MIDLAND, Texas, Nov. 14, 2012 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) today reported fourth quarter and year-end
results for fiscal 2012.
Fiscal 2012 Highlights
- EBITDA for the year-ended September 30,
2012 increased to $49,615,000
compared to $27,861,000 for the same
period of fiscal 2011, an increase of 78 percent;
- Net income for the year-ended September
30, 2012 increased to $11,113,000, or $1.42 earnings per share, compared to a net loss
of $3,246,000, or $0.42 loss per share, in fiscal 2011;
- Reported revenues of $319,274,000
for the year-ended September 30, 2012
compared to $333,279,000 for the
year-ended September 30, 2011;
- Revenues net of third-party reimbursable charges increased 13
percent in fiscal 2012 from fiscal 2011;
- Strengthened order book capable of sustaining fourteen data
acquisition crews well into calendar 2013;
- Fiscal 2012 capital expenditures of approximately $47,664,000 compared to $59,380,000 in fiscal 2011;
- Purchased 10,500 single-channel Geospace GSR units, 3,000 GSR
three-channel units with three component geophones and 19 INOVA
vibrator energy source units to increase recording capacity and
improve efficiency;
- Balanced portfolio of projects in the Eagle Ford Shale,
Niobrara Shale, Bakken Shale,
Marcellus Shale, Permian Basin and
Mississippi Lime;
- Approximately $78 million of
working capital at September 30,
2012; and
- Awarded first contract in Canada for the deployment of the Company's
first Canadian data acquisition crew during the 2012-2013 winter
season.
The Company reported revenues of $72,998,000 for the quarter-ended September 30, 2012, the Company's fourth quarter
of fiscal 2012, compared to $84,256,000 for the same quarter in fiscal 2011.
The Company reported net income for the fourth quarter of fiscal
2012 of $1,152,000, or $0.15 per share, compared to $2,944,000, or $0.38 per share, in the same quarter of fiscal
2011. EBITDA for the fourth quarter of fiscal 2012 was $10,630,000 compared to $12,955,000 in the same quarter of fiscal
2011.
For the fiscal year-ended September 30,
2012, the Company reported revenues of $319,274,000 compared to $333,279,000 for the year-ended fiscal 2011. Net
income for fiscal 2012 increased to $11,113,000 from a net loss of $3,246,000 in fiscal 2011. Earnings per share for
fiscal 2012 were $1.42 compared to a
loss per share of $0.42 for fiscal
2011. EBITDA for fiscal 2012 increased to $49,615,000 compared to $27,861,000 in the same period of fiscal 2011, an
increase of 78 percent.
Revenues for the year-ended September 30,
2012 decreased over the same period of fiscal 2011 primarily
as a result of a significant reduction in third-party reimbursable
charges as a percentage of revenue. Third-party charges, which are
included in revenues, continued to decline as a percentage of
revenues during the third and fourth fiscal quarters of 2012 to a
level more consistent with the Company's historical average for
such charges. These third-party charges are related to the
Company's use of helicopter support services, specialized survey
technologies and dynamite energy sources in areas of limited
access. The Company is reimbursed for these expenses by its
clients. The decline in third-party charges is primarily a result
of the Company's movement of operations toward the more open
terrain of the western United
States. Third-party charges in fiscal 2012 decreased 29
percent from fiscal 2011 and revenue net of third-party charges for
fiscal 2012 increased 13 percent from fiscal 2011.
Revenues for the fiscal 2012 fourth quarter decreased over the
same period of fiscal 2011 primarily as a result of lower
utilization rates during the first half of the 2012 fourth fiscal
quarter, crew moves as a result of the completion of several
projects late in the fourth fiscal quarter of 2012 and the
continued reduction of third-party reimbursable charges as a
percentage of revenue. Third-party charges in the fourth quarter of
fiscal 2012 decreased 12 percent from the same period in 2011 and
revenues net of third-party charges decreased 14 percent over the
same period in fiscal 2011.
As anticipated in the Company's second and third fiscal quarter
earnings press releases, the Company experienced lower utilization
rates during the third and fourth fiscal quarters of 2012 as crews
were affected by project preparation, weather delays, agricultural
activity, land access permit issues and client delays. Utilization
rates were also affected by increasing crew efficiencies driven by
improved processes and recent equipment purchases. In several
instances during the second and third fiscal quarters of 2012, the
Company's data acquisition crews completed projects ahead of
schedule and were idled as additional projects were in preparatory
and/or permitting phases. While these early project completions
have a negative impact on utilization, the Company believes that
these increased crew efficiencies may enable the Company to
increase its overall capacity, especially as the Company's order
book continues to grow in both variety and scope. Approximately
one-half of the Company's fourteen crews were impacted by the
factors described above for approximately one-half of each of the
last two fiscal quarters of 2012. The Company returned to full
utilization during the second half of the fourth fiscal quarter,
and such full utilization has continued into the first fiscal
quarter of 2013. Currently the Company has all of its fourteen
crews actively deployed.
Transaction costs related to a terminated merger agreement of
$1,444,000 and $3,866,000, respectively, were included in fourth
fiscal quarter and year-end 2011 results. Included in the Company's
fiscal 2012 results is a $0.18 per
share one-time tax benefit, taken in the first fiscal quarter of
2012, related to the same terminated merger agreement. Reflected in
the fourth fiscal quarter and year-end of 2012 results were
increases in depreciation expense of $637,000 and $1,962,000, respectively, from the prior year
periods. The increase in depreciation expenses was related to the
Company's investment in additional recording equipment and energy
source units over the past 24 months. Operating and General and
Administrative expenses increased during the fourth fiscal quarter
of 2012 from the third fiscal quarter of 2012, primarily as the
result of the Company returning to full utilization during the
quarter and costs associated with the Canadian entity start up.
Stephen Jumper, President and CEO
of Dawson Geophysical Company said, "Increasing demand for services
fueled our first profitable year since fiscal 2009. Requests for
seismic services approached multi-year highs in fiscal 2012. As a
result, both Net Income and EBITDA for the year increased
significantly despite decreased revenue from the prior year. We
believe that the decrease in 2012 revenue is not a reflection of
decreasing geophysical demand, but rather, a product of both lower
third-party charges as a percentage of revenue and the reduction in
utilization experienced during the second half of the fiscal year.
Our Company is beginning to realize improved results and returns on
the investments made in fiscal 2011 and 2012 as our business
continues to gain momentum into 2013. Our increased efficiencies
and crew productivity have us well positioned to capture more
upside as market conditions continue to improve."
Jumper continued, "While our results in both the third and
fourth quarter were negatively impacted by circumstances from May
through mid-August, we believe we have resolved those issues. We
are now at full utilization and operating at our highest level in
many years as we begin fiscal 2013. We are pleased to report that
several of the previously delayed fiscal 2012 projects are now
underway."
Market conditions continue to provide more favorable contract
terms as the Company's order book remains at its highest level
since late fiscal 2008, and continues to strengthen in terms of
client mix, project size, and geographic diversity. The order book
contains projects primarily in oil and liquids-rich basins such as
the Bakken, Niobrara, Mississippi Lime, Permian, Eagleford and
Marcellus Shale areas. In addition,
the Company's wholly-owned subsidiary, Dawson Seismic Services ULC,
has been awarded its first multi-component project in Canada. The Company anticipates operating one
crew in Canada this winter season.
Although clients may cancel, modify or delay their contracts on
short notice, the Company's order book reflects commitments
sufficient to maintain full operation of fourteen crews well into
calendar 2013. As always, the Company remains subject to delays
related to weather, securing land access permits and other factors,
which can affect operating results from quarter to quarter.
Jumper added, "Strong off the heels of our success in the lower
48, I am happy to report that we have executed our first contract
in Canada. Demand remains robust
in the lower 48. We believe we will be awarded a large multi-crew
project anticipated to begin the second quarter of calendar 2013
and recently have entered into two term agreements, one of which is
for multiple crews in various basins effective through mid-calendar
2014. We are currently negotiating potential term contracts with a
large independent and a major E&P company. We believe we will
continue to see steady levels of demand during fiscal 2013 as our
clients seek to obtain higher resolution subsurface images,
particularly in a time of increased pressure on drilling budgets.
We are well positioned with technology, capacity and efficiency to
serve our broadening client base effectively."
Capital expenditures for fiscal 2012 totaled $47,664,000 as compared to $59,380,000 in fiscal 2011 and $19,962,000 in fiscal 2010. The expenditures in
fiscal 2012 included 10,500 GSR single-channel units, 3,000 GSR
three-channel units, nineteen INOVA vibrator energy source units,
additional geophones, cables and vehicles, along with maintenance
capital requirements. The Company anticipates a capital budget in
fiscal 2013 of approximately $40,000,000, which includes purchases of
additional cable-less recording equipment and energy source units,
Canadian operation capital requirements and maintenance capital
requirements.
Jumper said, "New equipment purchases have been a big part of
our financial and operational success in 2012, and we believe these
expenditures will continue to generate increasing returns going
forward. We have invested approximately $126,000,000 since the beginning of fiscal 2010
in new, state-of-the-art recording and sourcing equipment, while
generating approximately $89,000,000
of EBITBA over the same period, $49,000,000 of which was generated in fiscal
2012. Our investments in maintenance and new equipment
competitively position us to capture continued improvement in
efficiency, and with it, improving results and returns on those
investments."
The Company's balance sheet remains strong with approximately
$78,000,000 of working capital,
$20,310,000 of debt, approximately
$61,000,000 of cash and cash
equivalents and short-term investments, and approximately
$105,000,000 of retained earnings. In
addition, the Company has $20,000,000
available under its undrawn revolving line of credit.
Jumper concluded, "As we close fiscal 2012, we hear discussion
regarding the decrease in horizontal rig count and whether the
decrease will negatively affect seismic data acquisition activity.
In light of this discussion, we note an interesting fact. As of
October 26, 2012, there were
approximately 1,105 horizontal rigs operating in the lower 48. At
the peak of 2008, however, during our most successful year in the
lower 48, there were approximately 600 horizontal rigs operating in
the lower 48. From this data, we can extrapolate that horizontal
rig count, while an important component of seismic activity, is not
the only component of seismic activity or our success. As drilling
decisions have become more critical to our clients, we believe the
need for high resolution subsurface images may continue to fuel
demand for our services for the foreseeable future, even if there
are moderate swings in the horizontal rig count."
Conference Call Information
Dawson will host a conference call to review its fiscal year-end
and fourth quarter 2012 financial results on November 14, 2012, at 9
a.m. CST. Participants can access the call at (877) 317-6789
(US/Canada) or (412) 317-6789
(International). To access the live audio webcast or the subsequent
archived recording, visit the Dawson website at www.dawson3d.com.
Callers can access the telephone replay through Monday, November 19, 2012 by dialing (877)
344-7529 (US/Canada) or (412)
317-0088 (International). The passcode is 10021219. The webcast
will be recorded and available for replay on Dawson's website until
December 14, 2012.
About Dawson
Dawson Geophysical Company is a leading provider of U.S. onshore
seismic data acquisition services in the lower 48 states of
the United States. 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.
Non-GAAP Financial Measures
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,
interest income, 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 (loss) 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, the volatility of oil and natural gas prices,
disruptions in the global economy, dependence upon energy industry
spending, limited number of customers, credit risk related to our
customers, cancellations of service contracts, high fixed costs of
operations, weather interruptions, inability to obtain land access
rights of way, industry competition, managing growth, 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, 2011.
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
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
Three
Months Ended September 30,
|
|
Twelve
Months Ended September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
$
72,998,000
|
|
$
84,256,000
|
|
$
319,274,000
|
|
$
333,279,000
|
Operating costs:
|
|
|
|
|
|
|
|
Operating expenses
|
59,302,000
|
|
67,195,000
|
|
258,970,000
|
|
292,519,000
|
General and administrative
|
3,159,000
|
|
4,154,000
|
|
11,205,000
|
|
13,550,000
|
Depreciation
|
8,406,000
|
|
7,769,000
|
|
32,498,000
|
|
30,536,000
|
|
70,867,000
|
|
79,118,000
|
|
302,673,000
|
|
336,605,000
|
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
2,131,000
|
|
5,138,000
|
|
16,601,000
|
|
(3,326,000)
|
Other
income (expense):
|
|
|
|
|
|
|
|
Interest income
|
12,000
|
|
2,000
|
|
28,000
|
|
35,000
|
Interest expense
|
(207,000)
|
|
(167,000)
|
|
(629,000)
|
|
(167,000)
|
Other income
|
93,000
|
|
48,000
|
|
516,000
|
|
651,000
|
Income
(loss) before income tax
|
2,029,000
|
|
5,021,000
|
|
16,516,000
|
|
(2,807,000)
|
|
|
|
|
|
|
|
|
Income
tax (expense) benefit:
|
|
|
|
|
|
|
|
Current
|
(298,000)
|
|
(158,000)
|
|
(490,000)
|
|
2,929,000
|
Deferred
|
(579,000)
|
|
(1,919,000)
|
|
(4,913,000)
|
|
(3,368,000)
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
$
1,152,000
|
|
$
2,944,000
|
|
$
11,113,000
|
|
$
(3,246,000)
|
|
|
|
|
|
|
|
|
Basic
income (loss) per common share
|
$
0.15
|
|
$
0.38
|
|
$
1.42
|
|
$
(0.42)
|
|
|
|
|
|
|
|
|
Diluted
income (loss) per common share
|
$
0.15
|
|
$
0.37
|
|
$
1.40
|
|
$
(0.42)
|
|
|
|
|
|
|
|
|
Weighted average equivalent common shares
outstanding
|
7,846,769
|
|
7,829,785
|
|
7,841,722
|
|
7,809,561
|
|
|
|
|
|
|
|
|
Weighted average equivalent
common shares outstanding-assuming
dilution
|
7,924,015
|
|
7,917,160
|
|
7,931,593
|
|
7,809,561
|
DAWSON
GEOPHYSICAL COMPANY
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
2012
|
|
2011
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash equivalents
|
$
57,373,000
|
|
$
26,077,000
|
Short-term investments
|
4,000,000
|
|
-
|
Accounts receivable, net of allowance
for doubtful accounts of $250,000 and $155,000 at September 30,
2012 and September 30, 2011, respectively
|
53,719,000
|
|
86,716,000
|
Prepaid expenses and other
assets
|
762,000
|
|
4,254,000
|
Current deferred tax asset
|
1,925,000
|
|
1,236,000
|
|
|
|
|
Total current assets
|
117,779,000
|
|
118,283,000
|
|
|
|
|
Property, plant and equipment
|
326,030,000
|
|
302,647,000
|
Less accumulated depreciation
|
(164,634,000)
|
|
(156,106,000)
|
|
|
|
|
Net property, plant
and equipment
|
161,396,000
|
|
146,541,000
|
|
|
|
|
Total assets
|
$
279,175,000
|
|
$
264,824,000
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$
18,544,000
|
|
$
18,732,000
|
Accrued liabilities:
|
|
|
|
Payroll costs and
other taxes
|
1,802,000
|
|
1,436,000
|
Other
|
6,425,000
|
|
9,230,000
|
Deferred revenue
|
3,467,000
|
|
9,616,000
|
Current maturities of
notes payable and obligations under capital leases
|
9,131,000
|
|
5,290,000
|
|
|
|
|
Total current liabilities
|
39,369,000
|
|
44,304,000
|
|
|
|
|
Long-term liabilities:
|
|
|
|
Notes payable and
obligations under capital leases less current maturities
|
11,179,000
|
|
10,281,000
|
Deferred tax liability
|
27,678,000
|
|
22,076,000
|
|
|
|
|
Total long-term liabilities
|
38,857,000
|
|
32,357,000
|
|
|
|
|
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, 8,031,369 and
7,910,885 shares issued and outstanding at September 30, 2012 and
September 30, 2011, respectively
|
2,677,000
|
|
2,637,000
|
Additional paid-in capital
|
93,224,000
|
|
91,591,000
|
Retained earnings
|
105,048,000
|
|
93,935,000
|
|
|
|
|
Total stockholders' equity
|
200,949,000
|
|
188,163,000
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
279,175,000
|
|
$
264,824,000
|
|
|
|
|
Reconciliation of EBITDA to Net Income
(Loss)
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Twelve
Months Ended
|
|
September
30,
|
|
September
30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
(in
thousands)
|
|
(in
thousands)
|
Net income
(loss)
|
$
1,152
|
|
$
2,944
|
|
$
11,113
|
|
$
(3,246)
|
Depreciation
|
8,406
|
|
7,769
|
|
32,498
|
|
30,536
|
Interest
expense (income), net
|
195
|
|
165
|
|
601
|
|
132
|
Income tax
expense
|
877
|
|
2,077
|
|
5,403
|
|
439
|
EBITDA
|
$
10,630
|
|
$
12,955
|
|
$
49,615
|
|
$
27,861
|
|
|
|
|
|
|
|
|
Reconciliation of EBITDA to Net Cash Provided by
Operating
|
|
|
|
|
|
|
|
Activities
|
Three
Months Ended
|
|
Twelve
Months Ended
|
|
September
30,
|
|
September
30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
(in
thousands)
|
|
(in
thousands)
|
Net cash
provided by operating activities
|
$
18,376
|
|
$
17,420
|
|
$
76,380
|
|
$
16,951
|
Changes in
working capital and other items
|
(7,292)
|
|
(4,198)
|
|
(24,949)
|
|
12,812
|
Noncash
adjustments to income
|
(454)
|
|
(267)
|
|
(1,816)
|
|
(1,902)
|
EBITDA
|
$
10,630
|
|
$
12,955
|
|
$
49,615
|
|
$
27,861
|
SOURCE Dawson Geophysical Company