Company Deploys 14th Data Acquisition Crew MIDLAND, Texas, May 2
/PRNewswire-FirstCall/ -- Dawson Geophysical Company (NASDAQ:DWSN)
today reported revenues of $59,935,000 for the quarter ending March
31, 2007, the Company's second fiscal quarter of 2007, compared to
$40,042,000 for the same quarter in fiscal 2006, an increase of 50
percent. Revenue growth in the quarter was primarily the result of
the addition of two seismic data acquisition crews during 2006,
increased channel count and productivity on existing crews,
improved pricing, and more favorable contract terms. Included in
the second quarter of fiscal 2007 revenues are substantial
increases in third party charges related to the use of helicopter
support services, specialized survey technologies, and dynamite
energy sources. The increase in these charges is driven by the
Company's continued operations in areas with limited access in the
Appalachian Basin, Arkansas, the Rocky Mountains and eastern
Oklahoma. The Company is reimbursed for these expenses by its
clients. Net income for the second quarter of fiscal 2007 was
$5,368,000, compared to $4,351,000 in the same quarter of fiscal
2006, an increase of 23 percent. Earnings per share for the second
quarter of fiscal 2007 were $0.71 per share, compared to $0.58 per
share in the same quarter of fiscal 2006. EBITDA for the second
quarter of fiscal 2007 was $12,961,000, compared to $9,899,000 in
the same quarter of fiscal 2006, an increase of 31 percent.
Although the Company's second quarter reflects continued brisk
domestic exploration activities by the Company's oil and gas
clients, adverse weather conditions, particularly in January and
March, and the inability to secure land access permits in a timely
manner on several projects in February negatively affected the
Company's second quarter results. While inclement weather
conditions continued to have a negative effect on operations into
April, the Company is currently operating at full capacity and
deployed its fourteenth crew in April as scheduled. During the
second quarter and in April, the Company took delivery of ten new
I/O vibrator energy source units and has eight more on order. The
Company is also on schedule to replace an I/O System II MRX
recording system used by an existing crew with a 9500 channel Aram
recording system in June, an increase of 1000 channels over the
8500 channels previously announced. In response to continued demand
for high resolution images and operating efficiencies, the Company
has increased the channel count on its fourteenth crew from 8500
channels to 10,000 channels and has purchased an additional 1500
channels of Aram equipment to further expand the recording capacity
on existing crews. The Company will own in excess of 95,000
channels upon fielding of the additional channels. In March, Dawson
Geophysical completed the data acquisition phase of a 3D seismic
project at the Dallas Fort Worth International Airport. The airport
project represents one of the most complex logistical and
operational undertakings in the Company's 55-year history. Demand
for the Company's services continues at an all-time high with an
order book reflecting commitments through the end of calendar 2007
for all fourteen crews and into calendar 2008 on several crews.
Operations are currently active on projects in West Texas, South
Texas, East Texas, the Barnett Shale of the Ft. Worth Basin, the
Fayetteville Shale in Arkansas, the Rocky Mountains, Oklahoma, and
the Appalachian Basin. The Company's data processing division
continues to make positive gains in market penetration, product
improvement, and technical support. Six Months Results For the six
months ended March 31, 2007, revenues were $113,589,000, compared
to $75,535,000 for the same period in 2006, an increase of 50
percent. Net income for the same six months increased 62 percent to
$10,803,000 in 2007, compared to $6,651,000 in 2006. Earnings per
share for the first six months of fiscal 2007 were $1.43 as
compared to $0.89 for the first six months of fiscal 2006, an
increase of 61 percent. EBITDA was $25,629,000 in the first six
months of fiscal 2007 versus $16,311,000 during the same period of
fiscal 2006, an increase of 57 percent. Stephen Jumper, President
and CEO of Dawson Geophysical said, "We are very pleased by our
year-over-year results. Despite inclement weather conditions and
land access issues during the second quarter, we were able to post
strong financial results. Going forward, we continue to anticipate
strong demand in the 3-D seismic data acquisition markets we serve.
It is a very exciting time at Dawson Geophysical and as we
celebrate our 55th anniversary on May 15, we will continue to serve
our clients in their quest for oil and natural gas." Management
Appointments The Board of Directors for Dawson Geophysical recently
made several management appointments. The Company named James W.
(Tom) Thomas as Vice President, Chief Geophysicist and Stuart
Wright as Vice President of Applied Geophysics. Tom and Stuart have
over 50 years of combined experience in the seismic industry. Tom
joined the Company in 2002 in the Midland office. Prior to joining
the Company, Tom was with Phillips Petroleum. Tom will soon
relocate to the Oklahoma City office. Stuart joined the Company in
2003 and is in the Denver office. Prior to joining the Company,
Stuart was most recently with WesternGeco in Denver. About Dawson
Geophysical 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 2-D, 3-D, 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. Forward Looking Statement This press
release contains information about the Company's EBITDA, a non-GAAP
financial measure. The Company defines EBITDA as net income 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, 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 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, dependence
upon energy industry spending, the volatility of oil and gas
prices, weather interruptions, the ability to manage growth, the
ability to obtain land access rights of way and the availability of
capital resources. 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, 2006. 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 (UNAUDITED) Three Months Ended Six
Months Ended March 31, March 31, 2007 2006 2007 2006 Operating
revenues $59,935,000 $40,042,000 $113,589,000 $75,535,000 Operating
costs: Operating expenses 45,608,000 29,109,000 85,332,000
57,247,000 General and administrative 1,605,000 1,314,000 3,053,000
2,441,000 Depreciation 4,154,000 3,188,000 8,168,000 6,164,000
51,367,000 33,611,000 96,553,000 65,852,000 Income from operations
8,568,000 6,431,000 17,036,000 9,683,000 Other income: Interest
income 272,000 167,000 426,000 328,000 Other income (expense)
(33,000) 113,000 (1,000) 136,000 Income before income tax 8,807,000
6,711,000 17,461,000 10,147,000 Income tax expense: Current
(3,138,000) (1,307,000) (5,065,000) (1,842,000) Deferred (301,000)
(1,053,000) (1,593,000) (1,654,000) Net income $5,368,000
$4,351,000 $10,803,000 $6,651,000 Net income per common share $0.71
$0.58 $1.43 $0.89 Net income per common share -- assuming dilution
$0.70 $0.57 $1.41 $0.88 Weighted average equivalent common shares
outstanding 7,590,911 7,504,811 7,572,156 7,495,499 Weighted
average equivalent common shares outstanding -- assuming dilution
7,650,405 7,593,193 7,642,709 7,583,611 Dawson Geophysical Company
Balance Sheets March 31, September 30, 2007 2006 (Unaudited) ASSETS
Current assets: Cash and cash equivalents $16,337,000 $8,064,000
Short-term investments 6,484,000 6,437,000 Accounts receivable, net
of allowance for doubtful accounts of $280,000 in March 2007 and
$148,000 in September 2006 45,187,000 46,074,000 Prepaid expenses
and other assets 1,771,000 690,000 Current deferred tax asset
807,000 1,619,000 Total current assets 70,586,000 62,884,000
Property, plant and equipment 180,140,000 160,740,000 Less
accumulated depreciation (82,228,000) (74,206,000) Net property,
plant and equipment 97,912,000 86,534,000 $168,498,000 $149,418,000
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $19,203,000 $16,280,000 Accrued liabilities: Payroll costs
and other taxes 2,275,000 1,958,000 Other 5,902,000 4,195,000
Deferred revenue 2,180,000 863,000 Total current liabilities
29,560,000 23,296,000 Deferred tax liability 7,709,000 6,914,000
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,
7,622,744 and 7,549,244 shares issued and outstanding in each
period 2,541,000 2,517,000 Additional paid-in capital 83,540,000
82,370,000 Other comprehensive expense, net of tax (9,000) (33,000)
Retained earnings 45,157,000 34,354,000 Total stockholders' equity
131,229,000 119,208,000 $168,498,000 $149,418,000 Reconciliation of
EBITDA to Net Income Three Months Ended Six Months Ended March 31,
March 31, 2007 2006 2007 2006 (in thousands) (in thousands) Net
Income $5,368 $4,351 $10,803 $6,651 Depreciation 4,154 3,188 8,168
6,164 Interest expense -- -- -- -- Income tax expense 3,439 2,360
6,658 3,496 EBITDA $12,961 $9,899 $25,629 $16,311 Reconciliation of
EBITDA to Net Cash Provided by Operating Activities Six Months
Ended March 31, 2007 2006 (in thousands) Net cash provided by
operating activities $21,028 $10,309 Changes in working capital
items and other 5,016 6,538 Non-cash adjustments to income (415)
(536) EBITDA $25,629 $16,311 DATASOURCE: Dawson Geophysical Company
CONTACT: L. Decker Dawson, Chairman, or Stephen C. Jumper, CEO and
President, or Christina W. Hagan, Chief Financial Officer, all of
Dawson Geophysical Company, +1-800-332-9766 Web site:
http://www.dawson3d.com/
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