Greetings and welcome to the Mammoth Energy Services Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. The brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ken Denard. Thank you, sir. You may begin.

Thank you, Maria, and good morning, everyone. We appreciate you joining us for the Mammoth Energy Conference call to review 2024 second quarter results. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the Investor Relations section of mammothenergy.com. Also note that information reported on this call speaks only as of today, August 9, 2024. Please be advised that any time-sensitive information may no longer be accurate as of any subsequent date. I'd also like to remind you that statements made in today's discussions 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 provision of the Private Securities Litigation Reform Act of 1995. We will be making forward-looking statements today as part of today's call that by nature are uncertain and outside the company's control. Actual results may materially differ. Please refer to the earnings press release that was issued this morning for our disclosure on forward-looking statements. These factors and other factors 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 in today's call. The definition of this non-GAAP measure and its reconciliation to the most directly comparable GAAP measures can be found at the end of the earnings release and in the investor presentation, which can also be found on the website. Mammoth Energy assumes no obligation to publicly update or revise any forward-looking statements. And now, I'd like to turn the call over to Mammoth Energy CEO, Arty Straehla. Arty?

Thank you, Ken, and good morning, everyone. I'll start with some commentary around several highlights and recent developments for Mammoth before discussing our second quarter results. I'll then provide commentary about our expectations going forward before turning the call over to Mark to cover the financials in more detail. I'd like to kick off today's call by discussing the PREPA settlement agreement that we announced last month on July 22nd. Our subsidiary Cobra Acquisitions entered into a settlement agreement with PREPA to settle all outstanding matters between Cobra and the Puerto Rico Public Electric Power Authority, or PREPA. The settlement agreement remains subject to approval by the Title III Court, which is expected to hear the motion related to the settlement agreement at the next omnibus hearing to be held on September 18th, 2024. We're pleased to have reached this agreement with PREPA and look forward to receiving the money for work we completed over five years ago. We plan to use a portion of the $188.4 million in settlement proceeds to pay off our term credit facility, which had a balance of approximately $49.3 million as of June 30th, 2024. The remaining amount of approximately $139.1 million will be cash on our balance sheet to be used to invest back into our businesses and for general corporate purposes. This is a significant development for us and may enable us to meaningfully enhance our standing within the markets that we operate and ultimately drive additional value creation for our shareholders. Turning now to our results. Our second quarter results demonstrate sequential improvement compared to the first quarter, despite continued challenges that persist due to industry activity softness. This softness particularly impacts the natural gas basins where we operate, which has especially constrained our well completion services division and other oil field services. This demand softness in the first half of the year resulted in underutilization of our assets. Current indications are that activity levels are expected to remain relatively flat in the back half of the year with potential for ramp-up in 2025. We will be strategically positioned to capitalize on this anticipated demand if and when it ramps up. In this business segment, we remain very focused on our cost structure and will continue to efficiently manage our capital expenditures to align with expected activity levels and demand. Our infrastructure services business continues to perform well and in Q2 demonstrated growth both sequentially and year-over-year. We are seeing an uptick in bidding opportunities relating to engineering, fiber, and transmission and distribution, all of which are areas that I believe we have differential and specialized capabilities to capitalize on opportunities in the market. Our engineering group continues to do well and we expect that business will continue to grow in terms of both revenue and EBITDA. The infrastructure investment and Job Acts funds are slowly being released for infrastructure projects such as fiber and engineering as well as the transmission and distribution areas where we remain excited participants, and this continues to give us optimism for improvements throughout 2024. In addition, on the storm-related side of this business, NOAA is forecasting an active storm season this year, which we've already seen commence with several named storms beginning in June, and we will be opportunistically prepared to deploy teams in the 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. As we enter the second half of the year, our teams across the organization remain focused on efficient and effective cost management to align with the activity levels of our customers. Currently, we have an undrawn revolver and cash on the balance sheet as well as a recently announced resolution with PREPA. Moving forward, we believe Mammoth is well-positioned for the second half of 2024 and beyond. We have improved our financial position with a strong balance sheet and cash position. We also have better visibility and opportunities across our business segments than we had at the beginning of the year and having reached our settlement agreement with PREPA, we can finally put that chapter of our history in the rearview mirror, pay off our term loan facility, and focus on opportunities to invest in our current business segments, explore new opportunities, and return to more meaningful enhancements of shareholder value. 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. To begin, I'd like to point out that our second quarter results were impacted by the recognition of a $170.7 million non-cash and non-recurring expense related to the settlement between Mammoth Subsidiary, Cobra Acquisitions, LLC, and PREPA. Of this amount, $89.2 million was charged to credit loss expense, which is included in SG&A, and $81.5 million was charged to interest on delinquent accounts receivable, which is included in other income. Mammoth's total revenue during the second quarter of 2024 came in at $51.5 million compared to $43.2 million in the first quarter of 2024. The 19% sequential increase in total revenues was primarily attributable to the increased infrastructure and storm-related work during the second quarter after a mild Q1. This improvement demonstrates the benefits and resilience of our differentiated service offerings despite the continued softness and activity within the natural gas-heavy basins that we operate. We generated improved revenue in the face of a 7% sequential decline in total rate count, which is a true testament to the diversified nature of our business. We continue to believe that there are positive demand implications for natural gas on the horizon and we remain optimistic for associated activity increases in 2025 that will support further financial improvement. In Q2 of 2024, we pumped 292 stages with approximately 0.3 fleets utilized on average compared to 380 stages and an average utilization of 0.6 fleets during the first quarter of 2024. This decrease resulted from the continued activity softness felt across the industry as well as sustained lower natural gas prices and commodity price uncertainty that impacted utilization across our well completion services division in the second quarter. Operators continued to push much of their activity to the right, and this resulted in persistent white space on the calendar. We now expect these trends to linger throughout the second half of the year resulting in relatively flat activity levels. Looking forward, our current visibility points to improvements in 2025. We will remain disciplined stewards of capital and continue to align our spending appropriately with the demand that we are seeing from our customers. Our sand division sold approximately 141,000 tons of sand in the second quarter of 2024 at an average sales price of $22.73 per ton compared to 146,000 tons of sand at an average sales price of $24.38 per ton during the first quarter of 2024. Although sand volume sales and pricing declined slightly, we are encouraged by discussions with our customers and expect improvements in the coming quarters. Our infrastructure services division contributed revenue of $31.4 million for the second quarter of 2024, which represents a sequential increase when compared to $25 million for the first quarter. During the quarter, we had a greater amount of storm-related work than last quarter after an unusually slow start to 2024. We are seeing an uptick in bidding activity and are focused on operational execution. We will continue to 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 second quarter of 2024 was $156 million, or a loss of $3.25 per diluted share. This net loss was primarily attributable to the PREPA settlement agreement that was recorded during the second quarter impacting our bottom line. Adjusted EBITDA as defined and reconciled in our earnings release was a negative $160.7 million for the second quarter of 2024. Again, primarily related to the settlement agreement charges we recorded during the quarter. Excluding this non-recurring expense and a portion of the interest income previously accrued on the receivable with PREPA, adjusted EBITDA would have been negative $0.3 million for the second quarter of 2024, an improvement compared to the negative $6 million for the first quarter of 2024. CapEx for the second quarter of 2024 was approximately $4.9 million, which was up slightly sequentially compared to our CapEx for the first quarter. While we did make investments in our well completion division during the quarter related to several Tier 4 DGB upgrades, we remained focused on aligning our capital spending with activity levels. As already mentioned and as we've demonstrated, we continue to prudently manage our costs to more accurately reflect the activity levels of our customers. Our current CapEx budget for 2024 is $12 million, an increase from the previously announced CapEx guidance of $9 million. Our CapEx budget for 2024 remains heavily weighted towards pressure pumping, but as always, we will continue to monitor customer spending and activity trends in order to most effectively manage our capital to align with the demand we see in the market. Selling, general and administrative expenses totaled approximately $97.5 million during the second quarter of 2024. As I mentioned, the significant sequential increase in SG&A was related to the recording of the charges in connection with the settlement agreement with PREPA. As of June 30, 2024, we had cash on hand of $10.3 million. Our revolving credit facility was undrawn, and we had approximately $14.3 million in available borrowing capacity. Our total liquidity was approximately $24.6 million. If Mammoth receives the $188.4 million due from PREPA, the company intends to eliminate its outstanding debt obligations under the term loan facility and will have a significantly enhanced liquidity position to invest in the business for the future. To conclude our call, we would like to thank our 690 employees throughout the company for their hard work, dedication, and commitment to maintaining safe and sustainable work sites for themselves and their teammates. As Arty mentioned, we are pleased to have reached an agreement with PREPA and to be approaching an acceptable conclusion after pursuing the outstanding receivables for several years. The cash we expect to receive would enable us to substantially invest in and grow the company. We continue to position the business for the future, and the boosted liquidity will allow us to opportunistically advance our standing within the market, while remaining focused on improved returns in 2025 as demand and activity improve. We will continue to prioritize disciplined operations, efficiency, and strategic capital allocation, which, when coupled with our strong balance sheet, we believe will drive meaningful improvement in shareholder value.

Thank you. We will now be conducting a question and answer session. Our first question comes from John Daniel with Daniel Energy Partners. Please proceed with your question.

Hey guys, thanks for having me. Arty, I'm going to ask a question about the infrastructure business. After experiencing Hurricane Beryl and being without power for eight days, I noticed various companies coming in to address the situation. Can you remind me how you secure that kind of work? When do you typically start preparing for projects related to such events or other natural disasters?

Hey John, good talking with you, and sorry about your power loss for that length of time. Certainly, it is very harmful. It makes you appreciate electricity all that much more. It depends on the intensity of the storm. For example, as Debby started going, we actually had mobilized some of our crews. We get contacted early on when they see clarity of the path of storms beginning to become evident and the infrastructure that is there. So, we had deployed quite a few crews to Beryl and we deployed crews as well to take care of Hurricane Debby. As you well know, NOAA has forecast, I think they lowered their forecast for the first time from 25 named storms to 24 named storms this year. And so far, we're in the D's which indicates that it's the fourth storm of the season. So, it's expected to be inactive with the heat of the oceans and expected to be an active season. We try to get our crews, we actually, for most of them, position our crews right outside the path where they can then go in as soon as the hurricane has passed that particular area.

Okay. So it sounds like you have like a prearranged deal with others ahead of the storm. How's the contract? Who's the contract with?

Well, it typically differs. It's not with FEMA. It's with the investor-owned utility. And it will be where they bring it in either under mutual assistance that they have with other utilities or with independent groups like ourselves where they just call and say, hey, I need eight crews over in this particular area at this particular point in time.

Got it. And then the last one for me is we hear more and more about EMPs building out their own sort of microgrids. Are you guys dabbling with that much? Is there an opportunity for you there?

We have done some of that work, but mostly for the utility that is in that particular area. So yes, we've done a little bit, but it usually goes through the utility that is in control of the area where the EMP is. Thanks, John. Take care.

Our next question comes from David Marsh with Singular Research. Please proceed with your question.

Hey, good morning, guys. Thank you very much for taking my questions.

Good morning.

Good morning. I may have missed it or misunderstood it in the release, but do you have any idea about the timing of the payment you will receive from PREPA at this point?

First, it has to go through the Title III court, with the omnibus hearing currently scheduled for September 18th. After that, it will be up to the judge to authorize the release. According to our agreement, there is a specific number of days after the court's approval for PREPA to make the payment.

So currently that's contemplated to be 10 business days following an order issued by the Title III court.

So, if I'm reading the theories, it sounds like you're likely to get the money in the fourth quarter. Is that a safe assessment?

It'll be tail end of Q3, first part of Q4, depending on the timing of the issuance of an order by the Title III Court.

Sure, sure. Perfect. Thank you very much for clarifying that. That's very helpful. And then my next question is, obviously you'll pay down the term loan. I think that's great. Can you just talk about the priority uses of cash once you get past that? Are there some potential acquisitions that are available given the disruption in the market that might be interesting to you? And if so, could you talk about specific verticals in which you might pursue acquisitions?

Sure. Certainly, it'll be good to be out of debt, have cash on the balance sheet, and to be moving forward. So what we will do is invest in our T&D Group, including our engineering and transmission distribution service business, to grow it out and to fill it. We'll allocate some capital to modernize our frac fleet. Then we'll invest money in our portfolio companies that would have the best return on invested capital. We will be looking for other investments for growth. What we have proven over time is that we're effective stewards of capital, and have the ability to go out and grow this business when opportunities arise, as a debt-free, very sound balance sheet indicates for us.

Really appreciate that color. Thank you very much, guys. Congrats on the recent settlements. It's great news.

Thank you.

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

Thank you, Maria. I very much appreciate that. And thanks everybody for joining us on the call today. We continue to position Mammoth for improved results, growth, and success, and it is all made possible by our talented and skilled team members. This concludes our conference call. We look forward to speaking to you again next quarter.

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