MIDLAND, Texas, March 11, 2021 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its fourth quarter and full year
ended December 31, 2020.
For the fourth quarter ended December 31, 2020, the Company
reported revenues of $8,884,000, a
decrease of approximately 74% compared to $33,557,000 for the quarter ended
December 31, 2019. For the fourth quarter of 2020, the Company
reported a net loss of $7,849,000, or
$0.33 loss per share of common stock,
compared to a net loss of $5,828,000,
or $0.25 loss per share of common
stock, for the quarter ended December 31, 2019. The Company
reported negative EBITDA of $4,151,000 for the quarter ended December 31, 2020 compared to negative EBITDA of
$788,000 for the quarter ended
December 31, 2019.
For the year ended December 31, 2020, the Company reported
revenues of $86,100,000, a decrease
of approximately 41% compared to $145,773,000 for the year ended December 31,
2019. For the full year 2020, the Company narrowed its net loss to
$13,196,000, or $0.56 loss per share of common stock, from a net
loss of $15,213,000, or $0.66 loss per share of common stock, for the
year ended December 31, 2019. The Company reported EBITDA of
$3,683,000 for the year ended
December 31, 2020, a decrease of approximately 41% compared to
$6,261,000 for the year ended
December 31, 2019.
During the fourth quarter of 2020, the Company operated one data
acquisition crew with periods of low utilization in the United States ("U.S."). The one crew was
inactive for the latter part of the third quarter and well into the
fourth quarter. Based on currently available information, the
Company anticipates operating one crew in the U.S. through the
first quarter with likely sustained periods of downtime and one
crew in Canada for the winter
season ending at the end of the first quarter of 2021. While
visibility remains limited beyond the first quarter, the Company
maintains the ability to deploy additional crews on short notice
when market conditions improve. Reflected in both the fourth
quarter and year end results is a non-cash impairment of
approximately $1.6 million related to
a note receivable and bad debt expense.
Stephen C. Jumper, President and
Chief Executive Officer, said, "Fiscal 2020 was a year of
unprecedented adversity. The company started out the first half of
the year with its best financial and operational results in many
years. We operated three large channel count crews in the U.S. and
up to three crews in the Canada
during the first quarter of 2020. The company continued
profitability in the second quarter with the operation of two large
channel count crews. As reported in our second quarter earnings
release, the company began to experience the dramatic impact of the
COVID-19 related economic lockdowns in late spring and early
summer. As oil prices began to trade at significantly low levels,
Exploration and Production ("E&P") companies reduced their
capital budgets and spending, which in turn, negatively impacted
demand for our services. As a result, crew deployment lessened and
utilization of our existing channels dropped. Utilization levels
went from strong and promising in the first half of the year to
weak for periods of time in the second half of the year. Even
though we have seen some gradual uptick in oil prices, current
requests for proposals for our services in both the U.S. and
Canada remain challenged. We are
beginning to see signs of modest recovery in the oilfield service
space as the oil and gas industry has experienced slight economic
improvements in the number of active drilling rigs and hydraulic
fracturing crews deployed in the U.S. On a different note, the
decrease in overall activity and financial difficulties led to an
increase in M&A activity as some E&P companies have chosen
to consolidate with others. At this time, we are unable to forecast
the impact that this activity will have on the demand for our
services as E&P companies re-evaluate their capital spending
projects. However, this recent M&A activity indicates E&P
companies will continue their focus on shareholder returns and
disciplined capital spending as they seek to develop and produce
oil and natural gas with increased efficiency by prioritizing their
most economic drilling locations. This need for increased
efficiencies promotes demand for seismic data acquisition and the
services we provide. As in the most recent down cycles, we
anticipate recovery in seismic data acquisition to somewhat lag
behind increases in drilling and completion activities. The overall
effect on the Company of the current administration's order to
pause oil and gas leasing and issuance of new drilling permits on
federal lands is yet to be determined, however, we anticipate
activity among E&P companies to be cautious in many of the
Western States such as New Mexico,
Utah and Wyoming."
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 past 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, as
previously reported in our second quarter 2020 earnings press
release, the Company anticipates approximately $4.3 million in annual cost savings as a result
of previously enacted cost saving measures."
Capital expenditures for the fourth quarter were $25,000 and totaled $2,786,000 for the twelve months ended
December 31, 2020, primarily for
maintenance capital items. The Company's Board of Directors has
approved an initial capital budget of $1,000,000 for 2021. The Company's balance sheet
remains strong with $46,538,000 of
cash, restricted cash and short term investments and $51,149,000 of working capital as of December 31, 2020. The Company is nearly debt
free, with notes payable and finance leases of $138,000 as of December
31, 2020.
Jumper concluded, "Despite the setbacks thrust upon us by the
worldwide COVID-19 pandemic, we are determined to press forward and
deliver the highest quality services for our clients. Our
state-of-the-art equipment inventory, our strong and unleveraged
balance sheet and our dedicated work force positions us for a
healthy recovery when market conditions improve. As mentioned
above, conditions are difficult and will remain so for the
near-term pending continued improvement and stabilization in oil
prices, but I am confident in the future and that we are properly
focused on upcoming opportunities. I thank all of our hard-working
employees, valued clients and our trusted shareholders as we work
toward better times ahead."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its year-end and fourth quarter 2020 financial results on
March 11, 2021 at
9:00 a.m. Central / 10:00 a.m. Eastern. Participants
can access the call at 1-800-289-0438 (US/Canada) 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
April 11, 2021 by dialing
1-844-512-2921 (Toll-Free) and 1-412-317-6671 (Toll/International).
The passcode is 7372829. The webcast will be recorded and available
for replay on Dawson's website
at http://www.dawson3d.com until April 11, 2021.
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 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 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
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(amounts in
thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
8,884
|
|
$
|
33,557
|
|
$
|
86,100
|
|
$
|
145,773
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
10,809
|
|
|
30,814
|
|
|
68,998
|
|
|
123,024
|
General
and administrative
|
|
2,715
|
|
|
3,779
|
|
|
13,920
|
|
|
17,169
|
Depreciation and amortization
|
|
3,762
|
|
|
5,182
|
|
|
17,174
|
|
|
21,826
|
|
|
17,286
|
|
|
39,775
|
|
|
100,092
|
|
|
162,019
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(8,402)
|
|
|
(6,218)
|
|
|
(13,992)
|
|
|
(16,246)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
76
|
|
|
103
|
|
|
402
|
|
|
548
|
Interest
expense
|
|
(3)
|
|
|
(54)
|
|
|
(83)
|
|
|
(435)
|
Other
income (expense), net
|
|
489
|
|
|
248
|
|
|
501
|
|
|
681
|
Loss before income
tax
|
|
(7,840)
|
|
|
(5,921)
|
|
|
(13,172)
|
|
|
(15,452)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
(expense) benefit
|
|
(9)
|
|
|
93
|
|
|
(24)
|
|
|
239
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(7,849)
|
|
|
(5,828)
|
|
|
(13,196)
|
|
|
(15,213)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized income on foreign exchange rate translation,
net
|
|
593
|
|
|
112
|
|
|
372
|
|
|
392
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(7,256)
|
|
$
|
(5,716)
|
|
$
|
(12,824)
|
|
$
|
(14,821)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share of common stock
|
$
|
(0.33)
|
|
$
|
(0.25)
|
|
$
|
(0.56)
|
|
$
|
(0.66)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share of common stock
|
$
|
(0.33)
|
|
$
|
(0.25)
|
|
$
|
(0.56)
|
|
$
|
(0.66)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
23,478,072
|
|
|
23,257,830
|
|
|
23,382,433
|
|
|
23,179,257
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
23,478,072
|
|
|
23,257,830
|
|
|
23,382,433
|
|
|
23,179,257
|
|
|
|
|
|
|
|
|
|
|
|
|
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED
BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
December
31,
|
|
2020
|
|
2019
|
Assets
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
40,955
|
|
$
|
26,271
|
Restricted cash
|
|
5,000
|
|
|
5,000
|
Short-term investments
|
|
583
|
|
|
2,350
|
Accounts
receivable, net of allowance for doubtful accounts of
$250
|
|
|
|
|
|
at December 31, 2020
and 2019
|
|
7,343
|
|
|
24,356
|
Current
maturities of notes receivable
|
|
—
|
|
|
66
|
Prepaid
expenses and other current assets
|
|
4,709
|
|
|
7,575
|
Total current
assets
|
|
58,590
|
|
|
65,618
|
|
|
|
|
|
|
Property and
equipment
|
|
271,480
|
|
|
284,647
|
Less
accumulated depreciation
|
|
(232,580)
|
|
|
(231,098)
|
Property and
equipment, net
|
|
38,900
|
|
|
53,549
|
|
|
|
|
|
|
Right-of-use
assets
|
|
5,494
|
|
|
6,605
|
Notes receivable,
net of current maturities
|
|
—
|
|
|
1,394
|
Intangibles,
net
|
|
393
|
|
|
385
|
Long-term deferred
tax assets, net
|
|
—
|
|
|
57
|
|
|
|
|
|
|
Total
assets
|
$
|
103,377
|
|
$
|
127,608
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
1,603
|
|
$
|
3,952
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,045
|
|
|
1,963
|
Other
|
|
1,811
|
|
|
3,599
|
Deferred
revenue
|
|
1,779
|
|
|
3,481
|
Current
maturities of notes payable and finance leases
|
|
94
|
|
|
4,062
|
Current
maturities of opearating lease liabilities
|
|
1,109
|
|
|
1,200
|
Total current
liabilities
|
|
7,441
|
|
|
18,257
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and finance leases, net of current maturities
|
|
44
|
|
|
96
|
Operating lease liabilities, net of current maturities
|
|
4,899
|
|
|
5,940
|
Deferred
tax liabilities, net
|
|
19
|
|
|
—
|
Other
accrued liabilities
|
|
—
|
|
|
150
|
Total long-term
liabilities
|
|
4,962
|
|
|
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 December 31,
2020 and 2019, respectively
|
|
|
|
|
|
|
|
|
|
|
|
235
|
|
|
233
|
Additional paid-in capital
|
|
154,866
|
|
|
154,235
|
Retained
deficit
|
|
(62,927)
|
|
|
(49,731)
|
Treasury
stock, at cost; 48,445 shares
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(1,200)
|
|
|
(1,572)
|
Total stockholders'
equity
|
|
90,974
|
|
|
103,165
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
103,377
|
|
$
|
127,608
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Loss
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(7,849)
|
|
$
|
(5,828)
|
|
$
|
(13,196)
|
|
$
|
(15,213)
|
Depreciation and
amortization
|
|
3,762
|
|
|
5,182
|
|
|
17,174
|
|
|
21,826
|
Interest (income)
expense, net
|
|
(73)
|
|
|
(49)
|
|
|
(319)
|
|
|
(113)
|
Income tax expense
(benefit)
|
|
9
|
|
|
(93)
|
|
|
24
|
|
|
(239)
|
EBITDA
|
$
|
(4,151)
|
|
$
|
(788)
|
|
$
|
3,683
|
|
$
|
6,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash (Used in) Provided by Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
$
|
(4,807)
|
|
$
|
8,283
|
|
$
|
19,641
|
|
$
|
9,480
|
Changes in working
capital and other items
|
|
2,654
|
|
|
(8,518)
|
|
|
(12,444)
|
|
|
(812)
|
Non-cash adjustments
to net loss
|
|
(1,998)
|
|
|
(553)
|
|
|
(3,514)
|
|
|
(2,407)
|
EBITDA
|
$
|
(4,151)
|
|
$
|
(788)
|
|
$
|
3,683
|
|
$
|
6,261
|
View original
content:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-fourth-quarter-and-full-year-2020-results-301245271.html
SOURCE Dawson Geophysical Company