Mammoth Energy Services Inc.
Feb 22, 2017

Mammoth Energy Services, Inc. Announces Fourth Quarter and Full Year 2016 Operational and Financial Results

OKLAHOMA CITY, Feb. 22, 2017 (GLOBE NEWSWIRE) -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ:TUSK) today reported financial and operational results for the fourth quarter and full year ended December 31, 2016. Key information related to Mammoth for the reporting periods is as follows:

Key Highlights for Fourth Quarter 2016:

Adjusted EBITDA is a non-GAAP financial measure. Reconciliations of this measure to a financial measure calculated in accordance with generally accepted accounting principles ("GAAP") are provided on pages 8 - 10 of this release.

Arty Straehla, Chief Executive Officer, commented, "I am very proud of the way the Mammoth team responded to an adverse environment in 2016. We executed at a high level as a team which allowed us to outperform analyst expectations. The plan outlined during our IPO process to grow organically, while evaluating accretive acquisitions, is on track and should position us to capitalize on an improving market. Once the 132,500 Hhp and related equipment on order is delivered, our six high pressure fleets will give us further scale in both the Utica and the SCOOP/STACK. We intend to grow further in the service areas experiencing increasing customer demand, including pressure pumping, sand and last-mile logistics to further integrate our product offering."

Pressure Pumping Services

Mammoth's pressure pumping segment contributed revenues and stages completed of $32.3 million on 764 stages and $25.7 million on 497 stages for the three months ended December 31, 2016 and 2015, respectively. The pressure pumping segment contributed revenues of $124.3 million on 2,442 stages and $170.0 million on 2,963 stages for the years ended December 31, 2016 and 2015, respectively. Utilization was 63% and 50% for the three and twelve months ended December 31, 2016, on two active spreads, as compared to 26% and 63% for the three and twelve months ended December 31, 2015, on three active spreads.

Cost of revenue increased by 19% to $21.5 million from $18.1 million for the three months ended December 31, 2016 and 2015, respectively. Cost of revenue decreased by 34% to $86.8 million from $131.7 million for the years ended December 31, 2016 and 2015, respectively.

Well Services

Mammoth's well services segment contributed revenues of $2.8 million and $3.6 million for the three months ended December 31, 2016 and 2015, respectively. The well services segment contributed revenues of $10.0 million and $28.9 million for the years ended December 31, 2016 and 2015, respectively. Our coil tubing division revenue declined as a result of decreases in average day rates and our flowback services declined as a result of discontinuing our flowback operations in the Appalachian Basin in December 2015 combined with a decline in both pricing and utilization of such services in our other basins.

Cost of revenue decreased by 26% to $3.5 million from $4.7 million for the three months ended December 31, 2016 and 2015, respectively. Cost of revenue decreased by 52% to $13.5 million from $28.1 million for the years ended December 31, 2016 and 2015, respectively.

Natural Sand Proppant Production

Mammoth's natural sand proppant ("sand") segment contributed revenues of $10.4 million and $7.3 million for the three months ended December 31, 2016 and 2015, respectively. The sand segment contributed revenues of $33.8 million and $52.8 million for the years ended December 31, 2016 and 2015, respectively. The Company sold 195,400 and 83,500 tons of sand for the three months ended December 31, 2016 and 2015, respectively, and 575,400 and 512,700 for the years ended December 31, 2016 and 2015, respectively. At December 31, 2016, the Company was not using its Muskie processing plant to produce sand as a result of the decline in commodity pricing and the resulting decrease in completion activity. However, based on recent increases in demand for sand and rising prices, Mammoth recently returned this plant to operation and the first shipments from this plant began in February 2017. The Company expects this plant to reach full utilization of approximately 58,300 tons per month by April 2017.

Cost of revenue increased by 80% to $8.5 million from $4.7 million for the three months ended December 31, 2016 and 2015, respectively. Cost of revenue decreased by 36% to $28.2 million from $43.9 million for the years ended December 31, 2016 and 2015, respectively.

Contract Land and Directional Drilling Services

Mammoth's contract land and directional drilling ("drilling") segment contributed revenues of $11.7 million and $9.9 million for the three months ended December 31, 2016 and 2015, respectively. The drilling segment contributed revenues of $32.0 million and $73.0 million for the years ended December 31, 2016 and 2015, respectively. The changes in revenues resulted primarily from changes in utilization and day rates for both land rigs and directional drilling services.

Cost of revenue increased by 8% to $9.8 million from $9.1 million for the three months ended December 31, 2016 and 2015, respectively. Cost of revenue decreased by 45% to $31.8 million from $57.5 million for the years ended December 31, 2016 and 2015, respectively.

Other Energy Services

Mammoth's other energy services segment contributed revenues of $7.6 million and $7.3 million for the three months ended December 31, 2016 and 2015, respectively. The other energy services segment contributed revenues of $30.9 million and $35.3 million for the years ended December 31, 2016 and 2015, respectively. The changes were primarily driven by occupancy levels for the respective periods.

Cost of revenue decreased by 6% to $3.2 million from $3.4 million for the three months ended December 31, 2016 and 2015, respectively. Cost of revenue decreased by 13% to $13.2 million from $15.1 million for the years ended December 31, 2016 and 2015, respectively.

General and Administrative Expenses

General and administrative expenses decreased by 13% to $5.7 million from $6.5 million for the three months ended December 31, 2016 and 2015, respectively. General and administrative expenses decreased by 19% to $16.7 million and $20.5 million for the years ended December 31, 2016 and 2015, respectively. The decrease was primarily attributable to decreased compensation and benefits along with decreased bad debt expense charges.

Liquidity

As of December 31, 2016, our revolving credit facility was undrawn, leaving an aggregate of $146.2 million of available borrowing capacity under this facility and $28.7 million of cash on hand.

Capital Expenditures

Capital expenditures totaled $7.6 million and $1.8 million for the three months ended December 31, 2016 and 2015, respectively. Capital expenditures totaled $11.3 million and $26.3 million for the years ended December 31, 2016 and 2015, respectively. Mammoth currently expects its total capital expenditures to be approximately $120.0 million for 2017.

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 information contained in this release should be read in conjunction with the information contained in Mammoth's final prospectus dated October 13, 2016 and filed with the U.S. Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933 on October 17, 2016 (the "Final Prospectus").

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, 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.

Additionally, given that the Company is a C Corporation that will file a consolidated income tax returns for periods following the contribution that occurred in October 2016, the Company deems income (loss) before income taxes to be a more meaningful representation of operational performance.

Conference Call Information

Mammoth will host a conference call on Thursday, February 23, 2017 at 10:00 a.m. CST to discuss its fourth quarter 2016 financial and operational results. The telephone number to access the conference call is 844-265-1561 or international dial in 216-562-0385. The conference ID for the call is 72891861. Mammoth encourages those who would like to participate in the call to place calls between 9:50 a.m. and 10:00 a.m. CST .

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 oilfield service company serving companies engaged in the exploration and development of North American onshore unconventional oil and natural gas reserves. 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 primarily of remote accommodation 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.

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 the Final Prospectus, 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; 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.


MAMMOTH ENERGY SERVICES, INC.
 
CONSOLIDATED BALANCE SHEETS
 
ASSETS At December 31,
  2016 2015
CURRENT ASSETS    
Cash and cash equivalents $28,693,985  $3,074,072 
Accounts receivable, net 20,602,962  17,797,852 
Receivables from related parties 28,059,565  25,643,781 
Inventories 4,355,088  4,755,661 
Prepaid Expenses 4,254,148  4,447,253 
Other current assets 391,599  422,219 
Total current assets 86,357,347  56,140,838 
     
Property, plant and equipment, net 221,247,228  273,026,665 
Intangible assets, net - customer relationships 15,949,772  24,309,772 
Intangible assets, net - trade names 5,617,057  6,328,057 
Goodwill 86,043,148  86,043,148 
Other non-current assets 5,339,283  5,137,090 
Total assets $420,553,835  $450,985,570 
     
LIABILITIES AND EQUITY    
CURRENT LIABILITIES    
Accounts payable $18,480,325  $16,046,378 
Payables to related parties 2,434,031  6,997,929 
Accrued expenses and other current liabilities 8,396,968  7,718,956 
Income taxes payable 28,156  26,912 
Total current liabilities 29,339,480  30,790,175 
     
Long-term debt   95,000,000 
Deferred income taxes  47,670,789  1,460,959 
Other liabilities 2,501,886  571,174 
Total liabilities $79,512,155  $127,822,308 
     
EQUITY    
Equity:    
Common stock, $0.01 par value, 200,000,000 shares authorized, $375,000  $ 
37,500,000 issued and outstanding at December 31, 2016; zero issued    
and outstanding at December 31, 2015    
Additional paid in capital 400,205,921   
Accumulated Deficit (56,322,878)  
Common units, 30,000,000 units issued and outstanding    
at December 31, 2015; zero issued and outstanding at December 31, 2016   329,090,230 
Accumulated other comprehensive loss (3,216,363) (5,926,968)
Total equity 341,041,680  323,163,262 
Total liabilities and equity $420,553,835  $450,985,570 


MAMMOTH ENERGY SERVICES, INC.
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
 
 Three Months Ended December 31, Years Ended December 31,
 2016 2015 2016 2015
REVENUE       
Services revenue$23,678,126  $16,900,036  $89,642,899  $172,012,405 
Services revenue - related parties30,732,255  27,113,147  107,599,378  132,674,989 
Product revenue2,345,926  2,647,254  5,433,141  16,732,077 
Product revenue - related parties8,030,404  7,143,975  28,323,303  38,517,222 
Total Revenue64,786,711  53,804,412  230,998,721  359,936,693 
         
COST AND EXPENSES       
Services cost of revenue (1)37,694,866  32,362,906  139,807,987  225,820,450 
Services cost of revenue - related parties 370,861  583,736  5,575,092  4,177,335 
Product cost of revenue (2)2,672,176  3,481,090  7,577,660  25,838,555 
Product cost of revenue - related parties5,805,432   3,695,995  20,589,170  20,510,977 
Selling, general and administrative5,330,070  6,029,563  15,836,165  19,303,557 
Selling, general and administrative - related parties348,303  469,486  894,810  1,237,991 
Depreciation and amortization17,095,045  18,697,618  69,910,858  72,393,882 
Impairment of long-lived assets  6,745,116   1,870,885  12,124,353 
Total cost and expenses69,316,753  72,065,510  262,062,627  381,407,100 
Operating loss(4,530,042) (18,261,098) (31,063,906) (21,470,407)
        
OTHER (EXPENSE) INCOME        
Interest income      98,492 
Interest expense(669,503) (1,108,067) (3,711,457) (5,290,821)
Other, net(199,556) 76,750  252,239  (2,157,764)
Total other expense(869,059) (1,031,317) (3,459,218) (7,350,093)
Loss before income taxes(5,399,101) (19,292,415) (34,523,124) (28,820,500)
Provision (benefit) for income taxes (3)51,145,175  1,088,421  53,884,871  (1,589,086)
Net loss$(56,544,276) $(20,380,836) $(88,407,995) $(27,231,414)
        
OTHER COMPREHENSIVE (LOSS) INCOME       
Foreign currency translation adjustment (4)(604,875) (602,227) 2,710,605  (4,814,819)
Comprehensive loss$(57,149,151) $(20,983,063) $(85,697,390) $(32,046,233)
        
Net loss per share (basic and diluted)$(1.57) $(0.68) $(2.81) $(0.91)
Weighted average number of shares outstanding35,951,087  30,000,000  31,500,000  30,000,000 
        
(1) Exclusive of depreciation and amortization16,046,845  17,613,570  65,705,373  68,053,581 
(2) Exclusive of depreciation and amortization1,010,399  1,047,335  4,072,674  4,193,106 
(3) Inclusive of tax conversion effect53,088,861    53,088,861   
(4) Net of tax1,731,887    1,731,887   


MAMMOTH ENERGY SERVICES, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 Years Ended December 31,
  2016 2015
Cash flows from operating activities   
Net Income (loss)$(88,407,995) $(27,231,414)
Adjustments to reconcile net loss to cash flow provided by operating activities:   
Non cash compensation501,147   
Depreciation and amortization69,910,858  72,393,882 
Amortization of Coil Tubing Strings2,027,752  2,075,787 
Amortization of Debt Origination Costs398,806  398,805 
Bad debt expense1,968,001  3,682,218 
Loss (gain) on disposal of property and equipment(747,896) 1,429,087 
Impairments of long-lived assets1,870,885  12,124,353 
Deferred Taxes47,898,688  (5,717,451)
Changes in assets and liabilities:   
Accounts receivable, net(4,636,428) 27,522,839 
Receivables from related parties(2,415,741) 9,499,181 
Inventories(1,627,179) (2,611,047)
Prepaid expenses and other assets(372,308) 4,086,044 
Accounts payable295,550  (27,633,817)
Payables to related parties(4,578,623) 2,420,581 
Accrued expenses and other current liabilities6,015,365  (4,054,709)
Income taxes payable770  8,277 
Net cash provided by operating activities28,101,652  68,392,616 
    
Cash flows from investing activities:   
Purchases of property and equipment(11,317,909) (26,251,675)
Proceeds from disposal of property and equipment4,022,092  1,416,766 
Net cash used in investing activities(7,295,817) (24,834,909)
    
Cash flows from financing activities:   
Borrowings on long-term debt28,560,000  14,500,000 
Repayments of long-term debt(126,974,820) (70,430,761)
Proceeds from initial public offering105,838,750   
Initial public offering costs(2,764,089)  
Capital distributions  (711)
Net cash (used in) provided by financing activities4,659,841  (55,931,472)
Effect of foreign exchange rate on cash154,237  (226,655)
Net increase (decrease) in cash and cash equivalents25,619,913  (12,600,420)
Cash and cash equivalents at beginning of period3,074,072  15,674,492 
Cash and cash equivalents at end of period$28,693,985  $3,074,072 
    
Supplemental disclosure of cash flow information:   
Cash paid for interest$3,518,623  $5,120,482 
Cash paid for income taxes$3,587,871  $3,888,470 
Supplemental disclosure of non-cash transactions:   
Purchases of property and equipment included in trade accounts payable$2,788,602  $740,555 
        

MAMMOTH ENERGY SERVICES, INC.

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 (loss) income before depreciation and amortization, impairment of long-lived assets, one-time compensation charges associated with the IPO, equity based compensation, interest income, interest expense, other (income) expense, net (which is comprised of the (gain) or loss on disposal of long-lived assets) and 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 because this measure:

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 may not be comparable to similarly titled measures of other companies.

The following tables also provide a reconciliation of Adjusted EBITDA to the GAAP financial measure of (loss) income on a consolidated basis and for each of our operating segments.

Consolidated

 Three Months Ended December 31, Years Ended December 31,
Reconciliation of Adjusted EBITDA to net income (loss):2016 2015 2016 2015
Net loss $(56,544,276) $(20,380,836) $(88,407,995) $ (27,231,414)
Depreciation and amortization17,095,045  18,697,618  69,910,858  72,393,882 
Impairment of long-lived assets  6,745,116  1,870,885  12,124,353 
One-time IPO compensation charges1,200,770    1,200,770   
Equity based compensation519,830    501,147   
Interest income      (98,492)
Interest expense669,503  1,108,067  3,711,457  5,290,821 
Other (income) expense, net199,556  (76,750) (252,239) 2,157,764 
Provision (benefit) for income taxes51,145,175  1,088,421  53,884,871  (1,589,086)
Adjusted EBITDA$14,285,603  $7,181,636  $42,419,754  $63,047,828 

Pressure Pumping Services

 Three Months Ended December 31, Years Ended December 31,
Reconciliation of Adjusted EBITDA to net income (loss):2016 2015 2016 2015
Net income (loss)$248,279  $(3,891,655) $(4,605,494) $(5,579,236)
Depreciation and amortization9,048,810  9,564,380  37,012,902  35,728,715 
Impairment of long-lived assets  305,429  138,587  1,213,885 
One-time IPO compensation charges101,760     101,760   
Equity based compensation176,326    176,326   
Interest expense96,366  312,504  599,147  1,859,195 
Other expense, net1,656  (33,222) 26,743  66,889 
Provision for income taxes  72,435    72,435 
Adjusted EBITDA $9,673,197  $6,329,871  $33,449,971  $33,361,883 

Well Services

 Three Months Ended December 31, Years Ended December 31,
Reconciliation of Adjusted EBITDA to net income (loss):2016 2015 2016  2015
Net loss$(53,059,453) $(3,811,382) $(62,197,372) $(8,483,700)
Depreciation and amortization1,223,955  1,459,394  5,127,879  5,696,547 
Impairment of long-lived assets  88,247  1,384,751  88,247 
One-time IPO compensation charges35,640    35,640   
Equity based compensation61,756    43,073   
Interest expense(44,577) 122,367  134,007  429,061 
Other (income) expense, net106,020  414,501   (565,966) 686,617 
Provision for income taxes50,262,368  4,454  50,265,203  4,454 
Adjusted EBITDA$(1,414,291) $(1,722,419) $(5,772,785) $(1,578,774)

Natural Sand Proppant Production

 Three Months Ended December 31, Years Ended December 31,
Reconciliation of Adjusted EBITDA to net income (loss):2016 2015 2016 2015
Net income (loss)$410,317  $1,366,924  $(564,425) $524,182 
Depreciation and amortization1,011,649  1,049,190  4,078,844  4,200,809 
Impairment of long-lived assets      1,904,981 
One-time IPO compensation charges33,150    33,150   
Equity based compensation57,441    57,441   
Interest income      (98,056)
Interest expense20,610  589  49,518  51,476 
Other (income) expense, net(200) (225,329) 2,321  (88,976)
Provision for income taxes    3,716   
Adjusted EBITDA$1,532,967  $2,191,374  $3,660,565  $6,494,416 

Contract Land and Directional Drilling Services

 Three Months Ended December 31, Years Ended December 31,
Reconciliation of Adjusted EBITDA to net income (loss):2016 2015 2016 2015
Net loss$(6,286,843) $(16,086,602) $(30,366,202) $(30,401,338)
Depreciation and amortization5,268,491  6,106,002  21,512,117  24,626,705 
Impairment of long-lived assets  6,351,440  347,547  8,917,240 
One-time IPO compensation charges963,660    963,660   
Equity based compensation110,307    110,307   
Interest expense555,840  672,636  2,828,753  2,890,130 
Other expense, net67,981  (59,788) 247,620  1,121,093 
Provision (benefit) for income taxes      (184,523)
Adjusted EBITDA$ 679,436  $(3,016,312) $(4,356,198) $6,969,307 

Other Energy Services

 Three Months Ended December 31, Years Ended December 31,
Reconciliation of Adjusted EBITDA to net income (loss):2016 2015 2016 2015
Net income$2,143,424  $2,041,879  $9,325,498  $16,708,678 
Depreciation and amortization542,140  518,652  2,179,116  2,141,106 
One-time IPO compensation charges66,560    66,560   
Equity based compensation114,000    114,000   
Interest income      (436)
Interest expense41,264  (29) 100,032  60,959 
Other expense, net24,099  (172,912) 37,043   372,141 
Provision (benefit) for income taxes882,807  1,011,532  3,615,952  (1,481,452)
Adjusted EBITDA$3,814,294  $3,399,122  $15,438,201  $17,800,996 
                

MAMMOTH ENERGY SERVICES, INC.

HISTORICAL SEGMENT DATA RECAST

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, 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, types of customers.

Based on the CODM's assessment, effective December 31, 2016, the Company reorganized the reportable segments to align with its new management reporting structure and business activities. Prior to this reorganization, the existing 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. As a result of this update, there are five reportable segments for financial reporting purposes as described above. We have conformed our presentation for prior periods to reflect this new segment presentation.

The Company has recast the data from prior periods to reflect these change to conform to the current year presentation. For the presentation below, we have shown the quarterly financial results for the pressure pumping and well services segments and aggregation of the two segments to reflect the completion and production services ("Predecessor").

Year Ended December 31, 2016 (unaudited)

 Pressure Pumping 
 Three Months Ended 
 March 31 ,June 30,September 30,December 31,Total
 2016201620162016 
Revenue from external customers$12,294,529 $5,862,584 $137,626  $3,152,064 $21,446,803 
Revenue from related parties$10,261 $38,219,555 $35,517,708 $29,113,899 $102,861,423 
Cost of revenue$14,260,507 $30,177,248 $ 20,846,016 $21,524,971 $86,808,742 
Selling, general and administrative expenses$526,171 $1,539,371 $916,176 $1,345,881 $4,327,599 
Earnings before other expense (income), interest, depreciation and amortization, impairment and taxes (1)$(2,481,888)$12,365,520 $13,893,142 $9,395,111 $33,171,885 
Other expense (income)$(19,208)$43,033 $1,262 $1,656 $26,743 
Interest expense$237,055 $131,709 $134,017 $96,366 $599,147 
Depreciation and amortization$8,955,217 $9,958,270 $9,050,605 $9,048,810 $37,012,902 
Impairment of long-lived assets$ $138,587 $ $ $138,587 
Loss (income) before income taxes$(11,654,952)$2,093,921 $4,707,258 $248,279 $(4,605,494 )

(1) Includes $101,760 and  $176,326 for one-time IPO compensation charges and equity and share-based compensation, respectively.

 Well Services 
 Three Months Ended 
 March 31,June 30,September 30,December 31,Total
 2016 201620162016 
Revenue from external customers$2,698,592 $1,662,019 $ 2,109,873 $2,686,558 $9,157,042 
Revenue from related parties$ $567,887 $164,855 $135,029 $867,771 
Cost of revenue$3,927,709 $3,034,345 $3,068,159 $3,510,096 $13,540,309 
Selling, general and administrative expenses$573,296 $440,182 $499,346 $823,178 $2,336,002 
Earnings before other expense (income), interest, depreciation and amortization, impairment and taxes (2)$(1,802,413)$(1,244,621)$(1,292,777)$(1,511,687)$(5,851,498)
Other expense (income)$9,400 $(682,545)$1,159 $106,020 $(565,966)
Interest expense$98,319 $50,776 $29,489 $(44,577)$134,007 
Depreciation and amortization$1,397,507 $1,272,715 $1,233,702 $1,223,955 $5,127,879 
Impairment of long-lived assets$ $1,384,751 $ $ $1,384,751 
Loss before income taxes$(3,307,639)$(3,270,318)$(2,557,127)$(2,797,085) $(11,932,169)

(2) Includes $35,640 and  $43,073 for one-time IPO compensation charges and equity and share-based compensation, respectively.

 Well ServicesPressure PumpingPredecessor
 Year Ended December 31, 2016
Revenue from external customers$9,157,042 $21,446,803 $ 30,603,845 
Revenue from related parties$867,771 $102,861,423 $103,729,194 
Cost of revenue$13,540,309 $86,808,742 $100,349,051 
Selling, general and administrative expenses$2,336,002 $4,327,599 $6,663,601 
Earnings before other expense (income), interest, depreciation and amortization, impairment and taxes$(5,851,498)$33,171,885 $27,320,387 
Other expense (income)$(565,966)$26,743 $(539,223)
Interest expense$134,007 $599,147 $733,154 
Depreciation and amortization$5,127,879 $37,012,902 $42,140,781 
Impairment of long-lived assets$1,384,751 $138,587 $1,523,338 
Loss before income taxes$(11,932,169)$(4,605,494)$(16,537,663)

Year Ended December 31, 2015 (unaudited)

 Pressure Pumping 
 Three Months Ended 
 March 31,June 30,September 30,December 31,Total
 2015201520152015 
Revenue from external customers$17,596,477 $18,716,413 $9,192,158 $33,345 $45,538,393 
Revenue from related parties$30,569,072 $37,706,526 $30,547,821 $25,618,874 $124,442,293 
Cost of revenue$36,024,702 $43,175,451 $34,391,032 $18,126,159 $131,717,344 
Selling, general and administrative expenses$1,324,066 $1,271,108 $1,110,096 $1,196,189 $4,901,459 
Earnings before other expense (income), interest, depreciation and amortization, impairment and taxes$10,816,781 $11,976,380 $4,238,851 $6,329,871 $33,361,883 
Other expense (income)$57,666 $5,345 $37,100 $(33,222)$66,889 
Interest expense$690,440 $443,681 $412,570 $312,504  $1,859,195 
Depreciation and amortization$8,571,964 $8,719,860 $8,872,511 $9,564,380 $35,728,715 
Impairment of long-lived assets$ $ $908,456 $305,429 $1,213,885 
Loss (income) before income taxes$1,496,711 $2,807,494 $(5,991,786) $(3,819,220)$(5,506,801)


 Well Services 
 Three Months Ended 
 March 31,June 30,September 30,December 31,Total
 2015 201520152015 
Revenue from external customers$9,405,364 $5,852,653 $7,921,372 $2,955,179 $26,134,568 
Revenue from related parties$812,666 $841,974  $405,734 $656,399 $2,716,773 
Cost of revenue$7,689,145 $6,952,233 $8,769,464 $4,733,589 $28,144,431 
Selling, general and administrative expenses$644,170 $535,478 $505,628 $600,408 $2,285,684 
Earnings before other expense (income), interest, depreciation and amortization, impairment and taxes$1,884,715 $(793,084)$(947,986)$(1,722,419)$(1,578,774)
Other expense (income)$50,538 $157,596 $63,982 $414,501 $686,617 
Interest expense$121,254 $97,050 $88,390 $122,367 $429,061 
Depreciation and amortization$1,444,052 $1,393,847 $1,399,254 $1,459,394 $5,696,547 
Impairment of long-lived assets$ $ $ $88,247 $88,247 
Loss (income) before income taxes$268,871 $(2,441,577)$(2,499,612)$(3,806,928)$(8,479,246)


 Well ServicesPressure PumpingPredecessor
  Year Ended December 31, 2015
Revenue from external customers$26,134,568 $45,538,393 $71,672,961 
Revenue from related parties$2,716,773 $124,442,293 $127,159,066 
Cost of revenue$28,144,431 $131,717,344 $159,861,775 
Selling, general and administrative expenses$2,285,684 $4,901,459 $7,187,143 
Earnings before other expense (income), interest, depreciation and amortization, impairment and taxes$(1,578,774)$33,361,883 $31,783,109 
Other expense (income)$686,617 $66,889 $753,506 
Interest expense$429,061 $1,859,195 $2,288,256 
Depreciation and amortization$5,696,547 $35,728,715 $41,425,262 
Impairment of long-lived assets$88,247 $1,213,885 $1,302,132 
Loss before income taxes$(8,479,246)$(5,506,801)$(13,986,047)
Don Crist

405-608-6048

dcrist@Mammothenergy.com

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Source: Mammoth Energy Services, Inc.

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