MIDLAND, Texas, May 5 /PRNewswire-FirstCall/ -- Dawson
Geophysical Company (Nasdaq: DWSN) today reported revenues of
$48,585,000 for the quarter ending
March 31, 2010, the Company's second
quarter of fiscal 2010, compared to $64,625,000 for the same quarter in fiscal 2009,
a decrease of 25 percent. Net loss for the second quarter of fiscal
2010 was $2,706,000 compared to net
income of $6,170,000 in the same
quarter of fiscal 2009. Loss per share for the second quarter of
fiscal 2010 was $0.35 compared to
income per share of $0.79 for the
second quarter of fiscal 2009. EBITDA for the second quarter of
fiscal 2010 was $2,488,000 compared
to $16,814,000 in the same quarter of
fiscal 2009.
The revenue decrease in the quarter compared to the same quarter
of fiscal 2009 was primarily the result of previously announced
reductions in active crew count from sixteen to nine crews
beginning in 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 higher level of these charges during
the second quarter was driven by the Company's increased demand
levels 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, "Increased demand for our
services and higher crew utilization rates during our second
quarter resulted in improved financial performance compared to our
first fiscal quarter despite extremely difficult weather
conditions, particularly heavy snowfalls in the Northern and
Northeastern regions of the country along with wet and icy
conditions in the mid and southern regions. As previously
announced, we redeployed two seismic data acquisition crews during
the quarter bringing the number of currently active crews to
eleven."
Jumper continued, "We continue to experience steady demand for
our services, especially in targeted 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. While we remain in a competitive pricing
environment, we believe we are in a position to continue to
mitigate short-term utilization rate issues 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 well into calendar 2010."
The Company's Board of Directors has approved an additional
$10,000,000 capital budget for fiscal
2010, bringing the total fiscal 2010 budget to $20,000,000. At the end of the second quarter,
the Company spent $8,007,000 after
trade-in allowance on the purchase of additional ARAM and RSR
channels as the desire for increased channel count for higher
resolution images and improved operational efficiencies continues
to grow. Our current channel count is in excess of 120,000. Total
capital expenditures for the fiscal year to date are $15,658,000 including the purchase of the 2,000
stations of OYO GSR four channel three-component recording
equipment reported in the first quarter. The balance of the capital
budget will be used for maintenance capital requirements and the
purchase of additional geophones.
Jumper concluded, "While market conditions are still
challenging, we believe we are positioned to capture the upside of
the seismic market. We now have eleven crews fully deployed
throughout every major oil and natural gas basin in the continental
United States. Utilization rates
continue to improve, demand for our services remains steady, and we
maintain a very solid balance sheet with approximately $80,000,000 of working capital, no debt and a
$20,000,000 undrawn revolver
available. In addition, we continue to cultivate and nurture
valuable client relationships. We have retained all of our key
technical and operational people which 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
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STATEMENTS OF
OPERATIONS
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Three Months
Ended
March
31,
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Six Months
Ended
March
31,
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2010
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2009
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2010
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2009
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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Operating revenues
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$
48,585,000
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$
64,625,000
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$
84,915,000
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$
144,841,000
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Operating costs:
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Operating expenses
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44,428,000
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45,737,000
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79,147,000
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104,752,000
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General and
administrative
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1,792,000
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2,408,000
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3,646,000
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4,563,000
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Depreciation
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6,695,000
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6,529,000
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13,172,000
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13,130,000
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52,915,000
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54,674,000
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95,965,000
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122,445,000
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Income (loss) from
operations
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(4,330,000)
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9,951,000
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(11,050,000)
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22,396,000
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Other income:
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Interest income
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28,000
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62,000
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58,000
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140,000
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Other income
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95,000
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272,000
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97,000
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310,000
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Income (loss) before income
tax
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(4,207,000)
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10,285,000
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(10,895,000)
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22,846,000
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Income tax benefit
(expense)
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1,501,000
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(4,115,000)
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3,973,000
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(8,942,000)
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Net income (loss)
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$
(2,706,000)
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$
6,170,000
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$
(6,922,000)
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$
13,904,000
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Net income (loss) per common
share
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$
(0.35)
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$
0.79
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$
(0.89)
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$
1.78
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Net income (loss) per common
share-assuming dilution
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$
(0.35)
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$
0.79
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$
(0.89)
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$
1.78
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Weighted average equivalent common
shares outstanding
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7,779,256
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7,799,744
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7,775,483
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7,797,986
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Weighted average equivalent
common
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shares outstanding-assuming
dilution
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7,779,256
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7,850,508
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7,775,483
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7,824,202
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DAWSON GEOPHYSICAL
COMPANY
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BALANCE
SHEETS
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March
31,
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September
30,
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2010
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2009
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(Unaudited)
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ASSETS
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Current assets:
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Cash and cash
equivalents
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$
19,117,000
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$
36,792,000
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Short-term
investments
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30,123,000
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25,267,000
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Accounts receivable, net of
allowance for
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doubtful accounts
of $639,000 in March 2010
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and $533,000 in
September 2009
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54,009,000
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40,106,000
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Prepaid expenses and other
assets
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7,143,000
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7,819,000
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Current deferred tax
asset
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921,000
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1,694,000
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Total
current assets
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111,313,000
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111,678,000
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Property, plant and
equipment
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246,333,000
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240,820,000
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Less accumulated
depreciation
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(118,322,000)
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(115,341,000)
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Net property,
plant and equipment
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128,011,000
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125,479,000
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Total
assets
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$
239,324,000
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$
237,157,000
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LIABILITIES AND
STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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$
16,894,000
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$
6,966,000
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Accrued liabilities:
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Payroll costs and
other taxes
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3,160,000
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2,720,000
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Other
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9,822,000
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10,600,000
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Deferred
revenue
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1,512,000
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2,230,000
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Total
current liabilities
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31,388,000
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22,516,000
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Deferred tax liability
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15,987,000
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16,262,000
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Stockholders' equity:
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Preferred stock-par value $1.00
per share;
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5,000,000 shares
authorized, none outstanding
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-
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-
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Common stock-par value $.33 1/3
per share;
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50,000,000 shares
authorized, 7,817,756
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and 7,822,994
shares issued and outstanding
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in each
period
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2,606,000
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2,608,000
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Additional paid-in
capital
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89,690,000
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89,220,000
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Other comprehensive income, net
of tax
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42,000
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18,000
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Retained earnings
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99,611,000
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106,533,000
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Total
stockholders' equity
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191,949,000
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198,379,000
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Total
liabilities and stockholders' equity
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$
239,324,000
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$
237,157,000
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Reconciliation of EBITDA to Net Income
(Loss)
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Three Months
Ended
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Six Months
Ended
|
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March
31,
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March
31,
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2010
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2009
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2010
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2009
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(in
thousands)
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(in
thousands)
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Net income (loss)
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$
(2,706)
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$
6,170
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$
(6,922)
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$
13,904
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Depreciation
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6,695
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6,529
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13,172
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13,130
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Income tax (benefit)
expense
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(1,501)
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4,115
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(3,973)
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8,942
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EBITDA
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$
2,488
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$
16,814
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$
2,277
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$
35,976
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Reconciliation of EBITDA to Net Cash
Provided by Operating
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Activities
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Six Months
Ended
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March
31,
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2010
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2009
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(in
thousands)
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Net cash provided by operating
activities
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$
2,510
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$
38,291
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Changes in working capital items and
other
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763
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(328)
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Non-cash adjustments to
income
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(996)
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(1,987)
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EBITDA
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$
2,277
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$
35,976
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SOURCE Dawson Geophysical Company