Le Lézard
Classified in: Oil industry, Business
Subjects: ERN, ERP

Mammoth Energy Services, Inc. Announces PREPA's Payment of $50.6 Million and Reports Fourth Quarter and Full Year 2023 Operational and Financial Results


OKLAHOMA CITY, March 1, 2024 /PRNewswire/ -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ: TUSK) today announced payment of $50.6 million from the Puerto Rico Electric Power Authority ("PREPA") for a portion of the work its wholly-owned subsidiary Cobra Acquisitions LLC ("Cobra") completed in the aftermath of Hurricane Maria. This is in addition to $13.4 million paid by PREPA in January 2024. As previously announced, on December 1, 2023, Cobra entered into an agreement to transfer approximately $54.4 million of its outstanding receivable with PREPA to SPCP Group, LLC ("SPCP Group"). The aggregate payments from PREPA in 2024 totaling $64.0 million fully satisfied the obligations to SPCP Group and resulted in Cobra receiving approximately $9.6 million in cash.

Mark Layton, Chief Financial Officer of Mammoth commented, "We're pleased to have received these payments from PREPA, which has allowed us to extinguish the liability owed to SPCP Group and collect nearly $10 million in cash. We continue to pursue payment of the outstanding amounts owed to Cobra, including the associated interest, as these payments represent only a portion of the amounts still owed to us."

In addition, today Mammoth reported financial and operational results for the fourth quarter and full year ended December 31, 2023.

Financial Overview for the Fourth Quarter and Full Year 2023:

Total revenue was $52.8 million for the fourth quarter of 2023 compared to $102.9 million for the same quarter of 2022 and $65.0 million for the third quarter of 2023. Total revenue for the full year of 2023 was $309.5 million, a decrease of 15% compared to $362.1 million in 2022.

Net loss for the fourth quarter of 2023 was $6.0 million, or $0.12 loss per diluted share, compared to net income of $4.8 million, or $0.10 per diluted share, for the same quarter of 2022 and net loss of $1.1 million, or $0.02 loss per diluted share, for the third quarter of 2023. Net loss for the full year of 2023 was $3.2 million, or $0.07 per fully diluted share, compared to net loss of $0.6 million, or $0.01 per fully diluted share for 2022.

Adjusted EBITDA (as defined and reconciled below) was $10.5 million for the fourth quarter of 2023, compared to $24.1 million for the same quarter of 2022 and $13.4 million for the third quarter of 2023. Adjusted EBITDA was $71.0 million for the full year of 2023 compared to $86.1 million for 2022.

Arty Straehla, Chief Executive Officer of Mammoth commented, "The fourth quarter proved to be challenging, largely due to additional deferred activity by exploration and production companies, commodity price fluctuations, and customer budget exhaustion. Despite the operational softness we experienced this year, 2023 marked several accomplishments for Mammoth as we completed a significant debt refinancing transaction, began receiving payments from PREPA on our outstanding receivable and entered into an agreement to monetize a portion of our outstanding PREPA receivable.

"In 2023, we entered into a new revolving credit facility agreement and a new term loan agreement, which refinanced, in full, Mammoth's indebtedness outstanding under our previous revolving credit facility. We believe these new agreements provide Mammoth with a solid liquidity base for years to come. During 2023, we also received our first payments from PREPA in more than four years totaling $22.2 million. In addition, we entered into an agreement to monetize a portion of our outstanding receivable with PREPA, which allowed us to increase liquidity and invest in our business. We used a portion of the proceeds to repay in full our outstanding borrowings under the new revolving credit facility, which currently remains undrawn. We plan to use the remainder of the proceeds to invest back into our business, which may include upgrading an additional hydraulic fracturing fleet with dual fuel capabilities. This incremental dual fuel fleet would result in three of our six fleets having dual fuel capabilities."

Commenting further, Straehla said, "We exited 2023 with a strong balance sheet and a secure financing structure that positions Mammoth for future growth. We have entered 2024 with an improving line of sight, particularly in our infrastructure and sand divisions, and we will be opportunistic in our well completions business as commodity prices improve and activity increases. I am proud of the hard work and perseverance that our teams have demonstrated across our organization. Our continued commitment to safety and high-quality standards propels our organization forward."

Well Completion Services

Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $16.1 million on 669 stages for the fourth quarter of 2023, compared to $51.4 million on 1,837 stages for the same quarter of 2022 and $20.3 million on 577 stages for the third quarter of 2023. On average, 0.9 of the Company's fleets were active for the fourth quarter of 2023 compared to an average utilization of 3.4 fleets during the same quarter of 2022 and 1.2 fleets during the third quarter of 2023.

The well completion services division contributed revenues (inclusive of inter-segment revenues) of $131.3 million on 4,220 stages for the full year of 2023, down from $170.7 million on 6,149 stages for 2022. On average, 1.8 of the Company's fleets were active in 2023 compared to 3.0 fleets in 2022.

Infrastructure Services

Mammoth's infrastructure services division contributed revenue of $27.2 million for the fourth quarter of 2023 compared to $29.6 million for the same quarter of 2022 and $26.7 million for the third quarter of 2023. Average crew count was 78 crews during the fourth quarter of 2023 compared to 93 crews during the same quarter of 2022 and 81 crews during the third quarter of 2023.

The infrastructure services division contributed revenues of $110.5 million for the full year of 2023 compared to $111.5 million for 2022. Average crew count declined to 83 crews for 2023 compared to 91 crews for 2022.

Natural Sand Proppant Services

Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $4.5 million for the fourth quarter of 2023 compared to $13.8 million for the same quarter of 2022 and $10.6 million for the third quarter of 2023. In the fourth quarter of 2023, the Company sold approximately 104,000 tons of sand at an average sales price of $23.62 per ton compared to sales of approximately 366,000 tons of sand at an average sales price of $29.80 per ton during the same quarter of 2022. In the third quarter of 2023, sales were approximately 352,000 tons of sand at an average price of $30.18 per ton.

The natural sand proppant division contributed revenues (inclusive of inter-segment revenues) of $39.1 million for the full year of 2023 compared to $51.4 million for 2022. The Company sold 1.2 million tons of sand during 2023, a decrease from 1.4 million tons of sand during 2022. The Company's average sales price for the sand sold during 2023 was $29.86 per ton, an increase from $27.11 per ton average sales price during 2022.

Drilling Services

Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $0.6 million for the fourth quarter of 2023 compared to $1.9 million for the same quarter of 2022 and $2.3 million for the third quarter of 2023. The drilling services division contributed revenues of $7.1 million for the full year of 2023, compared to $8.4 million for 2022. The decrease in drilling services revenue is primarily attributable to decreased utilization for our directional drilling business.

Other Services

Mammoth's other services, including aviation, equipment rentals, remote accommodations and equipment manufacturing, contributed revenue (inclusive of inter-segment revenue) of $4.9 million for the fourth quarter of 2023 compared to $6.9 million for the same quarter of 2022 and $6.0 million for the third quarter of 2023. The Company's other services contributed revenues of $24.1 million for the full year of 2023, compared to $25.2 million for 2022.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses were $8.3 million for the fourth quarter of 2023 compared to $13.0 million for the same quarter of 2022 and $10.4 million for the third quarter of 2023. SG&A expenses were $37.5 million for the full year of 2023 compared to $39.6 million for 2022.

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


Three Months Ended


Twelve Months Ended


December 31,


September 30,


December 31,


2023


2022


2023


2023


2022

Cash expenses:










Compensation and benefits

$              3,898


$              3,932


$              3,392


$            15,563


$            13,729

Professional services

2,559


3,434


4,684


13,448


13,501

Other(a)

1,808


1,885


2,105


7,693


8,012

Total cash SG&A expense

8,265


9,251


10,181


36,704


35,242

Non-cash expenses:










Change in provision for expected credit losses

(177)


3,501


11


(591)


3,389

Stock based compensation

219


241


219


1,345


923

Total non-cash SG&A expense

42


3,742


230


754


4,312

Total SG&A expense

$              8,307


$            12,993


$            10,411


$            37,458


$            39,554



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 16% for the fourth quarter of 2023 compared to 13% for the same quarter of 2022 and 16% for the third quarter of 2023. SG&A expenses, as a percentage of total revenue, were 12% for the full year of 2023 compared to 11% for 2022.

Interest Expense and Financing Charges, net

Interest expense and financing charges, net were $6.8 million for the fourth quarter of 2023 compared to $3.2 million for the same quarter of 2022 and $2.9 million for the third quarter of 2023. Interest expense and financing charges, net were $16.2 million for the full year of 2023 compared to $11.5 million for 2022.

On December 1, 2023, Cobra entered into an agreement to transfer approximately $54.4 million of its outstanding receivable with PREPA to SPCP Group in exchange for net proceeds of $46.1 million. During the fourth quarter of 2023, the Company incurred financing charges totaling $2.8 million in relation to this transaction. Mammoth expects to recognize a financing charge totaling approximately $5.5 million during the first quarter of 2024 related to the termination of the Assignment Agreement.

Liquidity 

As of December 31, 2023, Mammoth had cash on hand of $16.6 million. As of December 31, 2023, the Company's revolving credit facility was undrawn, the borrowing base was $27.0 million and there was $20.7 million of available borrowing capacity under the revolving credit facility, after giving effect to $6.3 million of outstanding letters of credit. As of December 31, 2023, Mammoth had total liquidity of $37.3 million.

As of February 28, 2024, Mammoth had cash on hand of $10.5 million, no outstanding borrowings under its revolving credit facility, and a borrowing base of $23.3 million. As of February 28, 2024, the Company had $17.0 million of available borrowing capacity under its revolving credit facility and total liquidity of $27.5 million. These amounts do not include $9.6 million in cash received on February 29, 2024.

Capital Expenditures

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


Three Months Ended


Twelve Months Ended


December 31,


September 30,


December 31,


2023


2022


2023


2023


2022

Well completion services(a)

$              3,170


$              3,374


$              4,651


$            17,931


$            11,421

Infrastructure services(b)

373


62


69


716


885

Natural sand proppant services(c)

223


54


?


223


88

Drilling services(c)

13


54


98


110


95

Other(d)

229


121


72


312


401

Eliminations

124


(26)


(165)


103


(153)

Total capital expenditures

$              4,132


$              3,639


$              4,725


$            19,395


$            12,737



a.

Capital expenditures primarily for upgrades and maintenance to our pressure pumping fleet for the periods presented.

b.

Capital expenditures primarily for truck, tooling and equipment purchases for the periods presented.

c.

Capital expenditures primarily for maintenance for the periods presented.

d.

Capital expenditures primarily for equipment for the Company's rental businesses for the periods presented.

Mammoth's full year 2024 capital expenditure budget is approximately $15 million.

Conference Call Information

Mammoth will host a conference call on Friday, March 1, 2024 at 9:00 a.m. Central time (10:00 a.m. Eastern time) to discuss its fourth quarter and full year financial and operational results. The telephone number to access the conference call is 1-201-389-0872. The conference call will also be webcast live on https://ir.mammothenergy.com/events-presentations. Please submit any questions for management prior to the call via email to [email protected]

About Mammoth Energy Services, Inc.

Mammoth is an integrated, growth-oriented energy services company focused on the providing products and services to enable the exploration and development of North American onshore unconventional oil and natural gas reserves as well as the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its infrastructure services businesses. Mammoth's suite of services and products include: well completion services, infrastructure 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, plans for stock repurchases under its stock repurchase program, 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: 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 impact of the war in Ukraine and the Israel-Hamas war on the global energy and capital markets and global stability; performance of contracts and supply chain disruptions; inflationary pressures; high interest rates and their impact on the cost of capital; instability in the banking and financial services sectors; the outcome of ongoing government investigations and other legal proceedings, including those relating to the contracts awarded to the Company's subsidiary Cobra by PREPA; the failure to receive or delays in receiving governmental authorizations, approvals and/or payments, including payments with respect to the PREPA account receivable for prior services to PREPA performed by Cobra; 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, including concerns over a potential economic slowdown or recession; impacts of the recent federal infrastructure bill on the infrastructure industry and our infrastructure services business; 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 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 comply with the applicable financial covenants and other terms and conditions under Mammoth's revolving credit facility and term loan; 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


December 31,


December 31,



2023


2022

CURRENT ASSETS


(in thousands)

Cash and cash equivalents


$                     16,556


$                     17,282

Restricted Cash


7,742


?

Accounts receivable, net


447,155


456,465

Receivables from related parties, net


47


223

Inventories


12,653


8,883

Prepaid expenses


12,181


13,219

Other current assets


591


620

Total current assets


496,925


496,692






Property, plant and equipment, net


113,905


138,066

Sand reserves


58,528


61,830

Operating lease right-of-use assets


9,551


10,656

Intangible assets, net


913


1,782

Goodwill


9,214


11,717

Deferred income tax asset


1,844


?

Other non-current assets


7,599


3,935

Total assets


$                   698,479


$                   724,678

LIABILITIES AND EQUITY





CURRENT LIABILITIES





Accounts payable


$                     27,508


$                     47,391

Accrued expenses and other current liabilities


86,713


52,297

Accrued expenses and other current liabilities - related parties


1,241


?

Current operating lease liability


5,771


5,447

Current portion of long-term debt


?


83,520

Income taxes payable


61,320


48,557

Total current liabilities


182,553


237,212






Long-term debt from related parties


42,809


?

Deferred income tax liabilities


628


471

Long-term operating lease liability


3,534


4,913

Asset retirement obligation


4,140


3,981

Other long-term liabilities


4,715


15,485

Total liabilities


238,379


262,062






COMMITMENTS AND CONTINGENCIES










EQUITY





Equity:





Common stock, $0.01 par value, 200,000,000 shares authorized, 47,941,652 and 47,312,270
issued and outstanding at December 31, 2023 and 2022


479


473

Additional paid in capital


539,558


539,138

Accumulated deficit


(76,317)


(73,154)

Accumulated other comprehensive loss


(3,620)


(3,841)

Total equity


460,100


462,616

Total liabilities and equity


$                   698,479


$                   724,678

 

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



Three Months Ended


Twelve Months Ended


December 31,


September 30,


December 31,


2023


2022


2023


2023


2022


(in thousands, except per share amounts)

REVENUE


Services revenue

$          48,087


$          88,963


$          54,025


$        269,227


$        311,968

Services revenue - related parties

139


110


252


980


1,133

Product revenue

4,556


13,836


10,682


39,285


48,985

Total revenue

52,782


102,909


64,959


309,492


362,086











COST AND EXPENSES










Services cost of revenue (exclusive of depreciation,
depletion, amortization and accretion of $6,931, $11,819,
$8,394, $37,356, and $55,546, respectively, for the three
months ended December 31, 2023, December 31, 2022, and
September 30, 2023 and years ended December 31, 2023
and 2022)

40,972


67,502


45,082


219,876


241,323

Services cost of revenue - related parties

114


135


120


475


541

Product cost of revenue (exclusive of depreciation,
depletion, amortization and accretion of $1,339, $2,014,
$2,836, $7,734, and $8,725, respectively, for the three
months ended December 31, 2023, December 31, 2022, and
September 30, 2023 and years ended December 31, 2023
and 2022)

4,692


9,226


7,615


27,489


36,723

Selling, general and administrative

8,307


12,993


10,411


37,458


39,554

Depreciation, depletion, amortization and accretion

8,271


13,786


11,233


45,110


64,271

Gains on disposal of assets, net

(2,757)


(170)


(2,450)


(6,041)


(3,908)

Impairment of goodwill

?


?


1,810


1,810


?

Total cost and expenses

59,599


103,472


73,821


326,177


378,504

Operating loss

(6,817)


(563)


(8,862)


(16,685)


(16,418)











OTHER INCOME (EXPENSE)










Interest expense and financing charges, net

(5,570)


(3,237)


(2,876)


(14,955)


(11,506)

Interest expense and financing charges, net - related parties

(1,241)


?


?


(1,241)


?

Other income, net

10,964


10,737


14,088


42,015


40,912

Total other income

4,153


7,500


11,212


25,819


29,406

(Loss) income before income taxes

(2,664)


6,937


2,350


9,134


12,988

Provision for income taxes

3,291


2,165


3,438


12,297


13,607

Net (loss) income

$          (5,955)


$            4,772


$          (1,088)


$          (3,163)


$             (619)











OTHER COMPREHENSIVE (LOSS) INCOME










Foreign currency translation adjustment

266


(59)


(275)


221


(910)

Comprehensive (loss) income

$          (5,689)


$            4,713


$          (1,363)


$          (2,942)


$          (1,529)











Net (loss) income per share (basic)

$            (0.12)


$             0.10


$            (0.02)


$            (0.07)


$            (0.01)

Net (loss) income per share (diluted)

$            (0.12)


$             0.10


$            (0.02)


$            (0.07)


$            (0.01)

Weighted average number of shares outstanding (basic)

47,942


47,312


47,942


47,777


47,175

Weighted average number of shares outstanding (diluted)

47,942


47,963


47,942


47,777


47,175

 

 

MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS



Twelve Months Ended


December 31,


2023


2022


(in thousands)

Cash flows from operating activities:




Net loss

$                         (3,163)


$                            (619)

Adjustments to reconcile net loss to cash provided by operating activities:




Stock based compensation

1,345


923

Depreciation, depletion, accretion and amortization

45,110


64,271

Amortization of debt origination costs

1,288


777

Change in provision for expected credit losses

(591)


3,389

Gains on disposal of assets

(6,041)


(3,908)

Gains from sales of equipment damaged or lost down-hole

(335)


(604)

Impairment of goodwill

1,810


?

Gain on sale of business

(2,080)


?

Deferred income taxes

(1,687)


7,700

Other

(693)


(117)

Changes in assets and liabilities:




Accounts receivable, net

11,099


(52,392)

Receivables from related parties, net

176


(135)

Inventories

(3,770)


(517)

Prepaid expenses and other assets

354


(710)

Accounts payable

(18,485)


6,680

Accrued expenses and other liabilities

(6,949)


(15,272)

Accrued expenses and other liabilities - related parties

1,241


?

Income taxes payable

12,757


5,800

Net cash provided by operating activities

31,386


15,266





Cash flows from investing activities:




Purchases of property and equipment

(19,395)


(12,737)

Business divestitures, net of cash transferred

3,276


?

Proceeds from disposal of property and equipment

7,333


10,613

Net cash used in investing activities

(8,786)


(2,124)





Cash flows from financing activities:




Borrowings on long-term debt

201,091


197,975

Borrowings on long-term debt - related parties

43,874


?

Repayments of long-term debt

(284,610)


(199,430)

Proceeds from financing transaction

46,120


?

Proceeds from sale-leaseback transaction

?


4,589

Payments on sale-leaseback transaction

(4,958)


(4,429)

Principal payments on financing leases and equipment financing notes

(12,212)


(4,306)

Debt issuance costs

(3,972)


?

Other

(919)


?

Net cash used in financing activities

(15,586)


(5,601)

Effect of foreign exchange rate on cash

2


(158)

Net change in cash, cash equivalents and restricted cash

7,016


7,383

Cash, cash equivalents and restricted cash at beginning of period

17,282


9,899

Cash, cash equivalents and restricted cash at end of period

$                         24,298


$                         17,282





Supplemental disclosure of cash flow information:




Cash paid for interest

$                         12,017


$                         10,164

Cash paid for income taxes, net of refunds received

$                              897


$                              106

Supplemental disclosure of non-cash transactions:




Purchases of property and equipment included in accounts payable

$                           3,339


$                           4,736

Right-of-use assets obtained for financing lease liabilities

$                           1,417


$                           3,058

 

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


Three Months Ended December 31, 2023

Well
Completion

Infrastructure

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$           15,962

$           27,229

$            4,464

$               625

$            4,502

$                 ?

$           52,782

Intersegment revenues

116

?

?

?

360

(476)

?

Total revenue

16,078

27,229

4,464

625

4,862

(476)

52,782

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

14,248

22,668

4,419

1,059

3,384

?

45,778

Intersegment cost of revenues

216

119

?

?

141

(476)

?

Total cost of revenue

14,464

22,787

4,419

1,059

3,525

(476)

45,778

Selling, general and administrative

1,365

4,987

973

193

789

?

8,307

Depreciation, depletion, amortization and accretion

3,506

1,023

1,339

1,017

1,386

?

8,271

(Gains) losses on disposal of assets, net

(75)

(71)

3

(1,577)

(1,037)

?

(2,757)

Operating (loss) income

(3,182)

(1,497)

(2,270)

(67)

199

?

(6,817)

Interest expense and financing charges, net

1,975

4,394

119

113

210

?

6,811

Other expense (income), net

1

(10,539)

(5)

(33)

(388)

?

(10,964)

(Loss) income before income taxes

$           (5,158)

$            4,648

$           (2,384)

$             (147)

$               377

$                 ?

$           (2,664)


Three Months Ended December 31, 2022

Well
Completion

Infrastructure

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$           51,292

$           29,559

$           13,817

$            1,919

$            6,322

$                 ?

$         102,909

Intersegment revenues

147

?

25

?

602

(774)

?

Total revenue

51,439

29,559

13,842

1,919

6,924

(774)

102,909

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

36,108

24,387

10,081

1,756

4,531

?

76,863

Intersegment cost of revenues

475

23

?

32

242

(772)

?

Total cost of revenue

36,583

24,410

10,081

1,788

4,773

(772)

76,863

Selling, general and administrative

2,328

5,091

4,397

184

993

?

12,993

Depreciation, depletion, amortization and accretion

4,140

3,675

2,015

1,390

2,566

?

13,786

(Gains) losses on disposal of assets, net

(68)

?

1

?

(103)

?

(170)

Operating income (loss)

8,456

(3,617)

(2,652)

(1,443)

(1,305)

(2)

(563)

Interest expense and financing charges, net

617

2,046

201

134

239

?

3,237

Other expense (income), net

1

(10,522)

(4)

?

(212)

?

(10,737)

Income (loss) before income taxes

$            7,838

$            4,859

$           (2,849)

$           (1,577)

$           (1,332)

$                 (2)

$            6,937


Three months ended September 30, 2023

Well
Completion

Infrastructure

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$           20,166

$           26,712

$           10,633

$            2,336

$            5,112

$                 ?

$           64,959

Intersegment revenues

161

?

?

?

909

(1,070)

?

Total revenue

20,327

26,712

10,633

2,336

6,021

(1,070)

64,959

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

17,528

22,042

6,977

2,194

4,076

?

52,817

Intersegment cost of revenues

325

10

?

?

735

(1,070)

?

Total cost of revenue

17,853

22,052

6,977

2,194

4,811

(1,070)

52,817

Selling, general and administrative

1,579

6,495

1,224

215

898

?

10,411

Depreciation, depletion, amortization and accretion

3,971

1,557

2,836

1,114

1,755

?

11,233

Gains on disposal of assets, net

(2,016)

(311)

?

?

(123)

?

(2,450)

Impairment of goodwill

?

?

?

?

1,810

?

1,810

Operating loss

(1,060)

(3,081)

(404)

(1,187)

(3,130)

?

(8,862)

Interest expense and financing charges, net

774

1,647

117

117

221

?

2,876

Other income, net

?

(11,348)

(6)

?

(2,734)

?

(14,088)

(Loss) income before income taxes

$           (1,834)

$            6,620

$             (515)

$           (1,304)

$             (617)

$                 ?

$            2,350


Year ended December 31, 2023

Well
Completion

Infrastructure

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$        130,771

$        110,537

$          39,106

$            7,126

$          21,952

$                ?

$        309,492

Intersegment revenues

517

?

25

?

2,102

(2,644)

$                ?

Total revenue

131,288

110,537

39,131

7,126

24,054

(2,644)

309,492

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

107,405

90,478

26,324

7,095

16,538

?

247,840

Intersegment cost of revenues

1,246

149

?

26

1,223

(2,644)

$                ?

Total cost of revenue

108,651

90,627

26,324

7,121

17,761

(2,644)

247,840

Selling, general and administrative

7,212

22,078

3,655

746

3,767

?

37,458

Depreciation, depletion, amortization and accretion

16,794

8,390

7,737

4,514

7,675

?

45,110

Gains on disposal of assets, net

(2,091)

(510)

(13)

(1,577)

(1,850)

?

(6,041)

Impairment of goodwill

?

?

?

?

1,810

?

1,810

Operating income (loss)

722

(10,048)

1,428

(3,678)

(5,109)

?

(16,685)

Interest expense and financing charges, net

4,502

9,753

540

489

912

?

16,196

Other expense (income), net

2

(39,252)

(18)

(33)

(2,714)

?

(42,015)

(Loss) income before income taxes

$          (3,782)

$          19,451

$              906

$          (4,134)

$          (3,307)

$                ?

$            9,134


Year ended December 31, 2022

Well
Completion

Infrastructure

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$        169,872

$        111,452

$          48,916

$            8,380

$          23,466

$                ?

$        362,086

Intersegment revenues

791

?

2,475

?

1,708

(4,974)

?

Total revenue

170,663

111,452

51,391

8,380

25,174

(4,974)

362,086

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

124,848

91,577

36,783

7,514

17,865

?

278,587

Intersegment cost of revenues

3,894

72

?

85

923

(4,974)

?

Total cost of revenue

128,742

91,649

36,783

7,599

18,788

(4,974)

278,587

Selling, general and administrative

8,642

19,147

7,171

606

3,988

?

39,554

Depreciation, depletion, amortization and accretion

22,103

16,171

8,732

5,811

11,454

?

64,271

Gains on disposal of assets, net

(615)

(795)

(89)

?

(2,409)

?

(3,908)

Operating income (loss)

11,791

(14,720)

(1,206)

(5,636)

(6,647)

?

(16,418)

Interest expense and financing charges, net

1,940

7,390

753

435

988

?

11,506

Other income, net

(343)

(40,470)

(14)

?

(85)

?

(40,912)

Income (loss) before income taxes

$          10,194

$          18,360

$          (1,945)

$          (6,071)

$          (7,550)

$                ?

$          12,988

 

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 (loss) income before depreciation, depletion, amortization and accretion expense, gains on disposal of assets, net, impairment of goodwill, stock based compensation, interest expense and financing charges, net, other (income) expense, net (which is comprised of interest on trade accounts receivable and certain legal expenses) 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 (loss) income 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 (loss) income 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 (loss) income on a consolidated basis and for each of the Company's segments (in thousands):


Consolidated


Three Months Ended


Years Ended


December 31,


September 30,


December 31,

Reconciliation of net (loss) income to Adjusted EBITDA:

2023


2022


2023


2023


2022

Net (loss) income

$          (5,955)


$            4,772


$          (1,088)


$          (3,163)


$             (619)

Depreciation, depletion, amortization and accretion expense

8,271


13,786


11,233


45,110


64,271

Gains on disposal of assets, net

(2,757)


(170)


(2,450)


(6,041)


(3,908)

Impairment of goodwill

?


?


1,810


1,810


?

Stock based compensation

219


241


219


1,345


923

Interest expense and financing charges, net

6,811


3,237


2,876


16,196


11,506

Other income, net

(10,964)


(10,737)


(14,088)


(42,015)


(40,912)

Provision for income taxes

3,291


2,165


3,438


12,297


13,607

Interest on trade accounts receivable

11,543


10,785


11,443


45,440


41,276

Adjusted EBITDA

$          10,459


$          24,079


$          13,393


$          70,979


$          86,144


Well Completion Services


Three Months Ended


Years Ended


December 31,


September 30,


December 31,

Reconciliation of net (loss) income to Adjusted EBITDA:

2023


2022


2023


2023


2022

Net (loss) income

$          (5,158)


$            7,838


$          (1,834)


$          (3,782)


$          10,194

Depreciation and amortization expense

3,506


4,140


3,971


16,794


22,103

Gains on disposal of assets, net

(75)


(68)


(2,016)


(2,091)


(615)

Stock based compensation

57


106


64


508


380

Interest expense and financing charges, net

1,975


617


774


4,502


1,940

Other expense (income), net

1


1


?


2


(343)

Adjusted EBITDA

$                306


$          12,634


$                959


$          15,933


$          33,659


Infrastructure Services


Three Months Ended


Years Ended


December 31,


September 30,


December 31,

Reconciliation of net income to Adjusted EBITDA:

2023


2022


2023


2023


2022

Net income

$            1,844


$            1,609


$            3,239


$            8,237


$            4,933

Depreciation and amortization expense

1,023


3,675


1,557


8,390


16,171

Gains on disposal of assets, net

(71)


?


(311)


(510)


(795)

Stock based compensation

103


88


99


538


349

Interest expense and financing charges, net

4,394


2,046


1,647


9,753


7,390

Other income, net

(10,539)


(10,522)


(11,348)


(39,252)


(40,470)

Provision for income taxes

2,804


3,250


3,381


11,214


13,427

Interest on trade accounts receivable

11,543


10,785


11,443


45,440


41,276

Adjusted EBITDA

$          11,101


$          10,931


$            9,707


$          43,810


$          42,281


Natural Sand Proppant Services


Three Months Ended


Years Ended


December 31,


September 30,


December 31,

Reconciliation of net (loss) income to Adjusted EBITDA:     

2023


2022


2023


2023


2022

Net (loss) income

$          (2,384)


$          (2,849)


$              (515)


$                906


$          (1,945)

Depreciation, depletion, amortization and accretion expense

1,339


2,015


2,836


7,737


8,732

Losses (gains) on disposal of assets, net

3


1


?


(13)


(89)

Stock based compensation

38


29


37


187


119

Interest expense and financing charges, net

119


201


117


540


753

Other income, net

(5)


(4)


(6)


(18)


(14)

Adjusted EBITDA

$              (890)


$              (607)


$            2,469


$            9,339


$            7,556


Drilling Services


Three Months Ended


Years Ended


December 31,


September 30,


December 31,

Reconciliation of net loss to Adjusted EBITDA:

2023


2022


2023


2023


2022

Net loss

$              (147)


$          (1,577)


$          (1,304)


$          (4,134)


$          (6,071)

Depreciation expense

1,017


1,390


1,114


4,514


5,811

Gains on disposal of assets, net

(1,577)


?


?


(1,577)


?

Stock based compensation

5


3


5


23


11

Interest expense and financing charges, net

113


134


117


489


435

Other income, net

(33)


?


?


(33)


?

Adjusted EBITDA

$              (622)


$                (50)


$                (68)


$              (718)


$                186


Other Services(a)


Three Months Ended


Years Ended


December 31,


September 30,


December 31,

Reconciliation of net loss to Adjusted EBITDA:

2023


2022


2023


2023


2022

Net loss

$              (110)


$              (249)


$              (674)


$          (4,390)


$          (7,730)

Depreciation, amortization and accretion expense

1,386


2,566


1,755


7,675


11,454

Gains on disposal of assets, net

(1,037)


(103)


(123)


(1,850)


(2,409)

Impairment of goodwill

?


?


1,810


1,810


?

Stock based compensation

16


15


14


89


64

Interest expense and financing charges, net

210


239


221


912


988

Other income, net

(388)


(212)


(2,734)


(2,714)


(85)

Provision (benefit) for income taxes

487


(1,085)


57


1,083


180

Adjusted EBITDA

$                564


$            1,171


$                326


$            2,615


$            2,462



a.

Includes results for Mammoth's aviation, equipment rentals, remote accommodations and equipment manufacturing and corporate related activities. The Company's corporate related activities do not generate revenue.

 

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


Adjusted net (loss) income and adjusted basic and diluted (loss) earnings per share are supplemental non-GAAP financial measures that are used by management to evaluate the Company's operating and financial performance. Mammoth defines adjusted net (loss) income as net (loss) income before impairment of goodwill. Mammoth defines adjusted basic and diluted (loss) earnings per share as (loss) earnings per share before the effects of impairment of goodwill and impairment of other long-lived assets. Management believes these measures provide meaningful information about the Company's performance by excluding certain non-cash charges, such as impairment of goodwill and impairment of other long-lived assets, that may not be indicative of the Company's ongoing operating results. Adjusted net (loss) income and adjusted (loss) earnings per share should not be considered in isolation or as a substitute for net (loss) income and (loss) earnings per share prepared in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. The following tables provide a reconciliation of adjusted net (loss) income and adjusted (loss) earnings per share to the GAAP financial measures of net (loss) income and (loss) earnings per share for the periods specified.



Three Months Ended


Years Ended


December 31,


September 30,


December 31,


2023


2022


2023


2023


2022


(in thousands, except per share amounts)

Net (loss) income, as reported

$          (5,955)


$            4,772


$          (1,088)


$          (3,163)


$             (619)

Impairment of goodwill

?


?


?


1,810


?

Adjusted net (loss) income

$          (5,955)


$            4,772


$          (1,088)


$          (1,353)


$             (619)











Basic (loss) earnings per share, as reported

$            (0.12)


$              0.10


$            (0.02)


$            (0.07)


$            (0.01)

Impairment of goodwill

?


?


?


0.04


?

Adjusted basic (loss) earnings per share

$            (0.12)


$              0.10


$            (0.02)


$            (0.03)


$            (0.01)











Diluted (loss) earnings per share, as reported     

$            (0.12)


$              0.10


$            (0.02)


$            (0.07)


$            (0.01)

Impairment of goodwill

?


?


?


0.04


?

Adjusted diluted (loss) earnings per share

$            (0.12)


$              0.10


$            (0.02)


$            (0.03)


$            (0.01)

 

SOURCE Mammoth Energy Services, Inc.


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