Pulse Seismic Inc.

Pulse Seismic Inc.

March 23, 2009 23:59 ET

Pulse Data Inc. Reports Strong 2008 Results; Temporarily Suspends Quarterly Dividend in Response to Lower Energy Sector Spending

CALGARY, ALBERTA--(Marketwire - March 23, 2009) - Douglas Cutts, President and Chief Executive
Officer of Pulse Data Inc. (TSX:PSD) ("Pulse" or "the Company"), reports the financial
and operating results of Pulse for the year ended December 31, 2008. The
audited consolidated financial statements, accompanying notes and MD&A will be
filed March 23, 2009 on SEDAR. These documents will also be available on
Pulse's website www.pulsedatainc.com.
For Pulse, 2008 was a good year in what was a challenging time for the
Canadian oil and natural gas industry. Significantly, the Company returned to
being a pure play seismic data library company.


- Returned $10.8 million in dividends to shareholders from cash

- Increased the 3D seismic data library by 907 net square kilometres at a
total cost of $21.0 million (at a net cost to Pulse of $13.6 million).

- Reduced net long-term debt by $5.2 million.

- Purchased and cancelled 2,186,900 common shares through the normal
course issuer bid program for a total cost of $5.4 million.

- Total seismic revenue was the highest in the Company's history, and
2008 data library sales and cash EBITDA were the second highest.

- Total seismic revenue was $45.4 million, comprised of $36.9 million of
data library sales and $8.5 million of participation survey revenue;
compared to 2007 total seismic revenues of $44.2 million, comprised of
$41.2 million of data library sales and $3.0 million of participation
survey revenue.

- Cash EBITDA for the year ended December 31, 2008 was $28.2 million,
compared to $33.0 million in 2007.

- Net earnings from continuing operations were $880,000 ($0.02 per share
basic and diluted) in 2008 compared to $2.5 million ($0.05 per share
basic and diluted) in 2007.

- Net earnings were $586,000 ($0.01 per share basic and diluted) in 2008,
compared to a loss of $5.0 million ($0.10 per share basic and diluted)
in 2007.


As a result of a combination of sharply lower seismic data library sales
in the first quarter of 2009, and the extreme uncertainty related to commodity
prices and energy sector capital expenditures, Pulse announces that it is
temporarily suspending the Company's quarterly dividend. Mr. Cutts indicated
that the Board and management believe that it is in the shareholders' best
interests to preserve cash at this time in order to maintain Pulse's financial
position and to maintain financial flexibility to take advantage of attractive
opportunities in the current downturn.

"Pulse is in an enviable financial position and we want to preserve that
competitive advantage," said Mr. Cutts, noting Pulse's strong current working
capital position of $11.5 million (including cash of $18.8 million) and total
long-term debt of $32.3 million (including current portion of $6.8 million).
At year-end 2008, Pulse had a total debt to equity ratio of 0.5 and cash
EBITDA to total debt ratio of 0.85. On December 17, 2008 Pulse closed a $75.0
million syndicated revolving credit facility to provide additional financing
should attractive growth opportunities arise, of which $42.7 million is
currently undrawn. The current interest rate of this facility is 4.7 percent.
The Company is currently in compliance with all financial covenants under this

Seismic data library sales drive cash EBITDA - Pulse's key financial
metric. Under normal economic conditions, Pulse's business model generates
sufficient cash EBITDA to distribute dividends to shareholders. Pulse
initiated its quarterly dividend program in 2003 and to date has made 22
consecutive payments totaling $32.9 million, equivalent to $0.6625 per share.
The board of directors decided to temporarily suspend the dividend rather than
reduce it, and is committed to reviewing and reinstating the payment of
dividends when seismic data library sales recover.

The dividend suspension will result in cash savings on a quarterly basis
of approximately $2.6 million. Pulse has also implemented additional cost
saving measures including a reduction in directors' and senior management's
compensation and reductions in other general and administrative costs. Pulse
will continue to look for other cost saving measures if current economic
conditions persist.


(000s of dollars except per share data)

3 months ended 12 months ended
December 31 December 31
----------- -----------
2008 2007 2008 2007
---- ---- ---- ----
(unaudited) (unaudited)
Revenue from
Data library sales $ 10,067 $ 10,995 $ 36,894 $ 41,215
Participation surveys 2,202 461 8,509 3,010
Total revenue
from continuing
operations $ 12,269 $ 11,456 $ 45,403 $ 44,225

of seismic
data library $ 10,889 $ 8,478 $ 32,438 $ 28,345

Net earnings
(loss) from
continuing operations $ (1,640) $ 1,018 $ 880 $ 2,511
Net earnings (loss)
from continuing
operations per share:
Basic and diluted $ (0.03)(a) $ 0.02 $ 0.02 $ 0.05

Net earnings (loss) $ (1,640) $ (294) $ 586 $ (4,982)
Net earnings
(loss) per share:
Basic and diluted $ (0.03)(a) $ (0.01)(a) $ 0.01 $ (0.10)(a)

Funds from
operations(b) $ 9,238 $ 8,465 $ 35,188 $ 31,208
Funds from
per share(b):
Basic $ 0.17 $ 0.15 $ 0.65 $ 0.61
Diluted $ 0.17 $ 0.15 $ 0.65 $ 0.60

Cash EBITDA(b) $ 7,351 $ 8,952 $ 28,196 $ 33,038
Working capital:
Cash $ 13,244 $ 6,602 $ 13,244 $ 6,602
Non-cash working
capital 7,918 13,661 7,918 13,661
Current portion
of long term debt (6,798) (8,004) (6,798) (8,004)
Total working capital $ 14,364 $ 12,259 $ 14,364 $ 12,259

Total assets $ 112,383 $ 124,473 $ 112,383 $ 124,473

Capital expenditures:
Seismic data
purchases $ 2,524 $ - $ 4,557 $ 11,738
surveys 11,358 4,700 16,433 6,979
Changes to work
in progress (6,580) (3,991) 1,681 -
Property &
equipment additions 12 475 556 422
Total capital
expenditures $ 7,314 $ 1,184 $ 23,227 $ 19,139

Total long-term debt
(net of current
maturities and debt
financing costs) $ 26,188 $ 23,543 $ 26,188 $ 23,543
Shareholders' equity $ 66,288 $ 79,174 $ 66,288 $ 79,174

Weighted average
shares outstanding:
Basic 53,736,580 54,637,247 53,985,299 50,828,071
Diluted 55,738,860 55,370,779 54,160,333 52,168,384
Shares outstanding
at period end 53,397,583 54,481,601 53,397,583 54,481,601

Seismic library:
2D in net kilometres 257,281 257,281
3D in net square kilometres 12,514 11,607

(a) Basic weighted average shares outstanding are used to calculate loss
per share.
(b) The Company's continuous disclosure documents provide discussion and
analysis of "cash EBITDA", "funds from operations" and "funds from
operations per share". These financial measures do not have standard
definitions prescribed by GAAP in Canada and, therefore, may not be
comparable to similar measures disclosed by other companies. The
Company has included these non-GAAP financial measures because
management, investors, analysts and others use them as measures of
the Company's financial performance. The Company's definition of cash
EBITDA is cash available for interest payments, cash taxes if
applicable, debt servicing, discretionary capital expenditures and
the payment of dividends, and is calculated as earnings before
interest, income taxes, depreciation and amortization less
participation survey revenue, plus non-cash and non-recurring G&A
expenses. The Company's definition of funds from operations is cash
flow from operations as prescribed by Canadian GAAP but excluding the
impact of changes in non-cash working capital. Funds from operations
per share is defined as funds from operations divided by the weighted
average number of shares outstanding for the period.
(c) On July 1, 2008 the Company changed its participation survey revenue
recognition policy from the completed contract method to the
percentage of completion method. Under the percentage of completion
method, participation survey revenue is recognized proportionately
with the degree of completion of the participation survey projects.
As a result, certain financial results for Q4 2007 were restated, but
there was no effect on the financial results for the year ended
December 31, 2007.


During 2008, a total of 907 net square kilometres of 3D seismic data were
added to the seismic data library by conducting participation surveys for new
3D data, and by acquiring existing 3D data sets. Pulse's business model is
designed to generate cash EBITDA by repeatedly licensing data from its seismic
data library to oil and natural gas companies. Pulse believes that this new
seismic data will drive future annuity-like data library sales, of not only
this new seismic data, but also of pre-existing seismic data that the Company
owns in these prospective exploration areas.

During 2008, Pulse completed two 3D participation surveys in west-central
Alberta consisting of 566 net square kilometres and initiated a third 3D
participation survey program consisting of 291 net square kilometres. In
September 2008, Pulse completed and delivered the first participation survey,
consisting of 193 net square kilometres of 3D data. In November 2008, Pulse
completed and delivered the second participation survey, consisting of 373 net
square kilometres of 3D data. A third participation survey was started in the
fourth quarter of 2008, with expected delivery at the end of the first quarter
of 2009. The third participation survey was approximately 19 percent completed
at December 31, 2008. The three participation surveys are all located in the
Deep Basin area in west-central Alberta and the data sets generated are
complementary to Pulse's current seismic data library.

In 2008 Pulse also purchased 341 net square kilometres of existing 3D
seismic data, investing $4.6 million through four separate transactions. The
largest consisted of a 169 net square kilometre data set located in the Deep
Basin area in west-central Alberta. The second-largest is in southeast
Saskatchewan and consists of 117 net square kilometres.


The weakening oil and natural gas industry conditions and financial
market instability, outlined in Pulse's Third Quarterly Report, clearly
worsened during the fourth quarter of 2008 and into the first quarter of 2009.
Oil and natural gas companies have continued to defer previously planned
capital expenditures, reduced 2009 budgets and continue to encounter poor
capital market conditions. Those oil and gas companies that are not
well-capitalized are having difficulty accessing further credit.

As previously stated, Pulse has experienced a sharply lower level of
seismic data library sales to date in the first quarter of 2009. In addition,
there is an unusual lack of clarity or "visibility" concerning the future
levels of oil and natural gas industry field activity. Consequently, it is
problematic for Pulse to attempt to forecast either when energy sector capital
expenditures or seismic data library sales will recover. Pulse has adopted an
extremely conservative stance for 2009 in order to maximize the length of time
that the Company can endure adverse business conditions. Senior management has
developed various planning scenarios that include a range of seismic data
library sales from moderate, through weak to extremely low levels.

In the meantime, Pulse's seismic sales and marketing team is continuing
to engage in active and innovative sales efforts to encourage spending on
seismic data by oil and natural gas producers. Pulse has the second largest
freely licensable seismic data library in Canada and the Company believes that
this data will be attractive to oil and natural gas producers as their capital
budgets are restored. In addition, Pulse is evaluating opportunities to
acquire high-quality data sets at favourable valuations, as E&P companies shed
non-core assets to gain cash. The Company is also continuing to negotiate with
E&P companies on conducting further 3D participation surveys that meet
targeted pre-funding levels from survey partners.

The Company is fortunate to have a flexible financial position, ample
cash and working capital, a lean cost structure, very low capital commitments
in 2009 and access to additional credit. The Company also benefits from
completing its transition in the second quarter of 2008 to become a pure-play
seismic data library company through the disposition of the Terrapoint
business unit. Accordingly, Pulse could continue to operate throughout 2009
and 2010 with extremely low revenue if current difficult economic conditions


A conference call and webcast to review the 2008 financial and operating
results will take place Tuesday, March 24, 2009 at 1:00 p.m. EDT (11:00 a.m.
MDT). Douglas Cutts, President and Chief Executive Officer will chair the call
with Pamela Wicks, Vice-President Finance also taking part. A
question-and-answer period will follow an update on the Company's strategies
and outlook.

To participate please dial (416) 644-3416 (Toronto) or 1 800-732-9303,
approximately 10 minutes before the commencement of the call in order to avoid
delays. A live webcast of the conference call will be available at
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2585440. An archival
recording of the conference call will be available approximately one hour
after the completion of the call until April 3, 2009. To access the replay,
please dial 1-877-289-8525 or (416) 640-1917 (Toronto) and enter the pass code
21300941 followed by the pound (number) sign. In addition, a recording of the
call will be available commencing April 3, 2009 in the Investor Relations
section of Pulse's website at www.pulsedatainc.com.


Pulse is a market leader in the acquisition, marketing and licensing of
2D and 3D seismic data for the western Canadian energy sector. Pulse owns the
second-largest licensable seismic data library in Canada, currently consisting
of approximately 257,300 net kilometres of 2D seismic and 12,500 net square
kilometres of 3D seismic. The library extensively covers the Western Canada
Sedimentary Basin where most of Canada's oil and natural gas exploration and
development occurs. The replacement value of Pulse's library is currently
estimated at over $1 billion based on current field replacement costs.

Forward Looking Statements

This document contains information that constitutes "forward looking
information" or "forward looking statements" (collectively, "forward looking
information") within the meaning of applicable securities legislation. This
forward looking information includes, among other things, statements

- estimated future demand for seismic data;

- estimated future seismic data sales;

- estimated future demand for participation surveys;

- estimated costs, funding, size, commencement dates and delivery dates
of participation surveys;

- planned future participation surveys;

- planned growth of the seismic data library;

- estimated future revenues, cash flow, cash EBITDA and earnings;

- estimated future oil and gas drilling activities;

- planned future dividend payments;

- planned future normal course issuer bid purchases;

- Pulse's business strategy;

- other expectations, beliefs, plans, goals, objectives, assumptions,
information and statements about possible future events, conditions,
results and performance.

Often, but not always, forward looking information uses words or phrases
such as: "expects", "does not expect" or "is expected", "anticipates" or "does
not anticipate", "plans" or "does not plan", "estimates" or "estimated",
"projects" or "projected", "forecasts" or "forecasted", "believes" or "does
not believe", "intends" or "does not intend", "likely" or "unlikely",
"possible", "probable", "scheduled", "positioned", "goal", "objective",
"hopes", "optimistic" or states that certain actions, events or results
"should", "may", "could", "would", "might" or "will" be taken, occur or be

Undue reliance should not be placed on forward-looking information.
Forward looking information is based upon current expectations, estimates and
projections that involve a number of risks and uncertainties which could cause
actual results to vary and in some instances to differ materially from those
anticipated in the forward looking information.

The material risk factors include, but are not limited to:

- the demand for seismic data and participation surveys;

- the pricing of data library license sales;

- the level of pre-funding of participation surveys, and the ability of
the Company to make subsequent data library sales from such
participation surveys;

- the ability of the Company to complete participation surveys on time
and within budget;

- the price and demand for oil and natural gas;

- the level of oil and gas exploration and development activities;

- the ability of the Company's customers to raise capital;

- environmental, health and safety risks;

- the effect of seasonality and weather conditions on participation

- federal and provincial government laws and regulation, including
taxation, royalty rates, environment and safety;

- competition from other seismic data library companies;

- dependence upon qualified seismic field contractors;

- dependence upon key management, operations and marketing personnel.

The foregoing list of risks is not exhaustive. Additional information on
these risks and other factors which could affect the Company's operations or
financial results are included in the Risk Factors section of the Company's
MD&A for the most recent calendar year and interim periods.

Forward looking information is based upon the assumptions, expectations,
estimates and opinions of the Company's management at the time the information
is presented. The Company does not update forward looking information should
circumstances change or management's assumptions, expectations, estimates or
opinions change, except as required by securities laws.

Contact Information