MIDLAND, Texas, Aug. 7, 2015 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) today reported results for its second
quarter ended June 30, 2015.
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. The combined
companies adopted a calendar fiscal year ending December 31.
Second quarter fiscal 2015 results reflect the first full quarter
of operations for the combined companies. Second quarter fiscal
2015 results are compared to the quarterly results for legacy
Dawson Geophysical for the period April 1
through June 30, 2014, which at the time was legacy Dawson
Geophysical's third fiscal quarter of its fiscal year ended
September 30, 2014 and did not include the results of legacy
TGC Industries, Inc. Due to the foregoing, the historical financial
results for the quarter ended June 30,
2014 discussed below are not directly comparable to the
combined Company's financial results for the quarter ended
June 30, 2015. Selected pro
forma financial information giving effect to the business
combination as if it had occurred on January
1, 2014 (together with the assumptions related thereto) is
presented at the end of this press release, and additional
information regarding the business combination and its impact on
the Company's financial position is set forth in the Company's Form
10-Q for the quarterly period ended June 30,
2015.
For the quarter ended June 30,
2015, the Company reported revenues of $43,335,000 as compared to $54,166,000 (or $72,403,000 on a pro forma basis) for the quarter
ended June 30, 2014. For the
2015 quarter, the Company reported a net loss of $11,877,000, or $0.55 loss per share attributable to common
stock, as compared to a net loss of $7,493,000 (or $8,654,000 on a pro forma basis), or $0.54 (or $0.41 on
a pro forma basis) loss per share attributable to common stock for
the quarter ended June 30,
2014. The Company also reported negative EBITDA of
$5,704,000 for the quarter ended
June 30, 2015. Revenues for the
second quarter 2015 were negatively impacted by reduced client
demand due to decreasing and uncertain commodity prices,
client-directed project delays and severe weather conditions in
many areas of operation that adversely impacted data acquisition
crews in the lower 48 United States. The Company operated the
equivalent of seven crews during the second quarter 2015. Severe
weather conditions and flooding in Texas and the mid-continent region
significantly reduced utilization rates for the seven crews and
delayed deployment of three additional crews onto ready
projects.
The dramatic reduction of the Company's overall utilization
rates had a significant negative impact on revenue for the second
quarter 2015, partially offset by weather stand-by charges on
several of the Company's crews but at significantly reduced rates.
Operating expenses for the June quarter were at reduced levels
although not in direct proportion to the negative impact on
revenue. Reflected in the current quarter is $690,000 of severance costs related to an
approximately 30 percent reduction in work force since the closing
of our merger.
Demand for Dawson's services is at reduced levels from recent
years and is anticipated to remain at such levels through 2015 in
response to decreasing and uncertain commodity prices and reduced
client expenditures. The Company anticipates operating eight to ten
crews in the United States with
limited activity in Canada during
the third quarter ending September 30,
2015. Based on currently available information, the Company
anticipates operating eight to ten crews in the United States through the balance of
2015.
The Company's capital budget for 2015 continues at previously
announced maintenance levels below the $10
million capital budget approved by the Board of Directors.
Strategic investments in state-of-the-art seismic equipment during
recent years are partially responsible for the lower 2015 capital
budget. The Company's balance sheet remains strong at June 30, 2015 with approximately $56,775,000 of cash and cash equivalents and
short-term investments, $66,247,000
of working capital and $14,931,000 of
debt and capital lease obligations.
Stephen C. Jumper said, "Despite
today's challenging environment, Dawson Geophysical is
strategically positioned to withstand the commodities cycle
downturn. Our strong balance sheet, diverse client base and a
management team with more than one-hundred years of combined
industry experience provide us with the tools and resources
required to successfully navigate today's market. Equipment
purchases made during recent years further enable us to
successfully serve our valued clients while simultaneously
operating below previously established capex levels."
Jumper continued, "Severe weather conditions that began in
mid-April and that were subsequently followed by Tropical Storm
Bill later in the quarter negatively affected Texas and the mid-continent region where many
of our crews were deployed. These multiple weather delays impacted
utilization on seven of the active crews and delayed deployment of
three additional crews on new projects. In addition to the negative
weather in the quarter, the continuing actions to right size our
organization to meet industry demands further impacted our
quarterly results. We are currently operating ten crews in the
United Sates. Weather conditions improved for July allowing us to
operate at a higher utilization rate for the month as compared to
the second quarter of 2015."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its second quarter 2015 financial results on August 7, 2015 at 9 a.m. CDT. Participants
can access the call at 1-888-348-3664 (US), 1-855-669-9657
(Canada) 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
August 10, 2015 by dialing
1-877-870-5176 (Toll-Free) and 1-858-384-5517 (Toll/International).
The passcode is 10070060. The webcast will be recorded and
available for replay on Dawson's website until September 4, 2015.
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. Founded in 1952, 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
This press release contains 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 income (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, Dawson Geophysical
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. These risks include, but
are not limited to, dependence upon energy industry spending, the
volatility of oil and natural gas prices, high fixed costs of
operations, operational disruptions, changes in economic
conditions, industry competition, the potential for contract delay
or cancellations of service contracts, the availability of capital
resources, weather interruptions, limited number of customers, and
credit risk related to our customers. A discussion of these and
other factors, including risks and uncertainties, is set forth in
Exhibit 99.5 to the Company's Form 8-K/A that was filed
with the Securities and Exchange Commission on April 30, 2015.
Dawson Geophysical 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
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended June
30,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
43,335,000
|
|
$
|
54,166,000
|
|
$
|
117,057,000
|
|
$
|
130,932,000
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
43,399,000
|
|
|
49,608,000
|
|
|
108,190,000
|
|
|
109,699,000
|
General
and administrative
|
|
5,621,000
|
|
|
3,533,000
|
|
|
13,143,000
|
|
|
7,209,000
|
Depreciation and amortization
|
|
12,380,000
|
|
|
10,253,000
|
|
|
23,603,000
|
|
|
20,430,000
|
|
|
61,400,000
|
|
|
63,394,000
|
|
|
144,936,000
|
|
|
137,338,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(18,065,000)
|
|
|
(9,228,000)
|
|
|
(27,879,000)
|
|
|
(6,406,000)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
25,000
|
|
|
16,000
|
|
|
49,000
|
|
|
37,000
|
Interest
expense
|
|
(190,000)
|
|
|
(133,000)
|
|
|
(337,000)
|
|
|
(294,000)
|
Other
(expense) income
|
|
(19,000)
|
|
|
441,000
|
|
|
13,000
|
|
|
98,000
|
Loss before income
tax
|
|
(18,249,000)
|
|
|
(8,904,000)
|
|
|
(28,154,000)
|
|
|
(6,565,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
6,372,000
|
|
|
1,411,000
|
|
|
9,685,000
|
|
|
724,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(11,877,000)
|
|
$
|
(7,493,000)
|
|
$
|
(18,469,000)
|
|
$
|
(5,841,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized income (loss) on foreign exchange rate
translation, net of tax
|
$
|
344,000
|
|
$
|
42,000
|
|
$
|
(74,000)
|
|
$
|
(65,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(11,533,000)
|
|
$
|
(7,451,000)
|
|
$
|
(18,543,000)
|
|
$
|
(5,906,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss
per share attributable to common stock
|
$
|
(0.55)
|
|
$
|
(0.54)
|
|
$
|
(0.93)
|
|
$
|
(0.42)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share attributable to common stock
|
$
|
(0.55)
|
|
$
|
(0.54)
|
|
$
|
(0.93)
|
|
$
|
(0.42)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividend
declared per share of common stock
|
$
|
0.00
|
|
$
|
0.08
|
|
$
|
0.00
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
21,525,952
|
|
|
14,010,497
|
|
|
19,783,724
|
|
|
14,009,930
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding -assuming dilution
|
|
21,525,952
|
|
|
14,010,497
|
|
|
19,783,724
|
|
|
14,009,930
|
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED BALANCE
SHEETS
|
(unaudited)
|
|
June
30,
|
|
December
31,
|
ASSETS
|
2015
|
|
2014
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
$
|
37,275,000
|
|
$
|
14,644,000
|
Short-term investments
|
|
19,500,000
|
|
|
28,750,000
|
Accounts receivable, net of allowance
for doubtful accounts of $775,000 at June 30, 2015 and $250,000 at
December 31, 2014
|
|
31,297,000
|
|
|
37,133,000
|
Prepaid
expenses and other assets
|
|
6,413,000
|
|
|
5,703,000
|
Current
deferred tax asset
|
|
1,445,000
|
|
|
2,818,000
|
|
|
|
|
|
|
Total current assets
|
|
95,930,000
|
|
|
89,048,000
|
|
|
|
|
|
|
Property, plant
and equipment
|
|
367,825,000
|
|
|
339,245,000
|
Less
accumulated depreciation
|
|
(200,945,000)
|
|
|
(181,453,000)
|
|
|
|
|
|
|
Net property, plant and equipment
|
|
166,880,000
|
|
|
157,792,000
|
|
|
|
|
|
|
Intangibles,
net
|
|
2,747,000
|
|
|
-
|
|
|
|
|
|
|
Total assets
|
$
|
265,557,000
|
|
$
|
246,840,000
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
7,216,000
|
|
$
|
5,849,000
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
3,322,000
|
|
|
3,015,000
|
Other
|
|
4,988,000
|
|
|
3,158,000
|
Deferred
revenue
|
|
5,265,000
|
|
|
1,752,000
|
Current
maturities of notes payable and
obligations under capital
leases
|
|
|
|
|
|
|
8,892,000
|
|
|
6,018,000
|
|
|
|
|
|
|
Total current liabilities
|
|
29,683,000
|
|
|
19,792,000
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes payable and obligations under capital leases
less current maturities
|
|
|
|
|
|
|
6,039,000
|
|
|
4,209,000
|
Deferred tax liability
|
|
11,339,000
|
|
|
28,621,000
|
|
|
|
|
|
|
Total long-term liabilities
|
|
17,378,000
|
|
|
32,830,000
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock-par value $1.00 per share; 4,000,000 shares
authorized, none
outstanding
|
|
|
|
|
|
|
-
|
|
|
-
|
Common stock-par value $.01 per share;
35,000,000 shares authorized, 21,571,513 and 14,216,540 shares
issued and outstanding at June 30, 2015 and December 31, 2014,
respectively
|
|
216,000
|
|
|
142,000
|
Additional paid-in capital
|
|
141,831,000
|
|
|
99,084,000
|
Retained
earnings
|
|
76,867,000
|
|
|
95,336,000
|
Treasury
stock, at cost; 48,445 shares at June 30, 2015 and none at December
31, 2014
|
|
-
|
|
|
-
|
Accumulated other comprehensive loss, net of tax
|
|
(418,000)
|
|
|
(344,000)
|
|
|
|
|
|
|
Total stockholders' equity
|
|
218,496,000
|
|
|
194,218,000
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
265,557,000
|
|
$
|
246,840,000
|
Reconciliation of
EBITDA to Net loss
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended June
30,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
(in
thousands)
|
|
|
(in
thousands)
|
Net loss
|
$
|
(11,877)
|
|
$
|
(7,493)
|
|
$
|
(18,469)
|
|
$
|
(5,841)
|
Depreciation and
amortization
|
|
12,380
|
|
|
10,253
|
|
|
23,603
|
|
|
20,430
|
Interest expense
(income), net
|
|
165
|
|
|
117
|
|
|
288
|
|
|
257
|
Income tax
benefit
|
|
(6,372)
|
|
|
(1,411)
|
|
|
(9,685)
|
|
|
(724)
|
EBITDA
|
$
|
(5,704)
|
|
$
|
1,466
|
|
$
|
(4,263)
|
|
$
|
14,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash provided by Operating Activities
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended June
30,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
(in
thousands)
|
|
|
(in
thousands)
|
Net cash provided by
operating activities
|
$
|
15,970
|
|
$
|
9,252
|
|
$
|
12,708
|
|
$
|
32,602
|
Changes in working
capital and other items
|
|
(21,572)
|
|
|
(7,563)
|
|
|
(16,237)
|
|
|
(17,790)
|
Noncash adjustments
to income
|
|
(102)
|
|
|
(223)
|
|
|
(734)
|
|
|
(690)
|
EBITDA
|
$
|
(5,704)
|
|
$
|
1,466
|
|
$
|
(4,263)
|
|
$
|
14,122
|
Pro Forma Information
The following unaudited pro forma condensed financial
information for the three and six months ended June 30, 2015 and 2014 gives effect to the Merger
as if it had occurred on January l, 2014. The unaudited pro forma
condensed financial information has been included for comparative
purposes only and is not necessarily indicative of the results that
might have occurred had the transactions taken place on the dates
indicated and is not intended to be a projection of future results.
The unaudited pro forma financial information reflects certain
adjustments related to the acquisition, such as (1) to record
certain incremental expenses resulting from purchase accounting
adjustments, such as reduced depreciation and amortization expense
in connection with the fair value adjustments to property, plant
and equipment, and intangible assets; and (2) to record the related
tax effects. Shares used in the calculations of earnings per share
in the table below were 21,525,952 and 21,329,220 for the three
months ended June 30, 2015 and 2014,
respectively, and 21,509,886 and 21,329,371 for the six months
ended June 30, 2015 and 2014,
respectively.
|
Pro
Forma
|
|
Pro
Forma
|
|
Three Months Ended
June 30
|
|
Six Months Ended
June 30
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
43,335,000
|
|
$
72,403,000
|
|
$
130,667,000
|
|
$
197,970,000
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(11,877,000)
|
|
$
(8,654,000)
|
|
$
(22,446,000)
|
|
$
(977,000)
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
$
(0.55)
|
|
$
(0.41)
|
|
$
(1.04)
|
|
$
(0.05)
|
|
|
|
|
|
|
|
|
Diluted
|
$
(0.55)
|
|
$
(0.41)
|
|
$
(1.04)
|
|
$
(0.05)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-second-quarter-2015-results-300125387.html
SOURCE Dawson Geophysical Company