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TGC Industries (TGE)

Q4 2012 Earnings Call

February 25, 2013 9:30 am ET


Jack Lascar - Partner

Wayne A. Whitener - Chief Executive Officer, President and Director

James K. Brata - Chief Financial Officer, Principal Accounting Officer, Vice President, Secretary and Treasurer


Veny Aleksandrov - FIG Partners, LLC, Research Division

Joel D. Luton - Westlake Securities LLC, Research Division

Keith Maher - Singular Research

Rhys Hoyle Williams - Columbia Partners, L.L.C. Investment Management



Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the TGC Industries Fourth Quarter Earnings Conference Call. [Operator Instructions] This conference is being recorded today Monday, February 25, 2013. At this time, I would like to turn the conference over to Jack Lascar with Dennard Lascar Associates. Please go ahead, sir.

Jack Lascar

Thank you, Vince. Good morning and welcome to the TGC Industries fourth quarter and year end 2012 conference call. We appreciate you joining us today. Your hosts are Wayne Whitener, President and Chief Executive Officer; and Jim Brata, Chief Financial Officer.

Before I turn the call over to management, I have a few items to cover. If you would like to listen to a replay of today's call, it is available via webcast by going to the Investor Relations section of the company's website at or via a recorded instant replay until March 11. Information on how to access the replay was provided in this morning's earnings release. Information reported on this call speaks only as of today, Monday, February 25, 2013, and therefore you're advised that time-sensitive information may no longer be accurate as of the time of any replay.

Before we begin, let me remind you that certain statements made by management during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding the company's future performance are forward-looking statements. These forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which the company is unable to predict or control, that may cause the company's actual future results or performance to materially differ from any future results or performance expressed or implied by those statements.

These risks and uncertainties include the risk factors disclosed by the company from time to time in its filings with the SEC, including in its annual reform -- report on Form 10-K for the year ended December 31, 2011. Furthermore, as we start this call, please also refer to the statement regarding forward-looking statements incorporated in our press release issued this morning, and please note that the contents of our conference call are covered by these statements.

I will now turn the call over to Wayne Whitener.

Wayne A. Whitener

Thank you, Jack. Good morning to everyone. Thank you for joining us today for our fourth quarter and year end 2012 earnings call. I would like to make some initial comments and Jim Brata will provide you with some financial details, then I will conclude with some remarks about our markets and business going forward.

We're extremely pleased with our quarterly and full year results, both of which reached record levels. I will begin by commenting on the quarter, which was a fourth quarter record in terms of revenue, earnings and EBITDA. Revenues increased 44% from a year ago to $57 million, earnings per share rose 18% to $0.20, and EBITDA rose 26% to $14 million. We operated 9 crews in the U.S. for the entire fourth quarter and began the quarter with 4 crews in Canada. As the Canadian winter season progressed, we added an additional crew, ending the quarter with 5 crews working in Canada.

Our U.S. crews are currently working in South Texas, Kansas, the Utica Shale, the Marcellus and the Permian Basin. Our Canadian crews are operating in British Columbia, Alberta and Saskatchewan. During the fourth quarter and through 2012 we benefited from the production of our new equipment and enhanced efficiencies of our crews. Over the past 3 years, we have invested over $100 million in new advanced equipment in order to continue providing our customers with the latest available technology, as well as maintain the optimum crew efficiency. As part of that investment during the last 18 months, we acquired approximately 70,000 wireless channels enabling us to be one of the largest fleets of Geospace wireless data acquisition units in North America. We believe we now have the latest and most technological-advanced seismic acquisition fleet in North America.

At the same time, we have continued to maintain our low-cost structure, as evidenced with our SG&A expense ratio being that in the 4% range for both the quarter and the year. For 2012, we also generated record revenues in terms of revenues, earnings and EBITDA. Annual revenues increased 30% to $196 million. Earnings per share rose 42% to $0.75 and EBITDA rose 40% to $52 million. We ended the year with a backlog of $81 million as we've been efficiently working through our Canadian backlog. Since year-end, we have added an additional crew in Canada and now operating 9 crews in the U.S. and 6 crews in Canada for a total of 15 crews.

I will now turn over the call to Jim Brata who will give you some detailed review of our financial results, and then I will come back with some final remarks.

James K. Brata

Thank you, Wayne, and good morning. The revenues for the fourth quarter of 2012 were $57 million, compared to approximately $40 million in the fourth quarter of 2011. We operated 9 crews in the U.S. during the quarter, compared to 8 crews in last year's fourth quarter. In Canada, we began the fourth quarter with 4 crews and ended with 5, which compares with 4 crews operating in Canada during the entire fourth quarter of last year.

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