Mammoth Energy Services, Inc. Announces Strong Second Quarter 2022 Operational and Financial Results
Significant Increases in Q2 Revenue, Net Income and Adjusted EBITDA
OKLAHOMA CITY, July 28, 2022 /PRNewswire/ -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ: TUSK) today reported strong financial and operational results for the second quarter ended June 30, 2022.
Financial Overview for the Second Quarter 2022:
Total revenue was $89.7 million for the second quarter of 2022, as compared to $47.4 million for the same quarter last year and $62.3 million for the first quarter of 2022.
Net income for the second quarter of 2022 was $1.7 million, or $0.04 per share, as compared to a net loss of $34.8 million, or a $0.75 loss per share, for the same quarter last year, and a net loss of $14.8 million, or a $0.32 loss per share, for the first quarter of 2022.
Adjusted EBITDA (as defined and reconciled below) was $23.0 million for the second quarter of 2022, as compared to ($3.3) million for the same quarter last year and $9.3 million for the first quarter of 2022.
Arty Straehla, Chief Executive Officer of Mammoth commented, "Our significant second quarter growth in revenue, net income and Adjusted EBITDA resulted from substantial gains in Infrastructure Services, Well Completion Services and our Sand business. In our Infrastructure Services division, we have continued to add crews since the first quarter to just over 100 crews currently, and we expect to add additional crews in the coming weeks in preparation for the seasonal storm restoration services anticipated in the third and fourth quarters. Our Well Completion Services division posted the strongest quarter we've seen since mid-2019 resulting from the robust macro demand that the pressure pumping industry is experiencing. We currently have four pressure pumping spreads operating, which have full schedules through the end of the year, and we expect to add a fifth spread sometime in the fourth quarter. Our Sand business is also experiencing strong demand, as well as increased pricing, which we believe will continue to improve into the back half of the year and into 2023. I am proud of our team's continued commitment and hard work to push through the challenges we have faced over the last few years and am confident that we are well equipped to build on the improvements we have made this quarter."
Infrastructure Services
Mammoth's infrastructure services division contributed revenue of $25.6 million for the second quarter of 2022, as compared to $18.4 million for the same quarter last year and $23.0 million for the first quarter of 2022. The increase in revenue compared to the same quarter of 2021 is primarily due to an increase in storm activity, resulting in higher storm restoration revenue.
Well Completion Services
Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $43.8 million on 1,716 stages for the second quarter of 2022, as compared to $17.4 million on 520 stages for the same quarter of 2021 and $23.9 million on 699 stages for the first quarter of 2022. On average, 3.5 of the Company's fleets were active for the second quarter of 2022, compared to an average utilization of 0.9 fleets during the same quarter last year and 1.6 fleets during the first quarter of 2022. As of July 26, 2022, Mammoth was operating four of its six pressure pumping fleets and currently expects to activate a fifth fleet in the fourth quarter. Looking to 2023, the Company plans to activate its sixth fleet in the first quarter of 2023, and has plans to acquire or build a new Tier 4, dual-fuel fleet for a total of seven fleets by year-end 2023.
Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $15.5 million for the second quarter of 2022, as compared to $6.9 million for the same quarter last year and $9.2 million for the first quarter of 2022. In the second quarter of 2022, the Company sold approximately 350,000 tons of sand at an average sales price of $26.86 per ton, as compared to sales of approximately 255,000 tons of sand at an average sales price of $15.80 per ton during the same quarter last year. In the first quarter of 2022, sales were approximately 329,000 tons of sand at an average price of $21.44 per ton.
Drilling Services
Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $2.0 million for the second quarter of 2022, as compared to $1.1 million for the same quarter last year and $2.9 million for the first quarter of 2022.
Other Services
Mammoth's other services, including aviation, equipment rentals, crude oil hauling, remote accommodations and equipment manufacturing, contributed revenue (inclusive of inter-segment revenue) of $5.0 million for the second quarter of 2022, as compared to $4.3 million for the same quarter last year and $4.7 million for the first quarter of 2022.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses were $8.2 million for the second quarter of 2022, as compared to $9.9 million for the same quarter last year and $8.7 million for the first quarter of 2022.
Following is a breakout of SG&A expense (in thousands):
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | |||||||
2022 | 2021 | 2022 | 2022 | 2021 | |||||
Cash expenses: | |||||||||
Compensation and benefits | $ 3,137 | $ 3,333 | $ 2,983 | $ 6,120 | $ 8,027 | ||||
Professional services(a) | 2,724 | 3,683 | 3,637 | 6,361 | 4,264 | ||||
Other(b) | 2,162 | 2,464 | 1,906 | 4,068 | 4,806 | ||||
Total cash SG&A expense | 8,023 | 9,480 | 8,526 | 16,549 | 17,097 | ||||
Non-cash expenses: | |||||||||
Bad debt provision(c) | (16) | 76 | (99) | (115) | 10,201 | ||||
Stock based compensation | 199 | 304 | 241 | 440 | 586 | ||||
Total non-cash SG&A expense | 183 | 380 | 142 | 325 | 10,787 | ||||
Total SG&A expense | $ 8,206 | $ 9,860 | $ 8,668 | $ 16,874 | $ 27,884 | ||||
a. | Certain legal expenses totaling $2.1 million, $4.9 million and $2.8 million were reclassified to Other, net for the three and six months ended June 30, 2021 and three months ended March 31, 2022, respectively. |
b. | Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs. |
c. | The bad debt provision for the six months ended June 30, 2021 includes $10.0 million related to the voluntary petitions for relief filed on November 13, 2020, by Gulfport Energy Corporation and its subsidiaries. |
SG&A expenses, as a percentage of total revenue, were 9% for the second quarter of 2022, as compared to 21% for the same quarter last year and 14% for the first quarter of 2022.
Liquidity
As of June 30, 2022, Mammoth had cash on hand of $12.7 million, outstanding borrowings under its revolving credit facility of $82.9 million and $14.3 million of available borrowing capacity under its revolving credit facility, after giving effect to $7.5 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, 2022, Mammoth had total liquidity of $27.0 million.
As of July 26, 2022, Mammoth had cash on hand of $9.5 million and outstanding borrowings under its revolving credit facility of $84.1 million. As of July 26, 2022, the Company had $8.2 million of available borrowing capacity under its revolving credit facility, after giving effect to $7.5 million of outstanding letters of credit and the requirement to maintain a $10.0 million reserve out of the available borrowing capacity. Neither Cobra Acquisitions LLC nor Mammoth plan to make the scheduled settlement payment due on August 1, 2022 to Mastec Renewables Puerto Rico, LLC, but expects to make the payment on or before December 1, 2022.
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, | |||||||
2022 | 2021 | 2022 | 2022 | 2021 | |||||
Infrastructure services(a) | $ 200 | $ 105 | $ 398 | $ 598 | $ 293 | ||||
Well completion services(b) | 2,500 | 388 | 801 | 3,301 | 896 | ||||
Natural sand proppant services(c) | — | 5 | — | — | 413 | ||||
Drilling services(d) | 12 | 1 | 2 | 14 | 38 | ||||
Other(e) | 161 | 63 | 60 | 221 | 165 | ||||
Eliminations | (87) | (96) | (79) | (166) | (96) | ||||
Total capital expenditures | $ 2,786 | $ 466 | $ 1,182 | $ 3,968 | $ 1,709 | ||||
a. | Capital expenditures primarily for truck, tooling and equipment purchases for the periods presented. |
b. | Capital expenditures primarily for upgrades to our pressure pumping fleet for the periods presented. |
c. | Capital expenditures primarily for maintenance for the periods presented. |
d. | Capital expenditures primarily for directional drilling equipment for the periods presented. |
e. | Capital expenditures primarily for equipment for the Company's rental businesses for the periods presented. |
Mammoth anticipates that its total capital expenditures for 2022 will be approximately $20.0 million, representing an $8.0 million increase in its previously announced capital expenditure guidance for 2022, which Mammoth expects to fund from cash flow from operations, cash on hand and borrowings under its revolving credit facility.
Conference Call Information
Mammoth will host a conference call on Thursday, July 28, 2022 at 4:00 p.m. Central time (5:00 p.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 [email protected].
About Mammoth Energy Services, Inc.
Mammoth is an integrated, growth-oriented energy services company focused on the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its infrastructure services businesses. The Company also provides products and services to enable the exploration and development of North American onshore unconventional oil and natural gas reserves. Mammoth's suite of services and products include: infrastructure services, well completion services, natural sand and proppant services, drilling services and other energy services. For more information, please visit www.mammothenergy.com.
Contacts:
Mark Layton, CFO
Mammoth Energy Services, Inc
[email protected]
Rick Black / Ken Dennard
Dennard Lascar Investor Relations
[email protected]
Forward-Looking Statements and Cautionary Statements
This news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein) contains certain statements and information that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts that address activities, events or developments that Mammoth expects, believes or anticipates will or may occur in the future are forward-looking statements. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "plan," "estimate," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "potential," "would," "may," "probable," "likely" and similar expressions, and the negative thereof, are intended to identify forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's business outlook and plans, future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, costs and other guidance regarding future developments. Forward-looking statements are not assurances of future performance. These forward-looking statements are based on management's current expectations and beliefs, forecasts for the Company's existing operations, experience and perception of historical trends, current conditions, anticipated future developments and their effect on Mammoth, and other factors believed to be appropriate. Although management believes that the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Moreover, the Company's forward-looking statements are subject to significant risks and uncertainties, including those described in its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings it makes with the SEC, including those relating to the Company's acquisitions and contracts, many of which are beyond the Company's control, which may cause actual results to differ materially from historical experience and present expectations or projections which are implied or expressed by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: 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; operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; inflationary pressures; rising interest rates and their impact on the cost of capital; 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 the prior levels of work in its business segments, including its infrastructure and well completion services segments; risks relating to economic conditions; 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, including the adverse impact of the recent settlement with MasTec Renewables Puerto Rico, LLC, and the effect on our financial condition and results of operations; the effects of government regulation, permitting and other legal requirements; operating risks; the adequacy of capital resources and liquidity; Mammoth's ability to continue to comply with, or if applicable, obtain a waiver of forecasted or actual noncompliance with certain financial covenants and comply with other terms and conditions under our recently amended revolving credit facility; weather; natural disasters; litigation; volatility in commodity markets; competition in the oil and natural gas and infrastructure industries; and costs and availability of resources.
Investors are cautioned not to place undue reliance on any forward-looking statement which speaks only as of the date on which such statement is made. We undertake no obligation to correct, revise or update any forward-looking statement after the date such statement is made, whether as a result of new information, future events or otherwise, except as required by applicable law.
MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED BALANCE SHEETS | ||||
ASSETS | June 30, | December 31, | ||
2022 | 2021 | |||
CURRENT ASSETS | (in thousands) | |||
Cash and cash equivalents | $ 12,729 | $ 9,899 | ||
Short-term investment | 1,765 | 1,762 | ||
Accounts receivable, net | 430,443 | 407,550 | ||
Receivables from related parties, net | 193 | 88 | ||
Inventories | 8,000 | 8,366 | ||
Prepaid expenses | 7,919 | 12,381 | ||
Other current assets | 645 | 737 | ||
Total current assets | 461,694 | 440,783 | ||
Property, plant and equipment, net | 145,905 | 176,586 | ||
Sand reserves | 64,141 | 64,641 | ||
Operating lease right-of-use assets | 11,654 | 12,168 | ||
Intangible assets, net | 2,171 | 2,561 | ||
Goodwill | 11,717 | 11,717 | ||
Deferred income tax asset | 2,228 | 8,094 | ||
Other non-current assets | 3,620 | 4,342 | ||
Total assets | $ 703,130 | $ 720,892 | ||
LIABILITIES AND EQUITY | ||||
CURRENT LIABILITIES | ||||
Accounts payable | $ 38,618 | $ 37,560 | ||
Accrued expenses and other current liabilities | 55,484 | 62,516 | ||
Current operating lease liability | 5,655 | 5,942 | ||
Current portion of long-term debt | 1,505 | 1,468 | ||
Income taxes payable | 43,660 | 42,748 | ||
Total current liabilities | 144,922 | 150,234 | ||
Long-term debt, net of current portion | 83,969 | 85,240 | ||
Deferred income tax liabilities | 1,611 | 865 | ||
Long-term operating lease liability | 5,840 | 5,918 | ||
Asset retirement obligation | 3,952 | 3,720 | ||
Other long-term liabilities | 12,537 | 11,693 | ||
Total liabilities | 252,831 | 257,670 | ||
COMMITMENTS AND CONTINGENCIES | ||||
EQUITY | ||||
Equity: | ||||
Common stock, $0.01 par value, 200,000,000 shares authorized, 47,312,270 and 46,684,065 issued and outstanding at June 30, 2022 and December 31, 2021 | 473 | 467 | ||
Additional paid in capital | 538,656 | 538,221 | ||
Accumulated deficit | (85,649) | (72,535) | ||
Accumulated other comprehensive loss | (3,181) | (2,931) | ||
Total equity | 450,299 | 463,222 | ||
Total liabilities and equity | $ 703,130 | $ 720,892 | ||
MAMMOTH ENERGY SERVICES, INC. | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | |||||||
2022 | 2021 | 2021 | 2022 | 2021 | |||||
(in thousands, except per share amounts) | |||||||||
REVENUE | |||||||||
Services revenue | $ 75,459 | $ 40,867 | $ 53,667 | $ 129,126 | $ 83,558 | ||||
Services revenue - related parties | 395 | 90 | 274 | 669 | 15,076 | ||||
Product revenue | 13,824 | 6,483 | 8,357 | 22,181 | 13,465 | ||||
Product revenue - related parties | — | — | — | — | 2,145 | ||||
Total revenue | 89,678 | 47,440 | 62,298 | 151,976 | 114,244 | ||||
COST AND EXPENSES | |||||||||
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $15,404, $17,861, $15,355, $30,759 and $36,850, respectively, for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 and six months ended June 30, 2022 and 2021) | 58,433 | 43,103 | 46,567 | 105,000 | 85,165 | ||||
Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of $0, $0, $0, $0 and $0, respectively, for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 and six months ended June 30, 2022 and 2021) | 128 | 107 | 135 | 263 | 216 | ||||
Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $2,055, $2,384, $1,792, $3,847 and $4,521, respectively, for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 and six months ended June 30, 2022 and 2021) | 10,225 | 7,165 | 7,778 | 18,003 | 13,074 | ||||
Selling, general and administrative | 8,206 | 9,668 | 8,668 | 16,874 | 27,499 | ||||
Selling, general and administrative - related parties | — | 192 | — | — | 385 | ||||
Depreciation, depletion, amortization and accretion | 17,476 | 20,265 | 17,167 | 34,643 | 41,411 | ||||
Total cost and expenses | 94,468 | 80,500 | 80,315 | 174,783 | 167,750 | ||||
Operating loss | (4,790) | (33,060) | (18,017) | (22,807) | (53,506) | ||||
OTHER INCOME (EXPENSE) | |||||||||
Interest expense, net | (2,659) | (1,169) | (2,349) | (5,008) | (2,394) | ||||
Other income (expense), net | 13,087 | (17,121) | 9,237 | 22,324 | (9,998) | ||||
Other expense, net - related parties | — | — | — | — | (515) | ||||
Total other income (expense) | 10,428 | (18,290) | 6,888 | 17,316 | (12,907) | ||||
Income (loss) before income taxes | 5,638 | (51,350) | (11,129) | (5,491) | (66,413) | ||||
Provision (benefit) for income taxes | 3,935 | (16,560) | 3,688 | 7,623 | (19,183) | ||||
Net income (loss) | $ 1,703 | $ (34,790) | $ (14,817) | $ (13,114) | $ (47,230) | ||||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||
Foreign currency translation adjustment, net of tax of $0, $63, $0, $0 and $680, respectively, for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 and six months ended June 30, 2022 and 2021) | (448) | 239 | 198 | (250) | 407 | ||||
Comprehensive income (loss) | $ 1,255 | $ (34,551) | $ (14,619) | $ (13,364) | $ (46,823) | ||||
Net income (loss) per share (basic) | $ 0.04 | $ (0.75) | $ (0.32) | $ (0.28) | $ (1.02) | ||||
Net income (loss) per share (diluted) | $ 0.04 | $ (0.75) | $ (0.32) | $ (0.28) | $ (1.02) | ||||
Weighted average number of shares outstanding (basic) | 47,225 | 46,402 | 46,845 | 47,036 | 46,168 | ||||
Weighted average number of shares outstanding (diluted) | 47,634 | 46,402 | 46,845 | 47,036 | 46,168 | ||||
MAMMOTH ENERGY SERVICES, INC. | |||
Six Months Ended | |||
June 30, | |||
2022 | 2021 | ||
(in thousands) | |||
Cash flows from operating activities: | |||
Net loss | $ (13,114) | $ (47,230) | |
Adjustments to reconcile net loss to cash (used in) provided by operating activities: | |||
Stock based compensation | 441 | 698 | |
Depreciation, depletion, accretion and amortization | 34,643 | 41,411 | |
Amortization of debt origination costs | 375 | 296 | |
Bad debt (recoveries) expense | (115) | 10,201 | |
Gain on disposal of property and equipment | (3,650) | (1,599) | |
Deferred income taxes | 6,612 | (20,898) | |
Other | 449 | 548 | |
Changes in assets and liabilities: | |||
Accounts receivable, net | (22,480) | (30,386) | |
Receivables from related parties, net | (105) | 28,381 | |
Inventories | 366 | 1,808 | |
Prepaid expenses and other assets | 4,567 | 5,923 | |
Accounts payable | (2,132) | (1,546) | |
Accrued expenses and other liabilities | (7,407) | 15,756 | |
Income taxes payable | 912 | 1,107 | |
Net cash (used in) provided by operating activities | (638) | 4,471 | |
Cash flows from investing activities: | |||
Purchases of property and equipment | (3,968) | (1,709) | |
Proceeds from disposal of property and equipment | 7,447 | 4,632 | |
Net cash provided by investing activities | 3,479 | 2,923 | |
Cash flows from financing activities: | |||
Borrowings on long-term debt | 83,000 | 12,000 | |
Repayments of long-term debt | (84,241) | (30,269) | |
Payments on sale-leaseback transaction | (2,094) | (1,278) | |
Principal payments on financing leases and equipment financing notes | (1,197) | (1,140) | |
Net cash (used in) provided by financing activities | 57 | (11,214) | |
Effect of foreign exchange rate on cash | (68) | 36 | |
Net change in cash and cash equivalents | 2,830 | (3,784) | |
Cash and cash equivalents at beginning of period | 9,899 | 14,822 | |
Cash and cash equivalents at end of period | $ 12,729 | $ 11,038 | |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | $ 3,792 | $ 2,134 | |
Cash paid for income taxes, net of refunds received | $ 98 | $ 964 | |
Supplemental disclosure of non-cash transactions: | |||
Purchases of property and equipment included in accounts payable | $ 4,733 | $ 2,035 | |
MAMMOTH ENERGY SERVICES, INC. | |||||||
Three months ended June 30, 2022 | Infrastructure | Well | Sand | Drilling | All Other | Eliminations | Total |
Revenue from external customers | $ 25,587 | $ 43,574 | $ 13,841 | $ 1,952 | $ 4,724 | $ — | $ 89,678 |
Intersegment revenues | — | 243 | 1,618 | 19 | 306 | (2,186) | — |
Total revenue | 25,587 | 43,817 | 15,459 | 1,971 | 5,030 | (2,186) | 89,678 |
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 21,808 | 31,486 | 9,707 | 2,034 | 3,751 | — | 68,786 |
Intersegment cost of revenues | 15 | 1,985 | — | 160 | 103 | (2,263) | — |
Total cost of revenue | 21,823 | 33,471 | 9,707 | 2,194 | 3,854 | (2,263) | 68,786 |
Selling, general and administrative | 4,443 | 1,884 | 870 | 277 | 732 | — | 8,206 |
Depreciation, depletion, amortization and accretion | 4,211 | 6,747 | 2,058 | 1,651 | 2,809 | — | 17,476 |
Operating (loss) income | (4,890) | 1,715 | 2,824 | (2,151) | (2,365) | 77 | (4,790) |
Interest expense, net | 1,755 | 422 | 178 | 121 | 183 | — | 2,659 |
Other income, net | (10,925) | (157) | (19) | — | (1,986) | — | (13,087) |
Income (loss) before income taxes | $ 4,280 | $ 1,450 | $ 2,665 | $ (2,272) | $ (562) | $ 77 | $ 5,638 |
Three months ended June 30, 2021 | Infrastructure | Well | Sand | Drilling | All Other | Eliminations | Total |
Revenue from external customers | $ 18,420 | $ 17,337 | $ 6,886 | $ 1,130 | $ 3,667 | $ — | $ 47,440 |
Intersegment revenues | — | 36 | — | 17 | 682 | (735) | — |
Total revenue | 18,420 | 17,373 | 6,886 | 1,147 | 4,349 | (735) | 47,440 |
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 21,062 | 16,396 | 7,400 | 1,568 | 3,949 | — | 50,375 |
Intersegment cost of revenues | 50 | 666 | — | — | 19 | (735) | — |
Total cost of revenue | 21,112 | 17,062 | 7,400 | 1,568 | 3,968 | (735) | 50,375 |
Selling, general and administrative | 5,620 | 1,893 | 991 | 395 | 961 | — | 9,860 |
Depreciation, depletion, amortization and accretion | 5,899 | 6,447 | 2,387 | 2,078 | 3,454 | — | 20,265 |
Operating loss | (14,211) | (8,029) | (3,892) | (2,894) | (4,034) | — | (33,060) |
Interest expense, net | 664 | 219 | 90 | 58 | 138 | — | 1,169 |
Other expense (income), net | 18,035 | 1 | (53) | (126) | (736) | — | 17,121 |
Loss before income taxes | $ (32,910) | $ (8,249) | $ (3,929) | $ (2,826) | $ (3,436) | $ — | $ (51,350) |
Three months ended March 31, 2022 | Infrastructure | Well | Sand | Drilling | All Other | Eliminations | Total |
Revenue from external customers | $ 23,009 | $ 23,630 | $ 8,347 | $ 2,852 | $ 4,460 | $ — | $ 62,298 |
Intersegment revenues | — | 244 | 832 | 3 | 272 | (1,351) | — |
Total revenue | 23,009 | 23,874 | 9,179 | 2,855 | 4,732 | (1,351) | 62,298 |
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 18,887 | 21,839 | 7,788 | 2,372 | 3,594 | — | 54,480 |
Intersegment cost of revenues | 16 | 1,031 | — | 160 | 70 | (1,277) | — |
Total cost of revenue | 18,903 | 22,870 | 7,788 | 2,532 | 3,664 | (1,277) | 54,480 |
Selling, general and administrative | 4,645 | 2,039 | 828 | 292 | 864 | — | 8,668 |
Depreciation, depletion, amortization and accretion | 4,314 | 6,444 | 1,795 | 1,680 | 2,934 | — | 17,167 |
Operating loss | (4,853) | (7,479) | (1,232) | (1,649) | (2,730) | (74) | (18,017) |
Interest expense, net | 1,542 | 371 | 162 | 104 | 170 | — | 2,349 |
Other (income) expense, net | (9,587) | (49) | (79) | — | 478 | — | (9,237) |
Income (loss) before income taxes | $ 3,192 | $ (7,801) | $ (1,315) | $ (1,753) | $ (3,378) | $ (74) | $ (11,129) |
Six months ended June 30, 2022 | Infrastructure | Well | Sand | Drilling | All Other | Eliminations | Total |
Revenue from external customers | $ 48,596 | $ 67,202 | $ 22,189 | $ 4,804 | $ 9,185 | $ — | $ 151,976 |
Intersegment revenues | — | 489 | 2,450 | 22 | 576 | (3,537) | — |
Total revenue | 48,596 | 67,691 | 24,639 | 4,826 | 9,761 | (3,537) | 151,976 |
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 40,695 | 53,325 | 17,495 | 4,406 | 7,345 | — | 123,266 |
Intersegment cost of revenues | 31 | 3,016 | — | 321 | 172 | (3,540) | — |
Total cost of revenue | 40,726 | 56,341 | 17,495 | 4,727 | 7,517 | (3,540) | 123,266 |
Selling, general and administrative | 9,088 | 3,923 | 1,698 | 569 | 1,596 | — | 16,874 |
Depreciation, depletion, amortization and accretion | 8,525 | 13,191 | 3,852 | 3,331 | 5,744 | — | 34,643 |
Operating (loss) income | (9,743) | (5,764) | 1,594 | (3,801) | (5,096) | 3 | (22,807) |
Interest expense, net | 3,298 | 793 | 340 | 225 | 352 | — | 5,008 |
Other income, net | (20,512) | (206) | (98) | — | (1,508) | — | (22,324) |
Income (loss) before income taxes | $ 7,471 | $ (6,351) | $ 1,352 | $ (4,026) | $ (3,940) | $ 3 | $ (5,491) |
Six months ended June 30, 2021 | Infrastructure | Well | Sand | Drilling | All Other | Eliminations | Total |
Revenue from external customers | $ 48,619 | $ 40,238 | $ 15,592 | $ 2,049 | $ 7,746 | $ — | $ 114,244 |
Intersegment revenues | — | 90 | — | 31 | 1,322 | (1,443) | — |
Total revenue | 48,619 | 40,328 | 15,592 | 2,080 | 9,068 | (1,443) | 114,244 |
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 48,439 | 25,399 | 13,262 | 3,173 | 8,182 | — | 98,455 |
Intersegment cost of revenues | 95 | 1,060 | — | — | 288 | (1,443) | — |
Total cost of revenue | 48,534 | 26,459 | 13,262 | 3,173 | 8,470 | (1,443) | 98,455 |
Selling, general and administrative | 9,359 | 12,505 | 3,040 | 817 | 2,163 | — | 27,884 |
Depreciation, depletion, amortization and accretion | 12,566 | 13,130 | 4,527 | 4,243 | 6,945 | — | 41,411 |
Operating loss | (21,840) | (11,766) | (5,237) | (6,153) | (8,510) | — | (53,506) |
Interest expense, net | 1,333 | 473 | 183 | 121 | 284 | — | 2,394 |
Other expense (income), net | 11,548 | 440 | (847) | (135) | (493) | — | 10,513 |
Loss before income taxes | $ (34,721) | $ (12,679) | $ (4,573) | $ (6,139) | $ (8,301) | $ — | $ (66,413) |
MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. Mammoth defines Adjusted EBITDA as net income (loss) before depreciation, depletion, amortization and accretion expense, public offering costs, stock based compensation, interest expense, net, other (income) expense, net (which is comprised of the (gain) or loss on disposal of long-lived assets, 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 income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within the energy service industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) or cash flows from operating activities as determined in accordance with GAAP or as an indicator of Mammoth's operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets. Mammoth's computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure its ability to meet debt service requirements.
The following tables provide a reconciliation of Adjusted EBITDA to the GAAP financial measure of net income (loss) on a consolidated basis and for each of the Company's segments (in thousands):
Consolidated
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | |||||||
Reconciliation of Adjusted EBITDA to net income (loss): | 2022 | 2021 | 2022 | 2022 | 2021 | ||||
Net income (loss) | $ 1,703 | $ (34,790) | $ (14,817) | $ (13,114) | $ (47,230) | ||||
Depreciation, depletion, amortization and accretion expense | 17,476 | 20,265 | 17,167 | 34,643 | 41,411 | ||||
Public offering costs | — | 77 | — | — | 77 | ||||
Stock based compensation | 200 | 354 | 241 | 441 | 698 | ||||
Interest expense, net | 2,659 | 1,169 | 2,349 | 5,008 | 2,394 | ||||
Other (income) expense, net | (13,087) | 17,121 | (9,237) | (22,324) | 10,513 | ||||
Provision (benefit) for income taxes | 3,935 | (16,560) | 3,688 | 7,623 | (19,183) | ||||
Interest on trade accounts receivable | 10,160 | 9,017 | 9,862 | 20,022 | 17,175 | ||||
Adjusted EBITDA | $ 23,046 | $ (3,347) | $ 9,253 | $ 32,299 | $ 5,855 | ||||
Infrastructure Services
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | |||||||
Reconciliation of Adjusted EBITDA to net income (loss): | 2022 | 2021 | 2022 | 2022 | 2021 | ||||
Net income (loss) | $ 572 | $ (24,073) | $ 125 | $ 695 | $ (28,311) | ||||
Depreciation and amortization expense | 4,211 | 5,899 | 4,314 | 8,525 | 12,566 | ||||
Public offering costs | — | 45 | — | — | 45 | ||||
Stock based compensation | 74 | 162 | 98 | 172 | 301 | ||||
Interest expense | 1,755 | 664 | 1,542 | 3,298 | 1,333 | ||||
Other (income) expense, net | (10,925) | 18,035 | (9,587) | (20,512) | 11,548 | ||||
Provision (benefit) for income taxes | 3,708 | (8,838) | 3,067 | 6,776 | (6,409) | ||||
Interest on trade accounts receivable | 10,160 | 9,017 | 9,862 | 20,022 | 17,689 | ||||
Adjusted EBITDA | $ 9,555 | $ 911 | $ 9,421 | $ 18,976 | $ 8,762 | ||||
Well Completion Services
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | |||||||
Reconciliation of Adjusted EBITDA to net income (loss): | 2022 | 2021 | 2022 | 2022 | 2021 | ||||
Net income (loss) | $ 1,450 | $ (8,248) | $ (7,801) | $ (6,351) | $ (12,678) | ||||
Depreciation and amortization expense | 6,747 | 6,447 | 6,444 | 13,191 | 13,130 | ||||
Public offering costs | — | 12 | — | — | 12 | ||||
Stock based compensation | 84 | 75 | 87 | 171 | 158 | ||||
Interest expense | 422 | 219 | 371 | 793 | 473 | ||||
Other (income) expense, net | (157) | 1 | (49) | (206) | 440 | ||||
Interest on trade accounts receivable | — | — | — | — | (513) | ||||
Adjusted EBITDA | $ 8,546 | $ (1,494) | $ (948) | $ 7,598 | $ 1,022 | ||||
Natural Sand Proppant Services
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | |||||||
Reconciliation of Adjusted EBITDA to net income (loss): | 2022 | 2021 | 2022 | 2022 | 2021 | ||||
Net income (loss) | $ 2,665 | $ (3,930) | $ (1,315) | $ 1,352 | $ (4,574) | ||||
Depreciation, depletion, amortization and accretion expense | 2,058 | 2,387 | 1,795 | 3,852 | 4,527 | ||||
Public offering costs | — | 12 | — | — | 12 | ||||
Stock based compensation | 26 | 66 | 34 | 60 | 130 | ||||
Interest expense | 178 | 90 | 162 | 340 | 183 | ||||
Other income, net | (19) | (53) | (79) | (98) | (847) | ||||
Interest on trade accounts receivable | — | — | — | — | (1) | ||||
Adjusted EBITDA | $ 4,908 | $ (1,428) | $ 597 | $ 5,506 | $ (570) | ||||
Drilling Services
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | |||||||
Reconciliation of Adjusted EBITDA to net loss: | 2022 | 2021 | 2022 | 2022 | 2021 | ||||
Net loss | $ (2,272) | $ (2,825) | $ (1,753) | $ (4,026) | $ (6,140) | ||||
Depreciation expense | 1,651 | 2,078 | 1,680 | 3,331 | 4,243 | ||||
Public offering costs | — | 2 | — | — | 2 | ||||
Stock based compensation | 4 | 28 | 5 | 9 | 65 | ||||
Interest expense | 121 | 58 | 104 | 225 | 121 | ||||
Other income, net | — | (126) | — | — | (135) | ||||
Adjusted EBITDA | $ (496) | $ (785) | $ 36 | $ (461) | $ (1,844) | ||||
Other Services(a)
Three Months Ended | Six Months Ended | ||||||||
June 30, | March 31, | June 30, | |||||||
Reconciliation of Adjusted EBITDA to net (loss) income: | 2022 | 2021 | 2022 | 2022 | 2021 | ||||
Net (loss) income | $ (788) | $ 4,286 | $ (3,999) | $ (4,786) | $ 4,473 | ||||
Depreciation, amortization and accretion expense | 2,809 | 3,454 | 2,934 | 5,744 | 6,945 | ||||
Public offering costs | — | 6 | — | — | 6 | ||||
Stock based compensation | 12 | 23 | 17 | 29 | 44 | ||||
Interest expense, net | 183 | 138 | 170 | 352 | 284 | ||||
Other income (expense), net | (1,986) | (736) | 478 | (1,508) | (493) | ||||
Provision (benefit) for income taxes | 226 | (7,722) | 621 | 846 | (12,774) | ||||
Adjusted EBITDA | $ 456 | $ (551) | $ 221 | $ 677 | $ (1,515) | ||||
a. | Includes results for Mammoth's aviation, equipment rentals, crude oil hauling, remote accommodations and equipment manufacturing and corporate related activities. The Company's corporate related activities do not generate revenue. |
SOURCE Mammoth Energy Services, Inc.
Share this article