Dawson Geophysical Co (DWSN) Reports Third Quarter 2023 Results
Dawson Geophysical Co (NASDAQ:DWSN) sees a significant increase in third-quarter revenue year-over-year, yet reports a net loss.
The company reports negative EBITDA for both the third quarter and nine-month period ended September 30, 2023.
Recent acquisition of Breckenridge assets expected to enhance operational efficiency and improve utilization.
Management remains optimistic about high channel count utilization and increased activity in carbon capture projects for 2024.
On November 9, 2023, Dawson Geophysical Co (NASDAQ:DWSN) released its unaudited financial results for the third quarter ended September 30, 2023. The company, a leading provider of North American onshore seismic data acquisition services, has reported a substantial increase in revenues, which reached $22,961,000, up from $7,429,000 in the same period last year. This increase is primarily attributed to third-party pass-through charges for support services related to a project in the northeast U.S., which accounted for approximately 58% of reported revenues.
Financial Performance Overview
Despite the revenue growth, Dawson Geophysical Co (NASDAQ:DWSN) experienced a net loss of $5,198,000 or $0.20 loss per common share for the third quarter of 2023, an improvement from a net loss of $6,912,000 or $0.28 loss per common share for the same quarter in 2022. The company also reported negative EBITDA of $3,351,000 for the quarter, compared to a negative EBITDA of $4,154,000 for the third quarter of 2022. For the nine-month period ended September 30, 2023, the company reported revenues of $72,588,000 and a net loss of $10,041,000 or $0.40 loss per common share, showing an improvement from a net loss of $15,876,000 or $0.64 loss per common share for the same period in 2022.
Operational Highlights and Strategic Developments
Dawson Geophysical Co (NASDAQ:DWSN) began the third quarter with one mid-sized channel count crew in operation and deployed a second crew in early August. The company anticipates operating two crews with improved channel count utilization through the fourth quarter and into 2024. Canadian activity is also expected to increase with up to three crews operating in the first quarter of 2024.
The company's acquisition of Breckenridge assets earlier this year is anticipated to enhance operational efficiency and improve utilization. The integration process is expected to streamline costs and leverage increased operational and financial efficiencies. The transaction has been reflected in the financial presentations as if the combination occurred on January 14, 2022, due to both companies being under Wilks' control from that date.
Balance Sheet and Capital Expenditures
As of September 30, 2023, Dawson Geophysical Co (NASDAQ:DWSN) reported cash, restricted cash, and short-term investments totaling $19,156,000, a decrease from $23,868,000 at the end of 2022. Working capital was $16,927,000, compared to $27,632,000 at the end of the previous year. Capital expenditures for the nine months ended September 30, 2023, were $3,427,000, primarily for maintenance capital requirements, with an initial capital budget of $5,000,000 for 2023.
Management's Outlook
Stephen C. Jumper, President and CEO of Dawson Geophysical, expressed that while the third quarter started with challenges, operations improved significantly towards the end of the quarter. He anticipates high channel count utilization and increased activity, particularly in the Permian and Delaware Basins, and expects a notable increase in carbon capture projects in 2024. Jumper remains optimistic about the company's positioning with an experienced workforce, robust equipment inventory, and a strong balance sheet as they move into the new year.
Dawson Geophysical Co (NASDAQ:DWSN) continues to navigate the challenges of the industry, with a focus on improving operational efficiency and capitalizing on emerging opportunities in the seismic data acquisition market. Investors and stakeholders will be watching closely as the company progresses towards its strategic goals in the coming quarters.
Explore the complete 8-K earnings release (here) from Dawson Geophysical Co for further details.
This article first appeared on GuruFocus.
