MIDLAND, Texas, Feb. 27, 2020 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its fourth quarter and full year
ended December 31, 2019.
For the fourth quarter ended December 31, 2019, the Company
reported revenues of $33,557,000, an
increase of approximately 21% compared to $27,670,000 for the quarter ended
December 31, 2018. For the fourth quarter of 2019, the Company
narrowed its net loss to $5,828,000
or $0.25 loss per share of common
stock from a net loss of $11,816,000
or $0.51 loss per share of common
stock for the quarter ended December 31, 2018. The Company
reported negative EBITDA of $788,000
for the quarter ended December 31, 2019 compared to negative
EBITDA of $5,442,000 for the quarter
ended December 31, 2018.
For the year ended December 31, 2019, the Company reported
revenues of $145,773,000, a decrease
of approximately five percent compared to $154,156,000 for the year ended December 31,
2018. For the full year 2019, the Company narrowed its net loss to
$15,213,000 or $0.66 loss per share of common stock from a net
loss of $24,407,000 or $1.07 loss per share of common stock for the year
ended December 31, 2018. The Company reported EBITDA of
$6,261,000, an increase of
approximately 31% for the year ended December 31, 2019
compared to $4,762,000 for the year
ended December 31, 2018.
During the early part of the fourth quarter of 2019, the Company
operated a peak of four crews in the
United States ("U.S."), primarily in the Permian Basin
region, including three large channel count crews. Crew activity in
Canada was minimal during the
fourth quarter of 2019. The fourth quarter and early part of the
first quarter in the U.S. historically has been challenging due to
shorter work days and the holiday season. The winter season in
Canada concludes at the end of the
first quarter of 2020. Upon completion of the Canadian season,
equipment will redeploy to the lower 48 in the second quarter of
2020. As in recent quarters, the majority of the Company's projects
are on behalf of multi-client data companies in the U.S., with some
activity directly for exploration and production companies.
Stephen C. Jumper, President and
Chief Executive Officer, said, "Fourth quarter and year-end results
for 2019 improved compared to 2018. While the Company reported a
decrease in revenues for the year ended December 31, 2019, our net loss was substantially
reduced, and EBITDA increased by more than 31% compared to the year
ended December 31, 2018. Gross
margins for the year ended 2019 improved by approximately 2% as a
result of improved crew efficiencies, increased utilization of
recording channels and energy sources, as well as continuing
success with our cost control initiatives."
Jumper continued, "While fourth quarter 2019 results were below
those of the Company's third quarter, our fourth quarter results
showed significant improvement compared to the fourth quarter of
2018. Management believes that the Company's ability to
successfully field large scale deployments is a contributing factor
to Dawson Geophysical's success as the industry continues to
transition toward a channel and energy source business model and
away from the traditional crew count model. Despite this
improvement, the Company's fourth quarter 2019 results were
negatively impacted by the completion of several large projects
early in the quarter, client delays that have moved the start of
new projects into the first quarter of 2020, and lower utilization
of recording channels and energy source units. Utilization was
suppressed into the early part of the first quarter of
2020."
Capital expenditures for the fourth quarter were $748,000 and totaled $3,590,000 for the twelve months ended
December 31, 2019, primarily for
maintenance capital items. The Company's Board of Directors has
approved an initial capital budget of $5,000,000 for 2020. The Company's balance sheet
remains strong with $33,621,000 of
cash, restricted cash and short term investments and $47,361,000 of working capital as of December 31, 2019. The Company has notes payable
and finance leases of $4,158,000 as
of December 31, 2019.
Jumper concluded, "The oil service markets remain challenging as
the capital spending levels of exploration and production companies
remain somewhat constrained and unpredictable. Utilization
visibility into the second half of 2020 remains unclear. As of the
middle part of the first quarter, the Company is near full
utilization with three large crews operating in the U.S., primarily
the Permian Basin region, and three crews operating in Canada. Based on currently available
information, the Company anticipates the same level of activity
through the end of the first quarter of 2020 with the three large
crews in the U.S. operating well into the second quarter of 2020.
While the seismic market remains challenging, conversations with
our clients, primarily providers of multi-client data libraries,
are positive for continued levels of recent activity through
2020."
Conference Call Information
Dawson Geophysical Company will host a conference call to review
its year-end and fourth quarter 2019 financial results on
February 27, 2020 at
9:00 a.m. Central / 10:00 a.m. Eastern. Participants
can access the call at 1-800-289-0438 (US/Canada) and 1-323-794-2423
(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 27, 2020 by dialing
1-844-512-2921 (Toll-Free) and 1-412-317-6671 (Toll/International).
The passcode is 4495508. The webcast will be recorded and available
for replay on Dawson's website at http://www.dawson3d.com until
March 27, 2020.
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 U.S. Securities and Exchange
Commission on March 6, 2019. 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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
33,557
|
|
$
|
27,670
|
|
$
|
145,773
|
|
$
|
154,156
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
30,814
|
|
|
28,544
|
|
|
123,024
|
|
|
132,937
|
General
and administrative
|
|
3,779
|
|
|
4,226
|
|
|
17,169
|
|
|
16,287
|
Depreciation and amortization
|
|
5,182
|
|
|
6,762
|
|
|
21,826
|
|
|
29,959
|
|
|
39,775
|
|
|
39,532
|
|
|
162,019
|
|
|
179,183
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(6,218)
|
|
|
(11,862)
|
|
|
(16,246)
|
|
|
(25,027)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
103
|
|
|
143
|
|
|
548
|
|
|
400
|
Interest
expense
|
|
(54)
|
|
|
(164)
|
|
|
(435)
|
|
|
(408)
|
Other
income (expense)
|
|
248
|
|
|
(342)
|
|
|
681
|
|
|
(170)
|
Loss before income
tax
|
|
(5,921)
|
|
|
(12,225)
|
|
|
(15,452)
|
|
|
(25,205)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
93
|
|
|
409
|
|
|
239
|
|
|
798
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(5,828)
|
|
|
(11,816)
|
|
|
(15,213)
|
|
|
(24,407)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized income (loss) on foreign exchange rate translation,
net
|
|
112
|
|
|
(808)
|
|
|
392
|
|
|
(1,141)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
$
|
(5,716)
|
|
$
|
(12,624)
|
|
$
|
(14,821)
|
|
$
|
(25,548)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share of common stock
|
$
|
(0.25)
|
|
$
|
(0.51)
|
|
$
|
(0.66)
|
|
$
|
(1.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share of common stock
|
$
|
(0.25)
|
|
$
|
(0.51)
|
|
$
|
(0.66)
|
|
$
|
(1.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding
|
|
23,257,830
|
|
|
22,943,853
|
|
|
23,179,257
|
|
|
22,912,217
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
equivalent common shares outstanding - assuming
dilution
|
|
23,257,830
|
|
|
22,943,853
|
|
|
23,179,257
|
|
|
22,912,217
|
DAWSON GEOPHYSICAL
COMPANY
|
CONSOLIDATED
BALANCE SHEETS
|
(amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
December
31,
|
|
2019
|
|
2018
|
Assets
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
26,271
|
|
$
|
28,729
|
Restricted Cash
|
|
5,000
|
|
|
—
|
Short-term investments
|
|
2,350
|
|
|
10,583
|
Accounts
receivable, net of allowance for doubtful accounts of
$250 at December 31, 2019 and
2018
|
|
|
|
|
|
|
24,356
|
|
|
25,338
|
Current
maturities of notes receivable
|
|
66
|
|
|
64
|
Prepaid
expenses and other current assets
|
|
7,575
|
|
|
12,311
|
Total current
assets
|
|
65,618
|
|
|
77,025
|
|
|
|
|
|
|
Property and
equipment
|
|
284,647
|
|
|
293,948
|
Less
accumulated depreciation
|
|
(231,098)
|
|
|
(222,407)
|
Property and
equipment, net
|
|
53,549
|
|
|
71,541
|
|
|
|
|
|
|
Right-of-use
assets
|
|
6,605
|
|
|
—
|
Notes receivable,
net of current maturities
|
|
1,394
|
|
|
1,447
|
Intangibles,
net
|
|
385
|
|
|
379
|
Long-term deferred
tax assets, net
|
|
57
|
|
|
293
|
|
|
|
|
|
|
Total
assets
|
$
|
127,608
|
|
$
|
150,685
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
3,952
|
|
$
|
5,427
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
1,963
|
|
|
1,034
|
Other
|
|
3,599
|
|
|
3,643
|
Deferred
revenue
|
|
3,481
|
|
|
10,501
|
Current
maturities of notes payable and finance leases
|
|
4,062
|
|
|
6,683
|
Current
maturities of opearating lease liabilities
|
|
1,200
|
|
|
—
|
Total current
liabilities
|
|
18,257
|
|
|
27,288
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable and finance leases, net of current maturities
|
|
96
|
|
|
6,097
|
Operating lease liabilities, net of current maturities
|
|
5,940
|
|
|
—
|
Deferred
tax liabilities, net
|
|
—
|
|
|
134
|
Other
accrued liabilities
|
|
150
|
|
|
150
|
Total long-term
liabilities
|
|
6,186
|
|
|
6,381
|
|
|
|
|
|
|
Operating
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,23,335,855 and
23,018,441 shares issued, and 23,287,410 and 22,969,996
shares outstanding at December 31, 2019
and 2018, respectively
|
|
233
|
|
|
230
|
|
|
|
|
|
|
Additional paid-in capital
|
|
154,235
|
|
|
153,268
|
Retained
deficit
|
|
(49,731)
|
|
|
(34,518)
|
Treasury
stock, at cost; 48,445 shares
|
|
—
|
|
|
—
|
Accumulated other comprehensive loss, net
|
|
(1,572)
|
|
|
(1,964)
|
Total stockholders'
equity
|
|
103,165
|
|
|
117,016
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
127,608
|
|
$
|
150,685
|
Reconciliation of
EBITDA to Net Loss
|
|
(amounts in
thousands)
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(5,828)
|
|
$
|
(11,816)
|
|
$
|
(15,213)
|
|
$
|
(24,407)
|
Depreciation and
amortization
|
|
5,182
|
|
|
6,762
|
|
|
21,826
|
|
|
29,959
|
Interest (income)
expense, net
|
|
(49)
|
|
|
21
|
|
|
(113)
|
|
|
8
|
Income tax
benefit
|
|
(93)
|
|
|
(409)
|
|
|
(239)
|
|
|
(798)
|
EBITDA
|
$
|
(788)
|
|
$
|
(5,442)
|
|
$
|
6,261
|
|
$
|
4,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA to Net Cash Provided by Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands)
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
8,283
|
|
$
|
99
|
|
$
|
9,480
|
|
$
|
12,871
|
Changes in working
capital and other items
|
|
(8,518)
|
|
|
(5,338)
|
|
|
(812)
|
|
|
(6,741)
|
Noncash adjustments
to net loss
|
|
(553)
|
|
|
(203)
|
|
|
(2,407)
|
|
|
(1,368)
|
EBITDA
|
$
|
(788)
|
|
$
|
(5,442)
|
|
$
|
6,261
|
|
$
|
4,762
|
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SOURCE Dawson Geophysical Company