Dawson(US:DWSN)2021-11-06 20:45Financial Data and Key Metrics Changes - For Q3 2021, the company reported revenues of $1.9 million, a decrease of approximately 78% compared to $8.7 million for Q3 2020 [6][8] - The net loss for Q3 2021 was $7.9 million or $0.33 loss per common share, compared to a net loss of $7.8 million or $0.33 loss per common share for Q3 2020 [6][8] - EBITDA for Q3 2021 was negative $4.7 million compared to negative $3.8 million in Q3 2020 [7][8] - For the nine months ended September 30, 2021, revenues were $13.9 million, a decrease of approximately 82% compared to $77.2 million for the same period in 2020 [9][10] - The net loss for the nine months ended September 30, 2021, was $22.1 million or $0.94 loss per common share, compared to a net loss of $5.3 million or $0.23 loss per common share for the same period in 2020 [10] Business Line Data and Key Metrics Changes - The company operated one seismic data acquisition crew in the Lower 48, with extended periods of low utilization, leading to depressed activity levels [7][12] - The company expects to operate two crews in Canada in the latter half of Q4 2021 through the end of the winter season [7][12] - Bid activity remains at historically low levels, and visibility into 2022 is limited in the Lower 48 [12][18] Market Data and Key Metrics Changes - Prices for seismic services have softened in the last quarter due to a lack of demand for onshore seismic data acquisition projects in both Canada and the Lower 48 [7][12] - Capital spending levels within the North American onshore client base have only slightly improved in 2021 and are not anticipated to increase meaningfully in 2022 [17][26] Company Strategy and Development Direction - The company has entered into a definitive merger agreement with Wilks Brothers, LLC, with a tender offer to acquire all outstanding common shares for $2.34 per share [19][20] - The Board believes the transaction presents a compelling value for shareholders and is in their best interest [22][30] - The company has significantly reduced capital expenditures below typical historic levels due to declining demand for seismic services [15][16] Management's Comments on Operating Environment and Future Outlook - Management indicated that the current environment is unprecedented, with downward pressure on cash and net working capital balances expected to continue [17][28] - The company does not foresee a dramatic increase in demand for North American onshore seismic services in the near future [17][29] - The Board unanimously recommends that shareholders tender their shares in favor of the merger due to the anticipated challenges in capital investments necessary for future growth [42][43] Other Important Information - The company has made only $329,000 of capital expenditures in 2021 against an initial budget of $1 million [16] - The balance sheet includes approximately $41.6 million in cash and short-term investments, with a current ratio of 8.8:1 [11][13] Q&A Session Summary Question: Discussion on alternatives for shareholders and rightsizing plans - Management has attempted to rightsize the company but has faced challenges in maintaining staffing levels necessary for operations [34][36] - The company has significantly reduced costs but further cuts could impact its ability to respond to demand [36][39] Question: Guidance on cash breakeven and future projects - Management refrained from providing specific guidance but acknowledged some short-term positives in Q4 and Q1 [41][42]