MIDLAND, Texas, July 31 /PRNewswire-FirstCall/ -- Dawson Geophysical
Company (Nasdaq: DWSN) today reported revenues of $84,568,000 for the quarter
ending June 30, 2008, the Company's third fiscal quarter of 2008, compared to
$68,637,000 for the same quarter in fiscal 2007, an increase of 23 percent.
Revenue growth in the quarter was primarily the result of the addition of a
new seismic data acquisition crew in September 2007, the replacement of an I/O
MRX recording system with an ARAM ARIES recording system on an existing crew
in April 2008, the redeployment of the I/O MRX recording system on a new crew
in May 2008, increased channel count, and productivity on existing crews.
Net income for the third quarter of fiscal 2008 was $9,707,000, compared
to $7,561,000 in the same quarter of fiscal 2007, an increase of 28 percent.
Earnings per share for the third quarter of fiscal 2008 were $1.27 per share,
compared to $0.99 per share in the same quarter of fiscal 2007. EBITDA for the
third quarter of fiscal 2008 was $22,397,000 compared to $17,700,000 in the
same quarter of fiscal 2007, an increase of 26.5 percent. Included in the
third quarter results is a 35 percent increase in depreciation charges from
the prior year period reflecting the Company's continued capital investment
and growth.
The Company's third quarter results reflect continued brisk domestic
exploration activities by the Company's clients, particularly those clients
seeking natural gas reserves. Revenues in the third quarter of fiscal 2008
continued to include 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 in the Appalachian Basin,
Arkansas, Val Verde Basin of Texas, and in Eastern Oklahoma. The Company is
reimbursed for these expenses by its clients.
Stephen Jumper, President and CEO of Dawson Geophysical Company said,
'Increased demand for higher subsurface resolution and lower finding and
development costs by our clients fueled record third quarter and nine months
results. This success further led to the fielding of an additional crew, our
sixteenth, in May 2008 by redeploying an existing I/O MRX recording system.
This crew has a smaller channel count and is initially committed to large
scale 2D and smaller 3D seismic projects in the Appalachian Basin.'
During the quarter, the Company took delivery of seven ION vibrator energy
source units ordered in the second quarter. The Company now operates in
excess of 115,000 channels and 143 vibrator energy source units.
Nine Months Results
For the nine months ended June 30, 2008, revenues were $240,530,000,
compared to $182,226,000 for the same period in 2007, an increase of 32
percent. Net income for the first nine months of fiscal 2008 increased 40
percent to $25,703,000, compared to $18,364,000 for the first nine months of
fiscal 2007. Earnings per share for the first nine months of fiscal 2008 were
$3.35 as compared to $2.42 for the first nine months of fiscal 2007, an
increase of 38 percent. EBITDA was $59,595,000 in the first nine months of
fiscal 2008 versus $43,329,000 during the same period of fiscal 2007, an
increase of 37.5 percent.
Demand for the Company's services continues at a high level. Although the
Company's clients may cancel their service contracts on short notice, the
Company's order book remains strong, reflecting commitments to operate at full
capacity on all crews through the end of calendar 2008 and on a number of
crews well into calendar 2009. Operations are currently active on projects in
West Texas, South Texas, East Texas, the Barnett Shale of the Ft. Worth Basin,
the Fayetteville Shale in Arkansas, the Rocky Mountains, New Mexico, Oklahoma,
Louisiana, California, and the Appalachian Basin.
Mr. Jumper said, 'Our strong performance and continued ability to deliver
value for our clients is a reflection of the strength of our people, the depth
of our geophysical resources, and our success in helping clients understand
the geological complexities of their E&P assets. Our clients' desire for
higher resolution subsurface images with improved efficiency and channel count
growth will continue to drive our earnings and revenues as they did in the
third fiscal quarter and nine month period.'
About Dawson Geophysical Company
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.
Forward Looking Statement
This press release contains information about the Company's EBITDA, a
non-GAAP financial measure. The Company defines EBITDA as net income 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, 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 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, dependence upon energy industry spending, the
volatility of oil and gas prices, high fixed cost of operations, weather
interruptions, the ability to obtain land access rights of way, industry
competition, the ability to manage growth, and the availability of capital
resources. 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, 2007. 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 June 30, Nine Months Ended June 30,
2008 2007 2008 2007
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating revenues $84,568,000 $68,637,000 $240,530,000 $182,226,000
Operating costs:
Operating expenses 60,457,000 49,825,000 176,111,000 135,157,000
General and
administrative 1,649,000 1,532,000 5,192,000 4,585,000
Depreciation 6,317,000 4,685,000 17,722,000 12,853,000
68,423,000 56,042,000 199,025,000 152,595,000
Income from
operations 16,145,000 12,595,000 41,505,000 29,631,000
Other income
(expense):
Interest income 76,000 190,000 410,000 616,000
Interest expense (116,000) - (316,000) -
Other (141,000) 230,000 (42,000) 229,000
Income before income
tax 15,964,000 13,015,000 41,557,000 30,476,000
Income tax expense:
Current (4,981,000) (4,502,000) (13,631,000) (9,567,000)
Deferred (1,276,000) (952,000) (2,223,000) (2,545,000)
(6,257,000) (5,454,000) (15,854,000) (12,112,000)
Net income $9,707,000 $7,561,000 $25,703,000 $18,364,000
Net income per
common share $1.27 $0.99 $3.35 $2.42
Net income per
common share-
assuming dilution $1.26 $0.98 $3.33 $2.40
Weighted average
equivalent common
shares outstanding 7,668,651 7,622,755 7,665,253 7,589,022
Weighted average
equivalent common
shares outstanding-
assuming dilution 7,733,076 7,695,371 7,727,205 7,660,053
DAWSON GEOPHYSICAL COMPANY
BALANCE SHEETS
June 30, September 30,
2008 2007
(Unaudited)
ASSETS
Current assets:
Cash and cash
equivalents $12,834,000 $14,875,000
Accounts
receivable, net
of allowance
for doubtful
accounts of
$216,000 and
$176,000 in 2008
and 2007
respectively 74,784,000 56,707,000
Prepaid expenses
and other assets 1,103,000 815,000
Current deferred
tax asset 697,000 693,000
Total current
assets 89,418,000 73,090,000
Property, plant and
equipment 245,597,000 207,427,000
Less accumulated
depreciation (96,806,000) (84,655,000)
Net property,
plant and
equipment 148,791,000 122,772,000
$238,209,000 $195,862,000
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $14,807,000 $12,816,000
Accrued
liabilities:
Payroll costs
and other taxes 1,612,000 2,325,000
Other 13,804,000 14,263,000
Deferred revenue 645,000 2,922,000
Line of credit 20,000,000 5,000,000
Total current
liabilities 50,868,000 37,326,000
Deferred tax
liability 11,609,000 9,381,000
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,
7,764,494 and
7,658,494 shares
issued and
outstanding in
each period 2,588,000 2,553,000
Additional paid-in
capital 86,137,000 85,090,000
Retained earnings 87,007,000 61,512,000
Total
stockholders'
equity 175,732,000 149,155,000
$238,209,000 $195,862,000
Reconciliation of
EBITDA to Net Income
Three Months Ended Nine Months Ended
June 30, June 30,
2008 2007 2008 2007
Net Income $9,707,000 $7,561,000 $25,703,000 $18,364,000
Depreciation 6,317,000 4,685,000 17,722,000 12,853,000
Interest expense 116,000 - 316,000 -
Income tax expense 6,257,000 5,454,000 15,854,000 12,112,000
EBITDA $22,397,000 $17,700,000 $59,595,000 $43,329,000
Reconciliation of
EBITDA to Net Cash
Provided by Operating
Activities
Nine Months Ended
June 30,
2008 2007
Net cash provided by
operating activities $30,605,000 $30,502,000
Changes in working
capital items and
other 29,818,000 12,718,000
Non-cash adjustments
to income (828,000) 109,000
EBITDA $59,595,000 $43,329,000
SOURCE Dawson Geophysical Company
