Exhibit 99.1
Mammoth Energy Services, Inc. Announces
Second Quarter 2023 Operational and Financial Results
OKLAHOMA CITY - August 11, 2023 - Mammoth Energy Services, Inc. (“Mammoth” or the “Company”) (NASDAQ: TUSK) today reported financial and operational results for the second quarter ended June 30, 2023.
Financial Overview for the Second Quarter 2023
Total revenue was $75.4 million for the second quarter of 2023, a decrease of 16% compared to $89.7 million for the same quarter last year and a decrease of 35% compared to $116.3 million for the first quarter of 2023.
Net loss for the second quarter of 2023 was $4.5 million, or $0.09 loss per diluted share, compared to net income of $1.7 million, or $0.04 per share, for the same quarter last year and net income of $8.4 million, or $0.17 per share, for the first quarter of 2023.
Adjusted EBITDA (as defined and reconciled below) was $16.4 million for the second quarter of 2023, a decrease compared to $23.0 million for the same quarter last year and $30.7 million for the first quarter of 2023.
Arty Straehla, Chief Executive Officer of Mammoth commented, “During the second quarter we experienced a decrease in our pressure pumping fleet utilization, as lower oil and gas demand negatively impacted the overall frac market. These market pressures led to operational softness which impacted our top and bottom line in the second quarter, as we foreshadowed in our first quarter conference call. We have again lowered capital expenditures to align with our current outlook. Our sand division performed admirably during the second quarter despite the impact of the wildfires in Canada, and pricing remained strong.
“While we expect the second half of the year will be challenging, we are encouraged by recent bid activity in our Infrastructure Services segment. Initial funds from the Infrastructure Investment and Jobs Act are being released for infrastructure projects such as fiber, transmission and distribution, areas where we are excited participants, which gives us optimism for improvements later in 2023 and into 2024.”
Straehla added, “Today we announced that we have entered into two non-binding agreements with lenders to refinance and repay our existing revolving credit facility. In addition, our Board of Directors has approved a stock repurchase program pursuant to which Mammoth is authorized to repurchase up to the lesser of $55 million or 10 million shares of our common stock, subject to the expected repayment and refinancing of our existing credit facility and certain other factors discussed in this release. Also, we were pleased to announce in June that we received our first payment in more than four years from PREPA in the amount of $10.75 million. This payment represents only a portion of what is still owed to us for the work completed by our subsidiary Cobra in 2019. We continue to pursue payment of the outstanding amounts owed by PREPA, including the associated interest that has accrued and is continuing to accrue.”
Well Completion Services
Mammoth’s well completion services division contributed revenue (inclusive of inter-segment revenue) of $27.6 million on 956 stages for the second quarter of 2023, compared to $43.8 million on 1,716 stages for the same quarter of 2022 and $67.3 million on 2,018 stages for the first quarter of 2023. On average, 1.6 of the Company’s
fleets were active for the second quarter of 2023 compared to an average utilization of 3.5 fleets during the same quarter of 2022 and 3.6 fleets during the first quarter of 2023.
Infrastructure Services
Mammoth’s infrastructure services division contributed revenue of $28.3 million for the second quarter of 2023 compared to $25.6 million for the same quarter of 2022 and $28.3 million for the first quarter of 2023. Average crew count was 86 crews during the second quarter of 2023 compared to 88 crews during the same quarter of 2022 and 88 crews during the first quarter of 2023.
Natural Sand Proppant Services
Mammoth’s natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $11.6 million for the second quarter of 2023 compared to $15.5 million for the same quarter of 2022 and $12.5 million for the first quarter of 2023. In the second quarter of 2023, the Company sold approximately 384,000 tons of sand at an average sales price of $30.08 per ton compared to sales of approximately 350,000 tons of sand at an average sales price of $26.86 per ton during the same quarter of 2022. In the first quarter of 2023, sales were approximately 391,000 tons of sand at an average price of $31.02 per ton.
Drilling Services
Mammoth’s drilling services division contributed revenue (inclusive of inter-segment revenue) of $3.3 million for the second quarter of 2023 compared to $2.0 million for the same quarter of 2022 and $1.8 million for the first quarter of 2023. The increase in drilling services revenue is primarily attributable to increased 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 $5.1 million for the second quarter of 2023 compared to $5.0 million for the same quarter of 2022 and $7.0 million for the first quarter of 2023.
Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses were $10.4 million for the second quarter of 2023 compared to $8.2 million for the same quarter of 2022 and $8.4 million for the first quarter of 2023.
Following is a breakout of SG&A expense (in thousands):
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | |||||||||||||||||||||||||
| Cash expenses: | |||||||||||||||||||||||||||||
| Compensation and benefits | $ | 3,996 | $ | 3,137 | $ | 4,277 | $ | 8,273 | $ | 6,120 | |||||||||||||||||||
| Professional services | 4,276 | 2,724 | 1,929 | 6,205 | 6,361 | ||||||||||||||||||||||||
Other(a) | 1,868 | 2,162 | 1,911 | 3,779 | 4,068 | ||||||||||||||||||||||||
| Total cash SG&A expense | 10,140 | 8,023 | 8,117 | 18,257 | 16,549 | ||||||||||||||||||||||||
| Non-cash expenses: | |||||||||||||||||||||||||||||
| Bad debt recoveries | (44) | (16) | (381) | (425) | (115) | ||||||||||||||||||||||||
| Stock based compensation | 261 | 199 | 647 | 908 | 440 | ||||||||||||||||||||||||
| Total non-cash SG&A expense | 217 | 183 | 266 | 483 | 325 | ||||||||||||||||||||||||
| Total SG&A expense | $ | 10,357 | $ | 8,206 | $ | 8,383 | $ | 18,740 | $ | 16,874 | |||||||||||||||||||
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 14% for the second quarter of 2023 compared to 9% for the same quarter of 2022 and 7% for the first quarter of 2023.
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Liquidity
As of June 30, 2023, Mammoth had cash on hand of $8.8 million, outstanding borrowings under its revolving credit facility of $59.4 million, a borrowing base of $89.4 million and $13.6 million of available borrowing capacity under its revolving credit facility, after giving effect to $6.4 million of outstanding letters of credit and the requirement to maintain a $10.0 million reserve out of the available borrowing capacity. As of June 30, 2023, Mammoth had total liquidity of $22.4 million.
As of August 9, 2023, Mammoth had cash on hand of $10.6 million, outstanding borrowings under its revolving credit facility of $72.3 million, and a borrowing base of $95.6 million. As of August 9, 2023, the Company had $16.9 million of available borrowing capacity under its revolving credit facility, after giving effect to $6.4 million of outstanding letters of credit and the requirement to maintain a $10.0 million reserve out of the available borrowing capacity.
On August 10, 2023, Mammoth entered into two non-binding agreements with lenders to repay and refinance its existing credit facility. The Company expects to close these refinancing transactions prior to the maturity of its existing credit facility on October 19, 2023, subject to customary closing conditions and closing deliverables; however, no assurance can be provided that these transactions will close on the currently anticipated timeline or at all.
Stock Repurchase Program
On August 10, 2023, the Mammoth Board of Directors approved a stock repurchase program pursuant to which Mammoth is authorized to repurchase up to the lesser of $55 million or 10 million shares of its common stock, subject to the expected repayment and refinancing of its credit facility and other factors discussed below. Following the completion of the refinancing transactions, any stock repurchases under this program may be made opportunistically from time to time in open market or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Act of 1934, as amended, including any 10b5-1 plan, and will be subject to market conditions, applicable legal and contractual restrictions, liquidity requirements and other factors. The repurchase program has no time limit, does not require Mammoth to repurchase any specific number of shares and may be suspended from time to time, modified or discontinued by the Board of Directors at any time. Any common stock repurchased as part of such stock repurchase program will be cancelled and retired.
Capital Expenditures
The following table summarizes Mammoth’s capital expenditures by operating division for the periods indicated (in thousands):
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | |||||||||||||||||||||||||
Well completion services(a) | $ | 4,348 | $ | 2,500 | $ | 5,772 | $ | 10,120 | $ | 3,301 | |||||||||||||||||||
Infrastructure services(b) | 72 | 200 | 203 | 275 | 598 | ||||||||||||||||||||||||
Drilling services(c) | — | 12 | — | — | 14 | ||||||||||||||||||||||||
Other(d) | — | 161 | — | — | 221 | ||||||||||||||||||||||||
| Eliminations | 83 | (87) | 61 | 144 | (166) | ||||||||||||||||||||||||
| Total capital expenditures | $ | 4,503 | $ | 2,786 | $ | 6,036 | $ | 10,539 | $ | 3,968 | |||||||||||||||||||
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.
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Conference Call Information
Mammoth will host a conference call on Friday, August 11, 2023 at 9:00 a.m. Central time (10:00 a.m. Eastern time) to discuss its second quarter 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 TUSK@dennardlascar.com.
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: any continuing impacts of the COVID-19 pandemic, related global and national health concerns and economic repercussions; 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 on the global energy and capital markets and global stability; performance of contracts and supply chain disruptions; inflationary pressures; rising 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 Acquisitions LLC ("Cobra") by the Puerto Rico Electric Power Authority ("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
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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 (i) continue to comply with or, if applicable, obtain a waiver of forecasted or actual non-compliance with certain financial covenants from its lenders and comply with other terms and conditions under its existing or any replacement revolving credit facility, (ii) extend, repay or refinance its existing revolving credit facility at or prior to the October 19, 2023 maturity on the terms acceptable to Mammoth or at all and (iii) meet its financial projections associated with refinancing or reducing its debt; 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.
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MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
| ASSETS | June 30, | December 31, | ||||||||||||
| 2023 | 2022 | |||||||||||||
| CURRENT ASSETS | (in thousands) | |||||||||||||
| Cash and cash equivalents | $ | 8,850 | $ | 17,282 | ||||||||||
| Accounts receivable, net | 449,189 | 456,465 | ||||||||||||
| Receivables from related parties, net | 205 | 223 | ||||||||||||
| Inventories | 10,189 | 8,883 | ||||||||||||
| Prepaid expenses | 7,993 | 13,219 | ||||||||||||
| Other current assets | 613 | 620 | ||||||||||||
| Total current assets | 477,039 | 496,692 | ||||||||||||
| Property, plant and equipment, net | 127,190 | 138,066 | ||||||||||||
| Sand reserves | 60,539 | 61,830 | ||||||||||||
| Operating lease right-of-use assets | 11,513 | 10,656 | ||||||||||||
| Intangible assets, net | 1,393 | 1,782 | ||||||||||||
| Goodwill | 11,717 | 11,717 | ||||||||||||
| Other non-current assets | 3,372 | 3,935 | ||||||||||||
| Total assets | $ | 692,763 | $ | 724,678 | ||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| CURRENT LIABILITIES | ||||||||||||||
| Accounts payable | $ | 49,863 | $ | 47,391 | ||||||||||
| Accrued expenses and other current liabilities | 36,788 | 52,297 | ||||||||||||
| Current operating lease liability | 6,051 | 5,447 | ||||||||||||
| Current portion of long-term debt | 59,356 | 83,520 | ||||||||||||
| Income taxes payable | 53,089 | 48,557 | ||||||||||||
| Total current liabilities | 205,147 | 237,212 | ||||||||||||
| Deferred income tax liabilities | 425 | 471 | ||||||||||||
| Long-term operating lease liability | 5,213 | 4,913 | ||||||||||||
| Asset retirement obligation | 4,068 | 3,981 | ||||||||||||
| Other long-term liabilities | 11,194 | 15,485 | ||||||||||||
| Total liabilities | 226,047 | 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 June 30, 2023 and December 31, 2022 | 479 | 473 | ||||||||||||
| Additional paid in capital | 539,121 | 539,138 | ||||||||||||
| Accumulated deficit | (69,273) | (73,154) | ||||||||||||
| Accumulated other comprehensive loss | (3,611) | (3,841) | ||||||||||||
| Total equity | 466,716 | 462,616 | ||||||||||||
| Total liabilities and equity | $ | 692,763 | $ | 724,678 | ||||||||||
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MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | |||||||||||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||||||||||||
| REVENUE | |||||||||||||||||||||||||||||
| Services revenue | $ | 63,478 | $ | 75,459 | $ | 103,637 | $ | 167,115 | $ | 129,126 | |||||||||||||||||||
| Services revenue - related parties | 369 | 395 | 220 | 589 | 669 | ||||||||||||||||||||||||
| Product revenue | 11,584 | 13,824 | 12,463 | 24,047 | 22,181 | ||||||||||||||||||||||||
| Total revenue | 75,431 | 89,678 | 116,320 | 191,751 | 151,976 | ||||||||||||||||||||||||
| COST AND EXPENSES | |||||||||||||||||||||||||||||
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $10,270, $15,404, $11,762, $22,032, and $30,759, respectively, for the three months ended June 30, 2023, June 30, 2022, and March 31, 2023 and six months ended June 30, 2023 and 2022) | 52,846 | 58,433 | 80,977 | 133,823 | 105,000 | ||||||||||||||||||||||||
| Services cost of revenue - related parties | 210 | 128 | 31 | 240 | 263 | ||||||||||||||||||||||||
| Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $2,373, $2,055, $1,186, $3,559, and $3,847, respectively, for the three months ended June 30, 2023, June 30, 2022, and March 31, 2023 and six months ended June 30, 2023 and 2022) | 7,196 | 10,225 | 7,985 | 15,181 | 18,003 | ||||||||||||||||||||||||
| Selling, general and administrative | 10,357 | 8,206 | 8,383 | 18,740 | 16,874 | ||||||||||||||||||||||||
| Depreciation, depletion, amortization and accretion | 12,650 | 17,476 | 12,956 | 25,606 | 34,643 | ||||||||||||||||||||||||
| Gains on disposal of assets, net | (473) | (2,943) | (361) | (834) | (3,139) | ||||||||||||||||||||||||
| Total cost and expenses | 82,786 | 91,525 | 109,971 | 192,756 | 171,644 | ||||||||||||||||||||||||
| Operating (loss) income | (7,355) | (1,847) | 6,349 | (1,005) | (19,668) | ||||||||||||||||||||||||
| OTHER INCOME (EXPENSE) | |||||||||||||||||||||||||||||
| Interest expense, net | (3,220) | (2,659) | (3,289) | (6,509) | (5,008) | ||||||||||||||||||||||||
| Other income, net | 8,339 | 10,144 | 8,624 | 16,963 | 19,185 | ||||||||||||||||||||||||
| Total other income | 5,119 | 7,485 | 5,335 | 10,454 | 14,177 | ||||||||||||||||||||||||
| (Loss) income before income taxes | (2,236) | 5,638 | 11,684 | 9,449 | (5,491) | ||||||||||||||||||||||||
| Provision for income taxes | 2,234 | 3,935 | 3,333 | 5,568 | 7,623 | ||||||||||||||||||||||||
| Net (loss) income | $ | (4,470) | $ | 1,703 | $ | 8,351 | $ | 3,881 | $ | (13,114) | |||||||||||||||||||
| OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment | 227 | (448) | 3 | 230 | (250) | ||||||||||||||||||||||||
| Comprehensive (loss) income | $ | (4,243) | $ | 1,255 | $ | 8,354 | $ | 4,111 | $ | (13,364) | |||||||||||||||||||
| Net (loss) income per share (basic) | $ | (0.09) | $ | 0.04 | $ | 0.18 | $ | 0.08 | $ | (0.28) | |||||||||||||||||||
| Net (loss) income per share (diluted) | $ | (0.09) | $ | 0.04 | $ | 0.17 | $ | 0.08 | $ | (0.28) | |||||||||||||||||||
| Weighted average number of shares outstanding (basic) | 47,718 | 47,225 | 47,443 | 47,581 | 47,036 | ||||||||||||||||||||||||
| Weighted average number of shares outstanding (diluted) | 47,718 | 47,634 | 48,002 | 47,966 | 47,036 | ||||||||||||||||||||||||
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MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six Months Ended | |||||||||||
| June 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| (in thousands) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 3,881 | $ | (13,114) | |||||||
| Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | |||||||||||
| Stock based compensation | 908 | 441 | |||||||||
| Depreciation, depletion, accretion and amortization | 25,606 | 34,643 | |||||||||
| Amortization of debt origination costs | 377 | 375 | |||||||||
| Bad debt recoveries | (425) | (115) | |||||||||
| Gains on disposal of assets, net | (834) | (3,139) | |||||||||
| Gains from sales of equipment damaged or lost down-hole | (46) | (511) | |||||||||
| Deferred income taxes | (46) | 6,612 | |||||||||
| Other | 387 | 449 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable, net | 7,862 | (22,480) | |||||||||
| Receivables from related parties, net | 18 | (105) | |||||||||
| Inventories | (1,306) | 366 | |||||||||
| Prepaid expenses and other assets | 5,162 | 4,567 | |||||||||
| Accounts payable | 466 | (2,132) | |||||||||
| Accrued expenses and other liabilities | (13,924) | (7,407) | |||||||||
| Income taxes payable | 4,523 | 912 | |||||||||
| Net cash provided by (used in) operating activities | 32,609 | (638) | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | (10,539) | (3,968) | |||||||||
| Proceeds from disposal of property and equipment | 806 | 7,447 | |||||||||
| Net cash (used in) provided by investing activities | (9,733) | 3,479 | |||||||||
| Cash flows from financing activities: | |||||||||||
| Borrowings on long-term debt | 118,900 | 83,000 | |||||||||
| Repayments of long-term debt | (143,064) | (84,241) | |||||||||
| Proceeds from sale-leaseback transaction | — | 4,589 | |||||||||
| Payments on sale-leaseback transaction | (2,449) | (2,094) | |||||||||
| Principal payments on financing leases and equipment financing notes | (3,791) | (1,197) | |||||||||
| Other | (919) | — | |||||||||
| Net cash (used in) provided by financing activities | (31,323) | 57 | |||||||||
| Effect of foreign exchange rate on cash | 15 | (68) | |||||||||
| Net change in cash and cash equivalents | (8,432) | 2,830 | |||||||||
| Cash and cash equivalents at beginning of period | 17,282 | 9,899 | |||||||||
| Cash and cash equivalents at end of period | $ | 8,850 | $ | 12,729 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid for interest | $ | 6,321 | $ | 3,792 | |||||||
| Cash paid for income taxes, net of refunds received | $ | 752 | $ | 98 | |||||||
| Supplemental disclosure of non-cash transactions: | |||||||||||
| Purchases of property and equipment included in accounts payable | $ | 6,732 | $ | 4,733 | |||||||
| Right-of-use assets obtained for financing lease liabilities | $ | 306 | $ | — | |||||||
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MAMMOTH ENERGY SERVICES, INC.
SEGMENT INCOME STATEMENTS
(in thousands)
| Three months ended June 30, 2023 | Well Completion | Infrastructure | Sand | Drilling | All Other | Eliminations | Total | ||||||||||||||||
| Revenue from external customers | $ | 27,466 | $ | 28,315 | $ | 11,567 | $ | 3,329 | $ | 4,754 | $ | — | $ | 75,431 | |||||||||
| Intersegment revenues | 118 | — | — | 6 | 365 | (489) | — | ||||||||||||||||
| Total revenue | 27,584 | 28,315 | 11,567 | 3,335 | 5,119 | (489) | 75,431 | ||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 23,594 | 23,292 | 7,067 | 2,725 | 3,574 | — | 60,252 | ||||||||||||||||
| Intersegment cost of revenues | 227 | 9 | — | 108 | 145 | (489) | — | ||||||||||||||||
| Total cost of revenue | 23,821 | 23,301 | 7,067 | 2,833 | 3,719 | (489) | 60,252 | ||||||||||||||||
| Selling, general and administrative | 1,776 | 6,385 | 954 | 337 | 905 | — | 10,357 | ||||||||||||||||
| Depreciation, depletion, amortization and accretion | 4,500 | 2,436 | 2,374 | 1,284 | 2,056 | — | 12,650 | ||||||||||||||||
| Gains on disposal of assets, net | — | — | — | — | (473) | — | (473) | ||||||||||||||||
| Operating (loss) income | (2,513) | (3,807) | 1,172 | (1,119) | (1,088) | — | (7,355) | ||||||||||||||||
| Interest expense, net | 824 | 1,869 | 149 | 170 | 208 | — | 3,220 | ||||||||||||||||
| Other expense (income), net | 1 | (8,557) | (4) | — | 221 | — | (8,339) | ||||||||||||||||
| (Loss) income before income taxes | $ | (3,338) | $ | 2,881 | $ | 1,027 | $ | (1,289) | $ | (1,517) | $ | — | $ | (2,236) | |||||||||
| Three months ended June 30, 2022 | Well Completion | Infrastructure | Sand | Drilling | All Other | Eliminations | Total | ||||||||||||||||
| Revenue from external customers | $ | 43,574 | $ | 25,587 | $ | 13,841 | $ | 1,952 | $ | 4,724 | $ | — | $ | 89,678 | |||||||||
| Intersegment revenues | 243 | — | 1,618 | 19 | 306 | (2,186) | — | ||||||||||||||||
| Total revenue | 43,817 | 25,587 | 15,459 | 1,971 | 5,030 | (2,186) | 89,678 | ||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 31,486 | 21,808 | 9,707 | 2,034 | 3,751 | — | 68,786 | ||||||||||||||||
| Intersegment cost of revenues | 1,985 | 15 | — | 160 | 103 | (2,263) | — | ||||||||||||||||
| Total cost of revenue | 33,471 | 21,823 | 9,707 | 2,194 | 3,854 | (2,263) | 68,786 | ||||||||||||||||
| Selling, general and administrative | 1,884 | 4,443 | 870 | 277 | 732 | — | 8,206 | ||||||||||||||||
| Depreciation, depletion, amortization and accretion | 6,747 | 4,211 | 2,058 | 1,651 | 2,809 | — | 17,476 | ||||||||||||||||
| Gains on disposal of assets, net | (157) | (863) | (16) | — | (1,907) | — | (2,943) | ||||||||||||||||
| Operating income (loss) | 1,872 | (4,027) | 2,840 | (2,151) | (458) | 77 | (1,847) | ||||||||||||||||
| Interest expense, net | 422 | 1,755 | 178 | 121 | 183 | — | 2,659 | ||||||||||||||||
| Other income, net | — | (10,062) | (3) | — | (79) | — | (10,144) | ||||||||||||||||
| Income (loss) before income taxes | $ | 1,450 | $ | 4,280 | $ | 2,665 | $ | (2,272) | $ | (562) | $ | 77 | $ | 5,638 | |||||||||
| Three months ended March 31, 2023 | Well Completion | Infrastructure | Sand | Drilling | All Other | Eliminations | Total | ||||||||||||||||
| Revenue from external customers | $ | 67,179 | $ | 28,280 | $ | 12,442 | $ | 1,824 | $ | 6,595 | $ | — | $ | 116,320 | |||||||||
| Intersegment revenues | 121 | — | 25 | 1 | 437 | (584) | — | ||||||||||||||||
| Total revenue | 67,300 | 28,280 | 12,467 | 1,825 | 7,032 | (584) | 116,320 | ||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 52,037 | 22,476 | 7,860 | 1,922 | 4,698 | — | 88,993 | ||||||||||||||||
| Intersegment cost of revenues | 478 | 11 | — | 109 | (14) | (584) | — | ||||||||||||||||
| Total cost of revenue | 52,515 | 22,487 | 7,860 | 2,031 | 4,684 | (584) | 88,993 | ||||||||||||||||
| Selling, general and administrative | 2,492 | 4,211 | 503 | 313 | 864 | — | 8,383 | ||||||||||||||||
| Depreciation, depletion, amortization and accretion | 4,817 | 3,374 | 1,187 | 1,367 | 2,211 | — | 12,956 | ||||||||||||||||
| (Gains) losses on disposal of assets, net | — | (127) | (16) | — | (218) | — | (361) | ||||||||||||||||
| Operating income (loss) | 7,476 | (1,665) | 2,933 | (1,886) | (509) | — | 6,349 | ||||||||||||||||
| Interest expense, net | 929 | 1,845 | 156 | 160 | 199 | — | 3,289 | ||||||||||||||||
| Other (income) expense, net | — | (8,808) | (2) | — | 186 | — | (8,624) | ||||||||||||||||
| Income (loss) before income taxes | $ | 6,547 | $ | 5,298 | $ | 2,779 | $ | (2,046) | $ | (894) | $ | — | $ | 11,684 | |||||||||
9
MAMMOTH ENERGY SERVICES, INC.
SEGMENT INCOME STATEMENTS
(in thousands)
| Six months ended June 30, 2023 | Well Completion | Infrastructure | Sand | Drilling | All Other | Eliminations | Total | ||||||||||||||||
| Revenue from external customers | $ | 94,644 | $ | 56,596 | $ | 24,009 | $ | 5,153 | $ | 11,349 | $ | — | $ | 191,751 | |||||||||
| Intersegment revenues | 240 | — | 25 | 7 | 801 | (1,073) | $ | — | |||||||||||||||
| Total revenue | 94,884 | 56,596 | 24,034 | 5,160 | 12,150 | (1,073) | 191,751 | ||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 75,630 | 45,768 | 14,927 | 4,648 | 8,271 | — | 149,244 | ||||||||||||||||
| Intersegment cost of revenues | 704 | 20 | — | 217 | 132 | (1,073) | $ | — | |||||||||||||||
| Total cost of revenue | 76,334 | 45,788 | 14,927 | 4,865 | 8,403 | (1,073) | 149,244 | ||||||||||||||||
| Selling, general and administrative | 4,268 | 10,595 | 1,458 | 650 | 1,769 | — | 18,740 | ||||||||||||||||
| Depreciation, depletion, amortization and accretion | 9,317 | 5,810 | 3,561 | 2,651 | 4,267 | — | 25,606 | ||||||||||||||||
| Gains on disposal of assets, net | — | (127) | (16) | — | (691) | — | (834) | ||||||||||||||||
| Operating income (loss) | 4,965 | (5,470) | 4,104 | (3,006) | (1,598) | — | (1,005) | ||||||||||||||||
| Interest expense, net | 1,753 | 3,714 | 305 | 330 | 407 | — | 6,509 | ||||||||||||||||
| Other expense (income), net | 1 | (17,365) | (6) | — | 407 | — | (16,963) | ||||||||||||||||
| Income (loss) before income taxes | $ | 3,211 | $ | 8,181 | $ | 3,805 | $ | (3,336) | $ | (2,412) | $ | — | $ | 9,449 | |||||||||
| Six months ended June 30, 2022 | Well Completion | Infrastructure | Sand | Drilling | All Other | Eliminations | Total | ||||||||||||||||
| Revenue from external customers | $ | 67,202 | $ | 48,596 | $ | 22,189 | $ | 4,804 | $ | 9,185 | $ | — | $ | 151,976 | |||||||||
| Intersegment revenues | 489 | — | 2,450 | 22 | 576 | (3,537) | — | ||||||||||||||||
| Total revenue | 67,691 | 48,596 | 24,639 | 4,826 | 9,761 | (3,537) | 151,976 | ||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 53,325 | 40,695 | 17,495 | 4,406 | 7,345 | — | 123,266 | ||||||||||||||||
| Intersegment cost of revenues | 3,016 | 31 | — | 321 | 172 | (3,540) | — | ||||||||||||||||
| Total cost of revenue | 56,341 | 40,726 | 17,495 | 4,727 | 7,517 | (3,540) | 123,266 | ||||||||||||||||
| Selling, general and administrative | 3,923 | 9,088 | 1,698 | 569 | 1,596 | — | 16,874 | ||||||||||||||||
| Depreciation, depletion, amortization and accretion | 13,191 | 8,525 | 3,852 | 3,331 | 5,744 | — | 34,643 | ||||||||||||||||
| Gains on disposal of assets, net | (206) | (868) | (91) | — | (1,974) | — | (3,139) | ||||||||||||||||
| Operating (loss) income | (5,558) | (8,875) | 1,685 | (3,801) | (3,122) | 3 | (19,668) | ||||||||||||||||
| Interest expense, net | 793 | 3,298 | 340 | 225 | 352 | — | 5,008 | ||||||||||||||||
| Other (income) expense, net | — | (19,644) | (7) | — | 466 | — | (19,185) | ||||||||||||||||
| (Loss) income before income taxes | $ | (6,351) | $ | 7,471 | $ | 1,352 | $ | (4,026) | $ | (3,940) | $ | 3 | $ | (5,491) | |||||||||
10
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, stock based compensation, interest expense, 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 | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||||||
| Reconciliation of net (loss) income to Adjusted EBITDA: | 2023 | 2022 | 2023 | 2023 | 2022 | ||||||||||||||||||||||||
| Net (loss) income | $ | (4,470) | $ | 1,703 | $ | 8,351 | $ | 3,881 | $ | (13,114) | |||||||||||||||||||
| Depreciation, depletion, amortization and accretion expense | 12,650 | 17,476 | 12,956 | 25,606 | 34,643 | ||||||||||||||||||||||||
| Gains on disposal of assets, net | (473) | (2,943) | (361) | (834) | (3,139) | ||||||||||||||||||||||||
| Stock based compensation | 261 | 200 | 647 | 908 | 441 | ||||||||||||||||||||||||
| Interest expense, net | 3,220 | 2,659 | 3,289 | 6,509 | 5,008 | ||||||||||||||||||||||||
| Other income, net | (8,339) | (10,144) | (8,624) | (16,963) | (19,185) | ||||||||||||||||||||||||
| Provision for income taxes | 2,234 | 3,935 | 3,333 | 5,568 | 7,623 | ||||||||||||||||||||||||
| Interest on trade accounts receivable | 11,341 | 10,160 | 11,112 | 22,454 | 20,022 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 16,424 | $ | 23,046 | $ | 30,703 | $ | 47,129 | $ | 32,299 | |||||||||||||||||||
11
MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Well Completion Services
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||||||
| Reconciliation of net (loss) income to Adjusted EBITDA: | 2023 | 2022 | 2023 | 2023 | 2022 | ||||||||||||||||||||||||
| Net (loss) income | $ | (3,338) | $ | 1,450 | $ | 6,547 | $ | 3,211 | $ | (6,351) | |||||||||||||||||||
| Depreciation and amortization expense | 4,500 | 6,747 | 4,817 | 9,317 | 13,191 | ||||||||||||||||||||||||
| Gains on disposal of assets, net | — | (157) | — | — | (206) | ||||||||||||||||||||||||
| Stock based compensation | 97 | 84 | 291 | 387 | 171 | ||||||||||||||||||||||||
| Interest expense | 824 | 422 | 929 | 1,753 | 793 | ||||||||||||||||||||||||
| Other expense, net | 1 | — | — | 1 | — | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 2,084 | $ | 8,546 | $ | 12,584 | $ | 14,669 | $ | 7,598 | |||||||||||||||||||
Infrastructure Services
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||||||
| Reconciliation of net income to Adjusted EBITDA: | 2023 | 2022 | 2023 | 2023 | 2022 | ||||||||||||||||||||||||
| Net income | $ | 697 | $ | 572 | $ | 2,452 | $ | 3,151 | $ | 695 | |||||||||||||||||||
| Depreciation and amortization expense | 2,436 | 4,211 | 3,374 | 5,810 | 8,525 | ||||||||||||||||||||||||
| Gains on disposal of assets, net | — | (863) | (127) | (127) | (868) | ||||||||||||||||||||||||
| Stock based compensation | 107 | 74 | 230 | 337 | 172 | ||||||||||||||||||||||||
| Interest expense | 1,869 | 1,755 | 1,845 | 3,714 | 3,298 | ||||||||||||||||||||||||
| Other income, net | (8,557) | (10,062) | (8,808) | (17,365) | (19,644) | ||||||||||||||||||||||||
| Provision for income taxes | 2,184 | 3,708 | 2,847 | 5,030 | 6,776 | ||||||||||||||||||||||||
| Interest on trade accounts receivable | 11,341 | 10,160 | 11,112 | 22,454 | 20,022 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 10,077 | $ | 9,555 | $ | 12,925 | $ | 23,004 | $ | 18,976 | |||||||||||||||||||
Natural Sand Proppant Services
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||||||
| Reconciliation of net income to Adjusted EBITDA: | 2023 | 2022 | 2023 | 2023 | 2022 | ||||||||||||||||||||||||
| Net income | $ | 1,027 | $ | 2,665 | $ | 2,779 | $ | 3,805 | $ | 1,352 | |||||||||||||||||||
| Depreciation, depletion, amortization and accretion expense | 2,374 | 2,058 | 1,187 | 3,561 | 3,852 | ||||||||||||||||||||||||
| Gains on disposal of assets, net | — | (16) | (16) | (16) | (91) | ||||||||||||||||||||||||
| Stock based compensation | 36 | 26 | 77 | 113 | 60 | ||||||||||||||||||||||||
| Interest expense | 149 | 178 | 156 | 305 | 340 | ||||||||||||||||||||||||
| Other income, net | (4) | (3) | (2) | (6) | (7) | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 3,582 | $ | 4,908 | $ | 4,181 | $ | 7,762 | $ | 5,506 | |||||||||||||||||||
12
MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Drilling Services
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||||||
| Reconciliation of net loss to Adjusted EBITDA: | 2023 | 2022 | 2023 | 2023 | 2022 | ||||||||||||||||||||||||
| Net loss | $ | (1,289) | $ | (2,272) | $ | (2,046) | $ | (3,336) | $ | (4,026) | |||||||||||||||||||
| Depreciation expense | 1,284 | 1,651 | 1,367 | 2,651 | 3,331 | ||||||||||||||||||||||||
| Stock based compensation | 6 | 4 | 11 | 18 | 9 | ||||||||||||||||||||||||
| Interest expense | 170 | 121 | 160 | 330 | 225 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 171 | $ | (496) | $ | (508) | $ | (337) | $ | (461) | |||||||||||||||||||
Other Services(a)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||||||
| Reconciliation of net loss to Adjusted EBITDA: | 2023 | 2022 | 2023 | 2023 | 2022 | ||||||||||||||||||||||||
| Net loss | $ | (1,567) | $ | (788) | $ | (1,381) | $ | (2,950) | $ | (4,786) | |||||||||||||||||||
| Depreciation, amortization and accretion expense | 2,056 | 2,809 | 2,211 | 4,267 | 5,744 | ||||||||||||||||||||||||
| Gains on disposal of assets, net | (473) | (1,907) | (218) | (691) | (1,974) | ||||||||||||||||||||||||
| Stock based compensation | 15 | 12 | 38 | 53 | 29 | ||||||||||||||||||||||||
| Interest expense, net | 208 | 183 | 199 | 407 | 352 | ||||||||||||||||||||||||
| Other expense (income), net | 221 | (79) | 186 | 407 | 466 | ||||||||||||||||||||||||
| Provision for income taxes | 50 | 226 | 486 | 538 | 846 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 510 | $ | 456 | $ | 1,521 | $ | 2,031 | $ | 677 | |||||||||||||||||||
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.
13