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DAWSON
Dawson Geophysical Company
OVER 50 YEARS OF GEOPHYSICAL EXCELLENCE
ANNUAL REPORT 2003
Founded in 1952, Dawson Geophysical Company acquires and processes 2-D, 3-D and
multi-component seismic data used in analyzing subsurface geologic conditions
for the potential of oil and natural gas accumulation. Dawson's clients - major
and intermediate-sized oil and gas companies and independent oil operators -
retain exclusive rights to the information obtained.
The Company operates highly mobile, land-based acquisition crews throughout the
lower 48 states. The Company has earned a 50-year reputation for
state-of-the-art equipment, technology and safety, as well as for having crews
that are among the most experienced and competent in the industry. Data
processing is performed by geophysicists in Midland and Houston, Texas.
FINANCIAL HIGHLIGHTS
REVENUES GROSS MARGIN
-------- ------------
$24,198 $18,469 $37,878 $36,078 $51,592 $ 2,236 $(3,239) $ 4,845 $ 2,873 $ 5,441
- ----------------------------------------------- -----------------------------------------------
1999 2000 2001 2002 2003 1999 2000 2001 2002 2003
(amounts in thousands) (amounts in thousands)
NET LOSS CAPITAL EXPENDITURES
-------- --------------------
$(6,430) $(11,135) $(4,978) $(2,292) $(899) $ 164 $ 3,861 $ 750 $ 2,047 $ 6,152
- ---------------------------------------------------- ----------------------------------------------
1999 2000 2001 2002 2003 1999 2000 2001 2002 2003
(amounts in thousands) (amounts in thousands)
CHANNEL COUNT
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17,500 20,000 21,000 22,720 26,400
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1999 2000 2001 2002 2003
(amounts in thousands)
LETTER TO SHAREHOLDERS
Dear Shareholder:
Your Company made significant progress on all fronts during fiscal year 2003
ending September 30. Revenues for the year of $51,592,000 exceed those of fiscal
year 2002, $36,078,000, by 43 percent. The net loss for the year of $899,000
reflects improvement over the 2002 loss of $2,292,000. Profitability remains
elusive due to generally depressed conditions within the geophysical industry
world wide during the past five years. Pricing in this environment has improved
considerably due to your Company's leading position in the U.S. market; however,
prices do not yet cover the unavoidable effects of weather and difficulties
encountered in obtaining rights-of-way.
The Company exhibited profitability in the second and fourth quarters of 2003.
The fourth quarter 2003 earnings of $557,000 compared to an identical net loss
of $557,000 in the same quarter of 2002. Net profit of $844,000 in the second
quarter of 2003 compares to a second quarter loss of $134,000 in 2002. The
Company's order book provided capacity operations for most of fiscal 2003,
remaining so going well into fiscal 2004. Management is working hard to obtain
more realistic weather protection and redoubling efforts to mitigate permit
related delays in order to reach improved and consistent profitability.
During 2003 the Company acted on opportunities for growth and technical depth.
The Company expanded operations in its Houston and Denver offices and added an
office in Oklahoma City. The technical expertise of additional staff in each
office coincides with increased demand for high resolution 3-D seismic surveys
and leading edge products such as the
ExxonMobil-licensed High Fidelity Vibratory Seismic (HFVS) method and
9-component 3-D surveys employing both compression and shear wave energy
sources. The Company has satisfied client demand for increased channel count by
acquiring equipment on the open market at reduced prices. In the 2000-2003 time
period the Company has invested $12,811,000 in these kinds of capital expansions
and improvements.
Dawson Geophysical Company is engaged in an essential technology designed to
help discover needed reserves of crude oil and natural gas, also essential
commodities in an expanding, demanding world. Your Company is dedicated to do
whatever is necessary to remain on the leading edge of this effort.
With best wishes for a joyous holiday season to you and yours from all of us, we
are sincerely yours.
[PHOTOS OF L. DECKER DAWSON AND STEPHEN C. JUMPER]
/s/ L. Decker Dawson /s/ Stephen C. Jumper
L. Decker Dawson Stephen C. Jumper
Chairman of the Board President
November 28, 2003
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DAWSON
Dawson Geophysical Company
THE TOTAL PACKAGE.
Dawson is one of the most experienced and respected names in the geophysical
industry. From survey design, to permitting, surveying, date acquisition and
data processing, the Company delivers our unique total package of seismic data
services to clients on shore throughout the lower 48 states. The commitment
of the Company and each of our employees is to continue our 50-year dedication
to delivering greater value and more reliable data for our clients' geophysical
data.
[VARIOUS PHOTOS]
INVESTOR INFORMATION
CORPORATE OFFICES DIRECTORS OFFICERS
508 West Wall, Suite 800 Paul H. Brown L. Decker Dawson
Midland, Texas 79701-5010 Sugar Land, Texas Chief Executive Officer
Phone: 432-684-3000 Management Consultant
Fax: 432-684-3030 Stephen C. Jumper
Email: info@dawson3d.com Calvin J. Clements President
http://www.dawson3d.com Lubbock, Texas & Chief Operating Officer
Retired Vice President
of the Company Howell W. Pardue
Executive Vice President
ANNUAL MEETING
The Annual Meeting of Shareholders will be L. Decker Dawson
held January 27, 2004, at 10:00 a.m. at Midland, Texas C. Ray Tobias
The Petroleum Club of Midland, Chairman of the Board of Executive Vice President
501 West Wall, Midland, Texas 79701 Directors and Chief Executive
Officer of the Company Christina W. Hagan
Senior Vice President, Secretary
& Chief Financial Officer
REGISTRAR AND TRANSFER AGENT Gary M. Hoover, Ph.D.
Mellon Investor Services LLC Bartlesville, Oklahoma
Dallas, Texas Retired Geophysicist Frank D. Brown
Vice President
Stephen C. Jumper
STOCK EXCHANGE LISTING Midland, Texas K.S. Forsdick
Nasdaq National Market System President and Chief Operating Vice President
Symbol: DWSN Officer of the Company
Edward L. Huff
Matthew P. Murphy Vice President
INDEPENDENT PUBLIC ACCOUNTANTS Midland, Texas
KPMG LLP Retired Banking Executive
Midland, Texas
Howell W. Pardue
Midland, Texas
Executive Vice President
of the Company
Tim C. Thompson
Midland, Texas
Management Consultant
C. Ray Tobias
Midland, Texas
Executive Vice President
of the Company
We are pleased to offer you the opportunity to receive future quarterly and
annual reports electronically over the internet. In utilizing this service, you
are not only improving the efficiency of your access to information, you will
also help reduce printing and postage costs for your Company.
Forms 10-Q and 10-K reports will be available on the internet at
www.sec.gov each quarter and additional information will be available at
www.dawson3d.com.
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DAWSON
Dawson Geophysical Company
Midland, Texas 432-684-3000 o 800-D-DAWSON
Houston, Texas 713-917-6772
Denver, Colorado 303-409-7787
Oklahoma City, Oklahoma 405-848-7512
www.dawson3d.com
508 West Wall, Suite 800
Midland, Texas 79701-5010