Dawson Geophysical Company (DWSN)
F3Q10 (Qtr End 06/30/10) Earnings Conference Call
August 4, 2010 10:00 AM ET
Steve Jumper – President and CEO
Christina Hagan – EVP and CFO
Collin Jerry (ph) – Raymond James
Luke Lemone (ph) – Capital One
Neal Dingmann – Wunderlich Securities
Veny Aleksandrov – Pritchard Capital Partners
A.J. Strasser – Cooper Creek Partners
Previous Statements by DWSN
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Good morning. I will be your conference operator today. At this time, I would like to welcome everyone to the Dawson Geophysical Third Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions). Thank you. I’d now like to call over to Mr. Steve Jumper, President, CEO. Please go ahead, sir.
Good morning and welcome to Dawson Geophysical Company’s third quarter 2010 earnings and operations conference call.
My name is Steve Jumper, President and CEO of the company. Joining me on the call are Christina Hagan, Executive Vice President and Chief Financial Officer; and Decker Dawson, Founder and Chairman of the company.
As in the past, today’s call will be presented in three segments. Following opening remarks, Chris will discuss our financial results. I will then return for an operations update, then open the call for questions. As is customary for us, the call is scheduled for 30 minutes and we will not provide guidance.
Just an opening, I would say that we are pleased with our third quarter results. This is our best quarter in terms of revenue and EBITDA since the second quarter of fiscal ‘09 when the effect of the financial crisis of late 2008 begin to take hold and seriously affect demand for our services.
This is our third consecutive quarter of positive growth and revenue, EBITDA, demand channel cap and channel deployment. And needless to say we’re feeling pretty good about where we are in terms of demand and opportunities going forward. So at this point, I would like to turn control of the call over to Chris Hagan, our CFO, to discuss our financial results.
Thank you, Steve. First, let us go over our Safe Harbor provision. In accordance with the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995, Dawson Geophysical Company cautions that statements made today in this conference call, 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, the volatility of oil and natural gas prices, disruptions in the global economy, dependence upon energy industry spending, cancellations of service contracts, high fixed costs of operations, weather interruptions, inability to obtain land access rights of way, industry competition, limited number of customers, credit risk related to our customers, asset impairment, the availability of capital resources and operational disruptions. A discussion of these and other factors, including risks and uncertainties, is set forth in the company’s Form 10-K for the fiscal year ending September 30, 2009. 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.
During this conference call, Dawson will make references to EBITDA, which is a non-GAAP financial measure. A reconciliation of this non-GAAP measure to the applicable GAAP measure can be found on Dawson’s current earnings release, a copy of which is located on the Dawson’s web site www.dawson3d.com.
Today, we reported revenue of $61,178,000 for the quarter ending June 30, 2010, our third quarter of fiscal 2010, compared to $52,319,000 for the same quarter in fiscal 2009, an increase of 17%. Net loss for the third quarter of fiscal 2010 was $1,019,000 compared to a net loss of $1,626,000 in the same quarter of 2009. Loss per share for the third quarter fiscal 2010 was $0.13, compared to loss per share of $0.21 for the third quarter of fiscal 2009. EBITDA for the third quarter of fiscal 2010 increased 32% to $5,591,000 from $4,245,000 in the same quarter of fiscal 2009 and from $2,488,000 in the second quarter fiscal 2010.
Revenues in the quarter continued to include relatively high third-party charges related to the use of helicopter support services, specialized survey technologies and dynamite energy sources. The higher level of these charges during the third quarter was driven by the increased demand levels for the Company’s services in areas with limited access. And we remind you, we were reimbursed for these expenses by our clients.
Our balance sheet remains debt-free and we have approximately $85 million in working capital. With that, I’ll turn to Steve.
Thank you, Chris. And Chris mentioned our third quarter highlights include a 32% increase in EBITDA up to $5.5 million, when compared the same quarter of fiscal ‘09. A 17% increase in revenues to $61 million, compared to the same quarter of ‘09. We redeployed crews in the second quarter of ‘10 and a third crew at the end of the third quarter just recently in June.
We’ve been awarded new contracts and utilization all over the U.S., but particularly, several large projects in the Haynesville area of East Texas and Eagle Ford area in South Texas. And we’re seeing an increased demand for services which is leading to improve utilization rates. Chris mentioned our debt-free balance sheet with $85 million in working capital, and approximately 124% increase in EBITDA when compared to the second quarter of fiscal 2010.