UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (date of earliest event reported): December 3, 2014
DAWSON GEOPHYSICAL COMPANY
(Exact name of Registrant as specified in its charter)
| TEXAS | 001-34404 | 75-0970548 | ||
| (State of incorporation or organization) |
(Commission file number) |
(I.R.S. employer identification number) | ||
| 508 W. WALL, SUITE 800 MIDLAND, TEXAS |
79701 | |||
| (Address of principal executive offices) | (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):
| x | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure. |
As previously announced, Stephen Jumper, the President and Chief Executive Officer of Dawson Geophysical Company (“Dawson”), presented at the Cowen and Company 4th Annual Ultimate Energy Conference on Wednesday, December 3, in New York City. The presentation materials include information related to the previously disclosed proposed strategic business combination (the “proposed transaction”) between Dawson, Riptide Acquisition Corp. and TGC Industries, Inc. (“TGC”). A copy of the presentation materials is furnished as Exhibit 99.1 hereto.
Pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), the information set forth in this Item 7.01 and in the attached Exhibit is deemed to be “furnished” and shall not be deemed to be “filed” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference into any of Dawson’s filings under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such filing.
| Item 8.01 | Other Events. |
The disclosure set forth above under “Item 7.01 Regulation FD Disclosure” is incorporated by reference into this Item 8.01.
Pursuant to the rules and regulations of the SEC, the attached Exhibit is deemed to be “furnished” and shall not be deemed to be “filed” under the Exchange Act, and shall not be deemed to be incorporated by reference into any of Dawson’s filings under the Securities Act or the Exchange Act whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such filing.
* * *
Important Information for Investors and Shareholders
The information contained in the Exhibit does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. The transactions contemplated by the merger agreement, including, with respect to Dawson, the proposed merger and, with respect to TGC, the proposed issuance of TGC common stock in the merger and an amendment to TGC’s certificate of formation, will, as applicable, be submitted to the shareholders of Dawson and TGC for their consideration. On November 6, 2014, TGC filed with the SEC a registration statement on Form S-4 that included a joint proxy statement of Dawson and TGC that also constitutes a prospectus of TGC. After the registration statement has been declared effective and subject to the terms of the merger agreement, Dawson and TGC will mail the joint proxy statement/prospectus to their respective shareholders. Dawson and TGC also plan to file other documents with the SEC regarding the proposed transaction. INVESTORS AND SECURITY HOLDERS OF DAWSON AND TGC ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and shareholders may currently obtain free copies of the joint proxy statement/prospectus filed on November 6, 2014, and will be able to obtain free copies of any amendments to the joint proxy statement/prospectus and other documents containing important information about Dawson and TGC, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Dawson and TGC make available free of charge at www.dawson3d.com and www.tgcseismic.com, respectively (in their “Investor Relations” sections), copies of materials they file with, or furnish to, the SEC, or investors and shareholders may contact Dawson at (432) 684-3000 or TGC at (972) 881-1099 or c/o Dennard-Lascar Associates at (713) 529-6600 to receive copies of documents that each company files with or furnishes to the SEC.
Participants in the Proxy Solicitation
Dawson, TGC, and certain of their respective directors and officers may be deemed to be participants in the solicitation of proxies from the shareholders of Dawson and TGC in connection with the proposed transactions. Information about the directors and officers of Dawson is set forth in its proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on December 18, 2013, as well as subsequent periodic reports filed with the SEC. Information about the directors and officers of TGC is set forth in the joint proxy statement/prospectus. These documents can be obtained free of charge from the sources indicated above. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the joint proxy statement/prospectus and may be contained in other relevant materials to be filed with the SEC when they become available.
Forward-Looking Statements
In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, Dawson cautions that statements in the Exhibit which are forward-looking and which provide other than historical information involve risks and uncertainties that may materially affect Dawson’s results of operations. Such forward-looking statements are based on the beliefs of management as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to the possibility that the proposed transaction does not close when expected or at all because required shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all; the risk that the benefits from the proposed transaction may not be fully realized or may take longer to realize than expected; the ability to promptly and effectively integrate the businesses of Dawson and TGC; the reaction of the companies’ customers, employees and counterparties to the transaction; diversion of management time on transaction-related issues; the volatility of oil and natural gas prices; dependence upon energy industry spending; industry competition; reduced utilization; delays, reductions or cancellations of service contracts; high fixed costs of operations and high capital requirements; external factors affecting Dawson’s or TGC’s crews such as weather interruptions and inability to obtain land access rights of way; whether either company enters into turnkey or dayrate contracts; crew productivity; the limited number of clients; credit risk related to clients; and the availability of capital resources. A discussion of these and other factors, including risks and uncertainties with respect to Dawson is set forth in Dawson’s Form 10-K for the fiscal year ended September 30, 2013. Dawson disclaims any intention or obligation to revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| 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 |
Description | |
| 99.1 | Dawson Geophysical Company’s Presentation at Cowen and Company’s 4th Annual Ultimate Energy Conference. | |
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: December 3, 2014 | By: | /s/ Christina W. Hagan | ||||
| Christina W. Hagan | ||||||
| Executive Vice President, Secretary and | ||||||
| Chief Financial Officer | ||||||
INDEX TO EXHIBITS
| Exhibit |
Description | |
| 99.1 | Dawson Geophysical Company’s Presentation at Cowen and Company’s 4th Annual Ultimate Energy Conference. | |
 December 2014
Investor Presentation
Exhibit 99.1 |
 Statements in
this presentation that relate to forecasts, estimates or other expectations regarding future
events, including without limitation, statements regarding the pending transaction,
technological advancements and the companies’
financial position, business strategy and plans and objectives of
management for future operations, may be deemed to be forward-looking statements within
the meaning of Section
27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. When
used in this presentation, words such as “anticipate,”
“believe,”
“estimate,”
“expect,”
“intend,”
and similar
expressions are intended to identify forward-looking statements. Such forward-looking
statements are based on the beliefs of management as well as assumptions made by and
information currently available to management. Actual results could differ materially
from those contemplated by the forward-looking statements as a result of certain
factors, including but not limited to the possibility that the transaction does not
close when expected or at all because required shareholder or other approvals and other
conditions to closing are not received or satisfied on a timely basis or at all; the risk that
the benefits from the transaction may not be fully realized or may take longer to
realize than expected; the ability to promptly and effectively integrate the businesses
of Dawson and TGC; the reaction of the companies’ customers, employees and
counterparties to the transaction; diversion of management time on
transaction-related issues; the volatility of oil and natural gas prices; dependence upon
energy industry spending; disruptions in the global economy; industry competition;
reduced utilization; delays, reductions or cancellations of service contracts; high
fixed costs of operations and high capital requirements; external factors affecting our
crews such as weather interruptions and inability to obtain land access rights of way;
the type of contracts we enter into; crew productivity; limited number of customers; credit
risk related to the companies’
customers; the availability of capital resources and operational disruptions. A discussion of
these and other factors, including risks and uncertainties with respect to Dawson is
set forth in Dawson’s Form 10-K for the fiscal year ended September 30, 2013,
and with respect to TGC, is set forth in TGC’s Form
10-K for the fiscal year ended December 31, 2013. Dawson and TGC disclaim any intention or
obligation to revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Nasdaq: DWSN
2 |
 Important
Information For Investors and Shareholders This presentation does not constitute an
offer to sell or the solicitation of an offer to buy any securities or a solicitation of any
vote or approval. The transactions contemplated by the merger agreement, including, with the
respect to Dawson, the proposed merger and, with respect to TGC, the proposed issuance
of TGC common stock in the merger and an amendment to TGC’s certificate of
formation, will, as applicable, be submitted to the shareholders of Dawson and TGC for their consideration.
On November 6, 2014, TGC filed with the Securities and Exchange Commission (SEC) a
registration statement on Form S-4 that included a joint proxy statement of Dawson
and TGC that also constitutes a prospectus of TGC. After the registration statement has
been declared effective and subject to the terms of the merger agreement, Dawson and TGC will mail the joint proxy
statement/prospectus to their respective shareholders. Dawson and TGC also plan to file other
documents with the SEC regarding the proposed transaction. INVESTORS AND SECURITY
HOLDERS OF DAWSON AND TGC ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND
OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION. Investors and shareholders may currently obtain free copies of the
joint proxy statement/prospectus filed on November 6, 2014 and will be able to obtain
free copies of any amendments to the joint proxy statement/prospectus and other
documents containing important information about Dawson and TGC, once such documents
are
filed
with
the
SEC,
through
the
website
maintained
by
the
SEC
at
www.sec.gov.
Dawson
and
TGC
make
available
free
of
charge
at
www.dawson3d.com
and
www.tgcseismic.com,
respectively
(in
the
"Investor
Relations"
section),
copies
of
materials
they file with, or furnish to, the SEC, or investors and shareholders may contact Dawson at
(432) 684-3000 or TGC at (972) 881- 1099
or
c/o
Dennard-Lascar
Associates
at
(713)
529-6600
to
receive
copies
of
documents
that
each
company
files
with
or
furnishes to the SEC.
Participants in the Merger Solicitation
Dawson, TGC, and certain of their respective directors and officers may be deemed to be
participants in the solicitation of proxies from the shareholders of Dawson and TGC in
connection with the proposed transactions. Information about the directors and officers
of Dawson is set forth in its proxy statement for its 2014 annual meeting of shareholders, which was filed
with the SEC on December 18, 2013, as well as subsequent periodic reports filed with the SEC.
Information about the directors and officers of TGC is set forth in the joint proxy
statement/prospectus. These documents can be obtained free of charge from the sources
indicated above. Other information regarding the participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise, will be contained in the
joint proxy statement/prospectus and other relevant materials to be filed with the SEC
when they become available. Nasdaq: DWSN
3 |
 |
 In business 62
years (founded 1952) Acquire and process seismic data
for the accounts of our clients
A leading provider of U.S. onshore
seismic data acquisition services
(2-D and 3-D)
Canadian-based operations
10 crews operating 178,500 channels
Diversified mix of oil and liquids-rich projects
Primarily turnkey contracts
Nasdaq: DWSN
5
Denver
Midland
Houston
Pittsburgh
Oklahoma City
Calgary |
 62-year
history enables Dawson Geophysical to navigate the cyclical nature of the
business Investments in technology and equipment upgrades generate
improved efficiencies
Robust equipment base drives opportunities for growth and leads
to improved contract terms
Geographic diversity fosters opportunities in multiple basins
Expertise in proprietary seismic solutions
Fiscally conservative management team
Nasdaq: DWSN
6 |
 Demand for
Dawson Geophysical services remains steady despite project readiness issues
Company deployed eight to twelve data acquisition crews in fiscal 2014
Order book sufficient to sustain deployment of nine to ten data
acquisition crews into calendar year 2015
Balance sheet strength remains strong with approximately $73,777,000
of working capital and approximately $11,685,000 of debt
Declared quarterly dividend of $0.08 per share in December 2014
2015 Capex anticipated to be at maintenance levels
Announced early termination of HSR waiting period and filing of joint
proxy statements/prospectus of Dawson Geophysical and TGC Industries
Nasdaq: DWSN
7 |
 E&P
company emphasis on exploration & developmental activities Seismic
sector
entering
a
new
phase
of
growth
with
an
increasing
portfolio
of
both exploration and developmental services
Continued emphasis on oil and liquids-rich projects with increasing
growth opportunities in the natural gas
Oil drives demand and creates opportunities for growth
Permian,
Delaware,
Mississippi
Lime
activity
creates
new
avenues
of
growth
Demand for high-resolution images
Increased channel count
Enhances subsurface resolution
Complex geological structures
Helps reduce dry-hole risk and optimize production
Advancements in technology
Increased utilization of cableless recording equipment
Nasdaq: DWSN
8 |
 Nasdaq: DWSN
9
Seismic data acquisition and processing is needed at all
stages of the exploration and production process
Map It
Lease It
Drill It
CONVENTIONAL
PROSPECTING
Objective
Shoot It
IDENTIFY GEO-HAZARD
Objective
Lease It
Map It
Drill It
Map It
Drill It
Repeat
MAXIMIZE PRODUCTION
Objective
Shoot It
Shoot It
Exploration
Evaluation
Exploitation |
 Data
Acquisition Design
Permit
Survey
Field Operations
Maintenance
Support Functions
Data Processing
Midland, Houston,
Oklahoma City
In-field Services
Nasdaq: DWSN
10 |
 Nasdaq: DWSN
11
10 Data Acquisition Crews Currently Spread Across Every
Major Basin in the Continental United States |
 Nasdaq: DWSN
12
150,000
155,000
160,000
165,000
170,000
175,000
180,000
185,000
2011
2012
2013
2014
145
150
155
160
165
170
175
2011
2012
2013
2014
Channel Count Growth
Energy Source Units
Operating 10 Crews
3 ARAM ARIES Systems
6 GSR Systems
2,500 channels Wireless System RT2000
56,000 channels of GSR multi-channel
boxes with 3-C geophones
48,000 single-channel GSR Units
9,000 three-component Geospace GSX3
Units
Recording Channels
178,500
Vibrator Energy Source Units
149 energy source units
8 Envirovibe units
Data Processing Services
Houston
Oklahoma City
Midland |
 Reported revenues of $261,683,000 compared to $305,299,000 for the
prior fiscal year EBITDA* for fiscal 2014 was $22,730,000 compared to
$57,262,000 in fiscal 2013
Capital expenditures for fiscal 2014 were $34,073,000 compared
to $50,069,000 in fiscal 2013
Balance sheet remains strong with $49,753,000 of cash and
short-term investments, $73,777,000 of working capital and
$11,685,000 of debt at September 30, 2014
On November 10, 2014 the Company's Board of Directors
approved the payment on December 8, 2014 of an $0.08 per
share quarterly cash dividend
*For a definition of EBITDA and a reconciliation of EBITDA to our net income (loss), see
Appendix A on Slides 24 and 25. Nasdaq: DWSN
13 |
 History of
conservative financial management
in a cyclical industry
Low debt
Well-positioned to respond
to future client demand
$20 million undrawn
revolving line of credit
available
Nasdaq: DWSN
Balance Sheet Data
($ in thousands)
At 09/30/14
Working Capital
$73,777
Net Property, Plant
and Equipment
$164,494
Total Assets
$262,639
Debt
$11,685
Stockholders’
Equity
$199,530
14 |
 |
 Combined
Company to Retain the Dawson Geophysical Name and Trading Symbol: DWSN
Current Dawson and TGC Shareholders will own approximately
66% and 34% of the combined company respectively
Continue Dawson and Eagle Canada as operating entities
Structured as a stock-for-stock transaction that qualifies as a
“reorganization”
for tax purposes
Closing is anticipated during the first calendar quarter of 2015
Requires 2/3 shareholder approval from both TGC and Dawson
shareholders
Board
of
Directors
–
5
previous
Dawson
Board
members
and
3
previous TGC Board members
Nasdaq: DWSN
16 |
 Structured as a
stock-for-stock transaction Dawson will merge into a wholly-owned subsidiary
of TGC and Dawson shareholders will receive shares of TGC common stock
TGC will effect a 1-for-3 reverse stock split, which will reduce the number
of outstanding TGC common shares from approximately 22 million to 7.3
million shares for transactional and charter purposes
Dawson shareholders will receive 1.76 shares of TGC split-effected stock for
every one share of Dawson stock
TGC will issue approximately 14.2 million of split-effected shares in
exchange for the approximately 8.1 million shares of Dawson stock
outstanding
Nasdaq: DWSN
17 |
 Expanded
geographical presence Positioned to better serve clients through regional
deployments Strengthened balance sheet
Enhances operational and financial flexibility
Enables
company
to
respond
more
quickly
to
client
needs
&
market
conditions
Compatible equipment bases
Increases operational efficiencies and logistics
Improves utilization rates and lowers costs
Improved processes drives efficiencies
Leads to lower expenses and increased revenue
Reduce dependence on third party providers
Expanded client base and order book
Relieves pressure on utilization rates
Nasdaq: DWSN
18 |
 Nasdaq: DWSN
19
Executive Management Team
Dawson to Designate Four Additional Board Members
TGC to Designate Two Additional Board Members
Stephen C. Jumper –
Chairman of the Board, President and Chief Executive Officer
Wayne Whitener –
Vice-Chairman and Officer
Craig W. Cooper –
Retired Geophysicist
Gary M. Hoover, Ph.D –
Retired Geophysicist
Ted R. North –
Certified Public Account
Mark A. Vander Ploeg –
Retired Investment Banker
William J. Barrett –
President of W.J. Barrett Associates, Inc.
Allen T. McInnes, Ph.D –
Emeritus Dean, Texas Tech University |
 Experienced
management team and companies with more than 100 years combined existence
Expanded equipment base and improved logistics designed to
increase utilization and lower costs
Combined client base and order book to relieve pressure on
utilization rates
Increased level of internal support services designed to reduce
outsourcing
Expanded channel count to shorten cycle times and provide
higher resolution images
Nasdaq: DWSN
20 |
 Full-service provider of data acquisition and data processing
services
First-Class Health, Safety & Environmental program
Continued commitment to superior land survey and
permitting services, improved IT support, expanded repair
capabilities, trucking services, data processing, research and
development and dynamite energy source drilling services
Top
rated
platform
of
shared
resources
--
people,
equipment
and
services
--
that
flows
through
to
our
clients,
shareholders
and employees
Nasdaq: DWSN
21
Staying the Course |
 Current Stock
Price: $15.57 (November 20, 2014)
52-Week Range: $15.25 -
$34.90
Market Cap: $123.63 Million
3-Month Avg. Daily Volume: 70,471
Shares Outstanding: 7.96 Million
Institutional Ownership: 80%
Fiscal Year-end: September 30
Publicly-traded since 1981
Nasdaq: DWSN
22 |
 A leading U.S. land
seismic data acquisition
company from coast-to-coast. |
 Nasdaq: DWSN
24
Use of EBITDA (Non-GAAP measure)
depreciation
and
amortization
expense.
Our
management
uses
EBITDA
as
a
supplemental
financial
measure to assess:
the
term
EBITDA
is
not
defined
under
generally
accepted
accounting
principles
(“GAAP”),
and
EBITDA
is
not a measure of operating income, operating performance or liquidity presented in accordance
with GAAP. When assessing our 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
GAAP.
In
addition,
our
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 us. Further, the results presented by EBITDA cannot be
achieved without incurring the costs that the measure excludes: interest, taxes,
depreciation and amortization.
the financial performance of our assets without regard to financing methods, capital
structures, taxes or historical cost basis;
our
liquidity
and
operating
performance
over
time
in
relation
to other
companies
that
own
similar
assets
and
that
we
believe
calculate
EBITDA
in
a
similar
manner;
and
the ability of our assets to generate cash sufficient for us to pay potential interest costs.
We also understand that such data are used by investors to assess our performance.
However, We define EBITDA as net income (loss) plus interest expense, interest income,
income taxes, •
•
• |
 Nasdaq: DWSN
25
Twelve
Months
Ended
September
30,
2014
2013
(in thousands)
Net income (loss)
$
(12,620)
10,480
Depreciation
40,168
37,095
Interest expense (income), net
462
597
Income tax (benefit) expense
(5,280)
9,090
EBITDA
$
22,730
$
57,262
$ |
 26
NASDAQ:
DWSN
Nasdaq: DWSN |