MIDLAND, Texas, March 1, 2018 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
preliminary financial results for its fourth quarter and full year
ended December 31, 2017.
For the quarter ended December 31, 2017, the Company
reported revenues of $39,125,000, an
increase of approximately 30% as compared to $30,067,000 for the quarter ended
December 31, 2016. For the fourth quarter 2017, the Company
reported a net loss of $4,544,000 or
$0.21 loss per share attributable to
common stock as compared to a net loss of $7,187,000 or $0.33
loss per share attributable to common stock for the quarter ended
December 31, 2016. The Company reported EBITDA of $4,283,000 for the quarter ended
December 31, 2017 as compared to $313,000 for the quarter ended December 31,
2016.
For the year ended December 31, 2017, the Company reported
revenues of $157,148,000, an increase
of approximately 18% as compared to $133,330,000 for the year ended December 31,
2016. For the full year 2017, the Company reported a net loss of
$31,266,000 or $1.44 loss per share attributable to common stock
as compared to a net loss of $39,792,000 or $1.84 loss per share attributable to common stock
for the year ended December 31, 2016. The Company reported
EBITDA of $2,507,000 for the year
ended December 31, 2017 as compared
to negative EBITDA of $2,045,000 for
the year ended December 31, 2016.
During the fourth quarter of 2017, as anticipated, the Company
experienced a temporary decline in crew utilization primarily due
to project readiness issues. The Company began the fourth quarter
operating seven crews in the United
States ("U.S.") and two in Canada and ended the quarter operating six
crews in the U.S. and three in Canada. The fourth quarter in the U.S.
historically has been challenging due to shorter work days and the
holiday season. The Company is currently operating seven crews in
the U.S. Based on currently available information, the Company
anticipates operating up to seven U.S. crews into the third quarter
of 2018, completing two U.S. microseismic projects during the first
half of 2018, and operating four crews in Canada through the end of the winter season
which concludes at the end of the first quarter of 2018.
Stephen C. Jumper, President and
Chief Executive Officer, said, "We are encouraged by our third and
fourth quarter results, as we finished the year with positive full
year EBITDA of $2,507,000. We
overcame negative EBITDA of $7.3
million for the first half of 2017 by generating positive
EBITDA of $9.8 million during the
second half of 2017. During 2017, we continued to explore ways to
reduce costs, downsized the levels of in-house services and gained
operating efficiencies through internal restructuring. While we
continue to experience lower than historical demand, we encountered
a moderate increase in demand for our services for the year 2017
when compared to 2016. This resulted in improved productivity and
crew utilization, primarily during the second half of the year. The
recent rise in oil prices, combined with forecasted oil price
increases through 2018, has resulted in increased demand for our
services and has brought about a return to positive EBITDA. At the
same time, the oil and gas industry's renewed focus on
profitability as well as production growth has further driven an
increase in requests for proposals, as more E&P operators seek
to lower drilling and completion costs as well as maximize
production through the integrated use of seismic data into their
development plans. While still well off the demand levels
experienced in 2015, the recent increase in bid activity is
encouraging."
Jumper continued, "As we experienced during the third quarter of
2017, the majority of our projects continue to be driven by
multi-client data library companies, a model we do not actively
participate in but we do act as a contractor for several of the
largest providers. The competition between various multi-client
providers continues to remain strong and affects project timing as
seismic programs are put together with multiple participants, a
situation which is beyond our control. It is our belief that
seismic data acquisition activity will increase in producing basins
outside of the Permian and Delaware basins, the primary areas of activity
in the U.S., as commodity prices improve and those basins become
more economic."
As reported during the third quarter of 2017, the Company's
Board of Directors approved an increase in our 2017 capital budget
to $16 million in response to an
attractive opportunity to acquire 19,000 units of multi-component
seismic data acquisition equipment, including 57,000 additional
cable-less recording channels to better serve its valued clients in
both the U.S. and Canada. The
Company believes that it fields the largest fleet of
multi-component equipment in North
America, which continues to be fully deployed. The Company
now owns and operates nearly 250,000 cable-less recording channels
which provide a competitive advantage by enabling it to react and
respond to client demand quickly and efficiently. With nearly
250,000 cable-less recording channels, the Company believes it has
the largest fleet of cable-less channels in North America. The Company's balance sheet
remains strong with $38,596,000 of
cash and short term investments and working capital of $59,297,000. The Company has capital lease
obligations totaling $7,865,000 as of
December 31, 2017.
Jumper concluded, "Project visibility, while remaining
constrained due to uncertain oil and natural gas prices, has
improved. Despite the improved operating environment, we
continue to maintain a conservative approach at Dawson Geophysical.
We remain committed to maintaining a strong balance sheet and
positioning ourselves as the leader of onshore seismic data
acquisition services in North
America. Management has an optimistic outlook for 2018
provided that oil prices maintain or improve on current levels. As
stated earlier, while the Permian and Delaware Basins remain the
primary areas of activity, we are beginning to see a modest uptick
in bid activity and interest levels outside of those regions. In
conclusion, we continue to be well positioned to meet the needs of
our shareholders and clients as we deliver the best in class high
resolution subsurface images that enable our clients to reduce
costs and improve their operating efficiencies."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its year-end and fourth quarter 2017 financial results on
March 1, 2018 at 9:00 a.m. Central / 10:00 a.m. Eastern. Participants can access the
call at 1-888-882-4478 (US/Canada)
and 1-323-701-0226 (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 April 1, 2018 by
dialing 1-844-512-2921 (Toll-Free) and 1-412-317-6671
(Toll/International). The passcode is 6541381. The webcast will be
recorded and available for replay on Dawson's website at
http://www.dawson3d.com until April 1, 2018.
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 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 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 Securities and Exchange
Commission on March 13, 2017. 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
|
(amounts in
thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
39,125
|
|
$
|
30,067
|
|
$
|
157,148
|
|
$
|
133,330
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
31,525
|
|
|
27,458
|
|
|
139,164
|
|
|
121,661
|
General
and administrative
|
|
3,893
|
|
|
3,575
|
|
|
16,189
|
|
|
16,822
|
Depreciation and amortization
|
|
9,485
|
|
|
10,316
|
|
|
39,235
|
|
|
44,283
|
|
|
44,903
|
|
|
41,349
|
|
|
194,588
|
|
|
182,766
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(5,778)
|
|
|
(11,282)
|
|
|
(37,440)
|
|
|
(49,436)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
76
|
|
|
121
|
|
|
306
|
|
|
347
|
Interest
expense
|
|
(97)
|
|
|
(21)
|
|
|
(158)
|
|
|
(260)
|
Other
income
|
|
576
|
|
|
1,279
|
|
|
712
|
|
|
3,108
|
Loss before income
tax
|
|
(5,223)
|
|
|
(9,903)
|
|
|
(36,580)
|
|
|
(46,241)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
679
|
|
|
2,716
|
|
|
5,314
|
|
|
6,449
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(4,544)
|
|
|
(7,187)
|
|
|
(31,266)
|
|
|
(39,792)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized income (loss) on foreign exchange rate translation,
net
|
|
66
|
|
|
(194)
|
|
|
816
|
|
|
228
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(4,478)
|
|
$
|
(7,381)
|
|
$
|
(30,450)
|
|
$
|
(39,564)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share attributable to common stock
|
$
|
(0.21)
|
|
$
|
(0.33)
|
|
$
|
(1.44)
|
|
$
|
(1.84)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share attributable to common stock
|
$
|
(0.21)
|
|
$
|
(0.33)
|
|
$
|
(1.44)
|
|
$
|
(1.84)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
21,733,724
|
|
|
21,636,869
|
|
|
21,694,645
|
|
|
21,611,562
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
21,733,724
|
|
|
21,636,869
|
|
|
21,694,645
|
|
|
21,611,562
|
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED
BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
ASSETS
|
2017
|
|
2016
|
|
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
22,013
|
|
$
|
14,624
|
Short-term investments
|
|
16,583
|
|
|
40,250
|
Accounts
receivable, net of allowance for doubtful accounts of $250
at December 31, 2017 and 2016
|
|
33,138
|
|
|
16,031
|
Current
maturities of notes receivable
|
|
695
|
|
|
—
|
Prepaid
expenses and other current assets
|
|
4,677
|
|
|
4,822
|
Total current
assets
|
|
77,106
|
|
|
75,727
|
|
|
|
|
|
|
Property and
equipment
|
|
307,844
|
|
|
324,950
|
Less
accumulated depreciation
|
|
(221,271)
|
|
|
(214,033)
|
Property and
equipment, net
|
|
86,573
|
|
|
110,917
|
|
|
|
|
|
|
Notes receivable,
net of current maturities
|
|
841
|
|
|
—
|
Intangibles,
net
|
|
494
|
|
|
487
|
Long-term deferred
tax assets, net
|
|
224
|
|
|
535
|
|
|
|
|
|
|
Total
assets
|
$
|
165,238
|
|
$
|
187,666
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
5,933
|
|
$
|
5,617
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,151
|
|
|
885
|
Other
|
|
4,314
|
|
|
2,983
|
Deferred
revenue
|
|
3,699
|
|
|
3,155
|
Current
maturities of notes payable and obligations under capital
leases
|
|
2,712
|
|
|
2,357
|
Total current
liabilities
|
|
17,809
|
|
|
14,997
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and obligations under capital leases, net of current
maturities
|
|
5,153
|
|
|
—
|
Deferred
tax liabilities, net
|
|
874
|
|
|
146
|
Other
accrued liabilities
|
|
150
|
|
|
1,639
|
Total long-term
liabilities
|
|
6,177
|
|
|
1,785
|
|
|
|
|
|
|
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, 21,836,617 and 21,704,851 shares issued, and
21,788,172 and 21,656,406
shares outstanding at
December 31, 2017 and 2016, respectively
|
|
218
|
|
|
217
|
Additional paid-in capital
|
|
143,835
|
|
|
142,998
|
Retained
(deficit) earnings
|
|
(2,021)
|
|
|
29,265
|
Treasury
stock, at cost; 48,445 shares at December 31, 2017 and
2016
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(780)
|
|
|
(1,596)
|
Total stockholders'
equity
|
|
141,252
|
|
|
170,884
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
165,238
|
|
$
|
187,666
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Loss
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net loss
|
$
|
(4,544)
|
|
$
|
(7,187)
|
|
$
|
(31,266)
|
|
$
|
(39,792)
|
Depreciation and
amortization
|
|
9,485
|
|
|
10,316
|
|
|
39,235
|
|
|
44,283
|
Interest expense
(income), net
|
|
21
|
|
|
(100)
|
|
|
(148)
|
|
|
(87)
|
Income tax
benefit
|
|
(679)
|
|
|
(2,716)
|
|
|
(5,314)
|
|
|
(6,449)
|
EBITDA
|
$
|
4,283
|
|
$
|
313
|
|
$
|
2,507
|
|
$
|
(2,045)
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash (Used in) Provided by Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net cash (used in)
provided by operating activities
|
$
|
(3,394)
|
|
$
|
(5,684)
|
|
$
|
(6,703)
|
|
$
|
8,742
|
Changes in working
capital and other items
|
|
7,947
|
|
|
6,205
|
|
|
10,186
|
|
|
(9,908)
|
Noncash adjustments
to net loss
|
|
(270)
|
|
|
(208)
|
|
|
(976)
|
|
|
(879)
|
EBITDA
|
$
|
4,283
|
|
$
|
313
|
|
$
|
2,507
|
|
$
|
(2,045)
|
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SOURCE Dawson Geophysical Company