Mammoth Energy Services, Inc. Announces Third Quarter 2024 Operational and Financial Results
OKLAHOMA CITY, Nov. 1, 2024 /PRNewswire/ -- Mammoth Energy Services, Inc. (NASDAQ: TUSK) ("Mammoth" or the "Company") today reported financial and operational results for the third quarter ended September 30, 2024.
Arty Straehla, Chief Executive Officer of Mammoth commented, "Softness across our Well Completion Services markets appeared to have bottomed in the third quarter, and we expect a rebound in the fourth quarter. More importantly, we were pleased to have recently received a total of $168.4 million of the $188.4 million owed to our subsidiary through the Settlement Agreement with the Puerto Rico Electric Power Authority, or PREPA. We are now debt free and have plans to invest in both our Infrastructure Services and Well Completion Services divisions over the next year. In Infrastructure Services, we will be investing in additional crews and our engineering services capabilities to better serve our customers. In our Well Completion Services division, we will be upgrading pressure pumping equipment to more efficient dual fuel Tier 4 technology. We believe this investment positions us to capitalize on rising demand as markets are anticipated to improve later next year. Now that we are debt free and have significant capital to invest into our businesses, we believe we have an excellent platform to increase shareholder value."
Financial Overview for the Third Quarter 2024:
Total revenue was $40.0 million for the third quarter compared to $65.0 million for the same quarter last year.
Net loss for the third quarter was $24.0 million, or $0.50 loss per diluted share, compared to net loss of $1.1 million, or $0.02 loss per diluted share, for the same quarter last year.
Adjusted EBITDA (as defined and reconciled below) was ($6.4) million for the third quarter of 2024, compared to $13.4 million for the same quarter last year.
Well Completion Services
Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $2.2 million for the third quarter, compared to $20.3 million for the same quarter of 2023. The Company had no pressure pumping fleets active during the third quarter of 2024 compared to an average utilization of 1.2 pressure pumping fleets during the same quarter of 2023. The third quarter 2024 revenue in the well completion services division was primarily attributable to one active pump-down crew.
Infrastructure Services
Mammoth's infrastructure services division contributed revenue of $26.0 million for the third quarter compared to $26.7 million for the same quarter of 2023. Average crew count was 77 crews during the third quarter compared to 81 crews during the same quarter of 2023.
Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $4.9 million for the third quarter compared to $10.6 million for the same quarter of 2023. In the third quarter, the Company sold approximately 163,000 tons of sand at an average sales price of $22.89 per ton compared to sales of approximately 352,000 tons of sand at an average sales price of $30.18 per ton during the same quarter of 2023.
Drilling Services
Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $1.6 million for the third quarter compared to $2.3 million for the same quarter of 2023.
Other Services
Mammoth's other services, including aviation, equipment rentals, remote accommodations and equipment manufacturing, contributed revenue (inclusive of inter-segment revenue) of $7.0 million for the third quarter compared to $6.0 million for the same quarter of 2023.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses were $8.7 million for the third quarter compared to $10.4 million for the same quarter of 2023.
Following is a breakout of SG&A expense (in thousands):
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Cash expenses:
Compensation and benefits
$ 3,173
$ 3,392
$ 10,394
$ 11,665
Professional services
3,503
4,684
9,016
10,889
Other(a)
1,775
2,105
5,249
5,884
Total cash SG&A expense
8,451
10,181
24,659
28,438
Non-cash expenses:
Change in provision for expected credit losses(b)
32
11
89,645
(414)
Stock based compensation
219
219
657
1,127
Total non-cash SG&A expense
251
230
90,302
713
Total SG&A expense
$ 8,702
$ 10,411
$ 114,961
$ 29,151
a.
Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.
b.
Included in the nine months ended September 30, 2024 amounts is a charge of $89.2 million related to Cobra's Settlement Agreement with PREPA.
SG&A expenses, as a percentage of total revenue, were 22% for the third quarter compared to 16% for the same quarter of 2023.
Interest Expense and Financing Charges, net
Interest expense and financing charges, net were $9.7 million for the third quarter compared to $2.9 million for the same quarter of 2023. The Company recognized a charge to interest expense totaling $7.1 million during the third quarter of 2024 related to its sale leaseback agreements.
Liquidity
As of September 30, 2024, Mammoth had unrestricted cash on hand of $4.2 million. As of September 30, 2024, the Company's revolving credit facility was undrawn, the borrowing base was $20.4 million and there was $13.7 million of available borrowing capacity under the revolving credit facility, after giving effect to $6.7 million of outstanding letters of credit. As of September 30, 2024, Mammoth had total liquidity of $17.9 million.
As previously announced, Cobra has received the first two installment payments of $150.0 million and $18.4 million, respectively, in connection with the previously disclosed Settlement Agreement with PREPA in October 2024. Subsequent to the receipt of the first installment payment, the Company paid, in full, all amounts owed under the term credit facility with Wexford Capital LP, including the accrued and unpaid interest, in the aggregate amount of $50.9 million, and terminated the facility on October 2, 2024. In connection with the receipt of the second installment payment from PREPA, as required under the terms of the Settlement Agreement, Cobra instructed Fifth Third Bank, National Association ("Fifth Third Bank") to issue a letter of credit to PREPA in the amount of $18.4 million and transferred a total of $19.3 million to a restricted cash account maintained by Fifth Third Bank as collateral for the letter of credit.
As of October 30, 2024, Mammoth had cash on hand of $86.2 million, no outstanding borrowings under its revolving credit facility, and a borrowing base of $18.2 million. As of October 30, 2024, the Company had $11.5 million of available borrowing capacity under its revolving credit facility and total liquidity of $97.7 million.
Capital Expenditures
The following table summarizes Mammoth's capital expenditures by operating division for the periods indicated (in thousands):
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Well completion services(a)
$ 3,812
$ 4,651
$ 8,549
$ 14,762
Infrastructure services(b)
88
69
1,051
344
Drilling services(c)
15
98
102
97
Other(d)
323
72
665
82
Eliminations(a)
(2,341)
(165)
600
(20)
Total capital expenditures
$ 1,897
$ 4,725
$ 10,967
$ 15,265
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.
Conference Call Information
Mammoth will host a conference call on Friday, November 1, 2024 at 9:00 a.m. Central time (10:00 a.m. Eastern time) to discuss its third 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 news 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; higher 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; the failure to receive or delays in receiving the remaining payments under the settlement agreement with PREPA; 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 its revolving credit facility; weather; natural disasters; litigation; volatility in commodity markets; competition in the oil and natural gas and infrastructure industries; and costs and availability of resources.
Investors are cautioned not to place undue reliance on any forward-looking statement which speaks only as of the date on which such statement is made. We undertake no obligation to correct, revise or update any forward-looking statement after the date such statement is made, whether as a result of new information, future events or otherwise, except as required by applicable law.
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30,
December 31,
2024
2023
CURRENT ASSETS
(in thousands)
Cash and cash equivalents
$ 4,165
$ 16,556
Restricted cash
2,000
7,742
Accounts receivable, net
232,032
447,202
Inventories
13,498
12,653
Prepaid expenses
2,912
12,181
Other current assets
581
591
Total current assets
255,188
496,925
Property, plant and equipment, net
109,394
113,905
Sand reserves, net
57,497
58,528
Operating lease right-of-use assets
5,010
9,551
Goodwill
9,214
9,214
Deferred income tax asset
—
1,844
Other non-current assets
6,675
8,512
Total assets
$ 442,978
$ 698,479
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable
$ 30,065
$ 27,508
Accrued expenses and other current liabilities
35,433
86,713
Accrued expenses and other current liabilities - related parties
—
1,241
Current operating lease liability
3,428
5,771
Income taxes payable
44,512
61,320
Total current liabilities
113,438
182,553
Long-term debt from related parties
49,009
42,809
Deferred income tax liabilities
2,272
628
Long-term operating lease liability
1,556
3,534
Asset retirement obligation
4,244
4,140
Other long-term liabilities
3,781
4,715
Total liabilities
174,300
238,379
COMMITMENTS AND CONTINGENCIES
EQUITY
Equity:
Common stock, $0.01 par value, 200,000,000 shares authorized, 48,127,369 and 47,941,652
issued and outstanding at September 30, 2024 and December 31, 2023
481
479
Additional paid in capital
540,213
539,558
Accumulated deficit
(268,163)
(76,317)
Accumulated other comprehensive loss
(3,853)
(3,620)
Total equity
268,678
460,100
Total liabilities and equity
$ 442,978
$ 698,479
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
(in thousands, except per share amounts)
REVENUE
Services revenue
$ 34,069
$ 54,025
$ 119,653
$ 221,140
Services revenue - related parties
1,037
252
1,171
841
Product revenue
4,909
10,682
13,908
34,729
Total revenue
40,015
64,959
134,732
256,710
COST AND EXPENSES
Services cost of revenue (exclusive of depreciation, depletion, amortization and
accretion of $4,495, $8,394, $15,149, $30,426, respectively, for the three months
ended September 30, 2024 and 2023 and nine months ended September 30, 2024
and 2023)
34,468
45,082
107,914
178,905
Services cost of revenue - related parties
118
120
355
360
Product cost of revenue (exclusive of depreciation, depletion, amortization and
accretion of $1,688, $2,836, $4,105, $6,395, respectively, for the three months
ended September 30, 2024 and 2023 and nine months ended September 30, 2024
and 2023)
3,386
7,615
14,130
22,796
Selling, general and administrative
8,702
10,411
114,961
29,151
Depreciation, depletion, amortization and accretion
6,184
11,233
19,256
36,839
Gains on disposal of assets, net
(293)
(2,450)
(2,496)
(3,284)
Impairment of goodwill
—
1,810
—
1,810
Total cost and expenses
52,565
73,821
254,120
266,577
Operating loss
(12,550)
(8,862)
(119,388)
(9,867)
OTHER INCOME (EXPENSE)
Interest expense and financing charges, net
(8,088)
(2,876)
(15,730)
(9,385)
Interest expense and financing charges, net - related parties
(1,642)
—
(4,670)
—
Other (expense) income, net
(1,122)
14,088
(64,658)
31,051
Total other (expense) income
(10,852)
11,212
(85,058)
21,666
(Loss) income before income taxes
(23,402)
2,350
(204,446)
11,799
Provision (benefit) for income taxes
640
3,438
(12,600)
9,006
Net (loss) income
$ (24,042)
$ (1,088)
$ (191,846)
$ 2,793
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustment
125
(275)
(233)
(45)
Comprehensive (loss) income
$ (23,917)
$ (1,363)
$ (192,079)
$ 2,748
Net (loss) income per share (basic)
$ (0.50)
$ (0.02)
$ (3.99)
$ 0.06
Net (loss) income per share (diluted)
$ (0.50)
$ (0.02)
$ (3.99)
$ 0.06
Weighted average number of shares outstanding (basic)
48,127
47,942
48,044
47,721
Weighted average number of shares outstanding (diluted)
48,127
47,942
48,044
47,973
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
2024
2023
(in thousands)
Cash flows from operating activities:
Net (loss) income
$ (191,846)
$ 2,793
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Stock based compensation
657
1,127
Depreciation, depletion, accretion and amortization
19,256
36,839
Amortization of debt origination costs
1,076
565
Change in provision for expected credit losses
171,108
(414)
Gains on disposal of assets
(2,496)
(3,284)
Gains from sales of equipment damaged or lost down-hole
(160)
(335)
Impairment of goodwill
—
1,810
Gain on sale of business
—
(2,080)
Deferred income taxes
3,488
(70)
Other
724
(273)
Changes in assets and liabilities:
Accounts receivable, net
43,107
1,445
Inventories
(845)
(2,896)
Prepaid expenses and other assets
9,252
8,990
Accounts payable
1,938
(7,537)
Accrued expenses and other liabilities
(3,796)
(19,679)
Accrued expenses and other liabilities - related parties
4,647
—
Income taxes payable
(16,809)
7,950
Net cash provided by operating activities
39,301
24,951
Cash flows from investing activities:
Purchases of property and equipment
(10,967)
(15,265)
Business divestitures, net of cash transferred
—
3,276
Proceeds from disposal of property and equipment
5,047
4,304
Net cash used in investing activities
(5,920)
(7,685)
Cash flows from financing activities:
Borrowings on long-term debt
—
168,800
Repayments of long-term debt
—
(183,291)
Payments on financing transaction
(46,837)
—
Payments on sale-leaseback transaction
(3,206)
(3,711)
Principal payments on financing leases and equipment financing notes
(1,403)
(4,872)
Debt issuance costs
(37)
—
Other
—
(919)
Net cash used in financing activities
(51,483)
(23,993)
Effect of foreign exchange rate on cash
(31)
(28)
Net change in cash, cash equivalents and restricted cash
(18,133)
(6,755)
Cash, cash equivalents and restricted cash at beginning of period
24,298
17,282
Cash, cash equivalents and restricted cash at end of period
$ 6,165
$ 10,527
Supplemental disclosure of cash flow information:
Cash paid for interest
$ 2,096
$ 8,951
Cash paid for income taxes, net of refunds received
$ 716
$ 788
Supplemental disclosure of non-cash transactions:
Interest paid in kind - related parties
$ 5,888
$ —
Purchases of property and equipment included in accounts payable
$ 3,964
$ 4,197
Right-of-use assets obtained for financing lease liabilities
$ 2,971
$ 507
MAMMOTH ENERGY SERVICES, INC.
SEGMENT INCOME STATEMENTS
(in thousands)
Three Months Ended September 30, 2024
Well
Completion
Infrastructure
Sand
Drilling
All Other
Eliminations
Total
Revenue from external customers
$ 2,124
$ 26,043
$ 4,909
$ 1,557
$ 5,382
$ —
$ 40,015
Intersegment revenues
108
—
—
—
1,641
(1,749)
—
Total revenue
2,232
26,043
4,909
1,557
7,023
(1,749)
40,015
Cost of revenue, exclusive of
depreciation, depletion, amortization and
accretion
7,099
22,539
3,110
1,478
3,746
—
37,972
Intersegment cost of revenues
185
—
—
1
1,565
(1,751)
—
Total cost of revenue
7,284
22,539
3,110
1,479
5,311
(1,751)
37,972
Selling, general and administrative
887
5,557
1,211
230
817
—
8,702
Depreciation, depletion, amortization
and accretion
2,546
626
1,688
587
737
—
6,184
Gains on disposal of assets, net
(60)
(41)
—
—
(192)
—
(293)
Operating (loss) income
(8,425)
(2,638)
(1,100)
(739)
350
2
(12,550)
Interest expense and financing charges,
net
533
8,742
135
127
193
—
9,730
Other expense (income), net
1
1,491
3
—
(373)
—
1,122
(Loss) income before income taxes
$ (8,959)
$ (12,871)
$ (1,238)
$ (866)
$ 530
$ 2
$ (23,402)
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
$ 2,337
$ 5,111
$ —
$ 64,959
Intersegment revenues
161
—
—
—
909
(1,070)
—
Total revenue
20,327
26,712
10,633
2,337
6,020
(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)
(1,186)
(3,131)
—
(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)
$ (1,303)
$ (618)
$ —
$ 2,350
Nine Months ended September 30, 2024
Well
Completion
Infrastructure
Sand
Drilling
All Other
Eliminations
Total
Revenue from external customers
$ 20,218
$ 82,514
$ 13,908
$ 2,804
$ 15,288
$ —
$ 134,732
Intersegment revenues
331
—
27
—
5,005
(5,363)
$ —
Total revenue
20,549
82,514
13,935
2,804
20,293
(5,363)
134,732
Cost of revenue, exclusive of
depreciation, depletion, amortization and
accretion
25,533
68,704
13,540
3,683
10,939
—
122,399
Intersegment cost of revenues
638
26
—
4
4,695
(5,363)
$ —
Total cost of revenue
26,171
68,730
13,540
3,687
15,634
(5,363)
122,399
Selling, general and administrative
3,156
105,625
3,185
618
2,377
—
114,961
Depreciation, depletion, amortization and
accretion
8,501
1,972
4,105
2,075
2,603
—
19,256
Losses (gains) on disposal of assets, net
85
(984)
(110)
—
(1,487)
—
(2,496)
Operating (loss) income
(17,364)
(92,829)
(6,785)
(3,576)
1,166
—
(119,388)
Interest expense and financing charges,
net
1,624
17,417
408
377
574
—
20,400
Other expense, net
2
63,919
2
—
735
—
64,658
Loss before income taxes
$ (18,990)
$ (174,165)
$ (7,195)
$ (3,953)
$ (143)
$ —
$ (204,446)
Nine Months ended September 30, 2023
Well
Completion
Infrastructure
Sand
Drilling
All Other
Eliminations
Total
Revenue from external customers
$ 114,810
$ 83,308
$ 34,643
$ 6,501
$ 17,448
$ —
$ 256,710
Intersegment revenues
400
—
25
—
1,743
(2,168)
—
Total revenue
115,210
83,308
34,668
6,501
19,191
(2,168)
256,710
Cost of revenue, exclusive of
depreciation, depletion, amortization and
accretion
93,158
67,810
21,905
6,035
13,153
—
202,061
Intersegment cost of revenues
1,029
29
—
26
1,084
(2,168)
—
Total cost of revenue
94,187
67,839
21,905
6,061
14,237
(2,168)
202,061
Selling, general and administrative
5,847
17,091
2,682
554
2,977
—
29,151
Depreciation, depletion, amortization and
accretion
13,288
7,366
6,397
3,497
6,291
—
36,839
Gains on disposal of assets, net
(2,016)
(439)
(16)
—
(813)
—
(3,284)
Impairment of goodwill
—
—
—
—
1,810
—
1,810
Operating income (loss)
3,904
(8,549)
3,700
(3,611)
(5,311)
—
(9,867)
Interest expense and financing charges,
net
2,527
5,361
422
376
699
—
9,385
Other expense (income), net
1
(28,713)
(12)
—
(2,327)
—
(31,051)
Income (loss) before income taxes
$ 1,376
$ 14,803
$ 3,290
$ (3,987)
$ (3,683)
$ —
$ 11,799
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
Nine Months Ended
September 30,
September 30,
Reconciliation of net (loss) income to Adjusted EBITDA:
2024
2023
2024
2023
Net (loss) income
$ (24,042)
$ (1,088)
$ (191,846)
$ 2,793
Depreciation, depletion, amortization and accretion expense
6,184
11,233
19,256
36,839
Gains on disposal of assets, net
(293)
(2,450)
(2,496)
(3,284)
Impairment of goodwill
—
1,810
—
1,810
Stock based compensation
219
219
657
1,127
Interest expense and financing charges, net
9,730
2,876
20,400
9,385
Other expense (income), net
1,122
(14,088)
64,658
(31,051)
Provision (benefit) for income taxes
640
3,438
(12,600)
9,006
Interest on trade accounts receivable
—
11,443
(60,686)
33,897
Adjusted EBITDA
$ (6,440)
$ 13,393
$ (162,657)
$ 60,522
Well Completion Services
Three Months Ended
Nine Months Ended
September 30,
September 30,
Reconciliation of net (loss) income to Adjusted EBITDA:
2024
2023
2024
2023
Net (loss) income
$ (8,959)
$ (1,834)
$ (18,990)
$ 1,376
Depreciation and amortization expense
2,546
3,971
8,501
13,288
(Gains) losses on disposal of assets, net
(60)
(2,016)
85
(2,016)
Stock based compensation
33
64
122
451
Interest expense and financing charges, net
533
774
1,624
2,527
Other expense, net
1
—
2
1
Adjusted EBITDA
$ (5,906)
$ 959
$ (8,656)
$ 15,627
Infrastructure Services
Three Months Ended
Nine Months Ended
September 30,
September 30,
Reconciliation of net (loss) income to Adjusted EBITDA:
2024
2023
2024
2023
Net (loss) income
$ (13,500)
$ 3,239
$ (158,767)
$ 6,392
Depreciation and amortization expense
626
1,557
1,972
7,366
Gains on disposal of assets, net
(41)
(311)
(984)
(439)
Stock based compensation
124
99
364
436
Interest expense and financing charges, net
8,742
1,647
17,417
5,361
Other expense (income), net
1,491
(11,348)
63,919
(28,713)
Provision (benefit) for income taxes
629
3,381
(15,398)
8,411
Interest on trade accounts receivable
—
11,443
(60,686)
33,897
Adjusted EBITDA
$ (1,929)
$ 9,707
$ (152,163)
$ 32,711
Natural Sand Proppant Services
Three Months Ended
Nine Months Ended
September 30,
September 30,
Reconciliation of net (loss) income to Adjusted EBITDA:
2024
2023
2024
2023
Net (loss) income
$ (1,238)
$ (515)
$ (7,195)
$ 3,290
Depreciation, depletion, amortization and accretion expense
1,688
2,836
4,105
6,397
Gains on disposal of assets, net
—
—
(110)
(16)
Stock based compensation
39
37
109
149
Interest expense and financing charges, net
135
117
408
422
Other expense (income), net
3
(6)
2
(12)
Adjusted EBITDA
$ 627
$ 2,469
$ (2,681)
$ 10,230
Drilling Services
Three Months Ended
Nine Months Ended
September 30,
September 30,
Reconciliation of net loss to Adjusted EBITDA:
2024
2023
2024
2023
Net loss
$ (866)
$ (1,303)
$ (3,953)
$ (3,987)
Depreciation expense
587
1,114
2,075
3,497
Stock based compensation
5
5
15
18
Interest expense and financing charges, net
127
117
377
376
Adjusted EBITDA
$ (147)
$ (67)
$ (1,486)
$ (96)
Other Services(a)
Three Months Ended
Nine Months Ended
September 30,
September 30,
Reconciliation of net income (loss) to Adjusted EBITDA:
2024
2023
2024
2023
Net income (loss)
$ 519
$ (675)
$ (2,941)
$ (4,278)
Depreciation, amortization and accretion expense
737
1,755
2,603
6,291
Gains on disposal of assets, net
(192)
(123)
(1,487)
(813)
Impairment of goodwill
—
1,810
—
1,810
Stock based compensation
18
14
47
73
Interest expense and financing charges, net
193
221
574
699
Other (income) expense, net
(373)
(2,734)
735
(2,327)
Provision for income taxes
11
57
2,798
595
Adjusted EBITDA
$ 913
$ 325
$ 2,329
$ 2,050
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.
View original content:https://www.prnewswire.com/news-releases/mammoth-energy-services-inc-announces-third-quarter-2024-operational-and-financial-results-302293680.html
SOURCE Mammoth Energy Services, Inc.
OKLAHOMA CITY, Nov. 1, 2024 /PRNewswire/ -- Mammoth Energy Services, Inc. (NASDAQ: TUSK) ("Mammoth" or the "Company") today reported financial and operational results for the third quarter ended September 30, 2024.
Arty Straehla, Chief Executive Officer of Mammoth commented, "Softness across our Well Completion Services markets appeared to have bottomed in the third quarter, and we expect a rebound in the fourth quarter. More importantly, we were pleased to have recently received a total of $168.4 million of the $188.4 million owed to our subsidiary through the Settlement Agreement with the Puerto Rico Electric Power Authority, or PREPA. We are now debt free and have plans to invest in both our Infrastructure Services and Well Completion Services divisions over the next year. In Infrastructure Services, we will be investing in additional crews and our engineering services capabilities to better serve our customers. In our Well Completion Services division, we will be upgrading pressure pumping equipment to more efficient dual fuel Tier 4 technology. We believe this investment positions us to capitalize on rising demand as markets are anticipated to improve later next year. Now that we are debt free and have significant capital to invest into our businesses, we believe we have an excellent platform to increase shareholder value."
Financial Overview for the Third Quarter 2024:
Total revenue was $40.0 million for the third quarter compared to $65.0 million for the same quarter last year.
Net loss for the third quarter was $24.0 million, or $0.50 loss per diluted share, compared to net loss of $1.1 million, or $0.02 loss per diluted share, for the same quarter last year.
Adjusted EBITDA (as defined and reconciled below) was ($6.4) million for the third quarter of 2024, compared to $13.4 million for the same quarter last year.
Well Completion Services
Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $2.2 million for the third quarter, compared to $20.3 million for the same quarter of 2023. The Company had no pressure pumping fleets active during the third quarter of 2024 compared to an average utilization of 1.2 pressure pumping fleets during the same quarter of 2023. The third quarter 2024 revenue in the well completion services division was primarily attributable to one active pump-down crew.
Infrastructure Services
Mammoth's infrastructure services division contributed revenue of $26.0 million for the third quarter compared to $26.7 million for the same quarter of 2023. Average crew count was 77 crews during the third quarter compared to 81 crews during the same quarter of 2023.
Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $4.9 million for the third quarter compared to $10.6 million for the same quarter of 2023. In the third quarter, the Company sold approximately 163,000 tons of sand at an average sales price of $22.89 per ton compared to sales of approximately 352,000 tons of sand at an average sales price of $30.18 per ton during the same quarter of 2023.
Drilling Services
Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $1.6 million for the third quarter compared to $2.3 million for the same quarter of 2023.
Other Services
Mammoth's other services, including aviation, equipment rentals, remote accommodations and equipment manufacturing, contributed revenue (inclusive of inter-segment revenue) of $7.0 million for the third quarter compared to $6.0 million for the same quarter of 2023.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses were $8.7 million for the third quarter compared to $10.4 million for the same quarter of 2023.
Following is a breakout of SG&A expense (in thousands):
|
Three Months Ended |
Nine Months Ended |
||||||
|
September 30, |
September 30, |
||||||
|
2024 |
2023 |
2024 |
2023 |
||||
|
Cash expenses: |
|||||||
|
Compensation and benefits |
$ 3,173 |
$ 3,392 |
$ 10,394 |
$ 11,665 |
|||
|
Professional services |
3,503 |
4,684 |
9,016 |
10,889 |
|||
|
Other(a) |
1,775 |
2,105 |
5,249 |
5,884 |
|||
|
Total cash SG&A expense |
8,451 |
10,181 |
24,659 |
28,438 |
|||
|
Non-cash expenses: |
|||||||
|
Change in provision for expected credit losses(b) |
32 |
11 |
89,645 |
(414) |
|||
|
Stock based compensation |
219 |
219 |
657 |
1,127 |
|||
|
Total non-cash SG&A expense |
251 |
230 |
90,302 |
713 |
|||
|
Total SG&A expense |
$ 8,702 |
$ 10,411 |
$ 114,961 |
$ 29,151 |
|||
|
a. |
Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs. |
|
b. |
Included in the nine months ended September 30, 2024 amounts is a charge of $89.2 million related to Cobra's Settlement Agreement with PREPA. |
SG&A expenses, as a percentage of total revenue, were 22% for the third quarter compared to 16% for the same quarter of 2023.
Interest Expense and Financing Charges, net
Interest expense and financing charges, net were $9.7 million for the third quarter compared to $2.9 million for the same quarter of 2023. The Company recognized a charge to interest expense totaling $7.1 million during the third quarter of 2024 related to its sale leaseback agreements.
Liquidity
As of September 30, 2024, Mammoth had unrestricted cash on hand of $4.2 million. As of September 30, 2024, the Company's revolving credit facility was undrawn, the borrowing base was $20.4 million and there was $13.7 million of available borrowing capacity under the revolving credit facility, after giving effect to $6.7 million of outstanding letters of credit. As of September 30, 2024, Mammoth had total liquidity of $17.9 million.
As previously announced, Cobra has received the first two installment payments of $150.0 million and $18.4 million, respectively, in connection with the previously disclosed Settlement Agreement with PREPA in October 2024. Subsequent to the receipt of the first installment payment, the Company paid, in full, all amounts owed under the term credit facility with Wexford Capital LP, including the accrued and unpaid interest, in the aggregate amount of $50.9 million, and terminated the facility on October 2, 2024. In connection with the receipt of the second installment payment from PREPA, as required under the terms of the Settlement Agreement, Cobra instructed Fifth Third Bank, National Association ("Fifth Third Bank") to issue a letter of credit to PREPA in the amount of $18.4 million and transferred a total of $19.3 million to a restricted cash account maintained by Fifth Third Bank as collateral for the letter of credit.
As of October 30, 2024, Mammoth had cash on hand of $86.2 million, no outstanding borrowings under its revolving credit facility, and a borrowing base of $18.2 million. As of October 30, 2024, the Company had $11.5 million of available borrowing capacity under its revolving credit facility and total liquidity of $97.7 million.
Capital Expenditures
The following table summarizes Mammoth's capital expenditures by operating division for the periods indicated (in thousands):
|
Three Months Ended |
Nine Months Ended |
||||||
|
September 30, |
September 30, |
||||||
|
2024 |
2023 |
2024 |
2023 |
||||
|
Well completion services(a) |
$ 3,812 |
$ 4,651 |
$ 8,549 |
$ 14,762 |
|||
|
Infrastructure services(b) |
88 |
69 |
1,051 |
344 |
|||
|
Drilling services(c) |
15 |
98 |
102 |
97 |
|||
|
Other(d) |
323 |
72 |
665 |
82 |
|||
|
Eliminations(a) |
(2,341) |
(165) |
600 |
(20) |
|||
|
Total capital expenditures |
$ 1,897 |
$ 4,725 |
$ 10,967 |
$ 15,265 |
|||
|
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. |
Conference Call Information
Mammoth will host a conference call on Friday, November 1, 2024 at 9:00 a.m. Central time (10:00 a.m. Eastern time) to discuss its third 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 news 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; higher 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; the failure to receive or delays in receiving the remaining payments under the settlement agreement with PREPA; 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 its revolving credit facility; weather; natural disasters; litigation; volatility in commodity markets; competition in the oil and natural gas and infrastructure industries; and costs and availability of resources.
Investors are cautioned not to place undue reliance on any forward-looking statement which speaks only as of the date on which such statement is made. We undertake no obligation to correct, revise or update any forward-looking statement after the date such statement is made, whether as a result of new information, future events or otherwise, except as required by applicable law.
|
MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED BALANCE SHEETS | ||||
|
ASSETS |
September 30, |
December 31, |
||
|
2024 |
2023 |
|||
|
CURRENT ASSETS |
(in thousands) |
|||
|
Cash and cash equivalents |
$ 4,165 |
$ 16,556 |
||
|
Restricted cash |
2,000 |
7,742 |
||
|
Accounts receivable, net |
232,032 |
447,202 |
||
|
Inventories |
13,498 |
12,653 |
||
|
Prepaid expenses |
2,912 |
12,181 |
||
|
Other current assets |
581 |
591 |
||
|
Total current assets |
255,188 |
496,925 |
||
|
Property, plant and equipment, net |
109,394 |
113,905 |
||
|
Sand reserves, net |
57,497 |
58,528 |
||
|
Operating lease right-of-use assets |
5,010 |
9,551 |
||
|
Goodwill |
9,214 |
9,214 |
||
|
Deferred income tax asset |
— |
1,844 |
||
|
Other non-current assets |
6,675 |
8,512 |
||
|
Total assets |
$ 442,978 |
$ 698,479 |
||
|
LIABILITIES AND EQUITY |
||||
|
CURRENT LIABILITIES |
||||
|
Accounts payable |
$ 30,065 |
$ 27,508 |
||
|
Accrued expenses and other current liabilities |
35,433 |
86,713 |
||
|
Accrued expenses and other current liabilities - related parties |
— |
1,241 |
||
|
Current operating lease liability |
3,428 |
5,771 |
||
|
Income taxes payable |
44,512 |
61,320 |
||
|
Total current liabilities |
113,438 |
182,553 |
||
|
Long-term debt from related parties |
49,009 |
42,809 |
||
|
Deferred income tax liabilities |
2,272 |
628 |
||
|
Long-term operating lease liability |
1,556 |
3,534 |
||
|
Asset retirement obligation |
4,244 |
4,140 |
||
|
Other long-term liabilities |
3,781 |
4,715 |
||
|
Total liabilities |
174,300 |
238,379 |
||
|
COMMITMENTS AND CONTINGENCIES |
||||
|
EQUITY |
||||
|
Equity: |
||||
|
Common stock, $0.01 par value, 200,000,000 shares authorized, 48,127,369 and 47,941,652 |
481 |
479 |
||
|
Additional paid in capital |
540,213 |
539,558 |
||
|
Accumulated deficit |
(268,163) |
(76,317) |
||
|
Accumulated other comprehensive loss |
(3,853) |
(3,620) |
||
|
Total equity |
268,678 |
460,100 |
||
|
Total liabilities and equity |
$ 442,978 |
$ 698,479 |
||
|
MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | |||||||
|
Three Months Ended |
Nine Months Ended |
||||||
|
September 30, |
September 30, |
||||||
|
2024 |
2023 |
2024 |
2023 |
||||
|
(in thousands, except per share amounts) |
|||||||
|
REVENUE |
|||||||
|
Services revenue |
$ 34,069 |
$ 54,025 |
$ 119,653 |
$ 221,140 |
|||
|
Services revenue - related parties |
1,037 |
252 |
1,171 |
841 |
|||
|
Product revenue |
4,909 |
10,682 |
13,908 |
34,729 |
|||
|
Total revenue |
40,015 |
64,959 |
134,732 |
256,710 |
|||
|
COST AND EXPENSES |
|||||||
|
Services cost of revenue (exclusive of depreciation, depletion, amortization and |
34,468 |
45,082 |
107,914 |
178,905 |
|||
|
Services cost of revenue - related parties |
118 |
120 |
355 |
360 |
|||
|
Product cost of revenue (exclusive of depreciation, depletion, amortization and |
3,386 |
7,615 |
14,130 |
22,796 |
|||
|
Selling, general and administrative |
8,702 |
10,411 |
114,961 |
29,151 |
|||
|
Depreciation, depletion, amortization and accretion |
6,184 |
11,233 |
19,256 |
36,839 |
|||
|
Gains on disposal of assets, net |
(293) |
(2,450) |
(2,496) |
(3,284) |
|||
|
Impairment of goodwill |
— |
1,810 |
— |
1,810 |
|||
|
Total cost and expenses |
52,565 |
73,821 |
254,120 |
266,577 |
|||
|
Operating loss |
(12,550) |
(8,862) |
(119,388) |
(9,867) |
|||
|
OTHER INCOME (EXPENSE) |
|||||||
|
Interest expense and financing charges, net |
(8,088) |
(2,876) |
(15,730) |
(9,385) |
|||
|
Interest expense and financing charges, net - related parties |
(1,642) |
— |
(4,670) |
— |
|||
|
Other (expense) income, net |
(1,122) |
14,088 |
(64,658) |
31,051 |
|||
|
Total other (expense) income |
(10,852) |
11,212 |
(85,058) |
21,666 |
|||
|
(Loss) income before income taxes |
(23,402) |
2,350 |
(204,446) |
11,799 |
|||
|
Provision (benefit) for income taxes |
640 |
3,438 |
(12,600) |
9,006 |
|||
|
Net (loss) income |
$ (24,042) |
$ (1,088) |
$ (191,846) |
$ 2,793 |
|||
|
OTHER COMPREHENSIVE (LOSS) INCOME |
|||||||
|
Foreign currency translation adjustment |
125 |
(275) |
(233) |
(45) |
|||
|
Comprehensive (loss) income |
$ (23,917) |
$ (1,363) |
$ (192,079) |
$ 2,748 |
|||
|
Net (loss) income per share (basic) |
$ (0.50) |
$ (0.02) |
$ (3.99) |
$ 0.06 |
|||
|
Net (loss) income per share (diluted) |
$ (0.50) |
$ (0.02) |
$ (3.99) |
$ 0.06 |
|||
|
Weighted average number of shares outstanding (basic) |
48,127 |
47,942 |
48,044 |
47,721 |
|||
|
Weighted average number of shares outstanding (diluted) |
48,127 |
47,942 |
48,044 |
47,973 |
|||
|
MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
|
Nine Months Ended |
|||
|
September 30, |
|||
|
2024 |
2023 |
||
|
(in thousands) |
|||
|
Cash flows from operating activities: |
|||
|
Net (loss) income |
$ (191,846) |
$ 2,793 |
|
|
Adjustments to reconcile net (loss) income to cash provided by operating activities: |
|||
|
Stock based compensation |
657 |
1,127 |
|
|
Depreciation, depletion, accretion and amortization |
19,256 |
36,839 |
|
|
Amortization of debt origination costs |
1,076 |
565 |
|
|
Change in provision for expected credit losses |
171,108 |
(414) |
|
|
Gains on disposal of assets |
(2,496) |
(3,284) |
|
|
Gains from sales of equipment damaged or lost down-hole |
(160) |
(335) |
|
|
Impairment of goodwill |
— |
1,810 |
|
|
Gain on sale of business |
— |
(2,080) |
|
|
Deferred income taxes |
3,488 |
(70) |
|
|
Other |
724 |
(273) |
|
|
Changes in assets and liabilities: |
|||
|
Accounts receivable, net |
43,107 |
1,445 |
|
|
Inventories |
(845) |
(2,896) |
|
|
Prepaid expenses and other assets |
9,252 |
8,990 |
|
|
Accounts payable |
1,938 |
(7,537) |
|
|
Accrued expenses and other liabilities |
(3,796) |
(19,679) |
|
|
Accrued expenses and other liabilities - related parties |
4,647 |
— |
|
|
Income taxes payable |
(16,809) |
7,950 |
|
|
Net cash provided by operating activities |
39,301 |
24,951 |
|
|
Cash flows from investing activities: |
|||
|
Purchases of property and equipment |
(10,967) |
(15,265) |
|
|
Business divestitures, net of cash transferred |
— |
3,276 |
|
|
Proceeds from disposal of property and equipment |
5,047 |
4,304 |
|
|
Net cash used in investing activities |
(5,920) |
(7,685) |
|
|
Cash flows from financing activities: |
|||
|
Borrowings on long-term debt |
— |
168,800 |
|
|
Repayments of long-term debt |
— |
(183,291) |
|
|
Payments on financing transaction |
(46,837) |
— |
|
|
Payments on sale-leaseback transaction |
(3,206) |
(3,711) |
|
|
Principal payments on financing leases and equipment financing notes |
(1,403) |
(4,872) |
|
|
Debt issuance costs |
(37) |
— |
|
|
Other |
— |
(919) |
|
|
Net cash used in financing activities |
(51,483) |
(23,993) |
|
|
Effect of foreign exchange rate on cash |
(31) |
(28) |
|
|
Net change in cash, cash equivalents and restricted cash |
(18,133) |
(6,755) |
|
|
Cash, cash equivalents and restricted cash at beginning of period |
24,298 |
17,282 |
|
|
Cash, cash equivalents and restricted cash at end of period |
$ 6,165 |
$ 10,527 |
|
|
Supplemental disclosure of cash flow information: |
|||
|
Cash paid for interest |
$ 2,096 |
$ 8,951 |
|
|
Cash paid for income taxes, net of refunds received |
$ 716 |
$ 788 |
|
|
Supplemental disclosure of non-cash transactions: |
|||
|
Interest paid in kind - related parties |
$ 5,888 |
$ — |
|
|
Purchases of property and equipment included in accounts payable |
$ 3,964 |
$ 4,197 |
|
|
Right-of-use assets obtained for financing lease liabilities |
$ 2,971 |
$ 507 |
|
|
MAMMOTH ENERGY SERVICES, INC. SEGMENT INCOME STATEMENTS (in thousands) | |||||||
|
Three Months Ended September 30, 2024 |
Well |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
|
Revenue from external customers |
$ 2,124 |
$ 26,043 |
$ 4,909 |
$ 1,557 |
$ 5,382 |
$ — |
$ 40,015 |
|
Intersegment revenues |
108 |
— |
— |
— |
1,641 |
(1,749) |
— |
|
Total revenue |
2,232 |
26,043 |
4,909 |
1,557 |
7,023 |
(1,749) |
40,015 |
|
Cost of revenue, exclusive of |
7,099 |
22,539 |
3,110 |
1,478 |
3,746 |
— |
37,972 |
|
Intersegment cost of revenues |
185 |
— |
— |
1 |
1,565 |
(1,751) |
— |
|
Total cost of revenue |
7,284 |
22,539 |
3,110 |
1,479 |
5,311 |
(1,751) |
37,972 |
|
Selling, general and administrative |
887 |
5,557 |
1,211 |
230 |
817 |
— |
8,702 |
|
Depreciation, depletion, amortization |
2,546 |
626 |
1,688 |
587 |
737 |
— |
6,184 |
|
Gains on disposal of assets, net |
(60) |
(41) |
— |
— |
(192) |
— |
(293) |
|
Operating (loss) income |
(8,425) |
(2,638) |
(1,100) |
(739) |
350 |
2 |
(12,550) |
|
Interest expense and financing charges, |
533 |
8,742 |
135 |
127 |
193 |
— |
9,730 |
|
Other expense (income), net |
1 |
1,491 |
3 |
— |
(373) |
— |
1,122 |
|
(Loss) income before income taxes |
$ (8,959) |
$ (12,871) |
$ (1,238) |
$ (866) |
$ 530 |
$ 2 |
$ (23,402) |
|
Three Months Ended September 30, 2023 |
Well |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
|
Revenue from external customers |
$ 20,166 |
$ 26,712 |
$ 10,633 |
$ 2,337 |
$ 5,111 |
$ — |
$ 64,959 |
|
Intersegment revenues |
161 |
— |
— |
— |
909 |
(1,070) |
— |
|
Total revenue |
20,327 |
26,712 |
10,633 |
2,337 |
6,020 |
(1,070) |
64,959 |
|
Cost of revenue, exclusive of |
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 |
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) |
(1,186) |
(3,131) |
— |
(8,862) |
|
Interest expense and financing charges, |
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) |
$ (1,303) |
$ (618) |
$ — |
$ 2,350 |
|
Nine Months ended September 30, 2024 |
Well |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
|
Revenue from external customers |
$ 20,218 |
$ 82,514 |
$ 13,908 |
$ 2,804 |
$ 15,288 |
$ — |
$ 134,732 |
|
Intersegment revenues |
331 |
— |
27 |
— |
5,005 |
(5,363) |
$ — |
|
Total revenue |
20,549 |
82,514 |
13,935 |
2,804 |
20,293 |
(5,363) |
134,732 |
|
Cost of revenue, exclusive of |
25,533 |
68,704 |
13,540 |
3,683 |
10,939 |
— |
122,399 |
|
Intersegment cost of revenues |
638 |
26 |
— |
4 |
4,695 |
(5,363) |
$ — |
|
Total cost of revenue |
26,171 |
68,730 |
13,540 |
3,687 |
15,634 |
(5,363) |
122,399 |
|
Selling, general and administrative |
3,156 |
105,625 |
3,185 |
618 |
2,377 |
— |
114,961 |
|
Depreciation, depletion, amortization and accretion |
8,501 |
1,972 |
4,105 |
2,075 |
2,603 |
— |
19,256 |
|
Losses (gains) on disposal of assets, net |
85 |
(984) |
(110) |
— |
(1,487) |
— |
(2,496) |
|
Operating (loss) income |
(17,364) |
(92,829) |
(6,785) |
(3,576) |
1,166 |
— |
(119,388) |
|
Interest expense and financing charges, |
1,624 |
17,417 |
408 |
377 |
574 |
— |
20,400 |
|
Other expense, net |
2 |
63,919 |
2 |
— |
735 |
— |
64,658 |
|
Loss before income taxes |
$ (18,990) |
$ (174,165) |
$ (7,195) |
$ (3,953) |
$ (143) |
$ — |
$ (204,446) |
|
Nine Months ended September 30, 2023 |
Well |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
|
Revenue from external customers |
$ 114,810 |
$ 83,308 |
$ 34,643 |
$ 6,501 |
$ 17,448 |
$ — |
$ 256,710 |
|
Intersegment revenues |
400 |
— |
25 |
— |
1,743 |
(2,168) |
— |
|
Total revenue |
115,210 |
83,308 |
34,668 |
6,501 |
19,191 |
(2,168) |
256,710 |
|
Cost of revenue, exclusive of |
93,158 |
67,810 |
21,905 |
6,035 |
13,153 |
— |
202,061 |
|
Intersegment cost of revenues |
1,029 |
29 |
— |
26 |
1,084 |
(2,168) |
— |
|
Total cost of revenue |
94,187 |
67,839 |
21,905 |
6,061 |
14,237 |
(2,168) |
202,061 |
|
Selling, general and administrative |
5,847 |
17,091 |
2,682 |
554 |
2,977 |
— |
29,151 |
|
Depreciation, depletion, amortization and |
13,288 |
7,366 |
6,397 |
3,497 |
6,291 |
— |
36,839 |
|
Gains on disposal of assets, net |
(2,016) |
(439) |
(16) |
— |
(813) |
— |
(3,284) |
|
Impairment of goodwill |
— |
— |
— |
— |
1,810 |
— |
1,810 |
|
Operating income (loss) |
3,904 |
(8,549) |
3,700 |
(3,611) |
(5,311) |
— |
(9,867) |
|
Interest expense and financing charges, |
2,527 |
5,361 |
422 |
376 |
699 |
— |
9,385 |
|
Other expense (income), net |
1 |
(28,713) |
(12) |
— |
(2,327) |
— |
(31,051) |
|
Income (loss) before income taxes |
$ 1,376 |
$ 14,803 |
$ 3,290 |
$ (3,987) |
$ (3,683) |
$ — |
$ 11,799 |
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 |
Nine Months Ended |
||||||
|
September 30, |
September 30, |
||||||
|
Reconciliation of net (loss) income to Adjusted EBITDA: |
2024 |
2023 |
2024 |
2023 |
|||
|
Net (loss) income |
$ (24,042) |
$ (1,088) |
$ (191,846) |
$ 2,793 |
|||
|
Depreciation, depletion, amortization and accretion expense |
6,184 |
11,233 |
19,256 |
36,839 |
|||
|
Gains on disposal of assets, net |
(293) |
(2,450) |
(2,496) |
(3,284) |
|||
|
Impairment of goodwill |
— |
1,810 |
— |
1,810 |
|||
|
Stock based compensation |
219 |
219 |
657 |
1,127 |
|||
|
Interest expense and financing charges, net |
9,730 |
2,876 |
20,400 |
9,385 |
|||
|
Other expense (income), net |
1,122 |
(14,088) |
64,658 |
(31,051) |
|||
|
Provision (benefit) for income taxes |
640 |
3,438 |
(12,600) |
9,006 |
|||
|
Interest on trade accounts receivable |
— |
11,443 |
(60,686) |
33,897 |
|||
|
Adjusted EBITDA |
$ (6,440) |
$ 13,393 |
$ (162,657) |
$ 60,522 |
|||
Well Completion Services
|
Three Months Ended |
Nine Months Ended |
||||||
|
September 30, |
September 30, |
||||||
|
Reconciliation of net (loss) income to Adjusted EBITDA: |
2024 |
2023 |
2024 |
2023 |
|||
|
Net (loss) income |
$ (8,959) |
$ (1,834) |
$ (18,990) |
$ 1,376 |
|||
|
Depreciation and amortization expense |
2,546 |
3,971 |
8,501 |
13,288 |
|||
|
(Gains) losses on disposal of assets, net |
(60) |
(2,016) |
85 |
(2,016) |
|||
|
Stock based compensation |
33 |
64 |
122 |
451 |
|||
|
Interest expense and financing charges, net |
533 |
774 |
1,624 |
2,527 |
|||
|
Other expense, net |
1 |
— |
2 |
1 |
|||
|
Adjusted EBITDA |
$ (5,906) |
$ 959 |
$ (8,656) |
$ 15,627 |
|||
Infrastructure Services
|
Three Months Ended |
Nine Months Ended |
||||||
|
September 30, |
September 30, |
||||||
|
Reconciliation of net (loss) income to Adjusted EBITDA: |
2024 |
2023 |
2024 |
2023 |
|||
|
Net (loss) income |
$ (13,500) |
$ 3,239 |
$ (158,767) |
$ 6,392 |
|||
|
Depreciation and amortization expense |
626 |
1,557 |
1,972 |
7,366 |
|||
|
Gains on disposal of assets, net |
(41) |
(311) |
(984) |
(439) |
|||
|
Stock based compensation |
124 |
99 |
364 |
436 |
|||
|
Interest expense and financing charges, net |
8,742 |
1,647 |
17,417 |
5,361 |
|||
|
Other expense (income), net |
1,491 |
(11,348) |
63,919 |
(28,713) |
|||
|
Provision (benefit) for income taxes |
629 |
3,381 |
(15,398) |
8,411 |
|||
|
Interest on trade accounts receivable |
— |
11,443 |
(60,686) |
33,897 |
|||
|
Adjusted EBITDA |
$ (1,929) |
$ 9,707 |
$ (152,163) |
$ 32,711 |
|||
Natural Sand Proppant Services
|
Three Months Ended |
Nine Months Ended |
||||||
|
September 30, |
September 30, |
||||||
|
Reconciliation of net (loss) income to Adjusted EBITDA: |
2024 |
2023 |
2024 |
2023 |
|||
|
Net (loss) income |
$ (1,238) |
$ (515) |
$ (7,195) |
$ 3,290 |
|||
|
Depreciation, depletion, amortization and accretion expense |
1,688 |
2,836 |
4,105 |
6,397 |
|||
|
Gains on disposal of assets, net |
— |
— |
(110) |
(16) |
|||
|
Stock based compensation |
39 |
37 |
109 |
149 |
|||
|
Interest expense and financing charges, net |
135 |
117 |
408 |
422 |
|||
|
Other expense (income), net |
3 |
(6) |
2 |
(12) |
|||
|
Adjusted EBITDA |
$ 627 |
$ 2,469 |
$ (2,681) |
$ 10,230 |
|||
Drilling Services
|
Three Months Ended |
Nine Months Ended |
||||||
|
September 30, |
September 30, |
||||||
|
Reconciliation of net loss to Adjusted EBITDA: |
2024 |
2023 |
2024 |
2023 |
|||
|
Net loss |
$ (866) |
$ (1,303) |
$ (3,953) |
$ (3,987) |
|||
|
Depreciation expense |
587 |
1,114 |
2,075 |
3,497 |
|||
|
Stock based compensation |
5 |
5 |
15 |
18 |
|||
|
Interest expense and financing charges, net |
127 |
117 |
377 |
376 |
|||
|
Adjusted EBITDA |
$ (147) |
$ (67) |
$ (1,486) |
$ (96) |
|||
Other Services(a)
|
Three Months Ended |
Nine Months Ended |
||||||
|
September 30, |
September 30, |
||||||
|
Reconciliation of net income (loss) to Adjusted EBITDA: |
2024 |
2023 |
2024 |
2023 |
|||
|
Net income (loss) |
$ 519 |
$ (675) |
$ (2,941) |
$ (4,278) |
|||
|
Depreciation, amortization and accretion expense |
737 |
1,755 |
2,603 |
6,291 |
|||
|
Gains on disposal of assets, net |
(192) |
(123) |
(1,487) |
(813) |
|||
|
Impairment of goodwill |
— |
1,810 |
— |
1,810 |
|||
|
Stock based compensation |
18 |
14 |
47 |
73 |
|||
|
Interest expense and financing charges, net |
193 |
221 |
574 |
699 |
|||
|
Other (income) expense, net |
(373) |
(2,734) |
735 |
(2,327) |
|||
|
Provision for income taxes |
11 |
57 |
2,798 |
595 |
|||
|
Adjusted EBITDA |
$ 913 |
$ 325 |
$ 2,329 |
$ 2,050 |
|||
|
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. |
View original content:https://www.prnewswire.com/news-releases/mammoth-energy-services-inc-announces-third-quarter-2024-operational-and-financial-results-302293680.html
SOURCE Mammoth Energy Services, Inc.