MIDLAND, Texas, May 2, 2012 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ:DWSN) today reported revenues of $85,546,000 for the quarter-ended March 31, 2012, the Company's second quarter of
fiscal 2012, compared to $78,337,000
for the same quarter in fiscal 2011, an increase of 9 percent. Net
income for the second quarter of fiscal 2012 was $5,589,000 compared to a net loss of $4,857,000 in the same quarter of fiscal 2011.
Earnings per share for the second quarter of fiscal 2012 were
$0.71 compared to loss per share of
$0.62 for the second quarter of
fiscal 2011. EBITDA for the second quarter of fiscal 2012 was
$17,520,000 compared to $1,219,000 in the same quarter of fiscal 2011.
The Company's second fiscal quarter results were fueled, in part,
by improved contract terms, increased crew productivity and higher
utilization rates.
Second Quarter and Six Month Highlights
- Increased second fiscal quarter 2012 revenues to $85,546,000 from $78,337,000 in the comparable fiscal 2011
quarter;
- Generated $17,520,000 of EBITDA
for the quarter-ended March 31, 2012
compared to $1,219,000 for the
quarter-ended March 31, 2011;
- Generated net income of $5,589,000, or $0.71 earnings per share, in the second fiscal
quarter of 2012 compared to a net loss of $4,857,000, or $0.62 loss per share, in the second fiscal
quarter of 2011;
- Increased revenues during the six-month period ended
March 31, 2012 to $177,928,000 compared to $150,990,000 for the comparable six-month period
of fiscal 2011;
- Generated EBITDA of $28,548,000
for the six-month period ended March 31,
2012 compared to $6,118,000
for the comparable six-month period of fiscal 2011;
- Generated net income of $8,820,000, or $1.13 earnings per share, for the six-month
period ended March 31, 2012 compared
to a net loss of $6,524,000, or
$0.84 loss per share, for the
comparable six-month period of fiscal 2011;
- Strengthened order book capable of sustaining fourteen crews
well into fiscal 2013 with current projects in the Permian Basin,
Eagle Ford Shale, Mississippi Lime of Oklahoma and Kansas, Niobrara, Bakken, Barnett and Marcellus Shale areas; and
- Formed a Canadian entity in Calgary,
Alberta and intends to establish operations in Canada during the 2012-2013 winter
season.
Second Quarter Results
The revenue increase in the quarter ended March 31, 2012 was primarily the result of the
previously announced redeployment of two data acquisition crews
during fiscal 2011, increased channel count per crew, more
favorable contract terms, and improved utilization rates and
productivity on all crews. Third-party charges, which are included
in revenues, declined as a percentage of revenue during the second
fiscal quarter of 2012 to a level more consistent with the
Company's historical average for such charges. These third-party
charges are related to the Company's use of helicopter support
services, specialized survey technologies and dynamite energy
sources in areas with limited access. The Company is reimbursed for
these expenses by its clients.
Included in the second fiscal quarter 2012 results is an
increase of $243,000 of depreciation
expense as compared to the second quarter of fiscal 2011. The
increase in depreciation expense is related to the Company's
investment in additional recording channels, primarily 28,850 OYO
GSR single-channel units and twelve INOVA vibrator energy source
units, over the past fifteen months.
Stephen Jumper, President and CEO
of Dawson Geophysical Company, said, "Increasing demand for seismic
services, predominantly in oil and liquid-rich plays, fueled our
second quarter and six-month results. We currently have
thirteen data acquisition crews that are engaged in oil and
liquids-rich projects. Companies of all sizes, from super-majors,
to large and medium independents, to small oil and natural gas
producers as well as providers of multi-client data libraries drove
the increase in demand. These factors combined with improved
productivity, crew efficiencies, and higher utilization rates
helped drive our financial success which led to our fourth
consecutive profitable quarter, producing a profitable trailing
twelve month period."
Jumper continued, "Investments in new technology, equipment
upgrades and improved efficiencies have resulted in clear improved
results for both our clients and shareholders. Equipment upgrades
and increased channel count are providing enhanced sub-surface
resolution images. Our current inventory of equipment and
experienced employee base are allowing us to better serve our
clients in a more time efficient manner."
Six Month Results
Revenues for the six months ended March
31, 2012 were $177,928,000
compared to $150,990,000 for the six
months ended March 31, 2011, an
increase of 18 percent. Net income for the six months ended
March 31, 2012 was $8,820,000, or $1.13 earnings per share, as compared to a net
loss of $6,524,000, or $0.84 loss per share, for the same period of
fiscal 2011. EBITDA for the six months ended March 31, 2012 increased to $28,548,000 from $6,118,000 for the six months ended March 31, 2011. Included in the Company's six
months fiscal 2012 results is a $0.18
per share one-time tax benefit, taken in the first quarter of 2012,
related to transaction costs for a terminated merger agreement.
Depreciation expense for the six months ended March 31, 2012 increased $897,000 compared to the same period in fiscal
2011. As with second fiscal quarter 2012 results, third-party
charges which are included in revenues declined as a percentage of
revenue during the first six months of fiscal 2012.
Demand for the Company's services remains at a high level, and
the Company's order book remains at its highest level since 2008 in
terms of the number of projects, size of projects and client
mix. In addition, interest levels and solicitations for proposals
for fiscal 2013 remain high. Although the Company's clients may
cancel, delay or modify the scope of their contracts on short
notice, the Company's order book reflects commitments sufficient to
maintain operations of the Company's fourteen data acquisition
crews into fiscal 2013. 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. In the
third fiscal quarter 2012, utilization rates are expected to be
temporarily impacted as the Company is experiencing project
preparation, permit, or client delays on several current projects.
A return to higher utilization rates in late fiscal third quarter
2012 and beyond is anticipated. The Company is active in the
Permian Basin, Eagle Ford Shale of South
Texas, the Mississippi Lime of Oklahoma and Kansas, the Niobrara, Bakken and Barnett Shale
areas. The Company will have one crew operating in the Marcellus
Shale region beginning in late third or early fourth fiscal quarter
through mid-calendar 2013. This crew will be relocated from the
Barnett Shale area.
In response to continued robust demand, the Company's Board of
Directors approved an increase of $30,000,000 to the fiscal 2012 capital budget,
bringing the fiscal 2012 total budget to $50,000,000. The increase in the budget will
primarily be used to purchase additional equipment, including seven
INOVA vibrator energy source units, 8,000 additional OYO GSR
recording units, 3,000 stations of OYO GSR three-channel units with
three-component geophones, additional conventional geophones and to
meet additional needs as they arise.
During April 2012, the Company
formed a Canadian entity in Calgary,
Alberta. The Company intends to pursue opportunities in the
Canadian market with the goal of operating one or two data
acquisition crews in the 2012-2013 winter season. The Canadian
entity will be operated by Doug
Schmidt. Mr. Schmidt has more than thirty years of seismic
experience worldwide with the majority of his career in
Canada. Previously, Mr. Schmidt
was President/Owner of Seisurv Exploration, employed by Western
Geophysical and Seiscom United in Canada and worldwide, employed as Operations
Supervisor and Geophysical Operations Coordinator by Devon Energy
Canada and most recently as Geophysical Operations Supervisor
worldwide by Devon Energy, Houston,
Texas. Mr. Schmidt retired from Devon in 2010.
In addition, during April 2012,
the Company filed and obtained SEC effectiveness of a shelf
registration statement which covers the offer and sale from time to
time of up to $150 million in debt
securities, preferred and common stock and warrants. The new shelf
registration statement replaces the Company's previous shelf
registration statement, which expired on April 9, 2012. The features of the shelf
registration statement allow the Company to sell securities in one
or more separate offerings with the size, price and terms to be
determined at the time of sale. The terms of any securities offered
would be described in a related prospectus supplement to be filed
separately with the SEC at the time of the offering. The Company
does not expect to make an offering at this time and made the
filing to enable the Company to act quickly as opportunities
arise.
Jumper concluded, "Demand for our services remains robust in
the United States. We are excited
about our expansion into the Canadian market and believe Doug is
the perfect fit for our new venture. We realize there are
challenges with creating a new entity, but believe that demand in
Canada will remain high and our
brand will be widely recognized. As we have in the past, we will
continue to serve our valued clients and leverage growth
opportunities in the lower 48 states while maintaining our strong
balance sheet with only $14,188,000
of debt and $81,000,000 of working
capital."
Conference Call Information
Dawson will host a conference call to review its second fiscal
quarter 2012 financial results on May 2,
2012, at 9 a.m. CDT.
Participants can access the call at (877) 317-6789 (US), (866)
605-3852 (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
May 4, 2012 by dialing (877) 344-7529
(US) or (412) 317-0088 (International). The passcode is 10013498.
The Webcast will be recorded and available for replay on Dawson's
website until June 1, 2012.
About Dawson
Dawson Geophysical Company is a 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 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 similarly 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,
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, 2011. 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 contact:
Stephen C. Jumper, CEO and
President
Christina W. Hagan, Chief Financial
Officer
(800) 332-9766
www.dawson3d.com
DAWSON
GEOPHYSICAL COMPANY
STATEMENTS
OF OPERATIONS
|
|
|
|
|
|
Three
Months Ended March 31,
|
|
Six Months
Ended March 31,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Operating revenues
|
$
85,546,000
|
|
$
78,337,000
|
|
$
177,928,000
|
|
$
150,990,000
|
Operating costs:
|
|
|
|
|
|
|
|
Operating expenses
|
65,202,000
|
|
73,733,000
|
|
144,016,000
|
|
139,893,000
|
General and administrative
|
2,920,000
|
|
3,414,000
|
|
5,476,000
|
|
5,592,000
|
Depreciation
|
7,978,000
|
|
7,735,000
|
|
15,764,000
|
|
14,867,000
|
|
76,100,000
|
|
84,882,000
|
|
165,256,000
|
|
160,352,000
|
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
9,446,000
|
|
(6,545,000)
|
|
12,672,000
|
|
(9,362,000)
|
Other
income (expense):
|
|
|
|
|
|
|
|
Interest income
|
8,000
|
|
6,000
|
|
11,000
|
|
31,000
|
Interest expense
|
(138,000)
|
|
-
|
|
(288,000)
|
|
-
|
Other income
|
96,000
|
|
23,000
|
|
112,000
|
|
582,000
|
Income
(loss) before income tax
|
9,412,000
|
|
(6,516,000)
|
|
12,507,000
|
|
(8,749,000)
|
|
|
|
|
|
|
|
|
Income
tax (expense) benefit:
|
(3,823,000)
|
|
1,659,000
|
|
(3,687,000)
|
|
2,225,000
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
$
5,589,000
|
|
$
(4,857,000)
|
|
$
8,820,000
|
|
$
(6,524,000)
|
|
|
|
|
|
|
|
|
Basic
income (loss) per common share
|
$
0.71
|
|
$
(0.62)
|
|
$
1.13
|
|
$
(0.84)
|
|
|
|
|
|
|
|
|
Diluted
income (loss) per common share
|
$
0.70
|
|
$
(0.62)
|
|
$
1.11
|
|
$
(0.84)
|
|
|
|
|
|
|
|
|
Weighted average equivalent common shares
outstanding
|
7,841,362
|
|
7,797,361
|
|
7,836,787
|
|
7,793,836
|
|
|
|
|
|
|
|
|
Weighted average equivalent common
|
|
|
|
|
|
|
|
shares outstanding-assuming
dilution
|
7,953,141
|
|
7,797,361
|
|
7,938,166
|
|
7,793,836
|
DAWSON
GEOPHYSICAL COMPANY
BALANCE
SHEETS
|
|
|
|
|
|
March
31,
|
|
September
30,
|
|
2012
|
|
2011
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash equivalents
|
$
25,060,000
|
|
$
26,077,000
|
Accounts receivable, net of allowance
for
|
|
|
|
doubtful accounts of
$250,000 and $155,000 at
|
|
|
|
March 31, 2012 and
September 30, 2011, respectively
|
85,313,000
|
|
86,716,000
|
Prepaid expenses and other
assets
|
5,870,000
|
|
4,254,000
|
Current deferred tax asset
|
1,891,000
|
|
1,236,000
|
|
|
|
|
Total current assets
|
118,134,000
|
|
118,283,000
|
|
|
|
|
Property, plant and equipment
|
301,533,000
|
|
302,647,000
|
Less accumulated depreciation
|
(149,985,000)
|
|
(156,106,000)
|
|
|
|
|
Net property, plant
and equipment
|
151,548,000
|
|
146,541,000
|
|
|
|
|
Total assets
|
$
269,682,000
|
|
$
264,824,000
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$
17,131,000
|
|
$
18,732,000
|
Accrued liabilities:
|
|
|
|
Payroll costs and
other taxes
|
1,827,000
|
|
1,436,000
|
Other
|
6,480,000
|
|
9,230,000
|
Deferred revenue
|
6,186,000
|
|
9,616,000
|
Current maturities of note payable and
obligations
|
|
|
|
under capital
leases
|
5,754,000
|
|
5,290,000
|
|
|
|
|
Total current liabilities
|
37,378,000
|
|
44,304,000
|
|
|
|
|
Long-term liabilities:
|
|
|
|
Note payable and obligations under
capital leases
|
|
|
|
less current
maturities
|
8,434,000
|
|
10,281,000
|
Deferred tax liability
|
25,990,000
|
|
22,076,000
|
|
|
|
|
Total long-term liabilities
|
34,424,000
|
|
32,357,000
|
|
|
|
|
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, 7,926,869
|
|
|
|
and 7,910,885 shares
issued and outstanding at
|
|
|
|
March 31, 2012 and
September 30, 2011, respectively
|
2,642,000
|
|
2,637,000
|
Additional paid-in capital
|
92,483,000
|
|
91,591,000
|
Retained earnings
|
102,755,000
|
|
93,935,000
|
|
|
|
|
Total stockholders' equity
|
197,880,000
|
|
188,163,000
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
269,682,000
|
|
$
264,824,000
|
Reconciliation of EBITDA to Net Income
(Loss)
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Six Months
Ended
|
|
March
31,
|
|
March
31,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
(in
thousands)
|
|
(in
thousands)
|
Net income
(loss)
|
$
5,589
|
|
$
(4,857)
|
|
$
8,820
|
|
$
(6,524)
|
Depreciation
|
7,978
|
|
7,735
|
|
15,764
|
|
14,867
|
Interest
expense (income), net
|
130
|
|
-
|
|
277
|
|
-
|
Income tax
expense (benefit)
|
3,823
|
|
(1,659)
|
|
3,687
|
|
(2,225)
|
EBITDA
|
$
17,520
|
|
$
1,219
|
|
$
28,548
|
|
$
6,118
|
|
|
|
|
|
|
|
|
Reconciliation of EBITDA to Net Cash Provided by
Operating
|
|
|
|
|
|
|
|
Activities
|
|
|
Six Months
Ended
|
|
|
|
March
31,
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
(in
thousands)
|
Net cash
provided by operating activities
|
|
|
|
|
$
20,906
|
|
$
3,089
|
Changes in
working capital and other items
|
|
|
|
|
8,669
|
|
4,283
|
Noncash
adjustments to income
|
|
|
|
|
(1,027)
|
|
(1,254)
|
EBITDA
|
|
|
|
|
$
28,548
|
|
$
6,118
|
SOURCE Dawson Geophysical Company