MIDLAND, Texas, Aug. 4, 2016 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its second quarter ended
June 30, 2016.
For the quarter ended June 30,
2016, the Company reported revenues of $28,086,000 as compared to $43,335,000 for the quarter ended June 30, 2015. For the second quarter of 2016,
the Company reported a net loss of $11,589,000 or $0.54 loss per share attributable to common
stock, as compared to a net loss of $11,877,000 or $0.55 loss per share attributable to common stock
for the quarter ended June 30, 2015.
The Company reported negative EBITDA of $1,464,000 for the quarter ended June 30, 2016 compared to negative EBITDA
$5,704,000 for the quarter ended
June 30, 2015. For the first
six months of 2016, the Company's EBITDA remains positive at
$1,045,000.
During the second quarter of 2016, the Company operated four to
six crews in the United States for
most of the quarter. Utilization of several crews was unfavorably
impacted by inclement weather conditions in several areas of
operation late in the first quarter that continued into the early
part of the second quarter, and again during the latter stages of
the second quarter. The Company also experienced a few client
driven project delays which resulted in longer than anticipated
crew moves.
Stephen C. Jumper, President and
Chief Executive Officer, said, "Demand for seismic data acquisition
services in North America and
worldwide continues to be soft in response primarily to low and
uncertain oil prices. During the quarter ending June 30, 2016, oil prices averaged approximately
$45 per barrel after reaching a
decade low price of $26 per barrel on
February 11, 2016 and ending the
quarter at approximately $48 per
barrel for West Texas Intermediate. Since the end of the quarter,
oil prices declined once again to below $40 during the first week of August. Given the
recent fluctuations in oil prices, it remains to be determined when
strengthening in oil prices will be sustained. As we
experienced during our first quarter of 2016, due to uncertainty in
oil and natural gas prices, our client base continues to take a
cautious approach to their capital spending budgets. Based on
currently available information and anticipated seismic data
acquisition service demand levels, we believe we will continue to
operate four to six crews through the third quarter of 2016.
However, visibility beyond the third quarter remains limited. In
response to these factors, we will continue our on-going effort to
control costs, maintain a strong balance sheet, retain our key
personnel and expand our position as a leading onshore seismic data
acquisition company in North
America."
Capital expenditures for the first six months of 2016 were
$5,326,000, primarily composed of
replacement recording channels lost in the spring 2015 floods in
southeast Texas. These
expenditures were funded primarily by insurance proceeds received
related to that loss. The Company anticipates a capital budget for
2016 to be at maintenance levels below the $10 million approved by our board of directors.
The Company's balance sheet remains strong with $67,195,000 of cash and cash equivalents and
short term investments, $67,637,000
of working capital and $6,177,000 of
debt and capital lease obligations as of June 30, 2016.
Jumper continued, "As mentioned during our first quarter call,
2016 will be a difficult year, and likely the most difficult in my
thirty-plus years of experience with the Company and in the
industry. Despite the recent fluctuations in oil prices, several of
our client companies have recently announced increases in their
capital programs going forward. We believe oil and gas companies
will gradually start to put capital back to work when the oil and
natural gas markets reach a supply and demand rebalance. As
oil and gas companies seek to maximize their production economics
and efficiencies from both conventional and unconventional
reservoirs, seismic technology should play an important role as it
has historically with reliance on improved high resolution
subsurface images. We continue to be well positioned to meet the
needs of our clients and shareholders as conditions
improve."
On February 11, 2015, legacy Dawson Geophysical Company and
legacy TGC Industries, Inc. consummated their previously
announced strategic business combination. The merger transaction
was accounted for as a reverse acquisition with legacy Dawson
Geophysical being deemed the accounting acquirer with the results
of legacy TGC Industries, Inc. being reflected in the
Company's reported consolidated financial results only for periods
from and after February 11, 2015. The merged companies adopted
a calendar fiscal year ending December 31. Due to the
foregoing, comparative financial results that include periods prior
to February 11, 2015 are not comparable to financial results
that include periods from and after February 11, 2015.
Additional information regarding the business combination and its
impact on the Company's financial position are set forth in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2015, which was filed with the Securities and
Exchange Commission on March 16, 2016 and includes the
Company's audited consolidated financial statements (i) as of
and for the years ended December 31, 2015 and
September 30, 2014, (ii) for the three months ended
December 31, 2014 and (iii) for the year ended
September 30, 2013.
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its second quarter 2016 financial results on August 4, 2016 at 9 a.m. CT.
Participants can access the call at 1-888-348-3664 (US) and
1-412-902-4233 (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 3, 2016 by
dialing 1-877-870-5176 (Toll-Free) and 1-858-384-5517
(Toll/International). The passcode is 10090582. The webcast will be
recorded and available for replay on Dawson's website until
September 3, 2016.
About Dawson
Dawson Geophysical Company is a leading provider of North America 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 unaudited results as determined by 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, 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 generally accepted accounting
principles, and EBITDA is not a measure of operating income,
operating performance or liquidity presented in accordance with
generally accepted accounting principles. 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 generally accepted
accounting principles. 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, 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; the
volatility of oil and natural gas prices; changes in economic
conditions; 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 disruptions; 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 dayrate 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 Securities and
Exchange Commission on March 16, 2016. 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)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended June
30,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
28,086,000
|
|
$
|
43,335,000
|
|
$
|
75,141,000
|
|
$
|
117,057,000
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
25,990,000
|
|
|
43,399,000
|
|
|
66,071,000
|
|
|
108,190,000
|
General
and administrative
|
|
4,031,000
|
|
|
5,621,000
|
|
|
9,591,000
|
|
|
13,143,000
|
Depreciation and amortization
|
|
11,331,000
|
|
|
12,380,000
|
|
|
23,376,000
|
|
|
23,603,000
|
|
|
41,352,000
|
|
|
61,400,000
|
|
|
99,038,000
|
|
|
144,936,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(13,266,000)
|
|
|
(18,065,000)
|
|
|
(23,897,000)
|
|
|
(27,879,000)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
70,000
|
|
|
25,000
|
|
|
134,000
|
|
|
49,000
|
Interest
expense
|
|
(72,000)
|
|
|
(190,000)
|
|
|
(168,000)
|
|
|
(337,000)
|
Other
income
|
|
471,000
|
|
|
(19,000)
|
|
|
1,566,000
|
|
|
13,000
|
Loss before income
tax
|
|
(12,797,000)
|
|
|
(18,249,000)
|
|
|
(22,365,000)
|
|
|
(28,154,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
1,208,000
|
|
|
6,372,000
|
|
|
2,176,000
|
|
|
9,685,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(11,589,000)
|
|
$
|
(11,877,000)
|
|
$
|
(20,189,000)
|
|
$
|
(18,469,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
(loss) income:
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized (loss) income on foreign exchange rate translation,
net
|
$
|
(249,000)
|
|
$
|
344,000
|
|
$
|
470,000
|
|
$
|
(74,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(11,838,000)
|
|
$
|
(11,533,000)
|
|
$
|
(19,719,000)
|
|
$
|
(18,543,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share attributable to common stock
|
$
|
(0.54)
|
|
$
|
(0.55)
|
|
$
|
(0.93)
|
|
$
|
(0.93)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share attributable to common stock
|
$
|
(0.54)
|
|
$
|
(0.55)
|
|
$
|
(0.93)
|
|
$
|
(0.93)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
21,605,262
|
|
|
21,525,952
|
|
|
21,593,317
|
|
|
19,783,724
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
-assuming dilution
|
|
21,605,262
|
|
|
21,525,952
|
|
|
21,593,317
|
|
|
19,783,724
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
June
30,
|
|
December
31,
|
ASSETS
|
2016
|
|
2015
|
|
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
25,695,000
|
|
$
|
37,009,000
|
Short-term investments
|
|
41,500,000
|
|
|
21,000,000
|
Accounts
receivable, net
|
|
15,647,000
|
|
|
35,700,000
|
Prepaid
expenses and other assets
|
|
3,978,000
|
|
|
6,150,000
|
|
|
|
|
|
|
Total current assets
|
|
86,820,000
|
|
|
99,859,000
|
|
|
|
|
|
|
Property and
equipment, net
|
|
128,374,000
|
|
|
147,567,000
|
|
|
|
|
|
|
Intangibles
|
|
361,000
|
|
|
361,000
|
|
|
|
|
|
|
Total assets
|
$
|
215,555,000
|
|
$
|
247,787,000
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
2,510,000
|
|
$
|
8,401,000
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
2,808,000
|
|
|
1,074,000
|
Other
|
|
3,664,000
|
|
|
4,604,000
|
Deferred
revenue
|
|
4,700,000
|
|
|
6,146,000
|
Current
maturities of notes payable and obligations under capital
leases
|
|
5,501,000
|
|
|
8,585,000
|
|
|
|
|
|
|
Total current liabilities
|
|
19,183,000
|
|
|
28,810,000
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes payable and obligations under capital leases less current
maturities
|
|
676,000
|
|
|
2,106,000
|
Deferred tax liability
|
|
3,298,000
|
|
|
5,319,000
|
Other accrued liabilities
|
|
1,997,000
|
|
|
1,834,000
|
|
|
|
|
|
|
Total long-term liabilities
|
|
5,971,000
|
|
|
9,259,000
|
|
|
|
|
|
|
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, 21,670,794 and
21,629,310 issued, and 21,622,349 and 21,580,865 shares outstanding
at June 30, 2016 and December 31, 2015, respectively
|
|
217,000
|
|
|
216,000
|
Additional paid-in capital
|
|
142,670,000
|
|
|
142,269,000
|
Retained
earnings
|
|
48,868,000
|
|
|
69,057,000
|
Treasury
stock, at cost; 48,445 shares at June 30, 2016 and December 31,
2015
|
|
-
|
|
|
-
|
Accumulated other comprehensive loss, net of tax
|
|
(1,354,000)
|
|
|
(1,824,000)
|
|
|
|
|
|
|
Total stockholders' equity
|
|
190,401,000
|
|
|
209,718,000
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
215,555,000
|
|
$
|
247,787,000
|
Reconciliation of
EBITDA to Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended June
30,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
(in
thousands)
|
|
|
(in
thousands)
|
Net loss
|
$
|
(11,589)
|
|
$
|
(11,877)
|
|
$
|
(20,189)
|
|
$
|
(18,469)
|
Depreciation and
amortization
|
|
11,331
|
|
|
12,380
|
|
|
23,376
|
|
|
23,603
|
Interest expense
(income), net
|
|
2
|
|
|
165
|
|
|
34
|
|
|
288
|
Income tax
benefit
|
|
(1,208)
|
|
|
(6,372)
|
|
|
(2,176)
|
|
|
(9,685)
|
EBITDA
|
$
|
(1,464)
|
|
$
|
(5,704)
|
|
$
|
1,045
|
|
$
|
(4,263)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided by (Used in) Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended June
30,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
(in
thousands)
|
|
|
(in
thousands)
|
Net cash provided by
(used in) operating activities
|
$
|
7,461
|
|
$
|
15,970
|
|
$
|
16,224
|
|
$
|
12,708
|
Changes in working
capital and other items
|
|
(8,689)
|
|
|
(21,572)
|
|
|
(14,746)
|
|
|
(16,237)
|
Noncash adjustments
to net loss
|
|
(236)
|
|
|
(102)
|
|
|
(433)
|
|
|
(734)
|
EBITDA
|
$
|
(1,464)
|
|
$
|
(5,704)
|
|
$
|
1,045
|
|
$
|
(4,263)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-second-quarter-2016-results-300308993.html
SOURCE Dawson Geophysical Company