Dawson Geophysical (DWSN) 10-Q 8 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	1-May-14
Document and Entity Information	'	'
Entity Registrant Name	'TGC INDUSTRIES INC	'
Entity Central Index Key	'0000799165	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	21,957,167
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q1	'

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013
CURRENT ASSETS	'	'
Cash and cash equivalents	$15,292,842	$16,130,374
Trade accounts receivable, net of allowance for doubtful accounts of $-0- in both periods	39,402,759	10,742,412
Cost and estimated earnings in excess of billings on uncompleted contracts	1,350,558	2,312,947
Prepaid expenses and other	885,346	1,808,411
Prepaid federal and state income tax	'	3,909,198
Total current assets	56,931,505	34,903,342
PROPERTY AND EQUIPMENT - at cost	'	'
Machinery and equipment	184,156,777	185,405,886
Automobiles and trucks	13,937,972	14,272,341
Furniture and fixtures	484,702	486,700
Leasehold improvements	14,994	14,994
Total property and equipment, gross	198,594,445	200,179,921
Less accumulated depreciation and amortization	-141,032,551	-137,072,725
Total property and equipment, net	57,561,894	63,107,196
Goodwill	201,530	201,530
Other assets	83,686	89,470
Total noncurrent assets	285,216	291,000
Total assets	114,778,615	98,301,538
CURRENT LIABILITIES	'	'
Trade accounts payable	9,839,952	4,097,819
Accrued liabilities	7,619,697	2,585,993
Billings in excess of costs and estimated earnings on uncompleted contracts	4,007,960	653,220
Federal and state income taxes payable	3,040,784	'
Current maturities of notes payable	7,647,305	8,434,879
Current portion of capital lease obligations	1,292,935	1,423,268
Total current liabilities	33,448,633	17,195,179
NOTES PAYABLE, less current maturities	4,857,216	6,483,112
CAPITAL LEASE OBLIGATIONS, less current portion	551,996	901,707
LONG-TERM DEFERRED TAX LIABILITY	4,018,378	4,590,739
COMMITMENTS AND CONTINGENCIES	'	'
SHAREHOLDERS' EQUITY	'	'
Preferred stock, $1.00 par value; 4,000,000 shares authorized; issued - none	'	'
Common stock, $.01 par value; 35,000,000 shares authorized; 22,102,502 and 22,090,127 issued and outstanding in each period, respectively	221,025	220,901
Additional paid-in capital	31,746,818	31,508,662
Retained earnings	46,037,218	41,757,515
Treasury stock, at cost, 145,335 shares in each period	-1,251,099	-1,251,099
Accumulated other comprehensive income (loss)	-4,851,570	-3,105,178
Total shareholders' equity	71,902,392	69,130,801
Total liabilities and shareholders' equity	$114,778,615	$98,301,538

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
CONSOLIDATED BALANCE SHEETS	'	'
Trade accounts receivable, allowance for doubtful accounts	$0	$0
Preferred stock, par value (in dollars per share)	$1	$1
Preferred stock, shares authorized	4,000,000	4,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$0.01	$0.01
Common stock, shares authorized	35,000,000	35,000,000
Common stock, shares issued	22,102,502	22,090,127
Common stock, shares outstanding	22,102,502	22,090,127
Treasury stock, shares	145,335	145,335

CONSOLIDATED_STATEMENTS_OF_EAR

CONSOLIDATED STATEMENTS OF EARNINGS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CONSOLIDATED STATEMENTS OF EARNINGS	'	'
Revenue	$48,801,423	$63,204,413
Cost and expenses	'	'
Cost of services	33,913,898	43,232,641
Selling, general and administrative expense	2,614,665	2,380,541
Depreciation and amortization expense	5,075,382	6,686,369
Total cost and expenses	41,603,945	52,299,551
Income from operations	7,197,478	10,904,862
Interest expense	181,572	319,706
Income before income taxes	7,015,906	10,585,156
Income tax expense	2,736,203	4,233,684
NET INCOME	$4,279,703	$6,351,472
Earnings per common share:	'	'
Basic (in dollars per share)	$0.19	$0.29
Diluted (in dollars per share)	$0.19	$0.29
Weighted average number of shares outstanding:	'	'
Basic (in shares)	21,956,067	21,722,855
Diluted (in shares)	22,059,551	22,186,333

CONSOLIDATED_STATEMENTS_OF_COM

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	'	'
Net Income	$4,279,703	$6,351,472
Other comprehensive income (loss):	'	'
Unrealized loss on foreign currency translation adjustments	-1,746,392	-1,490,612
Total other comprehensive income (loss)	-1,746,392	-1,490,612
Comprehensive income	$2,533,311	$4,860,860

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES	'	'
Net income	$4,279,703	$6,351,472
Adjustments to reconcile net income to net cash provided by operating activities:	'	'
Depreciation and amortization	5,075,382	6,686,369
Gain on disposal of property and equipment	-35,867	-42,485
Non-cash compensation	238,280	217,952
Deferred income taxes	-572,361	-930,840
Changes in operating assets and liabilities	'	'
Trade accounts receivable	-28,928,162	-2,488,167
Cost and estimated earnings in excess of billings on uncompleted contracts	958,380	-2,210,937
Prepaid expenses and other	1,080,158	815,489
Prepaid federal and state income tax	3,795,639	'
Other assets	4,295	-1,115
Trade accounts payable	5,812,549	-1,191,337
Accrued liabilities	5,067,307	443,155
Billings in excess of cost and estimated earnings on uncompleted contracts	3,354,740	-2,853,690
Federal and state income taxes payable	3,051,796	475,328
NET CASH PROVIDED BY OPERATING ACTIVITIES	3,181,839	5,271,194
CASH FLOWS FROM INVESTING ACTIVITIES	'	'
Capital expenditures	-978,660	-559,335
Proceeds from sale of property and equipment	69,543	42,982
NET CASH USED IN INVESTING ACTIVITIES	-909,117	-516,353
CASH FLOWS FROM FINANCING ACTIVITIES	'	'
Principal payments on notes payable	-2,576,131	-2,994,826
Principal payments on capital lease obligations	-446,911	-643,768
Proceeds from exercise of stock options	'	336,764
NET CASH USED IN FINANCING ACTIVITIES	-3,023,042	-3,301,830
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	-750,320	1,453,011
Effect of exchange rates on cash	-87,212	-67,822
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	16,130,374	8,614,244
CASH AND CASH EQUIVALENTS AT END OF PERIOD	15,292,842	9,999,433
Supplemental cash flow information	'	'
Interest paid	181,572	319,706
Income taxes paid	3,538,869	4,689,198
Noncash investing and financing activities	'	'
Capital lease obligations incurred	'	316,850
Financed insurance premiums	167,682	156,276
Restricted stock awards to employees	100,200	54,390
Treasury shares issued for stock options exercised	'	$183,964

BASIS_OF_PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2014
BASIS OF PRESENTATION	'
BASIS OF PRESENTATION	'
	NOTE A
	BASIS OF PRESENTATION
	The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and the instructions to Form 10-Q.  Accordingly, they do not include all of the financial information and footnotes required by generally accepted accounting principles for complete financial statements.  References to “we,” “us,” “our,” “its,” or the “Company” refer to TGC Industries, Inc. and our subsidiaries.
	CRITICAL ACCOUNTING POLICIES
	A discussion of our critical accounting policies can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013. There have been no material changes to these policies (including critical accounting estimates and assumptions or judgments affecting the application of those estimates and assumptions) during the quarter ended March 31, 2014.  Certain policies have been paraphrased herein for convenience.
	REVENUE RECOGNITION
	Seismic Surveys
	The Company provides seismic data acquisition survey services to its customers under general service agreements which define certain obligations for the Company and for its customers.  The Company typically enters into a supplemental agreement setting forth the terms of each project, which may be cancelled by either party upon 30 days’ advance written notice.  These supplemental agreements are either “turnkey” agreements providing for a fixed fee to be paid for each unit of seismic data acquired or “term” agreements providing for a fixed hourly, daily, or monthly fee during the term of the project.  Under both types of agreements, the Company recognizes revenues when services have been performed and revenue is realizable.  Services are defined as the commencement of data acquisition.  Revenues are deemed realizable when earned according to the terms of the contracts.  Under turnkey agreements, the total number of units of seismic data to be gathered is set forth in the agreement.  Revenue under turnkey agreements is recognized on a per unit of seismic data acquired rate as services are performed.  Revenue under term agreements is recognized on a per unit of time worked rate as services are performed based on the time worked rate provided in the term agreement.  In the event of a cancelled contract, revenue is recognized and the client is billed for services performed to the date of contract cancellation.  When it becomes evident that the estimates of total costs to be incurred on a contract will exceed the total estimates of revenue to be earned, an estimated loss is recognized in the period in which the loss is identifiable.  The asset “Cost and estimated earnings in excess of billings on uncompleted contracts” represents cost incurred on turnkey agreements in excess of billings on those agreements.  The liability “Billings in excess of costs and estimated earnings on uncompleted contracts” represents billings on turnkey agreements in excess of cost on those agreements.
	ACCUMULATED OTHER COMPREHENSIVE INCOME
	Comprehensive income is a measure of income which includes both net income and other comprehensive income or loss.  Other comprehensive income or loss results from items deferred from recognition in the statement of earnings, which consists solely of foreign currency translation adjustments.  Accumulated other comprehensive income (loss) is presented on the Company’s consolidated balance sheet as a part of shareholders’ equity.  In addition, the Company reports comprehensive income and its components in a separate statement of comprehensive income.
	Foreign currency translation income or loss represents changes in foreign currency rates used to translate the assets, liabilities, revenues and expenses of the Company’s international subsidiary from the local currency.  These changes in foreign currency rates may never be realized or may only be partially realized upon the ultimate disposition, if any, of the international subsidiary.  The Company’s foreign investment is considered permanent in nature as the Company has no plans to divest it.
	RECENT ACCOUNTING PRONOUNCEMENTS
	In July 2013, the Financial Accounting Standards Board issued Accounting Standard Update No. 2013-11, Income Taxes (Topic 740) - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”).  ASU 2013-11 clarifies the balance sheet presentation of an unrecognized tax benefit and was issued to resolve the diversity in practice that had developed in the absence any specific U.S. GAAP.  ASU 2013-11 is applicable to all entities that have an unrecognized tax benefit due to a net operating loss carryforward, a similar tax loss, of a tax credit carryforward.  ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and does not create any new disclosure requirements.  The Company adopted ASU 2013-11 on January 1, 2014, and it did not have a significant effect on its consolidated financial statements.

MANAGEMENT_PRESENTATION

MANAGEMENT PRESENTATION	3 Months Ended
	Mar. 31, 2014
MANAGEMENT PRESENTATION	'
MANAGEMENT PRESENTATION	'
	NOTE B — MANAGEMENT PRESENTATION
	In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial position, results of operations, and changes in financial position have been included.  The results of the interim periods are not necessarily indicative of results to be expected for the entire year.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q report pursuant to certain rules and regulations of the Securities and Exchange Commission (the “SEC”).  For further information, refer to the financial statements and the footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

EARNINGS_PER_SHARE

EARNINGS PER SHARE	3 Months Ended
	Mar. 31, 2014
EARNINGS PER SHARE	'
EARNINGS PER SHARE	'
	NOTE C — EARNINGS PER SHARE
	Basic earnings per common share are based upon the weighted average number of shares of common stock (“common shares”) outstanding.  Diluted earnings per share are based upon the weighted average number of common shares outstanding and, when dilutive, common shares issuable for stock options, warrants, and convertible securities.  All earnings per common share for the three-month periods ended March 31, 2014, and 2013, have been adjusted for the 5% stock dividend paid on May 14, 2013, to shareholders of record as of April 30, 2013.
	The following is a reconciliation of net income and weighted average common shares outstanding for purposes of calculating basic and diluted earnings per share common share:
		Three Months Ended
		March 31,
		(Unaudited)
		2014		2013
	Basic:
	Numerator:
	Net income	$	4,279,703	$	6,351,472
	Denominator:
	Basic - weighted average common shares outstanding	21,956,067		21,722,855
	Basic EPS	$	0.19	$	0.29
	Diluted:
	Numerator:
	Net income	$	4,279,703	$	6,351,472
	Denominator:
	Weighted average common shares outstanding	21,956,067		21,722,855
	Effect of Dilutive Securities:
	Stock options	103,484		463,478
		22,059,551		22,186,333
	Diluted EPS	$	0.19	$	0.29

DIVIDENDS

DIVIDENDS	3 Months Ended
	Mar. 31, 2014
DIVIDENDS	'
DIVIDENDS	'
	NOTE D — DIVIDENDS
	On April 19, 2013, the Company declared a five percent (5%) stock dividend on its outstanding common shares.  The 5% stock dividend was paid on May 14, 2013, to shareholders of record as of April 30, 2013.

INCOME_TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2014
INCOME TAXES	'
INCOME TAXES	'
	NOTE E — INCOME TAXES
	Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes.  In addition, the Company paid various state estimated income taxes for tax year 2014, as well as various state income taxes for tax year 2013.

SHAREBASED_COMPENSATION

SHARE-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2014
SHARE-BASED COMPENSATION.	'
SHARE-BASED COMPENSATION	'
	NOTE F — SHARE-BASED COMPENSATION
	The Company accounts for share-based compensation awards and for unvested awards outstanding using the modified prospective application method.  Accordingly, the Company recognizes the fair value of the share-based compensation awards as wages in the Consolidated Statements of Earnings on a straight-line basis over the vesting period.  The Company recognized compensation expense, relative to share-based awards, in wages in the Consolidated Statements of Earnings of approximately $190,000 and $151,000, less than $0.01 per share, for the three months ended March 31, 2014, and 2013, respectively.
	As of March 31, 2014, there was approximately $299,000 of unrecognized compensation expense, related to the Company’s two share-based compensation plans, which the Company expects to recognize over a period of three years.

BASIS_OF_PRESENTATION_Policies

BASIS OF PRESENTATION (Policies)	3 Months Ended
	Mar. 31, 2014
BASIS OF PRESENTATION	'
BASIS OF PRESENTATION	'
	BASIS OF PRESENTATION
	The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and the instructions to Form 10-Q.  Accordingly, they do not include all of the financial information and footnotes required by generally accepted accounting principles for complete financial statements.  References to “we,” “us,” “our,” “its,” or the “Company” refer to TGC Industries, Inc. and our subsidiaries.
REVENUE RECOGNITION	'
	REVENUE RECOGNITION
	Seismic Surveys
	The Company provides seismic data acquisition survey services to its customers under general service agreements which define certain obligations for the Company and for its customers.  The Company typically enters into a supplemental agreement setting forth the terms of each project, which may be cancelled by either party upon 30 days’ advance written notice.  These supplemental agreements are either “turnkey” agreements providing for a fixed fee to be paid for each unit of seismic data acquired or “term” agreements providing for a fixed hourly, daily, or monthly fee during the term of the project.  Under both types of agreements, the Company recognizes revenues when services have been performed and revenue is realizable.  Services are defined as the commencement of data acquisition.  Revenues are deemed realizable when earned according to the terms of the contracts.  Under turnkey agreements, the total number of units of seismic data to be gathered is set forth in the agreement.  Revenue under turnkey agreements is recognized on a per unit of seismic data acquired rate as services are performed.  Revenue under term agreements is recognized on a per unit of time worked rate as services are performed based on the time worked rate provided in the term agreement.  In the event of a cancelled contract, revenue is recognized and the client is billed for services performed to the date of contract cancellation.  When it becomes evident that the estimates of total costs to be incurred on a contract will exceed the total estimates of revenue to be earned, an estimated loss is recognized in the period in which the loss is identifiable.  The asset “Cost and estimated earnings in excess of billings on uncompleted contracts” represents cost incurred on turnkey agreements in excess of billings on those agreements.  The liability “Billings in excess of costs and estimated earnings on uncompleted contracts” represents billings on turnkey agreements in excess of cost on those agreements.
ACCUMULATED OTHER COMPREHENSIVE INCOME	'
	ACCUMULATED OTHER COMPREHENSIVE INCOME
	Comprehensive income is a measure of income which includes both net income and other comprehensive income or loss.  Other comprehensive income or loss results from items deferred from recognition in the statement of earnings, which consists solely of foreign currency translation adjustments.  Accumulated other comprehensive income (loss) is presented on the Company’s consolidated balance sheet as a part of shareholders’ equity.  In addition, the Company reports comprehensive income and its components in a separate statement of comprehensive income.
	Foreign currency translation income or loss represents changes in foreign currency rates used to translate the assets, liabilities, revenues and expenses of the Company’s international subsidiary from the local currency.  These changes in foreign currency rates may never be realized or may only be partially realized upon the ultimate disposition, if any, of the international subsidiary.  The Company’s foreign investment is considered permanent in nature as the Company has no plans to divest it.
RECENT ACCOUNTING PRONOUNCEMENTS	'
	RECENT ACCOUNTING PRONOUNCEMENTS
	In July 2013, the Financial Accounting Standards Board issued Accounting Standard Update No. 2013-11, Income Taxes (Topic 740) - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”).  ASU 2013-11 clarifies the balance sheet presentation of an unrecognized tax benefit and was issued to resolve the diversity in practice that had developed in the absence any specific U.S. GAAP.  ASU 2013-11 is applicable to all entities that have an unrecognized tax benefit due to a net operating loss carryforward, a similar tax loss, of a tax credit carryforward.  ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and does not create any new disclosure requirements.  The Company adopted ASU 2013-11 on January 1, 2014, and it did not have a significant effect on its consolidated financial statements.

EARNINGS_PER_SHARE_Tables

EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2014
EARNINGS PER SHARE	'
Schedule of reconciliation of net income and weighted average common shares outstanding for purposes of calculating basic and diluted earnings per share common share	'
		Three Months Ended
		March 31,
		(Unaudited)
		2014		2013
	Basic:
	Numerator:
	Net income	$	4,279,703	$	6,351,472
	Denominator:
	Basic - weighted average common shares outstanding	21,956,067		21,722,855
	Basic EPS	$	0.19	$	0.29
	Diluted:
	Numerator:
	Net income	$	4,279,703	$	6,351,472
	Denominator:
	Weighted average common shares outstanding	21,956,067		21,722,855
	Effect of Dilutive Securities:
	Stock options	103,484		463,478
		22,059,551		22,186,333
	Diluted EPS	$	0.19	$	0.29

BASIS_OF_PRESENTATION_Details

BASIS OF PRESENTATION (Details)	3 Months Ended
	Mar. 31, 2014
BASIS OF PRESENTATION	'
Minimum period of prior notice to cancel supplemental agreement	'30 days

EARNINGS_PER_SHARE_Details

EARNINGS PER SHARE (Details) (USD $)	0 Months Ended	3 Months Ended
	14-May-13	Mar. 31, 2014	Mar. 31, 2013
EARNINGS PER SHARE	'	'	'
Percentage of dividend paid on common stock	5.00%	'	'
Numerator:	'	'	'
Net income	'	$4,279,703	$6,351,472
Denominator:	'	'	'
Basic - weighted average common shares outstanding	'	21,956,067	21,722,855
Basic EPS (in dollars per share)	'	$0.19	$0.29
Numerator:	'	'	'
Net income	'	$4,279,703	$6,351,472
Denominator:	'	'	'
Weighted average common shares outstanding	'	21,956,067	21,722,855
Effect of Dilutive Securities:	'	'	'
Stock options	'	103,484	463,478
Diluted - weighted average common shares outstanding	'	22,059,551	22,186,333
Diluted EPS (in dollars per share)	'	$0.19	$0.29

DIVIDENDS_Details

DIVIDENDS (Details)	0 Months Ended
	14-May-13	Apr. 19, 2013
DIVIDENDS	'	'
Percentage of dividend declared on common stock	'	5.00%
Percentage of dividend paid on common stock	5.00%	'

SHAREBASED_COMPENSATION_Detail

SHARE-BASED COMPENSATION (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
	item
SHARE-BASED COMPENSATION.	'	'
Compensation expense of share-based awards recognized in wages	$190,000	$151,000
Unrecognized compensation expense related to share-based compensation plans	$299,000	'
Number of share-based compensation plans	2	'
Period over which unrecognized compensation expense is expected to be recognized	'3 years	'
Less than	'	'
Allocation of stock-based compensation cost	'	'
Compensation expense per share (in dollars per share)	$0.01	$0.01