Dawson(US:DWSN)2019-05-03 13:56Financial Data and Key Metrics Changes - The company reported revenues of $51 million for Q1 2019, an increase of approximately 3% compared to $49.9 million for Q1 2018 [10][14] - The net loss for Q1 2019 was $137,000, or $0.01 loss per share, compared to a net loss of $1.7 million, or $0.07 loss per share for Q1 2018 [11][18] - EBITDA for Q1 2019 was $5.9 million, down from $6.9 million in Q1 2018 [11][19] - Cost of services increased to $40.9 million in Q1 2019, a 5% increase from $38.8 million in Q1 2018 [17] - General and administrative expenses rose to $4.5 million in Q1 2019 from $4.1 million in Q1 2018 [17] Business Line Data and Key Metrics Changes - The company operated a peak of five crews in the U.S. and four crews in Canada during Q1 2019, down from nine crews in the U.S. in Q1 2018 [12][15] - The winter season in Canada ended with limited seismic activities anticipated until the next winter season [13][15] - The company anticipates operating two to four crews in the U.S. during Q2 2019 and up to five crews in Q3 2019 [13][16] Market Data and Key Metrics Changes - The majority of projects are for multi-client companies in the U.S. [14][16] - A significant project in West Texas involved a peak of 48,000 channels, representing a trend towards larger, more complex projects [21][22] - In Canada, a high-density 3D multi-component project utilized 32,000 three-channel recording units, generating approximately 1.6 petabytes of data [25] Company Strategy and Development Direction - The company is focusing on increasing channel counts and operational efficiencies to adapt to market demands for larger projects [21][31] - There is a growing trend towards larger projects requiring increased channel counts and data management capabilities [24][31] - The company has reduced its workforce by approximately 23% since the end of 2018 in response to anticipated lower crew counts and operational improvements [29] Management's Comments on Operating Environment and Future Outlook - The management anticipates a challenging second quarter due to reduced utilization of channels and crews in the U.S. [28][71] - Despite current challenges, the company believes it is well-positioned for future growth as seismic data acquisition projects continue to increase in scale [31][71] - Management noted that the industry is moving towards higher channel counts and improved data quality for better wellbore placement and geosteering [36][46] Other Important Information - Capital expenditures for Q1 2019 were $1 million, primarily for maintenance capital items [30][68] - The balance sheet remains strong with $34 million in cash and short-term investments and a current ratio of 3 to 1 [20] Q&A Session Summary Question: Changes in business model and revenue generation - The business model has shifted towards larger crew sizes and higher data capture, indicating a trend towards channel count modeling rather than crew count [33][35] Question: Future channel count expectations - Management confirmed that the trend is towards higher channel counts due to larger project sizes and increased density requirements [36][38] Question: Impact of increased data quality on operations - Improved data quality is expected to enhance wellbore placement and geosteering capabilities, moving beyond traditional geohazard mapping [44][46] Question: Second quarter guidance and channel utilization - Management indicated a significant drop in channel utilization for Q2, with expectations of lower revenue compared to Q1 [60][61] Question: Capital expenditures outlook - Capital expenditures are expected to remain at maintenance levels, around $1 million per quarter [68]