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What changed in DAWSON GEOPHYSICAL CO's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of DAWSON GEOPHYSICAL CO's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+173 added−186 removedSource: 10-K (2025-04-02) vs 10-K (2024-04-01)

Top changes in DAWSON GEOPHYSICAL CO's 2024 10-K

173 paragraphs added · 186 removed · 145 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

22 edited+4 added−2 removed34 unchanged
Biggest changeCurrently, our chief operating decision maker reviews the discrete segment financial information on a geographic basis for the US operations and Canada Operations. The revenue for both of the Company’s segments is generated by the same services, which utilize the same type of equipment and personnel. The performance of our segments is evaluated primarily on Adjusted EBITDA.
Biggest changeThe revenue for both of our segments is generated by the same services, which utilize the same type of equipment and personnel. Tony Clark, Chief Executive Officer, is our current chief operating decision maker. Our chief operating decision maker reviews the discrete segment financial information on a geographic basis for the US operations and Canada Operations.
In addition, we market and supplement our services in Canada from our facilities in Calgary, Alberta. The Industry Technological advances in seismic equipment and computing allow the seismic industry to acquire and process, on an efficient basis, immense volumes of seismic data which produce precise images of the earth’s subsurface.
In addition, we market and supplement our services in Canada from our facilities in Calgary and Wheatland County, Alberta. Our Industry Technological advances in seismic equipment and computing allow the seismic industry to acquire and process, on an efficient basis, immense volumes of seismic data which produce precise images of the earth’s subsurface.
In addition to these previously named companies, we also compete for projects from time to time with smaller seismic companies which operate in local markets with only one or two small channel count crews. Further, the barriers to entry in the seismic industry are substantial but not prohibitive.
In addition to these companies, we also compete for projects from time to time with smaller seismic companies which operate in local markets with only one or two small channel count crews. Further, the barriers to entry in the seismic industry are substantial but not prohibitive.
We believe we will realize the benefit of increased channel counts and flexibility of deployment through increased crew efficiencies, higher revenues and improved margins. In recent years, we have purchased or leased a significant number of cableless recording channels. We utilize this equipment primarily as stand-alone recording systems.
We believe we will realize the benefit of increased channel counts and flexibility of deployment through increased crew efficiencies, higher revenues and improved margins. We have purchased or leased a significant number of cableless recording channels. We utilize this equipment primarily as stand-alone recording systems.
Risk Factors ". 5 Table of Contents Contracts Our contracts are obtained either through competitive bidding or as a result of client negotiations. Our services are conducted under general service agreements for seismic data acquisition services which define certain obligations for us and for our clients.
Contracts Our contracts are obtained either through competitive bidding or as a result of client negotiations. Our services are conducted under general service agreements for seismic data acquisition services which define certain obligations for us and for our clients.
Our clients range from major oil and gas companies to small independent oil and gas operators and providers of multi-client data libraries. The services we provide to our clients vary according to the size and needs of each client. During the twelve months ended December 31, 2023, sales to four clients represented approximately 73% of our revenues.
Our clients range from major oil and gas companies to small independent oil and gas operators and providers of multi-client data libraries. The services we provide to our clients vary according to the size and needs of each client. During the twelve months ended December 31, 2024, sales to two clients represented approximately 43% of our revenues.
In order to meet the requirements necessary to fully realize the benefits of 3-D seismic data, there is an increasing demand for improved data quality with greater subsurface resolution with increased density of recording channels and vibrator energy source units. Currently, the North American seismic data acquisition industry includes a number of primary competitors which includes us, SAExploration Holdings, Inc.
In order to meet the requirements necessary to fully realize the benefits of 3-D seismic data, there is an increasing demand for improved data quality with greater subsurface resolution with increased density of recording channels and vibrator energy source units. Currently, the North American seismic data acquisition industry includes several primary competitors, including SAExploration Holdings, Inc. (“SAE”), Echo Seismic Ltd.
Microseismic monitoring is used by clients who use hydraulic fracturing to extract hydrocarbon deposits to monitor their hydraulic fracturing operations. We market and supplement our services in the continental U.S. from our headquarters in Midland, Texas and from additional offices in two other cities in Texas (Houston and Plano).
Microseismic monitoring is used by clients who use hydraulic fracturing to extract hydrocarbon deposits to monitor their hydraulic fracturing operations. We market and supplement our services in the continental U.S. from our headquarters in Midland, Texas and from an additional office in Plano, Texas.
Beginning in 2014, we adopted a maintenance capital expenditures program due to the belief that our equipment base was sufficient to meet current demand; however, our Board of Directors may increase the capital budget in response to strategic opportunities to acquire seismic recording equipment.
Beginning in 2014, we adopted a maintenance capital expenditures program due to the belief that our equipment base was sufficient to meet current demand; however, our Board of Directors may increase the capital budget in response to strategic opportunities to acquire seismic recording equipment. Our Board of Directors initially approved a maintenance capital expenditure budget of $2.5 million for 2024.
Clients Our services are marketed by supervisory and executive personnel who contact clients to determine geophysical needs and respond to client inquiries regarding the availability of crews or processing schedules. These contacts are based principally on professional relationships developed over a number of years.
Our Board of Directors has approved a capital expenditure budget of $6 million for 2025. Clients Our services are marketed by supervisory and executive personnel who contact clients to determine geophysical needs and respond to client inquiries regarding the availability of crews or processing schedules. These contacts are based principally on professional relationships developed over a number of years.
The recent increase in channel count and number of energy source units required for larger projects makes it more costly and timely for new seismic companies or those outside of the U.S. to enter the domestic market and compete with us.
The recent increase in channel count and number of energy source units required for larger projects increases the cost and time commitment required for new seismic companies or those outside of the U.S. to enter the domestic market and compete with us.
We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax expense or benefit, (iii) depreciation, depletion and amortization and (iv) other unusual or non-recurring charges, such as severance expenses. As a result, our business has two reportable segments, US operations and Canada Operations.
We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax expense or benefit, (iii) depreciation, depletion and amortization and (iv) other unusual or non-recurring charges, such as severance expenses.
Due to the increase in demand for higher channel counts, in recent years we continued to make investments in additional channels. In response to project-based channel requirements, we routinely deploy a variable number of channels on a variable number of crews in an effort to maximize asset utilization and meet client needs.
In response to project-based channel requirements, we routinely deploy a variable number of channels on a variable number of crews in an effort to maximize asset utilization and meet client needs.
We have included disclosures about our two reportable segments for all periods presented herein. For a discussion of financial information by segment refer to “Note 15, Segments” to the Consolidated Financial Statements incorporated by reference herein for additional details. For a description of risks associated with our foreign operations, please see “Item 1A.
As a result, our business has two reportable segments, US operations and Canada Operations. 5 Table of Contents For a discussion of financial information by segment refer to “Note 15, Segments” to the Consolidated Financial Statements incorporated by reference herein for additional details. For a description of risks associated with our foreign operations, please see “Item 1A. Risk Factors ".
(“SAE”), Echo Seismic Ltd. (“ECHO”), and Paragon Geophysical Services, Inc. (“Paragon”), along with other smaller companies that generally run one or two small channel count seismic crews and often specialize in specific regions or types of operations.
(“ECHO”), and Paragon Geophysical Services, Inc. (“Paragon”), along with other, smaller companies that generally run one or two small channel count seismic crews and often specialize in specific regions or types of operations. Equipment and Crews In recent years, we have experienced continued increases in recording channel capacity and vibrator energy source units on a per crew or project basis.
Equipment and Crews In recent years, we have experienced continued increases in recording channel capacity and vibrator energy source units on a per crew or project basis. This increase in channel count and energy source unit demand is driven by client needs and is necessary to produce higher resolution images, increase crew efficiencies and undertake larger scale projects.
This increase in channel count and energy source unit demand is driven by client needs and is necessary to produce higher resolution images, increase crew efficiencies and undertake larger scale projects. Due to the increase in demand for higher channel counts, in recent years we continued to make investments in additional channels.
Equipment Acquisition and Capital Expenditures We monitor and evaluate advances in geophysical technology and commit capital funds to purchase the equipment we deem most effective to maintain our competitive position. Purchasing and updating seismic equipment and technology involves a commitment to capital spending. We also tie our capital expenditures closely to demand for our services.
Purchasing and updating seismic equipment and technology involves a commitment to capital spending. We also tie our capital expenditures closely to demand for our services.
The recording channels consist of 117,000 single-channel GSR/GSX boxes, 186,000 channels of GSR Multi-channel boxes and a 24,000 channel INOVA Hawk System. Each crew consists of approximately 40 to 100 technicians with associated vehicles, geophones, a seismic recording system, energy sources, cables, and a variety of other equipment.
Each crew consists of approximately 40 to 100 technicians with associated vehicles, geophones, a seismic recording system, energy sources, cables, and a variety of other equipment. The GSR/GSX and INOVA Hawk crews utilize a recorder to manage the data acquisition while the individual system captures and holds the data until they are placed in the Data Transfer Module.
We believe we will experience continued demand for cableless recording systems and increased channel count in the future. 4 Table of Contents As of December 31, 2023, we operate 130 vibrator energy source units and approximately 327,000 recording channels.
We believe we will experience continued demand for cableless recording systems and increased channel count in the future. 4 Table of Contents In the fourth quarter, we began testing single point node channels from multiple vendors in our operations.
Employees As of December 31, 2023, we employed 281 full-time employees, of which 45 consisted of management, sales, and administrative personnel with the remainder being crew and crew support personnel. Our employees are not represented by a collective bargaining agreement. We believe we have good relations with our employees. See “Item 2.
Our employees are not represented by a collective bargaining agreement. We believe we have good relations with our employees. See “Item 2. Properties” for a description of the material properties utilized in our business.
The revenue for both of our segments is generated by the same services, which utilize the same type of equipment and personnel. Historically, the chief operating decision maker made operating decisions and evaluated operating results of the Company on a consolidated basis. In December 2023, we appointed a new Chief Executive Officer who is our current chief operating decision maker.
The revenue for both of the Company’s segments is generated by the same services, which utilize the same type of equipment and personnel. The performance of our segments is evaluated primarily on Adjusted EBITDA.
The GSR/GSX and INOVA Hawk crews utilize a recorder to manage the data acquisition while the individual system captures and holds the data until they are placed in the Data Transfer Module. The data is then transferred to various data storage media, which are delivered to a data processing center selected by the client.
The data is then transferred to various data storage media, which are delivered to a data processing center selected by the client. Equipment Acquisition and Capital Expenditures We monitor and evaluate advances in geophysical technology and commit capital funds to purchase the equipment we deem most effective to maintain our competitive position.
Removed
Our Board of Directors approved a maintenance capital expenditure budget of $5 million for 2023 of which we utilized $3.7 million during the year ended December 31, 2023. Our Board of Directors has approved an initial maintenance capital expenditure budget of $5 million for 2024.
Added
We are continuing to test and evaluate single point node channels and we may lease or purchase new channels in the future. The single point node channels are expected to increase our revenues through more competitive bids for our customers and increase our margins due to improved crew efficiencies.
Removed
Properties” for a description of the material properties utilized in our business.
Added
As of December 31, 2024, we operate 130 vibrator energy source units and approximately 326,000 recording channels. The recording channels consist of 116,000 single-channel GSR/GSX boxes, 186,000 channels of GSR Multi-channel boxes and a 24,000 channel INOVA Hawk System.
Added
During 2024, our Board approved an increase in our capital budget to $6 million for the potential purchase of new single point node channels. We are continuing to evaluate the single point node channels, and may lease or purchase new channels in the future. In 2024, we utilized $1.9 million of our capital budget.
Added
Employees and Human Capital Resources As of December 31, 2024, we employed 233 full-time employees, of which 40 consisted of management, sales, and administrative personnel with the remainder being crew and crew support personnel. The reduction in our headcount resulted from right-sizing our headcount while being able to continue to effectively meet our customers’ needs.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe United States Environmental Protection Agency has proposed strict new methane emission regulations for certain oil and gas facilities and the Inflation Reduction Act of 2022 establishes a charge on methane emissions above certain limits from the same facilities.
Biggest changeAdditionally, in March 2024, the EPA issued final standards under the Clean Air Act to sharply reduce methane emissions and other harmful air pollution from new and existing oil and gas operations. ● The Inflation Reduction Act of 2022 establishes a charge on methane emissions above certain limits from the same facilities. ● On March 21, 2022, the SEC proposed new rules relating to the disclosure of a range of climate-related risks, and the final rules were adopted in March 2024.
Many factors beyond our control affect oil and natural gas prices, including: ● the cost of exploring for, producing, and delivering oil and natural gas; ● the discovery rate of new oil and natural gas reserves; ● the rate of decline of existing and new oil and natural gas reserves; ● available pipeline and other oil and natural gas transportation capacity; ● the ability of oil and natural gas companies to raise capital and debt financing; ● actions by OPEC+; ● political instability in the Middle East and other major oil and natural gas producing regions; ● economic conditions in the U.S. and elsewhere; 7 Table of Contents ● domestic and foreign tax policy; ● domestic and foreign energy policy including increased emphasis on alternative sources of energy; ● increased attention to environmental, social and governance matters, including climate change; ● weather conditions in the U.S., Canada and elsewhere; ● the pace adopted by foreign governments for the exploration, development, and production of their national reserves; ● the price of foreign imports of oil and natural gas; and ● the overall supply and demand for oil and natural gas.
Many factors beyond our control affect oil and natural gas prices, including: ● the cost of exploring for, producing, and delivering oil and natural gas; ● the discovery rate of new oil and natural gas reserves; 7 Table of Contents ● the rate of decline of existing and new oil and natural gas reserves; ● available pipeline and other oil and natural gas transportation capacity; ● the ability of oil and natural gas companies to raise capital and debt financing; ● actions by OPEC+; ● political instability in the Middle East and other major oil and natural gas producing regions; ● economic conditions in the U.S. and elsewhere; ● domestic and foreign trade policy; ● domestic and foreign energy policy including increased emphasis on alternative sources of energy; ● increased attention to environmental, social and governance matters, including climate change; ● weather conditions in the U.S., Canada and elsewhere; ● the pace adopted by foreign governments for the exploration, development, and production of their national reserves; ● the price of foreign imports of oil and natural gas; and ● the overall supply and demand for oil and natural gas.
If any of these events were to materialize, they could lead to losses of sensitive information, critical infrastructure, personnel or capabilities essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations or cash flows. Our business is subject to government regulation, which may adversely affect our future operations.
If any of these events were to materialize, they could lead to losses of sensitive information, critical infrastructure, personnel or capabilities essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations or cash flows. Our business is subject to significant government regulation, which may adversely affect our operations.
If we were to expand our operations at a rate exceeding operating cash flow, if current demand or pricing of geophysical services were to decrease substantially, or if technical advances or competitive pressures required us to acquire new equipment faster than our cash flow could sustain, additional financing could be required.
If we expand our operations at a rate exceeding operating cash flow, if current demand or pricing of geophysical services decrease substantially, or if technical advances or competitive pressures require us to acquire new equipment faster than our cash flow could sustain, additional financing could be required.
The broader consequences of the Russian-Ukrainian conflict and unrest in the Middle East, which may include further sanctions, embargoes, supply chain disruptions, regional instability and geopolitical shifts, may have adverse effects on global macroeconomic conditions, increase volatility in the price and 6 Table of Contents demand for oil and natural gas, increase exposure to cyberattacks, cause disruptions in global supply chains, increase foreign currency fluctuations, cause constraints or disruption in the capital markets and limit sources of liquidity.
The broader consequences of the Russian-Ukrainian conflict and unrest in the Middle East, which may include further sanctions, embargoes, supply chain disruptions, regional instability and geopolitical shifts, may have adverse effects on global macroeconomic conditions, increase volatility in the price and demand for oil and natural gas, increase exposure to cyberattacks, cause disruptions in global supply chains, increase foreign currency fluctuations, cause constraints or disruption in the capital markets and limit sources of liquidity.
Future events, including our financial performance, sustained decreases in oil and natural gas prices, reduced demand for our services, our market valuation or the market valuation of comparable companies, loss of a significant client’s business, or strategic 9 Table of Contents decisions, could cause us to conclude that impairment indicators exist and ultimately that the values associated with our equipment or intangible assets should be impaired.
Future events, including our financial performance, sustained decreases in oil and natural gas prices, reduced demand for our services, our market valuation or the market valuation of comparable companies, loss of a significant client’s business, or strategic decisions, could cause us to conclude that impairment indicators exist and ultimately that the values associated with our equipment or intangible assets should be impaired.
In response to concerns suggesting that emissions of certain gases, commonly referred to as “greenhouse gases” (“GHG”) (including carbon dioxide and methane), may be contributing to global climate change, legislative and regulatory 13 Table of Contents measures to address the concerns are in various phases of discussion or implementation at the national and state levels.
In response to concerns suggesting that emissions of certain gases, commonly referred to as “greenhouse gases” (“GHG”) (including carbon dioxide and methane), may be contributing to global climate change, legislative and regulatory measures to address the concerns are in various phases of discussion or implementation at the national and state levels.
Many states, either individually or through multi-state regional initiatives, have already taken legal measures intended to reduce GHG emissions, primarily through the planned development of GHG emission inventories and/or GHG cap and trade programs. Although various climate change legislative measures have periodically been introduced in the U.S.
Many states, either individually or through multi-state regional initiatives, have already taken legal measures intended to 13 Table of Contents reduce GHG emissions, primarily through the planned development of GHG emission inventories and/or GHG cap and trade programs. Although various climate change legislative measures have periodically been introduced in the U.S.
Fluctuations in our operating results may also be affected by other 8 Table of Contents factors that are outside of our control such as permit delays, weather delays and crew productivity. Oil and natural gas prices have continued to be volatile and have resulted in significant demand fluctuations for our services.
Fluctuations in our operating results may also be affected by other factors that are outside of our control such as permit delays, weather delays and crew productivity. Oil and natural gas prices have continued to be volatile and have resulted in significant demand fluctuations for our services.
Additional factors which may affect oil and natural gas prices include, but are not limited to, the effect of U.S. energy, monetary and trade policies; U.S. and global economic and political conditions and developments; U.S. and international energy and environmental policies; and any operating curtailment of the U.S. oil and gas industry.
Additional factors which may affect oil and natural gas prices include, but are not limited to, the effect of U.S. energy, monetary and trade policies, including the imposition of tariffs; U.S. and global economic and political conditions and developments; U.S. and international energy and environmental policies; and any operating curtailment of the U.S. oil and gas industry.
Overall market conditions, including a decline in oil and natural gas prices and other risks and uncertainties described in this “Risk Factors” section and in our other filings with the SEC, could cause the market price of our common stock to fall.
Our stock price is subject to volatility. Overall market conditions, including a decline in oil and natural gas prices and other risks and uncertainties described in this “Risk Factors” section and in our other filings with the SEC, could cause the market price of our common stock to fall.
Our common stock is listed on The NASDAQ Stock Market LLC (“NASDAQ”) under the symbol “DWSN.” However, daily trading volumes for our common stock are, and may continue to be, relatively small compared to many other publicly traded securities.
Our common stock is listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “DWSN.” However, daily trading volumes for our common stock are, and may continue to be, relatively low compared to other publicly traded securities.
Hydraulic fracturing is an important and commonly used process in the completion of oil and gas wells. Hydraulic fracturing involves the injection of water, sand and chemical additives under pressure into rock formations to stimulate 14 Table of Contents gas production.
Hydraulic fracturing is an important and commonly used process in the completion of oil and gas wells. Hydraulic fracturing involves the injection of water, sand and chemical additives under pressure into rock formations to stimulate gas production.
The loss, whether by death, departure or illness, of our senior executives or other key employees or our failure to continue to attract and retain skilled and technically knowledgeable personnel could adversely affect our ability to compete in the seismic services industry. We may experience significant competition for such personnel, particularly during periods of increased demand for seismic services.
The loss of our senior executives or other key employees or our failure to continue to attract and retain skilled and technically knowledgeable personnel could adversely affect our ability to compete in the seismic services industry. We may experience significant competition for such personnel, particularly during periods of increased demand for seismic services.
If any of such programs or systems were to fail or create erroneous information in our hardware or software network infrastructure, or if we were subject to cyberspace breaches or attacks, possible consequences include our loss of communication links, loss of seismic data and inability to automatically process commercial transactions or engage in similar automated or computerized business activities.
If any of such programs or systems were to fail or create erroneous information, or if we were subject to cyberspace breaches or attacks, possible consequences include loss of communication links, loss of seismic data and inability to automatically process commercial transactions or engage in similar automated or computerized business activities.
A default in payment from one of our large clients could have a material adverse effect on our operating results for the period involved. We have historically incurred net losses. We incurred net losses of $12.1 million for the year ended December 31, 2023, and $18.6 million for the year ended December 31, 2022.
A default in payment from one of our large clients could have a material adverse effect on our operating results for the period involved. We have historically incurred net losses. We incurred net losses of $4.1 million for the year ended December 31, 2024, and $12.1 million for the year ended December 31, 2023.
For example, weather delays could affect our operations on a particular project or an entire region and could lengthen the time to complete data acquisition projects. In addition, even if we negotiate weather protection provisions in our contracts, we may not be fully compensated by our clients for delays caused by inclement weather.
For example, weather delays could affect our operations on a particular project or an entire region and could lengthen the time to complete projects. In addition, 10 Table of Contents even if we negotiate weather protection provisions in our contracts, we may not be fully compensated by our clients for delays caused by inclement weather.
Several political and regulatory authorities and governmental bodies have studied hydraulic fracturing and considered potential regulations, and certain environmental and other groups have devoted resources to campaigns aimed at restricting or eradicating hydraulic fracturing.
Several political and regulatory authorities and governmental bodies have studied hydraulic fracturing and 14 Table of Contents considered potential regulations, and certain environmental and other groups have devoted resources to campaigns aimed at restricting or eradicating hydraulic fracturing.
A limited number of our employees are under employment contracts, and we have no key man insurance. We are subject to Canadian foreign currency exchange rate risk. We conduct business in Canada which subjects us to foreign currency exchange rate risk.
A limited number of our employees are under employment contracts, and we do not maintain key man insurance. We are subject to Canadian foreign currency exchange rate risk. We conduct business in Canada which subjects us to foreign currency exchange rate risk.
We derive a significant amount of our revenues from a relatively small number of oil and gas exploration and development companies and providers of multi-client data libraries. During the twelve months ended December 31, 2023, our four largest clients accounted for approximately 73% of our revenues.
We derive a significant amount of our revenues from a relatively small number of oil and gas exploration and development companies and providers of multi-client data libraries. During the twelve months ended December 31, 2024, our two largest clients accounted for approximately 43% of our revenues.
If we were not able to obtain such financing or renew our existing revolving line of credit when needed, it could have a negative impact on our ability to pursue expansion and maintain our competitive advantage. Technological change in our business creates risks of technological obsolescence and requirements for future capital expenditures.
If we are not able to obtain such financing or renew our existing revolving line of credit when needed, it could have a negative impact on our ability to pursue expansion and maintain our competitive advantage. Consistent technological change in our business creates obsolescence risks and requires capital expenditures to maintain market share.
Further, the barriers to entry in the seismic industry are substantial but not prohibitive. The recent increase in channel count and number of energy source units required for larger projects makes it more costly and timely for new seismic companies or those outside of the U.S. to enter the domestic market and compete with us.
Further, the barriers to entry in the seismic industry are substantial but not prohibitive. The recent increase in channel count and number of energy source units required for larger projects increases the cost and time commitment required for new seismic companies or those outside of the U.S. to enter the domestic market and compete with us.
From time to time, we may have indebtedness under credit facilities with a commercial bank. We maintain a restricted IntraFi Network Deposit account with our commercial bank which can be used as collateral against future borrowings.
Our ability to borrow may be limited if our accounts receivable decreases. From time to time, we may have indebtedness under credit facilities with a commercial bank. We maintain a restricted IntraFi Network Deposit account with our commercial bank which can be used as collateral against future borrowings.
Our high and low sales prices of our common stock for the twelve months ended December 31, 2023 were $2.65 and $1.28, respectively. Further, the high and low sales prices of our common stock for the twelve months ended December 31, 2022 were $2.69 and $1.08, respectively.
Our high and low sales prices of our common stock for the twelve months ended December 31, 2024 were $2.22 and $1.27, respectively. Further, the high and low sales prices of our common stock for the twelve months ended December 31, 2023 were $2.65 and $1.28, respectively.
Current macroeconomic conditions, including inflationary pressures in the broader U.S. economy and military conflicts between Russia and Ukraine and in the Middle East have had, and are expected to continue to have, an impact on oil and gas commodity prices and, therefore, demand for our services and, depending on the duration and severity, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If any of the events described below occur, our business, financial condition or results of operations could be materially adversely affected. 6 Table of Contents Current macroeconomic conditions, including inflationary pressures in the broader U.S. economy and military conflicts between Russia and Ukraine and in the Middle East have had, and are expected to continue to have, an impact on oil and gas commodity prices and, therefore, demand for our services and, depending on the duration and severity, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our operations are subject to a variety of federal, state, provincial and local laws and regulations, including laws and regulations relating to the protection of the environment and archeological sites and those that may result from climate change legislation or executive orders that could negatively impact the exploration and production of oil and gas.
Our operations are subject to a variety of federal, state, provincial and local laws and regulations, including laws and regulations relating to the protection of the environment and archeological sites, such as obtaining permits from governmental entities to allow survey and drilling activities, as well as those that may result from climate change legislation or executive orders that could negatively impact the exploration and production of oil and gas.
In addition, as of December 31, 2023, Wilks and its affiliates own over 80 % of our common stock so the public market for our common stock is more limited, which can lead to increased volatility and low trading volumes. For example, during 2023 our daily trading volume was as low as 0 shares.
In addition, as of December 31, 2024, Wilks and its affiliates own approximately 80% of our common stock, limiting the public market for our common stock, which can lead to increased price volatility and low trading volumes. For example, during 2024 our daily trading volume was as low as 0 shares.
Our clients could delay, reduce or cancel their service contracts with us on short notice, which may lead to lower than expected demand and revenues. Our order book reflects client commitments at levels we believe are sufficient to maintain operations on our existing crews for the indicated periods.
Our order book reflects client commitments at levels we believe are sufficient to maintain operations on our existing crews for the indicated periods. However, our clients can delay, reduce or cancel their service contracts with us on short notice.
It may be difficult for you to sell your shares in the public market at any given time at prevailing prices, and the price of our common stock may, therefore, be volatile.
It may be difficult for you to sell your shares in the public market at any given time at prevailing prices, and the price of our common stock may, therefore, be volatile. We may be subject to liability claims that are not covered by our insurance.
The adoption of laws and regulations that have the effect of reducing or curtailing exploration and development activities by energy companies could also adversely affect our operations by reducing the demand for our services.
The adoption of laws and regulations that have the effect of reducing or curtailing exploration and development activities by energy companies could also adversely affect our operations by reducing the demand for our services. Legislation or regulation relating to greenhouse gas emissions could negatively affect the exploration and production of oil and gas and adversely affect demand for our services.
Our profitability is determined, in part, by the utilization level and productivity of our crews and is affected by numerous external factors that are beyond our control. Our revenues are determined, in part, by the contract price we receive for our services, the level of utilization of our data acquisition crews and the productivity of these crews.
Our revenues are determined, in part, by the contract price we receive for our services, the level of utilization of our data acquisition crews and the productivity of these crews.
Additional risks and uncertainties, including those that are not yet identified or that we currently believe are immaterial, may also adversely affect our business, financial condition or results of operations. If any of the events described below occur, our business, financial condition or results of operations could be materially adversely affected.
Additional risks and uncertainties, including those that are not yet identified or that we currently believe are immaterial, may also adversely affect our business, financial condition or results of operations.
Currently, we do not hold or issue foreign currency forward contracts, option contracts or other derivative financial instruments to mitigate the 11 Table of Contents currency exchange rate risk. Our results of operations and our cash flows could be impacted by changes in foreign currency exchange rates.
Currently, we do not hold or issue foreign currency forward contracts, option contracts or other derivative financial instruments to mitigate the currency exchange rate risk. Our results of operations and our cash flows could be impacted by changes in foreign currency exchange rates. Our common stock has experienced, and may continue to experience, price volatility and low trading volume.
Canadian operations have been historically cyclical due to governmental restrictions on seismic acquisition during certain periods. As a result, there is a risk that there will be a significant amount of unused equipment during those periods.
Canadian operations have been historically cyclical due to governmental restrictions on seismic acquisition during certain periods. In addition, governmental entities do not always grant permits within the expected time period. As a result, there is a risk that there will be a significant amount of unused equipment during those periods.
If these clients, or any of our other significant clients, were to terminate their contracts or fail to contract for our services in the future because they are acquired, alter their exploration or development strategy, experience financial difficulties or for any other reason, our results of operations could be adversely affected.
If these clients, or any of our other significant clients, were to terminate their contracts or fail to contract for our services in the future because they are acquired, alter their exploration or development strategy, experience financial difficulties or for any other reason, our results of operations could be adversely affected. 8 Table of Contents Our clients could delay, reduce or cancel their service contracts with us on short notice, which may lead to lower than expected demand and revenues.
If competitive pressures were to become such that our suppliers would no longer sell to us, we would not be able to easily replace the technology with equipment that communicates effectively with our existing technology, thereby impairing our ability to conduct our business.
If competitive pressures were to become such that our suppliers would no longer sell to us, we would not be able to easily replace the technology with equipment that communicates effectively with our existing technology, thereby impairing our ability to conduct our business. 11 Table of Contents We are dependent on our management team and key employees, and inability to retain our current team or attract new employees could harm our business.
Delays associated with obtaining such rights of way could negatively affect our results of operations. 10 Table of Contents Capital requirements for our operations are large. If we are unable to finance these requirements, we may not be able to maintain our competitive advantage.
Additionally, some landowners have become more resistant to seismic and drilling activities occurring on their property. Increased costs and delays associated with obtaining such rights of way could negatively affect our results of operations. Capital requirements for our operations are large. If we are unable to finance these requirements, we may not be able to maintain our competitive advantage.
As a “controlled company,” we are permitted to, and we may, opt out of the Nasdaq listing requirements that would require (i) a majority of the members of our board of directors to be independent, (ii) that we establish a compensation committee and a nominating and governance committee, each comprised entirely of independent directors, or (iii) an annual performance evaluation of the nominating and governance and compensation committees.
As a “controlled company,” we are permitted to, and we may, opt out of the Nasdaq listing requirements that require (i) a majority of the members of our board of directors to be independent, as defined by Nasdaq rules, (ii) our nominating committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and (iii) our compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
We often work as the general contractor on seismic data acquisition surveys and, consequently, engage a number of subcontractors to perform services and provide products.
We often work as the general contractor on seismic data acquisition surveys and, consequently, engage a number of subcontractors to perform services and provide products. While we obtain contractual indemnification and insurance covering the acts of these subcontractors and require the subcontractors to obtain insurance for our benefit, we could be held liable for the actions of these subcontractors.
In addition, our crews often operate in areas where the risk of wildfires is present and may be increased by our activities. Since our crews are mobile, equipment and personnel are subject to vehicular accidents. We use diesel fuel which is classified by the U.S. Department of Transportation as a hazardous material.
Since our crews are mobile, equipment and personnel are subject to vehicular accidents. We use diesel fuel which is classified by the U.S. Department of Transportation as a hazardous material. These risks could cause us to experience equipment losses, injuries to our personnel and interruptions in our business.
We are dependent on our management team and key employees, and inability to retain our current team or attract new employees could harm our business. Our continued success depends upon attracting and retaining highly skilled professionals and other technical personnel. A number of our employees are highly skilled scientists and highly trained technicians.
Our continued success depends upon attracting and retaining highly skilled professionals and other technical personnel. A number of our employees are highly skilled scientists and highly trained technicians.
These risks could cause us to experience equipment losses, injuries to our personnel and interruptions in our business. Delays due to operational disruptions such as equipment losses, personnel injuries and business interruptions could adversely affect our profitability and results of operations. Loss of our information and computer systems could adversely affect our business.
Delays due to operational disruptions such as equipment losses, personnel injuries and business interruptions could adversely affect our profitability and results of operations. Loss of our information and computer systems could adversely affect our business. We are heavily dependent on our information systems and computer-based programs, including our seismic information, electronic data processing and accounting data.
These and other lawsuits relating to GHG emissions may result in decisions by state and federal courts and agencies that could impact our operations. In addition, the U.S. was actively involved in the United Nations Conference on Climate Change in Paris, which led to the creation of the Paris Agreement.
These and other lawsuits relating to GHG emissions may result in decisions by state and federal courts and agencies that could impact our operations.
The increasing governmental focus on GHG emissions may result in new environmental laws or regulations that may negatively affect us, our suppliers and our clients.
New laws or regulations focused on GHG emissions or that otherwise seek to address climate change may negatively affect us, our suppliers and our clients.
Our activities are often conducted in remote areas under extreme weather and other dangerous conditions, including the use of dynamite as an energy source. These operations are subject to risk of injury to our personnel and third parties and damage to our equipment and improvements in the areas in which we operate.
Our business is subject to the general risks inherent in land-based seismic data acquisition activities. Our activities are often conducted in remote areas under extreme weather and other dangerous conditions, including the use of dynamite as an energy source.
We operate under hazardous conditions that subject us to risk of damage to property or personnel injuries and may interrupt our business. Our business is subject to the general risks inherent in land-based seismic data acquisition activities.
In addition, subcontractors may cause injury to our personnel or damage to our property that is not fully covered by insurance. 12 Table of Contents We operate under hazardous conditions that subject us to risk of damage to property or personnel injuries and may interrupt our business.
Our revenues, operating results and cash flows can be expected to fluctuate from period to period. Our revenues, operating results and cash flows may fluctuate from period to period.
As a result, our order book as of any particular date may not be indicative of actual demand and revenues for any succeeding period. Our revenues, operating results and cash flows can be expected to fluctuate from period to period. Our revenues, operating results and cash flows may fluctuate from period to period.
If we impair our equipment or intangible assets, these non-cash asset impairments could negatively affect our financial results in a material manner in the period in which the impairments are recorded, and the larger the amount of any impairment that may be taken, the greater the impact such impairment may have on our financial results.
If we impair our equipment or intangible assets, these non-cash asset impairments could have a material adverse effect on our financial results in the period in which the impairments are recorded. Our profitability is determined, in part, by the utilization level and productivity of our crews and is affected by numerous external factors that are beyond our control.
We are a "controlled company", which exempts us from certain corporate governance requirements that are designed to provide protection to stockholders of companies that are not controlled companies. As of December 31, 2023, Wilks Brothers, LLC (“Wilks”) and its affiliates control over 80% of our combined voting power and can elect all of the members of our board of directors.
We are a "controlled company", which exempts us from certain corporate governance requirements that are designed to provide protection to stockholders of companies that are not controlled companies.
However, our clients can delay, reduce or cancel their service contracts with us on short notice. If the oil and natural gas industry experiences a downturn, it may result in an increase in delays, reductions or cancellations by our clients.
If the oil and natural gas industry experiences a downturn, it may result in an increase in delays, reductions or cancellations by our clients. In addition, the timing of the origination and completion of projects and when projects are awarded and contracted for is also uncertain.
We have indebtedness from time to time under credit facilities with a commercial bank, and certain of our accounts receivable and a restricted IntraFi Network Deposit account are pledged as collateral for these obligations. Our ability to borrow may be limited if our accounts receivable decreases.
As a result, any extended periods of significant downtime or low productivity caused by reduced demand, weather interruptions, equipment failures, permit delays, or other causes could result in continuing or increasing operating losses. 9 Table of Contents We have indebtedness from time to time under credit facilities with a commercial bank, and certain of our accounts receivable and a restricted IntraFi Network Deposit account are pledged as collateral for these obligations.
In addition, ongoing maintenance capital expenditures, as well as new equipment investment, can be significant. As a result, any extended periods of significant downtime or low productivity caused by reduced demand, weather interruptions, equipment failures, permit delays, or other causes could result in continuing or increasing operating losses.
In addition, ongoing maintenance capital expenditures, as well as new equipment investment, can be significant.
Removed
As a result, we are considered a “controlled company” for the purposes of the Nasdaq listing requirements.
Added
As of December 31, 2024, Wilks Brothers, LLC (“Wilks”) and its affiliates control approximately 80% of our combined voting power, can elect all of the members of our board of directors and can generally control matters requiring stockholder approval. As a result, we are considered a “controlled company” for the purposes of the Nasdaq listing requirements.
Removed
In addition, the timing of the origination and completion of projects and when projects are awarded and contracted for is also uncertain. As a result, our order book as of any particular date may not be indicative of actual demand and revenues for any succeeding period.
Added
These operations are subject to risk of injury to our personnel and third parties and damage to our equipment and improvements in the areas in which we operate. In addition, our crews often operate in areas where the risk of wildfires is present and may be increased by our activities.
Removed
Additionally, while landowners generally are cooperative in granting access rights, some have become more resistant to seismic and drilling activities occurring on their property. In addition, governmental entities do not always grant permits within the time periods expected.
Added
Although the climate-related disclosure rules have been stayed by the SEC pending litigation challenging the rules, if the rules are implemented, we may incur increased costs relating to the assessment and disclosure of climate-related risks. ● The U.S. has historically been actively involved in the United Nations Conference on Climate Change in Paris, which led to the creation of the Paris Agreement.
Removed
Our common stock has experienced, and may continue to experience, price volatility and low trading volume. Our stock price is subject to volatility.
Added
However, on January 20, 2025, President Trump signed an executive order to withdraw the U.S. from the Paris Agreement, marking a significant shift in U.S. climate policy.
Removed
Our common stock traded below $5.00 per share for the past year, and when it trades below $5.00 per share it may be considered a low-priced stock and may be subject to regulations that limit or restrict the potential market for the stock.
Added
It remains unclear what further actions President Trump may take with respect to domestic and international programs and initiatives, what support the Trump administration would have for any potential changes to such legislative programs and initiatives in the U.N. or Congress and what the impact of any such changes might be.
Removed
Our common stock may be considered a low-priced stock pursuant to rules promulgated under the Exchange Act, if it continues to trade below a price of $5.00 per share.
Removed
Under these rules, broker-dealers participating in transactions in low-priced securities must first deliver a risk disclosure document which describes the risks associated with such stock, the broker-dealer’s duties, the client’s rights and remedies, and certain market and other information, and make a suitability determination approving the client for low-priced stock transactions based on the client’s financial situation, investment experience and objectives.
Removed
Broker-dealers must also disclose these restrictions in writing and provide monthly account statements to the client, and obtain specific written consent of the client.
Removed
With these restrictions, the likely effect of designation as a low-price stock would be to decrease the willingness of broker-dealers to make a market for our common stock, to decrease the liquidity of the stock, and to increase the transaction costs of sales and purchases of such stocks compared to other securities.
Removed
Our common stock traded below a price of $5.00 per share for the duration of 2023 and we cannot guarantee that our common stock will trade at a price greater than $5.00 per share. We may be subject to liability claims that are not covered by our insurance.
Removed
While we obtain contractual indemnification and insurance 12 Table of Contents covering the acts of these subcontractors and require the subcontractors to obtain insurance for our benefit, we could be held liable for the actions of these subcontractors. In addition, subcontractors may cause injury to our personnel or damage to our property that is not fully covered by insurance.
Removed
We are heavily dependent on our information systems and computer-based programs, including our seismic information, electronic data processing and accounting data.
Removed
Current and future legislation or regulation relating to climate change could negatively affect the exploration and production of oil and gas and adversely affect demand for our services.
Removed
In April 2016, the U.S. signed the Paris Agreement, which requires countries to review and “represent a progression” in their nationally determined contributions, which set emissions reduction goals, every five years. In November 2020, the U.S. officially withdrew from the Paris Agreement.
Removed
However, on January 20, 2021, President Biden signed an “Acceptance on Behalf of the United States of America” that will allow the U.S. to rejoin the Paris Agreement. The acceptance, deposited with the United Nations on January 20, reverses the prior withdrawal. The U.S. officially rejoined the Paris Agreement on February 19, 2021.
Removed
The Paris Agreement requires countries to review and “represent a progression” in their nationally determined contributions, which set emissions reduction goals, every five years beginning in 2020.
Removed
As part of rejoining the Paris Agreement, President Biden announced that the U.S. would commit to a 50 to 52 percent reduction from 2005 levels of GHG emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050.
Removed
In addition, shortly after taking office in January 2021, President Biden issued a series of executive orders designed to address climate change.
Removed
For example, the Executive Order on “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis” sought to adopt new regulations and policies to address climate change and suspend, revise, or rescind, prior agency actions that were identified as conflicting with the Biden Administration’s climate policies.
Removed
Additional legislation or regulation by states and regions, the EPA, and/or any international agreements to which the U.S. may become a party that control or limit GHG emissions or otherwise seek to address climate change could adversely affect our operations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations or financial condition, and we do not believe that such risks are reasonably likely to have such an effect over the long term. ​
Biggest changeRisks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us nor are they reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
Despite ongoing efforts to continue improvement of our and our vendors’ ability to protect against cyber incidents, we may not be able to protect all information systems, and such incidents may lead to reputational harm, revenue and client loss, legal actions, statutory penalties, among other consequences.
Despite ongoing efforts to continue improvement of our own and our vendors’ ability to protect against cyber incidents, we may not be able to protect all information systems, and such incidents may lead to reputational harm, revenue and client loss, legal actions or statutory penalties, among other consequences.
As an additional measure to facilitate our timely and comprehensive response to any security incident, we engage a third-party vendor on retainer to assist in such incidents. As detailed elsewhere herein, we also rely on information technology and third-party vendors to support our operations, including our secure processing of personal, confidential, sensitive, proprietary and other types of information.
As an additional measure to facilitate our timely and comprehensive response to any security incident, we engage a third-party vendor on retainer to assist in such incidents. We rely on third-party information technology vendors to support our operations, including our secure processing of personal, confidential, sensitive, proprietary and other types of information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease a 15,020 square foot facility in Calgary, Alberta consisting of office, warehouse and shop space. 16 Table of Contents We believe that our existing facilities are being appropriately utilized in line with past experience and are well maintained, suitable for their intended use, and adequate to meet our current and future operating requirements.
Biggest changeWe believe that our existing facilities are being appropriately utilized and are well maintained, suitable for their intended use, and adequate to meet our current and future operating requirements. 16 Table of Contents
We have two properties in Midland that we own, including a 61,402 square foot property we use as a field office, equipment and fabrication facility, and maintenance and repair shop, along with a 6,600 square foot property that we use as an inventory field office and storage facility.
Additionally, we own two properties in Midland, including a 61,402 square foot property that we use as a field office, equipment and fabrication facility, and maintenance and repair shop, and a 6,600 square foot property that we use as an inventory field office and storage facility. We lease a 5,181 square foot office in Plano, Texas consisting of office space.
Removed
We also have additional offices in two other cities in Texas: Houston and Plano. Our Houston sales office is in an 8,161 square foot facility. Our office in Plano, Texas consists of 5,181 square feet of office space.
Added
We lease a 15,020 square foot facility in Calgary, Alberta consisting of office, warehouse and shop space. We lease a 10,800 square foot facility in Wheatland County, Alberta consisting of shop space.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS For a discussion of certain contingencies and legal proceedings affecting the Company, please refer to “Note 16, Commitments and Contingencies” to the Consolidated Financial Statements incorporated by reference herein. Item 4. MINE SAFETY DISCLOSURES Not applicable. Part II
Biggest changeItem 3. LEGAL PROCEEDINGS For a discussion of certain contingencies and legal proceedings affecting the Company, please refer to “Note 16, Commitments and Contingencies” in the Notes to the Consolidated Financial Statements, which is incorporated by reference herein. ​ Item 4. MINE SAFETY DISCLOSURES Not applicable. Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our common stock trades on the NASDAQ under the symbol “DWSN.” The table below represents the high and low sales prices per share for the periods shown. ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended High Low March 31, 2022 ​ $ 2.61 ​ $ 2.25 ​ June 30, 2022 ​ $ 2.69 ​ $ 1.29 ​ September 30, 2022 ​ $ 2.18 ​ $ 1.08 ​ December 31, 2022 ​ $ 2.28 ​ $ 1.54 ​ March 31, 2023 ​ $ 2.06 ​ $ 1.28 ​ June 30, 2023 ​ $ 2.25 ​ $ 1.55 ​ September 30, 2023 ​ $ 2.65 ​ $ 1.45 ​ December 31, 2023 ​ $ 2.48 ​ $ 1.36 ​ As of March 26, 2024, the market price for our common stock was $1.39 per share, and we had 66 common shareholders of record, as reported by our transfer agent.
Biggest changeThe table below represents the high and low sales prices per share for the periods shown. ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended High Low March 31, 2023 ​ $ 2.06 ​ $ 1.28 ​ June 30, 2023 ​ $ 2.25 ​ $ 1.55 ​ September 30, 2023 ​ $ 2.65 ​ $ 1.45 ​ December 31, 2023 ​ $ 2.48 ​ $ 1.36 ​ March 31, 2024 ​ $ 1.83 ​ $ 1.27 ​ June 30, 2024 ​ $ 2.22 ​ $ 1.27 ​ September 30, 2024 ​ $ 2.10 ​ $ 1.36 ​ December 31, 2024 ​ $ 1.82 ​ $ 1.30 ​ As of March 31, 2025, the market price for our common stock was $1.23 per share.
On March 28, 2024, t he Company’s Board of Directors declared a special cash dividend on the company’s common stock of $0.32 per share, payable on May 6, 2024, to stockholders of record as of the close of business on April 22, 2024. The aggregate payment will be approximately $9.9 million.
On March 28, 2024, t he Company’s Board of Directors declared a special cash dividend on the company’s common stock of $0.32 per share, payable on May 6, 2024, to stockholders of record as of the close of business on April 22, 2024. The aggregate payment was approximately $9.9 million.
Payment of any dividends in the future will be at the discretion of our board. Item 6. [RESERVED] ​
Payment of any dividends in the future will be at the discretion of our board. There are currently no restrictions prohibiting us from paying dividends to our shareholders. No dividends were paid in 2023. Item 6. [RESERVED] ​
Removed
No dividends were paid in 2023 or 2022. There are currently no restrictions prohibiting us from paying dividends to our shareholders.
Added
Item 5. MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our common stock trades on the NASDAQ under the symbol “DWSN.” As of March 31, 2025, we had 198 holders of record of our common stock.
Added
The actual number of shareholders is greater than the number of record holders and includes shareholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

57 edited+16 added−17 removed26 unchanged
Biggest changeNet cash used in operating activities $ (236) ​ $ 1,050 ​ $ 814 ​ $ (6,440) ​ $ 3,171 ​ $ (3,269) Changes in working capital and other items ​ (2,627) ​ ​ (1,249) ​ ​ (3,876) ​ ​ (1,529) ​ ​ (785) ​ ​ (2,314) Non-cash adjustments to net loss ​ 1,226 ​ ​ (180) ​ ​ 1,046 ​ ​ (1,267) ​ ​ (144) ​ ​ (1,411) EBITDA $ (1,637) ​ $ (379) ​ $ (2,016) ​ $ (9,236) ​ $ 2,242 ​ $ (6,994) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 US ​ 2023 CA ​ 2023 Consol. ​ 2022 US ​ 2022 CA ​ 2022 Consol.
Biggest changeNet cash (used in) provided by operating activities $ (2,821) ​ $ 955 ​ $ (1,866) ​ $ (237) ​ $ 1,051 ​ $ 814 Changes in working capital and other items ​ 3,928 ​ ​ 1,023 ​ ​ 4,951 ​ ​ (2,298) ​ ​ (1,578) ​ ​ (3,876) Non-cash adjustments to net (loss) income ​ (1,401) ​ ​ (209) ​ ​ (1,610) ​ ​ (982) ​ ​ (180) ​ ​ (1,162) EBITDA ​ (294) ​ ​ 1,769 ​ ​ 1,475 ​ ​ (3,517) ​ ​ (707) ​ ​ (4,224) Severance expense ​ 486 ​ ​ — ​ ​ 486 ​ ​ 2,208 ​ ​ — ​ ​ 2,208 Adjusted EBITDA $ 192 ​ $ 1,769 ​ $ 1,961 ​ $ (1,309) ​ $ (707) ​ $ (2,016) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 US ​ 2024 CA ​ 2024 Consol. ​ 2023 US ​ 2023 CA ​ 2023 Consol.
Income Taxes. We account for income taxes by recognizing amounts of taxes payable or refundable for the current year, and by using an asset and liability approach in recognizing the amount of deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns.
We account for income taxes by recognizing amounts of taxes payable or refundable for the current year, and by using an asset and liability approach in recognizing the amount of deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns.
When assessing our operating performance or liquidity, investors and others should not consider this data in isolation or as a substitute for net income (loss), cash flow from operating activities or other cash flow data calculated in accordance with GAAP.
When assessing our operating performance, investors and others should not consider this data in isolation or as a substitute for net income (loss), cash flow from operating activities or other cash flow data calculated in accordance with GAAP.
Critical Accounting Policies The preparation of our financial statements in conformity with GAAP requires that certain assumptions and estimates be made that affect the reported amounts of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting periods.
Critical Accounting Estimates The preparation of our financial statements in conformity with GAAP requires that certain assumptions and estimates be made that affect the reported amounts of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting periods.
Our management uses EBITDA as a supplemental financial measure to assess: ● the financial performance of our assets without regard to financing methods, capital structures, taxes or historical cost basis; ● our liquidity and operating performance over time in relation to other companies that own similar assets and that we believe calculate EBITDA in a similar manner; and ● the ability of our assets to generate cash sufficient for us to pay potential interest costs.
Our management uses Adjusted EBITDA as a supplemental financial measure to assess: ● the financial performance of our assets without regard to financing methods, capital structures, taxes or historical cost basis; ● our operating performance over time in relation to other companies that own similar assets and that we believe calculate Adjusted EBITDA in a similar manner; and ● the ability of our assets to generate cash sufficient for us to pay potential interest costs.
However, our ability to satisfy working capital requirements, meet debt repayment obligations, and fund future capital requirements will depend principally upon our future operating performance, which is subject to the risks inherent in our business, and will also depend on the extent to which the current economic climate adversely affects the ability of our customers, and/or potential customers, to promptly pay amounts owing to us under their service contracts with us.
However, our ability to meet debt repayment obligations and fund future capital requirements will depend principally upon our future operating performance, which is subject to the risks inherent in our business, and will also depend on the extent to which the current economic climate adversely affects the ability of our customers, and/or potential customers, to promptly pay amounts owing to us under their service contracts with us.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) . ASU 2023-09 seeks to improve transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures. The updated guidance is effective for us on January 1, 2025.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) . ASU 2023-09 seeks to improve transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures. The updated guidance is effective for the Company on January 1, 2025.
In addition, our EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as us. Further, the results presented by EBITDA cannot be achieved without incurring the costs that the measure excludes: interest, taxes, and depreciation and amortization.
In addition, our Adjusted EBITDA may not be comparable to Adjusted EBITDA or similarly titled measures utilized by other companies since other companies may not calculate Adjusted EBITDA in the same manner as us. Further, the results presented by Adjusted EBITDA cannot be achieved without incurring the costs that the measure excludes: interest, taxes, and depreciation and amortization.
We also understand that such data are used by investors to assess our performance. However, the term EBITDA is not defined under generally accepted accounting principles (“GAAP”), and EBITDA is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP.
We also understand that such data are used by investors to assess our performance. However, the term Adjusted EBITDA is not defined under generally accepted accounting principles (“GAAP”), and Adjusted EBITDA is not a measure of operating income or operating performance presented in accordance with GAAP.
Factors impacting productivity and utilization levels include client demand, commodity prices, whether we enter into turnkey or dayrate contracts with our clients, the number and size of crews, the number of recording channels per crew, crew downtime related to inclement weather, delays in acquiring land access permits, agricultural or hunting activity, holiday schedules, short winter days, crew repositioning and equipment failure.
Factors impacting productivity and utilization levels include client demand, commodity prices, whether we enter into turnkey or day-rate contracts with our clients, the number and size of crews, the number of recording channels per crew, crew downtime related to inclement weather, delays in acquiring land access permits, agricultural or hunting activity, holiday schedules, short winter days, crew repositioning and equipment failure.
Unless the context requires otherwise, all references in this Item 7 to the “Company,” “we,” “us” or “our” refer to Dawson Geophysical Company and its consolidated subsidiaries. 17 Table of Contents Overview We are a leading provider of North American onshore seismic data acquisition services with operations throughout the continental U.S. and Canada.
Unless the context requires otherwise, all references in this Item 7 to the “Company,” “we,” “us” or “our” refer to Dawson Geophysical Company and its consolidated subsidiaries. Overview We are a leading provider of North American onshore seismic data acquisition services with operations throughout the continental U.S. and Canada.
We expect the majority of our contracts to be turnkey as we continue our operations in the mid-continent, western and southwestern regions of the U.S. in which turnkey contracts are more common. Over time, we have experienced continued increases in recording channel capacity on a per-crew or project basis and high utilization of cableless and multicomponent equipment.
We expect the majority of our contracts to be turnkey as we continue our operations in the midwest, western and southwestern regions of the U.S. in which turnkey contracts are more common. Over time, we have experienced continued increases in recording channel capacity on a per-crew or project basis and high utilization of cableless and multicomponent equipment.
Our methodology for recording income taxes requires judgment regarding assumptions and the use of estimates, including determining our annual effective tax rate and the valuation of deferred tax assets, which can create a variance between actual results and estimates and could have a material impact on our provision or benefit for income taxes.
Our methodology for recording income taxes requires judgment regarding assumptions and the use of estimates, including determining our annual effective tax rate and the valuation of deferred tax assets, which can create a variance between actual results and 22 Table of Contents estimates and could have a material impact on our provision or benefit for income taxes.
Our effective tax rates differ from the statutory federal rate of 21% for certain items such as state and local taxes, valuation allowances, and non-deductible expenses. Use of EBITDA (Non-GAAP measure) We define EBITDA as net income (loss) plus interest expense, interest income, income taxes, depreciation and amortization expense and severance expenses.
Our effective tax rates differ from the statutory federal rate of 21% for certain items such as state and local taxes, valuation allowances, and non-deductible expenses. 19 Table of Contents Use of Adjusted EBITDA (Non-GAAP measure) We define Adjusted EBITDA as net income (loss) plus interest expense, interest income, income taxes, depreciation and amortization expense and severance expenses.
The majority of our operating leases are non-cancelable operating leases for office, shop and warehouse space in Midland, Plano, Houston and Calgary, Alberta. The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair market value of the related assets.
The majority of our operating leases are non-cancelable operating leases for office, shop and warehouse space in Midland, Texas, and Plano, Texas, and Calgary, Alberta, and Wheatland County, Alberta. The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair market value of the related assets.
Due to recent operating losses and valuation allowances, we may recognize reduced or no tax benefits on future losses on the Consolidated Statements of Operations and Comprehensive Loss. Our effective tax rates differ from the statutory federal rate of 21% for certain items such as state and local taxes, valuation allowances, and non-deductible expenses.
Due to recent operating losses and valuation allowances, we may recognize reduced or no tax benefits on future losses on the Consolidated Statements of Operations and Comprehensive Loss. Our effective tax rates differ from the statutory federal rate of 21% for certain items such as state and local taxes, valuation allowances, and non-deductible expenses. Critical Accounting Policies Revenue Recognition.
Depreciation for the year ended December 31, 2023, was $8.5 million compared to $11.8 million for the same period of 2022. The decrease in depreciation expense is a result of limiting capital expenditures to necessary maintenance capital requirements in recent years.
Depreciation for the year ended December 31, 2024, was $5.7 million compared to $8.5 million for the same period of 2023. The decrease in depreciation expense is a result of limiting capital expenditures to necessary maintenance capital requirements in recent years.
The reconciliation of our EBITDA to our net loss and net cash used in operating activities, which are the most directly comparable GAAP financial measures, are provided in the following tables (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 US ​ 2023 CA ​ 2023 Consol. ​ 2022 US ​ 2022 CA ​ 2022 Consol.
The reconciliation of our Adjusted EBITDA to our net cash (used in) provided by operating activities and net (loss) income, which are the most directly comparable GAAP financial measures, are provided in the following tables (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 US ​ 2024 CA ​ 2024 Consol. ​ 2023 US ​ 2023 CA ​ 2023 Consol.
We believe that our cash flows from operations, and our current financial position are adequate to fund our continued operations. Capital Resources . Historically, we have primarily relied on cash generated from operations, cash reserves and borrowings from commercial banks to fund our working capital requirements and, to some extent, our capital expenditures.
We believe that our cash flows from operations, and our current financial position are adequate to fund our continued operations for the next 12 months. Capital Resources . Historically, we have primarily relied on cash generated from operations, cash reserves and borrowings from commercial banks to fund our working capital requirements and, to some extent, our capital expenditures.
Net cash used in investing activities was $4.5 million for the year ended December 31, 2023, and includes cash capital expenditures of $3.7 million and cash acquisition of short–term investments of $1.0 million, offset by $217,000 in proceeds from the disposal of assets.
Net cash used in investing activities was $4.5 million for the year ended December 31, 2023, and includes cash capital expenditures of $3.7 million and cash acquisition of short–term investments of $1.0 million associated with the acquisition of Breckenridge Geophysical, LLC (“Breckenridge”) assets, offset by $217,000 in proceeds from the disposal of assets.
Historically, cash generated from our operations along with cash reserves and borrowings from commercial banks have been sufficient to fund our working capital requirements and, to some extent, our capital expenditures. Cash Flows.
Historically, cash generated from our operations along with cash reserves and borrowings from commercial banks have been sufficient to fund our working capital requirements and, to some extent, our capital expenditures. 20 Table of Contents Cash Flows.
Recognition of an impairment charge is required if future expected undiscounted net cash flows are insufficient to recover the carrying value of the assets, and the fair value of the assets is below the carrying value of the assets.
Recognition of an impairment charge is required if future expected undiscounted net cash flows are insufficient to recover the carrying value of the asset group and the fair value of the asset group is below its carrying value.
Off-Balance Sheet Arrangements As of December 31, 2023, we had no off-balance sheet arrangements.
Off-Balance Sheet Arrangements As of December 31, 2024, we had no off-balance sheet arrangements.
The majority of our revenues were derived from turnkey contracts for the years ending December 31, 2023 and 2022. While turnkey contracts allow us to capitalize on improved crew productivity, we also bear more risk related to weather and crew downtime.
The majority of our revenues were derived from turnkey contracts for the years ending December 31, 2024, and 2023. While turnkey contracts allow us to capitalize on improved crew productivity, we also bear more risk related to crew downtime or other operational delays.
Our depreciation expense is expected to remain flat or decline slightly during 2024 primarily due to limited capital expenditures to maintain our existing asset base. Our total operating costs for the year ended December 31, 2023 were $110.2 million, representing a 49% increase from the corresponding period of 2022. This change was primarily due to the factors described above.
Our depreciation expense is expected to remain flat or decline slightly during 2025 primarily due to limited capital expenditures to maintain our existing asset base. Our total operating costs for the year ended December 31, 2024 were $78.7 million, representing a 28% decrease from the corresponding period of 2023. This change was primarily due to the factors described above.
We incurred net losses of $12.1 million for the year ended December 31, 2023, and $18.6 million for the year ended December 31, 2022. As of December 31, 2023, we had $15.8 million in cash, and a positive working capital balance of $15 million.
We incurred net losses of $4.1 million for the year ended December 31, 2024, and $12.1 million for the year ended December 31, 2023. As of December 31, 2024, we had $1.4 million in cash, and a positive working capital balance of $4.6 million.
Acquisition revenues for the year ended December 31, 2023, were $49.0 million compared to $31.1 million for the same period of 2022. The increase in revenues for the year ended December 31, 2023, compared to the same period of 2022 was primarily a result of increased demand for our services. Canadian Fee Revenues.
Acquisition revenues for the year ended December 31, 2024, were $40.7 million compared to $49.0 million for the same period of 2023. The decrease in revenues for the year ended December 31, 2024, compared to the same period of 2023 was primarily a result of decreased demand for our services. Canadian Fee Revenues.
The increase in operating expenses was mainly due to an overall increase in general operating costs. Reimbursable Revenues and Costs . These revenues and expenses passed through to our clients and are job specific and vary significantly from year to year. The costs are agreed to by our clients prior to contracting with outside vendors for the various tasks.
The decrease in operating expenses was mainly due to increased operational efficiencies at the crew level. Reimbursable Revenues and Costs . These revenues and expenses are passed through to our clients and are job specific and vary significantly from year to year. The costs are agreed to by our clients prior to contracting with outside vendors for the various tasks.
We do not expect the adoption of ASU 2023-09 to have a material impact on our financial statements and disclosures.
The Company does not expect the adoption of ASU 2023-09 to have a material impact on its financial statements and disclosures.
The following table shows our sources and uses of cash (in thousands) for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 2022 Net cash provided by (used in) ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ 814 ​ $ (3,269) ​ Investing activities ​ (4,504) ​ (1,089) ​ Financing activities ​ (4,204) ​ (2,150) ​ Effect of exchange rate changes on cash, cash equivalents and restricted cash ​ 63 ​ (265) ​ Net change in cash and cash equivalents and restricted cash ​ $ (7,831) ​ $ (6,773) ​ Year Ended December 31, 2023 versus Year Ended December 31, 2022 Net cash provided by operating activities was $814,000 for the year ended December 31, 2023 and net cash used by operating activities was $3.3 million for the same period of 2022.
The following table shows our sources and uses of cash (in thousands) for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 Net cash (used in) provided by: ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ (1,866) ​ $ 814 ​ Investing activities ​ (735) ​ (4,504) ​ Financing activities ​ (11,563) ​ (4,204) ​ Effect of exchange rate changes on cash, cash equivalents and restricted cash ​ (223) ​ 63 ​ Net change in cash and cash equivalents and restricted cash ​ $ (14,387) ​ $ (7,831) ​ Year Ended December 31, 2024 versus Year Ended December 31, 2023 Net cash used in operating activities was $1.9 million for the year ended December 31, 2024, and net cash provided by operating activities was $814,000 for the same period of 2023.
Under both types of agreements, we recognize revenue as the services are performed. Revenue is generally recognized based on receiver layout and pickup compared to total number of receivers anticipated to be recorded on the survey using the total estimated revenue for the service contract.
Revenue is generally recognized based on receiver layout and pickup compared to total number of receivers anticipated to be recorded on the survey using the total estimated revenue for the service contract.
On September 30, 2019, we entered into a Loan and Security Agreement with Dominion Bank.
Dominion Credit Facility. On September 30, 2019, we entered into a Loan and Security Agreement with Dominion Bank, a Texas state bank (“Dominion Bank”).
Portions of this document that are not statements of historical or current fact are forward-looking statements that involve risk and uncertainties, such as statements of our plans, business strategy, objectives, expectations and intentions. This discussion contains forward-looking statements that involve risks and uncertainties. Please see “Business,” “Disclosure Regarding Forward-Looking Statements” and “Risk Factors” elsewhere in this Form 10-K.
Portions of this document that are not statements of historical or current fact are forward-looking statements that involve risk and uncertainties, such as statements of our plans, business strategy, objectives, expectations and intentions. This discussion contains forward-looking statements that involve risks and uncertainties.
No additional credits are expected to be received. Income Taxes. Income tax benefit was $96,000 for the year ended December 31, 2023 compared to income tax expense of $107,000 for the same period of 2022. The effective tax benefit/expense rates for the years ended December 31, 2023 and 2022 were approximately 0.8% and -0.6%, respectively.
Income Tax (expense) benefit. Income tax expense was $7,000 for the year ended December 31, 2024, compared to income tax benefit of $96,000 for the same period of 2023. The effective tax rates for the years ended December 31, 2024, and 2023 were approximately -0.2% and 0.8%, respectively.
From time to time in the past, we have also funded our capital expenditures and other financing needs through public equity offerings. 21 Table of Contents We believe that our capital resources, including our cash and short-term investments, cash flow from operations, and funds available under our Revolving Credit Facility are sufficient to meet our operational needs. Dominion Credit Facility.
Recently, we have funded some of our capital expenditures through finance leases and equipment term loans. From time to time in the past, we have also funded our capital expenditures and other financing needs through public equity offerings. We believe that our capital resources, including our cash and cash flow from operations are sufficient to meet our operational needs.
High crew utilization in the fourth quarter resulted in improved margins and profitability. In the first quarter, we continued to keep our crews highly utilized in the US and Canada. We are working to keep our crews highly utilized throughout the remainder of the year.
We had two crews operating throughout the fourth quarter in the United States and resumed our seasonal operations in Canada. High crew utilization in the fourth quarter resulted in improved margins and profitability. In the first quarter, we started the year with two crews in the US and continued to keep our crews highly utilized in Canada.
On September 30, 2023, we entered into the Fifth Loan Modification Agreement (as amended by (i) that certain Loan Modification Agreement dated as of September 30, 2020, (ii) that certain Second Loan Modification Agreement dated as of September 30, 2021, (iii) that certain Third Loan Modification Agreement dated as of September 30, 2022, (iv) that certain Fourth Modification Agreement dated as of March 21, 2023, and (v) the Fifth Modification Agreement, the “Loan Agreement”) The Loan Agreement now provides for a Revolving Credit Facility in an amount up to the lesser of (I) an amount equal to the Borrowing Base or (II) $5 million.
On September 30, 2023, we entered into a Fifth Loan Modification Agreement (the “Fifth Modification Agreement”) to the Loan and Security Agreement (as amended by (i) that certain Loan Modification Agreement dated as of September 30, 2020, (ii) that certain Second Loan Modification Agreement dated as of September 30, 2021, (iii) that certain Third Loan Modification Agreement dated as of September 30, 2022, (iv) that certain Fourth Modification Agreement dated as of March 21, 2023, and (v) the Fifth Modification 21 Table of Contents Agreement, the “Loan Agreement”).
Net cash used in investing activities was $1.1 million for the year ended December 31, 2022, and includes cash capital expenditures of $1.4 million offset by $340,000 in proceeds from the disposal of assets.
Net cash used in investing activities was $0.7 million for the year ended December 31, 2024, and includes cash capital expenditures of $1.9 million, offset by $533,000 in proceeds from the disposal of assets, $332,000 proceeds from insurance claims and $265,000 proceeds from maturity of short-term investments.
Management considers a variety of factors such as whether various components of the performance obligation will be performed internally or externally, cost of third party services, and facts and circumstances unique to the performance obligation in making these estimates. 23 Table of Contents Additionally, our policy includes (i) ignoring the financing component when estimating the transaction price for service contracts completed within one year, (ii) excluding sales tax collected from the customer when determining the transaction price, and (iii) expensing incremental costs to obtain a customer contract if the amortization period for those costs would otherwise be one year or less.
Additionally, our policy includes (i) ignoring the financing component when estimating the transaction price for service contracts completed within one year, (ii) excluding sales tax collected from the customer when determining the transaction price, and (iii) expensing incremental costs to obtain a customer contract if the amortization period for those costs would otherwise be one year or less. Leases.
Acquisition revenues for the year ended December 31, 2023, were $12.4 million compared to $15.0 million for the same period of 2022. The decrease in revenues for the year ended December 31, 2023, compared to the same period of 2022 was primarily a result of a slight decrease in demand for our services in Canada. Total Revenues.
The increase in revenues for the year ended December 31, 2024, compared to the same period of 2023 was primarily a result of a slight increase in demand for our services in Canada, and utilization of single node channels in our operations. Total Revenues.
In addition, we lease certain seismic recording equipment and vehicles under leases classified as finance leases. Our Consolidated Balance Sheet as of December 31, 2023 includes finance leases of $1.8 million. Contractual Obligations.
As of December 31, 2024, we have one note payable to a finance company for various insurance premiums totaling $168,000. In addition, we lease certain seismic recording equipment and vehicles under leases classified as finance leases. Our Consolidated Balance Sheet as of December 31, 2024 includes finance leases of $2.4 million. Contractual Obligations.
You should read this discussion in conjunction with the financial statements and notes thereto included elsewhere in this Form 10-K.
Please see “Business,” “Disclosure Regarding Forward-Looking Statements” and “Risk Factors” elsewhere in this Form 10-K. 17 Table of Contents You should read this discussion in conjunction with the financial statements and notes thereto included elsewhere in this Form 10-K.
The performance of our segments is evaluated primarily on Adjusted EBITDA. We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax expense or benefit, (iii) depreciation, depletion and amortization and (iv) other unusual or non-recurring charges, such as severance expenses.
We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax expense or benefit, (iii) depreciation, depletion and amortization and (iv) other charges, such as severance expenses. Results of Operations Year Ended December 31, 2024 versus Year Ended December 31, 2023 U.S. Fee Revenues.
We believe that we will be able to finance our 2024 capital expenditures through cash flow from operations, borrowings from commercial lenders, and the funds available under our Revolving Credit Facility.
We believe that our capital resources, including our cash and cash flow from operations, will be adequate to meet our current operational needs. We believe that we will be able to finance our 2025 capital expenditures through cash flow from operations and borrowings from commercial lenders.
We deem leasehold improvements as one of the few economic incentives that would entice us to renew a lease and all of our leasehold improvements are currently fully amortized. Revenue Recognition. Our services are provided under cancelable service contracts which usually have an original expected duration of one year or less. These contracts are either turnkey or term agreements.
Our services are provided under cancelable service contracts which usually have an original expected duration of one year or less. These contracts are either turnkey or term agreements. Under both types of agreements, we recognize revenue as the services are performed.
Because of the use of assumptions and estimates inherent in the reporting process, actual results could differ from those estimates. Impairment of Long-Lived Assets. We review long-lived assets for impairment when triggering events occur suggesting deterioration in the assets’ recoverability or fair value.
Because of the use of assumptions and estimates inherent in the reporting process, actual results could differ from those estimates. Impairment of Long-Lived Assets. Long-lived assets are tested for impairment at the asset group level when events or changes in circumstances indicate the carrying value of the asset group may not be recoverable.
Revenue for the year ended December 31. 2023, were $96.8 million compared to $51.6 million for the same period of 2022. Total revenues included an increase of $29.8 million in reimbursable revenues. US Fee Operating Expenses. Acquisition expenses for the year ended December 31, 2023, increased to $41.1 million compared to $29.5 million for the same period of 2022.
Revenue for the year ended December 31. 2024, were $74.2 million compared to $96.8 million for the same period of 2023. Total revenues included a decrease of $14.7 million in reimbursable revenues. U.S. Fee Operating Expenses. Acquisition expenses for the year ended December 31, 2024, decreased to $32.8 million compared to $39.9 million for the same period of 2023.
Currently, our chief operating decision maker reviews the discrete segment financial information on a geographic basis for the US operations and Canada Operations. The revenue for both of the Company’s 18 Table of Contents segments is generated by the same services, which utilize the same type of equipment and personnel.
The revenue for both segments is generated by the same 18 Table of Contents services, which utilize the same type of equipment and personnel. The performance of our segments is evaluated primarily on Adjusted EBITDA.
Several of our leases include options to renew, with renewal terms that can extend from one to 10 years or more. The exercise of lease renewal options is primarily at our discretion. To measure operating lease recognition, we evaluate our lease agreements to determine if they have economic incentives for renewal or options to purchase.
We do not recognize leases with an initial term of 12 months or less and we do not separate lease and non-lease components. 23 Table of Contents Several of our leases include options to renew, with renewal terms that can extend from one to 10 years or more. The exercise of lease renewal options is primarily at our discretion.
General and Administrative Expenses. General and administrative expenses decreased 26% to $11.4 million for the year ended December 31, 2023 compared to $15.5 million for the same period of 2022. The primary factors for the decrease in general and administrative expenses are related to continued cost management and streamlining procedures.
General and Administrative Expenses. General and administrative expenses decreased 25% to $9.5 million for the year ended December 31, 2024, compared to $12.6 million for the same period of 2023.
The ROU assets are amortized to operating lease cost over the lease terms on a straight-line basis. We do not recognize leases with an initial term of 12 months or less and we do not separate lease and non-lease components.
The ROU assets are amortized to operating lease cost over the lease terms on a straight-line basis.
Our obligations under the Loan Agreement are secured by a Certificate of Deposit with Dominion Bank for $5 million (the “Deposit”) in our collateral account. As of December 31, 2023, we have not borrowed any amounts under the Revolving Credit Facility and have approximately $5.0M available for withdrawal.
The Loan Agreement provided for a secured revolving credit facility (the “Revolving Credit Facility”) in an amount up to the lesser of (I) an amount equal to the Borrowing Base or (II) $5 million. Our obligations under the Loan Agreement were secured by a Certificate of Deposit with Dominion Bank for $5 million (the “Deposit”) in our collateral account.
The updated guidance is effective for our annual periods beginning January 1, 2024, and interim periods within fiscal years beginning January 1, 2025. As we have two reportable segments, we do not expect the adoption of this ASU to have a material impact on our financial statements and disclosures.
The updated guidance is effective for our annual periods beginning January 1, 2024, and interim periods within fiscal years beginning January 1, 2025. The Company adopted this ASU 2023-07 for the fiscal year ended December 31, 2024, as required under this standard.
The increase in operating expenses was mainly due to an overall increase in crew production and utilization. Canadian Fee Operating Expenses. Acquisition expenses for the year ended December 31, 2023, increased slightly to $11.8 million compared to $11.4 million for the same period of 2022.
Acquisition expenses decreased from 81% of revenues in 2023 to 80% of revenues due to cost reduction initiatives throughout the year. The decrease in operating expenses was due to an overall decrease in crew production and utilization and to cost reduction initiatives. Canadian Fee Operating Expenses.
Net loss $ (10,057) ​ $ (2,090) ​ $ (12,147) ​ $ (18,867) ​ $ 222 ​ $ (18,645) Depreciation and amortization ​ 6,566 ​ ​ 1,926 ​ ​ 8,492 ​ ​ 9,721 ​ ​ 2,109 ​ ​ 11,830 Severance expense ​ 2,208 ​ ​ - ​ ​ 2,208 ​ ​ - ​ ​ - ​ ​ - Interest (income) expense, net ​ (258) ​ ​ (215) ​ ​ (473) ​ ​ (197) ​ ​ (89) ​ ​ (286) Income tax expense (benefit) ​ (96) ​ ​ - ​ ​ (96) ​ ​ 107 ​ ​ - ​ ​ 107 EBITDA $ (1,637) ​ $ (379) ​ $ (2,016) ​ $ (9,236) ​ $ 2,242 ​ $ (6,994) 20 Table of Contents ​ Liquidity and Capital Resources Introduction.
Net (loss) income $ (4,907) ​ $ 788 ​ $ (4,119) ​ $ (9,729) ​ $ (2,418) ​ $ (12,147) Depreciation and amortization ​ 4,752 ​ ​ 984 ​ ​ 5,736 ​ ​ 6,566 ​ ​ 1,926 ​ ​ 8,492 Interest income, net ​ (146) ​ ​ (3) ​ ​ (149) ​ ​ (258) ​ ​ (215) ​ ​ (473) Income tax expense (benefit) ​ 7 ​ ​ — ​ ​ 7 ​ ​ (96) ​ ​ — ​ ​ (96) EBITDA ​ (294) ​ ​ 1,769 ​ ​ 1,475 ​ ​ (3,517) ​ ​ (707) ​ ​ (4,224) Severance expense ​ 486 ​ ​ — ​ ​ 486 ​ ​ 2,208 ​ ​ — ​ ​ 2,208 Adjusted EBITDA $ 192 ​ $ 1,769 ​ $ 1,961 ​ $ (1,309) ​ $ (707) ​ $ (2,016) Liquidity and Capital Resources Introduction.
Net cash used in financing activities was $2.2 million for the year ended December 31, 2022 and includes principal payments of $1.3 million on our notes and $47,000 on our finance leases and outflows of $301,000 for cash settlement of restricted stock units, $79,000 associated with taxes related to stock compensation awards vesting, and $583,000 associated with the acquisition of Breckenridge assets offset by $113,000 received for sale of treasury stock.
Net cash used in financing activities was $11.6 million for the year ended December 31, 2024, and includes dividend payment of approximately $9.9 million, principal payments of $947,000 on our notes and $680,000 on our finance leases.
If the carrying amounts of the assets exceed the estimated expected undiscounted future cash flows, we measure the amount of possible impairment by comparing the carrying amount of the asset to its fair value. No impairment charges were recognized for the years ended December 31, 2023 and 2022. Leases.
Because the fair value of these assets collectively exceeded the carrying value of the asset group, no impairment charges were recognized for the year ended December 31, 2024 or 2023. Income Taxes.
Removed
In the fourth quarter, our Board of Directors terminated our President and Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer. Our current management team is focused on improving margins on our seismic acquisition services, reducing general and administrative expenses, and improving our operating cash flows.
Added
We have a strong backlog of projects through the end of the second quarter of 2025. In the fourth quarter of 2024, we began testing new single node channels from multiple vendors, which have improved our team’s efficiency and margins.
Removed
We have implemented a mark-up to our customers on reimbursable expenses and permitting costs, adjusting our bidding process to better account for our cost structure, and other cost reduction initiatives to improve our profitability. We had two crews operating throughout the fourth quarter in the United States and resumed our seasonal operations in Canada.
Added
We are still evaluating our options to upgrade to these single node channels based on the results of our field operations and market conditions.
Removed
Historically, the chief operating decision maker made operating decisions and evaluated operating results of the Company on a consolidated basis. In December 2023, we appointed a new Chief Executive Officer who is our current chief operating decision maker.
Added
Our business has two reportable segments, U.S. operations and Canada operations. Tony Clark, Chief Executive Officer, is our current chief operating decision maker. Mr. Clark reviews the discrete segment financial information on a geographic basis for the U.S. operations and Canada operations.
Removed
As a result, our business has two reportable segments, US operations and Canada Operations. We have included management’s discussion and analysis about our two reportable segments for all periods presented herein. Results of Operations Year Ended December 31, 2023 versus Year Ended December 31, 2022 US Fee Revenues.
Added
Acquisition revenues for the year ended December 31, 2024, were $12.7 million compared to $12.4 million for the same period of 2023.
Removed
We anticipate general and administrative charges for 2024 to be below those in 2023 due to continued focus on reducing costs and the change in our management team. Severance Expenses.
Added
Acquisition expenses for the year ended December 31, 2024, decreased to $9.5 million compared to $11.6 million for the same period of 2023. Acquisition expenses decreased from 94% of revenues to 75% of revenues due to utilization of single node channels in our operations and higher channel count jobs in 2024.
Removed
Other Income (Expense). Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (“the CARES Act”) and its subsequent amendments, we were eligible and, in April 2022, we applied for a refundable employee retention credit subject to program conditions and requirements.
Added
The primary factors for the decrease in general and administrative expenses are related to continued cost management and streamlining procedures as well as cost savings related to changes to the executive personnel during the fourth quarter of 2023.
Removed
We recognize these credits as a gain when all uncertainties have been met and the amounts are realizable in accordance with similar gain contingencies.
Added
We anticipate general and administrative expenses to continue to decrease in 2025 due to continued focus on maintaining an efficient and cost-effective administrative structure. Severance Expenses. For the year ended December 31, 2024, we recorded severance expenses of $0.5 million in connection with the termination of a portion of our workforce.
Removed
We recognized $3.0 million as a gain in other income and $69,000 as interest income on the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2022 and recognized $3.0M as an employee retention credit receivable in the 19 Table of Contents Consolidated Balance Sheet as of December 31, 2022. Payments were received in January 2023.
Added
In 2023, cash provided by operating activities included receipt of $3 million from an employee retention credit under the Coronavirus Aid, Relief, and Economic Security Act (“the CARES Act”). The decrease in cash provided by operating activities to cash used in operating activities was primarily due to changes in operating assets and liabilities.
Removed
Our effective tax rate increased compared to the corresponding period from the prior year primarily due to a change in the valuation allowance on a portion of the NOLs due to an Internal Revenue Code section 382 limitation.
Added
On May 2, 2024, the collateral deposit of $5 million was released and the Loan Agreement was terminated. Dominion Letters of Credit. As of December 31, 2024, we have no outstanding letters of credit. Our previously issued letter of credit in the amount of $265,000 was not renewed on August 9, 2024. Other Indebtedness.
Removed
The decrease in cash used in operating activities was primarily due to a decreased net loss, due to an increase in activity.
Added
Depending upon the facts and circumstances, when indicators of asset impairment exist, management will test the asset group for impairment through developing a forecast of future undiscounted cash flows expected to be generated by the asset group or by estimating the fair value of assets within the asset group in lieu of detailed cash flow projections.
Removed
Recently, we have funded some of our capital expenditures through finance leases and equipment term loans.
Added
If either the future undiscounted cashflows expected to be generated by the asset group or the fair of the assets within the asset group exceeds the carrying value of the asset group no impairment would be recognized.
Removed
Under the Revolving Credit Facility, interest will accrue at an annual rate equal to the lesser of (i) 7.75% and (ii) the greater of (a) the prime rate as published from time to time in The Wall Street Journal or (b) 4.75%.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed7 unchanged
Biggest changeHistorically, we have not experienced any losses in such accounts; however, volatility in financial markets may impact our credit risk on cash and short-term investments. At December 31, 2023, cash, restricted cash and short term investments totaled $16.0 million. For further information, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 1A.
Biggest changeHistorically, we have not experienced any losses in such accounts; however, volatility in financial markets may impact our credit risk on cash and short-term investments. At December 31, 2024, cash totaled $1.4 million. For further information, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 1A. Risk Factors.”
Our historical experience supports our allowance for expected credit losses of $250,000 at December 31, 2023. This does not necessarily indicate that it would be adequate to cover a payment default by one large or several smaller clients. We generally provide services to certain key clients that account for a significant percentage of our accounts receivable at any given time.
Our historical experience supports our allowance for expected credit losses of $250,000 at December 31, 2024. This does not necessarily indicate that it would be adequate to cover a payment default by one large or several smaller clients. We generally provide services to certain key clients that account for a significant percentage of our accounts receivable at any given time.
The remaining balance of our revenue derived from varied clients and none represented more than 10% of revenue. Interest Rate Risk. From time to time, we are exposed to the impact of interest rate changes on the outstanding indebtedness under our Loan Agreement. We generally have cash in the bank which exceeds federally insured limits.
The remaining balance of our revenue derived from varied clients and none represented more than 10% of revenue. 24 Table of Contents Interest Rate Risk. From time to time, we are exposed to the impact of interest rate changes on the outstanding indebtedness under our Loan Agreement. We generally have cash in the bank which exceeds federally insured limits.
This concentration of credit risk may be affected by changes in the economic or other conditions of our key clients and 24 Table of Contents may accordingly impact our overall credit risk.
This concentration of credit risk may be affected by changes in the economic or other conditions of our key clients and may accordingly impact our overall credit risk.
Because of the nature of our contracts and clients’ projects, our largest clients can change from year to year, and the largest clients in any year may not be indicative of the largest clients in any subsequent year. During the twelve months ended December 31, 2023, our four largest clients accounted for approximately 73% of revenue.
Because of the nature of our contracts and clients’ projects, our largest clients can change from year to year, and the largest clients in any year may not be indicative of the largest clients in any subsequent year. During the twelve months ended December 31, 2024, our two largest clients accounted for approximately 43% of revenue.

Other DWSN 10-K year-over-year comparisons