UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (date of earliest event reported): August 1, 2007
DAWSON GEOPHYSICAL COMPANY
(Exact name of Registrant as specified in its charter)
| TEXAS (State of incorporation or organization) |
0-10144 (Commission file number) |
75-0970548 (I.R.S. employer identification number) |
| 508 W. WALL, SUITE 800 MIDLAND, TEXAS (Address of principal executive offices) |
79701 (Zip code) |
Registrant’s telephone number, including area code: (432) 684-3000
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On August 1, 2007, Dawson Geophysical Company (the “Company”) issued a press release reporting
its operating results for the quarter ended June 30, 2007, the third quarter of its 2007 fiscal
year.
The Company hereby incorporates by reference into this Item 2.02 the information set forth in
such press release, a copy of which is furnished as Exhibit 99.1 to this Current Report. Pursuant
to the rules and regulations of the Securities and Exchange Commission, such exhibit and the
information set forth therein and herein are deemed to be furnished and shall not be deemed to be
“filed” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
In accordance with General Instruction B.2 of Form 8-K, the information set forth in the
attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for
purposes of the Exchange Act.
| Exhibit | ||
| Number | Description | |
99.1
|
Press release dated August 1, 2007. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DAWSON GEOPHYSICAL COMPANY |
||||
| Date: August 1, 2007 | By: | /s/ Christina W. Hagan | ||
| Christina W. Hagan | ||||
| Executive Vice President, Secretary and Chief Financial Officer |
||||
INDEX TO EXHIBITS
| Exhibit | ||
| Number | Description | |
99.1
|
Press release dated August 1, 2007. |
Exhibit 99.1
Dawson Geophysical Reports Third Quarter and Nine Months Results
MIDLAND, Texas, August 1, 2007 /PRNewswire/ — 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.
Operations
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.
DAWSON GEOPHYSICAL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
STATEMENTS OF OPERATIONS
(UNAUDITED)
| 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
Balance Sheets
| June 30, | September 30, | |||||||
| 2007 | 2006 | |||||||
| (Unaudited) | ||||||||
ASSETS |
||||||||
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 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
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 | ||||||
Deferred 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; 5,000,000 shares 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 Company, +1-800-332-9766
http://www.dawson3d.com
Midland, Texas • 432-684-3000 • Houston, Texas 713-917-6772 • Denver, Colorado 303-409-7787 • Oklahoma City, Oklahoma • 405-848-7512
www.dawson3d.com • 800-D-DAWSON
Copyright © 2004, Dawson Geophysical Company. All rights reserved.
No portion may be reproduced without written permission of Dawson Geophysical Company
No portion may be reproduced without written permission of Dawson Geophysical Company