Dawson Geophysical Reports First Quarter Results
Company to Deploy Two Additional Crews in Current Quarter
MIDLAND, Texas, Feb. 3 /PRNewswire-FirstCall/ -- Dawson Geophysical Company (Nasdaq: DWSN) today reported revenues of $36,330,000 for the quarter ending December 31, 2009, the Company's first quarter of fiscal 2010, compared to $80,216,000 for the same quarter in fiscal 2009, a decrease of 55 percent. Net loss for the first quarter of fiscal 2010 was $4,216,000, compared to net income of $7,734,000 in the same quarter of fiscal 2009. Loss per share for the first quarter of fiscal 2010 was $0.54, compared to income per share of $1.00 for the first quarter of fiscal 2009. EBITDA for the first quarter of fiscal 2010 was a loss of $211,000, compared to income of $19,162,000 in the same quarter of fiscal 2009.
The revenue decrease in the quarter was primarily the result of previously announced reductions in active crew count during the second quarter of fiscal 2009 (four crews), third quarter of fiscal 2009 (two crews), and first quarter of fiscal 2010 (one crew), a more competitive pricing environment, substantially lower utilization rates of the remaining crews and increased downtime for weather. Revenues in the quarter continued to include relatively high third-party charges related to the use of helicopter support services, specialized survey technologies and dynamite energy sources. The sustained level of these charges is driven by the Company's continued operations in areas with limited access. The Company is reimbursed for these expenses by its clients.
Stephen Jumper, President and CEO of Dawson Geophysical Company, said, "The first quarter of fiscal 2010 was challenging. Lower crew utilization rates and excessive weather downtime on several crews in October and December, coupled with first quarter related issues of shorter days and holiday season negatively impacted our results."
Jumper continued, "Despite the disappointing first quarter results, we have experienced an increase in demand for our services beginning in late calendar year 2009 in various oil and natural gas producing basins, including the Marcellus Shale, Barnett Shale, Fayetteville Shale, Eagle Ford Shale, Haynesville Shale, Bakken Shale, mid-continent region and the Permian Basin. In response to the increase in demand, we have redeployed two additional crews in the current quarter, our second fiscal quarter, bringing the number of currently active crews to eleven. While we remain in a competitive pricing environment and the pace of future economic activity remains uncertain, we believe we are in a position to mitigate short-term utilization rate issues experienced in recent quarters and take advantage of increased crew efficiencies and productivity. Although our clients may cancel their service contracts on short notice, we believe our current order book reflects commitment levels sufficient to maintain operations for eleven crews through the middle of calendar 2010."
As previously announced, the Company's Board of Directors has approved a $10,000,000 capital budget for fiscal 2010 to be used to purchase 2,000 stations of OYO GSR three-component recording equipment and to meet necessary maintenance requirements during fiscal 2010. The addition of the OYO GSR recording equipment will allow the Company to record 6,000 channels of multi-component data or up to 8,000 channels of conventional seismic data, either as a stand alone system or as added channel count and increased flexibility for the Company's existing ARAM recording systems. The operational flexibility of the OYO equipment should lead to improved operational opportunities and efficiencies which, in turn, may lead to improved financial performance in the future. The Company took delivery of the OYO equipment on February 1, and will deploy the system in the first week of February in a multi-component mode as part of a larger conventional 3D seismic data acquisition project utilizing an ARAM recording system.
Jumper concluded, "As in past down cycles, we have maintained a very solid balance sheet with in excess of $91,000,000 of working capital, no debt and a $20,000,000 undrawn revolver available. We continue to cultivate and nurture valuable client relationships. We have retained all of our key technical and operational people all of whom should allow us to capitalize on the opportunities beginning to emerge in 2010 and beyond."
Dawson Geophysical Company is the leading provider of U.S. onshore seismic data acquisition services as measured by the number of active data acquisition crews. Founded in 1952, Dawson acquires and processes 2D, 3D, and multi-component seismic data solely for its clients, ranging from major oil and gas companies to independent oil and gas operators as well as providers of multi-client data libraries.
This press release contains information about the Company's EBITDA, a non-GAAP financial measure as defined by Regulation G promulgated by the U.S. Securities and Exchange Commission. The Company defines EBITDA as net income (loss) plus interest expense, income taxes, depreciation and amortization expense. The Company uses EBITDA as a supplemental financial measure to assess:
- the financial performance of its assets without regard to financing methods, capital structures, taxes or historical cost basis;
- its liquidity and operating performance over time in relation to other companies that own similar assets and that the Company believes calculate EBITDA in a similar manner; and
- the ability of the Company's assets to generate cash sufficient for the Company to pay potential interest costs.
The Company also understands that such data are used by investors to assess the Company's performance. However, the term EBITDA is not defined under generally accepted accounting principles and EBITDA is not a measure of operating income, operating performance or liquidity presented in accordance with generally accepted accounting principles. When assessing the Company's operating performance or liquidity, investors and others should not consider this data in isolation or as a substitute for net income (loss), cash flow from operating activities or other cash flow data calculated in accordance with generally accepted accounting principles. In addition, the Company's EBITDA may not be comparable to EBITDA or similar titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as the Company. Further, the results presented by EBITDA cannot be achieved without incurring the costs that the measure excludes: interest, taxes, depreciation and amortization. A reconciliation of the Company's EBITDA to its net income (loss) is presented in the table following the text of this press release.
In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, Dawson Geophysical Company cautions that statements in this press release which are forward-looking and which provide other than historical information involve risks and uncertainties that may materially affect the Company's actual results of operations. These risks include but are not limited to, the volatility of oil and natural gas prices, disruptions in the global economy, dependence upon energy industry spending, cancellations of service contracts, high fixed costs of operations, weather interruptions, inability to obtain land access rights of way, industry competition, limited number of customers, credit risk related to our customers, asset impairments, the availability of capital resources and operational disruptions. A discussion of these and other factors, including risks and uncertainties, is set forth in the Company's Form 10-K for the fiscal year ended September 30, 2009. Dawson Geophysical Company disclaims any intention or obligation to revise any forward-looking statements, whether as a result of new information, future events or otherwise.
DAWSON GEOPHYSICAL COMPANY
STATEMENTS OF OPERATIONS
Three Months Ended December 31,
-------------------------------
2009 2008
---- ----
(Unaudited) (Unaudited)
Operating revenues $36,330,000 $80,216,000
Operating costs:
Operating expenses 34,719,000 59,015,000
General and administrative 1,854,000 2,155,000
Depreciation 6,477,000 6,601,000
----------- -----------
43,050,000 67,771,000
Income (loss) from operations (6,720,000) 12,445,000
Other income:
Interest income 30,000 78,000
Other income 2,000 38,000
----------- -----------
Income (loss) before income tax (6,688,000) 12,561,000
Income tax benefit (expense) 2,472,000 (4,827,000)
Net income (loss) $(4,216,000) $7,734,000
=========== ==========
Net income (loss) per
common share $(0.54) $1.00
=========== ==========
Net income (loss) per
common share-assuming
dilution $(0.54) $0.99
=========== ==========
Weighted average equivalent
common shares outstanding 7,771,791 7,701,766
=========== ==========
Weighted average equivalent
common shares outstanding-
assuming dilution 7,771,791 7,805,209
=========== ==========
DAWSON GEOPHYSICAL COMPANY
BALANCE SHEETS
December 31, September 30,
2009 2009
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $37,731,000 $36,792,000
Short-term investments 25,192,000 25,267,000
Accounts receivable, net of
allowance for doubtful accounts
of $639,000 in December 2009
and $533,000 in September 2009 35,920,000 40,106,000
Prepaid expenses and other
assets 11,259,000 7,819,000
Current deferred tax asset 1,149,000 1,694,000
------------ ------------
Total current assets 111,251,000 111,678,000
Property, plant and equipment 240,546,000 240,820,000
Less accumulated depreciation (121,606,000) (115,341,000)
------------ ------------
Net property, plant and
equipment 118,940,000 125,479,000
------------ ------------
Total assets $230,191,000 $237,157,000
============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $7,346,000 $6,966,000
Accrued liabilities:
Payroll costs and other taxes 1,988,000 2,720,000
Other 8,760,000 10,600,000
Deferred revenue 1,643,000 2,230,000
------------ ------------
Total current liabilities 19,737,000 22,516,000
------------ ------------
Deferred tax liability 16,113,000 16,262,000
Stockholders' equity:
Preferred stock-par value
$1.00 per share;
5,000,000 shares
authorized, none
outstanding - -
Common stock-par value
$.33 1/3 per share;
50,000,000 shares
authorized, 7,817,756
and 7,822,994 shares issued
and outstanding
in each period 2,606,000 2,608,000
Additional paid-in capital 89,387,000 89,220,000
Other comprehensive income,
net of tax 31,000 18,000
Retained earnings 102,317,000 106,533,000
------------ ------------
Total stockholders' equity 194,341,000 198,379,000
------------ ------------
Total liabilities and
stockholders' equity $230,191,000 $237,157,000
============ ============
Reconciliation of EBITDA to Net Income (Loss)
Three Months Ended
------------------
December 31,
------------
2009 2008
---- ----
(in thousands)
Net income (loss) $(4,216) $7,734
Depreciation 6,477 6,601
Income tax (benefit) expense (2,472) 4,827
------- -------
EBITDA $(211) $19,162
======= =======
Reconciliation of EBITDA to Net Cash Provided
by Operating Activities Three Months Ended
------------------
December 31,
------------
2009 2008
---- ----
(in thousands)
Net cash provided by operating activities $959 $10,361
Changes in working capital items and other (524) 9,470
Non-cash adjustments to income (646) (669)
------- -------
EBITDA $(211) $19,162
======= =======
SOURCE Dawson Geophysical Company
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