DWSN Dawson Geophysical Company

MIDLAND, Texas, May 7 /PRNewswire-FirstCall/ -- Dawson Geophysical Company (NASDAQ:DWSN) today reported revenues of $64,625,000 for the quarter ending March 31, 2009, the Company's second quarter of fiscal 2009, compared to $78,363,000 for the same quarter in fiscal 2008, a decrease of 18 percent. The revenue decrease in the quarter was primarily the result of a previously announced reduction in active crew count of four crews during the second quarter of 2009 along with lower utilization of the remaining crews. Net income for the second quarter of fiscal 2009 was $6,170,000 compared to $8,292,000 in the same quarter of fiscal 2008, a decrease of 26 percent. Earnings per share for the second quarter of fiscal 2009 were $0.79 per share, compared to $1.08 per share in the same quarter of fiscal 2008. EBITDA for the second quarter of fiscal 2009 was $16,814,000 compared to $19,228,000 in the same quarter of fiscal 2008, a decrease of 13 percent. Included in the second quarter results is a 12 percent increase in depreciation charges from the prior year period reflecting the Company's significant capital investment during fiscal 2008. The Company's second quarter results reflect a significant decrease in domestic exploration activities by the Company's clients. Revenues in the second quarter of fiscal 2009 continued to include relatively high third-party charges related to the use of helicopter support services, specialized survey technologies and dynamite energy sources. The sustained level of these charges is driven by the Company's continued operations in areas with limited access in the Appalachian Basin, Arkansas, Louisiana and Eastern Oklahoma. The Company is reimbursed for these expenses by its clients. Stephen Jumper, President and CEO of Dawson Geophysical Company said, "While we are pleased with our second quarter results, the global economic slowdown and resulting weakness in commodity prices from reduced demand for oil and natural gas continue to decrease demand for our services. Since the beginning of our 2009 fiscal year, several large projects have been delayed or reduced in size and a number of projects have been cancelled. These demand reductions will continue to impact crew scheduling in the near future. As a result, during the second fiscal quarter we had a reduction in crew count of four crews from the sixteen crews we had previously operated. We anticipate a further reduction in active crew count of up to two crews in the third quarter of fiscal 2009. Equipment and key personnel from crews taken out of service will be redeployed on remaining crews as needed and available for rapid expansion of crew count as demand and market conditions dictate in the future." Six Months Results For the six months ended March 31, 2009, revenues were $144,841,000, compared to $155,962,000 for the same period in 2008, a decrease of 7 percent. Net income for the first six months of fiscal 2009 decreased 13 percent to $13,904,000, compared to $15,996,000 for the first six months of fiscal 2008. Earnings per share for the first six months of fiscal 2009 were $1.78 as compared to $2.09 for the first six months of fiscal 2008, a decrease of 15 percent. EBITDA was $35,976,000 in the first six months of fiscal 2009 as compared to $37,198,000 during the same period of fiscal 2008, a decrease of 3 percent. Jumper continued, "Although we maintain a competitive and financially strong position, we are not immune to low commodity prices and the resulting reduced capital spending by exploration and production companies. We understand the financial pressure that many of our clients face in this lower priced commodity environment but believe our services are vital in our clients' long-term efforts to limit dry hole risk, identify hydrocarbon reservoirs and lower finding and development costs." The Company has significantly reduced its capital expenditures during the first six months of fiscal 2009 to $4,242,000 from $30,880,000 for the same period of the previous fiscal year. Due to current market conditions, the Company plans to continue to limit its capital expenditures in the near term to necessary maintenance requirements rather than investing in additional equipment as in the past few years. The Board of Directors had originally approved a capital budget for fiscal 2009 of $20,000,000. Jumper concluded, "As in the past down cycles our Company has experienced in its 57-year history, we believe that challenging times bring new opportunities. We remain focused on our commitment to safety, people, sustainability and integrity while maintaining financial strength and building capabilities for delivering value for our clients. The strength of our balance sheet, our lack of long-term debt, our more than $76,000,000 of working capital and our available revolving line of credit provide us with the financial strength required to manage this period and capture future opportunities." 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. 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 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, 2008. 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 STATEMENTS OF OPERATIONS Three Months Ended March 31, Six Months Ended March 31, ---------------------------- -------------------------- 2009 2008 2009 2008 ---------------------------- -------------------------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Operating revenues $64,625,000 $78,363,000 $144,841,000 $155,962,000 Operating costs: Operating expenses 45,737,000 57,529,000 104,752,000 115,654,000 General and administrative 2,408,000 1,837,000 4,563,000 3,543,000 Depreciation 6,529,000 5,854,000 13,130,000 11,405,000 ----------- ---------- ----------- ----------- 54,674,000 65,220,000 122,445,000 130,602,000 Income from operations 9,951,000 13,143,000 22,396,000 25,360,000 Other income (expense): Interest income 62,000 116,000 140,000 334,000 Interest expense - (95,000) - (200,000) Other income 272,000 115,000 310,000 99,000 ----------- ---------- ----------- ----------- Income before income tax 10,285,000 13,279,000 22,846,000 25,593,000 Income tax expense: Current (2,951,000) (4,110,000) (8,126,000) (8,650,000) Deferred (1,164,000) (877,000) (816,000) (947,000) ----------- ---------- ----------- ----------- Net income $6,170,000 $8,292,000 $13,904,000 $15,996,000 =========== =========== =========== =========== Net income per common share $0.79 $1.08 $1.78 $2.09 =========== =========== =========== =========== Net income per common share-assuming dilution $0.79 $1.07 $1.78 $2.07 =========== =========== =========== =========== Weighted average equivalent common shares outstanding 7,799,744 7,667,071 7,797,986 7,663,556 =========== =========== =========== =========== Weighted average equivalent common shares outstanding- assuming dilution 7,850,508 7,728,437 7,824,202 7,724,269 =========== =========== =========== =========== DAWSON GEOPHYSICAL COMPANY BALANCE SHEETS March 31, September 30, 2009 2008 ------------ ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents $45,548,000 $8,311,000 Accounts receivable, net of allowance for doubtful accounts of $797,000 in March 2009 and $55,000 in September 2008 54,259,000 76,221,000 Prepaid expenses and other assets 1,526,000 877,000 Current deferred tax asset 1,112,000 873,000 ------------ ------------ Total current assets 102,445,000 86,282,000 Property, plant and equipment 253,738,000 250,519,000 Less accumulated depreciation (115,368,000) (103,180,000) ------------ ------------ Net property, plant and equipment 138,370,000 147,339,000 ------------ ------------ $240,815,000 $233,621,000 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $11,430,000 $15,308,000 Accrued liabilities: Payroll costs and other taxes 2,501,000 3,363,000 Other 9,877,000 14,869,000 Deferred revenue 2,142,000 993,000 ------------ ------------ Total current liabilities 25,950,000 34,533,000 ------------ ------------ Deferred tax liability 14,183,000 13,128,000 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, 7,799,744 and 7,794,744 shares issued and outstanding in each period 2,600,000 2,598,000 Additional paid-in capital 87,867,000 87,051,000 Retained earnings 110,215,000 96,311,000 ------------ ------------ Total stockholders' equity 200,682,000 185,960,000 ------------ ------------ $240,815,000 $233,621,000 ============ ============ Reconciliation of EBITDA to Net Income Three Months Ended Six Months Ended ------------------ ---------------- March 31, March 31, --------- --------- 2009 2008 2009 2008 ---- ---- ---- ---- (in thousands) (in thousands) Net Income $6,170 $8,292 $13,904 $15,996 Depreciation 6,529 5,854 13,130 11,405 Interest expense - 95 - 200 Income tax expense 4,115 4,987 8,942 9,597 ------- ------- ------- ------- EBITDA $16,814 $19,228 $35,976 $37,198 ======= ======= ======= ======= Reconciliation of EBITDA to Net Cash Provided by Operating Activities Six Months Ended ---------------- March 31, --------- 2009 2008 ---- ---- (in thousands) Net cash provided by operating activities $38,291 $16,501 Changes in working capital items and other (328) 21,298 Non-cash adjustments to income (1,987) (601) ------- ------- EBITDA $35,976 $37,198 ======= ======= DATASOURCE: Dawson Geophysical Company CONTACT: L. Decker Dawson, Chairman, or Stephen C. Jumper, CEO and President, or Christina W. Hagan, Chief Financial Officer, all of Dawson Geophysical Company, 1-800-332-9766 Web Site: http://www.dawson3d.com/

Copyright