MIDLAND, Texas, May 7, 2013 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) today reported results for the quarter-ended
March 31, 2013, the Company's second
quarter of fiscal 2013.
Second Quarter and Six Month Highlights
- EBITDA for the quarter-ended March 31,
2013 increased to $20,314,000
compared to $17,520,000 for the same
period of fiscal 2012, an increase of 16 percent;
- Income from operations for the quarter-ended March 31, 2013 increased to $10,598,000 compared to $9,446,000 for the quarter-ended March 31,
2012, an increase of 12 percent;
- Net income for the quarter-ended March
31, 2013 increased to $6,279,000, or $0.78 per share attributable to common stock,
compared to $5,589,000, or
$0.71 per share attributable to
common stock, for the quarter-ended March
31, 2012;
- Reported revenues for the quarter-ended March 31, 2013 of $83,350,000 compared to $85,546,000 in the second fiscal quarter of
2012;
- Revenues net of third-party reimbursable charges increased 14
percent in the second fiscal quarter of 2013 compared to the second
fiscal quarter of 2012;
- EBITDA for the six months ended March
31, 2013 was $34,652,000
compared to $28,548,000 for the same
period of fiscal 2012, an increase of 21 percent;
- Income from operations for the six months ended March 31, 2013 was $15,792,000 compared to $12,672,000 for the same period of fiscal 2012,
an increase of 25 percent;
- Net income for the six months ended March 31, 2013 was $9,207,000, or $1.15 per share attributable to common stock,
versus $8,820,000, or $1.11 per share attributable to common stock, for
the same period of fiscal 2012, which included the effect of an
$0.18 per share one-time tax benefit
recognized in the December 31, 2011
quarter related to a merger agreement terminated in calendar 2011;
excluding the impact of the one-time tax benefit in fiscal 2012,
net income and earnings per share both increased in the fiscal 2013
six-month period 24 percent;
- Reported revenues for the six months ended March 31, 2013 of $159,979,000 compared to $177,928,000 in the same period of 2012;
- Revenues net of third-party reimbursable charges for the six
months ended March 31, 2013 increased
12 percent from the same period of fiscal 2012;
- Ended with approximately $67
million of working capital at March
31, 2013;
- Balanced portfolio of projects in the Eagle Ford Shale, Bakken
Shale, Marcellus Shale, Mississippi Lime of Kansas and Oklahoma, the State
of Mississippi and the Permian Basin including the Cline
Shale, Avalon Shale, Bone Spring and
Wolfcamp areas;
- Deployed small channel count crew utilizing the Wireless
Seismic RT 2000 recording system;
- Replaced an I/O RSR recording system with 12,000 channel
Geospace GSR cable-less recording system in the first fiscal
quarter of 2013;
- Secured contracts to perform surface microseismic surveys in
West Texas and East Texas and completed one in April;
- Hired a Manager of Microseismic Operations, and
- Completed first Canadian project.
Stephen C. Jumper, President and
CEO of Dawson Geophysical Company, said, "Steady demand for
services, combined with improved efficiencies, fueled our strong
second quarter and six month results. Exploration and production
companies continue to utilize our services for numerous functions,
ranging from conventional exploration for hydrocarbons to
unconventional reservoir description to hydraulic fracture
monitoring projects. Improved efficiencies are paying strong
dividends as we are able to complete some projects ahead of
schedule at reduced costs."
Revenues for the quarter and six months ended March 31, 2013 decreased from the same period of
fiscal 2012 primarily as a result of a significant reduction in
third-party reimbursable charges as a percentage of revenue. The
decline in third-party charges, which are included in revenues and
reimbursed to the Company by its clients, is primarily a result of
the Company's movement of operations towards the more open terrain
of the western United States.
Revenue, net of third-party charges increased 14 percent in the
second fiscal quarter of 2013 from the same period in fiscal 2012
and 12 percent for the six month comparison.
Revenues net of third-party charges increased during the second
fiscal quarter and the six months ended March 31, 2013 primarily as a result of improved
crew efficiencies, higher utilization rates and favorable contract
terms for projects during the quarter, including several earned
early completion and performance incentives. Reflected in the
second fiscal quarter and six month results were increased
depreciation expense from capital expenditures and increased
general and administrative expense primarily related to Canadian
costs.
During the second fiscal quarter of 2013, the Company completed
its first multi-component 3D survey in Canada. The Canadian crew, operating as Dawson
Seismic Services, was in operation for approximately 25 days during
the Canadian winter season in early calendar 2013. While the
Canadian 2012-2013 winter season was not as robust as anticipated,
Dawson Seismic Services was able to successfully complete its first
project, secure necessary industry safety audits and perform at a
high level of efficiency in its entry into the market. Financial
results for the Canadian operation had a slight negative effect on
the Company's overall second quarter and six month fiscal 2013
results. Dawson Seismic Services anticipates operating one or two
crews in Canada in the winter
season of 2013-2014. In early April, Jason
Nelson, General Manager, was named President of Dawson
Seismic Services, replacing Doug
Schmidt who fulfilled his one year commitment.
Demand for the Company's services in the U.S. remains steady.
The Company is active with projects in the Permian Basin, Mississippi Lime of Oklahoma and Kansas, the Bakken Shale, the Marcellus Shale
and the Eagle Ford Shale. In addition, the Company has been awarded
projects in the Granite Wash of the Texas
Panhandle and in the State of
Mississippi. Requests for proposals remain steady and the
Company anticipates securing additional contracts in the third
fiscal quarter. The Company's contracts may be cancelled, delayed
or reduced in size by its clients on short notice, and utilization
rates and overall results can vary due to a number of factors,
including weather interruptions, the inability to secure land
access agreements in a timely manner and overall project
readiness.
While the Company's order book is sufficient to maintain
operation of fourteen crews into the fall of 2013, the Company
anticipates reducing the number of large channel count crews to
thirteen during the third or fourth fiscal quarter of 2013 by
taking an I/O RSR radio-based crew out of service. The Company
believes it will be able to improve long-term utilization rates and
meet client demands with thirteen large channel count crews.
Activity levels for the small channel count, Wireless Seismic RT
2000 crew is expected to increase, keeping the Company's overall
crew count at fourteen. It is the Company's intention to operate
six Geospace GSR cable-less equipped crews, six ARAM cable-based
equipped crews, one I/O RSR radio-based equipped crew and one 2500
channel Wireless Seismic RT 2000 crew. The Company will maintain
the ability to redeploy an additional large channel count crew in
short order should client demand dictate. During the third and
fourth fiscal quarters of 2013, the Company will be utilizing a
FairfieldNodal cable-less system under a lease arrangement in place
of an ARAM system on one of its crews working under contract in the
Permian Basin.
Utilization rates are expected to be impacted on several crews
in the third fiscal quarter of 2013 due to project readiness and
early project completion but the overall effect is anticipated to
be partially offset with completion of several projects contracted
with incentive clauses during the third fiscal quarter. In
addition, the reduction of the large channel count crew could have
a short-term effect on utilization rates during the third or fourth
fiscal quarter as crews are reassigned as scheduling allows.
Jumper continued, "In today's seismic data acquisition market,
the ability to identify and respond to client needs is critical.
Two years ago we identified the need for the Geospace cable-less
equipment in response to client needs, increasing efficiency
demands and diverse operating environments. In early 2013, our
experienced personnel identified our clients' needs for a smaller
channel count crew, which in turn, enabled us to transition from
the I/O RSR crew to the smaller Wireless Seismic RT 2000 crew. Our
organizational structure encourages our talented employees to
maintain close contact and communication with our valued clients.
In this case, we used the information from our clients to provide
them with a smaller crew best suited to their needs. We believe
that this should ultimately lead to higher utilization rates and
improved financial performance."
During the third fiscal quarter of 2013, the Company anticipates
completing the data acquisition phase on two surface- recorded
microseismic, hydraulic fracture monitoring projects in West and
East Texas utilizing a Geospace
GSR recording system. The Company successfully completed two such
projects during 2012 and anticipates expanding its microseismic
operation during 2013. In response to increased requests to perform
microseismic services, the Company hired Steve Houghtaling as Manager of Microseismic
Operations in April. Mr. Houghtaling is a geophysicist with
extensive industry experience and recent focus on microseismic data
acquisition for the purpose of hydraulic fracture monitoring in the
lower 48.
The Company expects to maintain its previously announced
$50 million capital expenditure
budget for fiscal 2013. Capital expenditures for fiscal 2014 are
anticipated to be at reduced levels from recent fiscal years and
will include additional equipment expenditures for its Canadian
operation. The Company's balance sheet remains strong with
approximately $67 million in working
capital, approximately $18 million of
cash and cash equivalents, approximately $13
million of short-term investments and approximately
$18 million of debt.
Jumper concluded, "Overall market conditions remain steady in
terms of requests for proposals and strength of order book. We
continue to secure contracts at a level and pace to maintain a
consistent order book with our increased crew productivity. Our
balance sheet and equipment base is as strong as it has ever been
and puts us in a position to respond quickly to market conditions
and client needs. We are executing at a high level with increasing
efficiencies, improving safety statistics and generating higher
returns. In 2012, we successfully expanded into the Canadian market
and anticipate a stronger 2013-2014 winter season. In 2013, we are
expanding our surface microseismic data acquisition business. The
challenge we face, and will continue to face, will be maintaining
high short-term utilization rates and project readiness as our
productivity continues to improve. We believe during the third
quarter we will transition to a crew configuration that will add to
our overall performance."
Conference Call Information
Dawson will host a conference call to review its fiscal second
quarter 2013 financial results on May 7,
2013, at 9 a.m. CDT.
Participants can access the call at (877) 317-6789
(US/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 10, 2013, by dialing (877) 344-7529
(US/Canada) or (412) 317-0088
(International). The passcode is 10028524. The webcast will be
recorded and available for replay on Dawson's website until
May 31, 2013.
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.
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 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, 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, 2012. 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 contacts:
Stephen C.
Jumper, CEO and President
Christina W. Hagan, Chief Financial
Officer
(800) 332-9766
www.dawson3d.com
DAWSON
GEOPHYSICAL COMPANY
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
Three
Months Ended March 31,
|
|
Six Months
Ended March 31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Operating revenues
|
$
83,350,000
|
|
$
85,546,000
|
|
$
159,979,000
|
|
$
177,928,000
|
Operating costs:
|
|
|
|
|
|
|
|
Operating expenses
|
59,666,000
|
|
65,202,000
|
|
118,401,000
|
|
144,016,000
|
General and administrative
|
3,508,000
|
|
2,920,000
|
|
7,104,000
|
|
5,476,000
|
Depreciation
|
9,578,000
|
|
7,978,000
|
|
18,682,000
|
|
15,764,000
|
|
72,752,000
|
|
76,100,000
|
|
144,187,000
|
|
165,256,000
|
|
|
|
|
|
|
|
|
Income
from operations
|
10,598,000
|
|
9,446,000
|
|
15,792,000
|
|
12,672,000
|
Other
income (expense):
|
|
|
|
|
|
|
|
Interest income
|
19,000
|
|
8,000
|
|
35,000
|
|
11,000
|
Interest expense
|
(174,000)
|
|
(138,000)
|
|
(365,000)
|
|
(288,000)
|
Other income
|
138,000
|
|
96,000
|
|
178,000
|
|
112,000
|
Income
before income tax
|
10,581,000
|
|
9,412,000
|
|
15,640,000
|
|
12,507,000
|
|
|
|
|
|
|
|
|
Income
tax expense
|
(4,302,000)
|
|
(3,823,000)
|
|
(6,433,000)
|
|
(3,687,000)
|
|
|
|
|
|
|
|
|
Net
income
|
$
6,279,000
|
|
$
5,589,000
|
|
$
9,207,000
|
|
$
8,820,000
|
|
|
|
|
|
|
|
|
Basic
income attributable to common stock
|
$
0.78
|
|
$
0.71
|
|
$
1.15
|
|
$
1.11
|
|
|
|
|
|
|
|
|
Diluted
income attributable to common stock
|
$
0.78
|
|
$
0.70
|
|
$
1.14
|
|
$
1.11
|
|
|
|
|
|
|
|
|
Weighted average equivalent common shares
outstanding
|
7,861,204
|
|
7,841,362
|
|
7,855,284
|
|
7,836,787
|
|
|
|
|
|
|
|
|
Weighted average equivalent common shares
outstanding-assuming dilution
|
7,901,636
|
|
7,896,949
|
|
7,888,906
|
|
7,885,590
|
DAWSON
GEOPHYSICAL COMPANY
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
March
31,
|
|
September
30,
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash equivalents
|
$
17,652,000
|
|
$
57,373,000
|
Short-term investments
|
12,750,000
|
|
4,000,000
|
Accounts receivable, net of
allowance for doubtful accounts of $250,000 at March 31, 2013 and
September 30, 2012
|
67,047,000
|
|
53,719,000
|
Prepaid expenses and other
assets
|
3,769,000
|
|
762,000
|
Current deferred tax asset
|
2,129,000
|
|
1,925,000
|
|
|
|
|
Total current assets
|
103,347,000
|
|
117,779,000
|
|
|
|
|
Property, plant and equipment
|
327,575,000
|
|
326,030,000
|
Less accumulated depreciation
|
(141,454,000)
|
|
(164,634,000)
|
|
|
|
|
Net property, plant
and equipment
|
186,121,000
|
|
161,396,000
|
|
|
|
|
Total assets
|
$
289,468,000
|
|
$
279,175,000
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$
15,974,000
|
|
$
18,544,000
|
Accrued liabilities:
|
|
|
|
Payroll costs and
other taxes
|
2,109,000
|
|
1,802,000
|
Other
|
6,527,000
|
|
6,425,000
|
Deferred revenue
|
2,123,000
|
|
3,467,000
|
Current maturities of notes payable
and obligations under capital leases
|
10,026,000
|
|
9,131,000
|
|
|
|
|
Total current liabilities
|
36,759,000
|
|
39,369,000
|
|
|
|
|
Long-term liabilities:
|
|
|
|
Notes payable and obligations under
capital leases less current maturities
|
7,892,000
|
|
11,179,000
|
Deferred tax liability
|
33,424,000
|
|
27,678,000
|
|
|
|
|
Total long-term liabilities
|
41,316,000
|
|
38,857,000
|
|
|
|
|
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, 8,053,407 and 8,031,369
shares issued and outstanding at March 31, 2013 and September 30,
2012, respectively
|
2,684,000
|
|
2,677,000
|
Additional paid-in capital
|
94,454,000
|
|
93,224,000
|
Retained earnings
|
114,255,000
|
|
105,048,000
|
|
|
|
|
Total stockholders' equity
|
211,393,000
|
|
200,949,000
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
289,468,000
|
|
$
279,175,000
|
Reconciliation of EBITDA to Net
Income
|
|
|
|
|
|
Three
Months Ended
|
|
Six Months
Ended
|
|
March
31,
|
|
March
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(in
thousands)
|
|
(in
thousands)
|
Net
income
|
$
6,279
|
|
$
5,589
|
|
$
9,207
|
|
$
8,820
|
Depreciation
|
9,578
|
|
7,978
|
|
18,682
|
|
15,764
|
Interest
expense (income), net
|
155
|
|
130
|
|
330
|
|
277
|
Income tax
expense
|
4,302
|
|
3,823
|
|
6,433
|
|
3,687
|
EBITDA
|
$
20,314
|
|
$
17,520
|
|
$
34,652
|
|
$
28,548
|
|
|
|
|
|
|
|
|
Reconciliation of EBITDA to Net Cash Provided
by Operating Activities
|
Three
Months Ended
|
|
Six Months
Ended
|
|
March
31,
|
|
March
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(in
thousands)
|
|
(in
thousands)
|
Net cash
provided by operating activities
|
$
3,399
|
|
$
22,404
|
|
$
12,413
|
|
$
20,906
|
Changes in
working capital and other items
|
17,332
|
|
(4,418)
|
|
23,296
|
|
8,669
|
Noncash
adjustments to income
|
(417)
|
|
(466)
|
|
(1,057)
|
|
(1,027)
|
EBITDA
|
$
20,314
|
|
$
17,520
|
|
$
34,652
|
|
$
28,548
|
SOURCE Dawson Geophysical Company