MIDLAND, Texas, Nov. 13,
2013 /PRNewswire/ -- Dawson Geophysical Company (NASDAQ: DWSN)
today reported fourth quarter and year-end results for fiscal
2013.
Fiscal 2013 Highlights
- EBITDA for the year-ended September 30, 2013 increased to
$57,262,000 compared to $49,615,000 for the same period of fiscal 2012,
an increase of 15 percent;
- Income from operations for fiscal 2013 increased 22 percent to
$20,180,000 from $16,601,000 in fiscal 2012;
- Net income for the year-ended September 30, 2013 of
$10,480,000, or $1.31 per share attributable to common stock,
compared to net income of $11,113,000, or $1.40 per share attributable to common stock in
fiscal 2012. Included in the fiscal 2012 results is an $0.18 per share one-time tax benefit related to a
terminated merger agreement in fiscal 2011;
- Revenues of $305,299,000 for the
year-ended September 30, 2013 compared to $319,274,000 for the year-ended
September 30, 2012;
- Revenues net of third-party reimbursable charges increased 9
percent in fiscal 2013 from fiscal 2012;
- Fiscal 2013 capital expenditures of $50,069,000 compared to $47,664,000 in fiscal 2012;
- Purchased 12,000 single-channel Geospace GSX units, 1,000
three-channel GSX units, 2,500 channels of the Wireless Seismic RT
System 2 recording system and 10 INOVA vibrator energy source units
to increase recording capacity and improve efficiency;
- Deployed a small crew equipped with 2,500 channels of the
Wireless Seismic RT System 2 recording system for small 2D and 3D
projects as well as microseismic applications;
- Entered into the surface recording microseismic business
line;
- Completed first winter season of operations in Canada;
- Balanced portfolio of projects primarily in the Eagle Ford
Shale, Niobrara Shale, Bakken Shale,
Marcellus Shale, Permian Basin
including the Cline Shale and Wolfcamp areas, and Mississippi Lime
of Kansas and Oklahoma; and
- Approximately $79 million of
working capital at September 30, 2013.
The Company reported revenues of $69,673,000 for the quarter-ended
September 30, 2013, the Company's fourth quarter of fiscal
2013, compared to $72,998,000 for the
same quarter in fiscal 2012. The Company reported a net loss for
the fourth quarter of fiscal 2013 of $2,790,000, or $0.35 per share attributable to common stock,
compared to earnings of $1,152,000,
or $0.14 per share attributable to
common stock, in the same quarter of fiscal 2012. EBITDA for the
fourth quarter of fiscal 2013 was $6,635,000 compared to $10,630,000 in the same quarter of fiscal
2012.
Revenues for the year-ended September 30, 2013 decreased
over the same period of fiscal 2012 primarily as a result of a
continued reduction in third-party reimbursable charges as a
percentage of revenue and lower utilization rates in the fourth
fiscal quarter of 2013. Third-party charges, which are included in
revenues, continued to decline as a percentage of revenues during
fiscal 2013 to a level below the Company's historical average for
such charges. In fiscal 2013 third-party charges decreased 38
percent as compared to fiscal 2012. 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. Without the effect of third-party charges, the
Company's revenues in fiscal 2013 increased 9 percent as
compared with the previous fiscal year. Revenues for the fiscal
2013 fourth quarter decreased over the same period of fiscal 2012
primarily as a result of lower utilization rates during the fourth
fiscal quarter of 2013.
As anticipated in the Company's third fiscal quarter earnings
press releases and subsequent September operations update press
release, the Company experienced lower utilization rates during
fourth fiscal quarter of 2013 as crews were affected by project
readiness issues due to agricultural operations in key regions,
weather delays, land access permit issues and a softness in bid
activity during the third fiscal quarter of 2013. Utilization rates
were also affected by increasing crew efficiencies driven by
improved processes and recent equipment purchases. In several
instances during the third fiscal quarter of 2013, 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 going forward.
As a result of the factors discussed above, the Company operated
the equivalent of eight crews during the fourth fiscal quarter of
2013 into the first quarter of fiscal 2014. As previously
disclosed, the Company maintains equipment and personnel required
to operate twelve large channel count crews and one small crew
which will be utilized for small 2D and 3D projects along with
microseismic applications. The Company anticipates a return to full
utilization with the operation of twelve large channel crews in the
U.S. and one crew in Canada by the
middle of the first fiscal quarter of 2014.
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 transaction costs for
a terminated merger agreement in fiscal 2011. Also reflected in the
fourth fiscal quarter and year-end of 2013 results were increases
in depreciation expense of $776,000
and $4,597,000, 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.
Stephen Jumper, President and CEO
of Dawson Geophysical Company said, "Steady demand for services
fueled our fiscal 2013 results. As a result, both income from
operations and EBITDA for the year increased significantly despite
decreased revenue from the prior year. We believe that the decrease
in 2013 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 fourth quarter of the fiscal year. Our
Company continues to realize improved results and returns on the
investments made since fiscal 2011. Our increased efficiencies and
crew productivity have us well positioned to capture more upside as
market conditions improve."
Market conditions have fluctuated since the beginning of the
third fiscal quarter of 2013 with a period of increased request for
proposal activity early in the fourth quarter following soft
activity levels in the third quarter. Bid activity and our order
book strength indicate a return to higher utilization in the first
fiscal quarter of 2014. The order book contains projects primarily
in oil and liquids-rich basins such as the Bakken, Niobrara,
Mississippi Lime, Permian, Eagle Ford and Marcellus Shale areas. In addition, the
Company's wholly-owned subsidiary, Dawson Seismic Services ULC, has
been awarded two multi-component projects in Canada. The Company anticipates operating one
crew in Canada on two projects for
part of the 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
twelve large channel count crews and one small channel count crew
into the middle of fiscal 2014. 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.
Capital expenditures for fiscal 2013 totaled $50,069,000 as compared to $47,664,000 in fiscal 2012. The expenditures in
fiscal 2013 included 12,000 single-channel Geospace GSX units,
1,000 three-channel Geospace GSX units, 2,500 channels of the
Wireless Seismic RT System 2 recording system, ten INOVA vibrator
energy source units, additional geophones, and vehicles, along with
maintenance capital requirements. The Company anticipates a capital
budget in fiscal 2014 of approximately $35,000,000, which includes purchases of
additional cable-less recording equipment and energy source units,
Canadian operation capital requirements and maintenance capital
requirements. As announced in early October, the Company placed an
order for 9,000 stations of three component GSX equipment and has
begun taking delivery. This equipment will be utilized on several
multicomponent projects in the United
States and Canada.
Jumper said, "Implementation of new technologies has played a
big role in our financial and operational success in 2013.
Improved subsurface resolution and increased data from investments
in these technologies is enabling our clients to make even more
informed drilling decisions. Equally important, we are
providing data that allows our clients to make decisions across all
phases of the demand cycle, from exploration to evaluation to
exploitation. As we move into fiscal 2014, we will continue to
invest in technologies that provide our clients with the most
robust data and subservice resolutions while, at the same time,
generate strong returns for Dawson Geophysical."
The Company's balance sheet remains strong with approximately
$79,000,000 of working capital,
$13,000,000 of debt, $76,000,000 of cash and cash equivalents and
short-term investments, and $115,000,000 of retained earnings. In addition,
the Company has $20,000,000 available
under its undrawn revolving line of credit. The Company anticipates
financing its recent purchase of GSX equipment with a mixture of
cash and debt.
Jumper concluded, "While our results in the fourth quarter were
negatively impacted by circumstances from July through October, we
believe those issues will be resolved in the first fiscal quarter
of 2014. Challenges in the North American market are slowly
starting to give way to new opportunities. Lower utilization
rates primarily in the Permian Basin are showing signs of
improvement as we move into the fiscal first quarter of 2014. The
Canadian market for this winter season appears to be softer than
anticipated but remains a long-term growth opportunity. Our
microseismic business we believe will continue to provide growth
opportunities. We continue to work on right sizing our crew count
relative to project readiness concerns and reducing operating costs
in an effort to maximize returns. We maintain a superior balance
sheet and will evaluate growth opportunities as they present
themselves."
Conference Call Information
Dawson will host a conference call to review its fiscal year-end
and fourth quarter 2013 financial results on November 13,
2013, 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 18, 2013 by dialing (877) 344-7529
(US/Canada) or (412) 317-0088
(International). The passcode is 10036914. The webcast will be
recorded and available for replay on Dawson's website until
December 13, 2013.
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, 2012. 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.
Company Contacts:
Stephen C.
Jumper, CEO and President
Christina W. Hagan, Chief Financial
Officer
(800) 332-9766
www.dawson3d.com
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
Three Months Ended
September 30,
|
|
Twelve Months Ended
September 30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
69,673,000
|
|
$
72,998,000
|
|
$
305,299,000
|
|
$
319,274,000
|
Operating
costs:
|
|
|
|
|
|
|
|
Operating expenses
|
59,740,000
|
|
59,302,000
|
|
234,660,000
|
|
258,970,000
|
General
and administrative
|
3,214,000
|
|
3,159,000
|
|
13,364,000
|
|
11,205,000
|
Depreciation
|
9,182,000
|
|
8,406,000
|
|
37,095,000
|
|
32,498,000
|
|
72,136,000
|
|
70,867,000
|
|
285,119,000
|
|
302,673,000
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
(2,463,000)
|
|
2,131,000
|
|
20,180,000
|
|
16,601,000
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
14,000
|
|
12,000
|
|
63,000
|
|
28,000
|
Interest
expense
|
(136,000)
|
|
(207,000)
|
|
(660,000)
|
|
(629,000)
|
Other
(expense) income
|
(84,000)
|
|
93,000
|
|
(13,000)
|
|
516,000
|
(Loss) income
before income tax
|
(2,669,000)
|
|
2,029,000
|
|
19,570,000
|
|
16,516,000
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense):
|
|
|
|
|
|
|
|
Current
|
117,000
|
|
(298,000)
|
|
(817,000)
|
|
(490,000)
|
Deferred
|
(238,000)
|
|
(579,000)
|
|
(8,273,000)
|
|
(4,913,000)
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
(2,790,000)
|
|
$
1,152,000
|
|
$
10,480,000
|
|
$
11,113,000
|
|
|
|
|
|
|
|
|
Basic (loss)
income attributable to common stock
|
$
(0.35)
|
|
$
0.14
|
|
$
1.31
|
|
$
1.40
|
|
|
|
|
|
|
|
|
Diluted (loss)
income attributable to common stock
|
$
(0.35)
|
|
$
0.14
|
|
$
1.31
|
|
$
1.39
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
7,933,903
|
|
7,846,769
|
|
7,879,614
|
|
7,841,722
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding-assuming
dilution
|
|
|
|
|
|
|
|
7,933,903
|
|
7,864,697
|
|
7,920,365
|
|
7,877,107
|
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
September
30,
|
|
September
30,
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$
52,405,000
|
|
$
57,373,000
|
Short-term investments
|
23,500,000
|
|
4,000,000
|
Accounts
receivable, net of allowance for
|
|
|
|
doubtful accounts of
$250,000 at September 30, 2013 and
|
|
|
|
September 30,
2012
|
37,488,000
|
|
53,719,000
|
Prepaid
expenses and other assets
|
737,000
|
|
762,000
|
Current
deferred tax asset
|
1,664,000
|
|
1,925,000
|
|
|
|
|
Total current assets
|
115,794,000
|
|
117,779,000
|
|
|
|
|
Property, plant
and equipment
|
325,464,000
|
|
326,030,000
|
Less
accumulated depreciation
|
(152,231,000)
|
|
(164,634,000)
|
|
|
|
|
Net property, plant
and equipment
|
173,233,000
|
|
161,396,000
|
|
|
|
|
Total assets
|
$
289,027,000
|
|
$
279,175,000
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
15,880,000
|
|
$
18,544,000
|
Accrued
liabilities:
|
|
|
|
Payroll costs and
other taxes
|
1,850,000
|
|
1,802,000
|
Other
|
6,154,000
|
|
6,425,000
|
Deferred
revenue
|
3,438,000
|
|
3,467,000
|
Current
maturities of notes payable and obligations
|
|
|
|
under capital leases
|
9,258,000
|
|
9,131,000
|
|
|
|
|
Total current liabilities
|
36,580,000
|
|
39,369,000
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
Notes
payable and obligations under capital leases
|
|
|
|
less current
maturities
|
3,697,000
|
|
11,179,000
|
Deferred
tax liability
|
35,690,000
|
|
27,678,000
|
|
|
|
|
Total long-term liabilities
|
39,387,000
|
|
38,857,000
|
|
|
|
|
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, 8,056,943
|
|
|
|
and 8,031,369 shares
issued and outstanding at
|
|
|
|
September 30, 2013 and
September 30, 2012, respectively
|
2,686,000
|
|
2,677,000
|
Additional paid-in capital
|
94,846,000
|
|
93,224,000
|
Retained
earnings
|
115,528,000
|
|
105,048,000
|
|
|
|
|
Total stockholders' equity
|
213,060,000
|
|
200,949,000
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
289,027,000
|
|
$
279,175,000
|
Reconciliation of
EBITDA to Net (Loss) Income
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(in
thousands)
|
|
(in
thousands)
|
Net (loss)
income
|
$
(2,790)
|
|
$
1,152
|
|
$
10,480
|
|
$
11,113
|
Depreciation
|
9,182
|
|
8,406
|
|
37,095
|
|
32,498
|
Interest expense
(income), net
|
122
|
|
195
|
|
597
|
|
601
|
Income tax
expense
|
121
|
|
877
|
|
9,090
|
|
5,403
|
EBITDA
|
$
6,635
|
|
$
10,630
|
|
$
57,262
|
|
$
49,615
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided by Operating Activities
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(in
thousands)
|
|
(in
thousands)
|
Net cash provided by
operating activities
|
$
20,986
|
|
$
18,376
|
|
$
70,579
|
|
$
76,380
|
Changes in working
capital and other items
|
(13,972)
|
|
(7,292)
|
|
(11,457)
|
|
(24,949)
|
Noncash adjustments
to income
|
(379)
|
|
(454)
|
|
(1,860)
|
|
(1,816)
|
EBITDA
|
$
6,635
|
|
$
10,630
|
|
$
57,262
|
|
$
49,615
|
SOURCE Dawson Geophysical Company