Mammoth Energy Services, Inc. Announces Fourth Quarter and Full Year 2020 Operational and Financial Results
Financial Highlights for the Fourth Quarter and Full Year 2020:
Total revenue was
Net loss for the three months ended
Adjusted EBITDA (as defined and reconciled below) was
“The fourth quarter of 2020 clearly shows that Mammoth continues to execute on its transition to an industrial focused company, with approximately 66% of our revenues derived from the industrial sector during the quarter. Given the anticipated demand in the industrial sector, we are well positioned to continue to grow our industrial business rapidly over the coming years. We expect to be ready to ramp up our oilfield service offerings when oilfield demand, pricing and margins strengthen. The recent signing of an agreement by our engineering group allows for significant expansion and brings us one step closer to being a fully integrated Engineering, Procurement and Construction “EPC” company,” commented
Infrastructure Services
Mammoth's infrastructure services division contributed revenue of
The infrastructure segment contributed revenues of
Mammoth had approximately 115 crews operating in the continental
Well Completion Services
Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of
The well completion division contributed revenues (inclusive of inter-segment revenues) of
Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of
The natural sand proppant division contributed revenues (inclusive of inter-segment revenues) of
Drilling Services
Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of
As a result of market conditions, the Company temporarily shut down its contract land drilling operations beginning in
Other Services
Mammoth's other services, including aviation, coil tubing, pressure control, flowback, cementing, acidizing, equipment rentals, crude oil hauling, full service transportation, remote accommodations, equipment manufacturing and infrastructure engineering and design services, contributed revenue (inclusive of inter-segment revenue) of
The Company's other services contributed revenues of
As a result of market conditions, the Company has temporarily shut down its cementing and acidizing operations as well as its flowback operations beginning in
Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses were
Following is a breakout of SG&A expense (in thousands):
Three Months Ended | Years Ended |
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2020 | 2019 | 2020 | 2020 | 2019 | |||||||||||||||
Cash expenses: | |||||||||||||||||||
Compensation and benefits | $ | 3,738 | $ | 3,203 | $ | 3,449 | $ | 14,876 | $ | 19,364 | |||||||||
Professional services | 4,570 | 4,301 | 5,651 | 19,905 | 17,128 | ||||||||||||||
Other(a) | 2,256 | 2,010 | 2,163 | 8,828 | 10,300 | ||||||||||||||
Total cash SG&A expense | 10,564 | 9,514 | 11,263 | 43,609 | 46,792 | ||||||||||||||
Non-cash expenses: | |||||||||||||||||||
Bad debt provision | 19,652 | 204 | 626 | 21,958 | 1,434 | ||||||||||||||
Stock based compensation | 292 | 620 | 291 | 1,618 | 3,326 | ||||||||||||||
Total non-cash SG&A expense | 19,944 | 824 | 917 | 23,576 | 4,760 | ||||||||||||||
Total SG&A expense | $ | 30,508 | $ | 10,338 | $ | 12,180 | $ | 67,185 | $ | 51,552 |
a. Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.
SG&A expenses, as a percentage of total revenue, were 36% for the three months ended
Liquidity
As of
As of
Capital Expenditures
The following table summarizes Mammoth's capital expenditures by operating division for the periods indicated (in thousands):
Three Months Ended | Years Ended |
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2020 | 2019 | 2020 | 2020 | 2019 | |||||||||||||||
Infrastructure services(a) | $ | 37 | $ | — | $ | 178 | $ | 258 | $ | 3,456 | |||||||||
Well completion services(b) | 606 | 398 | 698 | 4,358 | 14,703 | ||||||||||||||
Natural sand proppant services(c) | 4 | 174 | 194 | 1,073 | 2,877 | ||||||||||||||
Drilling services(d) | 234 | 84 | 131 | 432 | 3,156 | ||||||||||||||
Other(e) | 7 | 215 | 324 | 716 | 11,569 | ||||||||||||||
Total capital expenditures | $ | 888 | $ | 871 | $ | 1,525 | $ | 6,837 | $ | 35,761 |
a. Capital expenditures primarily for truck, tooling and other equipment for the periods presented.
b. Capital expenditures primarily for well completion and water transfer equipment for the periods presented.
c. Capital expenditures primarily for maintenance for the periods presented.
d. Capital expenditures primarily for upgrades to the Company's rig fleet for the periods presented.
e. Capital expenditures primarily for equipment for the Company's rental businesses for the periods presented.
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 Reports filed on Form 10-K with the
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.
As of
Conference Call Information
Mammoth will host a conference call on
About
Mammoth is an integrated, growth-oriented energy service company serving companies engaged in the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its energy infrastructure services and the exploration and development of North American onshore unconventional oil and natural gas reserves. Mammoth’s suite of services and products include: infrastructure services, well completion services, natural sand and proppant services, drilling services and other energy 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:
Director of Investor Relations
dcrist@mammothenergy.com
405-608-6048
Media Contact:
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 Mammoth expects, believes or anticipates 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 the Company's 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 the Company's existing operations, experience and perception of historical trends, current conditions, anticipated future developments and their effect on Mammoth, 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, the Company's forward-looking statements are subject to significant risks and uncertainties, including those described in its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings it makes with the
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.
CONSOLIDATED BALANCE SHEETS |
||||||||||
ASSETS | ||||||||||
2020 | 2019 | |||||||||
CURRENT ASSETS | (in thousands) | |||||||||
Cash and cash equivalents | $ | 14,822 | $ | 5,872 | ||||||
Short-term investment | 1,750 | — | ||||||||
Accounts receivable, net | 393,112 | 363,053 | ||||||||
Receivables from related parties | 28,461 | 7,523 | ||||||||
Inventories | 12,020 | 17,483 | ||||||||
Prepaid expenses | 13,825 | 12,354 | ||||||||
Other current assets | 758 | 695 | ||||||||
Total current assets | 464,748 | 406,980 | ||||||||
Property, plant and equipment, net | 251,262 | 352,772 | ||||||||
Sand reserves | 65,876 | 68,351 | ||||||||
Operating lease right-of-use assets | 20,179 | 43,446 | ||||||||
Intangible assets, net - customer relationships | 408 | 583 | ||||||||
Intangible assets, net - trade names | 4,366 | 5,205 | ||||||||
12,608 | 67,581 | |||||||||
Other non-current assets | 5,115 | 7,467 | ||||||||
Total assets | $ | 824,562 | $ | 952,385 | ||||||
LIABILITIES AND EQUITY | ||||||||||
CURRENT LIABILITIES | ||||||||||
Accounts payable | $ | 40,316 | $ | 39,220 | ||||||
Payables to related parties | 3 | 526 | ||||||||
Accrued expenses and other current liabilities | 44,408 | 40,754 | ||||||||
Current operating lease liability | 8,618 | 16,432 | ||||||||
Current portion of long-term debt | 1,165 | — | ||||||||
Income taxes payable | 34,088 | 33,465 | ||||||||
Total current liabilities | 128,598 | 130,397 | ||||||||
Long-term debt | 81,338 | 80,000 | ||||||||
Deferred income tax liabilities | 24,741 | 36,873 | ||||||||
Long-term operating lease liability | 11,377 | 27,102 | ||||||||
Asset retirement obligation | 4,746 | 4,241 | ||||||||
Other liabilities | 10,435 | 5,031 | ||||||||
Total liabilities | 261,235 | 283,644 | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||
EQUITY | ||||||||||
Equity: | ||||||||||
Common stock, |
458 | 451 | ||||||||
Additional paid in capital | 537,039 | 535,094 | ||||||||
Retained earnings | 28,895 | 136,502 | ||||||||
Accumulated other comprehensive loss | (3,065 | ) | (3,306 | ) | ||||||
Total equity | 563,327 | 668,741 | ||||||||
Total liabilities and equity | $ | 824,562 | $ | 952,385 |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||||||||||||||
Three Months Ended | Years Ended |
|||||||||||||||||||||||
2020 | 2019 | 2020 | 2020 | 2019 | ||||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||
Services revenue | $ | 65,079 | $ | 57,950 | $ | 55,279 | $ | 234,081 | $ | 452,594 | ||||||||||||||
Services revenue - related parties | 7,862 | 6,714 | 8,565 | 43,091 | 102,624 | |||||||||||||||||||
Product revenue | 10,234 | 1,724 | 4,815 | 28,404 | 42,105 | |||||||||||||||||||
Product revenue - related parties | 1,875 | 1,249 | 1,875 | 7,500 | 27,689 | |||||||||||||||||||
Total revenue | 85,050 | 67,637 | 70,534 | 313,076 | 625,012 | |||||||||||||||||||
COST AND EXPENSES | ||||||||||||||||||||||||
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of |
51,260 | 68,599 | 41,445 | 205,657 | 451,206 | |||||||||||||||||||
Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of |
90 | 633 | 131 | 418 | 4,770 | |||||||||||||||||||
Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of |
4,083 | 6,337 | 4,353 | 25,946 | 87,812 | |||||||||||||||||||
Selling, general and administrative | 30,364 | 9,978 | 11,979 | 66,427 | 49,705 | |||||||||||||||||||
Selling, general and administrative - related parties | 144 | 360 | 201 | 758 | 1,847 | |||||||||||||||||||
Depreciation, depletion, amortization and accretion | 22,187 | 28,521 | 23,132 | 95,317 | 117,033 | |||||||||||||||||||
Impairment of goodwill | — | 30,470 | — | 54,973 | 33,664 | |||||||||||||||||||
Impairment of other long-lived assets | — | 4,010 | — | 12,897 | 7,358 | |||||||||||||||||||
Total cost and expenses | 108,128 | 148,908 | 81,241 | 462,393 | 753,395 | |||||||||||||||||||
Operating loss | (23,078 | ) | (81,271 | ) | (10,707 | ) | (149,317 | ) | (128,383 | ) | ||||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||||||||||
Interest expense, net | (1,191 | ) | (1,486 | ) | (1,098 | ) | (5,397 | ) | (4,958 | ) | ||||||||||||||
Other, net | 9,559 | 7,272 | 7,943 | 33,048 | 42,216 | |||||||||||||||||||
Other, net - related parties | (341 | ) | — | 1,099 | 1,890 | — | ||||||||||||||||||
Total other income | 8,027 | 5,786 | 7,944 | 29,541 | 37,258 | |||||||||||||||||||
Loss before income taxes | (15,051 | ) | (75,485 | ) | (2,763 | ) | (119,776 | ) | (91,125 | ) | ||||||||||||||
Benefit for income taxes | (3,190 | ) | (14,706 | ) | (6,193 | ) | (12,169 | ) | (12,081 | ) | ||||||||||||||
Net (loss) income | $ | (11,861 | ) | $ | (60,779 | ) | $ | 3,430 | $ | (107,607 | ) | $ | (79,044 | ) | ||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax of ( |
663 | (213 | ) | 324 | 241 | 775 | ||||||||||||||||||
Comprehensive (loss) income | $ | (11,198 | ) | $ | (60,992 | ) | $ | 3,754 | $ | (107,366 | ) | $ | (78,269 | ) | ||||||||||
Net (loss) income per share (basic) | $ | (0.26 | ) | $ | (1.35 | ) | $ | 0.07 | $ | (2.36 | ) | $ | (1.76 | ) | ||||||||||
Net (loss) income per share (diluted) | $ | (0.26 | ) | $ | (1.35 | ) | $ | 0.07 | $ | (2.36 | ) | $ | (1.76 | ) | ||||||||||
Weighted average number of shares outstanding (basic) | 45,769 | 45,092 | 45,764 | 45,644 | 45,011 | |||||||||||||||||||
Weighted average number of shares outstanding (diluted) | 45,769 | 45,092 | 46,571 | 45,644 | 45,011 | |||||||||||||||||||
Dividends declared per share | $ | — | $ | — | $ | — | $ | — | $ | 0.25 |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
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Years Ended |
|||||||||
2020 | 2019 | ||||||||
(in thousands) | |||||||||
Cash flows from operating activities: | |||||||||
Net loss | $ | (107,607 | ) | $ | (79,044 | ) | |||
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | |||||||||
Stock based compensation | 1,952 | 4,177 | |||||||
Depreciation, depletion, accretion and amortization | 95,317 | 117,033 | |||||||
Amortization of coil tubing strings | 359 | 1,641 | |||||||
Amortization of debt origination costs | 831 | 326 | |||||||
Bad debt expense | 21,958 | 1,434 | |||||||
(Gain) loss on disposal of property and equipment | (1,379 | ) | 55 | ||||||
Impairment of goodwill | 54,973 | 33,664 | |||||||
Impairment of other long-lived assets | 12,897 | 7,358 | |||||||
Inventory obsolescence | — | 1,349 | |||||||
Deferred income taxes | (12,186 | ) | (42,639 | ) | |||||
Other | (143 | ) | (986 | ) | |||||
Changes in assets and liabilities: | |||||||||
Accounts receivable, net | (32,621 | ) | (27,006 | ) | |||||
Receivables from related parties | (40,333 | ) | 3,641 | ||||||
Inventories | 5,103 | 830 | |||||||
Prepaid expenses and other assets | 1,996 | (1,040 | ) | ||||||
Accounts payable | 2,526 | (25,968 | ) | ||||||
Payables to related parties | (522 | ) | 156 | ||||||
Accrued expenses and other liabilities | 3,198 | (18,800 | ) | ||||||
Income taxes payable | 648 | (71,499 | ) | ||||||
Net cash provided by (used in) operating activities | 6,967 | (95,318 | ) | ||||||
Cash flows from investing activities: | |||||||||
Purchases of property and equipment | (6,761 | ) | (35,417 | ) | |||||
Purchases of property and equipment from related parties | (76 | ) | (344 | ) | |||||
Contributions to equity investee | (490 | ) | (680 | ) | |||||
Proceeds from disposal of property and equipment | 6,782 | 3,217 | |||||||
Purchase of short-term investment | (1,750 | ) | — | ||||||
Net cash used in investing activities | (2,295 | ) | (33,224 | ) | |||||
Cash flows from financing activities: | |||||||||
Borrowings from lines of credit | 35,351 | 156,000 | |||||||
Repayments of lines of credit | (32,800 | ) | (76,000 | ) | |||||
Proceeds from sale leaseback transaction | 5,000 | — | |||||||
Payments on sale leaseback transaction | (268 | ) | — | ||||||
Dividends paid | — | (11,219 | ) | ||||||
Principal payments on financing leases and equipment financing notes | (1,966 | ) | (2,079 | ) | |||||
Debt issuance costs | (1,051 | ) | — | ||||||
Net cash provided by financing activities | 4,266 | 66,702 | |||||||
Effect of foreign exchange rate on cash | 12 | 87 | |||||||
Net change in cash and cash equivalents | 8,950 | (61,753 | ) | ||||||
Cash and cash equivalents at beginning of period | 5,872 | 67,625 | |||||||
Cash and cash equivalents at end of period | $ | 14,822 | $ | 5,872 | |||||
Supplemental disclosure of cash flow information: | |||||||||
Cash paid for interest | $ | 4,729 | $ | 4,741 | |||||
Cash (recovered) paid for income taxes | $ | (617 | ) | $ | 110,848 | ||||
Supplemental disclosure of non-cash transactions: | |||||||||
Purchases of property and equipment included in accounts payable | $ | 1,312 | $ | 2,303 | |||||
Right-of-use assets obtained for financing lease liabilities | $ | 2,431 | $ | 3,721 |
SEGMENT INCOME STATEMENTS (in thousands) |
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Three months ended |
Infrastructure | Well Completion | Sand | Drilling | All Other | Eliminations | Total | |||||||||||||||||||||
Revenue from external customers | $ | 55,934 | $ | 12,653 | $ | 11,843 | $ | 580 | $ | 4,040 | $ | — | $ | 85,050 | ||||||||||||||
Intersegment revenues | — | 44 | — | 23 | 670 | (737 | ) | — | ||||||||||||||||||||
Total revenue | 55,934 | 12,697 | 11,843 | 603 | 4,710 | (737 | ) | 85,050 | ||||||||||||||||||||
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 41,265 | 5,194 | 4,110 | 1,165 | 3,699 | — | 55,433 | |||||||||||||||||||||
Intersegment cost of revenues | 127 | 426 | — | — | 184 | (737 | ) | — | ||||||||||||||||||||
Total cost of revenue | 41,392 | 5,620 | 4,110 | 1,165 | 3,883 | (737 | ) | 55,433 | ||||||||||||||||||||
Selling, general and administrative | 7,057 | 17,691 | 4,070 | 373 | 1,317 | — | 30,508 | |||||||||||||||||||||
Depreciation, depletion, amortization and accretion | 6,957 | 7,066 | 2,390 | 2,224 | 3,550 | — | 22,187 | |||||||||||||||||||||
Operating income (loss) | 528 | (17,680 | ) | 1,273 | (3,159 | ) | (4,040 | ) | — | (23,078 | ) | |||||||||||||||||
Interest expense, net | 685 | 273 | 95 | 5 | 133 | — | 1,191 | |||||||||||||||||||||
Other (income) expense, net | (8,355 | ) | 170 | 86 | 23 | (1,142 | ) | — | (9,218 | ) | ||||||||||||||||||
Income (loss) before income taxes | $ | 8,198 | $ | (18,123 | ) | $ | 1,092 | $ | (3,187 | ) | $ | (3,031 | ) | $ | — | $ | (15,051 | ) |
Three months ended |
Infrastructure | Well Completion | Sand | Drilling | All Other | Eliminations | Total | |||||||||||||||||||||
Revenue from external customers | $ | 25,601 | $ | 24,515 | $ | 2,946 | $ | 4,637 | $ | 9,938 | $ | — | $ | 67,637 | ||||||||||||||
Intersegment revenues | — | 414 | — | 14 | 407 | (835 | ) | — | ||||||||||||||||||||
Total revenue | 25,601 | 24,929 | 2,946 | 4,651 | 10,345 | (835 | ) | 67,637 | ||||||||||||||||||||
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 29,925 | 20,354 | 6,162 | 6,927 | 12,201 | — | 75,569 | |||||||||||||||||||||
Intersegment cost of revenues | — | 339 | — | 206 | 290 | (835 | ) | — | ||||||||||||||||||||
Total cost of revenue | 29,925 | 20,693 | 6,162 | 7,133 | 12,491 | (835 | ) | 75,569 | ||||||||||||||||||||
Selling, general and administrative | 5,097 | 1,428 | 792 | 1,063 | 1,958 | — | 10,338 | |||||||||||||||||||||
Depreciation, depletion, amortization and accretion | 7,662 | 9,985 | 2,628 | 3,361 | 4,885 | — | 28,521 | |||||||||||||||||||||
Impairment of goodwill | — | 23,423 | 2,684 | — | 4,363 | — | 30,470 | |||||||||||||||||||||
Impairment of other long-lived assets | — | — | — | 2,955 | 1,055 | — | 4,010 | |||||||||||||||||||||
Operating loss | (17,083 | ) | (30,600 | ) | (9,320 | ) | (9,861 | ) | (14,407 | ) | — | (81,271 | ) | |||||||||||||||
Interest expense, net | 660 | 304 | 48 | 217 | 257 | — | 1,486 | |||||||||||||||||||||
Other (income) expense, net | (7,236 | ) | 574 | — | 14 | (624 | ) | — | (7,272 | ) | ||||||||||||||||||
Loss before income taxes | $ | (10,507 | ) | $ | (31,478 | ) | $ | (9,368 | ) | $ | (10,092 | ) | $ | (14,040 | ) | $ | — | $ | (75,485 | ) |
Three months ended |
Infrastructure | Well Completion | Sand | Drilling | All Other | Eliminations | Total | |||||||||||||||||||||
Revenue from external customers | $ | 43,582 | $ | 15,738 | $ | 6,031 | $ | 1,193 | $ | 3,990 | $ | — | $ | 70,534 | ||||||||||||||
Intersegment revenues | — | 27 | — | 11 | 687 | (725 | ) | — | ||||||||||||||||||||
Total revenue | 43,582 | 15,765 | 6,031 | 1,204 | 4,677 | (725 | ) | 70,534 | ||||||||||||||||||||
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 28,883 | 6,510 | 4,154 | 1,955 | 4,427 | — | 45,929 | |||||||||||||||||||||
Intersegment cost of revenues | 162 | 449 | — | — | 114 | (725 | ) | — | ||||||||||||||||||||
Total cost of revenue | 29,045 | 6,959 | 4,154 | 1,955 | 4,541 | (725 | ) | 45,929 | ||||||||||||||||||||
Selling, general and administrative | 7,227 | 1,721 | 1,056 | 382 | 1,794 | — | 12,180 | |||||||||||||||||||||
Depreciation, depletion, amortization and accretion | 7,294 | 7,189 | 2,700 | 2,294 | 3,655 | — | 23,132 | |||||||||||||||||||||
Operating income (loss) | 16 | (104 | ) | (1,879 | ) | (3,427 | ) | (5,313 | ) | — | (10,707 | ) | ||||||||||||||||
Interest expense, net | 623 | 253 | 70 | 60 | 92 | — | 1,098 | |||||||||||||||||||||
Other (income) expense, net | (8,375 | ) | (1,156 | ) | 1,792 | 20 | (1,323 | ) | — | (9,042 | ) | |||||||||||||||||
Income (loss) before income taxes | $ | 7,768 | $ | 799 | $ | (3,741 | ) | $ | (3,507 | ) | $ | (4,082 | ) | $ | — | $ | (2,763 | ) |
Year ended |
Infrastructure | Well Completion | Sand | Drilling | All Other | Eliminations | Total | |||||||||||||||||||||
Revenue from external customers | $ | 155,241 | $ | 87,201 | $ | 34,265 | $ | 7,746 | $ | 28,623 | $ | — | $ | 313,076 | ||||||||||||||
Intersegment revenues | — | 1,124 | 95 | 39 | 2,716 | (3,974 | ) | — | ||||||||||||||||||||
Total revenue | 155,241 | 88,325 | 34,360 | 7,785 | 31,339 | (3,974 | ) | 313,076 | ||||||||||||||||||||
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 122,046 | 45,647 | 25,955 | 10,757 | 27,616 | — | 232,021 | |||||||||||||||||||||
Intersegment cost of revenues | 323 | 1,836 | — | 152 | 1,663 | (3,974 | ) | — | ||||||||||||||||||||
Total cost of revenue | 122,369 | 47,483 | 25,955 | 10,909 | 29,279 | (3,974 | ) | 232,021 | ||||||||||||||||||||
Selling, general and administrative | 26,058 | 23,039 | 7,807 | 3,149 | 7,132 | — | 67,185 | |||||||||||||||||||||
Depreciation, depletion, amortization and accretion | 29,373 | 30,411 | 9,771 | 10,039 | 15,723 | — | 95,317 | |||||||||||||||||||||
Impairment of goodwill | — | 53,406 | — | — | 1,567 | — | 54,973 | |||||||||||||||||||||
Impairment of other long-lived assets | — | 4,203 | — | 326 | 8,368 | — | 12,897 | |||||||||||||||||||||
Operating loss | (22,559 | ) | (70,217 | ) | (9,173 | ) | (16,638 | ) | (30,730 | ) | — | (149,317 | ) | |||||||||||||||
Interest expense, net | 2,775 | 1,130 | 312 | 454 | 726 | — | 5,397 | |||||||||||||||||||||
Other (income) expense, net | (32,437 | ) | (2,274 | ) | 1,839 | (227 | ) | (1,839 | ) | — | (34,938 | ) | ||||||||||||||||
Income (loss) before income taxes | $ | 7,103 | $ | (69,073 | ) | $ | (11,324 | ) | $ | (16,865 | ) | $ | (29,617 | ) | $ | — | $ | (119,776 | ) |
Year ended |
Infrastructure | Well Completion | Sand | Drilling | All Other | Eliminations | Total | |||||||||||||||||||||
Revenue from external customers | $ | 210,691 | $ | 241,951 | $ | 67,267 | $ | 31,728 | $ | 73,375 | $ | — | $ | 625,012 | ||||||||||||||
Intersegment revenues | 2,573 | 1,851 | 29,796 | 236 | 15,232 | (49,688 | ) | — | ||||||||||||||||||||
Total revenue | 213,264 | 243,802 | 97,063 | 31,964 | 88,607 | (49,688 | ) | 625,012 | ||||||||||||||||||||
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 160,449 | 174,816 | 87,637 | 35,925 | 84,961 | — | 543,788 | |||||||||||||||||||||
Intersegment cost of revenues | 12,820 | 31,727 | 15 | 1,028 | 4,158 | (49,748 | ) | — | ||||||||||||||||||||
Total cost of revenue | 173,269 | 206,543 | 87,652 | 36,953 | 89,119 | (49,748 | ) | 543,788 | ||||||||||||||||||||
Selling, general and administrative | 23,235 | 10,889 | 5,006 | 4,177 | 8,245 | — | 51,552 | |||||||||||||||||||||
Depreciation, depletion, amortization and accretion | 30,349 | 40,159 | 14,050 | 13,143 | 19,332 | — | 117,033 | |||||||||||||||||||||
Impairment of goodwill | — | 23,423 | 2,684 | — | 7,557 | — | 33,664 | |||||||||||||||||||||
Impairment of other long-lived assets | — | — | — | 2,955 | 4,403 | — | 7,358 | |||||||||||||||||||||
Operating loss | (13,589 | ) | (37,212 | ) | (12,329 | ) | (25,264 | ) | (40,049 | ) | 60 | (128,383 | ) | |||||||||||||||
Interest expense, net | 1,674 | 1,228 | 193 | 862 | 1,001 | — | 4,958 | |||||||||||||||||||||
Other (income) expense, net | (41,949 | ) | 580 | 67 | (9 | ) | (905 | ) | — | (42,216 | ) | |||||||||||||||||
Income (loss) before income taxes | $ | 26,686 | $ | (39,020 | ) | $ | (12,589 | ) | $ | (26,117 | ) | $ | (40,145 | ) | $ | 60 | $ | (91,125 | ) |
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 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 goodwill, impairment of other long-lived assets, inventory obsolescence charges, acquisition related costs, stock based compensation, interest expense, net, other (income) expense, net (which is comprised of the (gain) or loss on disposal of long-lived assets and interest on trade accounts receivable) and provision (benefit) for income taxes, further adjusted to add back interest on trade accounts receivable. 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. 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 | Years Ended |
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Reconciliation of Adjusted EBITDA to net (loss) income: | 2020 | 2019 | 2020 | 2020 | 2019 | |||||||||||||||||||
Net (loss) income | $ | (11,861 | ) | $ | (60,779 | ) | $ | 3,430 | $ | (107,607 | ) | $ | (79,044 | ) | ||||||||||
Depreciation, depletion, amortization and accretion expense | 22,187 | 28,521 | 23,132 | 95,317 | 117,033 | |||||||||||||||||||
Impairment of goodwill | — | 30,470 | — | 54,973 | 33,664 | |||||||||||||||||||
Impairment of other long-lived assets | — | 4,010 | — | 12,897 | 7,358 | |||||||||||||||||||
Inventory obsolescence charges | — | — | — | — | 1,349 | |||||||||||||||||||
Acquisition related costs | — | — | — | — | 45 | |||||||||||||||||||
Stock based compensation | 354 | 811 | 353 | 1,952 | 4,177 | |||||||||||||||||||
Interest expense, net | 1,191 | 1,486 | 1,098 | 5,397 | 4,958 | |||||||||||||||||||
Other income, net | (9,218 | ) | (7,272 | ) | (9,042 | ) | (34,938 | ) | (42,216 | ) | ||||||||||||||
Benefit for income taxes | (3,190 | ) | (14,706 | ) | (6,193 | ) | (12,169 | ) | (12,081 | ) | ||||||||||||||
Interest on trade accounts receivable | 8,077 | 7,174 | 9,285 | 34,130 | 42,040 | |||||||||||||||||||
Adjusted EBITDA | $ | 7,540 | $ | (10,285 | ) | $ | 22,063 | $ | 49,952 | $ | 77,283 |
Infrastructure Services
Three Months Ended | Years Ended |
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Reconciliation of Adjusted EBITDA to net income (loss): | 2020 | 2019 | 2020 | 2020 | 2019 | |||||||||||||||||||
Net income (loss) | $ | 6,150 | $ | (13,161 | ) | $ | 6,122 | $ | (30 | ) | $ | 18,778 | ||||||||||||
Depreciation and amortization expense | 6,957 | 7,662 | 7,294 | 29,373 | 30,349 | |||||||||||||||||||
Acquisition related costs | — | — | — | — | 12 | |||||||||||||||||||
Stock based compensation | 156 | 175 | 139 | 580 | 822 | |||||||||||||||||||
Interest expense | 685 | 660 | 623 | 2,775 | 1,674 | |||||||||||||||||||
Other income, net | (8,355 | ) | (7,236 | ) | (8,375 | ) | (32,437 | ) | (41,949 | ) | ||||||||||||||
Provision for income taxes | 2,048 | 2,654 | 1,646 | 7,133 | 7,908 | |||||||||||||||||||
Interest on trade accounts receivable | 8,418 | 7,174 | 8,170 | 32,214 | 42,040 | |||||||||||||||||||
Adjusted EBITDA | $ | 16,059 | $ | (2,072 | ) | $ | 15,619 | $ | 39,608 | $ | 59,634 |
Well Completion Services
Three Months Ended | Years Ended |
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Reconciliation of Adjusted EBITDA to net (loss) income: | 2020 | 2019 | 2020 | 2020 | 2019 | |||||||||||||||||||
Net (loss) income | $ | (18,123 | ) | $ | (31,478 | ) | $ | 799 | $ | (69,073 | ) | $ | (39,020 | ) | ||||||||||
Depreciation and amortization expense | 7,066 | 9,985 | 7,189 | 30,411 | 40,159 | |||||||||||||||||||
Impairment of goodwill | — | 23,423 | — | 53,406 | 23,423 | |||||||||||||||||||
Impairment of other long-lived assets | — | — | — | 4,203 | — | |||||||||||||||||||
Acquisition related costs | — | — | — | — | 18 | |||||||||||||||||||
Stock based compensation | 70 | 296 | 76 | 527 | 1,693 | |||||||||||||||||||
Interest expense | 273 | 304 | 253 | 1,130 | 1,228 | |||||||||||||||||||
Other expense (income), net | 170 | 574 | (1,156 | ) | (2,274 | ) | 580 | |||||||||||||||||
Interest on trade accounts receivable | (318 | ) | — | 1,073 | 1,888 | — | ||||||||||||||||||
Adjusted EBITDA | $ | (10,862 | ) | $ | 3,104 | $ | 8,234 | $ | 20,218 | $ | 28,081 |
Natural Sand Proppant Services
Three Months Ended | Years Ended |
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Reconciliation of Adjusted EBITDA to net income (loss): | 2020 | 2019 | 2020 | 2020 | 2019 | |||||||||||||||||||
Net income (loss) | $ | 1,092 | $ | (9,368 | ) | $ | (3,741 | ) | $ | (11,324 | ) | $ | (12,589 | ) | ||||||||||
Depreciation, depletion, amortization and accretion expense | 2,390 | 2,628 | 2,700 | 9,771 | 14,050 | |||||||||||||||||||
Impairment of goodwill | — | 2,684 | — | — | 2,684 | |||||||||||||||||||
Acquisition related costs | — | — | — | — | 8 | |||||||||||||||||||
Stock based compensation | 70 | 156 | 77 | 425 | 812 | |||||||||||||||||||
Interest expense | 95 | 48 | 70 | 312 | 193 | |||||||||||||||||||
Other expense, net | 86 | — | 1,792 | 1,839 | 67 | |||||||||||||||||||
Interest on trade accounts receivable | (23 | ) | — | 26 | 3 | — | ||||||||||||||||||
Adjusted EBITDA | $ | 3,710 | $ | (3,852 | ) | $ | 924 | $ | 1,026 | $ | 5,225 |
Drilling Services
Three Months Ended | Years Ended |
|||||||||||||||||||||||
Reconciliation of Adjusted EBITDA to net loss: | 2020 | 2019 | 2020 | 2020 | 2019 | |||||||||||||||||||
Net loss | $ | (3,187 | ) | $ | (10,092 | ) | $ | (3,507 | ) | $ | (16,865 | ) | $ | (26,117 | ) | |||||||||
Depreciation expense | 2,224 | 3,361 | 2,294 | 10,039 | 13,143 | |||||||||||||||||||
Impairment of other long-lived assets | — | 2,955 | — | 326 | 2,955 | |||||||||||||||||||
Acquisition related costs | — | — | — | — | 2 | |||||||||||||||||||
Stock based compensation | 36 | 82 | 38 | 203 | 361 | |||||||||||||||||||
Interest expense | 5 | 217 | 60 | 454 | 862 | |||||||||||||||||||
Other expense (income), net | 23 | 14 | 20 | (227 | ) | (9 | ) | |||||||||||||||||
Adjusted EBITDA | $ | (899 | ) | $ | (3,463 | ) | $ | (1,095 | ) | $ | (6,070 | ) | $ | (8,803 | ) |
Other Services(a)
Three Months Ended | Years Ended |
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Reconciliation of Adjusted EBITDA to net income (loss): | 2020 | 2019 | 2020 | 2020 | 2019 | |||||||||||||||||||
Net income (loss) | $ | 2,207 | $ | 3,320 | $ | 3,757 | $ | (10,315 | ) | $ | (20,156 | ) | ||||||||||||
Depreciation, amortization and accretion expense | 3,550 | 4,885 | 3,655 | 15,723 | 19,332 | |||||||||||||||||||
Impairment of goodwill | — | 4,363 | — | 1,567 | 7,557 | |||||||||||||||||||
Impairment of other long-lived assets | — | 1,055 | — | 8,368 | 4,403 | |||||||||||||||||||
Inventory obsolescence charges | — | — | — | — | 1,349 | |||||||||||||||||||
Acquisition related costs | — | — | — | — | 5 | |||||||||||||||||||
Stock based compensation | 22 | 102 | 23 | 217 | 489 | |||||||||||||||||||
Interest expense, net | 133 | 257 | 92 | 726 | 1,001 | |||||||||||||||||||
Other income, net | (1,142 | ) | (624 | ) | (1,323 | ) | (1,839 | ) | (905 | ) | ||||||||||||||
Benefit for income taxes | (5,238 | ) | (17,360 | ) | (7,839 | ) | (19,302 | ) | (19,989 | ) | ||||||||||||||
Interest on trade accounts receivable | — | — | 16 | 25 | — | |||||||||||||||||||
Adjusted EBITDA | $ | (468 | ) | $ | (4,002 | ) | $ | (1,619 | ) | $ | (4,830 | ) | $ | (6,914 | ) |
a. | Includes results for Mammoth's aviation, coil tubing, pressure control, flowback, cementing, acidizing, equipment rentals, crude oil hauling, full service transportation and remote accommodations, equipment manufacturing and infrastructure engineering and design services and corporate related activities. The Company's corporate related activities do not generate revenue. |
Adjusted Net (Loss) Income and Adjusted (Loss) Earnings per Share
Adjusted net (loss) income and adjusted basic and diluted (loss) earnings per share are supplemental non-GAAP financial measures that are used by management to evaluate the Company's operating and financial performance. Management believes these measures provide meaningful information about the Company's performance by excluding certain non-cash charges, such as impairment of goodwill and impairment of other long-lived assets, that may not be indicative of the Company's ongoing operating results. Adjusted net (loss) income and adjusted (loss) earnings per share should not be considered in isolation or as a substitute for net (loss) income and (loss) earnings per share prepared in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. The following tables provide a reconciliation of adjusted net (loss) income and adjusted (loss) earnings per share to the GAAP financial measures of net (loss) income and (loss) earnings per share for the periods specified.
Three Months Ended | Years Ended |
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2020 | 2019 | 2020 | 2020 | 2019 | |||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||||
Net (loss) income, as reported | $ | (11,861 | ) | $ | (60,779 | ) | $ | 3,430 | $ | (107,607 | ) | $ | (79,044 | ) | |||||||||
Impairment of goodwill | — | 30,470 | — | 54,973 | 33,664 | ||||||||||||||||||
Impairment of other long-lived assets | — | 4,010 | — | 12,897 | 7,358 | ||||||||||||||||||
Adjusted net (loss) income | $ | (11,861 | ) | $ | (26,299 | ) | $ | 3,430 | $ | (39,737 | ) | $ | (38,022 | ) | |||||||||
Basic (loss) earnings per share, as reported | $ | (0.26 | ) | $ | (1.35 | ) | $ | 0.07 | $ | (2.36 | ) | $ | (1.76 | ) | |||||||||
Impairment of goodwill | — | 0.68 | — | 1.20 | 0.75 | ||||||||||||||||||
Impairment of other long-lived assets | — | 0.09 | — | 0.28 | 0.16 | ||||||||||||||||||
Adjusted basic (loss) earnings per share | $ | (0.26 | ) | $ | (0.58 | ) | $ | 0.07 | $ | (0.88 | ) | $ | (0.85 | ) | |||||||||
Diluted (loss) earnings per share, as reported | $ | (0.26 | ) | $ | (1.35 | ) | $ | 0.07 | $ | (2.36 | ) | $ | (1.76 | ) | |||||||||
Impairment of goodwill | — | 0.68 | — | 1.20 | 0.75 | ||||||||||||||||||
Impairment of other long-lived assets | — | 0.09 | — | 0.28 | 0.16 | ||||||||||||||||||
Adjusted diluted (loss) earnings per share | $ | (0.26 | ) | $ | (0.58 | ) | $ | 0.07 | $ | (0.88 | ) | $ | (0.85 | ) |
Source: Mammoth Energy Services, Inc.