EX-13 6 exhibit-13_12368.txt 2003 ANNUAL REPORT TO SHAREHOLDERS [LOGO] DAWSON Dawson Geophysical Company OVER 50 YEARS OF GEOPHYSICAL EXCELLENCE ANNUAL REPORT 2003 Founded in 1952, Dawson Geophysical Company acquires and processes 2-D, 3-D and multi-component seismic data used in analyzing subsurface geologic conditions for the potential of oil and natural gas accumulation. Dawson's clients - major and intermediate-sized oil and gas companies and independent oil operators - retain exclusive rights to the information obtained. The Company operates highly mobile, land-based acquisition crews throughout the lower 48 states. The Company has earned a 50-year reputation for state-of-the-art equipment, technology and safety, as well as for having crews that are among the most experienced and competent in the industry. Data processing is performed by geophysicists in Midland and Houston, Texas. FINANCIAL HIGHLIGHTS
REVENUES GROSS MARGIN -------- ------------ $24,198 $18,469 $37,878 $36,078 $51,592 $ 2,236 $(3,239) $ 4,845 $ 2,873 $ 5,441 ----------------------------------------------- ----------------------------------------------- 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 (amounts in thousands) (amounts in thousands) NET LOSS CAPITAL EXPENDITURES -------- -------------------- $(6,430) $(11,135) $(4,978) $(2,292) $(899) $ 164 $ 3,861 $ 750 $ 2,047 $ 6,152 ---------------------------------------------------- ---------------------------------------------- 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 (amounts in thousands) (amounts in thousands) CHANNEL COUNT ------------- 17,500 20,000 21,000 22,720 26,400 ------------------------------------------ 1999 2000 2001 2002 2003 (amounts in thousands)
LETTER TO SHAREHOLDERS Dear Shareholder: Your Company made significant progress on all fronts during fiscal year 2003 ending September 30. Revenues for the year of $51,592,000 exceed those of fiscal year 2002, $36,078,000, by 43 percent. The net loss for the year of $899,000 reflects improvement over the 2002 loss of $2,292,000. Profitability remains elusive due to generally depressed conditions within the geophysical industry world wide during the past five years. Pricing in this environment has improved considerably due to your Company's leading position in the U.S. market; however, prices do not yet cover the unavoidable effects of weather and difficulties encountered in obtaining rights-of-way. The Company exhibited profitability in the second and fourth quarters of 2003. The fourth quarter 2003 earnings of $557,000 compared to an identical net loss of $557,000 in the same quarter of 2002. Net profit of $844,000 in the second quarter of 2003 compares to a second quarter loss of $134,000 in 2002. The Company's order book provided capacity operations for most of fiscal 2003, remaining so going well into fiscal 2004. Management is working hard to obtain more realistic weather protection and redoubling efforts to mitigate permit related delays in order to reach improved and consistent profitability. During 2003 the Company acted on opportunities for growth and technical depth. The Company expanded operations in its Houston and Denver offices and added an office in Oklahoma City. The technical expertise of additional staff in each office coincides with increased demand for high resolution 3-D seismic surveys and leading edge products such as the ExxonMobil-licensed High Fidelity Vibratory Seismic (HFVS) method and 9-component 3-D surveys employing both compression and shear wave energy sources. The Company has satisfied client demand for increased channel count by acquiring equipment on the open market at reduced prices. In the 2000-2003 time period the Company has invested $12,811,000 in these kinds of capital expansions and improvements. Dawson Geophysical Company is engaged in an essential technology designed to help discover needed reserves of crude oil and natural gas, also essential commodities in an expanding, demanding world. Your Company is dedicated to do whatever is necessary to remain on the leading edge of this effort. With best wishes for a joyous holiday season to you and yours from all of us, we are sincerely yours. [PHOTOS OF L. DECKER DAWSON AND STEPHEN C. JUMPER] /s/ L. Decker Dawson /s/ Stephen C. Jumper L. Decker Dawson Stephen C. Jumper Chairman of the Board President November 28, 2003 [LOGO] DAWSON Dawson Geophysical Company THE TOTAL PACKAGE. Dawson is one of the most experienced and respected names in the geophysical industry. From survey design, to permitting, surveying, date acquisition and data processing, the Company delivers our unique total package of seismic data services to clients on shore throughout the lower 48 states. The commitment of the Company and each of our employees is to continue our 50-year dedication to delivering greater value and more reliable data for our clients' geophysical data. [VARIOUS PHOTOS]
INVESTOR INFORMATION CORPORATE OFFICES DIRECTORS OFFICERS 508 West Wall, Suite 800 Paul H. Brown L. Decker Dawson Midland, Texas 79701-5010 Sugar Land, Texas Chief Executive Officer Phone: 432-684-3000 Management Consultant Fax: 432-684-3030 Stephen C. Jumper Email: info@dawson3d.com Calvin J. Clements President http://www.dawson3d.com Lubbock, Texas & Chief Operating Officer Retired Vice President of the Company Howell W. Pardue Executive Vice President ANNUAL MEETING The Annual Meeting of Shareholders will be L. Decker Dawson held January 27, 2004, at 10:00 a.m. at Midland, Texas C. Ray Tobias The Petroleum Club of Midland, Chairman of the Board of Executive Vice President 501 West Wall, Midland, Texas 79701 Directors and Chief Executive Officer of the Company Christina W. Hagan Senior Vice President, Secretary & Chief Financial Officer REGISTRAR AND TRANSFER AGENT Gary M. Hoover, Ph.D. Mellon Investor Services LLC Bartlesville, Oklahoma Dallas, Texas Retired Geophysicist Frank D. Brown Vice President Stephen C. Jumper STOCK EXCHANGE LISTING Midland, Texas K.S. Forsdick Nasdaq National Market System President and Chief Operating Vice President Symbol: DWSN Officer of the Company Edward L. Huff Matthew P. Murphy Vice President INDEPENDENT PUBLIC ACCOUNTANTS Midland, Texas KPMG LLP Retired Banking Executive Midland, Texas Howell W. Pardue Midland, Texas Executive Vice President of the Company Tim C. Thompson Midland, Texas Management Consultant C. Ray Tobias Midland, Texas Executive Vice President of the Company
We are pleased to offer you the opportunity to receive future quarterly and annual reports electronically over the internet. In utilizing this service, you are not only improving the efficiency of your access to information, you will also help reduce printing and postage costs for your Company. Forms 10-Q and 10-K reports will be available on the internet at www.sec.gov each quarter and additional information will be available at www.dawson3d.com. -------------------------------------------------------------------------------- [LOGO] DAWSON Dawson Geophysical Company Midland, Texas 432-684-3000 o 800-D-DAWSON Houston, Texas 713-917-6772 Denver, Colorado 303-409-7787 Oklahoma City, Oklahoma 405-848-7512 www.dawson3d.com 508 West Wall, Suite 800 Midland, Texas 79701-5010