MIDLAND, Texas, Nov. 5, 2015 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) today reported results for its
third quarter ended September 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 merged
companies adopted a calendar fiscal year ending December 31.
The merged Company's third quarter fiscal 2015 results are compared
to the quarterly results for legacy Dawson Geophysical for the
period July 1 through September 30, 2014, which at the
time was legacy Dawson Geophysical's fourth 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
September 30, 2014 discussed below are not directly comparable
to the merged Company's financial results for the quarter ended
September 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
September 30, 2015.
For the quarter ended September 30, 2015, the Company
reported revenues of $62,498,000 as
compared to $62,570,000 (or
$88,665,000 on a pro forma basis) for
the quarter ended September 30, 2014. For the 2015
quarter, the Company reported a net loss of $2,870,000, or $0.13 loss per share attributable to common
stock, as compared to a net loss of $3,882,000 (or $6,556,000 on a pro forma basis) or $0.28 (or $0.31 on
a pro forma basis) loss per share attributable to common stock for
the quarter ended September 30, 2014. The Company reported
EBITDA of $7,806,000 for the quarter
ended September 30, 2015 compared to $3,748,000 for the quarter ended September 30, 2014. Included in the quarter
results for September 30, 2015 and
September 30, 2014 were
approximately $325,000 and
$950,000, respectively, of
transaction costs related to the completed business combination
with TGC Industries, Inc. Although the impact to the Company's
overall financial statements was significantly less, the
September 30, 2015 operating expenses
and margins include approximately $593,000 of expenses related to lost and damaged
equipment incurred during the flooding throughout Texas which occurred during the June 2015 quarter. These expenses are
predominantly offset in other income as the Company expects to
recoup most of the expenses related to the lost and damaged
equipment through insurance proceeds expected to be received in the
fourth quarter ending December 31,
2015.
Stephen C. Jumper said, "The
Company operated approximately ten crews in the United States with limited activity in
Canada during the third quarter of
2015. Improved weather conditions, operational discipline, and
strong financial management, in the Company's areas of operations
lead to increased crew utilization in the third quarter of 2015 as
compared to the second quarter of 2015, and resulted in a 108%
increase in EBITDA from the same period in 2014. Despite the
year-over-year improvement in EBITDA, demand for services is at
reduced levels from recent years and is anticipated to remain so
into 2016 in response to decreased 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 fourth quarter ending
December 31, 2015 and into the latter
part of the first quarter of 2016."
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.
The Company's balance sheet remains strong at September 30,
2015 with approximately $58,265,000
of cash and cash equivalents and short-term investments,
$72,602,000 of working capital, and
$12,183,000 of debt and capital lease
obligations.
Jumper concluded, "Despite the challenging environment, we
continue to work with several of our clients on potential projects
for 2016. As in previous downturns, we are well positioned with a
strong balance sheet, a state-of-the-art equipment base, and the
most experienced and talented workforce in the industry. All
of these factors position Dawson to respond rapidly as market
conditions improve."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its third quarter 2015 financial results on November 5, 2015 at 9 a.m. CT.
Participants can access the call at 1-888-401-4669 (US) and
1-719-457-2628 (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 November 8, 2015 by dialing 1-877-870-5176
(Toll-Free) and 1-858-384-5517 (Toll/International). The passcode
is 8990842. The webcast will be recorded and available for replay
on Dawson's website until December 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 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
62,498,000
|
|
$
|
62,570,000
|
|
$
|
179,555,000
|
|
$
|
193,502,000
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
50,195,000
|
|
|
54,529,000
|
|
|
158,385,000
|
|
|
164,228,000
|
General
and administrative
|
|
4,999,000
|
|
|
4,710,000
|
|
|
18,142,000
|
|
|
11,919,000
|
Depreciation and amortization
|
|
11,966,000
|
|
|
9,862,000
|
|
|
35,569,000
|
|
|
30,292,000
|
|
|
67,160,000
|
|
|
69,101,000
|
|
|
212,096,000
|
|
|
206,439,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(4,662,000)
|
|
|
(6,531,000)
|
|
|
(32,541,000)
|
|
|
(12,937,000)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
35,000
|
|
|
19,000
|
|
|
84,000
|
|
|
56,000
|
Interest
expense
|
|
(155,000)
|
|
|
(106,000)
|
|
|
(492,000)
|
|
|
(400,000)
|
Other
income
|
|
502,000
|
|
|
417,000
|
|
|
515,000
|
|
|
515,000
|
Loss before income
tax
|
|
(4,280,000)
|
|
|
(6,201,000)
|
|
|
(32,434,000)
|
|
|
(12,766,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
1,410,000
|
|
|
2,319,000
|
|
|
11,095,000
|
|
|
3,043,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(2,870,000)
|
|
$
|
(3,882,000)
|
|
$
|
(21,339,000)
|
|
$
|
(9,723,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss:
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized loss on foreign exchange rate translation, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(890,000)
|
|
$
|
(152,000)
|
|
$
|
(964,000)
|
|
$
|
(217,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(3,760,000)
|
|
$
|
(4,034,000)
|
|
$
|
(22,303,000)
|
|
$
|
(9,940,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
loss per share attributable to common stock
|
$
|
(0.13)
|
|
$
|
(0.28)
|
|
$
|
(1.05)
|
|
$
|
(0.70)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share attributable to common stock
|
$
|
(0.13)
|
|
$
|
(0.28)
|
|
$
|
(1.05)
|
|
$
|
(0.70)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividend
declared per share of common stock
|
$
|
-
|
|
$
|
0.08
|
|
$
|
-
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
21,571,513
|
|
|
14,011,789
|
|
|
20,386,202
|
|
|
14,010,557
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding -assuming dilution
|
|
|
|
|
|
|
|
|
|
|
|
|
21,571,513
|
|
|
14,011,789
|
|
|
20,386,202
|
|
|
14,010,557
|
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED BALANCE
SHEETS
|
(UNAUDITED)
|
|
|
September
30,
|
|
December
31,
|
ASSETS
|
2015
|
|
2014
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
$
|
39,015,000
|
|
$
|
14,644,000
|
Short-term investments
|
|
19,250,000
|
|
|
28,750,000
|
Accounts
receivable, net of allowance for doubtful accounts
of $250,000 at September 30,
2015 and December 31, 2014
|
|
37,443,000
|
|
|
37,133,000
|
Prepaid
expenses and other assets
|
|
5,769,000
|
|
|
5,703,000
|
Current
deferred tax asset
|
|
2,131,000
|
|
|
2,818,000
|
|
|
|
|
|
|
Total current assets
|
|
103,608,000
|
|
|
89,048,000
|
|
|
|
|
|
|
Property, plant
and equipment
|
|
357,420,000
|
|
|
339,245,000
|
Less
accumulated depreciation
|
|
(203,274,000)
|
|
|
(181,453,000)
|
|
|
|
|
|
|
Net property, plant and equipment
|
|
154,146,000
|
|
|
157,792,000
|
|
|
|
|
|
|
Intangibles,
net
|
|
2,537,000
|
|
|
-
|
|
|
|
|
|
|
Total assets
|
$
|
260,291,000
|
|
$
|
246,840,000
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
8,929,000
|
|
$
|
5,849,000
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
2,303,000
|
|
|
3,015,000
|
Other
|
|
4,911,000
|
|
|
3,158,000
|
Deferred
revenue
|
|
6,705,000
|
|
|
1,752,000
|
Current
maturities of notes payable and
obligations under capital
leases
|
|
|
|
|
|
|
|
8,158,000
|
|
|
6,018,000
|
|
|
|
|
|
|
Total current liabilities
|
|
31,006,000
|
|
|
19,792,000
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes payable and obligations under capital leases
less current maturities
|
|
|
|
|
|
|
|
4,025,000
|
|
|
4,209,000
|
Deferred tax liability
|
|
10,008,000
|
|
|
28,621,000
|
Other accrued liabilities
|
|
456,000
|
|
|
-
|
|
|
|
|
|
|
Total long-term liabilities
|
|
14,489,000
|
|
|
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 September 30, 2015 and December 31, 2014,
respectively
|
|
|
|
|
|
|
|
|
|
|
|
|
216,000
|
|
|
142,000
|
Additional paid-in capital
|
|
141,891,000
|
|
|
99,084,000
|
Retained
earnings
|
|
73,997,000
|
|
|
95,336,000
|
Treasury
stock, at cost; 48,445 shares at September 30, 2015 and none
at December 31, 2014
|
|
|
|
|
|
|
|
-
|
|
|
-
|
Accumulated other comprehensive loss, net of tax
|
|
(1,308,000)
|
|
|
(344,000)
|
|
|
|
|
|
|
Total stockholders' equity
|
|
214,796,000
|
|
|
194,218,000
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
260,291,000
|
|
$
|
246,840,000
|
Reconciliation of
EBITDA to Net loss
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
(in
thousands)
|
|
|
(in
thousands)
|
Net loss
|
$
|
(2,870)
|
|
$
|
(3,882)
|
|
$
|
(21,339)
|
|
$
|
(9,723)
|
Depreciation and
amortization
|
|
11,966
|
|
|
9,862
|
|
|
35,569
|
|
|
30,292
|
Interest expense
(income), net
|
|
120
|
|
|
87
|
|
|
408
|
|
|
344
|
Income tax
benefit
|
|
(1,410)
|
|
|
(2,319)
|
|
|
(11,095)
|
|
|
(3,043)
|
EBITDA
|
$
|
7,806
|
|
$
|
3,748
|
|
$
|
3,543
|
|
$
|
17,870
|
Reconciliation of
EBITDA to Net Cash provided by (used in) Operating
Activities
|
|
|
|
Three Months
Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
(in
thousands)
|
|
|
(in
thousands)
|
Net cash provided by
(used in) operating activities
|
$
|
5,170
|
|
$
|
(447)
|
|
$
|
17,878
|
|
$
|
32,155
|
Changes in working
capital and other items
|
|
2,696
|
|
|
4,324
|
|
|
(13,541)
|
|
|
(13,464)
|
Noncash adjustments
to income
|
|
(60)
|
|
|
(129)
|
|
|
(794)
|
|
|
(821)
|
EBITDA
|
$
|
7,806
|
|
$
|
3,748
|
|
$
|
3,543
|
|
$
|
17,870
|
Pro Forma Information
The following unaudited pro forma condensed financial
information for the three and nine months ended September 30,
2015 and 2014 gives effect to the business combination 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 21,571,513 and 21,262,566 for the
three months ended September 30, 2015 and 2014, respectively,
and 21,521,707 and 21,306,724 for the nine months ended
September 30, 2015 and 2014, respectively.
|
|
Pro Forma
|
|
Pro Forma
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
|
62,498,000
|
|
$
|
88,665,000
|
|
$
|
193,165,000
|
|
$
|
286,635,000
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,870,000)
|
|
$
|
(6,556,000)
|
|
$
|
(25,316,000)
|
|
$
|
(7,533,000)
|
|
|
|
|
|
|
|
|
|
Net loss per
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.13)
|
|
$
|
(0.31)
|
|
$
|
(1.18)
|
|
$
|
(0.35)
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
(0.13)
|
|
$
|
(0.31)
|
|
$
|
(1.18)
|
|
$
|
(0.35)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-third-quarter-2015-results-300172940.html
SOURCE Dawson Geophysical Company