Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 28, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'ION GEOPHYSICAL CORP | ' |
Entity Central Index Key | '0000866609 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 163,306,746 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $88,585 | $60,971 |
Accounts receivable, net | 62,901 | 127,136 |
Unbilled receivables | 82,894 | 89,784 |
Inventories | 61,404 | 70,675 |
Prepaid expenses and other current assets | 25,698 | 25,605 |
Total current assets | 321,482 | 374,171 |
Deferred income tax asset | 0 | 28,414 |
Property, plant, equipment and seismic rental equipment, net | 49,360 | 33,772 |
Multi-client data library, net | 242,870 | 230,315 |
Equity method investments | 69,624 | 73,925 |
Goodwill | 55,322 | 55,349 |
Intangible assets, net | 11,986 | 14,841 |
Other assets | 15,199 | 9,796 |
Total assets | 765,843 | 820,583 |
Current liabilities: | ' | ' |
Current maturities of long-term debt | 5,193 | 3,496 |
Accounts payable | 31,808 | 28,688 |
Accrued expenses | 60,360 | 124,095 |
Accrued multi-client data library royalties | 24,661 | 26,300 |
Deferred revenue | 20,361 | 26,899 |
Total current liabilities | 142,383 | 209,478 |
Long-term debt, net of current maturities | 180,530 | 101,832 |
Other long-term liabilities | 207,044 | 8,131 |
Total liabilities | 529,957 | 319,441 |
Redeemable noncontrolling interest | 1,881 | 2,123 |
Equity: | ' | ' |
Cumulative convertible preferred stock | 0 | 27,000 |
Common stock, $0.01 par value; authorized 200,000,000 shares; outstanding 163,298,996 and 156,356,949 shares at September 30, 2013 and December 31, 2012, respectively, net of treasury stock | 1,633 | 1,564 |
Additional paid-in capital | 877,891 | 848,669 |
Accumulated deficit | -625,976 | -360,297 |
Accumulated other comprehensive loss | -13,300 | -11,886 |
Treasury stock, at cost, 849,539 shares at both September 30, 2013 and December 31, 2012 | -6,565 | -6,565 |
Total stockholders' equity | 233,683 | 498,485 |
Noncontrolling interests | 322 | 534 |
Total equity | 234,005 | 499,019 |
Total liabilities and equity | $765,843 | $820,583 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares outstanding | 163,298,996 | 156,356,949 |
Treasury stock, shares | 849,539 | 849,539 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement [Abstract] | ' | ' | ' | ' |
Service revenues | $44,679 | $93,023 | $224,231 | $232,501 |
Product revenues | 35,159 | 43,300 | 106,259 | 120,746 |
Total net revenues | 79,838 | 136,323 | 330,490 | 353,247 |
Cost of services | 52,256 | 59,136 | 188,494 | 149,863 |
Cost of products | 42,686 | 21,229 | 85,525 | 60,327 |
Gross profit (loss) | -15,104 | 55,958 | 56,471 | 143,057 |
Operating expenses: | ' | ' | ' | ' |
Research, development and engineering | 10,288 | 7,504 | 28,665 | 25,536 |
Marketing and sales | 8,416 | 8,091 | 25,364 | 24,162 |
General, administrative and other operating expenses | 22,720 | 15,314 | 50,277 | 43,695 |
Total operating expenses | 41,424 | 30,909 | 104,306 | 93,393 |
Income (loss) from operations | -56,528 | 25,049 | -47,835 | 49,664 |
Interest expense, net | -4,281 | -1,237 | -8,103 | -4,119 |
Equity in earnings (losses) of investments | -5,192 | -1,684 | -10,414 | 4,561 |
Other expense, net | -74,301 | -936 | -180,392 | -727 |
Income (loss) before income taxes | -140,302 | 21,192 | -246,744 | 49,379 |
Income tax expense | 56,954 | 6,037 | 19,450 | 13,666 |
Net income (loss) | -197,256 | 15,155 | -266,194 | 35,713 |
Net loss attributable to noncontrolling interest | 498 | 42 | 515 | 436 |
Net income (loss) attributable to ION | -196,758 | 15,197 | -265,679 | 36,149 |
Preferred stock dividends | 338 | 338 | 1,014 | 1,014 |
Conversion payment of preferred stock | 5,000 | 0 | 5,000 | 0 |
Net income (loss) applicable to common shares | ($202,096) | $14,859 | ($271,693) | $35,135 |
Net income (loss) per share: | ' | ' | ' | ' |
Basic | ($1.29) | $0.10 | ($1.73) | $0.23 |
Diluted | ($1.29) | $0.09 | ($1.73) | $0.22 |
Weighted average number of common shares outstanding: | ' | ' | ' | ' |
Basic | 157,143 | 155,918 | 156,842 | 155,698 |
Diluted | 157,143 | 162,852 | 156,842 | 162,680 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income (loss) | ($197,256) | $15,155 | ($266,194) | $35,713 |
Other comprehensive income (loss), net of taxes, as appropriate: | ' | ' | ' | ' |
Foreign currency translation adjustments | 2,513 | 2,707 | -530 | 2,972 |
Equity interest in investees' other comprehensive income (loss) | -716 | -783 | -1,265 | -67 |
Unrealized gain (loss) on available-for-sale securities | 0 | -80 | -244 | 383 |
Other changes in other comprehensive income (loss) | 27 | 63 | 625 | 36 |
Total other comprehensive income (loss), net of taxes | 1,824 | 1,907 | -1,414 | 3,324 |
Comprehensive net income (loss) | -195,432 | 17,062 | -267,608 | 39,037 |
Comprehensive loss attributable to noncontrolling interest | 498 | 42 | 515 | 436 |
Comprehensive net income (loss) attributable to ION | ($194,934) | $17,104 | ($267,093) | $39,473 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net income (loss) | ($266,194) | $35,713 |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ' | ' |
Depreciation and amortization (other than multi-client library) | 13,146 | 11,532 |
Amortization of multi-client library | 50,892 | 66,911 |
Amortization of debt costs | 928 | 187 |
Stock-based compensation expense | 5,707 | 4,473 |
Equity in (earnings) losses of investments | 10,414 | -4,561 |
Gain on sale of cost-method investment | -3,591 | 0 |
Accrual for loss contingency related to legal proceedings | 181,776 | 10,000 |
Write-down of multi-client data library | 5,461 | 0 |
Write-down of receivables from OceanGeo | 9,157 | 0 |
Write-down of excess and obsolete inventory | 21,197 | 0 |
Deferred income taxes | 7,768 | 795 |
Change in operating assets and liabilities: | ' | ' |
Accounts receivable | 57,481 | 37,526 |
Unbilled receivables | 6,890 | -40,898 |
Inventories | -13,157 | -8,540 |
Accounts payable, accrued expenses and accrued royalties | -6,179 | 12,812 |
Deferred revenue | -6,527 | -12,316 |
Other assets and liabilities | 3,346 | -2,302 |
Net cash provided by operating activities | 78,515 | 111,332 |
Cash flows from investing activities: | ' | ' |
Cash invested in multi-client data library | -86,346 | -105,600 |
Purchase of property, plant, equipment and seismic rental assets | -13,539 | -13,566 |
Net advances to INOVA Geophysical | -8,000 | 0 |
Investment in and advances to OceanGeo B.V. (formerly named GeoRXT B.V.) | -9,500 | 0 |
Proceeds from sale of a cost-method investment | 4,150 | 0 |
Maturity of short-term investments | 0 | 20,000 |
Investment in convertible note | -2,000 | -2,000 |
Other investing activities | 76 | 0 |
Net cash used in investing activities | -115,159 | -101,166 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of notes | 175,000 | 0 |
Payments under amended revolving line of credit | -97,250 | -51,000 |
Borrowings under amended revolving line of credit | 0 | 148,250 |
Repayment of term loan | 0 | -98,250 |
Payments on long-term debt | -3,296 | -2,776 |
Cost associated with issuance of notes | -6,731 | 0 |
Cost associated with debt amendment | 0 | -1,313 |
Payment of preferred dividends | -1,014 | -1,014 |
Conversion payment for preferred stock | -5,000 | 0 |
Proceeds from exercise of stock options | 2,367 | 563 |
Other financing activities | 790 | 338 |
Net cash provided by (used in) financing activities | 64,866 | -5,202 |
Effect of change in foreign currency exchange rates on cash and cash equivalents | -608 | 113 |
Net increase in cash and cash equivalents | 27,614 | 5,077 |
Cash and cash equivalents at beginning of period | 60,971 | 42,402 |
Cash and cash equivalents at end of period | $88,585 | $47,479 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The condensed consolidated balance sheet of ION Geophysical Corporation and its subsidiaries (collectively referred to as the “Company” or “ION,” unless the context otherwise requires) at December 31, 2012 has been derived from the Company’s audited consolidated financial statements at that date. The condensed consolidated balance sheet at September 30, 2013, and the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2013 and 2012 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2013 and 2012, are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the operating results for a full year or of future operations. | |
These condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements presented in accordance with accounting principles generally accepted in the United States have been omitted. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and Amendment No. 1 thereto on Form 10-K/A, which was filed on April 17, 2013 and contains the separate consolidated financial statements of INOVA Geophysical Equipment Limited (“INOVA Geophysical”) for the fiscal year ended December 31, 2012. | |
The Company’s consolidated results of operations for the second and third quarters of 2013 were affected by certain additional contingent loss accruals, restructuring charges and impairments of certain assets. See Note 9 “Litigation” and Note 15 “Restructuring Activities” for additional information. The Company’s conclusion to record the restructuring and impairment charges was made in connection with the Company’s preparation of the financial statements included in this Quarterly Report on Form 10-Q. | |
In addition, also in connection with the Company’s preparation and review of its financial statements included in this Quarterly Report on Form 10-Q, the Company determined that it had incorrectly presented the investments in its multi-client seismic data libraries, or SPANs, in its condensed consolidated statements of cash flows for the three months ended March 31, 2013 and the six months ended June 30, 2013. The Company incorrectly included non-cash activity related to the investment in its multi-client seismic data libraries, which resulted in an understatement of its cash provided by operating activities and an understatement of its cash used in investing activities as previously reported for the interim periods ended March 31, 2013 and June 30, 2013. See Item 4. - Controls and Procedures for further discussion of the improvements to the Company’s controls and procedures implemented to address this incorrect presentation. As a result of this incorrect presentation, the Company restated its condensed consolidated statements of cash flows for the interim periods ended March 31, 2013 and June 30, 2013. |
Segment_Information
Segment Information | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Segment Information | ' | |||||||||||||||
Segment Information | ||||||||||||||||
The Company operates through three business segments – Solutions, Systems and Software. The Company measures segment operating results based on income from operations. In addition, the Company has equity ownership interests in two joint ventures: INOVA Geophysical and OceanGeo B.V. (formerly known as GeoRXT B.V.) (“OceanGeo”). See Note 3 “Equity Method Investments” for the summarized financial information for INOVA Geophysical and OceanGeo. | ||||||||||||||||
A summary of segment information is as follows (in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net revenues: | ||||||||||||||||
Solutions: | ||||||||||||||||
New Venture | $ | 11,945 | $ | 40,817 | $ | 93,630 | $ | 91,355 | ||||||||
Data Library | 5,184 | 22,756 | 36,153 | 55,259 | ||||||||||||
Total multi-client revenues | 17,129 | 63,573 | 129,783 | 146,614 | ||||||||||||
Data Processing | 26,318 | 28,546 | 91,453 | 83,601 | ||||||||||||
Total | $ | 43,447 | $ | 92,119 | $ | 221,236 | $ | 230,215 | ||||||||
Systems: | ||||||||||||||||
Towed Streamer | $ | 15,342 | $ | 17,529 | $ | 41,461 | $ | 47,060 | ||||||||
Ocean Bottom | 159 | 7,969 | 7,307 | 13,104 | ||||||||||||
Other | 10,766 | 5,616 | 33,194 | 30,475 | ||||||||||||
Total | $ | 26,267 | $ | 31,114 | $ | 81,962 | $ | 90,639 | ||||||||
Software: | ||||||||||||||||
Software Systems | $ | 8,892 | $ | 12,186 | $ | 24,297 | $ | 30,107 | ||||||||
Services | 1,232 | 904 | 2,995 | 2,286 | ||||||||||||
Total | $ | 10,124 | $ | 13,090 | $ | 27,292 | $ | 32,393 | ||||||||
Total | $ | 79,838 | $ | 136,323 | $ | 330,490 | $ | 353,247 | ||||||||
Gross profit (loss): | ||||||||||||||||
Solutions | $ | (8,487 | ) | $ | 33,142 | $ | 33,600 | $ | 81,031 | |||||||
Systems | (13,987 | ) | 12,731 | 3,195 | 37,777 | |||||||||||
Software | 7,370 | 10,085 | 19,676 | 24,249 | ||||||||||||
Total | $ | (15,104 | ) | $ | 55,958 | $ | 56,471 | $ | 143,057 | |||||||
Gross margin: | ||||||||||||||||
Solutions | (20 | )% | 36 | % | 15 | % | 35 | % | ||||||||
Systems | (53 | )% | 41 | % | 4 | % | 42 | % | ||||||||
Software | 73 | % | 77 | % | 72 | % | 75 | % | ||||||||
Total | (19 | )% | 41 | % | 17 | % | 40 | % | ||||||||
Income (loss) from operations: | ||||||||||||||||
Solutions | $ | (18,163 | ) | $ | 22,341 | $ | 215 | $ | 49,381 | |||||||
Systems | (23,610 | ) | 6,335 | (21,172 | ) | 16,070 | ||||||||||
Software | 6,280 | 9,186 | 16,396 | 21,547 | ||||||||||||
Corporate and other | (21,035 | ) | (12,813 | ) | (43,274 | ) | (37,334 | ) | ||||||||
Income (loss) from operations | (56,528 | ) | 25,049 | (47,835 | ) | 49,664 | ||||||||||
Interest expense, net | (4,281 | ) | (1,237 | ) | (8,103 | ) | (4,119 | ) | ||||||||
Equity in earnings (losses) of investments | (5,192 | ) | (1,684 | ) | (10,414 | ) | 4,561 | |||||||||
Other expense, net | (74,301 | ) | (936 | ) | (180,392 | ) | (727 | ) | ||||||||
Income (loss) before income taxes | $ | (140,302 | ) | $ | 21,192 | $ | (246,744 | ) | $ | 49,379 | ||||||
Equity_Method_Investments
Equity Method Investments | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | |||||||||||||||
Equity Method Investments | ' | |||||||||||||||
Equity Method Investments | ||||||||||||||||
The following table reflects the change in the Company’s equity method investments and note receivable from equity method investees during the nine months ended September 30, 2013 (in thousands): | ||||||||||||||||
INOVA Geophysical | OceanGeo | Total | ||||||||||||||
Investment at December 31, 2012 | $ | 73,925 | $ | — | $ | 73,925 | ||||||||||
Investment in equity | — | 1,500 | 1,500 | |||||||||||||
Note receivable | — | 8,000 | 8,000 | |||||||||||||
Equity in losses of investments | (3,036 | ) | (7,378 | ) | (10,414 | ) | ||||||||||
Write-down of note receivable from OceanGeo | — | (2,122 | ) | (2,122 | ) | |||||||||||
Equity interest in investees' other comprehensive income (loss) | (1,265 | ) | — | (1,265 | ) | |||||||||||
Investments at September 30, 2013 | $ | 69,624 | $ | — | $ | 69,624 | ||||||||||
OceanGeo — In February 2013, the Company purchased from Reservoir Exploration Technology ASA for $1.5 million its 30% interest in OceanGeo (formerly known as GeoRXT B.V.). OceanGeo is headquartered in Rio de Janeiro, Brazil, and specializes in seismic acquisition operations using ocean-bottom cables deployed from vessels leased by OceanGeo. The Company was originally granted an option, exercisable at any time on or before May 15, 2013, to increase its ownership percentage to 50%, which would have required making additional capital contributions to OceanGeo. Additionally, the Company provided OceanGeo with an $8.0 million working capital loan, the repayment of which is guaranteed by the Company’s majority joint venture partner in OceanGeo, Georadar Levantamentos Geofisicos S/A (“Georadar”). The stated maturity date of the loan was May 25, 2013. No repayments have been made to date under this loan, and the indebtedness under the loan remains outstanding. As of September 30, 2013, ION had no obligation, implicit or explicit, to fund any continued losses of OceanGeo. | ||||||||||||||||
During the third quarter of 2013, OceanGeo’s vessels and crew remained idle because it had no contracts for seismic acquisition operations. The Company’s share of losses in OceanGeo attributable to its investment and its receivable for the three and nine months ended September 30, 2013 were $(5.0) million and $(7.4) million, respectively. The Company’s share of losses reduced its equity method investment in OceanGeo to zero. The Company continued to record its share of additional losses, reducing the carrying value of the note receivable from OceanGeo to $2.1 million at September 30, 2013. As of September 30, 2013, the Company evaluated the realizability of its remaining $9.2 million of receivables from OceanGeo and concluded they were fully impaired because OceanGeo has no current revenue-producing contracts and no backlog of contracts for seismic acquisition operations, and it continues to deplete its cash reserves. As a result, the Company recorded a charge through general, administrative and other operating expenses of $9.2 million, such that there is no remaining carrying value of the receivables. | ||||||||||||||||
The following table reflects the summarized financial information for OceanGeo for the three months ended September 30, 2013 and the period from March 1 to September 30, 2013 (in thousands): | ||||||||||||||||
Three Months Ended September 30, 2013 | Period from March 1 to September 30, 2013 | |||||||||||||||
Net revenues | $ | — | $ | 19,668 | ||||||||||||
Gross loss | $ | (11,359 | ) | $ | (11,237 | ) | ||||||||||
Loss from operations | $ | (16,733 | ) | $ | (23,609 | ) | ||||||||||
Net loss | $ | (17,553 | ) | $ | (24,598 | ) | ||||||||||
In October 2013, the Company reached agreement with Georadar for the Company to have the option to increase its ownership percentage in OceanGeo to 70%, subject to certain conditions. As of November 15, 2013, the Company had advanced an additional $7.9 million for working capital purposes. The Company has no obligation, implicit or explicit, to fund any continued expenses of OceanGeo. The Company continues to evaluate the business and prospects of OceanGeo and has not yet determined whether it will increase its ownership interest in OceanGeo. If the Company increases its ownership interest, the Company would likely need to provide OceanGeo additional funding. | ||||||||||||||||
INOVA Geophysical — The Company accounts for its 49% interest in INOVA Geophysical as an equity method investment and records its share of earnings and losses of INOVA Geophysical on a one fiscal quarter lag basis. For the three and nine months ended September 30, 2013, the Company recorded its share of earnings (losses) from INOVA Geophysical of $(0.2) million and $(3.0) million, respectively, compared to its share of earnings (losses) for the corresponding periods in 2012, of $(1.7) million and $4.6 million, respectively. The following table reflects the summarized financial information for INOVA Geophysical for the three months ended June 30, 2013 and 2012 and the nine-month periods from October 1 to June 30 of 2013 and 2012 (in thousands): | ||||||||||||||||
Three Months Ended June 30, | Nine-Month Period from October 1 through June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net revenues | $ | 61,241 | $ | 47,447 | $ | 142,947 | $ | 163,224 | ||||||||
Gross profit | $ | 12,243 | $ | 6,296 | $ | 26,378 | $ | 39,762 | ||||||||
Income (loss) from operations | $ | 1,658 | $ | (4,029 | ) | $ | (7,103 | ) | $ | 11,390 | ||||||
Net income (loss) | $ | (488 | ) | $ | (3,454 | ) | $ | (6,518 | ) | $ | 10,917 | |||||
In the third quarter, INOVA Geophysical initiated a restructuring of its product lines. This was a necessary response to the continued softness in the land market and competition among the land equipment providers for both cabled and cableless acquisition systems. The restructuring within INOVA Geophysical is intended to enable the business to operate profitably at lower revenue levels. INOVA Geophysical reduced its employee headcount by a total of 77 positions, approximately 20%. | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
For information regarding transactions between the Company and its equity method investees, see Note 14 “Related Party Transactions.” |
Net_Income_Loss_per_Share
Net Income (Loss) per Share | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Net Income (Loss) per Share | ' | |||||||||||||||
Net Income (Loss) per 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 issued or reserved for future issuance under outstanding stock options at September 30, 2013 and 2012 was 7,081,950 and 6,699,604, respectively, and the total number of shares of restricted stock and shares reserved for restricted stock units outstanding at September 30, 2013 and 2012 was 763,559 and 842,438, respectively. | ||||||||||||||||
Prior to September 30, 2013, there were 27,000 shares outstanding of the Company’s Series D Cumulative Convertible Preferred Stock (“Series D Preferred Stock”). On September 30, 2013, the holder converted all of the outstanding shares of Series D Preferred Stock into 6,065,075 shares of common stock. See further discussion of the Series D Preferred Stock conversion at Note 6 “Cumulative Convertible Preferred Stock.” The effects of the dilutive stock awards and the outstanding shares of Series D Preferred Stock were anti-dilutive for three and nine months ended September 30, 2013. | ||||||||||||||||
The following table summarizes the computation of basic and diluted net income (loss) per common share (in thousands, except per share amounts): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income (loss) applicable to common shares | $ | (202,096 | ) | $ | 14,859 | $ | (271,693 | ) | $ | 35,135 | ||||||
Income impact of assumed Series D Preferred Stock conversion | — | 338 | — | 1,014 | ||||||||||||
Net income (loss) after assumed Series D Preferred Stock conversion | $ | (202,096 | ) | $ | 15,197 | $ | (271,693 | ) | $ | 36,149 | ||||||
Weighted average number of common shares outstanding | 157,143 | 155,918 | 156,842 | 155,698 | ||||||||||||
Effect of dilutive stock awards | — | 869 | — | 917 | ||||||||||||
Effect of convertible preferred stock | — | 6,065 | — | 6,065 | ||||||||||||
Weighted average number of diluted common shares outstanding | 157,143 | 162,852 | 156,842 | 162,680 | ||||||||||||
Basic net income (loss) per share | $ | (1.29 | ) | $ | 0.1 | $ | (1.73 | ) | $ | 0.23 | ||||||
Diluted net income (loss) per share | $ | (1.29 | ) | $ | 0.09 | $ | (1.73 | ) | $ | 0.22 | ||||||
Longterm_Debt
Long-term Debt | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Long-term Debt | ' | ||||||||
Long-term Debt | |||||||||
Obligations (in thousands) | September 30, | December 31, | |||||||
2013 | 2012 | ||||||||
Senior secured second-priority notes | $ | 175,000 | $ | — | |||||
Revolving line of credit | — | 97,250 | |||||||
Facility lease obligation | 1,721 | 2,334 | |||||||
Equipment capital leases | 9,002 | 5,744 | |||||||
Total | 185,723 | 105,328 | |||||||
Current portion of long-term debt and lease obligations | (5,193 | ) | (3,496 | ) | |||||
Non-current portion of long-term debt and lease obligations | $ | 180,530 | $ | 101,832 | |||||
Senior Secured Second-Priority Notes | |||||||||
On May 13, 2013, the Company sold $175 million aggregate principal amount of 8.125% Senior Secured Second-Priority Notes due 2018 (“Notes”) in a private offering pursuant to an Indenture dated as of May 13, 2013. The Notes are senior secured second-priority obligations of the Company, are guaranteed by certain of the Company’s U.S. subsidiaries, and mature on May 15, 2018. Interest on the Notes accrues at the rate of 8.125% per annum and will be payable semiannually in arrears on May 15 and November 15, commencing on November 15, 2013. | |||||||||
On or after May 15, 2015, the Company may on one or more occasions redeem all or a part of the Notes at the redemption prices set forth below, plus accrued and unpaid interest and special interest, if any, on the Notes redeemed during the twelve-month period beginning on May 15th of the years indicated below: | |||||||||
Date | Percentage | ||||||||
2015 | 104.063 | % | |||||||
2016 | 102.031 | % | |||||||
2017 and thereafter | 100 | % | |||||||
The Notes are initially jointly and severally guaranteed on a senior secured basis by each of the Company’s current material U.S. subsidiaries: GX Technology Corporation, ION Exploration Production (U.S.A.), Inc. and I/O Marine Systems, Inc. (the “Notes Guarantors”). The Notes and the guarantees are secured, subject to certain exceptions and permitted liens, by second-priority liens on substantially all of the assets that secure the indebtedness under the Company's senior first-priority secured credit facility with China Merchants Bank Co., Ltd., New York Branch (“CMB”) as administrative agent and lender under the facility (see “– Revolving Line of Credit” below). The indebtedness under the Notes is effectively junior to the Company's obligations under the senior secured credit facility to the extent of the value of the collateral securing the facility, and to any other indebtedness secured on a first-priority basis to the extent of the value of the Company's assets subject to those first-priority security interests. | |||||||||
The Company used the net proceeds from the offering to repay outstanding indebtedness under its senior secured credit facility with CMB and for general corporate purposes. The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. | |||||||||
The Notes contain certain covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to: | |||||||||
• | Make certain investments; pay certain dividends or distributions on the capital stock or other equity interests of the Company or any restricted subsidiary; purchase, redeem or retire capital stock or certain indebtedness or make other types of restricted payments, unless | ||||||||
* | No default under the Indenture has occurred or would occur as a result of such payment or investment, | ||||||||
* | The Company would, after giving pro forma effect to such investment or payment, have been permitted to incur at least $1.00 of additional indebtedness under a Fixed Charge Coverage Ratio test under the Indenture and | ||||||||
* | The aggregate cumulative amount of all such payments or investments would not exceed a sum calculated by reference to, among other items, the Company's consolidated net income, proceeds from certain sales of equity or assets, certain conversions or exchanges of debt for equity and certain other reductions in indebtedness; | ||||||||
• | Incur additional indebtedness or issue certain preferred stock, unless the Fixed Charge Coverage Ratio for the four most recently completed fiscal quarters immediately prior to such incurrence or issuance would have been 2.0 to 1.0, as determined on a pro forma basis as if the debt had been incurred or the stock issued at the beginning of such four-quarter period; | ||||||||
• | Create, incur or assume any lien, except certain permitted liens; | ||||||||
• | Restrict or encumber the ability of any restricted subsidiary to (i) pay dividends on or make any other distributions with respect to its equity interests, (ii) pay indebtedness owed to the Company or any restricted subsidiary, (iii) make loans or advances to the Company or any of its restricted subsidiaries or (iv) sell, lease or transfer properties or assets to the Company or any restricted subsidiary; | ||||||||
• | Carry out certain mergers or consolidations with another entity, or sell, assign or lease all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries, taken as a whole, unless | ||||||||
* | No default under the Indenture has occurred or would occur as a result of such merger or sale, and | ||||||||
* | The Fixed Charge Coverage Ratio of the Company or its successor for the four most recently completed fiscal quarters immediately prior to such merger or sale would have been 2.0 to 1.0, as determined on a pro forma basis as if the merger or sale and any related financing transactions had occurred at the beginning of such four-quarter period, which would permit the Company or its successor to incur additional indebtedness under the Indenture; | ||||||||
• | Create unrestricted subsidiaries; or | ||||||||
• | Enter into certain transactions with affiliates of the Company. | ||||||||
These and other restrictive covenants contained in the Indenture are subject to important exceptions and qualifications. All of the Company's subsidiaries are currently restricted subsidiaries. | |||||||||
As of September 30, 2013, the Company was in compliance with these covenants. | |||||||||
In connection with the offering of the Notes, the Company entered into a consent agreement with CMB as administrative agent and lender under the Company’s senior secured credit facility. See “— Revolving Line of Credit” below. | |||||||||
In connection with the issuance of the Notes, the Company and the Notes Guarantors entered into a second lien intercreditor agreement dated as of May 13, 2013 (the “Intercreditor Agreement”) with, among others, CMB, as administrative agent, first lien representative for the first lien secured parties and collateral agent for the first lien secured parties, the trustee under the Indenture and the collateral agent for the second lien secured parties. The Intercreditor Agreement provides, among other things, that the liens on the collateral securing the Notes and related obligations will be junior and subordinate in all respects to the liens on the collateral securing the Company's senior secured credit facility and related obligations. | |||||||||
Revolving Line of Credit | |||||||||
On May 29, 2012, the Company amended the terms of its senior secured credit facility (the “Credit Facility”) with CMB, as administrative agent and lender. The First Amendment to the Credit Agreement and Loan Documents (the “First Amendment”) modified certain provisions of the Company’s senior credit agreement with CMB that it had entered into on March 25, 2010. The maturity date of any outstanding debt under the Credit Facility remains March 24, 2015. | |||||||||
As amended by the First Amendment, the Credit Facility provides that the Company may make revolving credit borrowings in U.S. Dollars, Euros, British Pounds Sterling or Canadian Dollars up to an amount not to exceed the U.S. Dollar equivalent of $175.0 million. The Company also agreed that no additional borrowings may be made at any time at which the outstanding indebtedness under the revolving line of credit (principal, accrued interest and fees) exceeds the U.S. Dollar equivalent of $175.0 million. The First Amendment eliminated sub-facility limits under the Credit Facility. | |||||||||
The Company’s obligations under the Credit Facility continue to be guaranteed by certain of its material U.S. subsidiaries that remain as parties to the Credit Facility. In addition, INOVA Geophysical continues to provide a bank stand-by letter of credit as credit support for the Company’s obligations under the Credit Facility. The Company also entered into a credit support agreement with INOVA Geophysical whereby the Company has agreed to indemnify INOVA Geophysical for any and all losses sustained by INOVA Geophysical that arise out of INOVA Geophysical’s guarantee. | |||||||||
As amended by the First Amendment, the interest rates per annum on borrowings under the Credit Facility are, at the Company’s option: | |||||||||
• | an alternate base rate equal to the sum of (i) the greatest of (a) the prime rate of CMB, (b) a federal funds effective rate plus 0.50%, or (c) an adjusted LIBOR-based rate plus 1.0%, and (ii) an applicable interest margin of 1.4% (reduced from 2.5%); or | ||||||||
• | for eurodollar borrowings and borrowings in Euros, Pounds Sterling or Canadian Dollars, the sum of (i) an adjusted LIBOR-based rate, and (ii) an applicable interest margin of 2.4% (reduced from 3.5%). | ||||||||
As of September 30, 2013, no borrowed amounts were outstanding under the Credit Facility. | |||||||||
The Credit Facility contains covenants that restrict the Company, subject to certain exceptions, from: | |||||||||
• | incurring additional indebtedness (including certain capital lease obligations), granting or incurring additional liens on the Company's properties, pledging shares of the Company's subsidiaries, entering into certain merger or other change-in-control transactions, entering into certain transactions with the Company's affiliates, making certain sales or other dispositions of assets, making certain investments, acquiring other businesses and entering into sale-leaseback transactions with respect to the Company's properties; | ||||||||
• | paying cash dividends on the Company's common stock; and | ||||||||
• | repurchasing and acquiring the Company's capital stock, unless there is no event of default under the Credit Facility and the amount of such repurchases does not exceed an amount equal to (i) 25% of the Company's consolidated net income for the prior fiscal year, less (ii) the amount of any cash dividends paid on the Company's common stock. | ||||||||
The Credit Facility requires compliance with certain financial covenants, including the following: | |||||||||
• | maintain a minimum fixed charge coverage ratio, as defined, in an amount equal to at least 1.125 to 1; | ||||||||
• | not exceed a maximum leverage ratio, as defined, of 3.25 to 1; and | ||||||||
• | maintain a minimum tangible net worth of at least 60% of the Company’s tangible net worth as of March 31, 2010, as defined. | ||||||||
The fixed charge coverage ratio is defined as the ratio of (i) the Company’s consolidated EBITDA, as defined in the Credit Facility, less cash income tax expense, non-financed capital expenditures and capitalized research and development costs to (ii) the sum of scheduled payments of lease payments and payments of principal indebtedness, interest expense actually paid and cash dividends, in each case for the four consecutive fiscal quarters most recently ended. The leverage ratio is defined as the ratio of (x) total funded consolidated debt, capital lease obligations and issued letters of credit (net of cash collateral) to (y) the Company's consolidated EBITDA for the four consecutive fiscal quarters most recently ended. | |||||||||
The Credit Facility contains customary event of default provisions, including a “change of control” event, the occurrence of which could lead to an acceleration of the Company's obligations under the Credit Facility. The Credit Facility also provides that certain acts of bankruptcy, insolvency or liquidation of INOVA Geophysical or BGP, Inc., China National Petroleum Corporation (“BGP”) would constitute additional events of default under the Credit Facility. | |||||||||
As of September 30, 2013, the Company was in compliance with these financial covenants and the Company expects to remain in compliance with these financial covenants for at least the next 12 months. | |||||||||
In connection with the Company’s offering of the Notes, on April 12, 2013, the Company, the Notes Guarantors and CMB, as administrative agent and lender under the Credit Facility, entered into a consent agreement related to the Credit Facility that permitted the Company and the Notes Guarantors to, among other things, (i) issue the Notes and related guarantees and (ii) invest a cumulative aggregate amount of up to $100 million in OceanGeo from and after February 26, 2013. |
Cumulative_Convertible_Preferr
Cumulative Convertible Preferred Stock (Notes) | 9 Months Ended |
Sep. 30, 2013 | |
Equity [Abstract] | ' |
Cumulative Convertible Preferred Stock | ' |
Cumulative Convertible Preferred Stock | |
On September 30, 2013, an affiliate of D. E. Shaw & Co., Inc., as holder of all of the 27,000 shares of Series D Preferred Stock of the Company remaining outstanding, converted all of the shares into a total of 6,065,075 shares of the Company’s common stock. Concurrently with the holder’s conversion of its shares of Series D Preferred Stock, the Company paid the holder a cash payment of approximately $5.0 million, representing the estimated present value of certain future dividends in respect of the Series D Preferred Stock. The cash payment made in connection with the conversion of preferred stock reduced the net income (loss) applicable to common shares. As a result of the conversion, all outstanding shares of Series D Preferred Stock were converted into shares of the Company’s common stock and no shares of Series D Preferred Stock remain outstanding. |
Income_Taxes
Income Taxes | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||||||
Income Taxes | ' | |||||||||||||||
Income Taxes | ||||||||||||||||
The Company has recorded a valuation allowance for substantially all of its net deferred tax assets as a result of the significant charges recorded in the three months ended September 30, 2013. Including these current year charges, the Company is expected to be in a cumulative recent loss position for the three-year period ending December 31, 2013. The cumulative recent loss represents significant negative evidence regarding the Company’s ability to realize substantially all of its deferred tax assets. As a result, a valuation allowance has been established. The Company anticipates that deferred tax assets, which includes net operating losses, will not be recognized until they are used in the Company’s tax return, the Company is no longer in a cumulative recent loss position or there is otherwise sufficient evidence to warrant recognition. Based on the significance of the cumulative recent loss, the Company expects to maintain a valuation allowance on its deferred tax assets for the foreseeable future. | ||||||||||||||||
The Company’s effective tax rates for the three months ended September 30, 2013 and 2012 were (40.6)% and 28.5%, respectively. The change in the effective tax rate is the result of recording the valuation allowance during the three months ended September 30, 2013. The Company’s effective tax rate was (7.9)% and 27.7% for the nine months ended September 30, 2013 and 2012, respectively. A reconciliation of the expected income tax expense (benefit) on income (loss) before income taxes using the statutory federal income tax rate of 35% for the three and nine months ended September 30, 2013 and 2012 to income tax expense is as follows (in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Expected income tax expense (benefit) at 35% | $ | (49,106 | ) | $ | 7,417 | $ | (86,360 | ) | $ | 17,282 | ||||||
Foreign taxes (tax rate differential and foreign tax differences) | 9,124 | (919 | ) | 9,052 | (4,083 | ) | ||||||||||
Nondeductible expenses and other | 819 | (133 | ) | (30 | ) | 371 | ||||||||||
Deferred tax asset valuation allowance | 96,117 | (328 | ) | 96,788 | 96 | |||||||||||
Total income tax expense | $ | 56,954 | $ | 6,037 | $ | 19,450 | $ | 13,666 | ||||||||
The total amount of the Company’s unrecognized tax benefits as of September 30, 2013 was $2.1 million. The Company accrues estimated interest and penalties, if any, related to unrecognized tax benefits as a component of the Company’s provision for income taxes. | ||||||||||||||||
The Company’s U.S. federal tax returns for 2007 and subsequent years remain subject to examination by tax authorities. The Company is no longer subject to IRS examination for periods prior to 2007, although carryforward attributes that were generated prior to 2007 may still be adjusted upon examination by the IRS if they either have been or will be used in an open year. In the Company’s foreign tax jurisdictions, tax returns for 2008 and subsequent years generally remain open to examination. | ||||||||||||||||
In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. The standard is effective for interim and annual periods beginning after December 15, 2013 and is to be applied prospectively with optional retrospective adoption permitted. The adoption of this standard is effective on January 1, 2014. The Company is currently evaluating the standard but does not expect it to materially impact the condensed consolidated financial statements and footnote disclosures. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
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. | ||||||||||||
Investment in Convertible Notes. The following table provides additional information related to assets measured at fair value on a recurring basis at September 30, 2013 and December 31, 2012. The reference to the level within the table relates to the level of inputs used to determine fair value, and the key inputs are then described below. The table is as follows (amounts in thousands): | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
As of September 30, 2013: | ||||||||||||
Investment in convertible notes | $ | — | $ | — | $ | 4,194 | ||||||
As of December 31, 2012: | ||||||||||||
Investment in convertible notes | — | — | 8,195 | |||||||||
In May 2011, the Company purchased a convertible note from a privately-owned U.S.-based technology company. The original principal amount of the note was $6.5 million, and the note accrued interest at a rate of 4% per annum. On April 25, 2013, the Company converted the note and accrued interest into 1,533,858 common shares of the investee which resulted in a post-conversion equity ownership percentage interest in the investee of 16%. This investment is now accounted for as a cost method investment. At April 25, 2013, prior to conversion, the note and accrued interest had a fair value of $6.5 million compared to a book value of $7.0 million resulting in a realized loss of $(0.5) million. The Company performed a fair value analysis with respect to its investment in the convertible note and interest using Level 3 inputs. These inputs included (i) an income approach, using a discounted cash flow model, (ii) a market approach, using peer company multiples, and (iii) a market approach, including terms and likelihood of an investment event. | ||||||||||||
In March 2012, the Company and the investee entered into an agreement for the Company to make available to the investee a credit facility in an amount of up to $4.0 million. This credit facility originally had a term of one year with an option to extend its term by one year, which was exercised, extending the maturity date to March 2014. In September 2013, the Company and the investee amended the agreement to (i) extend the maturity date to March 2015, (ii) change the annual interest rate from the London Interbank Offered Rate plus 1150 basis points to an annual rate of 0.25% commencing in June 2013, and (iii) change the conversion provision to allow for conversion of any or all of the outstanding balance of the promissory note under the credit facility into common shares of the investee. As of September 30, 2013, the investee had drawn $4.0 million under this credit arrangement. | ||||||||||||
The Company performed a fair value analysis with respect to its investment in the convertible note using Level 3 inputs. These inputs included a market approach, including the terms and likelihood of an investment event. As of September 30, 2013, the fair value of this investment was approximately $4.2 million, including accrued interest. | ||||||||||||
Fair Value of Other Financial Instruments. Due to their highly liquid nature, the amount of the Company’s other financial instruments, including cash and cash equivalents, accounts and unbilled receivables, notes receivable, 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 September 30, 2013 and December 31, 2012 were $185.7 million and $105.3 million, respectively, compared to its fair values of $173.5 million and $105.3 million as of September 30, 2013 and December 31, 2012, respectively. The fair value of the long-term debt was calculated using a market approach based upon Level 2 inputs, including a price quote from a major financial institution, as of September 30, 2013. As of December 31, 2012, Level 3 inputs were used, including an estimated interest rate reflecting then-current market conditions. | ||||||||||||
The Company’s cost method investments for which quoted market prices are not available are recorded at cost and reviewed periodically if there are events or changes in circumstances that may have a significant adverse effect on the fair value of the investments. |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Litigation | ' |
Litigation | |
WesternGeco | |
In June 2009, WesternGeco L.L.C. (“WesternGeco”) filed a lawsuit against the Company in the United States District Court for the Southern District of Texas, Houston Division. In the lawsuit, styled WesternGeco L.L.C. v. ION Geophysical Corporation, WesternGeco alleged that the Company had infringed several method and apparatus claims contained in four of its United States patents regarding marine seismic streamer steering devices. WesternGeco sought unspecified monetary damages and an injunction prohibiting the Company from making, using, selling, offering for sale or supplying any infringing products in the United States. | |
In June 2010, WesternGeco filed a lawsuit against various subsidiaries and affiliates of Fugro N.V. (“Fugro”), one of the Company’s seismic contractor customers, accusing Fugro of infringing the same United States patents regarding marine seismic streamer steering devices by planning to use certain equipment purchased from the Company on a survey located outside of U.S. territorial waters. The court approved the consolidation of the Fugro case with the case against the Company. Fugro filed a motion to dismiss the lawsuit, and in March 2011 the presiding judge granted Fugro’s motion to dismiss in part, on the basis that the alleged activities of Fugro would occur more than 12 miles from the U.S. coast and therefore are not actionable under U.S. patent infringement law. In response to a Motion for Summary Judgment filed jointly by the Company and Fugro, the Court ruled in April 2012 that the Company did not directly infringe WesternGeco’s method patent claims. In a pre-trial ruling on June 29, 2012, the Court ruled that, if a particular patent claim of WesternGeco was held to be valid and enforceable at the trial, the Company’s supplying of its DigiFIN® lateral streamer control units and related software from the United States to its customers overseas with an intention for the customers to combine DigiFIN and such related software with other required components of the patent claim, would infringe one claim in one of WesternGeco’s asserted patents, U.S. Patent No. 7,293,520. | |
Trial began on July 23, 2012. During the trial, Fugro settled all claims asserted against it by WesternGeco and obtained a global license from WesternGeco. A verdict was returned by the jury on August 16, 2012, finding that the Company willfully infringed the claims contained in the four patents by supplying DigiFIN and the related software from the United States and awarded WesternGeco the sum of $105.9 million in damages, consisting of $12.5 million in reasonable royalty and $93.4 million in lost profits. | |
In September 2012, the Company filed motions with the trial court to overturn all or portions of the verdict. In June 2013, the presiding judge entered a Memorandum and Order rejecting the jury's finding of willfulness and denying WesternGeco's motions for willfulness and enhanced damages, but also denying the Company's post-verdict motions that challenged the jury's infringement findings and the damages amount. In the Memorandum and Order, the judge also stated that he would approve WesternGeco’s motion for a permanent injunction and that WesternGeco is entitled to be awarded supplemental damages for the additional DigiFIN units that were supplied from the United States before and after trial that were not included in the jury verdict due to the timing of the trial. On October 24, 2013, the judge entered another Memorandum and Order, ruling on the number of DigiFIN units that are subject to supplemental damages and also ruling that the supplemental damages applicable to the additional units should be calculated by adding together the jury’s previous reasonable royalty and lost profits damages awards per unit, resulting in supplemental damages of $73.1 million. The total damages award in the case now consists of the jury award of $105.9 million and the supplemental damages award of $73.1 million. The October 2013 Memorandum and Order also concluded that the Company’s infringement involving the supplemental units was not willful and that WesternGeco was not entitled to receive enhanced damages. | |
The next probable step in the case is for the trial court judge to sign and enter a final judgment. As of the filing date of this Quarterly Report on Form 10-Q, the Court had not yet entered a final judgment in the case. | |
Upon the entering of a final judgment, the Company intends to appeal the judgment to the United States Court of Appeals for the Federal Circuit. WesternGeco would also have the right to elect to appeal any final judgment. | |
Either within its final judgment or in a separate order entered after its final judgment, the trial court has ruled that it will also enter a permanent injunction against the Company. As of the filing date of this Quarterly Report on Form 10-Q, the Court had not issued the terms of the permanent injunction. Until the permanent injunction is entered, the terms of the injunction cannot be known for certain, but it is likely that the permanent injunction will prohibit the Company from supplying its DigiFIN units, two parts that are unique to the DigiFIN product and related software from the United States to its customers overseas with an intention for the customers to combine DigiFIN and the software with other required components of the patent claims. The Company has reorganized its operations such that it no longer supplies DigiFIN units, the unique DigiFIN parts and the related software from the United States. | |
Based on the Company’s analysis after the trial court’s Memorandum and Order in June 2013 denying the Company’s post-verdict motions that challenged the jury's infringement findings and the damages amount, the Company increased its loss contingency accrual related to this case from $10.0 million to $120.0 million, consisting of jury verdict damages, court costs, and estimates of prejudgment interest and supplemental damages. Based on the Company’s analysis after the trial court’s Memorandum and Order in October 2013 awarding supplemental damages, the Company further increased its loss contingency accrual related to this case as of September 30, 2013 from $120.0 million, to $191.8 million, consisting of jury verdict damages, supplemental damages, court costs, and estimates of prejudgment interest. Additional interest will continue to accrue until this legal matter is fully resolved. | |
The Company’s assessment of its potential loss contingency may change in the future due to developments at the trial court or appellate court and other events, such as changes in applicable law, and such reassessment could lead to the determination that no loss contingency is probable or that a greater or lesser loss contingency is probable. Any such reassessment could have a material effect on the Company’s financial condition or results of operations. | |
As stated above, the Company intends to appeal the trial court judgment to the United States Court of Appeals for the Federal Circuit. In order to appeal the judgment, the Company may be required to post an appeal bond for the full amount of damages entered in the judgment. To be prepared for an adverse judgment in this case, the Company is in the process of arranging with sureties to post an appeal bond on its behalf if necessary. Until the surety arrangements are completed, the terms applicable to the appeal bond, including the terms enabling each surety to require the Company to post collateral with the surety at any time the bond is outstanding, for up to the full amount of the bond, are not certain. If the Company is required to post collateral with a surety during the appeal process, depending on the size of the bond and the level of required collateral, in order to collateralize the bond the Company might need to utilize a combination of cash on hand, undrawn balances available under its revolving line of credit and possibly incur additional debt and/or equity financing. The collateralization of such a large appeal bond could have an adverse effect on the Company’s liquidity. If the Company is unable to post the appeal bond, the Company may be unable to stay enforcement of the judgment or appeal the case. At this time, the Company is unable to determine the amount of such an appeal bond or whether and to what extent the sureties may require the appeal bond to be collateralized. Similarly, the Company is unable to predict the timing of the final judgment being entered by the trial court or the timing of posting any required appeal bond. | |
Any requirements that the Company collateralize the appeal bond will reduce its liquidity and may reduce the borrowings available under its credit facility. The current maturity date of any outstanding debt under the Company’s Credit Facility is March 2015. No assurances can be made whether the Company’s efforts to raise additional cash would be successful and, if so, on what terms and conditions, and at what cost the Company might be able to secure any such financing. | |
Fletcher | |
In November 2009, Fletcher International, Ltd. (“Fletcher”), the holder of the shares of the Company’s outstanding Series D Preferred Stock until June 2012, filed a lawsuit against the Company and certain of its directors in the Delaware Court of Chancery. In the lawsuit, styled Fletcher International, Ltd. v. ION Geophysical Corporation, et al, Fletcher alleged, among other things, that the Company violated Fletcher’s consent rights contained in the Series D Preferred Stock Certificates of Designation, by (a) the execution and delivery of a convertible promissory note to the Bank of China, New York Branch by one of the Company’s subsidiaries (incorporated in Luxembourg), in connection with a bridge loan funded in October 2009 by Bank of China, and (b) a Canadian subsidiary of the Company executing and delivering several promissory notes in 2008 in connection with the Company’s acquisition of ARAM Systems Ltd., Fletcher also alleged that the Company’s directors violated their fiduciary duties by allowing the subsidiaries to deliver the notes without Fletcher’s consent. In a Memorandum Opinion issued in May 2010 in response to a motion for partial summary judgment, the judge dismissed all of Fletcher’s claims against the named Company directors but also concluded that, because the bridge loan note executed by the Company’s Luxembourg subsidiary in 2009 was convertible into the Company’s common stock, Fletcher had the right to consent to the issuance of the note and that the Company had violated Fletcher’s consent rights by that subsidiary’s issuing the note without Fletcher’s consent. In March 2011, the judge dismissed certain additional claims asserted by Fletcher. In May 2012, the judge ruled that Fletcher did not have the right to consent with respect to two promissory notes executed and delivered by the Canadian subsidiary in September 2008 in connection with the Company’s purchase of ARAM Systems Ltd., but that Fletcher did have the right to consent to the execution and delivery in December 2008 of a replacement promissory note in the principal amount of $35 million, and that the Company had violated Fletcher’s consent rights by the subsidiary’s executing and delivering the replacement promissory note without Fletcher’s consent. Fletcher has since declared to the Court that it will not pursue damages related to the issuance of the replacement $35 million promissory note. | |
In June 2012, Fletcher filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Fletcher’s shares of Series D Preferred Stock, which had been pledged by Fletcher to secure certain indebtedness, were sold by the pledgee to an affiliate of D.E. Shaw & Co., Inc. in June 2012. On September 30, 2013, the holder of the shares of Series D Preferred Stock converted all of the shares into shares of the Company’s common stock. As a result of the conversion, no shares of Series D Preferred Stock remain outstanding. The Company does not believe that the acquisition of the shares by such D. E. Shaw & Co., Inc. affiliate, the bankruptcy filing by Fletcher or the conversion of all of the shares of Series D Preferred Stock into shares of the Company’s common stock will have a material impact on Fletcher’s lawsuit against the Company. | |
The Company believes that the monetary damages suffered by Fletcher as a result of the Company’s subsidiary executing and delivering the convertible note without Fletcher’s consent are nonexistent or nominal, and that the ultimate outcome of the lawsuit will not result in a material adverse effect on the Company’s financial condition or results of operations. | |
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. |
Other_Expense_Net
Other Expense, Net | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Other Income and Expenses [Abstract] | ' | |||||||||||||||
Other Expense, Net | ' | |||||||||||||||
Other Expense, Net | ||||||||||||||||
A summary of other expense, net is as follows (in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Accrual for loss contingency related to legal proceedings (Note 9) | $ | (71,776 | ) | $ | — | $ | (181,776 | ) | $ | (10,000 | ) | |||||
Legal settlement | — | — | — | 11,895 | ||||||||||||
Gain on sale of a cost-method investment | — | — | 3,591 | — | ||||||||||||
Other expense, net | (2,525 | ) | (936 | ) | (2,207 | ) | (2,622 | ) | ||||||||
Total other expense, net | $ | (74,301 | ) | $ | (936 | ) | $ | (180,392 | ) | $ | (727 | ) |
Details_of_Selected_Balance_Sh
Details of Selected Balance Sheet Accounts Details of Selected Balance Sheet Accounts | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |||||||
Details of Selected Balance Sheet Accounts | ' | |||||||
Details of Selected Balance Sheet Accounts | ||||||||
A summary of inventories is as follows (in thousands): | September 30, | December 31, | ||||||
2013 | 2012 | |||||||
Raw materials and subassemblies | $ | 52,177 | $ | 49,421 | ||||
Work-in-process | 10,645 | 8,613 | ||||||
Finished goods | 30,894 | 26,880 | ||||||
Reserve for excess and obsolete inventories | (32,312 | ) | (14,239 | ) | ||||
Total | $ | 61,404 | $ | 70,675 | ||||
For the three months ended September 30, 2013, the Company increased its reserve for excess and obsolete inventories by $18.2 million related to write-downs of inventory resulting from the restructuring of its Systems segment. In addition, the Company wrote off $1.1 million of inventory through scrap expense, and wrote down $1.9 million of inventory to a lower of cost or market value as a result of the restructuring. For additional information related to the Company’s restructuring charges, see Note 15 “Restructuring Activities.” | ||||||||
A summary of other long-term liabilities is as follows (in thousands): | September 30, | December 31, | ||||||
2013 | 2012 | |||||||
Accrual for loss contingency related to legal proceedings (Note 9) | $ | 191,776 | $ | — | ||||
Facility restructuring accrual | 4,511 | 5,073 | ||||||
Other long-term liabilities | 10,757 | 3,058 | ||||||
Total | $ | 207,044 | $ | 8,131 | ||||
At December 31, 2012, the Company had an accrual for loss contingency related to legal proceedings of $10.0 million, which was reflected in Accrued Expenses. During 2013, that amount was reclassified into other long-term liabilities. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Equity [Abstract] | ' | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
A summary of changes in accumulated other comprehensive income (loss) by component is as follows (in thousands): | ||||||||||||||||||||
Foreign currency translation adjustments | Equity interest in investees’ other comprehensive income (loss) | Unrealized gain (loss) on available-for-sale securities | Other changes in other comprehensive income (loss) | Total | ||||||||||||||||
Accumulated other comprehensive income (loss) at December 31, 2012 | $ | (12,638 | ) | $ | 1,214 | $ | (305 | ) | $ | (157 | ) | $ | (11,886 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (530 | ) | (1,265 | ) | (244 | ) | — | (2,039 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | — | 520 | -1 | 105 | -2 | 625 | |||||||||||||
Net current-period other comprehensive income (loss) | (530 | ) | (1,265 | ) | 276 | 105 | (1,414 | ) | ||||||||||||
Accumulated other comprehensive income (loss) at September 30, 2013 | $ | (13,168 | ) | $ | (51 | ) | $ | (29 | ) | $ | (52 | ) | $ | (13,300 | ) | |||||
-1 | Previously unrealized gain (loss) on available-for-sale securities is now recognized in other expense, net, on the Condensed Consolidated Statement of Operations | |||||||||||||||||||
-2 | Items previously recognized in other changes in other comprehensive income (loss) are now recognized in interest expense, net, on the Condensed Consolidated Statement of Operations |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information and Non-Cash Activity Supplemental Cash Flow Information and Non-Cash Activity | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Supplemental Cash Flow Elements [Abstract] | ' | |||||||
Supplemental Cash Flow Information and Non-cash Activity | ' | |||||||
Supplemental Cash Flow Information and Non-cash Activity | ||||||||
A summary of non-cash items from investing and financing activities is as follows (in thousands): | ||||||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Purchases of computer equipment financed through capital leases | $ | 5,962 | $ | 2,953 | ||||
Leasehold improvement paid by landlord | $ | 5,000 | $ | — | ||||
Conversion of investment in a convertible note to equity | $ | 6,765 | $ | — | ||||
Transfer of inventory to seismic rental equipment | $ | 1,471 | $ | 6,730 | ||||
Purchases of property, plant, and equipment and seismic rental equipment financed through accounts payable | $ | 835 | $ | — | ||||
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Related Party Transactions | |
BGP owned approximately 14.6% of the Company’s outstanding common stock as of September 30, 2013. For the nine months ended September 30, 2013 and 2012, the Company recorded revenues from BGP of $5.3 million and $11.0 million, respectively. Total receivables due from BGP were $2.5 million at September 30, 2013. During the nine months ended September 30, 2013, the Company paid to BGP $38.7 million for seismic acquisition services provided on a large 3D marine project; the Company’s accounts payable owed to BGP for those same services was $9.0 million as of September 30, 2013. | |
In July 2013, the Company agreed to lend up to $10.0 million to INOVA Geophysical, and received a promissory note issued by INOVA Geophysical to the order of the Company, which was scheduled to mature on September 30, 2013. The loan was made by the Company to support certain short-term working capital needs of INOVA Geophysical. The indebtedness under the note accrues interest at an annual rate equal to the London Interbank Offered Rate plus 650 basis points. In July 2013, the Company advanced the full principal amount of $10.0 million to INOVA Geophysical under the promissory note. In September 2013, the Company received a $2.0 million payment from INOVA Geophysical on the loan. On September 30, 2013, the maturity date of the note was extended to December 31, 2013. |
Restructuring_Activities
Restructuring Activities | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Restructuring Activities | ' | ||||||||||||
Restructuring Activities | |||||||||||||
In the third quarter of 2013, the Company initiated a restructuring of its Systems segment, which impacted its results of operations for the three and nine months ended September 30, 2013. This restructuring involves the closing of certain manufacturing facilities and reducing headcount in those and other facilities. This restructuring is expected to be complete by December 31, 2013, and the Company expects to incur a total of $28.4 million of charges, including $7.3 million of cash expenditures. | |||||||||||||
In connection with the preparation and review of these financial statements required to be included in this Quarterly Report on Form 10-Q, we re-evaluated the realizability of our Systems segment inventory and recorded $18.2 million of charges related to excess and obsolete inventory. In addition, the Company wrote off $1.1 million of inventory through scrap expense, and wrote down $1.9 million of inventory to a lower of cost or market value as a result of the restructuring. The Company has reduced its employee headcount in its Systems segment by a total of 88 positions as of September 30, 2013, or approximately 31% of the total Systems full-time employee headcount. Also in connection with the preparation and review of the financial statements included in this Quarterly Report on Form 10-Q, at September 30, 2013, the Company had accrued $5.6 million related to severance costs resulting from the reductions. Of the amount expensed for the three months ended September 30, 2013, $3.7 million is included in cost of sales, with the remaining $1.8 million included in operating expenses. | |||||||||||||
During the three months ended September 30, 2013, the Company recognized the following pre-tax charges related to its Systems segment restructuring activity: | |||||||||||||
Severance charges | Asset write-downs and other | Total | |||||||||||
Cost of goods sold | $ | 3,729 | $ | 21,351 | $ | 25,080 | |||||||
Operating expenses | $ | 1,833 | $ | 383 | $ | 2,216 | |||||||
Consolidated total | $ | 5,562 | $ | 21,734 | $ | 27,296 | |||||||
During the fourth quarter, the Company expects to incur an additional $1.1 million in restructuring charges related to closing facilities and other items. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Goodwill | ' |
Goodwill | |
The Company’s total goodwill balance was $55.3 million at September 30, 2013, of which $27.0 million related to its Marine Systems reporting unit. During the third quarter of 2013, due to the restructuring of the Systems segment, the Company determined that there were sufficient indicators to require an interim goodwill impairment analysis of its Marine Systems reporting unit. | |
For goodwill testing purposes, the $191.8 million litigation contingency accrual is assigned to the Marine Systems reporting unit. Based on the increase in this accrual and the recording of a valuation allowance on substantially all of the Company’s net deferred tax assets in the third quarter of 2013, this reporting unit’s carrying value was negative as of September 30, 2013. Based on the Company’s evaluation of qualitative factors relevant to the Marine Systems reporting unit, the second step of the impairment test was performed to measure the amount of any potential impairment by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities in a hypothetical purchase price allocation is the implied fair value of goodwill. The Company completed the step two impairment test, which did not indicate an impairment of goodwill associated with the Marine Systems reporting unit. |
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Summary of Segment Information | ' | |||||||||||||||
A summary of segment information is as follows (in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net revenues: | ||||||||||||||||
Solutions: | ||||||||||||||||
New Venture | $ | 11,945 | $ | 40,817 | $ | 93,630 | $ | 91,355 | ||||||||
Data Library | 5,184 | 22,756 | 36,153 | 55,259 | ||||||||||||
Total multi-client revenues | 17,129 | 63,573 | 129,783 | 146,614 | ||||||||||||
Data Processing | 26,318 | 28,546 | 91,453 | 83,601 | ||||||||||||
Total | $ | 43,447 | $ | 92,119 | $ | 221,236 | $ | 230,215 | ||||||||
Systems: | ||||||||||||||||
Towed Streamer | $ | 15,342 | $ | 17,529 | $ | 41,461 | $ | 47,060 | ||||||||
Ocean Bottom | 159 | 7,969 | 7,307 | 13,104 | ||||||||||||
Other | 10,766 | 5,616 | 33,194 | 30,475 | ||||||||||||
Total | $ | 26,267 | $ | 31,114 | $ | 81,962 | $ | 90,639 | ||||||||
Software: | ||||||||||||||||
Software Systems | $ | 8,892 | $ | 12,186 | $ | 24,297 | $ | 30,107 | ||||||||
Services | 1,232 | 904 | 2,995 | 2,286 | ||||||||||||
Total | $ | 10,124 | $ | 13,090 | $ | 27,292 | $ | 32,393 | ||||||||
Total | $ | 79,838 | $ | 136,323 | $ | 330,490 | $ | 353,247 | ||||||||
Gross profit (loss): | ||||||||||||||||
Solutions | $ | (8,487 | ) | $ | 33,142 | $ | 33,600 | $ | 81,031 | |||||||
Systems | (13,987 | ) | 12,731 | 3,195 | 37,777 | |||||||||||
Software | 7,370 | 10,085 | 19,676 | 24,249 | ||||||||||||
Total | $ | (15,104 | ) | $ | 55,958 | $ | 56,471 | $ | 143,057 | |||||||
Gross margin: | ||||||||||||||||
Solutions | (20 | )% | 36 | % | 15 | % | 35 | % | ||||||||
Systems | (53 | )% | 41 | % | 4 | % | 42 | % | ||||||||
Software | 73 | % | 77 | % | 72 | % | 75 | % | ||||||||
Total | (19 | )% | 41 | % | 17 | % | 40 | % | ||||||||
Income (loss) from operations: | ||||||||||||||||
Solutions | $ | (18,163 | ) | $ | 22,341 | $ | 215 | $ | 49,381 | |||||||
Systems | (23,610 | ) | 6,335 | (21,172 | ) | 16,070 | ||||||||||
Software | 6,280 | 9,186 | 16,396 | 21,547 | ||||||||||||
Corporate and other | (21,035 | ) | (12,813 | ) | (43,274 | ) | (37,334 | ) | ||||||||
Income (loss) from operations | (56,528 | ) | 25,049 | (47,835 | ) | 49,664 | ||||||||||
Interest expense, net | (4,281 | ) | (1,237 | ) | (8,103 | ) | (4,119 | ) | ||||||||
Equity in earnings (losses) of investments | (5,192 | ) | (1,684 | ) | (10,414 | ) | 4,561 | |||||||||
Other expense, net | (74,301 | ) | (936 | ) | (180,392 | ) | (727 | ) | ||||||||
Income (loss) before income taxes | $ | (140,302 | ) | $ | 21,192 | $ | (246,744 | ) | $ | 49,379 | ||||||
Equity_Method_Investments_Tabl
Equity Method Investments (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | |||||||||||||||
Schedule of Change in Equity Method Investments | ' | |||||||||||||||
The following table reflects the change in the Company’s equity method investments and note receivable from equity method investees during the nine months ended September 30, 2013 (in thousands): | ||||||||||||||||
INOVA Geophysical | OceanGeo | Total | ||||||||||||||
Investment at December 31, 2012 | $ | 73,925 | $ | — | $ | 73,925 | ||||||||||
Investment in equity | — | 1,500 | 1,500 | |||||||||||||
Note receivable | — | 8,000 | 8,000 | |||||||||||||
Equity in losses of investments | (3,036 | ) | (7,378 | ) | (10,414 | ) | ||||||||||
Write-down of note receivable from OceanGeo | — | (2,122 | ) | (2,122 | ) | |||||||||||
Equity interest in investees' other comprehensive income (loss) | (1,265 | ) | — | (1,265 | ) | |||||||||||
Investments at September 30, 2013 | $ | 69,624 | $ | — | $ | 69,624 | ||||||||||
Equity Method Investments Summarized Financial Information | ' | |||||||||||||||
The following table reflects the summarized financial information for INOVA Geophysical for the three months ended June 30, 2013 and 2012 and the nine-month periods from October 1 to June 30 of 2013 and 2012 (in thousands): | ||||||||||||||||
Three Months Ended June 30, | Nine-Month Period from October 1 through June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net revenues | $ | 61,241 | $ | 47,447 | $ | 142,947 | $ | 163,224 | ||||||||
Gross profit | $ | 12,243 | $ | 6,296 | $ | 26,378 | $ | 39,762 | ||||||||
Income (loss) from operations | $ | 1,658 | $ | (4,029 | ) | $ | (7,103 | ) | $ | 11,390 | ||||||
Net income (loss) | $ | (488 | ) | $ | (3,454 | ) | $ | (6,518 | ) | $ | 10,917 | |||||
The following table reflects the summarized financial information for OceanGeo for the three months ended September 30, 2013 and the period from March 1 to September 30, 2013 (in thousands): | ||||||||||||||||
Three Months Ended September 30, 2013 | Period from March 1 to September 30, 2013 | |||||||||||||||
Net revenues | $ | — | $ | 19,668 | ||||||||||||
Gross loss | $ | (11,359 | ) | $ | (11,237 | ) | ||||||||||
Loss from operations | $ | (16,733 | ) | $ | (23,609 | ) | ||||||||||
Net loss | $ | (17,553 | ) | $ | (24,598 | ) |
Net_Income_per_Share_Tables
Net Income per Share (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Computation of basic and diluted net income per common share | ' | |||||||||||||||
The following table summarizes the computation of basic and diluted net income (loss) per common share (in thousands, except per share amounts): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income (loss) applicable to common shares | $ | (202,096 | ) | $ | 14,859 | $ | (271,693 | ) | $ | 35,135 | ||||||
Income impact of assumed Series D Preferred Stock conversion | — | 338 | — | 1,014 | ||||||||||||
Net income (loss) after assumed Series D Preferred Stock conversion | $ | (202,096 | ) | $ | 15,197 | $ | (271,693 | ) | $ | 36,149 | ||||||
Weighted average number of common shares outstanding | 157,143 | 155,918 | 156,842 | 155,698 | ||||||||||||
Effect of dilutive stock awards | — | 869 | — | 917 | ||||||||||||
Effect of convertible preferred stock | — | 6,065 | — | 6,065 | ||||||||||||
Weighted average number of diluted common shares outstanding | 157,143 | 162,852 | 156,842 | 162,680 | ||||||||||||
Basic net income (loss) per share | $ | (1.29 | ) | $ | 0.1 | $ | (1.73 | ) | $ | 0.23 | ||||||
Diluted net income (loss) per share | $ | (1.29 | ) | $ | 0.09 | $ | (1.73 | ) | $ | 0.22 | ||||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Obligations | ' | ||||||||
Obligations (in thousands) | September 30, | December 31, | |||||||
2013 | 2012 | ||||||||
Senior secured second-priority notes | $ | 175,000 | $ | — | |||||
Revolving line of credit | — | 97,250 | |||||||
Facility lease obligation | 1,721 | 2,334 | |||||||
Equipment capital leases | 9,002 | 5,744 | |||||||
Total | 185,723 | 105,328 | |||||||
Current portion of long-term debt and lease obligations | (5,193 | ) | (3,496 | ) | |||||
Non-current portion of long-term debt and lease obligations | $ | 180,530 | $ | 101,832 | |||||
Debt Instrument Redemption Percentages | ' | ||||||||
On or after May 15, 2015, the Company may on one or more occasions redeem all or a part of the Notes at the redemption prices set forth below, plus accrued and unpaid interest and special interest, if any, on the Notes redeemed during the twelve-month period beginning on May 15th of the years indicated below: | |||||||||
Date | Percentage | ||||||||
2015 | 104.063 | % | |||||||
2016 | 102.031 | % | |||||||
2017 and thereafter | 100 | % |
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | ' | |||||||||||||||
A reconciliation of the expected income tax expense (benefit) on income (loss) before income taxes using the statutory federal income tax rate of 35% for the three and nine months ended September 30, 2013 and 2012 to income tax expense is as follows (in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Expected income tax expense (benefit) at 35% | $ | (49,106 | ) | $ | 7,417 | $ | (86,360 | ) | $ | 17,282 | ||||||
Foreign taxes (tax rate differential and foreign tax differences) | 9,124 | (919 | ) | 9,052 | (4,083 | ) | ||||||||||
Nondeductible expenses and other | 819 | (133 | ) | (30 | ) | 371 | ||||||||||
Deferred tax asset valuation allowance | 96,117 | (328 | ) | 96,788 | 96 | |||||||||||
Total income tax expense | $ | 56,954 | $ | 6,037 | $ | 19,450 | $ | 13,666 | ||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||
Assets and liabilities measured at fair value on a recurring basis | ' | |||||||||||
The following table provides additional information related to assets measured at fair value on a recurring basis at September 30, 2013 and December 31, 2012. The reference to the level within the table relates to the level of inputs used to determine fair value, and the key inputs are then described below. The table is as follows (amounts in thousands): | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
As of September 30, 2013: | ||||||||||||
Investment in convertible notes | $ | — | $ | — | $ | 4,194 | ||||||
As of December 31, 2012: | ||||||||||||
Investment in convertible notes | — | — | 8,195 | |||||||||
Other_Expense_Net_Tables
Other Expense, Net (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Other Income and Expenses [Abstract] | ' | |||||||||||||||
Summary of Other Income (Expense) | ' | |||||||||||||||
A summary of other expense, net is as follows (in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Accrual for loss contingency related to legal proceedings (Note 9) | $ | (71,776 | ) | $ | — | $ | (181,776 | ) | $ | (10,000 | ) | |||||
Legal settlement | — | — | — | 11,895 | ||||||||||||
Gain on sale of a cost-method investment | — | — | 3,591 | — | ||||||||||||
Other expense, net | (2,525 | ) | (936 | ) | (2,207 | ) | (2,622 | ) | ||||||||
Total other expense, net | $ | (74,301 | ) | $ | (936 | ) | $ | (180,392 | ) | $ | (727 | ) |
Details_of_Selected_Balance_Sh1
Details of Selected Balance Sheet Accounts (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |||||||
Summary of Inventories | ' | |||||||
A summary of inventories is as follows (in thousands): | September 30, | December 31, | ||||||
2013 | 2012 | |||||||
Raw materials and subassemblies | $ | 52,177 | $ | 49,421 | ||||
Work-in-process | 10,645 | 8,613 | ||||||
Finished goods | 30,894 | 26,880 | ||||||
Reserve for excess and obsolete inventories | (32,312 | ) | (14,239 | ) | ||||
Total | $ | 61,404 | $ | 70,675 | ||||
Summary of Other Long-term Liabilities | ' | |||||||
A summary of other long-term liabilities is as follows (in thousands): | September 30, | December 31, | ||||||
2013 | 2012 | |||||||
Accrual for loss contingency related to legal proceedings (Note 9) | $ | 191,776 | $ | — | ||||
Facility restructuring accrual | 4,511 | 5,073 | ||||||
Other long-term liabilities | 10,757 | 3,058 | ||||||
Total | $ | 207,044 | $ | 8,131 | ||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Equity [Abstract] | ' | |||||||||||||||||||
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||||||
A summary of changes in accumulated other comprehensive income (loss) by component is as follows (in thousands): | ||||||||||||||||||||
Foreign currency translation adjustments | Equity interest in investees’ other comprehensive income (loss) | Unrealized gain (loss) on available-for-sale securities | Other changes in other comprehensive income (loss) | Total | ||||||||||||||||
Accumulated other comprehensive income (loss) at December 31, 2012 | $ | (12,638 | ) | $ | 1,214 | $ | (305 | ) | $ | (157 | ) | $ | (11,886 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (530 | ) | (1,265 | ) | (244 | ) | — | (2,039 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | — | 520 | -1 | 105 | -2 | 625 | |||||||||||||
Net current-period other comprehensive income (loss) | (530 | ) | (1,265 | ) | 276 | 105 | (1,414 | ) | ||||||||||||
Accumulated other comprehensive income (loss) at September 30, 2013 | $ | (13,168 | ) | $ | (51 | ) | $ | (29 | ) | $ | (52 | ) | $ | (13,300 | ) | |||||
-1 | Previously unrealized gain (loss) on available-for-sale securities is now recognized in other expense, net, on the Condensed Consolidated Statement of Operations | |||||||||||||||||||
-2 | Items previously recognized in other changes in other comprehensive income (loss) are now recognized in interest expense, net, on the Condensed Consolidated Statement of Operations |
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information and Non-Cash Activity (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Supplemental Cash Flow Elements [Abstract] | ' | |||||||
Summary of Non-cash Items from Investing and Financing Activities | ' | |||||||
A summary of non-cash items from investing and financing activities is as follows (in thousands): | ||||||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Purchases of computer equipment financed through capital leases | $ | 5,962 | $ | 2,953 | ||||
Leasehold improvement paid by landlord | $ | 5,000 | $ | — | ||||
Conversion of investment in a convertible note to equity | $ | 6,765 | $ | — | ||||
Transfer of inventory to seismic rental equipment | $ | 1,471 | $ | 6,730 | ||||
Purchases of property, plant, and equipment and seismic rental equipment financed through accounts payable | $ | 835 | $ | — | ||||
Restructuring_Activities_Table
Restructuring Activities (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Schedule of Restructuring and Related Costs [Table Text Block] | ' | ||||||||||||
During the three months ended September 30, 2013, the Company recognized the following pre-tax charges related to its Systems segment restructuring activity: | |||||||||||||
Severance charges | Asset write-downs and other | Total | |||||||||||
Cost of goods sold | $ | 3,729 | $ | 21,351 | $ | 25,080 | |||||||
Operating expenses | $ | 1,833 | $ | 383 | $ | 2,216 | |||||||
Consolidated total | $ | 5,562 | $ | 21,734 | $ | 27,296 | |||||||
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Summary of segment information | ' | ' | ' | ' |
Revenues | $79,838 | $136,323 | $330,490 | $353,247 |
Gross profit (loss) | -15,104 | 55,958 | 56,471 | 143,057 |
Gross margin | -19.00% | 41.00% | 17.00% | 40.00% |
Income (loss) from operations | -56,528 | 25,049 | -47,835 | 49,664 |
Interest expense, net | -4,281 | -1,237 | -8,103 | -4,119 |
Equity in earnings (losses) of investments | -5,192 | -1,684 | -10,414 | 4,561 |
Other expense, net | -74,301 | -936 | -180,392 | -727 |
Income (loss) before income taxes | -140,302 | 21,192 | -246,744 | 49,379 |
Solutions [Member] | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 43,447 | 92,119 | 221,236 | 230,215 |
Gross profit (loss) | -8,487 | 33,142 | 33,600 | 81,031 |
Gross margin | -20.00% | 36.00% | 15.00% | 35.00% |
Income (loss) from operations | -18,163 | 22,341 | 215 | 49,381 |
Systems | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 26,267 | 31,114 | 81,962 | 90,639 |
Gross profit (loss) | -13,987 | 12,731 | 3,195 | 37,777 |
Gross margin | -53.00% | 41.00% | 4.00% | 42.00% |
Income (loss) from operations | -23,610 | 6,335 | -21,172 | 16,070 |
Software [Member] | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 10,124 | 13,090 | 27,292 | 32,393 |
Gross profit (loss) | 7,370 | 10,085 | 19,676 | 24,249 |
Gross margin | 73.00% | 77.00% | 72.00% | 75.00% |
Income (loss) from operations | 6,280 | 9,186 | 16,396 | 21,547 |
Corporate and Other [Member] | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Income (loss) from operations | -21,035 | -12,813 | -43,274 | -37,334 |
New Venture and Data Library [Member] | Solutions [Member] | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 17,129 | 63,573 | 129,783 | 146,614 |
New Venture [Member] | Solutions [Member] | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 11,945 | 40,817 | 93,630 | 91,355 |
Data Library [Member] | Solutions [Member] | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 5,184 | 22,756 | 36,153 | 55,259 |
Data Processing [Member] | Solutions [Member] | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 26,318 | 28,546 | 91,453 | 83,601 |
Towed Streamer [Member] | Systems | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 15,342 | 17,529 | 41,461 | 47,060 |
Ocean Bottom [Member] | Systems | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 159 | 7,969 | 7,307 | 13,104 |
Other [Member] | Systems | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 10,766 | 5,616 | 33,194 | 30,475 |
Software Systems [Member] | Software [Member] | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | 8,892 | 12,186 | 24,297 | 30,107 |
Services [Member] | Software [Member] | ' | ' | ' | ' |
Summary of segment information | ' | ' | ' | ' |
Revenues | $1,232 | $904 | $2,995 | $2,286 |
Equity_Method_Investments_Chan
Equity Method Investments Changes in Equity Method Investments (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Investment balance, beginning balance | ' | ' | $73,925 | ' |
Investment in equity | ' | ' | 1,500 | ' |
Notes receivable | ' | ' | 8,000 | ' |
Equity in earnings (losses) of investments | -5,192 | -1,684 | -10,414 | 4,561 |
Write-down of note receivable from OceanGeo | ' | ' | -2,122 | ' |
Equity interest in investees' other comprehensive income (loss) | ' | ' | -1,265 | ' |
Investment balance, ending balance | 69,624 | ' | 69,624 | ' |
INOVA Geophysical [Member] | ' | ' | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Investment balance, beginning balance | ' | ' | 73,925 | ' |
Investment in equity | ' | ' | 0 | ' |
Notes receivable | ' | ' | 0 | ' |
Equity in earnings (losses) of investments | -200 | -1,684 | -3,036 | 4,561 |
Write-down of note receivable from OceanGeo | ' | ' | 0 | ' |
Equity interest in investees' other comprehensive income (loss) | ' | ' | -1,265 | ' |
Investment balance, ending balance | 69,624 | ' | 69,624 | ' |
OceanGeo [Member] | ' | ' | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Investment balance, beginning balance | ' | ' | 0 | ' |
Investment in equity | ' | ' | 1,500 | ' |
Notes receivable | ' | ' | 8,000 | ' |
Equity in earnings (losses) of investments | -5,000 | ' | -7,378 | ' |
Write-down of note receivable from OceanGeo | ' | ' | -2,122 | ' |
Equity interest in investees' other comprehensive income (loss) | ' | ' | 0 | ' |
Investment balance, ending balance | $0 | ' | $0 | ' |
Equity_Method_Investments_Narr
Equity Method Investments Narrative (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | |||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Feb. 19, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Nov. 15, 2013 | Oct. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
OceanGeo [Member] | OceanGeo [Member] | OceanGeo [Member] | OceanGeo [Member] | OceanGeo [Member] | INOVA Geophysical [Member] | INOVA Geophysical [Member] | INOVA Geophysical [Member] | INOVA Geophysical [Member] | INOVA Geophysical [Member] | Optional Increase in Ownership [Member] | Subsequent Event | Subsequent Event | Notes Receivable [Member] | INOVA Geophysical [Member] | ||||||
OceanGeo [Member] | OceanGeo [Member] | Optional Increase in Ownership [Member] | OceanGeo [Member] | position | ||||||||||||||||
OceanGeo [Member] | ||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment in equity | ' | ' | ' | ' | ' | ' | ' | ' | $1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of equity method investment | ' | ' | ' | ' | ' | ' | ' | ' | 30.00% | ' | 49.00% | ' | 49.00% | ' | ' | 50.00% | ' | 70.00% | ' | ' |
Working capital loan to investee | ' | ' | ' | ' | ' | ' | ' | ' | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | 7,900,000 | ' | ' | ' |
Equity in earnings (losses) of investments | -5,192,000 | -1,684,000 | -10,414,000 | 4,561,000 | ' | -5,000,000 | -7,378,000 | ' | ' | ' | -200,000 | -1,684,000 | -3,036,000 | 4,561,000 | ' | ' | ' | ' | ' | ' |
Equity method investments | 69,624,000 | ' | 69,624,000 | ' | 73,925,000 | 0 | 0 | ' | ' | 0 | 69,624,000 | ' | 69,624,000 | ' | 73,925,000 | ' | ' | ' | ' | ' |
Value of receivables due from related party | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,100,000 | ' |
Value of remaining receivables due from related party | ' | ' | ' | ' | ' | ' | ' | -9,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write-down of note receivable from OceanGeo | ' | ' | ($9,157,000) | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of positions eliminated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 77 |
Number of positions eliminated, percent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% |
Equity_Method_Investments_Inco
Equity Method Investments Income (Loss) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 |
OceanGeo [Member] | OceanGeo [Member] | INOVA Geophysical [Member] | INOVA Geophysical [Member] | INOVA Geophysical [Member] | INOVA Geophysical [Member] | |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | ' |
Net revenues | $0 | $19,668 | $61,241 | $47,447 | $142,947 | $163,224 |
Gross profit | -11,359 | -11,237 | 12,243 | 6,296 | 26,378 | 39,762 |
Income (loss) from operations | -16,733 | -23,609 | 1,658 | -4,029 | -7,103 | 11,390 |
Net income (loss) | ($17,553) | ($24,598) | ($488) | ($3,454) | ($6,518) | $10,917 |
Narrative_Details
Narrative (Details) | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share [Abstract] | ' | ' |
Number of shares issued or committed for issuance under outstanding stock options | 7,081,950 | 6,699,604 |
Number of shares of restricted stock and shares reserved for restricted stock units outstanding | 763,559 | 842,438 |
Basic_and_Diluted_Per_Share_De
Basic and Diluted Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Net income (loss) applicable to common shares | ($202,096) | $14,859 | ($271,693) | $35,135 |
Weighted average number of common shares outstanding | 157,143 | 155,918 | 156,842 | 155,698 |
Effect of dilutive stock awards and convertible preferred stock | 0 | 869 | 0 | 917 |
Effect of convertible preferred stock | 0 | 6,065 | 0 | 6,065 |
Weighted average number of diluted common shares outstanding | 157,143 | 162,852 | 156,842 | 162,680 |
Basic net income (loss) per share | ($1.29) | $0.10 | ($1.73) | $0.23 |
Diluted net income (loss) per share | ($1.29) | $0.09 | ($1.73) | $0.22 |
Series D Preferred Stock | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Income impact of assumed Series D Preferred Stock conversion | 0 | 338 | 0 | 1,014 |
Net income (loss) after assumed Series D Preferred Stock conversion | ($202,096) | $15,197 | ($271,693) | $36,149 |
Longterm_Debt_Obligations_Deta
Long-term Debt Obligations (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Obligations | ' | ' |
Carrying value of long-term debt | $185,723 | $105,328 |
Current portion of long-term debt and lease obligations | -5,193 | -3,496 |
Non-current portion of long-term debt and lease obligations | 180,530 | 101,832 |
Senior Notes [Member] | ' | ' |
Obligations | ' | ' |
Carrying value of long-term debt | 175,000 | 0 |
Revolving Credit Facility [Member] | ' | ' |
Obligations | ' | ' |
Carrying value of long-term debt | 0 | 97,250 |
Facility Lease Obligation [Member] | ' | ' |
Obligations | ' | ' |
Carrying value of long-term debt | 1,721 | 2,334 |
Capital Lease Obligations [Member] | ' | ' |
Obligations | ' | ' |
Carrying value of long-term debt | $9,002 | $5,744 |
Longterm_Debt_Narrative_Detail
Long-term Debt Narrative (Details) (USD $) | Feb. 26, 2013 | Sep. 30, 2013 | 13-May-13 | Mar. 31, 2010 | Sep. 30, 2013 | Mar. 31, 2010 | Sep. 30, 2013 |
Senior Notes [Member] | Senior Notes [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | ||
China Merchants Bank Co. (CMB) [Member] | China Merchants Bank Co. (CMB) [Member] | China Merchants Bank Co. (CMB) [Member] | China Merchants Bank Co. (CMB) [Member] | China Merchants Bank Co. (CMB) [Member] | China Merchants Bank Co. (CMB) [Member] | ||
Eurodollar Borrowing [Member] | Eurodollar Borrowing [Member] | ||||||
Long-term Debt and Interest Rate Caps (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Principal amount of debt | ' | ' | $175,000,000 | ' | ' | ' | ' |
Stated rate on debt | ' | ' | 8.13% | ' | ' | ' | ' |
Revolving line of credit, Maximum | ' | ' | ' | ' | 175,000,000 | ' | ' |
Outstanding term loan indebtedness under Credit Facility | ' | ' | ' | ' | 0 | ' | ' |
Debt instrument restrictive covenant, maximum percentage of stock to net income allowed to be repurchased | ' | ' | ' | ' | 25.00% | ' | ' |
Debt instrument basis spread on variable rate under option one | ' | ' | ' | ' | 0.50% | 3.50% | 2.40% |
Debt instrument basis spread on variable rate under option two | ' | ' | ' | ' | 1.00% | ' | ' |
Debt instrument basis spread on variable rate under option three | ' | ' | ' | 2.50% | 1.40% | ' | ' |
Fixed charge coverage ratio | ' | 2 | ' | ' | 1.125 | ' | ' |
Leverage ratio | ' | ' | ' | ' | 3.25 | ' | ' |
Percentage of tangible net worth for covenants compliance | ' | ' | ' | 60.00% | ' | ' | ' |
Amount allowed by lender to invest in investee | $100,000,000 | ' | ' | ' | ' | ' | ' |
Longterm_Debt_Redemption_Perce
Long-term Debt Redemption Percentages for Future Periods (Details) | 9 Months Ended |
Sep. 30, 2013 | |
2015 | ' |
Debt Instrument Redemption [Line Items] | ' |
Notes redemption percentages | 104.06% |
2016 | ' |
Debt Instrument Redemption [Line Items] | ' |
Notes redemption percentages | 102.03% |
2017 and thereafter | ' |
Debt Instrument Redemption [Line Items] | ' |
Notes redemption percentages | 100.00% |
Cumulative_Convertible_Preferr1
Cumulative Convertible Preferred Stock (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 |
Series D Preferred Stock | Common stock | |||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' |
Number of shares owned by fletcher Ltd. after conversion | ' | ' | ' | ' | 27,000 | ' |
Number of common stock shares issued after conversion | ' | ' | ' | ' | ' | 6,065,075 |
Payment representing the estimated present value of certain future dividends | $5,000 | $0 | $5,000 | $0 | $5,000 | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Effective income tax rates | -40.60% | 28.50% | -7.90% | 27.70% |
Statutory federal income tax rate | ' | ' | 35.00% | ' |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ' | ' | ' | ' |
Expected income tax expense (benefit) at 35% | ($49,106,000) | $7,417,000 | ($86,360,000) | $17,282,000 |
Foreign taxes (tax rate differential and foreign tax differences) | 9,124,000 | -919,000 | 9,052,000 | -4,083,000 |
Nondeductible expenses and other | 819,000 | -133,000 | -30,000 | 371,000 |
Deferred tax asset valuation allowance | 96,117,000 | -328,000 | 96,788,000 | 96,000 |
Total income tax expense | 56,954,000 | 6,037,000 | 19,450,000 | 13,666,000 |
Unrecognized tax benefits | $2,100,000 | ' | $2,100,000 | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments Assets Measured on Recurring Basis (Details) (Convertible Debt Securities [Member], Recurring Basis [Member], USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Level 1 [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis | ' | ' |
Available-for-sale investments, fair value | $0 | $0 |
Level 2 [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis | ' | ' |
Available-for-sale investments, fair value | 0 | 0 |
Level 3 [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis | ' | ' |
Available-for-sale investments, fair value | $4,194 | $8,195 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments Narrative (Details) (USD $) | 0 Months Ended | 1 Months Ended | 1 Months Ended | ||||
Apr. 25, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | 31-May-11 | Mar. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | |
Convertible Debt Securities [Member] | Credit Facility Receivable [Member] | Credit Facility Receivable [Member] | LIBOR | ||||
Credit Facility Receivable [Member] | |||||||
Fair Value of Financial Instruments (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Carrying value of long-term debt | ' | $185,723,000 | $105,328,000 | ' | ' | ' | ' |
Fair value of long-term debt | ' | 173,500,000 | 105,300,000 | ' | ' | ' | ' |
Fair Value of Financial Instruments (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Principal amount of convertible note | ' | ' | ' | 6,500,000 | ' | ' | ' |
Basis spread on annual rate of loan | ' | 11.50% | ' | ' | ' | ' | ' |
Interest rate on convertible note | ' | ' | ' | 4.00% | ' | ' | 0.25% |
Number of common shares note receivable converted into | 1,533,858 | ' | ' | ' | ' | ' | ' |
Post-conversion equity ownership percentage in investee | 16.00% | ' | ' | ' | ' | ' | ' |
Note and accrued interest, fair value | 6,500,000 | 4,200,000 | ' | ' | ' | ' | ' |
Note and accrued interest, carrying value | 7,000,000 | ' | ' | ' | ' | ' | ' |
Realized loss on convertible note prior to conversion | -500,000 | ' | ' | ' | ' | ' | ' |
Credit facility to investee | ' | ' | ' | ' | 4,000,000 | ' | ' |
Original term of credit facility to investee | ' | ' | ' | ' | '1 year | ' | ' |
Optional extended term of credit facility to investee | ' | ' | ' | ' | '1 year | ' | ' |
Amount drawn on credit facility by investee | ' | ' | ' | ' | ' | $4,000,000 | ' |
Litigation_Details
Litigation (Details) (USD $) | 1 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | |||||
In Millions, unless otherwise specified | Jun. 30, 2009 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | 31-May-12 | Aug. 16, 2012 | Oct. 24, 2013 | Aug. 16, 2012 | Aug. 16, 2012 | Oct. 24, 2013 |
WesternGeco [Member] | WesternGeco [Member] | WesternGeco [Member] | WesternGeco [Member] | Fletcher [Member] | Pending Litigation [Member] | Settled Litigation [Member] | Lost Royalties [Member] | Lost Profits [Member] | Lost Profits [Member] | |
Patent | WesternGeco [Member] | WesternGeco [Member] | Pending Litigation [Member] | Pending Litigation [Member] | Settled Litigation [Member] | |||||
WesternGeco [Member] | WesternGeco [Member] | WesternGeco [Member] | ||||||||
Litigation (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of patent apparatus claims contained | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total damages awarded | ' | ' | ' | ' | ' | $105.90 | $105.90 | $12.50 | $93.40 | $73.10 |
Accrual for loss contingency related to legal proceedings | ' | 191.8 | 120 | 10 | ' | ' | ' | ' | ' | ' |
Principal amount of promissory note | ' | ' | ' | ' | $35 | ' | ' | ' | ' | ' |
Other_Expense_Net_Details
Other Expense, Net (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Other Income and Expenses [Abstract] | ' | ' | ' | ' |
Accrual for loss contingency related to legal proceedings (Note 9) | ($71,776) | $0 | ($181,776) | ($10,000) |
Legal settlement | 0 | 0 | 0 | 11,895 |
Gain on sale of a cost-method investment | 0 | 0 | 3,591 | 0 |
Other expense, net | -2,525 | -936 | -2,207 | -2,622 |
Total other expense, net | ($74,301) | ($936) | ($180,392) | ($727) |
Details_of_Selected_Balance_Sh2
Details of Selected Balance Sheet Accounts Inventories (Details) (USD $) | 3 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' |
Raw materials and subassemblies | $52,177,000 | $49,421,000 |
Work-in-process | 10,645,000 | 8,613,000 |
Finished goods | 30,894,000 | 26,880,000 |
Reserve for excess and obsolete inventories | -32,312,000 | -14,239,000 |
Total | 61,404,000 | 70,675,000 |
Write-down of excess and obsolete inventory | 18,200,000 | ' |
Inventory written off through scrap expense | 1,100,000 | ' |
Inventory write-down to a lower of cost of market value | $1,900,000 | ' |
Details_of_Selected_Balance_Sh3
Details of Selected Balance Sheet Accounts Long-term Liabilities (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Other Liabilities Disclosure [Abstract] | ' | ' |
Accrual for loss contingency related to legal proceedings (Note 9) | $191,776,000 | $0 |
Facility restructuring accrual | 4,511,000 | 5,073,000 |
Other long-term liabilities | 10,757,000 | 3,058,000 |
Total | 207,044,000 | 8,131,000 |
Accrual for loss contingency related to legal proceedings | ' | $10,000,000 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | |
Accumulated other comprehensive income (loss), beginning balance | ' | ' | ($11,886) | ' | |
Other comprehensive income (loss) before reclassifications | ' | ' | -2,039 | ' | |
Amounts reclassified from accumulated other comprehensive income (loss) | ' | ' | 625 | ' | |
Net current-period other comprehensive income (loss) | 1,824 | 1,907 | -1,414 | 3,324 | |
Accumulated other comprehensive income (loss), ending balance | -13,300 | ' | -13,300 | ' | |
Foreign currency translation adjustments | ' | ' | ' | ' | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | |
Accumulated other comprehensive income (loss), beginning balance | ' | ' | -12,638 | ' | |
Other comprehensive income (loss) before reclassifications | ' | ' | -530 | ' | |
Amounts reclassified from accumulated other comprehensive income (loss) | ' | ' | 0 | ' | |
Net current-period other comprehensive income (loss) | ' | ' | -530 | ' | |
Accumulated other comprehensive income (loss), ending balance | -13,168 | ' | -13,168 | ' | |
Equity interest in investeesb other comprehensive income (loss) | ' | ' | ' | ' | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | |
Accumulated other comprehensive income (loss), beginning balance | ' | ' | 1,214 | ' | |
Other comprehensive income (loss) before reclassifications | ' | ' | -1,265 | ' | |
Amounts reclassified from accumulated other comprehensive income (loss) | ' | ' | 0 | ' | |
Net current-period other comprehensive income (loss) | ' | ' | -1,265 | ' | |
Accumulated other comprehensive income (loss), ending balance | -51 | ' | -51 | ' | |
Unrealized gain (loss) on available-for-sale securities | ' | ' | ' | ' | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | |
Accumulated other comprehensive income (loss), beginning balance | ' | ' | -305 | ' | |
Other comprehensive income (loss) before reclassifications | ' | ' | -244 | ' | |
Amounts reclassified from accumulated other comprehensive income (loss) | ' | ' | 520 | [1] | ' |
Net current-period other comprehensive income (loss) | ' | ' | 276 | ' | |
Accumulated other comprehensive income (loss), ending balance | -29 | ' | -29 | ' | |
Other changes in other comprehensive income (loss) | ' | ' | ' | ' | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | |
Accumulated other comprehensive income (loss), beginning balance | ' | ' | -157 | ' | |
Other comprehensive income (loss) before reclassifications | ' | ' | 0 | ' | |
Amounts reclassified from accumulated other comprehensive income (loss) | ' | ' | 105 | [2] | ' |
Net current-period other comprehensive income (loss) | ' | ' | 105 | ' | |
Accumulated other comprehensive income (loss), ending balance | ($52) | ' | ($52) | ' | |
[1] | Unrealized income (loss) on available-for-sale securities affected Other income (expense), net on the Condensed ConsolidatedStatement of Operations | ||||
[2] | Other changes in other comprehensive income affected Interest expense and Tax expense on the Condensed Consolidated Statement of Operations |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information and Non-Cash Activity (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Supplemental Cash Flow Elements [Abstract] | ' | ' |
Purchases of computer equipment financed through capital leases | $5,962 | $2,953 |
Leasehold improvement paid by landlord | 5,000 | 0 |
Conversion of investment in a convertible note to equity | 6,765 | 0 |
Transfer of inventory to seismic rental equipment | 1,471 | 6,730 |
Purchases of property, plant, and equipment and seismic rental equipment financed through trade payables | $835 | $0 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Jul. 31, 2013 | Feb. 19, 2013 | Jul. 31, 2013 | |
BGP Joint Venture [Member] | BGP Joint Venture [Member] | BGP Joint Venture [Member] | INOVA Geophysical [Member] | INOVA Geophysical [Member] | OceanGeo [Member] | LIBOR | |||
INOVA Geophysical [Member] | |||||||||
Property Subject to or Available for Operating Lease [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on annual rate of loan | 11.50% | ' | ' | ' | ' | ' | ' | ' | 6.50% |
Company's outstanding common stock owned by BGP | ' | ' | 14.60% | 14.60% | ' | ' | ' | ' | ' |
Related party transaction, revenues from transactions with related party | ' | ' | ' | $5,300,000 | $11,000,000 | ' | ' | ' | ' |
Receivables due from BGP | ' | ' | 2,500,000 | 2,500,000 | ' | ' | ' | ' | ' |
Paid to related party for seismic acquisition services | ' | ' | 38,700,000 | ' | ' | ' | ' | ' | ' |
Owed to related party for unpaid services | ' | ' | 9,000,000 | 9,000,000 | ' | ' | ' | ' | ' |
Percentage of equity method investment | ' | ' | ' | ' | ' | ' | ' | 30.00% | ' |
Loan made to equity method investee | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' |
Advance to related party | 8,000,000 | 0 | ' | ' | ' | ' | 10,000,000 | ' | ' |
Payment received on related party debt | ' | ' | ' | ' | ' | $2,000,000 | ' | ' | ' |
Restructuring_Activities_Detai
Restructuring Activities (Details) (USD $) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges expected to incur | ' | $1,100,000 | ' |
Expected cash expenditures for remainder of fiscal year | ' | 7,300,000 | ' |
Write-down of excess and obsolete inventory | 18,200,000 | ' | ' |
Inventory written off through scrap expense | 1,100,000 | ' | ' |
Inventory write-down to a lower of cost of market value | 1,900,000 | ' | ' |
Amount accrued for restructuring | 4,511,000 | 4,511,000 | 5,073,000 |
Systems | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges expected to incur | ' | 28,400,000 | ' |
Write-down of excess and obsolete inventory | 18,200,000 | ' | ' |
Number of positions eliminated | 88 | ' | ' |
Number of positions eliminated, percent | 31.00% | ' | ' |
Restructuring charges | 27,296,000 | ' | ' |
Systems | Cost of goods sold | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges | 25,080,000 | ' | ' |
Systems | Operating expenses | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges | 2,216,000 | ' | ' |
Systems | Severance charges | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Amount accrued for restructuring | 5,600,000 | 5,600,000 | ' |
Restructuring charges | 5,562,000 | ' | ' |
Systems | Severance charges | Cost of goods sold | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges | 3,729,000 | ' | ' |
Systems | Severance charges | Operating expenses | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges | 1,833,000 | ' | ' |
Systems | Asset write-downs | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges | 21,734,000 | ' | ' |
Systems | Asset write-downs | Cost of goods sold | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges | 21,351,000 | ' | ' |
Systems | Asset write-downs | Operating expenses | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges | $383,000 | ' | ' |
INOVA Geophysical [Member] | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Number of positions eliminated | 77 | ' | ' |
Number of positions eliminated, percent | 20.00% | ' | ' |
Goodwill_Details
Goodwill (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Goodwill [Line Items] | ' | ' |
Goodwill | $55,322 | $55,349 |
Accrual for loss contingency related to legal proceedings | 191,776 | 0 |
Marine Systems | ' | ' |
Goodwill [Line Items] | ' | ' |
Goodwill | $27,000 | ' |