MIDLAND, Texas, May 7, 2014 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) today reported revenues of
$76,766,000 for the quarter ended
March 31, 2014, the Company's second quarter of fiscal 2014,
as compared to $83,350,000 for the
same quarter of fiscal 2013. The Company reported net income of
$1,652,000 for the second quarter of
fiscal 2014, or $0.20 per share
attributable to common stock, as compared to net income of
$6,279,000, or $0.78 per share attributable to common stock, in
the same quarter of fiscal 2013. EBITDA for the second quarter of
fiscal 2014 was $12,656,000 compared
to $20,314,000 for the same quarter
of fiscal 2013.
Consistent with the Company's previously announced quarterly
dividend policy, on May 5, 2014 the
Company's Board of Directors approved the payment on May 30, 2014 of an $0.08 per share quarterly cash dividend to
Company shareholders of record at the close of business on
May 16, 2014 (the "record date"). The
quarterly dividend represents an aggregate distribution of
approximately $645,000 based on the
outstanding number of shares of Common Stock as of the declaration
date, or approximately $2,580,000 on
an annualized basis.
Revenues for the second quarter of fiscal 2014 decreased
compared to the second fiscal quarter of 2013 primarily as a result
of a reduction in the average number of active crews in
the United States from fourteen
large channel count crews and one small channel count crew to
twelve crews and intermittent weather related crew interruptions in
a few areas of operation. Revenue comparisons between the second
fiscal quarter of 2014 and the year-ago period are especially
difficult as the revenues earned from early completions during the
second fiscal quarter of 2013 on several projects were atypically
higher than normal as were utilization and crew production rates.
Despite the reduction of average crew count from the second fiscal
quarter of 2013 to the second fiscal quarter of 2014, market
conditions were sufficient to maintain twelve data acquisition
crews during the second half of the first quarter of fiscal 2014
through the second fiscal quarter of 2014.
On a sequential basis, revenues for the second quarter of fiscal
2014 increased 13% to $76,766,000
from $68,181,000 for the first
quarter of fiscal 2014 primarily as the result of increased crew
utilization during the second quarter. For the second fiscal
quarter of 2014, net income increased to $1,652,000 compared to a net loss of $2,897,000 in the first quarter of fiscal 2014
and EBITDA increased 160% to $12,656,000 compared to $4,860,000 in the first quarter of fiscal
2014.
Operating expenses for the quarter ended March 31, 2014 were essentially flat compared to
the same quarter of 2013 but higher than previously anticipated for
the quarter. The increase in operating expenses, relative to
expectations, was primarily the result of significant increases in
costs on a project in Canada. The
Canadian project anticipated to be completed in early December 2013 extended into early February 2014 due to excessive snowfall in the
area of operation and unanticipated operational difficulties.
Routine startup costs on several projects in the United States further contributed to the
overall increase in operating expenses. Depreciation expense for
the second fiscal quarter of 2014 increased $599,000 as compared to the second quarter of
fiscal 2013 primarily as a result of capital expenditures made in
the first fiscal quarter of 2014.
Stephen Jumper, President, Chief
Executive Officer and Chairman of the Company, said, "We are
pleased to be profitable again after two consecutive difficult
quarters. The second quarter of fiscal 2013, as mentioned above,
was unique in that utilization was very high with several projects
completed early resulting in additional revenues which makes the
comparison to the second quarter of fiscal 2014 difficult. As
previously discussed, our Canadian crew experienced extreme weather
conditions and unusual operational difficulties on their first
winter project which lingered into the recent quarter. I am pleased
to report that our Canadian crew completed its second project this
winter season ahead of schedule and without difficulties. However,
this success was not enough to overcome the difficulties
experienced during the first project. Despite severe weather
conditions across several areas of the
United States during the second fiscal quarter, our U.S.
crews worked diligently to complete several projects by the end of
the quarter which added to our financial success and client
satisfaction. We completed a large multi-component project in the
Bakken region and that particular crew has moved onto a second
project. We anticipate keeping our large multi-component crew in
operation into early fiscal 2015."
Bid activity for the Company's services remains steady. The
Company's order book continues at a level consistent with
commitments carried over the past twelve months. While the
Company's clients may cancel, delay or alter the scope of their
agreements on short notice and the Company's operations may be
impacted by weather conditions or land access delays, the Company
anticipates a demand level sufficient to maintain the operation of
an average of twelve crews from the middle of the third quarter of
2014 into fiscal 2015. However, project readiness and delays
continue to be intermittent issues and, as a result, the Company's
utilization is expected to be negatively impacted on five crews for
the first half of the third fiscal quarter of 2014. The Company
anticipates returning to full utilization of twelve crews during
the second half of the third fiscal quarter in the United States. The Canadian crew completed
operation for the winter season and is not expected to resume
operation until the 2014/2015 winter season.
The Company intends to maintain its previously
disclosed $35,000,000 capital budget for fiscal 2014 with
the unspent balance and any additions to the capital budget
dedicated primarily to maintenance capital requirements, including
replacement of light vehicles and batteries for recording
equipment. The balance sheet strength remains strong with
approximately $69,847,000 of working capital and
approximately $17,559,000 of debt as of March 31, 2014, of which
approximately $9,894,000 will be re-paid over the next twelve
months.
Jumper concluded, "While we are pleased with our return to
profitability, the declaration of our second quarterly dividend
payment and our ability to maintain our strong balance sheet, we
are disappointed to have another short term utilization
issue. We believe the issue will clear itself during the
quarter. We continue to explore ways to right size our operation to
fit current demand and project readiness timing while maintaining a
high resolution product that continually meets client needs. Based
on recent bid activity, we believe market conditions in
the United States indicate signs
of improvement for the second half of calendar 2014. The second
half of calendar 2013 and the first half of calendar 2014 have been
more difficult than anticipated. From technology, equipment,
services, operational and personnel perspectives along with our
presence in most producing basins, we are poised to once again
catch the upswing in activity anticipated in the second half of
calendar 2014."
Conference Call Information
Dawson will host a conference call to review its second quarter
2014 financial results on May 7,
2014, at 9 a.m. CDT.
Participants can access the call at (877) 418-5260 (US),
1-866-605-3852 (Canada) or
(412) 717-9589 (International) with the passcode 10045345. 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 8:00 a.m.
CDT on Monday, May 12, 2014 by
dialing (877) 344-7529 (US/Canada) or (412) 317-0088
(International), again using the passcode 10045345. The webcast
will be recorded and available for replay on Dawson's website until
June 6, 2014.
About Dawson
Dawson Geophysical Company is a leading provider of onshore
seismic data acquisition services in the lower 48 states of
the United States and Canada. 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 Statements
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,
dependence upon energy industry spending, disruptions in the global
economy, industry competition, delays, reductions or cancellations
of service contracts, high fixed costs of operations, external
factors affecting our crews such as weather interruptions and
inability to obtain land access rights of way, whether we enter
into turnkey or term contracts, crew productivity, limited number
of customers, credit risk related to our customers, 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, 2013. 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.
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 income (loss) is
presented in the table following the text of this press
release.
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
76,766,000
|
|
$
83,350,000
|
|
$
144,947,000
|
|
$
159,979,000
|
Operating
costs:
|
|
|
|
|
|
|
|
Operating expenses
|
60,091,000
|
|
59,666,000
|
|
119,199,000
|
|
118,401,000
|
General
and administrative
|
3,676,000
|
|
3,508,000
|
|
7,840,000
|
|
7,104,000
|
Depreciation
|
10,177,000
|
|
9,578,000
|
|
20,053,000
|
|
18,682,000
|
|
73,944,000
|
|
72,752,000
|
|
147,092,000
|
|
144,187,000
|
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
2,822,000
|
|
10,598,000
|
|
(2,145,000)
|
|
15,792,000
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
21,000
|
|
19,000
|
|
38,000
|
|
35,000
|
Interest
expense
|
(161,000)
|
|
(174,000)
|
|
(296,000)
|
|
(365,000)
|
Other
(expense) income
|
(343,000)
|
|
138,000
|
|
(392,000)
|
|
178,000
|
Income (loss)
before income tax
|
2,339,000
|
|
10,581,000
|
|
(2,795,000)
|
|
15,640,000
|
|
|
|
|
|
|
|
|
Income tax
(expense) benefit
|
(687,000)
|
|
(4,302,000)
|
|
1,550,000
|
|
(6,433,000)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
1,652,000
|
|
$
6,279,000
|
|
$
(1,245,000)
|
|
$
9,207,000
|
|
|
|
|
|
|
|
|
Other comprehensive
loss:
|
|
|
|
|
|
|
|
Net
unrealized loss on foreign exchange rate translation, net of
tax
|
$
(107,000)
|
|
$
-
|
|
$
(107,000)
|
|
$
-
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss)
|
$
1,545,000
|
|
$
6,279,000
|
|
$
(1,352,000)
|
|
$
9,207,000
|
|
|
|
|
|
|
|
|
Basic income
(loss) per share attributable to common stock
|
$
0.20
|
|
$
0.78
|
|
$
(0.16)
|
|
$
1.15
|
|
|
|
|
|
|
|
|
Diluted income
(loss) per share attributable to common stock
|
$
0.20
|
|
$
0.78
|
|
$
(0.16)
|
|
$
1.14
|
|
|
|
|
|
|
|
|
Cash dividend
declared per share of common stock
|
$
0.08
|
|
$
-
|
|
$
0.08
|
|
$
-
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
7,959,863
|
|
7,861,204
|
|
7,958,020
|
|
7,855,284
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
|
|
|
|
|
|
-assuming dilution
|
7,997,721
|
|
7,901,636
|
|
7,958,020
|
|
7,888,906
|
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
March 31,
|
|
September
30,
|
|
2014
|
|
2013
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$
26,326,000
|
|
$
52,405,000
|
Short-term investments
|
24,500,000
|
|
23,500,000
|
Accounts receivable, net of allowance for doubtful
accounts of $250,000 at March 31, 2014 and September 30,
2013
|
49,995,000
|
|
37,488,000
|
Prepaid
expenses and other assets
|
4,330,000
|
|
737,000
|
Current
deferred tax asset
|
2,786,000
|
|
1,664,000
|
|
|
|
|
Total current assets
|
107,937,000
|
|
115,794,000
|
|
|
|
|
Property, plant
and equipment
|
351,860,000
|
|
325,464,000
|
Less
accumulated depreciation
|
(166,759,000)
|
|
(152,231,000)
|
|
|
|
|
Net property, plant
and equipment
|
185,101,000
|
|
173,233,000
|
|
|
|
|
Total assets
|
$
293,038,000
|
|
$
289,027,000
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
14,583,000
|
|
$
15,880,000
|
Accrued
liabilities:
|
|
|
|
Payroll costs and
other taxes
|
2,286,000
|
|
1,850,000
|
Other
|
4,241,000
|
|
6,154,000
|
Deferred
revenue
|
7,086,000
|
|
3,438,000
|
Current maturities of
notes payable and obligations under capital leases
|
9,894,000
|
|
9,258,000
|
|
|
|
|
Total current liabilities
|
38,090,000
|
|
36,580,000
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
Notes
payable and obligations under capital leases less
current maturities
|
7,665,000
|
|
3,697,000
|
Deferred
tax liability
|
35,504,000
|
|
35,690,000
|
|
|
|
|
Total long-term liabilities
|
43,169,000
|
|
39,387,000
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
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,
8,063,906 and 8,056,943
shares issued and outstanding at March 31, 2014 and
September 30, 2013, respectively
|
2,688,000
|
|
2,686,000
|
Additional paid-in capital
|
95,560,000
|
|
94,846,000
|
Retained
earnings
|
113,638,000
|
|
115,528,000
|
Other
comprehensive loss, net of tax
|
(107,000)
|
|
-
|
Total stockholders' equity
|
211,779,000
|
|
213,060,000
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
293,038,000
|
|
$
289,027,000
|
Reconciliation of
EBITDA to Net Income (Loss)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
March 31,
|
|
March 31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
(in
thousands)
|
|
(in
thousands)
|
Net income
(loss)
|
$
1,652
|
|
$
6,279
|
|
$
(1,245)
|
|
$
9,207
|
Depreciation
|
10,177
|
|
9,578
|
|
20,053
|
|
18,682
|
Interest expense
(income), net
|
140
|
|
155
|
|
258
|
|
330
|
Income tax expense
(benefit)
|
687
|
|
4,302
|
|
(1,550)
|
|
6,433
|
EBITDA
|
$
12,656
|
|
$
20,314
|
|
$
17,516
|
|
$
34,652
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided by Operating Activities
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
March 31,
|
|
March 31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
(in
thousands)
|
|
(in
thousands)
|
Net cash provided by
operating activities
|
$
23,180
|
|
$
3,399
|
|
$
1,471
|
|
$
12,413
|
Changes in working
capital and other items
|
(10,226)
|
|
17,332
|
|
16,747
|
|
23,296
|
Noncash adjustments
to income
|
(298)
|
|
(417)
|
|
(702)
|
|
(1,057)
|
EBITDA
|
$
12,656
|
|
$
20,314
|
|
$
17,516
|
|
$
34,652
|
SOURCE Dawson Geophysical Company