All per share amounts have been adjusted to reflect the 5% stock dividend declared on April 16, 2009 to shareholders of record as of April 28, 2009 and payable on May 12, 2009. First quarter 2009 EBITDA (earnings before net interest expense, taxes, depreciation, and amortization) raised 89% to $12.6 million from $6.7 million in the year-ago quarter.
Wayne Whitener, TGC Industries’ president and chief executive officer, said, “We are pleased to report solid revenue growth during the first quarter as we were able to fully utilize our nine crews and optimize the utilization rates of those crews. Despite the difficult economic conditions and relatively weak oil and gas prices, we were not materially impacted by the widespread reductions in capital budgets for exploration and development activities in the lower 48 states to the extent that we did not experience substantial backlog cancellations during the first quarter.”
“However, we have been experiencing a slowdown in the demand for our services and have been operating with eight crews since the beginning of the second quarter. Our current backlog stands at about $50 million, and we continue to bid on new work as oil prices above $50 per barrel have kept drilling activity active in several parts of the oil patch. Furthermore, the industry anticipates a decrease in service revenues during the second half of the year, and if this were to occur, it would have an adverse impact on our revenues and earnings.”
“We continued to generate good cash flow from operations of $2.3 million and ended the quarter with about $24.3 million in cash and $10.3 million in long term debt. We are well capitalized and strong financially and are confident we have the liquidity and financial flexibility to weather the current period of reduced oil and gas demand. In this environment, we continue to be in close contact with our customers so that we can respond quickly to any reduced demand for our services by adjusting our crew count and utilization.”
First quarter 2009 revenues benefitted from the high capacity utilization of the nine operating crews. Cost of services decreased to 61.8% of revenues compared to 66.2% of revenues in the first quarter of 2008. The lower cost of services as percentage of revenues versus a year ago is due to various factors, including improved weather and crew productivity. SG&A as percentage of revenues decreased to 3.3% compared to 4.2% in the year-ago quarter, mainly due to higher revenues.
Income from operations increased 160% to $8.8 million compared to $3.4 million a year ago. Income from operations as percentage of revenues rose to 24.4% compared to 15.1% in the year-ago quarter. Income before income taxes for the first quarter of 2009 was $8.5 million, or 23.7% of revenues, compared to $3.2 million, or 14.3% of revenues in the comparable period a year ago.
