MIDLAND, Texas, Oct. 29, 2020 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) (the "Company") today reported unaudited
financial results for its third quarter ended September 30, 2020.
For the quarter ended September 30,
2020, the Company reported revenues of $8,738,000, a decrease of approximately 76
percent compared to $36,976,000 for
the quarter ended September 30, 2019.
For the third quarter of 2020, the Company reported a net loss of
$7,840,000 or $0.33 loss per common share compared to net
income of $1,998,000 or $0.09 income per common share for the third
quarter of 2019. The Company reported negative EBITDA of
$3,796,000 for the quarter ended
September 30, 2020 compared to
positive EBITDA of $7,160,000 for the
quarter ended September 30, 2019.
For the nine months ended September 30,
2020, the Company reported revenues of $77,216,000, a decrease of approximately 31
percent compared to $112,216,000 for
the nine months ended September 30,
2019. For the nine months ended September 30, 2020, the Company reported a net
loss of $5,347,000 or $0.23 loss per common share compared to a net
loss of $9,385,000 or $0.41 loss per common share for the nine months
ended September 30, 2019. The Company
reported EBITDA of $7,834,000 for the
nine months ended September 30, 2020
compared to $7,049,000 for the nine
months ended September 30, 2019.
During the third quarter of 2020, the Company operated one data
acquisition crew with periods of low utilization. The one crew was
inactive for the latter part of the third quarter and into the
fourth quarter. Based on currently available information, the
Company anticipates operating one crew with periods of low
utilization for the foreseeable future in the United States ("U.S.") and up to two crews
in Canada for the winter season in
the late fourth quarter of 2020 and first quarter of
2021.
Capital expenditures for the third quarter and first nine months
of 2020 were $58,000 and $2,761,000, respectively, primarily for
maintenance capital items. The Company's balance sheet remains
strong with $45,422,000 of cash and
cash equivalents and $54,797,000 of
working capital as of September 30,
2020. The Company is nearly debt-free, having notes payable
and finance leases totaling $266,000
as of September 30, 2020.
Stephen C. Jumper, President and
Chief Executive Officer, said, "Reduced demand for oil and gas
resulting primarily from the worldwide COVID–19 induced economic
shutdown negatively impacted our third quarter operations. Project
uncertainties remain high and have led to a substantial reduction
in demand for our services going forward. Many of the companies we
serve have significantly reduced their capital spending plans for
the remainder of 2020 and into 2021. Requests for proposals for
seismic services continue to come in slowly in both the U.S. and
Canada, as well as worldwide.
While oil prices remain in the $40
price per barrel range with a strong likelihood of remaining there
through the remainder of 2020, several energy analysts are
forecasting meaningful improvements in both oil and natural gas
prices in 2021. Despite current challenges, the oil service
industry is beginning to experience slight improvements in some
areas that include an increase in the number of active rigs and
hydraulic fracturing crews deployed in the U.S. In addition, there
has been a recent surge in merger and acquisition activity within
the oil and gas Exploration and Production sector, of which the
impact upon oil service activity is yet to be determined. This
recent activity indicates E&P companies will continue their
focus on shareholder returns and disciplined capital spending as
they seek to develop and produce with increased efficiency by
drilling more robust locations. As in the most recent down cycles,
we anticipate recovery in seismic data acquisition to somewhat lag
behind increases in drilling and completion activities."
Jumper continued, "In response to these difficult conditions, we
are maintaining our focus on cost saving measures while balancing
the ability to respond rapidly when market conditions improve. As
reported in our previous press releases this year, we have taken
steps to outsource several ancillary services. These steps,
including permitting and surveying, have resulted in reduced salary
costs and lower general and administrative expenses. Moreover, and
as also reported in our second quarter 2020 earnings press release,
the Company anticipates approximately $4.3
million in annual costs savings as a result of previously
enacted cost saving measures."
Jumper concluded, "The current downturn in the oil and gas
industry is one of the most difficult periods I have experienced in
my 35 years in the industry. Reduced commodity prices triggered by
the COVID-19 pandemic and an oversupplied oil market continue to
weigh on our operations and will likely remain so through the end
of the year and into 2021. That said, we are well situated to
withstand the current downturn as our cost cutting measures, strong
balance sheet and investment in state-of-the art equipment in years
past has positioned us for a strong recovery once the market turns.
We continue to believe as E&P companies focus on returns as
opposed to growth, the use of high resolution seismic data should
play an important role in achieving that goal. As noted in our
previous press releases, I want to thank all of our hard-working
employees and our valued clients and shareholders during these
challenging times."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its third quarter 2020 financial results on October 29, 2020 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 29, 2020 by
dialing 1-844-512-2921 (Toll-Free) and 1-412-317-6671
(Toll/International). The passcode is 7730230. The webcast will be
recorded and available for replay on Dawson's website until
November 29, 2020.
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 (loss) income 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.
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
INCOME
|
(unaudited and
amounts in thousands, except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
8,738
|
|
$
|
36,976
|
|
$
|
77,216
|
|
$
|
112,216
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
9,441
|
|
|
26,030
|
|
|
58,189
|
|
|
92,210
|
General
and administrative
|
|
3,270
|
|
|
3,797
|
|
|
11,205
|
|
|
13,390
|
Depreciation and amortization
|
|
4,125
|
|
|
5,238
|
|
|
13,412
|
|
|
16,644
|
|
|
16,836
|
|
|
35,065
|
|
|
82,806
|
|
|
122,244
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
|
(8,098)
|
|
|
1,911
|
|
|
(5,590)
|
|
|
(10,028)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
106
|
|
|
152
|
|
|
326
|
|
|
445
|
Interest
expense
|
|
(10)
|
|
|
(101)
|
|
|
(80)
|
|
|
(381)
|
Other
income (expense), net
|
|
177
|
|
|
11
|
|
|
12
|
|
|
433
|
(Loss) income
before income tax
|
|
(7,825)
|
|
|
1,973
|
|
|
(5,332)
|
|
|
(9,531)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
(expense) benefit
|
|
(15)
|
|
|
25
|
|
|
(15)
|
|
|
146
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
(7,840)
|
|
|
1,998
|
|
|
(5,347)
|
|
|
(9,385)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized income
(loss) on foreign exchange rate translation, net
|
|
374
|
|
|
(103)
|
|
|
(221)
|
|
|
280
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
$
|
(7,466)
|
|
$
|
1,895
|
|
$
|
(5,568)
|
|
$
|
(9,105)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)
income per share of common stock
|
$
|
(0.33)
|
|
$
|
0.09
|
|
$
|
(0.23)
|
|
$
|
(0.41)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
income per share of common stock
|
$
|
(0.33)
|
|
$
|
0.09
|
|
$
|
(0.23)
|
|
$
|
(0.41)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
23,423,437
|
|
|
23,222,045
|
|
|
23,350,204
|
|
|
23,152,776
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
23,423,437
|
|
|
23,337,903
|
|
|
23,350,204
|
|
|
23,152,776
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2020
|
|
2019
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
45,422
|
|
$
|
26,271
|
Restricted cash
|
|
5,000
|
|
|
5,000
|
Short-term investments
|
|
583
|
|
|
2,350
|
Accounts
receivable, net
|
|
4,987
|
|
|
24,356
|
Current
maturities of notes receivable
|
|
1,434
|
|
|
66
|
Prepaid
expenses and other current assets
|
|
3,499
|
|
|
7,575
|
Total current
assets
|
|
60,925
|
|
|
65,618
|
|
|
|
|
|
|
Property and
equipment, net
|
|
42,449
|
|
|
53,549
|
Right-of-use
assets
|
|
5,736
|
|
|
6,605
|
Notes receivable,
net of current maturities
|
|
—
|
|
|
1,394
|
Intangibles,
net
|
|
375
|
|
|
385
|
Long-term deferred
tax assets, net
|
|
—
|
|
|
57
|
|
|
|
|
|
|
Total
assets
|
$
|
109,485
|
|
$
|
127,608
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
908
|
|
$
|
3,952
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,230
|
|
|
1,963
|
Other
|
|
2,304
|
|
|
3,599
|
Deferred
revenue
|
|
374
|
|
|
3,481
|
Current
maturities of notes payable and finance leases
|
|
215
|
|
|
4,062
|
Current
maturities of operating lease liabilities
|
|
1,097
|
|
|
1,200
|
Total current
liabilities
|
|
6,128
|
|
|
18,257
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and finance leases, net of current maturities
|
|
51
|
|
|
96
|
Operating lease liabilities, net of current maturities
|
|
5,157
|
|
|
5,940
|
Deferred
tax liabilities, net
|
|
22
|
|
|
—
|
Other
accrued liabilities
|
|
—
|
|
|
150
|
Total long-term
liabilities
|
|
5,230
|
|
|
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,
23,526,517
|
|
|
|
|
|
and
23,335,855 shares issued, and 23,478,072 and 23,287,410 shares
outstanding
|
|
|
|
|
|
at
September 30, 2020 and December 31, 2019, respectively
|
|
235
|
|
|
233
|
Additional paid-in capital
|
|
154,763
|
|
|
154,235
|
Retained
deficit
|
|
(55,078)
|
|
|
(49,731)
|
Treasury
stock, at cost; 48,445 shares
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(1,793)
|
|
|
(1,572)
|
Total stockholders'
equity
|
|
98,127
|
|
|
103,165
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
109,485
|
|
$
|
127,608
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net (Loss) Income
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(7,840)
|
|
$
|
1,998
|
|
$
|
(5,347)
|
|
$
|
(9,385)
|
Depreciation and
amortization
|
|
4,125
|
|
|
5,238
|
|
|
13,412
|
|
|
16,644
|
Interest (income)
expense, net
|
|
(96)
|
|
|
(51)
|
|
|
(246)
|
|
|
(64)
|
Income tax expense
(benefit)
|
|
15
|
|
|
(25)
|
|
|
15
|
|
|
(146)
|
EBITDA
|
$
|
(3,796)
|
|
$
|
7,160
|
|
$
|
7,834
|
|
$
|
7,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided by (Used in) Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
$
|
15,472
|
|
$
|
(10,872)
|
|
$
|
24,448
|
|
$
|
1,197
|
Changes in working
capital and other items
|
|
(18,831)
|
|
|
18,612
|
|
|
(15,098)
|
|
|
7,706
|
Noncash adjustments
to net (loss) income
|
|
(437)
|
|
|
(580)
|
|
|
(1,516)
|
|
|
(1,854)
|
EBITDA
|
$
|
(3,796)
|
|
$
|
7,160
|
|
$
|
7,834
|
|
$
|
7,049
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-third-quarter-2020-results-301162447.html
SOURCE Dawson Geophysical Company