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): April 27, 2023
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 April 27, 2023, Mammoth Energy Services, Inc. (the “Company”) issued a press release announcing its operational and financial results for the first quarter ended March 31, 2023. 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 April 27, 2023, 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 datedApril 27, 2023, entitled “Mammoth Energy Services, Inc. Announces FirstQuarter2023Operational 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: | April 27, 2023 | By: | /s/ Mark Layton |
| Mark Layton | |||
| Chief Financial Officer and Secretary |
Document
Exhibit 99.1
Mammoth Energy Services, Inc. Announces
First Quarter 2023 Operational and Financial Results
OKLAHOMA CITY - April 27, 2023 - Mammoth Energy Services, Inc. (“Mammoth” or the “Company”) (NASDAQ: TUSK) today reported financial and operational results for the first quarter ended March 31, 2023.
Financial Overview for the First Quarter 2023:
Total revenue was $116.3 million for the first quarter of 2023, an increase of 87% compared to $62.3 million for the same quarter of 2022 and an increase of 13% compared to $102.9 million for the fourth quarter of 2022.
Net income for the first quarter of 2023 was $8.4 million, or $0.17 per diluted share, compared to a net loss of $14.8 million, or a $0.32 loss per share, for the same quarter of 2022 and net income of $4.8 million, or $0.10 per share, for the fourth quarter of 2022.
Adjusted EBITDA (as defined and reconciled below) was $30.7 million for the first quarter of 2023, an increase of 230% compared to $9.3 million for the same quarter of 2022 and an increase of 27% compared to $24.1 million for the fourth quarter of 2022.
Arty Straehla, Chief Executive Officer of Mammoth commented, “Our first quarter performance was in line with our expectations, contributing to significant year-over-year growth in revenue, net income and Adjusted EBITDA. Our talented and hard-working teams throughout the organization continue to manage through a challenging economic environment for our customers, especially related to supply chain constraints that persist in many of our business segments. Our Well Completion Services division generated strong growth in the quarter, however, the oil field services markets that we serve are now being negatively impacted by lower commodity prices, in particular natural gas prices, which are restricting utilization of our well completion services and capacity growth. Natural gas prices have been cut nearly in half since the end of 2022, which is resulting in a reduction in completions activity across the industry, particularly in the northeast where we have a concentration of frac fleets. While we remain bullish long-term on natural gas, in the near-term, the lower commodity prices are reducing activity and leading to more calendar white space, which we expect is likely to reduce near-term utilization in our well completion segment as we adjust to market conditions. As we continue to work with our customers to keep as many fleets active as we can, we are also utilizing our extensive experience to manage our assets and the variable costs in this segment as we adjust to market conditions. We now plan to significantly reduce our capital expenditures for the year to approximately $24 million.”
Commenting further, Straehla said, “In our Infrastructure Services division, we experienced strong year-over-year revenue and profitability growth due to operational improvements, team performance and higher utilization of crews and equipment. The bidding and pricing environment for infrastructure services throughout our footprint continue to be robust, with added opportunities expected from the Infrastructure Investment and Jobs Act (IIJA). This business segment, that has grown organically, we believe will be a key growth driver for Mammoth over the long term and I’m pleased with its continual progress. In addition, the sand business also grew in the quarter compared to last year, and we are pleased with our team’s performance. Mammoth has a diverse portfolio of assets and businesses across several dynamic market segments that we believe possess an ability to adapt quickly to evolving market conditions.
Our experienced team remains focused on managing this portfolio efficiently and effectively to create long-term value for all of our stakeholders.”
Well Completion Services
Mammoth’s well completion services division contributed revenue (inclusive of inter-segment revenue) of $67.3 million on 2,018 stages for the first quarter of 2023, compared to $23.9 million on 699 stages for the same quarter of 2022 and $51.4 million on 1,837 stages for the fourth quarter of 2022. On average, 3.6 of the Company’s fleets were active for the first quarter of 2023 compared to an average utilization of 1.6 fleets during the same quarter of 2022 and 3.4 fleets during the fourth quarter of 2022.
Infrastructure Services
Mammoth’s infrastructure services division contributed revenue of $28.3 million for the first quarter of 2023 compared to $23.0 million for the same quarter of 2022 and $29.6 million for the fourth quarter of 2022. Average crew count was 88 crews during the first quarter of 2023 compared to 85 crews during the same quarter of 2022 and 93 crews during the fourth quarter of 2022.
Natural Sand Proppant Services
Mammoth’s natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $12.5 million for the first quarter of 2023 compared to $9.2 million for the same quarter of 2022 and $13.8 million for the fourth quarter of 2022. In the first quarter of 2023, the Company sold approximately 391,000 tons of sand at an average sales price of $31.02 per ton compared to sales of approximately 329,000 tons of sand at an average sales price of $21.44 per ton during the same quarter of 2022. In the fourth quarter of 2022, sales were approximately 366,000 tons of sand at an average price of $29.80 per ton.
Drilling Services
Mammoth’s drilling services division contributed revenue (inclusive of inter-segment revenue) of $1.8 million for the first quarter of 2023 compared to $2.9 million for the same quarter of 2022 and $2.4 million for the fourth quarter of 2022. The decrease in drilling services revenue is primarily attributable to decreased utilization for our directional drilling business.
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 first quarter of 2023 compared to $4.7 million for the same quarter of 2022 and $6.4 million for the fourth quarter of 2022. The increase in revenue is primarily due to improved utilization for our equipment rental and remote accommodations businesses.
Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses were $8.4 million for the first quarter of 2023 compared to $8.7 million for the same quarter of 2022 and $13.0 million for the fourth quarter of 2022.
Following is a breakout of SG&A expense (in thousands):
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| 2023 | 2022 | 2022 | ||||
| Cash expenses: | ||||||
| Compensation and benefits | $ | 4,277 | $ | 2,983 | $ | 3,932 |
| Professional services | 1,929 | 3,637 | 3,434 | |||
| Other(a) | 1,911 | 1,906 | 1,885 | |||
| Total cash SG&A expense | 8,117 | 8,526 | 9,251 | |||
| Non-cash expenses: | ||||||
| Bad debt (recoveries) provision | (381) | (99) | 3,501 | |||
| Stock based compensation | 647 | 241 | 241 | |||
| Total non-cash SG&A expense | 266 | 142 | 3,742 | |||
| Total SG&A expense | $ | 8,383 | $ | 8,668 | $ | 12,993 |
a. Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.
SG&A expenses, as a percentage of total revenue, were 7% for the first quarter of 2023 compared to 14% for the same quarter of 2022 and 13% for the fourth quarter of 2022.
Liquidity
As of March 31, 2023, Mammoth had cash on hand of $11.7 million, outstanding borrowings under its revolving credit facility of $84.6 million and $17.4 million of available borrowing capacity under its revolving credit facility, after giving effect to $6.4 million of outstanding letters of credit and the requirement to maintain a $10.0 million reserve out of the available borrowing capacity. As of March 31, 2023, Mammoth had total liquidity of $29.1 million.
As of April 26, 2023, Mammoth had cash on hand of $9.5 million and outstanding borrowings under its revolving credit facility of $76.0 million. As of April 26, 2023, the Company had $26.0 million of available borrowing capacity under its revolving credit facility, after giving effect to $6.4 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, | |||||
| 2023 | 2022 | 2022 | ||||
| Well completion services(a) | $ | 5,772 | $ | 801 | $ | 3,374 |
| Infrastructure services(b) | 203 | 398 | 62 | |||
| Natural sand proppant services(c) | — | — | 54 | |||
| Drilling services(d) | — | 2 | 55 | |||
| Other(e) | — | 60 | 120 | |||
| Eliminations | 61 | (79) | (26) | |||
| Total capital expenditures | $ | 6,036 | $ | 1,182 | $ | 3,639 |
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 maintenance for the periods presented.
e. 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 Thursday, April 27, 2023 at 4:00 p.m. Central time (5:00 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. 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 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 war in Ukraine 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; rising 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, 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, 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 (i) continue to comply with or, if applicable, obtain a waiver of forecasted or actual non-compliance with certain financial covenants from its lenders and comply with other terms and conditions under its amended revolving credit facility, as amended, (ii) extend, repay or refinance its revolving credit facility at or prior to maturity on the terms acceptable to Mammoth or at all and (iii) meet its financial projections associated with reducing its debt; 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, | ||
|---|---|---|---|---|
| 2023 | 2022 | |||
| CURRENT ASSETS | (in thousands) | |||
| Cash and cash equivalents | $ | 11,727 | $ | 17,282 |
| Accounts receivable, net | 475,582 | 456,465 | ||
| Receivables from related parties, net | 115 | 223 | ||
| Inventories | 10,230 | 8,883 | ||
| Prepaid expenses | 10,056 | 13,219 | ||
| Other current assets | 581 | 620 | ||
| Total current assets | 508,291 | 496,692 | ||
| Property, plant and equipment, net | 132,529 | 138,066 | ||
| Sand reserves | 61,830 | 61,830 | ||
| Operating lease right-of-use assets | 11,907 | 10,656 | ||
| Intangible assets, net | 1,587 | 1,782 | ||
| Goodwill | 11,717 | 11,717 | ||
| Other non-current assets | 3,635 | 3,935 | ||
| Total assets | $ | 731,496 | $ | 724,678 |
| LIABILITIES AND EQUITY | ||||
| CURRENT LIABILITIES | ||||
| Accounts payable | $ | 57,174 | $ | 47,391 |
| Accrued expenses and other current liabilities | 38,485 | 52,297 | ||
| Current operating lease liability | 5,858 | 5,447 | ||
| Current portion of long-term debt | 84,614 | 83,520 | ||
| Income taxes payable | 51,588 | 48,557 | ||
| Total current liabilities | 237,719 | 237,212 | ||
| Deferred income tax liabilities | 444 | 471 | ||
| Long-term operating lease liability | 5,772 | 4,913 | ||
| Asset retirement obligation | 4,017 | 3,981 | ||
| Other long-term liabilities | 12,846 | 15,485 | ||
| Total liabilities | 260,798 | 262,062 | ||
| COMMITMENTS AND CONTINGENCIES | ||||
| EQUITY | ||||
| Equity: | ||||
| Common stock, $0.01 par value, 200,000,000 shares authorized, 47,713,342 and 47,312,270 issued and outstanding at March 31, 2023 and December 31, 2022 | 477 | 473 | ||
| Additional paid in capital | 538,862 | 539,138 | ||
| Accumulated deficit | (64,803) | (73,154) | ||
| Accumulated other comprehensive loss | (3,838) | (3,841) | ||
| Total equity | 470,698 | 462,616 | ||
| Total liabilities and equity | $ | 731,496 | $ | 724,678 |
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| 2023 | 2022 | 2022 | ||||
| (in thousands, except per share amounts) | ||||||
| REVENUE | ||||||
| Services revenue | $ | 103,637 | $ | 53,667 | $ | 88,963 |
| Services revenue - related parties | 220 | 274 | 110 | |||
| Product revenue | 12,463 | 8,357 | 13,836 | |||
| Total revenue | 116,320 | 62,298 | 102,909 | |||
| COST AND EXPENSES | ||||||
| Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $11,762, $15,355 and $11,819, respectively, for the three months ended March 31, 2023, March 31, 2022 and December 31, 2022) | 80,977 | 46,567 | 67,502 | |||
| 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, 2023, March 31, 2022 and December 31, 2022) | 31 | 135 | 135 | |||
| Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $1,186, $1,792 and $2,014, respectively, for the three months ended March 31, 2023, March 31, 2022 and December 31, 2022) | 7,985 | 7,778 | 9,226 | |||
| Selling, general and administrative | 8,383 | 8,668 | 12,993 | |||
| Depreciation, depletion, amortization and accretion | 12,956 | 17,167 | 13,786 | |||
| Gains on disposal of assets, net | (361) | (196) | (170) | |||
| Total cost and expenses | 109,971 | 80,119 | 103,472 | |||
| Operating income (loss) | 6,349 | (17,821) | (563) | |||
| OTHER INCOME (EXPENSE) | ||||||
| Interest expense, net | (3,289) | (2,349) | (3,237) | |||
| Other income, net | 8,624 | 9,041 | 10,737 | |||
| Total other income | 5,335 | 6,692 | 7,500 | |||
| Income (loss) before income taxes | 11,684 | (11,129) | 6,937 | |||
| Provision for income taxes | 3,333 | 3,688 | 2,165 | |||
| Net income (loss) | $ | 8,351 | $ | (14,817) | $ | 4,772 |
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||
| Foreign currency translation adjustment, net of tax of $0, $0 and $0, respectively, for the three months ended March 31, 2023, March 31, 2022 and December 31, 2022) | 3 | 198 | (59) | |||
| Comprehensive income (loss) | $ | 8,354 | $ | (14,619) | $ | 4,713 |
| Net income (loss) per share (basic) | $ | 0.18 | $ | (0.32) | $ | 0.10 |
| Net income (loss) per share (diluted) | $ | 0.17 | $ | (0.32) | $ | 0.10 |
| Weighted average number of shares outstanding (basic) | 47,443 | 46,845 | 47,312 | |||
| Weighted average number of shares outstanding (diluted) | 48,002 | 46,845 | 47,963 |
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended | ||||
|---|---|---|---|---|
| March 31, | ||||
| 2023 | 2022 | |||
| (in thousands) | ||||
| Cash flows from operating activities: | ||||
| Net income (loss) | $ | 8,351 | $ | (14,817) |
| Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||
| Stock based compensation | 647 | 241 | ||
| Depreciation, depletion, accretion and amortization | 12,956 | 17,167 | ||
| Amortization of debt origination costs | 188 | 186 | ||
| Bad debt recoveries | (381) | (99) | ||
| Gains on disposal of assets, net | (361) | (196) | ||
| Gains from sales of equipment damaged or lost down-hole | — | (397) | ||
| Deferred income taxes | (27) | 3,481 | ||
| Other | 174 | 535 | ||
| Changes in assets and liabilities: | ||||
| Accounts receivable, net | (18,643) | (3,898) | ||
| Receivables from related parties, net | 109 | (225) | ||
| Inventories | (1,347) | (1,992) | ||
| Prepaid expenses and other assets | 3,203 | 3,404 | ||
| Accounts payable | 8,602 | 1,041 | ||
| Accrued expenses and other liabilities | (13,262) | (7,013) | ||
| Income taxes payable | 3,031 | 201 | ||
| Net cash provided by (used in) operating activities | 3,240 | (2,381) | ||
| Cash flows from investing activities: | ||||
| Purchases of property and equipment | (6,036) | (1,182) | ||
| Proceeds from disposal of property and equipment | 330 | 1,038 | ||
| Net cash used in investing activities | (5,706) | (144) | ||
| Cash flows from financing activities: | ||||
| Borrowings on long-term debt | 66,700 | 37,550 | ||
| Repayments of long-term debt | (65,606) | (35,317) | ||
| Payments on sale-leaseback transaction | (1,214) | (868) | ||
| Principal payments on financing leases and equipment financing notes | (2,044) | (629) | ||
| Other | (919) | — | ||
| Net cash (used in) provided by financing activities | (3,083) | 736 | ||
| Effect of foreign exchange rate on cash | (6) | 8 | ||
| Net change in cash and cash equivalents | (5,555) | (1,781) | ||
| Cash and cash equivalents at beginning of period | 17,282 | 9,899 | ||
| Cash and cash equivalents at end of period | $ | 11,727 | $ | 8,118 |
| Supplemental disclosure of cash flow information: | ||||
| Cash paid for interest | $ | 3,108 | $ | 1,754 |
| Cash paid for income taxes, net of refunds received | $ | (26) | $ | 6 |
| Supplemental disclosure of non-cash transactions: | ||||
| Purchases of property and equipment included in accounts payable | $ | 5,917 | $ | 1,707 |
MAMMOTH ENERGY SERVICES, INC.
SEGMENT INCOME STATEMENTS
(in thousands)
| Three months ended March 31, 2023 | Well Completion | Infrastructure | Sand | Drilling | All Other | Eliminations | Total | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue from external customers | $ | 67,179 | $ | 28,280 | $ | 12,442 | $ | 1,824 | $ | 6,595 | $ | — | $ | 116,320 | ||||||||||||||||
| Intersegment revenues | 121 | — | 25 | 1 | 437 | (584) | — | |||||||||||||||||||||||
| Total revenue | 67,300 | 28,280 | 12,467 | 1,825 | 7,032 | (584) | 116,320 | |||||||||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 52,037 | 22,476 | 7,860 | 1,922 | 4,698 | — | 88,993 | |||||||||||||||||||||||
| Intersegment cost of revenues | 478 | 11 | — | 109 | (14) | (584) | — | |||||||||||||||||||||||
| Total cost of revenue | 52,515 | 22,487 | 7,860 | 2,031 | 4,684 | (584) | 88,993 | |||||||||||||||||||||||
| Selling, general and administrative | 2,492 | 4,211 | 503 | 313 | 864 | — | 8,383 | |||||||||||||||||||||||
| Depreciation, depletion, amortization and accretion | 4,817 | 3,374 | 1,187 | 1,367 | 2,211 | — | 12,956 | |||||||||||||||||||||||
| Gains on disposal of assets, net | — | (127) | (16) | — | (218) | — | (361) | |||||||||||||||||||||||
| Operating income (loss) | 7,476 | (1,665) | 2,933 | (1,886) | (509) | — | 6,349 | |||||||||||||||||||||||
| Interest expense, net | 929 | 1,845 | 156 | 160 | 199 | — | 3,289 | |||||||||||||||||||||||
| Other (income) expense, net | — | (8,808) | (2) | — | 186 | — | (8,624) | |||||||||||||||||||||||
| Income (loss) before income taxes | $ | 6,547 | $ | 5,298 | $ | 2,779 | $ | (2,046) | $ | (894) | $ | — | $ | 11,684 | Three months ended March 31, 2022 | Well Completion | Infrastructure | Sand | Drilling | All Other | Eliminations | Total | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||
| Revenue from external customers | $ | 23,630 | $ | 23,009 | $ | 8,347 | $ | 2,852 | $ | 4,460 | $ | — | $ | 62,298 | ||||||||||||||||
| Intersegment revenues | 244 | — | 832 | 3 | 272 | (1,351) | — | |||||||||||||||||||||||
| Total revenue | 23,874 | 23,009 | 9,179 | 2,855 | 4,732 | (1,351) | 62,298 | |||||||||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 21,839 | 18,887 | 7,788 | 2,372 | 3,594 | — | 54,480 | |||||||||||||||||||||||
| Intersegment cost of revenues | 1,031 | 16 | — | 160 | 70 | (1,277) | — | |||||||||||||||||||||||
| Total cost of revenue | 22,870 | 18,903 | 7,788 | 2,532 | 3,664 | (1,277) | 54,480 | |||||||||||||||||||||||
| Selling, general and administrative | 2,039 | 4,645 | 828 | 292 | 864 | — | 8,668 | |||||||||||||||||||||||
| Depreciation, depletion, amortization and accretion | 6,444 | 4,314 | 1,795 | 1,680 | 2,934 | — | 17,167 | |||||||||||||||||||||||
| Gains on disposal of assets, net | (49) | (5) | (75) | — | (67) | — | (196) | |||||||||||||||||||||||
| Operating loss | (7,430) | (4,848) | (1,157) | (1,649) | (2,663) | (74) | (17,821) | |||||||||||||||||||||||
| Interest expense, net | 371 | 1,542 | 162 | 104 | 170 | — | 2,349 | |||||||||||||||||||||||
| Other (income) expense, net | — | (9,582) | (4) | — | 545 | — | (9,041) | |||||||||||||||||||||||
| (Loss) income before income taxes | $ | (7,801) | $ | 3,192 | $ | (1,315) | $ | (1,753) | $ | (3,378) | $ | (74) | $ | (11,129) | Three months ended December 31, 2022 | Well Completion | Infrastructure | Sand | Drilling | All Other | Eliminations | Total | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||
| Revenue from external customers | $ | 51,292 | $ | 29,559 | $ | 13,817 | $ | 2,425 | $ | 5,816 | $ | — | $ | 102,909 | ||||||||||||||||
| Intersegment revenues | 147 | — | 25 | — | 570 | (742) | — | |||||||||||||||||||||||
| Total revenue | 51,439 | 29,559 | 13,842 | 2,425 | 6,386 | (742) | 102,909 | |||||||||||||||||||||||
| Cost of revenue, exclusive of depreciation, depletion, amortization and accretion | 36,108 | 24,387 | 10,081 | 2,158 | 4,129 | — | 76,863 | |||||||||||||||||||||||
| Intersegment cost of revenues | 475 | 23 | — | 109 | 133 | (740) | — | |||||||||||||||||||||||
| Total cost of revenue | 36,583 | 24,410 | 10,081 | 2,267 | 4,262 | (740) | 76,863 | |||||||||||||||||||||||
| Selling, general and administrative | 2,328 | 5,091 | 4,397 | 367 | 810 | — | 12,993 | |||||||||||||||||||||||
| Depreciation, depletion, amortization and accretion | 4,140 | 3,675 | 2,015 | 1,539 | 2,417 | — | 13,786 | |||||||||||||||||||||||
| (Gains) losses on disposal of assets, net | (68) | — | 1 | 113 | (216) | — | (170) | |||||||||||||||||||||||
| Operating income (loss) | 8,456 | (3,617) | (2,652) | (1,861) | (887) | (2) | (563) | |||||||||||||||||||||||
| Interest expense, net | 617 | 2,046 | 201 | 166 | 207 | — | 3,237 | |||||||||||||||||||||||
| Other expense (income), net | 1 | (10,522) | (4) | — | (212) | — | (10,737) | |||||||||||||||||||||||
| Income (loss) before income taxes | $ | 7,838 | $ | 4,859 | $ | (2,849) | $ | (2,027) | $ | (882) | $ | (2) | $ | 6,937 |
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, gains on disposal of assets, net, stock based compensation, interest expense, 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 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 income (loss): | 2023 | 2022 | 2022 | |||
| Net income (loss) | $ | 8,351 | $ | (14,817) | $ | 4,772 |
| Depreciation, depletion, amortization and accretion expense | 12,956 | 17,167 | 13,786 | |||
| Gains on disposal of assets, net | (361) | (196) | (170) | |||
| Stock based compensation | 647 | 241 | 241 | |||
| Interest expense, net | 3,289 | 2,349 | 3,237 | |||
| Other income, net | (8,624) | (9,041) | (10,737) | |||
| Provision for income taxes | 3,333 | 3,688 | 2,165 | |||
| Interest on trade accounts receivable | 11,112 | 9,862 | 10,785 | |||
| Adjusted EBITDA | $ | 30,703 | $ | 9,253 | $ | 24,079 |
MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Well Completion Services
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| Reconciliation of Adjusted EBITDA to net income (loss): | 2023 | 2022 | 2022 | |||
| Net income (loss) | $ | 6,547 | $ | (7,801) | $ | 7,838 |
| Depreciation and amortization expense | 4,817 | 6,444 | 4,140 | |||
| Gains on disposal of assets, net | — | (49) | (68) | |||
| Stock based compensation | 291 | 87 | 106 | |||
| Interest expense | 929 | 371 | 617 | |||
| Other expense, net | — | — | 1 | |||
| Adjusted EBITDA | $ | 12,584 | $ | (948) | $ | 12,634 |
Infrastructure Services
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| Reconciliation of Adjusted EBITDA to net income: | 2023 | 2022 | 2022 | |||
| Net income | $ | 2,452 | $ | 125 | $ | 1,609 |
| Depreciation and amortization expense | 3,374 | 4,314 | 3,675 | |||
| Gains on disposal of assets, net | (127) | (5) | — | |||
| Stock based compensation | 230 | 98 | 88 | |||
| Interest expense | 1,845 | 1,542 | 2,046 | |||
| Other income, net | (8,808) | (9,582) | (10,522) | |||
| Provision for income taxes | 2,847 | 3,067 | 3,250 | |||
| Interest on trade accounts receivable | 11,112 | 9,862 | 10,785 | |||
| Adjusted EBITDA | $ | 12,925 | $ | 9,421 | $ | 10,931 |
Natural Sand Proppant Services
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| Reconciliation of Adjusted EBITDA to net income (loss): | 2023 | 2022 | 2022 | |||
| Net income (loss) | $ | 2,779 | $ | (1,315) | $ | (2,849) |
| Depreciation, depletion, amortization and accretion expense | 1,187 | 1,795 | 2,015 | |||
| (Gains) losses on disposal of assets, net | (16) | (75) | 1 | |||
| Stock based compensation | 77 | 34 | 29 | |||
| Interest expense | 156 | 162 | 201 | |||
| Other income, net | (2) | (4) | (4) | |||
| Adjusted EBITDA | $ | 4,181 | $ | 597 | $ | (607) |
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: | 2023 | 2022 | 2022 | |||
| Net loss | $ | (2,046) | $ | (1,753) | $ | (2,027) |
| Depreciation expense | 1,367 | 1,680 | 1,539 | |||
| Losses on disposal of assets, net | — | — | 113 | |||
| Stock based compensation | 11 | 5 | 5 | |||
| Interest expense | 160 | 104 | 166 | |||
| Adjusted EBITDA | $ | (508) | $ | 36 | $ | (204) |
Other Services(a)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | December 31, | |||||
| Reconciliation of Adjusted EBITDA to net (loss) income: | 2023 | 2022 | 2022 | |||
| Net (loss) income | $ | (1,381) | $ | (3,999) | $ | 201 |
| Depreciation, amortization and accretion expense | 2,211 | 2,934 | 2,417 | |||
| Gains on disposal of assets, net | (218) | (67) | (216) | |||
| Stock based compensation | 38 | 17 | 13 | |||
| Interest expense, net | 199 | 170 | 207 | |||
| Other expense (income), net | 186 | 545 | (212) | |||
| Provision (benefit) for income taxes | 486 | 621 | (1,085) | |||
| Adjusted EBITDA | $ | 1,521 | $ | 221 | $ | 1,325 |
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.
12