Restructurings and Special Items

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

The recent decline in crude oil prices to five-year lows and the depressed level of natural gas prices have negatively impacted the economic outlook of the Company’s exploration and production (“E&P”) customers, which has also negatively impacted the outlook for the Company’s seismic contractor customers. In response to the decline in crude oil prices, E&P companies have reduced their capital expenditures and shifted their spending from exploration activities to production-related activities on existing assets. Because seismic spending is discretionary, E&P companies have disproportionately cut their spending on seismic-related services and products.

In April, 2016, the Company implemented additional cost saving initiatives by reducing its current workforce by over 12%. Additional reductions were needed to further streamline the organization and bring it in line with the Company’s current revenue stream, while maintaining the necessary core capabilities to continue our operations and strategic initiatives. During the three and six months ended June 30, 2016, the Company recognized the following pre-tax charges (in thousands):



	Severance Charges^(a)		Loss on Bond Exchange^(b)		Total
Cost of goods sold	$	1,077	$	—	$	1,077
Operating expenses	932		—		932
Other expense	—		2,182		2,182
Consolidated total	$	2,009	$	2,182	$	4,191


^(a)	Represents severance charges related to the second quarter 2016 restructurings.


^(b)	Represents a loss on exchange of bonds during the second quarter 2016.