MIDLAND, Texas, Nov. 1, 2018 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) (the "Company") today reported unaudited
financial results for its third quarter ended September 30, 2018.
For the quarter ended September 30,
2018, the Company reported revenues of $40,448,000, a decrease of approximately ten
percent compared to $45,108,000 for
the quarter ended September 30, 2017.
For the third quarter of 2018, the Company reported a net loss of
$5,171,000 or $0.23 loss per common share compared to a net
loss of $2,922,000 or $0.13 loss per common share for the third quarter
of 2017, primarily due to decreased crew utilization. The Company
reported EBITDA of $1,651,000 for the
quarter ended September 30, 2018
compared to $5,322,000 for the
quarter ended September 30, 2017.
For the nine months ended September 30,
2018, the Company reported revenues of $126,486,000, an increase of approximately six
percent compared to $119,114,000 for
the nine months ended September 30,
2017. For the nine months ended September 30, 2018, the Company narrowed its net
loss to $12,591,000 or $0.55 loss per common share from a net loss of
$27,002,000 or $1.19 loss per common share for the nine months
ended September 30, 2017. The Company
reported positive EBITDA of $10,204,000 for the nine months ended
September 30, 2018 compared to
negative EBITDA of $2,056,000 for the
nine months ended September 30, 2017.
Effective January 1, 2018, the
Company adopted the requirements of Accounting Standards Update No.
2014-09, Revenue from Contracts with Customers "Topic 606", and all
amounts set forth in this earnings release for periods prior to
January 1, 2018 have been adjusted to
comply with the new standard. All comparative financial statement
presentation has been retroactively adjusted for the five percent
stock dividend declared and paid in the second quarter of 2018.
During the third quarter of 2018, the Company operated a peak of
five crews in the United States
("U.S.") and one crew in Canada
for approximately half of the quarter. The Company anticipates
operating three to five crews in the U.S. and one to two crews in
Canada in the fourth quarter. In
addition, the Company will conduct one microseismic project in the
U.S. during the fourth quarter of 2018. Based on currently
available information, the Company anticipates operating three to
five crews in the U.S. and up to four crews in Canada during the first quarter of 2019.
Stephen C. Jumper, President and
Chief Executive Officer, said, "Despite recent challenges in market
conditions, we are pleased to report that for the nine month period
ending September 30, 2018, Dawson
Geophysical delivered a six percent improvement in revenues, a
significant reduction in net loss and an increase of over
$12 million in EBITDA compared to the
nine month period ended September 30,
2017. Our continued focus on improved efficiencies and cost
cutting initiatives fueled much of our success, particularly early
in the year. Despite the improved nine month results, market
conditions remain challenging in both the U.S. and Canada. As noted above, we operated a peak of
five crews in the U.S. and one crew in Canada for approximately half of the third
quarter and anticipate operating three to five crews in the U.S.
and one to two crews in Canada in
the fourth quarter. The increase in demand we had anticipated for
the back half of 2018 has not materialized to the degree that we
originally expected. Our optimism for opportunities in the Canadian
market has lessened somewhat with the recent large differential
between Canadian oil prices and WTI prices. In the Permian and
Delaware Basins, capacity constraint issues continue to weigh on
oil prices as a large pricing differential remains in place. Many
industry professionals believe the Permian and Delaware pricing differential is temporary and
will ease as additional takeaway capacity is added in 2019 and
2020. In addition, as we enter the second month of the fourth
quarter, we are beginning to experience a slight improvement in bid
activity and have secured additional work in various basins
including the Permian and Delaware."
Jumper continued, "Although oil prices have risen in recent
quarters, project visibility remains constrained. Part of this
constraint revolves around our project driven multi-client data
library customer base, a model that we do not actively participate
in but do work as a contractor for several of the largest
providers. The multiple participants and long lead times associated
with these projects make seismic planning decisions more difficult
and are often beyond our control. We believe part of the late 2018
slowdown in demand is related to 2018 capital budget exhaustion on
behalf of our client base as they maintain overall spending levels
within cash flows. It is our belief that sustainability of oil
prices at current or improved levels will result in increased
activity and exploration in multiple basins including the Permian
and Delaware and lead to improved
project visibility as exploration and production companies generate
greater cash flows."
During the third quarter, the Company's Board of Directors
approved an increase in our 2018 capital budget from $10 million to $17
million in response to a strategic opportunity to acquire
certain seismic recording equipment. Capital expenditures for the
third quarter were $8,219,000 and
total $13,787,000 for 2018 to date,
primarily for seismic data acquisition equipment and replacement
vehicles. The Company's balance sheet remains strong with
$45,746,000 of cash and short term
investments and $58,555,000 of
working capital as of September 30,
2018. The Company has notes payable and capital lease
obligations totaling $12,463,000 as
of September 30, 2018.
Jumper concluded, "While we are encouraged by the slight uptick
in bid activity that we have seen in the first month of the fourth
quarter, we remain cautiously optimistic as our clients evaluate
2019 capital budget expenditures. We continue to maintain our
commitment to protecting our balance sheet, taking advantage of
opportunistic equipment purchases, and positioning ourselves to
meet the needs of our valued shareholders and clients as we deliver
the best in class high resolution subsurface images."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its third quarter 2018 financial results on November 1, 2018 at 9 a.m. CT.
Participants can access the call at 1-877-407-9208 (US) and
1-201-493-6784 (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 December 1, 2018 by
dialing 1-844-512-2921 (Toll-Free) and 1-412-317-6671
(Toll/International). The passcode is 13684474. The webcast will be
recorded and available for replay on Dawson's website until
December 1, 2018.
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 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; 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 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 on March 9, 2018. 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
40,448
|
|
$
|
45,108
|
|
$
|
126,486
|
|
$
|
119,114
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
34,419
|
|
|
36,238
|
|
|
104,393
|
|
|
109,010
|
General
and administrative
|
|
4,136
|
|
|
3,445
|
|
|
12,061
|
|
|
12,296
|
Depreciation and amortization
|
|
7,127
|
|
|
9,724
|
|
|
23,197
|
|
|
29,750
|
|
|
45,682
|
|
|
49,407
|
|
|
139,651
|
|
|
151,056
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(5,234)
|
|
|
(4,299)
|
|
|
(13,165)
|
|
|
(31,942)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
147
|
|
|
87
|
|
|
257
|
|
|
230
|
Interest
expense
|
|
(74)
|
|
|
(25)
|
|
|
(244)
|
|
|
(61)
|
Other
(expense) income
|
|
(242)
|
|
|
(103)
|
|
|
172
|
|
|
136
|
Loss before income
tax
|
|
(5,403)
|
|
|
(4,340)
|
|
|
(12,980)
|
|
|
(31,637)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
232
|
|
|
1,418
|
|
|
389
|
|
|
4,635
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(5,171)
|
|
|
(2,922)
|
|
|
(12,591)
|
|
|
(27,002)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized income (loss) on foreign exchange rate translation,
net
|
|
216
|
|
|
395
|
|
|
(333)
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(4,955)
|
|
$
|
(2,527)
|
|
$
|
(12,924)
|
|
$
|
(26,252)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share of common stock
|
$
|
(0.23)
|
|
$
|
(0.13)
|
|
$
|
(0.55)
|
|
$
|
(1.19)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share of common stock
|
$
|
(0.23)
|
|
$
|
(0.13)
|
|
$
|
(0.55)
|
|
$
|
(1.19)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
22,926,764
|
|
|
22,786,745
|
|
|
22,901,558
|
|
|
22,765,548
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
22,926,764
|
|
|
22,786,745
|
|
|
22,901,558
|
|
|
22,765,548
|
|
|
|
|
|
|
|
|
|
|
|
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited and
amounts in thousands, except share data)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2018
|
|
2017
|
Assets
|
|
|
|
(as
adjusted)
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
28,163
|
|
$
|
22,013
|
Short-term investments
|
|
17,583
|
|
|
16,583
|
Accounts
receivable, net
|
|
29,800
|
|
|
33,156
|
Current
maturities of notes receivable
|
|
63
|
|
|
695
|
Prepaid
expenses and other current assets
|
|
6,758
|
|
|
7,340
|
Total current
assets
|
|
82,367
|
|
|
79,787
|
|
|
|
|
|
|
Property and
equipment, net
|
|
76,565
|
|
|
86,573
|
Notes receivable,
net of current maturities
|
|
1,460
|
|
|
841
|
Intangibles,
net
|
|
421
|
|
|
494
|
Long-term deferred
tax assets, net
|
|
224
|
|
|
224
|
|
|
|
|
|
|
Total
assets
|
$
|
161,037
|
|
$
|
167,919
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
10,037
|
|
$
|
5,933
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,886
|
|
|
1,151
|
Other
|
|
4,020
|
|
|
4,314
|
Deferred
revenue
|
|
2,779
|
|
|
6,314
|
Current
maturities of notes payable and obligations under capital
leases
|
|
5,090
|
|
|
2,712
|
Total current
liabilities
|
|
23,812
|
|
|
20,424
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and obligations under capital leases, net of current
maturities
|
|
7,373
|
|
|
5,153
|
Deferred
tax liabilities, net
|
|
445
|
|
|
874
|
Other
accrued liabilities
|
|
150
|
|
|
150
|
Total long-term
liabilities
|
|
7,968
|
|
|
6,177
|
|
|
|
|
|
|
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,
22,992,084 and 22,926,805 shares issued, and 22,943,639 and
22,878,360 shares outstanding at September 30, 2018 and December
31, 2017, respectively
|
|
230
|
|
|
229
|
Additional paid-in capital
|
|
152,885
|
|
|
151,881
|
Retained
deficit
|
|
(22,702)
|
|
|
(10,012)
|
Treasury
stock, at cost; 48,445 shares
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(1,156)
|
|
|
(780)
|
Total stockholders'
equity
|
|
129,257
|
|
|
141,318
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
161,037
|
|
$
|
167,919
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Loss
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(5,171)
|
|
$
|
(2,922)
|
|
$
|
(12,591)
|
|
$
|
(27,002)
|
Depreciation and
amortization
|
|
7,127
|
|
|
9,724
|
|
|
23,197
|
|
|
29,750
|
Interest (income)
expense, net
|
|
(73)
|
|
|
(62)
|
|
|
(13)
|
|
|
(169)
|
Income tax
benefit
|
|
(232)
|
|
|
(1,418)
|
|
|
(389)
|
|
|
(4,635)
|
EBITDA
|
$
|
1,651
|
|
$
|
5,322
|
|
$
|
10,204
|
|
$
|
(2,056)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash (Used in) Provided by Operating
Activities
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
$
|
(66)
|
|
$
|
(1,433)
|
|
$
|
12,772
|
|
$
|
(3,309)
|
Changes in working
capital and other items
|
|
2,317
|
|
|
7,002
|
|
|
(1,403)
|
|
|
1,959
|
Noncash adjustments
to net loss
|
|
(600)
|
|
|
(247)
|
|
|
(1,165)
|
|
|
(706)
|
EBITDA
|
$
|
1,651
|
|
$
|
5,322
|
|
$
|
10,204
|
|
$
|
(2,056)
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-third-quarter-2018-results-300741859.html
SOURCE Dawson Geophysical Company