Dawson Geophysical Company (DWSN, Financial) filed Quarterly Report for the period ended 2009-03-31.
Dawson Geophysical Company acquires and processes 3-D seismic data used in analyzing subsurface geologic conditions for the potential of oil and natural gas accumulation. The Company operates land-based acquisition crews primarily in the western United States. Data processing is performed by geophysicists at Dawson's computer center in Midland Texas. Dawson Geophysical Company has a market cap of $226.2 million; its shares were traded at around $28.99 with a P/E ratio of 6.4 and P/S ratio of 0.8. Dawson Geophysical Company had an annual average earning growth of 87.6% over the past 5 years.
Operating Costs. Operating expenses for the six months ended March 31, 2009 totaled $104,752,000 as compared to $115,654,000 for the same period of fiscal 2008, a decrease of 9.4%. Operating expenses for the three months ended March 31, 2009 decreased 20.5% to $45,737,000 as compared to $57,529,000 for the same period of fiscal 2008 primarily due to reductions in field personnel and other expenses of operating the four data acquisition crews taken out of service during the second quarter of fiscal 2009. As discussed above, reimbursed expenses have a similar impact on operating costs.
General and administrative expenses were 3.2% of revenues in the first six months of fiscal 2009, as compared to 2.3% of revenues in the same period of 2008. For the quarter ended March 31, 2009, general and administrative expenses were approximately 3.7% of revenues as compared to 2.3% for the comparable quarter of fiscal 2008. The ratio of general and administrative expenses to revenue increased in the first six months and the quarter ended March 31, 2009 due to managements decision to increase the Companys allowance for doubtful accounts. We increased the allowance for doubtful accounts based on managements review of the Companys current past due accounts and client base. During the second quarter, we were made aware that two former clients and one current client with an accounts receivable balance of approximately $1.0 million had filed for reorganization under bankruptcy protection. These facts significantly influenced managements decision to increase the Companys allowance for doubtful accounts. The increase in the allowance for doubtful accounts was partially offset by a release of reserves of approximately $450,000 as a result of a partial payment in connection with the settlement of a previously disputed invoice.
Depreciation for the six months ended March 31, 2009 totaled $13,130,000 compared to $11,405,000 for the six months ended March 31, 2008. We recognized $6,529,000 of depreciation expense in the second quarter of fiscal 2009 as compared to $5,854,000 in the comparable quarter of fiscal 2008. The increase in depreciation expense in both the six month and three month periods is the result of the significant capital expenditures we made during fiscal 2008. Our depreciation expense is expected to continue to increase during fiscal 2009 reflecting our significant capital expenditures in fiscal 2008.
Income tax expense was $8,942,000 for the six months ended March 31, 2009 and $9,597,000 for the six months ended March 31, 2008. The effective tax rate for the income tax provision for the six months ended March 31, 2009 and 2008 was 39.1% and 37.5%, respectively.
Cash Flows. Net cash provided by operating activities was $38,291,000 for the first six months of fiscal 2009 and $16,501,000 for the first six months of fiscal 2008. These amounts primarily reflect our revenues 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. The decrease in accounts receivable reflects the decrease in our revenues, as the number of days in receivables has not significantly changed over the last twelve months. Amounts in our accounts receivable that are over ninety days typically represent less than 3% of our total accounts receivables and are generally ultimately collected. The average number of days in accounts receivable is approximately fifty-five.
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Dawson Geophysical Company acquires and processes 3-D seismic data used in analyzing subsurface geologic conditions for the potential of oil and natural gas accumulation. The Company operates land-based acquisition crews primarily in the western United States. Data processing is performed by geophysicists at Dawson's computer center in Midland Texas. Dawson Geophysical Company has a market cap of $226.2 million; its shares were traded at around $28.99 with a P/E ratio of 6.4 and P/S ratio of 0.8. Dawson Geophysical Company had an annual average earning growth of 87.6% over the past 5 years.
Highlight of Business Operations:
Operating Revenues. Our operating revenues for the first six months of fiscal 2009 decreased 7.1% to $144,841,000 from $155,962,000 for the first six months of fiscal 2008. For the three months ended March 31, 2009, operating revenues totaled $64,625,000 as compared to $78,363,000 for the same period of fiscal 2008, a 17.5% decrease. The decrease in revenues during the second quarter of fiscal 2009 reflected the result of a reduction in active crew count of four crews along with lower utilization rates for existing crews. Revenues in the second quarter of fiscal 2009 continued to include relatively high third-party charges related to the use of helicopter support services, specialized survey technologies, and dynamite energy sources. The sustained level of these charges is driven by our continued operations in areas with limited access in the Appalachian Basin, Arkansas, Val Verde Basin of Texas and Eastern Oklahoma. We are reimbursed for these charges by our clients.Operating Costs. Operating expenses for the six months ended March 31, 2009 totaled $104,752,000 as compared to $115,654,000 for the same period of fiscal 2008, a decrease of 9.4%. Operating expenses for the three months ended March 31, 2009 decreased 20.5% to $45,737,000 as compared to $57,529,000 for the same period of fiscal 2008 primarily due to reductions in field personnel and other expenses of operating the four data acquisition crews taken out of service during the second quarter of fiscal 2009. As discussed above, reimbursed expenses have a similar impact on operating costs.
General and administrative expenses were 3.2% of revenues in the first six months of fiscal 2009, as compared to 2.3% of revenues in the same period of 2008. For the quarter ended March 31, 2009, general and administrative expenses were approximately 3.7% of revenues as compared to 2.3% for the comparable quarter of fiscal 2008. The ratio of general and administrative expenses to revenue increased in the first six months and the quarter ended March 31, 2009 due to managements decision to increase the Companys allowance for doubtful accounts. We increased the allowance for doubtful accounts based on managements review of the Companys current past due accounts and client base. During the second quarter, we were made aware that two former clients and one current client with an accounts receivable balance of approximately $1.0 million had filed for reorganization under bankruptcy protection. These facts significantly influenced managements decision to increase the Companys allowance for doubtful accounts. The increase in the allowance for doubtful accounts was partially offset by a release of reserves of approximately $450,000 as a result of a partial payment in connection with the settlement of a previously disputed invoice.
Depreciation for the six months ended March 31, 2009 totaled $13,130,000 compared to $11,405,000 for the six months ended March 31, 2008. We recognized $6,529,000 of depreciation expense in the second quarter of fiscal 2009 as compared to $5,854,000 in the comparable quarter of fiscal 2008. The increase in depreciation expense in both the six month and three month periods is the result of the significant capital expenditures we made during fiscal 2008. Our depreciation expense is expected to continue to increase during fiscal 2009 reflecting our significant capital expenditures in fiscal 2008.
Income tax expense was $8,942,000 for the six months ended March 31, 2009 and $9,597,000 for the six months ended March 31, 2008. The effective tax rate for the income tax provision for the six months ended March 31, 2009 and 2008 was 39.1% and 37.5%, respectively.
Cash Flows. Net cash provided by operating activities was $38,291,000 for the first six months of fiscal 2009 and $16,501,000 for the first six months of fiscal 2008. These amounts primarily reflect our revenues 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. The decrease in accounts receivable reflects the decrease in our revenues, as the number of days in receivables has not significantly changed over the last twelve months. Amounts in our accounts receivable that are over ninety days typically represent less than 3% of our total accounts receivables and are generally ultimately collected. The average number of days in accounts receivable is approximately fifty-five.
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