Dawson(US:DWSN)2025-11-13 21:21Revenue Growth - Acquisition revenues for Q3 2025 increased 217.6% to $14.8 million compared to $4.7 million in Q3 2024, primarily due to increased crew utilization [94] - Canadian acquisition revenues for Q3 2025 rose to $166,000 from $11,000 in Q3 2024, with a 53.9% increase to $13.0 million for the first nine months of 2025 compared to $8.5 million in the same period of 2024 [95] - Total revenues for Q3 2025 were $22.7 million, up from $14.4 million in Q3 2024, despite a $2.0 million decrease in reimbursable revenues [96] Operating Costs and Expenses - Total operating costs for Q3 2025 were $23.9 million, an 18.6% increase from Q3 2024, while operating expenses for the first nine months of 2025 decreased 17.8% to $51.2 million [102] - General and administrative expenses decreased 19.8% to $2.1 million in Q3 2025 compared to $2.6 million in Q3 2024, reflecting cost reduction initiatives [100] Equipment and Capital Expenditures - The company entered into an equipment purchase agreement for new single point node channels for approximately $24.2 million, with $4.8 million paid upon execution and $18.2 million financed through promissory notes [90] - As of September 30, 2025, the company had taken delivery of $10.4 million of equipment and issued two promissory notes totaling approximately $7.5 million [91] - Capital expenditures for the nine months ended September 30, 2025, totaled $12.6 million, primarily for new node channels and maintenance capital requirements [113] Cash Flow and Financing Activities - For the nine months ended September 30, 2025, net cash provided by operating activities was $11.9 million, an increase from $3.6 million for the same period in 2024, primarily due to an increase in deferred revenue [110] - Net cash used in investing activities increased to $5.7 million for the nine months ended September 30, 2025, compared to $0.9 million for the same period in 2024, driven by a rise in capital expenditures to $6.1 million from $1.6 million [111] - Net cash used in financing activities was $2.5 million for the nine months ended September 30, 2025, down from $11.4 million in the same period of 2024, which included $9.9 million in dividends paid [112] Debt and Interest Expenses - Interest expenses for Q3 2025 were $71,000, up from $35,000 in Q3 2024, primarily due to additional debt from capital leases and new equipment notes [103] - The company executed Geospace Notes totaling approximately $7.5 million, with a fixed interest rate of 8.75% and monthly payments of about $239,000 [121] - The company has finance leases totaling $2.5 million as of September 30, 2025, with interest rates ranging from 4.86% to 8.74% [123] Tax and Market Risk - The effective tax rate for Q3 2025 was -0.9%, compared to 0.6% for Q3 2024, influenced by net operating loss carryovers and adjustments to deferred tax assets [104] - No material change in market risk profile during the three months ended September 30, 2025 [131] - Company is exposed to credit risk and interest rate changes due to financial instruments used in business operations [132] - No hedge arrangements or derivative financial instruments have been entered into by the company [132] - Business operations in Canada expose the company to foreign currency exchange rate risk [132] Future Outlook - The company expects to ramp up seasonal operations in Canada and has multiple small channel crew jobs contracted for Q4 2025, anticipating revenue growth quarter-over-quarter [92] - The company believes its capital resources will be adequate to meet current operational needs and fund future capital requirements, depending on future operating performance [126] - The maximum borrowing limit under the Revolving Credit Note is $5,035,032, with a 13% interest rate, payable in 36 monthly installments [117] Dividends - The company declared a special cash dividend of $0.32 per share, totaling approximately $9.9 million, paid on May 6, 2024 [115]