VERITAS DGC INC.

VERITAS DGC INC.

March 29, 2005 16:18 ET

Veritas DGC Inc. Announces Preliminary Second Fiscal Quarter Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: VERITAS DGC INC.

NYSE, TSX SYMBOL: VTS

MARCH 29, 2005 - 16:18 ET

Veritas DGC Inc. Announces Preliminary Second Fiscal
Quarter Results

HOUSTON, TEXAS--(CCNMatthews - March 29, 2005) - Veritas DGC Inc.
(TSX:VTS)(NYSE:VTS) today announced preliminary financial results for
the second fiscal quarter ended January 31, 2005. Preliminary revenue
and earnings were as follows:



For The Three Months
Ended
January 31, 2005
--------------------
(millions, except earnings per share)

Revenues $ 192.2
Pre- tax income 33.5
Net income 16.9
Diluted earnings per common share 0.49


The Company has previously announced that it will restate its prior
period results, including the results for the second quarter of fiscal
2004. Therefore, the Company has not included information for the
comparable 2004 period.

Chairman and CEO, Thierry Pilenko, commented on the quarter, "I am
delighted to report that Veritas had an excellent second quarter.
Revenues of $192 million set an all time record which enabled us to
increase our cash by $70 million during the quarter, resulting in an
ending cash balance of $205 million as of January 31, 2005."

Mr. Pilenko went on to say, "We continue to see increased exploration
activity driven by robust market conditions and reserves replacement
concerns. Through our unique reservoir illuminating acquisition and
processing technologies, I believe Veritas is well positioned for
continued excellent performance and I am truly excited about the future."

Revenue for the second quarter breaks down as follows:



For The Three Months
Ended
January 31, 2005
--------------------
(millions)

Multi-client:
Land $ 15.2
Marine 72.5
--------
Subtotal 87.7
Contract:
Land 40.4
Marine 64.1
--------
Subtotal 104.5
--------
Total Revenues $ 192.2
--------
--------


Income Taxes

The Company's effective tax rate for the quarter was 50%, significantly
higher than the 35% U.S. statutory rate. Substantially all of this
difference in tax rate is due to the fact that, in accordance with GAAP,
the Company is currently required to record valuation allowances on most
of its deferred tax assets due to losses the Company incurred in prior
years. Deferred tax assets include temporary book-tax differences and
tax attributes such as net operating losses and tax credits. The
remainder of the difference in tax rate is principally attributable to
double taxation of certain of the Company's non-U.S. operations.

Backlog

The Company's backlog increased to $300 million at January 31, 2005 from
$146 million at July 31, 2004 with significant backlog increases in both
contract and multi-client areas of the business.

Other

The Company had a cash balance of $205 million at January 31, 2005, an
increase of $89 million from the July 31, 2004 balance of $116 million.
Total debt remained unchanged from the beginning of the year at $155
million.

Financial Reports

The Company has not yet completed its previously announced restatement
of prior period results or filed its Form 10-K for fiscal year 2004 or
its Form 10-Q's for the first two quarters of fiscal year 2005. The
Company's independent auditor has not yet completed its customary SAS
100 review of the financial information for the quarter ended January
31, 2005 provided in this release nor has it audited the Company's
financial statements for the fiscal year ended July 31, 2004. All such
financial information is, therefore, preliminary and remains subject to
final review and audit by the Company and its independent auditor and is
subject to change.

The Company's conference call will be Wednesday, March 30, 2005, at 8:00
a.m. central. Following a brief presentation, participants will have the
opportunity to ask questions. The dial in number to participate is
800-374-1498 or 706-643-0395.

There will also be a real-time audio webcast of the conference call at
www.veritasdgc.com. Windows Media player software is required and is
available, free of charge, for download through our website. Individuals
accessing the audio webcast will be "listen only" and will be unable to
take part in the Q&A session.

The audio replay will be available at the conclusion of the call until
the close of business Wednesday, April 13, 2005. Interested persons can
phone 800-642-1687 or 706-645-9291, passcode 4028520, or access the
webcast replay at www.veritasdgc.com.

The Company cautions that statements in this release may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These include statements as to
expectations, beliefs and future financial performance, such as
statements regarding our business prospects. All of these are based on
current information and expectations that are subject to a number of
risks, uncertainties and assumptions. These risks and uncertainties are
more fully described in our reports filed with the Securities and
Exchange Commission. Should one or more of these risks or uncertainties
materialize, or should the assumptions prove incorrect, actual results
may vary in material respect from those currently anticipated. In
addition, the Company is currently in the process of restating certain
prior periods' results, including those of the prior fiscal year. The
financial information in this release is preliminary and subject to
review by our independent auditors and is, therefore, subject to change.

Veritas DGC Inc., headquartered in Houston, Texas, is a leading provider
of integrated geophysical services and reservoir technologies to the
petroleum industry worldwide.



VERITAS DGC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(PRELIMINARY AND UNAUDITED)
(In thousands, except per share amounts)


For The Three Months
Ended
January 31, 2005
--------------------
(see note)


Revenues $ 192,228
Cost of services 145,174
Research and development 5,020
General and administrative 8,595
----------
Operating income 33,439
Interest expense 906
Other income, net (1,011)
----------
Income before provision for income tax 33,544
Provision for income taxes 16,628
----------
Net income $ 16,916
----------
----------

Earnings per share:
Basic:
Earnings per share $ 0.50
Weighted average shares 33,783

Diluted:
Earnings per share $ 0.49
Weighted average shares 34,283

Supplemental Data:
Depreciation and amortization $ 12,431
Multi-client amortization 48,738

Multi-client expenditures, net cash 23,271
Capital expenditures 9,858


Note:

The Company has not yet completed its previously announced restatement
of prior period results or filed its Form 10-K for fiscal year 2004 or
its Form 10-Q's for the first two quarters of fiscal year 2005. The
Company's independent auditor has not yet completed its customary SAS
100 review of the financial information provided in this release for the
quarter ended January 31, 2005 nor has it completed its audit of the
information for the fiscal year ended July 31, 2004. All such financial
information is, therefore, preliminary and remains subject to final
review and audit by the Company and its independent auditor and is
subject to change.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Veritas DGC Inc.
    Mark E. Baldwin
    Executive Vice President, Chief Financial Officer
    (832) 351-8821
    or
    Veritas DGC Inc.
    Stephen J. Ludlow
    Vice Chairman
    (832) 351-8821
    or
    Veritas DGC Inc.
    Mindy Ingle
    Investor Relations
    (832) 351-8821