Dawson Geophysical Reports Second Quarter 2015 Results

MIDLAND, Texas, Aug. 7, 2015 /PRNewswire/ -- Dawson Geophysical Company (NASDAQ: DWSN) today reported results for its second quarter ended June 30, 2015.

On February 11, 2015, legacy Dawson Geophysical Company and legacy TGC Industries, Inc. consummated their previously announced strategic business combination. The merger transaction was accounted for as a reverse acquisition with legacy Dawson Geophysical being deemed the accounting acquirer. The combined companies adopted a calendar fiscal year ending December 31. Second quarter fiscal 2015 results reflect the first full quarter of operations for the combined companies. Second quarter fiscal 2015 results are compared to the quarterly results for legacy Dawson Geophysical for the period April 1 through June 30, 2014, which at the time was legacy Dawson Geophysical's third fiscal quarter of its fiscal year ended September 30, 2014 and did not include the results of legacy TGC Industries, Inc. Due to the foregoing, the historical financial results for the quarter ended June 30, 2014 discussed below are not directly comparable to the combined Company's financial results for the quarter ended June 30, 2015.  Selected pro forma financial information giving effect to the business combination as if it had occurred on January 1, 2014 (together with the assumptions related thereto) is presented at the end of this press release, and additional information regarding the business combination and its impact on the Company's financial position is set forth in the Company's Form 10-Q for the quarterly period ended June 30, 2015.

For the quarter ended June 30, 2015, the Company reported revenues of $43,335,000 as compared to $54,166,000 (or $72,403,000 on a pro forma basis) for the quarter ended June 30, 2014.  For the 2015 quarter, the Company reported a net loss of $11,877,000, or $0.55 loss per share attributable to common stock, as compared to a net loss of $7,493,000 (or $8,654,000 on a pro forma basis), or $0.54 (or $0.41 on a pro forma basis) loss per share attributable to common stock for the quarter ended June 30, 2014.  The Company also reported negative EBITDA of $5,704,000 for the quarter ended June 30, 2015. Revenues for the second quarter 2015 were negatively impacted by reduced client demand due to decreasing and uncertain commodity prices, client-directed project delays and severe weather conditions in many areas of operation that adversely impacted data acquisition crews in the lower 48 United States. The Company operated the equivalent of seven crews during the second quarter 2015. Severe weather conditions and flooding in Texas and the mid-continent region significantly reduced utilization rates for the seven crews and delayed deployment of three additional crews onto ready projects.

The dramatic reduction of the Company's overall utilization rates had a significant negative impact on revenue for the second quarter 2015, partially offset by weather stand-by charges on several of the Company's crews but at significantly reduced rates. Operating expenses for the June quarter were at reduced levels although not in direct proportion to the negative impact on revenue. Reflected in the current quarter is $690,000 of severance costs related to an approximately 30 percent reduction in work force since the closing of our merger.

Demand for Dawson's services is at reduced levels from recent years and is anticipated to remain at such levels through 2015 in response to decreasing and uncertain commodity prices and reduced client expenditures. The Company anticipates operating eight to ten crews in the United States with limited activity in Canada during the third quarter ending September 30, 2015. Based on currently available information, the Company anticipates operating eight to ten crews in the United States through the balance of 2015.

The Company's capital budget for 2015 continues at previously announced maintenance levels below the $10 million capital budget approved by the Board of Directors. Strategic investments in state-of-the-art seismic equipment during recent years are partially responsible for the lower 2015 capital budget. The Company's balance sheet remains strong at June 30, 2015 with approximately $56,775,000 of cash and cash equivalents and short-term investments, $66,247,000 of working capital and $14,931,000 of debt and capital lease obligations.

Stephen C. Jumper said, "Despite today's challenging environment, Dawson Geophysical is strategically positioned to withstand the commodities cycle downturn. Our strong balance sheet, diverse client base and a management team with more than one-hundred years of combined industry experience provide us with the tools and resources required to successfully navigate today's market. Equipment purchases made during recent years further enable us to successfully serve our valued clients while simultaneously operating below previously established capex levels."

Jumper continued, "Severe weather conditions that began in mid-April and that were subsequently followed by Tropical Storm Bill later in the quarter negatively affected Texas and the mid-continent region where many of our crews were deployed. These multiple weather delays impacted utilization on seven of the active crews and delayed deployment of three additional crews on new projects. In addition to the negative weather in the quarter, the continuing actions to right size our organization to meet industry demands further impacted our quarterly results. We are currently operating ten crews in the United Sates. Weather conditions improved for July allowing us to operate at a higher utilization rate for the month as compared to the second quarter of 2015."

Conference Call Information

Dawson Geophysical Company will host a conference call to review its second quarter 2015 financial results on August 7, 2015 at 9 a.m. CDT. Participants can access the call at 1-888-348-3664 (US), 1-855-669-9657 (Canada) and 1-412-902-4233 (Toll/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 August 10, 2015 by dialing 1-877-870-5176 (Toll-Free) and 1-858-384-5517 (Toll/International). The passcode is 10070060. The webcast will be recorded and available for replay on Dawson's website until September 4, 2015.

About Dawson

Dawson Geophysical Company is a leading provider of North America onshore seismic data acquisition services with operations throughout the continental 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 (loss) plus interest expense, interest income, 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 (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 income (loss) is presented in the table following the text of this press release.

Forward-Looking Statements

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 natural gas prices, high fixed costs of operations, operational disruptions, changes in economic conditions, industry competition, the potential for contract delay or cancellations of service contracts, the availability of capital resources, weather interruptions, limited number of customers, and credit risk related to our customers. A discussion of these and other factors, including risks and uncertainties, is set forth in Exhibit 99.5 to the Company's Form 8-K/A that was filed with the Securities and Exchange Commission on April 30, 2015. 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.

Pro Forma Information

The following unaudited pro forma condensed financial information for the three and six months ended June 30, 2015 and 2014 gives effect to the Merger as if it had occurred on January l, 2014. The unaudited pro forma condensed financial information has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the transactions taken place on the dates indicated and is not intended to be a projection of future results. The unaudited pro forma financial information reflects certain adjustments related to the acquisition, such as (1) to record certain incremental expenses resulting from purchase accounting adjustments, such as reduced depreciation and amortization expense in connection with the fair value adjustments to property, plant and equipment, and intangible assets; and (2) to record the related tax effects. Shares used in the calculations of earnings per share in the table below were 21,525,952 and 21,329,220 for the three months ended June 30, 2015 and 2014, respectively, and 21,509,886 and 21,329,371 for the six months ended June 30, 2015 and 2014, respectively.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-second-quarter-2015-results-300125387.html

SOURCE Dawson Geophysical Company