Dawson Geophysical Reports Fiscal Fourth Quarter And Year-End Results 2013

  Dawson Geophysical Reports Fiscal Fourth Quarter And Year-End Results 2013

PR Newswire

MIDLAND, Texas, Nov. 13, 2013

MIDLAND, Texas, Nov.13, 2013 /PRNewswire/ --Dawson Geophysical Company
(NASDAQ: DWSN) today reported fourth quarter and year-end results for fiscal
2013.

Fiscal 2013 Highlights

  oEBITDA for the year-ended September30, 2013 increased to $57,262,000
    compared to $49,615,000 for the same period of fiscal 2012, an increase of
    15 percent;
  oIncome from operations for fiscal 2013 increased 22 percent to $20,180,000
    from $16,601,000 in fiscal 2012;
  oNet income for the year-ended September30, 2013 of $10,480,000, or $1.31
    per share attributable to common stock, compared to net income of
    $11,113,000, or $1.40 per share attributable to common stock in fiscal
    2012. Included in the fiscal 2012 results is an $0.18 per share one-time
    tax benefit related to a terminated merger agreement in fiscal 2011;
  oRevenues of $305,299,000 for the year-ended September30, 2013 compared to
    $319,274,000 for the year-ended September30, 2012;
  oRevenues net of third-party reimbursable charges increased 9 percent in
    fiscal 2013 from fiscal 2012;
  oFiscal 2013 capital expenditures of $50,069,000 compared to $47,664,000 in
    fiscal 2012;
  oPurchased 12,000 single-channel Geospace GSX units, 1,000 three-channel
    GSX units, 2,500 channels of the Wireless Seismic RT System 2 recording
    system and 10 INOVA vibrator energy source units to increase recording
    capacity and improve efficiency;
  oDeployed a small crew equipped with 2,500 channels of the Wireless Seismic
    RT System 2 recording system for small 2D and 3D projects as well as
    microseismic applications;
  oEntered into the surface recording microseismic business line;
  oCompleted first winter season of operations in Canada;
  oBalanced portfolio of projects primarily in the Eagle Ford Shale, Niobrara
    Shale, Bakken Shale, Marcellus Shale, Permian Basin including the Cline
    Shale and Wolfcamp areas, and Mississippi Lime of Kansas and Oklahoma; and
  oApproximately $79 million of working capital at September30, 2013.

The Company reported revenues of $69,673,000 for the quarter-ended
September30, 2013, the Company's fourth quarter of fiscal 2013, compared to
$72,998,000 for the same quarter in fiscal 2012. The Company reported a net
loss for the fourth quarter of fiscal 2013 of $2,790,000, or $0.35 per share
attributable to common stock, compared to earnings of $1,152,000, or $0.14 per
share attributable to common stock, in the same quarter of fiscal 2012. EBITDA
for the fourth quarter of fiscal 2013 was $6,635,000 compared to $10,630,000
in the same quarter of fiscal 2012.

Revenues for the year-ended September30, 2013 decreased over the same period
of fiscal 2012 primarily as a result of a continued reduction in third-party
reimbursable charges as a percentage of revenue and lower utilization rates in
the fourth fiscal quarter of 2013. Third-party charges, which are included in
revenues, continued to decline as a percentage of revenues during fiscal 2013
to a level below the Company's historical average for such charges. In fiscal
2013 third-party charges decreased 38 percent as compared to fiscal 2012.
Third-party charges are related to the Company's use of helicopter support
services, specialized survey technologies and dynamite energy sources in areas
of limited access. The Company is reimbursed for these expenses by its
clients. The decline in third-party charges is primarily a result of the
Company's movement of operations toward the more open terrain of the western
United States. Without the effect of third-party charges, the Company's
revenues in fiscal 2013 increased 9 percent as compared with the previous
fiscal year. Revenues for the fiscal 2013 fourth quarter decreased over the
same period of fiscal 2012 primarily as a result of lower utilization rates
during the fourth fiscal quarter of 2013.

As anticipated in the Company's third fiscal quarter earnings press releases
and subsequent September operations update press release, the Company
experienced lower utilization rates during fourth fiscal quarter of 2013 as
crews were affected by project readiness issues due to agricultural operations
in key regions, weather delays, land access permit issues and a softness in
bid activity during the third fiscal quarter of 2013. Utilization rates were
also affected by increasing crew efficiencies driven by improved processes and
recent equipment purchases. In several instances during the third fiscal
quarter of 2013, the Company's data acquisition crews completed projects ahead
of schedule and were idled as additional projects were in preparatory and/or
permitting phases. While these early project completions have a negative
impact on utilization, the Company believes that these increased crew
efficiencies may enable the Company to increase its overall capacity going
forward.

As a result of the factors discussed above, the Company operated the
equivalent of eight crews during the fourth fiscal quarter of 2013 into the
first quarter of fiscal 2014. As previously disclosed, the Company maintains
equipment and personnel required to operate twelve large channel count crews
and one small crew which will be utilized for small 2D and 3D projects along
with microseismic applications. The Company anticipates a return to full
utilization with the operation of twelve large channel crews in the U.S. and
one crew in Canada by the middle of the first fiscal quarter of 2014.

Included in the Company's fiscal 2012 results is a $0.18 per share one-time
tax benefit, taken in the first fiscal quarter of 2012, related to transaction
costs for a terminated merger agreement in fiscal 2011. Also reflected in the
fourth fiscal quarter and year-end of 2013 results were increases in
depreciation expense of $776,000 and $4,597,000, respectively, from the prior
year periods. The increase in depreciation expenses was related to the
Company's investment in additional recording equipment and energy source units
over the past 24 months.

Stephen Jumper, President and CEO of Dawson Geophysical Company said, "Steady
demand for services fueled our fiscal 2013 results. As a result, both income
from operations and EBITDA for the year increased significantly despite
decreased revenue from the prior year. We believe that the decrease in 2013
revenue is not a reflection of decreasing geophysical demand, but rather, a
product of both lower third-party charges as a percentage of revenue and the
reduction in utilization experienced during the fourth quarter of the fiscal
year. Our Company continues to realize improved results and returns on the
investments made since fiscal 2011. Our increased efficiencies and crew
productivity have us well positioned to capture more upside as market
conditions improve."

Market conditions have fluctuated since the beginning of the third fiscal
quarter of 2013 with a period of increased request for proposal activity early
in the fourth quarter following soft activity levels in the third quarter. Bid
activity and our order book strength indicate a return to higher utilization
in the first fiscal quarter of 2014. The order book contains projects
primarily in oil and liquids-rich basins such as the Bakken, Niobrara,
Mississippi Lime, Permian, Eagle Ford and Marcellus Shale areas. In addition,
the Company's wholly-owned subsidiary, Dawson Seismic Services ULC, has been
awarded two multi-component projects in Canada. The Company anticipates
operating one crew in Canada on two projects for part of the winter season.
Although clients may cancel, modify or delay their contracts on short notice,
the Company's order book reflects commitments sufficient to maintain full
operation of twelve large channel count crews and one small channel count crew
into the middle of fiscal 2014. As always, the Company remains subject to
delays related to weather, securing land access permits and other factors,
which can affect operating results from quarter to quarter.

Capital expenditures for fiscal 2013 totaled $50,069,000 as compared to
$47,664,000 in fiscal 2012. The expenditures in fiscal 2013 included 12,000
single-channel Geospace GSX units, 1,000 three-channel Geospace GSX units,
2,500 channels of the Wireless Seismic RT System 2 recording system, ten INOVA
vibrator energy source units, additional geophones, and vehicles, along with
maintenance capital requirements. The Company anticipates a capital budget in
fiscal 2014 of approximately $35,000,000, which includes purchases of
additional cable-less recording equipment and energy source units, Canadian
operation capital requirements and maintenance capital requirements. As
announced in early October, the Company placed an order for 9,000 stations of
three component GSX equipment and has begun taking delivery. This equipment
will be utilized on several multicomponent projects in the United States and
Canada.

Jumper said, "Implementation of new technologies has played a big role in our
financial and operational success in 2013. Improved subsurface resolution and
increased data from investments in these technologies is enabling our clients
to make even more informed drilling decisions. Equally important, we are
providing data that allows our clients to make decisions across all phases of
the demand cycle, from exploration to evaluation to exploitation. As we move
into fiscal 2014, we will continue to invest in technologies that provide our
clients with the most robust data and subservice resolutions while, at the
same time, generate strong returns for Dawson Geophysical."

The Company's balance sheet remains strong with approximately $79,000,000 of
working capital, $13,000,000 of debt, $76,000,000 of cash and cash equivalents
and short-term investments, and $115,000,000 of retained earnings. In
addition, the Company has $20,000,000 available under its undrawn revolving
line of credit. The Company anticipates financing its recent purchase of GSX
equipment with a mixture of cash and debt.

Jumper concluded, "While our results in the fourth quarter were negatively
impacted by circumstances from July through October, we believe those issues
will be resolved in the first fiscal quarter of 2014. Challenges in the North
American market are slowly starting to give way to new opportunities. Lower
utilization rates primarily in the Permian Basin are showing signs of
improvement as we move into the fiscal first quarter of 2014. The Canadian
market for this winter season appears to be softer than anticipated but
remains a long-term growth opportunity. Our microseismic business we believe
will continue to provide growth opportunities. We continue to work on right
sizing our crew count relative to project readiness concerns and reducing
operating costs in an effort to maximize returns. We maintain a superior
balance sheet and will evaluate growth opportunities as they present
themselves."

Conference Call Information

Dawson will host a conference call to review its fiscal year-end and fourth
quarter 2013 financial results on November13, 2013, at 9 a.m. CST.
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 Monday, November18, 2013 by
dialing (877)344-7529 (US/Canada) or (412)317-0088 (International). The
passcode is 10036914. The webcast will be recorded and available for replay on
Dawson's website until December13, 2013.

About Dawson

Dawson Geophysical Company is a leading provider of U.S. onshore seismic data
acquisition services in the lower 48 states of the United States. 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:

  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 (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.

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          Twelve Months Ended
                          September 30,               September 30,
                          2013           2012         2013         2012
                          (Unaudited)    (Unaudited)  (Unaudited)
Operating revenues        $             $           $            $
                          69,673,000    72,998,000  305,299,000  319,274,000
Operating costs:
 Operating expenses     59,740,000     59,302,000   234,660,000  258,970,000
 General and            3,214,000      3,159,000    13,364,000   11,205,000
administrative
 Depreciation           9,182,000      8,406,000    37,095,000   32,498,000
                          72,136,000     70,867,000   285,119,000  302,673,000
(Loss) income from        (2,463,000)    2,131,000    20,180,000   16,601,000
operations
Other income (expense):
 Interest income        14,000         12,000       63,000       28,000
 Interest expense       (136,000)      (207,000)    (660,000)    (629,000)
 Other (expense)        (84,000)       93,000       (13,000)     516,000
income
(Loss) income before      (2,669,000)    2,029,000    19,570,000   16,516,000
income tax
Income tax benefit
(expense):
 Current                117,000        (298,000)    (817,000)    (490,000)
 Deferred               (238,000)      (579,000)    (8,273,000)  (4,913,000)
Net (loss) income        $            $         $          $  
                          (2,790,000)   1,152,000    10,480,000  11,113,000
Basic (loss) income       $        $       $       $     
attributable to common     (0.35)         0.14      1.31      1.40
stock
Diluted (loss) income     $        $       $       $     
attributable to common     (0.35)         0.14      1.31      1.39
stock
Weighted average
equivalent common shares  7,933,903      7,846,769    7,879,614    7,841,722
outstanding
Weighted average
equivalent commonshares
outstanding-assuming      7,933,903      7,864,697    7,920,365    7,877,107
dilution



DAWSON GEOPHYSICAL COMPANY
CONSOLIDATED BALANCE SHEETS
                                              September 30,    September 30,
                                              2013             2012
                                              (Unaudited)
ASSETS
Current assets:
 Cash and cash equivalents                  $  52,405,000  $  57,373,000
 Short-term investments                     23,500,000       4,000,000
 Accounts receivable, net of allowance for
 doubtful accounts of $250,000 at
September 30, 2013 and
 September 30, 2012                      37,488,000       53,719,000
 Prepaid expenses and other assets          737,000          762,000
 Current deferred tax asset                 1,664,000        1,925,000
 Total current assets                 115,794,000      117,779,000
Property, plant and equipment                 325,464,000      326,030,000
 Less accumulated depreciation              (152,231,000)    (164,634,000)
 Net property, plant and equipment       173,233,000      161,396,000
 Total assets                         $ 289,027,000   $ 279,175,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                           $  15,880,000  $  18,544,000
 Accrued liabilities:
 Payroll costs and other taxes           1,850,000        1,802,000
 Other                                   6,154,000        6,425,000
 Deferred revenue                           3,438,000        3,467,000
 Current maturities of notes payable and
obligations
 under capital leases                     9,258,000        9,131,000
 Total current liabilities            36,580,000       39,369,000
Long-term liabilities:
 Notes payable and obligations under
capital leases
 less current maturities                 3,697,000        11,179,000
 Deferred tax liability                     35,690,000       27,678,000
 Total long-term liabilities          39,387,000       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, 8,056,943
 and 8,031,369 shares issued and
outstanding at
 September 30, 2013 and September 30,    2,686,000        2,677,000
2012, respectively
 Additional paid-in capital                 94,846,000       93,224,000
 Retained earnings                         115,528,000      105,048,000
 Total stockholders' equity           213,060,000      200,949,000
 Total liabilities and stockholders'  $ 289,027,000    $ 279,175,000
equity



Reconciliation of EBITDA to Net (Loss) Income
                          Three Months Ended         Twelve Months Ended
                          September 30,               September 30,
                          2013           2012         2013         2012
                          (in thousands)              (in thousands)
Net (loss) income         $         $       $       $     
                          (2,790)        1,152     10,480      11,113
Depreciation              9,182          8,406        37,095       32,498
Interest expense          122            195          597          601
(income), net
Income tax expense       121            877          9,090        5,403
EBITDA                    $        $       $       $     
                          6,635         10,630      57,262      49,615
Reconciliation of EBITDA to Net Cash Provided by
Operating
Activities
                          Three Months Ended         Twelve Months Ended
                          September 30,               September 30,
                          2013           2012         2013         2012
                          (in thousands)              (in thousands)
Net cash provided by      $         $       $       $     
operating activities      20,986        18,376      70,579      76,380
Changes in working        (13,972)       (7,292)      (11,457)     (24,949)
capital and other items
Noncash adjustments to    (379)          (454)        (1,860)      (1,816)
income
EBITDA                    $        $       $       $     
                          6,635         10,630      57,262      49,615



SOURCE Dawson Geophysical Company

Website: http://www.dawson3d.com