Ion Geophysical (IOGPQ) 8-K ION Reports Strong First Quarter Results

ION Earnings Call –

Q1 2012

Earnings Call Presentation

May 3, 2012

Exhibit 99.2

Earnings Call Introduction

Corporate Participants & Contact Information

CONTACT INFORMATION

If you have technical problems during the call, please contact DRG&L at 713 529 6600.

If you

would

like

to

listen

to

a

replay

of

today's

call,

it

will

be

available

via

webcast

in

the

Investor

Relations

section

of

the

Company's

website

-

www.iongeo.com

for

approximately

12

months. 

BRIAN HANSON

Chief Executive Officer

GREG HEINLEIN

Chief Financial Officer

2

Earnings Call Introduction

FORWARD-LOOKING STATEMENTS

The information included herein contains forward-looking statements within

the meaning of Section 27A of the Securities Act of 1933 and Section 21E

of the Securities Exchange Act of 1934.

Actual results may vary fundamentally from those described in these

forward-looking statements.

All forward-looking statements reflect numerous assumptions and involve a

number of risks and uncertainties.

These risks and uncertainties include risk factors that are disclosed by ION

from time to time in its filings with the Securities and Exchange Commission.

3

ION Q1 2012 Highlights

Strongest Q1 in recent company history

–

Revenue, Operating Income, and Net Income all up

Y/Y

–

Revenues $112 million, up 23% from Q1 2011

–

Diluted EPS of $0.05 on net income of $8 million

Y/Y revenue growth across all segments

–

Systems up 53%

–

Solutions up 14%

–

Software up 4% (British Pounds)

Sequential profitable quarters for INOVA

4

Q1 11

Q1 12

Q1 11

Q1 12

Q1 11

Q1 12

0

20,000

40,000

60,000

80,000

100,000

120,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

$-

$0.01

$0.02

$0.03

$0.04

$0.05

$0.06

Revenues

($ Thousands)

Operating Income

($ Thousands)

Diluted EPS

Market Observations

Marine Seismic Acquisition Market Growing

Tender activity up

Vessel utilization up

Backlog up

4D activity up

5

Towed Streamer

Seabed

Source: ODS Petrodata, Company Analysis

Market size up

Tender activity up

Vessel utilization up

#OBC and OBN Crews up

Backlog up

All key indicators up

Market Observations

Data Processing Picking Up

Robust tender activity

–

Global in scope

–

Gulf of Mexico improving nicely (next

lease round in June)

Broadband demand on the rise

Interest in GXT technologies, including

RTM

3

(velocity modeling tool), high

ION data processing backlog robust

6

Market Observations

Majors Driving Strong Demand for Multi-client Data

Rise in international exploration

–

Africa,  Arctic, and Latin America

–

ION well positioned for upcoming lease rounds in

Australia, Brazil, Greenland, and parts of Africa

–

Commenced PolandSPAN

TM

2D

land

program in

Q1

Continued domestic shift to liquids and

mixed plays

–

Growing ResSCAN

TM

3D land portfolio with four

programs in progress

ION’s multi-client backlog continues to

be robust

7

INOVA Geophysical

General Market Observations & Operational Highlights

•

G3i

TM

new

cable

product

launched

in

March,

15,000 channels of G3i delivered to BGP

•

Vibrator sales in Q1 (46 units) included

balance of Saudi deliveries for BGP plus

Oman contract

•

First

UniVib

TM

contract

for

3

units

delivered in

Q1

•

Field

testing

of

new

wireless

Hawk

TM

SN11

product in process

8

Two profitable quarters –

Q4 & Q1

Reported on a one-quarter lag

Software

Systems

Solutions

9

Systems revenues $37 million, up

53%

from Q1 2011, due to increased

sales of ocean-bottom and other

marine products and growth in the

land sensor business.

Solutions revenues $66 million, up

14%

from Q1 2011, due to strong

data processing and multi-client

performance.

Software revenues $9 million, up 2%

in USD from Q1 2011, with a steady

stream of software subscription

sales.

Financial Overview

Revenues by Segment

Strong start for 2012

Systems Segment

Financial Overview

Revenue by Type

Towed Streamer Equipment

OBC

Other

10

Robust performance in repairs & replacement business

Return of OBC market

Solutions Segment

Financial Overview

Revenue by Type

Multi-client Investments

Solutions Backlog

Q4 11                                               $134 M

Data

Processing

Data

Libraries

New

Ventures

Q2 11                                 $117 M

11

Q3 11                         $106 M

Q1 12                                          $129 M

$150 M

$130 M

Q1 11                        $105 M

-

40

60

80

100

120

140

160

2010

2011

2012

20

-

10

20

30

40

50

60

70

80

Q1 11

Q1 12

Data Processing and New Ventures activity strong

Backlog remains robust

Software Segment

Financial Overview

Revenue by Type (GBP)

Services

Software Systems

% of Seismic Vessels with Orca

®

Orca Vessel Conversion

2011

Orca-Permanent

Other

2010

12

2012

44

vessels

51

vessels

49

vessels

Steady subscription model

OBC Gator

®

uplift

Orca 3D license converted to 2D Spectra

60%

40%

-

1

2

3

4

5

6

Q1 11

Q1 12

INOVA Geophysical

Revenues

Revenues

•

Estimated Q1 2012 revenues of $53 to

$57 million with operating income of

$7 to $8 million**

•

Revenue approximately 70% ahead of

the same period last year

**ION to share in 49% of these estimated results.  These

estimates are unaudited.

13

*Forecast

-

10

20

30

40

50

60

Q1 11

Q1 12*

Financial Overview

Cash Flow

Three Months Ended

March 31,

SUMMARIZED CASH FLOW

2012

2011

Cash from operations

32,341

28,125

Working capital

19,715

24,001

Multi-client investment

(24,527)

(11,907)

PP&E Capital Expenditures

(1,768)

(3,674)

Free Cash Flow

25,761

36,545

Other Investing & Financing

18,933

(70,130)

Cash & Cash Equivalents (Beginning of Period)

42,402

84,419

Cash & Cash Equivalents (End of Period)

87,096

50,834

14

$

$

$

$

Good free cash flow and strong cash position

Undrawn

Revolver

Cash

Term Loan

Facility & Equipment Leases

Financial Overview

Balance Sheet, Liquidity & Debt as of March 31, 2012

Capital Employed

Financing

Cash

Net Fixed Assets

Multi-Client Data Library

Goodwill & Equity in INOVA

Equity

Debt

Ample liquidity and improving balance sheet

$105M

$177M

$87M

Remaining Working Capital

15

Liquidity of $187M

Debt of $105M

0

100

200

300

400

500

600

0

100

200

300

400

500

600

47%

53%

94%

6%

Solid Start to 2012

16

•

Continue to expect solid growth across all

business lines

•

Data processing business back, with growth

expected for balance of 2012

•

Major oil company demand high for multi-client

exploration, with projects expanding globally

•

On track to hit $130M to $150M of multi-client

investment

•

Marine division benefitting from resurgence in

OBC market

•

INOVA off and running with portfolio of new

products

17