Dawson Geophysical Co 10-Q for FY2022 Q2

Dawson Geophysical Co (DWSN)

10-Q 2022-08-12 For: 2022-06-30

Added on April 10, 2026

About this 10-Q

Dawson Geophysical Co filed this 10-Q on August 12, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $921K; up 377.2% from $193K a year earlier
Net loss: $7.68M; compared with a net loss of $9.02M a year earlier
Diluted EPS: -$0.32; compared with -$0.38 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 10, 2022
Common Stock, $0.01 par value		23,812,329 shares

		Page Number
Part I. FINANCIAL INFORMATION		3
Item 1. Financial Statements		3
Condensed Consolidated Balance Sheets at June 30, 2022 (unaudited) and December 31, 2021		3
Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)		4
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (unaudited)		5
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)		6
Notes to Condensed Consolidated Financial Statements (unaudited)		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
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,
	2022		2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	24,654	$	25,376
Restricted cash		5,000		5,000
Short-term investments		265		265
Accounts receivable, net		1,781		8,905
Prepaid expenses and other current assets		4,186		3,313
Total current assets		35,886		42,859

Property and equipment		21,301		26,349

Right-of-use assets		4,456		4,435

Intangibles, net		388		395

Total assets	$	62,031	$	74,038

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,068	$	2,580
Accrued liabilities:
Payroll costs and other taxes		632		1,066
Other		1,253		1,338
Deferred revenue		1,472		1,344
Current maturities of notes payable and finance leases		522		302
Current maturities of operating lease liabilities		1,057		961
Total current liabilities		6,004		7,591

Long-term liabilities:
Notes payable and finance leases, net of current maturities		—		8
Operating lease liabilities, net of current maturities		3,869		3,942
Deferred tax liabilities, net		20		20
Total long-term liabilities		3,889		3,970

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,
23,812,329 and 23,692,379 shares issued, and 23,812,329 and 23,643,934 shares
outstanding at June 30, 2022 and December 31, 2021, respectively		238		237
Additional paid-in capital		155,669		155,268
Accumulated deficit		(102,087)		(92,018)
Treasury stock, at cost; 0 and 48,445 shares at June 30, 2022 and December 31, 2021, respectively		—		—
Accumulated other comprehensive loss, net		(1,682)		(1,010)
Total stockholders’ equity		52,138		62,477

Total liabilities and stockholders’ equity	$	62,031	$	74,038


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating revenues	$	921	$	193	$	19,280	$	11,941

Operating costs:
Operating expenses		4,013		3,330		16,651		14,272
General and administrative		2,415		2,746		7,946		5,553
Depreciation and amortization		2,451		3,400		5,085		6,834
		8,879		9,476		29,682		26,659

Loss from operations		(7,958)		(9,283)		(10,402)		(14,718)

Other income (expense):
Interest income		29		56		54		126
Interest expense		(9)		(6)		(20)		(12)
Other income (expense), net		276		216		315		359

Loss before income tax		(7,662)		(9,017)		(10,053)		(14,245)

Income tax expense		(16)		—		(16)		—

Net loss		(7,678)		(9,017)		(10,069)		(14,245)

Other comprehensive (loss) income:
Net unrealized (loss) income on foreign exchange rate translation, net		(439)		211		(672)		412

Comprehensive loss	$	(8,117)	$	(8,806)	$	(10,741)	$	(13,833)

Basic loss per share of common stock	$	(0.32)	$	(0.38)	$	(0.42)	$	(0.61)

Diluted loss per share of common stock	$	(0.32)	$	(0.38)	$	(0.42)	$	(0.61)

Weighted average equivalent common shares outstanding		23,812,329		23,525,728		23,752,775		23,501,900

Weighted average equivalent common shares outstanding - assuming dilution		23,812,329		23,525,728		23,752,775		23,501,900


								Accumulated
	Common Stock			Additional				Other
	Number			Paid-in		Accumulated		Comprehensive
	Of Shares	Amount		Capital		Deficit		(Loss) Income		Total
Balance January 1, 2022	23,692,379	$	237	$	155,268	$	(92,018)	$	(1,010)	$	62,477
Net loss							(2,391)				(2,391)
Unrealized loss on foreign exchange rate translation									(233)		(233)
Issuance of common stock under stock compensation plans	155,000		1		(1)						—
Stock-based compensation expense					279						279
Treasury stock sale					113						113
Shares exchanged for taxes on stock-based compensation	(35,050)				(79)						(79)
Balance March 31, 2022	23,812,329	$	238	$	155,580	$	(94,409)	$	(1,243)	$	60,166
Net loss							(7,678)				(7,678)
Unrealized loss on foreign exchange rate translation									(439)		(439)
Stock-based compensation expense					89						89
Balance June 30, 2022	23,812,329	$	238	$	155,669	$	(102,087)	$	(1,682)	$	52,138


	June 30, 2022		December 31, 2021
Notes payable to finance company for insurance
Aggregate principal amount outstanding	$	496	$	265
Interest rate		4.99%		4.99%


	Operating Leases		Finance Leases
July 2022 - June 2023	$	1,280	$	26
July 2023 - June 2024		1,298		—
July 2024 - June 2025		1,139		—
July 2025 - June 2026		1,013		—
July 2026 - June 2027		780		—
Thereafter		—		—
Total payments under lease agreements		5,510		26

Less imputed interest		(584)		—

Total lease liabilities	$	4,926	$	26




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.

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, 2022, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2022 and 2021, (ii) Condensed Consolidated Balance Sheets at June 30, 2022 and December 31, 2021, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021, 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 12, 2022	By:	/s/ Stephen C. Jumper
		Stephen C. Jumper
		President and Chief Executive Officer


DATE: August 12, 2022	By:	/s/ James K. Brata
		James K. Brata
		Executive Vice President, Chief Financial Officer, Secretary and Treasurer


Dated: August 12, 2022

	/s/ Stephen C. Jumper
	Stephen C. Jumper
	President and Chief Executive Officer
	(principal executive officer)


	/s/ James K. Brata
	James K. Brata
	Executive Vice President,
	Chief Financial Officer, Secretary and Treasurer
	(principal financial and accounting officer)


	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(10,069)	$	(14,245)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		5,085		6,834
Operating lease cost		499		528
Non-cash compensation		368		198
Gain on disposal of assets		(142)		(82)
Remeasurement and other		(18)		121
Change in operating assets and liabilities:
Decrease in accounts receivable		6,696		7,038
Decrease in prepaid expenses and other assets		68		1,927
Decrease in accounts payable		(1,508)		(1,063)
Decrease in accrued liabilities		(491)		(911)
Decrease in operating lease liabilities		(496)		(548)
Increase (decrease) in deferred revenue		128		(1,095)

Net cash provided by (used in) operating activities		120		(1,298)

Cash flows from investing activities:
Capital expenditures, net of non-cash capital expenditures summarized below (if applicable)		(95)		—
Proceeds from disposal of assets		142		335

Net cash provided by investing activities		47		335

Cash flows from financing activities:
Proceeds from notes payable		—		550
Principal payments on notes payable		(713)		(237)
Principal payments on finance leases		(18)		(27)
Tax withholdings related to stock-based compensation awards		(79)		(75)
Sale of treasury stock		113		—

Net cash (used in) provided by financing activities		(697)		211

Effect of exchange rate changes on cash and cash equivalents and restricted cash		(192)		131

Net decrease in cash and cash equivalents and restricted cash		(722)		(621)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021			2022	2021
Net cash provided by (used in) operating activities	$	10,780	$	(1,126)	$	120	$	(1,298)
Changes in working capital and other items		(15,678)		(4,178)		(4,255)		(5,501)
Non-cash adjustments to net loss		(333)		(363)		(867)		(726)
EBITDA	$	(5,231)	$	(5,667)	$	(5,002)	$	(7,525)