SAExploration Holdings, Inc. (NASDAQ:SAEX, OTCBB:SAEXW)(“SAE”) today provided an update on the previously disclosed review of questions associated with certain adjustments to direct operating expenses between the 2013 first quarter ended March 31, 2013 (“Q1 2013”) and the second quarter ended June 30, 2013 (“Q2 2013”). On August 19, 2013, SAE determined that it will restate, and that investors should not rely upon, its previously-filed interim financial statements for Q1 2013, following management’s discussion of the matter with the audit committee of SAE’s board of directors, and management’s and the audit committee’s discussions with SAE’s independent registered public accounting firm.
The restatement results from information that came to SAE’s attention in connection with the preparation and review of its Form 10-Q for Q2 2013, as reported in SAE’s August 13, 2013 press release announcing preliminary financial results for the six months ended June 30, 2013. Although the review is ongoing and additional items may need to be included in the restatement, certain adjustments have been identified relating to SAE’s operations in Papua New Guinea. As reported on August 13, 2013, these adjustments will change the allocation of direct operating expenses between Q1 2013 and Q2 2013. SAE believes that these adjustments may decrease Q1 2013 direct operating expenses by up to $1.3 million, resulting in restated net income for Q1 2013 of $6.2 million, up from as reported net income of $4.9 million.
Because of the time involved in restating Q1 2013, SAE will not timely file its Quarterly Report on Form 10-Q for Q2 2013. SAE expects Q2 2013 direct operating expenses to increase by approximately $1.7 million to $2.0 million. At this time, SAE cannot estimate net income for Q2 2013, but does not expect that possible further adjustments will change its expected range of net income for the six-months ended June 30, 2013 by more than $300,000 from the amounts reported in the August 13, 2013 press release.