866609--3/1/2010--ION_GEOPHYSICAL

related topics

{product, market, service}

{debt, indebtedness, cash}

{system, service, information}

{customer, product, revenue}

{operation, international, foreign}

{acquisition, growth, future}

{operation, natural, condition}

{gas, price, oil}

{personnel, key, retain}

{loan, real, estate}

{control, financial, internal}

{property, intellectual, protect}

{tax, income, asset}

{provision, law, control}

{stock, price, operating}

{cost, regulation, environmental}

We have a substantial amount of outstanding indebtedness, and we will need to pay or refinance our existing indebtedness or incur additional indebtedness, which may adversely affect our operations. Any failure to complete our proposed transactions with BGP could result in an event of default under our credit obligations. There is no guarantee that we will complete our proposed joint venture with BGP, and, if we do complete the joint venture, we may be subject to additional risks relating to our ability to perform our obligations under the joint venture, including funding future joint venture capital requirements. To comply with our indebtedness and other obligations, we will require a significant amount of cash and will be required to satisfy certain debt financial covenants. Our ability to generate cash and satisfy debt covenants depends on many factors beyond our control. Our failure to complete the proposed joint venture and related transactions with BGP and refinance our existing bank indebtedness could result in an event of default under our credit facilities. We are exposed to risks relating to the effectiveness of our internal controls. The current economic and credit environment and lower oil and natural gas prices could continue to have an adverse effect on customer demand for certain of our products and services, which in turn would adversely affect our results of operations, our cash flows, our financial condition, our ability to borrow and our stock price. If capital expenditures for E P companies remain at reduced levels compared to recent periods, the demand for our products and services may remain weak and our results of operations will be adversely affected. We derive a substantial amount of our revenues from foreign operations and sales, which pose additional risks. Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Our operating results may fluctuate from period to period, and we are subject to seasonality factors. The technologies and businesses contributed by our company and BGP to the proposed joint venture may prove difficult to integrate, disrupt our business, dilute stockholder value and divert management attention. Intangible assets and goodwill that we have recorded in connection with our acquisitions are subject to impairment evaluations and, as a result, we could be required to write-off additional goodwill and intangible assets, which may adversely affect our financial condition and results of operations. Due to the international scope of our business activities, our results of operations may be significantly affected by currency fluctuations We are exposed to risks related to complex, highly technical products. We rely on highly skilled personnel in our businesses, and if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively. If we do not effectively manage our transitions into new products and services, our revenues may suffer. Technological change in the seismic industry requires us to make substantial research and development expenditures. We invest significant sums of money in acquiring and processing seismic data for our ION Solutions multi-client data library. The loss of any significant customer could materially and adversely affect our results of operations and financial condition. Our ION Solutions and Data Management Solutions segments increase our exposure to the risks experienced by more technology-intensive companies. Reservoir Exploration Technology (RXT) has been a significant customer of our Marine Imaging Systems segment. A loss of business from this customer could adversely affect our sales and financial condition if RXT is not replaced by another customer or customers. We are subject to intense competition, which could limit our ability to maintain or increase our market share or to maintain our prices at profitable levels. Certain of our facilities could be damaged by hurricanes and other natural disasters, which could have an adverse effect on our results of operations and financial condition. We have outsourcing arrangements with third parties to manufacture some of our products. If these third party suppliers fail to deliver quality products or components at reasonable prices on a timely basis, we may alienate some of our customers and our revenues, profitability, and cash flow may decline. Additionally, the current global economic crisis could have a negative impact on our suppliers, causing a disruption in our vendor supplies. A disruption in vendor supplies may adversely affect our results of operations. Our outsourcing relationships may require us to purchase inventory when demand for products produced by third-party manufacturers is low. We may be unable to obtain broad intellectual property protection for our current and future products and we may become involved in intellectual property disputes. Our operations, and the operations of our customers, are subject to numerous government regulations, which could adversely limit our operating flexibility. Our certificate of incorporation and bylaws, Delaware law, our stockholders rights plan, the terms of our Series D Preferred Stock and contractual requirements under our agreement with Fletcher contain provisions that could discourage another company from acquiring us.

Full 10-K form ▸

866609--3/1/2010--ION_GEOPHYSICAL_CORP