MIDLAND, Texas, Aug. 3, 2017 /PRNewswire/ -- Dawson Geophysical
Company (NASDAQ: DWSN) (the "Company") today reported unaudited
financial results for its second quarter ended June 30, 2017.
For the quarter ended June 30,
2017, the Company reported revenues of $30,469,000 as compared to $28,086,000 for the quarter ended June 30, 2016. For the second quarter of 2017,
the Company reported a net loss of $14,809,000 or $0.68 loss per share attributable to common stock
as compared to a net loss of $11,589,000 or $0.54 loss per share attributable to common stock
for the second quarter of 2016. The Company reported negative
EBITDA of $5,402,000 for the quarter
ended June 30, 2017 as compared to
negative EBITDA of $1,464,000 for the
quarter ended June 30, 2016.
During the second quarter of 2017, the Company operated six
crews in the United States
("U.S.") in June while effective crew count had been as low as two
in April. The Company operated one crew in Canada for a short period of time during the
quarter. The low effective utilization in April was primarily due
to weather delays and project readiness issues. As of the end of
the second quarter, we were operating six crews in the U.S. and one
in Canada. We are currently
operating eight crews in the U.S. and anticipate operating those
eight crews through the end of the third quarter. Bid activity in
North America has shown
improvement despite the recent pull back in oil prices. During the
quarter, the Company completed a fairly large surface micro-seismic
project, the first in over a year, and we have been awarded a
second micro-seismic project to be completed in the late third or
early fourth quarter. The Company continues to operate its
multi-component recording crew in the U.S. on a regular basis.
Visibility into 2018, however, remains uncertain.
Stephen C. Jumper, President and
Chief Executive Officer, said, "We are disappointed with our second
quarter results which were impacted by low utilization of our data
acquisition crews. Since the beginning of the year, oil prices have
dropped from approximately $57 per
barrel for West Texas Intermediate to below $43 per barrel in the last month. Analyst models
forecast oil prices between $40 per
barrel and $60 per barrel for West
Texas Intermediate leaving upcoming seismic project timing
uncertain. According to the Department of Energy and analyst
estimates, there are more than 5,000 drilled but uncompleted wells
in inventory in the U.S., the majority of which are in the
Permian/Delaware and Eagle Ford
basins. This concentration of uncompleted wells adds some pressure
to 3D seismic acquisition activity in these areas. However,
completion of these existing wells could improve demand for
micro-seismic activity. U.S. active rig count has more than doubled
in the last year, which also helps drive demand for our services,
but remains below peak levels of early 2015. It is anticipated that
the rig count will remain at or near current levels for the
foreseeable future despite the recent pull back in oil
prices."
Jumper continued, "Seismic data continues to play an
increasingly important role in unconventional drilling programs.
Our clients find value in the high resolution images our seismic
technology provides. The difficulty in the current market
environment lies not in the need for seismic data, but rather in
the highly concentrated areas of primary drilling activity in the
Permian and Delaware basins of
West Texas as stated in our first
quarter earnings release. The majority of the seismic activity in
these concentrated areas is currently 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 remains strong
and affects project timing as seismic programs are put together
with multiple participants, a situation which is beyond our
control."
The Company anticipates capital expenditures for 2017 of less
than the $10 million capital budget
approved by the board of directors. The Company had capital
expenditures of $2,162,000 during the
second quarter and $6,129,000 for
2017 year to date. Cash and short-term investments are $44,179,000 with working capital of $51,255,000 as of June 30,
2017. The Company plans to retire its final remaining
equipment note payable on or around September 30, 2017.
Jumper continued, "Despite more than doubling in rig count in
the last year, the Philadelphia Oil Service Index has lost 40
percent of its value over that time, and in the last six months,
oil prices have dropped approximately 25 percent. These factors
continue to put pressure on both oil service and Exploration and
Production company stocks. Given the market uncertainty, our
strategy remains to reduce costs, right size our company, retain
necessary technology and personnel to respond to any uptick in
demand, and protect our balance sheet. Our primary near term
objective is to reduce and eliminate cash burn from the balance
sheet while remaining a top-tier provider of seismic services with
the ability to respond quickly to changes in market conditions. We
anticipate a continued reduced capital spending budget in 2018 as
our equipment remains state of the art."
The Company had an employee count of 640 at June 30, 2017. During the second quarter, the
Company underwent a small internal reorganization with a reduction
in support service capacity as well as certain management
changes.
Jumper concluded, "As I have stated in prior comments, while
crew utilization is improving and bid activity is strengthening, we
continue to operate in a difficult market environment. That said,
we have recently been awarded some significant new projects. We
believe oil and gas companies are beginning to put capital back to
work as the oil and natural gas markets reach a supply and demand
rebalance. As oil and gas companies seek to maximize their
production economics and efficiencies, seismic technology will play
an important role, as it has historically, with increasing reliance
on improved high resolution subsurface images. The Dawson brand and
our balance sheet remain strong, our technology is state of the
art, and our personnel are among the most well respected in the
industry. We continue to be well positioned to meet the needs of
our clients and shareholders as conditions improve."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its second quarter 2017 financial results on August 3, 2017 at 9 a.m. CT.
Participants can access the call at 1-888-203-7667 (U.S.) and
1-719-325-2297 (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 3, 2017 by
dialing 1-844-512-2921 (Toll-Free) and 1-412-317-6671
(Toll/International). The passcode is 8644465. The webcast will be
recorded and available for replay on Dawson's website until
September 3, 2017.
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 and to net cash provided by (used in)
operating activities is presented in the tables 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 U.S. 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
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
(amounts in
thousands, except share and per share data)
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
30,469
|
|
$
|
28,086
|
|
$
|
72,396
|
|
$
|
75,141
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
31,508
|
|
|
25,990
|
|
|
71,045
|
|
|
66,071
|
General
and administrative
|
|
4,496
|
|
|
4,031
|
|
|
8,851
|
|
|
9,591
|
Depreciation and amortization
|
|
9,850
|
|
|
11,331
|
|
|
20,026
|
|
|
23,376
|
|
|
45,854
|
|
|
41,352
|
|
|
99,922
|
|
|
99,038
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(15,385)
|
|
|
(13,266)
|
|
|
(27,526)
|
|
|
(23,897)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
63
|
|
|
70
|
|
|
143
|
|
|
134
|
Interest
expense
|
|
(14)
|
|
|
(72)
|
|
|
(36)
|
|
|
(168)
|
Other
income
|
|
133
|
|
|
471
|
|
|
239
|
|
|
1,566
|
Loss before income
tax
|
|
(15,203)
|
|
|
(12,797)
|
|
|
(27,180)
|
|
|
(22,365)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
394
|
|
|
1,208
|
|
|
3,217
|
|
|
2,176
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(14,809)
|
|
|
(11,589)
|
|
|
(23,963)
|
|
|
(20,189)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized income (loss) on foreign exchange rate translation,
net
|
|
258
|
|
|
(249)
|
|
|
355
|
|
|
470
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(14,551)
|
|
$
|
(11,838)
|
|
$
|
(23,608)
|
|
$
|
(19,719)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share
attributable to common stock
|
$
|
(0.68)
|
|
$
|
(0.54)
|
|
$
|
(1.11)
|
|
$
|
(0.93)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share attributable to common stock
|
$
|
(0.68)
|
|
$
|
(0.54)
|
|
$
|
(1.11)
|
|
$
|
(0.93)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
21,682,757
|
|
|
21,605,262
|
|
|
21,671,212
|
|
|
21,593,317
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming dilution
|
|
21,682,757
|
|
|
21,605,262
|
|
|
21,671,212
|
|
|
21,593,317
|
DAWSON GEOPHYSICAL
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2017
|
|
2016
|
ASSETS
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
35,179
|
|
$
|
14,624
|
Short-term investments
|
|
9,000
|
|
|
40,250
|
Accounts
receivable, net
|
|
18,943
|
|
|
16,031
|
Current
maturities of notes receivable
|
|
523
|
|
|
—
|
Prepaid
expenses and other current assets
|
|
7,568
|
|
|
4,822
|
Total current
assets
|
|
71,213
|
|
|
75,727
|
|
|
|
|
|
|
Property and
equipment, net
|
|
96,473
|
|
|
110,917
|
|
|
|
|
|
|
Notes receivable,
net of current maturities
|
|
1,109
|
|
|
—
|
|
|
|
|
|
|
Intangibles
|
|
505
|
|
|
487
|
|
|
|
|
|
|
Long-term deferred
tax assets, net
|
|
—
|
|
|
535
|
|
|
|
|
|
|
Total
assets
|
$
|
169,300
|
|
$
|
187,666
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
5,552
|
|
$
|
5,617
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,343
|
|
|
885
|
Other
|
|
3,943
|
|
|
2,983
|
Deferred
revenue
|
|
8,316
|
|
|
3,155
|
Current
maturities of notes payable and obligations under capital
leases
|
|
804
|
|
|
2,357
|
Total current
liabilities
|
|
19,958
|
|
|
14,997
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Deferred
tax liabilities, net
|
|
1,491
|
|
|
146
|
Other
accrued liabilities
|
|
174
|
|
|
1,639
|
Total long-term
liabilities
|
|
1,665
|
|
|
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, 21,750,107 and
21,704,851 shares issued, and 21,701,662 and 21,656,406
shares outstanding at June 30,
2017 and December 31, 2016, respectively
|
|
217
|
|
|
217
|
Additional paid-in capital
|
|
143,419
|
|
|
142,998
|
Retained
earnings
|
|
5,282
|
|
|
29,265
|
Treasury
stock, at cost; 48,445 shares at June 30, 2017 and December 31,
2016
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(1,241)
|
|
|
(1,596)
|
Total stockholders'
equity
|
|
147,677
|
|
|
170,884
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
169,300
|
|
$
|
187,666
|
Reconciliation of
EBITDA to Net loss
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
Three Months Ended
June 30,
|
|
Six Months Ended June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net loss
|
$
|
(14,809)
|
|
$
|
(11,589)
|
|
$
|
(23,963)
|
|
$
|
(20,189)
|
Depreciation and
amortization
|
|
9,850
|
|
|
11,331
|
|
|
20,026
|
|
|
23,376
|
Interest (income)
expense, net
|
|
(49)
|
|
|
2
|
|
|
(107)
|
|
|
34
|
Income tax
benefit
|
|
(394)
|
|
|
(1,208)
|
|
|
(3,217)
|
|
|
(2,176)
|
EBITDA
|
$
|
(5,402)
|
|
$
|
(1,464)
|
|
$
|
(7,261)
|
|
$
|
1,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net cash provided by
(used in) operating activities
|
$
|
4,873
|
|
$
|
7,461
|
|
$
|
(1,876)
|
|
$
|
16,224
|
Changes in working
capital and other items
|
|
(10,074)
|
|
|
(8,689)
|
|
|
(4,926)
|
|
|
(14,746)
|
Noncash adjustments
to net loss
|
|
(201)
|
|
|
(236)
|
|
|
(459)
|
|
|
(433)
|
EBITDA
|
$
|
(5,402)
|
|
$
|
(1,464)
|
|
$
|
(7,261)
|
|
$
|
1,045
|
View original
content:http://www.prnewswire.com/news-releases/dawson-geophysical-reports-second-quarter-2017-results-300498846.html
SOURCE Dawson Geophysical Company