EX-99.1 2 a09-32609_1ex99d1.htm EX-99.1

Exhibit 99.1

 

GRAPHIC

 

NEWS RELEASE

 

 

 

 

CONTACTS:

Wayne Whitener

 

 

Chief Executive Officer

 

 

TGC Industries, Inc.

 

 

(972) 881-1099

 

 

 

 

 

Jack Lascar / Karen Roan

 

 

DRG&E (713) 529-6600

 

FOR IMMEDIATE RELEASE

 

TGC Industries Reports Third Quarter 2009 Results

 

PLANO, TEXAS – November 2, 2009 – TGC Industries, Inc. (NASDAQ: TGE) today announced financial results for the third quarter of 2009.  Revenues fell to $16.1 million from $21.6 million in the third quarter of 2008.  The Company reported a net loss of $1.7 million, or ($0.09) per share, compared to net income of $1.9 million, or $0.10 per diluted share, in the third quarter of 2008.  (All per share amounts have been adjusted to reflect the five percent stock dividend paid on May 12, 2009 to shareholders of record as of April 28, 2009.)  Third quarter 2009 EBITDA* (earnings before net interest expense, taxes, depreciation, and amortization) declined to approximately $968,000 from $7.1 million in last year’s third quarter.

 

Wayne Whitener, TGC Industries’ President and Chief Executive Officer, said, “As we had anticipated and announced in our second quarter earnings release, we experienced weakening demand for our services during the third quarter, along with a competitive pricing environment. Due to the decreased demand for hydrocarbons and the reduction in capital expenditures from our customers, as well as uncertainty regarding future energy policy, we continue to expect challenging conditions for the balance of the year.

 

“We have responded to this lower level of demand by reducing our crew count and adjusting our utilization to better match the expected demand from our customers.  We operated four crews throughout the third quarter, and our current backlog is approximately $35 million compared to $37 million at the end of the second quarter and $82 million at the end of the third quarter of last year.

 


 

“However, we are not merely waiting for the U.S. market to recover, and on October 19, 2009 we announced the acquisition of Eagle Canada. This acquisition strengthens our strategic position within the seismic industry bringing us diversification away from natural gas and access to the Canadian seismic market.  It provides us with operational exposure to new markets since Eagle Canada has extensive experience in 3-C data acquisition in the Canadian oil sands, and its seismic acquisition services are also used by the potash mining industry in Canada.

 

“Since the beginning of the fourth quarter, we have seen an increase in inquiries and bidding activity, which should bode well for our 2010 performance.  In addition, we have the ability to quickly add crews when business conditions improve.

 

“We generated cash flow from operations of $5.8 million during the quarter and closed the third quarter with approximately $34.1 million in cash and $7.6 million in long term debt.  Subsequent to quarter end, we used $10.3 million of existing cash for the acquisition of Eagle Canada.  We remain well capitalized and strong financially and are confident we have the liquidity and financial flexibility to manage through this current period of lower seismic activity.”

 

THIRD QUARTER 2009

 

Revenues for the third quarter of 2009 declined 25.4 percent year over year, mainly driven by lower overall demand and a competitive pricing environment for domestic seismic services.   Cost of services increased 5.6 percent to $14.1 million from $13.4 million a year ago but was down from $15.6 million in the second quarter.  Cost of services as a percentage of revenues increased to 87.8 percent in the 2009 third quarter compared to 62.0 percent in the 2008 third quarter primarily as a result of the significant decline in revenues due to the reduction in crew count during the second quarter and the beginning of the third quarter.  Selling, general and administrative expenses (“SG&A”) fell to approximately $995,000 in the third quarter compared to $1.1 million in last year’s third quarter but rose to 6.2 percent of revenues compared to 5.2 percent of revenues in the third quarter of 2008. Interest expense for the quarter remained essentially flat with a year ago.

 

Net loss was $1.7 million compared to net income of $1.9 million in the third quarter of 2008.  The effective tax benefit rate for the quarter was 36.4 percent compared to an effective tax expense rate of 44.5 percent in the third quarter of 2008.

 

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YEAR TO DATE 2009

 

Revenues for the first nine months of 2009 increased 19.2 percent to $74.7 million from $62.6 million in the first nine months of 2008.  Cost of services rose 27.3 percent to $51.9 million compared to $40.8 million in last year’s period.  Cost of services as a percentage of revenues were 69.5 percent compared to 65.1 percent in the same period of last year.  Income from operations was essentially flat with the same period last year at $8.7 million.  Net income was $4.5 million, or $0.25 per diluted share, compared to $4.7 million, or $0.26 per diluted share, for the first nine months of 2008.  Year to date EBITDA rose 4.4 percent to $19.6 million, or 26.3 percent of revenues, compared to $18.8 million, or 30.0 percent of revenues, for the comparable period of 2008.

 

* A reconciliation of EBITDA (a non-GAAP financial measure) to reported earnings can be found in the financial tables.

 

CONFERENCE CALL

 

TGC Industries has scheduled a conference call for Monday, November 2, 2009, at 9:30 a.m. Eastern Time.  To participate in the conference call, dial 480-629-9722 a few minutes before the call begins and ask for the TGC Industries conference call.  A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until November 16, 2009.  To access the replay, dial 303-590-3030 using a pass code of 4169102#.

 

Investors, analysts, and the general public will also have the opportunity to listen to the conference call over the Internet by visiting http://www.tgcseismic.com.  To listen to the live call on the web, please visit the website at least fifteen minutes before the call begins to register, download, and install any necessary audio software.  For those who cannot listen to the live webcast, an archive will be available shortly after the call and will remain available for approximately 90 days at http://www.tgcseismic.com.

 

TGC Industries, Inc., based in Plano, Texas with branch offices in Houston and Oklahoma City, is one of the leading providers of seismic data acquisition services throughout the continental United States.

 

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This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations and projections about future events. All statements other than statements of historical fact included in this press release regarding the Company are forward-looking statements. There can be no assurance that those expectations and projections will prove to be correct.  We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

 

Tables to follow

 

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TGC Industries, Inc.

Statements of Income

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

16,083,161

 

$

21,553,653

 

$

74,685,172

 

$

62,644,731

 

 

 

 

 

 

 

 

 

 

 

Cost and expenses

 

 

 

 

 

 

 

 

 

Cost of services

 

14,120,847

 

13,373,764

 

51,931,010

 

40,800,341

 

Selling, general, administrative

 

994,643

 

1,125,128

 

3,136,509

 

3,045,079

 

Depreciation and amortization expense

 

3,449,011

 

3,451,571

 

10,881,764

 

10,132,918

 

 

 

18,564,501

 

17,950,463

 

65,949,283

 

53,978,338

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

(2,481,340

)

3,603,190

 

8,735,889

 

8,666,393

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

245,751

 

245,429

 

782,711

 

615,353

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

(2,727,091

)

3,357,761

 

7,953,178

 

8,051,040

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

(992,726

)

1,494,972

 

3,410,612

 

3,337,944

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

(1,734,365

)

$

1,862,789

 

$

4,542,566

 

$

4,713,096

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.09

)

$

0.10

 

$

0.25

 

$

0.26

 

Diluted

 

$

(0.09

)

$

0.10

 

$

0.25

 

$

0.26

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

18,285,288

 

18,264,745

 

18,278,643

 

18,258,345

 

Diluted

 

18,285,288

 

18,308,469

 

18,324,301

 

18,305,719

 

 

The statements of income reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the interim periods.  The results of the interim periods are not necessarily indicative of results to be expected for

the entire year.

 

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TGC Industries, Inc.

Condensed Balance Sheets

 

 

 

September 30,

 

December 31,

 

 

 

2009

 

2008

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

34,144,954

 

$

24,114,351

 

Receivables (net)

 

5,526,742

 

5,853,908

 

Prepaid expenses and other

 

1,575,685

 

4,239,440

 

Current assets

 

41,247,381

 

34,207,699

 

Other assets (net)

 

234,329

 

250,659

 

Property and equipment (net)

 

40,907,854

 

50,632,563

 

Total assets

 

$

82,389,564

 

$

85,090,921

 

 

 

 

 

 

 

Current liabilities

 

$

13,902,194

 

$

17,238,656

 

Long-term obligations

 

7,592,691

 

11,451,835

 

Long-term deferred tax liability

 

5,517,023

 

5,973,000

 

Shareholders’ equity

 

55,377,656

 

50,427,430

 

Total liabilities & equity

 

$

82,389,564

 

$

85,090,921

 

 

TGC Industries, Inc.

Reconciliation of EBITDA to Net Income

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,734,365

)

$

1,862,789

 

$

4,542,566

 

$

4,713,096

 

Depreciation

 

3,449,011

 

3,451,571

 

10,881,764

 

10,132,918

 

Interest

 

245,751

 

245,429

 

782,711

 

615,353

 

Income tax expense (benefit)

 

(992,726

)

1,494,972

 

3,410,612

 

3,337,944

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

967,671

 

$

7,054,761

 

$

19,617,653

 

$

18,799,311

 

 

# # #

 

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