MIDLAND, Texas, Aug. 1, 2019 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its second quarter ended
June 30, 2019.
For the quarter ended June 30, 2019, the Company reported
revenues of $24,076,000, a decrease
of approximately thirty three percent compared to $36,158,000 for the quarter ended June 30, 2018. For the second quarter of 2019,
the Company reported a net loss of $11,246,000 or $0.49 loss per common share compared to a net
loss of $5,711,000 or $0.25 loss per common share for the second
quarter of 2018. The Company reported negative EBITDA of
$6,071,000 for the quarter ended
June 30, 2019 compared to positive
EBITDA of $1,564,000 for the quarter
ended June 30, 2018.
For the six months ended June 30, 2019, the Company
reported revenues of $75,240,000, a
decrease of approximately thirteen percent compared to $86,038,000 for the six months ended June 30, 2018. For the six months ended
June 30, 2019, the Company reported a
net loss of $11,383,000 or
$0.49 loss per common share compared
to a net loss of $7,420,000 or
$0.32 loss per common share for the
six months ended June 30, 2018. The
Company reported negative EBITDA of $111,000 for the six months ended June 30, 2019 compared to positive EBITDA of
$8,553,000 for the six months ended
June 30, 2018.
During the second quarter of 2019, the Company operated a peak
of five crews in the United States
("U.S."), including microseismic operations, and a single small
channel count crew in Canada for a
short period of time compared to four large channel count crews in
the U.S. and four large channel count crews in Canada in the first quarter. Based on
currently available information, the Company anticipates operating
four to six crews in the U.S. during the third quarter and into
early fourth quarter of 2019 and two to four crews in the U.S.
later in the fourth quarter of 2019, with limited activity in
Canada in the fourth quarter. The
Company is currently operating three crews in the U.S. with two
additional crews to be deployed in the next few weeks. As in recent
quarters, the majority of the Company's projects are on behalf of
multi-client companies in the U.S. with some activity directly for
exploration and production companies. The Company continues to
implement cost reduction measures and maintain a strong balance
sheet.
Capital expenditures for the second quarter were $1,152,000 and total $2,198,000 for the first six months of 2019,
primarily for maintenance capital items. The Company's balance
sheet remains strong with $44,861,000
of cash and short term investments and $44,906,000 of working capital as of June 30, 2019. The Company has notes payable and
finance leases totaling $9,436,000 as
of June 30, 2019.
Stephen C. Jumper, President and
Chief Executive Officer, said, "As anticipated in our first quarter
press release and conference call, overall crew utilization was
lower during the second quarter. We began the quarter with three
crews operating and two microseismic projects and ended the quarter
with two crews active and three microseismic projects. Channel
utilization was markedly lower in the second quarter compared to
the first quarter of 2019, as several large channel count projects
transitioned into smaller channel count projects during much of the
second quarter. Utilization during the second quarter was further
impacted by the timing of crew moves and severe wet conditions,
primarily in Oklahoma, which
limited activity on a large channel count crew for the back half of
the quarter. Weather conditions became more favorable in the
beginning of the third quarter. Reflected in the second quarter is
an accrual of $1,450,000 for
severance and retirement package costs related to recent headcount
reductions and executive retirements."
Jumper continued, "We anticipate that both crew and channel
count utilization will be improved in the third quarter and into
the fourth quarter of 2019 in the U.S. as compared to second
quarter levels, with four to six crews operating. In June, we began
a large multicomponent project in West
Texas utilizing 44,000 three-component units, or 132,000
total channels. Our current inventory of multicomponent channels is
sufficient to meet these needs. This project is anticipated to be
completed mid-fourth quarter, at which time the multicomponent
equipment will redeploy to Canada
for the winter season.
Primary areas of operations are in the Permian and Delaware
Basins, SCOOP/STACK region of Oklahoma and Austin
Chalk area of Southeast
Texas. In addition, we have two larger channel count
projects in Louisiana and
Wyoming, each of which is
projected to begin in the late third or early fourth quarter of
this year. Bid activity remains intermittent and visibility remains
challenging as exploration and production companies continue to
evaluate capital spending."
Jumper concluded, "On June 30,
2019, Wayne Whitener,
Executive Vice Chairman of the Company, and Robert Wood, President of our Canadian
subsidiary, Eagle Canada, both entered into retirement. Wayne and
Rob joined Dawson in February of 2015 when the legacy Dawson
Geophysical merged with TGC Industries, where Wayne was Chief
Executive Officer and Rob was President of TGC's Canadian
operation, Eagle Canada. Terry
Jackson, with forty years of experience in the Canadian
seismic industry and ten years with Eagle Canada, will assume the
role as president of our operations in Canada. In addition, Wayne has retired from
his position as a member of the Board of Directors and the Company
has reduced the number of active directors to seven. Wayne and Rob
had very distinguished careers and were recognized as highly
regarded leaders in the seismic industry. Their tremendous
contributions to TGC Industries, Eagle Canada and Dawson
Geophysical will be sorely missed. On behalf of the board,
shareholders and employees, we wish them well in the next chapter
of their lives."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its second quarter 2019 financial results on August 1, 2019 at
9 a.m. CT. Participants can access the call at
1-866-548-4713 (U.S.) 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 1, 2019 by dialing
1-844-512-2921 (Toll-Free) and 1-412-317-6671 (Toll/International).
The passcode is 4489359. The webcast will be recorded and available
for replay on Dawson's website until September 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 multicomponent 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
June 30,
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
24,076
|
|
$
|
36,158
|
|
$
|
75,240
|
|
$
|
86,038
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
25,324
|
|
|
31,215
|
|
|
66,180
|
|
|
69,974
|
General
and administrative
|
|
5,049
|
|
|
3,842
|
|
|
9,593
|
|
|
7,925
|
Depreciation and amortization
|
|
5,325
|
|
|
7,392
|
|
|
11,406
|
|
|
16,070
|
|
|
35,698
|
|
|
42,449
|
|
|
87,179
|
|
|
93,969
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(11,622)
|
|
|
(6,291)
|
|
|
(11,939)
|
|
|
(7,931)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
151
|
|
|
73
|
|
|
293
|
|
|
110
|
Interest
expense
|
|
(122)
|
|
|
(82)
|
|
|
(280)
|
|
|
(170)
|
Other
income
|
|
226
|
|
|
463
|
|
|
422
|
|
|
414
|
Loss before income
tax
|
|
(11,367)
|
|
|
(5,837)
|
|
|
(11,504)
|
|
|
(7,577)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
121
|
|
|
126
|
|
|
121
|
|
|
157
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(11,246)
|
|
|
(5,711)
|
|
|
(11,383)
|
|
|
(7,420)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized income (loss) on foreign exchange rate translation,
net
|
|
174
|
|
|
(220)
|
|
|
383
|
|
|
(549)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(11,072)
|
|
$
|
(5,931)
|
|
$
|
(11,000)
|
|
$
|
(7,969)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share of common stock
|
$
|
(0.49)
|
|
$
|
(0.25)
|
|
$
|
(0.49)
|
|
$
|
(0.32)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share of common stock
|
$
|
(0.49)
|
|
$
|
(0.25)
|
|
$
|
(0.49)
|
|
$
|
(0.32)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
23,176,934
|
|
|
22,897,686
|
|
|
23,117,571
|
|
|
22,888,746
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
23,176,934
|
|
|
22,897,686
|
|
|
23,117,571
|
|
|
22,888,746
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
34,278
|
|
$
|
28,729
|
Short-term investments
|
|
10,583
|
|
|
10,583
|
Accounts
receivable, net
|
|
16,590
|
|
|
25,338
|
Current
maturities of notes receivable
|
|
65
|
|
|
64
|
Prepaid
expenses and other current assets
|
|
8,863
|
|
|
12,311
|
Total current
assets
|
|
70,379
|
|
|
77,025
|
|
|
|
|
|
|
Property and
equipment, net
|
|
62,582
|
|
|
71,541
|
Right-of-use
assets
|
|
7,165
|
|
|
—
|
Notes receivable,
net of current maturities
|
|
1,421
|
|
|
1,447
|
Intangibles,
net
|
|
382
|
|
|
379
|
Long-term deferred
tax assets, net
|
|
287
|
|
|
293
|
|
|
|
|
|
|
Total
assets
|
$
|
142,216
|
|
$
|
150,685
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
3,922
|
|
$
|
5,427
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
2,254
|
|
|
1,034
|
Other
|
|
3,698
|
|
|
3,643
|
Deferred
revenue
|
|
8,538
|
|
|
10,501
|
Current
maturities of notes payable and finance leases
|
|
5,855
|
|
|
6,683
|
Current
maturities of operating lease liabilities
|
|
1,206
|
|
|
—
|
Total current
liabilities
|
|
25,473
|
|
|
27,288
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and finance leases, net of current maturities
|
|
3,581
|
|
|
6,097
|
Operating lease liabilities, net of current maturities
|
|
6,494
|
|
|
—
|
Deferred
tax liabilities, net
|
|
73
|
|
|
134
|
Other
accrued liabilities
|
|
150
|
|
|
150
|
Total long-term
liabilities
|
|
10,298
|
|
|
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,
|
|
|
|
|
|
23,270,100 and 23,018,441 shares issued, and 23,221,655 and
22,969,996
|
|
|
|
|
|
shares outstanding at June 30, 2019 and December 31, 2018,
respectively
|
|
233
|
|
|
230
|
Additional paid-in capital
|
|
153,694
|
|
|
153,268
|
Retained
deficit
|
|
(45,901)
|
|
|
(34,518)
|
Treasury
stock, at cost; 48,445 shares
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(1,581)
|
|
|
(1,964)
|
Total stockholders'
equity
|
|
106,445
|
|
|
117,016
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
142,216
|
|
$
|
150,685
|
Reconciliation of
EBITDA to Net Loss
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(11,246)
|
|
$
|
(5,711)
|
|
$
|
(11,383)
|
|
$
|
(7,420)
|
Depreciation and
amortization
|
|
5,325
|
|
|
7,392
|
|
|
11,406
|
|
|
16,070
|
Interest (income)
expense, net
|
|
(29)
|
|
|
9
|
|
|
(13)
|
|
|
60
|
Income tax
benefit
|
|
(121)
|
|
|
(126)
|
|
|
(121)
|
|
|
(157)
|
EBITDA
|
$
|
(6,071)
|
|
$
|
1,564
|
|
$
|
(111)
|
|
$
|
8,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided by Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
13,636
|
|
$
|
12,084
|
|
$
|
12,069
|
|
$
|
12,838
|
Changes in working
capital and other items
|
|
(19,143)
|
|
|
(10,190)
|
|
|
(10,906)
|
|
|
(3,720)
|
Noncash adjustments
to net loss
|
|
(564)
|
|
|
(330)
|
|
|
(1,274)
|
|
|
(565)
|
EBITDA
|
$
|
(6,071)
|
|
$
|
1,564
|
|
$
|
(111)
|
|
$
|
8,553
|
View original
content:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-second-quarter-2019-results-300894506.html
SOURCE Dawson Geophysical Company