DWSN - Earnings call transcript Q1 2019 | Dawson Geophysical Company

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Operator

Welcome to the Dawson Geophysical First Quarter 2019 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. 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. to based risks, current many actual uncertainties the expressed is by are known and of implied future statements that or future company unknown control, results to and and unable from results forward-looking or on the statements. materially expectations management’s include which may performance These cause or differ company’s any predict those other performance factors, of in company uncertainties report and factors the filings from including time SEC, include time filed on with annual the risks These the March disclosed in to SEC risk its XX-K company’s the with on by the XXXX. X, Form morning, Furthermore, the by regarding as incorporated press those this in conference please also start this that call, company’s call covered forward-looking please contents the refer and to company’s morning note of statements statements. this the is the statement issued we release

non-GAAP any company’s to non-GAAP I and the The scheduled provide is which XX would and Dawson GAAP Geophysical Jumper, is of www.dawsonXd.com. During CEO ahead, A the company’s on reconciliation this EBITDA, in over of not will found release, to conference now current go the which call minutes located like to call sir. turn company President to references the for Stephen website, the guidance. Chairman, Please Company. call, earnings will a measure. financial can make be measure copy the is a management of measure applicable

Stephen Jumper

conference first thank XXXX Well, morning, Good operations welcome Geophysical you, Jeremy. call. quarter Dawson and earnings and to Company’s

President company. is my CEO stated, Chairman, of name Jeremy As and Jumper, the Steve

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

comments. Just a few

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

March $XX.X quarter Now an quarter million The turning first to to reported company quick increase XXXX. ended of million, X%, financial for revenues XX, of compared approximately for the the XX, March ended XXXX. quarter results $XX

net XXXX, first common to the $X.X quarter million, reported of share net $X.XX $X.XX a common per we loss $XXX,XXX, a share, loss or loss or for compared loss per For EBITDA ended the XX reported quarter of the million of $X.X $X.X of for the ended compared first March quarter quarter XXXX. to March EBITDA XXXX. of of million XXXX, XX of We for

the of a five XXXX, United a a the and crews four utilization during States in four of crews of compared up peak Canada, U.S. quarter until first end anticipate at Based four with winter crews XXXX concluded second two the during information, Canada of we anticipated next limited quarter. crews to currently in available in the Canada crews U.S. with nine the the on third activities operating a to During the XXXX, operated in season. XXXX. operation, quarter the we the in first of seismic peak in five of season of both varying of of quarter crews areas The active of quarter in to in and winter and quarter first peak peak the the of in the

of of companies multi-client As behalf in projects on majority the recent quarters, the are in our U.S.

final projects Jim over remarks. who that second will of of to now the U.S. with two will microseismic the review I’ll the and we Jim? XXXX. a call anticipate in In conduct the turn financial Brata, third I of quarters during addition, return will control results, we total and some

James Brata

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

during of morning, peak limited XXXX seismic quarter this Canada, issued with company during concluded release first earnings four second third varying the of anticipates our activities season. quarter. next and company of season the a in in with information, quarter to crews of operating the of in The to during operation. winter areas currently first U.S. the at up five quarter Canada the available crews operated in utilization a five the XXXX, anticipated the on end crews quarter two both XXXX, in four in the the winter of in until peak crews the Based of stated U.S. As the and

companies the in on behalf recent in of are As quarters, the the company’s U.S. of projects majority multi-client

record it company of during An addition, was the services the in XXXX. the U.S. and XXXX $XX.X same of of in third $XX.X quarter the quarter second during in first a the will two increase morning. to compared EBITDA release of was X%, total tax conduct issued of XXXX. the first same loss XXXX. of XXXX Cost In were to quarter loss anticipates that an of $X.XX loss in income administrative in of the benefit in first million, the XX% quarter of to million compared earnings expenses and same share an or the $X.X expense to the XXXX microseismic XXXX, of amortization reconciliation projects $X.X which XXXX. that’s first of million and in $X.XX XXX. were quarter $XXX,XXX, for of $X.X million, first Net first in quarter compared first of decrease of million a in million the quarter of of General was in not this same and in $X.XX per X XXXX. million, the of XXXX the $X.X quarter to $X.X compared our did tax share, income compared loss the is million was quarter Depreciation quarter to in an a quarters provided per the million, of We compared $XX,XXX quarter $X.XX XXXX benefit first net XXXX. EBITDA or of period

some Now sheet I’ll items. highlight balance

XX, including finally, current obligations debt, with X approximately $XX Steve to X; the had I’ll XXXX, operations. our of leases continues call to under capital to Our that, And $XX.X turn of was balance working on of comments And back was finance short-term and cash $XX.X sheet and ratio million; remain we strong. million. approximately million; for as March investments some our

Stephen Jumper

you, Thank Jim.

in the our issued earnings our better anticipated season results As this of morning, winter result stated Canada. and release late a recording utilization first in in quarter than a increased of channels primarily were active U.S.

and compared typical of a sources in our started approximately U.S. with seismic The West crews XX channel Texas as channel recording project the XX,XXX terabytes the represents the XXX combined completed completed as measured company in of the during average volume, XD day in the of represents West channels. data today field storage in seismic down overall New from a project It by number was number project of large West as XX,XXX points high-density, generated Texas, included is U.S., Eastern count X.X While high-resolution of utilization the density in the a petabytes source data. peak in completed Mexico channel crew output recent largest units increase projects. was XX quarters, the over two per peaked data second quarter, of that also XX,XXX-channel and with single operation. quarter, to recorded well data and units approximately that which energy first The in acquired project channels and count vibrator and in a times Texas an the approximate project of by number energy peak

complex in the currently projects acquisition channel energy typical are data growing company data projects projects, an a be count, to for larger, require and not such more increase the source toward projects unit that capabilities. there continues While U.S., management in trend

XX.X multi-component requiring recording quarter XX,XXX units, that a three-channel of high-density output high-density, successfully petabytes XX,XXX of -- high-resolution terabytes data. of high-density XD generated field in approximately During project or data multi-component the we data seismic first recorded X.X channels completed Canada, seismic and

data With no capacity, fourth to reductions quarter, over our operations multi-component simultaneously units. recent seismic XX year energy vibrator first projects Basin a could group gathering XX-year recording requirements operational impressive to a were and financial the quarter, approximately with and or and XX,XXX the results channels, technical the as successfully up expertise evolution that utilization three-channel equipment, these recently be seismic Midland company, seismic were and in We equipment of programs. channel channel cost data in from equally in may require source the streamlining our instituting XXX,XXX of previous award generate heights which In third seismic projects to an count signaling overall data reduction in efficiencies improved enormous unprecedented throughput project the have requirements. in quarters. drove history in units, Despite full handling as the the or demanded such count U.S. Canada, count while crew

Capital navigate of both the in ended the since season our U.S. remain XX% utilization workforce second we response The channels crews overall In in quarter. and conditions approximately market the million, from requirements lower operational of reduction items. end channel months of XXXX anticipated capital XXXX the XXXX. for headcount to a were count end higher of improvements. is count, expenditures $X have the the However, second count, and The to and crew crew Canadian quarter. difficult XX% and nearly the in three reduced decrease reduced maintenance we first primarily management during for as anticipates response an has

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

payable our scale have channels the are develop we experienced We Dawson exploration projects more questions. and XX, concluded, the of capitalize forward In both appears totaling open overall $XX for industry-leading trend. in as data well-positioned closing, this knowledge, requesting and base, image. as call uniquely up we positioned XXXX. to to multi-client leases are going seismic a and vivid second Geophysical, we And with while subsurface Jeremy, finance with We that, to production is will companies increase acquisition quarter and and believe notes order per in robust continue that on and and are equipment million more operators March personnel challenging, project

Operator

question question. with comes Adkins of from Please line the first James. Our Instructions] Raymond Marshall [Operator proceed from your

Marshall Adkins

had crew. Steve of but a crews to morning, about seems I’m Starting changed And got good you year. has business the a last year. year, of the last it what you crews of the peak nine generated here. revenues model referring and your five this year quarter is, questions meaningfully as bunch same with same – like versus So last I’ve in

So gotten crew clearly, has the size bigger.

And to more going lot data. from a sounds your this like it future. capturing commentary, continue the into is You’re

we like count the asking all, the is been on, forward. talking just of giant channels all or counts our we’re this of we’ve to industry to state And just channel first I’m that, on modeling crew reason So the is than well, or crews It modeling I’d sounds model need per comment crews. going rather like – from you here crew? –

So just some help give us that. on

Stephen Jumper

the count. we for – to significant the back Thanks to going the question or mile increased to to just channel channel count. trend channel XX,XXX There project jump in XXs have seen the we’ve the without A projects in believe size a But out. XXs. of And lot requirements to seeing XX,XXX. we things and come project. then question, up changes we headed this big Marshall. seen X,XXX XXX are X,XXX many that as One many, XXs, that you’re from square is scale some the the count two years the And and of see is higher increased was a the and began driving

are – things crews. you’re X,XXX last square we’ve are some And are XXX, two miles. in high-channel Now the square count years that seen that and require that they few XXX projects even XXX, seeing miles

the of number part complete to just takes it efficiently. it size of of the is so the the And project channels project,

and seeing tight. density we’re getting increase At one per is, or channels the The that’s both we’re square in to in so would each places, a example, second the an really XXX sources of see for in is square point, starting thing seeing in have we’re Canada, kilometer per really, and now where in increases. to XXX, mile density of happening really we XXX XXX, States

XXX involved it’s lack in getting to the so. imaging. spacing. collecting feet better In a of now so data meter down or – sub-XX, one time, that subsurface the we’re surveys points tighter almost were And spacing. And for a At we every more pixels we’re sub-XX-feet were attributes is Canada, seeing word

something the working towards on of two a would did We utilization. successful horizon. very are It’s first those things been have channel thinking quarter So we’ve count. channel that be

we’re less and will arms in measure still kind And trying at quarter up question so that and of But end channel we going down, model less yet, much January, early to play. into do the is around efficiently. data to your came terms unit total. really how the One, more than the – of But project with working answer couple How with we so we in towards our allowed four of look in U.S. somewhere density the late because of because the is just start and that. February user, per us utilization five moving the and do you count it five we’re quite model. – and way, – the the cost count look and around more a a can And to when it end intensity channel that things. we’re to we that, the it’s get another we than of at it that much acquiring if

that so out and and And true as these trying to work to very still shoot through issues we’re us that creates capacity projects efficiently having quickly. for figure it we’re very, we some

And how – time to so shoot work a project how having to it. actually we’re the it it to takes through long ready versus takes get

do, this be to a the bigger yes, yes, channel utilization is on is but trend got I a some work going we’ve believe So and scale. future to

Marshall Adkins

of you hear in So of jobs in is what larger density I the square and scale both terms saying is just right? miles, increase overall

Stephen Jumper

Yes, yes.

to are the several projects improved it’s… particularly, future. really I we’re in but And very – those so quality, of data think to having operation, nice we as need And areas it’s and see

Marshall Adkins

that. a the quality? this wellbore Spend better placement exactly it increased within operators second or fractures, are on? zones, or what’s these on What for this? horizontal with avoiding is dealing Why it Is is going

Stephen Jumper

density of attributes survey, increase Well, when the you… a when the inside you

Marshall Adkins

Right.

to get they going You’re but better pixels, do better use… definition, what

Stephen Jumper

and that. pictures all Better

so… And

Marshall Adkins

what What I’m in that about? for is picture is use the better curious

Stephen Jumper

Yes.

long. the whether kind – it. But stuff a exactly project. very deliver for geohazard that end that is, users of long say, – we haven’t from years, a is used sure a would in laterals not to indicator, doing suspicion indicator. – the know were so away has Marshall, about But don’t historically in or information But always long I is that geosteering say the I past, recent seismic privileged what what is in-house moving which we’ve And And kind doing. my been looked we’re after in the farther we not exactly and a end lagger, are one. leader we’re And and because not is been how seismic leading mapping, activity proprietary of lot a a we’re lagging either I’m we to be we then of happens

type to the we’re develop positioned, almost got now think it. they a trying land where I mid-cycle now they’re tool

getting some information. we’re better lack we’ve of the a geosteering, better move with of characterization level areas So a just level think, I of help some detection, more better a beyond, for type, potential believe of some into I get fracture and starting unconventional. to enough geohazard word, rock analytics in some will The –

to think look favorable when move and I with just there, more saying spot intensity, you I this go a so multi-component ability in areas more I completing. of at we’re think, want maybe sweet project the and but favorable particularly where geohazard you’re And well to maybe point, to put positioning, to beyond how – geosteering your don’t identification, level

– groups So now, – not through length the working sometimes we a are multi-client while at where from E&P. the away we’re with lot arm’s of

not are speed time. up the that’s what on. things going and work real on where are are that some – in so to done And I that there beyond we provide being being those believe we’re that services – But always are –

Marshall Adkins

All right.

you very So for that’s that and useful, color. thank

Stephen Jumper

clarity one hate thing, like And on you. a if indoors. lack data better is – example, cellphone I more Marshall. interrupt your kind of seismic, for of talking to But in you’re seismic

get You clean a signal. good

signal. as be of may clean If you you’re not a outside,

that cellphone a to that with the in around you’re out, voice. which a picking things it’s up affect input is If Different how to the that U.S. hard, kind is of to the seismic can someone how of make is same way. Well, but related that signal, bases it – you "noise" is hard kind environment, is cellphone hear. data the in to windy respond it, talking

U.S. where of a to in there’s – to And in not of can U.S. parts a clean be you – on filtering. lot answer We just be that so going places activity less you very where on with a and the it’s talking areas on happen in in – our density, like at you some the where windy but of almost be other right get image cellphone a they is can day. now

to the us statistics, Our depths down get we’ve signal that that that the rock we the got. to that get need help analytics answer is to more more through to type

is And that Midland, you issue so key. imaging the particular west go to more farther that issue density The course, is becomes basins. in of an from related that

that just So I I thought throw would there. in

Marshall Adkins

Got it. Thank you.

to Let’s from it, of us with a versus too a really the where last four channel thoughts second month U.S. shift perspective. quarter. your you into doesn’t help quarter in a five that kind much But counts, of crews modeling changing mentioned again, two peak the and guidance gears to

a So let different me maybe – ask way. you to

utilization If a say, in lower last count expect channel can QX? to it? utilized much in about versus, pretty be way you you how were U.S., much the quarter, that Is you would – do QX channel think XXX% I on your

Stephen Jumper

going channel be obviously, count way going – is channel Canada, down… It utilization is be count – in Yes. to to

Marshall Adkins

Right.

Stephen Jumper

that some a but not apologize, because some avoiding a they job they difficult got issues, move kind we’ve But count of projects to and question, quickly. the things job Marshall, high-channel model When high-channel …and now, pretty I’m count I – can happen. I mean, can hit, timing way are right down. on

the that from probably Other – coming that’s third quarter. roll early second, multi-component we’ve And so States, the – it late be the will States was the to that, some the to sometime take XC, active than gear or Canada projects off. – had

the with a in the have probably, And QX, would crew of size. the that – will that in based channel time crew – a be count. just count in channel would going drop period line on we’re I say, channel so QX significant It’s – the in for guidance count to utilization

Marshall Adkins

Let me…

Stephen Jumper

– got to not It’s significantly you giving down number. to those be It QX the back down. QX. So lot we’re go like exact in of it’s channels to work. going be a looks

Marshall Adkins

All right.

let half that down. isn’t visibility, – at the two-thirds and rate? in So from QX is ours or – should is narrow either. guidance of it’s me of perspective, line from we we’re maybe a be any running of stuff rate know top Just ballpark on great thinking perspective. it on But this a the I obviously, kind revenue were your and we in that QX

Stephen Jumper

you’re think the contribution correct. Canadian was too mind we’ve the Keep so that drop-off, Canadian there. you’re probably – in directionally I got

I that’s can you all So give about really right now, Marshall.

Marshall Adkins

Wow, helpful. immensely

that So until Canadian winter. the you that Is going for down did – hear correctly? summer move – next months the to move the Canadian channels your you’re channels I to U.S.

Stephen Jumper

move the border Yes, channels we We do as needed. that. across do

And season overwhelmingly Canadian the market. or so market Canadian XC the is

– then year used Canadian stayed get they’re late back up and active the those have they calendar the the not when And or after we in quarter. entity the season. to channels recently in Canadian historic then States So first out in

channel most channels do and some while XC is move the gear. single we forth, movement So of the back

Canadian U.S. non-Canadian XX%-plus – States Typically, while the busy the channels XX,XXX less channels, XC much to the in market XC of that. market the is XX,XXX we’ve in season. kept U.S. is While the than of

that’s channels. the don’t typically, typically sources, energy move So it’s – we just XC

Marshall Adkins

got And good. it you’ve you that’s people fewer in you a had mentioned seem right, like All does release the lot before. than that

and larger better to ago? people – less year, crew channel profitability than or means is think or maybe count this it employed, crew to crew channels years three less a used better generally So about your crew we’ve maybe less that seeing less – overall per been a probably way is at two, people larger

Stephen Jumper

trying That’s We channel know certainly of the utilization model. direction we’re in throw we’re to that evasive, – there. headed. I can couple comments I really but sounds sometimes it understand the and a better will

issues. we it. that to or be And line, sudden, – will continuing get grow but will back have add-on and delay, that in are a I still delayed has mean so and been some – we’re causes utilization to scale, have will a they pushed there in because of they work which projects all

demand so for be utilization to problematic issue for to come pretty the sporadic. it continues And will will industry, And slowdown our just spurts, high in be us. a continues not It then demand while. and

with is forward, to done you difficult. what and as move said, has they in job what’s But being like a do of has lot side visibility, terms density, look on other do the our at equipment we’ve our more basis. on tighter capacity to that, trying of of get. of we able so And group real the – to been operations the look a great that A daily going

the just have to far. don’t equipment You as move

but changed laying a crew of far configurations move of kind And little picking You you’re up it, don’t and bit. out move it equipment. when you as more

increase sources. moving to channels as you count, channel – the moves so And moving the from pressure energy

crew of like, nature with configuration looks do just So less. we’re able by what more to the

you’re do to that seeing issue over think is again, way. it we we the ways worked stated going on be have the next So quarters. think and And some that we to few right good utilization the

Marshall Adkins

All spent on this see rest year? CapEx, quarter. $X right, the you for me. CapEx of you for million that Where the do last one

Stephen Jumper

at I this just at see – maintenance as point, just I level. see as

Marshall Adkins

roughly? million You’re quarter $X a saying

Stephen Jumper

kind point that same But computer I anything out at is those don’t of materially. there stock, most Yes, this rolling changes anything see about run hardware, rate. the that things. of UTVs,

Marshall Adkins

Got it. Thank you. I appreciate it.

Stephen Jumper

Thanks.

Operator

for turn to question-and-answer management the this the remarks. session. I would call And have end closing like reached the to of at We back point,

Stephen Jumper

appreciate for have to the call. to our to I second we’re appreciate – and channel to Okay. see in operations hard and all I that Jeremy, forward, to continued we very work XX a us in our first we’re position. group everybody and their challenging put we pleased want And And to trust results, as and going the we’re that again it. to I count. you days. questions. that while while done valued quarter our I talking our support our But in in look clients projects their thank thank continue valued Thank in forward the they’ve going quarter. looking you. this in with to we’re appreciate for increase scope want shareholders, in believe listening And services, and we to said, I scale

Operator

concludes conference, this may you your and participation. Thank at This disconnect time. lines for you your today’s

Dawson Geophysical (DWSN) 3 May 192019 Q1 Earnings call transcript