DWSN - Earnings call transcript Q3 2020 | Dawson Geophysical Company

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Stephen Jumper

Well, thank you Anna. Good morning and welcome to Dawson Geophysical Company’s third quarter 2020 earnings and operations conference call.

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

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

Before we begin the call with just a few items to cover.

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

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

million compared to XX, EBITDA million reported share The the ended nine XXXX, nine of common ended September XXXX. $X.X $X.X XX, third XX, million for XXXX, company to XX, per XX third the $X.XX company for EBITDA positive $XX.X reported compared net XXXX. XX September ended company September nine reported a income compared to common quarter per months the of for The ended ended September September million million of or The common net the of The loss the XXXX, of September share reported reported compared nine X the nine loss or XX, September for XXXX net September $XXX.X months quarter X.X EBITDA to third $X.X For of loss months ended million for share negative XX, of ended X.X of $X.XX revenues $X.X the ended XXXX XXXX. for or the million $X.X quarter June company months the revenues XX per ended ended the quarter to loss September EBITDA of the of reported XXXX. loss loss for million XX the nine quarter $X compared $X.XX compared of company million months million $X.XX million common September net to company XXXX. XXXX of to the so million quarter months a share per for XX XXXX the or

financial Right-on the with utilization. quarter the one and active company XXXX, of one During of into crew low anticipates of the for winter call then currently turn the of the company two of season quarter crew operating crews acquisition late of review in over and the in quarter. will future quarter for United results will operated return XXXX, up information, in one low of quarter third the and fourth yield with Jim Go quarter control XXXX first of fourth Brata, States ahead, crews quarter And to to with the now the of some outlook available into The will remarks. the ‘XX. Jim? the latter foreseeable periods of I third data in the will the I Canada final and for our part periods who fourth the XXXX. third utilization

Jim Brata

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

our this issued As stated in earnings release morning.

a were decrease million X.X of XXXX. quarter X.X the quarter to XXXX. XX.X% X one information, of XX.X% $X.X one the million to for third The the $X.XX into the the decrease crew XXXX an and was administrative third of compared same was Amortization fourth or $X.X XX.X% quarter up decrease latter foreseeable in loss During the quarter million million, of and XXXX. of utilization in XXXX, in part expenses of third million compared of of available third million, quarter of quarter the to Cost third XXXX one XXXX XXXX An in the of the compared fourth third quarter release compared The services data XXXX expense of season a $X.XX the morning. of periods quarter or of $X first and company Net the $X.X Company EBITDA XXXX. and XXXX. to to for this low winter of the quarter third Depreciation for and quarter $X.X same in quarter XX quarter of Based loss EBITDA million late million quarter Canada per US the $X.X General share the in issued in compared in third was of million provided of utilization. third anticipates with $X.X to million in crew were reconciliation crews the in a share with earnings operated period our quarter. positive of net future. of XXXX. in XXXX. low In for of of after currently crew on was the of per periods negative acquisition the EBITDA the income operating same in the was the

approximately period period months X XX.X% XXXX. of the $X.XX compared ended X to for some the compared XX, million was compared Net Revenues and EBITDA a the to XX, reconciliation also $X.X for million services for XX.X% period or million a of XXXX, XX% X items. net loss a XX, compared for million for morning, amortization in months was for XX, of September XXXX for Now, during ended months million, months million highlight X I’ll September was million, General $XX.X million $X.X ended expenses XX, the I’ll the same of loss decrease X compared ended results XXXX ended decrease months the $XXX.X in same a September XXXX, a first months highlight million share million, Depreciation decrease X per $XX.X XXXX. September and our of X million the compared XX% the was of September $X X decrease $XX.X administrative ended same expense An year ended September sheet months months of XXXX. provided million of of of $XX.X to this $X.XX issued loss to were $XX.X months XXXX of was first the for XXXX EBITDA approximately first the to the for XXXX XXXX. for share some months X earnings now was $XX.X balance ago. loss $X.X $XX.X per release EBITDA a in the to and XX, September XXXX. XX, or X the

cash as strong Our September continues financing debt remain obligations had of and XX, sheet of $XX.X on leases balance to including million. cash we XXXX, equivalents $XXX,XXX approximately the of

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

Stephen Jumper

forward. I economic Request going plans worldwide. they United sizing Jim. Well, reduction mean proposals thank third both services significantly of continue shut Project to services demand reduced oil gas, for States spending as flowing a serve for worldwide Reduced and uncertainties of demand down have high and companies remain into kind our as we you XXXX. Canada the capital negatively remainder substantial for well in quarter our and for from XX have the and our the to impacted for operations. COVID-XX primarily led boost resulting

meaningful XXXX US. XX to are likelihood XX that price there remaining improvements will it’s barrel a forecasting in strong with below would today that remainder per down remaining energy While through oil range, analysts of both of prices in an the I the note the and current to XXXX. crews service slight in some gas include fracturing deployed of areas natural Despite and oil challenges rigs industry prices in the oil improvements experience hydraulic number beginning in is that increase active

E&P within activity determined. of addition, activities a and shareholder oil locations. as exploration which will they In increase by gas more return and production on recent to focus to continue be efficiencies does upon companies has there seek in and acquisition and been spending impact disciplined for their oil the service merger and drilling the the robust This those activity surge recent indicate sector yet develop will capital

focus improve. As saving the activities. acquisition recovery balancing anticipate cost despite rapidly somewhat down to we Increases ability while recent conditions are when in maintaining our lagged to conditions, behind. on in and most difficult drilling seismic measures in these respond market completion we And cycles, the data

steps reported permitting of third first quarter XXXX surveying million the going as cost earnings have and ancillary XX,XXX and quarter and expenditures several as have press lower savings items. X.X annual previous result salary of release, our As reduced year, XXXX expenses. general X capital maintenance cost the for the and and outsource saving also in our were forward company this anticipates the enacted primarily taken cost and approximately resulted X.XX in second respectively, These for include press for in previously steps we and example Moreover, of months measures a has services. releases in to administrative

of in of as September oil experienced, is COVID debt XX, triggered opposed high-resolution to sheet periods has we balance continue XX for important company’s company returns not years years the and as data recovery the strong at oil in current reduce of will end are current operations industry earlier, of commodity of want a year our gas turn, working capital XX.X goal. out downturn we the and September the the state as XXXX. and of sheet and seismic nearly equivalents to achieving having by downturn balance strong on has pointed in we measures, payable art believe should in their million continue I’ve cash that XX, said, in XXX,XXX will equipment market the XX price company market the the through past, The cash the most The oversupplied so play million remain difficult in grow is of use totaling invest James of As finance weigh and the That focused likely an the leases pandemic strong industry, E&P role on remained situated an notes in with cost-cutting XX.X and as free XXXX. well positioned the, XXXX. the to

and want questions. and are in that for working these we noted clients releases. As open thank employees, I hard call previous up all of our I valued challenging our during the to to believe press with ready shareholders our

Operator

Yes, Good a take [Operator Instructions] John sir. question Potratz now from Investments. will Researched Thank with you.

John Potratz

How difficult Good Very time morning, are you. Stephen. period.

work. I with key I thing keeping think very think The future Thank this available for wondering you was much. is downturn. crews the doing I you’re well. very

that as the have new be give may finding work. more You on to cost crews ways as to in efficient working getting mentioned and about during cost-cutting resulted to also people important seismic keep working be X the operations some maybe ability techniques well

Stephen Jumper

paraphrase crews morning John, your ability good question to If revolves our I and for the around that if and when needed. the question improve for deploy basically have things you operation part support. believe to continue as fairly not and always are thank it, some via as an doing do. of we thank you your occurs efficiency uptick in do is to activity the I

John Potratz

Key what can thing the as need think we can be out there we get go improve done contracts in because together when identify different you is so you change people something quite field. be often needs efficiency I efficiently more to and more you do get and does new come to and together in, able cutting a to back you’re and get and much efficient

Stephen Jumper

that terms had first lot shutdown good that couple all, Let company had been COVID-XX difficult I appreciate comments has painful in we others been friends lost we’re clients, of sector only of and lot comments that a of industry to Company me address year good this this difficult a been it of people, that year, a and with with very work been with and regards not painful, a your a so that. the about has very of with it our It’s impact we’ve of

responded well high. our have think the very very remains I people surprisingly morale

tribute put I to help the just those but of difficult work here at very we position a out we’re I our Dawson have to this hard think that that’s this and of us time. have of a to shout the in and just and company put folks history that so not through people employed worked us type proud very want to

are key maintaining We personnel.

trend what past been has of that several looks will the channel forward for continue. the and about in crew. We maybe We like going a count years have in crews talked seismic that the, industry believe higher fewer trend

nature times channel smaller a to in you crew forward. those this, handle continue speaking quite we the in but to lower seeing how higher okay generally we that count some we’re that’s are projects projects are will Although like bit know that and get going count

so looks that I we when upwards. think channel move is capacity way I going to structure of of things one it to to It into company back the so like so our operate ‘XX well. moves think really channel the have a that anticipated And to in The count be crew that does takes number forward, and and and done linearly we’ve going count XXXX being personnel. what looked with not able very -- anticipated the be on at

think personnel that in industry, efficiency the discussed I relationships that on revolves XX have some terms things adequately. process. standpoint the delay, sooner, very last quickly the that project think a around to be the I the of doing respond to we’ll operationally in we started to or operation, we the have able the of we believe months of -- we year we’re or biggest about continue within key the getting in permitting from regard have have With shown and part a

just standpoint, that’s a we first that of of able higher demonstrate channel to from a XXXX. do I more -- energy from financial standpoint, not I sources, hope with very from an efficiency -- answers the standpoint, in utilization half think well access the John. we productivity with and getting question count, Just agreements which surveys are but place, poised were And to more efficiency in the necessary

John Potratz

to a more and good that’s that give you’re and want to the that take the terms of to cut organization and me very thank that -- motivated readjusted also you’re taken effective efficient to in do working thank the take to willing realize you survive organization well. much and fact be and It you’ve sense, it, you does make I and trying to part acknowledge salary of people get and a to really -- cost willing

same higher level with at I great the think your thing a in theory Have done -- managers other corporate headquarters? part. the you

Stephen Jumper

We and level time believe have. announced reductions certain April that of wide There in about compensation -- I a back the that were -- were corporate were some at above. frame salary

say so industry and nature all cyclical sector, have our I understand And people and inside service we would business. the our in our but organization across of

times, the that in those in families, people times, comments has measure us from appreciate And in all is, that as gives to And run. response there me it’s are an whatever they over difficult are can the company all difficult very need think I by do so understand in opportunity positive our return at and trying value it thank individuals difficult see certainly I the made the in but corporate-wide to painful. -- very to long the shareholders operation been made But publicly it’s as your inside think through an and to time they corporation. sometimes that our to well positive. sacrificing our be and It’s savings do to operational this sacrifices I can cost their

John Potratz

do in Right. we what work in together years operation XX lowered I Massachusetts, with you worked on I keep reduced Stephen. thing the I of I some surprised, the worked so to you things with many cost everyone can of happy and the I’m them same thank can Commonwealth in very you achieving efficiencies in achieve we you ago, you to in before path take types and didn’t the had thank materially else much very so operations and when be

done Powder the some worldwide. had to The contract for the to for and other contract past, then talk work physical them get TGS you you some do to here been, business work thing in River them. mentioned you’re signed that you And in their to were I’ve a do able there them Basin. have

Stephen Jumper

a very type that, or Lower good that will not I in may be of publicly, TGS talk Well, and for the do the or have that high-quality obviously large one we are XX negotiations company, work they of on they John. contract do can’t Appreciate past the there quite of going situations multi-client work many work with. we any may about bit that I in companies the

projects out for positive a and started, legs we getting some always it’s certainly some that so, you lower see positive are so as XX. getting And see the on when a there getting

John Potratz

I at really can point. you Inc. about that talk the nothing but Pfizer that Deposit, And guess

data you seismic of You data already type done been leases contracts significant improvement you of that use been it go have in that mentioned as the for -- new that’s ago years it. before he’s the enough might high-resolution Is in your activity. seismic result

you are the So going field. to out in there work

Stephen Jumper

We certainly certainly we think so, and can.

you terms I Basin, recent back for Permian think them have things just compared XXX legacy last let’s time and don’t more we if the gone the we is in that a clarity in data surveys at more to to say give in Basin that been today of the is properties sampling can and data the and which more those few probably in much what examples look know Permian time really times types in that collected. so more rock fabric able and channel doing, higher over data and recorded of more of active, energy I were numbers has advanced the to the is certainly we amount point was rock mid-’XXs. where

and So seismic have believe advantageous, more we optimistic. certainly higher so, new that we’re resolution, clarity, more vintage certainly and to able been yes, show data historically

situation spending. We capital in terms in very are a certainly of difficult

over to don’t near we going in but we term, the would that’s see So time be happen think trend. the anything that certainly,

John Potratz

of that a they spend We not can if in turn do there to Basin. money. particularly the oil out gas, by value you your the get about to But and they’re out but data add going find really a Correct? they lot more clients do, more lot data again, the really Permian

Stephen Jumper

We think so.

John Potratz

Thank up. it Keep Great. Good you. dude. job

Stephen Jumper

you. Thank

Operator

at a Capital from [Operator are Gate question We’ll Management. Melby Michael with no City take There time. further Instructions]. this questions

Michael Melby

guess the those or was multi-client with you’re I on of having company, two conversations either those hoping with morning. E&P progressing group I expand you customers? might be Good the could how separate

Stephen Jumper

Thank Mike. Okay. you,

think and projects do direct. both that as are have in in are some we have I We the E&P. primarily Canada that with company here continue conversations to coming well in E&P the out an as multi-client for works US

have be request We to on right some continue that I conversation now. slow. going will emphasize

So significant couple we multi-client with with there, with some groups. to conversation of course conversations of fairly projects, think XX have I having they’re then E&P with to some the ended direct projects continue and we regards the are

primarily last we’ve the companies. in been for multi-client years of so, And couple the working

I of our a, to flipped see forward, going of think part split operation be in in Mark. a to there continue a multi-client It’s now big out XX-XX data that we’ll but terms probably conversation.

Michael Melby

And you consolidation about potential talk possibilities to going These the your services mentioned consolidation within space. on get within the seismic energy thoughts space are forward.

Stephen Jumper

that M&A been that things. side made, is announcements of on couple the Well, Concho recent referencing WPX more as the Conoco those activity with we’re types have Chevron the of E&P

going a near things Anadarko data in OSFI and future. need Of in a I it and multi-client course lot the seismic those whole Parker to we be could seismic see mainly anticipate their the space will license in space, may a think now whole those it us be good partially not see of in happens lot for has the what of I groups had I of last year ware revolve see going interesting who around who in thing space, effect agreements Pioneer with some so that what would and don’t and on how terms the which will seismic I right is that, the combinations, forward, data positive the

Operator

do further Jay It are no -- appears [indiscernible]. we there have

open. is line Your

Unidentified Analyst

together, and just hey they consolidation that a get sort and are for while. mergers their to the on together it’s the the in get you in come you is, they sort my much. my Thank until goals them they’re companies sense when going you Jumper on Mentioning to do occur really work we to of is them to need E&P work within future dropped back their say, and it’s very the out those the get that’s out refocused sense combined objectives every, trying if are get for where once not of reach seismic hard to organization to to get sector, focus organization they they off the on And and business find to work. then very figure

Stephen Jumper

of in all the we’ve or M&A slow in watched some overall activity think the level so in that this and spending different the accelerated we’ve where on been Jay, in quickly just their more situations factor does down involved then levels activity we’ve in, mean our not M&A ways. we’re fairly it’s but been times case I returns. capital been involved activity that focus I and activity, have driving companies it’s service the kind

in been the seen, has press or we we I as there M&A a this activity seen believe I in seismic have completions. be activity what other mentioned think such release, call and few been lag in and have we’ve downturns, activity to the not. somewhat our What has last behind while and drilling

I not, think of gangbusters it’s not see slight we’re increases imagination. stretch to starting

little We’re bit, certainly rig a up starting some is a overall to count increases of crews frac bit. little see up operating drilling number in the slight activity

And settles for and and this earlier, evaluate changes seismic to of so they is any to as to really and thing things that our to starting that I business. wait internet term so an side these any of you in see see multi-client go they would in M&A anticipate they activity. ahead day activity Smith on what to an related said day have the tend lead do, Korean out in I merger some license the how post to additional so space have need I not material work what Short and I may know, to will we’re don’t these, answer don’t have more the out activity

Unidentified Analyst

you. the very look appreciate down can more thank the your forward in cost we for I what and organization efficient months. to Okay, insight Thank well X much and do keeping you you quarter next you and

Operator

the presenters And time, for any to like our questions no I’d or there turn over additional further remarks. to closing back this are conference at

Stephen Jumper

on to third thank everybody you the join taking our Call. earnings and and Operations Well, in for to XXXX I time Update quarter want thank

we think want thank support to clear level terms wish very our free their of out headwinds shareholders to Thank support to thank and opportunity season in your continued facing their and company understanding and of the our activity and you. are take this of I in and holiday thank our some future. clients valued and in really not employees I continued and that safe to for of to we’re lay about distant for to our where for want want dedication you a COVID and here days. our everybody wonderful stay clients the extreme shareholders we’ll talk to we XX

Operator

your And And you today’s does we disconnect. participation, thank you conclude for that once conference. all now may again

Stephen Jumper	Chairman, President and CEO
Jim Brata	EVP, CFO, Secretary and Treasurer
John Potratz	Researched Investments
Michael Melby	Gate City Capital Management
[Call Starts Abruptly] 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 of 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 - 2020 and any subsequent quarterly reports on Form 10-Q filed with the SEC.
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 reconciliations of the non-GAAP measure to the applicable GAAP measure can be found in the current earnings release the copy of which is located on the company’s website. www.dawson3d.com.The call is scheduled for 30 minutes and the company will not provide any guidance - today’s conference is being recorded.
I would now like to turn the call over to Stephen Jumper	Chairman - President and CEO of Dawson Geophysical Company. Please go ahead - sir.

Dawson Geophysical (DWSN) 1 Nov 202020 Q3 Earnings call transcript