<< Back
Nov 01, 2017

Mammoth Energy Service, Inc. Announces Third Quarter 2017 Operational and Financial Results

OKLAHOMA CITY, Nov. 01, 2017 (GLOBE NEWSWIRE) -- Mammoth Energy Service, Inc. ("Mammoth" or the "Company") (NASDAQ:TUSK) today reported financial and operational results for the three and nine months ended September 30, 2017.

Key Highlights for and subsequent to the Third Quarter 2017:

  • Total revenue was $149.3 million for the three months ended September 30, 2017, up 136% from $63.3 million for the three months ended September 30, 2016 and up 52% sequentially from $98.3 million for the three months ended June 30, 2017.

  • Net loss for the three months ended September 30, 2017 was $0.8 million, an improvement of $2.2 million from a net loss of $3.0 million for the three months ended September 30, 2016. Mammoth reported Adjusted EBITDA (as defined and reconciled below) of $28.0 million and $17.3 million for the three months ended September 30, 2017 and 2016, respectively.

  • Expanded pressure pumping, sand deliveries and last-mile trucking into the SCOOP/STACK with the startup of our fifth pressure pumping fleet in August 2017 and the startup of our sixth fleet on October 20, 2017. Pricing is continuing to increase pricing across both pressure pumping and sand along with our other completions services.

  • Introduced our broadened energy services offering with the formation of Cobra, an electric utility infrastructure business active across 5 states and recently completed storm restoration work in Texas and Florida. Cobra signed a contract, worth up to $200 million in revenue, to aid in the restoration of the electric utility infrastructure in Puerto Rico.

Arty Straehla, Mammoth's Chief Executive Officer, stated, "The third quarter of 2017 was a very active one for the entire Mammoth team and a pivotal point in our portfolio's development. We expanded our pressure pumping segment organically, integrated the two sand mines that were purchased in the prior quarter and rapidly expanded the development of our energy infrastructure business. Our team executed flawlessly and the fruits of their hard work are starting to show up in our financial results across the broader portfolio of services. With a majority of our growth capex for 2017 already spent, we expect to begin generating free cash flow later this year, while we continue to explore ways to grow and pay down debt in the interim."

Pressure Pumping Services

Mammoth's pressure pumping division contributed revenue of $75.7 million on 1,617 stages for the three months ended September 30, 2017 compared to $35.5 million on 511 stages for the three months ended September 30, 2016, increases of 113% and 216%, respectively. Sequentially, the number of stages pumped during the quarter grew by 26% from 1,287 in the three months ended June 30, 2017. We were nearly fully utilized during 3Q 2017 despite adding a partial spread during the period, similar to our full effective utilization during the prior year period.

Mammoth's pressure pumping division contributed revenue of $166.1 million on 3,764 stages for the nine months ended September 30, 2017 compared to $91.9 million on 1,678 stages for the nine months ended September 30, 2016, increases of 81% and 124%, respectively.

During the three months ended September 30, 2017, we expanded pressure pumping operations into the SCOOP/STACK. Demand remains strong with our frac calendar fully booked into early 2018 in both the Utica and Mid-Continent. All six of our fleets are operating today for quality operators.

Well Services

Mammoth's well services division contributed revenue of $16.2 million for the three months ended September 30, 2017 compared to $2.3 million for the three months ended September 30, 2016, an increase of 604%. The acquisitions of Stingray Cementing LLC and Stingray Energy Services LLC were completed on June 5, 2017. The inclusion of these businesses added $9.1 million in revenue during the three months ended September 30, 2017. Our coil tubing services accounted for $4.1 million of our operating division increase as a result of an increase in utilization and an increase in average day rates from approximately $16,800 for the three months ended September 30, 2016 to approximately $30,200 for the three months ended September 30, 2017. Our flowback services accounted for $0.7 million of our operating division increase as a result of an increase in utilization.

Mammoth's well services division contributed revenue of $27.6 million for the nine months ended September 30, 2017 compared to $7.2 million for the nine months ended September 30, 2016, an increase of 283%. Stingray Cementing and Stingray Energy Services added $11.7 million in revenue. Our coil tubing services accounted for $7.9 million of our operating division increase as a result of an increase utilization and an increase in average day rates from approximately $17,933 for the nine months ended September 30, 2016 to approximately $26,933 for the nine months ended September 30, 2017. Our flowback services accounted for $0.8 million of our operating division increase as a result of increased utilization.

Natural Sand Proppant Services

Mammoth's natural sand proppant division contributed revenue of $29.3 million for the three months ended September 30, 2017 compared to $8.2 million for the three months ended September 30, 2016, an increase of 257%. The Company sold 438,800 and 188,018 tons of sand for the three months ended September 30, 2017 and 2016, respectively. Sequentially, sand volumes sold increased by approximately 25% in the third quarter of 2017 as compared to the second quarter of 2017.

Mammoth's natural sand proppant division contributed revenue of $68.2 million for the nine months ended September 30, 2017 compared to $22.4 million for the nine months ended September 30, 2016, an increase of 204%. The Company sold 1,035,506 and 447,908 tons of sand for the nine months ended September 30, 2017 and 2016, respectively.

The average FOB mine gate price increased to $41.14 per ton in the three months ended September 30, 2017, as industry activity increased and the demand for frac sand remained strong. Our sales of purchased sand, as a percentage of overall sales, fell to 25% in 3Q 2017 (from 49% in 2Q 2017) as the production from our mines increased.

Contract Land and Directional Drilling Services

Mammoth's contract land and directional drilling services division contributed revenue of $13.6 million for the three months ended September 30, 2017 compared to $8.7 million for the three months ended September 30, 2016, an increase of 56%. The increase in revenue resulted primarily from increased utilization and day rates for both land rigs and directional drilling services.

Mammoth's contract land and directional drilling services division contributed revenue of $36.9 million for the nine months ended September 30, 2017 compared to $20.3 million for the nine months ended September 30, 2016, an increase of 82%. The increase in revenue resulted primarily from increased utilization and day rates for both land rigs and directional drilling services.

Five horizontal rigs on average operated in 3Q 2017, at an average day rate of $14,800, with five horizontal rigs operating today. For the remainder of 2017, we expect between five and six of our horizontal rigs to operate in the Permian Basin.

Other Energy Services

Mammoth's other energy services division contributed revenue of $14.5 million and $8.6 million for the three months ended September 30, 2017 and 2016, respectively. The increase was driven by our energy infrastructure operations that accounted for $13.5 million of the revenue in the third quarter of 2017. The increase from infrastructure services was partially offset by a decrease from our remote accommodations division driven by decreased occupancy levels.

Mammoth's other energy services division contributed revenues of $23.7 million and $23.3 million for the nine months ended September 30, 2017 and 2016, respectively.

During 3Q 2017, we deployed capital to grow our electric utility infrastructure business, Cobra. This business currently has 58 crews working in two geographic areas of the U.S. and participated in the restoration of electric utility infrastructure in both Texas and Florida following Hurricanes Harvey and Irma. Cobra also recently signed a contract to aid in the rebuilding of electric utility infrastructure in Puerto Rico, which provides for revenues of up to $200 million.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses increased by 150% to $8.0 million from $3.2 million for the three months ended September 30, 2017 and 2016, respectively. The increase was primarily attributable to increased compensation and benefits along with increased professional service charges.

SG&A expenses increased by 88% to $22.5 million from $12.0 million for the nine months ended September 30, 2017 and 2016, respectively. The increase was primarily attributable to increased compensation and benefits along with increased professional service charges.

SG&A expenses, as a percentage of total revenue, came in at 5.4% in the third quarter of 2017 as compared to 5% during the third quarter of 2016.

Liquidity

As of September 30, 2017, we had net debt of approximately $80 million reflecting $94.0 million in borrowings outstanding under our $170.0 million revolving credit facility and $14.3 million of cash on hand. We have approximately $75.2 million of available borrowing capacity.

Capital Expenditures

The following table summarizes our capital expenditures by operating division for the periods indicated:

 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Pressure pumping services (a)$19,580,804  $335,312  $72,982,713  $1,262,854 
Well services (b)777,399  156,783  1,121,873  404,612 
Natural sand proppant services (c)4,927,935  359,656  7,897,818  522,267 
Contract and directional drilling services (d)2,356,885  1,069,381  8,257,702  1,492,476 
Other energy services (e)8,054,748  12,706  12,013,384  425,838 
Net change in cash$35,697,771  $1,933,838  $102,273,490   $4,108,047 

(a).    Capital expenditures primarily for pressure pumping equipment for the three and nine months ended September 30, 2017 and 2016.
(b).    Capital expenditures primarily for equipment upgrades for the three and nine months ended September 30, 2017 and 2016.
(c).    Capital expenditures included a conveyor and plant additions for the three and nine months ended September 30, 2017 and 2016.
(d).    Capital expenditures primarily for upgrades to our rig fleet for the three and nine months ended September 30, 2017 and 2016.
(e).    Capital expenditures primarily for an intersection upgrade for the nine months ended September 30, 2016. Capital expenditures for the nine months ended September 30, 2017 represent property and equipment for energy infrastructure services.

Explanatory Note Regarding Financial Information

The historical financial information for periods prior to October 12, 2016, contained in this release relates to Mammoth Energy Partners LP, a Delaware limited partnership (the "Partnership"). On October 12, 2016, the Partnership was converted into a Delaware limited liability company named Mammoth Energy Partners LLC ("Mammoth LLC"), and then each member of Mammoth LLC contributed all of its membership interests in Mammoth LLC to the Company. Prior to the conversion and the contribution, the Company was a wholly-owned subsidiary of the Partnership. Following the conversion and the contribution, Mammoth LLC (as the converted successor to the Partnership) became a wholly-owned subsidiary of the Company.

On October 13, 2016, Mammoth priced 7,750,000 shares of its common stock in its initial public offering (the "IPO") at a price to the public of $15.00 per share and, on October 14, 2016, Mammoth's common stock began trading on The Nasdaq Global Select Market under the symbol "TUSK." On October 19, 2016, Mammoth closed its IPO. Unless the context otherwise requires, references in this release to Mammoth or the Company, when used in a historical context for periods prior to October 12, 2016 refer to the Partnership and its subsidiaries. References in this release to Mammoth or the Company, when used for periods beginning on or after October 12, 2016 refer to Mammoth and its subsidiaries.

The financial information contained in this release should be read in conjunction with the financial information contained in Mammoth's Annual Report filed on Form 10-K with the Securities and Exchange Commission ("SEC") on February 24, 2017, Subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings.

The Company's Chief Executive Officer and Chief Financial Officer comprise the Company's Chief Operating Decision Maker function ("CODM"). Segment information is prepared on the same basis that our CODM manages the segments, evaluates the segment financial statements, and makes key operating and resource utilization decisions. Segment evaluation is determined on a quantitative basis based on a function of net income (loss) before income taxes prior to depreciation and amortization, impairment of long-lived assets, acquisition related costs, one-time compensation charges associated with the IPO, equity based compensation, interest income, interest expense and other (income) expense, net (which is comprised of the (gain) loss on disposal of long-lived assets) as well as a qualitative basis, such as nature of the product and service offerings and types of customers.

Based on the CODM's assessment, effective December 31, 2016 , the Company updated the reportable segments to align with its new CODM designated reporting structure and business activities. The Company now has five segments consisting of pressure pumping services, well services, natural sand proppant, contract land and directional drilling services and other energy services. Prior to this change, the reportable segments were comprised of four segments for financial reporting purposes: completion and production services, completion and production - natural sand proppant, land and directional drilling services and remote accommodation services. We have conformed our presentation for prior periods to reflect this new segment presentation.

On June 5, 2017, the Company completed the acquisition of (1) Sturgeon Acquisitions, LLC and its wholly owned subsidiaries Taylor Frac LLC, Taylor RE, LLC and South River, LLC (collectively, "Sturgeon"); (2) Stingray Energy Services and (3) Stingray Cementing (together with Stingray Energy Services, the "Stingray Acquisition") in exchange for the issuance by Mammoth of an aggregate of 7,000,000 shares of its common stock.

Prior to the acquisition, the Company and Sturgeon were under common control and it is required under accounting principles generally accepted in the Unites States of America ("GAAP") to account for this common control acquisition in a manner similar to the pooling of interest method of accounting. Therefore, the Company's historical financial information has been recast to combine Sturgeon with the Company as if the acquisition had been completed at commencement of Sturgeon's operations on September 13, 2014.

Conference Call Information

Mammoth will host a conference call on Thursday, November 2, 2017 at 10:00 a.m. CST (11:00 am EST) to discuss its third quarter 2017 financial and operational results. The telephone number to access the conference call is 844-265-1561 in the U.S. and the international dial in is 216-562-0385. The conference ID for the call is 9587499. The conference call will also be webcast live on www.mammothenergy.com in the "Investors" section.

About Mammoth Energy Services, Inc.

Mammoth is an integrated, growth-oriented energy service company serving companies engaged in the exploration and development of North American onshore unconventional oil and natural gas reserves and energy infrastructure. Mammoth's suite of services includes pressure pumping services, well services, natural sand proppant services, contract land and directional drilling services and other energy services. Other energy services currently consists of remote accommodation services and energy infrastructure services. For additional information about Mammoth, please visit our website at www.mammothenergy.com, where we routinely post announcements, updates, events, investor information and presentations and recent news releases. Information on our website is not part of this news release.

Forward-Looking Statements and Cautionary Statements

This news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein) contains certain statements and information that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "plan," "estimate," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "potential," "would," "may," "probable," "likely," and similar expressions, and the negative thereof, are intended to identify forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding our business outlook and plans, future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, costs and other guidance regarding future developments. Forward-looking statements are not assurances of future performance. These forward-looking statements are based on management's current expectations and beliefs, forecasts for our existing operations, experience, and perception of historical trends, current conditions, anticipated future developments and their effect on us, and other factors believed to be appropriate. Although management believes that the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Moreover, our forward-looking statements are subject to significant risks and uncertainties, including those described in our Annual Report filed on Form 10-K filed with the SEC on February 24, 2017, our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings we make with the Securities and Exchange Commission (the "SEC"), including those relating to our acquisitions and our contracts, many of which are beyond our control, which may cause actual results to differ materially from our historical experience and our present expectations or projections which are implied or expressed by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, risks relating to economic conditions; volatility of crude oil and natural gas commodity prices; delays in or failure of delivery of current or future orders of specialized equipment; the loss of or interruption in operations of one or more key suppliers or customers; solvency of counterparties to our contracts and their ability to timely pay for our services; oil and gas market conditions; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; operating risks; the adequacy of our capital resources and liquidity; weather; litigation; competition in the oil and natural gas industry; and costs and availability of resources.

Readers are cautioned not to place undue reliance on any forward-looking statement which speaks only as of the date on which such statement is made. We undertake no obligation to correct, revise or update any forward-looking statement after the date such statement is made, whether as a result of new information, future events or otherwise, except as required by applicable law.

Contact:
Mammoth Energy Services, Inc.,
14201 Caliber Drive, Suite 300
Oklahoma City, Oklahoma 73134

Investor Contact:
Don Crist
Director Investor Relations
dcrist@mammothenergy.com
405-608-6048

Media Contact:
Andrew Wilson
Andrew.wilson@edelman.com
212-704-4490

 
MAMMOTH ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
 
ASSETS September 30, December 31,
CURRENT ASSETS 2017 2016 (a)
Cash and cash equivalents $14,278,328  $29,238,618 
Accounts receivable, net 65,490,189  21,169,579 
Receivables from related parties 44,772,661  27,589,283 
Inventories 12,164,225  6,124,201 
Prepaid expenses 2,753,800  4,425,872 
Other current assets 335,513  391,599 
Total current assets 139,794,716  88,939,152 
     
Property, plant and equipment, net 347,317,716  242,119,663 
Sand reserves 75,210,457  55,367,295 
Intangible assets, net - customer relationships 11,770,375  15,949,772 
Intangible assets, net - trade names 6,722,197  5,617,057 
Goodwill 99,810,819  88,726,875 
Other non-current assets 4,509,500  5,642,661 
Total assets $685,135,780  $502,362,475 
LIABILITIES AND EQUITY    
CURRENT LIABILITIES    
Accounts payable $70,229,349  $20,469,542 
Payables to related parties 211,352  203,209 
Accrued expenses and other current liabilities 21,556,542  8,546,198 
Income taxes payable   28,156 
Total current liabilities 91,997,243  29,247,105 
     
Long-term debt 94,000,000   
Deferred income taxes 51,086,739   47,670,789 
Asset retirement obligation 2,031,119  259,804 
Other liabilities 4,755,414  2,404,422 
Total liabilities 243,870,515  79,582,120 
     
COMMITMENTS AND CONTINGENCIES (Note 14)    
     
EQUITY    
Equity:    
Common stock, $0.01 par value, 200,000,000 shares authorized, 44,502,223 and 445,022  375,000 
37,500,000 issued and outstanding at September 30, 2017 and December 31, 2016, respectively.    
Additional paid in capital 506,274,038   400,205,921 
Member's equity   81,738,675 
Accumulated deficit (63,274,499) (56,322,878)
Accumulated other comprehensive loss (2,179,296) (3,216,363)
Total equity  441,265,265  422,780,355 
Total liabilities and equity $685,135,780  $502,362,475 

(a) Financial information has been recast to include the financial position and results attributable to Sturgeon.


 
MAMMOTH ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited)
 
 Three Months Ended Nine Months Ended
 September 30, September 30,
REVENUE2017 2016 (b) 2017 (a) 2016 (b)
Services revenue$63,112,621  $19,077,680  $119,863,654  $65,964,774 
Services revenue - related parties56,860,754  36,028,399  134,425,170  76,679,011 
Product revenue15,276,279  1,675,230  29,043,367  4,651,673 
Product revenue - related parties 14,055,246  6,557,237  39,200,789  17,788,581 
Total revenue149,304,900  63,338,546  322,532,980  165,084,039 
        
COST AND EXPENSES       
Services cost of revenue89,345,946  35,850,660  191,910,453  102,113,120 
Services cost of revenue - related parties8,899  587,087  701,008  787,079 
Product cost of revenue25,177,849  6,429,040  57,759,173  22,861,407 
Selling, general and administrative7,667,419   3,063,445  21,473,039  11,558,114 
Selling, general and administrative - related parties355,242   131,162  986,126  456,505 
Depreciation, depletion, accretion and amortization27,223,733  17,921,471  64,354,383  54,483,158 
Impairment of long-lived assets      1,870,885 
Total cost and expenses149,779,088  63,982,865  337,184,182  194,130,268 
Operating loss(474,188) (644,319) (14,651,202) (29,046,229)
        
OTHER (EXPENSE) INCOME       
Interest expense(1,420,067) (1,024,514) (2,928,859) (3,332,901)
Bargain purchase gain, net of tax    4,011,512   
Other, net(319,252) (253,832) (705,894) 371,894 
Total other (expense) income(1,739,319) (1,278,346) 376,759  (2,961,007)
Loss before income taxes(2,213,507) (1,922,665) (14,274,443) (32,007,236)
(Benefit) provision for income taxes(1,412,680) 1,055,961  (7,322,822) 2,739,696 
Net loss$(800,827) $(2,978,626) $(6,951,621) $(34,746,932)
         
OTHER COMPREHENSIVE INCOME (LOSS)       
Foreign currency translation adjustment (1)627,515  (386,265) 1,037,067  1,583,593 
Comprehensive loss$(173,312) $(3,364,891) $(5,914,554) $(33,163,339)
        
Net loss per share (basic and diluted)$(0.02) $(0.10) $(0.17) $(1.16)
Weighted average number of shares outstanding44,501,885  30,000,000  40,526,276  30,000,000 
        
(1) Net of tax357,594    811,906   

(a) Financial information includes the financial position and results attributable to Sturgeon for the entire period presented.
(b) Financial information has been recast to include the financial position and results attributable to Sturgeon.


 
MAMMOTH ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
 
 Nine Months Ended
 September 30,
Cash flows from operating activities2017 (a) 2016 (b)
Net loss$(6,951,621) $(34,746,932)
Adjustments to reconcile net loss to cash provided by operating activities:   
Equity based compensation2,648,211  (18,683)
Depreciation, depletion, accretion and amortization64,354,383  54,483,158 
Amortization of coil tubing strings2,144,231  1,386,856 
Amortization of debt origination costs299,104   452,343 
Bad debt expense117,426  1,779,870 
(Gain) loss on disposal of property and equipment125,653   (426,917)
Gain on bargain purchase(4,011,512)  
Impairment of long-lived assets  1,870,885 
Deferred income taxes(8,151,410) (18,906)
Changes in assets and liabilities, net of acquisitions of businesses:   
Accounts receivable, net(37,439,781) (2,139,172)
Receivables from related parties(12,080,870) 167,964 
Inventories(7,878,174) (119,260)
Prepaid expenses and other assets2,643,797  59,940 
Accounts payable30,444,904  2,099,991 
Payables to related parties7,934  (394,292)
Accrued expenses and other liabilities14,392,715  (1,292,176)
Income taxes payable(28,156) (4,052)
Net cash provided by operating activities40,636,834   23,140,617 
    
Cash flows from investing activities:   
Purchases of property and equipment(102,273,490) (4,108,047)
Business acquisitions(42,008,187)  
Proceeds from disposal of property and equipment782,432  3,399,705 
Business combination cash acquired (Note 3)2,671,558   
Net cash used in investing activities(140,827,687) (708,342)
    
Cash flows from financing activities:   
Borrowings from lines of credit118,850,000  22,776,411 
Repayments of lines of credit(24,850,000)  (45,776,411)
Repayment of Stingray acquisition long-term debt(8,851,063)  
Net cash provided by (used in) financing activities85,148,937   (23,000,000)
Effect of foreign exchange rate on cash81,626  186,967 
Net decrease in cash and cash equivalents(14,960,290) (380,758)
Cash and cash equivalents at beginning of period29,238,618  4,038,899 
Cash and cash equivalents at end of period$14,278,328  $3,658,141 
    
Supplemental disclosure of cash flow information:   
Cash paid for interest$2,300,250  $2,972,072 
Cash paid for income taxes$ 840,421  $2,755,562 
Supplemental disclosure of non-cash transactions:   
Purchases of property and equipment included in trade accounts payable$13,647,557  $1,832,892 
Acquisition of Sturgeon, Stingray Cementing LLC and Stingray Energy Services LLC (Note 3)$23,090,580  $ 

(a) Financial information includes the financial position and results attributable to Sturgeon for the entire period presented.
(b) Financial information has been recast to include the financial position and results attributable to Sturgeon.


 
MAMMOTH ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED SEGMENT INCOME STATEMENTS (unaudited)
 
 Completion and Production    
Nine Months Ended September 30, 2017 (a)Pressure
Pumping
Services
Well ServicesSandDrillingOther
Energy
Services
Total
Revenue from external customers$46,511,384 $ 15,852,372 $29,043,367 $33,805,844 $23,694,054 $148,907,021 
Revenue from related parties $119,570,520 $11,793,299 $39,200,789 $3,060,826 $525 $173,625,959 
Cost of revenue$117,494,570 $24,288,693 $57,759,173 $34,584,336 $16,243,862 $250,370,634 
Selling, general and administrative expenses$6,690,812 $2,789,881 $6,314,182 $4,103,053 $2,561,237 $22,459,165 
Earnings before interest, other expense, impairment, taxes and depreciation and amortization$41,896,522 $567,097 $4,170,801 $(1,820,719)$4,889,480 $49,703,181 
Other expense$126,650 $36,195 $251,520 $262,560 $28,969 $705,894 
Bargain purchase gain$ $ $(4,011,512)$ $ $(4,011,512)
Interest expense (income)$1,023,519 $(14,019)$572,096 $1,227,422 $119,841 $2,928,859 
Depreciation, depletion, accretion and amortization$31,823,408 $7,939,784 $6,603,001 $14,978,300 $3,009,890 $64,354,383 
Income tax (benefit) provision$ $(7,778,970)$32,326 $ $ 423,822 $(7,322,822)
Net income (loss)$8,922,945 $384,107 $723,370 $(18,289,001)$1,306,958 $(6,951,621)
Total expenditures for property, plant and equipment$72,982,713 $1,121,873 $7,897,818 $8,257,702 $12,013,384 $102,273,490 
       
       
Three Months Ended September 30, 2017      
Revenue from external customers$29,003,286 $7,055,718 $15,276,279 $12,590,622 $14,462,995 $78,388,900 
Revenue from related parties $46,701,582 $9,105,851 $14,055,246 $1,053,321 $ $70,916,000 
Cost of revenue$52,960,761 $13,852,628 $25,177,849 $11,597,757 $10,943,699 $114,532,694 
Selling, general and administrative expenses$2,511,147 $1,091,378 $1,840,746 $1,374,275 $1,205,115 $8,022,661 
Earnings before interest, other expense, impairment, taxes and depreciation and amortization$20,232,960 $1,217,563 $2,312,930 $671,911 $2,314,181 $26,749,545 
Other expense$120,261 $38,186 $97,744 $38,324 $24,737 $319,252 
Interest expense$591,724 $94,357 $86,857  $570,364 $76,765 $1,420,067 
Depreciation, depletion, accretion and amortization$13,038,962 $4,511,622 $3,034,342 $5,035,990 $1,602,817 $27,223,733 
Income tax (benefit) provision$ $(1,278,456)$23,824 $ $(158,048)$(1,412,680)
Net income (loss)$6,482,013 $(2,148,146)$(929,837)$(4,972,767)$767,910 $(800,827)
Total expenditures for property, plant and equipment$19,580,804 $777,399 $4,927,935 $2,356,885 $8,054,748 $35,697,771 


 
MAMMOTH ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED SEGMENT INCOME STATEMENTS (unaudited)
 
 Completion and Production    
Nine Months Ended September 30, 2016 (b)Pressure
Pumping
Services
Well ServicesSandDrillingOther
Energy
Services
Total
Revenue from external customers$18,294,739 $6,470,485 $4,651,673 $17,946,458  $23,253,092 $70,616,447 
Revenue from related parties$73,559,413 $732,740 $ 17,788,581 $2,381,446 $5,412 $94,467,592 
Cost of revenue$60,866,617 $10,030,214 $22,861,407 $22,010,295 $9,993,073 $125,761,606 
Selling, general and administrative expenses$2,981,718 $1,512,824 $2,525,310 $3,353,243 $1,641,524  $12,014,619 
Earnings before interest, other expense (income), impairment, taxes and depreciation and amortization$28,005,817 $(4,339,813)$(2,946,463)$(5,035,634)$11,623,907 $27,307,814 
Other expense (income)$25,087 $(671,986)$82,422 $179,639 $12,944 $(371,894)
Interest expense$502,781 $178,584 $319,855 $2,272,913 $58,768 $3,332,901 
Depreciation, depletion, accretion and amortization$27,964,092 $3,903,924 $4,734,540 $16,243,626 $1,636,976 $54,483,158 
Impairment of long-lived assets$138,587 $1,384,751 $ $347,547 $ $1,870,885 
Income tax provision$ $2,835 $3,716 $ $2,733,145 $2,739,696 
Net (loss) income$(624,730)$(9,137,921)$(8,086,996)$(24,079,359)$7,182,074 $(34,746,932)
Total expenditures for property, plant and equipment$1,262,854 $404,612 $522,267 $1,492,476 $425,838 $4,108,047 
       
       
Three Months Ended September 30, 2016 (b)      
Revenue from external customers$137,626 $2,109,874 $1,675,230 $8,230,625 $8,599,555 $20,752,910 
Revenue from related parties$35,393,855 $164,854 $ 6,557,237 $464,850 $4,840 $42,585,636 
Cost of revenue$20,782,936 $3,068,159 $6,429,040 $9,042,242 $3,544,410 $42,866,787 
Selling, general and administrative expenses$916,176 $499,346 $415,505 $786,008 $577,572 $3,194,607 
Earnings before interest, other expense, impairment, taxes and depreciation and amortization$13,832,369 $(1,292,777)$1,387,922 $(1,132,775)$4,482,413 $17,277,152 
Other expense$1,262 $1,159 $9,439 $237,211 $4,761 $253,832 
Interest expense$134,017 $29,489 $108,744 $718,706 $33,558 $1,024,514  
Depreciation, depletion, accretion and amortization$9,050,605 $1,233,702 $1,784,689 $5,297,694 $554,781 $17,921,471 
Impairment of long-lived assets$ $ $ $ $ $ 
Income tax provision$ $5,929 $3,716 $ $1,046,316 $1,055,961 
Net income (loss)$4,646,485 $(2,563,056)$(518,666)$(7,386,386)$2,842,997 $(2,978,626)
Total expenditures for property, plant and equipment$335,312 $156,783 $359,656 $1,069,381 $12,706 $1,933,838 

(a) Financial information includes the financial position and results attributable to Sturgeon for the entire period presented.
(b) Financial information has been recast to include the financial position and results attributable to Sturgeon.


MAMMOTH ENERGY PARTNERS LP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA

Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA as net income (loss) before depreciation, depletion, accretion and amortization, impairment of long-lived assets, acquisition related costs, equity based compensation, bargain purchase gain, interest expense, other expense (income), net (which is comprised of the (gain) or loss on disposal of long-lived assets) and (benefit) provision for income taxes. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) or cash flows from operating activities as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measure of other companies. We believe that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements.

  • is widely used by investors in the energy services industry to measure a company's operating performance without regard to items excluded from the calculation of such measure, which can vary substantially from company to company depending upon accounting methods, book value of assets, capital structure and the method by which assets were acquired, among other factors;
  • is a financial measurement that is used by rating agencies, lenders and other parties to evaluate our creditworthiness; and
  • is used by our management for various purposes, including as a measure of performance of our operating entities and as a basis for strategic planning and forecasting.

There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect our net income or loss. Additionally, because Adjusted EBITDA excludes some, but not all, items that affect net income and is defined differently by different companies in our industry, our definition of Adjusted EBITDA used in this release may not be comparable to similarly titled measures of other companies or used in our various agreements. 

MAMMOTH ENERGY PARTNERS LP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

The following tables also provide a reconciliation of Adjusted EBITDA to the GAAP financial measure of net income or loss for each of our operating segments.

Consolidated

  Three Months Ended Nine Months Ended
 September 30, September 30,
Reconciliation of Adjusted EBITDA to net income (loss):2017 2016 2017 2016
Net loss$(800,827) $(2,978,626) $(6,951,621) $(34,746,932)
Depreciation, depletion, accretion and amortization expense27,223,733  17,921,471  64,354,383  54,483,158 
Impairment of long-lived assets      1,870,885 
Acquisition related costs264,091    2,454,840   
Equity based compensation1,028,317  (18,683) 2,648,210  (18,683)
Bargain purchase gain    (4,011,512 )  
Interest expense1,420,067  1,024,514  2,928,859  3,332,901 
Other expense (income), net319,252  253,832  705,894  (371,894)
(Benefit) provision for income taxes(1,412,680) 1,055,961  (7,322,822) 2,739,696 
Adjusted EBITDA$28,041,953  $17,258,469  $54,806,231  $27,289,131 
                

Pressure Pumping Services

 Three Months EndedNine Months Ended
 September 30, September 30,
Reconciliation of Adjusted EBITDA to net income (loss):2017 2016 2017 2016
Net income (loss)$6,482,013  $4,646,485  $8,922,945  $(624,730)
Depreciation and amortization expense13,038,962  9,050,605  31,823,408  27,964,092 
Impairment of long-lived assets      138,587 
Acquisition related costs500    500   
Equity based compensation428,398    1,202,687   
Interest expense591,724  134,017  1,023,519  502,781 
Other expense, net120,261  1,262  126,650  25,087 
Adjusted EBITDA$20,661,858  $13,832,369  $43,099,709  $28,005,817 
                

MAMMOTH ENERGY PARTNERS LP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Other Well Services

 Three Months EndedNine Months Ended
 September 30, September 30,
Reconciliation of Adjusted EBITDA to net income (loss):2017 2016 2017 2016
Net (loss) income$(2,148,146) $(2,563,056) $384,107  $(9,137,921)
Depreciation and amortization expense4,511,622  1,233,702  7,939,784  3,903,924 
Impairment of long-lived assets      1,384,751 
Acquisition related costs65,394    235,526   
Equity based compensation127,930  (18,683) 265,380  (18,683)
Interest expense, net94,357  29,489  (14,019) 178,584 
Other expense (income), net38,186  1,159  36,195  (671,986)
(Benefit) provision for income taxes(1,278,456) 5,929  (7,778,970) 2,835 
Adjusted EBITDA$1,410,887  $(1,311,460) $1,068,003  $(4,358,496)
                

Natural Sand Proppant Services

 Three Months EndedNine Months Ended
 September 30, September 30,
Reconciliation of Adjusted EBITDA to net income (loss):2017 2016 2017 2016
Net (loss) income$(929,837) $(518,666) $723,370  $(8,086,996)
Depreciation, depletion, accretion and amortization expense3,034,342  1,784,689  6,603,001  4,734,540 
Acquisition related costs166,654    2,120,733   
Equity based compensation271,762    524,223   
Bargain purchase gain    (4,011,512)  
Interest expense86,857  108,744  572,096  319,855 
Other expense, net97,744  9,439  251,520  82,422 
Provision for income taxes23,824  3,716  32,326  3,716 
Adjusted EBITDA$2,751,346  $1,387,922  $6,815,757  $(2,946,463)
                

Contract Land and Directional Drilling Services

 Three Months EndedNine Months Ended
 September 30, September 30,
Reconciliation of Adjusted EBITDA to net income (loss):2017 2016 2017 2016
Net loss$(4,972,767) $(7,386,386) $(18,289,001) $(24,079,359)
Depreciation and amortization expense5,035,990  5,297,694  14,978,300  16,243,626 
Impairment of long-lived assets      347,547 
Acquisition related costs(16,328)   8,187   
Equity based compensation137,637     429,901   
Interest expense570,364  718,706  1,227,422  2,272,913 
Other expense, net38,324  237,211  262,560  179,639 
Adjusted EBITDA$793,220  $(1,132,775) $(1,382,631) $(5,035,634)
                

MAMMOTH ENERGY PARTNERS LP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Other Energy Services

 Three Months EndedNine Months Ended
 September 30,  September 30,
Reconciliation of Adjusted EBITDA to net income (loss):2017 2016 2017 2016
Net income$767,910  $2,842,997  $1,306,958   $7,182,074 
Depreciation and amortization expense1,602,817  554,781  3,009,890  1,636,976 
Impairment of long-lived assets       
Acquisition related costs47,871    89,894   
Equity based compensation62,590    226,019   
Interest expense76,765  33,558  119,841  58,768 
Other expense, net24,737  4,761  28,969  12,944 
(Benefit) provision for income taxes(158,048) 1,046,316  423,822  2,733,145 
Adjusted EBITDA$2,424,642  $4,482,413  $5,205,393  $11,623,907 

 

Source: Mammoth Energy Services, Inc.

News Provided by Acquire Media