First Quarter Highlights:
-- Tesla generated $19.1 million of EBITDA(2) and $10.3 million of net income on $66.4 million of revenues in the first quarter of 2013.-- Tesla Canada peaked at eight crews and operated over 80,000 channels during the seasonally strong first quarter of 2013 almost all of which was on three-dimensional ("3D") and three- component ("3C") programs in the oil sands region. Canadian operations utilized 23,000 stations (69,000 channels) of 3C recording equipment, including 13,000 stations (39,000 channels) owned by the Company.-- Tesla Canada also utilized the Company's multi-component wireless acquisition system ("Hawk") on the first phase of a significant program during the first quarter of 2013 with completion of the project expected in the fourth quarter of 2013.-- Tesla Canada received 100% on its 2013 Workplace Safety Certificate of Recognition ("COR") audit performed by an external Enform auditor supporting the Company's commitment to safety.-- Tesla Canada is optimistic regarding fall work based upon early bid requests and several substantial 3D/3C projects planned for the fourth quarter of 2013.-- Tesla USA returned to work under an extended seismic services agreement with a multi-client geophysical company in mid-March utilizing the Hawk system and has built up a backlog for additional crews in the second half of the year.-- Tesla incorporated a new subsidiary, Tesla Exploration Colombia S.A.S. ("Tesla Colombia") in early 2013 further expanding the Company's geographical footprint in South America.-- Tesla Offshore continued to generate positive results during the historically slow first quarter with work on up to four geophysical vessels. Tesla Offshore has developed a lengthy backlog of turnkey and day rate geophysical projects as a direct result of last year's lease sale and large scale day rate exploration commitments.-- The Company's acquisition of a Bluefin Autonomous Underwater Vehicle ("AUV") remains on schedule and is expected to be operational by September 2013. Tesla Offshore continues to hire experienced personnel to support the AUV service line and develop international markets.-- Tesla International operated two crews during the quarter. One in the UK and Europe on hydrocarbon and mineral projects while a crew in Africa completed a land and marine project in Tanzania and the land phase of a project in the Democratic Republic of the Congo ("DRC").-- Tesla International also began the mobilization phase of a day rate contract in Somaliland. The project has a minimum number of operating days and is likely to begin in June once appropriate security is in place.
First Quarter Financial Results:
The Company's consolidated revenues including reimbursables decreased 35% in the first quarter of 2013 compared to the first quarter of 2012 due to an expected decline in North American land activity. The Company's revenue excluding reimbursables decreased 36%. Improvements in activity levels for Tesla International were more than offset by declines in activity levels for Tesla Canada, Tesla USA and Tesla Trinidad. Tesla Offshore enjoyed a consistent level of activity. The Company's gross margin declined in the first quarter of 2013 compared to the first quarter of 2012 due to the drop in revenues. However, gross margin as a percentage of total revenue (including reimbursables) increased to 38% in the first quarter of 2013 from 33% in the first quarter of 2012 due to a heavier weighting of continued strong margins in Canada and improvements for Tesla International. Gross margin as a percentage of revenue excluding reimbursables also improved to 47% in the first quarter of 2013 compared to 40% in the first quarter of 2012 for similar reasons. Reimbursable revenues declined proportionately to total revenues.