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, 2022

☐	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, 2022
Common Stock, $0.01 par value		23,812,329 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, 2022 (unaudited) and December 31, 2021		3
Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2022 and 2021 (unaudited)		4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (unaudited)		5
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 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		17
Part II. OTHER INFORMATION		18
Item 1. Legal Proceedings		18
Item 1A. Risk Factors		18
Item 6. Exhibits		19
Signatures		20

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,
	2022		2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	14,395	$	25,376
Restricted cash		5,000		5,000
Short-term investments		265		265
Accounts receivable, net		18,495		8,905
Prepaid expenses and other current assets		4,179		3,313
Total current assets		42,334		42,859

Property and equipment		23,780		26,349

Right-of-use assets		4,711		4,435

Intangibles, net		400		395

Total assets	$	71,225	$	74,038

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	2,010	$	2,580
Accrued liabilities:
Payroll costs and other taxes		988		1,066
Other		1,447		1,338
Deferred revenue		489		1,344
Current maturities of notes payable and finance leases		917		302
Current maturities of operating lease liabilities		1,030		961
Total current liabilities		6,881		7,591

Long-term liabilities:
Notes payable and finance leases, net of current maturities		—		8
Operating lease liabilities, net of current maturities		4,158		3,942
Deferred tax liabilities, net		20		20
Total long-term liabilities		4,178		3,970

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,
23,812,329 and 23,692,379 shares issued, and 23,812,329 and 23,643,934 shares
outstanding at March 31, 2022 and December 31, 2021, respectively		238		237
Additional paid-in capital		155,580		155,268
Accumulated deficit		(94,409)		(92,018)
Treasury stock, at cost; 0 and 48,445 shares at March 31, 2022 and December 31, 2021, respectively		—		—
Accumulated other comprehensive loss, net		(1,243)		(1,010)
Total stockholders’ equity		60,166		62,477

Total liabilities and stockholders’ equity	$	71,225	$	74,038

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

Table of Contents

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,
	2022		2021
Operating revenues	$	18,359	$	11,748

Operating costs:
Operating expenses		12,638		10,942
General and administrative		5,531		2,807
Depreciation and amortization		2,634		3,434
		20,803		17,183

Loss from operations		(2,444)		(5,435)

Other income (expense):
Interest income		25		70
Interest expense		(11)		(6)
Other income (expense), net		39		143

Loss before income tax		(2,391)		(5,228)

Income tax (expense) benefit		—		—

Net loss		(2,391)		(5,228)

Other comprehensive (loss) income:
Net unrealized (loss) income on foreign exchange rate translation, net		(233)		201

Comprehensive loss	$	(2,624)	$	(5,027)

Basic loss per share of common stock	$	(0.10)	$	(0.22)

Diluted loss per share of common stock	$	(0.10)	$	(0.22)

Weighted average equivalent common shares outstanding		23,692,558		23,478,072

Weighted average equivalent common shares outstanding - assuming dilution		23,692,558		23,478,072

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

Table of Contents

DAWSON GEOPHYSICAL COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and amounts in thousands)


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net loss	$	(2,391)	$	(5,228)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,634		3,434
Operating lease cost		255		262
Non-cash compensation		279		101
(Gain) loss on disposal of assets		(10)		38
Remeasurement and other		(23)		61
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable		(9,851)		2,232
Decrease in prepaid expenses and other assets		78		1,627
Decrease in accounts payable		(576)		(171)
Increase (decrease) in accrued liabilities		47		(480)
Decrease in operating lease liabilities		(247)		(269)
Decrease in deferred revenue		(855)		(1,779)

Net cash used in operating activities		(10,660)		(172)

Cash flows from investing activities:
Capital expenditures, net of non-cash capital expenditures summarized below		(28)		—
Proceeds from disposal of assets		10		94

Net cash (used in) provided by investing activities		(18)		94

Cash flows from financing activities:
Proceeds from notes payable		—		550
Principal payments on notes payable		(328)		(89)
Principal payments on finance leases		(9)		(13)
Tax withholdings related to stock-based compensation awards		(79)		—
Sale of treasury stock		113		—

Net cash (used in) provided by financing activities		(303)		448

Effect of exchange rate changes on cash and cash equivalents and restricted cash		—		46

Net (decrease) increase in cash and cash equivalents and restricted cash		(10,981)		416

Cash and cash equivalents and restricted cash at beginning of period		30,376		45,955

Cash and cash equivalents and restricted cash at end of period	$	19,395	$	46,371

Supplemental cash flow information:
Cash paid for interest	$	11	$	4

Non-cash operating, investing and financing activities:
Increase in right-of-use assets and operating lease liabilities	$	527	$	1
Financed insurance premiums	$	944	$	—

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

Table of Contents

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		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


								Accumulated
	Common Stock			Additional				Other
	Number			Paid-in		Accumulated		Comprehensive
	Of Shares	Amount		Capital		Deficit		(Loss) Income		Total
Balance January 1, 2021	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