DWSN - Earnings call transcript Q3 2017 | Dawson Geophysical Company

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Operator

Good day. And welcome to today's Dawson Geophysical Third Quarter 2017 Results Conference Call. Statements made by management during this call with respect to forecasts, estimates or other expectations regarding future events or which provide any information other than historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which the company is unable to predict or control, that may cause the company's actual future results or performance to materially differ from any future results or performance expressed or implied by those statements. These risks and uncertainties include the risk factors disclosed by the company from time to time in its filings with the SEC, including in the company's Annual Report on Form 10-K filed with the SEC on March 13, 2017. this statements also press incorporated this start statement to release we morning. forward-looking regarding in as call, refer please the issued Furthermore, the company's this of note company's the please covered content And conference those that call morning statements. is by the

call, applicable conference references make is be company's The any in GAAP non-GAAP measure will is the non-GAAP current to reconciliation the a which measure. can the located A for management company's of which copy company earnings measure a website, this provide is During call not EBITDA, financial XX the to of release, guidance. and the minutes on will found www.dawsonXd.com. scheduled

being Company. As sir. President Jumper, now I Chairman, would turn Please CEO to a is like Dawson of go Stephen reminder, and today's ahead, Geophysical recorded. the conference to call over

Stephen Jumper

thank Dawson to Operations Conference and Call. you, Earnings Geophysical Company's morning, Deanna. and Well, Quarter XXXX Update welcome Good Third

Chairman, Deanna stated CEO my Steve company. name of is As and earlier, President the and I'm Jumper,

Joining and Chief me Executive Vice Officer. is President call on Financial Brata, Jim the

I start items have we the cover. to a call, few I Before want

call the you as only of time X, are Information If on the may listening. the November this longer therefore, available will Relations website speaks going accurate via by replay to be of to to reported www.dawsonXd.com. any company's advised of today's be call, webcast and information XXXX, Thursday, section today, at no that time-sensitive listen of you'd of replay like it Investor a

financial results. Turning to our third quarter preliminary

quarter quarter in standpoint by an our encouraged best EBITDA third our from years. which are We results, two is

quarter active XX% impacted EBITDA September revenue XXXX XX, million positively third to improvement. to quarter for results of XXXX. Operating quarter third by drove the the increased million were and $XX.X increased compared in ended of $XX.X revenues which Our crews, utilization

company and been is third a eight six crew currently one in The the Canada short and quarter, increase the to with quarter season United active The issues first We Canada anticipate U.S. for in first the five Utilization Utilization currently a readiness we is to has holiday in range the crews the historically the mid-fourth due U.S. expected to company is in three U.S. six anticipate two and to the in of in two increase crews that to challenging in in Canada U.S. expected crews the XXXX. in six six quarter seven The of has workdays to crews and operated XXXX. to crews States in period. in in two the expect to the as quarter of the early field, U.S. we XXXX, three Canada. the during project crews shorter quarter to operating due During in in the winter the with crews through operating in temporary eight to began Canada quarter. field the have for utilization through decline quarter to most fourth in fourth the season.

movement in third followed year, recent prices, experience The by in environment. challenging quarter has oil a the project the micro-seismic in a market remained in of another activity completed steady, continue bid While we micro-seismic America this project despite the second North to company quarter.

will In its to we continue which number regular on recording we continues crews basis. currently the U.S. operate 'XX. one a are addition, then of company have a projects, micro-seismic multi-component The of awarded in into that performing

acquisition onshore America. our at a maintain in outlook ourselves return encouraging, conservative control who third review to quarter will with Jim? as results. will remarks services fourth Brata, cost, the the While of to Then we I of seismic Jim the to the of financial continue into will approach and protect call quarter I designed now the the turn reduce position North some 'XX. over final are balance sheet Dawson, results data and leader

Jim Brata

Revenues you, September to XXXX. morning. the and Thank million Steve, were quarter XX.X third up $XX.X million, XX, from good for the quarter ended XXXX XX% compared of

to share the issued expected temporary to increase has to crews the winter Canada anticipate quarter compared U.S. first project U.S. third per to As Canada. X to in release Utilization $X.X during Canada stated of States, million currently the season expenses in a in million in the $XX.X operating to year. million amortization field. mid-fourth this three begun expect was same loss XX.X early to $X.XX of We as tax The in quarter quarter or for to in quarter million readiness two in the we same of six quarter in of crews three in five million in $X.X was quarter third XXXX. issues morning, first for $X.X the XXXX same short was to two benefit year earnings to quarter Net to loss earnings in our of with in six in of increase we most net due we million the same compared our XXXX an quarter. million in U.S. is seven third recorded year of a end an same in in is compared year and Utilization $XX.X last operated utilization two in in quarter to of XXXX loss operating We quarter six crews to million as this a issued the to crews eight third of the services EBITDA and from the Depreciation release share $X.X currently decline of Canada quarter administrative crews and company The a third in income in of to quarter compared benefit the ago. Also of quarter to eight quarter the in period $X.X $X.X $X.X period. EBITDA XXXX negative morning. loss through six the Canada tax to was active an million crew EBITDA quarter was to expected compared or in $X.XX the per United expense with the million is XXXX. and have third the XXXX of ago. X.X crews XXXX. fourth in a year $XX.X of the field, the quarter of the provided this crews million anticipate same the million XXXX. in reconciliation compared decreased through income in a General the ago, the and

highlight balance items. some will I sheet Now,

remains sheet strong. balance Our

As the short-term million. that, debt, of under our $X.X of capital of including of And leases, XXXX, is cash our and the some the ratio quarter current comments end X.X:X approximately turn approximately million, finally, $XX.X with to million, investments third for and Steve XX.X I'll call working we was of had operations. back capital obligations on

Stephen Jumper

Jim. you, thank Well,

release As by production. morning, in in to as continues important our returns stated data continue increasing increasingly production focus costs role play this seismic on unconventional earnings to companies lowering an issued and programs exploration and drilling

as several data of library the primarily stated put affects project basins companies, the West our multi-client basins participate the competition which Our seismic the a difficulties participants, but in act Delaware model drilling between largest is The provides. data data, we in outside contractor the clients Permian The and programs Permian as providers. release. Texas, control. together do our our Delaware become these current we timing our activities earnings and the second of seismic beyond the -- Delaware of majority currently more providers Permian seismic what various concentrated by is areas in of is activity and of strong multi-client those quarter driven a a acquisition primary in but increase basins need do that images not situation are in technology lie in commodity for for find of prices high-resolution not It remain of and highly activity seismic in in, as producing economic. in market seismic are concentrated and multiple improve rather with in will the value environment basins basins that the areas There belief

from an quarter an XXXX. -- quarter budget opportunity of note $XX deployed During data capital in previously to attractive $X.X acquisition million Directors strategic quarter, Also, our during XXXX $X in payable. GSX final multi-component for the XX, that to XXXX response included third million the equipment equipment. approved third million seismic for quarter, expenditures acquire rates favorable million an the remaining expenditures the the capital Board to increase retired million $XX its during September lease through for Capital were capital The $XX.X of had company equipment. company at

short-term are closing, and market balance state-of-the-art our the in strong, our Our years. million remained to among lease downturn sheet of been respected strong technology commodity debt balance remains industry. excuse brand for the of and obligations company million $X.X sheet, investments, this capital well million are we capital $XX.X while remained and positioned cash said, several and working that's believe The withstand on the with going me, cycle of most XX, Dawson September our is of $XX.X approximately we XXXX. -- In personnel well challenging, and as Jim conditions as

operating enable to cost our sub-surface to clients be reduce and questions. for clients believe, And with efficiency. We high-resolution their ready as and best-in-class, positioned of we needs the meet shareholders that, we continue the to I that Deanna, improve well delivered images our are

Operator

first go Raymond Adkins to We'll of Marshall James. Instructions] [Operator

Marshall Adkins

good million EBITDA. of Jumper, Mr. $X That's there. quarter pretty

Stephen Jumper

We're encouraged. you. Thank

Marshall Adkins

encouraged or encouraged. more at I'm least as

channel you've we up during your thought, we in for count was dozen crews got being days know crews? all per or closer is you count which quarter? might based question, in Because are as the more many a And we much crew you to running. could eight How I maybe utilization going on adjust? the full six channels, in utilized count, -- the channel been run the have channel old you So I would count Are were your to of guess, getting as crew.

Stephen Jumper

that's Marshall. I a assessment, think fair

and attractive the belief, Canada continues opportunity to that I continues is would that with which primarily and America. increase channel multi-component environment the multi-component that's, current industry-wide And or is North we recording. And particularly higher my consider utilization. than made multi-component all in and crew what think us old-style opinion the for made for I that historically that, a based us the -- why on is that my channel on think is count we across what utilization move, -- you probably year,

one got big so and And crew go in pretty the U.S. Canada. in large we've multi-component -- pretty

you boxes means project with multi-component is think about if So crew on reality. got XX,XXX it, that in which XX,XXX about we've a channels

be for XX,XXX, channel the to in So uncommon us XX,XXX, XX,XXX it's not range.

Marshall Adkins

Which is you been three than have would four years higher ago. or way

Stephen Jumper

Yes.

average an to well. we do as today. I on like we're run X,XXX the think range that because working, per years world channel probably thing per there primarily based is in channel down be where ago, probably channel XX,XXX with it's West And a was X,XXX it world, XX,XXX some something the no such will maybe Texas X, X as that. But crew

Marshall Adkins

That's a big deal.

else channel count, are if some So -- I is get does as leverage? potential deed. seeing you any utilization that we everyone you in will, similar doing seeing the a more tighter we Are for industry pricing assume on

Stephen Jumper

The we ago has the the shot changed and three terms grade, in now well has years quite steady. effort relatively the of compared way pretty Pricing energy, way things we're to of tightness a stayed shooting bit. things

We turnkey on -- well. high. jobs our really And the productivity crews very are is so performing really,

it has excuse and me, productivity And recovery. not It But right so utilization seen I pricing and increased. call I steady. think efficiency significant productivity -- would now, see I greatly or has certainly

market still like I with challenging forward, in environment, think, certain of stuff. we're Going types a equipment particularly multi-component

not those budgets for meaningful think within a while some our seismic yet. still there's work we clients having what that's yet. there's we're don't increase there coming, which activity, not activity, certainly we're have not capital today. still budgets I it's to in And think still been but of I potential is And the there allocated think -- for movement. it's the

the is get begin is as to potential So increase there. is utilization count possibility I certainly there. think channel Certainly, that

Marshall Adkins

is you're falls to think because a it of and if maintain Can to is yet one-off $X or efficiency So event? a -- here a lot really EBITDA productive of this is it a you forward? Or sounds In that massive and it margins pricing quarter you're like reasonable moving highly mean, I words, of million just efficient of a obviously, that going sequential back is other kind isn't going $XXXX quarter efficient. forward? in repeatable that and just improvement

Stephen Jumper

give you don't historically. guidance. at But our look that we at I forward-looking company look you and if Well, industry you our would historically, tell

to months, utilization the high being predominantly it participants is words, quarter-to-quarter primary surveyed primarily have In where probably XX that today's issues. permitted the last a level the always with readiness. we utilization issue related by that deal would been world, is of Our that other getting world, had were issues getting in, year, variability, this weather In in results project ready. job past and multi-client driven the a and we've

And think so certainly, somewhat lumpy be And environment. I remain the going is a area we're in the highly between certainly continue two. I somewhere question still, We generally in speaking. to the the remain term. of answer We're to challenging concentrated in to activity, think a we're near in

Marshall Adkins

way. different a at come me let We'll

Houston, quarter. that that great didn't weather through. there in of You have kind was rolled here I mean, storm being little exactly last

rain to quarter, time, from weather exactly the You the a was bunch had wasn't time of for it? Permian up so favorable in

Stephen Jumper

any, We We little Texas, us. quarter be I impact, event. in hurricane wouldn't weather had to have weather the very in impactful but this the for did some if from extraordinarily consider West

Marshall Adkins

else. I for will to attractive over Define attractive opportunity. you me, and bought, more equipment opportunity. it The Two turn somebody

or the the buying for stuff dollar You're $X.XX on what?

Stephen Jumper

put recent, made mean, like more I had Because because pool, base. it a a was is But fits used with certainly, purchase attractive, to right it this existing It sense equipment near-term it in we really rental out it favorable it I And of the was being it think of where can't than term cost I was to go -- favorable. felt came that's for in a was a more And equipment at and it us equipment. there. more the… need. was situation some it our some tough

Marshall Adkins

less cost. new than build Clearly,

Stephen Jumper

Yes. Absolutely, yes.

Marshall Adkins

to think profitability versus me this Canada And we're that likewise, the overview profitability. whatever in quarter of running an Canada? Give should I your of crews were shifting this versus about quarter how last mentioned you micro-seismic conventional third release, these and how in projects compared of Canada projects? micro-seismic in projects, how conventional things world these profitability profitability coming a contrast like compare quarter micro-seismic looks do up? the So to just to So

Stephen Jumper

-- ground crew. personnel nice really a margin carry, equipment it's out are typically a have. on to much a crews They micro-seismic The projects there margin the standpoint, the probably best from and because they're smaller just

So -- and there's not active energy sources.

because to Canada up -- in margins higher look And a time as down to bit historically, begin could Canada do what work profitability they the short-cycled working frame. projects X and too even firm into on operations, early you for have tell well, carried season that quite that QX. has the a of what Canadian if is impact So least to think micro-seismic feels right at Canada. it's net the there's -- They -- be like, do I such impact with really November-to-March now that at the they do it had it's going historically our to get

So to down, go have the quarter. it going crews issues, feels project because several to what the going back that going this the -- to is to quarter looking contingent upon we're be weather And mid-quarter see we're is highly where have. again. I the to going slump like, readiness ahead, And we going we're fourth impact into are mid-quarter have then for think come we'll they're

as quarter shorter I So has toughest the said historically that got the said weather concerns this days. just fact as we the in -- our we because been and one release, these

at gets X:XX. dark as -- to I now X so it -- X:XX at And opposed mean

Marshall Adkins

lot after this Well, my you a made thank easier call, Steve. you more certainly modeling

Operator

Researched go Investments. to We'll Potratz John of next Instructions] [Operator

John Potratz

a to large put get they're they you long fruition under seismic. together. My is but the the to you release, component projects can press it, before have Permian get about to not that lease come there's there, area to coming a sense these takes Basin. in very have it multi-component -- in to can you projects the the providers out you get that In do before developed that you just And talked people because together time a and put sense being and can take

long So process get going. that a for correct? time that to takes that Is

Stephen Jumper

to correct. -- cancelable been of all, or all at first have notice always of look you things. have on terms in contracts our is It's consider We That three have, really that modified what can be of short very we scope.

can So be increased can a project large project size. smaller size. in reduced A in be

the at to where you really have three we And are so phases. today look market in

not have that what going you have they're in and to together. You is projects bid sure that And book, their really are put project awarded the to contracted consider have been a what order be. you trying that you're would had that then timing's you phase

probably very positions move and may is have In And that participant, but the us the that that operate with those the further multi-client in more still sometimes, primary participants aren't And as shot, and considered very operating are number in now variables late always which And projects active think types a concentrated bit may we've sitting that been that one dealt and other some ready, issues, back on variable of of the little and past. that's you you the continue puts program crew-ready are the around have areas crew just issue becomes today the of one words, schedule. projects have. the It's the phase, Permian in I'd as have on of being of that with historically. larger it Delaware. there fairly than schedule those size so of they grow becomes Permian actually be are than other on the level a of what based with land providers And quick areas bid fact because out -- companies in companies there very it for the farther to items ever to service could they you quick. operation are that and three and we their E&P out that's more size well the

And lot would generally think, there, of assessment. so I agree I your factors a in with speaking, but there's

John Potratz

these But months psychology on have going business. say, together. of more they That working know put was, ago? much them haven't positive like The that to together, you're projects, quite say really to six bit a don't that looks is we come until they

Stephen Jumper

with I would agree that.

rough had like a in we we the to had of us to a of going going We does early that QX. a long think one, in I be. utilization. the drop QX, terms feel have -- what was happening part QX had but We're doesn't it to in particular QX, utilization drop's in in how in drop significant nor

that desire be drilling program. seems and bid agree I that I more seismic to be part a E&P data for their companies So of activity steady. pretty have more sense to a

-- your asked very to that a short-term happen that Marshall you'll can takes as seismic the demand have it back amount of data to project Going other time get question much get from of that we don't because ready, earlier, of a the one services boost that quickly.

more the yes, in with challenging environment is short little the term. we We better. so, It making in a commodity more a certainly sentiment week, of but positive, continue feels this optimism. bit movement. And prices to operate with Certainly, sense

John Potratz

are that that increasing in dramatically that Journal -- that I implement? seeing in the environment plans you West to a any any -- by like companies the Street Texas, decade. Wall on their the Exxon? for to net they end year the The you noticed the Exxon Are does benefit output XX% in and and interest a Permian said still of But that And Permian? positive that West Exxon through is Are slow boost Chevron article very or

Stephen Jumper

exactly we the including driver times, several always had Many program. the very It know don't is. levels of majors The the multi-client particular high who activity. the behind is a Permian, and particularly activity have world, with in seismic

program, you know or may fully survey. be mean, I not survey know it's not or the have that with may miles, and was we we may full if independent. So major a we'll we the may players but if generally involved that hundred couple shoot And involved. some square be or not a -- precipitants everybody out an in in of may all a aware go you knowledge of of a it's

to So of are us independents hard exactly majors directly for and it's kind directly which or involved. tell

John Potratz

that But wants if you're it? basin, in, Exxon to know get they to to some going Xelvin sit increase you if they'd production, don't but But who, of Permian plan and you Chevron where. a sense in when, saying even business, comes some were have a probably get component probably

Stephen Jumper

Correct.

John Potratz

Ford to are Dakota other developing? And areas the STACK, or Eagle like are time, at expansions the there other North this they

Stephen Jumper

or from a project crew to in and you few crews, together can here talked particular time, a which they then they string a of We put be is likely not like parts a the we've could in and two continue project where in country basins. past, the projects. QX to the basin operate under time about in would But three other there, other a call,

say going have in pricing. So a to commodity one-offs. increased outside be -- I I two be And little have but more the primary the basins, there tend think we're to other would to will think basins on activity these help I project of

have trigger going don't to what some in Delaware. commodity For price. to terms But basins that -- that activity do exactly but point help to I and will I the have in be get know to happen, meaningful we're outside of the other think Permian

John Potratz

the finally, And equipment. on

going to cost are So added lower -- -- [indiscernible] it's component fire lot a currently -- a and sale. equipment was the you that what this you've equipment just have like it is

there couldn't some got -- there refuse. you just equipment was You

Stephen Jumper

Well, and... it we needed

John Potratz

needed Oh okay. you Oh it.

Stephen Jumper

in went cost a and rental attractive really looked it we an was you purchase versus was felt of basis that like the when immediately it to equipment basis, currently And where situation. is It operations. a at field situation was

affected that factors, decision. variables there multiple that So multiple were

Operator

questions back turn for over I'd [Operator closing conference remarks. like Instructions] holding, further or any And additional the no to with

Stephen Jumper

and We interest. for your you in your to listening thank our Well, time for appreciate call.

are pleased by As we've encouraged results. said, and we our quarterly

environment. We continue in challenging operate a to

I we'll continue fair it's encouraged. an -- again, be once and And of to 'XX. to a probably night Thank point, wish for interest. back moving But thank the It think nice was to our to utilization be -- that their in really say opportunity extend valuable Astros like this I a at to for think I February of I gratitude we're on you. somewhat would year-end variable of to support and I our want continued to employees our hard Certainly, to shareholder thank like more and to base. work. to behalf our last them. their services. certainly, touch company to discuss their efficient will their in believe the working and our our greatest be and both I win thank and and than base continue dedication thank clients hard to season. shareholders see great behalf in our shareholders you want And the They ever. with our on of we client trust holiday everybody And energetic more they're And results.

Operator

Thank participation. does today's conference. conclude your you for That

may now disconnect. You

Dawson Geophysical (DWSN) 5 Nov 172017 Q3 Earnings call transcript