Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - ION GEOPHYSICAL CORP | ex991earningsrelease2016-q3.htm |
| 8-K - 8-K - ION GEOPHYSICAL CORP | a8k-2016xq3xearnings.htm |
ION Earnings Call – Q3 2016
Earnings Call Presentation
November 3, 2016
Corporate Participants and Contact Information
CONTACT INFORMATION
If you have technical problems during the call, please contact DENNARD–LASCAR Associates
at 713 529 6600.
If you would like to view a replay of today's call, it will be available via webcast in the Investor Relations
section of the Company's website at www.iongeo.com for approximately 12 months.
BRIAN HANSON
President and
Chief Executive Officer
STEVE BATE
Executive Vice President
and Chief Financial Officer
2
Forward-Looking Statements
The information included herein contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934.
Actual results may vary fundamentally from those described in these
forward-looking statements.
All forward-looking statements reflect numerous assumptions and involve a
number of risks and uncertainties.
These risks and uncertainties include risk factors that are disclosed by ION
from time to time in its filings with the Securities and Exchange Commission.
3
Revenues $M
4
• Revenues of $79M:
• up 18% compared to Q3-15
• up 117% sequentially to Q2-16
• Net income of $2M compared to
$(17)M adjusted net loss in Q3-15
• Adjusted EBITDA of $24M
compared to $8M in Q3-15
• Generated $10M of cash versus
$(29)M consumed in Q3-15
• Expected higher revenues and
cash generation in 2H-16, both of
which are reflected in Q3 results
• First positive net income from
operations since Q2-14
• Indicates $95M annualized cost
reduction has rightsized business
ION Q3-16 Financial Highlights
(1.54)
0.14
$(1.75)
$(1.50)
$(1.25)
$(1.00)
$(0.75)
$(0.50)
$(0.25)
$-
$0.25
Adjusted EPS
Q3-15
(Adj)
Q3-16
(17)
2
$(20)
$(15)
$(10)
$(5)
$-
$5
Adjusted Net Income (Loss)
Q3-15
(Adj)
Q3-16
(29)
$(30)
$(25)
$(20)
$(15)
$(10)
$(5)
$-
$5
$10
Cash Activity $M
Q3-15 Q3-16
67
36
79
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
Q3-15 Q2-16 Q3-16
10
ION Q3-16 Highlights
Increased revenue and generated
positive cash flows
General industry consensus down
cycle has likely hit bottom – early signs
of recovery
Seeing increasing client value for data
5
Overall E&P Technology & Services Segment
E&P Operations Optimization Segment
Secured fleet-wide Orca deal with
major customer
Continued high praise for Marlin –
three deployments completed
Very positive client feedback on the
efficient processing and imaging
improvement in our 3D multi-client
program in partnership with WesternGeco
Dedicated imaging services capacity to
large 3D reprocessing project
ION E&P Advisors completed Mexico
consulting project and received Mexico
reserve audit registration
Ocean Bottom Services Segment
Successfully completed OBS survey
offshore Nigeria, exceeding our
expectations
Continue to work on, and are strongly
positioned for, two tenders in the region
(1.54)
0.14
$(1.75)
$(1.50)
$(1.25)
$(1.00)
$(0.75)
$(0.50)
$(0.25)
$-
$0.25
Adjusted EPS
Q3-15
(Adj)
6
ION Financial Overview
Q3-16 Summary
$-
$20
$40
$60
$80
Q3-15 Q3-16
Ocean Bottom
E&P Ops E&P T&S
Revenue $M
$8
$24
$-
$10
$20
$30
Q3-15
Adjusted EBITDA $M
Q3-16
• Revenues up 18% vs Q3-15
• E&P Technology & Services down 32%
• E&P Operations Optimization down 10%
• Ocean Bottom Services $30M in revenues
•Operating income of $12M compared to
$(9)M adjusted operating loss in Q3-15
• Margin improvement driven by increased
revenues and prior cost cutting initiatives
• Adjusted EPS of $0.14 compared to
$(1.54) in Q3-15
• First positive Adjusted EPS since Q1-14
• Adjusted EBITDA of $24M compared to
$8M in Q3-15
• YTD 16 Adjusted EBITDA turned positive to
$4M compared to $(60)M YTD 15
Q3-16
$(9)
$12
$(15)
$(10)
$(5)
$-
$5
$10
$15
Q3-16
Adjusted Operating Inc. $M
Q3-15
(Adj)
ION Financial Overview
Cash Flow $M
7
• Generated cash of
$10M, compared to
$(29)M Q3-15
• Reduced debt by ~20%
(excl revolver) since
December 2015
• Total liquidity of $78M
at Sept. 2016, up $14M
from June 2016
• $63M of cash,
including $15M of
revolver borrowings
• $16M additional
availability on revolver
• Revolving credit
availability to increase
with expected increase
in data library revenues
in Q4-16
Q3-15 Q3-16 YTD-15 YTD-16
Net income (loss) (20.2)$ 1.9$ (19.9)$ (58.4)$
Non-cash adjustments 27.9 16.1 (47.6) 45.9
Working capital (21.2) (2.4) 31.5 15.7
Cash from operations (13.5) 15.6 (36.0) 3.2
Multi-client investment (14.6) (3.0) (28.2) (11.6)
PP&E capital expenditures (0.4) (0.2) (17.6) (0.6)
Other investing activities 1.0 - 1.3 -
Net cash from investing activities (13.9) (3.2) (44.5) (12.2)
Payment to repurchase bonds - - - (15.0)
Costs associated with issuance of debt (0.1) (0.5) (0.1) (6.6)
Repurchase of common stock - - - (1.0)
Borrowings under revolving credit facility - - - 15.0
ther financing activities (1.8) (1.9) (5.3) (6.7)
Net cash from inancing activities (1.9) (2.4) (5.5) (14.3)
Effect of chang on f/x 0.5 0.1 0.6 0.9
Net Change i Cash (28.8) 10.1 (85.4) (22.4)
Cash & cash equiv. (beg. of period) 117.1 52.4 173.6 84.9
Cash & cash quiv. (end of period) 88.2$ 62.5$ 88.2$ 62.5$
Summary
Expect a strong finish to the year
– Industry-funded new venture programs offshore Mexico
– Traditional year-end spending on data libraries in Q4
– Equipment and software licensing recurring revenue streams
– Full realization of the cost cutting put in place over the last eight quarters
Expect to continue to generate positive cash flows in Q4, rebuilding
cash balance
Expect working capital to continue to increase in Q4, providing liquidity
into 2017 and restoring the borrowing base of revolver
Reduced overall leverage this year by 20%
8
9
Q&A
