MIDLAND, Texas, May 3, 2018 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) (the "Company") today reported unaudited
financial results for its first quarter ended March 31, 2018.
For the quarter ended March 31,
2018, the Company reported revenues of $49,880,000, an increase of approximately 18% as
compared to $42,366,000 for the
quarter ended March 31, 2017. For the
first quarter of 2018, the Company reported a net loss of
$1,709,000 or $0.07 loss per common share, as compared to a net
loss of $9,152,000 or $0.40 loss per common share for the first quarter
of 2017. The Company reported EBITDA of $6,989,000 for the quarter ended March 31, 2018 as compared to negative EBITDA of
$1,857,000 for the quarter ended
March 31, 2017. Effective
January 1, 2018, the Company adopted
the requirements of Accounting Standards Update No. 2014-09,
Revenue from Contracts with Customers (Topic 606), and all amounts
set forth in this earnings release for periods prior to
January 1, 2018 have been adjusted to
comply with the new standard.
The Company began the first quarter of 2018 operating six crews
in the United States ("U.S.") and
four in Canada, and ended the
quarter operating eight crews in the U.S. and four in Canada. The Company experienced a stronger
than anticipated Canadian winter season, which has now concluded,
after encountering temporary weather delays early in the quarter.
The Company is currently operating six crews in the U.S. As stated
in our earnings release for the fourth quarter and full year 2017,
the Company anticipates operating up to seven crews into the third
quarter of 2018.
Stephen C. Jumper, President and
Chief Executive Officer, said, "We are encouraged by the results of
our last three quarters, as we have generated strong EBITDA results
during that time. We have continued to explore ways to reduce
costs, downsized the levels of in-house services and gained
operating efficiencies through internal restructuring. We
encountered a moderate increase in demand for our services for the
year 2017 and through the first quarter of 2018 as compared to 2016
demand levels. This has resulted in improved productivity and
crew utilization, primarily during the second half of 2017 and
through the first quarter of 2018. The recent rise in oil prices,
combined with forecasted oil price increases through 2018, has
resulted in increased demand for our services. At the same time,
the oil and gas industry's renewed focus on profitability as well
as production growth has further driven an increase in requests for
proposals, as more E&P operations seek to lower drilling and
completion costs as well as maximize production through the
integrated use of seismic data into their development plans. While
still lower than the demand levels experienced in 2015, the recent
increase in bid activity is encouraging."
Jumper continued, "As we experienced during the second half of
2017, the majority of our projects continue to be driven by
multi-client data library companies, a model we do not actively
participate in but we do act as a contractor for several of the
largest providers. The competition between various multi-client
providers continues to remain strong and affects project timing as
seismic programs are put together with multiple participants, a
situation which is beyond our control. It is our belief that
seismic data acquisition activity will increase in producing basins
outside of the Permian and Delaware basins, the primary areas of activity
in the U.S., if commodity prices continue to improve and those
basins become more economic."
The Company's Board of Directors has approved a 2018 capital
budget in the amount of $10 million.
Capital expenditures for the first three months of 2018 were
$4,435,000, primarily composed of
replacement vehicles and seismic data acquisition equipment. The
Company's balance sheet remains strong with $35,191,000 of cash and short term investments
and $60,677,000 of working capital.
The Company has notes payable and capital lease obligations
totaling $7,463,000 as of
March 31, 2018.
Jumper concluded, "Project visibility, while remaining
constrained due to the uncertain sustainability of the recent rise
in oil prices and seismic data acquisition budgets, has improved.
Despite the improved environment, market conditions remain
challenging and we continue to maintain a conservative approach at
Dawson Geophysical. We remain committed to maintaining a strong
balance sheet and positioning ourselves as the leader of onshore
seismic data acquisition services in North America. Management has an optimistic
outlook for the remainder of 2018, provided that oil prices
maintain or improve on current levels. As stated earlier, while the
Permian and Delaware Basins remain the primary areas of activity
for the Company, we are beginning to see a modest uptick in bid
activity and interest levels outside of those regions, but those
projects are presently very competitive and the contracts on those
early projects have not been awarded. In conclusion, we continue to
be well positioned to meet the needs of our shareholders and
clients as we deliver the best in class high resolution subsurface
images that enable our clients to reduce costs and improve their
operating efficiencies."
Stock Dividend
The Company today announced that its Board of Directors had
declared a 5% stock dividend (or 0.05 share for each share
outstanding) on the outstanding shares of common stock of the
Company, par value $0.01 per share.
The stock dividend is payable on May 29,
2018 to shareholders of record on May
14, 2018. Shareholders will receive cash in lieu of
any fractional shares that they otherwise would have been entitled
to receive in connection with the stock dividend. The anticipated
impact of all loss per common share for the quarters ended
March 31, 2018 and 2017, and impact
on the Condensed Consolidated Balance Sheets for March 31, 2018 and December 31, 2017 referenced within this press
release have been adjusted for the 5% stock dividend to be paid on
May 29, 2018 to shareholders of
record as of May 14, 2018 (excluding
the actual fractional shares that cannot be determined at this
date).
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its first quarter 2018 financial results on May 3, 2018 at 9 a.m. CT. Participants
can access the call at 1-800-239-9838 (US) and 1-323-794-2551
(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 3, 2018 by dialing
1-844-512-2921 (Toll-Free) and 1-412-317-6671 (Toll/International).
The passcode is 8152137. The webcast will be recorded and available
for replay on Dawson's website until June 3,
2018.
About Dawson
Dawson Geophysical Company is a leading provider of North
American onshore seismic data acquisition services with operations
throughout the continental U.S. 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
generally accepted accounting principles ("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, and 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 GAAP, and EBITDA is not a measure of
operating income, operating performance or liquidity presented in
accordance with GAAP. 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 GAAP. In addition, the Company's
EBITDA may not be comparable to EBITDA or similarly 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, and
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 day rate 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 U.S. Securities and Exchange
Commission on March 9, 2018. 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 and
amounts in thousands, except share and per share
data)
|
|
|
Three Months Ended
March 31,
|
|
2018
|
|
2017
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
|
|
Operating
revenues
|
$
|
49,880
|
|
$
|
42,366
|
Operating
costs:
|
|
|
|
|
|
Operating expenses
|
|
38,759
|
|
|
39,974
|
General
and administrative
|
|
4,083
|
|
|
4,355
|
Depreciation and amortization
|
|
8,678
|
|
|
10,176
|
|
|
51,520
|
|
|
54,505
|
|
|
|
|
|
|
Loss from
operations
|
|
(1,640)
|
|
|
(12,139)
|
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
|
|
Interest
income
|
|
37
|
|
|
80
|
Interest
expense
|
|
(88)
|
|
|
(22)
|
Other
(expense) income
|
|
(49)
|
|
|
106
|
Loss before income
tax
|
|
(1,740)
|
|
|
(11,975)
|
|
|
|
|
|
|
Income tax
benefit
|
|
31
|
|
|
2,823
|
|
|
|
|
|
|
Net
loss
|
|
(1,709)
|
|
|
(9,152)
|
|
|
|
|
|
|
Other
comprehensive (loss) income:
|
|
|
|
|
|
Net
unrealized (loss) income on foreign exchange rate translation,
net
|
|
(329)
|
|
|
97
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(2,038)
|
|
$
|
(9,055)
|
|
|
|
|
|
|
Basic loss per
share of common stock
|
$
|
(0.07)
|
|
$
|
(0.40)
|
|
|
|
|
|
|
Diluted loss per
share of common stock
|
$
|
(0.07)
|
|
$
|
(0.40)
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
22,879,805
|
|
|
22,742,516
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
22,879,805
|
|
|
22,742,516
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited and
amounts in thousands, except share data)
|
|
|
March
31,
|
|
December
31,
|
|
2018
|
|
2017
|
Assets
|
|
|
|
(as
adjusted)
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
17,608
|
|
$
|
22,013
|
Short-term investments
|
|
17,583
|
|
|
16,583
|
Accounts
receivable, net
|
|
41,215
|
|
|
33,156
|
Current
maturities of notes receivable
|
|
50
|
|
|
695
|
Prepaid
expenses and other current assets
|
|
9,396
|
|
|
7,340
|
Total current
assets
|
|
85,852
|
|
|
79,787
|
|
|
|
|
|
|
Property and
equipment, net
|
|
82,056
|
|
|
86,573
|
Notes receivable,
net of current maturities
|
|
1,486
|
|
|
841
|
Intangibles,
net
|
|
461
|
|
|
494
|
Long-term deferred
tax assets, net
|
|
224
|
|
|
224
|
|
|
|
|
|
|
Total
assets
|
$
|
170,079
|
|
$
|
167,919
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
9,057
|
|
$
|
5,933
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
3,093
|
|
|
1,151
|
Other
|
|
4,175
|
|
|
4,314
|
Deferred
revenue
|
|
5,833
|
|
|
6,314
|
Current
maturities of notes payable and obligations under capital
leases
|
|
3,017
|
|
|
2,712
|
Total current
liabilities
|
|
25,175
|
|
|
20,424
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and obligations under capital leases, net of current
maturities
|
|
4,446
|
|
|
5,153
|
Deferred
tax liabilities, net
|
|
816
|
|
|
874
|
Other
accrued liabilities
|
|
150
|
|
|
150
|
Total long-term
liabilities
|
|
5,412
|
|
|
6,177
|
|
|
|
|
|
|
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,
22,942,386 and 22,926,026 shares issued, and 22,893,941 and
22,877,581
shares outstanding at March 31, 2018 and December 31, 2017,
respectively
|
|
229
|
|
|
229
|
Additional paid-in capital
|
|
152,093
|
|
|
151,881
|
Retained
deficit
|
|
(11,678)
|
|
|
(10,012)
|
Treasury
stock, at cost; 48,445 shares at March 31, 2018 and December 31,
2017
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(1,152)
|
|
|
(780)
|
Total stockholders'
equity
|
|
139,492
|
|
|
141,318
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
170,079
|
|
$
|
167,919
|
Reconciliation of
EBITDA to Net Loss
|
(amounts in
thousands)
|
|
Three Months Ended
March 31,
|
|
2018
|
|
2017
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
|
|
Net loss
|
$
|
(1,709)
|
|
$
|
(9,152)
|
Depreciation and
amortization
|
|
8,678
|
|
|
10,176
|
Interest expense
(income), net
|
|
51
|
|
|
(58)
|
Income tax
benefit
|
|
(31)
|
|
|
(2,823)
|
EBITDA
|
$
|
6,989
|
|
$
|
(1,857)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided by (Used in) Operating
Activities
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2018
|
|
2017
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
$
|
754
|
|
$
|
(6,749)
|
Changes in working
capital and other items
|
|
6,470
|
|
|
5,150
|
Noncash adjustments
to net loss
|
|
(235)
|
|
|
(258)
|
EBITDA
|
$
|
6,989
|
|
$
|
(1,857)
|
|
|
|
|
|
|
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SOURCE Dawson Geophysical Company