Dawson Geophysical Reports First Quarter 2015 Results

MIDLAND, Texas, May 18, 2015 /PRNewswire/ -- Dawson Geophysical Company (NASDAQ: DWSN) today reported results for its first quarter ended March 31, 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. First quarter 2015 results reflect the operations of legacy Dawson Geophysical for the period January 1 through March 31, 2015 and the operations of legacy TGC Industries for the period February 12 through March 31, 2015.  First quarter 2015 results are compared to the quarterly results for legacy Dawson Geophysical for the period January 1 through March 31, 2014, which at the time was legacy Dawson Geophysical's second fiscal quarter of its fiscal year ended September 30, 2014. The Company's second quarter ending June 30, 2015 will reflect a full quarter of combined entity operating results.

For the quarter ended March 31, 2015, the Company reported revenues of $73,722,000, a net loss of $6,592,000, or $0.37 loss per share attributable to common stock, and EBITDA of $1,441,000.

Revenues for the March 2015 quarter were negatively impacted by reduced client demand due to decreasing and uncertain commodity prices, client-directed project delays, severe weather conditions in many areas of operation, a weaker than anticipated Canadian season and reduced utilization rates of deployed data acquisition crews in the lower 48 United States.  Severe wet weather conditions, reduced demand and client delays have continued during April and through mid-May 2015. During the March 2015 quarter, the post transaction combined Company operated a peak of fourteen seismic data acquisition crews in the United States and four crews in the Canadian market. Reflected in the current quarter are merger related transaction costs of approximately $2,600,000 and $530,000 of severance costs related to an approximately 20 percent reduction in work force since the closing of the transaction. Cumulative transaction costs for the combined Company since transaction inception to date are approximately $7,500,000.

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 is currently operating eight to ten data acquisition crews in the United States and based on currently available information anticipates operating eight to ten crews in the United States with limited activity in Canada into the third quarter ending September 30, 2015. Utilization rates on the Company's active data acquisition crews have been severely impacted through the middle of the second quarter primarily due to excessive wet conditions. Commencement of a large multi-component surface recorded microseismic project is scheduled to begin late in the June 2015 quarter. Based on currently available information, demand for the Company's multi-component equipment is anticipated to remain steady for the balance of 2015.

The Company's capital budget for 2015 is anticipated at maintenance levels below the $10 million capital budget approved by the Board of Directors. Strategic investments in state-of-the-art seismic equipment during the past three years are partially responsible for the lower 2015 capital budget. The Company's balance sheet remains strong at March 31, 2015 with approximately $48,100,000 of cash and cash equivalents and short-term investments, $77,276,000 of working capital and $19,171,000 of debt and capital lease obligations.

Stephen Jumper, President and Chief Executive Officer of the Company, said, "The past twelve months, and particularly the first fiscal quarter of 2015, have been challenging times throughout the seismic data acquisition and oil field service sectors. The difficulties have continued into the second fiscal quarter with weather and further client delays. Lower commodity prices, reduced exploration activity and scaled-back budget programs from many of our valued clients have slowed seismic crew activity in the lower 48 United States and Canada. In response to the pullback in activity, we have moved to quickly right-size our crew count to meet current and anticipated demand levels. We anticipate deployment of eight to ten crews through the summer of 2015 and are working diligently to drive efficiencies and reduce costs."

Jumper concluded, "We are pleased to have completed the strategic business combination with TGC Industries in February. We continue to work through the integration process at a rapid and effective pace. We believe the combination of Dawson Geophysical and TGC Industries will provide long term growth opportunities. These factors, combined with the earnings power from our existing equipment inventory, as well as our strong balance sheet, will enable us to respond quickly when market conditions improve."

Conference Call Information

Dawson Geophysical Company will host a conference call to review its first quarter 2015 financial results on May 19, 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 May 22, 2015 by dialing 1-877-870-5176 (Toll-Free) and 1-858-384-5517 (Toll/International).  The passcode is 10065839.  The webcast will be recorded and available for replay on Dawson's website until June 18, 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 (loss) income 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.

SOURCE Dawson Geophysical Company