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DAWSON GEOPHYSICAL CO

DAWSON GEOPHYSICAL CO Q2 FY2021 earnings call

August 13, 2021 · fiscal period ended 2021-06

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Summary

Generated 2021-08-13

Management highlights

• Second quarter 2021 was extremely challenging with low activity levels; no seismic data acquisition crew operating in US or Canada as Canadian season ended in Q1. • Near-term outlook for US seismic data acquisition activity remains challenging with one midsized channel count crew operating; anticipates one crew in US during second half of 2021 with low utilization and potentially one crew in Canada in Q4. • Reviewed financial results for Q2 and 6 months ended June 30, 2021, showing revenue, cost, expense, and EBITDA changes. • Exploration and production companies continue capital discipline; oil and gas price situations discussed. • Saw slight uptick in bid activity in US and inquiries in Canada, including carbon capture projects. • Limited capital budget spending, reduced operating expenses, implemented equipment maintenance program; balance sheet remains strong with $45.9 million in cash and short-term investments as of June 30, 2021.

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Segment performance

For the second quarter ended June 30, 2021, revenues were $193,000, a significant decrease from $29.5 million in Q2 2020. Net loss was $9 million or $0.38 per share compared to net income of $1.5 million or $0.06 per share in Q2 2020. EBITDA was negative $5.7 million vs positive $5.8 million in Q2 2020. For the 6 months ended June 30, 2021, revenues were $11.9 million, down ~83% from $68.5 million in the prior year period. Net loss was $14.2 million or $0.61 per share vs net income of $2.5 million or $0.11 per share in the prior year period. EBITDA was negative $7.5 million vs positive $11.6 million in the prior year period.

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Guidance

• Not providing formal guidance. • Q2 was low point; has a crew in US field with periods of low utilization, anticipates operating through end of 2021 in US and into Q1 2022. • Hopes for earlier season start in Canada; back half of 2021 will continue to be difficult. • Closely watching balance sheet and cash position, working to reduce cash burn.

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Risks

• Forward-looking statements subject to known and unknown risks, uncertainties, and factors that may cause actual results to differ from expectations. Includes risks disclosed in SEC filings such as those in annual report on Form 10-K and subsequent quarterly reports on Form 10-Q.

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Q&A highlights

Q: What's your strategy given cash burn concerns?

A: Q2 was low point, has a crew in US field with low utilization periods, anticipates keeping crew busy in US through end of 2021 and into Q1, hopes for earlier Canada season start, will continue to watch balance sheet and reduce cash burn.

Q: What type of work in Canada?

A: Most work in Canada is in heavy oil basins, mostly 3 component in nature, recent history with heavy oil sands.

Q: Carbon capture, lithium exploration, competition?

A: Seen inquiries in US land-based carbon capture projects, some lithium inquiries but not fruition yet, competitive landscape difficult for everyone, seeing slight uptick in bid activity but market remains challenging

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Key numbers

Reported versus consensus

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Transcript

August 13, 2021

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