Attached files
| file | filename |
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| EX-99.1 - EXHIBIT 99.1 - ION GEOPHYSICAL CORP | ex991earningsrelease2017-q2.htm |
| 8-K - 8-K - ION GEOPHYSICAL CORP | a8k-2017xq2xearnings.htm |
ION Earnings Call – Q2 2017
Earnings Call Presentation
August 3, 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 $46M
• Up 27% compared to Q2-16
• Up >50% excluding OBS Services
• Up 41% sequentially to Q1-17
• 2H-17 expected to outperform 1H
considering license round activity
and customer purchasing patterns
• Adjusted EBITDA of $14M versus
$(3)M in Q2-16
• Fourth consecutive quarter since
2014 of break-even or better Adjusted
EBITDA
• Backlog increased to $48M, up
from $30M one year ago
• Multi-client backlog is the highest it’s
been since Q3-13
• Backlog is now >$62M as momentum
continued to build throughout July
ION Q2-17 Financial Highlights
(21)
(10)
-$30
-$20
-$10
$0
Adjusted Net Loss $M
Q2-16 Q2-17
36
33
46
$-
$10
$20
$30
$40
$50
Q2-16 Q1-17 Q2-17
16
-3
14
$(5)
$-
$5
$10
$15
Q2-16
Adjusted EBITDA $M
Q2-17
30
25
$-
$10
$20
$30
$40
$50
Q2-16 Q1-17 Q2-17
Backlog $M
48
ION Q2-17 Highlights
5
E&P Technology & Services
Significant increase in new venture and
data library revenues
Continue seeing strong demand for our
3D multi-client reimaging programs
New venture activity picking up,
launched two programs in Q2 and
expect to launch three programs in Q3
Imaging Services supported Talos'
historic Zama-1 Mexico discovery
Imaging Services awarded two ocean
bottom seismic imaging projects
E&P Advisors awarded third license
round management contract
ION Q2-17 Highlights
6
E&P Operations Optimization
Devices revenues increased due to
new sales to non-traditional customers
and from new offerings
Completed 50th deployment of Marlin,
adding significant value to clients
Evaluating Marlin for adjacent markets,
such as offshore wind and port
management
Ocean Bottom Seismic Services
Continue to actively pursue multiple
tenders for longer-term work
Anticipate significant growth in the
OBS market in 2017+
New 4Sea system was extremely well
received
– Cost and productivity
– Turnaround time
– Geophysical integrity
Step change in:
(1.85)
(.88)
$(2.00)
$(1.50)
$(1.00)
$(0.50)
$-
Adjusted EPS
Q2-16
7
ION Financial Overview
Q2-17 Summary
$-
$10
$20
$30
$40
$50
Q2-16 Q2-17
36
46
27%
OBS Services
E&P Ops E&P T&S
Revenue $M
• Revenues up 27% vs Q2-16
• E&P Technology & Services up 82%
• E&P Operations Optimization up 9%
• No OBS Services revenues Q2-17
• Adjusted operating loss of $4M compared
to $15M in Q2-16
• Favorability driven by higher margin revenue
mix in addition to the positive impact of cost
savings initiatives
• Adjusted EPS of $(.88) compared to
$(1.85) in Q2-16
• Adjusted EBITDA of $14M versus $(3)M in
Q2-16
• Fourth consecutive quarter of break-even or
better Adjusted EBITDA
(15)
(4)
($20)
($15)
($10)
($5)
$0
T
h
o
u
s
a
n
d
s
Q2-16 Q2-17
Q2-17
Adjusted Operating Loss $M
-3
14
$(5)
$-
$5
$10
$15
Q2-16
Adjusted EBITDA $M
Q2-17
Q2-16 Q2-17 1H-16 1H-17
Net income (loss) (25.3)$ (10.0)$ (60.3)$ (33.0)$
Non-cash adjustments 16.2 18.5 29.8 36.2
Working capital (5.8) (6.9) 18.2 0.5
Cash from operations (14.8) 1.7 (12.3) 3.6
Multi-client investment (2.3) (5.1) (8.6) (8.5)
PP&E capital expenditures (0.1) (0.9) (0.3) (0.9)
Net cash from investing activities (2.4) (6.0) (9.0) (9.4)
Payment to repurchase bonds (15.0) - (15.0) -
Costs associated with issuance of debt (4.9) - (6.2) -
Borrowings under revolving credit facility 15.0 - 15.0 -
Other financing activities (2.6) (1.5) (5.7) (3.5)
Net cash from financing activities (7.4) (1.5) (11.9) (3.5)
Effect of change on f/x 0.4 (0.6) 0.7 (0.2)
Net Change in Cash (24.2) (6.4) (32.5) (9.4)
Cash & cash equiv. (beg. of period) 76.7 49.6 84.9 52.7
Cash & cash equiv. (end of period) 52.4$ 43.3$ 52.4$ 43.3$
ION Financial Overview
Cash Flow $M
8
• Net cash flows from
operations of $2M vs $(15)M
in prior year
• Total net cash flows of $(6)M
vs $(24)M in Q2-16
• Cash balance of $33M,
excluding borrowings under
credit facility
• Credit facility borrowings of
$10M and remaining availability
of $12M
• Expect credit facility availability
to increase with increasing
revenues in 2H-17
• Total liquidity (cash and
revolver availability) of $55M
at June 2017
• Expect liquidity to increase in
back half of year
R&D Programs Key to Positioning ION for Recovery
9
VSO
1st Generation
VSO
2nd Generation
VSO
3rd Generation
Next Gen
OBS
System
2016
2004
2007
2006
2018
EQUIPMENT
SUPPLIER
SOLUTION PROVIDER
TO E&P COMPANIES
VSO
4th Generation
4Sea
Next Generation
Nodal System
SailWing
Innovative foil
diverter
Summary
Over the last 18 months, we have targeted opportunities
less dependent on cycle recovery and we are starting to
see these efforts pay off
– Selecting specific geographic areas
– Focusing on production optimization offerings
– Commercializing unique and differentiated technologies
We are a niche business in a large market and are
surgically targeting areas that are attractive, which is
supporting the recovery of our business
10
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Q&A
