Ion Geophysical (IOGPQ) 8-K ION Reports First Quarter 2010 Results First Quarter EPS of ($0.09), excluding special items

Exhibit 99.1

ION Reports First Quarter 2010 Results
First Quarter EPS of ($0.09), excluding special items

     HOUSTON- May 5, 2010 — ION Geophysical Corporation (NYSE: IO) today reported first quarter 2010 revenues of $88.7 million, resulting in a net loss of ($11.2) million, or ($0.09) per share, excluding certain special items described below. In the first quarter of 2009, ION’s net loss was ($10.4) million, or ($0.10) per share, on revenues of $106.9 million, excluding special items. During the first quarter of 2010, ION incurred $44.1 million, before tax, or $0.51 per share, after tax, of charges associated with the formation of the land joint venture with BGP and the re-financing of our debts. These special charges are provided in more detail in a table at the end of this press release. Including these special items, loss per share for the first quarter was ($0.60). In the first quarter of 2009, including special items, ION’s net loss was ($38.4) million, or ($0.39) per share.

     Bob Peebler, ION’s Chief Executive Officer, said, “The results for the quarter were within the range of our internal expectations. We had a weak start in our land equipment business, and similarly, a relatively slow start for our marine equipment business. This was not surprising since equipment sales are tied to our contractor customers’ activity and typically lags any pick-up in their business. The land business’ weakness was further compounded by the fact that our Chinese customers, including BGP, generated no sales for ION during the quarter due to the timing of the impending INOVA Geophysical joint venture that closed at the end of the quarter. The good news is that most leading indicators for future equipment sales are improving, including contractor activity and our pipeline of future business opportunities. We expect that the first quarter will be the low point for the year, with improvement going forward in both land and marine equipment sales.

     “On the positive side, our marine software, data processing, and multi-client businesses all finished the first quarter stronger than the prior year period, which suggests we are in the early stages of a rebound. In addition to seeing growing signs of improved future business, the biggest news for the quarter was our completion of the INOVA Geophysical land joint venture with BGP. As previously discussed, we believe this

is a transformational event for the company. The cash infusion from BGP allowed us to significantly de-leverage and improve our balance sheet. In addition, our two companies are now much better aligned as a result of the joint venture and BGP taking an ownership position in ION.”

FIRST QUARTER 2010

     Total revenues in the first quarter of 2010 decreased 17% to $88.7 million compared to $106.9 million a year ago. The Land Imaging Systems and Marine Imaging Systems segments experienced lower revenues compared to prior year. ION Solutions segment revenues increased by 2% over the prior year, while the Data Management Solutions division experienced a 10% increase in revenues compared to the prior year.

     During the first quarter of 2010, the ION Systems group generated sales of $40.6 million compared to $59.9 million in the same period in 2009. Land Imaging Systems’ revenues decreased to $18.9 million compared to $34.2 million in the first quarter of 2009. The lower results for the first quarter were primarily caused by the lack of sales to the Company’s Chinese customers during the first quarter due to the impending formation of the joint venture. Marine Imaging Systems’ revenues decreased to $13.7 million compared to $18.5 million a year ago, mainly due to lower DigiBIRD^™ positioning product sales. However, partially offsetting the decrease was the continued market demand for DigiFIN^® as customers continue to retrofit their existing fleets with the latest streamer control technology. Data Management Solutions’ revenues increased to $8.0 million for the first quarter compared to $7.2 million a year ago as a result of the continued success of converting the high end 3D vessels to the ORCA^® software platform.

     The ION Solutions group generated $48.1 million in revenues compared to $47.0 million in the same period a year ago. The increase was primarily driven by continued robust data processing revenues and by increased data library sales, partially offset by a reduction in new venture program revenues compared to a year ago. As seen throughout 2009 and into 2010, ION’s data processing services group continues to grow and to generate strong revenues.

     Consolidated gross margins for the first quarter of 2010 decreased to 25% from 32% in the first quarter of 2009. The decrease in the gross margin percentage was primarily due to the impact of rental equipment depreciation in the Land Imaging Systems segment and the product mix in the ION Solutions group. However, the gross margins in the Marine Imaging Systems and Data Management Solutions divisions remained consistent with those of 2009.

     Excluding the 2009 special items, operating expenses for the first quarter of 2010 decreased by $5.8 million compared to the prior year period. As a percentage of revenue, operating expenses during the first quarter were stable at 38% compared to 37% in the prior year period. Adjusted EBITDA for the first quarter decreased to $15.9 million compared to $18.0 million in the first quarter of 2009. A reconciliation of Adjusted EBITDA to reported earnings can be found in the financial tables of this press release.

     The Company’s effective tax rate during the first quarter of 2010 was (20.7%) (provision on a loss) compared to 27.1% (benefit on a loss) for the same period in 2009. The change in effective tax rate relates primarily to the tax impact on the special charges related to the closing of the joint venture transaction with BGP. Removing the impact of these special charges of $44.1 million, before tax, the effective tax rate was 29.1% (benefit on a loss).

OUTLOOK

     Brian Hanson, Executive Vice President and Chief Financial Officer, commented, “As mentioned last quarter, our plan is to return ION to a profitable business this year, excluding any one-time charges related to the formation of the joint venture, and to set the stage for a much improved 2011. Our current expectations are that we will experience increasing momentum in all of our businesses as the year unfolds, which will likely carry into 2011. We are not yet positioned to give formal guidance for next year, but assuming the world economies continue to heal and oil prices stay above $70 per barrel, we expect a much stronger 2011.”

CONFERENCE CALL

     ION has scheduled a conference call for Thursday, May 6, 2010, at 10:00 a.m. Eastern Time. To participate in the conference call, dial 480-629-9726 at least 10 minutes before the call begins and ask for the ION conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until May 20, 2010. To access the replay, dial 303-590-3030 and use pass code 4285993#.

     Investors, analysts and the general public will also have the opportunity to listen to the conference call live over the Internet by visitingwww.iongeo.com. Also, an archive of the web cast will be available shortly after the call on the Company’s website.

About ION

     ION Geophysical Corporation is a leading provider of geophysical technology, services, and solutions for the global oil & gas industry. ION’s offerings allow E&P operators to obtain higher resolution images of the subsurface to reduce the risk of exploration and reservoir development, and enable seismic contractors to acquire geophysical data more efficiently. Additional information about ION is available atwww.iongeo.com.

CONTACTS:
R. Brian Hanson
Chief Financial Officer
+1.281.879.3672

Jack Lascar
DRG&E
+1.713.529.6600

The information included herein contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include future sales and market growth, timing of sales, future liquidity and cash levels, future estimated revenues and earnings, benefits expected to result from the INOVA joint venture and related transactions and other statements that are not of historical fact. Actual results may vary materially from those described in these forward-looking statements. All

forward-looking statements reflect numerous assumptions and involve a number of risks and uncertainties. These risks and uncertainties include the timing and development of the Company’s products and services and market acceptance of the Company’s new and revised product offerings; risks associated with the economic downturn and the volatile credit environment; risks associated with the operation of the INOVA joint venture; risks associated with the Company’s level and terms of indebtedness; risks associated with competitors’ product offerings and pricing pressures resulting therefrom; the relatively small number of customers that the Company currently relies upon; the fact that a significant portion of the Company’s revenues is derived from foreign sales; risks that sources of capital may not prove adequate; the Company’s inability to produce products to preserve and increase market share; collection of receivables; and technological and marketplace changes affecting the Company’s product line. Additional risk factors, which could affect actual results, are disclosed by the Company from time to time in its filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2009.

Tables to follow

ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended
	March 31,
	2010			2009
Product revenues	$	40,242		$	59,476
Service revenues		48,477			47,414
Total net revenues		88,719			106,890
Cost of products		30,491			40,031
Cost of services		35,862			33,163
Gross profit		22,366			33,696
Operating expenses:
Research, development and engineering		8,999			11,465
Marketing and sales		7,906			9,763
General and administrative		16,438			19,000
Impairment of intangible assets		—			38,044
Total operating expenses		33,343			78,272
Loss from operations		(10,977	)		(44,576	)
Interest expense, net, including $18.8 million of non-recurring items in 2010		(25,643	)		(6,933	)
Loss on disposition of land division		(38,115	)		—
Fair value adjustment of the warrant		12,788			—
Other income (expense)		3,217			(22	)
Loss before income taxes		(58,730	)		(51,531	)
Income tax expense (benefit)		12,160			(13,963	)
Net loss		(70,890	)		(37,568	)
Preferred stock dividends		875			875
Net loss applicable to common shares	$	(71,765	)	$	(38,443	)
Earnings per share:
Basic and diluted net loss per share	$	(0.60	)	$	(0.39	)
Weighted average number of common shares outstanding:
Basic and diluted		120,312			99,743

ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

	March 31,			December 31,
	2010			2009
ASSETS
Current assets:
Cash and cash equivalents	$	46,344		$	16,217
Restricted cash		1,185			1,469
Accounts receivable, net		61,112			111,046
Current portion notes receivable		—			13,367
Unbilled receivables		28,708			21,655
Inventories, net		53,545			202,601
Deferred income tax asset		6,827			6,001
Prepaid expenses and other current assets		6,598			23,145
Total current assets		204,319			395,501
Deferred income tax asset		15,652			26,422
Property, plant and equipment, net		18,245			78,555
Multi-client data library, net		123,538			130,705
Equity method investment		119,000			—
Goodwill		50,705			52,052
Intangible assets, net		24,650			61,766
Other assets		6,962			3,185
Total assets	$	563,071		$	748,186
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current maturities of long-term debt	$	7,950		$	271,132
Accounts payable		18,282			40,189
Accrued expenses		45,390			65,893
Accrued multi-client data library royalties		17,628			18,714
Fair value of the warrant		—			44,789
Deferred revenue and other current liabilities		14,417			13,802
Total current liabilities		103,667			454,519
Long-term debt, net of current maturities		106,502			6,249
Non-current deferred income tax liability		5,456			1,262
Other long-term liabilities		8,960			3,688
Total liabilities		224,585			465,718
Stockholders’ equity:
Cumulative convertible preferred stock		68,786			68,786
Common stock		1,426			1,187
Additional paid-in capital		774,804			666,928
Accumulated deficit		(482,438	)		(411,548	)
Accumulated other comprehensive loss		(17,527	)		(36,320	)
Treasury stock		(6,565	)		(6,565	)
Total stockholders’ equity		338,486			282,468
Total liabilities and stockholders’ equity	$	563,071		$	748,186

ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	Three Months Ended
	March 31,
	2010			2009
Cash flows from operating activities:
Net loss	$	(70,890	)	$	(37,568	)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization (other than multi-client library)		11,238			10,643
Amortization of multi-client library		12,382			13,899
Stock-based compensation		1,660			2,035
Bad debt expense		131			2,377
Amortization of debt discount		8,656			—
Write-off of unamortized debt issuance costs		10,121			—
Fair value adjustment of the warrant		(12,788	)		—
Deferred income taxes		8,179			(15,380	)
Loss on disposition of land division		38,115			—
Impairment of intangible assets		—			38,044
Change in operating assets and liabilities:
Accounts and notes receivable		35,294			46,645
Unbilled receivables		(7,053	)		(6,956	)
Inventories		(52	)		(18,337	)
Accounts payable, accrued expenses and accrued royalties		(12,536	)		(52,551	)
Deferred revenue		3,913			1,158
Other assets and liabilities		269			7,152
Net cash provided by (used in) operating activities		26,639			(8,839	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(1,268	)		(1,580	)
Investment in multi-client data library		(5,215	)		(18,296	)
Cash, net of fees, from disposition of land division		102,848			—
Cash balances of the disposed land division contributed to INOVA Geophysical		(3,058	)		—
Other investing activities		(3,168	)		143
Net cash provided by (used in) investing activities		90,139			(19,733	)
Cash flows from financing activities:
Net proceeds from issuance of debt		105,695			—
Net proceeds from issuance of common stock		38,039			—
Borrowings under revolving line of credit		85,000			32,000
Repayments under revolving line of credit		(174,429	)		—
Payments on notes payable and long-term debt		(139,211	)		(14,873	)
Payment of preferred dividends		(875	)		(875	)
Other financing activities		(28	)		257
Net cash (used in) provided by financing activities		(85,809	)		16,509
Effect of change in foreign currency exchange rates on cash and cash equivalents		(842	)		(437	)
Net increase in cash and cash equivalents		30,127			(12,500	)
Cash and cash equivalents at beginning of period		16,217			35,172
Cash and cash equivalents at end of period	$	46,344		$	22,672

ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
SUMMARY OF SEGMENT INFORMATION
(In thousands)
(Unaudited)

	Three Months Ended
	March 31,
	2010			2009
Net revenues:
Land Imaging Systems	$	18,926		$	34,182
Marine Imaging Systems		13,699			18,453
Data Management Solutions		7,973			7,246
Total ION Systems Division		40,598			59,881
ION Solutions Division		48,121			47,009
Total	$	88,719		$	106,890
Gross margin percentages:
Land Imaging Systems		(5.9	%)		17.0	%
Marine Imaging Systems		41.6	%		43.8	%
Data Management Solutions		67.3	%		68.0	%
Total ION Systems Division		24.5	%		31.4	%
ION Solutions Division		25.8	%		31.7	%
Total		25.2	%		31.5	%
Income (loss) from operations:
Land Imaging Systems	$	(10,609	)	$	(4,747	)
Marine Imaging Systems		1,892			2,761
Data Management Solutions		4,806			4,430
Total ION Systems Division		(3,911	)		2,444
ION Solutions Division		5,565			5,206
Corporate		(12,631	)		(14,182	)
Impairment of intangible assets		—			(38,044	)
Total	$	(10,977	)	$	(44,576	)

Reconciliation of Adjusted EBITDA to Net Income (Loss)
(Non-GAAP Measure)
(In thousands)
(Unaudited)

     Adjusted EBITDA is a Non-GAAP measurement that is presented as an additional indicator of operating performance and is not a substitute for net income (loss) or net income (loss) per share calculated under generally accepted accounting principles (GAAP). We believe that Adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to service our debt. The calculation of Adjusted EBITDA shown below is based upon amounts derived from the company’s financial statements prepared in conformity with GAAP.

	Three Months Ended
	March 31,
	2010			2009
Net loss	$	(70,890	)	$	(37,568	)
Interest expense, net		25,643			6,933
Income tax expense (benefit)		12,160			(13,963	)
Depreciation and amortization expense		23,620			24,542
Impairment of intangible assets		—			38,044
Loss on disposition of land division		38,115			—
Fair value adjustment of the warrant		(12,788	)		—
Adjusted EBITDA	$	15,860		$	17,988

Reconciliation of Special Charges to Diluted Earnings Per Share
(Non-GAAP Measure)
(In thousands, except per share amounts)
(Unaudited)

     The financial results are reported in accordance with GAAP. However, management believes that certain non-GAAP performance measures may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. One such non-GAAP financial measure is income (loss) from operations or net income (loss) excluding certain charges or amounts. This adjusted income amount is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for operating income (loss), net income (loss) or other income data prepared in accordance with GAAP. See the table below for supplemental financial data and the corresponding reconciliation to GAAP financials for the three months ended March 31, 2010 and 2009:

	Three Months Ended March 31, 2010
	As			Loss on			Write-off of		Adjustments of			As
	Reported			Disposition			Debt Costs*		the Warrant			Adjusted
Net revenues	$	88,719		$	—		$	—	$	—		$	88,719
Cost of sales		66,353			—			—		—			66,353
Gross profit		22,366			—			—		—			22,366
Operating expenses		33,343			—			—		—			33,343
Loss from operations		(10,977	)		—			—		—			(10,977	)
Interest expense, net		(25,643	)		—			10,121		8,656			(6,866	)
Loss on disposition of land division		(38,115	)		38,115			—		—			—
Fair value adjustment of the warrant		12,788			—			—		(12,788	)		—
Other income		3,217			—			—		—			3,217
Income tax expense (benefit)		12,160			(19,954	)		3,542		—			(4,252	)
Net loss		(70,890	)		58,069			6,579		(4,132	)		(10,374	)
Preferred stock dividends		875			—			—		—			875
Net loss applicable to common shares	$	(71,765	)	$	58,069		$	6,579	$	(4,132	)	$	(11,249	)
Basic and diluted earnings per share	$	(0.60	)									$	(0.09	)
Weighted average number of basic and diluted common shares outstanding		120,312											120,312

* Relates to the write-off of unamortized debt issuance costs relating to our first quarter 2010 re-financings.

	Three Months Ended March 31, 2009
	As			Impairment			Restructuring			As
	Reported			Charges			Charges			Adjusted
Net revenues	$	106,890		$	—		$	—		$	106,890
Cost of sales		73,194			—			(517	)		72,677
Gross profit		33,696			—			517			34,213
Operating expenses		78,272			(38,044	)		(1,081	)		39,147
Loss from operations		(44,576	)		38,044			1,598			(4,934	)
Interest expense, net		(6,933	)		—			—			(6,933	)
Other expense		(22	)		—			—			(22	)
Income tax expense (benefit)		(13,963	)		11,033			559			(2,371	)
Net loss		(37,568	)		27,011			1,039			(9,518	)
Preferred stock dividends		875			—			—			875
Net loss applicable to common shares	$	(38,443	)	$	27,011		$	1,039		$	(10,393	)
Basic and diluted earnings per share	$	(0.39	)							$	(0.10	)
Weighted average number of basic and diluted common shares outstanding		99,743									99,743

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