Dawson(DWSN) - 2023 Q3 - Quarterly Report

Financial Performance - Operating revenues for Q3 2023 increased 209.1% to $22,961,000 compared to $7,429,000 in Q3 2022[83] - Operating expenses for Q3 2023 increased 179.1% to $24,144,000 compared to $8,650,000 in Q3 2022[85] - Total operating costs for Q3 2023 were $28,653,000, representing a 97.8% increase from Q3 2022[88] - EBITDA for Q3 2023 was $(3,351,000), an improvement from $(4,154,000) in Q3 2022[92] Cost Management - General and administrative expenses decreased to 10.9% of revenues in Q3 2023 from 40.0% in Q3 2022, reflecting a reduction of $480,000 or 16.1%[86] Tax and Cash Flow - The effective tax rate for Q3 2023 was -0.1%, compared to a benefit of 0.2% in Q3 2022[89] - Net cash provided by operating activities increased to $2,462,000 for the nine months ended September 30, 2023, compared to a net cash used of $1,598,000 for the same period in 2022, primarily due to a $3,035,000 employee retention credit received in 2023[94] Investment and Financing Activities - Net cash used in investing activities rose to $3,450,000 for the nine months ended September 30, 2023, up from $333,000 in 2022, driven by increased capital expenditures of $2,623,000 compared to $637,000 in the prior year[95] - Net cash used in financing activities was $3,726,000 for the nine months ended September 30, 2023, compared to $2,332,000 in 2022, with significant cash distributions of $3,055,000 related to a transaction[96] Capital Expenditures - Capital expenditures for the nine months ended September 30, 2023, totaled $3,427,000, primarily for rolling stock and maintenance, against an approved budget of $5,000,000[97] - The company anticipates funding its 2023 capital expenditures through cash flow from operations, borrowings, and available funds under its Revolving Credit Facility[109] Liquidity and Credit - As of September 30, 2023, the company had approximately $5,000,000 available for withdrawal under its Revolving Credit Facility, with no amounts borrowed to date[100] - The company reported cash, restricted cash, and short-term investments totaling $19,156,000 as of September 30, 2023[116] - The allowance for doubtful accounts stood at $250,000 as of September 30, 2023, reflecting the company's ongoing credit evaluations of clients in the oil and natural gas industry[113] - The company has finance leases totaling $1,527,000 as of September 30, 2023, with interest rates ranging from 4.85% to 8.74%[105] Future Operations - The company anticipates operating two crews with improved channel count utilization through Q4 2023 and into 2024[78] - Canadian operations are expected to ramp up to three crews in Q1 2024, with several larger projects planned[78] - The company is better positioned in early Q4 2023 compared to previous quarters, with high utilization expected to continue[81] - A short-term convertible note payable of approximately $9,880,000 was converted into 5,811,765 shares of common stock following shareholder approval on September 13, 2023[104] - Management believes cash on hand and working capital are sufficient to fund operating and investing cash flow requirements[93]