IO - Earnings call transcript Q1 2019

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Operator

Greetings and welcome to the ION Geophysical First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rachel White, Vice President Of Corporate Communications. Thank you, Miss White, you may begin.

Rachel White

Thank you, Operator. to quarter welcome call. earnings and morning ION's XXXX first conference Good appreciate today. joining We us you're

on X, Steve indicated and President As Slide Chief Chief Hanson, are and Executive President Brian Officer; Officer. and Financial Bate, Vice our Executive hosts today

call Before I have cover. to a I over them, items few turn to the

you accompany of We investor our of relations to they will find accessible replay today's There a also will call. be using via are today's page website, call, slides link the iongeo.com. on

on that reported of today, be Information call may X. speaks and of Slide to the any on longer as this May therefore only Moving time no at accurate you time-sensitive XXXX, replay. X, are advised information

which on the are to please and over now that with filings refer covered will the to I'll on actual include factors, many Before the annual risks, to expressed any remind in unable yesterday, our made cause that contents our start include control please we call, that statements. Form other this this who statements or we disclosed in incorporated may this the SEC, known uncertainties Form our let our and these our by turn quarterly we which risk certain you implied or issued me current release results XX-Q. expectations Brian, based X. disclosure performance results time XX-K risks to and forward-looking are including future note on in press our forward-looking begin our unknown by from statements. and factors call conference of are reports begin, in those call the morning statements, to and or ION on time report of and These uncertainties during from may Furthermore, statements as Slide materially constitute call or predict by differ regarding performance

Brian Hanson

had uncertain E&P many Thanks, everyone. positive of start, Rachel, the a clients We're in to volatility. oil morning, to price December given outlook and good due our off

total flows investing Our were the we and of million up Including during to cash both compared cash operations from of most liquidity & XX% Net expectations in will that segments. revenues $XX million are budgets were our will million of the across indicating increasing financing activities, first In analysts' quarter flat $X spending E&P digits slightly with generated our XXXX. our business $X Technology $XX up Services to in million. be this year. clients quarter, be single or up segment, line E&P their

continue exploration spending reserve to exploration unclear replacement. funding over how global in will remains XXXX. However, remains prioritize focused E&P companies cash as It conservation robust very activity and be

expect to sales license of this multiclient year. data tied be majority to the closing rounds We

and Our year. programs improve new program to new plan venture to we of this activity sanctioned number the increase continues

we're the uptick optimistic, activity and cautiously We new given are venture in seeing. interest

We sanctioned far. three new last of programs year. year so have I'll the out five seven this all to we've already been multiclient that for compared speak to

surveys offshore across XD to We calibrated large phase and consistently reimaging fourth are XX integrates continuing The Santos Brazil the further Picanha program with seamlessly provide XD imaged expand to Picanha our north. Campos basins. dataset over program a originally and

services was Smart backlog awards now closely providers active with will also to growth Maya a million. Round XD higher our In arising data. optimization Brazil an and Backlog with exploration previous E&P XX,XXX that XX Marlin our not from is highest covers customer in harbors XX,XXX upcoming of it's presence the program data unexplored, branded programs square kilometers sequentially key ocean-bottom a portfolios Imaging wells has off low-cost as the two E&P be technology-driven, Ports three exploring XD value the Brazil's program are offering is primarily part kilometers Pacific We activity for multiclient data and our due Software are in and driven to markets, of but a customers services to in commitments. of library quarter. deployment The covers second-quarter Marlin deployments offshore interested which this Marlin of group's across the expand deepwater our and engineering new by reserves we XX% our of service in customer Marlin driven to operations been reimaging a adjacent XD segment, up program to new Software be XD years, October U.K. frontiers. years, revenue These XX. our half acreage initiative. projects. continue coast America. long-term record $X basin range new is Brazil Farofa, offshore of looking reimaging this A continued and sustainable volume is of nodal high Marlin system. acreage by to companies In a revenue to suggests Central their called revenues, petroleum Campos E&P Partnerships $XX both some to strategy. primarily attributable also for broad X,XXX-kilometer million new sanctioned of up in digital are their had of late deployments. grow licensing add to open that working to multiclient transformation available adoption the ports are configure

Marlin's seabed in projected frequency to providers solution, new our offerings for a equipment an repair continue sensor of optimizing XX% were quarter, adoption, software data logistics Streamer our due segment, weather services improve bottom and seabed to In The increase production. growing modest Towed of cloud with and firm ocean monitoring the closely market its partnerships of monetization footprint. on Marlin's value release sensor. Devices nodal to further the of working five establish leading continue operations also ease drilling content provider up is the year optimization in a our We revenues Group And with growth to business, Hertz due extend year, provider. of the our this in to lower

commercialized and components share in our our value deck five nodal of are unique growing has commercial As be which successful potential broadly technology expensive XSea dramatically retrieval number XSea, to next-generation proof-of-concept speeds revenue to we automation delivers. another economics a to more ocean offering The service the the the track to enable reminder, the OBS nodal achieve elements bottom system, under back today's demonstration, After and remaining of We in were providers attachment. of of of to able proprietary deployment on us finalized system, are knots. surveys XXXX. recurring very design a that strategies the improved we to

to clients to potential launch an recurring the it that partners. conventional financials, who with as of Steve gain are questions. also over diverters sourced to million traction SailWing up be We I'll has $X improving ocean-bottom innovative and and us this quarter, I'll high-margin foil-based niche taking alternative SailWing held is through year trials to two a different to successful field place. we marine With the the $X million potential turn two vessel then performance revenue in market walk growing before wrap bulky

Steve Bate

Thanks Brian. Good morning, everyone.

& our XXXX. were Optimization first both in Operations revenues quarter up of Revenues first-quarter total compared by to segment segment, Services and XX%. Technology increased XX% E&P the Our

last Ocean segment. Integrated discontinued our in reporting call a separate as Bottom we Technologies earnings our mentioned we in As February, have

in in operations were Going the of with E&P from in services new existing XX% data multiclient & the of XXXX, over to other of revenues XXXX. forward, an million, with first our quarter data costs and Brazil recorded data XSea and our of was first the in all majority sales to by and cost The revenues increase segment, completed the library library. XD Within the increase will primarily relevant revenues venture our XXXX. technology segments increasing our residing optimization programs two revenues Brazil recently library reimaging essentially technology flat XSea quarter technologies our revenues XX% XD due be $XX of

revenues were $X of a decrease services Our million, XX%. imaging

XXXX. a revenues, XXXX. remainder new from $X increase were backlog million, experienced increase increase market primarily significant quarter by a of to closed our increase an level continued imaging a backlog in in our million, Optimization revenues Services in in increase, This since lead services XXXX. services revenue of revenues of imaging imaging to due operations were While its quarter the was X% our Marlin number engineering an during a by deployment segment, decline driven and revenues the should during the $X driven Devices increase highest adoption increasing In services This & repairs. in to software. the in offshore XX% first services increase optimization operations Software an optimization of projects

the to of as our Overall, a an loss $X.XX the in we $X.XX part the million we in in $X in XXXX, While loss our quarter million our SARs operating the expenses of $X $XX of million quarter compared compensation per net an XXXX. net increase or to reported declined for a in of overall quarter of share share increase XXXX. per million consolidated first expenses or quarter due $XX first first of to experienced revenues, first compared recorded to compared we margin

to first quarter adjusted EBITDA described was negative a moment in year the $X adjusted negative compared expense a to our was decline related $X I in a one Our for the EBITDA ago. The ago. million, increase compensation million,

back strong increase from turn ago. million, With million remains that, to an liquidity one year it Our of $X at I'll $XX Brian.

Brian Hanson

Steve. Thanks

production gradually improve demand becomes increasingly the as next believe decade. to to will We in continue critical meet market it fundamentals

the While expect E&P that have to software that, several second currently exceeded guidance, into XXXX for revenue general XXXX's XXXX, with last a operator significant we'll the growth improvement backlog, we quarter to left new an Any With momentum suggest and increasing we to not Q&A. solid anticipate programs and turn to EBITDA drivers recognize XXXX, XXXX. as XXXX years. months developed already of expected. benefit of experiencing improvement and two deals, to compared combination we and the offerings be commercialization closed over quarter budget a we on sales of back second levels The venture go. recently the subject we increase do during it the of business few the is Primary program provide pushed will as include

Operator

[Operator the Please Andrew first McLellan Instructions] of with question Wesserstein your Company. comes Our from with question. line proceed

Andrew McLellan

I a mentioned. SARs the just you around had that question

you during of expense quarter, noncash stock like? add look will adjusted back the EBITDA some the If what

Steve Bate

quarter It flat Steve. This roughly quarter. is been over would

Andrew McLellan

we out? impact on right SARs elaborate just should the kind forward? way of the model as that how And going just we think Could is you about that

Steve Bate

XXXX a get all the the vested it's topic. get get they I to - move to fully stock into details, complicated every so going mark-to-market it's Yes, quarter and but the price. SARs are going they're now with won't so and

Andrew McLellan

on Panama? what updates And Any we...

Brian Hanson

and then Andrew, Yes. update, quarter. - - elections yes, We're real No of evaluate the it's the May, other the we'll real no than last for update elections. as than same the on in waiting side other other

Andrew McLellan

at the of and the seeing far two the other the April? being Brian, that regards with that second-quarter to prepared that's months levels quarter. last in comments made, at the comment EBITDA kind then second kind ago of And providing similar you at What's end least trajectory far of to improvement year's so driver you're so the

Brian Hanson

say in of the but performed every our our would this and XXXX, segment business, you segment every business if are Where year segment across drivers of I of - multiclient segment went quarter. the business second performing. the if back look to quarter is our you that healthy every of

So better than year. this significantly be of I'd quarter second year the last to expect

Andrew McLellan

of this expect already all terms to the do programs, five in guideposts be said the And terms for year of versus number year. in you seven of year? new that last you What

Brian Hanson

A our interest in programs. or We're you improved multiclient give that seeing direction. of to little early increased kind

out. more that we're early time to bit our really to So flesh going stages It's a customers. with need little still

Andrew McLellan

can though tell? kind early of north XX? too Directionally, on of it is you north XX? it give a - Is of Or guidepost us to

Brian Hanson

to early And not Some large. tell. are too are all some also, created are programs equal, it's Yes, right? small,

the not lot so numbers, the absolute have next to a color more as And you on meaningful as we'll as call. probably give just. Probably

Andrew McLellan

would Where improvement the year? terms of million, benefit What through the the that see we the the most? think you I of in up backlog in $X And would business that go as business we mentioned. that's part

Brian Hanson

attributed the increase to Well, was largest backlog last services the business. side of in the in imaging quarter the

Andrew McLellan

And sorry question. one last

expect consistent I the to stayed was investments kind terms of in just Is year? you around has XX-K, in year. you multiclient that guideposts provided think provided of that, what previously, this for with the spend what

Steve Bate

hasn't this Andrew - Yes, guidance that. that is we're standing still Steve, by

Operator

There closing no I'd in are queue. the questions to hand like further call the to management comments. back for

Brian Hanson

speaking to to time attend for look you quarter to call. We the call. Well, our taking thank conference on you forward second the

Operator

this conclude you your Ladies and does participation. gentlemen, teleconference. Thank today's for

have your a at this may and time wonderful day. lines You disconnect

Ion Geophysical (IOGPQ) 4 May 192019 Q1 Earnings call transcript