Dawson Geophysical Co 10-Q for FY2021 Q3

About this 10-Q

Headline figures

Dawson Geophysical Co (DWSN)

10-Q 2021-11-04 For: 2021-09-30

Added on April 10, 2026

Dawson Geophysical Co filed this 10-Q on November 4, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

September 30, 2021

December 31, 2020

Notes payable to finance company for insurance

Aggregate principal amount outstanding

Interest rate

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

Revenue: $1.91M; down 78.1% from $8.74M a year earlier
Net loss: $7.87M; compared with a net loss of $7.84M a year earlier
Diluted EPS: -$0.33; compared with -$0.33 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 November 2, 2021
Common Stock, $0.01 par value		23,643,934 shares

		Page Number
Part I. FINANCIAL INFORMATION		3
Item 1. Financial Statements		3
Condensed Consolidated Balance Sheets at September 30, 2021 (unaudited) and December 31, 2020		3
Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)		4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited)		5
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 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		19
Item 6. Exhibits		20
Signatures		21


	September 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	36,018	$	40,955
Restricted cash		5,000		5,000
Short-term investments		583		583
Accounts receivable, net		325		7,343
Prepaid expenses and other current assets		2,516		4,709
Total current assets		44,442		58,590

Property and equipment, net		28,941		38,900

Right-of-use assets		4,703		5,494

Intangibles, net		394		393

Total assets	$	78,480	$	103,377

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,557	$	1,603
Accrued liabilities:
Payroll costs and other taxes		672		1,045
Other		1,491		1,811
Deferred revenue		96		1,779
Current maturities of notes payable and finance leases		246		94
Current maturities of operating lease liabilities		1,006		1,109
Total current liabilities		5,068		7,441

Long-term liabilities:
Notes payable and finance leases, net of current maturities		10		44
Operating lease liabilities, net of current maturities		4,177		4,899
Deferred tax liabilities, net		19		19
Total long-term liabilities		4,206		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,
23,692,379 and 23,526,517 shares issued, and 23,643,934 and 23,478,072 shares
outstanding at September 30, 2021 and December 31, 2020, respectively		237		235
Additional paid-in capital		155,101		154,866
Retained deficit		(85,037)		(62,927)
Treasury stock, at cost; 48,445 shares		—		—
Accumulated other comprehensive loss, net		(1,095)		(1,200)
Total stockholders’ equity		69,206		90,974

Total liabilities and stockholders’ equity	$	78,480	$	103,377


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating revenues	$	1,914	$	8,738	$	13,855	$	77,216

Operating costs:
Operating expenses		3,975		9,441		18,247		58,189
General and administrative		2,443		3,270		7,996		11,205
Depreciation and amortization		3,249		4,125		10,083		13,412
		9,667		16,836		36,326		82,806

Loss from operations		(7,753)		(8,098)		(22,471)		(5,590)

Other income (expense):
Interest income		50		106		176		326
Interest expense		(4)		(10)		(16)		(80)
Other (expense) income, net		(158)		177		201		12

Loss before income tax		(7,865)		(7,825)		(22,110)		(5,332)

Income tax expense		—		(15)		—		(15)

Net loss		(7,865)		(7,840)		(22,110)		(5,347)

Other comprehensive (loss) income:
Net unrealized (loss) income on foreign exchange rate translation, net		(307)		374		105		(221)

Comprehensive loss	$	(8,172)	$	(7,466)	$	(22,005)	$	(5,568)

Basic loss per share of common stock	$	(0.33)	$	(0.33)	$	(0.94)	$	(0.23)

Diluted loss per share of common stock	$	(0.33)	$	(0.33)	$	(0.94)	$	(0.23)

Weighted average equivalent common shares outstanding		23,632,112		23,423,437		23,545,693		23,350,204

Weighted average equivalent common shares outstanding - assuming dilution		23,632,112		23,423,437		23,545,693		23,350,204


								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
Net loss							(7,865)				(7,865)
Unrealized loss on foreign exchange rate translation									(307)		(307)
Stock-based compensation expense					84						84
Issuance of common stock as compensation	11,952		—		30						30
Balance September 30, 2021	23,692,379	$	237	$	155,101	$	(85,037)	$	(1,095)	$	69,206


	Operating Leases		Finance Leases
October 2021 - September 2022	$	1,243	$	45
October 2022 - September 2023		1,166		10
October 2023 - September 2024		1,188		—
October 2024 - September 2025		943		—
October 2025 - September 2026		892		—
Thereafter		451		—
Total payments under lease agreements		5,883		55

Less imputed interest		(700)		(2)

Total lease liabilities	$	5,183	$	53




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.

10.1			Second Loan Modification Agreement to Loan and Security Agreement, by and between Dawson Geophysical Company and Dominion Bank, dated September 30, 2021, filed on October 1, 2021 as Exhibit 10.1 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 September 30, 2021, formatted in Inline XBRL ( Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021 and 2020, (ii) Condensed Consolidated Balance Sheets at September 30, 2021 and December 31, 2020, (iii) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 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: November 4, 2021	By:	/s/ Stephen C. Jumper
		Stephen C. Jumper
		Chairman of the Board of Directors, President and Chief Executive Officer


DATE: November 4, 2021	By:	/s/ James K. Brata
		James K. Brata
		Executive Vice President, Chief Financial Officer, Secretary and Treasurer


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net loss	$	(22,110)	$	(5,347)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		10,083		13,412
Operating lease cost		796		916
Non-cash compensation		312		600
Deferred income tax expense		—		79
Change in other long-term liabilities		—		(150)
Gain on disposal of assets		(131)		(3)
Remeasurement and other		20		68
Change in operating assets and liabilities:
Decrease in accounts receivable		7,037		19,373
Decrease in prepaid expenses and other assets		2,194		4,505
Decrease in accounts payable		(365)		(2,957)
Decrease in accrued liabilities		(696)		(2,011)
Decrease in operating lease liabilities		(830)		(930)
Decrease in deferred revenue		(1,683)		(3,107)

Net cash (used in) provided by operating activities		(5,373)		24,448

Cash flows from investing activities:
Capital expenditures, net of non-cash capital expenditures summarized below		(11)		(2,822)
Proceeds from maturity of short-term investments		—		1,767
Proceeds from disposal of assets		384		225
Proceeds from notes receivable		—		26

Net cash provided by (used in) investing activities		373		(804)

Cash flows from financing activities:
Proceeds from notes payable		550		6,374
Principal payments on notes payable		(387)		(8,393)
Principal payments on finance leases		(46)		(2,291)
Tax withholdings related to stock-based compensation awards		(75)		(70)

Net cash provided by (used in) financing activities		42		(4,380)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020			2021	2020
Net cash (used in) provided by operating activities	$	(4,075)	$	15,472	$	(5,373)	$	24,448
Changes in working capital and other items		(205)		(18,831)		(5,706)		(15,098)
Non-cash adjustments to net loss		(382)		(437)		(1,108)		(1,516)
EBITDA	$	(4,662)	$	(3,796)	$	(12,187)	$	7,834