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Dawson Geophysical Reports Third Quarter and Nine Months Results

MIDLAND, Texas, Aug 01, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Dawson Geophysical Company (Nasdaq: DWSN) today reported record revenues of $68,637,000 for the quarter ending June 30, 2007, the Company's third fiscal quarter of 2007, compared to $41,524,000 for the same quarter in fiscal 2006, an increase of 65 percent. Revenue growth in the quarter was primarily the result of the addition of two seismic data acquisition crews during fiscal 2006 and another in April 2007, increased channel count and productivity on existing crews, improved pricing, and more favorable contract terms. Revenues in the third quarter of fiscal 2007 included a substantial increase in third party charges related to the use of helicopter support services, specialized survey technologies, and dynamite energy sources as compared to the third quarter of fiscal 2006. The increase in 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.

Net income for the third quarter of fiscal 2007 was $7,561,000, the highest in the Company's history compared to $4,241,000 in the same quarter of fiscal 2006, an increase of 78 percent. Earnings per share for the third quarter of fiscal 2007 were $0.99 per share, compared to $0.56 per share in the same quarter of fiscal 2006. EBITDA for the third quarter of fiscal 2007 was $17,700,000 compared to $10,095,000 in the same quarter of fiscal 2006, an increase of 75 percent.

Increasing Capital Investment

The Company's Board of Directors has increased the previously reported fiscal 2007 capital budget by $16,900,000 to $55,000,000. During the third quarter, the Company took delivery of eight new I/O vibrator energy source units, two 5,000 channel Aram recording systems, and one 9,500 channel Aram recording system. The 9,500 channel Aram system was deployed by the Company in July as a replacement for an existing I/O System II MRX recording system. One of the 5,000 channel Aram systems will replace an existing I/O System II MRX in August. The Company anticipates deploying the other 5,000 channel Aram system on a new data acquisition crew, the Company's fifteenth, to be fielded in the fall. The Company currently owns in excess of 102,000 recording channels and 113 vibrator energy source units.


Third quarter results reflect continued brisk domestic exploration activities by the Company's clients, particularly those client's seeking natural gas. Inclement weather conditions had a negative effect on operations in early April and late June continuing into July.

Demand for the Company's data acquisition and processing services continues at an all-time high. Although the Company's clients may cancel their service contracts on short notice, the Company's order book reflects commitments through the end of calendar 2007 for all fourteen crews and into calendar 2008 on several crews. Operations are currently active on projects in West Texas, South Texas, New Mexico, the Barnett Shale of the Ft. Worth Basin,

the Fayetteville Shale in Arkansas, the Rocky Mountains, Oklahoma, and the Appalachian Basin.

Nine Months Results

For the nine months ended June 30, 2007, revenues were $182,226,000, compared to $117,059,000 for the same period in 2006, an increase of 56 percent. Net income for the same nine months increased 69 percent to $18,364,000 in 2007, compared to $10,892,000 in 2006. Earnings per share for the first nine months of fiscal 2007 were $2.42 as compared to $1.45 for the first nine months of fiscal 2006, an increase of 67 percent. EBITDA was $43,329,000 in the first nine months of fiscal 2007 versus $26,406,000 during the same period of fiscal 2006, an increase of 64 percent.

Stephen Jumper, President and CEO of Dawson Geophysical said, "We are pleased to report another excellent quarter. Our strong performance and continued momentum reflect 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."

About Dawson Geophysical

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 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 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 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, dependence upon energy industry spending, the volatility of oil and gas prices, weather interruptions, the ability to manage growth, the ability to obtain land access rights of way 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, 2006. 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.


                      Three Months Ended June 30, Nine Months Ended June 30,
                             2007        2006         2007         2006

    Operating revenues   $68,637,000 $41,524,000  $182,226,000 $117,059,000
    Operating costs:
      Operating expenses  49,825,000  30,378,000   135,157,000   87,625,000
      General and
       administrative      1,532,000   1,117,000     4,585,000    3,558,000
      Depreciation         4,685,000   3,393,000    12,853,000    9,557,000
                          56,042,000  34,888,000   152,595,000  100,740,000

    Income from
     operations           12,595,000   6,636,000    29,631,000   16,319,000
    Other income:
      Interest income        190,000     147,000       616,000      475,000
      Other income (expense) 230,000    (81,000)       229,000       55,000
      Income before
       income tax         13,015,000   6,702,000    30,476,000   16,849,000

    Income tax expense:
      Current            (4,502,000) (1,543,000)   (9,567,000)   (3,385,000)
      Deferred             (952,000)   (918,000)   (2,545,000)   (2,572,000)

    Net income            $7,561,000  $4,241,000   $18,364,000  $10,892,000

    Net income per
     common share              $0.99       $0.56         $2.42        $1.45

    Net income per common
     share-assuming dilution   $0.98       $0.56         $2.40        $1.44

    Weighted average equivalent
     common shares
     outstanding           7,622,755   7,535,615     7,589,022    7,508,871

    Weighted average
     equivalent common
     shares outstanding-
     assuming dilution     7,695,371   7,614,507     7,660,053     7,586,117

         Dawson Geophysical Company
               Balance Sheets
                                                 June 30,       September 30,
                                                   2007              2006
    Current assets:
                 Cash and cash
                  equivalents                   $1,587,000        $8,064,000
                 Short-term investments                  -         6,437,000
                 Accounts receivable, net
                  of allowance
                  for doubtful
                  accounts of
                  $300,000 in
                  June 2007
                  and $148,000 in
                  September 2006                51,818,000        46,074,000
                 Prepaid expenses and
                  other assets                     979,000           690,000
                 Current deferred tax
                  asset                            810,000         1,619,000

                      Total current assets      55,194,000        62,884,000

    Property, plant and equipment              208,682,000       160,740,000
                  Less accumulated
                   depreciation                (86,429,000)      (74,206,000)

                      Net property, plant
                       and equipment           122,253,000        86,534,000

                                              $177,447,000      $149,418,000

    Current liabilities:
                   Accounts payable            $18,863,000       $16,280,000
                   Accrued liabilities:
                    Payroll costs
                     and other taxes             1,044,000         1,958,000
                    Other                        7,759,000         4,195,000
                     revenue                     1,914,000           863,000

                      Total current
                       liabilities              29,580,000        23,296,000

    Deferred tax liability                       8,651,000         6,914,000

    Stockholders' equity:
          Preferred stock-par
           value $1.00 per share;
           authorized, none outstanding                  -                 -
          Common stock-par value
           $.33 1/3 per share;
           50,000,000 shares authorized,
           7,623,744 and 7,549,244
           shares issued and outstanding
           in each period                        2,541,000         2,517,000
          Additional paid-in capital            83,957,000        82,370,000
          Other comprehensive expense,
           net of tax                                    -           (33,000)
          Retained earnings                     52,718,000        34,354,000

                      Total stockholders'
                       equity                  139,216,000       119,208,000

                                              $177,447,000      $149,418,000

    Reconciliation of EBITDA to Net Income
                                          Three Months Ended Nine Months Ended
                                               June 30,          June 30,
                                            2007     2006     2007     2006
                                             (in thousands)    (in thousands)
    Net Income                              $7,561   $4,241  $18,364  $10,892
    Depreciation                             4,685    3,393   12,853    9,557
    Interest expense                             -        -        -        -
    Income tax expense                       5,454    2,461   12,112    5,957
    EBITDA                                 $17,700  $10,095  $43,329  $26,406

    Reconciliation of EBITDA to Net Cash Provided by Operating
    Activities                                           Nine Months Ended
                                                              June 30,
                                                     2007              2006
                                                          (in thousands)
    Net cash provided by operating
     activities                                     $30,502           $20,689
    Changes in working capital items and
     other                                           13,301             6,307
    Non-cash adjustments to income                     (474)             (590)
    EBITDA                                          $43,329           $26,406

SOURCE Dawson Geophysical Company

L. Decker Dawson, Chairman, or Stephen C. Jumper, CEO and President, or Christina W.
Hagan, Chief Financial Officer, all of Dawson Geophysical, 800-332-9766, or

Stock Information

DWSN (Common Stock)
0.00 (0.00%)
Last Trade
04/19/18 3:59 p.m. ET
On February 11, 2015, Dawson completed a strategic business combination with TGC Industries Inc. formerly listed as TGE

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