Dawson(US:DWSN)2019-11-05 21:29Financial Performance - Operating revenues for the three months ended September 30, 2019, were $36,976,000, a decrease of 8.5% from $40,448,000 in the same period of 2018[14]. - Net loss for the nine months ended September 30, 2019, was $9,385,000, compared to a net loss of $12,591,000 for the same period in 2018, showing an improvement[19]. - Income (loss) from operations for the three months ended September 30, 2019, was $1,911,000, compared to a loss of $5,234,000 in the same period of 2018[14]. - The company reported a comprehensive income of $1,895,000 for the three months ended September 30, 2019, compared to a loss of $4,955,000 in the same period of 2018[14]. - The net income for the three months ended September 30, 2019, was $1,998,000, compared to a net loss of $5,171,000 in the same period of 2018[79]. - Net income for the nine months ended September 30, 2019, was $1,998,000, compared to a net loss of $5,171,000 for the same period in 2018[110]. - EBITDA for the nine months ended September 30, 2019, was $7,049,000, a decrease from $10,204,000 in the same period of 2018[110]. Assets and Liabilities - Total current assets decreased to $73,464,000 as of September 30, 2019, down from $77,025,000 at December 31, 2018[9]. - Cash and cash equivalents at the end of the period were $19,670,000, down from $28,163,000 at the end of the same period in 2018[19]. - Total assets decreased to $140,249,000 as of September 30, 2019, from $150,685,000 at December 31, 2018[9]. - Total stockholders' equity decreased to $108,626,000 as of September 30, 2019, from $117,016,000 at December 31, 2018[9]. - As of September 30, 2019, the total stockholders' equity was $108,626,000, with a retained earnings deficit of $43,903,000[21]. - The accumulated other comprehensive loss was $1,684,000 as of September 30, 2019, reflecting unrealized losses on foreign exchange rate translation[21]. - The Company adopted Topic 842, recognizing a right-of-use asset of $7.7 million and an operating lease liability of $8.2 million[40]. - The aggregate principal amount of notes payable to commercial banks was $5,975,000 with an interest rate of 5.00%[66]. - The aggregate principal amount of notes payable to finance companies for insurance was $1,680,000, with an interest rate increase from 3.80% in December 2018 to 4.99% in September 2019[66]. - Total finance lease liabilities as of September 30, 2019, amounted to $3,135,000, with current liabilities of $3,029,000[68]. Revenue and Expenses - Operating expenses for the three months ended September 30, 2019, were $26,030,000, down from $34,419,000 in the same period of 2018[14]. - Total operating revenues for the nine months ended September 30, 2019, were $112,216,000, down 11.3% from $126,486,000 for the same period in 2018[60]. - The total number of common shares outstanding increased to 23,305,950 as of September 30, 2019, from 22,926,805 as of December 31, 2017[22]. - The total payments under lease agreements for the period were $8,723,000, with imputed interest of $1,326,000 deducted[74]. - General and administrative expenses were 10.3% of revenues in Q3 2019, a slight increase from 10.2% in Q3 2018[102]. - Total operating costs for Q3 2019 were $35,065,000, representing a 23.2% decrease from the same period in 2018[105]. Cash Flow - Net cash provided by operating activities decreased by $11,575,000, from $12,772,000 in 2018 to $1,197,000 in 2019, primarily due to an increase in accounts receivable[113]. - Net cash used in investing activities was $181,000 for the nine months ended September 30, 2019, a significant decrease from $10,651,000 in 2018[114]. - Net cash used in financing activities was $10,229,000 for the nine months ended September 30, 2019, primarily due to principal payments of $7,867,000[115]. Credit and Risk Management - The company maintains an allowance for doubtful accounts of $250,000 as of September 30, 2019, reflecting credit risk concentration in the oil and natural gas industry[134]. - The company has a concentration of credit risk due to key clients in the oil and natural gas industry, which may impact overall credit risk if significant clients terminate contracts or alter strategies[135]. - Interest rate risk exists due to variable interest rates on outstanding indebtedness under the company's Credit Agreement[136]. - The company is exposed to potential impacts on operations if key clients change their exploration or development strategies[135]. - The largest clients can change from year to year, indicating a dynamic client base that may affect future revenues[135]. Operational Insights - The company operated a peak of six crews in the U.S. during Q3 2019, up from five crews in Q2 2019[91]. - The company anticipates operating up to five crews in the U.S. during Q4 2019, with sustained activity expected into Q2 2020[91]. - The company experienced high utilization of energy source units and recording channels, moving towards a channel and energy source utilization model[92]. - Revenues associated with third-party charges were generally below the historical range of 25% to 35% of revenue[99]. - The company expects improved channel and source utilization in 2020 compared to Q2 2019, despite ongoing challenges in the seismic market[96]. Internal Controls and Compliance - There have been no material changes in the company's internal control over financial reporting during the quarter ended September 30, 2019[140]. - The company has evaluated its disclosure controls and procedures and concluded they were effective as of June 30, 2019[139]. - The company has maintained effective internal controls, ensuring timely decisions regarding required disclosures[139].