abstract] | |||||||||||||||||||||||||||||||||||||
Future Rental Commitments Over the Next Five Years Under Non-cancelable Operating Leases | A summary of future rental commitments over the next five years under non-cancelable operating leases follows (in thousands):
|
Goodwill |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill On December 31, 2018, the Company completed the annual reviews of the carrying value of goodwill in its E&P Technology & Services and Optimization Software & Services reporting units and noted no impairments. The qualitative assessment concluded it was more likely than not that the fair values of the Company’s E&P Technology & Services and Optimization Software & Services reporting units exceeded their carrying values. The following is a summary of the changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 (in thousands):
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Fair Value of Financial Instruments |
12 Months Ended |
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Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Authoritative guidance on fair value measurements defines fair value, establishes a framework for measuring fair value and stipulates the related disclosure requirements. The Company follows a three-level hierarchy, prioritizing and defining the types of inputs used to measure fair value. Due to their highly liquid nature, the amount of the Company’s other financial instruments, including cash and cash equivalents, restricted cash, accounts and unbilled receivables, short term investments, accounts payable and accrued multi-client data library royalties, represent their approximate fair value. The carrying amounts of the Company’s long-term debt as of December 31, 2018 and 2017 were $124.7 million and $160.7 million, respectively, compared to its fair values of $120.7 million and $158.2 million as of December 31, 2018 and 2017, respectively. The fair value of the long-term debt was calculated using Level 1 inputs, including an active market price. Fair value measurements are applied with respect to non-financial assets and liabilities measured on a non-recurring basis, which would consist of measurements primarily of goodwill, intangibles assets, multi-client data library and property, plant and equipment and seismic rental equipment. |
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