DAWSON GEOPHYSICAL REPORTS THIRD QUARTER 2024 RESULTS
MIDLAND, Texas, Nov. 12, 2024 /PRNewswire/ -- Dawson Geophysical Company (NASDAQ: DWSN) (the "Company") today reported unaudited financial results for its third quarter ended September 30, 2024.
Management Comment
Tony Clark, Dawson's President and CEO, commented, "We began the quarter with one crew operating in the United States, and had two small channel crews operating later in the quarter. We currently have one crew operating and a second large channel crew scheduled to deploy in mid-November, which will utilize the majority of our channels in the United States. Our seasonal operations in Canada resumed in October, and we expect increased revenues and profitability from Canada through the first quarter of 2025.
We are currently testing new single node channels in the field, and we expect to invest in increasing our channel count through the purchase of new equipment in the near future. We believe that investing in new single node channels will improve our revenue and margins due to improved crew efficiency with the lighter weight equipment.
We expect to finish the year strong and believe that we are positioned to capitalize on the opportunities in our industry."
Third Quarter and Year-to-Date Results
For the third quarter ended September 30, 2024, the Company reported revenues of $14.4 million, a decrease of 37% compared to $23 million for the comparable quarter ended September 30, 2023. Revenue included reimbursable revenue of $9.8 million and $13.2 million for the quarters ended September 30, 2024, and September 30, 2023, respectively.
For the third quarter ended September 30, 2024, we incurred a net loss of $5.6 million or $0.18 per common share compared to a net loss of $5.2 million or $0.20 per common share for the quarter ended September 30, 2023. During the quarter, we generated negative EBITDA of $4.3 million in the quarter ended September 30, 2024, compared to negative EBITDA of $3.4 million in the quarter ended September 30, 2023.
For the nine months ended September 30, 2024, we incurred a net loss of $3.3 million or $0.11 per common share compared to a net loss of $10 million or $0.40 per common share, for the nine months ended September 30, 2023.
Operations Update
Our Board of Directors approved an increase in our capital budget to $6 million for the potential purchase of new single node channels. The single node channels are expected to increase our revenues through more competitive bids for our customers, and increase our margins due to improved crew efficiencies. As we look to modernize our equipment for the current market, we are continuing to evaluate all of our assets and are looking for opportunities to divest under-utilized assets to improve our return on capital.
Liquidity
For the nine months ended September 30, 2024, we generated $3.6 million of cash from our operations, and as of September 30, 2024, the company had cash of $7 million and positive working capital of $4.4 million.
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 for its clients, which range from major oil and gas companies to independent oil and gas operators, as well as providers of multi-client data libraries. Dawson also provides Carbon Capture Utilization and Storage ("CCUS") seismic monitoring, which continues to grow and be an integral part of its business. Dawson has acquired several CCUS base surveys and plan to acquire more in the future.
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, depreciation and amortization expense and severance expenses. 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. Forward-looking statements generally relate to future events or the Company's future financial or operating performance and may be identified by words such as "may," "should," "expect," "intend," "will," "estimate," "anticipate," "believe," "predict," or similar words. 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 factors include, but are not limited to, the Company's status as a controlled public company, which exempts the Company from certain corporate governance requirements; the limited market for the Company's shares, which could result in the delisting of the Company's shares from Nasdaq and the Company no longer being required to make filings with the U.S. Securities and Exchange Commission (the "SEC"); the impact of general economic, industry, market or political conditions; dependence upon energy industry spending; changes in exploration and production spending by our customers and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of our customers, particularly during extended periods of low prices for crude oil and natural gas; the volatility of oil and natural gas prices; changes in economic conditions; the severity and duration of the COVID-19 pandemic, related economic repercussions and the resulting impact on demand for oil and gas; surplus in the supply of oil and the ability of the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+ to agree on and comply with supply limitations; the duration and magnitude of the unprecedented disruption in the oil and gas industry currently resulting from the impact of the foregoing factors, which is negatively impacting our business; 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 challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees and remote work arrangements; 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; disruptions in the global economy, including export controls and financial and economic sanctions imposed on certain industry sectors and parties as a result of the developments in Ukraine and related activities, and whether or not a future transaction or other action occurs that causes the Company to be delisted from Nasdaq and no longer be required to make filings with the SEC. 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 SEC on April 1, 2024. 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 INCOME (LOSS)
(unaudited and amounts in thousands, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Operating revenues:
Fee Revenue $
4,663 $
9,735 $
39,727 $
42,889
Reimbursable Revenue 9,758 13,226 18,790 29,699
14,421 22,961 58,517 72,588
Operating costs:
Operating expenses
Fee operating expenses 6,537 10,918 32,532 38,133
Reimbursable operating expenses 9,758 13,226 18,790 29,699
16,295 24,144 51,322 67,832
General and administrative 2,529 2,495 6,611 8,971
Severance expense 86
Depreciation and amortization 1,388 2,014 4,383 6,827
20,212 28,653 62,402 83,630
Loss from operations (5,791) (5,692) (3,885) (11,042)
Other income (expense):
Interest income 72 192 290 436
Interest expense (35) (22) (120) (53)
Other income (expense), net 102 327 434 522
Loss before income tax (5,652) (5,195) (3,281) (10,137)
Income tax benefit (expense) 35 (3) (36) 96
Net loss (5,617) (5,198) (3,317) (10,041)
Other comprehensive income (loss):
Net unrealized income (loss) on foreign exchange rate 29 (218) (241) 25
translation
Comprehensive loss $
(5,588) $
(5,416) $
(3,558) $
(10,016)
Basic loss per share of common stock $
(0.18) $
(0.20) $
(0.11) $
(0.40)
Diluted loss per share of common stock $
(0.18) $
(0.20) $
(0.11) $
(0.40)
Weighted average equivalent common shares outstanding 30,906,777 26,137,648 30,845,076 25,383,757
Weighted average equivalent common shares outstanding 30,906,777 26,137,648 30,845,076 25,383,757
- assuming dilution
DAWSON GEOPHYSICAL COMPANY
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
September 30, December 31,
2024 2023
Assets
Current assets:
Cash and cash equivalents $
6,980 $
10,772
Restricted cash 5,000
Short-term investments 265
Accounts receivable, net 2,788 12,735
Prepaid expenses and other current assets 3,411 8,654
Total current assets 13,179 37,426
Property and equipment, net 14,284 16,508
Right-of-use assets 2,348 3,208
Intangibles, net 370 377
Total assets $
30,181 $
57,519
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $
3,424 $
3,883
Accrued liabilities:
Payroll costs and other taxes 1,954 3,415
Other 992 709
Deferred revenue 691 11,829
Current maturities of notes payable and finance leases 704 1,380
Current maturities of operating lease liabilities 1,005 1,202
Total current liabilities 8,770 22,418
Long-term liabilities:
Notes payable and finance leases, net of current maturities 1,531 1,289
Operating lease liabilities, net of current maturities 1,621 2,363
Deferred tax liabilities, net 15 15
Total long-term liabilities 3,167 3,667
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,
30,906,777 and 30,812,329 shares issued and outstanding at September 30, 2024
and December 31, 2023, respectively 309 308
Additional paid-in capital 156,905 156,678
Accumulated deficit (136,817) (123,640)
Accumulated other comprehensive loss, net (2,153) (1,912)
Total stockholders' equity 18,244 31,434
Total liabilities and stockholders' equity $
30,181 $
57,519
Reconciliation of Adjusted EBITDA to Net (Loss) Income
(amounts in thousands)
Three Months Ended September 30,
2024 US 2024 CA 2024 Consol. 2023 US 2023 CA 2023 Consol.
Net loss $
(4,442) $
(1,175) $
(5,617) $
(3,813) $
(1,385) $
(5,198)
Depreciation and amortization 1,144 244 1,388 1,527 487 2,014
Interest income, net (34) (3) (37) (58) (112) (170)
Income tax (benefit) expense (35) (35) 3 3
EBITDA (3,367) (934) (4,301) (2,341) (1,010) (3,351)
Severance expense
Adjusted EBITDA $
(3,367) $
(934) $
(4,301) $
(2,341) $
(1,010) $
(3,351)
Nine Months Ended September 30,
2024 US 2024 CA 2024 Consol. 2023 US 2023 CA 2023 Consol.
Net (loss) income $
(4,743) $
1,426 $
(3,317) $
(9,067) $
(974) $
(10,041)
Depreciation and amortization 3,611 772 4,383 5,173 1,654 6,827
Interest income, net (157) (13) (170) (214) (169) (383)
Income tax expense (benefit) 36 36 (96) (96)
EBITDA (1,253) 2,185 932 (4,204) 511 (3,693)
Severance expense 86 86
Adjusted EBITDA $
(1,167) $
2,185 $
1,018 $
(4,204) $
511 $
(3,693)
Reconciliation of Adjusted EBITDA to Net Cash (Used in) Provided By Operating Activities
(amounts in thousands)
Three Months Ended September 30,
2024 US 2024 CA 2024 Consol. 2023 US 2023 CA 2023 Consol.
Net cash used in operating activities $
(3,331) $
(900) $
(4,231) $
(2,849) $
(440) $
(3,289)
Changes in working capital and other items 233 17 250 833 (521) 312
Non-cash adjustments to net loss (269) (51) (320) (325) (49) (374)
EBITDA (3,367) (934) (4,301) (2,341) (1,010) (3,351)
Severance expense
Adjusted EBITDA $
(3,367) $
(934) $
(4,301) $
(2,341) $
(1,010) $
(3,351)
Nine Months Ended September 30,
2024 US 2024 CA 2024 Consol. 2023 US 2023 CA 2023 Consol.
Net cash (used in) provided by operating activities $
(33) $
3,592 $
3,559 $
(1,139) $
3,601 $
2,462
Changes in working capital and other items (217) (1,255) (1,472) (2,301) (2,959) (5,260)
Non-cash adjustments to net (loss) income (1,003) (152) (1,155) (764) (131) (895)
EBITDA (1,253) 2,185 932 (4,204) 511 (3,693)
Severance expense 86 86
Adjusted EBITDA $
(1,167) $
2,185 $
1,018 $
(4,204) $
511 $
(3,693)
Statements of Operations by operating segment for the three and nine months ended September 30, 2024, and 2023.
Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024
USA Operations Canada Operations Consolidated USA Operations Canada Operations Consolidated
Operating revenues
Fee revenue $
4,652 $
11 $
4,663 $
31,260 $
8,467 $
39,727
Reimbursable revenue 9,758 9,758 18,753 37 18,790
14,410 11 14,421 50,013 8,504 58,517
Operating costs:
Fee operating expenses 5,726 811 6,537 26,751 5,781 32,532
Reimbursable operating expenses 9,758 9,758 18,753 37 18,790
Operating expenses 15,484 811 16,295 45,504 5,818 51,322
General and administrative 2,393 136 2,529 6,133 478 6,611
Severance expense 86 86
Depreciation and amortization 1,144 244 1,388 3,611 772 4,383
19,021 1,191 20,212 55,334 7,068 62,402
(Loss) income from operations (4,611) (1,180) (5,791) (5,321) 1,436 (3,885)
Other income (expense):
Interest income 58 14 72 246 44 290
Interest expense (24) (11) (35) (89) (31) (120)
Other income (expense), net 100 2 102 457 (23) 434
(Loss) income before income tax (4,477) (1,175) (5,652) (4,707) 1,426 (3,281)
Income tax benefit (expense) 35 35 (36) (36)
Net (loss) income (4,442) (1,175) (5,617) (4,743) 1,426 (3,317)
Other comprehensive income (loss):
Net unrealized income (loss) on 29 29 (241) (241)
foreign exchange rate translation
Comprehensive (loss) income $
(4,442) $
(1,146) $
(5,588) $
(4,743) $
1,185 $
(3,558)
Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023
USA Operations Canada Operations Consolidated USA Operations Canada Operations Consolidated
Operating revenues
Fee revenue $
9,724 $
11 $
9,735 $
32,767 $
10,122 $
42,889
Reimbursable revenue 13,223 3 13,226 29,092 607 29,699
22,947 14 22,961 61,859 10,729 72,588
Operating costs:
Fee operating expenses 10,066 852 10,918 29,353 8,780 38,133
Reimbursable operating expenses 13,223 3 13,226 29,092 607 29,699
Operating expenses 23,289 855 24,144 58,445 9,387 67,832
General and administrative 2,315 180 2,495 8,084 887 8,971
Severance expense
Depreciation and amortization 1,527 487 2,014 5,173 1,654 6,827
27,131 1,522 28,653 71,702 11,928 83,630
Loss from operations (4,184) (1,508) (5,692) (9,843) (1,199) (11,042)
Other income (expense):
Interest income 72 120 192 250 186 436
Interest expense (14) (8) (22) (36) (17) (53)
Other income (expense), net 316 11 327 466 56 522
Loss before income tax (3,810) (1,385) (5,195) (9,163) (974) (10,137)
Income tax (expense) benefit (3) (3) 96 96
Net loss (3,813) (1,385) (5,198) (9,067) (974) (10,041)
Other comprehensive (loss) income:
Net unrealized (loss) income on (218) (218) 25 25
foreign exchange rate translation
Comprehensive loss $
(3,813) $
(1,603) $
(5,416) $
(9,067) $
(949) $
(10,016)
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SOURCE Dawson Geophysical Company
