Press Release Details

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

November 5, 2021 at 6:00 AM EDT

OKLAHOMA CITY, Nov. 5, 2021 /PRNewswire/ -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ: TUSK) today reported financial and operational results for the third quarter ended September 30, 2021.

Financial Overview for the Third Quarter 2021:

Total revenue was $57.5 million for the third quarter of 2021, as compared to $70.5 million for the same quarter last year and $47.4 million for the second quarter of 2021.

Net loss for the third quarter of 2021 was $40.9 million, or a $0.88 loss per share, as compared to net income of $3.4 million, or a $0.07 income per share, for the same quarter last year, and a net loss of $34.8 million, or a $0.75 loss per share, for the second quarter of 2021.

Adjusted EBITDA (as defined and reconciled below) was ($29.7) million for the third quarter of 2021, as compared to $22.1 million for the same quarter last year and ($5.5) million for the second quarter of 2021. During the third quarter of 2021, Mammoth recognized expense of $32.6 million related to its settlement with Gulfport Energy Corporation. Excluding this non-recurring expense, adjusted EBITDA was $2.9 million for the third quarter of 2021.

Arty Straehla, Chief Executive Officer of Mammoth commented, "We are pleased with the positive trajectory throughout our business segments during the third quarter compared to the second quarter, which led to higher revenue and an improved bottom line. We are also encouraged by the positive trends in our infrastructure business in the third quarter, including increased storm work relative to the second quarter, a new fiber maintenance and installation contract and increased bidding activity, as well as internal personnel changes that are gaining traction in this segment. Funding for projects in the infrastructure space remains strong with the added opportunity of a new federal infrastructure bill, which we are optimistic will be passed in the near future. While this is a sector impacted by near-term seasonality, we remain focused on improving results as we continue migrating the Company further into the infrastructure space to enhance long-term growth and sustainability.

"In our oilfield businesses, improved commodities pricing continues to contribute to positive industry movement and increased equipment utilization as we ramped up a second hydraulic fracturing fleet during the quarter. In our sand business, we continue to see increased market activity."

Straehla continued, "Lastly, as documented in several recent press releases, we are continuing to pursue numerous avenues in our efforts to collect our receivable from PREPA for work performed by our subsidiary Cobra Acquisitions LLC 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 of $23.5 million, or approximately 41% of Mammoth's total revenue, for the third quarter of 2021, as compared to $43.6 million for the same quarter last year and $17.2 million for the second quarter of 2021. The decrease in revenue compared to the same quarter of 2020 is primarily due to a decline in storm activity, resulting in lower storm restoration revenue, as well as management and crew turnover.

Well Completion Services
Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $22.7 million on 688 stages for the third quarter of 2021, as compared to $15.8 million on 449 stages for the same quarter last year and $17.4 million on 520 stages for the second quarter of 2021. On average, 1.2 of the Company's fleets were active for the third quarter, compared to an average utilization of 0.9 fleets during the same quarter last year and during the second quarter of 2021.

Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $8.4 million for the third quarter of 2021, as compared to $6.0 million for the same quarter last year and $6.9 million for the second quarter of 2021. In the third quarter of 2021, the Company sold approximately 315,000 tons of sand at an average sales price of $16.58 per ton, as compared to sales of approximately 68,000 tons of sand at an average sales price of $15.59 per ton during the same quarter last year. In the second quarter of 2021, sales were approximately 255,000 tons of sand at an average price of $15.80 per ton.

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

As a result of market conditions, the Company 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 $6.2 million for the third quarter of 2021, as compared to $4.7 million for the same quarter last year and $5.5 million for the second quarter of 2021.

As a result of market conditions, the Company temporarily shut down its cementing and acidizing operations as well as its flowback operations beginning in July 2019, its coil tubing and full-service transportation operations beginning in July 2020 and its crude oil hauling operations beginning in July 2021.

Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses were $41.9 million for the third quarter of 2021, as compared to $12.2 million for the same quarter last year and $12.0 million for the second quarter of 2021.

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

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

2021

 

2020

 

2021

 

2021

 

2020

Cash expenses:

                 

Compensation and benefits

$

3,353

   

$

3,449

   

$

3,333

   

$

11,379

   

$

11,138

 

Professional services

4,571

   

5,651

   

5,806

   

13,783

   

15,335

 

Other(a)

2,252

   

2,163

   

2,464

   

7,058

   

6,572

 

Total cash SG&A expense

10,176

   

11,263

   

11,603

   

32,220

   

33,045

 

Non-cash expenses:

                 

Bad debt provision(b)

31,449

   

626

   

76

   

41,650

   

2,306

 

Stock based compensation

241

   

291

   

304

   

827

   

1,326

 

Total non-cash SG&A expense

31,690

   

917

   

380

   

42,477

   

3,632

 

Total SG&A expense

$

41,866

   

$

12,180

   

$

11,983

   

$

74,697

   

$

36,677

 
   

a.

Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.

b.

The bad debt provision for the three and nine months ended September 30, 2021, includes $31.2 million and $41.2 million, respectively, for settlement of our accounts with Gulfport Energy Corporation and its subsidiaries.

SG&A expenses, as a percentage of total revenue, were 73% for the third quarter of 2021, as compared to 17% for the same quarter last year and 25% for the second quarter of 2021.

Liquidity
As of September 30, 2021, Mammoth had cash on hand of $8.0 million, outstanding borrowings under its revolving credit facility of $77.0 million and $43.2 million of available borrowing capacity under its revolving credit facility, after giving effect to $9.0 million of outstanding letters of credit. As of September 30, 2021, Mammoth had total liquidity of $51.2 million.

On November 3, 2021, Mammoth entered into a third amendment to its revolving credit facility, providing, among other things, for a limited waiver and suspension of the leverage ratio and fixed charges coverage ratio covenants for the quarters ending September 30, 2021 and December 31, 2021 and permanently reducing the maximum revolving advance amount under its revolving credit facility from $130 million to $120 million. As of November 3, 2021, Mammoth had cash on hand of $6.5 million, outstanding borrowings under its revolving credit facility of $76.1 million and $24.1 million of available borrowing capacity under its revolving credit facility, after giving effect to $9.0 million of outstanding letters of credit, the $10 million reduction in the borrowing base and the requirement to maintain a $10 million reserve out of the available borrowing capacity during the limited waiver period, which will end on May 15, 2022, but may terminate earlier upon the occurrence of certain events.

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

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

2021

 

2020

 

2021

 

2021

 

2020

Infrastructure services(a)

$

181

   

$

178

   

$

104

   

$

474

   

$

221

 

Well completion services(b)

2,392

   

698

   

388

   

3,192

   

3,752

 

Natural sand proppant services(c)

16

   

194

   

5

   

429

   

1,069

 

Drilling services(d)

4

   

132

   

1

   

42

   

199

 

Other(e)

172

   

323

   

63

   

337

   

708

 

Total capital expenditures

$

2,765

   

$

1,525

   

$

561

   

$

4,474

   

$

5,949

 
   

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, November 5, 2021 at 8:00 a.m. Central time (9:00 a.m. Eastern time) to discuss its third 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; 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; 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; whether a federal infrastructure bill is implemented and the terms thereof; the loss of or interruption in operations of one or more of Mammoth's significant suppliers or customers; the loss of management and/or crews; the outcome or settlement of our litigation matters, including the adverse impact of the recent settlements 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; Mammoth's ability to regain compliance with certain financial covenants and comply with other terms and conditions under our recently amended revolving credit facility; 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

 

September 30,

 

December 31,

   

2021

 

2020

CURRENT ASSETS

 

(in thousands)

Cash and cash equivalents

 

$

7,953

   

$

14,822

 

Short-term investment

 

1,760

   

1,750

 

Accounts receivable, net

 

402,035

   

393,112

 

Receivables from related parties, net

 

238

   

28,461

 

Inventories

 

9,438

   

12,020

 

Prepaid expenses

 

3,859

   

13,825

 

Other current assets

 

754

   

758

 

Total current assets

 

426,037

   

464,748

 
         

Property, plant and equipment, net

 

194,478

   

251,262

 

Sand reserves

 

64,806

   

65,876

 

Operating lease right-of-use assets

 

14,766

   

20,179

 

Intangible assets, net - customer relationships

 

277

   

408

 

Intangible assets, net - trade names

 

3,194

   

4,366

 

Goodwill

 

12,608

   

12,608

 

Deferred income tax asset

 

8,094

   

 

Other non-current assets

 

4,247

   

5,115

 

Total assets

 

$

728,507

   

$

824,562

 

LIABILITIES AND EQUITY

       

CURRENT LIABILITIES

       

Accounts payable

 

$

43,628

   

$

40,316

 

Payables to related parties

 

5

   

3

 

Accrued expenses and other current liabilities

 

54,724

   

44,408

 

Current operating lease liability

 

6,996

   

8,618

 

Current portion of long-term debt

 

1,449

   

1,165

 

Income taxes payable

 

39,283

   

34,088

 

Total current liabilities

 

146,085

   

128,598

 
         

Long-term debt, net of current portion

 

79,195

   

81,338

 

Deferred income tax liabilities

 

687

   

24,741

 

Long-term operating lease liability

 

7,591

   

11,377

 

Asset retirement obligation

 

3,682

   

4,746

 

Other liabilities

 

15,003

   

10,435

 

Total liabilities

 

252,243

   

261,235

 
         

COMMITMENTS AND CONTINGENCIES

       
         

EQUITY

       

Equity:

       

Common stock, $0.01 par value, 200,000,000 shares authorized, 46,684,065 and 45,769,283 issued
and outstanding at September 30, 2021 and December 31, 2020

 

467

   

458

 

Additional paid in capital

 

537,980

   

537,039

 

Retained earnings

 

(59,236)

   

28,895

 

Accumulated other comprehensive loss

 

(2,947)

   

(3,065)

 

Total equity

 

476,264

   

563,327

 

Total liabilities and equity

 

$

728,507

   

$

824,562

 

 

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

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

2021

 

2020

 

2021

 

2021

 

2020

 

(in thousands, except per share amounts)

REVENUE

 

Services revenue

$

52,417

   

$

55,279

   

$

40,867

   

$

135,975

   

$

169,002

 

Services revenue - related parties

601

   

8,565

   

90

   

15,678

   

35,228

 

Product revenue

4,467

   

4,815

   

6,483

   

17,932

   

18,171

 

Product revenue - related parties

   

1,875

   

   

2,145

   

5,625

 

Total revenue

57,485

   

70,534

   

47,440

   

171,730

   

228,026

 
                   

COST AND EXPENSES

                 

Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $35,857, $20,424, $17,861, $53,448 and $65,728, respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)

43,538

   

41,445

   

43,103

   

128,703

   

154,397

 

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 September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)

181

   

131

   

107

   

397

   

329

 

Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $4,667, $2,689, $2,384, $7,051 and $7,344, respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)

9,865

   

4,353

   

7,165

   

22,939

   

21,862

 

Selling, general and administrative

41,866

   

11,979

   

11,791

   

74,312

   

36,063

 

Selling, general and administrative - related parties

   

201

   

192

   

385

   

614

 

Depreciation, depletion, amortization and accretion

19,148

   

23,132

   

20,265

   

60,559

   

73,130

 

Impairment of goodwill

   

   

   

   

54,973

 

Impairment of other long-lived assets

547

   

   

   

547

   

12,897

 

Total cost and expenses

115,145

   

81,241

   

82,623

   

287,842

   

354,265

 

Operating loss

(57,660)

   

(10,707)

   

(35,183)

   

(116,112)

   

(126,239)

 
                   

OTHER INCOME (EXPENSE)

                 

Interest expense, net

(1,484)

   

(1,098)

   

(1,169)

   

(3,878)

   

(4,207)

 

Other income (expense), net

11,056

   

7,943

   

(14,998)

   

6,004

   

23,489

 

Other income (expense), net - related parties

   

1,099

   

   

(515)

   

2,232

 

Total other income (expense)

9,572

   

7,944

   

(16,167)

   

1,611

   

21,514

 

Loss before income taxes

(48,088)

   

(2,763)

   

(51,350)

   

(114,501)

   

(104,725)

 

Benefit for income taxes

(7,187)

   

(6,193)

   

(16,560)

   

(26,370)

   

(8,979)

 

Net (loss) income

$

(40,901)

   

$

3,430

   

$

(34,790)

   

$

(88,131)

   

$

(95,746)

 
                   

OTHER COMPREHENSIVE INCOME (LOSS)

                 

Foreign currency translation adjustment, net of tax of ($69), ($95), $63, $36  and $116, respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020

(289)

   

324

   

239

   

118

   

(422)

 

Comprehensive (loss) income

$

(41,190)

   

$

3,754

   

$

(34,551)

   

$

(88,013)

   

$

(96,168)

 
                   

Net (loss) income per share (basic)

$

(0.88)

   

$

0.07

   

$

(0.75)

   

$

(1.90)

   

$

(2.10)

 

Net (loss) income per share (diluted)

$

(0.88)

   

$

0.07

   

$

(0.75)

   

$

(1.90)

   

$

(2.10)

 

Weighted average number of shares outstanding (basic)

46,683

   

45,764

   

46,402

   

46,342

   

45,603

 

Weighted average number of shares outstanding (diluted)

46,683

   

46,571

   

46,402

   

46,342

   

45,603

 

 

 

MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS

 
 

Nine Months Ended

 

September 30,

 

2021

 

2020

 

(in thousands)

Cash flows from operating activities:

     

Net loss

$

(88,131)

   

$

(95,746)

 

Adjustments to reconcile net loss to cash (used in) provided by operating activities:

     

Stock based compensation

950

   

1,598

 

Depreciation, depletion, accretion and amortization

60,559

   

73,130

 

Amortization of coil tubing strings

   

359

 

Amortization of debt origination costs

469

   

703

 

Bad debt expense

41,650

   

2,306

 

Gain on disposal of property and equipment

(4,632)

   

(927)

 

Impairment of goodwill

   

54,973

 

Impairment of other long-lived assets

547

   

12,897

 

Deferred income taxes

(32,183)

   

(7,334)

 

Other

502

   

581

 

Changes in assets and liabilities:

     

Accounts receivable, net

(50,666)

   

(11,707)

 

Receivables from related parties

28,224

   

(31,152)

 

Inventories

2,582

   

3,827

 

Prepaid expenses and other assets

9,947

   

8,803

 

Accounts payable

2,597

   

(5,211)

 

Payables to related parties

2

   

(508)

 

Accrued expenses and other liabilities

6,627

   

(3,166)

 

Income taxes payable

5,192

   

(1,644)

 

Net cash (used in) provided by operating activities

(15,764)

   

1,782

 
       

Cash flows from investing activities:

     

Purchases of property and equipment

(4,474)

   

(5,873)

 

Purchases of property and equipment from related parties

   

(76)

 

Proceeds from disposal of property and equipment

9,581

   

4,859

 

Net cash provided by (used in) investing activities

5,107

   

(1,090)

 
       

Cash flows from financing activities:

     

Borrowings on long-term debt

31,700

   

30,800

 

Repayments of long-term debt

(33,571)

   

(21,000)

 

Proceeds from sale leaseback transaction

9,473

   

 

Payments on sale leaseback transaction

(2,106)

   

 

Principal payments on financing leases and equipment financing notes

(1,716)

   

(1,423)

 

Debt issuance costs

   

(1,000)

 

Net cash provided by financing activities

3,780

   

7,377

 

Effect of foreign exchange rate on cash

8

   

(57)

 

Net change in cash and cash equivalents

(6,869)

   

8,012

 

Cash and cash equivalents at beginning of period

14,822

   

5,872

 

Cash and cash equivalents at end of period

$

7,953

   

$

13,884

 
       

Supplemental disclosure of cash flow information:

     

Cash paid for interest

$

3,236

   

$

3,637

 

Cash paid for income taxes, net of refunds received

$

978

   

$

13

 

Supplemental disclosure of non-cash transactions:

     

Purchases of property and equipment included in accounts payable

$

2,028

   

$

2,032

 

 

 

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

 

Three months ended September  30, 2021

Infrastructure

Well
Completion(a)

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$

23,489

 

$

22,702

 

$

4,439

 

$

1,184

 

$

5,671

 

$

 

$

57,485

 

Intersegment revenues

 

30

 

3,980

 

23

 

482

 

(4,515)

 

 

Total revenue

23,489

 

22,732

 

8,419

 

1,207

 

6,153

 

(4,515)

 

57,485

 

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion

20,541

 

18,125

 

9,368

 

1,566

 

4,917

 

 

54,517

 

Intersegment cost of revenues

54

 

3,204

 

 

 

324

 

(4,515)

 

(933)

 

Total cost of revenue

20,595

 

21,329

 

9,368

 

1,566

 

5,241

 

(4,515)

 

53,584

 

Selling, general and administrative

4,586

 

34,606

 

1,068

 

288

 

1,318

 

 

41,866

 

Depreciation, depletion, amortization and accretion

4,933

 

6,538

 

2,533

 

1,942

 

3,202

 

 

19,148

 

Impairment of other long-lived assets

 

 

 

 

547

 

 

547

 

Operating loss

(6,625)

 

(39,741)

 

(4,550)

 

(2,589)

 

(4,155)

 

 

(57,660)

 

Interest expense, net

971

 

215

 

107

 

56

 

135

 

 

1,484

 

Other (income) expense, net

(9,256)

 

755

 

(46)

 

(66)

 

(2,443)

 

 

(11,056)

 

Income (loss) before income taxes

$

1,660

 

$

(40,711)

 

$

(4,611)

 

$

(2,579)

 

$

(1,847)

 

$

 

$

(48,088)

 
 

Three months ended September 30, 2020

Infrastructure

Well
Completion(a)

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)

 
 

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)

 
 

Nine months ended September 30, 2021

Infrastructure

Well
Completion(a)

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$

69,965

 

$

62,939

 

$

20,031

 

$

3,234

 

$

15,561

 

$

 

$

171,730

 

Intersegment revenues

 

120

 

3,980

 

54

 

1,804

 

(5,958)

 

 

Total revenue

69,965

 

63,059

 

24,011

 

3,288

 

17,365

 

(5,958)

 

171,730

 

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion

66,864

 

42,339

 

22,631

 

4,739

 

15,466

 

 

152,039

 

Intersegment cost of revenues

165

 

5,449

 

 

 

344

 

(5,958)

 

 

Total cost of revenue

67,029

 

47,788

 

22,631

 

4,739

 

15,810

 

(5,958)

 

152,039

 

Selling, general and administrative

18,222

 

47,111

 

4,108

 

1,105

 

4,151

 

 

74,697

 

Depreciation, depletion, amortization and accretion

17,499

 

19,668

 

7,059

 

6,185

 

10,148

 

 

60,559

 

Impairment of other long-lived assets

 

 

 

 

547

 

 

547

 

Operating loss

(32,785)

 

(51,508)

 

(9,787)

 

(8,741)

 

(13,291)

 

 

(116,112)

 

Interest expense, net

2,287

 

688

 

291

 

177

 

435

 

 

3,878

 

Other (income) expense, net

(2,663)

 

1,196

 

(892)

 

(201)

 

(2,929)

 

 

(5,489)

 

Loss before income taxes

$

(32,409)

 

$

(53,392)

 

$

(9,186)

 

$

(8,717)

 

$

(10,797)

 

$

 

$

(114,501)

 
 

Nine months ended September 30, 2020

Infrastructure

Well
Completion(a)

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$

99,307

 

$

74,549

 

$

22,421

 

$

7,166

 

$

24,583

 

$

 

$

228,026

 

Intersegment revenues

 

1,080

 

95

 

16

 

2,046

 

(3,237)

 

 

Total revenue

99,307

 

75,629

 

22,516

 

7,182

 

26,629

 

(3,237)

 

228,026

 

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion

80,780

 

40,454

 

21,845

 

9,592

 

23,917

 

 

176,588

 

Intersegment cost of revenues

197

 

1,410

 

 

151

 

1,479

 

(3,237)

 

 

Total cost of revenue

80,977

 

41,864

 

21,845

 

9,743

 

25,396

 

(3,237)

 

176,588

 

Selling, general and administrative

19,001

 

5,347

 

3,737

 

2,776

 

5,816

 

 

36,677

 

Depreciation, depletion, amortization and accretion

22,416

 

23,346

 

7,380

 

7,814

 

12,174

 

 

73,130

 

Impairment of goodwill

 

53,406

 

 

 

1,567

 

 

54,973

 

Impairment of other long-lived assets

 

4,203

 

 

326

 

8,368

 

 

12,897

 

Operating loss

(23,087)

 

(52,537)

 

(10,446)

 

(13,477)

 

(26,692)

 

 

(126,239)

 

Interest expense, net

2,091

 

857

 

217

 

450

 

592

 

 

4,207

 

Other (income) expense, net

(24,082)

 

(2,444)

 

1,753

 

(251)

 

(697)

 

 

(25,721)

 

Loss before income taxes

$

(1,096)

 

$

(50,950)

 

$

(12,416)

 

$

(13,676)

 

$

(26,587)

 

$

 

$

(104,725)

 
   

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

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

Reconciliation of Adjusted EBITDA to net (loss) income:

2021

 

2020

 

2021

 

2021

 

2020

Net (loss) income

$

(40,901)

   

$

3,430

   

$

(34,790)

   

$

(88,131)

   

$

(95,746)

 

Depreciation, depletion, amortization and accretion expense

19,148

   

23,132

   

20,265

   

60,559

   

73,130

 

Impairment of goodwill

   

   

   

   

54,973

 

Impairment of other long-lived assets

547

   

   

   

547

   

12,897

 

Public offering costs

13

   

   

77

   

91

   

 

Stock based compensation

252

   

353

   

354

   

950

   

1,598

 

Interest expense, net

1,484

   

1,098

   

1,169

   

3,878

   

4,207

 

Other (income) expense, net

(11,056)

   

(9,042)

   

14,998

   

(5,489)

   

(25,721)

 

Benefit for income taxes

(7,187)

   

(6,193)

   

(16,560)

   

(26,370)

   

(8,979)

 

Interest on trade accounts receivable

7,963

   

9,285

   

9,017

   

25,138

   

26,052

 

Adjusted EBITDA

$

(29,737)

   

$

22,063

   

$

(5,470)

   

$

(28,827)

   

$

42,411

 

 

Infrastructure Services

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

Reconciliation of Adjusted EBITDA to net (loss) income:

2021

 

2020

 

2021

 

2021

 

2020

Net (loss) income

$

(2,288)

   

$

6,123

   

$

(23,715)

   

$

(29,946)

   

$

(6,182)

 

Depreciation and amortization expense

4,933

   

7,294

   

5,899

   

17,499

   

22,416

 

Public offering costs

(7)

   

   

43

   

37

   

 

Stock based compensation

96

   

139

   

158

   

388

   

424

 

Interest expense

971

   

623

   

656

   

2,287

   

2,091

 

Other (income) expense, net

(9,256)

   

(8,375)

   

15,904

   

(2,663)

   

(24,082)

 

Provision (benefit) for income taxes

3,947

   

1,645

   

(8,838)

   

(2,463)

   

5,085

 

Interest on trade accounts receivable

9,290

   

8,170

   

9,017

   

26,980

   

23,796

 

Adjusted EBITDA

$

7,686

   

$

15,619

   

$

(876)

   

$

12,119

   

$

23,548

 

 

Well Completion Services

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

Reconciliation of Adjusted EBITDA to net (loss) income:

2021

 

2020

 

2021

 

2021

 

2020

Net (loss) income

$

(40,711)

   

$

799

   

$

(8,249)

   

$

(53,391)

   

$

(50,951)

 

Depreciation and amortization expense

6,538

   

7,189

   

6,447

   

19,668

   

23,346

 

Impairment of goodwill

   

   

   

   

53,406

 

Impairment of other long-lived assets

   

   

   

   

4,203

 

Public offering costs

19

   

   

12

   

31

   

 

Stock based compensation

95

   

76

   

75

   

253

   

458

 

Interest expense

215

   

253

   

219

   

688

   

857

 

Other expense (income), net

755

   

(1,156)

   

1

   

1,196

   

(2,444)

 

Interest on trade accounts receivable

(1,327)

   

1,073

   

   

(1,841)

   

2,206

 

Adjusted EBITDA

$

(34,416)

   

$

8,234

   

$

(1,495)

   

$

(33,396)

   

$

31,081

 

 

Natural Sand Proppant Services

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

Reconciliation of Adjusted EBITDA to net loss:

2021

 

2020

 

2021

 

2021

 

2020

Net loss

$

(4,611)

   

$

(3,741)

   

$

(3,929)

   

$

(9,186)

   

$

(12,415)

 

Depreciation, depletion, amortization and accretion expense

2,533

   

2,700

   

2,387

   

7,059

   

7,380

 

Public offering costs

   

   

12

   

12

   

 

Stock based compensation

32

   

77

   

65

   

163

   

354

 

Interest expense

107

   

70

   

90

   

291

   

217

 

Other income (expense), net

(46)

   

1,792

   

(53)

   

(892)

   

1,753

 

Interest on trade accounts receivable

   

26

   

   

(1)

   

26

 

Adjusted EBITDA

$

(1,985)

   

$

924

   

$

(1,428)

   

$

(2,554)

   

$

(2,685)

 

 

Drilling Services

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

Reconciliation of Adjusted EBITDA to net loss:

2021

 

2020

 

2021

 

2021

 

2020

Net loss

$

(2,579)

   

$

(3,508)

   

$

(2,826)

   

$

(8,717)

   

$

(13,676)

 

Depreciation expense

1,942

   

2,294

   

2,079

   

6,185

   

7,814

 

Impairment of other long-lived assets

   

   

   

   

326

 

Acquisition related costs

   

   

   

   

 

Public offering costs

   

   

2

   

2

   

 

Stock based compensation

6

   

38

   

28

   

71

   

166

 

Interest expense

56

   

60

   

58

   

177

   

449.501

 

Other (income) expense, net

(66)

   

20

   

(127)

   

(201)

   

(251)

 

Adjusted EBITDA

$

(641)

   

$

(1,096)

   

$

(786)

   

$

(2,483)

   

$

(5,171)

 

 

Other Services(a)

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

Reconciliation of Adjusted EBITDA to net income (loss):

2021

 

2020

 

2021

 

2021

 

2020

Net income (loss)

$

9,288

   

$

3,756

   

$

3,929

   

$

13,109

   

$

(12,522)

 

Depreciation, amortization and accretion expense

3,202

   

3,655

   

3,453

   

10,148

   

12,174

 

Impairment of goodwill

   

   

   

   

1,567

 

Impairment of other long-lived assets

547

   

   

   

547

   

8,368

 

Public offering costs

1

   

   

8

   

9

   

 

Stock based compensation

23

   

23

   

28

   

75

   

196

 

Interest expense, net

135

   

92

   

146

   

435

   

592

 

Other (income) expense, net

(2,443)

   

(1,323)

   

(727)

   

(2,929)

   

(697)

 

Benefit for income taxes

(11,134)

   

(7,838)

   

(7,722)

   

(23,907)

   

(14,064)

 

Interest on trade accounts receivable

   

16

   

   

   

25

 

Adjusted EBITDA

$

(381)

   

$

(1,619)

   

$

(885)

   

$

(2,513)

   

$

(4,361)

 
   

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.

Adjusted Net (Loss) Income and Adjusted (Loss) Income per Share

Adjusted net (loss) income and adjusted basic and diluted (loss) income 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.