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May 02, 2018

Mammoth Energy Services, Inc. Announces First Quarter 2018 Operational and Financial Results

OKLAHOMA CITY, May 02, 2018 (GLOBE NEWSWIRE) -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ:TUSK) today reported financial and operational results for the three months ended March 31, 2018.

Key Highlights for the First Quarter 2018:

  • Total revenue was $494.2 million for the three months ended March 31, 2018, up 34% sequentially from $369.0 million for the three months ended December 31, 2017 and up 559% from $75.0 million for the three months ended March 31, 2017.
  • Net income for the three months ended March 31, 2018 was $55.5 million, a $10.4 million decrease from $65.9 million for the three months ended December 31, 2017 and an improvement of $60.5 million from a net loss of $5.0 million for the three months ended March 31, 2017. The three months ended December 31, 2017 included a provisional benefit of $31.0 million due to changes in tax policy as a result of the Tax Cut and Jobs Act (“Tax Act”).
  • Adjusted EBITDA (as defined and reconciled below) was $130.8 million for the three months ended March 31, 2018, up 18% sequentially from $110.5 million for the three months ended December 31, 2017 and up 1,037% from $11.5 million for the three months ended March 31, 2017.
  • Reduced debt to $39.0 million as of March 31, 2018, which is down $60.9 million from December 31, 2017.
  • Executed two amendments to Mammoth subsidiary Cobra Acquisitions LLC's contract with the Puerto Rico Electric Power Authority ("PREPA") to aid in the restoration of the electric utility infrastructure in Puerto Rico, increasing the total contract value to approximately $945 million, up from $200 million originally.
  • Completed the expansion of Mammoth subsidiary Taylor Frac LLC's sand facility, increasing company-wide functional sand production capacity to approximately 4.0 million tons per year, up from 3.0 million tons per year at December 31, 2017.

Arty Straehla, Mammoth's Chief Executive Officer, stated, "The first quarter was challenging due to several factors including harsh working environments, severe winter weather and logistics issues, but our teams were able to overcome these obstacles and continue to execute at a high level. The first quarter of 2018 was our third sequential record quarter on an EBITDA basis, which was underpinned by the hard work performed by our teams in Puerto Rico. Debt was reduced by $61 million during the quarter, despite spending approximately $36 million on growth capital, highlighting our significant cash flow. The outlook for all of our operating divisions is strong and we intend to continue to grow both organically and through accretive acquisitions."

Pressure Pumping Services

Mammoth's pressure pumping division contributed revenues (inclusive of inter-segment revenues) of $101.1 million on 1,672 stages for the three months ended March 31, 2018, a 10% decrease from $111.9 million on 1,375 stages for the three months ended December 31, 2017 and a 149% increase from $40.6 million on 860 stages for the three months ended March 31, 2017. The sequential decline in the first quarter of 2018 was a result of a combination of significant winter weather and sand logistics constraints.

Infrastructure Services

Mammoth's infrastructure services segment contributed revenues of $325.5 million for the three months ended March 31, 2018, a 56% increase from $209.2 million for the three months ended December 31, 2017. The infrastructure services segment did not generate revenues during the three months ended March 31, 2017.

During the first quarter of 2018, Cobra and PREPA amended the initial PREPA contract to increase the total contract amount by an additional $745.4 million.

Natural Sand Proppant Services

Mammoth's natural sand proppant division contributed revenues (inclusive of inter-segment revenues) of $51.0 million for the three months ended March 31, 2018, up 16% from $43.9 million for the three months ended December 31, 2017 and up 227% from $15.6 million for the three months ended March 31, 2017. The Company sold 735,584 tons of sand for the three months ended March 31, 2018, a 23% increase from 600,182 for the three months ended December 31, 2017 and a 187% increase from 255,865 for the three months ended March 31, 2017.

The Company completed the expansion of its Taylor Frac facility during the first quarter of 2018, increasing Mammoth's total processing capacity to approximately 4.0 million tons per year. The Company is currently upgrading certain equipment at its Piranha facility, which is expected to further increase Mammoth's total sand processing capacity to 4.4 million tons per year by mid-2018.

Contract Land and Directional Drilling Services

Mammoth's contract land and directional drilling services division contributed revenues (inclusive of inter-segment revenues) of $15.2 million for the three months ended March 31, 2018, an 11% increase from $13.7 million for the three months ended December 31, 2017 and a 41% increase from $10.8 million for the three months ended March 31, 2017. The average drilling day rate was $16,541, $15,964 and $14,400, respectively, for the three months ended March 31, 2018, December 31, 2017 and March 31, 2017.

Mammoth anticipates that it will operate, on average, five to six rigs throughout 2018.

Other Services

Mammoth's other services, including coil tubing, pressure control, flowback, cementing, equipment rentals and remote accommodations, contributed revenues (inclusive of inter-segment revenues) of $22.9 million for the three months ended March 31, 2018, a 51% increase from $15.2 million for the three months ended December 31, 2017 and a 157% increase from $8.9 million for the three months ended March 31, 2017. The increase in revenues was primarily due to increase in utilization.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses increased to $38.5 million for the three months ended March 31, 2018 from $27.4 million for the three months ended December 31, 2017 and $6.7 million for the three months ended March 31, 2017. The increase is primarily attributable to increased bad debt expense and increased compensation and benefits.

SG&A expenses, as a percentage of total revenue, were 8% for the three months ended March 31, 2018 compared to 7% for the three months ended December 31, 2017 and 9% for the three months ended March 31, 2017.

Liquidity

As of March 31, 2018, Mammoth had cash on hand totaling $10.4 million and borrowings outstanding under its revolving credit facility of $39.0 million. As of March 31, 2018, the Company had approximately $123.7 million of available borrowing capacity under its revolving credit facility, after giving effect to $6.5 million of outstanding letters of credit.

Capital Expenditures

The following table summarizes Mammoth's capital expenditures by operating division for the periods indicated (in thousands):

  Three Months Ended
  March 31,   December 31,
  2018   2017   2017
Pressure pumping services(a) $ 7,866     $ 28,665     $ 12,870  
Infrastructure services(b) 15,778         8,131  
Natural sand proppant services(c) 5,700     175     8,478  
Contract and directional drilling services(d) 3,618     2,269     669  
Other services (e) 2,812     1     1,431  
Net change in cash $ 35,774     $ 31,110     $ 31,579  

  1. Capital expenditures primarily for pressure pumping equipment for the three months ended March 31, 2018, March 31, 2017 and December 31, 2017.
  2. Capital expenditures primarily for trucks and other equipment for the three months ended March 31, 2018 and December 31, 2017.
  3. Capital expenditures primarily for plant upgrades for the three months ended March 31, 2018 and December 31, 2017.
  4. Capital expenditures primarily for upgrades to our rig fleet for the three months ended March 31, 2018, March 31, 2017 and December 31, 2017.
  5. Capital expenditures primarily for equipment for our rental business for the three months ended March 31, 2018 and December 31, 2017.

Explanatory Note Regarding Financial Information

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 28, 2018, 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 the 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 operating income (loss) as well as a qualitative basis, such as nature of the product and service offerings and types of customers.

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, May 3, 2018 at 10:00 a.m. CST (11:00 am EST) to discuss its first quarter 2018 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 4096257. 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 (i) companies engaged in the exploration and development of North American onshore unconventional oil and natural gas reserves and (ii) government-funded utilities, private utilities, public investor-owned utilities and co‑operative utilities through its energy infrastructure services division. Mammoth’s suite of services and products include: pressure pumping services, infrastructure services, natural sand and proppant services, contract land and directional drilling services and other services. For additional information about Mammoth, please visit its website at www.mammothenergy.com, where Mammoth routinely posts announcements, updates, events, investor information and presentations and recent news releases.

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

Media Contact:
Peter Mirijanian
peter@pmpadc.com
(202) 464-8803

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, and the Private Securities Litigation Reform Act of 1995. 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 Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings we make with 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 and infrastructure industries; and costs and availability of resources.

Investors 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.



MAMMOTH ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

         
ASSETS March 31,   December 31,
  2018   2017
               
CURRENT ASSETS (in thousands)
Cash and cash equivalents $ 10,447     $ 5,637  
Accounts receivable, net 243,913     243,746  
Receivables from related parties 46,338     33,788  
Inventories 12,189     17,814  
Prepaid expenses 12,030     12,552  
Other current assets 1,112     886  
Total current assets 326,029     314,423  
       
Property, plant and equipment, net 365,757     351,017  
Sand reserves 74,682     74,769  
Intangible assets, net - customer relationships 7,436     9,623  
Intangible assets, net - trade names 6,296     6,516  
Goodwill 99,811     99,811  
Deferred income tax asset 16,829     6,739  
Other non-current assets 4,245     4,345  
Total assets $     901,085     $ 867,243  
LIABILITIES AND EQUITY      
CURRENT LIABILITIES      
Accounts payable $ 151,509     $ 141,306  
Payables to related parties 2,228     1,378  
Accrued expenses and other current liabilities 42,919     40,895  
Income taxes payable 62,272     36,409  
Total current liabilities 258,928     219,988  
       
Long-term debt 39,000     99,900  
Deferred income tax liabilities 31,897     34,147  
Asset retirement obligation 3,124     2,123  
Other liabilities 3,999     3,289  
Total liabilities 336,948     359,447  
       
COMMITMENTS AND CONTINGENCIES      
       
EQUITY      
Equity:      
Common stock, $0.01 par value, 200,000,000 shares authorized, 44,714,296 and 44,589,306
issued and outstanding at March 31, 2018 and December 31, 2017, respectively
447     446  
Additional paid in capital 509,265     508,010  
Retained earnings 57,547     2,001  
Accumulated other comprehensive loss (3,122 )   (2,661 )
Total equity 564,137     507,796  
Total liabilities and equity $ 901,085     $ 867,243  
 
 
 

MAMMOTH ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

   
  Three Months Ended
  March 31,   December 31,
  2018   2017   2017
                       
  (in thousands, except per share amounts)
REVENUE          
Services revenue $   408,659     $    27,092     $ 315,545  
Services revenue - related parties 49,088     32,962     31,639  
Product revenue 25,040     3,372       18,024  
Product revenue - related parties 11,462       11,540     3,755  
Total revenue 494,249     74,966     368,963  
           
COST AND EXPENSES          
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of
$24,575, $15,838 and $25,044, respectively, for the three months ended March 31, 2018,
March 31, 2017 and December 31, 2017)
290,979     45,461     198,201  
Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization
and accretion of $0, $0 and $0, respectively, for the three months ended March 31, 2018,
March 31, 2017 and December 31, 2017)
1,792     430     707  
Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of
$2,314, $1,362 and $2,790, respectively, for the three months ended March 31, 2018,
March 31, 2017 and December 31, 2017)
33,330     12,607     33,290  
Selling, general and administrative 38,082     6,413     26,931  
Selling, general and administrative - related parties 429     324     495  
Depreciation, depletion, amortization and accretion 26,908     17,237     27,770  
Impairment of long-lived assets         4,146  
Total cost and expenses 391,520     82,472     291,540  
Operating income (loss) 102,729     (7,506 )   77,423  
           
OTHER (EXPENSE) INCOME          
Interest expense, net (1,237 )   (397 )   (1,381 )
Other, net (28 )   (184 )   28  
Total other expense (1,265 )   (581 )   (1,353 )
Income (loss) before income taxes 101,464     (8,087 )   76,070  
Provision (benefit) for income taxes 45,918     (3,106 )   10,155  
Net income (loss) $ 55,546     $ (4,981 )   $ 65,915  
           
OTHER COMPREHENSIVE INCOME (LOSS)          
Foreign currency translation adjustment, net of tax of $186, $20 and ($167), respectively,
for the three months ended March 31, 2018, March 31, 2017 and December 31, 2017
(461 )   228     (482 )
Comprehensive income (loss) $ 55,085     $ (4,753 )   $ 65,433  
           
Net income (loss) per share (basic) $ 1.24     $ (0.13 )   $ 1.48  
Net income (loss) per share (diluted) $ 1.24     $ (0.13 )   $ 1.48  
Weighted average number of shares outstanding (basic) 44,650     37,500     44,579  
Weighted average number of shares outstanding (diluted) 44,884     37,500     44,683  
                 
                 


MAMMOTH ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 
  Three Months Ended
  March 31,
  2018     2017
               
  (in thousands)
Cash flows from operating activities:      
Net income (loss) $ 55,546     $ (4,981 )
Adjustments to reconcile net loss to cash provided by operating activities:      
Equity based compensation 1,256     570  
Depreciation, depletion, accretion and amortization 26,908     17,237  
Amortization of coil tubing strings 565     492  
Amortization of debt origination costs 100     151  
Bad debt expense 25,527     (41 )
Gain on disposal of property and equipment (184 )   (79 )
Deferred income taxes (12,117 )   (3,801 )
Changes in assets and liabilities, net of acquisitions of businesses:      
Accounts receivable, net (25,722 )   (4,357 )
Receivables from related parties (12,550 )   (4,842 )
Inventories 5,060     (466 )
Prepaid expenses and other assets 294     77  
Accounts payable 8,302     13,302  
Payables to related parties 851     451  
Accrued expenses and other liabilities 1,636     733  
Income taxes payable 25,851     (28 )
Net cash provided by operating activities 101,323     14,418  
       
Cash flows from investing activities:      
Purchases of property and equipment (35,176 )      (31,110 )
Purchases of property and equipment from related parties (598 )    
Proceeds from disposal of property and equipment 286     369  
Net cash used in investing activities (35,488 )   (30,741 )
       
Cash flows from financing activities:      
Borrowings from lines of credit 31,000      
Repayments of lines of credit    (91,900 )    
Repayments of equipment financing note (72 )    
Net cash used in financing activities (60,972 )    
Effect of foreign exchange rate on cash (53 )   11  
Net change in cash and cash equivalents 4,810     (16,312 )
Cash and cash equivalents at beginning of period 5,637     29,239  
Cash and cash equivalents at end of period $ 10,447     $ 12,927  
       
Supplemental disclosure of cash flow information:      
Cash paid for interest $ 1,442     $ 254  
Cash paid for income taxes $ 32,184     $ 701  
Supplemental disclosure of non-cash transactions:      
Purchases of property and equipment included in trade accounts payable $ 16,558     $ 9,346  
               
               


MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 
Three months ended March 31, 2018 Pressure Pumping
  Infrastructure
  Sand
  Drilling
  All Other
  Eliminations
  Total
Revenue from external customers $ 96,579   $ 325,459   $ 36,503     $ 15,228     $ 20,480     $     $ 494,249
Intersegment revenues 4,559     14,512     2     2,415     (21,488 )  
Total revenue 101,138   325,459   51,015     15,230     22,895     (21,488 )   494,249
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 66,612   194,076   33,330     14,475     17,608         326,101
Intersegment cost of revenues 15,402   1,791   4,286     162     105     (21,746 )  
Total cost of revenue 82,014   195,867   37,616     14,637     17,713     (21,746 )   326,101
Selling, general and administrative 2,663   31,851   1,644     1,253     1,100         38,511
Depreciation, depletion, amortization and accretion 13,986   2,407   2,316     4,355     3,844         26,908
Operating income (loss) 2,475   95,334   9,439     (5,015 )   238     258     102,729
Interest expense 504   76   80     395     182         1,237
Other expense 12   2   (13 )   40     (13 )       28
Income (loss) before income taxes $ 1,959   $ 95,256   $ 9,372     $ (5,450 )   $ 69     $ 258     $ 101,464
Total expenditures for property, plant and equipment $ 7,866   $ 15,778   $ 5,700     $ 3,618     $ 2,812     $     $ 35,774
                                                 


Three months ended March 31, 2017 Pressure Pumping
  Infrastructure
  Sand
  Drilling
  All Other
  Eliminations
  Total
Revenue from external customers $ 40,453   $     $ 14,912     $ 10,751     $ 8,850     $     $ 74,966  
Intersegment revenues 187       685             (872 )    
Total revenue 40,640       15,597     10,751     8,850     (872 )   74,966  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 28,707   86     12,608     10,953     6,144         58,498  
Intersegment cost of revenues 685       187             (872 )    
Total cost of revenue 29,392   86     12,795     10,953     6,144     (872 )   58,498  
Selling, general and administrative 1,777   48     2,058     1,293     1,561         6,737  
Depreciation, depletion, amortization and accretion 9,158       1,363     4,968     1,748         17,237  
Operating income (loss) 313   (134 )   (619 )   (6,463 )   (603 )       (7,506 )
Interest expense 128       133     217     (81 )       397  
Other expense 3       14     164     3         184  
Income (loss) before income taxes $ 182   $ (134 )   $ (766 )   $ (6,844 )   $ (525 )   $     $ (8,087 )
Total expenditures for property, plant and equipment $ 28,665   $     $ 175     $ 2,269     $ 1     $     $ 31,110  
                                                     
                                                     


MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

                           
Three Months Ended December 31, 2017 Pressure Pumping
  Infrastructure
  Sand
  Drilling
  All Other
  Eliminations
  Total
Revenue from external customers $ 111,244   $ 209,229     $ 21,779     $ 13,208     $ 13,503     $     $ 368,963  
Intersegment revenues 617       22,167     446     1,708     (24,938 )    
Total revenue 111,861   209,229     43,946     13,654     15,211     (24,938 )   368,963  
Cost of revenues, exclusive of depreciation, depletion, amortization and accretion 65,594   108,289     33,289     12,117     12,909         232,198  
Intersegment cost of revenues 22,928   1,443     373     101     58     (24,903 )    
Total cost of revenue 88,522   109,732     33,662     12,218     12,967     (24,903 )   232,198  
Selling, general and administrative 2,810   20,365     1,875     1,406     970         27,426  
Depreciation, depletion, amortization and accretion 13,590   1,805     2,791     4,657     4,927         27,770  
Impairment of long-lived assets       324     3,822             4,146  
Operating income (loss) 6,939   77,327     5,294     (8,449 )   (3,653 )   (35 )   77,423  
Interest expense 599   168     107     467     40         1,381  
Other, net 2   (4 )   (40 )   (6 )   20         (28 )
Income (loss) before income taxes $ 6,338   $ 77,163     $ 5,227     $ (8,910 )   $ (3,713 )   $ (35 )   $ 76,070  
Total expenditures for property, plant and equipment $ 12,870   $ 8,131     $ 8,478     $ 669     $ 1,431     $     $ 31,579  
                                                     

Adjusted EBITDA

Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. Mammoth defines Adjusted EBITDA as net income (loss) before depreciation, depletion, amortization and accretion expense, impairment of long-lived assets, acquisition related costs, equity based compensation, interest expense, net, other (income) expense, net (which is comprised of the (gain) or loss on disposal of long-lived assets) and provision (benefit) for income taxes. The Company excludes the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within the energy service 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 Mammoth's 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. Mammoth's computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure its ability to meet debt service requirements.

The following tables provide a reconciliation of Adjusted EBITDA to the GAAP financial measure of net income (loss) on a consolidated basis and for each of the Company's segments (in thousands):

Consolidated

  Three Months Ended
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net income (loss): 2018   2017   2017
Net income (loss) $ 55,546     $ (4,981 )   $ 65,915  
Depreciation, depletion, accretion and amortization expense 26,908     17,237     27,770  
Impairment of long-lived assets         4,146  
Acquisition related costs (46 )   1,247     51  
Equity based compensation 1,256     570     1,093  
Interest expense, net 1,237     397     1,381  
Other expense, net 28     184     (28 )
Provision (benefit) for income taxes 45,918     (3,106 )   10,155  
Adjusted EBITDA $ 130,847     $ 11,548     $ 110,483  
 
 


MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Pressure Pumping Services

  Three Months Ended
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net income (loss): 2018   2017   2017
Net income $ 1,959   $ 182   $ 6,338
Depreciation and amortization expense 13,986   9,158   13,590
Equity based compensation 418   271   438
Interest expense 504   128   599
Other expense, net 12   3   2
Adjusted EBITDA $     16,879   $      9,742   $ 20,967
 

Infrastructure Services

  Three Months Ended
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net income (loss): 2018   2017   2017
Net income (loss) $ 47,299     $ (134 )   $ 47,873  
Depreciation and amortization expense 2,407         1,805  
Acquisition related costs (8 )       8  
Equity based compensation 457         316  
Interest expense 76         168  
Other expense (income), net 2         (4 )
Provision for income taxes 47,957         29,290  
Adjusted EBITDA $   98,190     $      (134 )   $ 79,456  
                       

Natural Sand Proppant Services

  Three Months Ended
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net income (loss): 2018   2017   2017
Net income (loss) $ 9,372     $ (766 )   $ 5,263  
Depreciation, depletion, accretion and amortization expense 2,316     1,363     2,791  
Impairment of long-lived assets         324  
Acquisition related costs (38 )   1,038     42  
Equity based compensation 186     70     184  
Interest expense 80     133     107  
Other (income) expense, net (13 )   14     (40 )
Benefit for income taxes         (36 )
Adjusted EBITDA $   11,903     $    1,852     $ 8,635  
 
 


MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Contract Land and Directional Drilling Services

  Three Months Ended
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net loss:    2018   2017   2017
Net loss $   (5,450 )   $   (6,844 )   $ (8,910 )
Depreciation expense 4,355     4,968     4,657  
Impairment of long-lived assets         3,822  
Acquisition related costs     22      
Equity based compensation 107     112     77  
Interest expense, net 395     217     467  
Other expense (income), net 40     164     (6 )
Adjusted EBITDA $ (553 )   $ (1,361 )   $ 107  
 

Other Services(a)

  Three Months Ended
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net income: 2018   2017   2017
Net income $ 2,107     $ 2,581     $ 15,386  
Depreciation and amortization expense 3,844     1,748     4,927  
Acquisition related costs     187     2  
Equity based compensation 89     117     77  
Interest expense (income), net 182     (81 )   40  
Other (income) expense, net (13 )   3     20  
Benefit for income taxes       (2,038 )        (3,106 )   (19,099 )
Adjusted EBITDA $ 4,171     $ 1,449     $ 1,353  

(a)  Includes results for the Company's coil tubing, pressure control, flowback, cementing, equipment rentals and remote accommodations services and corporate related activities.

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Source: Mammoth Energy Services, Inc.