DWSN - Earnings call transcript Q3 2019 | Dawson Geophysical Company

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Operator

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 6, 2019.

Furthermore, as we start this call, please also refer to the statement regarding forward-looking statements incorporated in 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.

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

Mr. Dawson I Please Geophysical like to go the President Chairman, ahead, call turn now Jumper, and Company. would over sir. to Steve CEO of

Steve Jumper

earnings Company's and and Derek morning welcome third good quarter Geophysical XXXX conference Well thank you operations to and call. Dawson

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

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

just reported Thursday, today, I any that longer Information by time of the only www.dawsonXd.com. you're Investor replay few a October of if cover, sensitive today's the the Relations XX, on call, section be going information you this to speaks of be advised to company's and may webcast listening. no would therefore have as it website time to via to call of a like at listen accurate will things available replay XXXX of

to to strong for quarter preliminary nine pleased months our third September XXXX financial I am the Turning quarter XX, company. results and results, ended third report

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

income the XX, EBITDA quarter to quarter or common of million reported XXXX. The compared per million For for the September a for $X.XX $X.X the third ended million to million share third of quarter share XXXX, quarter XXXX loss for or the $X XXXX. of $X.X net income $X.X company reported net of for September company ended $X.XX XX, of the common compared loss

month ended approximately period XXXX, the nine XXXX. XX, nine September million compared ended a months of to XX% reported decrease revenues for $XXX.X the XX, of September million, For $XXX.X company the

loss company the of loss $X.X common reported loss or XXXX share or of $X.XX common months nine $XX.X months first per share first million net of $X.XX net the nine 'XX. For of a million loss the to for per compared

reported million to months million XX, $X nine nine ended XX $XX.X XXXX. of the company for months ended for compared September September The EBITDA the

quarter quarter crews the States operated six compared five During the third channel company time. a single account equipped United and with large smaller peak crews US account of of accounts operations channel channel in second short crews peak of a 'XX including period small in included for of Canada in a to the a microseismic four the and the 'XX in of crew

up available in result on during account in of the crews energy quarter operating be and available information US information Based during the such continued of XXXX US the on and levels in quarter fourth five second the quarter along the Canada XXXX during Canada. crews could with limited utilization source of up quarter quarter 'XX. of of activity XXXX currently into currently the We sustained activity in to fourth and first based in the high in of to four that believe levels anticipate we channel can

in in ramp currently Canada winter as crew and the up small are US five the operating season. We one crews we

for the company. quarters with US recent in in limited projects multi-client some As production behalf the exploration majority companies and our are directly on of of activity

fourth in Brata of and I'll to call control will Jim and our second results. quarter quarter some XXXX. who the outlook over the the now financial return of first and final remarks turn Jim? with I'll then review

Jim Brata

for quarter X% million XXXX of net quarter for the report XXXX. million approximately were $XX.X decrease September for third and quarter very Steve We're you, income ended of a the $XX million the good of morning. $X Thank Revenues to XXXX. XX, pleased of compared third to

in of of compared quarter third count the a crews the of stated the operations a XXXX short United earnings in issued US counts channel five channel second Canada company to peak As operated quarter including for and crew channel the four single of release with six crews a large XXXX the in during and morning States this crews count in in smaller microseismic time. our of that included small a peak

company XXXX crews available currently continued levels is often to anticipates Canada along in the five available the with counts of levels in fourth the US quarter in the limited four quarter to The XXXX. of during quarter up the on on utilization Based currently such during energy and in sustained up channel high could company quarter of activity quarter same XXXX of be into XXXX and operating the of activity crews believes that US source based first of during the Canada. information in fourth information that the crew

up million $X.X third same XXXX of and ramps down small quarter of in one season. administrative XXXX. the was The as in X% compared XXXX million quarter of XXXX. in $XX.X company a million quarter in and compared third third $X.X the XX% in operating of to the US to of General five it decrease the the Services expenses million were Canada crew crews is quarter for $XX the winter currently in

We income million quarter quarter tax income third a million Net of a per compared million third to in share $X.XX expense XXXX. of million $X.X the the compared of quarter same the income $X.X was compared to for benefit an the XXXX. of quarter net in in of amortization or $XX,XXX decrease XXXX was in XXXX XXXX third of to the $X.X of $XXX,XXX same share an in of of and XX.X% loss the $X.XX loss benefit of $X quarter income or tax XXXX. per quarter third recorded Depreciation

earnings provided issued third quarter $X.X in reconciliation XXXX our release of the morning. compared EBITDA million $X.X in million period the in was An to EBITDA of same this XXXX. was

XXXX. results September Now months for highlight some I'll the XX, ended nine

to September Cost the $XX.X for XX% $XXX.X decrease nine for were the first XX, and of a an of million nine period same the $XXX.X nine XXXX. ended expenses $XX.X XX% September million a nine months to administrative to services XXXX September Revenues for million XXXX. months compared XXXX decrease were ended million in of for of was of of the $XXX.X XX% General the same months increase million XXXX million compared XX, for ended months period the XXXX. $XX.X compared of

the first XX, or compared share to million ago. ended the $XX.X same loss net for million loss Net expense a loss of period $X.XX a September was ended months million or amortization XXXX $X.X $X.XX compared in and share was a per year XX% months per September XX, a million nine $XX.X nine to the same year $XX.X XXXX the for decrease ago. period in of loss Depreciation

compared in EBITDA morning was $X EBITDA the year a same $XX.X issued sheet items. in for and some the provided reconciliation million balance I'll XXXX of period ago. our first million to was this highlight nine months An release earnings

Our to remains strong. balance sheet continues

was approximately XX, under short-term had $XX.X September of of capital was $XX.X As million. million current of XXXX approximately our working obligations million, investments we and $X.X finally X.X:X ratio debt finance and cash including leases

to back call the Steve operations. for on turn I'll that with some our comments And

Steve Jumper

Jim. you, thank Well,

EBITDA very results report we're income of our net million. pleased quarter said, third million strong $X.X for of with to we and As $X

efforts operating improve attributable improved designed to Our conditions channels were to while favorable productivity, cost in larger crews, utilization channel diligent further continued results and reduce or and the quarter. much higher reporting quarter count

model source energy of we channel In energy very second drive acquisition and crew the addition utilization units based today's model. as to channel channel seismic data clients continue and large a we market. source and the for quarter, increased to utilization Despite increased high challenging oil sector, experienced move times to greatly utilization demand compared well our continues gas projects count as a to in toward

multi-component continued the with source large of we smaller with total of in quarter During and along account plus earnings that crews XX,XXX quarter the channels between station and channel units. last channel call crews. operated we XX account mentioned third energy intermittent XX our Each XXX,XXX crew the crews operation two XX,XXX

in continue quarter. will projects fourth these of the Several well

are We industry-leading wireless using source equipment. inventory and our conducting of energy projects these channels

will on XXXX inventory level to both be available but utilization. currently into below Based much Our to third utilization source tag second current over improved the and Visibility of quarters. compared anticipate channel positive needs. quarter sufficient current client appears is we quarter, information, recent to our meet our

Early second the season utilization the in We're quarter equipment XXXX. the energy of the US will XXXX. first XX strong in second indications in the the lower the the four are utilization, for to with operating completion Canadian After channel season in in source account similar to of high up last redeploy the year source channel US quarter with quarter. Canadian and to the anticipating of and second crews in

expenditures XX with As season capital increased and prior nine of were the the $X.X shorter days, season a in of first exposure. XXX,XXX winter difficult months in items. the for the lower Capital 'XX third total maintenance historically for holiday quarter for years million and is primarily weather

remained September we XXXX. strong as million $XX.X capital of Our XX, with said, as balance sheet of working

the finance $X.X to report we're are XX. pleased visibility results and In change utilization. utilization while we the primary gas have -- cancellations We challenging to notes and market continue as and to activity source closing project and as leases payable in report and increased improved energy sector pleased remains totaling or channel overall oil the solidly be and overall of delays, million quarter factors third seismic September of scope

multi-client encouraged be our to conversations future by primarily to companies with ongoing clients, projects. regard continue We with

Derek, call to that, I with for believe the open ready questions. And we're up

Operator

John have a you we question Potratz [Operator from Investments. And Thank with instructions] Research

John Potratz

Thank Beautiful, Steve. morning, Good very you beautiful results. much.

out of the market wondering sense the sort of Just there.

the had of result they Do You a have what talking be the a you or might but do that -- being might versus they're over prospects. you and some about crews some the additional people projects next to talking ago could get with utilized. about least strong and they cancellations are at you in that some said six-month potentials they might year sense talking very -- what of like it you see

Steve Jumper

just Well I answer John, we late. haven’t know is that can really not the any thank cancellations I which briefly question. you me, as and for but the I'll common to comments as as for try of experienced

difficult mineral whether thing with a arrangements, access particularly in access to phase land some XX. but information continues the project continue to worldwide related deal seismic primarily We delays lower and it's permitting in to market from the really be land owners getting

from are short-term beyond our So things quarter that and to can control. quarter those affect utilization, obviously

deal to and molding one utilization to impact up a with of due ramp could continue when or begins We that projects timing the accrue. de-mobilizing next

always can I and oil constrained order. gas going overall an remains, encouraged market that with base with would tight then are short the capital and projects so caution and our that that levels and can into XXXX. opportunities our client our on in We be be remain conversations about the market spending issue deal we by cancelled

one to think will we encouraged, looking we I have a units. difficult the going channel. high recording forward. can both crew But of can is Whether are that two to of that We continue crew utilization have to into channels are that and large crews optimistic could XX,XXX say net XX channel and we additional say energy and time for source in split period result we're

base our So we're source are start units That's currently going optimistic. channel cautious the We're at channels fluid energy to and equipment crews. as and very source to but why number looking forward. utilization local we're of recording

John Potratz

lot reallocated marketplace. maybe say to opportunities that ago that you're the be like system, and two flexibility up means when in years used more sounds the your to you respond in you It a have crews that you overall which able have can that better split

Steve Jumper

can an that they continue to getting have flexibility and fluidity We've need, has on years the some move, but to this talked as only I amount equipment crews they about you has channel to a it have the need becoming market larger, always Yeah been done It more get that over have moves not equipment been the it. that industry crews intensive this. developing. something when think base which it's from that's

aerial job that understanding in need they fantastic survey think to today so how And thins folks where years we've really in going that what's timely manner have and talked operations a the they're in works scale getting as larger just I a the over and shooting we're of be about, extent. on done our is

need putting on more tighter create from we're a grid and resolution standpoint an coverage higher they aerial So the images. to men channels

anytime changing that soon. don’t I see

As a see one to demand in ultimately continuing We'll fact have I to overall controls see level. increase. with happens XXXX to that thing what that spending, regards is our just which the

John Potratz

operating you year, sense important impressed me thing fairly is the the expanding but feeling having that my my to way costs the you're talking overall gotten look come is of down lot about that efficient operation overall and last and manage is and that's a were company, the the a more within overall Right good well that's at sense, it. operations has that efficiency done to other making more you’ve and feeling

Steve Jumper

I Yeah so. think

I services high just operation the think the backside to the you entire performing it's at level when running on data operations a handling upfront handling how data much from are through ready, actually things very getting the think today. we're guys

entire proud this of today. to team we're very I'm into our has get So put efforts the that where

John Potratz

much maybe I what very other of leader doing what do which and and have Decker and and very thank you're a you but team for the you very very and some and you there to [ph] Right following remember good know well, have Thank thank do again. have question. appreciative a I you're you for of you I'm much footsteps

Steve Jumper

Thank Sir. you,

Operator

instructions] do instructions] [Operator with from Please question we Michael a And [ph] ahead. have [Operator go

Unidentified Conference Call Participant

Steve, where has geographically changed congrats Jim, good thanks. and seeing be from of standpoint might morning a looking you the was on curious you're that areas result. if out I XXXX into strength, improved anything demand and

Steve Jumper

E&P hear appreciate from forward, of over lot more about I in new I good and data Permian, value Still analysis to confident that very bring the that confident from at in looking basin attribute high back need the continue The the Delaware am we're areas resolution, going confident to Permian I it a data size continues them acquiring that that technology users. today I kind shifted think the be that play least to data the it's I a am role to it's that we're the to with of having of and end lends itself majority to personally companies grid the will much our at and conversation important tight area. the the am better continue to work Mike, you.

time We've we Oklahoma. We work had down start Louisiana some Wyoming. conversations have work significant Delaware to to job other We've to some continue have Texas We projects that and the current. some so now of and the side the in be but where from part in come of the Austin. work had so to in in recently had to time more Permian right up our some in are the areas continues

Unidentified Conference Call Participant

that you even maybe reshooting a on what certain bit and prior entities color fair the little guess mean of lifecycle just that from as standpoint. amount and my areas are you like maybe shoots helpful go the I That's more a areas? Permian, sense a shot about Could seismic would of might and be talk forward

Steve Jumper

in been two may I over think about say I really in questions that I it's mentioned again, hear in is to Mike. don’t back we cannot years been that the and Permian, and of high want much back started XXXX about but seismic there too XXs am that's level mid to sometimes so in kind we I areas has or any past the mentioned activity accused Delaware We there data acquisition there area. have and XX of going of the working XXXX, then really the since diligently here

we would Midland focus the west a so guess be into we the kind were area we the southern kind -- then highly Midland moving of of to Permian. in we're the And east and the I of kind and in that about the very Permian Delaware have out of concentrated we of areas We've had lot and the basins. of on Northern we've Delaware Delaware been worked talked of moved focused back then maybe of it

be that still new need there open data. to some So is areas need --

that, of is new the the today and conversations that recent say then started In really terms would really lifecycle, techniques of over last I back in years always any is but could of to that five any done about stuff over that.. to there we haven't seven there haven't times gone lead back some, but we've

periods currently But what drilled data lateral most are our long getting had but of from really consider on. being we're standpoint, from lateral I'll haven't that work still a

Unidentified Conference Call Participant

utilization expected to the thanks. any it the need like and high levels, helpful over of current fairly your expand thoughts on next That's sounds periods, equipment from be you few equipment your to base

Steve Jumper

our at there think of lot is base now. base to be that some short gained I looking the certainly level his think equipment supplemented operating we're always comfortable from ability in good equipment the Well, and is needed to the question, we shape we're of in in right we're channels order pretty flexibility could way that of if feel next of as We high those utilization to in anticipate but do area so but one some opportunities and kind flexibility and a eluded move Jay there. I the

that that something certainly So at look and at would whether a But we of capital take be with makes or but to take the budget supplemental market certainly look something would said year. got will think we we sense looking the might this it's as end improve at certainly additive be comparable a and at to us, that if we're always levels here that we're the continues just point always the allocated at we've up and it. maintenance comes if that, having between it,

Unidentified Conference Call Participant

again. congrats and you thank Well

Operator

[ph] go [Operator from next instructions] Please ahead. go We'll Silk [indiscernible]. Bill

Unidentified Conference Call Participant

Congratulations on quarter. the

more Could it little winter it on gas there. color up versus you're you the more impact any is season in color Just wonder optimistic like some pipeline lingering that if from color, Canada. oil a you issues, sounds more more could give on little just the give

Steve Jumper

no Well, means Canadian I expert. Bill by I an appreciate that,

more understanding That's area last our and most want impact lot is sure looks it concentrated channel think Canadian group those of the up a to today the has they're count get I heavy four are they year. not It's to and understanding that going the crews be. opportunities my in think indicating area. are that on my pretty So I'm can that they like yet and crews

some will continues know that I be a in channel they intense the with very particular a type less if needed high -- in I don’t count projects we year last but that. it's be count get sense job to reporting. had one channel very density high smaller

and that to stuff be I be think work just the answering continues out challenging continues the that gas yeah, Canadian market the in but in question say can it just tell much So I'll oil not impact pipeline briefly terms everybody heavy of for very I to area. there

Unidentified Conference Call Participant

Okay. Fair enough thanks.

Operator

gentlemen, And does time. it this at in questions queue no have further appear we the

Steve Jumper

you want the everybody our quarterly very and thank to with pleased we're Well, listening thank Obviously into Derek I for call. result.

energy as optimistic source we're utilization. going we've our the call the release, least in forward said are terms in at on quarter press cautiously channels in and of next We

difficult We're in we've optimistic. market I just delays subject order to our the gas we again the us remind shorter this to take dedication in hard level, company moment some midlevel scope, I fourth very their some my those most gratitude be would to continue help folks in perseverance lower to to to continued challenging be days the be change with through just the and get support to favorable to with the the exposure to of continue working field the tight to hard XX seasons as and that for fourth management the things quarter the be like entering we've and express groups, administrative continue are want and into way all said so and up work point. continues weather from we everybody and and staff, to our but quarter cancellations, to the so said and types and levels time, employees holiday that but oil and tailwind importance that challenging spending

look their their and I'd like they in that us and I and of would lastly for the the valued ended our you our trust services One continued our for but [indiscernible] to also the road to fiscal the clients would our to here like quarter you. to thank the end year. we're the pleased thank talking it fourth end be and shareholders forward support. opportunity give to certainly Thank one at of

Operator

it you Thank conclude does your We and you do again for call. participation. thank today's

disconnect. now You may

Dawson Geophysical (DWSN) 2 Nov 192019 Q3 Earnings call transcript