MIDLAND, Texas, May 13, 2021 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) (the "Company") today reported unaudited
financial results for its first quarter ended March 31, 2021.
For the first quarter ended March 31,
2021, the Company reported revenues of $11,748,000, a decrease of approximately 70%
compared to $38,979,000 for the
quarter ended March 31, 2020. For the
first quarter of 2021, the Company reported a net loss of
$5,228,000, or $0.22 loss per share of common stock, compared to
net income of $993,000, or
$0.04 per share of common stock, for
the quarter ended March 31, 2020. The
Company reported negative EBITDA of $1,858,000 for the quarter ended March 31, 2021 compared to EBITDA of $5,831,000 for the quarter ended March 31, 2020.
The first fiscal quarter of 2021 was difficult as indicated in
our 2020 year-end earnings release. The Company operated one
seismic data acquisition crew in the
United States ("U.S.") with limited utilization and one crew
in Canada. The near term outlook
for seismic data acquisition activity in the U.S. remains
challenged with historically low levels of crew and bid activity.
Based on currently available information, the Company anticipates
limited crew activity in the second quarter with up to one crew
operating in the U.S. with periods of low utilization in the back
half of 2021. Currently, the Company does not have a crew deployed
in the U.S. and the Canadian season concluded at the end of the
first quarter.
Stephen C. Jumper, President and
Chief Executive Officer, said, "Since the onset of the COVID-19
pandemic over a year ago, the seismic data acquisition market along
with other oil field services remain challenged in the U.S. and
Canada. While there are
encouraging signs of recovery in certain oil field services, such
as drilling and completion services, current demand for seismic
related services remains at very low levels. In recent months, oil
prices have improved to the $60 per
barrel range as oil demand has increased with states beginning to
further open businesses, air travel increasing and the rollout of
the COVID-19 vaccines. The U.S. rig count, currently at 448, is
steadily improving, as is the number of hydraulic fracturing crews.
Based on currently available information, we anticipate seismic
data acquisition activity in the lower 48 to reach a low in the
second quarter and into the third quarter of 2021 with slight
improvement later in 2021.
As we have stated in prior earnings releases, demand for seismic
data acquisition in recent cycles lags behind the recovery in
drilling and completion activity as Exploration and Production
companies initially deploy capital into such services and work
through their inventory of drillable projects. The same is true on
the front side of a downturn as drilling and completion services
are scaled back, while currently active seismic related projects
continue, as seen in 2020 where our activity levels remained
relatively high through the second quarter and into the third
quarter after the onset of the COVID-19 pandemic. The timing of a
return to an increase in demand for seismic services in 2021 is
further delayed due to the depth of the most recent downturn, slow
recovery of capital budget increases as oil prices remained
depressed into 2021, a larger than typical post downturn inventory
of drilling projects, and slower recovery of rig count to work
through the inventory back log.
During the latter part of 2018 and continuing into the first
half of 2020, the Company successfully acquired multiple high
density, large channel count projects in certain areas of the
Permian Basin. These fully processed data sets first became
available to the industry in late 2019 and continue into 2021.
Early results of these data sets indicate substantially improved
subsurface image quality compared to prior seismic data sets,
examples of which are just beginning to become public. The
increases in data quality and imagery are currently being utilized
for improved well planning, geo-steering of long lateral well
bores, geo-hazard identification and avoidance, enhanced reservoir
definition and rock property description between well data samples
and strategic placement of disposal well locations. As the industry
begins to recognize and appreciate the value of these high density,
large channel count surveys, we believe demand for such surveys
will improve. The Company's state-of-the-art equipment base allows
us to deploy multiple large channel count crews when demand does
improve."
Jumper continued, "In our continuing response to these difficult
times, the Company significantly limited capital budget spending,
reduced fixed and variable operating expenses, and implemented a
comprehensive equipment maintenance program in preparation for a
rapid response to increased activity levels. In addition, the
Company maintains its commitment to its robust Health, Safety and
Environmental program, ongoing client relationships and product
quality."
The Company made no capital expenditures during the first
quarter of 2021. As stated in our December
31, 2020 earnings release, 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 $46,954,000 of
cash, restricted cash and short term investments and $49,714,000 of working capital as of March 31, 2021. The Company is nearly debt free,
with notes payable and finance leases of $587,000 as of March 31,
2021.
Jumper concluded, "While today's conditions in the seismic data
acquisition market remain challenged and are likely to remain so in
the coming months, we are encouraged by the overall improvement in
both the economy and the oil field service sector. Improvement in
drilling and completion activities helps set the stage for a
successful recovery in the seismic data acquisition sector. I thank
our hard-working employees, valued customers and trusted
shareholders as we work our way through these difficult conditions
and toward better times ahead."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its first quarter 2021 financial results on May 13, 2021 at
9:00 a.m. Central / 10:00 a.m. Eastern. Participants
can access the call at 1-866-548-4713 (US/Canada) and 1-323-794-2093
(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 13, 2021 by dialing
1-844-512-2921 (Toll-Free) and 1-412-317-6671 (Toll/International).
The passcode is 6711653. The webcast will be recorded and available
for replay on Dawson's website
at http://www.dawson3d.com until June 13, 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;
surpluses 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 16, 2021 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
|
(unaudited and
amounts in thousands, except share and per share
data)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
|
|
|
|
|
|
Operating
revenues
|
$
|
11,748
|
|
$
|
38,979
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
Operating expenses
|
|
10,942
|
|
|
29,016
|
General
and administrative
|
|
2,807
|
|
|
3,674
|
Depreciation and amortization
|
|
3,434
|
|
|
4,904
|
|
|
17,183
|
|
|
37,594
|
|
|
|
|
|
|
(Loss)
income from operations
|
|
(5,435)
|
|
|
1,385
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
income
|
|
70
|
|
|
105
|
Interest
expense
|
|
(6)
|
|
|
(40)
|
Other
income (expense), net
|
|
143
|
|
|
(458)
|
(Loss) income
before income tax
|
|
(5,228)
|
|
|
992
|
|
|
|
|
|
|
Income tax
benefit
|
|
—
|
|
|
1
|
|
|
|
|
|
|
Net (loss)
income
|
|
(5,228)
|
|
|
993
|
|
|
|
|
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
Net
unrealized income (loss) on foreign exchange rate translation,
net
|
|
201
|
|
|
(1,199)
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(5,027)
|
|
$
|
(206)
|
|
|
|
|
|
|
Basic (loss)
income per share of common stock
|
$
|
(0.22)
|
|
$
|
0.04
|
|
|
|
|
|
|
Diluted (loss)
income per share of common stock
|
$
|
(0.22)
|
|
$
|
0.04
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
23,478,072
|
|
|
23,287,410
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
23,478,072
|
|
|
23,465,651
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
41,371
|
|
$
|
40,955
|
Restricted cash
|
|
5,000
|
|
|
5,000
|
Short-term investments
|
|
583
|
|
|
583
|
Accounts
receivable, net
|
|
5,137
|
|
|
7,343
|
Prepaid
expenses and other current assets
|
|
3,083
|
|
|
4,709
|
Total current
assets
|
|
55,174
|
|
|
58,590
|
|
|
|
|
|
|
Property and
equipment, net
|
|
35,409
|
|
|
38,900
|
Right-of-use
assets
|
|
5,241
|
|
|
5,494
|
Intangibles,
net
|
|
398
|
|
|
393
|
|
|
|
|
|
|
Total
assets
|
$
|
96,222
|
|
$
|
103,377
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
1,434
|
|
$
|
1,603
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,011
|
|
|
1,045
|
Other
|
|
1,375
|
|
|
1,811
|
Deferred
revenue
|
|
—
|
|
|
1,779
|
Current
maturities of notes payable and finance leases
|
|
551
|
|
|
94
|
Current
maturities of operating lease liabilities
|
|
1,089
|
|
|
1,109
|
Total current
liabilities
|
|
5,460
|
|
|
7,441
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and finance leases, net of current maturities
|
|
36
|
|
|
44
|
Operating lease liabilities, net of current maturities
|
|
4,659
|
|
|
4,899
|
Deferred
tax liabilities, net
|
|
19
|
|
|
19
|
Total long-term
liabilities
|
|
4,714
|
|
|
4,962
|
|
|
|
|
|
|
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
|
|
|
|
|
|
shares issued, and 23,478,072 shares outstanding at March 31, 2021
and
|
|
|
|
|
|
December 31, 2020
|
|
235
|
|
|
235
|
Additional paid-in capital
|
|
154,967
|
|
|
154,866
|
Retained
deficit
|
|
(68,155)
|
|
|
(62,927)
|
Treasury
stock, at cost; 48,445 shares
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(999)
|
|
|
(1,200)
|
Total stockholders'
equity
|
|
86,048
|
|
|
90,974
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
96,222
|
|
$
|
103,377
|
Reconciliation of
EBITDA to Net (Loss) Income
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
|
|
|
|
|
Net (loss)
income
|
$
|
(5,228)
|
|
$
|
993
|
Depreciation and
amortization
|
|
3,434
|
|
|
4,904
|
Interest (income)
expense, net
|
|
(64)
|
|
|
(65)
|
Income tax
benefit
|
|
-
|
|
|
(1)
|
EBITDA
|
$
|
(1,858)
|
|
$
|
5,831
|
Reconciliation of
EBITDA to Net Cash Used in Operating Activities
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
|
|
|
|
|
Net cash used in
operating activities
|
$
|
(172)
|
|
$
|
(173)
|
Changes in working
capital and other items
|
|
(1,323)
|
|
|
6,508
|
Non-cash adjustments
to net (loss) income
|
|
(363)
|
|
|
(504)
|
EBITDA
|
$
|
(1,858)
|
|
$
|
5,831
|
View original
content:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-first-quarter-2021-results-301290399.html
SOURCE Dawson Geophysical Company