Input/Output Inc. (IO, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 $510.08 million; its shares were traded at around $4.31 with and P/S ratio of 0.75.
On June 4, 2009, we completed a private placement transaction under which we issued and sold 18,500,000 shares of our common stock in privately-negotiated transactions, for aggregate gross proceeds of approximately $40.7 million. The $38.2 million of net proceeds from the offering, along with $2.6 million of cash on hand, were applied to repay in full the outstanding indebtedness under the our Bridge Loan Agreement dated as of December 30, 2008 (the Bridge Loan Agreement) with Jefferies Finance LLC (Jefferies). The indebtedness under the Bridge Loan Agreement had been scheduled to mature on January 31, 2010 and had an effective interest rate at the time of repayment of 25.3%. We also entered into an additional amendment (the Fifth Amendment) to the Amended Credit Facility, which among other things, modified certain of the financial and other covenants contained in the Amended Credit Facility. See further discussion below at Liquidity and Capital Resources Sources of Capital and at Note 9 Notes Payable, Long-term Debt and Lease Obligations.
On June 29, 2009, we entered into a $20.0 million secured equipment financing with ICON ION, LLC, an affiliate of ICON Capital Inc. (ICON). We received $12.5 million in funding from ICON on June 29, 2009 and $7.5 million on July 20, 2009. All borrowed indebtedness under the master loan agreements governing this equipment financing arrangement is scheduled to mature on July 31, 2014. The indebtedness under these master loan agreements constitutes permitted indebtedness under the Amended Credit Facility. We used the proceeds of the secured term loans for working capital and general corporate purposes. See further discussion below at Liquidity and Capital Resources Sources of Capital and at Note 9 Notes Payable, Long-term Debt and Lease Obligations.
The ongoing global financial crisis, which has contributed, among other things, to significant reductions in available capital and liquidity from banks and other providers of credit, has resulted in the worldwide economy entering into a recessionary period, which may be prolonged and severe. Oil prices have been highly volatile over the past two years, increasing to record levels in the second quarter of 2008 and then sharply declining thereafter, falling to approximately $35 per barrel during the first quarter of 2009. By the end of September 2009, oil prices were approximately $65 per barrel. Due to oversupplies of natural gas, prices for natural gas at the Henry Hub interconnection point at the end of September 2009 were approximately 75% below the July 2008 price of $13.31 per mmBtu. These conditions have sharply curtailed demand for exploration activities in North America and other regions. The uncertainty surrounding future economic activity levels and the tightening of credit availability have resulted in decreased sales levels for several of our businesses in 2009. Our land seismic equipment businesses in North America and Russia have been particularly adversely affected.
In response to this downturn, we have taken measures to further reduce operating costs in our businesses. This year has been 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. For the nine months ended September 30, 2009, total capital expenditures were $77.6 million, and we are projecting additional capital expenditures for the fourth quarter of 2009 to be between $12 million to $17 million. Of that total, we expect to spend approximately $10 million to $15 million on investments in our multi-client data library during the fourth quarter of 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 $298.5 million for the nine months ended September 30, 2009 decreased $240.8 million, or 44.7%, compared to total net revenues for the nine months ended September 30, 2008. Our overall gross profit percentage for the first nine months of 2009 was 32.9% compared to 33.2% for the first nine months of 2008. In the first nine months of 2009, we recorded a loss from operations of ($53.6) million (which includes the effect of an impairment of intangible assets charge of $38.0 million taken in the first quarter of 2009), compared to $61.6 million income from operations for the first nine months of 2008.
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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 $510.08 million; its shares were traded at around $4.31 with and P/S ratio of 0.75.
Highlight of Business Operations:
Our Current Debt Levels. In September 2008, we completed our acquisition of ARAM Systems Ltd. and Canadian Seismic Rentals, Inc. (which we sometimes collectively refer to in this Form 10-Q as ARAM). In connection with the ARAM acquisition, we increased our indebtedness significantly. As of September 30, 2009, we had outstanding total indebtedness of approximately $271.2 million, including capital lease obligations. Total indebtedness on that date included $106.3 million of outstanding five-year term indebtedness and $98.0 million in outstanding revolving credit debt, in each case incurred under our amended commercial banking credit facility (the Amended Credit Facility). Total indebtedness on that date also included $19.8 million in borrowings under a secured equipment financing transaction. Additionally, we had $35.0 million of subordinated indebtedness outstanding as of that date under an amended and restated subordinated promissory note (the Amended and Restated Subordinated Note) that we had issued to one of ARAMs selling shareholders as part of the purchase price consideration for the acquisition of ARAM.On June 4, 2009, we completed a private placement transaction under which we issued and sold 18,500,000 shares of our common stock in privately-negotiated transactions, for aggregate gross proceeds of approximately $40.7 million. The $38.2 million of net proceeds from the offering, along with $2.6 million of cash on hand, were applied to repay in full the outstanding indebtedness under the our Bridge Loan Agreement dated as of December 30, 2008 (the Bridge Loan Agreement) with Jefferies Finance LLC (Jefferies). The indebtedness under the Bridge Loan Agreement had been scheduled to mature on January 31, 2010 and had an effective interest rate at the time of repayment of 25.3%. We also entered into an additional amendment (the Fifth Amendment) to the Amended Credit Facility, which among other things, modified certain of the financial and other covenants contained in the Amended Credit Facility. See further discussion below at Liquidity and Capital Resources Sources of Capital and at Note 9 Notes Payable, Long-term Debt and Lease Obligations.
On June 29, 2009, we entered into a $20.0 million secured equipment financing with ICON ION, LLC, an affiliate of ICON Capital Inc. (ICON). We received $12.5 million in funding from ICON on June 29, 2009 and $7.5 million on July 20, 2009. All borrowed indebtedness under the master loan agreements governing this equipment financing arrangement is scheduled to mature on July 31, 2014. The indebtedness under these master loan agreements constitutes permitted indebtedness under the Amended Credit Facility. We used the proceeds of the secured term loans for working capital and general corporate purposes. See further discussion below at Liquidity and Capital Resources Sources of Capital and at Note 9 Notes Payable, Long-term Debt and Lease Obligations.
The ongoing global financial crisis, which has contributed, among other things, to significant reductions in available capital and liquidity from banks and other providers of credit, has resulted in the worldwide economy entering into a recessionary period, which may be prolonged and severe. Oil prices have been highly volatile over the past two years, increasing to record levels in the second quarter of 2008 and then sharply declining thereafter, falling to approximately $35 per barrel during the first quarter of 2009. By the end of September 2009, oil prices were approximately $65 per barrel. Due to oversupplies of natural gas, prices for natural gas at the Henry Hub interconnection point at the end of September 2009 were approximately 75% below the July 2008 price of $13.31 per mmBtu. These conditions have sharply curtailed demand for exploration activities in North America and other regions. The uncertainty surrounding future economic activity levels and the tightening of credit availability have resulted in decreased sales levels for several of our businesses in 2009. Our land seismic equipment businesses in North America and Russia have been particularly adversely affected.
In response to this downturn, we have taken measures to further reduce operating costs in our businesses. This year has been 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. For the nine months ended September 30, 2009, total capital expenditures were $77.6 million, and we are projecting additional capital expenditures for the fourth quarter of 2009 to be between $12 million to $17 million. Of that total, we expect to spend approximately $10 million to $15 million on investments in our multi-client data library during the fourth quarter of 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 $298.5 million for the nine months ended September 30, 2009 decreased $240.8 million, or 44.7%, compared to total net revenues for the nine months ended September 30, 2008. Our overall gross profit percentage for the first nine months of 2009 was 32.9% compared to 33.2% for the first nine months of 2008. In the first nine months of 2009, we recorded a loss from operations of ($53.6) million (which includes the effect of an impairment of intangible assets charge of $38.0 million taken in the first quarter of 2009), compared to $61.6 million income from operations for the first nine months of 2008.
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