MIDLAND, Texas, May 1, 2019 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its first quarter ended
March 31, 2019.
For the quarter ended March 31,
2019, the Company reported revenues of $51,164,000, an increase of approximately three
percent compared to $49,880,000
for the quarter ended March 31, 2018.
For the first quarter of 2019, the Company reported a net loss of
$137,000 or $0.01 loss per common share, compared to a net
loss of $1,709,000 or $0.07 loss per common share for the first quarter
of 2018. The Company reported EBITDA of $5,960,000 for the quarter ended March 31, 2019 compared to EBITDA of $6,989,000 for the quarter ended March 31, 2018.
During the first quarter of 2019, the Company operated a peak of
five crews in the United States
("U.S.") and a peak of four crews in Canada with varying utilization of the active
crews during the quarter in both areas of operation, compared to a
peak of nine crews in the U.S. and a peak of four crews in
Canada in the first quarter of
2018. The winter season in Canada
concluded at the end of the first quarter of 2019 with limited
seismic activities anticipated until the next winter season. Based
on currently available information, the Company anticipates
operating two to four crews in the U.S. during the second quarter
of 2019 and up to five crews in the third quarter. As in recent
quarters, the majority of the Company's projects are on behalf of
multi-client companies in the U.S. In addition, the Company
anticipates that it will conduct a total of two microseismic
projects in the U.S. during the second and third quarters of
2019.
Stephen C. Jumper, President and
Chief Executive Officer, said, "First quarter results were
primarily a result of increased utilization of active recording
channels in the U.S. and a better than anticipated late winter
season in Canada. While the
overall crew count in the U.S. was down from recent quarters,
channel utilization peaked with a project in West Texas that included a peak of 48,000
channels. The project in West
Texas, which was started and completed during the first
quarter, combined with a 34,000 channel project in Eastern New Mexico completed in the second
quarter, represents a peak of 82,000 channels and 42 vibrator
energy source units over two crews that generated approximately 1.4
petabytes of field recorded data and approximately 157 terabytes of
output high density, high resolution 3D seismic data. The large
channel project in West Texas is
the largest seismic project completed by the Company to date in the
U.S. as measured by the number of single channel recording units
and number of energy sources in operation. It also represents an
approximate fifteen times increase in data density and volume, as
well as the average number of data source points acquired per day,
compared to our typical projects. While such data acquisition
projects are currently not typical projects for the Company in the
U.S., there continues to be a growing trend toward larger more
complex projects; projects that require an increase in channel
count, energy source units and data management capabilities."
Jumper continued, "During the first quarter in Canada, we successfully completed a high
density 3D multi-component project requiring 32,000 three channel
multi-component seismic data recording units or 96,000 channels.
This project was performed utilizing smaller mini vibrator energy
source units and generated approximately 1.6 petabytes of field
recorded data and 60.5 terabytes of output high density, high
resolution seismic data. With these high channel count projects in
the U.S. and Canada, data
gathering and throughput were equally as impressive as the seismic
equipment requirements. In the sixty-seven year history of Dawson
Geophysical, no projects have demanded such unprecedented heights
of seismic equipment, technical expertise, and enormous data
handling requirements that may be signaling an evolution in seismic
programs. To put this data volume metric into context, one petabyte
is approximately equal to over 3.4 years of continuous full HD
video recordings. We were recently awarded a project in the
Midland Basin in the third or
fourth quarter which could require up to 44,000 three channel
multi-component seismic data recording units or 132,000 channels
with approximately 12 vibrator energy source units."
Despite a reduction in the overall crew count in the first
quarter, the Company successfully drove channel count utilization
to full capacity, while simultaneously streamlining operational
efficiencies and instituting cost reductions over the previous year
to generate improved financial results from recent quarters.
However, market conditions remain difficult as the Company
navigates the second quarter. The Canadian winter season has ended
and management anticipates reduced utilization of both channels and
crews in the U.S. during the second quarter.
In response to the decrease in overall crew count, the Company
has reduced its work force approximately 23% since the end of 2018
and nearly 47% from the end of 2017. The reduction in headcount is
in response to an anticipated lower crew count, higher channel
count requirements and operational improvements.
Capital expenditures for the first three months of 2019 were
$1,046,000, primarily for maintenance
capital items. The Company's balance sheet remains strong with
$33,988,000 of cash and short term
investments and $52,923,000 of
working capital. The Company has notes payable and finance leases
totaling $11,320,000 as of
March 31, 2019.
Jumper concluded, "While the second quarter appears challenging,
we are well positioned going forward as seismic data acquisition
projects continue to increase in scale, and both multi-client
companies and exploration and production operators are requesting
more channels per project in order to develop a more vivid and
robust subsurface image. We believe that Dawson Geophysical, with
its industry leading equipment base, experienced personnel and
overall knowledge, is uniquely positioned to capitalize on this
growing trend."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its first quarter 2019 financial results on May 1, 2019 at 9 a.m. CT. Participants
can access the call at 1-877-407-9208 (U.S.) 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
June 1, 2019 by dialing
1-844-512-2921 (Toll-Free) and 1-412-317-6671 (Toll/International).
The passcode is 13690050. The webcast will be recorded and
available for replay on Dawson's website until June 1, 2019.
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; 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 6, 2019. 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,
|
|
2019
|
|
2018
|
|
|
|
|
|
|
Operating
revenues
|
$
|
51,164
|
|
$
|
49,880
|
Operating
costs:
|
|
|
|
|
|
Operating expenses
|
|
40,856
|
|
|
38,759
|
General
and administrative
|
|
4,544
|
|
|
4,083
|
Depreciation and amortization
|
|
6,081
|
|
|
8,678
|
|
|
51,481
|
|
|
51,520
|
|
|
|
|
|
|
Loss from
operations
|
|
(317)
|
|
|
(1,640)
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
income
|
|
142
|
|
|
37
|
Interest
expense
|
|
(158)
|
|
|
(88)
|
Other
income (expense)
|
|
196
|
|
|
(49)
|
Loss before income
tax
|
|
(137)
|
|
|
(1,740)
|
|
|
|
|
|
|
Income tax
benefit
|
|
—
|
|
|
31
|
|
|
|
|
|
|
Net
loss
|
|
(137)
|
|
|
(1,709)
|
|
|
|
|
|
|
Other
comprehensive loss:
|
|
|
|
|
|
Net
unrealized loss on foreign exchange rate translation,
net
|
|
(209)
|
|
|
(329)
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(346)
|
|
$
|
(2,038)
|
|
|
|
|
|
|
Basic loss per
share of common stock
|
$
|
(0.01)
|
|
$
|
(0.07)
|
|
|
|
|
|
|
Diluted loss per
share of common stock
|
$
|
(0.01)
|
|
$
|
(0.07)
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
23,057,546
|
|
|
22,879,805
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
23,057,546
|
|
|
22,879,805
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
23,405
|
|
$
|
28,729
|
Short-term investments
|
|
10,583
|
|
|
10,583
|
Accounts
receivable, net
|
|
35,661
|
|
|
25,338
|
Current
maturities of notes receivable
|
|
64
|
|
|
64
|
Prepaid
expenses and other current assets
|
|
9,134
|
|
|
12,311
|
Total current
assets
|
|
78,847
|
|
|
77,025
|
|
|
|
|
|
|
Property and
equipment, net
|
|
66,696
|
|
|
71,541
|
Right-of-use
assets
|
|
7,531
|
|
|
—
|
Notes receivable,
net of current maturities
|
|
1,434
|
|
|
1,447
|
Intangibles,
net
|
|
374
|
|
|
379
|
Long-term deferred
tax assets, net
|
|
290
|
|
|
293
|
|
|
|
|
|
|
Total
assets
|
$
|
155,172
|
|
$
|
150,685
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
7,103
|
|
$
|
5,427
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
2,054
|
|
|
1,034
|
Other
|
|
3,404
|
|
|
3,643
|
Deferred
revenue
|
|
5,675
|
|
|
10,501
|
Current
maturities of notes payable and finance leases
|
|
6,459
|
|
|
6,683
|
Current
maturities of operating lease liabilities
|
|
1,229
|
|
|
—
|
Total current
liabilities
|
|
25,924
|
|
|
27,288
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and finance leases, net of current maturities
|
|
4,861
|
|
|
6,097
|
Operating lease liabilities, net of current maturities
|
|
6,839
|
|
|
—
|
Deferred
tax liabilities, net
|
|
146
|
|
|
134
|
Other
accrued liabilities
|
|
150
|
|
|
150
|
Total long-term
liabilities
|
|
11,996
|
|
|
6,381
|
|
|
|
|
|
|
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, 23,219,484 and
23,018,441 shares issued, and 23,171,039 and 22,969,996
shares outstanding at March 31, 2019 and
December 31, 2018, respectively
|
|
232
|
|
|
230
|
Additional paid-in capital
|
|
153,430
|
|
|
153,268
|
Retained
deficit
|
|
(34,655)
|
|
|
(34,518)
|
Treasury
stock, at cost; 48,445 shares
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(1,755)
|
|
|
(1,964)
|
Total stockholders'
equity
|
|
117,252
|
|
|
117,016
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
155,172
|
|
$
|
150,685
|
Reconciliation of
EBITDA to Net Loss
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(137)
|
|
$
|
(1,709)
|
Depreciation and
amortization
|
|
6,081
|
|
|
8,678
|
Interest expense
(income), net
|
|
16
|
|
|
51
|
Income tax
benefit
|
|
0
|
|
|
(31)
|
EBITDA
|
$
|
5,960
|
|
$
|
6,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash (Used in) Provided by Operating
Activities
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
$
|
(1,567)
|
|
$
|
754
|
Changes in working
capital and other items
|
|
8,237
|
|
|
6,470
|
Noncash adjustments
to net loss
|
|
(710)
|
|
|
(235)
|
EBITDA
|
$
|
5,960
|
|
$
|
6,989
|
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SOURCE Dawson Geophysical Company