MIDLAND, Texas, Oct. 31, 2019 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its third quarter ended
September 30, 2019.
For the quarter ended September 30,
2019, the Company reported revenues of $36,976,000, a decrease of approximately nine
percent compared to $40,448,000 for
the quarter ended September 30, 2018.
For the third quarter of 2019, the Company reported net income of
$1,998,000 or $0.09 income per common share compared to a net
loss of $5,171,000 or $0.23 loss per common share for the third quarter
of 2018. The Company reported EBITDA of $7,160,000 for the quarter ended September 30, 2019 compared to $1,651,000 for the quarter ended September 30, 2018.
For the nine months ended September 30,
2019, the Company reported revenues of $112,216,000, a decrease of approximately eleven
percent compared to $126,486,000 for
the nine months ended September 30,
2018. For the nine months ended September 30, 2019, the Company narrowed its net
loss to $9,385,000 or $0.41 loss per common share from a net loss of
$12,591,000 or $0.55 loss per common share for the nine months
ended September 30, 2018. The Company
reported EBITDA of $7,049,000 for the
nine months ended September 30, 2019
compared to $10,204,000 for the nine
months ended September 30, 2018.
During the third quarter of 2019, the Company operated a peak of
six crews in the United States
("U.S.") that included four large channel count crews compared
to a peak of five crews with smaller channel counts in the U.S. in
the second quarter of 2019, including microseismic operations, and
a single small channel count crew in Canada for a short period of time. Based on
currently available information, the Company anticipates operating
up to five crews in the U.S. during the fourth quarter of 2019 that
could result in continued high-levels of channel count and energy
source utilization during the quarter along with limited activity
in Canada in the fourth quarter of
2019. The Company believes, based on currently available
information, that such levels of activity could be sustained into
the second quarter of 2020 in the U.S. and up to four crews during
the first quarter of 2020 in Canada. The Company is currently operating
five crews in the U.S. and one small crew in Canada as it ramps up for the winter season.
As in recent quarters, the majority of the Company's projects are
on behalf of multi-client companies in the U.S. with some activity
directly for exploration and production companies.
Capital expenditures for the third quarter were $644,000 and total $2,842,000 for the first nine months of 2019,
primarily for maintenance capital items. The Company's balance
sheet remains strong with $48,278,000
of working capital as of September 30,
2019. The Company has notes payable and finance leases
totaling $3,259,000 as of
September 30, 2019.
Stephen C. Jumper, President and
Chief Executive Officer, said, "We are very pleased to report
strong results for our third quarter, with net income of
$1,998,000 and EBITDA of $7,160,000. Our improved quarterly results were
attributable to continued diligent efforts designed to further
reduce costs and improve productivity while operating much larger
channel count crews, favorable weather conditions and higher
utilization of recording channels. In addition to greatly increased
channel utilization compared to the second quarter, we experienced
very high utilization of energy source units as we continue to move
toward a channel and energy source utilization model rather than a
crew based model."
"Despite challenging times in the oil and gas sector, increased
demand for large channel count projects by our clients continues to
drive today's seismic market. During the third quarter, the Company
continued operation of the large 44,000 station multi-component
crew with 132,000 total channels and two 35,000 plus channel count
crews along with intermittent smaller channel count crews. Each of
the crews operated between 16 and 22 energy source units. Several
of these projects will continue well into the fourth quarter. We
are conducting these projects utilizing our industry-leading
inventory of wireless channels and energy source equipment. Our
current inventory, while tight, is sufficient to meet current
client needs."
Jumper continued, "Visibility into 2020 appears positive
compared to recent quarters. Based on currently available
information, we anticipate both channel and source utilization to
be much improved over our second quarter but below the level of our
third quarter utilization. Early indications are for a Canadian
season similar to last year with up to four crews operating, and
with high channel and source utilization in the U.S. in the first
quarter of 2020. After the completion of the Canadian season,
equipment will redeploy to the lower 48 in the second quarter. We
are anticipating strong channel and energy source utilization in
the U.S. into the second quarter of 2020. As in prior years, the
winter season in the lower 48 is historically difficult with
shorter days, the holiday season and increased weather
exposure."
Jumper concluded, "While we are pleased to report solidly
improved third quarter results and increased visibility of channel
and energy source utilization, the seismic market and the overall
oil and gas sector remain challenging as project delays,
cancellations or changes in scope continue to be the primary
factors in overall activity and utilization. We continue to be
encouraged by ongoing conversations with our clients, primarily
multi-client companies, with regards to future projects."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its third quarter 2019 financial results on October 31, 2019 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 November 30, 2019 by
dialing 1-844-512-2921 (Toll-Free) and 1-412-317-6671
(Toll/International). The passcode is 1695470. The webcast will be
recorded and available for replay on Dawson's website until
November 30, 2019.
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 preliminary and 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 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, and
depreciation and amortization. A reconciliation of the Company's
EBITDA to its net income (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 6, 2019. 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 INCOME
(LOSS)
|
(unaudited and
amounts in thousands, except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
36,976
|
|
$
|
40,448
|
|
$
|
112,216
|
|
$
|
126,486
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
26,030
|
|
|
34,419
|
|
|
92,210
|
|
|
104,393
|
General
and administrative
|
|
3,797
|
|
|
4,136
|
|
|
13,390
|
|
|
12,061
|
Depreciation and amortization
|
|
5,238
|
|
|
7,127
|
|
|
16,644
|
|
|
23,197
|
|
|
35,065
|
|
|
45,682
|
|
|
122,244
|
|
|
139,651
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
1,911
|
|
|
(5,234)
|
|
|
(10,028)
|
|
|
(13,165)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
152
|
|
|
147
|
|
|
445
|
|
|
257
|
Interest
expense
|
|
(101)
|
|
|
(74)
|
|
|
(381)
|
|
|
(244)
|
Other
income (expense)
|
|
11
|
|
|
(242)
|
|
|
433
|
|
|
172
|
Income (loss)
before income tax
|
|
1,973
|
|
|
(5,403)
|
|
|
(9,531)
|
|
|
(12,980)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
25
|
|
|
232
|
|
|
146
|
|
|
389
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
1,998
|
|
|
(5,171)
|
|
|
(9,385)
|
|
|
(12,591)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized (loss) income on foreign exchange rate translation,
net
|
|
(103)
|
|
|
216
|
|
|
280
|
|
|
(333)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss )
|
$
|
1,895
|
|
$
|
(4,955)
|
|
$
|
(9,105)
|
|
$
|
(12,924)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income
(loss) per share of common stock
|
$
|
0.09
|
|
$
|
(0.23)
|
|
$
|
(0.41)
|
|
$
|
(0.55)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income
(loss) per share of common stock
|
$
|
0.09
|
|
$
|
(0.23)
|
|
$
|
(0.41)
|
|
$
|
(0.55)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
23,222,045
|
|
|
22,926,764
|
|
|
23,152,776
|
|
|
22,901,558
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
23,337,903
|
|
|
22,926,764
|
|
|
23,152,776
|
|
|
22,901,558
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
14,670
|
|
$
|
28,729
|
Restricted cash
|
|
5,000
|
|
|
—
|
Short-term investments
|
|
7,425
|
|
|
10,583
|
Accounts
receivable, net
|
|
35,969
|
|
|
25,338
|
Current
maturities of notes receivable
|
|
65
|
|
|
64
|
Prepaid
expenses and other current assets
|
|
10,335
|
|
|
12,311
|
Total current
assets
|
|
73,464
|
|
|
77,025
|
|
|
|
|
|
|
Property and
equipment, net
|
|
57,848
|
|
|
71,541
|
Right-of-use
assets
|
|
6,863
|
|
|
—
|
Notes receivable,
net of current maturities
|
|
1,408
|
|
|
1,447
|
Intangibles,
net
|
|
377
|
|
|
379
|
Long-term deferred
tax assets, net
|
|
289
|
|
|
293
|
|
|
|
|
|
|
Total
assets
|
$
|
140,249
|
|
$
|
150,685
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
6,312
|
|
$
|
5,427
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
2,849
|
|
|
1,034
|
Other
|
|
3,676
|
|
|
3,643
|
Deferred
revenue
|
|
7,970
|
|
|
10,501
|
Current
maturities of notes payable and finance leases
|
|
3,153
|
|
|
6,683
|
Current
maturities of operating lease liabilities
|
|
1,226
|
|
|
—
|
Total current
liabilities
|
|
25,186
|
|
|
27,288
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and finance leases, net of current maturities
|
|
106
|
|
|
6,097
|
Operating lease liabilities, net of current maturities
|
|
6,171
|
|
|
—
|
Deferred
tax liabilities, net
|
|
10
|
|
|
134
|
Other
accrued liabilities
|
|
150
|
|
|
150
|
Total long-term
liabilities
|
|
6,437
|
|
|
6,381
|
|
|
|
|
|
|
Operating
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,
|
|
|
|
|
|
23,305,950 and 23,018,441 shares issued, and 23,257,505 and
22,969,996
|
|
|
|
|
|
shares outstanding at September 30, 2019 and December 31, 2018,
respectively
|
|
233
|
|
|
230
|
Additional paid-in capital
|
|
153,980
|
|
|
153,268
|
Retained
deficit
|
|
(43,903)
|
|
|
(34,518)
|
Treasury
stock, at cost; 48,445 shares
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(1,684)
|
|
|
(1,964)
|
Total stockholders'
equity
|
|
108,626
|
|
|
117,016
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
140,249
|
|
$
|
150,685
|
Reconciliation of
EBITDA to Net Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
1,998
|
|
$
|
(5,171)
|
|
$
|
(9,385)
|
|
$
|
(12,591)
|
Depreciation and
amortization
|
|
5,238
|
|
|
7,127
|
|
|
16,644
|
|
|
23,197
|
Interest (income)
expense, net
|
|
(51)
|
|
|
(73)
|
|
|
(64)
|
|
|
(13)
|
Income tax
benefit
|
|
(25)
|
|
|
(232)
|
|
|
(146)
|
|
|
(389)
|
EBITDA
|
$
|
7,160
|
|
$
|
1,651
|
|
$
|
7,049
|
|
$
|
10,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash (Used in) Provided by Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
$
|
(10,872)
|
|
$
|
(66)
|
|
$
|
1,197
|
|
$
|
12,772
|
Changes in working
capital and other items
|
|
18,612
|
|
|
2,317
|
|
|
7,706
|
|
|
(1,403)
|
Noncash adjustments
to net income (loss)
|
|
(580)
|
|
|
(600)
|
|
|
(1,854)
|
|
|
(1,165)
|
EBITDA
|
$
|
7,160
|
|
$
|
1,651
|
|
$
|
7,049
|
|
$
|
10,204
|
View original
content:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-third-quarter-2019-results-300948789.html
SOURCE Dawson Geophysical Company