MIDLAND, Texas, Aug. 12, 2021 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its second quarter ended
June 30, 2021.
For the quarter ended June 30, 2021, the Company reported
revenues of $193,000, a significant
decrease compared to $29,499,000 for
the quarter ended June 30, 2020. For
the second quarter of 2021, the Company reported a net loss of
$9,017,000 or $0.38 loss per common share compared to net
income of $1,500,000 or $0.06 per common share for the second quarter of
2020. The Company reported negative EBITDA of $5,667,000 for the quarter ended June 30, 2021 compared to positive EBITDA of
$5,799,000 for the quarter ended
June 30, 2020.
For the six months ended June 30,
2021, the Company reported revenues of $11,941,000, a decrease of approximately 83%
compared to $68,478,000 for the six
months ended June 30, 2020. For the
six months ended June 30, 2021, the
Company reported a net loss of $14,245,000 or $0.61 loss per common share compared to net
income of $2,493,000 or $0.11 per common share for the six months ended
June 30, 2020. The Company reported
negative EBITDA of $7,525,000 for the
six months ended June 30, 2021
compared to positive EBITDA of $11,630,000 for the six months ended June 30, 2020.
Activity levels during the second quarter of 2021 reached a low
point, as the Company did not have a seismic data acquisition crew
operating in either the United
States ("U.S.") or in Canada, as the Canadian season concluded at
the end of the first quarter. The near-term outlook for seismic
data acquisition activity in the U.S. remains challenging with the
Company currently operating one midsize channel count crew. Based
on currently available information, the Company anticipates
operating one crew in the U.S. during the second half of 2021 with
periods of low utilization and potentially one crew in Canada during the fourth quarter.
Stephen C. Jumper, President and
Chief Executive Officer, said, "As indicated in our first quarter
earnings release, the second quarter and into the third quarter
will reflect a low point for Dawson in terms of activity levels. We
deployed a midsize crew in the U.S. in mid-July and anticipate that
crew operating through the second half of 2021 with possible
periods of prolonged stand-by as we continue our efforts to fill
the seismic data acquisition project schedule.
Exploration and Production ("E&P") companies are continuing
on their path of capital discipline, focusing on shareholder
returns and keeping spending levels below cash flow. Despite recent
oil price improvement into the mid-$70 range and natural gas prices in the upper
$3 range, capital spending levels
increased only slightly as many E&P companies have portions of
their production hedged well below spot prices. According to IHS
Markit, U.S. oil hedging losses during the first half of 2021
totaled $7.5 billion, adding further
pressure on spending plans for companies that entered into such
contracts during the downturn.
That said, despite the recent pull back in oil prices in
response to the OPEC+ announcement concerning increased production
quotas, as well as uncertainty around the effects of the COVID-19
Delta variant on the overall economy, there continues to be modest
improvement in oil service activity. The U.S. rig count, which
typically precedes seismic data acquisition deployment, is
currently at 491, showing gains in five out of the last six weeks
and an increase from 247 a year ago but well below levels seen at
this time in 2019 of 918. The same is true for hydraulic fracturing
fleets with a current count of 235 crews operating, above the 70 of
a year ago but well below the 366 crews this time two years ago. As
we discussed in our first quarter 2021 earnings release, demand for
seismic data acquisition services continues to lag the recent
modest increase in oil service activity.
While seismic data acquisition activity remains at low levels,
we are beginning to experience a slight uptick in bid activity in
the U.S. and are encouraged by recent inquiries in Canada for the upcoming season. Included in
the bid activity are requests for carbon capture projects.
Carbon capture projects, while
typically smaller in scope, have certain levels of repeatability
and could offer new opportunities for Dawson Geophysical."
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 anticipated 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 and
second quarters 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 $45,917,000 of cash, restricted cash and short
term investments and $44,382,000 of
working capital as of June 30, 2021.
The Company is nearly debt free, with notes payable and finance
leases of $427,000 as of June 30, 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. The recent
increase in drilling and completion activities, combined with
hedging contracts that will ultimately unwind, sets 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 second quarter 2021 financial results on August 12, 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 September 12, 2021 by
dialing 1-844-512-2921 (Toll-Free) and 1-412-317-6671
(Toll/International). The passcode is 1161933. The webcast will be
recorded and available for replay on Dawson's website at
http://www.dawson3d.com until September
12, 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) 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;
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)
INCOME
|
(unaudited and
amounts in thousands, except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
193
|
|
$
|
29,499
|
|
$
|
11,941
|
|
$
|
68,478
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
3,330
|
|
|
19,732
|
|
|
14,272
|
|
|
48,748
|
General
and administrative
|
|
2,746
|
|
|
4,261
|
|
|
5,553
|
|
|
7,935
|
Depreciation and amortization
|
|
3,400
|
|
|
4,383
|
|
|
6,834
|
|
|
9,287
|
|
|
9,476
|
|
|
28,376
|
|
|
26,659
|
|
|
65,970
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
income from operations
|
|
(9,283)
|
|
|
1,123
|
|
|
(14,718)
|
|
|
2,508
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
56
|
|
|
115
|
|
|
126
|
|
|
220
|
Interest
expense
|
|
(6)
|
|
|
(30)
|
|
|
(12)
|
|
|
(70)
|
Other
income (expense), net
|
|
216
|
|
|
293
|
|
|
359
|
|
|
(165)
|
(Loss) income
before income tax
|
|
(9,017)
|
|
|
1,501
|
|
|
(14,245)
|
|
|
2,493
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
(9,017)
|
|
|
1,500
|
|
|
(14,245)
|
|
|
2,493
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized income (loss) on foreign exchange rate translation,
net
|
|
211
|
|
|
604
|
|
|
412
|
|
|
(595)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(8,806)
|
|
$
|
2,104
|
|
$
|
(13,833)
|
|
$
|
1,898
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)
income per share of common stock
|
$
|
(0.38)
|
|
$
|
0.06
|
|
$
|
(0.61)
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
income per share of common stock
|
$
|
(0.38)
|
|
$
|
0.06
|
|
$
|
(0.61)
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
23,525,728
|
|
|
23,339,644
|
|
|
23,501,900
|
|
|
23,313,383
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
23,525,728
|
|
|
23,548,253
|
|
|
23,501,900
|
|
|
23,500,109
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2021
|
|
2020
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
40,334
|
|
$
|
40,955
|
Restricted cash
|
|
5,000
|
|
|
5,000
|
Short-term investments
|
|
583
|
|
|
583
|
Accounts
receivable, net
|
|
324
|
|
|
7,343
|
Prepaid
expenses and other current assets
|
|
2,785
|
|
|
4,709
|
Total current
assets
|
|
49,026
|
|
|
58,590
|
|
|
|
|
|
|
Property and
equipment, net
|
|
31,967
|
|
|
38,900
|
Right-of-use
assets
|
|
4,983
|
|
|
5,494
|
Intangibles,
net
|
|
403
|
|
|
393
|
|
|
|
|
|
|
Total
assets
|
$
|
86,379
|
|
$
|
103,377
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
543
|
|
$
|
1,603
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
571
|
|
|
1,045
|
Other
|
|
1,394
|
|
|
1,811
|
Deferred
revenue
|
|
684
|
|
|
1,779
|
Current
maturities of notes payable and finance leases
|
|
400
|
|
|
94
|
Current
maturities of operating lease liabilities
|
|
1,052
|
|
|
1,109
|
Total current
liabilities
|
|
4,644
|
|
|
7,441
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and finance leases, net of current maturities
|
|
27
|
|
|
44
|
Operating lease liabilities, net of current maturities
|
|
4,425
|
|
|
4,899
|
Deferred
tax liabilities, net
|
|
19
|
|
|
19
|
Total long-term
liabilities
|
|
4,471
|
|
|
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,
23,680,427 and
|
|
|
|
|
|
23,526,517 shares issued, and 23,631,982 and 23,478,072 shares
outstanding at
|
|
|
|
|
|
June
30, 2021 and December 31, 2020, respectively
|
|
237
|
|
|
235
|
Additional paid-in capital
|
|
154,987
|
|
|
154,866
|
Retained
deficit
|
|
(77,172)
|
|
|
(62,927)
|
Treasury
stock, at cost; 48,445 shares
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(788)
|
|
|
(1,200)
|
Total stockholders'
equity
|
|
77,264
|
|
|
90,974
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
86,379
|
|
$
|
103,377
|
Reconciliation of
EBITDA to Net (Loss) Income
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(9,017)
|
|
$
|
1,500
|
|
$
|
(14,245)
|
|
$
|
2,493
|
Depreciation and
amortization
|
|
3,400
|
|
|
4,383
|
|
|
6,834
|
|
|
9,287
|
Interest (income)
expense, net
|
|
(50)
|
|
|
(85)
|
|
|
(114)
|
|
|
(150)
|
Income tax
expense
|
|
-
|
|
|
1
|
|
|
-
|
|
|
-
|
EBITDA
|
$
|
(5,667)
|
|
$
|
5,799
|
|
$
|
(7,525)
|
|
$
|
11,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash (Used in) Provided by Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
$
|
(1,126)
|
|
$
|
9,149
|
|
$
|
(1,298)
|
|
$
|
8,976
|
Changes in working
capital and other items
|
|
(4,178)
|
|
|
(2,775)
|
|
|
(5,501)
|
|
|
3,733
|
Non-cash adjustments
to net (loss) income
|
|
(363)
|
|
|
(575)
|
|
|
(726)
|
|
|
(1,079)
|
EBITDA
|
$
|
(5,667)
|
|
$
|
5,799
|
|
$
|
(7,525)
|
|
$
|
11,630
|
View original
content:https://www.prnewswire.com/news-releases/dawson-geophysical-reports-second-quarter-2021-results-301353642.html
SOURCE Dawson Geophysical Company