Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 06, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | DAWSON GEOPHYSICAL CO | |
Entity Central Index Key | 0000799165 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 23,171,039 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 23,405 | $ 28,729 |
Short-term investments | 10,583 | 10,583 |
Accounts receivable, net | 35,661 | 25,338 |
Current maturities of notes receivable | 64 | 64 |
Prepaid expenses and other current assets | 9,134 | 12,311 |
Total current assets | 78,847 | 77,025 |
Property and equipment, net | 66,696 | 71,541 |
Right-of-use assets | 7,531 | |
Notes receivable, net of current maturities | 1,434 | 1,447 |
Intangibles, net | 374 | 379 |
Long-term deferred tax assets, net | 290 | 293 |
Total assets | 155,172 | 150,685 |
Current liabilities: | ||
Accounts payable | 7,103 | 5,427 |
Accrued liabilities: | ||
Payroll costs and other taxes | 2,054 | 1,034 |
Other | 3,404 | 3,643 |
Deferred revenue | 5,675 | 10,501 |
Current maturities of notes payable and finance leases | 6,459 | 6,683 |
Current maturities of operating lease liabilities | 1,229 | |
Total current liabilities | 25,924 | 27,288 |
Long-term liabilities: | ||
Notes payable and finance leases, net of current maturities | 4,861 | 6,097 |
Operating lease liabilities, net of current maturities | 6,839 | |
Deferred tax liabilities, net | 146 | 134 |
Other accrued liabilities | 150 | 150 |
Total long-term liabilities | 11,996 | 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, 23,219,484 and 23,018,441 shares issued, and 23,171,039 and 22,969,996 shares outstanding at March 31, 2019 and December 31, 2018, respectively | 232 | 230 |
Additional paid-in capital | 153,430 | 153,268 |
Retained deficit | (34,655) | (34,518) |
Treasury stock, at cost; 48,445 shares | ||
Accumulated other comprehensive loss, net | (1,755) | (1,964) |
Total stockholders' equity | 117,252 | 117,016 |
Total liabilities and stockholders' equity | $ 155,172 | $ 150,685 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 4,000,000 | 4,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares issued | 23,219,484 | 23,018,441 |
Common stock, shares outstanding | 23,171,039 | 22,969,996 |
Treasury stock, shares | 48,445 | 48,445 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||
Operating revenues | $ 51,164 | $ 49,880 |
Operating costs: | ||
Operating expenses | 40,856 | 38,759 |
General and administrative | 4,544 | 4,083 |
Depreciation and amortization | 6,081 | 8,678 |
Operating expenses, total | 51,481 | 51,520 |
Loss from operations | (317) | (1,640) |
Other income (expense): | ||
Interest income | 142 | 37 |
Interest expense | (158) | (88) |
Other income (expense) | 196 | (49) |
Loss before income tax | (137) | (1,740) |
Income tax benefit | 31 | |
Net loss | (137) | (1,709) |
Other comprehensive income (loss): | ||
Net unrealized income (loss) on foreign exchange rate translation, net | 209 | (329) |
Comprehensive income (loss) | $ 72 | $ (2,038) |
Basic loss per share of common stock | $ (0.01) | $ (0.07) |
Diluted loss per share of common stock | $ (0.01) | $ (0.07) |
Weighted average equivalent common shares outstanding | 23,057,546 | 22,879,805 |
Weighted average equivalent common shares outstanding - assuming dilution | 23,057,546 | 22,879,805 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (137) | $ (1,709) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 6,081 | 8,678 |
Operating lease cost | 340 | |
Noncash compensation | 370 | 235 |
Deferred income tax benefit | (33) | |
(Gain) loss on disposal of assets | (44) | 10 |
Remeasurement and other | (153) | 174 |
Change in current assets and liabilities: | ||
Increase in accounts receivable | (10,291) | (9,036) |
Decrease (increase) in prepaid expenses and other current assets | 3,503 | (1,755) |
Increase in accounts payable | 2,606 | 2,845 |
Increase in accrued liabilities | 1,270 | 1,826 |
Decrease in operating lease liabilities | (286) | |
Decrease in deferred revenue | (4,826) | (481) |
Net cash (used in) provided by operating activities | (1,567) | 754 |
Cash flows from investing activities: | ||
Capital expenditures, net of noncash capital expenditures summarized below | (1,944) | (4,120) |
Proceeds from maturity of short-term investments | 9,000 | 11,000 |
Acquisition of short-term investments | (9,000) | (12,000) |
Proceeds from disposal of assets | 80 | 57 |
Proceeds from flood insurance claims | 687 | |
Proceeds from notes receivable | 13 | |
Net cash used in investing activities | (1,851) | (4,376) |
Cash flows from financing activities: | ||
Principal payments on notes payable | (1,146) | (27) |
Principal payments on finance leases | (700) | (663) |
Tax withholdings related to stock-based compensation awards | (206) | (23) |
Net cash used in financing activities | (2,052) | (713) |
Effect of exchange rate changes on cash and cash equivalents | 146 | (70) |
Net decrease in cash and cash equivalents | (5,324) | (4,405) |
Cash and cash equivalents at beginning of period | 28,729 | 22,013 |
Cash and cash equivalents at end of period | 23,405 | 17,608 |
Supplemental cash flow information: | ||
Cash paid for interest | 144 | 74 |
Noncash investing and financing activities: | ||
(Decrease) increase in accrued purchases of property and equipment | (938) | 315 |
Finance leases incurred | 40 | |
Increase in right-of-use assets and operating lease liabilities | 8,337 | |
Decrease in right-of-use asset for accrued rent | (497) | |
Increase in right-of-use asset for prepaid rent | 14 | |
Financed insurance premiums | $ 337 | $ 304 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive (Loss) Income | Total |
Balance at beginning of period at Dec. 31, 2017 | $ 229 | $ 152,022 | $ (10,153) | $ (780) | $ 141,318 |
Balance at beginning of period (in shares) at Dec. 31, 2017 | 22,926,805 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Impact of adopting ASUs | 43 | (43) | |||
Net loss | (1,709) | (1,709) | |||
Unrealized gain (loss) on foreign exchange rate translation | (329) | ||||
Other comprehensive income (loss) | (329) | (329) | |||
Issuance of common stock under stock compensation plans (in shares) | 8,334 | ||||
Stock-based compensation expense | 162 | 162 | |||
Issuance of common stock as compensation | 73 | 73 | |||
Issuance of common stock as compensation (in shares) | 11,247 | ||||
Shares exchanged for taxes on stock-based compensation | (23) | (23) | |||
Shares exchanged for taxes on stock-based compensation (in shares) | (4,000) | ||||
Balance at end of period at Mar. 31, 2018 | $ 229 | 152,234 | (11,819) | (1,152) | 139,492 |
Balance at end of period (in shares) at Mar. 31, 2018 | 22,942,386 | ||||
Balance at beginning of period at Dec. 31, 2018 | $ 230 | 153,268 | (34,518) | (1,964) | $ 117,016 |
Balance at beginning of period (in shares) at Dec. 31, 2018 | 23,018,441 | 22,969,996 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (137) | $ (137) | |||
Unrealized gain (loss) on foreign exchange rate translation | 209 | ||||
Other comprehensive income (loss) | 209 | 209 | |||
Issuance of common stock under stock compensation plans | $ 2 | (2) | |||
Issuance of common stock under stock compensation plans (in shares) | 229,459 | ||||
Stock-based compensation expense | 297 | 297 | |||
Issuance of common stock as compensation | 73 | 73 | |||
Issuance of common stock as compensation (in shares) | 24,785 | ||||
Shares exchanged for taxes on stock-based compensation | (206) | (206) | |||
Shares exchanged for taxes on stock-based compensation (in shares) | (53,201) | ||||
Balance at end of period at Mar. 31, 2019 | $ 232 | $ 153,430 | $ (34,655) | $ (1,755) | $ 117,252 |
Balance at end of period (in shares) at Mar. 31, 2019 | 23,219,484 | 23,171,039 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2019 | |
ORGANIZATION AND NATURE OF OPERATIONS | |
ORGANIZATION AND NATURE OF OPERATIONS | 1. ORGANIZATION AND NATURE OF OPERATIONS Dawson Geophysical Company (the “Company”) is a leading provider of North American onshore seismic data acquisition services with operations throughout the continental United States (“U.S.”) and Canada. The Company 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 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Certain prior period amounts in the condensed consolidated financial statements have been reclassified to conform to the current period’s presentation. These condensed consolidated financial statements have been prepared using accounting principles generally accepted in the U.S. for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements presented in accordance with accounting principles generally accepted in the U.S. have been omitted. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The Board of Directors approved a 5% stock dividend (or 0.05 share for each share outstanding) on the outstanding shares of common stock of the Company on May 1, 2018. The stock dividend was paid on May 29, 2018 to shareholders of record on May 14, 2018. All comparative financial statement presentations have been retroactively adjusted to reflect the dividend, as indicated by “as adjusted”. Significant Accounting Policies Principles of Consolidation. The condensed consolidated financial statements for the three months ended March 31, 2019 include the accounts of the Company and its wholly-owned subsidiaries, Dawson Operating LLC, Eagle Canada, Inc., Dawson Seismic Services Holdings, Inc., Eagle Canada Seismic Services ULC and Exploration Surveys, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Notes Receivable. The Company’s notes receivable consist of one note receivable from the purchaser of certain dynamite energy source drilling equipment. This note receivable is stated at the unpaid principal balance. An allowance for note losses was not deemed necessary at March 31, 2019. Interest is recognized over the term of the note and is calculated using the simple-interest method. Amounts payable to the Company under the note receivable are fully collateralized by the specific dynamite energy source drilling equipment sold to the note payor. Allowance for Doubtful Accounts. Management prepares its allowance for doubtful accounts receivable based on its review of past-due accounts, its past experience of historical write-offs and its current client base. While the collectability of outstanding client invoices is continually assessed, the inherent volatility of the energy industry’s business cycle can cause swift and unpredictable changes in the financial stability of the Company’s clients. The Company’s allowance for doubtful accounts was $250,000 at March 31, 2019 and December 31, 2018. Property and Equipment. Property and equipment is capitalized at historical cost or the fair value of assets acquired in a business combination and is depreciated over the useful life of the asset. Management’s estimation of this useful life is based on circumstances that exist in the seismic industry and information available at the time of the purchase of the asset. As circumstances change and new information becomes available, these estimates could change. Depreciation is computed using the straight-line method. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the balance sheet, and any resulting gain or loss is reflected in the results of operations for the period. Impairment of Long-lived Assets . Long-lived assets are reviewed for impairment when triggering events occur suggesting deterioration in the assets’ recoverability or fair value. Recognition of an impairment charge is required if future expected undiscounted net cash flows are insufficient to recover the carrying value of the assets and the fair value of the assets is below the carrying value of the assets. Management’s forecast of future cash flows used to perform impairment analysis includes estimates of future revenues and expenses based on the Company’s anticipated future results while considering anticipated future oil and natural gas prices, which is fundamental in assessing demand for the Company’s services. If the carrying amounts of the assets exceed the estimated expected undiscounted future cash flows, the Company measures the amount of possible impairment by comparing the carrying amount of the assets to the fair value. Stock-Based Compensation . The Company measures all stock-based compensation awards, which include stock options, restricted stock, restricted stock units and common stock awards, using the fair value method and recognizes compensation expense as operating or general and administrative expense, as appropriate, in the Condensed Consolidated Statements of Operations and Comprehensive Loss on a straight-line basis over the vesting period of the related awards. Use of Estimates in the Preparation of Financial Statements. Preparation of the accompanying financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because of the use of assumptions and estimates inherent in the reporting process, actual results could differ from those estimates. Leases . The Company leases certain vehicles, seismic recording equipment, real property and office equipment under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating lease or finance lease for financial reporting purposes. The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair market value of the related assets. Assets under finance leases are amortized using the straight-line method over the initial lease term. Amortization of assets under finance leases is included in depreciation expense. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”), which requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Subsequent ASUs were issued to provide additional guidance. On January 1, 2019, the Company adopted Topic 842 using the optional transition method of adoption, under which the new standards were applied prospectively rather than restating the prior periods presented. The Company elected the package of practical expedients permitted, which, among other things, allowed the Company to carry forward the historical lease classification. The Company made the accounting policy elections to not recognize lease assets and lease liabilities with an initial term of 12 months or less and to not separate lease and non-lease components. The Company’s accounting for finance leases (formerly called capital lease obligations) remains substantially unchanged. Operating lease right-of-use (“ROU”) assets and liabilities were recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, an incremental borrowing rate based on the information available at the commencement date was used in determining the present value. The Company will use the implicit rate when readily determinable. The operating lease ROU asset also included prepaid lease payments and was reduced by accrued lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. Operating lease cost for lease payments will be recognized on a straight-line basis over the lease term. The impact of adoption on the Company’s consolidated balance sheet was the recognition of a ROU asset of $7.8 million, an operating lease liability of $8.3 million, and a reduction of accrued liabilities of $0.5 million, primarily for office and shop space leases. The Company’s adoption of Topic 842 did not materially impact its results of operations or cash flows. Revenue Recognition . Services are provided under cancelable service contracts which usually have an original expected duration of one year or less. These contracts are either “turnkey” or “term” agreements. Under both types of agreements, the Company recognizes revenues as the services are performed. Revenue is recognized based on square miles of data recorded compared to total square miles anticipated to be recorded on the survey using the total estimated revenue for the service contract. In the case of a cancelled service contract, the client is billed and revenue is recognized for any third party charges and square miles of data recorded up to the date of cancellation. The Company receives reimbursements for certain out -of-pocket expenses under the terms of the service contracts. The amounts billed to clients are included at their gross amount in the total estimated revenue for the service contract. Clients are billed as permitted by the service contract. Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and cash collections. If billing occurs prior to the revenue recognition or billing exceeds the revenue recognized, the amount is considered deferred revenue and a contract liability. Conversely, if the revenue recognition exceeds the billing, the excess is considered an unbilled receivable and a contract asset. As services are performed, those deferred revenue amounts are recognized as revenue. In some instances, third-party permitting, surveying, drilling, helicopter, equipment rental and mobilization costs that directly relate to the contract are utilized to fulfill the contract obligations. These fulfillment costs are capitalized in other current assets and amortized based on the total square miles of data recorded compared to total square miles anticipated to be recorded on the survey using the total estimated fulfillment costs for the service contract. Estimates for total revenue and total fulfillment cost on any service contract are based on significant qualitative and quantitative judgments. Management considers a variety of factors such as whether various components of the performance obligation will be performed internally or externally, cost of third party services and facts and circumstances unique to the performance obligation in making these estimates. Recently Issued Accounting Pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-07, Compensation – Stock Compensation (“Topic 718”): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees except for certain circumstances. Any transition impact will be a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. The Company adopted this guidance in the first quarter of 2019 and it did not have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurement by removing, modifying and adding certain disclosures. This ASU is effective for the annual period beginning after December 15, 2019, including interim periods within that annual period. The Company is currently evaluating the new guidance to determine the impact it will have on the Company’s consolidated financial statements. In August 2018, the SEC adopted amendments to simplify certain disclosure requirements, as set forth in Securities Act Release No. 33-10532, Disclosure Update and Simplification, which includes a requirement for entities to present the changes in shareholders’ equity in the interim financial statements in quarterly reports on Form 10-Q. This amendment is effective for all filings made on or after November 5, 2018. In light of the timing of effectiveness of the amendment and proximity to the filing date for most filers’ quarterly reports, the SEC has allowed for a filer’s first presentation of the changes in shareholders’ equity to be included in its Form 10-Q for the quarter that begins after the effective date. The Company adopted the SEC’s amendment to interim disclosures in the first quarter of 2019 and has presented the changes in shareholders’ equity on an interim basis. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2019 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3. FAIR VALUE OF FINANCIAL INSTRUMENTS At March 31, 2019 and December 31, 2018, the Company’s financial instruments included cash and cash equivalents, short-term investments in certificates of deposit, accounts receivable, notes receivable, other current assets, accounts payable, other current liabilities, notes payable, finance leases and operating lease liabilities. Due to the short-term maturities of cash and cash equivalents, accounts receivable, other current assets, accounts payable and other current liabilities, the carrying amounts approximate fair value at the respective balance sheet dates. The carrying value of the notes receivable, notes payable, finance leases and operating lease liabilities approximate their fair value based on a comparison with the prevailing market interest rate. Due to the short-term maturities of the Company’s investments in certificates of deposit, the carrying amounts approximate fair value at the respective balance sheet dates. The fair values of the Company’s notes receivable, notes payable and investments in certificates of deposit are level 2 measurements in the fair value hierarchy . |
SUPPLEMENTAL CONSOLIDATED FINAN
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION | 3 Months Ended |
Mar. 31, 2019 | |
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION | |
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION | 4. SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION Disaggregated Revenues The Company has one line of business, acquiring and processing seismic data in North America. Our chief operating decision maker (President, Chief Executive Officer and Chairman of the Board) makes operating decisions and assesses performance based on the Company as a whole. Accordingly, the Company is considered to be in a single reportable segment. The following table presents the Company’s operating revenues (unaudited and in thousands) disaggregated by geographic region: Three Months Ended March 31, 2019 2018 Operating Revenues United States $ $ Canada Total $ $ Deferred Costs (in thousands) The opening balance of deferred cost was $6,994 and $2,991 at January 1, 2019 and 2018, respectively. The Company’s prepaid expenses and other current assets at March 31, 2019 and 2018 included deferred costs incurred to fulfill contracts with customers of $3,997 and $4,688, respectively. Deferred costs at March 31, 2019 compared to January 1, 2019 decreased primarily as a result of the completion of several projects during the first quarter of 2019 that had significant deferred fulfillment costs at January 1, 2019. Deferred cost at March 31, 2018 compared to January 1, 2018 increased primarily as a result of new projects for clients with significant deferred fulfillment costs at March 31, 2018. The amount of total deferred costs amortized for the first quarter of 2019 and 2018 was $12,905 and $6,999, respectively. There were no material impairment losses incurred during these periods. Deferred Revenue (in thousands) The opening balance of deferred revenue was $10,501 and $6,314 at January 1, 2019 and 2018, respectively. The Company’s deferred revenue at March 31, 2019 and 2018 was $5,675 and $5,833, respectively. Deferred revenue at March 31, 2019 compared to January 1, 2019 decreased primarily as a result of completing projects for clients with large prepayments for third party reimbursables. Deferred revenue at March 31, 2018 compared to January 1, 2018 remained fairly consistent. Revenue recognized for the first quarter of 2019 and 2018 that was included in the contract liability balance at the beginning of 2019 and 2018 was $6,893 and $3,683, respectively. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2019 | |
DEBT | |
DEBT | 5. DEBT Credit Agreement The Company’s existing amended and restated credit agreement (the “Credit Agreement”) with Veritex Community Bank, a Texas state bank (“Veritex Bank”), includes term loan and revolving loan features, and also allows for the issuance of letters of credit and other promissory notes. The Company can borrow up to a maximum of $20.0 million pursuant to the Credit Agreement, subject to the terms and limitations discussed below. The Credit Agreement provides for a revolving loan feature (the “Line of Credit”) that permits the Company to borrow, repay and re-borrow, from time to time until June 30, 2019, up to the lesser of (i) $20.0 million or (ii) a sum equal to (a) 80% of the Company’s eligible accounts receivable (less the outstanding principal balance of term loans and letters of credit under the Credit Agreement) and (b) the lesser of (i) 50% of the value of certain of the Company’s core equipment or (ii) $12,500,000. The Company has not utilized the Line of Credit since its inception. Because the Company’s ability to borrow funds under the Line of Credit is tied to the amount of the Company’s eligible accounts receivable and value of certain of its core equipment, if the Company’s accounts receivable decrease materially for any reason, including delays, reductions or cancellations by clients, or decreased demand for the Company’s services, or the value of the Company’s pledged core equipment decreases materially, the Company’s borrowing ability to fund operations or other obligations may be reduced. The Credit Agreement also provides for a term loan feature. Any notes outstanding under this feature would count toward the maximum amounts the Company may borrow under the Credit Agreement. The Company does not currently have any notes payable under the term loan feature of the Credit Agreement. The Company has one outstanding note payable under the Credit Agreement that is not under the term loan feature (and therefore does not count towards the maximum amounts that the Company may borrow) which was incurred on September 13, 2018 to purchase (and is secured by) equipment and has a remaining aggregate principal amount of $5,432,000 as of March 31, 2019. The note payable will mature upon the earlier of (i) the acceleration of the indebtedness pursuant to the terms of the Company’s existing credit facility with Veritex Bank or (ii) September 13, 2021. The Company’s obligations under the Line of Credit are secured by a security interest in the Company’s accounts receivable and certain of the Company’s core equipment, and the term loans are also secured by certain of the Company’s core equipment. Interest on amounts outstanding under the Credit Agreement accrues at the lesser of 4.5% or the prime rate (as quoted in the Wall Street Journal ), subject to an interest rate floor of 2.5%. The Credit Agreement contains customary covenants for credit facilities of this type, including limitations on disposition of assets, mergers and other fundamental changes. The Company is also obligated to meet certain financial covenants, including (i) a ratio of (x) total liabilities minus subordinated debt to (y) tangible net worth plus subordinated debt not to exceed 1.00:1.00, (ii) a ratio of current assets to current liabilities of at least 1.50:1.00 and (iii) required tangible net worth of not less than $100,000,000. The Company was in compliance with all covenants under the Credit Agreement, including specified ratios, as of March 31, 2019. Veritex Bank has also issued two letters of credit as of March 31, 2019. The first letter of credit is in the amount of $1,767,000 to support payment of certain insurance obligations of the Company. The principal amount of this letter of credit is collateralized by certain of the Company’s core equipment. The second letter of credit is in the amount of $583,000 to support the Company’s workers compensation insurance and is secured by a certificate of deposit. Neither of the letters of credit counts as funds borrowed under the Company’s Line of Credit. Other Indebtedness As of March 31, 2019, the Company has two notes payable to a finance company for various insurance premiums totaling $1,413,000. In addition, the Company leases certain seismic recording equipment and vehicles under leases classified as finance leases. The Company’s Condensed Consolidated Balance Sheets as of March 31, 2019 include finance leases of $4,475,000 . Maturities and Interest Rates of Debt The following table sets forth the aggregate principal amount (in thousands) under the Company’s outstanding notes payable and the interest rates as of March 31, 2019 and December 31, 2018. March 31, 2019 December 31, 2018 Notes payable to commercial banks Aggregate principal amount outstanding $ $ Interest rate March 31, 2019 December 31, 2018 Notes payable to finance company for insurance Aggregate principal amount outstanding $ $ Interest rate 3.80% - 4.99% The aggregate maturities of notes payable at March 31, 2019 are as follows (in thousands): April 2019 - March 2020 $ April 2020 - March 2021 April 2021 - March 2022 Total notes payable $ The aggregate maturities of finance leases at March 31, 2019 are as follows (in thousands): April 2019 - March 2020 $ April 2020 - March 2021 April 2021 - March 2022 April 2022 - March 2023 Obligations under finance leases $ Interest rates on these leases range from 4.65% to 5.37%. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2019 | |
LEASES | |
LEASES | 6. LEASES The Company leases certain vehicles, seismic recording equipment, real property and office equipment under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating lease or finance lease for financial reporting purposes. The majority of our operating leases are non-cancelable operating leases for office and shop space in Midland, Plano, Denison, Houston, Denver, Oklahoma City and Calgary, Alberta . On January 1, 2019, t he Company adopted Topic 842 requiring organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The Company elected to use the transition method of adoption, under which the new standards were applied prospectively rather than restating the prior periods presented. As a result of the transition method of adoption certain accounts lack a comparable value for the same period of 2018, specifically accounts and values associated with operating leases and ROU assets. The components of lease cost for the three months ended March 31, 2019 and 2018 were as follows (in thousands): March 31, 2019 March 31, 2018 Finance lease cost: Amortization of right-of-use assets $ $ Interest on lease liabilities Total finance lease cost Operating lease cost Short-term lease cost Total lease cost $ $ Supplemental cash flow information related to leases for the three months ended March 31, 2019 and 2018 was as follows (in thousands): March 31, 2019 March 31, 2018 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ $ Operating cash flows from finance leases $ $ Financing cash flows from finance leases $ $ Right-of-use assets obtained in exchange for lease obligations: Operating leases $ $ — Finance leases $ $ — Supplemental balance sheet information related to leases as of March 31, 2019 and 2018 was as follows (in thousands): March 31, 2019 March 31, 2018 Operating leases Operating lease right-of-use assets $ $ — Operating lease liabilities - current $ $ — Operating lease liabilities - long-term — Total operating lease liabilities $ $ — Finance leases Property and equipment, at cost $ $ Accumulated depreciation Property and equipment, net $ $ Finance lease liabilities - current $ $ Finance lease liabilities - long-term Total finance lease liabilities $ $ Weighted average remaining lease term: Operating leases 6.8 years 7.9 years Finance leases 1.5 years 2.5 years Weighted average discount rate: Operating leases — Finance leases Maturities of lease liabilities at March 31, 2019 were as follows (in thousands): Operating Leases Finance Leases April 2019 - March 2020 $ $ April 2020 - March 2021 April 2021 - March 2022 April 2022 - March 2023 April 2023 - March 2024 — Thereafter — Total payments under lease agreements $ $ Less imputed interest Total lease liabilities $ $ |
OPERATING COMMITMENTS AND CONTI
OPERATING COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
OPERATING COMMITMENTS AND CONTINGENCIES | |
OPERATING COMMITMENTS AND CONTINGENCIES | 7. OPERATING COMMITMENTS AND CONTINGENCIES From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. Although the Company cannot predict the outcomes of any such legal proceedings, management believes that the resolution of pending legal actions will not have a material adverse effect on the Company’s financial condition, results of operations or liquidity, as the Company believes it is adequately indemnified and insured. We are also party to the following legal proceeding: On April 1, 2019, Weatherford International, LLC and Weatherford U.S., L.P. (collectively, “Weatherford”) filed a petition in state district court for Midland County, Texas, in which the Company and eighteen other parties were named as defendants, alleging the Company and/or the other named defendants contributed to or caused contamination of groundwater at and around property owned by Weatherford. Weatherford is seeking declaratory judgment, recovery and contribution for past and future costs incurred in responding to or correcting the contamination at and around the property from each defendant. The Company disputes Weatherford’s allegations with respect to the Company and intends to vigorously defend itself in this case. While the outcome and impact of this legal proceeding on the Company cannot be predicted with certainty, based on currently available information management believes that the resolution of this proceeding will not have a material adverse effect on our financial condition, results of operations or liquidity. Additionally, the Company experiences contractual disputes with its clients from time to time regarding the payment of invoices or other matters. While the Company seeks to minimize these disputes and maintain good relations with its clients, the Company has experienced in the past, and may experience in the future, disputes that could affect its revenues and results of operations in any period. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2019 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | 8. NET LOSS PER SHARE Basic net loss per share is computed by dividing the net loss by the weighted average shares outstanding. Diluted loss per share is computed by dividing the net loss by the weighted average diluted shares outstanding. The computation of basic and diluted loss per share is as follows (in thousands, except share and per share data) : Three Months Ended March 31, 2019 2018 Net loss $ (137) $ (1,709) Weighted average common shares outstanding: Basic 23,057,546 22,879,805 Dilutive common stock options, restricted stock unit awards and restricted stock awards — — Diluted 23,057,546 22,879,805 Basic loss per share of common stock $ (0.01) $ (0.07) Diluted loss per share of common stock $ (0.01) $ (0.07) The Company had a net loss for the three months ended March 31, 2019 and 2018. As a result, all stock options, restricted stock unit awards and restricted stock awards were anti-dilutive and excluded from weighted average shares used in determining the diluted loss per share of common stock for the respective periods. The following weighted average numbers of stock options, restricted stock unit awards and restricted stock awards, in each case as adjusted for the 5% stock dividend paid to shareholders on May 29, 2018, have been excluded from the calculation of diluted loss per share of common stock, as their effect would be anti-dilutive for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (as adjusted) Stock options 87,497 290,838 Restricted stock units 546,747 413,385 Restricted stock awards 32,987 70,349 Total 667,231 774,572 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES For the three months ended March 31, 2019, the Company's effective tax rate was 0.0%. For the three months ended March 31, 2018, the Company’s effective tax rate was 1.8%. The Company’s effective tax rate decreased compared to the corresponding period from the prior year primarily due to the recognition of a full valuation allowance in all jurisdictions. The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over an extended amount of time. Such objective evidence limits the ability to consider other subjective evidence, such as projections for taxable earnings. Due to the Company’s near break-even results for the three months ended March 31, 2019, the Company did not record an income tax benefit. The Company does not include income tax benefits for all of the losses incurred because it has recorded valuation allowances against significantly all of its federal, state and foreign deferred tax assets. The Company has recorded valuation allowances against the associated deferred tax assets for the amounts it deems are not more likely than not realizable. Based on management’s belief that not all the net operating losses are realizable, a federal valuation allowance and additional state valuation allowances were maintained during the three months ended March 31, 2019 and 2018. In addition, due to the Company’s recent operating losses and valuation allowances, the Company may recognize reduced or no tax benefits on future losses on the condensed consolidated financial statements. The amount of the valuation allowances considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 10. SUBSEQUENT EVENTS None. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation. The condensed consolidated financial statements for the three months ended March 31, 2019 include the accounts of the Company and its wholly-owned subsidiaries, Dawson Operating LLC, Eagle Canada, Inc., Dawson Seismic Services Holdings, Inc., Eagle Canada Seismic Services ULC and Exploration Surveys, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. |
Notes Receivable | Notes Receivable. The Company’s notes receivable consist of one note receivable from the purchaser of certain dynamite energy source drilling equipment. This note receivable is stated at the unpaid principal balance. An allowance for note losses was not deemed necessary at March 31, 2019. Interest is recognized over the term of the note and is calculated using the simple-interest method. Amounts payable to the Company under the note receivable are fully collateralized by the specific dynamite energy source drilling equipment sold to the note payor. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts. Management prepares its allowance for doubtful accounts receivable based on its review of past-due accounts, its past experience of historical write-offs and its current client base. While the collectability of outstanding client invoices is continually assessed, the inherent volatility of the energy industry’s business cycle can cause swift and unpredictable changes in the financial stability of the Company’s clients. The Company’s allowance for doubtful accounts was $250,000 at March 31, 2019 and December 31, 2018. |
Property and Equipment | Property and Equipment. Property and equipment is capitalized at historical cost or the fair value of assets acquired in a business combination and is depreciated over the useful life of the asset. Management’s estimation of this useful life is based on circumstances that exist in the seismic industry and information available at the time of the purchase of the asset. As circumstances change and new information becomes available, these estimates could change. Depreciation is computed using the straight-line method. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the balance sheet, and any resulting gain or loss is reflected in the results of operations for the period. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets . Long-lived assets are reviewed for impairment when triggering events occur suggesting deterioration in the assets’ recoverability or fair value. Recognition of an impairment charge is required if future expected undiscounted net cash flows are insufficient to recover the carrying value of the assets and the fair value of the assets is below the carrying value of the assets. Management’s forecast of future cash flows used to perform impairment analysis includes estimates of future revenues and expenses based on the Company’s anticipated future results while considering anticipated future oil and natural gas prices, which is fundamental in assessing demand for the Company’s services. If the carrying amounts of the assets exceed the estimated expected undiscounted future cash flows, the Company measures the amount of possible impairment by comparing the carrying amount of the assets to the fair value. |
Stock-Based Compensation | Stock-Based Compensation . The Company measures all stock-based compensation awards, which include stock options, restricted stock, restricted stock units and common stock awards, using the fair value method and recognizes compensation expense as operating or general and administrative expense, as appropriate, in the Condensed Consolidated Statements of Operations and Comprehensive Loss on a straight-line basis over the vesting period of the related awards. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements. Preparation of the accompanying financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because of the use of assumptions and estimates inherent in the reporting process, actual results could differ from those estimates. |
Leases | Leases . The Company leases certain vehicles, seismic recording equipment, real property and office equipment under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating lease or finance lease for financial reporting purposes. The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair market value of the related assets. Assets under finance leases are amortized using the straight-line method over the initial lease term. Amortization of assets under finance leases is included in depreciation expense. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”), which requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Subsequent ASUs were issued to provide additional guidance. On January 1, 2019, the Company adopted Topic 842 using the optional transition method of adoption, under which the new standards were applied prospectively rather than restating the prior periods presented. The Company elected the package of practical expedients permitted, which, among other things, allowed the Company to carry forward the historical lease classification. The Company made the accounting policy elections to not recognize lease assets and lease liabilities with an initial term of 12 months or less and to not separate lease and non-lease components. The Company’s accounting for finance leases (formerly called capital lease obligations) remains substantially unchanged. Operating lease right-of-use (“ROU”) assets and liabilities were recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, an incremental borrowing rate based on the information available at the commencement date was used in determining the present value. The Company will use the implicit rate when readily determinable. The operating lease ROU asset also included prepaid lease payments and was reduced by accrued lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. Operating lease cost for lease payments will be recognized on a straight-line basis over the lease term. The impact of adoption on the Company’s consolidated balance sheet was the recognition of a ROU asset of $7.8 million, an operating lease liability of $8.3 million, and a reduction of accrued liabilities of $0.5 million, primarily for office and shop space leases. The Company’s adoption of Topic 842 did not materially impact its results of operations or cash flows. |
Revenue Recognition | Revenue Recognition . Services are provided under cancelable service contracts which usually have an original expected duration of one year or less. These contracts are either “turnkey” or “term” agreements. Under both types of agreements, the Company recognizes revenues as the services are performed. Revenue is recognized based on square miles of data recorded compared to total square miles anticipated to be recorded on the survey using the total estimated revenue for the service contract. In the case of a cancelled service contract, the client is billed and revenue is recognized for any third party charges and square miles of data recorded up to the date of cancellation. The Company receives reimbursements for certain out -of-pocket expenses under the terms of the service contracts. The amounts billed to clients are included at their gross amount in the total estimated revenue for the service contract. Clients are billed as permitted by the service contract. Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and cash collections. If billing occurs prior to the revenue recognition or billing exceeds the revenue recognized, the amount is considered deferred revenue and a contract liability. Conversely, if the revenue recognition exceeds the billing, the excess is considered an unbilled receivable and a contract asset. As services are performed, those deferred revenue amounts are recognized as revenue. In some instances, third-party permitting, surveying, drilling, helicopter, equipment rental and mobilization costs that directly relate to the contract are utilized to fulfill the contract obligations. These fulfillment costs are capitalized in other current assets and amortized based on the total square miles of data recorded compared to total square miles anticipated to be recorded on the survey using the total estimated fulfillment costs for the service contract. Estimates for total revenue and total fulfillment cost on any service contract are based on significant qualitative and quantitative judgments. Management considers a variety of factors such as whether various components of the performance obligation will be performed internally or externally, cost of third party services and facts and circumstances unique to the performance obligation in making these estimates. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-07, Compensation – Stock Compensation (“Topic 718”): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees except for certain circumstances. Any transition impact will be a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. The Company adopted this guidance in the first quarter of 2019 and it did not have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurement by removing, modifying and adding certain disclosures. This ASU is effective for the annual period beginning after December 15, 2019, including interim periods within that annual period. The Company is currently evaluating the new guidance to determine the impact it will have on the Company’s consolidated financial statements. In August 2018, the SEC adopted amendments to simplify certain disclosure requirements, as set forth in Securities Act Release No. 33-10532, Disclosure Update and Simplification, which includes a requirement for entities to present the changes in shareholders’ equity in the interim financial statements in quarterly reports on Form 10-Q. This amendment is effective for all filings made on or after November 5, 2018. In light of the timing of effectiveness of the amendment and proximity to the filing date for most filers’ quarterly reports, the SEC has allowed for a filer’s first presentation of the changes in shareholders’ equity to be included in its Form 10-Q for the quarter that begins after the effective date. The Company adopted the SEC’s amendment to interim disclosures in the first quarter of 2019 and has presented the changes in shareholders’ equity on an interim basis. |
SUPPLEMENTAL CONSOLIDATED FIN_2
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION | |
Schedule of operating revenues disaggregated by geographic region | Three Months Ended March 31, 2019 2018 Operating Revenues United States $ $ Canada Total $ $ |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
DEBT | |
Schedule of aggregate principal amount of outstanding notes payable and the interest rates | March 31, 2019 December 31, 2018 Notes payable to commercial banks Aggregate principal amount outstanding $ $ Interest rate March 31, 2019 December 31, 2018 Notes payable to finance company for insurance Aggregate principal amount outstanding $ $ Interest rate 3.80% - 4.99% |
Schedule of aggregate maturities of notes payable | The aggregate maturities of notes payable at March 31, 2019 are as follows (in thousands): April 2019 - March 2020 $ April 2020 - March 2021 April 2021 - March 2022 Total notes payable $ |
Schedule of aggregate maturities of finance leases | The aggregate maturities of finance leases at March 31, 2019 are as follows (in thousands): April 2019 - March 2020 $ April 2020 - March 2021 April 2021 - March 2022 April 2022 - March 2023 Obligations under finance leases $ |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
LEASES | |
Schedule of expense, cash flow information and balance sheet information related to operating and finance leases | The components of lease cost for the three months ended March 31, 2019 and 2018 were as follows (in thousands): March 31, 2019 March 31, 2018 Finance lease cost: Amortization of right-of-use assets $ $ Interest on lease liabilities Total finance lease cost Operating lease cost Short-term lease cost Total lease cost $ $ Supplemental cash flow information related to leases for the three months ended March 31, 2019 and 2018 was as follows (in thousands): March 31, 2019 March 31, 2018 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ $ Operating cash flows from finance leases $ $ Financing cash flows from finance leases $ $ Right-of-use assets obtained in exchange for lease obligations: Operating leases $ $ — Finance leases $ $ — Supplemental balance sheet information related to leases as of March 31, 2019 and 2018 was as follows (in thousands): March 31, 2019 March 31, 2018 Operating leases Operating lease right-of-use assets $ $ — Operating lease liabilities - current $ $ — Operating lease liabilities - long-term — Total operating lease liabilities $ $ — Finance leases Property and equipment, at cost $ $ Accumulated depreciation Property and equipment, net $ $ Finance lease liabilities - current $ $ Finance lease liabilities - long-term Total finance lease liabilities $ $ Weighted average remaining lease term: Operating leases 6.8 years 7.9 years Finance leases 1.5 years 2.5 years Weighted average discount rate: Operating leases — Finance leases |
Schedule of maturities of lease liabilities | Maturities of lease liabilities at March 31, 2019 were as follows (in thousands): Operating Leases Finance Leases April 2019 - March 2020 $ $ April 2020 - March 2021 April 2021 - March 2022 April 2022 - March 2023 April 2023 - March 2024 — Thereafter — Total payments under lease agreements $ $ Less imputed interest Total lease liabilities $ $ |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
NET LOSS PER SHARE | |
Schedule of computation of basic and diluted loss per share | Three Months Ended March 31, 2019 2018 Net loss $ (137) $ (1,709) Weighted average common shares outstanding: Basic 23,057,546 22,879,805 Dilutive common stock options, restricted stock unit awards and restricted stock awards — — Diluted 23,057,546 22,879,805 Basic loss per share of common stock $ (0.01) $ (0.07) Diluted loss per share of common stock $ (0.01) $ (0.07) |
Schedule of weighted average numbers of stock options, restricted stock unit awards, and restricted stock awards that have been excluded from the calculation of diluted loss per share of common stock | Three Months Ended March 31, 2019 2018 (as adjusted) Stock options 87,497 290,838 Restricted stock units 546,747 413,385 Restricted stock awards 32,987 70,349 Total 667,231 774,572 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Jan. 01, 2019USD ($) | May 01, 2018 | Mar. 31, 2019USD ($)item | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Common stock dividend declared, percentage of shares outstanding | 5.00% | ||||
Common stock dividend declared, ratio | 0.05 | ||||
Number of notes receivable | item | 1 | ||||
Allowance for doubtful accounts | $ 250,000 | $ 250,000 | |||
ROU asset | $ 7,800,000 | 7,531,000 | |||
Operating lease liability | 8,300,000 | 8,068,000 | |||
Reduction of accrued liabilities | $ 500,000 | $ (1,270,000) | $ (1,826,000) |
SUPPLEMENTAL CONSOLIDATED FIN_3
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Number of business segments | segment | 1 | |||
Operating revenues | $ 51,164 | $ 49,880 | ||
Deferred cost | $ 6,994 | $ 2,991 | ||
Deferred costs incurred to fulfill contracts with customers | 3,997 | 4,688 | ||
Total deferred costs amortized | 12,905 | 6,999 | ||
Deferred revenue | 5,675 | 5,833 | $ 10,501 | $ 6,314 |
Revenue recognized that was included in deferred revenue balances at beginning of period | 6,893 | 3,683 | ||
United States | ||||
Operating revenues | 37,636 | 37,777 | ||
Canada | ||||
Operating revenues | $ 13,528 | $ 12,103 |
DEBT (Details)
DEBT (Details) | 3 Months Ended | |
Mar. 31, 2019USD ($)instrumentitem | Dec. 31, 2018USD ($) | |
Debt Instruments | ||
Aggregate principal amount outstanding | $ 6,845,000 | |
Number of letters of credit issued | item | 2 | |
Letter Of Credit | ||
Debt Instruments | ||
Funds borrowed under Line of Credit | $ 0 | |
Credit Agreement | ||
Debt Instruments | ||
Borrowing, repaying and re-borrowing capacity | $ 20,000,000 | |
Percentage of maximum borrowing capacity on eligible accounts receivable | 80.00% | |
Percentage of maximum borrowing capacity on eligible core equipment | 50.00% | |
Maximum borrowing capacity on core equipment | $ 12,500,000 | |
Interest rate (as a percent) | 4.50% | |
Minimum tangible net worth | $ 100,000,000 | |
Credit Agreement | Prime rate | ||
Debt Instruments | ||
Variable interest rate basis | prime rate | |
Credit Agreement | Minimum | ||
Debt Instruments | ||
Ratio of current assets to current liabilities | 1.50 | |
Credit Agreement | Minimum | Prime rate | ||
Debt Instruments | ||
Interest rate (as a percent) | 2.50% | |
Credit Agreement | Maximum | ||
Debt Instruments | ||
Debt to tangible net worth ratio | 1 | |
Insurance Obligations | ||
Debt Instruments | ||
Letters of credit issued | $ 1,767,000 | |
Workers' Compensation Insurance | ||
Debt Instruments | ||
Letters of credit issued | $ 583,000 | |
Notes payable to commercial banks | ||
Debt Instruments | ||
Number of outstanding notes payable | instrument | 1 | |
Aggregate principal amount outstanding | $ 5,432,000 | $ 5,975,000 |
Interest rate (as a percent) | 5.00% | 5.00% |
DEBT - Maturities (Details)
DEBT - Maturities (Details) | Mar. 31, 2019USD ($)instrument | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) |
Aggregate maturities of notes payable | |||
April 2019 - March 2020 | $ 3,586,000 | ||
April 2020 - March 2021 | 2,173,000 | ||
April 2021 - March 2022 | 1,086,000 | ||
Total notes payable | 6,845,000 | ||
Aggregate maturities of finance leases: | |||
April 2019 - March 2020 | 2,873,000 | ||
April 2020 - March 2021 | 1,564,000 | ||
April 2021 - March 2022 | 24,000 | ||
April 2022 - March 2023 | 14,000 | ||
Total finance lease liabilities | $ 4,475,000 | $ 7,186,000 | |
Minimum | |||
Aggregate maturities of finance leases: | |||
Interest rate on leases | 4.65% | ||
Maximum | |||
Aggregate maturities of finance leases: | |||
Interest rate on leases | 5.37% | ||
Notes payable to finance companies for insurance | |||
Notes payable | |||
Number of outstanding notes payable | instrument | 2 | ||
Interest rate (as a percent) | 3.80% | ||
Aggregate maturities of notes payable | |||
Total notes payable | $ 1,413,000 | $ 1,680,000 | |
Notes payable to finance companies for insurance | Minimum | |||
Notes payable | |||
Interest rate (as a percent) | 3.80% | ||
Notes payable to finance companies for insurance | Maximum | |||
Notes payable | |||
Interest rate (as a percent) | 4.99% | ||
Notes payable to commercial banks | |||
Notes payable | |||
Number of outstanding notes payable | instrument | 1 | ||
Interest rate (as a percent) | 5.00% | 5.00% | |
Aggregate maturities of notes payable | |||
Total notes payable | $ 5,432,000 | $ 5,975,000 |
LEASES - Components of Lease Co
LEASES - Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Finance lease cost: | ||
Amortization of right-of-use assets | $ 351 | $ 366 |
Interest on lease liabilities | 55 | 86 |
Total finance lease cost | 406 | 452 |
Operating lease cost | 443 | 414 |
Short-term lease cost | 10 | 4 |
Total lease cost | $ 859 | $ 870 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
LEASES | ||
Operating cash flows from operating leases | $ (349) | $ (410) |
Operating cash flows from finance leases | (57) | (73) |
Financing cash flows from finance leases | (700) | $ (663) |
Right-of-use assets obtained in exchange for operating leases | 8,337 | |
Right-of-use assets obtained in exchange for finance leases | $ 40 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) | Mar. 31, 2019 | Jan. 01, 2019 | Mar. 31, 2018 |
Operating leases | |||
Right-of-use assets | $ 7,531,000 | $ 7,800,000 | |
Operating lease liabilities - current | 1,229,000 | ||
Operating lease liabilities - long-term | 6,839,000 | ||
Total operating lease liabilities | 8,068,000 | $ 8,300,000 | |
Finance leases | |||
Property and equipment, at cost | 8,582,000 | $ 8,542,000 | |
Accumulated depreciation | (2,223,000) | (869,000) | |
Property and equipment, net | 6,359,000 | 7,673,000 | |
Finance lease liabilities - current | 2,873,000 | 2,740,000 | |
Finance lease liabilities - long-term | 1,602,000 | 4,446,000 | |
Total finance lease liabilities | $ 4,475,000 | $ 7,186,000 | |
Weighted average remaining lease term: | |||
Operating leases | 6 years 9 months 18 days | 7 years 10 months 24 days | |
Finance leases | 1 year 6 months | 2 years 6 months | |
Weighted average discount rate: | |||
Operating leases | 5.04% | ||
Finance leases | 4.66% | 4.65% |
LEASES - Maturities of Lease Li
LEASES - Maturities of Lease Liabilities (Details) - USD ($) | Mar. 31, 2019 | Jan. 01, 2019 | Mar. 31, 2018 |
Operating Leases | |||
April 2019 - March 2020 | $ 1,614,000 | ||
April 2020 - March 2021 | 1,491,000 | ||
April 2021 - March 2022 | 1,314,000 | ||
April 2022 - March 2023 | 1,147,000 | ||
April 2023 - March 2024 | 1,168,000 | ||
Thereafter | 2,866,000 | ||
Total payments under lease agreements | 9,600,000 | ||
Less imputed interest | (1,532,000) | ||
Total lease liabilities | 8,068,000 | $ 8,300,000 | |
Finance Leases | |||
April 2019 - March 2020 | 3,022,000 | ||
April 2020 - March 2021 | 1,587,000 | ||
April 2021 - March 2022 | 25,000 | ||
April 2022 - March 2023 | 15,000 | ||
Total payments under lease agreements | 4,649,000 | ||
Less imputed interest | (174,000) | ||
Total lease liabilities | $ 4,475,000 | $ 7,186,000 |
OPERATING COMMITMENTS AND CON_2
OPERATING COMMITMENTS AND CONTINGENCIES (Details) | Apr. 01, 2019 |
Subsequent Event | Weatherford Litigation | |
OPERATING COMMITMENTS AND CONTINGENCIES | |
Number of other parties named as defendants | eighteen |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
NET LOSS PER SHARE | ||
Net loss | $ (137) | $ (1,709) |
Weighted average common shares outstanding: | ||
Basic | 23,057,546 | 22,879,805 |
Diluted | 23,057,546 | 22,879,805 |
Basic loss per share of common stock | $ (0.01) | $ (0.07) |
Diluted loss per share of common stock | $ (0.01) | $ (0.07) |
NET LOSS PER SHARE - Anti-Dilut
NET LOSS PER SHARE - Anti-Dilutive Awards Excluded from Calculation (Details) - shares | May 01, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Anti-dilutive Securities Excluded from Calculation of Earnings Per Share | |||
Common stock dividend declared, percentage of shares outstanding | 5.00% | ||
Weighted Average | |||
Anti-dilutive Securities Excluded from Calculation of Earnings Per Share | |||
Weighted average number of securities excluded from calculation | 667,231 | 774,572 | |
Stock options | |||
Anti-dilutive Securities Excluded from Calculation of Earnings Per Share | |||
Weighted average number of securities excluded from calculation | 87,497 | 290,838 | |
Restricted stock units | |||
Anti-dilutive Securities Excluded from Calculation of Earnings Per Share | |||
Weighted average number of securities excluded from calculation | 546,747 | 413,385 | |
Restricted stock awards | |||
Anti-dilutive Securities Excluded from Calculation of Earnings Per Share | |||
Weighted average number of securities excluded from calculation | 32,987 | 70,349 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
INCOME TAXES | ||
Effective tax rate (as percent) | 0.00% | 1.80% |