Dawson Geophysical Reports Fiscal Second Quarter And Six-Month 2013 Results

 Dawson Geophysical Reports Fiscal Second Quarter And Six-Month 2013 Results

Company Generates a 16 and 21 Percent Increase in EBITDA for the Second
Quarter and Six Month Period, Respectively

PR Newswire

MIDLAND, Texas, May 7, 2013

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

  oEBITDA 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;
  oIncome from operations for the quarter-ended March 31, 2013 increased to
    $10,598,000 compared to $9,446,000 for the quarter-ended March31, 2012,
    an increase of 12 percent;
  oNet 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;
  oReported revenues for the quarter-ended March 31, 2013 of $83,350,000
    compared to $85,546,000 in the second fiscal quarter of 2012;
  oRevenues net of third-party reimbursable charges increased 14 percent in
    the second fiscal quarter of 2013 compared to the second fiscal quarter of
    2012;
  oEBITDA 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;
  oIncome 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;
  oNet 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;
  oReported revenues for the six months ended March 31, 2013 of $159,979,000
    compared to $177,928,000 in the same period of 2012;
  oRevenues net of third-party reimbursable charges for the six months ended
    March 31, 2013 increased 12 percent from the same period of fiscal 2012;
  oEnded with approximately $67 million of working capital at March 31,
    2013;
  oBalanced 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;
  oDeployed small channel count crew utilizing the Wireless Seismic RT 2000
    recording system;
  oReplaced an I/O RSR recording system with 12,000 channel Geospace GSR
    cable-less recording system in the first fiscal quarter of 2013;
  oSecured contracts to perform surface microseismic surveys in West Texas
    and East Texas and completed one in April;
  oHired a Manager of Microseismic Operations, and
  oCompleted 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:

  othe financial performance of its assets without regard to financing
    methods, capital structures, taxes or historical cost basis;
  oits 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
  othe 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 September30, 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    Six Months Ended March 31,
                        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          3,508,000     2,920,000     7,104,000      5,476,000
administrative
 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    10,581,000    9,412,000     15,640,000     12,507,000
tax
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   0.78        0.71        1.15          1.11
stock
Diluted income          $        $        $        $     
attributable to common   0.78        0.70        1.14          1.11
stock
Weighted average
equivalent common       7,861,204     7,841,362     7,855,284      7,836,787
shares outstanding
Weighted average
equivalent common
shares                  7,901,636     7,896,949     7,888,906      7,885,590
outstanding-assuming
dilution



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,     67,047,000       53,719,000
2013 and September 30, 2012
 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     10,026,000       9,131,000
obligations under capital leases
 Total current liabilities             36,759,000       39,369,000
Long-term liabilities:
Notes payable and obligations under capital 7,892,000        11,179,000
leases less current maturities
 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 2,684,000        2,677,000
March 31, 2013 and September 30, 2012,
respectively
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'   $ 289,468,000   $ 279,175,000
equity



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),    155          130        330           277
net
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          Three Months Ended     Six Months Ended
Operating Activities
                              March 31,               March 31,
                              2013         2012       2013          2012
                              (in thousands)          (in thousands)
Net cash provided by          $   3,399  $ 22,404   $  12,413    $ 20,906
operating activities
Changes in working capital    17,332       (4,418)    23,296        8,669
and other items
Noncash adjustments to income (417)        (466)      (1,057)       (1,027)
EBITDA                        $  20,314   $ 17,520   $  34,652    $ 28,548



SOURCE Dawson Geophysical Company

Website: http://www.dawson3d.com