Dawson(US:DWSN)2020-08-01 17:58Financial Data and Key Metrics Changes - For Q2 2020, the company reported revenues of $29.5 million, a 23% increase from $24.1 million in Q2 2019 [9][10] - Net income for Q2 2020 was $1.5 million or $0.06 per share, compared to a net loss of $11.2 million or $0.49 loss per share in Q2 2019 [15] - EBITDA for Q2 2020 was $5.8 million, compared to negative EBITDA of $6.1 million in Q2 2019 [16] - For the first half of 2020, revenues were $68.5 million, a 9% decrease from $75.2 million in the same period of 2019 [10][18] - The company reported positive EBITDA of $11.6 million for the first half of 2020, compared to negative EBITDA of $111,000 in the same period of 2019 [18] Business Line Data and Key Metrics Changes - Cost of services in Q2 2020 was $19.7 million, a 23% decrease from $25.3 million in Q2 2019 [14] - General and administrative expenses were $4.3 million in Q2 2020, a 15.6% decrease from $5 million in Q2 2019 [14] - Depreciation and amortization expense in Q2 2020 was $4.4 million, a 17.7% decrease from $5.3 million in Q2 2019 [14] Market Data and Key Metrics Changes - The company noted a significant reduction in client spending levels, with many exploration and production companies cutting capital budgets by 30% to 50% [22] - A total of 1,238 permits to drill wells in the U.S. were approved in June 2020, a 15% month-over-month increase [23] Company Strategy and Development Direction - The company anticipates continued operation of one moderate-sized channel count crew through the end of 2020 in the U.S. with possible limited activity in Canada [23] - Management emphasized the importance of seismic exploration for E&P companies to identify optimal well locations in a cost-effective manner [29] Management's Comments on Operating Environment and Future Outlook - Management highlighted significant challenges in the oil and gas industry due to OPEC+ production cuts and the impact of COVID-19 on economic activity [21][22] - Despite challenges, there are signs of improvement with oil prices rebounding and some independent producers planning to increase activity [23] - The company has limited visibility beyond Q4 2020, with slow requests for proposals but some potential projects in late 2020 and 2021 [24] Other Important Information - The company reported a strong balance sheet with cash and short-term investments of $36.8 million and a current ratio of 6.2:1 as of June 30, 2020 [19] - Management continues to follow CDC guidelines to ensure employee safety during the COVID-19 pandemic [26][27] Q&A Session Summary Question: Client activity and project contracts for Q3 and Q4 - Management noted ongoing communication with clients but highlighted uncertainty regarding actual project contracts due to budget constraints and the current economic environment [32][35] Question: Industry consolidation during difficult market conditions - Management does not see any imminent or meaningful consolidation opportunities at this time [50] Question: Cash allocation and potential stock repurchase or dividends - The board regularly discusses the company's cash position and capital structure, but no specific plans for stock repurchase or dividends were mentioned [51][53] Question: Relationship between CapEx and depreciation - Management explained that the company has been focusing on maintenance CapEx, which is currently below depreciation levels, and emphasized the good condition of their equipment [56][59]