Press Release Details

Mammoth Energy Services, Inc. Announces Second Quarter 2021 Operational and Financial Results

July 30, 2021 at 6:00 AM EDT

OKLAHOMA CITY, July 30, 2021 (GLOBE NEWSWIRE) -- Mammoth Energy Services, Inc. (“Mammoth” or the “Company”) (NASDAQ: TUSK) today reported financial and operational results for the second quarter ended June 30, 2021.

Financial Overview for the Second Quarter 2021:

Total revenue was $47.4 million for the second quarter of 2021, as compared to $60.1 million for the same quarter last year and $66.8 million for the first quarter of 2021.

Net loss for the second quarter of 2021 was $34.8 million, or a $0.75 loss per share, as compared to a net loss of $15.2 million, or a $0.33 loss per share, for the same quarter last year, and a net loss of $12.4 million, or a $0.27 loss per share, for the first quarter of 2021.

Adjusted EBITDA (as defined and reconciled below) was ($5.5) million for the second quarter of 2021, as compared to $6.9 million for the same quarter last year and $6.4 million for the first quarter of 2021.

Arty Straehla, Chief Executive Officer of Mammoth commented, “While second quarter results did not meet expectations, internally we remain focused on improving near-term results as we continue migrating the Company further into the infrastructure space to enhance long-term growth and sustainability. In our energy businesses, improved commodities pricing is generating some positive industry movement and increased equipment utilization as we are ramping up to put a second hydraulic fracturing fleet to work in mid-August. We are also beginning to experience increased market activity in our sand business.”

“In the infrastructure space, improving macro trends related to increased project bidding levels and funding capacity in the sector persists. We continue to pursue opportunities within this sector as we strategically structure our service offerings for growth, both the geographic footprint and depth of projects.”

Straehla continued, “Lastly, we are continuing our efforts to collect our receivable from PREPA for work performed by our subsidiary Cobra in Puerto Rico. We believe that published documentation to date continues to show that our team performed a difficult job in a difficult environment to save lives and aid the people of Puerto Rico in their time of need.”

Infrastructure Services
Mammoth's infrastructure services division contributed revenue (inclusive of inter-segment revenue) of $17.2 million, or approximately 36% of Mammoth's total revenue, for the second quarter of 2021, as compared to $30.2 million for the same quarter last year and $29.3 million for the first quarter of 2021. The decrease in revenue compared to the same quarter of 2020 and first quarter of 2021 is primarily due to management and crew turnover.

Well Completion Services
Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $17.4 million on 520 stages for the second quarter of 2021, as compared to $16.5 million on 658 stages for the same quarter last year and $23.0 million on 445 stages for the first quarter of 2021. On average, 0.9 of the Company's fleets were active for the second quarter, compared to an average utilization of 1.9 fleets during the same quarter last year and an average utilization of 0.9 fleets during the first quarter of 2021.
  
Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $6.9 million for the second quarter of 2021, as compared to $6.2 million for the same quarter last year and $8.7 million for the first quarter of 2021. In the second quarter of 2021, the Company sold approximately 255,000 tons of sand at an average sales price of $15.80 per ton, as compared to sales of approximately 82,000 tons of sand at an average sales price of $15.18 per ton during the same quarter last year. In the first quarter of 2021, sales were approximately 171,000 tons of sand at an average price of $16.83 per ton.

Drilling Services
Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $1.1 million for the second quarter of 2021, as compared to $1.2 million for the same quarter last year and $0.9 million for the first quarter of 2021.

As a result of market conditions, the Company has temporarily shut down its contract land drilling operations beginning in December 2019 and its rig hauling operations beginning in April 2020.

Other Services
Mammoth's other services, including aviation, coil tubing, pressure control, 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 $5.5 million for the second quarter of 2021, as compared to $6.8 million for the same quarter last year and $5.7 million for the first quarter of 2021.

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 July 2019 and its coil tubing and full service transportation operations beginning in July 2020.

Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses were $12.0 million for the second quarter of 2021, as compared to $13.7 million for the same quarter last year and $20.8 million for the first quarter of 2021.

Following is a breakout of SG&A expense (in thousands):

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,
  2021   2020   2021   2021   2020
Cash expenses:                  
Compensation and benefits $ 3,333      $ 3,720      $ 4,694      $ 8,027      $ 7,690   
Professional services 5,806      6,147      3,405      9,211      9,684   
Other(a) 2,464      2,100      2,342      4,806      4,409   
Total cash SG&A expense 11,603      11,967      10,441      22,044      21,783   
Non-cash expenses:                  
Bad debt provision 76      1,624      10,125      10,201      1,679   
Stock based compensation 304      135      282      586      1,035   
Total non-cash SG&A expense 380      1,759      10,407      10,787      2,714   
Total SG&A expense $ 11,983      $ 13,726      $ 20,848      $ 32,831      $ 24,497   
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 25% for the second quarter of 2021, as compared to 23% for the same quarter last year and 31% for the first quarter of 2021. The bad debt provision for the first quarter of 2021 includes $10.0 million related to the voluntary petitions for relief filed on November 13, 2020, by Gulfport Energy Corporation and its subsidiaries.

Liquidity
As of June 30, 2021, Mammoth had cash on hand of $11.0 million, outstanding borrowings under its revolving credit facility of $60.2 million and $51.1 million of available borrowing capacity under its revolving credit facility, after giving effect to $13.0 million of outstanding letters of credit. As of June 30, 2021, Mammoth had total liquidity of $62.1 million.

As of July 27, 2021, Mammoth had cash on hand of $13.7 million, outstanding borrowings under its revolving credit facility of $61.4 million and $49.8 million of available borrowing capacity under its revolving credit facility, after giving effect to $13.0 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   Six Months Ended
  June 30,   March 31,   June 30,
  2021   2020   2021   2021   2020
Infrastructure services(a) $ 104     $ 43     $ 189     $ 293     $ 43  
Well completion services(b) 388     2,450     412     800     3,054  
Natural sand proppant services(c) 5     354     408     413     875  
Drilling services(d) 1     67     37     38     67  
Other(e) 63     10     102     165     385  
Total capital expenditures $ 561     $ 2,924     $ 1,148     $ 1,709     $ 4,424  
a.  Capital expenditures primarily for tooling and other equipment for the periods presented.
b.  Capital expenditures primarily for upgrades to our pressure pumping fleet to reduce greenhouse gas emissions and water transfer equipment for the periods presented.
c.   Capital expenditures primarily for maintenance for the periods presented.
d.   Capital expenditures primarily for maintenance for the periods presented.
e.   Capital expenditures primarily for equipment for the Company's rental businesses for the periods presented.

Conference Call Information
Mammoth will host a conference call on Friday, July 30, 2021 at 8:00 a.m. CDT (9:00 a.m. EDT) to discuss its second quarter 2021 financial and operational results. The telephone number to access the conference call is 216-562-0385. The conference call will also be webcast live on https://ir.mammothenergy.com/events-presentations.

About Mammoth Energy Services, Inc.
Mammoth is an integrated, growth-oriented energy services company focused on the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its infrastructure services businesses. The Company also provides products and services to enable 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 more information, please visit www.mammothenergy.com.

Contacts:
Mark Layton, CFO
Mammoth Energy Services, Inc
investors@mammothenergy.com

Rick Black / Ken Dennard
Dennard Lascar Investor Relations
TUSK@dennardlascar.com

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 SEC, including those relating to the Company's acquisitions and contracts, many of which are beyond the Company's control, which may cause actual results to differ materially from historical experience and 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: the severity and duration of the COVID-19 pandemic, related global and national health concerns and economic repercussions and the resulting negative impact on demand for our services; the volatility of oil and natural gas prices and actions by OPEC members and other exporting nations affecting commodities prices and production levels; the duration and magnitude of the unprecedented disruption in the oil and gas industry currently resulting from the impact of the foregoing factors, which is negatively impacting our business; operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; the failure to receive or delays in receiving governmental authorizations, approvals and/or payments; the outcome of ongoing government investigations and other legal proceedings, including those relating to the contracts awarded to the Company's subsidiary Cobra Acquisitions LLC by the Puerto Rico Electric Power Authority and contracts for our pressure pumping services and natural sand proppant services; the Company's inability to replace the prior levels of work in its business segments, including its infrastructure and well completion services segments; risks relating to economic conditions; the loss of or interruption in operations of one or more of Mammoth's significant suppliers or customers; the outcome or settlement of our litigation matters, including our litigation with Gulfport Energy Corporation and MasTec Renewables Puerto Rico, LLC, and the effect on our financial condition and results of operations ; the effects of government regulation, permitting and other legal requirements; operating risks; the adequacy of capital resources and liquidity; weather; natural disasters; litigation; volatility in commodity markets; 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.
CONSOLIDATED BALANCE SHEETS

ASSETS   June 30,   December 31,
    2021   2020
CURRENT ASSETS   (in thousands)
Cash and cash equivalents   $ 11,038       $ 14,822    
Short-term investment   1,757       1,750    
Accounts receivable, net   413,245       393,112    
Receivables from related parties, net   80       28,461    
Inventories   10,212       12,020    
Prepaid expenses   7,936       13,825    
Other current assets   708       758    
Other current assets - related parties            
Total current assets   444,976       464,748    
         
Property, plant and equipment, net   210,397       251,262    
Sand reserves   65,491       65,876    
Operating lease right-of-use assets   15,777       20,179    
Intangible assets, net - customer relationships   321       408    
Intangible assets, net - trade names   3,946       4,366    
Goodwill   12,608       12,608    
Deferred income tax asset   8,094          
Other non-current assets   4,329       5,115    
Total assets   $ 765,939       $ 824,562    
LIABILITIES AND EQUITY        
CURRENT LIABILITIES        
Accounts payable   $ 39,505       $ 40,316    
Payables to related parties   4       3    
Accrued expenses and other current liabilities   63,375       44,408    
Current operating lease liability   7,255       8,618    
Current portion of long-term debt   1,430       1,165    
Income taxes payable   35,198       34,088    
Total current liabilities   146,767       128,598    
         
Long-term debt, net of current portion   62,811       81,338    
Deferred income tax liabilities   12,041       24,741    
Long-term operating lease liability   8,293       11,377    
Asset retirement obligation   3,666       4,746    
Other liabilities   15,159       10,435    
Total liabilities   248,737       261,235    
         
COMMITMENTS AND CONTINGENCIES        
         
EQUITY        
Equity:        
Common stock, $0.01 par value, 200,000,000 shares authorized, 46,680,731 and 45,769,283 issued and outstanding at June 30, 2021 and December 31, 2020   467       458    
Additional paid in capital   537,728       537,039    
Retained earnings   (18,335 )     28,895    
Accumulated other comprehensive loss   (2,658 )     (3,065 )  
Total equity   517,202       563,327    
Total liabilities and equity   $ 765,939       $ 824,562    

MAMMOTH ENERGY SERVICES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,
  2021   2020   2021   2021   2020
  (in thousands, except per share amounts)
REVENUE  
Services revenue $ 40,867       $ 44,878       $ 42,691       $ 83,558       $ 113,723    
Services revenue - related parties 90       8,650       14,986       15,076       26,663    
Product revenue 6,483       4,706       6,982       13,465       13,356    
Product revenue - related parties       1,875       2,145       2,145       3,750    
Total revenue 47,440       60,109       66,804       114,244       157,492    
                   
COST AND EXPENSES                  
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $17,861, $21,750, $18,989, $36,850 and $45,305, respectively, for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020) 43,103       42,255       42,062       85,165       112,952    
Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of $0, $0, $0, $0 and $0, respectively, for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020) 107       97       109       216       198    
Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $2,384, $2,346, $2,137, $4,521 and $4,654, respectively, for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020) 7,165       6,401       5,909       13,074       17,509    
Selling, general and administrative 11,791       13,528       20,655       32,446       24,084    
Selling, general and administrative - related parties 192       198       193       385       413    
Depreciation, depletion, amortization and accretion 20,265       24,116       21,146       41,411       49,998    
Impairment of goodwill                         54,973    
Impairment of other long-lived assets                         12,897    
Total cost and expenses 82,623       86,595       90,074       172,697       273,024    
Operating loss (35,183 )     (26,486 )     (23,270 )     (58,453 )     (115,532 )  
                   
OTHER INCOME (EXPENSE)                  
Interest expense, net (1,169 )     (1,471 )     (1,225 )     (2,394 )     (3,109 )  
Other (expense) income, net (14,998 )     8,137       9,947       (5,051 )     15,546    
Other (expense) income, net - related parties       1,133       (515 )     (515 )     1,133    
Total other (expense) income (16,167 )     7,799       8,207       (7,960 )     13,570    
Loss before income taxes (51,350 )     (18,687 )     (15,063 )     (66,413 )     (101,962 )  
Benefit for income taxes (16,560 )     (3,482 )     (2,623 )     (19,183 )     (2,786 )  
Net loss $ (34,790 )     $ (15,205 )     $ (12,440 )     $ (47,230 )     $ (99,176 )  
                   
OTHER COMPREHENSIVE INCOME (LOSS)                  
Foreign currency translation adjustment, net of tax of $63, ($150), ($42), $680 and $211, respectively, for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020 239       668       168       407       (746 )  
Comprehensive loss $ (34,551 )     $ (14,537 )     $ (12,272 )     $ (46,823 )     $ (99,922 )  
                   
Net loss per share (basic) $ (0.75 )     $ (0.33 )     $ (0.27 )     $ (1.02 )     $ (2.18 )  
Net loss per share (diluted) $ (0.75 )     $ (0.33 )     $ (0.27 )     $ (1.02 )     $ (2.18 )  
Weighted average number of shares outstanding (basic) 46,402       45,727       45,932       46,168       45,521    
Weighted average number of shares outstanding (diluted) 46,402       45,727       45,932       46,168       45,521    

 

MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

  Six Months Ended
  June 30,
  2021   2020
  (in thousands)
Cash flows from operating activities:      
Net loss $ (47,230 )     $ (99,176 )  
Adjustments to reconcile net loss to cash provided by operating activities:      
Stock based compensation 698       1,246    
Depreciation, depletion, accretion and amortization 41,411       49,998    
Amortization of coil tubing strings       359    
Amortization of debt origination costs 296       577    
Bad debt expense 10,201       1,679    
Gain on disposal of property and equipment (1,599 )     (1,451 )  
Impairment of goodwill       54,973    
Impairment of other long-lived assets       12,897    
Deferred income taxes (20,898 )     931    
Other 548       623    
Changes in assets and liabilities:      
Accounts receivable, net (30,386 )     7,782    
Receivables from related parties 28,381       (19,793 )  
Inventories 1,808       4,651    
Prepaid expenses and other assets 5,923       6,079    
Accounts payable (1,546 )     (7,514 )  
Payables to related parties 1       (512 )  
Accrued expenses and other liabilities 15,756       (2,818 )  
Income taxes payable 1,107       (3,697 )  
Net cash provided by operating activities 4,471       6,834    
       
Cash flows from investing activities:      
Purchases of property and equipment (1,709 )     (4,348 )  
Purchases of property and equipment from related parties       (76 )  
Proceeds from disposal of property and equipment 4,632       2,544    
Net cash provided by (used in) investing activities 2,923       (1,880 )  
       
Cash flows from financing activities:      
Borrowings on long-term debt 12,000       22,800    
Repayments of long-term debt (30,269 )     (13,550 )  
Proceeds from sale leaseback transaction 9,473          
Payments on sale leaseback transaction (1,278 )        
Principal payments on financing leases and equipment financing notes (1,140 )     (914 )  
Debt issuance costs       (1,000 )  
Net cash (used in) provided by financing activities (11,214 )     7,336    
Effect of foreign exchange rate on cash 36       (137 )  
Net change in cash and cash equivalents (3,784 )     12,153    
Cash and cash equivalents at beginning of period 14,822       5,872    
Cash and cash equivalents at end of period $ 11,038       $ 18,025    
       
Supplemental disclosure of cash flow information:      
Cash paid for interest $ 2,134       $ 2,683    
Cash paid (recovered) for income taxes $ 964       $ (6 )  
Supplemental disclosure of non-cash transactions:      
Purchases of property and equipment included in accounts payable $ 2,035       $ 2,780    

 

MAMMOTH ENERGY SERVICES, INC.
SEGMENT INCOME STATEMENTS
(in thousands)

Three months ended June 30, 2021 Infrastructure Well
Completion
(a)
Sand Drilling All Other Eliminations Total
Revenue from external customers $ 17,220     $ 17,337     $ 6,886     $ 1,130     $ 4,867     $     $ 47,440    
Intersegment revenues     36         17     682     (735 )      
Total revenue 17,220     17,373     6,886     1,147     5,549     (735 )   47,440    
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 19,881     16,396     7,400     1,568     5,130         50,375    
Intersegment cost of revenues 50     666             19     (735 )      
Total cost of revenue 19,931     17,062     7,400     1,568     5,149     (735 )   50,375    
Selling, general and administrative 7,383     1,893     991     395     1,321         11,983    
Depreciation, depletion, amortization and accretion 5,899     6,447     2,387     2,079     3,453         20,265    
Operating loss (15,993 )   (8,029 )   (3,892 )   (2,895 )   (4,374 )       (35,183 )  
Interest expense, net 656     219     90     58     146         1,169    
Other expense (income), net 15,904     1     (53 )   (127 )   (727 )       14,998    
Loss before income taxes $ (32,553 )   $ (8,249 )   $ (3,929 )   $ (2,826 )   $ (3,793 )   $     $ (51,350 )  

 

Three months ended June 30, 2020 Infrastructure Well
Completion
(a)
Sand Drilling All Other Eliminations Total
Revenue from external customers $ 30,249     $ 16,125     $ 6,237     $ 1,250     $ 6,248     $     $ 60,109    
Intersegment revenues     419             584     (1,003 )      
Total revenue 30,249     16,544     6,237     1,250     6,832     (1,003 )   60,109    
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 25,217     8,375     6,394     2,012     6,755         48,753    
Intersegment cost of revenues 27     333         21     622     (1,003 )      
Total cost of revenue 25,244     8,708     6,394     2,033     7,377     (1,003 )   48,753    
Selling, general and administrative 7,830     1,456     1,378     1,331     1,731         13,726    
Depreciation, depletion, amortization and accretion 7,500     7,675     2,358     2,671     3,912         24,116    
Operating loss (10,325 )   (1,295 )   (3,893 )   (4,785 )   (6,188 )       (26,486 )  
Interest expense, net 716     329     69     132     225         1,471    
Other (income) expense, net (8,004 )   (1,179 )   (2 )   (298 )   213         (9,270 )  
Loss before income taxes $ (3,037 )   $ (445 )   $ (3,960 )   $ (4,619 )   $ (6,626 )   $     $ (18,687 )  

 

Three months ended March 31, 2021 Infrastructure Well
Completion
(a)
Sand Drilling All Other Eliminations Total
Revenue from external customers $ 29,257     $ 22,901     $ 8,705     $ 919     $ 5,022     $     $ 66,804    
Intersegment revenues     54         14     640     (708 )      
Total revenue 29,257     22,955     8,705     933     5,662     (708 )   66,804    
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 26,458     9,003     5,862     1,604     5,153         48,080    
Intersegment cost of revenues 45     394             269     (708 )      
Total cost of revenue 26,503     9,397     5,862     1,604     5,422     (708 )   48,080    
Selling, general and administrative 6,253     10,612     2,049     422     1,512         20,848    
Depreciation, depletion, amortization and accretion 6,667     6,683     2,140     2,165     3,491         21,146    
Operating loss (10,166 )   (3,737 )   (1,346 )   (3,258 )   (4,763 )       (23,270 )  
Interest expense, net 661     254     93     63     154         1,225    
Other (income) expense, net (9,310 )   439     (794 )   (9 )   242         (9,432 )  
Loss before income taxes $ (1,517 )   $ (4,430 )   $ (645 )   $ (3,312 )   $ (5,159 )   $     $ (15,063 )  

 

MAMMOTH ENERGY SERVICES, INC.
SEGMENT INCOME STATEMENTS
(in thousands)

Six months ended June 30, 2021 Infrastructure Well
Completion
(a)
Sand Drilling All Other Eliminations Total
Revenue from external customers $ 46,476     $ 40,238     $ 15,592     $ 2,049     $ 9,889     $     $ 114,244    
Intersegment revenues     90         31     1,322     (1,443 )      
Total revenue 46,476     40,328     15,592     2,080     11,211     (1,443 )   114,244    
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 46,340     25,399     13,262     3,173     10,281         98,455    
Intersegment cost of revenues 95     1,060             288     (1,443 )      
Total cost of revenue 46,435     26,459     13,262     3,173     10,569     (1,443 )   98,455    
Selling, general and administrative 13,635     12,505     3,040     818     2,833         32,831    
Depreciation, depletion, amortization and accretion 12,566     13,130     4,527     4,242     6,946         41,411    
Operating loss (26,160 )   (11,766 )   (5,237 )   (6,153 )   (9,137 )       (58,453 )  
Interest expense, net 1,317     473     183     121     300         2,394    
Other expense (income), net 6,593     440     (847 )   (135 )   (485 )       5,566    
Loss before income taxes $ (34,070 )   $ (12,679 )   $ (4,573 )   $ (6,139 )   $ (8,952 )   $     $ (66,413 )  

 

Six months ended June 30, 2020 Infrastructure Well
Completion
(a)
Sand Drilling All Other Eliminations Total
Revenue from external customers $ 55,724     $ 58,811     $ 16,391     $ 5,973     $ 20,593     $     $ 157,492    
Intersegment revenues     1,052     95     5     1,360     (2,512 )      
Total revenue 55,724     59,863     16,486     5,978     21,953     (2,512 )   157,492    
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 51,897     33,943     17,691     7,637     19,491         130,659    
Intersegment cost of revenues 35     961         152     1,364     (2,512 )      
Total cost of revenue 51,932     34,904     17,691     7,789     20,855     (2,512 )   130,659    
Selling, general and administrative 11,774     3,627     2,680     2,394     4,022         24,497    
Depreciation, depletion, amortization and accretion 15,122     16,157     4,681     5,520     8,518         49,998    
Impairment of goodwill     53,406             1,567         54,973    
Impairment of other long-lived assets     4,203         326     8,368         12,897    
Operating loss (23,104 )   (52,434 )   (8,566 )   (10,051 )   (21,377 )       (115,532 )  
Interest expense, net 1,467     605     147     389     501         3,109    
Other (income) expense, net (15,707 )   (1,288 )   (39 )   (271 )   626         (16,679 )  
Loss before income taxes $ (8,864 )   $ (51,751 )   $ (8,674 )   $ (10,169 )   $ (22,504 )   $     $ (101,962 )  
a. Mammoth changed the name of its pressure pumping segment to the well completion segment during the fourth quarter of 2020.

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 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, public offering 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   Six Months Ended
  June 30,   March 31,   June 30,
Reconciliation of Adjusted EBITDA to net loss: 2021   2020   2021   2021   2020
Net loss $ (34,790 )     $ (15,205 )     $ (12,440 )     $ (47,230 )     $ (99,176 )  
Depreciation, depletion, amortization and accretion expense 20,265       24,116       21,146       41,411       49,998    
Impairment of goodwill                         54,973    
Impairment of other long-lived assets                         12,897    
Public offering costs 77                   77          
Stock based compensation 354       196       344       698       1,246    
Interest expense, net 1,169       1,471       1,225       2,394       3,109    
Other expense (income), net 14,998       (9,270 )     (9,432 )     5,566       (16,679 )  
Benefit for income taxes (16,560 )     (3,482 )     (2,623 )     (19,183 )     (2,786 )  
Interest on trade accounts receivable 9,017       9,071       8,158       17,175       16,767    
Adjusted EBITDA $ (5,470 )     $ 6,897       $ 6,378       $ 908       $ 20,349    

MAMMOTH ENERGY SERVICES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Infrastructure Services

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,
Reconciliation of Adjusted EBITDA to net loss: 2021   2020   2021   2021   2020
Net loss $ (23,715 )     $ (3,985 )     $ (3,945 )     $ (27,658 )     $ (12,303 )  
Depreciation and amortization expense 5,899       7,500       6,667       12,566       15,122    
Public offering costs 43                   43          
Stock based compensation 158       44       135       293       286    
Interest expense 656       716       661       1,317       1,467    
Other expense (income), net 15,904       (8,004 )     (9,310 )     6,593       (15,707 )  
(Benefit) provision for income taxes (8,838 )     949       2,428       (6,410 )     3,440    
Interest on trade accounts receivable 9,017       7,930       8,673       17,690       15,626    
Adjusted EBITDA $ (876 )     $ 5,150       $ 5,309       $ 4,434       $ 7,931    

Well Completion Services

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,
Reconciliation of Adjusted EBITDA to net loss: 2021   2020   2021   2021   2020
Net loss $ (8,249 )     $ (446 )     $ (4,430 )     $ (12,680 )     $ (51,750 )  
Depreciation and amortization expense 6,447       7,675       6,683       13,130       16,157    
Impairment of goodwill                         53,406    
Impairment of other long-lived assets                         4,203    
Public offering costs 12                   12          
Stock based compensation 75       53       83       158       381    
Interest expense 219       329       254       473       605    
Other expense (income), net 1       (1,179 )     439       440       (1,288 )  
Interest on trade accounts receivable       1,133       (514 )     (514 )     1,133    
Adjusted EBITDA $ (1,495 )     $ 7,565       $ 2,515       $ 1,019       $ 22,847    

Natural Sand Proppant Services

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,
Reconciliation of Adjusted EBITDA to net loss: 2021   2020   2021   2021   2020
Net loss $ (3,929 )     $ (3,960 )     $ (645 )     $ (4,573 )     $ (8,676 )  
Depreciation, depletion, amortization and accretion expense 2,387       2,358       2,140       4,527       4,681    
Public offering costs 12                 12          
Stock based compensation 65       46       64       130       278    
Interest expense 90       69       93       183       147    
Other income, net (53 )     (2 )     (794 )     (847 )     (39 )  
Interest on trade accounts receivable             (1 )     (1 )        
Adjusted EBITDA $ (1,428 )     $ (1,489 )     $ 857       $ (569 )     $ (3,609 )  

 

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

Drilling Services

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,
Reconciliation of Adjusted EBITDA to net loss: 2021   2020   2021   2021   2020
Net loss $ (2,826 )     $ (4,620 )     $ (3,312 )     $ (6,139 )     $ (10,169 )  
Depreciation expense 2,079       2,671       2,165       4,242       5,520    
Impairment of other long-lived assets                         326    
Acquisition related costs                            
Public offering costs 2                 2          
Stock based compensation 28       34       38       65       128    
Interest expense 58       132       63       121       389.172    
Other income, net (127 )     (298 )     (9 )     (135 )     (271 )  
Adjusted EBITDA $ (786 )     $ (2,081 )     $ (1,055 )     $ (1,844 )     $ (4,077 )  

Other Services(a)

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,
Reconciliation of Adjusted EBITDA to net income (loss): 2021   2020   2021   2021   2020
Net income (loss) $ 3,929       $ (2,195 )     $ (108 )     $ 3,820       $ (16,279 )  
Depreciation, amortization and accretion expense 3,453       3,912       3,491       6,946       8,518    
Impairment of goodwill                         1,567    
Impairment of other long-lived assets                         8,368    
Public offering costs 8                 8          
Stock based compensation 28       20       24       52       173    
Interest expense, net 146       225       154       300       501    
Other (income) expense, net (727 )     213       242       (485 )     626    
Benefit for income taxes (7,722 )     (4,430 )     (5,051 )     (12,773 )     (6,226 )  
Interest on trade accounts receivable       9                   9    
Adjusted EBITDA $ (885 )     $ (2,246 )     $ (1,248 )     $ (2,132 )     $ (2,743 )  
a.   Includes results for Mammoth's aviation, coil tubing, pressure control, 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.

 

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

Adjusted Net Loss and Adjusted Loss per Share

Adjusted net loss and adjusted basic and diluted loss 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 and adjusted loss per share should not be considered in isolation or as a substitute for net loss and loss 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 and adjusted loss per share to the GAAP financial measures of net loss and loss per share for the periods specified.

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,
  2021   2020   2021   2021   2020
  (in thousands, except per share amounts)
Net loss, as reported $ (34,790 )     $ (15,205 )     $ (12,440 )     $ (47,230 )     $ (99,176 )  
Impairment of goodwill —        —        —        —        54,973     
Impairment of other long-lived assets —        —        —        —        12,897     
Adjusted net loss $ (34,790 )     $ (15,205 )     $ (12,440 )     $ (47,230 )     $ (31,306 )  
                   
Basic loss per share, as reported $ (0.75 )     $ (0.33 )     $ (0.27 )     $ (1.02 )     $ (2.18 )  
Impairment of goodwill —        —        —        —        1.21     
Impairment of other long-lived assets —        —        —        —        0.28     
Adjusted basic loss per share $ (0.75 )     $ (0.33 )     $ (0.27 )     $ (1.02 )     $ (0.69 )  
                   
Diluted loss per share, as reported $ (0.75 )     $ (0.33 )     $ (0.27 )     $ (1.02 )     $ (2.18 )  
Impairment of goodwill —        —        —        —        1.21     
Impairment of other long-lived assets —        —        —        —        0.28     
Adjusted diluted loss per share $ (0.75 )     $ (0.33 )     $ (0.27 )     $ (1.02 )     $ (0.69 )  
 

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Source: Mammoth Energy Services, Inc.