Summary of DWSN Q3 2021 Earnings Call

1Key Financial Results and Metrics

Revenues: $1.9 million for Q3 2021, down 78% from $8.7 million in Q3 2020.

Net Loss: $7.9 million, or $0.33 per share, consistent with a net loss of $7.8 million in Q3 2020.

EBITDA: Negative $4.7 million for Q3 2021, worsening from negative $3.8 million in Q3 2020.

Nine-Month Results: Revenues of $13.9 million (down 82% YoY), net loss of $22.1 million ($0.94 per share), and negative EBITDA of $12.2 million compared to positive $7.8 million in the same period of 2020.

Balance Sheet: Cash and short-term investments of $41.6 million; current ratio of 8.8:1; working capital of $39.4 million.

2Strategic Updates and Business Highlights

The company operated one seismic data acquisition crew in the Lower 48, which faced low utilization and was idled for part of the quarter.

The Canadian operations are expected to ramp up with two crews operating in the latter half of Q4 2021.

A merger agreement with Wilks Brothers, LLC was announced, with a tender offer of $2.34 per share expected to close in Q4 2021.

3Forward Guidance and Outlook

The near-term outlook for onshore seismic data acquisition remains challenging, with limited visibility into 2022.

Anticipated demand for services is low, with capital spending from E&P companies expected to remain below 2019 levels.

The company does not foresee a significant increase in demand for seismic services in the near future.

4Bad News, Challenges, or Points of Concern

Significant revenue decline and ongoing cash burn due to low demand for seismic services.

Declining bid activity and softening prices for services.

Staffing challenges and inability to maintain a sufficient workforce to meet potential demand.

The company’s capital expenditures have been drastically reduced, limiting future growth potential.

5Notable Q&A Insights

Management has been actively attempting to rightsize the company but faces challenges in further reducing costs without impacting operational capacity.

The current large crew working on a 65,000 channel project has limited visibility beyond February 2022, with smaller projects not providing sufficient revenue.

Management emphasized the compelling nature of the Wilks merger as a liquidity opportunity for shareholders, given the current market conditions and the company's financial challenges.

Concerns were raised about the long-term viability of the business without a dramatic increase in demand for seismic services, which management does not anticipate. Overall, the earnings call highlighted significant financial struggles, ongoing strategic adjustments, and a pivotal merger that may provide a path forward amidst challenging market conditions.