ION Geophysical Corporation (NYSE: IO) was a major gainer in yesterday’s session, to close the day with gains of 93.97%. This came after the company outlined measures to cut costs and mitigate the effects of the current macroeconomic issues.
The company announced that it was taking steps to cut personnel expenses by 13 million. It outlined that it would achieve this through a furlough program. Under the program, ION executives would take a 20% cut on their salaries, while a tiered approach would be used to cut the rest of the workforce’s compensation. The board of directors would also take a pay cut to reflect the changes taken on the other company stakeholders. The company added that the action it had taken would cut costs while allowing it to retain its key talent in these difficult times.
The company also announced that it had taken measures to lower its SG&A costs by $5 million. It added that it would continue reducing the usage of external contractors and streamline its supply chain. The company further stated that it would start implementing new systems that would support the business, while at the same time enhancing efficiency. The company also added that it had cut on its expenditures on trade shows and shifted to digital marketing strategies.
On top of the cost cuts, the company announced that it was cutting back on capital expenditure to $20-25 million for the year. This is a significant cut from the company’s earlier projections of $35 to 50 million. It added that the reduction in capital expenditure was a reflection of the drop in demand, and the ongoing travel restrictions.
Looking at its price action, IO is in a reversal. The stock opened the day at $1.31 and traded between a low of $1.31 and a high of $3.07, before closing the day at $3.07. Volumes in the days stood at 21.41 million.
About ION Geophysical Corporation
ION Geophysical Corporation offers seismic data acquisition services in the Americas. The company is based in Houston, Texas.