MIDLAND, Texas, March 11, 2016 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) (the "Company") today reported preliminary
financial results for its fourth quarter and full year ended
December 31, 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 with the results
of legacy TGC Industries, Inc. being reflected in the Company's
reported consolidated financial results only for periods from and
after February 11, 2015. The merged
companies adopted a calendar fiscal year ending December 31.
Due to the foregoing, comparative financial results that include
periods prior to February 11, 2015
are not comparable to financial results that include periods from
and after February 11, 2015. As a
result, the Company is including selected unaudited pro forma
financial information showing, on a pro forma basis, the effect
of the business combination as if it had occurred on
January 1, 2014 (together with the assumptions related
thereto), at the end of this press release. Additional information
regarding the business combination and its impact on the Company's
financial position will be set forth in the Company's
Form 10-K for the fiscal year ended December 31, 2015, which will be filed with the
Securities and Exchange Commission on or about March 15, 2016 and will include the Company's
audited consolidated financial statements (i) as of and for the
years ended December 31, 2015 and
September 30, 2014, (ii) for the
three months ended December 31, 2014
and (iii) for the years ended September 30,
2014 and 2013.
For the quarter ended December 31,
2015, the Company reported revenues of $55,130,000 as compared to $50,802,000 (or $76,897,000 on a pro forma basis) for the quarter
ended December 31, 2014. For the
fourth quarter 2015, the Company reported a net loss of
$4,940,000, or $0.23 loss per share attributable to common
stock, as compared to a net loss of $4,991,000 (or $7,722,000 on a pro forma basis) or $0.36 (or $0.36 on
a pro forma basis) loss per share attributable to common stock for
the quarter ended December 31, 2014.
The Company reported EBITDA of $3,945,000 for the quarter ended December 31, 2015 compared to $2,906,000 (or $1,642,000 on a pro forma basis) for the quarter
ended December 31, 2014.
For the year ended December 31,
2015, the Company reported revenues of $234,685,000 as compared to $244,304,000 (or $363,152,000 on a pro forma basis) for the year
ended December 31, 2014. For the full
year 2015, the Company reported a net loss of $26,279,000 or $1.27 loss per share attributable to common stock
as compared to a net loss of $14,714,000 (or $15,533,000 on a pro forma basis) or $1.05 loss per share (or $0.73 on a pro forma basis) attributable to
common stock for the year ended December 31,
2014. The Company reported EBITDA of $7,488,000 for the year-ended December 31, 2015 compared to $20,776,000 (or $26,382,000 on a pro forma basis) for the
year-ended December 31, 2014.
Included in the yearly results for December
31, 2015 and December 31, 2014
were approximately $3,314,000 and
$3,125,000, respectively, of
transaction costs related to the completed business combination
with TGC Industries, Inc.
Stephen C. Jumper, President and
CEO, said, "2015 was both exciting and difficult for our Company.
We are very pleased to have completed our strategic business
combination on February 11, 2015 with
TGC Industries. The combination brings together two of the
strongest companies in the industry, the benefits of which are well
described in earlier Company filings. 2015 was also a difficult
year as decreasing commodity prices negatively impacted demand for
services across North America as
our clients significantly reduced their capital budgets. Despite
the current economic conditions, we are confident that the
combination strategically positions Dawson Geophysical to emerge
from the downturn as a robust company. Our balance sheet remains
strong as we continue to pay down our already low level of
short-term debt. Our equipment base is state-of-the-art and among
the best in the industry. We continue to refine our personnel base
to position the company to react quickly as commodity prices
improve."
Mr. Jumper continued, "The Company operated approximately eight
to ten crews in the United States
with limited activity in Canada
during the fourth quarter of 2015. During the fourth quarter, WTI
oil prices continued their slide, ending the year near $38 per barrel and reaching as low as near
$27 per barrel during the first
quarter of 2016. Since that time, oil prices have increased to
their current level of near $38 per
barrel. As a result, demand for services has continued to decline,
several near term projects were delayed for a variety of reasons
including final approval of project funding, project partnership
agreements among our clients and delays in securing land access
agreements. Economic uncertainty continues to delay the final
approval of projects. In November of 2015, we anticipated operating
eight to ten crews in the United
States well into the first quarter of 2016. Based on
currently available information, however, we anticipate operating
four to six crews in the United
States into the second quarter of 2016. Currently,
visibility beyond the second quarter is limited given the continued
fluctuations in oil prices. We are currently operating two crews in
the seasonal Canadian market which concludes in the March 2016 time frame. In response to further
deterioration of current market conditions, we have reduced head
count an additional 25% since the beginning of 2016 and upper
management have taken salary reductions of 5 to 25 percent for
2016. Short term incentive plans are suspended and we continue to
explore other appropriate cost reduction options."
Capital expenditures for 2015 totaled $6,920,000, which was below the previously
announced $10 million maintenance
capital budget approved by the Board of Directors. The Company
anticipates a capital budget of less than $10,000,000 for 2016 primarily dedicated to
maintenance capital items and the replacement of recording channels
lost in the spring floods of 2015. The Company's balance sheet
remains strong at December 31, 2015
with approximately $58,009,000 of
cash and cash equivalents and short-term investments, $71,049,000 of working capital, and $10,691,000 of debt and capital lease
obligations.
Mr. Jumper concluded, "Despite the challenging environment, we
continue to work with several of our clients on potential projects
for 2016. Our experience working through previous downturns,
combined with our strong balance sheet, a state-of-the-art
equipment base, and the most experienced and talented workforce in
the industry, positions us to successfully navigate the current
downturn. All of these factors in conjunction with the
strategic business combination with TGC position Dawson to respond
rapidly as market conditions improve."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its fiscal year-end and fourth quarter 2015 financial results on
March 11, 2016 at
9 a.m. CT. Participants can access the call at
1-888-348-3664 (US) 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 March 14, 2016 by dialing
1-877-870-5176 (Toll-Free) and 1-858-384-5517 (Toll/International).
The passcode is 10080752. The webcast will be recorded and
available for replay on Dawson's website until April 10, 2016.
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. 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 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, 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, 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; high fixed costs of
operations and high capital requirements; operational disruptions;
changes in economic conditions; industry competition; reduced
utilization; the potential for contract delays, reductions or
cancellations of service contracts; external factors affecting the
Company's crews such as weather interruptions and inability to
obtain land access rights of way; disruptions in the global
economy; whether the Company enters into turnkey or dayrate
contracts; crew productivity; the availability of capital
resources; 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 the Company's Form 10-Q
that was filed with the Securities and Exchange Commission on
November 6, 2015 and 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. 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
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(PRELIMINARY AND
UNAUDITED)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
55,130,000
|
|
$
|
50,802,000
|
|
$
|
234,685,000
|
|
$
|
244,304,000
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
47,181,000
|
|
|
42,957,000
|
|
|
205,566,000
|
|
|
207,185,000
|
General
and administrative
|
|
4,587,000
|
|
|
5,093,000
|
|
|
22,729,000
|
|
|
17,012,000
|
Depreciation and amortization
|
|
11,503,000
|
|
|
9,736,000
|
|
|
47,072,000
|
|
|
40,028,000
|
|
|
63,271,000
|
|
|
57,786,000
|
|
|
275,367,000
|
|
|
264,225,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(8,141,000)
|
|
|
(6,984,000)
|
|
|
(40,682,000)
|
|
|
(19,921,000)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
75,000
|
|
|
20,000
|
|
|
159,000
|
|
|
76,000
|
Interest
expense
|
|
(117,000)
|
|
|
(93,000)
|
|
|
(609,000)
|
|
|
(493,000)
|
Other
income
|
|
583,000
|
|
|
154,000
|
|
|
1,098,000
|
|
|
669,000
|
Loss before income
tax
|
|
(7,600,000)
|
|
|
(6,903,000)
|
|
|
(40,034,000)
|
|
|
(19,669,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
2,660,000
|
|
|
1,912,000
|
|
|
13,755,000
|
|
|
4,955,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(4,940,000)
|
|
$
|
(4,991,000)
|
|
$
|
(26,279,000)
|
|
$
|
(14,714,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss:
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized loss on foreign exchange rate translation, net of
tax
|
$
|
(516,000)
|
|
$
|
(127,000)
|
|
$
|
(1,480,000)
|
|
$
|
(344,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(5,456,000)
|
|
$
|
(5,118,000)
|
|
$
|
(27,759,000)
|
|
$
|
(15,058,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss
per share attributable to common stock
|
$
|
(0.23)
|
|
$
|
(0.36)
|
|
$
|
(1.27)
|
|
$
|
(1.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share attributable to common stock
|
$
|
(0.23)
|
|
$
|
(0.36)
|
|
$
|
(1.27)
|
|
$
|
(1.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividend
declared per share of common stock
|
$
|
-
|
|
$
|
0.05
|
|
$
|
-
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
21,590,943
|
|
|
14,019,813
|
|
|
20,688,185
|
|
|
14,012,871
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding -assuming dilution
|
|
|
|
|
|
|
|
|
|
|
|
|
21,590,943
|
|
|
14,019,813
|
|
|
20,688,185
|
|
|
14,012,871
|
DAWSON GEOPHYSICAL
COMPANY
CONSOLIDATED BALANCE
SHEETS
(PRELIMINARY AND
UNAUDITED)
|
|
|
December
31,
|
|
September
30,
|
ASSETS
|
2015
|
|
2014
|
|
|
(unaudited)
|
|
|
(audited)
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
$
|
37,009,000
|
|
$
|
22,753,000
|
Short-term investments
|
|
21,000,000
|
|
|
27,000,000
|
Accounts
receivable, net of allowance for doubtful accounts of
|
|
|
|
|
|
$250,000 at December
31, 2015 and September 30, 2014
|
|
35,700,000
|
|
|
39,995,000
|
Prepaid
expenses and other assets
|
|
6,150,000
|
|
|
2,420,000
|
|
|
|
|
|
|
Total current assets
|
|
99,859,000
|
|
|
92,168,000
|
|
|
|
|
|
|
Property, plant
and equipment
|
|
345,619,000
|
|
|
337,922,000
|
Less
accumulated depreciation
|
|
(198,052,000)
|
|
|
(173,428,000)
|
|
|
|
|
|
|
Net property, plant and equipment
|
|
147,567,000
|
|
|
164,494,000
|
|
|
|
|
|
|
Intangibles
|
|
361,000
|
|
|
-
|
|
|
|
|
|
|
Total assets
|
$
|
247,787,000
|
|
$
|
256,662,000
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
8,401,000
|
|
$
|
10,720,000
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,074,000
|
|
|
1,998,000
|
Other
|
|
4,604,000
|
|
|
4,097,000
|
Deferred
revenue
|
|
6,146,000
|
|
|
801,000
|
Current
maturities of notes payable and obligations
|
|
|
|
|
|
under capital leases
|
|
8,585,000
|
|
|
6,752,000
|
|
|
|
|
|
|
Total current liabilities
|
|
28,810,000
|
|
|
24,368,000
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes payable and obligations under capital leases
|
|
|
|
|
|
less
current maturities
|
|
2,106,000
|
|
|
4,933,000
|
Deferred tax liability
|
|
5,319,000
|
|
|
27,831,000
|
Other accrued liabilities
|
|
1,834,000
|
|
|
-
|
|
|
|
|
|
|
Total long-term liabilities
|
|
9,259,000
|
|
|
32,764,000
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock-par value $1.00 per share; 4,000,000 shares
authorized, none
outstanding
|
|
|
|
|
|
|
-
|
|
|
-
|
Common
stock-par value $0.01 per share; 35,000,000 shares
authorized, 21,629,310 and
14,194,810 shares issued, and 21,580,865 and 14,194,810
shares outstanding at December 31, 2015
and September 30, 2014, respectively
|
|
|
|
|
|
|
|
|
|
|
|
216,000
|
|
|
142,000
|
Additional paid-in capital
|
|
142,269,000
|
|
|
98,632,000
|
Retained
earnings
|
|
69,057,000
|
|
|
100,973,000
|
Treasury
stock, at cost; 48,445 shares at December 31, 2015 and none
at September 30, 2014
|
|
|
|
|
|
|
-
|
|
|
-
|
Accumulated other comprehensive loss, net of tax
|
|
(1,824,000)
|
|
|
(217,000)
|
|
|
|
|
|
|
Total stockholders' equity
|
|
209,718,000
|
|
|
199,530,000
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
247,787,000
|
|
$
|
256,662,000
|
Reconciliation of
EBITDA to Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Twelve Months Ended
December 31,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
(in
thousands)
|
|
|
(in
thousands)
|
Net loss
|
$
|
(4,940)
|
|
$
|
(4,991)
|
|
$
|
(26,279)
|
|
$
|
(14,714)
|
Depreciation and
amortization
|
|
11,503
|
|
|
9,736
|
|
|
47,072
|
|
|
40,028
|
Interest expense
(income), net
|
|
42
|
|
|
73
|
|
|
450
|
|
|
417
|
Income tax
benefit
|
|
(2,660)
|
|
|
(1,912)
|
|
|
(13,755)
|
|
|
(4,955)
|
EBITDA
|
$
|
3,945
|
|
$
|
2,906
|
|
$
|
7,488
|
|
$
|
20,776
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash provided by (used in) Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Twelve Months Ended
December 31,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
(in
thousands)
|
|
|
(in
thousands)
|
Net cash provided by
(used in) operating activities
|
$
|
2,210
|
|
$
|
(1,683)
|
|
$
|
20,088
|
|
$
|
30,472
|
Changes in working
capital and other items
|
|
2,097
|
|
|
5,040
|
|
|
(11,444)
|
|
|
(8,426)
|
Noncash adjustments
to income
|
|
(362)
|
|
|
(451)
|
|
|
(1,156)
|
|
|
(1,270)
|
EBITDA
|
$
|
3,945
|
|
$
|
2,906
|
|
$
|
7,488
|
|
$
|
20,776
|
Pro Forma Information
The following unaudited pro forma condensed financial
information for the three and twelve months ended December 31,
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 expense in connection with the fair value
adjustments to property, plant and equipment; and (2) to
record the related tax effects. Shares used in the calculations of
earnings per share in the table below were 21,590,943 and
21,400,593 for the three months ended December 31, 2015 and
2014, respectively, and 21,537,480 and 21,393,651 for the years
ended December 31, 2015 and 2014, respectively.
|
Three Months Ended December
31,
|
|
Years
Ended December 31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Pro forma total
revenues
|
$
|
55,130,000
|
|
$
|
76,897,000
|
|
$
|
248,295,000
|
|
$
|
363,152,000
|
Pro forma net
loss
|
$
|
(4,940,000)
|
|
$
|
(7,722,000)
|
|
$
|
(30,256,000)
|
|
$
|
(15,533,000)
|
|
|
|
|
|
|
|
|
Pro forma net loss
per share
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.23)
|
|
$
|
(0.36)
|
|
$
|
(1.40)
|
|
$
|
(0.73)
|
Diluted
|
$
|
(0.23)
|
|
$
|
(0.36)
|
|
$
|
(1.40)
|
|
$
|
(0.73)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-fourth-quarter-and-full-year-2015-results-300234623.html
SOURCE Dawson Geophysical Company