Dawson Geophysical Company ( DWSN)

F4Q 2011 Earnings Results

November 9, 2011; 10:00 am ET


Steve Jumper - President & Chief Executive Officer

Christina Hagan - Executive Vice President & Chief Financial Officer

Ray Tobias - Executive Vice President & Chief Operating Officer


Collin Gerry - Raymond James

Veny Aleksandrov - Pritchard Capital

Georg Venturatos - Johnson Rice



Good morning. My name is Jenetta and I’ll be your conference operator today. At this time I would like to welcome everyone to the Dawson Geophysical fourth 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.

Mr. Jumper, you may begin your conference.

Steve Jumper

Thank you Jenetta. Well good morning and welcome to Dawson Geophysical Company’s fiscal fourth quarter and year end 2011 earnings and operations conference call. As Jenetta said, my name is Steve Jumper, President and CEO of the company and joining me on the call are Christina Hagan, Executive Vice President and Chief Financial Officer; and Ray Tobias, Executive Vice President and Chief Operating Officer.

As in the past, today’s call will be presented in segments. Following these brief remarks, Chris will discuss our financial results. I will then return for an operations update and open the call for questions. The call is scheduled for half an hour and we will not provide any guidance as we have done in the past.

At this point, I will turn control of the call over to Chris Hagan, our CFO to discuss our financial results.

Chris Hagan

Thank you Steve. First, I’ll share the Safe Harbor provision. In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, Dawson Geophysical Company cautions it’s statements made today in this conference call, which are forward-looking and which may 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, dependants upon energy industry spending, disruptions in the global economy, industry competitions, delays, reductions or cancellations of service contracts, higher fixed costs of operations, external factors affecting our crude such as weather interruptions, the inability to obtain land access rights of way, whether we enter into turnkey or term contracts, proved productivity, limited number of customers, credit risk provided to our customers, the availability of capital resources and operational disruptions.

A discussion of these and other factors including risks and uncertainties, except for what’s in the company’s Form 10-K for the fiscal year ended September 30, 2011. 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 we will make references to EBITDA, which is a non-GAAP financial measure. A reconciliation of the non-GAAP measure to the applicable GAAP measure can be found in our current earnings release, a copy of which is located on our website www.dawson3D.com

Today we reported fourth quarter and year-end results for our fiscal year end 2011 which ended September 30, 2011. For the fourth quarter of fiscal 2011 revenues were $84,256,000 compared to $59,139,000 for the same quarter in fiscal 2010, an increase of 42%. Net income for the fourth quarter of fiscal 2011 was $2,944,000 compared to a net loss of $1,411,000 in the same quarter of fiscal 2010.

Basic earnings per share for the fourth quarter of fiscal 2011 were $0.38 compared to a net loss of $0.18 per share in the same quarter of fiscal 2010. EBITDA for the fourth quarter of fiscal 2011 were $12,955,000 compared to $5,268,000 in the same quarter of fiscal 2010, an increase of 146%.

For the fiscal year beginning September 30, 2011 we reported revenues of $333,279,000 compared to $205,272,000 for the year ended fiscal 2010, an increase of 62%. Net loss for fiscal 2011 decreased to $3,246,000 from $9,352,000 in fiscal 2010. Loss per share for fiscal 2011 was $0.42 compared to a loss per share of $1.20 for fiscal 2010. EBITDA for fiscal 2011 increased to $27,861,000 compared to $13,136,000 in the same period of fiscal 2010, an increase of 112%.

Third party charges continue to be high for the year and contributed approximately half of the growth in revenues during the fiscal year ended September 30, 2011 as compared to the year ended September 30, 2010. The third party charges are related to our use of helicopters, port services, specialized survey technologies and dynamite energy sources and their use of limited access, such as the Appalachian basin, Oklahoma, East Texas and Arkansas. We are reimbursed for these expenses by our client.

Our fiscal fourth quarter and year end results also include approximately $1,444,000 and $3,866,000 or $0.18 and $0.49 per share before taxes respectively of expenses related to the recently terminated merger agreement with TGC Industries, Inc. and depreciation charge increases of $831,000 and $3,410,000 respectively, related to the company's continued investment in new recording equipment and energy source units during fiscal 2011.

With that, Steve, I’ll turn it to you.

Stephen Jumper

Well thank you Chris. Let me start by recapping our 2011 highlights, which include as Chris said a 62% increase in year-end revenues of $333,279,000 compared to $205,272,000 for the year ending fiscal 2010. A 112% increase in EBITDA for the fiscal year 2011 compared of $27,896,000 compared to $13,136,000 in the same period of fiscal 2010. The 2011 number does include $3.8 million of transaction cost related to the terminated merger with TGC Industries Inc.

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