Dawson Geophysical Co 10-Q for FY2021 Q2

About this 10-Q

Headline figures

Dawson Geophysical Co (DWSN)

10-Q 2021-08-13 For: 2021-06-30

Added on April 10, 2026

Dawson Geophysical Co filed this 10-Q on August 13, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

June 30, 2021

December 31, 2020

Notes payable to finance company for insurance

Aggregate principal amount outstanding

Interest rate

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $193K; down 99.3% from $29.5M a year earlier
Net loss: $9.02M; compared with net income of $1.5M a year earlier
Diluted EPS: -$0.38; compared with $0.06 a year earlier

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Texas		74-2095844
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)


Title of Each Class	Name of Exchange on Which Registered	Trading Symbol
Common Stock, $0.01 par value	The NASDAQ Stock Market	DWSN


Accelerated filer ☐	Large accelerated filer ◻	Smaller reporting company ☒

Non-accelerated filer ⌧	Emerging growth company ☐


Title of Each Class		Outstanding at August 11, 2021
Common Stock, $0.01 par value		23,631,982 shares

		Page Number
Part I. FINANCIAL INFORMATION		3
Item 1. Financial Statements		3
Condensed Consolidated Balance Sheets at June 30, 2021 (unaudited) and December 31, 2020		3
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)		4
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (unaudited)		5
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)		6
Notes to Condensed Consolidated Financial Statements (unaudited)		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3. Quantitative and Qualitative Disclosures about Market Risk		17
Item 4. Controls and Procedures		18
Part II. OTHER INFORMATION		18
Item 1. Legal Proceedings		18
Item 1A. Risk Factors		18
Item 6. Exhibits		19
Signatures		20


	June 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	40,334	$	40,955
Restricted cash		5,000		5,000
Short-term investments		583		583
Accounts receivable, net		324		7,343
Prepaid expenses and other current assets		2,785		4,709
Total current assets		49,026		58,590

Property and equipment, net		31,967		38,900

Right-of-use assets		4,983		5,494

Intangibles, net		403		393

Total assets	$	86,379	$	103,377

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	543	$	1,603
Accrued liabilities:
Payroll costs and other taxes		571		1,045
Other		1,394		1,811
Deferred revenue		684		1,779
Current maturities of notes payable and finance leases		400		94
Current maturities of operating lease liabilities		1,052		1,109
Total current liabilities		4,644		7,441

Long-term liabilities:
Notes payable and finance leases, net of current maturities		27		44
Operating lease liabilities, net of current maturities		4,425		4,899
Deferred tax liabilities, net		19		19
Total long-term liabilities		4,471		4,962

Operating commitments and contingencies		—		—

Stockholders’ equity:
Preferred stock-par value $1.00 per share; 4,000,000 shares authorized, none outstanding		—		—
Common stock-par value $0.01 per share; 35,000,000 shares authorized,
23,680,427 and 23,526,517 shares issued and 23,631,982 and 23,478,072 shares
outstanding at June 30, 2021 and December 31, 2020, respectively		237		235
Additional paid-in capital		154,987		154,866
Retained deficit		(77,172)		(62,927)
Treasury stock, at cost; 48,445 shares		—		—
Accumulated other comprehensive loss, net		(788)		(1,200)
Total stockholders’ equity		77,264		90,974

Total liabilities and stockholders’ equity	$	86,379	$	103,377


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Operating revenues	$	193	$	29,499	$	11,941	$	68,478

Operating costs:
Operating expenses		3,330		19,732		14,272		48,748
General and administrative		2,746		4,261		5,553		7,935
Depreciation and amortization		3,400		4,383		6,834		9,287
		9,476		28,376		26,659		65,970

(Loss) income from operations		(9,283)		1,123		(14,718)		2,508

Other income (expense):
Interest income		56		115		126		220
Interest expense		(6)		(30)		(12)		(70)
Other income (expense), net		216		293		359		(165)

(Loss) income before income tax		(9,017)		1,501		(14,245)		2,493

Income tax expense		—		(1)		—		—

Net (loss) income		(9,017)		1,500		(14,245)		2,493

Other comprehensive income (loss):
Net unrealized income (loss) on foreign exchange rate translation, net		211		604		412		(595)

Comprehensive (loss) income	$	(8,806)	$	2,104	$	(13,833)	$	1,898

Basic (loss) income per share of common stock	$	(0.38)	$	0.06	$	(0.61)	$	0.11

Diluted (loss) income per share of common stock	$	(0.38)	$	0.06	$	(0.61)	$	0.11

Weighted average equivalent common shares outstanding		23,525,728		23,339,644		23,501,900		23,313,383

Weighted average equivalent common shares outstanding - assuming dilution		23,525,728		23,548,253		23,501,900		23,500,109


								Accumulated
	Common Stock			Additional				Other
	Number			Paid-in		Retained		Comprehensive
	Of Shares	Amount		Capital		Deficit		(Loss) Income		Total
Balance December 31, 2020	23,526,517	$	235	$	154,866	$	(62,927)	$	(1,200)	$	90,974
Net loss							(5,228)				(5,228)
Unrealized income on foreign exchange rate translation									201		201
Stock-based compensation expense					101						101
Balance March 31, 2021	23,526,517		235		154,967		(68,155)		(999)		86,048
Net loss							(9,017)				(9,017)
Unrealized income on foreign exchange rate translation									211		211
Issuance of common stock under stock compensation plans	174,000		2		(2)						—
Stock-based compensation expense					67						67
Issuance of common stock as compensation	11,320				30						30
Shares exchanged for taxes on stock-based compensation	(31,410)				(75)						(75)
Balance June 30, 2021	23,680,427	$	237	$	154,987	$	(77,172)	$	(788)	$	77,264


	Operating Leases		Finance Leases
July 2021 - June 2022	$	1,303	$	49
July 2022 - June 2023		1,169		28
July 2023 - June 2024		1,187		—
July 2024 - June 2025		1,023		—
July 2025 - June 2026		888		—
Thereafter		676		—
Total payments under lease agreements		6,246		77

Less imputed interest		(769)		(3)

Total lease liabilities	$	5,477	$	74




Number			Exhibit

3.1			Amended and Restated Certificate of Formation, as amended February 11, 2015, filed on March 16, 2015 as Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K and incorporated herein by reference.

3.2			Bylaws, as amended February 11, 2015, filed on March 16, 2015 as Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K and incorporated herein by reference.

3.3			Statement of Resolutions Establishing Series of Shares designated Series A Junior Participating Preferred Stock of Dawson Geophysical Company, filed on April 8, 2021 as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K and incorporated herein by reference.

4.1			Rights Agreement, dated as of April 8, 2021 between Dawson Geophysical Company and American Stock Transfer & Trust Company, LLC, as Rights Agent, filed on April 8, 2021 as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K and incorporated herein by reference.

31.1*			Certification of Chief Executive Officer of Dawson Geophysical Company pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

31.2*			Certification of Chief Financial Officer of Dawson Geophysical Company pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

32.1*			Certification of Chief Executive Officer of Dawson Geophysical Company pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

32.2*			Certification of Chief Financial Officer of Dawson Geophysical Company pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

101*			The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, formatted in Inline XBRL ( Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the three and six months ended June 30, 2021 and 2020, (ii) Condensed Consolidated Balance Sheets at June 30, 2021 and December 31, 2020, (iii) Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2021 and 2020, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020, and (v) Notes to Condensed Consolidated Financial Statements.

104*			Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101).

	DAWSON GEOPHYSICAL COMPANY

DATE: August 13, 2021	By:	/s/ Stephen C. Jumper
		Stephen C. Jumper
		Chairman of the Board of Directors, President and Chief Executive Officer


DATE: August 13, 2021	By:	/s/ James K. Brata
		James K. Brata
		Executive Vice President, Chief Financial Officer, Secretary and Treasurer


	Six Months Ended June 30,
	2021		2020
Cash flows from operating activities:
Net (loss) income	$	(14,245)	$	2,493

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		6,834		9,287
Operating lease cost		528		605
Non-cash compensation		198		474
Deferred income tax expense		—		79
Change in other long-term liabilities		—		(150)
(Gain) loss on disposal of assets		(82)		1
Remeasurement and other		121		(14)
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable		7,038		(2,249)
Decrease in prepaid expenses and other assets		1,927		3,304
Decrease in accounts payable		(1,063)		(600)
Decrease in accrued liabilities		(911)		(1,319)
Decrease in operating lease liabilities		(548)		(613)
Decrease in deferred revenue		(1,095)		(2,322)

Net cash (used in) provided by operating activities		(1,298)		8,976

Cash flows from investing activities:
Capital expenditures, net of non-cash capital expenditures summarized below		—		(2,764)
Proceeds from disposal of assets		335		193
Proceeds from notes receivable		—		26

Net cash provided by (used in) investing activities		335		(2,545)

Cash flows from financing activities:
Proceeds from notes payable		550		6,374
Principal payments on notes payable		(237)		(7,842)
Principal payments on finance leases		(27)		(1,474)
Tax withholdings related to stock-based compensation awards		(75)		(17)

Net cash provided by (used in) financing activities		211		(2,959)

Effect of exchange rate changes on cash and cash equivalents and restricted cash		131		(265)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020			2021	2020
Net cash (used in) provided by operating activities	$	(1,126)	$	9,149	$	(1,298)	$	8,976
Changes in working capital and other items		(4,178)		(2,775)		(5,501)		3,733
Noncash adjustments to net (loss) income		(363)		(575)		(726)		(1,079)
EBITDA	$	(5,667)	$	5,799	$	(7,525)	$	11,630