MIDLAND, Texas, May 10, 2016 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its first quarter ended
March 31, 2016.
For the quarter ended March 31,
2016, the Company reported revenues of $47,055,000 as compared to $73,722,000 for the quarter ended March 31, 2015. For the first quarter of 2016,
the Company reported a net loss of $8,600,000 or $0.40
loss per share attributable to common stock, as compared to a net
loss of $6,592,000 or $0.37 loss per share attributable to common stock
for the quarter ended March 31, 2015.
The Company reported EBITDA of $2,509,000 for the quarter ended March 31, 2016 compared to $1,441,000 for the quarter ended March 31, 2015.
During the first quarter of 2016, the Company operated four to
six crews in the United States for
most of the quarter with a peak level of eight crews early in the
quarter. Utilization of several crews was unfavorably impacted by
inclement weather conditions in several areas of operation late in
the quarter that continued into the second quarter. The Company
operated an average of two crews in the Canadian market with a peak
level of three crews for a short period during the first quarter.
The Company is currently inactive in the Canadian market as the
winter season has come to a conclusion.
Stephen C. Jumper, President and
Chief Executive Officer, said, "Demand for seismic data acquisition
services in North America and
worldwide continues to be soft in response to low and uncertain oil
prices and reduced client expenditures. Oil prices have recently
climbed to approximately $45 per
barrel on May 9, 2016, from a low in
the first quarter of approximately $27 per barrel for West Texas Intermediate. While
encouraging, it remains to be determined if the recent
strengthening in oil prices can be sustained, and the price
increases have yet to result in an increase in demand for our
services. Due to uncertainty in oil and natural gas prices, our
client base continues to take a cautious approach to their capital
spending. Based on currently available information and seismic
service demand levels, we believe we will continue to operate four
to six crews through the second quarter of 2016, however,
visibility beyond the second quarter remains limited. In response
to these factors, we will continue to explore cost reduction
initiatives, many of which were implemented in the first quarter
and described in our prior March 11,
2016 year-end earnings release, in our on-going effort to
reduce costs and maintain a strong balance sheet, our personnel and
position as a leading onshore seismic data acquisition company in
North America."
Capital expenditures for the first quarter were $4,232,000, primarily composed of replacement
recording channels lost in the spring 2015 floods in southeast
Texas. These expenditures were funded in part by insurance
proceeds received related to that loss. The Company anticipates a
capital budget for 2016 to be at maintenance levels below the
$10 million approved by our board of
directors. The Company's balance sheet remains strong with
$62,628,000 of cash and cash
equivalents and short term investments, $70,160,000 of working capital and $8,436,000 of debt and capital lease obligations
as of March 31, 2016.
Jumper continued, "2016 will be a difficult year, and likely the
most difficult in my thirty-plus years of experience with the
Company and in the industry. That said, the price of oil is up
approximately 65% from the decade low reached earlier this year on
February 11. Although we have not
seen an increase in proposals as previously discussed, this
positive development is very encouraging. The oil market appears to
be slowly entering a rebalancing phase. We believe oil and gas
companies will start to put capital back to work, and seismic
surveys should play an important role in helping these companies
maximize their production economics. Dawson Geophysical continues
to work with our valued clients through these difficult times and
we are prepared financially, operationally and from a human
resources perspective to quickly respond to the market as
conditions improve. We expect a few difficult quarters, but our
people are focused on those things that they can control."
Jumper concluded, "It is with bitter sweet pleasure that we wish
Christina Hagan the best as she
moves onto her planned retirement later this month. Chris played an
instrumental role in the growth and development of Dawson
Geophysical. Over the past 28 years, Chris has navigated the
Company through three public offerings, the implementation of
Sarbanes-Oxley and the recent merger with TGC Industries, all while
building a first class accounting and finance group, as well as
mentoring many people inside and outside the Company, including
yours truly. She is an outstanding professional who has served
Dawson as Controller, Secretary, Chief Financial Officer and most
recently as Executive Vice President, Secretary and Chief
Accounting Officer prior to her resignation from such officer
positions last week. We wish Chris the best, will miss her greatly
and I look forward to partnering with her again in the near future
on the golf course."
Christina Hagan's duties, and the
accounting and finance group, will primarily be absorbed by
James K. Brata, who currently serves
as the Company's Executive Vice President, Chief Financial Officer
and Treasurer. Mr. Brata succeeded Ms. Hagan as the Secretary of
the Company effective at the close of business on May 5, 2016. Prior to our strategic business
combination, Mr. Brata served as Vice President, Chief Financial
Officer, Secretary and Treasurer of TGC Industries, Inc.
On February 11, 2015, legacy Dawson Geophysical Company and
legacy TGC Industries, Inc. consummated their previously
announced strategic business combination. The merger transaction
was accounted for as a reverse acquisition with legacy Dawson
Geophysical being deemed the accounting acquirer with the results
of legacy TGC Industries, Inc. being reflected in the
Company's reported consolidated financial results only for periods
from and after February 11, 2015. The merged companies adopted
a calendar fiscal year ending December 31. Due to the
foregoing, comparative financial results that include periods prior
to February 11, 2015 are not comparable to financial results
that include periods from and after February 11, 2015.
Additional information regarding the business combination and its
impact on the Company's financial position are set forth in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2015, which was filed with the Securities and
Exchange Commission on March 16, 2016 and includes the
Company's audited consolidated financial statements (i) as of
and for the years ended December 31, 2015 and
September 30, 2014, (ii) for the three months ended
December 31, 2014 and (iii) for the year ended
September 30, 2013.
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its first quarter 2016 financial results on May 10, 2016 at
9 a.m. CT. Participants can access the call at
1-888-348-3664 (US) and 1-412-902-4233 (Toll/International). To
access the live audio webcast or the subsequent archived recording,
visit the Dawson website at www.dawson3d.com. Callers can access
the telephone replay through June 9,
2016 by dialing 1-877-870-5176 (Toll-Free) and
1-858-384-5517 (Toll/International). The passcode is 10085646. The
webcast will be recorded and available for replay on Dawson's
website until June 9, 2016.
About Dawson
Dawson Geophysical Company is a leading provider of North America onshore seismic data acquisition
services with operations throughout the continental United States and Canada. Dawson acquires and processes 2-D, 3-D
and multi-component seismic data solely for its clients, ranging
from major oil and gas companies to independent oil and gas
operators, as well as providers of multi-client data libraries.
Non-GAAP Financial Measures
In an effort to provide investors with additional information
regarding the Company's unaudited results as determined by GAAP,
the Company has included in this press release information about
the Company's EBITDA, a non-GAAP financial measure as defined by
Regulation G promulgated by the U.S. Securities and Exchange
Commission. The Company defines EBITDA as net income (loss) plus
interest expense, interest income, income taxes, depreciation and
amortization expense. The Company uses EBITDA as a supplemental
financial measure to assess:
- the financial performance of its assets without regard to
financing methods, capital structures, taxes or historical cost
basis;
- its liquidity and operating performance over time in relation
to other companies that own similar assets and that the Company
believes calculate EBITDA in a similar manner; and
- the ability of the Company's assets to generate cash sufficient
for the Company to pay potential interest costs.
The Company also understands that such data are used by
investors to assess the Company's performance. However, the term
EBITDA is not defined under generally accepted accounting
principles, and EBITDA is not a measure of operating income,
operating performance or liquidity presented in accordance with
generally accepted accounting principles. When assessing the
Company's operating performance or liquidity, investors and others
should not consider this data in isolation or as a substitute for
net income (loss), cash flow from operating activities or other
cash flow data calculated in accordance with generally accepted
accounting principles. In addition, the Company's EBITDA may not be
comparable to EBITDA or similar titled measures utilized by other
companies since such other companies may not calculate EBITDA in
the same manner as the Company. Further, the results presented by
EBITDA cannot be achieved without incurring the costs that the
measure excludes: interest, taxes, depreciation and amortization. A
reconciliation of the Company's EBITDA to its net loss is presented
in the table following the text of this press release.
Forward-Looking Statements
In accordance with the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions that
statements in this press release which are forward-looking and
which provide other than historical information involve risks and
uncertainties that may materially affect the Company's actual
results of operations. Such forward looking statements are based on
the beliefs of management as well as assumptions made by and
information currently available to management. Actual results could
differ materially from those contemplated by the forward looking
statements as a result of certain factors. These risks include, but
are not limited to, dependence upon energy industry spending; the
volatility of oil and natural gas prices; changes in economic
conditions; the potential for contract delays; reductions or
cancellations of service contracts; limited number of customers;
credit risk related to our customers; reduced utilization; high
fixed costs of operations and high capital requirements;
operational disruptions; industry competition; external factors
affecting the Company's crews such as weather interruptions and
inability to obtain land access rights of way; whether the Company
enters into turnkey or dayrate contracts; crew productivity;
the availability of capital resources; and disruptions in the
global economy. A discussion of these and other factors, including
risks and uncertainties, is set forth in the Company's Annual
Report on Form 10-K that was filed with the Securities and
Exchange Commission on March 16,
2016. The Company disclaims any intention or obligation to
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
Operating
revenues
|
$
|
47,055,000
|
|
$
|
73,722,000
|
Operating
costs:
|
|
|
|
|
|
Operating expenses
|
|
40,081,000
|
|
|
64,791,000
|
General
and administrative
|
|
5,560,000
|
|
|
7,522,000
|
Depreciation and amortization
|
|
12,045,000
|
|
|
11,223,000
|
|
|
57,686,000
|
|
|
83,536,000
|
|
|
|
|
|
|
Loss from
operations
|
|
(10,631,000)
|
|
|
(9,814,000)
|
Other income
(expense):
|
|
|
|
|
|
Interest
income
|
|
64,000
|
|
|
24,000
|
Interest
expense
|
|
(96,000)
|
|
|
(147,000)
|
Other
income
|
|
1,095,000
|
|
|
32,000
|
Loss before income
tax
|
|
(9,568,000)
|
|
|
(9,905,000)
|
|
|
|
|
|
|
Income tax
benefit
|
|
968,000
|
|
|
3,313,000
|
|
|
|
|
|
|
Net
loss
|
$
|
(8,600,000)
|
|
$
|
(6,592,000)
|
|
|
|
|
|
|
Other comprehensive
gain (loss):
|
|
|
|
|
|
Net
unrealized gain (loss) on foreign exchange rate translation, net of
tax
|
$
|
719,000
|
|
$
|
(418,000)
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(7,881,000)
|
|
$
|
(7,010,000)
|
|
|
|
|
|
|
Basic loss
per share attributable to common stock
|
$
|
(0.40)
|
|
$
|
(0.37)
|
|
|
|
|
|
|
Diluted loss per
share attributable to common stock
|
$
|
(0.40)
|
|
$
|
(0.37)
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
21,629,817
|
|
|
18,021,366
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
|
|
|
|
-assuming dilution
|
|
21,629,817
|
|
|
18,021,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
March
31,
|
|
December
31,
|
ASSETS
|
2016
|
|
2015
|
|
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
30,378,000
|
|
$
|
37,009,000
|
Short-term investments
|
|
32,250,000
|
|
|
21,000,000
|
Accounts
receivable, net
|
|
26,720,000
|
|
|
35,700,000
|
Prepaid
expenses and other assets
|
|
5,605,000
|
|
|
6,150,000
|
|
|
|
|
|
|
Total current assets
|
|
94,953,000
|
|
|
99,859,000
|
|
|
|
|
|
|
Property and
equipment, net
|
|
139,136,000
|
|
|
147,567,000
|
|
|
|
|
|
|
Intangibles
|
|
361,000
|
|
|
361,000
|
|
|
|
|
|
|
Total assets
|
$
|
234,450,000
|
|
$
|
247,787,000
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
4,152,000
|
|
$
|
8,401,000
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
2,704,000
|
|
|
1,074,000
|
Other
|
|
5,181,000
|
|
|
4,604,000
|
Deferred
revenue
|
|
5,615,000
|
|
|
6,146,000
|
Current
maturities of notes payable and obligations under capital
leases
|
|
7,141,000
|
|
|
8,585,000
|
|
|
|
|
|
|
Total current liabilities
|
|
24,793,000
|
|
|
28,810,000
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes payable and obligations under capital leases less current
maturities
|
|
1,295,000
|
|
|
2,106,000
|
Deferred tax liability
|
|
4,429,000
|
|
|
5,319,000
|
Other accrued liabilities
|
|
1,899,000
|
|
|
1,834,000
|
|
|
|
|
|
|
Total long-term liabilities
|
|
7,623,000
|
|
|
9,259,000
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock-par value $1.00 per share; 4,000,000 shares
authorized,
|
|
|
|
|
|
none
outstanding
|
|
-
|
|
|
-
|
Common
stock-par value $0.01 per share; 35,000,000 shares
authorized,
|
|
|
|
|
|
21,644,685 and 21,629,310 issued, and 21,596,240 and
21,580,865 shares
|
|
|
|
|
|
outstanding at March 31, 2016 and December 31, 2015,
respectively
|
|
216,000
|
|
|
216,000
|
Additional paid-in capital
|
|
142,466,000
|
|
|
142,269,000
|
Retained
earnings
|
|
60,457,000
|
|
|
69,057,000
|
Treasury
stock, at cost; 48,445 shares at March 31, 2016 and December 31,
2015
|
|
-
|
|
|
-
|
Accumulated other comprehensive loss, net of tax
|
|
(1,105,000)
|
|
|
(1,824,000)
|
|
|
|
|
|
|
Total stockholders' equity
|
|
202,034,000
|
|
|
209,718,000
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
234,450,000
|
|
$
|
247,787,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net loss
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2016
|
|
|
2015
|
|
|
(in
thousands)
|
Net loss
|
$
|
(8,600)
|
|
$
|
(6,592)
|
Depreciation and
amortization
|
|
12,045
|
|
|
11,223
|
Interest expense
(income), net
|
|
32
|
|
|
123
|
Income tax
benefit
|
|
(968)
|
|
|
(3,313)
|
EBITDA
|
$
|
2,509
|
|
$
|
1,441
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided by (Used in) Operating
Activities
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2016
|
|
|
2015
|
|
|
(in
thousands)
|
Net cash provided by
(used in) operating activities
|
$
|
8,763
|
|
$
|
(3,262)
|
Changes in working
capital and other items
|
|
(6,057)
|
|
|
5,335
|
Noncash adjustments
to net loss
|
|
(197)
|
|
|
(632)
|
EBITDA
|
$
|
2,509
|
|
$
|
1,441
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-first-quarter-2016-results-300265537.html
SOURCE Dawson Geophysical Company