Seitel Announces Third Quarter and Nine Month 2003 Results HOUSTON,
Nov. 14 /PRNewswire-FirstCall/ -- Seitel, Inc. (BULLETIN BOARD:
SEIEQ) ("Seitel" or the "Company") today reported revenues for the
nine months ended September 30, 2003 of $101.3 million compared
with revenues of $120.2 million in the first nine months of 2002.
For the third quarter ended September 30, 2003, revenue was $39.2
million compared to $50.6 million of revenue in last year's third
quarter. Reported revenue in the 2002 periods benefited from high
rates of data selections by clients. Partially offsetting the lower
selections in the 2003 periods were increased revenue from new data
acquisition. Revenue for the quarter and nine-month periods
consisted of the following (in thousands): Three Months Ended Nine
Months Ended September 30, September 30, 2003 2002 2003 2002
Acquisition revenue $7,747 $5,544 $24,428 $18,959 Licensing revenue
Cash licensing sales 19,246 21,357 57,560 46,361 Non-monetary
exchanges 3,261 5,051 9,218 13,399 Deferral of revenue (9,805)
(9,113) (35,685) (26,389) Selections of data 17,403 26,974 42,433
66,327 Solutions and Other 1,347 791 3,342 1,562 Total $39,199
$50,604 $101,296 $120,219 For the nine months ended September 30,
2003, the Company reported a net loss of $12.2 million, or $.48 per
share, compared with a net loss of $94 million or $3.72 per share
in the first nine months of the prior year. Results for both
periods include certain adjustments, charges and costs. In the 2003
nine-month period, the Company recorded an impairment charge of
$13.4 million to reduce the carrying value of its seismic data
library. In addition, the 2003 nine month period includes expenses
totaling $5.9 million incurred for professional and other fees
related to the Company's restructuring efforts, including the
Company's Chapter 11 filing on July 21, 2003 and $1.9 million for
costs related to litigation. Partially offsetting a portion of
these expenses in 2003 were gains of $681,000 relating to the
settlement of certain liabilities at less than their carrying
value, $3.4 million due to a strengthening of the Canadian dollar
and a reduction of $2.0 million in liabilities associated with
certain litigation that was settled in 2003 for amounts less than
previously accrued. The 2002 nine-month period included costs of
$9.5 million for charges related to compensation accrued or paid to
and allowances for the collection of notes receivable from certain
former executives and $7.8 million for professional fees related to
the Company's restructuring efforts and costs related to
litigation. In addition, the 2002 nine month period includes
impairment charges of $25.7 million relating to the carrying value
of the Company's seismic data library, a loss of $60.2 million
relating to the discontinued oil and gas business of the Company,
and a charge of $17.2 million ($11.2 million, net of tax) relating
to the cumulative effect of a change in accounting policy for
amortizing its seismic data library. For the quarter ended
September 30, 2003, the Company reported a net loss of $10.9
million, or $.43 per share, compared with net income of $3.2
million or $.13 per share in the third quarter of 2002. Results for
both periods include certain adjustments, charges and costs. In the
2003 quarterly period, the Company recorded an impairment charge of
$13.4 million to reduce the carrying value of the Company's seismic
data library and incurred expenses totaling $1.7 million for
professional and other fees related to the Company's restructuring
efforts and the Company's Chapter 11 filing on July 21, 2003.
Partially offsetting these charges and expenses in the 2003 third
quarter was $300,000 due to a strengthening of the Canadian dollar.
The 2002 three-month period included $4.6 million of costs for
professional fees related to the Company's restructuring efforts
and costs related to litigation, $600,000 of losses related to the
weakening of the Canadian dollar, and a loss of $1.5 million
relating to the discontinued oil and gas business of the Company.
As noted above, during the period ended September 30, 2003, the
Company recorded a $13.4 million impairment charge to reduce the
carrying value of its seismic data library. Based on industry
conditions and the recent level of cash sales for certain of its
library components, the Company revised its estimate of future cash
flows for these library components. As a result, the Company
determined that the revised estimate of future cash flows would not
be sufficient to recover the carrying value of these certain
library components, and accordingly, the Company estimated the fair
value of such library components by discounting their estimated
future cash flows. The resulting difference between the estimated
fair value and the carrying value was recorded as an impairment
charge. As previously reported, Seitel and 30 of its United States
based subsidiaries filed for Chapter 11 bankruptcy protection in
the District of Delaware on July 21, 2003. As a result of these
filings, Seitel and its 30 United States based subsidiaries are
debtors-in-possession under Chapter 11 of the Bankruptcy Code. As
debtors-in-possession, the Company and these subsidiaries have
continued to operate their business in the ordinary and normal
course. Also, as previously disclosed, the Company's Canadian
subsidiaries are not debtors in the bankruptcy cases, and the
bankruptcy filing does not impact any operations or creditors of
Seitel's Canadian subsidiaries. The voting period on the Company's
previously filed plan of reorganization ended on November 13, 2003.
Based on preliminary and unaudited information, all classes of
creditors have voted to accept the plan, however securities action
plaintiffs have voted to reject, and holders of equity interests
are predicted based upon current tallies to have voted to reject,
the plan. A confirmation hearing on the Company's plan of
reorganization is scheduled to begin on November 17, 2003 and is
expected to be continued on December 3, 2003. Until such time as
the Bankruptcy Court makes a determination regarding confirmation
of the plan, it is not possible to predict whether or not the plan
will be confirmed or to predict the ultimate treatment that will be
accorded to the Company's existing shareholders or to holders of
claims or to the securities class action plaintiffs. All documents
in the Company's Chapter 11 cases, including plans of
reorganization proposed in the Chapter 11 cases, are publicly filed
with the Bankruptcy Court for the District of Delaware. Seitel
markets its proprietary seismic information/technology to more than
400 petroleum companies, licensing data from its library and
creating new seismic surveys under multi-client projects.
Information Regarding Forward Looking Statements This release
includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Statements contained in this release about
Seitel's future outlook, prospects and plans, including those that
express belief, expectation, estimates or intentions, as well as
those that are not statements of historical fact, are forward
looking. The words "proposed", "anticipates", "anticipated",
"will", "would", "should", "estimates" and similar expressions are
intended to identify forward-looking statements. Forward looking
statements represent Seitel's reasonable belief and are based on
Seitel's current expectations and assumptions with respect to
future events. While Seitel believes its expectations and
assumptions are reasonable, they involve risks and uncertainties
beyond Seitel's control that could cause the actual results or
outcome to differ materially from the expected results or outcome.
Such factors include the ability of the Company to continue as a
going concern; the Company's ability to obtain court approval with
respect to motions in the Chapter 11 proceeding prosecuted by it
from time to time; the impact of litigation on the Company and in
any distribution to creditors or equity holders of the Company; the
delay or inability of the Company to complete and/or consummate its
proposed plan of reorganization; risks associated with third
parties seeking and obtaining court approval to propose and confirm
one or more plans of reorganization, for the appointment of a
Chapter 11 trustee or to convert the Company's Chapter 11 case to a
Chapter 7 case; the ability of the Company to obtain and maintain
normal terms with vendors and service providers; the Company's
ability to maintain contracts that are critical to its operations;
the potential adverse impact of the Chapter 11 cases on the
Company's liquidity or results of operations and other risks
associated with operating a business in Chapter 11; any significant
change in the oil and gas industry or the economy generally;
changes in the exploration budgets of the Company's seismic data
and related services customers; actual customer demand for the
Company's 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 and conditions in the capital
markets and equity markets during the periods covered by the
forward looking statements; the effect on our reported operating
results and stock price as a result of the Company's restatement of
financial statements; the results or settlement of litigation
regarding the Company or its assets; the Company's non-compliance
with its debt covenants; adverse actions which may be taken by the
Company's creditors; the level of the Company's cash generated from
operations; the Company's ability to obtain alternative debt or
equity financing on satisfactory terms if internally generated
funds are insufficient to fund its capital needs and the lack of
any strategic disposition, acquisition or joint venture involving
the Company's businesses and assets; and other risks and
uncertainties identified from time to time in the Company's reports
filed with the Securities and Exchange Commission, including its
most recent Annual Report on Form 10-K, copies of which may be
obtained form the Company without charge. These forward-looking
statements speak only as of the date hereof and Seitel disclaims
any duty to update these statements other than as required by law.
Similarly, these and other factors, including the terms of any
reorganization plan ultimately confirmed, can affect the value of
the Company's various pre-petition liabilities, common stock and/or
other equity securities. As a result, no assurance can be given as
to what values, if any, ultimately will be ascribed in the
bankruptcy proceedings to each of these constituencies.
Accordingly, the Company urges that the appropriate caution be
exercised with respect to existing and future investments in any of
these liabilities and/or securities. FINANCIAL TABLES ON FOLLOWING
PAGES SEITEL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In
thousands, except share and per share amounts) (Unaudited)
September 30, December 31, 2003 2002 ASSETS Cash and equivalents
$45,739 $21,517 Restricted cash 350 4,469 Receivables Trade, net of
allowance 32,976 34,536 Notes and other 460 14,372 Net seismic data
library 259,461 284,396 Net other property and equipment 16,749
19,789 Oil and gas operations held for sale 291 656 Investment in
marketable securities 74 5 Deferred income taxes 8,123 11,322
Prepaid expenses, deferred charges and other assets 7,122 7,074
TOTAL ASSETS $371,345 $398,136 LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities not subject to compromise: Accounts payable and accrued
liabilities $11,666 $31,391 Income taxes payable 416 916 Oil and
gas operations held for sale 35 94 Debt Unsecured Notes --- 255,000
Term loans 5,910 8,622 Obligations under capital leases 6,846 8,439
Financial guaranty --- 554 Deferred revenue 50,540 56,084
Liabilities subject to compromise 267,598 --- TOTAL LIABILITIES
343,011 361,100 CONTINGENCIES AND COMMITMENTS STOCKHOLDERS' EQUITY
Preferred stock, par value $.01 per share; authorized 5,000,000
shares; none issued --- --- Common stock, par value $.01 per share;
authorized 50,000,000 shares; issued and outstanding 25,811,601 at
September 30, 2003 and December 31, 2002 258 258 Additional paid-in
capital 166,630 166,630 Retained deficit (133,946) (121,793)
Treasury stock, 435,918 shares at cost at September 30, 2003 and
December 31, 2002 (5,373) (5,373) Notes receivable from officers
and employees (169) (1,178) Accumulated other comprehensive income
(loss) 934 (1,508) TOTAL STOCKHOLDERS' EQUITY 28,334 37,036 TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $371,345 $398,136 SEITEL, INC.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In
thousands, except per share amounts) Three Months Ended September
30, 2003 2002 REVENUE $39,199 $50,604 EXPENSES: Depreciation and
amortization 23,470 23,344 Cost of sales 180 444 Selling, general
and administrative expenses 6,694 14,912 Impairment of seismic data
library 13,354 --- 43,698 38,700 INCOME (LOSS) FROM OPERATIONS
(4,499) 11,904 Interest expense, net (4,945) (4,855) Loss on sale
of security --- (250) Reorganization items (1,675) --- Income
(loss) from continuing operations before income taxes (11,119)
6,799 Provision (benefit) for income taxes (192) 2,130 Income
(loss) from continuing operations (10,927) 4,669 Income (loss) from
discontinued operations (including loss from disposal of $1,225 in
2002) 19 (1,490) NET INCOME (LOSS) $(10,908) $3,179 Basic and
diluted income (loss) per share: Income (loss) from continuing
operations $(.43) $.19 Loss from discontinued operations --- (.06)
Net income (loss) $(.43) $.13 Weighted average number of common and
common equivalent shares - basic and diluted 25,376 25,376 SEITEL,
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts) Nine Months Ended
September 30, 2003 2002 REVENUE $101,296 $120,219 EXPENSES:
Depreciation and amortization 61,718 61,505 Cost of sales 510 674
Selling, general and administrative expenses 21,213 49,645
Impairment of seismic data library 13,354 25,696 96,795 137,520
INCOME (LOSS) FROM OPERATIONS 4,501 (17,301) Interest expense, net
(14,860) (15,039) Gain on extinguishment of liabilities 681 ---
Loss on sale of security --- (332) Reorganization items (1,675) ---
Loss from continuing operations before income taxes and cumulative
effect of change in accounting principle (11,353) (32,672)
Provision (benefit) for income taxes 621 (10,025) Loss from
continuing operations before cumulative effect of change in
accounting principle (11,974) (22,647) Loss from discontinued
operations (including loss from disposal of $57,989 in 2002) (179)
(60,201) Cumulative effect of change in accounting principle, net
of tax --- (11,162) NET LOSS $(12,153) $(94,010) Basic and diluted
loss per share: Loss from continuing operations $(.47) $(.90) Loss
from discontinued operations (.01) (2.38) Cumulative effect of
accounting change --- (.44) Net loss $(.48) $(3.72) Weighted
average number of common and common equivalent shares - basic and
diluted 25,376 25,275 DATASOURCE: Seitel, Inc. CONTACT: Larry Lenig
or Len Goldstein, both of Seitel, Inc., +1-713-881-8900 Web site:
http://www.seitel-inc.com/
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