MIDLAND, Texas, Aug. 2, 2018 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) (the "Company") today reported unaudited
financial results for its second quarter ended June 30, 2018.
For the quarter ended June 30,
2018, the Company reported revenues of $36,158,000, an increase of approximately 14%
compared to $31,640,000 for the
quarter ended June 30, 2017.
For the second quarter of 2018, the Company reported a net loss of
$5,711,000 or $0.25 loss per common share compared to a net
loss of $14,928,000 or $0.66 loss per common share for the second
quarter of 2017. The Company reported EBITDA of $1,564,000 for the quarter ended June 30, 2018 compared to negative EBITDA of
$5,521,000 for the quarter ended
June 30, 2017.
For the six months ended June 30,
2018, the Company reported revenues of $86,038,000, an increase of approximately 16%
compared to $74,006,000 for the six
months ended June 30, 2017. For the
first half of 2018, the Company reported a net loss of $7,420,000 or $0.32
loss per common share compared to a net loss of $24,080,000 or $1.06 loss per common share for the first half of
2017. The Company reported EBITDA of $8,553,000 for the six months ended June 30, 2018 compared to negative EBITDA of
$7,378,000 for the six months ended
June 30, 2017. Effective
January 1, 2018, the Company adopted
the requirements of Accounting Standards Update No. 2014-09,
Revenue from Contracts with Customers "Topic 606", and all amounts
set forth in this earnings release for periods prior to
January 1, 2018 have been adjusted to
comply with the new standard. All comparative financial statement
presentation has been retroactively adjusted for the 5% stock
dividend declared and paid in the second quarter of 2018.
During the second quarter of 2018, the Company operated four to
seven crews in the United States
("U.S.") and the equivalent of one crew in Canada for approximately half of the quarter.
The Company is currently operating five crews in the U.S. and no
crews in Canada. Based on
currently available information, the Company anticipates operating
up to five crews in the U.S. during the third quarter and up to
five crews on a combined basis in the U.S. and Canada during the fourth quarter of 2018.
Early indications are leading to an improved outlook for the
upcoming October to April winter season in Canada.
Stephen C. Jumper, President and
Chief Executive Officer, said, "Increased crew productivity and
utilization continued to drive improved financial results as we
generated a fourteen percent increase in revenue and over
$7,000,000 improvement in EBITDA for
the quarter ended June 30, 2018
compared to the quarter ended June 30,
2017, and a sixteen percent increase in revenue and
nearly $16,000,000 improvement in
EBITDA for the six months ended June 30,
2018 compared to the six months ended June 30, 2017. At the same time, we
maintained our focus on activities designed to reduce costs and
generate increased efficiencies. While our second quarter and
trailing twelve months' financial results represent a strong
improvement from comparable prior periods, bid activity and crew
utilization slowed significantly during the second quarter of
2018. As we enter into the second month of the third quarter,
we are experiencing a gradual improvement in bid activity,
primarily outside of the Permian and Delaware Basins."
Jumper continued, "As we experienced during the second half 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. While our experience, highly qualified personnel
and robust equipment inventory favorably position us for these
projects, 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. During the second quarter,
Permian and Delaware activity
declined slightly as we are nearing completion of several projects
in this highly concentrated area of activity. Project
visibility remains constrained due to the uncertain sustainability
of the recent rise in oil prices and overall activity, particularly
in the Permian and Delaware
basins."
The Company's Board of Directors has approved a 2018 capital
budget in the amount of $10 million.
Capital expenditures for the second quarter were $1,133,000 and total $5,568,000 for the first six months 2018,
primarily for replacement vehicles and seismic data acquisition
equipment. The Company's balance sheet remains strong with
$44,338,000 of cash and short term
investments and $60,827,000 of
working capital as of June 30, 2018.
The Company has notes payable and capital lease obligations
totaling $6,701,000 as of
June 30, 2018.
Jumper concluded, "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., if commodity prices
continue to improve and those basins become more economic, but that
activity has yet to materialize in a meaningful way. 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 a guarded outlook for the remainder of 2018, but is
encouraged by the recent increase in bid activity for 2019. 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 second quarter 2018 financial results on August 2, 2018 at 9 a.m. CT.
Participants can access the call at 1-888-394-8218 (US) and
1-323-701-0225 (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 September 2, 2018 by
dialing 1-844-512-2921 (Toll-Free) and 1-412-317-6671
(Toll/International). The passcode is 2273078. The webcast will be
recorded and available for replay on Dawson's website until
September 2, 2018.
About Dawson
Dawson Geophysical Company is a leading provider of North
American onshore seismic data acquisition services with operations
throughout the continental U.S. 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
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 U.S. Securities and Exchange
Commission on March 9, 2018. 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 and
amounts in thousands, except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
36,158
|
|
$
|
31,640
|
|
$
|
86,038
|
|
$
|
74,006
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
31,215
|
|
|
32,798
|
|
|
69,974
|
|
|
72,772
|
General
and administrative
|
|
3,842
|
|
|
4,496
|
|
|
7,925
|
|
|
8,851
|
Depreciation and amortization
|
|
7,392
|
|
|
9,850
|
|
|
16,070
|
|
|
20,026
|
|
|
42,449
|
|
|
47,144
|
|
|
93,969
|
|
|
101,649
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(6,291)
|
|
|
(15,504)
|
|
|
(7,931)
|
|
|
(27,643)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
73
|
|
|
63
|
|
|
110
|
|
|
143
|
Interest
expense
|
|
(82)
|
|
|
(14)
|
|
|
(170)
|
|
|
(36)
|
Other
income
|
|
463
|
|
|
133
|
|
|
414
|
|
|
239
|
Loss before income
tax
|
|
(5,837)
|
|
|
(15,322)
|
|
|
(7,577)
|
|
|
(27,297)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
126
|
|
|
394
|
|
|
157
|
|
|
3,217
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(5,711)
|
|
|
(14,928)
|
|
|
(7,420)
|
|
|
(24,080)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized (loss) income on foreign exchange rate translation,
net
|
|
(220)
|
|
|
258
|
|
|
(549)
|
|
|
355
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(5,931)
|
|
$
|
(14,670)
|
|
$
|
(7,969)
|
|
$
|
(23,725)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share of common stock
|
$
|
(0.25)
|
|
$
|
(0.66)
|
|
$
|
(0.32)
|
|
$
|
(1.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share of common stock
|
$
|
(0.25)
|
|
$
|
(0.66)
|
|
$
|
(0.32)
|
|
$
|
(1.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
22,897,686
|
|
|
22,766,894
|
|
|
22,888,746
|
|
|
22,754,772
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
22,897,686
|
|
|
22,766,894
|
|
|
22,888,746
|
|
|
22,754,772
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited and
amounts in thousands, except share data)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2018
|
|
2017
|
Assets
|
|
|
|
(as
adjusted)
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
26,755
|
|
$
|
22,013
|
Short-term investments
|
|
17,583
|
|
|
16,583
|
Accounts
receivable, net
|
|
27,895
|
|
|
33,156
|
Current
maturities of notes receivable
|
|
63
|
|
|
695
|
Prepaid
expenses and other current assets
|
|
11,816
|
|
|
7,340
|
Total current
assets
|
|
84,112
|
|
|
79,787
|
|
|
|
|
|
|
Property and
equipment, net
|
|
75,469
|
|
|
86,573
|
Notes receivable,
net of current maturities
|
|
1,473
|
|
|
841
|
Intangibles,
net
|
|
433
|
|
|
494
|
Long-term deferred
tax assets, net
|
|
224
|
|
|
224
|
|
|
|
|
|
|
Total
assets
|
$
|
161,711
|
|
$
|
167,919
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
7,629
|
|
$
|
5,933
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,109
|
|
|
1,151
|
Other
|
|
4,479
|
|
|
4,314
|
Deferred
revenue
|
|
7,103
|
|
|
6,314
|
Current
maturities of notes payable and obligations under capital
leases
|
|
2,965
|
|
|
2,712
|
Total current
liabilities
|
|
23,285
|
|
|
20,424
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and obligations under capital leases, net of current
maturities
|
|
3,736
|
|
|
5,153
|
Deferred
tax liabilities, net
|
|
666
|
|
|
874
|
Other
accrued liabilities
|
|
150
|
|
|
150
|
Total long-term
liabilities
|
|
4,552
|
|
|
6,177
|
|
|
|
|
|
|
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, 22,964,444 and
22,926,805 shares issued, and 22,915,999 and 22,878,360
shares outstanding at June 30, 2018 and
December 31, 2017, respectively
|
|
229
|
|
|
229
|
Additional paid-in capital
|
|
152,548
|
|
|
151,881
|
Retained
deficit
|
|
(17,531)
|
|
|
(10,012)
|
Treasury
stock, at cost; 48,445 shares at June 30, 2018 and December 31,
2017
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(1,372)
|
|
|
(780)
|
Total stockholders'
equity
|
|
133,874
|
|
|
141,318
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
161,711
|
|
$
|
167,919
|
Reconciliation of
EBITDA to Net Loss
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(5,711)
|
|
$
|
(14,928)
|
|
$
|
(7,420)
|
|
$
|
(24,080)
|
Depreciation and
amortization
|
|
7,392
|
|
|
9,850
|
|
|
16,070
|
|
|
20,026
|
Interest expense
(income), net
|
|
9
|
|
|
(49)
|
|
|
60
|
|
|
(107)
|
Income tax
benefit
|
|
(126)
|
|
|
(394)
|
|
|
(157)
|
|
|
(3,217)
|
EBITDA
|
$
|
1,564
|
|
$
|
(5,521)
|
|
$
|
8,553
|
|
$
|
(7,378)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided by (Used in) Operating
Activities
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
(as
adjusted)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
$
|
12,084
|
|
$
|
4,873
|
|
$
|
12,838
|
|
$
|
(1,876)
|
Changes in working
capital and other items
|
|
(10,190)
|
|
|
(10,193)
|
|
|
(3,720)
|
|
|
(5,043)
|
Noncash adjustments
to net loss
|
|
(330)
|
|
|
(201)
|
|
|
(565)
|
|
|
(459)
|
EBITDA
|
$
|
1,564
|
|
$
|
(5,521)
|
|
$
|
8,553
|
|
$
|
(7,378)
|
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SOURCE Dawson Geophysical Company