8-K
MAMMOTH ENERGY SERVICES, INC. (TUSK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
| PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|
Date of Report (Date of earliest event reported): May 9, 2022
Mammoth Energy Services, Inc.
(Exact name of registrant as specified in its charter)
001-37917
(Commission File No.)
| Delaware | 32-0498321 | |||
|---|---|---|---|---|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
| 14201 Caliber Drive, | Suite 300 | |||
| Oklahoma City, | Oklahoma | (405) | 608-6007 | 73134 |
| (Address of principal executive offices) | (Registrant’s telephone number, including area code) | (Zip Code) |
______________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Securities registered pursuant to Section 12(b) of The Act: | ||
|---|---|---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock | TUSK | The Nasdaq Stock Market LLC |
| NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§232.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(s) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition
On May 9, 2022, Mammoth Energy Services, Inc. (the “Company”) issued a press release announcing its financial and operational results for the first quarter ended March 31, 2022. A copy of that press release is furnished as Exhibit 99.1 to this report.
The information in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified as being incorporated by reference in the registration statement.
Item 7.01 Regulation FD Disclosure
On May 9, 2022, the Company posted an investor presentation to the “investors” section of its website (www.mammothenergy.com), where the Company routinely posts announcements, updates, events, investor information and presentations and recent news releases. Information on the Company's website does not constitute part of this Current Report on Form 8-K.
The information in this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified as being incorporated by reference in the registration statement.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| 99.1 | Press release dated May 9, 2022, entitled “Mammoth Energy Services, Inc. Announces First Quarter2022Operational and Financial Results.” |
|---|---|
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MAMMOTH ENERGY SERVICES, INC. | |||
|---|---|---|---|
| Date: | May 9, 2022 | By: | /s/ Mark Layton |
| Mark Layton | |||
| Chief Financial Officer and Secretary |
Document
Exhibit 99.1
Mammoth Energy Services, Inc. Announces
First Quarter 2022 Operational and Financial Results
OKLAHOMA CITY - May 9, 2022 - Mammoth Energy Services, Inc. (“Mammoth” or the “Company”) (NASDAQ: TUSK) today reported financial and operational results for the first quarter ended March 31, 2022.
Financial Overview for the First Quarter 2022:
Total revenue was $62.3 million for the first quarter of 2022, as compared to $66.8 million for the same quarter of 2021 and $57.2 million for the fourth quarter of 2021.
Net loss for the first quarter of 2022 was $14.8 million, or a $0.32 loss per share, as compared to $12.4 million, or a $0.27 loss per share, for the same quarter of 2021, and $13.3 million, or a $0.28 loss per share, for the fourth quarter of 2021.
Adjusted EBITDA (as defined and reconciled below) was $9.3 million for the first quarter of 2022, as compared to $9.2 million for the same quarter of 2021 and $17.2 million for the fourth quarter of 2021.
Arty Straehla, Chief Executive Officer of Mammoth commented, “We maintained positive top line momentum during the first quarter of 2022, which we believe is a trend that will continue into the second quarter and back half of 2022. In our well completions and drilling services segments, pricing and utilization rates continue to increase and grow revenue in a favorable commodity environment with elevated activity. Similarly, strong industry tailwinds persist in the infrastructure space where we continue to compete for new project work. During the first quarter of 2022, the revenue contribution from our infrastructure services segment increased as a percentage of our total revenue and we are seeing an increasing number of opportunities in this segment. I am proud of our team’s commitment and hard work to mitigate the myriad of external challenges in today’s economic environment as we remain disciplined with our spending to continue to improve Mammoth’s cost structure and enhance value for our stockholders.”
Infrastructure Services
Mammoth’s infrastructure services division contributed revenue of $23.0 million, or approximately 37% of Mammoth’s total revenue, for the first quarter of 2022, as compared to $30.2 million for the same quarter of 2021 and $19.7 million for the fourth quarter of 2021. The decrease in revenue compared to the same quarter of 2021 is primarily due to a decline in storm activity, resulting in lower storm restoration revenue.
Well Completion Services
Mammoth’s well completion services division contributed revenue (inclusive of inter-segment revenue) of $23.9 million on 699 stages for the first quarter of 2022, as compared to $23.0 million on 445 stages for the same quarter of 2021 and $21.3 million on 891 stages for the fourth quarter of 2021. On average, 1.6 of the Company’s fleets were active for the first quarter of 2022, compared to an average utilization of 0.9 fleets during the same quarter of 2021 and 1.6 fleets during the fourth quarter of 2021. As of May 5, 2022, we were operating three of our six pressure pumping fleets.
Natural Sand Proppant Services
Mammoth’s natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of
$9.2 million for the first quarter of 2022, as compared to $8.7 million for the same quarter of 2021 and $10.8 million for the fourth quarter of 2021. In the first quarter of 2022, the Company sold approximately 329,000 tons of sand at an average sales price of $21.44 per ton, as compared to sales of approximately 171,000 tons of sand at an average sales price of $16.83 per ton during the same quarter of 2021. In the fourth quarter of 2021, sales were approximately 270,000 tons of sand at an average price of $17.84 per ton.
Drilling Services
Mammoth’s drilling services division contributed revenue (inclusive of inter-segment revenue) of $2.9 million for the first quarter of 2022, as compared to $0.9 million for the same quarter of 2021 and $1.0 million for the fourth quarter of 2021. The increase is due to an increase in utilization for Mammoth’s directional drilling business.
Other Services
Mammoth’s other services, including aviation, equipment rentals, crude oil hauling, remote accommodations and equipment manufacturing, contributed revenue (inclusive of inter-segment revenue) of $4.7 million for the first quarter of 2022, as compared to $4.7 million for the same quarter of 2021 and $4.9 million for the fourth quarter of 2021.
Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses were $8.7 million for the first quarter of 2022, as compared to $18.0 million for the same quarter of 2021 and $3.5 million for the fourth quarter of 2021.
Following is a breakout of SG&A expense (in thousands):
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| 2022 | 2021 | 2021 | ||||
| Cash expenses: | ||||||
| Compensation and benefits | $ | 2,983 | $ | 4,694 | $ | 3,685 |
| Professional services(a) | 3,637 | 581 | (2,383) | |||
| Other(b) | 1,906 | 2,342 | 1,994 | |||
| Total cash SG&A expense | 8,526 | 7,617 | 3,296 | |||
| Non-cash expenses: | ||||||
| Bad debt provision(c) | (99) | 10,125 | 12 | |||
| Stock based compensation | 241 | 282 | 241 | |||
| Total non-cash SG&A expense | 142 | 10,407 | 253 | |||
| Total SG&A expense | $ | 8,668 | $ | 18,024 | $ | 3,549 |
a. Certain legal expenses totaling $2.8 million and $5.4 million were reclassified to Other, net for the three months ended March 31, 2021 and December 31, 2021, respectively. The increase in professional fees is primarily due to an increase in legal expenses for matters related to ongoing operations.
b. Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.
c. The bad debt provision for the three months ended March 31, 2021 includes $10.0 million related to the Stingray Pressure Pumping and Muskie contracts with Gulfport.
SG&A expenses, as a percentage of total revenue, were 14% for the first quarter of 2022, as compared to 27% for the same quarter of 2021 and 6% for the fourth quarter of 2021.
Liquidity
As of March 31, 2022, Mammoth had cash on hand of $8.1 million, outstanding borrowings under its revolving credit facility of $86.0 million and $11.5 million of available borrowing capacity under its revolving credit facility, after giving effect to $7.5 million of outstanding letters of credit and the requirement to maintain a $7.5 million reserve out of the available borrowing capacity. As of March 31, 2022, Mammoth had total liquidity of $19.6 million.
As of May 5, 2022, Mammoth had cash on hand of $6.9 million and outstanding borrowings under its revolving
credit facility of $84.7 million. As of May 5, 2022, the Company had $10.3 million of available borrowing capacity under its revolving credit facility, after giving effect to $7.5 million of outstanding letters of credit and the requirement to maintain a $10.0 million reserve out of the available borrowing capacity.
Capital Expenditures
The following table summarizes Mammoth’s capital expenditures by operating division for the periods indicated (in thousands):
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| 2022 | 2021 | 2021 | ||||
| Infrastructure services(a) | $ | 398 | $ | 189 | $ | 153 |
| Well completion services(b) | 801 | 508 | 1,135 | |||
| Natural sand proppant services(c) | — | 408 | 55 | |||
| Drilling services(d) | 2 | 37 | 1 | |||
| Other(e) | 60 | 102 | 25 | |||
| Eliminations | (79) | (96) | — | |||
| Total capital expenditures | $ | 1,182 | $ | 1,148 | $ | 1,369 |
a. Capital expenditures primarily for truck, tooling and equipment purchases for the periods presented.
b. Capital expenditures primarily for upgrades to our pressure pumping fleet for the periods presented.
c. Capital expenditures primarily for maintenance for the periods presented.
d. Capital expenditures primarily for directional drilling equipment for the periods presented.
e. Capital expenditures primarily for equipment for the Company’s rental businesses for the periods presented.
We anticipate that our capital expenditures for 2022 will be approximately $12 million.
Conference Call Information
Mammoth will host a conference call on Monday, May 9, 2022 at 5:00 p.m. Central time (6:00 p.m. Eastern time) to discuss its first 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.
About Mammoth Energy Services, Inc.
Mammoth is an integrated, growth-oriented energy services company focused on the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its infrastructure services businesses. The Company also provides products and services to enable the exploration and development of North American onshore unconventional oil and natural gas reserves. Mammoth’s suite of services and products include: infrastructure services, well completion services, natural sand and proppant services, drilling services and other energy services. For more information, please visit www.mammothenergy.com.
Contacts:
Mark Layton, CFO
Mammoth Energy Services, Inc
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 press release specifically include statements, estimates and projections regarding the Company’s business outlook and plans, future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, costs and other guidance regarding future developments. Forward-looking statements are not assurances of future performance. These forward-looking statements are based on management’s current expectations and beliefs, forecasts for the Company’s existing operations, experience and perception of historical trends, current conditions, anticipated future developments and their effect on Mammoth, and other factors believed to be appropriate. Although management believes that the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Moreover, the Company’s forward-looking statements are subject to significant risks and uncertainties, including those described in its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings it makes with the SEC, including those relating to the Company’s acquisitions and contracts, many of which are beyond the Company’s control, which may cause actual results to differ materially from historical experience and present expectations or projections which are implied or expressed by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: any continuing impacts of the COVID-19 pandemic, related global and national health concerns and economic repercussions; demand for our services; the volatility of oil and natural gas prices and actions by OPEC members and other exporting nations affecting commodities prices and production levels; the impact of the current Russian/Ukrainian military conflict on the global energy and capital markets and global stability; operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; inflationary pressures; the outcome of ongoing government investigations and other legal proceedings, including those relating to the contracts awarded to the Company’s subsidiary Cobra Acquisitions LLC ("Cobra") by the Puerto Rico Electric Power Authority ("PREPA"); the failure to receive or delays in receiving governmental authorizations, approvals and/or payments, including payments with respect to the PREPA account receivable for prior services to PREPA performed by Cobra; the Company’s inability to replace the prior levels of work in its business segments, including its infrastructure and well completion services segments; risks relating to economic conditions; impacts of the recent federal infrastructure bill on the infrastructure industry and our infrastructure services business; the loss of or interruption in operations of one or more of Mammoth’s significant suppliers or customers; the loss of management and/or crews; the outcome or settlement of our litigation matters, including the adverse impact of the recent settlement with MasTec Renewables Puerto Rico, LLC, and the effect on our financial condition and results of operations; the effects of government regulation, permitting and other legal requirements; operating risks; the adequacy of capital resources and liquidity; Mammoth’s ability to continue to comply with, or if applicable, obtain a waiver of forecasted or actual noncompliance with certain financial covenants and comply with other terms and conditions under our recently amended revolving credit facility; weather; natural disasters; litigation; volatility in commodity markets; competition in the oil and natural gas and infrastructure industries; and costs and availability of resources.
Investors are cautioned not to place undue reliance on any forward-looking statement which speaks only as of the date on which such statement is made. We undertake no obligation to correct, revise or update any forward-looking statement after the date such statement is made, whether as a result of new information, future events or otherwise, except as required by applicable law.
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
| ASSETS | March 31, | December 31, | ||
|---|---|---|---|---|
| 2022 | 2021 | |||
| CURRENT ASSETS | (in thousands) | |||
| Cash and cash equivalents | $ | 8,118 | $ | 9,899 |
| Short-term investment | 1,763 | 1,762 | ||
| Accounts receivable, net | 411,931 | 407,550 | ||
| Receivables from related parties, net | 313 | 88 | ||
| Inventories | 10,358 | 8,366 | ||
| Prepaid expenses | 9,086 | 12,381 | ||
| Other current assets | 628 | 737 | ||
| Total current assets | 442,197 | 440,783 | ||
| Property, plant and equipment, net | 161,005 | 176,586 | ||
| Sand reserves | 64,628 | 64,641 | ||
| Operating lease right-of-use assets | 11,675 | 12,168 | ||
| Intangible assets, net | 2,366 | 2,561 | ||
| Goodwill | 11,717 | 11,717 | ||
| Deferred income tax asset | 5,180 | 8,094 | ||
| Other non-current assets | 3,679 | 4,342 | ||
| Total assets | $ | 702,447 | $ | 720,892 |
| LIABILITIES AND EQUITY | ||||
| CURRENT LIABILITIES | ||||
| Accounts payable | $ | 38,780 | $ | 37,560 |
| Accrued expenses and other current liabilities | 55,750 | 62,516 | ||
| Current operating lease liability | 5,710 | 5,942 | ||
| Current portion of long-term debt | 1,486 | 1,468 | ||
| Income taxes payable | 42,950 | 42,748 | ||
| Total current liabilities | 144,676 | 150,234 | ||
| Long-term debt, net of current portion | 87,458 | 85,240 | ||
| Deferred income tax liabilities | 1,431 | 865 | ||
| Long-term operating lease liability | 5,731 | 5,918 | ||
| Asset retirement obligation | 3,943 | 3,720 | ||
| Other long-term liabilities | 10,364 | 11,693 | ||
| Total liabilities | 253,603 | 257,670 | ||
| COMMITMENTS AND CONTINGENCIES | ||||
| EQUITY | ||||
| Equity: | ||||
| Common stock, $0.01 par value, 200,000,000 shares authorized, 47,184,065 and 46,684,065 issued and outstanding at March 31, 2022 and December 31, 2021 | 472 | 467 | ||
| Additional paid in capital | 538,457 | 538,221 | ||
| Accumulated deficit | (87,352) | (72,535) | ||
| Accumulated other comprehensive loss | (2,733) | (2,931) | ||
| Total equity | 448,844 | 463,222 | ||
| Total liabilities and equity | $ | 702,447 | $ | 720,892 |
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| 2022 | 2021 | 2021 | ||||
| (in thousands, except per share amounts) | ||||||
| REVENUE | ||||||
| Services revenue | $ | 53,667 | $ | 42,691 | $ | 46,262 |
| Services revenue - related parties | 274 | 14,986 | 104 | |||
| Product revenue | 8,357 | 6,982 | 10,867 | |||
| Product revenue - related parties | — | 2,145 | — | |||
| Total revenue | 62,298 | 66,804 | 57,233 | |||
| COST AND EXPENSES | ||||||
| Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $15,355, $18,989 and $15,953, respectively, for the three months ended March 31, 2022, March 31, 2021 and December 31, 2021) | 46,567 | 42,062 | 41,572 | |||
| Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of $0, $0 and $0, respectively, for the three months ended March 31, 2022, March 31, 2021 and December 31, 2021) | 135 | 109 | 134 | |||
| Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $1,792, $2,137 and $1,943, respectively, for the three months ended March 31, 2022, March 31, 2021 and December 31, 2021) | 7,778 | 5,909 | 4,581 | |||
| Selling, general and administrative | 8,668 | 17,831 | 3,549 | |||
| Selling, general and administrative - related parties | — | 193 | — | |||
| Depreciation, depletion, amortization and accretion | 17,167 | 21,146 | 17,916 | |||
| Impairment of goodwill | — | — | 891 | |||
| Impairment of other long-lived assets | — | — | 665 | |||
| Total cost and expenses | 80,315 | 87,250 | 69,308 | |||
| Operating loss | (18,017) | (20,446) | (12,075) | |||
| OTHER INCOME (EXPENSE) | ||||||
| Interest expense, net | (2,349) | (1,225) | (2,528) | |||
| Other income, net | 9,237 | 7,123 | 4,813 | |||
| Other expense, net - related parties | — | (515) | — | |||
| Total other income | 6,888 | 5,383 | 2,285 | |||
| Loss before income taxes | (11,129) | (15,063) | (9,790) | |||
| Provision (benefit) for income taxes | 3,688 | (2,623) | 3,507 | |||
| Net loss | $ | (14,817) | $ | (12,440) | $ | (13,297) |
| OTHER COMPREHENSIVE LOSS | ||||||
| Foreign currency translation adjustment, net of tax of $0, ($42) and $0, respectively, for the three months ended March 31, 2022, March 31, 2021 and December 31, 2021) | 198 | 168 | 16 | |||
| Comprehensive loss | $ | (14,619) | $ | (12,272) | $ | (13,281) |
| Net loss per share (basic) | $ | (0.32) | $ | (0.27) | $ | (0.28) |
| Net loss per share (diluted) | $ | (0.32) | $ | (0.27) | $ | (0.28) |
| Weighted average number of shares outstanding (basic) | 46,845 | 45,932 | 46,683 | |||
| Weighted average number of shares outstanding (diluted) | 46,845 | 45,932 | 46,683 |
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended | ||||
|---|---|---|---|---|
| March 31, | ||||
| 2022 | 2021 | |||
| (in thousands) | ||||
| Cash flows from operating activities: | ||||
| Net loss | $ | (14,817) | $ | (12,440) |
| Adjustments to reconcile net loss to cash (used in) provided by operating activities: | ||||
| Stock based compensation | 241 | 344 | ||
| Depreciation, depletion, accretion and amortization | 17,167 | 21,146 | ||
| Amortization of debt origination costs | 186 | 142 | ||
| Bad debt (recoveries) expense | (99) | 10,125 | ||
| Gain on disposal of property and equipment | (593) | (615) | ||
| Deferred income taxes | 3,481 | (5,061) | ||
| Other | 535 | 558 | ||
| Changes in assets and liabilities: | ||||
| Accounts receivable, net | (3,898) | 23,437 | ||
| Receivables from related parties | (225) | (14,611) | ||
| Inventories | (1,992) | 664 | ||
| Prepaid expenses and other assets | 3,404 | 3,105 | ||
| Other current assets - related parties | — | (2,228) | ||
| Accounts payable | 1,041 | (4,285) | ||
| Accrued expenses and other liabilities | (7,013) | (8,516) | ||
| Income taxes payable | 201 | 2,469 | ||
| Net cash (used in) provided by operating activities | (2,381) | 14,234 | ||
| Cash flows from investing activities: | ||||
| Purchases of property and equipment | (1,182) | (1,148) | ||
| Proceeds from disposal of property and equipment | 1,038 | 1,457 | ||
| Net cash (used in) provided by investing activities | (144) | 309 | ||
| Cash flows from financing activities: | ||||
| Borrowings on long-term debt | 37,550 | 1,500 | ||
| Repayments of long-term debt | (35,317) | (15,617) | ||
| Payments on sale-leaseback transaction | (868) | (330) | ||
| Principal payments on financing leases and equipment financing notes | (629) | (577) | ||
| Net cash provided by (used in) financing activities | 736 | (15,024) | ||
| Effect of foreign exchange rate on cash | 8 | 25 | ||
| Net change in cash and cash equivalents | (1,781) | (456) | ||
| Cash and cash equivalents at beginning of period | 9,899 | 14,822 | ||
| Cash and cash equivalents at end of period | $ | 8,118 | $ | 14,366 |
| Supplemental disclosure of cash flow information: | ||||
| Cash paid for interest | $ | 1,754 | $ | 1,093 |
| Cash paid for income taxes, net of refunds received | $ | 6 | $ | (32) |
| Supplemental disclosure of non-cash transactions: | ||||
| Purchases of property and equipment included in accounts payable | $ | 1,707 | $ | 1,964 |
MAMMOTH ENERGY SERVICES, INC.
SEGMENT INCOME STATEMENTS
(in thousands)
| Three months ended March 31, 2022 | Infrastructure | Well Completion | Sand | Drilling | All Other | Eliminations | Total | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue from external customers | $ | 23,009 | $ | 23,630 | $ | 8,347 | $ | 2,852 | $ | 4,460 | $ | — | $ | 62,298 | ||||||||||||||||
| Intersegment revenues | — | 244 | 832 | 3 | 272 | (1,351) | — | |||||||||||||||||||||||
| Total revenue | 23,009 | 23,874 | 9,179 | 2,855 | 4,732 | (1,351) | 62,298 | |||||||||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 18,887 | 21,839 | 7,788 | 2,372 | 3,594 | — | 54,480 | |||||||||||||||||||||||
| Intersegment cost of revenues | 16 | 1,031 | — | 160 | 70 | (1,277) | — | |||||||||||||||||||||||
| Total cost of revenue | 18,903 | 22,870 | 7,788 | 2,532 | 3,664 | (1,277) | 54,480 | |||||||||||||||||||||||
| Selling, general and administrative | 4,645 | 2,039 | 828 | 292 | 864 | — | 8,668 | |||||||||||||||||||||||
| Depreciation, depletion, amortization and accretion | 4,314 | 6,444 | 1,795 | 1,680 | 2,934 | — | 17,167 | |||||||||||||||||||||||
| Operating loss | (4,853) | (7,479) | (1,232) | (1,649) | (2,730) | (74) | (18,017) | |||||||||||||||||||||||
| Interest expense, net | 1,542 | 371 | 162 | 104 | 170 | — | 2,349 | |||||||||||||||||||||||
| Other (income) expense, net | (9,587) | (49) | (79) | — | 478 | — | (9,237) | |||||||||||||||||||||||
| Income (loss) before income taxes | $ | 3,192 | $ | (7,801) | $ | (1,315) | $ | (1,753) | $ | (3,378) | $ | (74) | $ | (11,129) | Three months ended March 31, 2021 | Infrastructure | Well Completion | Sand | Drilling | All Other | Eliminations | Total | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||
| Revenue from external customers | $ | 30,200 | $ | 22,901 | $ | 8,705 | $ | 919 | $ | 4,079 | $ | — | $ | 66,804 | ||||||||||||||||
| Intersegment revenues | — | 54 | — | 14 | 640 | (708) | — | |||||||||||||||||||||||
| Total revenue | 30,200 | 22,955 | 8,705 | 933 | 4,719 | (708) | 66,804 | |||||||||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 27,377 | 9,003 | 5,862 | 1,604 | 4,234 | — | 48,080 | |||||||||||||||||||||||
| Intersegment cost of revenues | 45 | 394 | — | — | 269 | (708) | — | |||||||||||||||||||||||
| Total cost of revenue | 27,422 | 9,397 | 5,862 | 1,604 | 4,503 | (708) | 48,080 | |||||||||||||||||||||||
| Selling, general and administrative | 3,739 | 10,612 | 2,049 | 422 | 1,202 | — | 18,024 | |||||||||||||||||||||||
| Depreciation, depletion, amortization and accretion | 6,667 | 6,683 | 2,140 | 2,165 | 3,491 | — | 21,146 | |||||||||||||||||||||||
| Operating loss | (7,628) | (3,737) | (1,346) | (3,258) | (4,477) | — | (20,446) | |||||||||||||||||||||||
| Interest expense, net | 669 | 254 | 93 | 63 | 146 | — | 1,225 | |||||||||||||||||||||||
| Other (income) expense, net | (6,486) | 439 | (794) | (9) | 242 | — | (6,608) | |||||||||||||||||||||||
| Loss before income taxes | $ | (1,811) | $ | (4,430) | $ | (645) | $ | (3,312) | $ | (4,865) | $ | — | $ | (15,063) | Three months ended December 31, 2021 | Infrastructure | Well Completion | Sand | Drilling | All Other | Eliminations | Total | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||
| Revenue from external customers | $ | 19,714 | $ | 21,251 | $ | 10,849 | $ | 963 | $ | 4,456 | $ | — | $ | 57,233 | ||||||||||||||||
| Intersegment revenues | — | 25 | — | 69 | 414 | (508) | — | |||||||||||||||||||||||
| Total revenue | 19,714 | 21,276 | 10,849 | 1,032 | 4,870 | (508) | 57,233 | |||||||||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 20,096 | 16,443 | 4,601 | 1,363 | 3,784 | — | 46,287 | |||||||||||||||||||||||
| Intersegment cost of revenues | 31 | 321 | — | — | 156 | (508) | — | |||||||||||||||||||||||
| Total cost of revenue | 20,127 | 16,764 | 4,601 | 1,363 | 3,940 | (508) | 46,287 | |||||||||||||||||||||||
| Selling, general and administrative | (1,017) | 2,164 | 1,243 | 309 | 850 | — | 3,549 | |||||||||||||||||||||||
| Depreciation, depletion, amortization and accretion | 4,380 | 6,709 | 1,946 | 1,812 | 3,069 | — | 17,916 | |||||||||||||||||||||||
| Impairment of goodwill | 891 | — | — | — | — | 891 | ||||||||||||||||||||||||
| Impairment of other long-lived assets | 665 | — | — | — | — | — | 665 | |||||||||||||||||||||||
| Operating loss | (5,332) | (4,361) | 3,059 | (2,452) | (2,989) | — | (12,075) | |||||||||||||||||||||||
| Interest expense, net | 1,613 | 419 | 183 | 116 | 197 | — | 2,528 | |||||||||||||||||||||||
| Other (income) expense, net | (4,131) | (121) | 18 | 23 | (602) | — | (4,813) | |||||||||||||||||||||||
| (Loss) income before income taxes | $ | (2,814) | $ | (4,659) | $ | 2,858 | $ | (2,591) | $ | (2,584) | $ | — | $ | (9,790) |
MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s financial statements, such as industry analysts, investors, lenders and rating agencies. Mammoth defines Adjusted EBITDA as net income (loss) before depreciation, depletion, amortization and accretion expense, impairment of goodwill, impairment of other long-lived assets, stock based compensation, interest expense, net, other (income) expense, net (which is comprised of the (gain) or loss on disposal of long-lived assets, interest on trade accounts receivable and certain legal expenses) and provision (benefit) for income taxes, further adjusted to add back interest on trade accounts receivable. The Company excludes the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within the energy service industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) or cash flows from operating activities as determined in accordance with GAAP or as an indicator of Mammoth’s operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets. Mammoth’s computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure its ability to meet debt service requirements.
The following tables provide a reconciliation of Adjusted EBITDA to the GAAP financial measure of net income (loss) on a consolidated basis and for each of the Company’s segments (in thousands):
Consolidated
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| Reconciliation of Adjusted EBITDA to net loss: | 2022 | 2021 | 2021 | |||
| Net loss | $ | (14,817) | $ | (12,440) | $ | (13,297) |
| Depreciation, depletion, amortization and accretion expense | 17,167 | 21,146 | 17,916 | |||
| Impairment of goodwill | — | — | 891 | |||
| Impairment of other long-lived assets | — | — | 665 | |||
| Stock based compensation | 241 | 344 | 242 | |||
| Interest expense, net | 2,349 | 1,225 | 2,528 | |||
| Other income, net | (9,237) | (6,608) | (4,813) | |||
| Provision (benefit) for income taxes | 3,688 | (2,623) | 3,507 | |||
| Interest on trade accounts receivable | 9,862 | 8,158 | 9,571 | |||
| Adjusted EBITDA | $ | 9,253 | $ | 9,202 | $ | 17,210 |
MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Infrastructure Services
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| Reconciliation of Adjusted EBITDA to net income (loss): | 2022 | 2021 | 2021 | |||
| Net income (loss) | $ | 125 | $ | (4,240) | $ | (5,992) |
| Depreciation and amortization expense | 4,314 | 6,667 | 4,380 | |||
| Impairment of goodwill | — | — | 891 | |||
| Impairment of other long-lived assets | — | — | 665 | |||
| Stock based compensation | 98 | 138 | 100 | |||
| Interest expense | 1,542 | 669 | 1,613 | |||
| Other income, net | (9,587) | (6,486) | (4,131) | |||
| Provision for income taxes | 3,067 | 2,429 | 3,175 | |||
| Interest on trade accounts receivable | 9,862 | 8,673 | 9,571 | |||
| Adjusted EBITDA | $ | 9,421 | $ | 7,850 | $ | 10,272 |
Well Completion Services
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| Reconciliation of Adjusted EBITDA to net loss: | 2022 | 2021 | 2021 | |||
| Net loss | $ | (7,801) | $ | (4,430) | $ | (4,659) |
| Depreciation and amortization expense | 6,444 | 6,683 | 6,709 | |||
| Stock based compensation | 87 | 83 | 80 | |||
| Interest expense | 371 | 254 | 419 | |||
| Other (income) expense, net | (49) | 439 | (121) | |||
| Interest on trade accounts receivable | — | (514) | — | |||
| Adjusted EBITDA | $ | (948) | $ | 2,515 | $ | 2,428 |
Natural Sand Proppant Services
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| Reconciliation of Adjusted EBITDA to net (loss) income: | 2022 | 2021 | 2021 | |||
| Net (loss) income | $ | (1,315) | $ | (645) | $ | 2,858 |
| Depreciation, depletion, amortization and accretion expense | 1,795 | 2,140 | 1,946 | |||
| Stock based compensation | 34 | 64 | 39 | |||
| Interest expense | 162 | 93 | 183 | |||
| Other (income) expense, net | (79) | (794) | 18 | |||
| Interest on trade accounts receivable | — | (1) | — | |||
| Adjusted EBITDA | $ | 597 | $ | 857 | $ | 5,044 |
MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Drilling Services
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| Reconciliation of Adjusted EBITDA to net loss: | 2022 | 2021 | 2021 | |||
| Net loss | $ | (1,753) | $ | (3,312) | $ | (2,590) |
| Depreciation expense | 1,680 | 2,165 | 1,812 | |||
| Stock based compensation | 5 | 38 | 5 | |||
| Interest expense | 104 | 63 | 116 | |||
| Other (income) expense, net | — | (9) | 23 | |||
| Adjusted EBITDA | $ | 36 | $ | (1,055) | $ | (634) |
Other Services(a)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| Reconciliation of Adjusted EBITDA to net (loss) income: | 2022 | 2021 | 2021 | |||
| Net (loss) income | $ | (3,999) | $ | 187 | $ | (2,915) |
| Depreciation, amortization and accretion expense | 2,934 | 3,491 | 3,069 | |||
| Stock based compensation | 17 | 21 | 18 | |||
| Interest expense, net | 170 | 146 | 197 | |||
| Other expense (income), net | 478 | 242 | (602) | |||
| Provision (benefit) for income taxes | 621 | (5,052) | 332 | |||
| Adjusted EBITDA | $ | 221 | $ | (965) | $ | 99 |
a. Includes results for Mammoth’s aviation, equipment rentals, crude oil hauling, remote accommodations and equipment manufacturing and corporate related activities. The Company’s corporate related activities do not generate revenue.
MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Adjusted Net Loss and Adjusted Loss per Share
Adjusted net loss and adjusted basic and diluted loss per share are supplemental non-GAAP financial measures that are used by management to evaluate the Company’s operating and financial performance. Mammoth defines adjusted net loss as net loss before impairment of goodwill and impairment of other long-lived assets. Mammoth defines adjusted basic and diluted loss per share as loss per share before the effects of impairment of goodwill and impairment of other long-lived assets. Management believes these measures provide meaningful information about the Company’s performance by excluding certain non-cash charges, such as impairment of goodwill and impairment of other long-lived assets, that may not be indicative of the Company’s ongoing operating results. Adjusted net loss and adjusted loss per share should not be considered in isolation or as a substitute for net loss and loss per share prepared in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. The following tables provide a reconciliation of adjusted net loss and adjusted loss per share to the GAAP financial measures of net loss and loss per share for the periods specified.
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| 2022 | 2021 | 2021 | ||||
| (in thousands, except per share amounts) | ||||||
| Net loss, as reported | $ | (14,817) | $ | (12,440) | $ | (13,297) |
| Impairment of goodwill | — | — | 891 | |||
| Impairment of other long-lived assets | — | — | 665 | |||
| Adjusted net loss | $ | (14,817) | $ | (12,440) | $ | (11,741) |
| Basic loss per share, as reported | $ | (0.32) | $ | (0.27) | $ | (0.28) |
| Impairment of goodwill | — | — | 0.02 | |||
| Impairment of other long-lived assets | — | — | 0.01 | |||
| Adjusted basic loss per share | $ | (0.32) | $ | (0.27) | $ | (0.25) |
| Diluted loss per share, as reported | $ | (0.32) | $ | (0.27) | $ | (0.28) |
| Impairment of goodwill | — | — | 0.02 | |||
| Impairment of other long-lived assets | — | — | 0.01 | |||
| Adjusted diluted loss per share | $ | (0.32) | $ | (0.27) | $ | (0.25) |
12