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Dawson Geophysical Company Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: December 5, 2012 03:07PM

Dawson Geophysical Company (DWSN) filed Annual Report for the period ended 2012-09-30. Dawson Geophysical Company has a market cap of $182.7 million; its shares were traded at around $23.45 with a P/E ratio of 18.7 and P/S ratio of 0.6. Dawson Geophysical Company had an annual average earning growth of 27.7% over the past 10 years.



Highlight of Business Operations:

Operating Revenues. Our operating revenues decreased 4% to $319,274,000 in fiscal 2012 from $333,279,000 in fiscal 2011. The revenue decrease in fiscal 2012 was primarily the result of a significant decrease in third-party charges and is not indicative of declining operations. Third-party charges decreased 29% in fiscal 2012 from fiscal 2011 due to continued operations in the more wide open terrain of the Western United States while fee revenue net of third-party charges for fiscal 2012 increased 13% from fiscal 2011. The increase in revenues net of third party charges is a result of increased utilization, production and more favorable contract terms in 2012 as compared to 2011.

Operating Costs. Our operating expenses decreased 11% to $258,970,000 in fiscal 2012 from $292,519,000 in fiscal 2011 primarily due to the decrease in reimbursed charges. As discussed above, third-party charges decreased 29% in fiscal 2012 from fiscal 2011. Operating expenses excluding third-party charges in fiscal 2012 increased 4% from fiscal 2011. This increase resulted primarily from increased field personnel and other expenses associated with higher utilization in 2012 as compared to 2011. The increase in revenues net of third-party charges of 13% in fiscal 2012 at the same time operating costs excluding third-party charges increased only 4%, resulted in an overall improvement in the Company’s margins during fiscal 2012. Improved turnkey rates, increased productivity, reduced third-party charges and reduced equipment rental and repair costs all contributed to this improvement in margins.

General and administrative expenses were 3.5% of revenues in fiscal 2012 as compared to 4.1% of revenues in fiscal 2011. General and administrative expenses decreased by $2,345,000 in fiscal 2012 as compared to fiscal 2011. The primary factor for the decrease in general and administrative expenses was the absence during fiscal 2012 of fiscal 2011 transaction costs of $3,866,000 associated with the terminated merger agreement with TGC. Without the effect of the 2011 transaction costs, general and administrative expense increased by $1,521,000. The increase in administrative expense was primarily due to increased employee costs to support expanded field operations and start-up costs associated with our Canadian operations.

General and administrative expenses were 4.1% of revenues in fiscal 2011 as compared to 3.5% of revenues in fiscal 2010. General and administrative expenses increased by $6,419,000 in fiscal 2011 as compared to fiscal 2010. The primary factors for the increase in general and administrative expenses during fiscal 2011 were increased administrative costs, primarily related to employee costs as a result of our increased crew count and operational activity, and transaction costs of $3,866,000 associated with the terminated merger agreement with TGC. There was no termination fee associated with the termination of the TGC merger agreement.

Cash Flows. Net cash provided by operating activities was $76,380,000 for fiscal 2012 and $16,951,000 for fiscal 2011. These amounts primarily reflect an increase in revenues and operating margins between periods. Our cash provided by operations was further positively impacted by cash collected from prior periods. Our collection experience during the period expressed as an average number of days in accounts receivable has remained at approximately sixty over the last twelve months. Amounts in our trade accounts receivable that are over sixty days as of September 30, 2012 represents approximately 20% of our total trade accounts receivables, which is consistent with historical levels. We believe our allowance for doubtful accounts of $250,000 at September 30, 2012 is adequate to cover exposures related to our trade account balances.

Read the The complete Report



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