TGC Industries Inc (TGE, Financial) filed Quarterly Report for the period ended 2009-09-30.
TGC Industries, Inc. is engaged in the domestic geophysical services business principally through conducting seismic surveys and to a lesser extent through sales of gravity information from the company's data bank to companies engaged in the exploration for oil and gas in the UnitedStates. Geophysics is the study of the structure and composition of theearth's interior and involves the measuring and interpretation of theearth's properties with appropriate instruments. Tgc Industries Inc has a market cap of $73.14 million; its shares were traded at around $4 with a P/E ratio of 10.42 and P/S ratio of 0.84. Tgc Industries Inc had an annual average earning growth of 96.2% over the past 5 years.
Income(loss) from operations. Loss from operations was ($2,481,340) for the three months ended September 30, 2009, compared to income from operations of $3,603,190 for the same period of 2008. The loss from operations was primarily attributable to a $5,470,492 decrease in revenues and a $747,083 increase in cost of services as discussed above. EBITDA decreased $6,087,090 to $967,671 for the three months ended September 30, 2009, from $7,054,761 for the same period of 2008, a decrease of 86.3%. This decrease was a result of factors discussed above. For a definition of EBITDA, a reconciliation of EBITDA to net income, and discussion of EBITDA, please refer to the section entitled EBITDA found below.
Working capital increased $10,376,144 to $27,345,187 as of September 30, 2009, from the December 31, 2008 working capital of $16,969,043. This increase was primarily due to a $10,030,603 increase in cash and cash equivalents, a $595,888 increase in prepaid expenses and other, a $2,339,588 decrease in trade accounts payable, a decrease in billings in excess of costs and estimated earnings on uncompleted contracts of $4,395,478, a decrease in the current portion of capital lease obligations of $251,310 partially offset by a $327,166 decrease in trade accounts receivable, a $2,039,489 decrease in cost and estimated earnings in excess of billings on uncompleted contracts, a decrease in prepaid federal and state income taxes of $1,220,154, a $627,808 increase in accrued liabilities, an increase in federal and state income taxes payable of $2,326,264 and an increase in the current portion of debt obligations of $695,842.
Net cash used in financing activities was $5,839,997 for the nine months ended September 30, 2009, and $5,967,716 for the nine months ended September 30, 2008. The decrease was due primarily to a decrease in the amount of principal payments on capital lease obligations of $223,617 partially offset by an increase in the amount of principal payments on our outstanding notes payable of $105,940.
During the nine months ended September 30, 2009, the Company acquired $1,291,181 of additional equipment and vehicles. Cash of $857,536 and capital lease obligations from a vehicle leasing company of $433,645 were used to finance these acquisitions. Although we do not budget for our capital expenditures, we may purchase additional equipment during 2009 should the demand for our services increase.
In April of 2005, we entered into a revolving credit agreement with a commercial bank. Effective September 16, 2006, we renewed our revolving credit agreement and increased the borrowing limit from $3,500,000 to $5,000,000. The borrowing limit under that revolving line of credit agreement remains at $5,000,000, and was renewed on September 16, 2007, September 16, 2008, and September 16, 2009, respectively. The revolving line of credit agreement does not expire until September 16, 2010. Our obligations under this agreement are secured by a security interest in our accounts receivable. Interest on the outstanding amount under the revolving credit agreement is payable monthly at the greater of 5.00% or the prime rate of interest. The credit loan agreement provides for non-financial and financial covenants including a minimum debt service coverage ratio in excess of 2.0 to 1.0 and a ratio of debt to worth not in excess of 1.25 to 1.0. As of September 30, 2009, we had no borrowings outstanding under the revolving credit agreement.
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TGC Industries, Inc. is engaged in the domestic geophysical services business principally through conducting seismic surveys and to a lesser extent through sales of gravity information from the company's data bank to companies engaged in the exploration for oil and gas in the UnitedStates. Geophysics is the study of the structure and composition of theearth's interior and involves the measuring and interpretation of theearth's properties with appropriate instruments. Tgc Industries Inc has a market cap of $73.14 million; its shares were traded at around $4 with a P/E ratio of 10.42 and P/S ratio of 0.84. Tgc Industries Inc had an annual average earning growth of 96.2% over the past 5 years.
Highlight of Business Operations:
Income from operations. Income from operations was $8,735,889 for the nine months ended September 30, 2009, compared to $8,666,393 for the same period of 2008, an increase of 0.8%. This increase was primarily attributable an increase in revenue, partially offset by increases in cost of services, SG&A and depreciation expense. EBITDA increased $818,342 to $19,617,653 for the nine months ended September 30, 2009, from $18,799,311 for the same period of 2008, an increase of 4.4%. This increase was a result of an increase in depreciation and amortization expense of $748,846, an increase in interest expense of $167,358 and an increase in income tax expense of $72,668, partially offset by a decrease in net income of $170,530. For a definition of EBITDA, a reconciliation of EBITDA to net income, and discussion of EBITDA, please refer to the section entitled EBITDA found below.Income(loss) from operations. Loss from operations was ($2,481,340) for the three months ended September 30, 2009, compared to income from operations of $3,603,190 for the same period of 2008. The loss from operations was primarily attributable to a $5,470,492 decrease in revenues and a $747,083 increase in cost of services as discussed above. EBITDA decreased $6,087,090 to $967,671 for the three months ended September 30, 2009, from $7,054,761 for the same period of 2008, a decrease of 86.3%. This decrease was a result of factors discussed above. For a definition of EBITDA, a reconciliation of EBITDA to net income, and discussion of EBITDA, please refer to the section entitled EBITDA found below.
Working capital increased $10,376,144 to $27,345,187 as of September 30, 2009, from the December 31, 2008 working capital of $16,969,043. This increase was primarily due to a $10,030,603 increase in cash and cash equivalents, a $595,888 increase in prepaid expenses and other, a $2,339,588 decrease in trade accounts payable, a decrease in billings in excess of costs and estimated earnings on uncompleted contracts of $4,395,478, a decrease in the current portion of capital lease obligations of $251,310 partially offset by a $327,166 decrease in trade accounts receivable, a $2,039,489 decrease in cost and estimated earnings in excess of billings on uncompleted contracts, a decrease in prepaid federal and state income taxes of $1,220,154, a $627,808 increase in accrued liabilities, an increase in federal and state income taxes payable of $2,326,264 and an increase in the current portion of debt obligations of $695,842.
Net cash used in financing activities was $5,839,997 for the nine months ended September 30, 2009, and $5,967,716 for the nine months ended September 30, 2008. The decrease was due primarily to a decrease in the amount of principal payments on capital lease obligations of $223,617 partially offset by an increase in the amount of principal payments on our outstanding notes payable of $105,940.
During the nine months ended September 30, 2009, the Company acquired $1,291,181 of additional equipment and vehicles. Cash of $857,536 and capital lease obligations from a vehicle leasing company of $433,645 were used to finance these acquisitions. Although we do not budget for our capital expenditures, we may purchase additional equipment during 2009 should the demand for our services increase.
In April of 2005, we entered into a revolving credit agreement with a commercial bank. Effective September 16, 2006, we renewed our revolving credit agreement and increased the borrowing limit from $3,500,000 to $5,000,000. The borrowing limit under that revolving line of credit agreement remains at $5,000,000, and was renewed on September 16, 2007, September 16, 2008, and September 16, 2009, respectively. The revolving line of credit agreement does not expire until September 16, 2010. Our obligations under this agreement are secured by a security interest in our accounts receivable. Interest on the outstanding amount under the revolving credit agreement is payable monthly at the greater of 5.00% or the prime rate of interest. The credit loan agreement provides for non-financial and financial covenants including a minimum debt service coverage ratio in excess of 2.0 to 1.0 and a ratio of debt to worth not in excess of 1.25 to 1.0. As of September 30, 2009, we had no borrowings outstanding under the revolving credit agreement.
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