MIDLAND, Texas, July 30, 2020 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its second quarter ended
June 30, 2020.
For the quarter ended June 30, 2020, the Company reported
revenues of $29,499,000, an increase
of approximately 23% compared to $24,076,000 for the quarter ended June 30, 2019. For the second quarter of 2020,
the Company reported net income of $1,500,000 or $0.06
per common share compared to a net loss of $11,246,000 or $0.49 loss per common share for the second
quarter of 2019. The Company reported positive EBITDA of
$5,799,000 for the quarter ended
June 30, 2020 compared to negative
EBITDA of $6,071,000 for the quarter
ended June 30, 2019.
For the six months ended June 30, 2020, the Company
reported revenues of $68,478,000, a
decrease of approximately 9% compared to $75,240,000 for the six months ended June 30, 2019. For the six months ended
June 30, 2020, the Company reported
net income of $2,493,000 or
$0.11 per common share compared to a
net loss of $11,383,000 or
$0.49 loss per common share for the
six months ended June 30, 2019. The
Company reported positive EBITDA of $11,630,000 for the six months ended June 30, 2020 compared to negative EBITDA of
$111,000 for the six months ended
June 30, 2019.
Stephen C. Jumper, President and
Chief Executive Officer, said, "Second quarter results were
favorably impacted by the continued operation of two large channel
count crews in the United States
("U.S.") that were partially offset by the redeployment of a small
channel count crew on a previously completed project as described
in our first quarter earnings release and severance costs of
approximately $1.4 million associated
with staff reductions that were announced in April. The company
anticipates annual savings of approximately $4.3 million from such reductions. While our
second quarter and six months results were positive, there continue
to be significant challenges to the oil and gas industry and the
overall energy market. On July 15,
the Organization of the Petroleum Exporting Countries and its
allies, collectively known as OPEC+, announced that OPEC+ will ease
production cuts from 9.7 million barrels per day to 8.3 million
barrels per day (net), potentially placing greater pressure on oil
prices. In addition, a recent surge in the number of COVID-19 cases
being reported both in the U.S. and globally may further limit
economic activity and restrict worldwide travel. Combined, these
factors could result in a further decrease of demand for oil and
gas production, placing greater restraint on our clients' spending
levels. Already, many exploration and production companies have
reduced their capital budgets by 30% to 50%, resulting in a
reduction in the number of new wells being drilled. The
corresponding decrease in the number of wells to be drilled and
completed by our clients can negatively impact the demand for our
services."
Jumper continued, "Despite today's challenges, there are signs
of improvement. Oil prices have rebounded from their April lows and
are currently trading in the $40
price per barrel range. A total of 1,238 permits to drill wells in
the U.S. was approved during the month of June, a 15%
month-over-month increase, and several independent oil and gas
producers announced their intentions to increase their presence in
both the Permian Basin and Bakken Oil Shale."
Based on current but rapidly changing information, the Company
anticipates continued operation of one moderate sized channel count
crew through the end of 2020 in the U.S. with possible periods of
low utilization and limited activity in Canada. Given the current market environment,
the Company's visibility beyond the fourth quarter is limited.
Requests for proposals continue to be slow. However, the Company
has several requests for projects in late 2020 that may require a
second crew in the fourth quarter and several requests for projects
in 2021.
Capital expenditures for the second quarter and first six months
of 2020 were $359,000 and $2,703,000, respectively, primarily for
maintenance capital items. The Company's balance sheet remains
strong with $58,264,000 of working capital as of
June 30, 2020. The Company has notes
payable and finance leases totaling $1,629,000 as
of June 30, 2020.
In response to the COVID-19 pandemic and its impact on our
people, we continue to follow recommended CDC guidelines including,
but not limited to, social distancing, hygiene recommendations,
small group limits, enhanced work-from-home guidelines, minimized
office hours in certain regions, and periodic town hall telephone
conferences to update employees and their families on the Company's
practices and protocols.
We continue to provide additional flexibility to work from home
for those with pre-existing health concerns, child care issues,
elderly in-home residents or other general concerns. At the crew
level, we have implemented policies to eliminate large group
gatherings, provided additional vehicles to reduce the number of
people per vehicle traveling to and from project locations,
increased utilization of radio communication, secured ample safe
daily water supply, offered increased housing flexibility and
relaxed field schedules to allow for individual needs. Most of our
day to day operations consist of small, often times individual,
isolated work groups.
Jumper concluded, "While the challenges we face today are
historic, they are by no means unfamiliar to Dawson Geophysical and
the members of our team. Throughout our company's 60-year plus
history, we have experienced several downturns and setbacks which
required us to reduce our crew counts, limit our spending and
maintain a close eye on the balance sheet. That said, even in
today's low-priced oil environment, there's a strong case for
seismic as exploration and production companies are working harder
than ever to identify optimum drilling locations in the most
cost-efficient manner possible. Seismic data and the solutions that
Dawson Geophysical provides are uniquely suited to help E&P
companies achieve their goals. I thank all of our hard working
employees, our valued clients and shareholders for their continued
commitment and support during these challenging times."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its second quarter 2020 financial results on July 30, 2020 at 9 a.m. CT.
Participants can access the call at 1-800-289-0438 (U.S.) and
1-323-794-2423 (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 August 30, 2020 by
dialing 1-844-512-2921 (Toll-Free) and 1-412-317-6671
(Toll/International). The passcode is 5281996. The webcast will be
recorded and available for replay on Dawson's website until
August 30, 2020.
About Dawson
Dawson Geophysical Company is a leading provider of North
American onshore seismic data acquisition services with operations
throughout the continental United
States and Canada. Dawson
acquires and processes 2-D, 3-D and multicomponent 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;
changes in exploration and production spending by our customers and
changes in the level of oil and natural gas exploration and
development; the results of operations and financial condition of
our customers, particularly during extended periods of low prices
for crude oil and natural gas; the volatility of oil and natural
gas prices; changes in economic conditions; the severity and
duration of the COVID-19 pandemic, related economic repercussions
and the resulting negative impact on demand for oil and gas; the
current significant surplus in the supply of oil and the ability of
OPEC+ to agree on and comply with supply limitations; the duration
and magnitude of the unprecedented disruption in the oil and gas
industry currently resulting from the impact of the foregoing
factors, which is negatively impacting our business; 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 challenges relating to the
COVID-19 pandemic and efforts to mitigate the spread of the virus,
including logistical challenges, protecting the health and
well-being of our employees and remote work arrangements; 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 (the "SEC") on
March 6, 2020 and any subsequent Quarterly Reports on Form
10-Q filed with the SEC. The Company disclaims any intention or
obligation to revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
|
(unaudited and
amounts in thousands, except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
29,499
|
|
$
|
24,076
|
|
$
|
68,478
|
|
$
|
75,240
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
19,732
|
|
|
25,324
|
|
|
48,748
|
|
|
66,180
|
General
and administrative
|
|
4,261
|
|
|
5,049
|
|
|
7,935
|
|
|
9,593
|
Depreciation and amortization
|
|
4,383
|
|
|
5,325
|
|
|
9,287
|
|
|
11,406
|
|
|
28,376
|
|
|
35,698
|
|
|
65,970
|
|
|
87,179
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
1,123
|
|
|
(11,622)
|
|
|
2,508
|
|
|
(11,939)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
115
|
|
|
151
|
|
|
220
|
|
|
293
|
Interest
expense
|
|
(30)
|
|
|
(122)
|
|
|
(70)
|
|
|
(280)
|
Other
income (expense), net
|
|
293
|
|
|
226
|
|
|
(165)
|
|
|
422
|
Income (loss)
before income tax
|
|
1,501
|
|
|
(11,367)
|
|
|
2,493
|
|
|
(11,504)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
(expense) benefit
|
|
(1)
|
|
|
121
|
|
|
—
|
|
|
121
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
1,500
|
|
|
(11,246)
|
|
|
2,493
|
|
|
(11,383)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized income
(loss) on foreign exchange rate translation, net
|
|
604
|
|
|
174
|
|
|
(595)
|
|
|
383
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss)
|
$
|
2,104
|
|
$
|
(11,072)
|
|
$
|
1,898
|
|
$
|
(11,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income
(loss) per share of common stock
|
$
|
0.06
|
|
$
|
(0.49)
|
|
$
|
0.11
|
|
$
|
(0.49)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income
(loss) per share of common stock
|
$
|
0.06
|
|
$
|
(0.49)
|
|
$
|
0.11
|
|
$
|
(0.49)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
23,339,644
|
|
|
23,176,934
|
|
|
23,313,383
|
|
|
23,117,571
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
23,548,253
|
|
|
23,176,934
|
|
|
23,500,109
|
|
|
23,117,571
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2020
|
|
2019
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
29,478
|
|
$
|
26,271
|
Restricted cash
|
|
5,000
|
|
|
5,000
|
Short-term investments
|
|
2,350
|
|
|
2,350
|
Accounts
receivable, net
|
|
26,600
|
|
|
24,356
|
Current
maturities of notes receivable
|
|
1,434
|
|
|
66
|
Prepaid
expenses and other current assets
|
|
4,700
|
|
|
7,575
|
Total current
assets
|
|
69,562
|
|
|
65,618
|
|
|
|
|
|
|
Property and
equipment, net
|
|
46,396
|
|
|
53,549
|
Right-of-use
assets
|
|
5,968
|
|
|
6,605
|
Notes receivable,
net of current maturities
|
|
—
|
|
|
1,394
|
Intangibles,
net
|
|
367
|
|
|
385
|
Long-term deferred
tax assets, net
|
|
—
|
|
|
57
|
|
|
|
|
|
|
Total
assets
|
$
|
122,293
|
|
$
|
127,608
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
3,260
|
|
$
|
3,952
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,978
|
|
|
1,963
|
Other
|
|
2,233
|
|
|
3,599
|
Deferred
revenue
|
|
1,159
|
|
|
3,481
|
Current
maturities of notes payable and finance leases
|
|
1,562
|
|
|
4,062
|
Current
maturities of operating lease liabilities
|
|
1,106
|
|
|
1,200
|
Total current
liabilities
|
|
11,298
|
|
|
18,257
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and finance leases, net of current maturities
|
|
67
|
|
|
96
|
Operating lease liabilities, net of current maturities
|
|
5,386
|
|
|
5,940
|
Deferred
tax liabilities, net
|
|
22
|
|
|
—
|
Other
accrued liabilities
|
|
—
|
|
|
150
|
Total long-term
liabilities
|
|
5,475
|
|
|
6,186
|
|
|
|
|
|
|
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,
23,399,035
|
|
|
|
|
|
and
23,335,855 shares issued, and 23,350,590 and 23,287,410 shares
outstanding
|
|
|
|
|
at
June 30, 2020 and December 31, 2019
|
|
234
|
|
|
233
|
Additional paid-in capital
|
|
154,691
|
|
|
154,235
|
Retained
deficit
|
|
(47,238)
|
|
|
(49,731)
|
Treasury
stock, at cost; 48,445 shares
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(2,167)
|
|
|
(1,572)
|
Total stockholders'
equity
|
|
105,520
|
|
|
103,165
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
122,293
|
|
$
|
127,608
|
Reconciliation of
EBITDA to Net Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
1,500
|
|
$
|
(11,246)
|
|
$
|
2,493
|
|
$
|
(11,383)
|
Depreciation and
amortization
|
|
4,383
|
|
|
5,325
|
|
|
9,287
|
|
|
11,406
|
Interest (income)
expense, net
|
|
(85)
|
|
|
(29)
|
|
|
(150)
|
|
|
(13)
|
Income tax expense
(benefit)
|
|
1
|
|
|
(121)
|
|
|
0
|
|
|
(121)
|
EBITDA
|
$
|
5,799
|
|
$
|
(6,071)
|
|
$
|
11,630
|
|
$
|
(111)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided by Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
9,149
|
|
$
|
13,636
|
|
$
|
8,976
|
|
$
|
12,069
|
Changes in working
capital and other items
|
|
(2,775)
|
|
|
(19,143)
|
|
|
3,733
|
|
|
(10,906)
|
Noncash adjustments
to net income (loss)
|
|
(575)
|
|
|
(564)
|
|
|
(1,079)
|
|
|
(1,274)
|
EBITDA
|
$
|
5,799
|
|
$
|
(6,071)
|
|
$
|
11,630
|
|
$
|
(111)
|
View original
content:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-second-quarter-2020-results-301102765.html
SOURCE Dawson Geophysical Company