ION reports third quarter 2020 results
HOUSTON, Nov. 4, 2020 /PRNewswire/ -- ION Geophysical Corporation (NYSE: IO) today reported total net revenues of $16.2 million in the third quarter 2020, a 29% decrease compared to $22.7 million in the second quarter 2020 and a 70% decrease compared to $53.2 million one year ago. At September 30, 2020, backlog, which consists of commitments for multi-client programs and proprietary imaging work, was $17.7 million or 77% higher compared to backlog at June 30, 2020.
Net loss attributable to ION in the third quarter 2020 was $16.6 million, or a loss of $1.16 per share, compared to a net loss attributable to ION of $3.7 million, or a loss of $0.26 per share in the third quarter 2019. The Company reported Adjusted EBITDA of $(6.6) million for the third quarter 2020, a decrease from $15.5 million one year ago. A reconciliation of Adjusted EBITDA to the closest comparable GAAP numbers can be found in the tables of this press release.
Year-to-date net revenues were $95.4 million, a 28% decrease year-over-year compared to the $132.0 million of net revenues one year ago. While year-to-date revenues were down $36.6 million, the net loss attributable to ION improved by $9.6 million primarily due to the over $38 million of structural changes and associated cost reductions implemented earlier this year.
Net loss attributable to ION was $24.1 million in the first nine months of 2020, or a loss of $1.69 per share, compared to a net loss attributable to ION of $33.7 million, or a loss of $2.39 per share in the first nine months of 2019. Year-to-date Adjusted EBITDA was $16.5 million, a decrease from $22.7 million for the first nine months of 2019.
At quarter close, the Company's total liquidity of $59.4 million consisted of $51.1 million of cash (including net revolver borrowings of $22.5 million) and $8.3 million of remaining available borrowing capacity under the revolving credit facility, slightly below total liquidity of $65.5 million from one year ago. In response to the market uncertainty from the COVID-19 pandemic and lower oil and gas prices, the Company drew under its credit facility during the first quarter 2020, of which $22.5 million remains outstanding and in the Company's cash balances as of September 30, 2020. In addition, the Company continues to work with its banking advisors and largest bondholder to proactively address the $121 million bond ahead of its scheduled maturity in December 2021.
"Our third quarter results were negatively impacted by continued challenging market conditions associated with repercussions of the oil price volatility earlier this year," said Chris Usher, ION's President and Chief Executive Officer. "More specifically, this quarter the impact of E&P clients' reduced budgets and restructuring began to materially impact results as many of our contacts found themselves in new or different positions with uncertain budgets. We partially mitigated this impact by fully benefiting from the over $38 million of structural changes and associated cost reductions we outlined early this year. Currently, we are seeing a number of constructive developments evidenced by more stable oil prices, a settling in of new client roles and clearer definition of E&P budgets to high-grade offshore reserves, and line of sight on specific deals for the fourth quarter. Based on these trends and high levels of client engagement on specific deals, including a number postponed from the third quarter, we expect the fourth quarter to be significantly better than the second quarter with the potential to approach our fourth quarter results from last year.
"Despite the macroeconomic backdrop, we have made significant progress executing our strategy. Backlog increased 77% sequentially, reversing several consecutive quarters of steady decline due to our strategic shift to enter the 3D new acquisition multi-client market. We successfully acquired the initial phase of our Mid North Sea High 3D multi-client program and built backlog for the significantly larger second phase next summer. We also commercialized our proprietary Gemini(TM) extended frequency source technology, a key ingredient for improving 3D subsurface imaging in complex geological settings, where some of the most attractive E&P investment areas reside. In addition, we are seeing increasing traction of our offshore optimization software, Marlin(TM). Our team is engaged in four trials outside of our core market to optimize port operations and maritime energy logistics and, based on the positive response, we believe we are well positioned for several additional trials and multiple tenders. In fact, we just won a highly competitive tender to provide a Port Management System for a series of ports in the United Kingdom. While we don't include recurring contracted Software revenues as backlog, year-to-date we extended seven multi-year command and control deals in our core market worth over $5 million annually.
"Although we expect the market will remain challenging, we see indications for improving offshore E&P industry dynamics and continue to anticipate significant growth in digitalization over the next decade. In addition to the E&P industry, we continue to work to broaden our offerings into other markets. I'm encouraged by the positive client feedback related to the value delivered from our innovative solutions. For example, clients can now identify, quantify and ultimately improve inefficiencies in vessel transit through the use of our Marlin software. Importantly, we intersect the E&P industry's need to high-grade portfolios and bring lower cost barrels online faster, while achieving environmental compliance goals, such as carbon neutrality. Rapid digital transformation has enabled a smarter, data-rich environment from which to identify high impact wells, maximize production, or improve the safety and efficiency of offshore operations. I strongly believe ION's consistent, pragmatic focus to provide data and software that optimizes decision-making in capital intensive industries positions us well for future success."
THIRD QUARTER 2020
The Company's segment net revenues for the third quarter were as follows (in thousands):
Three Months Ended September 30, 2020 2019 % Change E&P Technology % & Services $ 10,093 $ 40,241 (75) Operations 6,141 12,998 (53) Optimization % Total $ 16,234 $ 53,239 (70) %
E&P Technology & Services segment net revenues were $10.1 million for the third quarter 2020 compared to $15.2 million for the second quarter of 2020 and $40.2 million for third quarter 2019. Within the E&P Technology & Services segment, multi-client net revenues were $6.3 million, a decrease of 81% from third quarter 2019, primarily due to lower volume of ION's global data library sales, as well as a decline in new venture revenues due to acquisition completion of a large new program in the prior period compared to revenues from smaller reimaging programs in the current period. Imaging and Reservoir Services net revenues were $3.8 million, a decrease of 46% from third quarter 2019 due to lower proprietary tender activity, and consistent with our strategy to preferentially utilize these resources to generate higher margin multi-client reimaging products.
Operations Optimization segment net revenues were $6.1 million for the third quarter 2020 compared to $7.5 million for the second quarter of 2020 and $13.0 million for third quarter 2019. Within the Operations Optimization segment, Optimization Software & Services net revenues were $3.0 million, a 57% decrease from third quarter 2019 due to reduced seismic activity and associated services demand resulting from COVID-19. Devices net revenues were $3.1 million, a 49% decrease from third quarter 2019 due to lower sales of towed streamer equipment spares and repairs.
Consolidated gross margin for the quarter was 8%, compared to 47% one year ago. Gross margin in E&P Technology & Services was (11)% compared to 46% one year ago, resulting from the decline in net revenues. Operations Optimization gross margin was 39%, compared to 54% one year ago, primarily from the decline in net revenues.
Consolidated operating expenses were $12.5 million, a 42% decrease from $21.4 million in the third quarter 2019. Operating margin was (69)%, compared to 7% one year ago. The decline in operating margin was the result of the decrease in net revenues, partially offset by lower operating expenses from cost reduction measures made earlier in the year.
YEAR-TO-DATE 2020
The Company's segment net revenues for the first nine months of the year were as follows (in thousands):
Nine Months Ended September 30, 2020 2019 % Change E&P Technology & % Services $ 71,833 $ 95,867 (25) Operations 23,546 36,103 (35) Optimization % Total $ 95,379 $ 131,970 (28) %
Within the E&P Technology & Services segment, multi-client net revenues were $59.4 million, a decrease of 25% from the first nine months of 2019, predominantly driven by decreased new venture net revenues due to reduced new program activity this year. Data Library revenues were comparable with the first nine months of 2019 largely due to increased sales of global 2D data library in the first quarter of 2020. Imaging and Reservoir Services net revenues were $12.4 million, a decrease of 24% from the first nine months of 2019 due to lower proprietary tender activity, and consistent with our strategy to preferentially utilize these resources to generate higher margin multi-client reimaging products.
Within the Operations Optimization segment, Optimization Software & Services net revenues were $10.8 million, a 39% decrease from the first nine months of 2019 due to COVID-19 related reduced seismic activity and associated services demand. Devices net revenues were $12.7 million, a 31% decrease from the first nine months of 2019 due to decreased sales of towed streamer equipment spares and repairs.
Consolidated gross margin for the period was 36%, compared to 42% one year ago. Gross margin in E&P Technology & Services was 35% compared to 38% one year ago. The decline in E&P Technology & Services gross margin resulted from the decrease in new venture revenues, as well as the $1.2 million impairment of the multi-client data library in the first nine months of 2020. Operations Optimization gross margin was 40%, a decrease compared to 52% one year ago, primarily resulting from the decline in net revenues.
Consolidated operating expenses were $44.5 million, a 36% decrease from $69.4 million in the first nine months of 2019 and operating margin remained consistent at (11)% for both periods. Excluding special items, consolidated operating expenses, as adjusted, were $38.2 million, compared to $63.9 million in the first nine months of 2019, and operating margin, as adjusted, was (3)%, compared to (7)% one year ago. The improvement in operating margin, as adjusted, was primarily due to lower operating expenses from cost reductions made earlier in the year. A reconciliation of special items to the reported financial results can be found in the tables to this press release.
Income tax expense was $10.0 million, compared to $7.9 million in the first nine months of 2019. The income tax expense includes a $2.2 million valuation allowance established against our recognized deferred tax assets in our non-U.S. businesses. The Company's income tax expense primarily relates to results generated by our non-U.S. businesses in Latin America.
CONFERENCE CALL
The Company has scheduled a conference call for Thursday, November 5, 2020, at 10:00 a.m. Eastern Time that will include a slide presentation to be posted in the Investor Relations section of the ION website by 9:00 a.m. Eastern Time. To participate in the conference call, dial (877) 407-0672 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 November 19, 2020. To access the replay, dial (877) 660-6853 and use pass code 13698483#.
Investors, analysts and the general public will also have the opportunity to listen to the conference call live over the Internet by visiting iongeo.com. An archive of the webcast will be available shortly after the call on the Company's website.
About ION
Leveraging innovative technologies, ION delivers powerful data-driven decision-making to offshore energy, ports and defense industries, enabling clients to optimize operations and deliver superior returns. Learn more at iongeo.com.
Contact
Mike Morrison
Executive Vice President and Chief Financial Officer
+1.281.879.3615
The information 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 may include information 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 risks associated with the timing and development of ION Geophysical Corporation's products and services; pricing pressure; decreased demand; changes in oil prices; political, execution, regulatory, and currency risks; the COVID-19 pandemic; and agreements made or adhered to by members of OPEC and other oil producing countries to maintain production levels. For additional information regarding these various risks and uncertainties, see our Form 10-K for the year ended December 31, 2019, filed on February 6, 2020. Additional risk factors, which could affect actual results, are disclosed by the Company in its filings with the Securities and Exchange Commission ("SEC"), including its Form 10-K, Form 10-Qs and Form 8-Ks filed during the year. The Company expressly disclaims any obligation to revise or update any forward-looking statements.
Tables to follow
ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, --- 2020 2019 2020 2019 --- Service revenues $ 10,202 $ 41,990 $ 73,234 $ 100,525 Product revenues 6,032 11,249 22,145 31,445 Total net revenues 16,234 53,239 95,379 131,970 Cost of services 11,491 22,690 47,033 61,931 Cost of products 3,454 5,261 12,962 15,256 Impairment of multi-client data library - 1,167 Gross profit 1,289 25,288 34,217 54,783 Operating expenses: Research, development and engineering 2,899 4,878 9,943 15,421 Marketing and sales 2,811 5,591 8,888 17,444 General, administrative and other operating expenses 6,743 10,961 21,546 36,550 Impairment of goodwill - 4,150 Total operating expenses 12,453 21,430 44,527 69,415 Income (loss) from operations (11,164) 3,858 (10,310) (14,632) Interest expense, net (3,669) (3,155) (10,304) (9,378) Other income (expense), net (525) (242) 6,675 (938) Income (loss) before income taxes (15,358) 461 (13,939) (24,948) Income tax expense 1,056 3,790 9,982 7,916 Net loss (16,414) (3,329) (23,921) (32,864) Less: Net income attributable to noncontrolling interest (193) (394) (168) (841) Net loss attributable to ION $ (16,607) $ (3,723) $ (24,089) $ (33,705) Net loss per share: Basic $ (1.16) $ (0.26) $ (1.69) $ (2.39) Diluted $ (1.16) $ (0.26) $ (1.69) $ (2.39) Weighted average number of common shares outstanding: Basic 14,278 14,181 14,255 14,104 Diluted 14,278 14,181 14,255 14,104
ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) ASSETS September 30, December 31, 2020 2019 --- Current assets: Cash and cash equivalents $ 51,056 $ 33,065 Accounts receivable, net 8,288 29,548 Unbilled receivables 9,629 11,815 Inventories, net 11,873 12,187 Prepaid expenses and other current assets 5,861 6,012 Total current assets 86,707 92,627 Deferred income tax asset, net 8,092 8,734 Property, plant and equipment, net 11,227 13,188 Multi-client data library, net 53,289 60,384 Goodwill 18,684 23,585 Right-of-use assets 37,730 32,546 Other assets 2,136 2,130 Total assets $ 217,865 $ 233,194 LIABILITIES AND DEFICIT Current liabilities: Current maturities of long-term debt $ 23,527 $ 2,107 Accounts payable 35,107 49,316 Accrued expenses 29,197 30,328 Accrued multi-client data library royalties 20,534 18,831 Deferred revenue 2,156 4,551 Current maturities of operating lease liabilities 6,727 11,055 Total current liabilities 117,248 116,188 Long-term debt, net of current maturities 119,349 119,352 Operating lease liabilities, net of current maturities 40,380 30,833 Other long-term liabilities 412 1,453 Total liabilities 277,389 267,826 Deficit: Common stock 144 142 Additional paid-in capital 958,189 956,647 Accumulated deficit (998,380) (974,291) Accumulated other comprehensive loss (21,012) (19,318) Total stockholders' deficit (61,059) (36,820) Noncontrolling interest 1,535 2,188 Total deficit (59,524) (34,632) Total liabilities and deficit $ 217,865 $ 233,194
ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, --- 2020 2019 2020 2019 --- Cash flows from operating activities: Net loss $ (16,414) $ (3,329) $ (23,921) $ (32,864) Adjustments to reconcile net loss to cash provided by (used in) operating activities: Depreciation and amortization (other than multi-client data library) 1,088 805 2,936 2,903 Amortization of multi-client data library 3,973 10,391 16,674 29,787 Stock-based compensation expense 543 905 1,637 3,736 Impairment of multi-client data library - 1,167 Impairment of goodwill - 4,150 Amortization of government relief funding expected to be forgiven - (6,923) Deferred income taxes (101) (781) 237 (1,248) Changes in operating assets and liabilities: Accounts receivable 2,387 (6,619) 21,065 2,115 Unbilled receivables 3,261 (8,803) 1,181 12,772 Inventories (102) (6) 77 729 Accounts payable, accrued expenses and accrued royalties 501 7,582 (6,429) 1,528 Deferred revenue (1,780) 939 (2,246) (2,398) Other assets and liabilities 3,461 3,955 3,563 2,244 Net cash provided by (used in) operating activities (3,183) 5,039 13,168 19,304 Cash flows from investing activities: Investment in multi-client data library (5,245) (6,443) (19,841) (21,225) Purchase of property, plant and equipment (168) 140 (865) (1,272) Net cash used in investing activities (5,413) (6,303) (20,706) (22,497) Cash flows from financing activities: Borrowings under revolving line of credit - 15,000 27,000 15,000 Payments under revolving line of credit - (15,000) (4,500) (15,000) Proceeds from government relief funding - 6,923 Payments on notes payable and long-term debt (287) (554) (1,814) (1,960) Dividend payment to noncontrolling interest (217) (217) Other financing activities (96) (104) (91) (655) Net cash provided by (used in) financing activities (600) (658) 27,301 (2,615) Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash (37) 253 501 151 Net increase (decrease) in cash, cash equivalents and restricted cash (9,233) (1,669) 20,264 (5,657) Cash, cash equivalents and restricted cash at beginning of period 62,615 29,866 33,118 33,854 Cash, cash equivalents and restricted cash at end of period $ 53,382 $ 28,197 $ 53,382 $ 28,197
ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES SUMMARY OF SEGMENT INFORMATION (In thousands) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net revenues: E&P Technology & Services: New Venture $ 1,213 $ 5,905 $ 7,340 $ 24,394 Data Library 5,085 27,288 52,083 55,030 Total multi-client revenues 6,298 33,193 59,423 79,424 Imaging and Reservoir Services 3,795 7,048 12,410 16,443 Total 10,093 40,241 71,833 95,867 Operations Optimization: Optimization Software & Services 3,007 6,895 10,811 17,648 Devices $ 3,134 $ 6,103 $ 12,735 $ 18,455 Total 6,141 12,998 23,546 36,103 Total net revenues $ 16,234 $ 53,239 $ 95,379 $ 131,970 Gross profit (loss): E&P Technology & Services $ (1,092) $ 18,316 $ 24,902 (1) $ 36,113 Operations Optimization 2,381 6,972 9,315 18,670 Total gross profit $ 1,289 $ 25,288 $ 34,217 $ 54,783 Gross margin: E&P Technology & Services (11) % 46 % 35 % 38 % Operations Optimization 39 % 54 % 40 % 52 % Total gross margin 8 % 47 % 36 % 42 % Income (loss) from operations: E&P Technology & Services $ (4,591) $ 11,878 $ 13,803 (1) $ 15,500 Operations Optimization (232) 2,994 (3,965) (2) 5,808 Support and other (6,341) (11,014) (20,148) (35,940) Income (loss) from operations (11,164) 3,858 (10,310) (14,632) Interest expense, net (3,669) (3,155) (10,304) (9,378) Other income (expense), net (525) (242) 6,675 (3) (938) Income (loss) before income taxes $ (15,358) $ 461 $ (13,939) $ (24,948)
(1) Includes impairment of multi- client data library of $1.2 million for the nine months ended September 30, 2020. (2) Includes impairment of goodwill of $4.2 million for the nine months ended September 30, 2020. (3) Includes amortization of the government relief funding expected to be forgiven of $6.9 million for the nine months ended September 30, 2020.
ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES Summary of Net Revenues by Geographic Area (In thousands) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, --- 2020 2019 2020 2019 --- North America $ 479 $ 12,182 $ 37,920 $ 32,984 Latin America 7,925 22,720 22,695 50,572 Asia Pacific 3,777 2,744 15,696 8,287 Europe 3,011 8,335 12,997 24,850 Middle East 306 3,899 2,202 6,364 Africa 344 2,874 1,939 7,541 Other 392 485 1,930 1,372 Total net revenues $ 16,234 $ 53,239 $ 95,379 $ 131,970
ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
Reconciliation of Adjusted EBITDA to Net Loss (Non-GAAP Measure)
(In thousands)
(Unaudited)
The term EBITDA (excluding non-recurring items) represents net loss before net interest expense, income taxes, depreciation and amortization and other non-recurring charges such as impairment charges, severance expenses and government relief. The term Adjusted EBITDA is EBITDA (excluding non-recurring items) but also excludes the impact of fair value adjustments related to the Company's outstanding stock appreciation awards. EBITDA (excluding non-recurring items) and Adjusted EBITDA are not measures of financial performance under generally accepted accounting principles and should not be considered in isolation from or as a substitute for net income (loss) or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Additionally, EBITDA (excluding non-recurring items) and Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The Company has included EBITDA (excluding non-recurring items) and Adjusted EBITDA as a supplemental disclosure because its management believes that EBITDA (excluding non-recurring items) and Adjusted EBITDA provides investors a helpful measure for comparing its operating performance with the performance of other companies that have different financing and capital structures or tax rates.
Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Net loss $ (16,414) $ (3,329) $ (23,921) $ (32,864) Interest expense, net 3,669 3,155 10,304 9,378 Income tax expense 1,056 3,790 9,982 7,916 Depreciation and amortization expense 5,061 11,196 19,610 32,690 Impairment of multi-client data library 1,167 Impairment of goodwill 4,150 Severance expense 3,102 2,810 Amortization of government relief funding expected to be forgiven (6,923) EBITDA excluding non-recurring items (6,628) 14,812 17,471 19,930 Stock appreciation rights expense (credit) 58 732 (952) 2,742 Adjusted EBITDA $ (6,570) $ 15,544 $ 16,519 $ 22,672
ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
Description of Special Items and Reconciliation of GAAP (As Reported) to Non-GAAP (As Adjusted) Measures
(In thousands, except per share data)
(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 adjusted income (loss) from operations or adjusted net income (loss), which excludes certain charges or amounts. This adjusted income (loss) amount is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for income (loss) from operations, net income (loss) or other income data prepared in accordance with GAAP. See the tables below for supplemental financial data and the corresponding reconciliation to GAAP financials for the three and nine months ended September 30, 2020 and 2019:
Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 As Reported Special As Adjusted As Reported Special As Adjusted Items Items Net revenues $ 16,234 $ $ 16,234 $ 53,239 $ $ 53,239 Cost of sales 14,945 14,945 27,951 27,951 Gross profit 1,289 1,289 25,288 25,288 Gross margin 8 % % 8 % 47 % % 47 % Operating expenses 12,453 (58) (1) 12,395 21,430 (732) (1) 20,698 Income (loss) from operations (11,164) 58 (11,106) 3,858 732 4,590 Operating margin (69) 1 (68) 7 % 2 % % % % 9 % Interest expense, net (3,669) (3,669) (3,155) (3,155) Other income (expense), net (525) (525) (242) (242) Income (loss) before income taxes (15,358) 58 (15,300) 461 732 1,193 Income tax expense 1,056 1,056 3,790 3,790 Net income (loss) (16,414) 58 (16,356) (3,329) 732 (2,597) Less: Net income attributable to noncontrolling interest (193) (193) (394) (394) Net income (loss) attributable to ION $ (16,607) $ 58 $ (16,549) $ (3,723) $ 732 $ (2,991) Net loss per share: Basic $ (1.16) $ (1.16) $ (0.26) $ (0.21) Diluted $ (1.16) $ (1.16) $ (0.26) $ (0.21) Weighted average number of common shares outstanding: Basic 14,278 14,278 14,181 14,181 Diluted 14,278 14,278 14,181 14,181
(1) Represents stock appreciation rights awards expense for the three months ended September 30, 2020 and 2019.
Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 As Reported Special As Adjusted As Reported Special As Adjusted Items Items Net revenues $ 95,379 $ $ 95,379 $ 131,970 $ $ 131,970 Cost of sales 61,162 (1,167) (1) 59,995 77,187 77,187 Gross profit 34,217 1,167 35,384 54,783 54,783 Gross margin 36 % 1 % 37 % 42 % % 42 % Operating expenses 44,527 (6,301) (2) 38,226 69,415 (5,552) (4) 63,863 Income (loss) from operations (10,310) 7,468 (2,842) (14,632) 5,552 (9,080) Operating margin (11) 8 % % (3) % (11) % 4 % (7) % Interest expense, net (10,304) (10,304) (9,378) (9,378) Other income (expense), net 6,675 (6,923) (3) (248) (938) (938) Income (loss) before income taxes (13,939) 545 (13,394) (24,948) 5,552 (19,396) Income tax expense 9,982 350 (1) 10,332 7,916 7,916 Net loss (23,921) 195 (23,726) (32,864) 5,552 (27,312) Less: Net income attributable to noncontrolling interest (168) (168) (841) (841) Net loss attributable to ION $ (24,089) $ 195 $ (23,894) $ (33,705) $ 5,552 $ (28,153) Net loss per share: Basic $ (1.69) $ (1.68) $ (2.39) $ (2.00) Diluted $ (1.69) $ (1.68) $ (2.39) $ (2.00) Weighted average number of common shares outstanding: Basic 14,255 14,255 14,104 14,104 Diluted 14,255 14,255 14,104 14,104
(1) Represents impairment of multi- client data library of $1.2 million and the related tax impact of $0.4 million for the nine months ended September 30, 2020. (2) Represents impairment of goodwill of $4.2 million and severance expense of $3.1 million, partially offset by stock appreciation right awards credit of $1.0 million for the nine months ended September 30, 2020. (3) Represents amortization of the government relief funding expected to be forgiven for the nine months ended September 30, 2020. (4) Represents severance expense of $2.8 million and stock appreciation right awards expense of $2.7 million for the nine months ended September 30, 2019.
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SOURCE ION Geophysical Corporation