Attached files
| file | filename |
|---|---|
| 8-K - 8-K - ION GEOPHYSICAL CORP | a8k-2016xq4xearnings.htm |
| EX-99.1 - EXHIBIT 99.1 - ION GEOPHYSICAL CORP | ex991earningsrelease4q-16.htm |
ION Earnings Call – Q4 2016
Earnings Call Presentation
February 9, 2017
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 $35M
• Down 54% compared to Q4-15
• Adjusted net loss of $(12)M versus
$(6)M net loss in Q4-15
• Generated $16M of cash
(excluding special items*) versus
$(3)M in Q4-15
• Generated break-even cash flows
for FY 2016 excluding patent
litigation payment and cash used
on our Q2 bond exchange
• FY 2016 cash flow break-even
demonstrates we have rightsized
our business
ION Q4-16 Financial Highlights
(0.51)
(0.99)
$(1.25)
$(1.00)
$(0.75)
$(0.50)
$(0.25)
$-
Adjusted EPS
Q4-15 Q4-16
(6)
(12)
$(14)
$(12)
$(10)
$(8)
$(6)
$(4)
$(2)
$-
Adjusted Net Income (Loss)
Q4-15 Q4-16
$(5.0)
$-
$5.0
$10.0
$15.0
$20.0
Cash Activity* $M
Q4-15
(3)
Q4-16*
77
79
35
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
Q4-15 Q3-16 Q4-16
16
Q4-16 excludes patent litigation and
repayments on revolver
*
ION Q4-16 Highlights
Closed a significant amount of new
deals related to our 3D multi-client
Campeche reimaging program in
partnership with Schlumberger
Increased backlog $15M to $34M at
year-end, up from $19M at year-end
2015
5
Overall E&P Technology & Services Segment
E&P Operations Optimization Segment
Completed 22 deployments total of our
simultaneous operations management
software, Marlin, and continue to
receive great client feedback
Very positive customer feedback on the
unprecedented turnaround time and
imaging improvement in our 3D multi-
client program
Imaging Services group remains close
to being fully utilized, with a large
portion of capacity dedicated to higher
potential 3D reprocessing projects
Ocean Bottom Services Segment
Continue to work on, and are strongly
positioned for, tenders in the region
(0.51)
(0.99)
$(1.00)
$(0.75)
$(0.50)
$(0.25)
$-
Adjusted EPS
Q4-15
6
ION Financial Overview
Q4-16 Summary
$77
$35
$-
$15
$30
$45
$60
$75
$90
Q4-15 Q4-16
Ocean Bottom
E&P Ops E&P T&S
Revenue $M
$18
$7
$-
$5
$10
$15
$20
$25
Q4-15
Adjusted EBITDA $M
Q4-16
• Revenues down 54% vs Q4-15
• E&P Technology & Services down 60%
• E&P Operations Optimization down 29%
• No revenues from Ocean Bottom Services
•Operating loss of $8M compared to $0M in
Q4-15
• Decrease driven by significant decline in
revenues, more than offsetting the $95M in
annualized cost reductions implemented over
the last two years
• Adjusted EPS of $(0.99) compared to
$(0.51) in Q4-15
• Adjusted EBITDA of $7M compared to
$18M in Q4-15
• Adjusted EBITDA remained positive despite a
significant decline in revenues, the result of
savings from prior cost cutting initiatives
Q4-16
$(0)
$(8)
$(10)
$(5)
$-
Q4-16
Operating Loss $M
Q4-15
ION Financial Overview
Cash Flow $M
7
• Generated $16M of
positive cash flows in Q4-
16, excluding patent
litigation and repayments
on revolver
• FY-16 cash flow break-
even, excluding patent
litigation and bond
exchange payments
• Bond exchange reduced
debt by 20% and
extended maturities on
$121M of bonds to the
end of 2021
• Initiated “At-the-Market”
equity program
• Max. of $20M spread over
multiple quarters
• No shares have been sold
under the program
Q4-15 Q4-16 FY-15 FY-16
Net loss (5.3)$ (6.3)$ (25.2)$ (64.7)$
Non-cash adjustments 21.4 12.9 (26.2) 58.8
Working capital 3.3 12.6 34.8 28.3
Patent litigation payment - (20.8) - (20.8)
Net cash from operations 19.5 (1.7) (16.5) 1.6
Multi-client investment (17.4) (3.3) (45.6) (14.9)
PP&E capital expenditures (1.6) (0.9) (19.2) (1.5)
Other investing activities - 2.7 1.3 2.7
Net cash from investing activities (19.0) (1.5) (63.5) (13.6)
Payment to repurchase bonds - - - (15.0)
Costs associated with issuance of debt - (0.1) (0.1) (6.7)
Net borrowings under revolver - (5.0) - 10.0
ther financing activities (4.0) (2.2) (9.4) (9.9)
Net cash from inancing activities (4.0) (7.3) (9.5) (21.6)
Effect of chang on f/x 0.3 0.5 0.9 1.4
Net change i cash (3.3) (9.9) (88.7) (32.3)
Cash & cash equiv. (beg. of period) 88.2 62.5 173.6 84.9
Cash & cash quiv. (end of period) 84.9$ 52.7$ 84.9$ 52.7$
Summary
2016 was a tough year, but we’ve navigated it successfully
– Proactive, disciplined, and creative balance sheet management
– Rightsized our business to weather this severe industry downturn
Expect E&P market to start improving
– Expect a modest increase in 2017 E&P spending
– Expect growth in seismic spending to lag behind other oil and gas segments,
especially offshore marine activity, which remains our primary focus
Expect 2017 to be a transition year for ION
– As usual, we believe the first half will be softer than the back half
– Past rightsizing initiatives enable us to run our business in 2017 and position
ourselves for a recovery in our area of the industry in 2018
– Maintained our capabilities, our workforce and our R&D programs – we’re
actively positioning ourselves to take full advantage of a more normal 2018
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Q&A
