MIDLAND, Texas, Feb. 4,
2014 /PRNewswire/ -- Dawson Geophysical Company (NASDAQ: DWSN)
today reported revenues of $68,181,000 for the quarter ended December 31, 2013, the Company's first quarter of
fiscal 2014, as compared to $76,629,000 for the same quarter of fiscal 2013.
The Company reported a net loss of $2,897,000 for the first quarter of fiscal 2014,
or $0.36 per share attributable to
common stock, as compared to net income of $2,928,000, or $0.36 per share attributable to common stock, in
the same quarter of fiscal 2013. EBITDA for the first quarter of
fiscal 2014 was $4,860,000 compared
to $14,338,000 for the same quarter
of fiscal 2013.
On February 3, 2014, the Company's
Board of Directors approved the commencement of the payment of an
$0.08 per share quarterly cash
dividend to shareholders, subject to capital availability and a
determination that cash dividends continue to be in the best
interest of the Company. The Board of Directors has set the first
such quarterly dividend to be payable on February 24, 2014 to shareholders of record at
the close of business on February 14,
2014 (the "record date"). The declared amount represents an
aggregate dividend of approximately $645,000 based on the number of issued and
outstanding shares of Common Stock as of the declaration date, or
approximately $2,580,000 on an
annualized basis. The Board of Directors may from time to time, in
conjunction with management, evaluate supplemental dividend
payments depending on the Company's financial results, capital
requirements and overall market conditions.
Fiscal First Quarter 2014 Highlights
- Company returned to full deployment of twelve data acquisition
crews in mid-November;
- Crew utilization rates are back at full capacity following
extreme weather conditions in areas of operations in the United States and Canada, which had a significant negative
impact on the Company's operations;
- Interest levels for operations related to microseismic projects
continue to increase;
- Order book has strengthened to a level consistent with
commitments carried over the past twelve months despite the
slowdown in bid activity during the summer of 2013 as reported in
the Company's year-end earnings release;
- The Company took delivery of 9,000 stations of GSX
three-channel units complete with three-component geophones;
- The Company anticipates operating a large channel count
multi-component crew in the United
States for a significant portion of fiscal 2014;
- The Company plans to maintain its previously disclosed
$35,000,000 capital budget for fiscal
2014 with the unspent balance dedicated primarily to maintenance
capital requirements, including replacement of light vehicles and
batteries for recording equipment; and
- Balance sheet strength remains strong with approximately
$66,000,000 of working capital and
approximately $20,000,000 of debt, of
which approximately $11,000,000 will
be paid over the next twelve months.
Revenues for the first quarter of fiscal 2014, historically the
Company's most difficult quarter with shorter daylight hours and
the holiday season, decreased compared to the first fiscal quarter
of 2013 primarily as a result of previously disclosed significantly
reduced utilization rates for the first half of the quarter and
severe cold and inclement weather conditions in many areas of the
Company's operations in both the United
States and Canada during
the second half of the quarter, which negatively impacted crew
productivity. Utilization rates for the first half of the first
quarter of fiscal 2014 were at or below fifty percent. In addition,
the Company's operating expenses for the first quarter of fiscal
2014 increased relative to revenue primarily as the result of costs
related to the return to full utilization in the United States and higher than anticipated
United States and Canadian project
start-up costs and equipment rental expense.
Stephen Jumper, President, Chief
Executive Officer and Chairman of the Company, said, "Without a
doubt, the quarter ended December 31,
2013 had its challenges. Low utilization rates and severe
weather conditions negatively impacted our results. Activity levels
in the Canadian seismic market were softer than anticipated and
costs related to the return to full utilization in the United States were high. Despite these
challenges, we returned to full deployment of all twelve large data
acquisition crews in mid-November. All twelve crews have been fully
deployed since that time and utilization levels of these crews are
now at full capacity. Our outlook for the
United States, our primary area of operation, for fiscal
2014 remains positive with steady demand and utilization of twelve
large crews anticipated."
Demand for the Company's services remains steady. The Company's
order book has strengthened to a level consistent with commitments
carried over the past twelve months despite the slowdown in bid
activity during the summer of 2013 as reported in the Company's
year-end earnings release and is sufficient to maintain full
utilization until the middle of calendar 2014. While the Company's
clients may cancel, delay or alter the scope of their agreements on
short notice and the Company's operations may be impacted by
weather conditions or land access delays, the Company anticipates
demand levels to support operation of its twelve large crews at
full utilization through fiscal 2014.
The Company is currently operating one crew in Canada for the 2013-2014 winter season with
two large channel count multi-component projects under contract.
Demand in Canada was softer than
anticipated for the second consecutive season. In addition, during
the 2013-2014 winter season, the Company's Canadian operations
experienced higher than anticipated costs and operational
difficulties primarily related to extreme cold and excessive
snowfall in its current area of operation. The Company's Canadian
operations had an overall negative impact on the Company's first
quarter of fiscal 2014 financial results and is anticipated to have
a negative impact on the Company's second fiscal quarter.
While the Company did not conduct any operations related to
microseismic projects during the December
31, 2013 quarter, the interest level for such projects
continues to increase. The Company anticipates securing contracts
to complete several microseismic projects primarily utilizing the
small crew during the remainder of fiscal 2014 and continues to
pursue microseismic opportunities in both the United States and Canada.
Capital expenditures for the quarter ended December 31, 2013 were $24,188,000. As previously reported, the Company
took delivery of 9,000 stations of GSX three-channel units complete
with three-component geophones. These units combined with the
Company's existing units are deployed on large multi-component
projects in North Dakota and
Canada. The Company anticipates
operating a large channel count multi-component crew in
the United States for a
significant portion of fiscal 2014. The Company recently completed
a multi-component project in West
Texas utilizing leased recording equipment and Company owned
multi-component vibrator energy source units. Interest levels for
multi-component projects in the United
States and Canada continue
to increase. The Company anticipates maintaining its previously
disclosed $35,000,000 capital budget
for fiscal 2014 with the unspent balance of the capital budget
dedicated primarily to maintenance capital requirements, including
replacement of light vehicles and batteries for recording
equipment.
The Company's balance sheet remains strong with approximately
$66,000,000 of working capital and
approximately $20,000,000 of debt, of
which approximately $11,000,000 will
be paid over the next twelve months. Cash balances decreased
significantly during the first quarter of fiscal 2014 primarily as
a result of capital expenditures during the quarter, working
capital requirements and an increase in accounts receivables. The
Company continues to maintain a fully available $20,000,000 revolving line of credit.
Jumper concluded, "We are pleased that our Board has implemented
the payment of a quarterly dividend in order to reward our loyal
shareholders and increase shareholder value. The Company's cash
flow generation provides us with the ability to return capital to
shareholders while maintaining the level of capital investment
necessary to grow our business over the long term. We will continue
to evaluate from time to time supplemental dividend payments
depending on market conditions, financial performance and capital
needs in an effort to increase returns for shareholders."
Conference Call Information
Dawson will host a conference call to review its fiscal first
quarter 2014 financial results on February
4, 2014, at 9 a.m. CST.
Participants can access the call at (877) 418-5260 (US),
1-866-605-3852 (Canada) or
(412) 717-9589 (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 Friday, February 7,
2014 by dialing (877) 344-7529 (US/Canada) or (412) 317-0088
(International). The passcode is 10039918. The webcast will be
recorded and available for replay on Dawson's website until
March 4, 2014.
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.
Forward-Looking Statements
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, 2013. 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.
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 (loss) 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 (loss) 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 (loss) income is
presented in the table following the text of this press
release.
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
Three Months Ended
December 31,
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
Operating
revenues
|
$
68,181,000
|
|
$
76,629,000
|
Operating
costs:
|
|
|
|
Operating expenses
|
59,108,000
|
|
58,735,000
|
General
and administrative
|
4,164,000
|
|
3,596,000
|
Depreciation
|
9,876,000
|
|
9,104,000
|
|
73,148,000
|
|
71,435,000
|
|
|
|
|
(Loss) income from
operations
|
(4,967,000)
|
|
5,194,000
|
Other income
(expense):
|
|
|
|
Interest
income
|
17,000
|
|
16,000
|
Interest
expense
|
(135,000)
|
|
(191,000)
|
Other
(expense) income
|
(49,000)
|
|
40,000
|
(Loss) income
before income tax
|
(5,134,000)
|
|
5,059,000
|
|
|
|
|
Income tax benefit
(expense)
|
2,237,000
|
|
(2,131,000)
|
|
|
|
|
Net (loss)
income
|
$
(2,897,000)
|
|
$
2,928,000
|
|
|
|
|
Basic (loss)
income per share attributable to common stock
|
$
(0.36)
|
|
$
0.36
|
|
|
|
|
Diluted (loss)
income per share attributable to common stock
|
$
(0.36)
|
|
$
0.36
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
7,956,215
|
|
7,849,525
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
|
|
-assuming dilution
|
7,956,215
|
|
7,876,338
|
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
December
31,
|
|
September
30,
|
|
2013
|
|
2013
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$
11,860,000
|
|
$
52,405,000
|
Short-term investments
|
26,000,000
|
|
23,500,000
|
Accounts
receivable, net of allowance for doubtful accounts
of $250,000 at December 31, 2013 and
September 30, 2013
|
55,647,000
|
|
37,488,000
|
Prepaid
expenses and other assets
|
4,271,000
|
|
737,000
|
Current
deferred tax asset
|
1,592,000
|
|
1,664,000
|
|
|
|
|
Total current assets
|
99,370,000
|
|
115,794,000
|
|
|
|
|
Property, plant
and equipment
|
348,603,000
|
|
325,464,000
|
Less
accumulated depreciation
|
(161,301,000)
|
|
(152,231,000)
|
|
|
|
|
Net property, plant and equipment
|
187,302,000
|
|
173,233,000
|
|
|
|
|
Total assets
|
$
286,672,000
|
|
$289,027,000
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
11,905,000
|
|
$
15,880,000
|
Accrued
liabilities:
|
|
|
|
Payroll costs and
other taxes
|
3,401,000
|
|
1,850,000
|
Other
|
3,565,000
|
|
6,154,000
|
Deferred
revenue
|
2,985,000
|
|
3,438,000
|
Current
maturities of notes payable and
obligations under capital
leases
|
11,108,000
|
|
9,258,000
|
|
|
|
|
Total current liabilities
|
32,964,000
|
|
36,580,000
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
Notes payable and obligations under capital
leases less current
maturities
|
9,328,000
|
|
3,697,000
|
|
|
|
Deferred tax liability
|
33,800,000
|
|
35,690,000
|
|
|
|
|
Total long-term liabilities
|
43,128,000
|
|
39,387,000
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
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, 8,063,208
and 8,056,943 shares issued and
outstanding at December 31,
2013 and September 30, 2013, respectively
|
2,688,000
|
|
2,686,000
|
Additional paid-in capital
|
95,261,000
|
|
94,846,000
|
Retained
earnings
|
112,631,000
|
|
115,528,000
|
|
|
|
|
Total stockholders' equity
|
210,580,000
|
|
213,060,000
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
286,672,000
|
|
$289,027,000
|
Reconciliation of
EBITDA to Net (Loss) Income
|
|
|
|
|
Three Months
Ended
|
|
December
31,
|
|
2013
|
|
2012
|
|
(in
thousands)
|
Net (loss)
income
|
$
(2,897)
|
|
$
2,928
|
Depreciation
|
9,876
|
|
9,104
|
Interest expense
(income), net
|
118
|
|
175
|
Income tax (benefit)
expense
|
(2,237)
|
|
2,131
|
EBITDA
|
$
4,860
|
|
$ 14,338
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided (Used) by Operating
Activities
|
|
|
|
Three Months
Ended
|
|
December
31,
|
|
2013
|
|
2012
|
|
(in
thousands)
|
Net cash (used)
provided by operating activities
|
$ (21,709)
|
|
$
9,014
|
Changes in working
capital and other items
|
26,973
|
|
5,964
|
Noncash adjustments
to income
|
(404)
|
|
(640)
|
EBITDA
|
$
4,860
|
|
$ 14,338
|
SOURCE Dawson Geophysical Company