Dawson Geophysical Company has a market cap of $194.91 million; its shares were traded at around $24.96 with and P/S ratio of 0.8. Dawson Geophysical Company had an annual average earning growth of 87.6% over the past 5 years.DWSN is in the portfolios of Chuck Royce of ROYCE & ASSOCIATES.
Highlight of Business Operations:General and administrative expenses for the quarter ended December 31, 2009 were approximately 5.1% of revenues as compared to 2.7% for the comparable quarter of fiscal 2009. The ratio of general and administrative expenses to revenue increased in the first quarter of fiscal 2010 due to the substantial decrease in revenues compared to the same quarter of the prior year which outpaced the decline in general and administrative expenses over the same period. The dollar amount decrease to $1,854,000 during the first quarter of fiscal 2010 from $2,155,000 during the first quarter of fiscal 2009 reflects our lower level of operating costs during the quarter. Included in general and administrative expense in the current period is an increase of $106,000 in the allowance for doubtful accounts primarily reflecting an increased number of days in accounts receivable.
Depreciation for the three months ended December 31, 2009 totaled $6,477,000 compared to $6,601,000 for the three months ended December 31, 2008. The decrease in depreciation expense is the result of limiting capital expenditures to necessary maintenance capital requirements in the last three quarters of fiscal 2009 and the first quarter of fiscal 2010. In the current environment of limited capital expenditures, depreciation expense is expected to remain relatively constant throughout fiscal 2010.
Income tax benefit was $2,472,000 for the three months ended December 31, 2009 compared to income tax expense of $4,827,000 for the three months ended December 31, 2008. The effective tax rates for the income tax provision for the three months ended December 31, 2009 and 2008 were approximately 37.0% and 38.4%, respectively. Our effective tax rates differ from the statutory federal rate of 35.0% for certain items, such as state and local taxes, non-deductible expenses, expenses related to stock-based compensation that was not expected to result in a tax deduction and changes in reserves for uncertain tax positions.
Cash Flows. Net cash provided by operating activities was $959,000 for the first three months of fiscal 2010 and $10,361,000 for the first three months of fiscal 2009. These amounts primarily reflect our revenues and the effects of depreciation resulting from our significant capital expenditures over the last few years and the working capital components including a decrease in accounts receivable. The decrease in revenues during the first quarter of fiscal 2010, as discussed above, was not matched by a decrease in operating expenses such that margins and net results from operating activities were negatively affected.
Net cash used in investing activities was $20,000 in the three months ended December 31, 2009 and $2,943,000 in the three months ended December 31, 2008. In fiscal 2010, we reinvested the proceeds of a matured treasury investment. The net cash used in investing activities in fiscal 2009 primarily represents capital expenditures made with cash generated from operations.
Capital Expenditures. Capital expenditures of $41,000 during the first three months of fiscal 2010 represented maintenance capital items. Capital expenditures during the first three months of fiscal 2009 of $3,575,000 represented the purchase of an ARAM ARIES II recording system.
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