Input/Output Inc. (IO, Financial) filed Quarterly Report for the period ended 2009-03-31.
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. Input/Output Inc. has a market cap of $314.1 million; its shares were traded at around $3.15 with a P/E ratio of 6.1 and P/S ratio of 0.5.
In response to this downturn, we have taken measures to further reduce operating costs in our businesses. We expect that 2009 will prove to be a challenging year for our North America and Russia land systems and vibroseis truck sales. In addition, we have slowed our capital spending, including investments for our multi-client data library, and are projecting capital expenditures for 2009 at $75 million to $85 million compared with $127.9 million for the comparable period in 2008. Of that total, we expect to spend approximately $70 million to $80 million on investments in our multi-client data library during 2009, and we anticipate that a majority of this investment will be underwritten by our customers. To the extent our customers commitments do not reach an acceptable level of pre-funding, the amount of our anticipated investment could significantly decline. The remaining sums are expected to be funded from internally generated cash.
2009 Developments. Our overall total net revenues of $106.9 million for the three months ended March 31, 2009 decreased $33.3 million, or 23.7%, compared to total net revenues for the three months ended March 31, 2008. Our overall gross profit percentage for the first quarter of 2009 decreased to 31.5% compared to 34.5% for the first quarter of 2008. In the first quarter of 2009, we recorded a loss from operations of ($44.6) million, including the impairment of intangible assets charge of $38.0 million, compared to $10.3 million income from operations for the first quarter of 2008.
Net Revenues. Net revenues of $106.9 million for the three months ended March 31, 2009 decreased $33.3 million, or 23.7%, compared to the corresponding period last year. Land Imaging Systems net revenues decreased by $15.7 million, to $34.2 million compared to $49.9 million in the corresponding period of last year. This decrease related mainly to the continued decreased market demand in North America and Russia for land seismic equipment. Marine Imaging Systems net revenues for the three months ended March 31, 2009 decreased by $16.0 million to $18.5 million compared to $34.5 million in the corresponding period of last year, principally due to the timing of new marine vessels being introduced into the market. This decrease was partially offset by multiple
Interest Expense. Interest expense of $7.4 million for the three months ended March 31, 2009 increased $6.9 million compared to $0.5 million for the first quarter of 2008. The increase is due to the higher levels of indebtedness and the higher effective interest rate of the Bridge Loan Agreement that we incurred in connection with our acquisition of ARAM combined with increased revolver borrowings of $98.0 million. See Liquidity and Capital Resources Sources of Capital below. Because of these increased levels of borrowed indebtedness, our interest expense will continue to be significantly higher in 2009 than we experienced in prior years.
Revolving credit borrowings under the Amended Credit Facility are available to fund our working capital needs, to finance acquisitions, investments and share repurchases and for general corporate purposes. In addition, the Amended Credit Facility includes a $35.0 million sub-limit for the issuance of documentary and stand-by letters of credit, of which $1.6 million was outstanding at March 31, 2009. Borrowings under the Amended Credit Facility may be prepaid without penalty. As of March 31, 2009, $115.6 million in term loan indebtedness and $98.0 million in revolving credit indebtedness were outstanding under the Amended Credit Facility. As of April 28, 2009, we had available only $0.4 million of additional revolving credit borrowing capacity, which can be used only to fund additional letters of credit under the Amended Credit Facility. Our cash and cash equivalents as of April 28, 2009
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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. Input/Output Inc. has a market cap of $314.1 million; its shares were traded at around $3.15 with a P/E ratio of 6.1 and P/S ratio of 0.5.
Highlight of Business Operations:
Our Current Debt Levels. As a result of the ARAM acquisition, we have increased our indebtedness significantly. As of March 31, 2009, we had outstanding total indebtedness of approximately $309.2 million, including capital lease obligations. Total indebtedness on that date included $115.6 million in borrowings under five-year term indebtedness and $98.0 million in borrowings under our revolving credit facility, in each case incurred under our amended commercial banking credit facility (the Amended Credit Facility). We also had as of that date $40.8 million of indebtedness outstanding under a Bridge Loan Agreement, dated as of December 30, 2008 (the Bridge Loan Agreement), with Jefferies Finance LLC (Jefferies), which indebtedness matures on January 31, 2010. In addition, we had $35.0 million of subordinated indebtedness outstanding under an amended and restated subordinated promissory note (the Amended and Restated Subordinated Note) that we issued to one of ARAMs selling shareholders in exchange for a previous promissory note we had issued to that selling shareholder as part of the purchase price consideration for the acquisition of ARAM.In response to this downturn, we have taken measures to further reduce operating costs in our businesses. We expect that 2009 will prove to be a challenging year for our North America and Russia land systems and vibroseis truck sales. In addition, we have slowed our capital spending, including investments for our multi-client data library, and are projecting capital expenditures for 2009 at $75 million to $85 million compared with $127.9 million for the comparable period in 2008. Of that total, we expect to spend approximately $70 million to $80 million on investments in our multi-client data library during 2009, and we anticipate that a majority of this investment will be underwritten by our customers. To the extent our customers commitments do not reach an acceptable level of pre-funding, the amount of our anticipated investment could significantly decline. The remaining sums are expected to be funded from internally generated cash.
2009 Developments. Our overall total net revenues of $106.9 million for the three months ended March 31, 2009 decreased $33.3 million, or 23.7%, compared to total net revenues for the three months ended March 31, 2008. Our overall gross profit percentage for the first quarter of 2009 decreased to 31.5% compared to 34.5% for the first quarter of 2008. In the first quarter of 2009, we recorded a loss from operations of ($44.6) million, including the impairment of intangible assets charge of $38.0 million, compared to $10.3 million income from operations for the first quarter of 2008.
Net Revenues. Net revenues of $106.9 million for the three months ended March 31, 2009 decreased $33.3 million, or 23.7%, compared to the corresponding period last year. Land Imaging Systems net revenues decreased by $15.7 million, to $34.2 million compared to $49.9 million in the corresponding period of last year. This decrease related mainly to the continued decreased market demand in North America and Russia for land seismic equipment. Marine Imaging Systems net revenues for the three months ended March 31, 2009 decreased by $16.0 million to $18.5 million compared to $34.5 million in the corresponding period of last year, principally due to the timing of new marine vessels being introduced into the market. This decrease was partially offset by multiple
Interest Expense. Interest expense of $7.4 million for the three months ended March 31, 2009 increased $6.9 million compared to $0.5 million for the first quarter of 2008. The increase is due to the higher levels of indebtedness and the higher effective interest rate of the Bridge Loan Agreement that we incurred in connection with our acquisition of ARAM combined with increased revolver borrowings of $98.0 million. See Liquidity and Capital Resources Sources of Capital below. Because of these increased levels of borrowed indebtedness, our interest expense will continue to be significantly higher in 2009 than we experienced in prior years.
Revolving credit borrowings under the Amended Credit Facility are available to fund our working capital needs, to finance acquisitions, investments and share repurchases and for general corporate purposes. In addition, the Amended Credit Facility includes a $35.0 million sub-limit for the issuance of documentary and stand-by letters of credit, of which $1.6 million was outstanding at March 31, 2009. Borrowings under the Amended Credit Facility may be prepaid without penalty. As of March 31, 2009, $115.6 million in term loan indebtedness and $98.0 million in revolving credit indebtedness were outstanding under the Amended Credit Facility. As of April 28, 2009, we had available only $0.4 million of additional revolving credit borrowing capacity, which can be used only to fund additional letters of credit under the Amended Credit Facility. Our cash and cash equivalents as of April 28, 2009
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