Greetings, and welcome to the Mammoth Energy Services First Quarter Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Zach Vaughan. Thank you, sir. You may begin.

Thank you, operator, and good morning, everyone. We appreciate you joining us for the Mammoth Energy conference call to review 2024 first quarter results. This call is also being webcast and can be accessed through the audio link on the Events and Presentations page in the Investor Relations section at www.mammothenergy.com. Information reported on this call speaks only as of today, May 2, 2024. Please be advised that any time-sensitive information may no longer be accurate as of any subsequent date. I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We will be making forward-looking statements as part of today's call. Actual results may differ materially. Please refer to the earnings press release that was issued today for our disclosure on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Management may also refer to non-GAAP measures, including adjusted EBITDA. The definition of this non-GAAP measure and its reconciliations to the most directly comparable GAAP measure can be found at the end of our earnings release and in our investor presentation, which can be found on our website. Mammoth Energy assumes no obligation to publicly update or revise any forward-looking statements. Now, I would like to turn it over to Mammoth Energy's CEO, Arty Straehla.

Thank you, Zach, and good morning, everyone. I'll start with some overview comments about our business and the quarter before discussing recent developments and updated expectations for 2024. Our first quarter results were challenged for a number of reasons. Most notably, our well completion services division experienced continued activity softness resulting from lower energy prices in the quarter, particularly in natural gas, and operators electing to defer activity to later in the year. This softness resulted in white space in our calendar for the month of March and had a direct impact on our revenue and earnings for the quarter in this segment. Our infrastructure services division was also challenged this quarter, primarily due to experiencing less storm-related work than we had anticipated, and that caused a slight underperformance relative to our expectations. We do expect these first quarter results to serve as our low watermark for 2024. Our infrastructure division experienced a sequential decline in both revenue and adjusted EBITDA for the first quarter stemming from less storm-related activity. However, we are now seeing an uptick in bidding opportunities related to engineering, fiber, transmission, and distribution, all of which are areas where I believe we have differentiated and specialized capabilities to capitalize on opportunities in the market. Our engineering group continues to do well, and we're building up more projects in the T&D space currently. Funds are being released for infrastructure projects such as fiber and engineering as well as transmission and distribution, areas where we remain excited participants. Although the storm season in 2023 and so far in 2024 has been benign relative to historical standards, NOAA is forecasting an active storm season this year, and we will be prepared to deploy teams in areas that may be impacted. We remain encouraged about the potential for continued growth in this sector, and we feel strongly that Mammoth's infrastructure business is well positioned for long-term growth. Our well completions business experienced persistent challenges associated with lower U.S. onshore activity and sustained weakness in the natural gas basins in which we operate. However, we entered the second quarter with improved visibility for the remainder of 2024. We are seeing indications of increasing activity levels in the back half of the year in anticipation of increased natural gas demand, and we will be strategically positioned to capitalize on this anticipated demand when it ramps up. We continue to weigh opportunities to potentially move our assets to more oily basins, but we haven't had a sufficient opportunity yet that would allow us to sustain the calendar and costs associated with relocation. We remain extremely focused on our cost structure, and we will continue to efficiently manage our capital expenditures to align with activity levels and demand. In our sand division, we experienced increased demand resulting in sequential improvement in tonnage sold as well as a slight uptick in pricing relative to the fourth quarter. Despite the slow start to the year, we have entered 2024 with an undrawn revolver and cash on the balance sheet, and we believe Mammoth remains poised to capitalize on near-term opportunities. As demonstrated throughout our history, we have a resilient and diversified business comprised of talented and hard-working teams and will continue to find solutions that optimize our operational efficiencies with a customer and safety-first focus. We believe our diverse portfolio and ability to adapt quickly to changes in the environment position us well in these segments. Turning now to PREPA. As previously announced, PREPA has paid $64 million so far in 2024 regarding our receivable. While we are pleased with these payments, we are still owed approximately $349 million in principal and interest. PREPA has been holding $18.2 million in FEMA funding specifically related to Cobra's work since December. We continue to vigorously pursue payment of the outstanding amounts, especially the $18.2 million PREPA is withholding from us. If mediation is unsuccessful, we intend to litigate the disputed issues. Looking forward, we entered the second quarter with improved visibility and expect our results to take a meaningful step-up as we progress through 2024. We are encouraged by customer conversations and the anticipated ramp in demand and associated well completions activity in the second half of this year. Our current line of sight gives us confidence that we will generate improved adjusted EBITDA results in each of the remaining quarters of 2024. We have a strengthened balance sheet, a new revolving credit facility agreement, and a new term loan agreement, and we remain well positioned for growth in 2024. Now, let me turn the call over to Mark to take you through our financial performance in greater detail.

Thank you, Arty. I hope everyone is doing well, and we appreciate you joining us today. As I usually do, I'm going to take this time to provide additional details on some meaningful metrics and several key highlights. A detailed breakdown of our results can be found in our earnings release and in our 10-Q once it is on file with the SEC. Mammoth's total revenue during the first quarter of 2024 came in at $43.2 million compared to $52.8 million in the fourth quarter of 2023. The 18% sequential decline in total revenues was primarily attributable to the continued activity softness in the natural gas-heavy basins that we operate alongside an overall decline in North American energy prices in the quarter. We believe there are positive demand implications for natural gas on the horizon, and we remain optimistic for activity increases later this year. We view the first quarter as a low watermark for 2024 and anticipate improvements in our results moving forward. In Q1 of 2024, we pumped 380 stages with approximately 0.6 fleets utilized on average compared to 669 stages and an average utilization of 0.9 fleets during the fourth quarter of 2023, resulting from sustained lower natural gas prices and commodity price uncertainty. Operators continued to elect to push much of their activity to the right and were slow to reset and finalize their budgets, causing white space on the calendar, but we now feel we have a better line of sight for later this year. As many of our peers have noted, the expectation is that activity will begin to ramp up meaningfully in the second half of 2024. We will remain disciplined stewards of capital and continue to align our spending appropriately with the demand we see from our customers. Our sand division sold approximately 146,000 tons of sand in the first quarter of 2024 at an average sales price of $24.38 per ton compared to 104,000 tons of sand at an average sales price of $23.62 during the fourth quarter of 2023. The lower sequential revenue despite increases in tons sold and average sales price stem from approximately $2 million shortfall revenue recognized in the fourth quarter of 2023 compared to none in the first quarter. Our infrastructure services division contributed revenue of $25 million for the first quarter of 2024, a sequential decrease from $27.2 million in the fourth quarter. Storm work in the first quarter was much lower than in previous years, resulting in a slower start to 2024 than anticipated. However, we are seeing an uptick in bidding activity. We continue to focus on operational execution and pursue opportunities within this sector as we strategically structure our service offerings for growth, especially around T&D and fiber projects. Our net loss for the first quarter of 2024 was $11.8 million compared to $6 million for the fourth quarter of 2023. Adjusted EBITDA, as defined and reconciled in our earnings release, was $4.5 million for the first quarter of 2024, a decrease sequentially compared to $10.5 million in the fourth quarter of 2023. CapEx for Q1 of 2024 was approximately $4.2 million, consistent with our CapEx for the fourth quarter of 2023. We continue to prudently manage our costs to more accurately reflect the activity levels of our customers. We are revising our CapEx budget for 2024 and now expect to spend approximately $9 million, representing a $6 million decrease from our previous guidance. This budget remains heavily weighted towards pressure pumping. But as always, we will monitor customer spending activity trends to effectively manage our capital to align with market demand. Selling, general, and administrative expenses totaled approximately $8.8 million during Q1 of 2024, up 6% compared to $8.3 million for Q4 of 2023. This increase was related to a change in provision for expected credit losses in our infrastructure segment and audit fees. As of March 31, 2024, we had cash on hand of $22 million. Our revolving credit facility was undrawn, and we had approximately $21 million of available borrowing capacity, totaling approximately $43 million in total liquidity. The aggregate $64 million paid by PREPA with respect to our receivables this year allowed us to fulfill our $54.4 million obligation to SPCP Group under the previously reported financing arrangement while adding $9.6 million to our cash position. We are pleased to bolster our liquidity with the credit facility refinancing that occurred in the fourth quarter. Despite the soft start to 2024, we remain confident in our teams and the direction we are headed. We have taken appropriate steps to align our business with demand and strategically position Mammoth for improved results as activity rebounds later this year. We will continue to prioritize disciplined operations, efficiency, and strategic capital allocation, and we believe this will drive improvements in shareholder value.

We would now like to open the call up for questions.

I had a bit of a bigger picture question. I was hoping you could talk to us a little bit about the labor market and how you guys are thinking about the balance between maintaining staff, good hands, and wages in a competitive environment?

Yes, I'll take that one. The labor market is still competitive, but we are able to find people and grow those businesses as we start to add them. I'm speaking primarily about T&D because that's where the biggest shortage is right now. With a slight decrease in activity in oil and gas, the labor market is a little improved over what it was six months ago. However, in the transmission distribution area, where we are bringing on crews, we have been able to attract talented individuals and grow that business.

That's helpful. I was also hoping to maybe get some thoughts on the shape of the activity recovery in the back half of this year and early 2025, regarding what you're hearing from customers and how they're thinking about it.

Yes. Our schedule has been pretty dynamic, especially on the frac side. Customers have been coming at us late in the process, saying they're going to defer projects due to pricing or to get better rates with water or other concerns that would lower the cost to produce. We've seen a fair number of those deferred projects, but they still anticipate getting the work done this year. We're already looking at projects in July and August that we believe will come to fruition.

Just a couple of things on the revenue side. First, you mentioned there's a lot of bidding activity in infrastructure. Low storm volume left you behind a little bit this quarter. But looking at new build infrastructure, do you have any that seem imminent that would be significant?

We've won some bids recently and continue to see a fairly robust pipeline primarily relating to transmission projects as well as substation projects.

Yes, one of our emphasis this year is to improve in the transmission area, and I think we've done that. Our bidding is much more robust in that area. Currently, we have a couple of transmission jobs going concurrently. I can't disclose specific customers, but we are in the midst of a 15 crew offer with a major utility that could be very beneficial for us. It doesn't guarantee that we'll win it, but we think we're very competitive. Our engineering business that we started from scratch will do $20 million to $23 million in revenue. They were just awarded a nice contract and continue to build that business, which is a precursor to T&D activity and a vertical integration opportunity as we progress. There's significant demand for grid infrastructure with AI and data centers coming online. Reports indicate Texas will need to expand its grid size significantly over the next 8 to 10 years to meet demand.

Terrific. That's very encouraging. Just a couple of nitpicky questions. I noticed a spike in interest and financing charges relative to Q4 of last year, even though we paid down some debt using PREPA payment proceeds. Can you help me reconcile that?

The largest component of that spike relates to the SPCP agreement that was entered into in December. It was just under $3 million that impacted Q4 of 2023, and about $5 million that impacted Q1 of 2024 resulting from interest expense related to the SPCP deal.

So I wouldn't expect those interest levels going forward?

That's correct. Those are one-time charges. The $5 million included in Q1 fully extinguishes the SPCP agreement.

This now concludes our question-and-answer session. I would now like to turn the floor back over to management for closing comments.

Thank you, Maria. Thank you again for joining us on the call today. We continue to position Mammoth for improved results, growth, and success, all made possible by our talented team members. This concludes our conference call, and we look forward to speaking to you again next quarter.

You may disconnect your lines at this time. Thank you for your participation.