MIDLAND,
Texas, April 1, 2024 /PRNewswire/ -- Dawson
Geophysical Company (NASDAQ: DWSN) (the "Company") today reported
unaudited financial results for its fourth quarter and fiscal year
ended December 31, 2023.
Management Comment
Tony Clark, Dawson's President
and CEO, commented, "I appreciate the opportunity presented to me,
and our team, to bring Dawson back to profitability. The current
management team is focused on improving margins on our seismic
acquisition services, reducing general and administrative expenses,
and improving operating cash flows. We have adjusted our bidding
process to better account for our cost structure, implemented
measures to improve tracking of revenues and expenses to identify
opportunities to further improve our margins, and have enacted
other cost reduction initiatives. We believe these initiatives will
improve our margins and operating cash flows going forward. We
improved our operating results in the fourth quarter, and expect
that to continue into 2024.
Special Cash Dividend
The Company's Board of Directors announced today that they have
declared a special cash dividend on the company's common stock of
$0.32 per share, payable on
May 6, 2024, to stockholders of
record as of the close of business on April
22, 2024. The aggregate payment will be approximately
$9.9 million.
Fourth Quarter and Year-End Results
For the fourth quarter ended December 31, 2023, the Company
reported revenues of $24.3 million,
an increase of 39% compared to $17.5
million for the comparable quarter ended December 31,
2022. Revenue included reimbursable revenue of $5.7 million and $3.3
million for the quarters ended December 31, 2023, and December 31, 2022, respectively. Gross
margin1 for the quarter ended December 31, 2023,
was 20% compared to 6% for the comparable quarter ended
December 31, 2022.
We generated a net loss of $2.1
million or $0.07 per common
share, which included severance expenses of $2.2 million related to the change in our
management team. The Company generated positive EBITDA of
$1.7 million in the quarter ended
December 31, 2023, compared to EBITDA
of $0.3 million in the quarter ended
December 31, 2022.
For the year ended December 31, 2023, the Company reported
revenues of $96.8 million, an
increase of 88% compared to $51.6
million for the year ended December 31, 2022. Revenue
included reimbursable revenue of $35.4
million and $5.6 million for
the years ended December 31, 2023,
and December 31, 2022, respectively.
Gross margin1 for the year ended December 31, 2023,
was 14% compared to 11% for the comparable year ended
December 31, 2022.
For the year ended December 31, 2023, we generated a net
loss of $12.1 million or $0.45 per common share, compared to a net loss of
$18.6 million or $0.75 per common share in the prior year. The
Company generated an EBITDA loss of $2
million in the year ended December
31, 2023, compared to an EBITDA loss of $7 million in the year ended December 31, 2022.
Operations Update
The Company had two crews operating throughout the fourth
quarter in the United States and
resumed our seasonal operations in Canada. High crew utilization in the fourth
quarter resulted in improved margins and profitability. In the
first quarter, we continued to keep our crews highly utilized in
the US and Canada. We are working
to keep our crews highly utilized throughout the remainder of the
year.
Capital Budget and Liquidity
The Company's Board of Directors approved a capital budget of
$5 million for 2023 and the Company
allocated cash for capital expenditures of $3.7 million for the year, primarily for rolling
stock, recording equipment and maintenance capital requirements.
The Company's Board of Directors has approved an initial capital
budget of $2.5 million for 2024.
Cash, restricted cash and short-term investments at
December 31, 2023 were $16
million compared to $23.9
million at December 31, 2022.
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, 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. 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, 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.
1Defined as fee revenues less fee operating expenses,
divided by fee revenues
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
|
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
Fee
revenue
|
$
|
18,558
|
|
$
|
14,194
|
|
$
|
61,447
|
|
$
|
46,071
|
Reimbursable revenue
|
|
5,700
|
|
|
3,308
|
|
|
35,399
|
|
|
5,559
|
|
|
24,258
|
|
|
17,502
|
|
|
96,846
|
|
|
51,630
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs:
|
|
|
|
|
|
|
|
|
|
|
|
Fee operating
expenses
|
|
14,762
|
|
|
13,400
|
|
|
52,895
|
|
|
40,987
|
Reimbursable operating
expenses
|
|
5,450
|
|
|
3,308
|
|
|
35,149
|
|
|
5,559
|
Operating
expenses
|
|
20,212
|
|
|
16,708
|
|
|
88,044
|
|
|
46,546
|
General
and administrative
|
|
2,459
|
|
|
3,784
|
|
|
11,430
|
|
|
15,455
|
Severance
expense
|
|
2,208
|
|
|
|
|
|
2,208
|
|
|
|
Depreciation and amortization
|
|
1,665
|
|
|
2,858
|
|
|
8,492
|
|
|
11,830
|
|
|
26,544
|
|
|
23,350
|
|
|
110,174
|
|
|
73,831
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
(2,286)
|
|
|
(5,848)
|
|
|
(13,328)
|
|
|
(22,201)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
140
|
|
|
170
|
|
|
576
|
|
|
317
|
Interest
expense
|
|
(50)
|
|
|
(7)
|
|
|
(103)
|
|
|
(31)
|
Other
income (expense), net
|
|
90
|
|
|
57
|
|
|
612
|
|
|
411
|
Gain from
employee retention credit
|
|
—
|
|
|
2,966
|
|
|
—
|
|
|
2,966
|
Loss before income tax
|
|
(2,106)
|
|
|
(2,662)
|
|
|
(12,243)
|
|
|
(18,538)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (expense) benefit
|
|
—
|
|
|
(107)
|
|
|
96
|
|
|
(107)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(2,106)
|
|
|
(2,769)
|
|
|
(12,147)
|
|
|
(18,645)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized income (loss) on foreign exchange
rate translation
|
|
136
|
|
|
175
|
|
|
161
|
|
|
(1,063)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
$
|
(1,970)
|
|
$
|
(2,594)
|
|
$
|
(11,986)
|
|
$
|
(19,708)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share of common
stock
|
$
|
(0.07)
|
|
$
|
(0.11)
|
|
$
|
(0.45)
|
|
$
|
(0.75)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share of common
stock
|
$
|
(0.07)
|
|
$
|
(0.11)
|
|
$
|
(0.45)
|
|
$
|
(0.75)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average equivalent common shares
outstanding
|
|
30,812,329
|
|
|
25,000,564
|
|
|
26,752,055
|
|
|
24,971,031
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average equivalent common shares
outstanding - assuming dilution
|
|
30,812,329
|
|
|
25,000,564
|
|
|
26,752,055
|
|
|
24,971,031
|
DAWSON GEOPHYSICAL
COMPANY CONSOLIDATED BALANCE SHEETS (amounts in
thousands, except share data)
|
|
|
|
|
|
|
|
December 31,
|
|
2023
|
|
2022
|
Assets
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
10,772
|
|
$
|
18,603
|
Restricted
cash
|
|
5,000
|
|
|
5,000
|
Short-term
investments
|
|
265
|
|
|
265
|
Accounts
receivable, net of allowance for doubtful accounts of
$250
|
|
|
|
|
|
at December 31, 2023
and 2022
|
|
12,735
|
|
|
7,972
|
Employee
retention credit receivable
|
|
—
|
|
|
3,035
|
Prepaid
expenses and other current assets
|
|
8,654
|
|
|
8,951
|
Total current
assets
|
|
37,426
|
|
|
43,826
|
|
|
|
|
|
|
Property and equipment
|
|
241,955
|
|
|
254,679
|
Less
accumulated depreciation
|
|
(225,447)
|
|
|
(234,211)
|
Property and
equipment, net
|
|
16,508
|
|
|
20,468
|
|
|
|
|
|
|
Right-of-use assets
|
|
3,208
|
|
|
4,010
|
|
|
|
|
|
|
Intangibles, net
|
|
377
|
|
|
369
|
|
|
|
|
|
|
Total
assets
|
$
|
57,519
|
|
$
|
68,673
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
3,883
|
|
$
|
4,140
|
Accrued
liabilities:
|
|
|
|
|
|
Payroll costs and
other taxes
|
|
3,415
|
|
|
2,001
|
Other
|
|
709
|
|
|
1,280
|
Deferred
revenue
|
|
11,829
|
|
|
7,380
|
Current
maturities of notes payable and finance leases
|
|
1,380
|
|
|
275
|
Current
maturities of operating lease liabilities
|
|
1,202
|
|
|
1,118
|
Total current
liabilities
|
|
22,418
|
|
|
16,194
|
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
Notes
payable and finance leases, net of current maturities
|
|
1,289
|
|
|
207
|
Operating
lease liabilities, net of current maturities
|
|
2,363
|
|
|
3,331
|
Deferred
tax liabilities, net
|
|
15
|
|
|
137
|
Other
accrued liabilities
|
|
—
|
|
|
—
|
Total long-term
liabilities
|
|
3,667
|
|
|
3,675
|
|
|
|
|
|
|
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,
30,812,329 and
|
|
|
|
|
|
23,812,329
shares issued, and 30,812,329 and 23,812,329 shares outstanding
at
|
|
|
|
|
|
December
31, 2023 and 2022, respectively
|
|
308
|
|
|
238
|
Additional
paid-in capital
|
|
156,678
|
|
|
155,413
|
Accumulated deficit
|
|
(123,640)
|
|
|
(112,469)
|
Equity of
Breckenridge prior to acquisition
|
|
—
|
|
|
7,695
|
Accumulated other comprehensive loss, net
|
|
(1,912)
|
|
|
(2,073)
|
Total stockholders'
equity
|
|
31,434
|
|
|
48,804
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
57,519
|
|
$
|
68,673
|
Reconciliation of
EBITDA to Net Loss (amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Twelve Months Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net loss
|
$
|
(2,106)
|
|
$
|
(2,769)
|
|
$
|
(12,147)
|
|
$
|
(18,645)
|
Depreciation and
amortization
|
|
1,665
|
|
|
2,858
|
|
|
8,492
|
|
|
11,830
|
Severance
expense
|
|
2,208
|
|
|
—
|
|
|
2,208
|
|
|
—
|
Interest income
expense, net
|
|
(90)
|
|
|
(163)
|
|
|
(473)
|
|
|
(286)
|
Income tax expense
(benefit)
|
|
0
|
|
|
107
|
|
|
(96)
|
|
|
107
|
EBITDA
|
$
|
1,677
|
|
$
|
33
|
|
$
|
(2,016)
|
|
$
|
(6,994)
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash (used in)
provided by operating activities
|
$
|
(1,648)
|
|
$
|
(1,671)
|
|
$
|
814
|
|
$
|
(3,269)
|
Changes in working
capital and other items
|
|
1,384
|
|
|
1,954
|
|
|
(3,876)
|
|
|
(2,314)
|
Non-cash adjustments to
net loss
|
|
1,941
|
|
|
(250)
|
|
|
1,046
|
|
|
(1,411)
|
EBITDA
|
$
|
1,677
|
|
$
|
33
|
|
$
|
(2,016)
|
|
$
|
(6,994)
|
View original
content:https://www.prnewswire.com/news-releases/dawson-geophysical-reports-fourth-quarter-and-year-end-2023-results-302104072.html
SOURCE Dawson Geophysical Company