TGC Industries, Inc.
NASDAQ: TGE June 2008
SAFE HARBOR STATEMENT
In addition to historical information, this presentation contains forward-looking statements. These statements relate to future events or our future financial performance. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors. The following factors, among others, could cause our actual results and performance to differ materially from the results and performance projected in, or implied by, the forward-looking statements: our history of losses and possibility of further losses; the effect of poor operating results on our company; fluctuations in operating results from period to period; the effect of growth on our infrastructure, resources, and existing sales; our ability to expand our operations in both new and existing markets; dependence upon energy industry spending for seismic data acquisition services; the unpredictable nature of forecasting weather; the potential for contract delay or cancellation; the potential for fluctuations in oil and natural gas prices; the impact of litigation; our ability to raise capital and the availability of capital resources; our ability to fully utilize and retain executives; the impact of federal, state, or local government regulations; labor shortages or increases in labor costs; economic and political conditions generally; and the effect of competition in the seismic data acquisition industry. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in, or implied by, these forward-looking statements, even if new information becomes available in the future. Although the Company believes the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
2
COMPANY OVERVIEW
Operating since 1967 Leading provider of land seismic data acquisition services
throughout the continental U.S. Acquires geophysical data using the latest in three-dimensional (3-D) survey techniques Operates 8 seismic data acquisition crews, using 7 ARAM ARIES systems and 1 Opseis Eagle system Channel capacity is approximately 43,000 Experienced management team:
Wayne Whitener, President, CEO, Director Daniel Winn, VP Operations Kenneth Uselton, Secretary, Treasurer, CFO
30 years experience 25 years experience 25 years experience
3
SEISMIC DATA ACQUISITION SERVICES
Broad services for seismic
data acquisition
Seismic services tailored to
customer requirements hole) energy sources capability
Vibroseis or dynamite (shot-
Acquisition under contract
work only; no spec work
We are not involved in the processing and interpretation of data results.
4
SEISMIC DATA ACQUISITION PROCESS
Bid submitted / Contract awarded TGC survey crews equipped with the latest GPS equipment
Review operational issues and consider environmental impact Survey crew completes ground operation
Project design Deploy equipment for 3-D seismic data acquisition
Crews of 35 to 40 deploy geophones and cables connected to the central recording station in the field Sound waves are generated by an energy source, either dynamite or vibroseis Reflected waves are received by geophones which are connected to “channels” Channels amplify the analog signal, convert it to digital and transmit the data
We maintain complete and continuous quality control systems on all our crews, improving productivity without compromising safety and quality standards.
5
FIELD OPERATIONS
8 experienced seismic crews
Crew managers have at least 20 years experience Equipped with advanced electronics
58 vibration vehicles
7 ARAM ARIES and 1 Opseis Eagle data gathering systems
ARAM ARIES provides increased productivity in seismic data collection Opseis Eagle data gathering system used in specialized areas Approximately 43,000 available channels
Shot-hole assets replace third party contractors and reduce third party costs
We help customers reduce finding costs and increase exploration and development productivity.
6
CUSTOMERS AND CONTRACTS
Independent and major E&P companies
Loyal customer base In 2007, approximately 45% customer repeat rate
2007 contract mix Term (10%) Turnkey (90%) 2007 mix of contracts by energy source Vibroseis 66% Dynamite 34% Backlog as of April 28, 2008 of approximately $46 million
7
FAVORABLE SEISMIC INDUSTRY FUNDAMENTALS
Seismic market is expected to continue growing at a CAGR of
15%, reaching over $10 billion by 2010*
Capital spending by E & P companies expected to increase again
in 2008
Seismic surveys are increasing in size and complexity Strongest U.S. land activity in regions where TGC has strong
presence
Mid-continent / Gulf coast / Southwest
* Lehman Brothers Considerable near-term market opportunity for seismic data acquisition services
8
COMPETITIVE LANDSCAPE
TGC is a leader in the domestic land based seismic data acquisition
industry There are approximately 55 working land crews Primary peers / competitors include:
(1)
in the U.S.
Dawson Geophysical / Geokinetics / CGGVeritas
TGC’s major competitive advantages:
Equipment versatility Flexibility to move channels from one crew to another as market demands Excellent reputation Continued investment in new equipment Additional channels for larger jobs Specialized equipment to meet specific customer requirements More new equipment to meet overall demand
9
(1) Source: IHS Energy
GROWTH STRATEGIES
Increased productivity and optimize equipment and crew utilization
Larger jobs / increased channel count Specific needs / specialized equipment
Continued investment in new equipment as demand dictates
$70 million over the last 36 months
Selectively evaluate new equipment purchases based upon expected market dynamics
Shot-hole drilling equipment optimizes dynamite acquisition operations
Regional field offices in key areas of the country
Houston / Oklahoma City / Denver
10
FINANCIALS
11
REVENUES
$ In thousands
100,000 80,000 60,000 40,000
20,084 30,852 8,468 67,760
90,396
20,000 0
2003
2004
2005
2006
2007
12
EARNINGS PER SHARE
0.60 0.50 0.40 0.30 0.20 0.10 0.00 2003 2004 2005 2006 2007
$0.04 $0.43
$0.49
$0.46
$0.22
Per share amounts adjusted to reflect the 5% stock dividends paid in 2006 and 2007
13
EBITDA
$ In thousands
30,000 25,000 20,000 15,000 10,000 5,000 0 2003 2004 2005 2006
26,085
23,940
10,550 4,099 1,878
2007
14
EBITDA (Earnings before net interest expense, taxes, depreciation and amortization)
ANNUAL FINANCIAL HIGHLIGHTS
2005 Revenues D&A Expense % of Revenues $30,852 $ 3,201 10.4% 2006 $67,760 $ 9,540 14.1% 2007 $90,396 $12,743 14.1%
Income from operations
EPS EBITDA
$7,349
$0.43 $10,550
$14,400
$0.49 $23,940
$13,342
$0.46 $26,085
15
STRONG CAPITALIZATION
12/31/06
Cash, cash equivalents, and short-term investments Long-term debt $9,389 3,064
12/31/07
$4,504
3,769
Shareholders equity Total liabilities and equity
35,043
42,922
56,400
61,162
16
FIRST QUARTER 2008 RESULTS
Q1- 08
Q1- 07
18,608 3,662 2,079 $0.12 6,963 37.4% +20.8% - 7.6% - 4.6% - 8.3% - 4.3%
Revenues Inc from Operations Net Income Diluted EPS EBITDA EBITDA Margin
22,471 3,384 1,983 $0.11 6,661 29.6%
Per share amounts adjusted to reflect the 5% stock dividend paid April 28, 2008. $ Thousands, except EPS
17
INVESTMENT CONSIDERATIONS
Leading provider of land seismic data acquisition services
throughout the U.S.
Skilled and experienced seismic data acquisition crews Optimization of equipment and crews Long-standing and diverse customer base Favorable seismic industry fundamentals Strong financial position Dedicated and experienced management team
18
TGC Industries, Inc.
Thank you for your interest.