Welcome!

News Feed Item

Seitel Announces First Quarter 2014 Results

Seitel, Inc., a leading provider of seismic data to the oil and gas industry, today reported results for the first quarter ended March 31, 2014.

First Quarter Highlights -

     
($ in millions) First Quarter
2014       2013       % Increase
Cash Resales $ 32.3 $ 22.4 44 %
Total Revenue 57.1 51.4 11 %
Cash EBITDA 26.1 16.7 57 %
Net Income 1.9 1.7 9 %
 

Total revenue for the first quarter of 2014 was $57.1 million compared to $51.4 million in the first quarter of 2013. The 11% increase in total revenue resulted from a $14.2 million, or 57%, increase in total resale licensing revenue partially offset by an $8.3 million, or 33%, decrease in acquisition underwriting revenue. Cash resales, a component of resale licensing revenue, were $32.3 million, an increase of $9.8 million, or 44%, in the first quarter of 2014 compared to cash resales of $22.4 million in the first quarter of 2013. Cash resale activity can vary significantly quarter to quarter and, in the first quarter of 2014, we experienced an increase in activity as compared to the first quarter of 2013. Acquisition underwriting revenue was $16.8 million in the first quarter of 2014 compared to $25.1 million in the first quarter of 2013. Fewer data acquisition projects were ongoing in the first quarter of 2014 compared to 2013 as a result of our strategic decision to focus on cash generation by reducing our level of capital expenditures on new data acquisition projects beginning in 2013 and continuing in 2014 as compared to the levels incurred in 2012 and 2011. This reduction directly impacts acquisition underwriting revenue. We continue to focus our data acquisition activity on areas with oil and liquids-rich hydrocarbons, with the majority of our activity in the first quarter of 2014 occurring in the Eagle Ford/Woodbine, Utica/Marcellus, Permian and Montney areas. Solutions and other revenue was $1.2 million in the first quarter of 2014 compared to $1.4 million in the first quarter of 2013.

“We are pleased with the increase in our cash resale activity in the first quarter,” commented Rob Monson, president and chief executive officer. “Demand for data in conventional areas drove the increase while data in unconventional areas continued to generate a significant portion of our cash resale activity. Although we have made a strategic decision to reduce our level of capital investment in 2014, the investments made in our data library since 2010, along with our legacy data, should fuel growth in our data library sales. The size and diversity of our data library is the primary key to continuing to generate significant levels of cash resales.”

For the first quarter of 2014, our net income was $1.9 million compared to $1.7 million for the same period last year. The $0.2 million increase in net income was primarily due to higher revenue and lower interest expense. In addition, the first quarter of 2013 included a $1.5 million charge related to the early extinguishment of our debt. These increases to net income were partially offset by higher amortization of seismic data due to the mix of data licensed in the quarter.

Cash EBITDA, generally defined as cash resales and solutions revenue less cash operating expenses (excluding various non-recurring items), was $26.1 million in the first quarter of 2014 compared to $16.7 million for the first quarter of 2013. The increase between quarters resulted from the higher level of cash resale activity in the 2014 first quarter. Cash EBITDA for the last twelve months ended March 31, 2014 was $84.5 million.

Selling, general and administrative (“SG&A”) expenses were $7.4 million in both the first quarter of 2014 and 2013. Variable expenses, including commissions and annual incentive compensation, were higher in the first quarter of 2014 due to the increase in revenue and Cash EBITDA. This increase was offset by a benefit resulting from the reduction in our allowance for doubtful accounts primarily due to the collection of a previously reserved receivable.

We continue to target $35 million for our net cash capital expenditures for 2014. In the first quarter of 2014, our net cash capital expenditures were $7.0 million with total capital expenditures of $24.0 million, of which $23.1 million related to new data acquisition. Our current backlog of net cash capital expenditures related to acquisition programs is $10.1 million, of which we expect the majority to be incurred in 2014.

CONFERENCE CALL

Seitel will hold its quarterly conference call to discuss first quarter results for 2014 on Tuesday, May 20, 2014 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). The dial-in number for the call is 800-374-2540, Conference ID 41321131. A replay of the call will be available until May 27, 2014 by dialing 800-585-8367, Conference ID 41321131 and will be available following the conference call at the Investor Relations section of the company's website at http://www.seitel.com.

ABOUT SEITEL

Seitel is a leading provider of onshore seismic data to the oil and gas industry in North America. Seitel's data products and services are critical in the exploration for and development of oil and gas reserves by exploration and production companies. Seitel has ownership in an extensive library of proprietary onshore and offshore seismic data that it has accumulated since 1982 and that it licenses to a wide range of exploration and production companies. Seitel believes that its library of 3D onshore seismic data is the largest available for licensing in North America and includes leading positions in oil and liquids-rich unconventional plays. Seitel has ownership in over 40,000 square miles of 3D onshore data, over 10,000 square miles of 3D offshore data and approximately 1.1 million linear miles of 2D seismic data concentrated in the major active North American oil and gas producing regions. Seitel serves a market which includes over 1,600 companies in the oil and gas industry.

This press release contains “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Statements contained in this press release about our future outlook, prospects, strategies and plans, and about industry conditions, demand for seismic services and the future economic life of our seismic data are forward-looking, among others. All statements that express belief, expectation, estimates or intentions, as well as those that are not statements of historical fact, are forward-looking. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” “propose,” “plan,” “target,” “foresee,” “should,” “intend,” “may,” “will,” “would,” “could,” “potential” and similar expressions are intended to identify forward-looking statements. Forward-looking statements represent our present belief and are based on our current expectations and assumptions with respect to future events and their potential effect on us. While we believe our expectations and assumptions are reasonable, they involve risks and uncertainties beyond our control that could cause the actual results or outcome to differ materially from the expected results or outcome reflected in our forward-looking statements. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release may not occur. Such risks and uncertainties include, without limitation, actual customer demand for our seismic data and related services, the timing and extent of changes in commodity prices for natural gas, crude oil and condensate and natural gas liquids, conditions in the capital markets during the periods covered by the forward-looking statements, the effect of economic conditions, our ability to obtain financing on satisfactory terms if internally generated funds and our current credit facility are insufficient to fund our capital needs, the impact on our financial condition as a result of our debt and our debt service, our ability to obtain and maintain normal terms with our vendors and service providers, our ability to maintain contracts that are critical to our operations, changes in the oil and gas industry or the economy generally and changes in the exploration budgets of our customers. For additional information regarding known material factors that could cause our actual results to differ, please see our filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

The forward-looking statements contained in this press release speak only as of the date hereof and readers are cautioned not to place undue reliance on such forward-looking statements. Except as required by federal and state securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or any other reason. All forward-looking statements attributable to Seitel, Inc. or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein, in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and future reports filed with the SEC.

This press release also includes certain non-GAAP financial measures as defined under SEC rules. Non-GAAP financial measures include cash resales, for which the most comparable GAAP measure is total revenue; cash EBITDA, for which the most comparable GAAP measure is net income; and net cash capital expenditures, for which the most comparable GAAP measure is total capital expenditures. Reconciliations of each non-GAAP financial measure to its most comparable GAAP measure are included at the end of this press release.

(Tables to follow)

 

SEITEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

 

           
(unaudited)
March 31, 2014 December 31, 2013
ASSETS
Cash and cash equivalents $33,146 $31,353
Receivables, net 52,516 45,119
Net seismic data library 180,438 195,778
Net property and equipment 4,244 4,611
Prepaid expenses, deferred charges and other 9,833 9,844
Intangible assets, net 13,382 14,762
Goodwill 197,991 201,535
Deferred income taxes 91,033   92,511  
TOTAL ASSETS $582,583   $595,513  
 
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Accounts payable and accrued liabilities $ 38,159 $ 37,777
Income taxes payable 2,106 787
Senior Notes 250,000 250,000
Obligations under capital leases 2,516 2,676
Deferred revenue 31,909 41,739
Deferred income taxes 6,398   7,578  
TOTAL LIABILITIES 331,088   340,557  
 
COMMITMENTS AND CONTINGENCIES
 
STOCKHOLDER'S EQUITY
Common stock, par value $.001 per share; 100 shares authorized,
issued and outstanding at March 31, 2014 and December 31, 2013

-

-

Additional paid-in capital 399,819 399,641
Retained deficit (156,562 ) (158,454 )
Accumulated other comprehensive income 8,238   13,769  
TOTAL STOCKHOLDER'S EQUITY 251,495   254,956  
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $582,583   $595,513  
 
 

SEITEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands)

 

           
Three Months Ended
March 31,
2014 2013
(unaudited)
 
REVENUE $ 57,053 $ 51,351
 
EXPENSES:
Depreciation and amortization 37,858 29,338
Cost of sales 126 39
Selling, general and administrative 7,425   7,387  
45,409   36,764  
 
INCOME FROM OPERATIONS 11,644 14,587
 
Interest expense, net (6,207 ) (9,315 )
Foreign currency exchange losses (1,274 ) (647 )
Loss on early extinguishment of debt

-

(1,504 )
Other income (loss) (14 ) 1  
 
Income before income taxes 4,149 3,122
Provision for income taxes 2,257   1,384  
 
NET INCOME $ 1,892   $ 1,738  
 

Cash resales represent new contracts for data licenses from our library, including data currently in progress, payable in cash. We believe this measure is important in assessing overall industry and client activity. Cash resales are likely to fluctuate quarter to quarter as they do not require the longer planning and lead times necessary for new data creation. The following table summarizes the components of Seitel's revenue and shows how cash resales (a non-GAAP financial measure) are a component of total revenue, the most directly comparable GAAP financial measure (in thousands):

     
Three Months Ended
March 31,
2014       2013
Total acquisition underwriting revenue $ 16,837 $ 25,089
 
Resale licensing revenue:
Cash resales 32,277 22,445
Non-monetary exchanges 177 324
Revenue recognition adjustments 6,577 2,072
Total resale licensing revenue 39,031 24,841
 
Total seismic revenue 55,868 49,930
 
Solutions and other 1,185 1,421
Total revenue $ 57,053 $ 51,351
 

Cash EBITDA represents cash generated from licensing data from our seismic library net of recurring cash operating expenses. We believe this measure is helpful in determining the level of cash from operations we have available for debt service and funding of capital expenditures (net of the portion funded or underwritten by our customers). Cash EBITDA includes cash resales plus all other cash revenues other than from data acquisitions, less cost of goods sold and cash selling, general and administrative expenses (excluding non-recurring corporate expenses such as severance and legal, financial and other expenses related to corporate and strategic transactions). The following is a quantitative reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, net income (in thousands):

                 
Three Months Ended Last Twelve Months
March 31, Ended March 31,

2014

2013

2014

Cash EBITDA 26,118 16,656 $ 84,526
Add other revenue components not included in cash EBITDA:
Acquisition underwriting revenue 16,837 25,089 79,060
Non-monetary exchanges 177 324 1,509
Revenue recognition adjustments 6,577 2,072 18,181
Add (subtract) other items included in net income:
Depreciation and amortization (37,858 ) (29,338 ) (130,118 )
Non-cash operating expenses (178 ) (226 ) (821 )
Non-recurring corporate expenses (29 ) 10 (450 )
Interest expense, net (6,207 ) (9,315 ) (24,743 )
Foreign currency losses (1,274 ) (647 ) (2,849 )
Loss on early extinguishment of debt

-

(1,504 )

-

Other income (loss) (14 ) 1 473
Benefit (provision) for income taxes   (2,257 )   (1,384 )   89,067  
Net income $ 1,892   $ 1,738   $ 113,835  
 

Net cash capital expenditures represent total capital expenditures less cash underwriting revenue from our clients and non-cash additions to the seismic data library. We believe this measure is important as it reflects the amount of capital expenditures funded from our operating cash flow. The following table summarizes our actual capital expenditures for the three months ended March 31, 2014 and our estimate for the year ending December 31, 2014 and shows how net cash capital expenditures (a non-GAAP financial measure) are derived from total capital expenditures, the most directly comparable GAAP financial measure (in thousands):

                 
Three Months Estimate for
Ended March 31, Remainder of Total Estimate
2014 2014 for 2014
New data acquisition $ 23,147 86,753 109,900
Cash purchases and data processing 539 1,361 1,900
Non-monetary exchanges 177 4,523 4,700
Property and equipment and other   183     1,517     1,700  
Total capital expenditures 24,046 94,154 118,200
Less:
Non-monetary exchanges (177 ) (4,523 ) (4,700 )
Cash underwriting   (16,837 )   (61,663 )   (78,500 )
Net cash capital expenditures $ 7,032   $ 27,968   $ 35,000  
 

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
@ThingsExpo has been named the ‘Top WebRTC Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @ThingsExpo ranked as the number one ‘WebRTC Influencer' followed by @DevOpsSummit at 55th.
In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, John Jelinek IV, a web developer at Linux Academy, will discuss why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers...
SYS-CON Events announced today that Enzu will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive ad...
Providing the needed data for application development and testing is a huge headache for most organizations. The problems are often the same across companies - speed, quality, cost, and control. Provisioning data can take days or weeks, every time a refresh is required. Using dummy data leads to quality problems. Creating physical copies of large data sets and sending them to distributed teams of developers eats up expensive storage and bandwidth resources. And, all of these copies proliferating...
SYS-CON Events announced today that MobiDev, a client-oriented software development company, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex softw...
The speed of software changes in growing and large scale rapid-paced DevOps environments presents a challenge for continuous testing. Many organizations struggle to get this right. Practices that work for small scale continuous testing may not be sufficient as the requirements grow. In his session at DevOps Summit, Marc Hornbeek, Sr. Solutions Architect of DevOps continuous test solutions at Spirent Communications, explained the best practices of continuous testing at high scale, which is rele...
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, contrasted how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He showed how the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He also demoed building immutable pipelines in the cloud ...
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
Hardware virtualization and cloud computing allowed us to increase resource utilization and increase our flexibility to respond to business demand. Docker Containers are the next quantum leap - Are they?! Databases always represented an additional set of challenges unique to running workloads requiring a maximum of I/O, network, CPU resources combined with data locality.
Due of the rise of Hadoop, many enterprises are now deploying their first small clusters of 10 to 20 servers. At this small scale, the complexity of operating the cluster looks and feels like general data center servers. It is not until the clusters scale, as they inevitably do, when the pain caused by the exponential complexity becomes apparent. We've seen this problem occur time and time again. In his session at Big Data Expo, Greg Bruno, Vice President of Engineering and co-founder of StackIQ...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Security, data privacy, reliability, and regulatory compliance are critical factors when evaluating whether to move business applications from in-house, client-hosted environments to a cloud platform. Quality assurance plays a vital role in ensuring that the appropriate level of risk assessment, verification, and validation takes place to ensure business continuity during the migration to a new cloud platform.
"Tintri was started in 2008 with the express purpose of building a storage appliance that is ideal for virtualized environments. We support a lot of different hypervisor platforms from VMware to OpenStack to Hyper-V," explained Dan Florea, Director of Product Management at Tintri, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...