Aug. 2, 2010 (PR Newswire) --
PLANO, Texas -- TGC Industries, Inc. (Nasdaq: TGE) today announced financial results for the second quarter of 2010. Revenues were $22.5 million compared to $22.6 million for the second quarter of 2009. This year's first and second quarters include financial results from Eagle Canada, which was acquired in October 2009.
Net loss for the second quarter of 2010 was $1.2 million, or ($0.06) per share, compared to net income of $1.2 million, or $0.06 per diluted share, in the second quarter of 2009. (All per share amounts have been adjusted to reflect the five percent stock dividend paid on May 14, 2010 to shareholders of record as of April 30, 2010).
Wayne Whitener, TGC Industries' President and Chief Executive Officer, said, "As anticipated, we did not operate any crews in Canada for the entire second quarter as a result of the spring thawing season. Due to the seasonality of the Canadian market, the second quarter is the weakest quarter for activity in Canada, and we expect increasing levels of seismic activity in that region for the next three quarters, beginning with the third quarter. The inactivity in Canada contributed to the second quarter net loss as we incurred the ongoing costs of the Canadian operations during the spring thaw with little corresponding revenue.
"We have continued to optimize our utilization, keeping our crew count aligned with expected demand from our customers and operating six crews in the lower 48 states for the entire second quarter. Based on our current North American backlog of $50 million, we expect to operate at least six U.S. crews for the balance of 2010. Our backlog has been increasing steadily since its recent low of $37 million at the end of the 2009 second quarter, and we have the ability to add crews quickly as business conditions improve.
"While the oil spill in the Gulf of Mexico has created additional uncertainty in the decision-making process of our customers, we believe we should benefit from any potential transfer of exploration dollars from offshore to onshore U.S., which would be a positive factor for the U.S. land seismic acquisition industry. Overall, despite challenging circumstances, we continue to experience a steadily improving bidding environment that started in late 2009 and, therefore, remain cautiously optimistic regarding the second half of 2010.
"We ended the quarter with approximately $22 million in cash and remain well capitalized and strong financially, with the financial and operational flexibility to take advantage of the current recovery in the seismic market."
SECOND QUARTER 2010
Revenues for the second quarter of 2010 were $22.5 million compared to $22.6 million in the second quarter of 2009 as the Company's Canadian operations did not contribute materially to the overall results of this year's second quarter. The Company operated six crews in the U.S. during the entire second quarter. During the second quarter of 2009, the Company began with eight crews in the U.S. and ended with five crews, adjusting rapidly to diminishing demand during that quarter. Cost of services rose 17.8 percent to $18.3 million from $15.6 million in the second quarter of 2009. Cost of services as a percentage of revenues increased to 81.6 percent compared to 68.9 percent in the 2009 second quarter as a result of lower margins in the U.S. due to depressed demand and a more competitive pricing environment. Selling, general and administrative expenses ("SG&A") were $1.7 million, basically flat with the first quarter but up from $1.0 million in the second quarter of 2009 primarily due to the inclusion of Eagle Canada in this quarter's results.
Net loss was $1.2 million, or ($0.06) per share, compared to net income of $1.2 million, or $0.06 per diluted share, in the second quarter of 2009. The Company recorded a tax benefit of approximately $0.4 million, or an effective tax rate of 24.5 percent in the second quarter of 2010 compared to an effective tax rate of 42.4 percent in the second quarter of 2009. Second quarter 2010 EBITDA* (earnings before net interest expense, taxes, depreciation, and amortization) declined to $2.4 million from $6.1 million in the second quarter of 2009.
* A reconciliation of EBITDA (a non-GAAP financial measure) to reported earnings is provided in the financial tables below.
FIRST HALF 2010
Revenues for the first six months of 2010 declined 9.9 percent to $52.8 million from $58.6 million in the first six months of 2009. Cost of services rose 10.9 percent to $41.9 million compared to $37.8 million in the first half of 2009. Cost of services as a percentage of revenues increased to 79.4 percent compared to 64.5 percent in the first half of 2009. Net loss was $0.7 million, or ($0.03) per share, compared to net income of $6.3 million, or $0.33 per diluted share, for the first half of 2009. Year to date EBITDA declined to $7.4 million from $18.6 million for the comparable period of 2009.
* A reconciliation of EBITDA (a non-GAAP financial measure) to reported earnings can be found in the financial tables.
CONFERENCE CALL
TGC Industries has scheduled a conference call for Monday, August 2, 2010, at 9:30 a.m. Eastern Time. To participate in the conference call, dial 480-629-9274 at least 10 minutes before the call begins and ask for the TGC Industries conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until August 16, 2010. To access the replay, dial 303-590-3030 using a pass code of 4329573#.
Investors, analysts, and the general public will also have the opportunity to listen to the conference call over the Internet by visiting http://www.tgcseismic.com. To listen to the live call on the web, please visit the website at least fifteen minutes before the call begins to register, download, and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call and will remain available for approximately 90 days at http://www.tgcseismic.com.
TGC Industries, Inc., based in Plano, Texas, is a leading provider of seismic data acquisition services with operations throughout the continental United States and Canada. The Company has branch offices in Houston, Midland, Oklahoma City and Calgary.
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations and projections about future events. All statements other than statements of historical fact included in this press release regarding the Company are forward-looking statements. There can be no assurance that those expectations and projections will prove to be correct. We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACTS: | Wayne Whitener | |
Chief Executive Officer | ||
TGC Industries, Inc. | ||
(972) 881-1099 | ||
Jack Lascar / Karen Roan | ||
DRG&E (713) 529-6600 | ||
- Tables to follow - | ||||||||
TGC Industries, Inc. | ||||||||
Statements of Operations | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
2010 | 2009 | 2010 | 2009 | |||||
Revenue | $ 22,480,784 | $ 22,591,134 | $ 52,774,625 | $ 58,602,011 | ||||
Cost and expenses | ||||||||
Cost of services | 18,335,659 | 15,565,041 | 41,921,690 | 37,810,163 | ||||
Selling, general and administrative | 1,744,273 | 968,333 | 3,429,310 | 2,141,866 | ||||
Depreciation and amortization expense | 3,789,217 | 3,633,316 | 7,656,931 | 7,432,753 | ||||
23,869,149 | 20,166,690 | 53,007,931 | 47,384,782 | |||||
Income (loss) from operations | (1,388,365) | 2,424,444 | (233,306) | 11,217,229 | ||||
Interest expense | 214,202 | 268,313 | 429,814 | 536,960 | ||||
Income (loss) before income taxes | (1,602,567) | 2,156,131 | (663,120) | 10,680,269 | ||||
Income tax (benefit) expense | (391,961) | 913,862 | (3,021) | 4,403,338 | ||||
NET INCOME (LOSS) | $ (1,210,606) | $ 1,242,269 | $ (660,099) | $ 6,276,931 | ||||
Earnings per common share: | ||||||||
Basic | $ (0.06) | $ 0.06 | $ (0.03) | $ 0.33 | ||||
Diluted | $ (0.06) | $ 0.06 | $ (0.03) | $ 0.33 | ||||
Weighted average number of | ||||||||
common shares outstanding: | ||||||||
Basic | 19,202,800 | 19,194,360 | 19,201,133 | 19,189,029 | ||||
Diluted | 19,202,800 | 19,291,499 | 19,201,133 | 19,193,051 | ||||
All per share amounts have been adjusted for the 5% stock dividend paid May 14, 2010 to shareholders of record | ||||||||
as of April 30, 2010. The statements of income reflect all adjustments which are, in the opinion of management, necessary | ||||||||
for the fair presentation of the interim periods. The results of the interim periods are not necessarily indicative of | ||||||||
results to be expected for the entire year. TGC Industries, Inc. acquired Eagle Canada, Inc. during October of 2009, | ||||||||
and the earnings of Eagle Canada are included in the three and six month periods ended June 30, 2010. | ||||||||
TGC Industries, Inc. | ||||
Condensed Balance Sheet | ||||
June 30, | December 31, | |||
2010 | 2009 | |||
Cash and cash equivalents | $ 21,733,209 | $ 25,504,149 | ||
Receivables (net) | 10,680,928 | 9,455,224 | ||
Pre-paid expenses and other | 4,329,073 | 2,066,531 | ||
Current assets | 36,743,210 | 37,025,904 | ||
Other assets (net) | 1,443,338 | 1,440,488 | ||
Property and equipment (net) | 45,368,405 | 47,583,333 | ||
Total assets | $ 83,554,953 | $ 86,049,725 | ||
Current liabilities | $ 21,349,099 | $ 19,730,270 | ||
Long-term obligations | 4,309,558 | 6,507,147 | ||
Long-term deferred tax liability | 5,769,420 | 7,117,030 | ||
Shareholders' equity | 52,126,876 | 52,695,278 | ||
Total liabilities & equity | $ 83,554,953 | $ 86,049,725 | ||
TGC Industries, Inc. | ||||||||
Reconciliation of EBITDA to Net Income | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
2010 | 2009 | 2010 | 2009 | |||||
Net Income (Loss) | $ (1,210,606) | $ 1,242,269 | $ (660,099) | $ 6,276,931 | ||||
Depreciation | 3,789,217 | 3,633,316 | 7,656,931 | 7,432,753 | ||||
Interest expense | 214,202 | 268,313 | 429,814 | 536,960 | ||||
Income tax (benefit) expense | (391,961) | 913,862 | (3,021) | 4,403,338 | ||||
EBITDA | $ 2,400,852 | $ 6,057,760 | $ 7,423,625 | $ 18,649,982 | ||||
SOURCE TGC Industries, Inc.
