MIDLAND, Texas, Nov. 2, 2017 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its third quarter ended
September 30, 2017.
For the quarter ended September 30,
2017, the Company reported revenues of $45,627,000 as compared to $28,122,000 for the quarter ended September 30, 2016. For the third quarter of
2017, the Company reported a net loss of $2,759,000 or $0.13
loss per share attributable to common stock, compared to a net loss
of $12,416,000 or $0.57 loss per share attributable to common stock
for the third quarter of 2016. The Company reported EBITDA of
$5,485,000 for the quarter ended
September 30, 2017 compared to
negative EBITDA of $3,403,000 for the
quarter ended September 30, 2016.
During the third quarter, the Company operated six to eight
crews in the United States
("U.S.") with one crew active in Canada for a short period. The Company is
currently operating six crews in the U.S. and two in Canada. The fourth quarter in the U.S.
historically has been challenging due to shorter work days and the
holiday season. We anticipate a temporary decline in utilization
during the mid-fourth quarter in the U.S. due to project readiness
issues and expect to end the quarter with six to seven crews in the
field. Utilization in the U.S. is expected to increase to six to
eight crews through the first quarter of 2018. The winter season in
Canada has begun early, as we
currently have two crews in the field and we anticipate operating
two to three crews in Canada for
most of the fourth quarter. Utilization in Canada is expected to increase to three to
five crews through the first quarter of 2018. While bid activity in
North America has remained steady
despite the recent movement in oil prices, we continue to
experience a challenging market environment. The Company completed
a micro-seismic project in the second quarter this year followed by
another micro-seismic project in the third quarter. In addition, we
have been awarded a number of micro-seismic projects, one of which
we are currently performing, that will continue into 2018. The
Company continues to operate its multi-component recording crews in
the U.S. on a regular basis.
Stephen C. Jumper, President and
Chief Executive Officer, said, "We are encouraged by our third
quarter results which, from an EBITDA standpoint, is our best
quarter in two years. Our third quarter results were positively
impacted by the increased utilization of active crews which drove
revenue and EBITDA improvement. Since the beginning of the year,
oil prices have dropped from approximately $57 per barrel for West Texas Intermediate to
below $43 per barrel in the second
quarter and have recently rebounded to approximately $54 per barrel. Analyst models forecast oil
prices between $40 to $65 per barrel
for West Texas Intermediate, leaving upcoming seismic project
timing somewhat uncertain. U.S. active rig count, while
significantly increased over levels from a year ago, has declined
slightly in recent weeks. It is anticipated that the rig count will
remain at or near current levels for the foreseeable future,
despite the recent movement in oil prices, which should help to
drive demand for our services, although well below demand levels of
early 2015."
Jumper continued, "Seismic data continues to play an
increasingly important role in unconventional drilling programs as
Exploration and Production companies continue their focus on
returns by lowering costs and increasing production. Our clients
find value in the high resolution images our seismic technology
provides. There are difficulties in the current market environment
that lie not in the need for seismic data, but rather in the highly
concentrated areas of primary drilling activity in the Permian and
Delaware basins of West Texas as stated in our second quarter
earnings release. The majority of the seismic activity in these
concentrated areas is currently driven by multi-client data library
companies, a model we do not actively participate in but we do act
as a contractor for several of the largest providers. The
competition between various multi-client providers remains strong
and affects project timing as seismic programs are put together
with multiple participants, a situation which is beyond our
control. It is our belief that seismic data acquisition activity
will increase in producing basins outside of the Permian and
Delaware basins as commodity
prices improve and those basins become more economic.
During the third quarter, the Board of Directors approved an
increase in our capital budget from $10
million to $16 million in
response to an attractive opportunity to acquire seismic data
acquisition equipment. The Company had capital expenditures during
the quarter of $9,147,000 that
included an $8,001,000 strategic
capital lease at favorable rates for previously deployed
multi-component GSX equipment. Capital expenditures for 2017 were
$15,276,000 through September 30, 2017. Also during the third
quarter, the Company retired its final remaining equipment note
payable."
Jumper concluded, "While crew utilization improved in the third
quarter and bid activity is steady, we continue to operate in a
challenging market environment. While our third quarter results are
encouraging, we continue to maintain a conservative approach at
Dawson Geophysical designed to reduce costs, protect the balance
sheet and position ourselves as the leader of onshore seismic data
acquisition in North America. We
continue to be well positioned to meet the needs of our
shareholders and clients as we deliver the best in class high
resolution subsurface images that enable our clients to reduce
costs and improve their operating efficiencies."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its third quarter 2017 financial results on November 2, 2017 at 9 a.m. CT.
Participants can access the call at 1-800-263-8506 (U.S.) and
1-719-457-2640 (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 3, 2017 by
dialing 1-844-512-2921 (Toll-Free) and 1-412-317-6671
(Toll/International). The passcode is 5363588. The webcast will be
recorded and available for replay on Dawson's website until
December 3, 2017.
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 and to net cash (used in) provided by
operating activities is presented in the tables 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 U.S. Securities
and Exchange Commission on March 13, 2017. 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
|
(amounts in
thousands, except share and per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
45,627
|
|
$
|
28,122
|
|
$
|
118,023
|
|
$
|
103,263
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
36,594
|
|
|
28,132
|
|
|
107,639
|
|
|
94,203
|
General
and administrative
|
|
3,445
|
|
|
3,656
|
|
|
12,296
|
|
|
13,247
|
Depreciation and amortization
|
|
9,724
|
|
|
10,591
|
|
|
29,750
|
|
|
33,967
|
|
|
49,763
|
|
|
42,379
|
|
|
149,685
|
|
|
141,417
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(4,136)
|
|
|
(14,257)
|
|
|
(31,662)
|
|
|
(38,154)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
87
|
|
|
92
|
|
|
230
|
|
|
226
|
Interest
expense
|
|
(25)
|
|
|
(71)
|
|
|
(61)
|
|
|
(239)
|
Other
(expense) income
|
|
(103)
|
|
|
263
|
|
|
136
|
|
|
1,829
|
Loss before income
tax
|
|
(4,177)
|
|
|
(13,973)
|
|
|
(31,357)
|
|
|
(36,338)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
1,418
|
|
|
1,557
|
|
|
4,635
|
|
|
3,733
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(2,759)
|
|
|
(12,416)
|
|
|
(26,722)
|
|
|
(32,605)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized income (loss) on foreign exchange rate translation,
net
|
|
395
|
|
|
(48)
|
|
|
750
|
|
|
422
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(2,364)
|
|
$
|
(12,464)
|
|
$
|
(25,972)
|
|
$
|
(32,183)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share attributable to common stock
|
$
|
(0.13)
|
|
$
|
(0.57)
|
|
$
|
(1.23)
|
|
$
|
(1.51)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share attributable to common stock
|
$
|
(0.13)
|
|
$
|
(0.57)
|
|
$
|
(1.23)
|
|
$
|
(1.51)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
21,701,662
|
|
|
21,622,349
|
|
|
21,681,474
|
|
|
21,603,065
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
21,701,662
|
|
|
21,622,349
|
|
|
21,681,474
|
|
|
21,603,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2017
|
|
2016
|
ASSETS
|
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
30,503
|
|
$
|
14,624
|
Short-term investments
|
|
12,000
|
|
|
40,250
|
Accounts
receivable, net
|
|
25,599
|
|
|
16,031
|
Current
maturities of notes receivable
|
|
560
|
|
|
—
|
Prepaid
expenses and other current assets
|
|
6,205
|
|
|
4,822
|
Total current
assets
|
|
74,867
|
|
|
75,727
|
|
|
|
|
|
|
Property and
equipment, net
|
|
95,274
|
|
|
110,917
|
|
|
|
|
|
|
Notes receivable,
net of current maturities
|
|
975
|
|
|
—
|
|
|
|
|
|
|
Intangibles
|
|
525
|
|
|
487
|
|
|
|
|
|
|
Long-term deferred
tax assets, net
|
|
—
|
|
|
535
|
|
|
|
|
|
|
Total
assets
|
$
|
171,641
|
|
$
|
187,666
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
6,272
|
|
$
|
5,617
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,826
|
|
|
885
|
Other
|
|
4,161
|
|
|
2,983
|
Deferred
revenue
|
|
3,644
|
|
|
3,155
|
Current
maturities of notes payable and obligations under capital
leases
|
|
2,788
|
|
|
2,357
|
Total current
liabilities
|
|
18,691
|
|
|
14,997
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes payable and obligations under capital leases, net of current
maturities
|
|
5,829
|
|
|
-
|
Deferred
tax liabilities, net
|
|
1,392
|
|
|
146
|
Other
accrued liabilities
|
|
169
|
|
|
1,639
|
Total long-term
liabilities
|
|
7,390
|
|
|
1,785
|
|
|
|
|
|
|
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,
|
|
|
|
|
|
21,766,463 and 21,704,851 shares issued, and 21,718,018 and
21,656,406 shares
|
|
|
|
|
|
outstanding at September 30, 2017 and December 31, 2016,
respectively
|
|
217
|
|
|
217
|
Additional paid-in capital
|
|
143,666
|
|
|
142,998
|
Retained
earnings
|
|
2,523
|
|
|
29,265
|
Treasury
stock, at cost; 48,445 shares at September 30, 2017 and December
31, 2016
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(846)
|
|
|
(1,596)
|
Total stockholders'
equity
|
|
145,560
|
|
|
170,884
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
171,641
|
|
$
|
187,666
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net loss
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net loss
|
$
|
(2,759)
|
|
$
|
(12,416)
|
|
$
|
(26,722)
|
|
$
|
(32,605)
|
Depreciation and
amortization
|
|
9,724
|
|
|
10,591
|
|
|
29,750
|
|
|
33,967
|
Interest (income)
expense, net
|
|
(62)
|
|
|
(21)
|
|
|
(169)
|
|
|
13
|
Income tax
benefit
|
|
(1,418)
|
|
|
(1,557)
|
|
|
(4,635)
|
|
|
(3,733)
|
EBITDA
|
$
|
5,485
|
|
$
|
(3,403)
|
|
$
|
(1,776)
|
|
$
|
(2,358)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net cash (used in)
provided by operating activities
|
$
|
(1,433)
|
|
$
|
(1,798)
|
|
$
|
(3,309)
|
|
$
|
14,426
|
Changes in working
capital and other items
|
|
7,165
|
|
|
(1,367)
|
|
|
2,239
|
|
|
(16,113)
|
Noncash adjustments
to net loss
|
|
(247)
|
|
|
(238)
|
|
|
(706)
|
|
|
(671)
|
EBITDA
|
$
|
5,485
|
|
$
|
(3,403)
|
|
$
|
(1,776)
|
|
$
|
(2,358)
|
Company Contact:
Stephen C. Jumper, CEO and
President
James K. Brata, Chief Financial
Officer
(800) 332-9766
www.dawson3d.com
View original
content:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-third-quarter-2017-results-300548068.html
SOURCE Dawson Geophysical Company