saex-8k_20181113.htm

 

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________

 

FORM 8-K

_____________________________________

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 7, 2018

__________________________________________

 

SAExploration Holdings, Inc.

(Exact name of registrant as specified in its charter)

__________________________________________

Delaware

(State or other jurisdiction of incorporation)

 

001-35471

(Commission file number)

 

27-4867100

(IRS Employer Identification No.)

 

1160 Dairy Ashford Rd., Suite 160, Houston, Texas 77079

(Address of principal executive offices) (Zip Code)

 

(281) 258-4400

(Company's telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 Pre-commencement communications pursuant to Rule 14(d)-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


 

Item 2.02. Results of Operations and Financial Condition

 

On November 13, 2018, SAExploration Holdings, Inc. (the “Company”) issued a press release reporting its consolidated financial results for the third quarter ended September 30, 2018.  

A copy of the press release is being furnished as an exhibit to this Current Report and incorporated by reference into this Item 2.02. The information set forth in this Item 2.02, including Exhibit 99.2 attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Item 2.02 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.

Item 8.01. Other Events

On November 7, 2018, the Company issued a press release announcing that it plans to publicly release its consolidated financial results for the third quarter ended September 30, 2018, on Tuesday, November 13, 2018, before the market opens. In addition, the Company announced that an investors’ conference call to review these results will be held on Tuesday, November 13, 2018 at 10:00 a.m. Eastern Time.

The information in this Item 8.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Item 8.01 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.

CAUTIONARY NOTE REGARDING FORWARD–LOOKING STATEMENTS

This report contains “forward–looking statements” within the meaning of the U.S. federal securities laws, with respect to the Company’s financial condition, results of operations, cash flows and business, and expectations or beliefs concerning future events. These forward–looking statements can generally be identified by phrases such as “expects,” “anticipates,” “believes,” “estimates,” “intends,” “plans to,” “ought,” “could,” “will,” “should,” “likely,” “appears,” “projects,” “forecasts,” “outlook” or other similar words or phrases. There are inherent risks and uncertainties in any forward–looking statements. Although the Company believes that its expectations are reasonable, it can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, the Company undertakes no obligation to update, amend or clarify any forward–looking statements to reflect events, new information or otherwise. Some of the important factors that could cause actual results to differ materially from the Company’s expectations are discussed below. All written and oral forward–looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements.

You should refer to the risk factors from the Company’s Annual Report on Form 10–K filed on March 16, 2018, for the fiscal year ended December 31, 2017, as updated in the Company’s Quarterly Report on Form 10–Q filed on May 15, 2018, for the period ended March 31, 2018, and as updated in the Company’s Quarterly Report on Form 10–Q filed on August 8, 2018, for the period ended June 30, 2018, for specific risks which would cause actual results to be significantly different from those expressed or implied by any of the Company’s forward–looking statements. It is not possible to identify all of the risks, uncertainties and other factors that may affect future results. In light of these risks and uncertainties, the forward–looking events and circumstances discussed in this report may not occur and actual results could differ materially from those anticipated or implied in the forward–looking statements. Accordingly, readers of this report are cautioned not to place undue reliance on the forward–looking statements.

 

Item 9.01. Financial Statements and Exhibits.

 

(d)

Exhibits

 

99.1

Press Release dated November 7, 2018

 

99.2

Press Release dated November 13, 2018

 

1

 


 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Date: November 15, 2018 SAExploration Holdings, Inc.

 

 

By: /s/ Brent Whiteley

Name: Brent Whiteley

Title: Chief Financial Officer, General Counsel and Secretary

2

 

saex-ex991_6.htm

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

 

 

SAEXPLORATION ANNOUNCES THIRD QUARTER 2018 EARNINGS RELEASE AND CONFERENCE CALL SCHEDULE

 

November 7, 2018 – Houston, TX – SAExploration Holdings, Inc. (NASDAQ: SAEX, OTCQB: SXPLW), or SAE, today announced plans to release its unaudited consolidated financial results for the third quarter ended September 30, 2018 on Tuesday, November 13, 2018 before market open.  SAE has also scheduled a conference call for Tuesday, November 13, 2018 at 10:00 a.m. ET to discuss these results and other related matters.  

SAExploration Holdings, Inc. Q3 2018 Earnings Call

Date:

  

Tuesday, November 13, 2018

Time:

  

10:00 a.m. ET (9:00 a.m. CT)

Phone:

  

(855) 433-0934 (Toll-Free) or (484) 756-4291 (Toll)

The conference call will also be broadcast live on the Investors section of SAE’s website at www.saexploration.com following the conference call.  To listen to the live call via the Company’s website, please go to the website at least 15 minutes early to register and download any necessary audio software.  If you are unable to listen live, the webcast of the conference call will be archived on the Company’s website for at least 90 days.

About SAExploration Holdings, Inc.

SAE is an internationally-focused oilfield services company offering a full range of vertically-integrated seismic data acquisition and logistical support services in remote and complex environments throughout Alaska, Canada, South America, Southeast Asia and West Africa. In addition to the acquisition of 2D, 3D, time-lapse 4D and multi-component seismic data on land, in transition zones and offshore in depths reaching 3,000 meters, SAE offers a full suite of logistical support and in-field data processing services, such as program design, planning and permitting, camp services and infrastructure, surveying, drilling, environmental assessment and reclamation and community relations. SAE operates crews around the world, performing major projects for its blue-chip customer base, which includes major integrated oil companies, national oil companies and large independent oil and gas exploration companies. Operations are supported through a multi-national presence in Houston, Alaska, Canada, Peru, Colombia, Bolivia, Brazil and New Zealand. For more information, please visit SAE’s website at www.saexploration.com.

The information in SAE’s website is not, and shall not be deemed to be, a part of this notice or incorporated in filings SAE makes with the Securities and Exchange Commission.

 


Safety. Acquisition. Experiencesaexploration.com


 

Forward Looking Statements

This press release contains certain “forward-looking statements” within the meaning of the U.S. federal securities laws with respect to SAE. These statements can be identified by the use of words or phrases such as “expects,” “estimates,” “projects,” “budgets,” “forecasts,” “anticipates,” “intends,” “plans,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions. These forward-looking statements include statements regarding SAE’s financial condition, results of operations and business and SAE’s expectations or beliefs concerning future periods and possible future events. These statements are subject to significant known and unknown risks and uncertainties that could cause actual results to differ materially from those stated in, and implied by, this press release. Risks and uncertainties that could cause actual results to vary materially from SAE’s expectations are described under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in SAE’s filings with the Securities and Exchange Commission. Except as required by applicable law, SAE is not under any obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

Contact

SAExploration Holdings, Inc.

Ryan Abney

Vice President, Finance

(281) 258-4400

rabney@saexploration.com

 

 

 

 

 

Safety. Acquisition. Experiencesaexploration.com

saex-ex992_7.htm

Exhibit 99.2

 

 

FOR IMMEDIATE RELEASE

 

 

 

SAEXPLORATION ANNOUNCES THIRD QUARTER 2018 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

 

November 13, 2018 – Houston, TX – SAExploration Holdings, Inc. (NASDAQ: SAEX, OTCQB: SXPLW) today announced its financial results for the third quarter of 2018.

Third Quarter 2018 Summary

 

Revenue of $15.0 million, compared to $22.5 million in Q3 2017

 

 

Gross (loss) profit of $(4.0) million, or (26.9)% of revenues, compared to $1.5 million, or 6.6% of revenues, in Q3 2017

 

 

Adjusted gross (loss) profit, a non-GAAP measure, of $(1.1) million, or (7.2)% of revenues, compared to $4.3 million, or 19.1% of revenues, in Q3 2017

 

 

Net loss attributable to SAExploration of $25.3 million, compared to $13.8 million in Q3 2017

 

 

Adjusted EBITDA, a non-GAAP measure, of $(8.9) million, compared to $(1.2) million in Q3 2017

 

 

Contracted backlog of $173.2 million through 2019 and $383.7 million of bids outstanding as of September 30, 2018

 

 

Acquired substantially all of the assets of Geokinetics in a transformative and accretive transaction for $21.7 million, including transaction advisory fees and other acquisition costs

 

 

Recapitalized balance sheet and improved liquidity through series of transactions, including upsizing credit facility to $30.0 million, repaying $1.9 million of stub notes, and converting 8% Series A preferred stock into common stock and warrants

 

 

Further simplified capital structure and reduced interest expense through a private placement of $60.0 million 6% convertible notes due 2023 with proceeds used to repay certain existing credit facilities and provide working capital

 

Jeff Hastings, Chairman and CEO of SAE, commented, “As expected, activity in many of our markets remained historically low during the third quarter, due to the continued and sustained lack of exploration spending. However, despite the first nine months of 2018 being one of the most challenging periods in our history, I am encouraged by the effort put into formulating and executing the necessary changes to realign SAE’s business model and financial structure for long-term success. Beginning in January and ending in September, we initiated and completed a comprehensive strategy to further reduce our overall leverage and interest expense, enhance our liquidity, and effect much needed consolidation in a fragmented industry by opportunistically acquiring accretive assets. Even though we would always prefer to be busier at the field level, I believe these strategic initiatives could prove to be well timed if exploration spending increases, particularly given how soon we could deploy and benefit from our expanded and upgraded equipment profile.”

Safety. Acquisition. Experiencesaexploration.com


 

Mr. Hastings continued, “Looking forward, we are beginning to see some positive momentum with customers evaluating and approving new projects. As evidenced by our improved backlog, we currently expect to see higher than normal activity in the fourth quarter, which historically, has been a seasonally weak period for SAE. Most of this activity will result from active contracts in the Lower 48, as well as from the start of our recently-announced ocean-bottom marine project in Asia. As our customers continue to formulate their plans for 2019, we think it is possible that we could see some improvement in exploration spending return to a market driven almost exclusively by production-related spending. In particular, the ocean-bottom marine market appears to be the most active, with a large number of opportunities competing for limited available capacity in the nodal market. While the ocean-bottom marine market remains a relatively new market for SAE, we expect the overall healthy economic conditions to benefit our ability to compete and secure additional projects.”

Mr. Hastings concluded, “During the fourth quarter, we plan to continue the integration of the Geokinetics asset acquisition, which we expect will involve cost reductions and asset sales as we trim down to keep an efficient and productive equipment fleet without redundancies. We also continue to maintain our core focus on maximizing potential cash flow from ongoing and new projects. While we cannot control exploration spending, nor predict when growth may return, we are executing on a plan to put SAE in the best possible position to not only be sustainable in the current market environment, but to prosper in any broader recovery. We believe the strategic steps we have taken with the asset acquisition and the related capital structure transactions, along with the continued support of our employees and key stakeholders, will enable us to achieve our goal of leveraging SAE’s outstanding operational history to become a market leader in seismic data acquisition and processing services worldwide.”

Third Quarter 2018 Results

SAE reported revenues of $15.0 million for the third quarter of 2018, an 11.1% decrease from the second quarter of 2018 and a 33.2% decrease from the third quarter of 2017.  The decrease from the second quarter of 2018 was due to fewer projects in Colombia offset by an increase in projects in North America. The decrease from the third quarter of 2017 was due to more projects in North America offset by fewer projects in Colombia.

SAE reported adjusted gross (loss) profit of $(1.1) million for the third quarter of 2018 compared to adjusted gross (loss) profit of $(2.8) million for the second quarter of 2018 and adjusted gross (loss) profit of $4.3 million for the third quarter of 2017.  Adjusted EBITDA was $(8.9) million for the third quarter of 2018 compared to $(7.6) million for the second quarter of 2018 and $(1.2) million for the third quarter of 2017.  Both adjusted gross loss and adjusted EBITDA in the third quarter of 2018 were negatively impacted by less favorable pricing when taking into account the fixed costs involved in our projects.  Adjusted gross (loss) profit and adjusted EBITDA are non–GAAP financial measures and are described in the attached tables under “Non–GAAP Measures.”    

For the third quarter of 2018, SAE reported a net loss of $25.3 million, or $27.80 basic and diluted loss per share, compared to a net loss of $33.3 million, or $44.90 basic and diluted loss per share for the second quarter of 2018.  For the third quarter of 2017, SAE reported a net loss of $13.8 million, or $29.30 basic and diluted loss per share.  

As of September 30, 2018, cash and cash equivalents totaled $20.3 million, working capital was $14.1 million, total debt at face value, excluding net unamortized premiums or discounts, was $111.0 million, and total stockholders’ equity was $37.6 million.

Capital expenditures for the third quarter of 2018 were $0.3 million compared to $0.1 million in the third quarter of 2017. The low level of capital expenditures in both periods was primarily due to the continuation of unfavorable conditions in the oil and natural gas industry.

Safety. Acquisition. Experiencesaexploration.com


 

As of September 30, 2018, SAE’s backlog was $173.2 million and bids outstanding totaled $383.7 million. Please note, however, this backlog includes the recently contracted $100.0 million ocean-bottom marine project award, of which approximately 70% of the revenues are expected to be third-party pass-through revenues at cost. Approximately 98% of the backlog is comprised of data acquisition projects and the remainder is comprised of data processing projects. Additionally, approximately 41% of the data acquisition projects are located in North America, split primarily between Alaska and the Lower 48, with the balance attributable to projects in Asia. SAE currently expects to complete approximately 31% of the projects in its backlog as of September 30, 2018 during the fourth quarter of 2018, with the remainder scheduled to be performed during 2019.  The estimations of realization from SAE’s backlog can be impacted by a number of factors, however, including deteriorating industry conditions, customer delays or cancellations, permitting or project delays and environmental conditions.

Investor Conference Call

SAE will host a conference call on Tuesday, November 13, 2018 at 10:00 a.m. Eastern Time to discuss its unaudited consolidated financial results for the third quarter ended September 30, 2018. Participants can access the conference call by dialing (855) 433-0934 (toll-free) or (484) 756-4291 (toll). SAE will also offer a live webcast of the conference call on the Investors section of its website at www.saexploration.com.

To listen live via the company’s website, please go to the website at least 15 minutes prior to the start of the call to register and download any necessary audio software. A replay of the webcast for the conference call will be archived on the company’s website and can be accessed by visiting the Investors section of SAE’s website.

About SAExploration Holdings, Inc.  

SAE is an internationally-focused oilfield services company offering a full range of vertically-integrated seismic data acquisition and logistical support services in remote and complex environments throughout Alaska, Canada, South America, Southeast Asia and West Africa. In addition to the acquisition of 2D, 3D, time-lapse 4D and multi-component seismic data on land, in transition zones and offshore in depths reaching 3,000 meters, SAE offers a full suite of logistical support and data processing services, such as program design, planning and permitting, camp services and infrastructure, surveying, drilling, environmental assessment and reclamation and community relations. SAE operates crews around the world, performing major projects for its blue-chip customer base, which includes major integrated oil companies, national oil companies and large independent oil and gas exploration companies. Operations are supported through a multi-national presence in Houston, Alaska, Canada, Peru, Colombia, Bolivia, Australia and Singapore. For more information, please visit SAE’s website at www.saexploration.com.

The information in SAE’s website is not, and shall not be deemed to be, a part of this notice or incorporated in filings SAE makes with the Securities and Exchange Commission.  

Forward–Looking Statements

This press release contains certain "forward–looking statements" within the meaning of the U.S. federal securities laws with respect to SAE.  These statements can be identified by the use of words or phrases such as “expects,” “estimates,” “projects,” “budgets,” “forecasts,” “anticipates,” “intends,” “plans,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions.  These forward–looking statements include statements regarding SAE's financial condition, results of operations and business and SAE's expectations or beliefs concerning future periods and possible future events.  These statements are subject to significant known and unknown risks and uncertainties that could cause actual results to differ materially from those stated in, and implied by, this press release.  Risks and uncertainties that could cause actual results to vary materially from SAE’s expectations are described under “Risk Factors” and “Cautionary

Safety. Acquisition. Experiencesaexploration.com


 

Note Regarding Forward-Looking Statements” in SAE’s filings with the Securities and Exchange Commission.  Except as required by applicable law, SAE is not under any obligation to, and expressly disclaims any obligation to, update or alter its forward looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.  

Contact

SAExploration Holdings, Inc.

Ryan Abney

Vice President, Finance

(281) 258-4400

rabney@saexploration.com

Safety. Acquisition. Experiencesaexploration.com


 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

Revenue from services

 

$15,003

 

$22,452

 

$69,009

 

$122,180

Cost of services

 

16,085

 

18,172

 

61,800

 

87,575

Depreciation and amortization expense

 

2,951

 

2,809

 

7,667

 

9,007

Gross (loss) profit

 

(4,033)

 

1,471

 

(458)

 

25,598

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

14,858

 

6,005

 

46,998

 

18,880

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

(18,891)

 

(4,534)

 

(47,456)

 

6,718

 

 

 

 

 

 

 

 

 

Other (expense) income, net:

 

 

 

 

 

 

 

 

Interest expense, net

 

(4,738)

 

(7,496)

 

(10,225)

 

(24,415)

Costs incurred on debt restructuring

 

 

(208)

 

 

(208)

Foreign exchange (loss) gain, net

 

(331)

 

341

 

(2,510)

 

(695)

Other income (expense), net

 

27

 

2

 

181

 

(83)

Total other expense, net

 

(5,042)

 

(7,361)

 

(12,554)

 

(25,401)

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(23,933)

 

(11,895)

 

(60,010)

 

(18,683)

 

 

 

 

 

 

 

 

 

Income taxes

 

1,364

 

1,950

 

107

 

4,175

 

 

 

 

 

 

 

 

 

Net loss

 

(25,297)

 

(13,845)

 

(60,117)

 

(22,858)

 

 

 

 

 

 

 

 

 

Less: net income (loss) attributable to noncontrolling interest

 

10

 

(75)

 

904

 

1,972

 

 

 

 

 

 

 

 

 

Net loss attributable to SAExploration

 

$(25,307)

 

$(13,770)

 

$(61,021)

 

$(24,830)

 

 

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

$(27.80)

 

$(29.30)

 

$(141.82)

 

$(52.94)

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding (basic and diluted)

 

1,120

 

470

 

804

 

469

 

 


Safety. Acquisition. Experiencesaexploration.com


 

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except number of shares)

 

 

 

September 30,

2018

 

December 31,

2017

ASSETS

 

(Unaudited)

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$20,341

 

$3,613

Restricted cash

 

 

41

Accounts receivable, net

 

19,165

 

6,105

Deferred costs on contracts

 

448

 

2,107

Prepaid expenses and other current assets

 

3,164

 

6,395

Total current assets

 

43,118

 

18,261

 

 

 

 

 

Property and equipment, net of accumulated depreciation of $79,336 and $72,649, respectively

 

38,080

 

32,946

Goodwill

 

1,782

 

1,832

Intangible assets, net of accumulated amortization of $807 and $732, respectively

 

4,182

 

671

Long–term accounts receivable, net

 

59,117

 

78,102

Deferred income taxes

 

4,914

 

4,592

Other assets

 

3,242

 

5,534

Total assets

 

$154,435

 

$141,938

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$7,594

 

$4,551

Accrued liabilities

 

6,891

 

6,311

Income and other taxes payable

 

5,581

 

7,887

Current portion of long–term debt

 

6,954

 

995

Deferred revenue

 

2,043

 

1,477

Total current liabilities

 

29,063

 

21,221

 

 

 

 

 

Long–term debt, net

 

87,349

 

120,298

Other long–term liabilities

 

381

 

608

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

Common stock, 1,747,990 and 471,177 shares outstanding, respectively

 

 

Additional paid-in capital

 

231,644

 

133,742

Accumulated deficit

 

(194,033)

 

(133,306)

Accumulated other comprehensive loss

 

(3,077)

 

(5,082)

Treasury stock, at cost, 111,003 and 1,901 shares outstanding, respectively

 

(1,866)

 

(113)

Total stockholders’ equity (deficit) attributable to SAExploration

 

32,668

 

(4,759)

Noncontrolling interest

 

4,974

 

4,570

Total stockholders’ equity (deficit)

 

37,642

 

(189)

Total liabilities and stockholders’ equity (deficit)

 

$154,435

 

$141,938


Safety. Acquisition. Experiencesaexploration.com


 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

Net loss

 

$(25,297)

 

$(13,845)

 

$(60,117)

 

$(22,858)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

192

 

(362)

 

2,005

 

(434)

Comprehensive loss

 

(25,105)

 

(14,207)

 

(58,112)

 

(23,292)

Less: comprehensive income (loss) attributable to noncontrolling interest

 

10

 

(75)

 

904

 

1,972

Comprehensive loss attributable to SAExploration

 

$(25,115)

 

$(14,132)

 

$(59,016)

 

$(25,264)

 

 

REVENUE FROM SERVICES BY REGION

(In thousands)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$12,556

 

83.7%

 

$2,723

 

12.1%

 

$44,995

 

65.2%

 

$50,518

 

41.3%

South America

 

1,525

 

10.2%

 

19,729

 

87.9%

 

23,092

 

33.5%

 

32,224

 

26.4%

Southeast Asia

 

714

 

4.7%

 

 

0.0%

 

714

 

1.0%

 

4,266

 

3.5%

West Africa

 

 

–%

 

 

0.0%

 

 

–%

 

35,172

 

28.8%

Other

 

208

 

1.4%

 

 

 

 

 

208

 

0.3%

 

 

 

 

Total

 

$15,003

 

100.0%

 

$22,452

 

100.0%

 

$69,009

 

100.0%

 

$122,180

 

100.0%

 

Non–GAAP Measures

 

We define Adjusted EBITDA as net loss plus interest expense, income taxes, depreciation and amortization, provision for doubtful accounts, non–cash equity–based compensation, (gain) loss on disposal of property and equipment, foreign exchange loss (gain), (gain) on extinguishment of long-term debt, costs incurred on debt restructuring, and certain non–recurring expenses.  Adjusted Gross (Loss) Profit is defined as gross (loss) profit plus depreciation and amortization expense related to cost of services.

 

Adjusted EBITDA is used by our management as a supplemental financial measure to assess: (i) the financial performance of our assets without regard to financing methods, capital structures, taxes, historical cost basis or non-recurring expenses; (ii) our liquidity and operating performance over time in relation to other companies that own similar assets and calculate Adjusted EBITDA in a similar manner; and (iii) the ability of our assets to generate cash sufficient to pay potential interest cost. We consider Adjusted EBITDA as presented below to be the primary measure of period–over–period changes in our operational cash flow performance.

 

Our management uses Adjusted Gross (Loss) Profit as a substantial financial measure to assess the cost management and performance of our projects. Within the seismic data services industry, gross profit is presented both with and without depreciation and amortization expense on equipment used in operations and, therefore, we also use this measure to assess our performance over time in relation to other companies that own similar assets and calculate gross profit in the same manner.

 

Adjusted EBITDA and Adjusted Gross (Loss) Profit are not defined under GAAP, and we acknowledge that these are not measures of operating income, operating performance or liquidity presented in accordance with GAAP. When assessing our operating performance or liquidity, investors and others should not consider this data in isolation or as a substitute for any other measure of financial performance or liquidity presented in accordance with GAAP. In addition, our calculations of Adjusted EBITDA and Adjusted Gross (Loss) Profit may not be comparable to EBITDA, gross profit or other similarly titled measures utilized by other companies since such other companies may not calculate EBITDA, gross profit or similarly titled measures in the same manner.

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Further, the results presented by Adjusted EBITDA and Adjusted Gross (Loss) Profit cannot be achieved without incurring the costs that the measure excludes.

 

Reconciliation of Net Loss to Adjusted EBITDA

($ in thousands)

(Unaudited)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

Net loss

 

$(25,297)

 

$(13,845)

 

$(60,117)

 

$(22,858)

Interest expense, net

 

4,738

 

7,496

 

10,225

 

24,415

Income taxes

 

1,364

 

1,950

 

107

 

4,175

Depreciation and amortization expense (1)

 

3,092

 

2,900

 

7,960

 

9,300

Provision for doubtful accounts

 

 

 

19,120

 

Non–cash equity–based compensation

 

6,473

 

384

 

9,114

 

1,649

(Gain) loss on disposal of property and equipment, net

 

(130)

 

12

 

(315)

 

(71)

Foreign exchange loss (gain), net (2)

 

331

 

(341)

 

2,510

 

695

Gain on extinguishment of long–term debt

 

 

 

(53)

 

Costs incurred on debt restructuring

 

 

208

 

 

208

Non–recurring expenses (3)(4)

 

538

 

81

 

974

 

261

Adjusted EBITDA

 

$(8,891)

 

$(1,155)

 

$(10,475)

 

$17,774

 

(1)

Additional depreciation and amortization expense not related to cost of services was $141 and $91 for the three months ended September 30, 2018 and 2017, respectively, and $293 for both the nine months ended September 30, 2018 and 2017

 

(2)

Includes both realized and unrealized foreign exchange transactions

 

(3)

In 2018, consists of various non–operating expenses incurred at the corporate location.

 

(4)

In 2017, consists of severance payments incurred in Peru and Alaska and various non–operating expenses incurred at the corporate location

 

Reconciliation of Gross (Loss) Profit to Adjusted Gross (Loss) Profit

($ in thousands)

(Unaudited)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

Gross (loss) profit as presented

 

$(4,033)

 

$1,471

 

$(458)

 

$25,598

Depreciation and amortization expense (1)

 

2,951

 

2,809

 

7,667

 

9,007

Adjusted gross (loss) profit

 

$(1,082)

 

$4,280

 

$7,209

 

$34,605

 

(1)

Depreciation and amortization on equipment used in operations

 

 

 

 

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