Equibles

8-K

MAMMOTH ENERGY SERVICES, INC. (TUSK)

8-K 2022-07-28 For: 2022-07-28
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Added on April 10, 2026

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): July 28, 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 July 28, 2022, Mammoth Energy Services, Inc. (the “Company”) issued a press release announcing its financial and operational results for the second quarter ended June 30, 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 July 28, 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 July 28, 2022, entitled “Mammoth Energy Services, Inc. Announces Strong Second Quarter 2022 Operational 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: July 28, 2022 By: /s/ Mark Layton
Mark Layton
Chief Financial Officer and Secretary

Document

Exhibit 99.1

image.jpg

Mammoth Energy Services, Inc. Announces Strong

Second Quarter 2022 Operational and Financial Results

Significant Increases in Q2 Revenue, Net Income and Adjusted EBITDA

OKLAHOMA CITY - July 28, 2022 - Mammoth Energy Services, Inc. (“Mammoth” or the “Company”) (NASDAQ: TUSK) today reported strong financial and operational results for the second quarter ended June 30, 2022.

Financial Overview for the Second Quarter 2022:

Total revenue was $89.7 million for the second quarter of 2022, as compared to $47.4 million for the same quarter last year and $62.3 million for the first quarter of 2022.

Net income for the second quarter of 2022 was $1.7 million, or $0.04 per share, as compared to a net loss of $34.8 million, or a $0.75 loss per share, for the same quarter last year, and a net loss of $14.8 million, or a $0.32 loss per share, for the first quarter of 2022.

Adjusted EBITDA (as defined and reconciled below) was $23.0 million for the second quarter of 2022, as compared to ($3.3) million for the same quarter last year and $9.3 million for the first quarter of 2022.

Arty Straehla, Chief Executive Officer of Mammoth commented, “Our significant second quarter growth in revenue, net income and Adjusted EBITDA resulted from substantial gains in Infrastructure Services, Well Completion Services and our Sand business. In our Infrastructure Services division, we have continued to add crews since the first quarter to just over 100 crews currently, and we expect to add additional crews in the coming weeks in preparation for the seasonal storm restoration services anticipated in the third and fourth quarters. Our Well Completion Services division posted the strongest quarter we've seen since mid-2019 resulting from the robust macro demand that the pressure pumping industry is experiencing. We currently have four pressure pumping spreads operating, which have full schedules through the end of the year, and we expect to add a fifth spread sometime in the fourth quarter. Our Sand business is also experiencing strong demand, as well as increased pricing, which we believe will continue to improve into the back half of the year and into 2023. I am proud of our team’s continued commitment and hard work to push through the challenges we have faced over the last few years and am confident that we are well equipped to build on the improvements we have made this quarter.”

Infrastructure Services

Mammoth’s infrastructure services division contributed revenue of $25.6 million for the second quarter of 2022, as compared to $18.4 million for the same quarter last year and $23.0 million for the first quarter of 2022. The increase in revenue compared to the same quarter of 2021 is primarily due to an increase in storm activity, resulting in higher storm restoration revenue.

Well Completion Services

Mammoth’s well completion services division contributed revenue (inclusive of inter-segment revenue) of $43.8 million on 1,716 stages for the second quarter of 2022, as compared to $17.4 million on 520 stages for the same quarter of 2021 and $23.9 million on 699 stages for the first quarter of 2022. On average, 3.5 of the Company’s fleets were active for the second quarter of 2022, compared to an average utilization of 0.9 fleets during the same

quarter last year and 1.6 fleets during the first quarter of 2022. As of July 26, 2022, Mammoth was operating four of its six pressure pumping fleets and currently expects to activate a fifth fleet in the fourth quarter. Looking to 2023, the Company plans to activate its sixth fleet in the first quarter of 2023, and has plans to acquire or build a new Tier 4, dual-fuel fleet for a total of seven fleets by year-end 2023.

Natural Sand Proppant Services

Mammoth’s natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $15.5 million for the second quarter of 2022, as compared to $6.9 million for the same quarter last year and $9.2 million for the first quarter of 2022. In the second quarter of 2022, the Company sold approximately 350,000 tons of sand at an average sales price of $26.86 per ton, as compared to sales of approximately 255,000 tons of sand at an average sales price of $15.80 per ton during the same quarter last year. In the first quarter of 2022, sales were approximately 329,000 tons of sand at an average price of $21.44 per ton.

Drilling Services

Mammoth’s drilling services division contributed revenue (inclusive of inter-segment revenue) of $2.0 million for the second quarter of 2022, as compared to $1.1 million for the same quarter last year and $2.9 million for the first quarter of 2022.

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 $5.0 million for the second quarter of 2022, as compared to $4.3 million for the same quarter last year and $4.7 million for the first quarter of 2022.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses were $8.2 million for the second quarter of 2022, as compared to $9.9 million for the same quarter last year and $8.7 million for the first quarter of 2022.

Following is a breakout of SG&A expense (in thousands):

Three Months Ended Six Months Ended
June 30, March 31, June 30,
2022 2021 2022 2022 2021
Cash expenses:
Compensation and benefits $ 3,137 $ 3,333 $ 2,983 $ 6,120 $ 8,027
Professional services(a) 2,724 3,683 3,637 6,361 4,264
Other(b) 2,162 2,464 1,906 4,068 4,806
Total cash SG&A expense 8,023 9,480 8,526 16,549 17,097
Non-cash expenses:
Bad debt provision(c) (16) 76 (99) (115) 10,201
Stock based compensation 199 304 241 440 586
Total non-cash SG&A expense 183 380 142 325 10,787
Total SG&A expense $ 8,206 $ 9,860 $ 8,668 $ 16,874 $ 27,884

a.    Certain legal expenses totaling $2.1 million, $4.9 million and $2.8 million were reclassified to Other, net for the three and six months ended June 30, 2021 and three months ended March 31, 2022, respectively.

b.    Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.

c.    The bad debt provision for the six months ended June 30, 2021 includes $10.0 million related to the voluntary petitions for relief filed on November 13, 2020, by Gulfport Energy Corporation and its subsidiaries.

SG&A expenses, as a percentage of total revenue, were 9% for the second quarter of 2022, as compared to 21% for the same quarter last year and 14% for the first quarter of 2022.

Liquidity

As of June 30, 2022, Mammoth had cash on hand of $12.7 million, outstanding borrowings under its revolving credit facility of $82.9 million and $14.3 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. As of June 30, 2022, Mammoth had total liquidity of $27.0 million.

As of July 26, 2022, Mammoth had cash on hand of $9.5 million and outstanding borrowings under its revolving credit facility of $84.1 million. As of July 26, 2022, the Company had $8.2 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. Neither Cobra Acquisitions LLC nor Mammoth plan to make the scheduled settlement payment due on August 1, 2022 to Mastec Renewables Puerto Rico, LLC, but expects to make the payment on or before December 1, 2022.

Capital Expenditures

The following table summarizes Mammoth’s capital expenditures by operating division for the periods indicated (in thousands):

Three Months Ended Six Months Ended
June 30, March 31, June 30,
2022 2021 2022 2022 2021
Infrastructure services(a) $ 200 $ 105 $ 398 $ 598 $ 293
Well completion services(b) 2,500 388 801 3,301 896
Natural sand proppant services(c) — 5 — — 413
Drilling services(d) 12 1 2 14 38
Other(e) 161 63 60 221 165
Eliminations (87) (96) (79) (166) (96)
Total capital expenditures $ 2,786 $ 466 $ 1,182 $ 3,968 $ 1,709

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.

Mammoth anticipates that its total capital expenditures for 2022 will be approximately $20.0 million, representing an $8.0 million increase in its previously announced capital expenditure guidance for 2022, which Mammoth expects to fund from cash flow from operations, cash on hand and borrowings under its revolving credit facility.

Conference Call Information

Mammoth will host a conference call on Thursday, July 28, 2022 at 4:00 p.m. Central time (5:00 p.m. Eastern time) to discuss its second 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 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 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; 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 June 30, December 31,
2022 2021
CURRENT ASSETS (in thousands)
Cash and cash equivalents $ 12,729 $ 9,899
Short-term investment 1,765 1,762
Accounts receivable, net 430,443 407,550
Receivables from related parties, net 193 88
Inventories 8,000 8,366
Prepaid expenses 7,919 12,381
Other current assets 645 737
Total current assets 461,694 440,783
Property, plant and equipment, net 145,905 176,586
Sand reserves 64,141 64,641
Operating lease right-of-use assets 11,654 12,168
Intangible assets, net 2,171 2,561
Goodwill 11,717 11,717
Deferred income tax asset 2,228 8,094
Other non-current assets 3,620 4,342
Total assets $ 703,130 $ 720,892
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable $ 38,618 $ 37,560
Accrued expenses and other current liabilities 55,484 62,516
Current operating lease liability 5,655 5,942
Current portion of long-term debt 1,505 1,468
Income taxes payable 43,660 42,748
Total current liabilities 144,922 150,234
Long-term debt, net of current portion 83,969 85,240
Deferred income tax liabilities 1,611 865
Long-term operating lease liability 5,840 5,918
Asset retirement obligation 3,952 3,720
Other long-term liabilities 12,537 11,693
Total liabilities 252,831 257,670
COMMITMENTS AND CONTINGENCIES
EQUITY
Equity:
Common stock, $0.01 par value, 200,000,000 shares authorized, 47,312,270 and 46,684,065 issued and outstanding at June 30, 2022 and December 31, 2021 473 467
Additional paid in capital 538,656 538,221
Accumulated deficit (85,649) (72,535)
Accumulated other comprehensive loss (3,181) (2,931)
Total equity 450,299 463,222
Total liabilities and equity $ 703,130 $ 720,892

MAMMOTH ENERGY SERVICES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended Six Months Ended
June 30, March 31, June 30,
2022 2021 2021 2022 2021
(in thousands, except per share amounts)
REVENUE
Services revenue $ 75,459 $ 40,867 $ 53,667 $ 129,126 $ 83,558
Services revenue - related parties 395 90 274 669 15,076
Product revenue 13,824 6,483 8,357 22,181 13,465
Product revenue - related parties — — — — 2,145
Total revenue 89,678 47,440 62,298 151,976 114,244
COST AND EXPENSES
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $15,404, $17,861, $15,355, $30,759 and $36,850, respectively, for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 and six months ended June 30, 2022 and 2021) 58,433 43,103 46,567 105,000 85,165
Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of $0, $0, $0, $0 and $0, respectively, for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 and six months ended June 30, 2022 and 2021) 128 107 135 263 216
Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $2,055, $2,384, $1,792, $3,847 and $4,521, respectively, for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 and six months ended June 30, 2022 and 2021) 10,225 7,165 7,778 18,003 13,074
Selling, general and administrative 8,206 9,668 8,668 16,874 27,499
Selling, general and administrative - related parties — 192 — — 385
Depreciation, depletion, amortization and accretion 17,476 20,265 17,167 34,643 41,411
Total cost and expenses 94,468 80,500 80,315 174,783 167,750
Operating loss (4,790) (33,060) (18,017) (22,807) (53,506)
OTHER INCOME (EXPENSE)
Interest expense, net (2,659) (1,169) (2,349) (5,008) (2,394)
Other income (expense), net 13,087 (17,121) 9,237 22,324 (9,998)
Other expense, net - related parties — — — — (515)
Total other income (expense) 10,428 (18,290) 6,888 17,316 (12,907)
Income (loss) before income taxes 5,638 (51,350) (11,129) (5,491) (66,413)
Provision (benefit) for income taxes 3,935 (16,560) 3,688 7,623 (19,183)
Net income (loss) $ 1,703 $ (34,790) $ (14,817) $ (13,114) $ (47,230)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment, net of tax of $0, $63, $0, $0 and $680, respectively, for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 and six months ended June 30, 2022 and 2021) (448) 239 198 (250) 407
Comprehensive income (loss) $ 1,255 $ (34,551) $ (14,619) $ (13,364) $ (46,823)
Net income (loss) per share (basic) $ 0.04 $ (0.75) $ (0.32) $ (0.28) $ (1.02)
Net income (loss) per share (diluted) $ 0.04 $ (0.75) $ (0.32) $ (0.28) $ (1.02)
Weighted average number of shares outstanding (basic) 47,225 46,402 46,845 47,036 46,168
Weighted average number of shares outstanding (diluted) 47,634 46,402 46,845 47,036 46,168

MAMMOTH ENERGY SERVICES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended
June 30,
2022 2021
(in thousands)
Cash flows from operating activities:
Net loss $ (13,114) $ (47,230)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
Stock based compensation 441 698
Depreciation, depletion, accretion and amortization 34,643 41,411
Amortization of debt origination costs 375 296
Bad debt (recoveries) expense (115) 10,201
Gain on disposal of property and equipment (3,650) (1,599)
Deferred income taxes 6,612 (20,898)
Other 449 548
Changes in assets and liabilities:
Accounts receivable, net (22,480) (30,386)
Receivables from related parties, net (105) 28,381
Inventories 366 1,808
Prepaid expenses and other assets 4,567 5,923
Accounts payable (2,132) (1,546)
Accrued expenses and other liabilities (7,407) 15,756
Income taxes payable 912 1,107
Net cash (used in) provided by operating activities (638) 4,471
Cash flows from investing activities:
Purchases of property and equipment (3,968) (1,709)
Proceeds from disposal of property and equipment 7,447 4,632
Net cash provided by investing activities 3,479 2,923
Cash flows from financing activities:
Borrowings on long-term debt 83,000 12,000
Repayments of long-term debt (84,241) (30,269)
Payments on sale-leaseback transaction (2,094) (1,278)
Principal payments on financing leases and equipment financing notes (1,197) (1,140)
Net cash (used in) provided by financing activities 57 (11,214)
Effect of foreign exchange rate on cash (68) 36
Net change in cash and cash equivalents 2,830 (3,784)
Cash and cash equivalents at beginning of period 9,899 14,822
Cash and cash equivalents at end of period $ 12,729 $ 11,038
Supplemental disclosure of cash flow information:
Cash paid for interest $ 3,792 $ 2,134
Cash paid for income taxes, net of refunds received $ 98 $ 964
Supplemental disclosure of non-cash transactions:
Purchases of property and equipment included in accounts payable $ 4,733 $ 2,035

MAMMOTH ENERGY SERVICES, INC.

SEGMENT INCOME STATEMENTS

(in thousands)

Three months ended June 30, 2022 Infrastructure Well Completion Sand Drilling All Other Eliminations Total
Revenue from external customers $ 25,587 $ 43,574 $ 13,841 $ 1,952 $ 4,724 $ — $ 89,678
Intersegment revenues — 243 1,618 19 306 (2,186) —
Total revenue 25,587 43,817 15,459 1,971 5,030 (2,186) 89,678
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 21,808 31,486 9,707 2,034 3,751 — 68,786
Intersegment cost of revenues 15 1,985 — 160 103 (2,263) —
Total cost of revenue 21,823 33,471 9,707 2,194 3,854 (2,263) 68,786
Selling, general and administrative 4,443 1,884 870 277 732 — 8,206
Depreciation, depletion, amortization and accretion 4,211 6,747 2,058 1,651 2,809 — 17,476
Operating (loss) income (4,890) 1,715 2,824 (2,151) (2,365) 77 (4,790)
Interest expense, net 1,755 422 178 121 183 — 2,659
Other income, net (10,925) (157) (19) — (1,986) — (13,087)
Income (loss) before income taxes $ 4,280 $ 1,450 $ 2,665 $ (2,272) $ (562) $ 77 $ 5,638 Three months ended June 30, 2021 Infrastructure Well Completion Sand Drilling All Other Eliminations Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Revenue from external customers $ 18,420 $ 17,337 $ 6,886 $ 1,130 $ 3,667 $ — $ 47,440
Intersegment revenues — 36 — 17 682 (735) —
Total revenue 18,420 17,373 6,886 1,147 4,349 (735) 47,440
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 21,062 16,396 7,400 1,568 3,949 — 50,375
Intersegment cost of revenues 50 666 — — 19 (735) —
Total cost of revenue 21,112 17,062 7,400 1,568 3,968 (735) 50,375
Selling, general and administrative 5,620 1,893 991 395 961 — 9,860
Depreciation, depletion, amortization and accretion 5,899 6,447 2,387 2,078 3,454 — 20,265
Operating loss (14,211) (8,029) (3,892) (2,894) (4,034) — (33,060)
Interest expense, net 664 219 90 58 138 — 1,169
Other expense (income), net 18,035 1 (53) (126) (736) — 17,121
Loss before income taxes $ (32,910) $ (8,249) $ (3,929) $ (2,826) $ (3,436) $ — $ (51,350) 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)

MAMMOTH ENERGY SERVICES, INC.

SEGMENT INCOME STATEMENTS

(in thousands)

Six months ended June 30, 2022 Infrastructure Well Completion Sand Drilling All Other Eliminations Total
Revenue from external customers $ 48,596 $ 67,202 $ 22,189 $ 4,804 $ 9,185 $ — $ 151,976
Intersegment revenues — 489 2,450 22 576 (3,537) —
Total revenue 48,596 67,691 24,639 4,826 9,761 (3,537) 151,976
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 40,695 53,325 17,495 4,406 7,345 — 123,266
Intersegment cost of revenues 31 3,016 — 321 172 (3,540) —
Total cost of revenue 40,726 56,341 17,495 4,727 7,517 (3,540) 123,266
Selling, general and administrative 9,088 3,923 1,698 569 1,596 — 16,874
Depreciation, depletion, amortization and accretion 8,525 13,191 3,852 3,331 5,744 — 34,643
Operating (loss) income (9,743) (5,764) 1,594 (3,801) (5,096) 3 (22,807)
Interest expense, net 3,298 793 340 225 352 — 5,008
Other income, net (20,512) (206) (98) — (1,508) — (22,324)
Income (loss) before income taxes $ 7,471 $ (6,351) $ 1,352 $ (4,026) $ (3,940) $ 3 $ (5,491)
Six months ended June 30, 2021 Infrastructure Well Completion Sand Drilling All Other Eliminations Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Revenue from external customers $ 48,619 $ 40,238 $ 15,592 $ 2,049 $ 7,746 $ — $ 114,244
Intersegment revenues — 90 — 31 1,322 (1,443) —
Total revenue 48,619 40,328 15,592 2,080 9,068 (1,443) 114,244
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 48,439 25,399 13,262 3,173 8,182 — 98,455
Intersegment cost of revenues 95 1,060 — — 288 (1,443) —
Total cost of revenue 48,534 26,459 13,262 3,173 8,470 (1,443) 98,455
Selling, general and administrative 9,359 12,505 3,040 817 2,163 — 27,884
Depreciation, depletion, amortization and accretion 12,566 13,130 4,527 4,243 6,945 — 41,411
Operating loss (21,840) (11,766) (5,237) (6,153) (8,510) — (53,506)
Interest expense, net 1,333 473 183 121 284 — 2,394
Other expense (income), net 11,548 440 (847) (135) (493) — 10,513
Loss before income taxes $ (34,721) $ (12,679) $ (4,573) $ (6,139) $ (8,301) $ — $ (66,413)

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, public offering costs, 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 Six Months Ended
June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss): 2022 2021 2022 2022 2021
Net income (loss) $ 1,703 $ (34,790) $ (14,817) $ (13,114) $ (47,230)
Depreciation, depletion, amortization and accretion expense 17,476 20,265 17,167 34,643 41,411
Public offering costs — 77 — — 77
Stock based compensation 200 354 241 441 698
Interest expense, net 2,659 1,169 2,349 5,008 2,394
Other (income) expense, net (13,087) 17,121 (9,237) (22,324) 10,513
Provision (benefit) for income taxes 3,935 (16,560) 3,688 7,623 (19,183)
Interest on trade accounts receivable 10,160 9,017 9,862 20,022 17,175
Adjusted EBITDA $ 23,046 $ (3,347) $ 9,253 $ 32,299 $ 5,855

MAMMOTH ENERGY SERVICES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Infrastructure Services

Three Months Ended Six Months Ended
June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss): 2022 2021 2022 2022 2021
Net income (loss) $ 572 $ (24,073) $ 125 $ 695 $ (28,311)
Depreciation and amortization expense 4,211 5,899 4,314 8,525 12,566
Public offering costs — 45 — — 45
Stock based compensation 74 162 98 172 301
Interest expense 1,755 664 1,542 3,298 1,333
Other (income) expense, net (10,925) 18,035 (9,587) (20,512) 11,548
Provision (benefit) for income taxes 3,708 (8,838) 3,067 6,776 (6,409)
Interest on trade accounts receivable 10,160 9,017 9,862 20,022 17,689
Adjusted EBITDA $ 9,555 $ 911 $ 9,421 $ 18,976 $ 8,762

Well Completion Services

Three Months Ended Six Months Ended
June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss): 2022 2021 2022 2022 2021
Net income (loss) $ 1,450 $ (8,248) $ (7,801) $ (6,351) $ (12,678)
Depreciation and amortization expense 6,747 6,447 6,444 13,191 13,130
Public offering costs — 12 — — 12
Stock based compensation 84 75 87 171 158
Interest expense 422 219 371 793 473
Other (income) expense, net (157) 1 (49) (206) 440
Interest on trade accounts receivable — — — — (513)
Adjusted EBITDA $ 8,546 $ (1,494) $ (948) $ 7,598 $ 1,022

Natural Sand Proppant Services

Three Months Ended Six Months Ended
June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss): 2022 2021 2022 2022 2021
Net income (loss) $ 2,665 $ (3,930) $ (1,315) $ 1,352 $ (4,574)
Depreciation, depletion, amortization and accretion expense 2,058 2,387 1,795 3,852 4,527
Public offering costs — 12 — — 12
Stock based compensation 26 66 34 60 130
Interest expense 178 90 162 340 183
Other income, net (19) (53) (79) (98) (847)
Interest on trade accounts receivable — — — — (1)
Adjusted EBITDA $ 4,908 $ (1,428) $ 597 $ 5,506 $ (570)

MAMMOTH ENERGY SERVICES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Drilling Services

Three Months Ended Six Months Ended
June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net loss: 2022 2021 2022 2022 2021
Net loss $ (2,272) $ (2,825) $ (1,753) $ (4,026) $ (6,140)
Depreciation expense 1,651 2,078 1,680 3,331 4,243
Public offering costs — 2 — — 2
Stock based compensation 4 28 5 9 65
Interest expense 121 58 104 225 121
Other income, net — (126) — — (135)
Adjusted EBITDA $ (496) $ (785) $ 36 $ (461) $ (1,844)

Other Services(a)

Three Months Ended Six Months Ended
June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net (loss) income: 2022 2021 2022 2022 2021
Net (loss) income $ (788) $ 4,286 $ (3,999) $ (4,786) $ 4,473
Depreciation, amortization and accretion expense 2,809 3,454 2,934 5,744 6,945
Public offering costs — 6 — — 6
Stock based compensation 12 23 17 29 44
Interest expense, net 183 138 170 352 284
Other income (expense), net (1,986) (736) 478 (1,508) (493)
Provision (benefit) for income taxes 226 (7,722) 621 846 (12,774)
Adjusted EBITDA $ 456 $ (551) $ 221 $ 677 $ (1,515)

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.

12

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