DWSN Dawson Geophysical Company

Dawson Geophysical Reports Continued Growth MIDLAND, Texas, Jan. 28 /PRNewswire-FirstCall/ -- Dawson Geophysical Company (NASDAQ:DWSN) today reported revenues of $21,559,000 for the first quarter of its 2005 fiscal year ending December 31, 2004 compared to $15,475,000 in the same quarter of fiscal 2004, an increase of 39 percent. Net income for the first quarter of fiscal 2005 was $1,600,000 ($0.28 per share) compared to $506,000 ($0.09 per share) in the same quarter of fiscal 2004. In addition, the Company's EBITDA was $3,951,000 for the first quarter of fiscal 2005 as compared to $1,614,000 in the same quarter of fiscal 2004. The Company's improved performance is due to increased demand for the Company's services. This increased demand is a result of increased exploration and development activity by domestic oil and gas companies due to higher oil and natural gas prices. The Company has responded to the increased demand for its high resolution 3-D seismic surveys by increasing its number of crews and expanding recording channel capacity on its existing crews. Three additional seismic data acquisition crews were added in fiscal 2004, and an additional crew, Dawson's tenth, was fielded on January 17, 2005. The Company believes it has a sufficient order book to sustain operations at full capacity well into fiscal 2005. In addition, Dawson announced that its Board of Directors has approved an additional $10,000,000 of capital expenditures for fiscal 2005 to field another data acquisition crew, the Company's eleventh, during the third quarter of fiscal 2005, to increase recording channel capacities for its existing crews, and to make other maintenance capital requirements. This increase brings the total budgeted capital expenditures for fiscal 2005 to $30,000,000. Capital expenditures during the first quarter of fiscal 2005 were $10,490,000, consisting of payments for vibrator energy sources, data channels for the ninth and tenth crews, automotive equipment and miscellaneous ancillary equipment required for data acquisitions. As previously disclosed, on December 14, 2004, the Company filed a registration statement with the Securities and Exchange Commission for a proposed offering of up to 1,725,000 shares of its common stock. Dawson Geophysical Company is the leading provider of onshore seismic data acquisition services in the United States 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 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. 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 and net cash provided by operating activities is presented in the tables 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 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, 2004. Dawson Geophysical Company disclaims any intention or obligation to revise any forward-looking statements, whether as a result of new information, future event, or otherwise. Balance Sheets December 31, September 30, 2004 2004 (Unaudited) ASSETS Current assets: Cash and cash equivalents $1,568,000 $3,587,000 Short-term investments 4,088,000 4,130,000 Accounts receivable, net of allowance for doubtful accounts of $236,000 in December 2004 and $199,000 in September 2004 14,010,000 16,979,000 Prepaid expenses 437,000 440,000 Total current assets 20,103,000 25,136,000 Deferred tax asset 767,000 1,648,000 Property, plant and equipment 104,540,000 94,050,000 Less accumulated depreciation (65,544,000) (64,075,000) Net property, plant and equipment 38,996,000 29,975,000 $59,866,000 $56,759,000 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $5,010,000 $3,357,000 Accrued liabilities: Payroll costs and other taxes 328,000 742,000 Other 660,000 971,000 Deferred revenue 1,920,000 1,407,000 Total current liabilities 7,918,000 6,477,000 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; 10,000,000 shares authorized, 5,642,794 and 5,633,794 shares issued and outstanding in each period 1,881,000 1,878,000 Additional paid-in capital 40,026,000 39,949,000 Other comprehensive income, net of tax (42,000) (28,000) Retained earnings 10,083,000 8,483,000 Total stockholders' equity 51,948,000 50,282,000 $59,866,000 $56,759,000 Statements of Operations (UNAUDITED) Three Months Ended December 31, 2004 2003 Operating revenues $21,559,000 $15,475,000 Operating costs: Operating expenses 16,844,000 13,311,000 General and administrative 794,000 618,000 Depreciation 1,470,000 1,108,000 19,108,000 15,037,000 Income from operations 2,451,000 438,000 Other income: Interest income 24,000 69,000 Loss on disposal of assets --- (3,000) Other 6,000 2,000 Income before income tax 2,481,000 506,000 Income tax (expense) benefit: Current --- --- Deferred (881,000) --- Net income $1,600,000 $506,000 Net income per common share $0.28 $0.09 Net income per common share-assuming dilution $0.28 $0.09 Weighted average equivalent common shares outstanding 5,638,365 5,487,794 Weighted average equivalent common shares outstanding-assuming dilution 5,742,149 5,521,243 Reconciliation of EBITDA to Net Income Three Months Ended December 31, 2004 2003 (in thousands) Net Income $1,600 $506 Depreciation 1,470 1,108 Income tax (benefit) expense 881 --- EBITDA $3,951 $1,614 Reconciliation of EBITDA to Net Cash Provided by Operating Activities Three Months Ended December 31, 2004 2003 (in thousands) Net cash provided by operating activities $8,435 $3,590 Changes in working capital items and other (4,439) (1,976) Non-cash adjustments to income (45) --- EBITDA $3,951 $1,614 DATASOURCE: Dawson Geophysical Company CONTACT: L. Decker Dawson, CEO, or Christina W. Hagan, CFO, both of Dawson Geophysical Company, +1-800-332-9766 Web site: http://www.dawson3d.com/

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