MNTK 8-K

Montauk Renewables, Inc. (MNTK)

8-K 2024-08-08 For: 2024-08-08

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Delaware	001-39919	85-3189583
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5313 Campbells Run Road Suite 200
Pittsburgh, Pennsylvania		15205
(Address of Principal Executive Offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	MNTK	The Nasdaq Stock Market


			MONTAUK RENEWABLES, INC.

Date:	August 8, 2024	By:	/s/ Kevin A. Van Asdalan
		Name: Title:	Kevin A. Van Asdalan Chief Financial Officer


MONTAUK RENEWABLES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

(in thousands, except per share data)


	as of June 30,			as of December 31,
ASSETS	2024			2023
Current assets:
Cash and cash equivalents	$	42,285		$	73,811
Accounts and other receivables		21,984			12,752
Current restricted cash		8			8
Income tax receivable		506		—
Current portion of derivative instruments		766			785
Prepaid expenses and other current assets		5,598			2,819
Total current assets	$	71,147		$	90,175
Non-current restricted cash	$	452		$	423
Property, plant and equipment, net		244,367			214,289
Goodwill and intangible assets, net		17,932			18,421
Deferred tax assets		1,908			2,076
Non-current portion of derivative instruments		515			470
Operating lease right-of-use assets		4,165			4,313
Finance lease right-of-use assets		147			36
Related party receivable		10,158			10,138
Other assets		11,181			9,897
Total assets	$	361,972		$	350,238

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	11,864		$	7,916
Accrued liabilities		20,671			12,789
Income tax payable	—				313
Current portion of operating lease liability		452			420
Current portion of finance lease liability		67			26
Current portion of long-term debt		9,874			7,886
Total current liabilities	$	42,928		$	29,350
Long-term debt, less current portion		49,685			55,614
Non-current portion of operating lease liability		3,953			4,133
Non-current portion of finance lease liability		79			10
Asset retirement obligations		6,113			5,900
Other liabilities		3,893			4,992

Total liabilities	$	106,651		$	99,999

STOCKHOLDERS’ EQUITY

Common stock, $0.01 par value, authorized 690,000,000 shares; 143,732,811 shares issued at June 30, 2024 and December 31, 2023; 142,186,722 and 141,986,189 shares outstanding at June 30, 2024 and December 31, 2023, respectively		1,422			1,420
Treasury stock, at cost, 1,069,627 and 984,762 shares June 30, 2024 and December 31, 2023, respectively		(11,570	)		(11,173	)
Additional paid-in capital		218,717			214,378
Retained earnings		46,752			45,614
Total stockholders' equity		255,321			250,239
Total liabilities and stockholders' equity	$	361,972		$	350,238


MONTAUK RENEWABLES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)




(in thousands, except per share data)	For the three months ended June 30,						For the six months ended June 30,
	2024			2023			2024			2023
Total operating revenues	$	43,338		$	53,256		$	82,125		$	72,409

Operating expenses:
Operating and maintenance expenses		18,662			15,221			33,113			29,402
General and administrative expenses		8,737			8,745			18,166			18,220
Royalties, transportation, gathering and production fuel		9,077			10,205			15,593			14,138
Depreciation, depletion and amortization		5,823			5,251			11,257			10,447
Impairment loss		171			274			699			726
Transaction costs		-			3			61			86
Total operating expenses	$	42,470		$	39,699		$	78,889		$	73,019
Operating income (loss)	$	868		$	13,557		$	3,236		$	(610	)

Other expenses (income):
Interest expense	$	1,286		$	711		$	2,451		$	2,386
Other income		(50	)		(90	)		(1,110	)		(84	)
Total other expenses (income)	$	1,236		$	621		$	1,341		$	2,302
(Loss) income before income taxes	$	(368	)	$	12,936		$	1,895		$	(2,912	)

Income tax expense (benefit)		344			11,933			757			(127	)
Net (loss) income	$	(712	)	$	1,003		$	1,138		$	(2,785	)

(Loss) income per share:
Basic	$	(0.01	)	$	0.01		$	0.01		$	(0.02	)
Diluted	$	(0.01	)	$	0.01		$	0.01		$	(0.02	)

Weighted-average common shares outstanding:
Basic		142,069,697			141,633,417			142,027,943			141,633,417
Diluted		142,069,697			142,045,498			142,252,085			141,633,417


MONTAUK RENEWABLES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

(in thousands):
	For the six months ended June 30,
	2024			2023
Cash flows from operating activities:
Net income (loss)	$	1,138		$	(2,785	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		11,257			10,447
Provision (benefit) for deferred income taxes		168			87
Stock-based compensation		4,339			3,495
Derivative mark-to-market adjustments and settlements		(26	)		(119	)
Net loss on sale of assets		71			37
(Decrease) increase in earn-out liability		(465	)		350
Accretion of asset retirement obligations		220			202
Liabilities associated with properties sold		(225	)		—
Amortization of debt issuance costs		180			184
Impairment loss		699			726
Changes in operating assets and liabilities:
Accounts and other receivables and other current assets		(13,934	)		(13,246	)
Accounts payable and other accrued expenses		11,063			6,699
Net cash provided by operating activities	$	14,485		$	6,077
Cash flows from investing activities:
Capital expenditures	$	(40,764	)	$	(29,588	)
Asset acquisition		(820	)		—
Cash collateral deposits		29			1
Net cash used in investing activities	$	(41,555	)	$	(29,587	)
Cash flows from financing activities:
Repayments of long-term debt	$	(4,000	)	$	(4,000	)
Common stock issuance	$	2		$	-
Treasury stock purchase	$	(397	)	$	-
Finance lease payments		(32	)		(36	)
Net cash used in financing activities	$	(4,427	)	$	(4,036	)
Net decrease in cash and cash equivalents and restricted cash	$	(31,497	)	$	(27,546	)
Cash and cash equivalents and restricted cash at beginning of period	$	74,242		$	105,606
Cash and cash equivalents and restricted cash at end of period	$	42,745		$	78,060

Reconciliation of cash, cash equivalents, and restricted cash at end of period:
Cash and cash equivalents	$	42,285		$	77,630
Restricted cash and cash equivalents - current	8			22
Restricted cash and cash equivalents - non-current	452			408
	$	42,745		$	78,060

Supplemental cash flow information:
Cash paid for interest	$	2,366		$	2,460
Cash paid for income taxes		1,407			865
Accrual for purchase of property, plant and equipment included in accounts payable and accrued liabilities		7,697			6,565


MONTAUK RENEWABLES, INC.
NON-GAAP FINANCIAL MEASURES
(Unaudited)

(in thousands):

The following table provides our EBITDA and Adjusted EBITDA, as well as a reconciliation to net income (loss) which is the most directly comparable GAAP measure for the three and six months ended June 30, 2024 and 2023, respectively:



	For the three months ended June 30,
	2024			2023
Net (loss) income	$	(712	)	$	1,003
Depreciation, depletion and amortization		5,823			5,251
Interest expense		1,286			711
Income tax expense		344			11,933
Consolidated EBITDA		6,741			18,898

Impairment loss		171			274
Net loss on sale of assets		49			—
Transaction costs		—			3
Adjusted EBITDA	$	6,961		$	19,175



	For the six months ended June 30,
	2024			2023
Net income (loss)	$	1,138		$	(2,785	)
Depreciation, depletion and amortization		11,257			10,447
Interest expense		2,451			2,386
Income tax expense (benefit)		757			(127	)
Consolidated EBITDA		15,603			9,921

Impairment loss		699			726
Net loss on sale of assets		71			37
Transaction Costs		61			86
Adjusted EBITDA	$	16,434		$	10,770