MIDLAND, Texas, May 18, 2015 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) today reported results for its
first quarter ended March 31,
2015.
On February 11, 2015, legacy
Dawson Geophysical Company and legacy TGC Industries, Inc.
consummated their previously announced strategic business
combination. The merger transaction was accounted for as a reverse
acquisition with legacy Dawson Geophysical being deemed the
accounting acquirer. The combined companies adopted a calendar
fiscal year ending December 31. First
quarter 2015 results reflect the operations of legacy Dawson
Geophysical for the period January 1 through
March 31, 2015 and the operations of legacy TGC Industries
for the period February 12 through March
31, 2015. First quarter 2015 results are compared to
the quarterly results for legacy Dawson Geophysical for the period
January 1 through March 31, 2014,
which at the time was legacy Dawson Geophysical's second fiscal
quarter of its fiscal year ended September
30, 2014. The Company's second quarter ending June 30, 2015 will reflect a full quarter of
combined entity operating results.
For the quarter ended March 31,
2015, the Company reported revenues of $73,722,000, a net loss of $6,592,000, or $0.37 loss per share attributable to common
stock, and EBITDA of $1,441,000.
Revenues for the March 2015
quarter were negatively impacted by reduced client demand due to
decreasing and uncertain commodity prices, client-directed project
delays, severe weather conditions in many areas of operation, a
weaker than anticipated Canadian season and reduced utilization
rates of deployed data acquisition crews in the lower 48 United
States. Severe wet weather conditions, reduced demand and
client delays have continued during April and through mid-May 2015. During the March 2015 quarter, the post transaction combined
Company operated a peak of fourteen seismic data acquisition crews
in the United States and four
crews in the Canadian market. Reflected in the current quarter are
merger related transaction costs of approximately $2,600,000 and $530,000 of severance costs related to an
approximately 20 percent reduction in work force since the closing
of the transaction. Cumulative transaction costs for the combined
Company since transaction inception to date are approximately
$7,500,000.
Demand for Dawson's services is at reduced levels from recent
years and is anticipated to remain at such levels through 2015 in
response to decreasing and uncertain commodity prices and reduced
client expenditures. The Company is currently operating eight to
ten data acquisition crews in the United
States and based on currently available information
anticipates operating eight to ten crews in the United States with limited activity in
Canada into the third quarter
ending September 30, 2015.
Utilization rates on the Company's active data acquisition crews
have been severely impacted through the middle of the second
quarter primarily due to excessive wet conditions. Commencement of
a large multi-component surface recorded microseismic project is
scheduled to begin late in the June
2015 quarter. Based on currently available information,
demand for the Company's multi-component equipment is anticipated
to remain steady for the balance of 2015.
The Company's capital budget for 2015 is anticipated at
maintenance levels below the $10
million capital budget approved by the Board of Directors.
Strategic investments in state-of-the-art seismic equipment during
the past three years are partially responsible for the lower 2015
capital budget. The Company's balance sheet remains strong at
March 31, 2015 with approximately
$48,100,000 of cash and cash
equivalents and short-term investments, $77,276,000 of working capital and $19,171,000 of debt and capital lease
obligations.
Stephen Jumper, President and
Chief Executive Officer of the Company, said, "The past twelve
months, and particularly the first fiscal quarter of 2015, have
been challenging times throughout the seismic data acquisition and
oil field service sectors. The difficulties have continued into the
second fiscal quarter with weather and further client delays. Lower
commodity prices, reduced exploration activity and scaled-back
budget programs from many of our valued clients have slowed seismic
crew activity in the lower 48 United States and Canada. In response to the pullback in
activity, we have moved to quickly right-size our crew count to
meet current and anticipated demand levels. We anticipate
deployment of eight to ten crews through the summer of 2015 and are
working diligently to drive efficiencies and reduce costs."
Jumper concluded, "We are pleased to have completed the
strategic business combination with TGC Industries in February. We
continue to work through the integration process at a rapid and
effective pace. We believe the combination of Dawson Geophysical
and TGC Industries will provide long term growth opportunities.
These factors, combined with the earnings power from our existing
equipment inventory, as well as our strong balance sheet, will
enable us to respond quickly when market conditions improve."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its first quarter 2015 financial results on May 19, 2015 at 9 a.m.
CDT. Participants can access the call at 1-888-348-3664
(US), 1-855-669-9657 (Canada) and
1-412-902-4233 (Toll/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 22, 2015 by
dialing 1-877-870-5176 (Toll-Free) and 1-858-384-5517
(Toll/International). The passcode is 10065839. The
webcast will be recorded and available for replay on Dawson's
website until June 18, 2015.
About Dawson
Dawson Geophysical Company is a leading provider of North America onshore seismic data acquisition
services with operations throughout the continental 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 (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 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.
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, dependence upon energy industry spending, the
volatility of oil and natural gas prices, high fixed costs of
operations, operational disruptions, changes in economic
conditions, industry competition, the potential for contract delay
or cancellations of service contracts, the availability of capital
resources, weather interruptions, limited number of customers, and
credit risk related to our customers. A discussion of these and
other factors, including risks and uncertainties, is set forth in
Exhibit 99.5 to the Company's Form 8-K/A that was filed with the
Securities and Exchange Commission on April
30, 2015 . 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
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
|
|
|
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
Operating
revenues
|
$
|
73,722,000
|
|
$
|
76,766,000
|
Operating
costs:
|
|
|
|
|
|
Operating expenses
|
|
64,791,000
|
|
|
60,091,000
|
General
and administrative
|
|
7,522,000
|
|
|
3,676,000
|
Depreciation and amortization
|
|
11,223,000
|
|
|
10,177,000
|
|
|
83,536,000
|
|
|
73,944,000
|
|
|
|
|
|
|
(Loss) income from
operations
|
|
(9,814,000)
|
|
|
2,822,000
|
Other income
(expense):
|
|
|
|
|
|
Interest
income
|
|
24,000
|
|
|
21,000
|
Interest
expense
|
|
(147,000)
|
|
|
(161,000)
|
Other
income (expense)
|
|
32,000
|
|
|
(343,000)
|
(Loss) income
before income tax
|
|
(9,905,000)
|
|
|
2,339,000
|
|
|
|
|
|
|
Income tax benefit
(expense):
|
|
3,313,000
|
|
|
(687,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(6,592,000)
|
|
$
|
1,652,000
|
|
|
|
|
|
|
Other comprehensive
loss:
|
|
|
|
|
|
Net
unrealized loss on foreign exchange rate translation, net of tax
|
$
|
(418,000)
|
|
$
|
(107,000)
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
$
|
(7,010,000)
|
|
$
|
1,545,000
|
|
|
|
|
|
|
Basic (loss)
income per share attributable to common stock
|
$
|
(0.37)
|
|
$
|
0.12
|
|
|
|
|
|
|
Diluted (loss)
income per share attributable to common stock
|
$
|
(0.37)
|
|
$
|
0.12
|
|
|
|
|
|
|
Cash dividend
declared per share of common stock
|
$
|
-
|
|
$
|
0.08
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
18,021,366
|
|
|
14,009,358
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding -assuming dilution
|
|
18,021,366
|
|
|
14,075,988
|
DAWSON GEOPHYSICAL
COMPANY
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
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|
March
31,
|
|
December
31,
|
ASSETS
|
2015
|
|
2014
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
$
|
20,642,000
|
|
$
|
14,644,000
|
Short-term investments
|
|
27,500,000
|
|
|
28,750,000
|
Accounts
receivable, net of allowance for doubtful accounts
of $763,000 at March 31, 2015 and
December 31, 2014
|
|
57,795,000
|
|
|
37,133,000
|
Prepaid
expenses and other assets
|
|
8,568,000
|
|
|
5,703,000
|
Current
deferred tax asset
|
|
2,524,000
|
|
|
2,818,000
|
|
|
|
|
|
|
Total current assets
|
|
117,029,000
|
|
|
89,048,000
|
|
|
|
|
|
|
Property, plant
and equipment
|
|
366,436,000
|
|
|
339,245,000
|
Less
accumulated depreciation
|
|
(190,301,000)
|
|
|
(181,453,000)
|
|
|
|
|
|
|
Net property, plant and equipment
|
|
176,135,000
|
|
|
157,792,000
|
|
|
|
|
|
|
Intangibles
|
|
2,797,000
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
295,961,000
|
|
$
|
246,840,000
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
13,860,000
|
|
$
|
5,849,000
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
3,492,000
|
|
|
3,015,000
|
Other
|
|
5,629,000
|
|
|
3,158,000
|
Deferred
revenue
|
|
5,522,000
|
|
|
1,752,000
|
Current
maturities of notes payable and obligations under capital leases
|
|
11,250,000
|
|
|
6,018,000
|
|
|
|
|
|
|
Total current liabilities
|
|
39,753,000
|
|
|
19,792,000
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes payable and obligations under capital leases
less current maturities
|
|
7,921,000
|
|
|
4,209,000
|
Deferred tax liability
|
|
18,106,000
|
|
|
28,621,000
|
|
|
|
|
|
|
Total long-term liabilities
|
|
26,027,000
|
|
|
32,830,000
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock-par value $1.00 per share; 4,000,000 shares authorized, none outstanding at
March 31, 2015: par value $1.00
per share, 5,000,000 shares authorized, none outstanding at December 31, 2014
|
|
|
|
|
|
Common
stock-par value $0.01 per share, 35,000,000 shares
authorized; 21,543,681 and 14,216,540
issued and outstanding at March 31, 2015: and December 31, 2014
|
|
216,000
|
|
|
142,000
|
Additional paid-in capital
|
|
141,983,000
|
|
|
99,084,000
|
Retained
earnings
|
|
88,744,000
|
|
|
95,336,000
|
Treasury
stock
|
|
-
|
|
|
-
|
Accumulated other comprehensive loss, net of tax
|
|
(762,000)
|
|
|
(344,000)
|
|
|
|
|
|
|
Total stockholders' equity
|
|
230,181,000
|
|
|
194,218,000
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
295,961,000
|
|
$
|
246,840,000
|
Reconciliation of
EBITDA to Net (Loss) Income
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
|
2015
|
|
|
2014
|
|
|
(in
thousands)
|
Net (loss)
income
|
$
|
(6,592)
|
|
$
|
1,652
|
Depreciation
|
|
11,223
|
|
|
10,177
|
Interest expense
(income), net
|
|
123
|
|
|
140
|
Income tax (benefit)
expense
|
|
(3,313)
|
|
|
687
|
EBITDA
|
$
|
1,441
|
|
$
|
12,656
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash (Used in) Provided by Operating
Activities
|
|
Three Months
Ended
|
|
|
March 31,
|
|
|
2015
|
|
|
2014
|
|
|
(in
thousands)
|
Net cash (used in)
provided by in operating activities
|
$
|
(3,262)
|
|
$
|
23,350
|
Changes in working
capital and other items
|
|
5,335
|
|
|
(10,226)
|
Noncash adjustments
to net (loss) income
|
|
(632)
|
|
|
(468)
|
EBITDA
|
$
|
1,441
|
|
$
|
12,656
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-first-quarter-2015-results-300085129.html
SOURCE Dawson Geophysical Company