UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File No. 001-32472

DAWSON GEOPHYSICAL COMPANY

(Exact name of registrant as specified in its charter)


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

508 West Wall, Suite 800, Midland, Texas 79701

(Address of Principal Executive Office) (Zip Code)

Registrant’s Telephone Number, Including Area Code: 432-684-3000

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Accelerated filer ☐	Large accelerated filer ◻	Smaller reporting company ☒

Non-accelerated filer ⌧	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.


Title of Each Class		Outstanding at May 12, 2021
Common Stock, $0.01 par value		23,478,072 shares

Table of Contents

DAWSON GEOPHYSICAL COMPANY

INDEX

		Page Number
Part I. FINANCIAL INFORMATION		3
Item 1. Financial Statements		3
Condensed Consolidated Balance Sheets at March 31, 2021 (unaudited) and December 31, 2020		3
Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2021 and 2020 (unaudited)		4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020 (unaudited)		5
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 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		14
Item 3. Quantitative and Qualitative Disclosures about Market Risk		18
Item 4. Controls and Procedures		19
Part II. OTHER INFORMATION		19
Item 1. Legal Proceedings		19
Item 1A. Risk Factors		19
Item 6. Exhibits		20
Signatures		21

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

DAWSON GEOPHYSICAL COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)


	March 31,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	41,371	$	40,955
Restricted cash		5,000		5,000
Short-term investments		583		583
Accounts receivable, net		5,137		7,343
Prepaid expenses and other current assets		3,083		4,709
Total current assets		55,174		58,590

Property and equipment, net		35,409		38,900

Right-of-use assets		5,241		5,494

Intangibles, net		398		393

Total assets	$	96,222	$	103,377

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,434	$	1,603
Accrued liabilities:
Payroll costs and other taxes		1,011		1,045
Other		1,375		1,811
Deferred revenue		—		1,779
Current maturities of notes payable and finance leases		551		94
Current maturities of operating lease liabilities		1,089		1,109
Total current liabilities		5,460		7,441

Long-term liabilities:
Notes payable and finance leases, net of current maturities		36		44
Operating lease liabilities, net of current maturities		4,659		4,899
Deferred tax liabilities, net		19		19
Total long-term liabilities		4,714		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,
23,526,517 shares issued and 23,478,072 shares outstanding at March 31, 2021 and
December 31, 2020		235		235
Additional paid-in capital		154,967		154,866
Retained deficit		(68,155)		(62,927)
Treasury stock, at cost; 48,445 shares		—		—
Accumulated other comprehensive loss, net		(999)		(1,200)
Total stockholders’ equity		86,048		90,974

Total liabilities and stockholders’ equity	$	96,222	$	103,377

See accompanying notes to the condensed consolidated financial statements (unaudited).

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DAWSON GEOPHYSICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited and amounts in thousands, except share and per share data)


	Three Months Ended March 31,
	2021		2020
Operating revenues	$	11,748	$	38,979

Operating costs:
Operating expenses		10,942		29,016
General and administrative		2,807		3,674
Depreciation and amortization		3,434		4,904
		17,183		37,594

(Loss) income from operations		(5,435)		1,385

Other income (expense):
Interest income		70		105
Interest expense		(6)		(40)
Other income (expense), net		143		(458)

(Loss) income before income tax		(5,228)		992

Income tax benefit		—		1

Net (loss) income		(5,228)		993

Other comprehensive income (loss):
Net unrealized income (loss) on foreign exchange rate translation, net		201		(1,199)

Comprehensive loss	$	(5,027)	$	(206)

Basic (loss) income per share of common stock	$	(0.22)	$	0.04

Diluted (loss) income per share of common stock	$	(0.22)	$	0.04

Weighted average equivalent common shares outstanding		23,478,072		23,287,410

Weighted average equivalent common shares outstanding - assuming dilution		23,478,072		23,465,651

See accompanying notes to the condensed consolidated financial statements (unaudited).

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DAWSON GEOPHYSICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and amounts in thousands)


	Three Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net (loss) income	$	(5,228)	$	993

Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		3,434		4,904
Operating lease cost		262		301
Non-cash compensation		101		203
Deferred income tax expense		—		79
Loss (gain) on disposal of assets		38		(4)
Remeasurement and other		61		(130)
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable		2,232		(8,658)
Decrease (increase) in prepaid expenses and other assets		1,627		(1,738)
(Decrease) increase in accounts payable		(171)		942
(Decrease) increase in accrued liabilities		(480)		1,551
Decrease in operating lease liabilities		(269)		(303)
(Decrease) increase in deferred revenue		(1,779)		1,687

Net cash used in operating activities		(172)		(173)

Cash flows from investing activities:
Capital expenditures, net of non-cash capital expenditures summarized below		—		(1,777)
Proceeds from disposal of assets		94		85
Proceeds from notes receivable		—		13

Net cash provided by (used in) investing activities		94		(1,679)

Cash flows from financing activities:
Proceeds from notes payable		550		—
Principal payments on notes payable		(89)		(707)
Principal payments on finance leases		(13)		(725)

Net cash provided by (used in) financing activities		448		(1,432)

Effect of exchange rate changes on cash and cash equivalents and restricted cash		46		(135)

Net increase (decrease) in cash and cash equivalents and restricted cash		416		(3,419)

Cash and cash equivalents and restricted cash at beginning of period		45,955		31,271

Cash and cash equivalents and restricted cash at end of period	$	46,371	$	27,852

Supplemental cash flow information:
Cash paid for interest	$	4	$	42

Non-cash operating, investing and financing activities:
Increase in accrued purchases of property and equipment	$	—	$	567
Increase in right-of-use assets and operating lease liabilities	$	1	$	—
Financed insurance premiums	$	—	$	434

See accompanying notes to the condensed consolidated financial statements (unaudited).

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DAWSON GEOPHYSICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited and amounts in thousands, except share data)


								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)				(

SEC Form 10-Q filed by Dawson Geophysical Company