By a News Reporter-Staff News Editor at Information Technology Newsweekly -- ION Geophysical Corporation (NYSE: IO) reported second quarter 2014 net income of $1.2 million, or $0.01 per diluted share, on revenues of $121.5 million, compared to a net loss of $71.1 million, or $(0.45) per share, on revenues of $120.9 million in second quarter 2013. The second quarter results include a non-recurring gain on the sale of the Company's marine source product line, while second quarter 2013 results included a charge related to the ongoing WesternGeco legal matter. Excluding these special items, the Company's second quarter 2014 adjusted net income was a loss of $5.0 million, or $(0.03) per share, compared to adjusted net income of $0.4 million, or $0.00 per diluted share, in second quarter 2013.
At June 30, 2014, the Company's cash and cash equivalents were $157.8 million. During the second quarter, the Company paid down the outstanding balance of $50.0 million on its revolving credit facility, resulting in its full $175.0 million capacity being available at quarter-end. Through the first half of 2014, the Company has generated net cash flows before financing activities of $50.8 million. Adjusted EBITDA for the quarter was $33.7 million, a 6% increase over second quarter 2013, and $76.5 million for the first half of the year, a 33% increase over first half 2013. Reconciliations of special items and Adjusted EBITDA can be found in the financial tables of this press release.
Brian Hanson, ION's President and Chief Executive Officer, commented, "Consistent with several of our industry peers, ION's second quarter results reflected a slowdown in exploration spending by major oil companies. Our revenues for the quarter were slightly above our second quarter 2013 revenues, as we benefited from the revenues contributed by OceanGeo from their project in Trinidad. OceanGeo completed a five month acquisition project offshore Trinidad and was awarded another contract offshore West Africa. This new award is for a duration of three months, beginning in late July, and is in an area where OceanGeo is pursuing several tenders for additional long-term work. We are pleased that Calypso(®), our next generation ocean bottom system, will be further deployed on OceanGeo's next survey. In mid-July, we acquired the remaining ownership interest in OceanGeo, making it a wholly-owned subsidiary of ION.
"Within our Solutions segment, revenues declined due to cautious exploration spending and underwriting of new projects by our clients. We continue to maintain high standards for underwriting new projects and have delayed certain new venture programs from the first half of the year. We now anticipate that our 2014 multi-client library investments will be in the range of $70 million to $90 million.
"Although revenues from our data processing business were up 3% in the first half of the year, we are seeing a slowdown in that area of our business. Based on our backlog, we expect our data processing business to remain soft for the remainder of 2014, with revenues estimated to be between $25 million to $30 million per quarter. We have taken measured actions to reduce our data processing cost structure during this period.
"On a positive note to the quarter, our Software business generated record revenues during the second quarter, due primarily to increases in Orca(®) and Gator(®) licensing revenues.
"We have made significant progress in our strategy of penetrating into the ocean bottom services market through our ownership in OceanGeo. However, our outlook for the remainder of 2014 for all of ION remains cautious, and we will continue to maintain spending discipline across all businesses, maximizing cash generation, while still investing in key strategic technologies, and funding new programs only when they have been adequately underwritten by our customers."
Keywords for this news article include: Information Technology, ION Geophysical Corporation, Information and Data Processing.
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