Dawson Geophysical Company (DWSN, Financial) filed Quarterly Report for the period ended 2010-06-30.
Dawson Geophysical Company has a market cap of $192 million; its shares were traded at around $24.55 with and P/S ratio of 0.8. Dawson Geophysical Company had an annual average earning growth of 30.9% over the past 5 years.DWSN is in the portfolios of T Boone Pickens of BP Capital, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Operating Costs. Operating expenses for the nine months ended June 30, 2010 totaled $133,245,000 as compared to $151,126,000 for the same period of fiscal 2009, a decrease of 12%. Operating expenses for the three months ended June 30, 2010 increased 17% to $54,098,000 as compared to $46,374,000 for the same period of fiscal 2009. The decrease for the nine months ended June 30, 2010 compared to the nine months ended June 30, 2009 was primarily due to reductions in field personnel and other expenses associated with operating data acquisition crews taken out of service during 2009 and 2010. The increase for the three months ended June 30, 2010 compared to the three months ended June 30, 2009, reflects the operations of the two data acquisition crews that were placed into service during the second quarter of fiscal 2010. As discussed above, reimbursed expenses have a similar impact on operating costs.
Depreciation for the nine months ended June 30, 2010 totaled $20,188,000 compared to $19,651,000 for the nine months ended June 30, 2009. We recognized $7,016,000 of depreciation expense in the third quarter of fiscal 2010 as compared to $6,521,000 in the comparable quarter of fiscal 2009. The increases in depreciation expense in both the nine month and three month periods were the result of the relatively modest capital expenditures we made during fiscal 2009 and the somewhat larger expenditures we made during the second quarter of fiscal 2010 as discussed below in Liquidity and Capital Resources Capital Expenditures. We expect our depreciation expense to increase only slightly during fiscal 2010 reflecting these capital expenditures in fiscal 2009 and fiscal 2010.
Cash Flows. Net cash provided by operating activities was $1,472,000 for the first nine months of fiscal 2010 and $42,508,000 for the first nine months of fiscal 2009. These amounts primarily reflect our decline in revenues during 2009 and the effects of depreciation resulting from our significant capital expenditures over the last few years, while the working capital components in fiscal 2009 include a decrease in accounts receivable and in fiscal 2010 include an increase in accounts receivable. Although our cash flows from accounts receivable fluctuated during this period, this did not reflect any change in our collection experience during the period as the average number of days in accounts receivable has remained at approximately fifty-five over the last twelve months. Amounts in our trade accounts receivable that are over sixty days as of June 30, 2010 represent approximately 19.73% of our total trade accounts receivables, which is relatively high compared to historical levels. The remaining outstanding trade account balances after taking into consideration payments received subsequent to June 30, 2010 and additional payments anticipated by management, is more representative of historical levels. We believe our allowance for doubtful accounts of $639,000 at June 30, 2010 is adequate to cover exposures related to
Net cash used in investing activities was $11,057,000 in the nine months ended June 30, 2010 and $21,310,000 in the nine months ended June 30, 2009. In fiscal 2010, we reinvested proceeds of matured treasury investments. At June 30, 2010 a treasury note for $5,000,000 had matured and was reflected as cash on cash equivalents on our balance sheet. These funds were subsequently reinvested in a treasury bill on July 2, 2010. Capital expenditures in fiscal 2010 are discussed below. Due to market conditions, our capital expenditures in fiscal 2009 were limited to necessary maintenance capital requirements rather than investing in additional equipment as in the past few years. In fiscal 2009, cash generated from operations in excess of capital expenditures was used in the acquisition of short-term investments during the quarter ended June 30, 2009. Our short-term investments consisted of four U.S. Treasury instruments of approximately $5,000,000 each, with maturity dates ranging from December 2009 to September 2010. In fiscal 2009, we collected proceeds from an insurance claim on our equipment burned in a March 2008 wildfire.
Capital Expenditures. The Companys Board of Directors approved a $20,000,000 capital budget for fiscal 2010. Total capital expenditures for the fiscal year to date are $16,890,000, including the purchase of the 2,000 stations of OYO GSR four channel three-component recording equipment reported in the first fiscal quarter and the purchase of additional ARAM and I/O RSR channels at the end of the second fiscal quarter. The purchase of additional channels reflects our clients continuing desire for increased channel count to provide higher resolution images and improved operational efficiencies. The balance of the fiscal 2010 capital budget will be used for maintenance capital requirements and the purchase of additional geophones.
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Dawson Geophysical Company has a market cap of $192 million; its shares were traded at around $24.55 with and P/S ratio of 0.8. Dawson Geophysical Company had an annual average earning growth of 30.9% over the past 5 years.DWSN is in the portfolios of T Boone Pickens of BP Capital, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Operating Revenues. Our operating revenues for the first nine months of fiscal 2010 decreased 26% to $146,093,000 from $197,160,000 for the first nine months of fiscal 2009. For the three months ended June 30, 2010, operating revenues totaled $61,178,000 as compared to $52,319,000 for the same period of fiscal 2009, a 17% increase. The revenue decrease in the first nine months of fiscal 2010 compared to the same period of fiscal 2009 was primarily the result of reductions in active crew count from 16 crews in the beginning of fiscal 2009 to nine in the first fiscal quarter of 2010, a more competitive pricing environment, substantially lower utilization rates of remaining crews and increased downtime for weather during the winter months of 2010. The revenue increase in the third quarter of fiscal 2010 compared to the same quarter of fiscal 2009 was primarily the result of increased demand for our services which led to the redeployment of two seismic data acquisition crews during the second quarter of this fiscal year and higher utilization of existing crews despite wet conditions during May and June. As a result of the improving demand for our services during the third quarter of fiscal 2010, we redeployed an additional data acquisition crew in June 2010 bringing the number of currently active crews to twelve. 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 high level of these charges during the third quarter was driven by increased demand levels for our services in areas with limited access. We are reimbursed for these charges by our clients.Operating Costs. Operating expenses for the nine months ended June 30, 2010 totaled $133,245,000 as compared to $151,126,000 for the same period of fiscal 2009, a decrease of 12%. Operating expenses for the three months ended June 30, 2010 increased 17% to $54,098,000 as compared to $46,374,000 for the same period of fiscal 2009. The decrease for the nine months ended June 30, 2010 compared to the nine months ended June 30, 2009 was primarily due to reductions in field personnel and other expenses associated with operating data acquisition crews taken out of service during 2009 and 2010. The increase for the three months ended June 30, 2010 compared to the three months ended June 30, 2009, reflects the operations of the two data acquisition crews that were placed into service during the second quarter of fiscal 2010. As discussed above, reimbursed expenses have a similar impact on operating costs.
Depreciation for the nine months ended June 30, 2010 totaled $20,188,000 compared to $19,651,000 for the nine months ended June 30, 2009. We recognized $7,016,000 of depreciation expense in the third quarter of fiscal 2010 as compared to $6,521,000 in the comparable quarter of fiscal 2009. The increases in depreciation expense in both the nine month and three month periods were the result of the relatively modest capital expenditures we made during fiscal 2009 and the somewhat larger expenditures we made during the second quarter of fiscal 2010 as discussed below in Liquidity and Capital Resources Capital Expenditures. We expect our depreciation expense to increase only slightly during fiscal 2010 reflecting these capital expenditures in fiscal 2009 and fiscal 2010.
Cash Flows. Net cash provided by operating activities was $1,472,000 for the first nine months of fiscal 2010 and $42,508,000 for the first nine months of fiscal 2009. These amounts primarily reflect our decline in revenues during 2009 and the effects of depreciation resulting from our significant capital expenditures over the last few years, while the working capital components in fiscal 2009 include a decrease in accounts receivable and in fiscal 2010 include an increase in accounts receivable. Although our cash flows from accounts receivable fluctuated during this period, this did not reflect any change in our collection experience during the period as the average number of days in accounts receivable has remained at approximately fifty-five over the last twelve months. Amounts in our trade accounts receivable that are over sixty days as of June 30, 2010 represent approximately 19.73% of our total trade accounts receivables, which is relatively high compared to historical levels. The remaining outstanding trade account balances after taking into consideration payments received subsequent to June 30, 2010 and additional payments anticipated by management, is more representative of historical levels. We believe our allowance for doubtful accounts of $639,000 at June 30, 2010 is adequate to cover exposures related to
Net cash used in investing activities was $11,057,000 in the nine months ended June 30, 2010 and $21,310,000 in the nine months ended June 30, 2009. In fiscal 2010, we reinvested proceeds of matured treasury investments. At June 30, 2010 a treasury note for $5,000,000 had matured and was reflected as cash on cash equivalents on our balance sheet. These funds were subsequently reinvested in a treasury bill on July 2, 2010. Capital expenditures in fiscal 2010 are discussed below. Due to market conditions, our capital expenditures in fiscal 2009 were limited to necessary maintenance capital requirements rather than investing in additional equipment as in the past few years. In fiscal 2009, cash generated from operations in excess of capital expenditures was used in the acquisition of short-term investments during the quarter ended June 30, 2009. Our short-term investments consisted of four U.S. Treasury instruments of approximately $5,000,000 each, with maturity dates ranging from December 2009 to September 2010. In fiscal 2009, we collected proceeds from an insurance claim on our equipment burned in a March 2008 wildfire.
Capital Expenditures. The Companys Board of Directors approved a $20,000,000 capital budget for fiscal 2010. Total capital expenditures for the fiscal year to date are $16,890,000, including the purchase of the 2,000 stations of OYO GSR four channel three-component recording equipment reported in the first fiscal quarter and the purchase of additional ARAM and I/O RSR channels at the end of the second fiscal quarter. The purchase of additional channels reflects our clients continuing desire for increased channel count to provide higher resolution images and improved operational efficiencies. The balance of the fiscal 2010 capital budget will be used for maintenance capital requirements and the purchase of additional geophones.
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