DWSN - Earnings call transcript Q2 2018 | Dawson Geophysical Company

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Operator

Good day, everyone, and welcome to the Dawson Geophysical Second Quarter 2018 Results Conference Call. Statements made by management during this call with respect to forecast or 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 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 the company's annual report on Form 10-K filed with the SEC on March 9, 2018. Furthermore, as we start this call, please also refer to the statement regarding forward-looking statements incorporated on the company's press release issued this morning, and please note that the contents of the company's conference call this morning is covered by those statements.

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

and Geophysical. over As pleasure to my go And now to Jumper, a Stephen it's reminder, Dawson today's call is CEO Chairman, sir. ahead, President the Please recorded. conference of being turn

Stephen Jumper

you, Company's Laurie. and conference Good Dawson Thank morning and second operations to welcome call. Geophysical -- quarter XXXX update

-- of is the As Steve CEO President and name my company. Jumper, said, Chairman,

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

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

increase for XX, months the ended in the XXXX. six increase revenue XX, in Turning to improvement productivity for million revenue ended $XX XX% ended XXXX and we XX, XX, June and improvement and to drive June as June million XXXX; ended utilization and ended compared in June an XXXX quarter $X a EBITDA improved for six our XX% in to preliminary XXXX results. quarter results a to the six generated EBITDA continued months XX, compared over months nearly June Increased crew the financial results

ended $XX.X June reported revenues quarter we XXXX. ended for XX, XX% to the million $XX.X compared million, June increase XX, an XXXX of For quarter of the

XXXX. of a million of share $X.X net quarter common a $XX.X loss per we million or the nearly the loss reported share of for negative XXXX $X.X to quarter XXXX, XXXX. of ended $X.XX loss million or XX, XX, per common quarter for EBITDA June compared $X.XX a the a reported million of compared second the quarter $X.X to For second loss EBITDA ended for We June net of

revenues months six million, the an June XX, For compared ended of month June ended $XX of of six approximately increase reported XX million for we XXXX. XXXX, period to the XX% period $XX

million share we share the first of half compared ended $X.X 'XX. $X.X XXXX. reported $X.XX loss half million six XX, net $X.XX XX loss $XX.X months per of of of a six For first to to per the XXXX, months a for loss or or for net common reported a million June ended negative We EBITDA for June million the of EBITDA the $X.X of compared

quarter States operated the we in second the X XXXX, equivalent for of X to the of During quarter. crew X and in the Canada half of approximately crews United

Jim? some control season final for and some and improved call outlook outlook financial in review now I return an on Based in field fourth remarks Then a X with Early active basis our are U.S. results. Canada. operating combined the of in crews of U.S. the who We we will to over to October X the winter the are the third in have U.S. the of third and upcoming quarter the into crews available the to currently operating Canada no Jim I'll indications crews turn XXXX. [ph] in XXXX during leading on crews quarter information, the and X will currently to Brata, questions. Canada. anticipate during quarter April

James Brata

increase second compared of quarter and the Thank morning. to Steve, million quarter million, ended $XX.X for the XX, an XX.X% June good XXXX XXXX. as $XX.X Revenues you, of for were

and X second of this same negative of ago. ago. and the EBITDA morning. the our year a of million, for of of crews Canada. that $XXX,XXX the information, XXXX. $X.X a compares to to combined services XXXX XXXX and the in in of XXXX decrease Based in compared loss X of tax expenses same of compared an in the in EBITDA the quarter. crews Net the As was in is during the same in in quarter ago. X million U.S. quarter to $X.X the issued company The $X.XX in the of benefit currently anticipates and second EBITDA and second quarter this U.S. company the basis XXXX. second a tax last compared equivalent in XX.X% million Depreciation of same crew quarter common common loss reconciliation year and the in in half of release earnings on was in million was provided our second quarter quarter the same quarter loss no up crews a company operating a in the morning, million, operated the [ph] currently the $X.X $X.X this third crews of expense quarter available release stated during year income was benefit loss and quarter the the We in in Canada in $X.XX the decrease amortization to quarter income quarter million approximately An a per administrative operating X XX% same period a XXXX U.S. $XX.X $XX.X quarter was the the in million a to XXXX of of to earnings the [ph] of compared an of in X.X% million X year. share were $XX.X to crews $XXX,XXX on net a of per $X.XX up X General for $X.X to U.S. recorded share to or compared XXXX. second million year, or quarter Canada fourth issued of Cost million decrease $X.X of

a EBITDA decrease six June XXXX. increase our per this Cost loss XXXX months expense $XX a million a Revenues to to period months XXXX. compared for share ended of share provided for was $XX.X for million in million, million, compared EBITDA June ago. the six XX.X% An in XX, a same X.X% million for million XX, to a million in XXXX loss same $X.X compared first months I'll was XXXX. same period the first XX.X% for the or $X.XX a net $XX.X six for decrease earnings XX.X% million XXXX. $X.XX million, XXXX million reconciliation the of period June Now, ended XXXX in $XX and period were June the for six six the of to ago. loss period of as a million negative expenses $X.XX the XX, an morning. was period release of $XX Depreciation a results General of compared month administrative same per compared to ago. the some Net the the amortization same $X.X months loss or the were year and $XX $X.X million services of of XXXX the highlight months, compared in ended six XX, half for of ended issued June EBITDA ended XX, months $X.X was in decrease year was year the six of $X.X first of to

Now, items. I'll highlight some balance sheet

cash had short-term debt and quarter, of we remained at $XX.X end of the sheet including $X.X strong and capital second under the balance million Our We approximately leases held [ph]. of million. obligations investments

is some the back comments Our current with on [Indiscernible]. Steve for working And $XX.X capital And was our ratio operations. million. I'll that, to finally, turn call approximately

Stephen Jumper

made for Thank we a you, been experiencing speak. little trouble being here. bit and worked that as it We believe is are the aware audio Jim. I apparently I on apologize have we on call of that

So, us the remainder bear the call of with here. through

this comparable crew during trailing a results As activity significantly utilization release and second XX-month issued periods, improvement quarter bid and our second while XXXX. stated our the of morning, slowed prior from financial in quarter represent strong earnings

As the primarily bid a the are basins. into third month we we improvement into of Delaware activity, the enter and in quarter, second Permian outside experiencing gradual

experienced majority our of projects not the to half a in, participate actively we we second largest driven as library contractor of the during be data multi-client of companies, but the we providers. act did by do XXXX, continue As model several for a

between affects position competition beyond together various control. multi-client situation participants, are While with with our and as seismic and project experienced strong remains robust projects inventories our highly-qualified which is providers projects, personnel these favorably us a put timing multiple the

activity. Jim our sustainability we outside the of activity as primarily commodity million that increase belief in sheet to XXXX. completion and remainder outlook nearing as Directors basins needs has sheet and activity Management and well-positioned $XX.X The will second oil strong, the some continue be data short-term deliver positioning a particularly declined to in projects XXXX the Capital for of activity seismic capital concentrated guarded the more increase of our company's leader and maintaining our ready and Permian We believe to of costs to class and in the of the data overall improve uncertain primary to $XX.X and the we economic; become seismic as said, Jim to approved equipment. for as large but and the to second payable the in quarter encouraged basins, has XX, strong images notes million prices area data $X.X of $X.X Permian by million. million vehicles reduce seismic capital balance acquisition half highly materialize meet Delaware questions. with in I efficiency. shareholders producing subsurface take conclusion, U.S., of areas onshore meaningful the those basins And services due visibility XXXX, are as amount enable are During replacement activity yet activity in a resolution in of Board first the Delaware but slightly and were operating XXXX. has for improve quarter, as lease totaling continue In of remained if and of America. as balance investments for the we several bid remains earlier. cash the in level the in XXXX, has the expenditures North in Delaware million It maintenance a constrained company this acquisition and activity, remain $X.X clients $XX that with stated of ourselves prices we working a acquisition June quarter best capital we're the The of Project is clients The that, way. of budget obligations of for committed to Laurie, recent rise that of million recent company's their and Basin. high

Operator

James. Instructions] to And Adkins you. Marshall we'll [Operator Thank at go Raymond

Marshall Adkins

a understand me meaningfully better. make Steve. more we money? size phone The what crew what it seasonally little Hey, your thought, very or was your weak but you much a going margins apparently is quarter. Actually efficiencies you're performance good your on. typically cut in bill lower crew in is more than just count to or Was that cost bigger so able Help

Stephen Jumper

be one range; it's The the You not obviously channel of as to things. that I benign of more crews Margins XX the in improved just Marshall, you [ph] are bigger. affected several we've factors. and to those efficiency, those be continue projects efficiencies, types not always to range. can to It's in combination That but throw operating there, by a times you? got up move we're room, count. channel talked don't of it [Indiscernible] running it about gives think

So, doing think efficiencies, we've productivities channel nice projects efficiencies. been crew job, improving a I has on help. that done job certainly structure the of understanding some nicer and our group counts improving and bigger the a financial do cost the and

mentioned. So, I it's think a that you things of combination those several of

Marshall Adkins

right. All

quarter? counts crew coming EBITDA pretty of quarter. the caught guess up a Should expect these fairly low So, in out improvement half with down, I back your winding guidance you're projects we are year is into get on like normally third low an what of the we the obviously in

Stephen Jumper

-- to like what are it's of kind and QX. I'm on challenging looks we somewhat not tinkering go to but Marshall, here guidance there, be facing we're a going

we're of are -- the early in could make any the not where really for too quarter it's activity in some going and are so, to very contracted about couple pipeline think go. positive And things level be There a on fourth predictions that's yet, we in getting close quarter the up us. that the things to but third that could

the in momentum getting there's XXXX Permian SCOOP are just [Indiscernible]. there's and projects stuff Wyoming, related but Austin some Colorado areas in not in things in We stack, too area Chalk indicators down Delaware, that and some on for good have pretty some

you've about or -- XXXX for whether more into strip it's some had the of activity started We sure. capacity the that in encouraged looking guarded. we're the that in talked the where So, outlook we issues bid to weeks, in from takeaway last obviously couple 'XX. back in of QX the a whether not perspective are going our see significant we've is year But [ph] is Permian, degradation slowdown positive energy at here

Marshall Adkins

thoughts in you're a current currently are some are cycle are things So some say gets booked, I you half, shorter short may stuff maybe cycle over obviously ugly what what that hand. and get mean at there? but pretty but broke there, here up your above thinking. that a maybe there's little there looking some you back have you We're there upside bit

Stephen Jumper

in market, Yes, call that talked And appear and correct. projects and that some about to we've some we've there getting the got of last things a control. in out quarters we are [Indiscernible] our where beyond of position closer those have be things good in there on our talked we're about that some the as couple were is

are XXXX. back help that there the obviously some and could in So half, things we're there optimistic then for us

Marshall Adkins

back in improving half in the the Canada Canada, of looking in the meaningful at know activity And we're a year, the year. it in sounds of back half improvement also like I

Sounds like XXXX, a bright of operations as spot your have Canadian go the that through might rest we fair? is

Stephen Jumper

We really early -- but so. starts Canadian ramp think market Well, until it the December. up doesn't is the it in hope indications, we really October,

a maybe of month market I QX in level Canadian winter of things until so. a -- put season, October contracted or the in would XXXX. next a indications probably but to there be into April, couple improved so, the weeks, are of lot that activity get of But And up that won't most of will I which the its would

Marshall Adkins

There's some got movement landscape, the Last I bought guess [Indiscernible] competitive by one from me. on been company. another

an us and you're pricing update what seeing landscape Just the give on if general guess on I just competitive you could?

Stephen Jumper

purchased I some was tough of traded market market SAEX. we've XX as for Those transaction time there were bankruptcy American now. Exploration, publicly late Chapter a competitors. by has end. July seismic South And a about one quite our another The been closed, a symbol a believe company, by assets company with That

-- So in the landscape the SAE around I -- going are. who had has much Seismic standpoint traction today they allow that and things a been market. and us. to to returns projects in we we've that on half efficiencies a shooting think past remain larger while, a back market the think we better the count But to hasn't out know us It's competitive still competitive generate smaller been channel crew. really from with are been really particularly I the have than a changed that while. for in here of hasn't industry tough improve the the pricing much XXXX. it's ability But there

the in become market think point count constrained growth channel count. with the little think some to I a at starts channel I

model types this we've that circle the rather look move the always just there things of a time. channel to think big, It than terms and lot four going and over is talked I of for equipment like of capacity back issue get so of or hasn't as in crew count projects and And even been to these a count will those become capacity continue a about going is count more model crew three whole new to build years. really

Marshall Adkins

you. Thank Right.

Stephen Jumper

Thanks, Marshall.

Operator

Instructions]. We'll next go [Operator to [Indiscernible].

Unidentified Analyst

Hi, Steve.

Stephen Jumper

you? Hey, are Bill. How

Unidentified Analyst

your meaningful fine. just about of you could to that as doing not associated ago with to library you type was the Maybe when to part versus I'm ask activity business margins a more this traditional historically of business? that wanted opposed I address your years shift business.

Stephen Jumper

Okay.

related, to had years. book in multi-client percentage couple level unconventional, has not that basis particularly seen last of on have in The the to of multi-client comes of the some would E&P we've that With been tend they're scale than standalone projects count, the a in related. but business We a be increased efficiencies, through say, project the be. larger projects, let's so most about scale that channel and what, comes all turnkey operating longer

the scale scope. there certainly just So, of because potential there and is

you years back had with type and some rate the situations agreements, years If go we've had to day dedicated more We've E&Ps they several several projects, to time tend E&P in past when certain where whether back. individual smaller back worked have nature. be over going crews term in we

model And not we're a little unfamiliar different so a its model, with. it's that

them. worked for in difficult dealing in so is are scale I to Bill, some multi-client past. put them be other room be and time more underwriters that -- E&P fact tend them. say turnkey, the based is and running large be times more in have they would together have many thing, getting groups We The just and they is can very companies tend on I be But with consuming to behind news they the good tend the to at that potential biggest just downside

Unidentified Analyst

That's you. Thank great.

Operator

turn [Operator over at remarks. questions back have sir, this to call it Instructions] additional appears you And I'll time. I any additional the no for

Stephen Jumper

employees Well, efficiency listen extremely pleased maximizing cost. in taking the want dedication, their for XX Laurie. our to results. six-month and -- our thank and to We're their Thank our the want I controlling months, and recent with I everybody to it, for in. for effort appreciate you thank We continued time

in we've of had here. As -- little a slowdown got we've said, bit activity we've

estimate season. crew back of for our encouraged at somewhat the for our looking by outlook the we're year, count in and are winter half encouraged a We but lower upcoming XXXX

Our in strong. balance strong shape. financial We're sheet remains

remain Our strong. client relations

personnel are in well-respected Our the industry.

And so, talking hard working for positives our much. you very our and another look we've Thank lot days. a we in forward clients. to shareholders and to we'll to work for got of us continue you And XX

Operator

again And today's like today. and thank ladies again, for us joining gentlemen, I'd does everyone And conference. conclude once to that

Dawson Geophysical (DWSN) 6 Aug 182018 Q2 Earnings call transcript