Quarterly report pursuant to Section 13 or 15(d)

Reporting Segments

v3.22.2.2
Reporting Segments
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Reporting Segments Reporting Segments
As of September 30, 2022, the Company’s revenues, income before income taxes and identifiable assets are primarily attributable to four reportable segments. The Company principally provides electric infrastructure services to private utilities, public investor-owned utilities and co-operative utilities and services in connection with on-shore drilling of oil and natural gas wells for small to large domestic independent oil and natural gas producers.

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 loss less impairment expense, as well as a qualitative basis, such as nature of the product and service offerings and types of customers.

As of September 30, 2022, the Company’s four reportable segments include infrastructure services (“Infrastructure”), well completion services (“Well Completion”), natural sand proppant services (“Sand”) and drilling services (“Drilling”). Prior to the year ended December 31, 2021, the Company included Aquawolf in its “All Other” reconciling column. Based on its assessment of FASB ASC 280, Segment Reporting, guidance at December 31, 2021, the Company changed its presentation in 2021 to move Aquawolf to the Infrastructure segment. The results for the three and nine months ended September 30, 2021 have been retroactively adjusted to reflect this change.

The Infrastructure segment provides electric utility infrastructure services to government-funded utilities, private utilities, public investor-owned utilities and co-operative utilities in the northeastern, southwestern, midwestern and western portions of the United States. The Well Completion segment provides hydraulic fracturing and water transfer services primarily in the Utica Shale of Eastern Ohio, Marcellus Shale in Pennsylvania and the mid-continent region. The Sand segment mines, processes and sells sand for use in hydraulic fracturing. The Sand segment primarily services the Utica Shale, Permian Basin, SCOOP, STACK and Montney Shale in British Columbia and Alberta, Canada. The Drilling segment provides directional drilling services primarily in the Permian Basin and mid-continent region.

During certain of the periods presented, the Company also provided aviation services, equipment rental services, crude oil hauling services, remote accommodation and equipment manufacturing. The businesses that provide these services are distinct operating segments, which the CODM reviews independently when making key operating and resource utilization decisions. None of these operating segments meet the quantitative thresholds of a reporting segment and do not meet the aggregation criteria set forth in ASC 280 Segment Reporting. Therefore, results for these operating segments are included in the column titled “All Other” in the tables below. Additionally, assets for corporate activities, which primarily include cash and cash equivalents, inter-segment accounts receivable, prepaid insurance and certain property and equipment, are included in the All Other column. Although Mammoth Energy Partners LLC, which holds these corporate assets, meets one of the quantitative thresholds of a reporting segment, it does not engage in business activities from which it may earn revenues and its results are not regularly reviewed by the Company’s CODM when making key operating and resource utilization decisions. Therefore, the Company does not include it as a reportable segment.

Sales from one segment to another are generally priced at estimated equivalent commercial selling prices. Total revenue and total cost of revenue amounts included in the Eliminations column in the following tables include inter-segment transactions conducted between segments. Receivables due for sales from one segment to another and for corporate allocations to each segment are included in the Eliminations column for total assets in the following tables. All transactions conducted between segments are eliminated in consolidation. Transactions conducted by companies within the same reporting segment are eliminated within each reporting segment. The following tables set forth certain financial information with respect to the Company’s reportable segments (in thousands):
Three months ended September 30, 2022 Infrastructure Well Completion Sand Drilling All Other Eliminations Total
Revenue from external customers $ 33,296  $ 51,378  $ 12,910  $ 3,118  $ 6,500  $ —  $ 107,202 
Intersegment revenues —  154  —  —  468  (622) — 
Total revenue 33,296  51,532  12,910  3,118  6,968  (622) 107,202 
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 26,495  35,414  9,206  2,695  4,646  —  78,456 
Intersegment cost of revenues 17  403  —  109  93  (622) — 
Total cost of revenue 26,512  35,817  9,206  2,804  4,739  (622) 78,456 
Selling, general and administrative 4,968  2,390  1,076  305  946  —  9,685 
Depreciation, depletion, amortization and accretion 3,969  4,772  2,865  1,598  2,638  —  15,842 
Loss (gain) on disposal of assets 73  (339) —  (286) (47) —  (599)
Operating (loss) income (2,226) 8,892  (237) (1,303) (1,308) —  3,818 
Interest expense, net 2,047  531  212  154  318  —  3,262 
Other (income), net (10,304) (345) (3) —  (337) —  (10,989)
Income (loss) before income taxes $ 6,031  $ 8,706  $ (446) $ (1,457) $ (1,289) $ —  $ 11,545 
Three months ended September 30, 2021 Infrastructure Well Completion Sand Drilling All Other Eliminations Total
Revenue from external customers $ 25,070  $ 22,702  $ 4,439  $ 1,184  $ 4,090  $ —  $ 57,485 
Intersegment revenues —  30  3,980  23  482  (4,515) — 
Total revenue 25,070  22,732  8,419  1,207  4,572  (4,515) 57,485 
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 21,827  16,941  9,368  1,566  3,882  —  53,584 
Intersegment cost of revenues 71  4,388  —  —  56  (4,515) — 
Total cost of revenue 21,898  21,329  9,368  1,566  3,938  (4,515) 53,584 
Selling, general and administrative 4,542  34,606  1,068  288  925  —  41,429 
Depreciation, depletion, amortization and accretion 4,933  6,538  2,533  1,942  3,202  —  19,148 
Loss (gain) on disposal of assets 33  (573) (21) (66) (2,406) —  (3,033)
Impairment of other long-lived assets —  —  —  —  547  —  547 
Operating loss (6,336) (39,168) (4,529) (2,523) (1,634) —  (54,190)
Interest expense, net 979  215  107  56  127  —  1,484 
Other expense (income), net (8,852) 1,328  (25) —  (37) —  (7,586)
Income (loss) before income taxes $ 1,537  $ (40,711) $ (4,611) $ (2,579) $ (1,724) $ —  $ (48,088)
Nine months ended September 30, 2022 Infrastructure Well Completion Sand Drilling All Other Eliminations Total
Revenue from external customers $ 81,892  $ 118,580  $ 35,098  $ 7,922  $ 15,686  $ —  $ 259,178 
Intersegment revenues —  643  2,450  22  1,044  (4,159) — 
Total revenue 81,892  119,223  37,548  7,944  16,730  (4,159) 259,178 
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 67,190  88,740  26,701  7,100  11,991  —  201,722 
Intersegment cost of revenues 49  3,419  —  430  265  (4,163) — 
Total cost of revenue 67,239  92,159  26,701  7,530  12,256  (4,163) 201,722 
Selling, general and administrative 14,056  6,314  2,774  874  2,542  —  26,560 
Depreciation, depletion, amortization and accretion 12,495  17,963  6,717  4,929  8,381  —  50,485 
Gain on disposal of assets (795) (547) (90) (286) (2,020) —  (3,738)
Operating income (loss) (11,103) 3,334  1,446  (5,103) (4,429) 4  (15,851)
Interest expense, net 5,345  1,324  552  379  670  —  8,270 
Other (income) expense, net (29,948) (345) (10) —  128  —  (30,175)
Income (loss) before income taxes $ 13,500  $ 2,355  $ 904  $ (5,482) $ (5,227) $ 4  $ 6,054 
Nine months ended September 30, 2021 Infrastructure Well Completion Sand Drilling All Other Eliminations Total
Revenue from external customers $ 73,690  $ 62,939  $ 20,031  $ 3,234  $ 11,836  $ —  $ 171,730 
Intersegment revenues —  120  3,980  54  1,804  (5,958) — 
Total revenue 73,690  63,059  24,011  3,288  13,640  (5,958) 171,730 
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 70,267  42,339  22,631  4,739  12,063  —  152,039 
Intersegment cost of revenues 165  5,449  —  —  344  (5,958) — 
Total cost of revenue 70,432  47,788  22,631  4,739  12,407  (5,958) 152,039 
Selling, general and administrative 13,900  47,111  4,108  1,105  3,089  —  69,313 
Depreciation, depletion, amortization and accretion 17,501  19,668  7,059  6,185  10,146  —  60,559 
Gain on disposal of assets (255) (648) (41) (192) (3,496) —  (4,632)
Impairment of other long-lived assets —  —  —  —  547  —  547 
Operating loss (27,888) (50,860) (9,746) (8,549) (9,053) —  (106,096)
Interest expense, net 2,312  688  291  177  410  —  3,878 
Other (income) expense, net 2,983  1,844  (851) (9) 560  —  4,527 
Loss before income taxes $ (33,183) $ (53,392) $ (9,186) $ (8,717) $ (10,023) $ —  $ (114,501)

Infrastructure Well Completion Sand Drilling All Other Eliminations Total
As of September 30, 2022:
Total assets $ 445,143  $ 67,239  $ 145,567  $ 24,299  $ 120,025  $ (88,935) $ 713,338 
As of December 31, 2021:
Total assets $ 427,626  $ 56,036  $ 156,519  $ 27,457  $ 129,202  $ (75,948) $ 720,892