MIDLAND, Texas, Nov. 3, 2016 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) (the "Company") today reported unaudited
financial results for its third quarter ended September 30, 2016.
For the quarter ended September 30,
2016, the Company reported revenues of $28,122,000 as compared to $62,498,000 for the quarter ended September 30, 2015. For the third quarter of
2016, the Company reported a net loss of $12,416,000 or $0.57 loss per share attributable to common
stock, as compared to a net loss of $2,870,000 or $0.13
loss per share attributable to common stock for the third quarter
of 2015. The Company reported negative EBITDA of $3,403,000 for the quarter ended September 30, 2016 compared to EBITDA of
$7,806,000 for the quarter ended
September 30, 2015.
During the third quarter of 2016, the Company operated four to
five crews in the United States
for most of the quarter. Utilization of several crews was
unfavorably impacted by inclement weather conditions in several
areas of operation late in the first quarter that continued into
the early part of the second quarter, and again during the latter
stages of the second quarter that continued into the beginning of
the third quarter. In addition to inclement weather
conditions, we experienced several client-directed delays over the
last several months.
Stephen C. Jumper, President and
Chief Executive Officer, said, "Demand for seismic data acquisition
services in North America and
worldwide continues to be soft in response to low and uncertain oil
prices and reduced client expenditures. During the quarter ended
September 30, 2016, oil prices
averaged approximately $45 per
barrel, starting the quarter at just over $49 per barrel, dropping to a quarterly low below
$40 per barrel on August 2, and ending the quarter at just under
$48 per barrel for West Texas
Intermediate. While encouraging, it remains to be determined if the
recent strengthening in oil prices can be sustained, and the price
increases have yet to result in a meaningful increase in demand for
our services. As we experienced uncertainty in oil and natural gas
prices during our first two quarters of 2016, our client base
continues to take a cautious approach to their capital spending.
Based on currently available information, seismic service demand
levels and the anticipated winter season in Canada, we believe we will operate five to
seven crews through the first quarter of 2017. Visibility
beyond the first quarter of 2017 remains unclear. In response
to these factors, we will continue our on-going effort to control
costs and maintain a strong balance sheet, our experienced
personnel and our position as a leading onshore seismic data
acquisition company in North
America."
Capital expenditures for the first nine months of 2016 were
$6,198,000, primarily composed of
replacement recording channels lost in the spring 2015 and 2016
floods in southeast Texas and
Oklahoma. These expenditures were funded in part by insurance
proceeds received related to those losses. The Company anticipates
a capital budget for 2016 to be at maintenance levels below the
$10 million approved by our board of
directors. The Company's balance sheet remains strong with
$62,513,000 of cash and short term
investments, $63,884,000 of working
capital and $3,993,000 of debt and
capital lease obligations as of September
30, 2016.
Jumper continued, "As mentioned during our second quarter call,
2016 will be a difficult year, and likely the most difficult in my
thirty-plus years of experience with the Company and in the
industry. That said, the price of oil is up over 70% from the
decade low reached earlier this year on February 11. Although
we have not seen a meaningful increase in proposals as previously
discussed, this positive development is very encouraging. The oil
market appears to be slowly working through a rebalancing phase. We
believe oil and gas companies will gradually start to put capital
back to work, and seismic surveys should play an important role in
helping these companies maximize their production economics. Our
continuing commitment to maintain a strong balance sheet while
operating the largest fleet of state-of-the-art land-based seismic
equipment with the most experienced personnel in the industry
uniquely positions Dawson Geophysical to successfully respond to
the market as conditions improve."
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.
Additional information regarding the business combination and its
impact on the Company's financial position are set forth in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2015, which was filed with the Securities and
Exchange Commission on March 16, 2016 and includes 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 year ended
September 30, 2013.
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its third quarter 2016 financial results on November 3, 2016 at 9 a.m. CT.
Participants can access the call at 1-888-397-5362 (US) and
1-719-325-2248 (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 4, 2016 by
dialing 1-844-512-2921 (Toll-Free) and 1-412-317-6671
(Toll/International). The passcode is 7667218. The webcast will be
recorded and available for replay on Dawson's website until
December 4, 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 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; 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 Securities and
Exchange Commission on March 16, 2016. 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
28,122,000
|
|
$
|
62,498,000
|
|
$
|
103,263,000
|
|
$
|
179,555,000
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
28,132,000
|
|
|
50,195,000
|
|
|
94,203,000
|
|
|
158,385,000
|
General
and administrative
|
|
3,656,000
|
|
|
4,999,000
|
|
|
13,247,000
|
|
|
18,142,000
|
Depreciation and amortization
|
|
10,591,000
|
|
|
11,966,000
|
|
|
33,967,000
|
|
|
35,569,000
|
|
|
42,379,000
|
|
|
67,160,000
|
|
|
141,417,000
|
|
|
212,096,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(14,257,000)
|
|
|
(4,662,000)
|
|
|
(38,154,000)
|
|
|
(32,541,000)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
92,000
|
|
|
35,000
|
|
|
226,000
|
|
|
84,000
|
Interest
expense
|
|
(71,000)
|
|
|
(155,000)
|
|
|
(239,000)
|
|
|
(492,000)
|
Other
income
|
|
263,000
|
|
|
502,000
|
|
|
1,829,000
|
|
|
515,000
|
Loss before income
tax
|
|
(13,973,000)
|
|
|
(4,280,000)
|
|
|
(36,338,000)
|
|
|
(32,434,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
1,557,000
|
|
|
1,410,000
|
|
|
3,733,000
|
|
|
11,095,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(12,416,000)
|
|
$
|
(2,870,000)
|
|
$
|
(32,605,000)
|
|
$
|
(21,339,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
(loss) income:
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized (loss) income on foreign exchange rate translation,
net
|
$
|
(48,000)
|
|
$
|
(890,000)
|
|
$
|
422,000
|
|
$
|
(964,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(12,464,000)
|
|
$
|
(3,760,000)
|
|
$
|
(32,183,000)
|
|
$
|
(22,303,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share attributable to common stock
|
$
|
(0.57)
|
|
$
|
(0.13)
|
|
$
|
(1.51)
|
|
$
|
(1.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share attributable to common stock
|
$
|
(0.57)
|
|
$
|
(0.13)
|
|
$
|
(1.51)
|
|
$
|
(1.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
21,622,349
|
|
|
21,571,513
|
|
|
21,603,065
|
|
|
20,386,202
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
-assuming dilution
|
|
21,622,349
|
|
|
21,571,513
|
|
|
21,603,065
|
|
|
20,386,202
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
September
30,
|
|
December
31,
|
ASSETS
|
2016
|
|
2015
|
|
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
18,263,000
|
|
$
|
37,009,000
|
Short-term investments
|
|
44,250,000
|
|
|
21,000,000
|
Accounts
receivable, net
|
|
12,772,000
|
|
|
35,700,000
|
Prepaid
expenses and other assets
|
|
3,977,000
|
|
|
6,150,000
|
|
|
|
|
|
|
Total current assets
|
|
79,262,000
|
|
|
99,859,000
|
|
|
|
|
|
|
Property and
equipment, net
|
|
117,821,000
|
|
|
147,567,000
|
|
|
|
|
|
|
Intangibles
|
|
499,000
|
|
|
361,000
|
|
|
|
|
|
|
Total assets
|
$
|
197,582,000
|
|
$
|
247,787,000
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
3,981,000
|
|
$
|
8,401,000
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,928,000
|
|
|
1,074,000
|
Other
|
|
3,781,000
|
|
|
4,604,000
|
Deferred
revenue
|
|
1,760,000
|
|
|
6,146,000
|
Current
maturities of notes payable and obligations under capital
leases
|
|
3,928,000
|
|
|
8,585,000
|
|
|
|
|
|
|
Total current liabilities
|
|
15,378,000
|
|
|
28,810,000
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes payable and obligations under capital leases less current
maturities
|
|
65,000
|
|
|
2,106,000
|
Deferred tax liabilities, net
|
|
1,971,000
|
|
|
5,319,000
|
Other accrued liabilities
|
|
1,992,000
|
|
|
1,834,000
|
|
|
|
|
|
|
Total long-term liabilities
|
|
4,028,000
|
|
|
9,259,000
|
|
|
|
|
|
|
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,
21,680,934 and 21,629,310 issued, and 21,632,489 and 21,580,865
sharesoutstanding at September 30, 2016 and December 31, 2015,
respectively
|
|
|
|
|
|
|
|
|
|
|
|
217,000
|
|
|
216,000
|
Additional paid-in capital
|
|
142,909,000
|
|
|
142,269,000
|
Retained
earnings
|
|
36,452,000
|
|
|
69,057,000
|
Treasury
stock, at cost; 48,445 shares at September 30, 2016 and December
31, 2015
|
|
-
|
|
|
-
|
Accumulated other comprehensive loss, net
|
|
(1,402,000)
|
|
|
(1,824,000)
|
|
|
|
|
|
|
Total stockholders' equity
|
|
178,176,000
|
|
|
209,718,000
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
197,582,000
|
|
$
|
247,787,000
|
Reconciliation of
EBITDA to Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
(in
thousands)
|
|
|
(in
thousands)
|
Net loss
|
$
|
(12,416)
|
|
$
|
(2,870)
|
|
$
|
(32,605)
|
|
$
|
(21,339)
|
Depreciation and
amortization
|
|
10,591
|
|
|
11,966
|
|
|
33,967
|
|
|
35,569
|
Interest (income)
expense, net
|
|
(21)
|
|
|
120
|
|
|
13
|
|
|
408
|
Income tax
benefit
|
|
(1,557)
|
|
|
(1,410)
|
|
|
(3,733)
|
|
|
(11,095)
|
EBITDA
|
$
|
(3,403)
|
|
$
|
7,806
|
|
$
|
(2,358)
|
|
$
|
3,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash (Used in) Provided by Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
(in
thousands)
|
|
|
(in
thousands)
|
Net cash (used in)
provided by operating activities
|
$
|
(1,798)
|
|
$
|
5,170
|
|
$
|
14,426
|
|
$
|
17,878
|
Changes in working
capital and other items
|
|
(1,367)
|
|
|
2,696
|
|
|
(16,113)
|
|
|
(13,541)
|
Noncash adjustments
to net loss
|
|
(238)
|
|
|
(60)
|
|
|
(671)
|
|
|
(794)
|
EBITDA
|
$
|
(3,403)
|
|
$
|
7,806
|
|
$
|
(2,358)
|
|
$
|
3,543
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-third-quarter-2016-results-300356523.html
SOURCE Dawson Geophysical Company