Company to Deploy Two Additional Crews in Current Quarter MIDLAND,
Texas, Feb. 3 /PRNewswire-FirstCall/ -- Dawson Geophysical Company
(NASDAQ:DWSN) today reported revenues of $36,330,000 for the
quarter ending December 31, 2009, the Company's first quarter of
fiscal 2010, compared to $80,216,000 for the same quarter in fiscal
2009, a decrease of 55 percent. Net loss for the first quarter of
fiscal 2010 was $4,216,000, compared to net income of $7,734,000 in
the same quarter of fiscal 2009. Loss per share for the first
quarter of fiscal 2010 was $0.54, compared to income per share of
$1.00 for the first quarter of fiscal 2009. EBITDA for the first
quarter of fiscal 2010 was a loss of $211,000, compared to income
of $19,162,000 in the same quarter of fiscal 2009. The revenue
decrease in the quarter was primarily the result of previously
announced reductions in active crew count during the second quarter
of fiscal 2009 (four crews), third quarter of fiscal 2009 (two
crews), and first quarter of fiscal 2010 (one crew), a more
competitive pricing environment, substantially lower utilization
rates of the remaining crews and increased downtime for weather.
Revenues in the quarter 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. The
Company is reimbursed for these expenses by its clients. Stephen
Jumper, President and CEO of Dawson Geophysical Company, said, "The
first quarter of fiscal 2010 was challenging. Lower crew
utilization rates and excessive weather downtime on several crews
in October and December, coupled with first quarter related issues
of shorter days and holiday season negatively impacted our
results." Jumper continued, "Despite the disappointing first
quarter results, we have experienced an increase in demand for our
services beginning in late calendar year 2009 in various oil and
natural gas producing basins, including the Marcellus Shale,
Barnett Shale, Fayetteville Shale, Eagle Ford Shale, Haynesville
Shale, Bakken Shale, mid-continent region and the Permian Basin. In
response to the increase in demand, we have redeployed two
additional crews in the current quarter, our second fiscal quarter,
bringing the number of currently active crews to eleven. While we
remain in a competitive pricing environment and the pace of future
economic activity remains uncertain, we believe we are in a
position to mitigate short-term utilization rate issues experienced
in recent quarters and take advantage of increased crew
efficiencies and productivity. Although our clients may cancel
their service contracts on short notice, we believe our current
order book reflects commitment levels sufficient to maintain
operations for eleven crews through the middle of calendar 2010."
As previously announced, the Company's Board of Directors has
approved a $10,000,000 capital budget for fiscal 2010 to be used to
purchase 2,000 stations of OYO GSR three-component recording
equipment and to meet necessary maintenance requirements during
fiscal 2010. The addition of the OYO GSR recording equipment will
allow the Company to record 6,000 channels of multi-component data
or up to 8,000 channels of conventional seismic data, either as a
stand alone system or as added channel count and increased
flexibility for the Company's existing ARAM recording systems. The
operational flexibility of the OYO equipment should lead to
improved operational opportunities and efficiencies which, in turn,
may lead to improved financial performance in the future. The
Company took delivery of the OYO equipment on February 1, and will
deploy the system in the first week of February in a
multi-component mode as part of a larger conventional 3D seismic
data acquisition project utilizing an ARAM recording system. Jumper
concluded, "As in past down cycles, we have maintained a very solid
balance sheet with in excess of $91,000,000 of working capital, no
debt and a $20,000,000 undrawn revolver available. We continue to
cultivate and nurture valuable client relationships. We have
retained all of our key technical and operational people all of
whom should allow us to capitalize on the opportunities beginning
to emerge in 2010 and beyond." 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 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, 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. 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, cancellations of service contracts, high fixed costs of
operations, weather interruptions, inability to obtain land access
rights of way, industry competition, limited number of customers,
credit risk related to our customers, asset impairments, 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, 2009. 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 December 31, -------------------------------
2009 2008 ---- ---- (Unaudited) (Unaudited) Operating revenues
$36,330,000 $80,216,000 Operating costs: Operating expenses
34,719,000 59,015,000 General and administrative 1,854,000
2,155,000 Depreciation 6,477,000 6,601,000 ----------- -----------
43,050,000 67,771,000 Income (loss) from operations (6,720,000)
12,445,000 Other income: Interest income 30,000 78,000 Other income
2,000 38,000 ----------- ----------- Income (loss) before income
tax (6,688,000) 12,561,000 Income tax benefit (expense) 2,472,000
(4,827,000) Net income (loss) $(4,216,000) $7,734,000 ===========
========== Net income (loss) per common share $(0.54) $1.00
=========== ========== Net income (loss) per common share-assuming
dilution $(0.54) $0.99 =========== ========== Weighted average
equivalent common shares outstanding 7,771,791 7,701,766
=========== ========== Weighted average equivalent common shares
outstanding- assuming dilution 7,771,791 7,805,209 ===========
========== DAWSON GEOPHYSICAL COMPANY BALANCE SHEETS December 31,
September 30, 2009 2009 ---- ---- (Unaudited) ASSETS Current
assets: Cash and cash equivalents $37,731,000 $36,792,000
Short-term investments 25,192,000 25,267,000 Accounts receivable,
net of allowance for doubtful accounts of $639,000 in December 2009
and $533,000 in September 2009 35,920,000 40,106,000 Prepaid
expenses and other assets 11,259,000 7,819,000 Current deferred tax
asset 1,149,000 1,694,000 ------------ ------------ Total current
assets 111,251,000 111,678,000 Property, plant and equipment
240,546,000 240,820,000 Less accumulated depreciation (121,606,000)
(115,341,000) ------------ ------------ Net property, plant and
equipment 118,940,000 125,479,000 ------------ ------------ Total
assets $230,191,000 $237,157,000 ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $7,346,000 $6,966,000 Accrued liabilities: Payroll costs
and other taxes 1,988,000 2,720,000 Other 8,760,000 10,600,000
Deferred revenue 1,643,000 2,230,000 ------------ ------------
Total current liabilities 19,737,000 22,516,000 ------------
------------ Deferred tax liability 16,113,000 16,262,000
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, 7,817,756
and 7,822,994 shares issued and outstanding in each period
2,606,000 2,608,000 Additional paid-in capital 89,387,000
89,220,000 Other comprehensive income, net of tax 31,000 18,000
Retained earnings 102,317,000 106,533,000 ------------ ------------
Total stockholders' equity 194,341,000 198,379,000 ------------
------------ Total liabilities and stockholders' equity
$230,191,000 $237,157,000 ============ ============ Reconciliation
of EBITDA to Net Income (Loss) Three Months Ended
------------------ December 31, ------------ 2009 2008 ---- ----
(in thousands) Net income (loss) $(4,216) $7,734 Depreciation 6,477
6,601 Income tax (benefit) expense (2,472) 4,827 ------- -------
EBITDA $(211) $19,162 ======= ======= Reconciliation of EBITDA to
Net Cash Provided by Operating Activities Three Months Ended
------------------ December 31, ------------ 2009 2008 ---- ----
(in thousands) Net cash provided by operating activities $959
$10,361 Changes in working capital items and other (524) 9,470
Non-cash adjustments to income (646) (669) ------- ------- EBITDA
$(211) $19,162 ======= ======= 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/
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