Dawson Geophysical Reports Profitable Fiscal 2004
MIDLAND, TX -- 11/12/2004 -- Dawson Geophysical Company (NASDAQ: DWSN) today
reported improved profitability in its fiscal fourth quarter and year
ending September 30, 2004. Earnings for the quarter were $0.72 per share
compared to $0.10 in the 2003 fourth quarter. For the year, earnings were
$1.53 compared to a loss of $0.16 per share 2003.
Approximately $0.28 per share of the fourth quarter earnings are due to a
deferred income tax benefit from the elimination of a valuation allowance
on the Company's deferred tax asset resulting from net operating loss
carryforwards. The Company believes that its past five profitable quarters
and a continued favorable environment for its services will enable use of
the deferred tax asset.
Revenues in fiscal 2004 were $69,346,000, an increase of 34 percent over
2003 revenues of $51,592,000. Fourth quarter revenues of $21,556,000 were
47 percent above $14,695,000 in the 2003 quarter.
The Company's improved performance is a direct result of the domestic
petroleum industry's recent return to aggressive exploration for reserves
of crude oil and natural gas caused by improved prices. Dawson's position
as the leading provider of seismic exploration services in the U.S. onshore
market has occurred through expansion of its high-resolution 3-D surveys,
modest price improvement and increased revenue for lost time due to
weather.
Three additional data acquisition crews were fielded during the year,
funded from cash flow and cash reserves. Capital expenditures for the year
were $13,889,000. Funding during 2005 is estimated to be at least
$20,000,000 to complete the 2004 expansions and fund a new crew, the
Company's tenth, expected to be fielded in January, 2005. Short term bank
borrowings are planned to assist in financing these expansions.
The Company's order book currently exceeds nine months of capacity
operations, largely attributable to its reputation as a quality provider
offering flexibility and adaptability to a complete range of operational
requirements. Establishment and enlargement of offices in Houston, Denver
and Oklahoma City have placed the Company conveniently near its clientele.
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. Data processing is performed by geophysicists at
Dawson's computer center in the Midland, Texas headquarters. The Company
also provides data processing services through the Houston, Texas office.
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 impact the Company's actual results of operations. Please see the
Company's Form 10-K for the fiscal year ended September 30, 2003 for a more
complete discussion of such risk factors.
STATEMENTS OF OPERATIONS
Years Ended September 30,
2004 2003 2002
---------- ---------- ----------
Operating revenues $69,346,000 $51,592,000 $36,078,000
Operating costs:
Operating expenses 55,618,000 46,151,000 33,205,000
General and administrative 2,675,000 2,421,000 2,006,000
Depreciation 4,653,000 4,404,000 4,233,000
---------- ---------- ----------
62,946,000 52,976,000 39,444,000
Income (loss) from operations 6,400,000 (1,384,000) (3,366,000)
Other income:
Interest income 177,000 328,000 507,000
Other 505,000 209,000 96,000
---------- ---------- ----------
Income (loss) before
income tax 7,082,000 (847,000) (2,763,000)
Income tax benefit (expense):
Current (96,000) - 400,000
Deferred 1,632,000 (52,000) 71,000
---------- ---------- ----------
1,536,000 (52,000) 471,000
---------- ---------- ----------
Net income (loss) 8,618,000 (899,000) (2,292,000)
========== ========== =========
Net income (loss) per
common share $1.55 $(0.16) $(0.42)
========== ========== =========
Net income (loss) per common
share-assuming dilution $1.53 $(0.16) $(0.42)
========== ========== =========
Weighted average equivalent
common shares outstanding 5,558,646 5,484,593 5,462,936
========== ========== =========
Weighted average equivalent
common shares outstanding-
assuming dilution 5,631,397 5,484,593 5,462,936
========== ========== =========
BALANCE SHEETS
September 30,
2004 2003
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 3,587,000 $ 3,389,000
Short-term investments 4,130,000 8,623,000
Accounts receivable, net of allowance
for doubtful accounts of $199,000 in
2004 and $127,000 in 2003 16,979,000 9,713,000
Prepaid expenses 440,000 287,000
----------- -----------
Total current assets 25,136,000 22,012,000
Deferred tax asset 1,648,000 -
Property, plant and equipment 94,050,000 81,585,000
Less accumulated depreciation (64,075,000) (60,805,000)
----------- -----------
Net property, plant and equipment 29,975,000 20,780,000
----------- -----------
$56,759,000 $42,792,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,764,000 $ 1,237,000
Accrued liabilities:
Payroll costs and other taxes 742,000 478,000
Other 971,000 415,000
----------- -----------
Total current liabilities 6,477,000 2,130,000
----------- -----------
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;
10,000,000 shares authorized, 5,633,794
and 5,487,794 shares issued and outstanding
in 2004 and 2003, respectively 1,878,000 1,829,000
Additional paid-in capital 39,949,000 38,931,000
Other comprehensive income, net of tax (28,000) 37,000
Retained earnings (deficit) 8,483,000 (135,000)
----------- -----------
Total stockholders' equity 50,282,000 40,662,000
----------- -----------
$56,759,000 $42,792,000
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