DWSN - Earnings call transcript Q3 2018 | Dawson Geophysical Company

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Operator

Good day, everyone, and welcome to the Dawson Geophysical Third Quarter 2018 Results Conference Call. Statements made by management during this call with respect to forecasts, estimates or other expectations regarding future events 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. the covered this by that this conference note are morning those please contents company's of call And statements.

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

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

Stephen Jumper

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

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

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

things just we few get started, to Before cover. a

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

September financial results. XXXX XX, our to ended and third preliminary months Turning X quarter

a $XX.X for the of XXXX, the quarter of XXXX. September reported XX% million, ended XX, decrease For compared ended XX, $XX.X quarter September approximately revenues to million we

of loss to the net or XXXX, common $X.XX quarter of third a per a $X.X $X.X share third loss or $X.XX of for per the common For million share compared loss XXXX of XX net to loss quarter to reported utilization. million due September compared ended the ended primarily $X.XX EBITDA of XX, September decreased EBITDA 'XX. crew XXXX, for $X.X of for the of million quarter million reported We we quarter

September million, $XXX.X revenues the compared XX, approximately XX, an months million XXXX. X%, 'XX, ended ended of the we to September X a months increase For for reported $XXX.X of X

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

of quarter quarter to to X operated X crews in Canada of in peak third We quarter. States the U.S. X fourth Canada crews and year. this of X the we half in XXXX, X a X the for operating United the anticipate in During approximately the in and crews crew

who in microseismic In information, we project and X available will currently addition, of Brata, on X of of Jim Jim? of remarks will call 'XX. final with financial Then return will outlook reviews some quarter control the to during Canada during the we our first turn into operating U.S. crews over I crews in XXXX. now U.S. the fourth X Based the quarter fourth going in to results. X the to up the I quarter conduct 'XX. anticipate and

James Brata

the XX, September as were million for million, for $XX.X third Thank XXXX ended quarter XXXX. compared you, third of $XX.X Revenues decrease Stephen. Good to morning. quarter XX.X% a the of

in X of a company X XXXX, the in Canada U.S. earlier crews Canada earnings to operating during X quarter. X anticipates in in company for quarter As to fourth States United X crew and crews crews third in approximately quarter. of The operated stated peak the and the our this in in morning, X the the release of half the

in X million, in of to $XX.X period to the million administrative and were conduct information, benefit U.S. million quarter $X.XX reconciliation to X of of quarter fourth will EBITDA was An million U.S. X the the last this third share million share the year company $X.X million, quarter quarter loss third anticipates a $X.X quarter X% our ago. of tax of a per in $X.X and year Canada amortization was of XX% $X.X during $XX.X ago. quarter were in quarter loss million or the of to was crews the a available XXXX. XXXX Based in loss year the EBITDA million the compared of $X.X in release operating project Depreciation ago. quarter the in of in quarter XXXX same million quarter third quarter year. decrease $X.XX million $X.X XXXX to net issued third was on $X.XX of in a Cost the XXXX. a same of company of compared XXXX, services $X.XX of per the or crews to General benefit same in decrease $XXX,XXX compared this XXXX. in income In quarter the the compared of of year Net a in morning. an addition, income recorded third third provided million and the first the EBITDA same to currently of same compared tax up XXXX. loss an microseismic the the X during compared in in in to earnings of expenses in quarter same expense We the $X.X XXXX

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

highlight items. I'll balance sheet Now some

remained Cash $XX.X under balance third of the had sheet strong million. capital debt, investments million. including of short-term approximately the as end $XX.X of obligations of of and Our quarter leases We 'XX.

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

Stephen Jumper

Jim. thank Well, you,

to September that report recent in in challenges delivered significant market XXXX X-month for were in $XX stated issued this in EBITDA an September and million compared period improvement XX, to a the ending of X-month net XXXX. earnings market increase As reduction morning, pleased conditions, the ended XX, X% release revenues, our in despite -- a we we over recent loss, period

we the feel much for Despite and Our demand The continued focus to initiatives increase both on X-month had the originally expected. about conditions degree back the cutting challenging cost Canada. in early remain we our improved in results, in particularly materialized not success, XXXX efficiencies half has and market of anticipated the improved U.S. year. that

Canadian optimism basins, lessened weigh prices. somewhat opportunities has constraint and in continue Canadian issues capacity Delaware between the with the Our differential the large and WTI on oil recent Permian for Permian prices to in is oil prices In pricing and additional capacity and XXXX remains temporary in as professionals added as as will differential a pricing and Delaware takeaway believe 'XX. difference place. ease industry that Many market large

second additional we beginning activity of experience we of are have to a improvement entered In the work bid in quarter, and month secured Delaware. basins the various as addition, the and fourth slight Permian into including

current they late client including related belief levels improved at work as in prices multiple have risen as data as to budget library our exploration providers. in of contractor seismic makes of projects XXXX decisions of production participate on that but prices times Permian behalf remains increased actively often levels and the in constrained. for revolves the basins largest and generate more slowdown exploration project result companies around and our model in are oil quarters, believe in, demand oil associated project with cash not to XXXX constraint is and several control. maintain overall capital improve activity lead will Hardest visibility do Delaware, lead to cash difficult in driven within project long of We The multiple is greater the a our these planning sustainability part beyond spinning participants recent in flows. a exhaustion we do Although visibility customer multi-client our flows. It base base,

a million $X.X seismic an budget increase and primarily to opportunity replacement were for strategic total quarter, $XX require for million seismic equipment. the capital to for million equipment to Directors During in vehicle. of XXXX to recording approved our Capital million, Board acquisition quarter response third $XX the in expenditures data $XX.X in date XXXX certain from

as working and sheet of $XX.X Jim with of $XX.X balance cash said short-term XX. Our as September million in strong remains investments, capital million

seen as While encouraged activity fourth cautiously capital we clients quarter, the uptake the that budget month our have and we bid expenditures. the remain we optimistic of slight first by evaluate are XXXX in

shareholders subsurface high that, our our take deliver ready protecting purchases maintain take to continue to the and commitment to images. ourselves with are meet advantage of And needs and valued I class Devin, opportunistic as we We of questions. best positioning sheet, resolution believe to our in clients balance we

Operator

[Operator Instructions].

the comes with question of first Marshall James. from Raymond Adkins Our line

James Adkins

counts questions The you discount detail substantial you channel of at up that? or equipment give What's sizes it that Couple us much, need a new is or little going equipment driving more bought, just here. need buy crew going more we what's competitive this so there? or stay on you channels? to Did on

Stephen Jumper

-- all above. channel We think that here the to me. Well, Marshall, it you that 'XX, answered the we're soft QX know continue is for count despite of fact going to I It's we increase. little that demanded is know in

believe one the other and in equipment; X overtime cableless had were will so was presented to equipment. recording increase. conventional recording with counts opportunity we become channel was And of we Both really going -- X an available, equipment, each some which our places; component

opportunities. And past, done that was move move for there is Legacy Dawson to so in opportunity something both is the on and the these us that on equipment. had TGC This

So some We do requirements think cost large Canadian wise, count particularly was From price the particularly to XC with winter -- the some gear. in market a I X advantages. of good, timing was prospective, it project related the in growth channel XC this have very particular.

early the to it's eventually And, the want And up factor. next I ahead going that. is be And as as we we per think, of going a talked think could, continue grow issue counts flat, be all to crew channel constraining to I count count above. become I so and but we've think forward, to I think so go year, channel about count could I continue capacity crew Marshall, to think fill channel

James Adkins

it it Is there. a So more new -- little it... brand from clarification is Is manufacturer? equipment just

Stephen Jumper

not. is It

James Adkins

to lot the again for for it's want I'm I guys, side. answer of you. been your are tough seismic way going guessing, and and a competitors don't environment But all by

from that over stuff is guys? other this guessing, now So I'm was left

Stephen Jumper

equipment it either coming have Predominantly, out pools, that themselves of or that independent is lease had. companies manufacturers lease is

of back, this -- it's in stuff lease but is mainly that could come out have related essence, So pools. it's to some

James Adkins

pricing? Lot a today. next gone got is bring as me the equipment a when into you competition your does of is affecting there. owners still competitive landscape current the that company. Discuss my back now has that where Well, how hand, and out the but that of change Where new business, stands stand They question. business, come

Stephen Jumper

purchased Really in or in quarter we was two, -- through and bankruptcy competitors an believe last has talked replaced the had competitor XX of and in sale there then a about basically we I the and quarter Lower one equipment Canada. last that our that particular asset

last quarter has landscape really whole lot in And competitive so. the don't Marshall, or that so changed I think, the a

right. the the folks. not space, go in You're It's been a equipment but the for tough seismic contractors, just

model difficult talk that. is The in much level. be. get may databases the as What has the has And industry the where it's the quote channels It's say pricing provide mile more square I to down in that where question, been is been struggled of case me fact has tough. to that this per will so pricing always pricing we of that whatever or same more unit it been been turn not -- about for

And step pressure I a few in probably increase channel certainly per that pricing in X now, the related price years. haven't another so we're the in a counts year, right are channel issues months think seen an last have we to and seen change to

of there little room there. Everybody's landscape regardless in a so certainly, channel to key I the out we're actual is out large XX all next I bit counts. ability put on some going count And think And channel crew improvement behind months. to is think the what competitive a to be for is the curb probably XX

So I probably for -- rooms that's improvement. there's think where

James Adkins

maybe again which is competitive when that, possible capability look and landscape as -- size and I'm asking. whether in everybody, or you of at you other are So in I'm that what when similar tune use It's accurate? say two it's not I guys is that to the you X

Stephen Jumper

are, I there there three X, currently say would other we probably where Well, is X, companies. is

XX, active them can to Others There they has around, most there the is private. experience always equipment the But Some market. competitor have in can X X are enter is and always X that can public of that -- access to crews Lower run Lower XX. in one and can X this crews. some folks run industry hanging X there been

the I name last change competitive that would hasn't we the and But lot - that's in is last the overall much, little landscape has deck some a has the become a continued to couple And been bit, - we're of - change. pressure a count. on have could really factor changing of Marshall. There so channel changed going yet. terms in whole the have that is future. chairs to starting not but seen been capacity, not year, I think see meaningful say been in near What And shuffled

James Adkins

maybe on channel know about we channels should crew going going more when average vary crew forward, average? from next being just you but ballpark? perspective, just... on me work year count Or So on it's per XX% I per think and depend modeling a think all, where about give I And to

Stephen Jumper

Yes. We projects XX,XXX can XX,XXX we are a but to that for that a get many are it's uncommon We be not below more in get that few us by a many just crew. that -- get to have XX,XXX for with, don't the channels range.

continue X think year Delaware, I key. - of the And is by become so an last the some factors; issues over driven there we ways these two to increase in channels that this say density area. and the being look is going it's of to But surveys. I of are particularly to a where this lot size is And would a at

and as XX,XXX could high it's a there I so going we're I it's actually but thing about are to at mean, we're is growth where be because would say And be we've And per size the to of all of is that based the density bit going both as that possible, got little point there. channels some feeling to get increase continued settle XX% just see this going we've got some a there out and opportunity excited forward, difficult this number. projects, - on moving is channels, - XX,XXX. of a going but very is to area

on an that. So to something answer your question, XX% maybe like average

James Adkins

big. right. channel versus difference Is count That's U.S.? there Canada All regions? major the about How a between size in

Stephen Jumper

probably equipment. count Canadian channels. has channel single component by conventional just The greater the dominated on U.S. the market is cableless demand component standpoint, a From conventional a X

seen so component U.S. Canada, have to of real talked What in And the coming U.S. projects X density being out things are and the equipment. a about three we've we've related similar that are in in or seen component. high

So on that is the year going from up the work by component towards I the occurring type think on, the driven previous number into back more related from for XX% done thing but is X to X And market. States. the that answer we'd now, years versus We've is similar work -- some going next in component probably last that year. then historically say now this was question, conventional but we've is done States the in Canada

And of really that think over I we've XX to growth XX start head the to months, so last seen direction. that some

James Adkins

all Last bring it just a one me of kind from home.

great But because keeps - going dealing it spending you're You're of up. getting equipment. the a you need channel count

more If next out as more you X buying there to flow we is or cash have path a free the to X positive here years? over keep look equipment, and

Stephen Jumper

also Marshall. I the those at issues a if - related major think cableless you just what we not - expenditure. of now - we some right those mean equipment. is attrition year, end is this that I to channels of were There there that's replacement did that channels look at so, anything the

one And through, the we So I some just think here and had late at of that year we factored of last was had opportunities at that one that end QX. there. in these went we've

be probably opportunities are - forward. Those are limited. think more I will those limited going

cash were at in free it have be and this going a would basis, new been we going take right on at year flow of - right a this not... equipment to had is had this which now. out stronger But they people point, to that looking at new build type So obviously market are

James Adkins

this close asking to keep going and pretty more and spending why that's year you got this. I'm more... I We're

Stephen Jumper

have had It opportunity would there this Yes. been come up. not

is, in long needs one ever shape but capital your equipment we've But that's are here, capital tough, what when given times When I've into coming thing cycle, to I our we with industry right been is been times needs. as good, growth from opportunity. falls. now are a in company as struggle we're and expenditure have been to answer So think flow than is the is a an historically, be there around as hope we cash your yes, question that where always do better

Operator

from question with comes John the line next Potratz Our Investments. of Researched

John Potratz

mentioned what have more budget advantage something capital clients, later But your You budget here budgets dealt their because I will assume you that's contracts, in be that assume it contract that's is the but you when slowdown right the year. contract will have XXXX for and that of they relationships. base. of client years you work haven't back they based on exhaustion don't behalf people with have you sense and talk next their on until basic seat I great can't having now given they with increasing they these having approval. the personal

Stephen Jumper

Yes.

not phases you be related to indication look could various there activity, that in is at all just or activity, field various QX just seismic areas. in If some overall across, service slowdown you oil but if look there

we're end has with price lot budgetary that the year a high these takeaway some a differentials level that of has been been that numbers. spending, There so they're related capacity. - approaching And to issues where there of fact is

to the of their end the for uncommon year-end work slowdown not as run it's -- so they year And budget. through

a this year little past. maybe amplified more think years than I

We that - conversation that in budgets are suspect for and active at first, now fourth capital to we we will will they're part sure those know I And right some going looking increase. year. quarter and budgets how some early hope been in there's so budget And are won't next get we for projects about approving activity 'XX. been have the projects awarded the of move.

all that's so And positive.

in remains activity. places. we and it have and still it's this comment recent as about And starting We're won't Delaware Wyoming areas cautiously activity in contracted we'd still some challenging. We to with that yet, bid we've and there are but learn the market to right. leave And is a Oklahoma you uptick conversation. and till the It see seen but remains optimistic, all and concentrated. somewhat but -- are some and more improve know other they're of think I You to want Permian is But We're still don't other tough. Louisiana budgets. we conditions next some of going -- in market year, basins, a

John Potratz

historical going planning and going of their would with next to place everything have on of the They're based the sense basically year, cut So planning out run they you're to to do and approved. lot But your have approval dealing at are you sign money. yet, they start back. but in these the end they're the year, people, -- the is in any else to don't budgets a more don't contract not until contracts because prior

Stephen Jumper

Correct.

John Potratz

And seeing Louisiana. in increased you're the particularly you seen in [indiscernible], interest you the before? that Oklahoma, said premium Is interest outside haven't in this

Stephen Jumper

word from It's what it's industry Louisiana and -- really increase -- it's a not improvement, is in a -- in to that it's we guess. a recently but Oklahoma But not not I still slight the still meaningful. Wyoming not - - needs. our that level strong in and our It's and little It's particularly improvement.

John Potratz

really happen? X We this It's something say there can't going interest, sense that. you - nothing say, is that contractual an "We're just to would going crews". It but to is

Stephen Jumper

Correct.

John Potratz

guarantee But - all? at but don't no is there we

Stephen Jumper

right. That's

John Potratz

know the could works I you're we U.S., people if everything you fully looks Canada out, the and And utilized, until between when like look up of you contracts? X crews, be just lot, crews, the X it don't sign add lot at a number more if but and that

Stephen Jumper

Correct. Correct.

Operator

questions over for to There back closing this the like time. further you. no I'd turn are comments. management to at Thank floor

Stephen Jumper

into I Well, we the - Devin. listening and questions the appreciate everybody thank we call. appreciate you,

the compared little got conditions a fourth improved had softer approaching As of tough. anticipated than has quarter in market we've said, to XXXX that a activity. much a remain X we are in the summary, very had for months We're We Canadian day, same conditions XXXX. and first market

in and And would thank we We factor shareholders our are channel a opportunities our - be optimistic driving seeing thank support. channel I for clients you. their forward. count. their count I our in to forward in employees that next increase services. for dedication to increase to are trust our a our want quarter. work, I continued want factor their cautiously continued for hard going to and you Thank talking look

Operator

concludes teleconference. This today's

your You you at lines your may time. for this Thank disconnect participation.

Dawson Geophysical (DWSN) 3 Nov 182018 Q3 Earnings call transcript