Mammoth Energy Services, Inc. Announces Third Quarter 2021 Operational and Financial Results

Rhea-AI Summary

Mammoth Energy Services (TUSK) reported Q3 2021 revenue of $57.5 million, down from $70.5 million in Q3 2020 and slightly up from $47.4 million in Q2 2021. The company faced a net loss of $40.9 million, equating to a loss of $0.88 per share, contrasting with a net income of $3.4 million a year prior. Adjusted EBITDA was ($29.7) million, significantly lower than $22.1 million in Q3 2020. Key expenses included a $32.6 million settlement with Gulfport Energy. Despite challenges, CEO Arty Straehla noted positive trends in infrastructure and oilfield segments, driven by increased bidding activity and improved commodity prices.

Positive

• Improved revenue of $57.5 million in Q3 2021 compared to $47.4 million in Q2 2021.
• Increased revenue in well completion services to $22.7 million on 688 stages from $17.4 million on 520 stages in Q2 2021.
• Sales of natural sand reached approximately 315,000 tons at an average price of $16.58 per ton.

Negative

• Net loss of $40.9 million, a significant drop from a net income of $3.4 million in Q3 2020.
• Adjusted EBITDA of ($29.7) million down from $22.1 million one year prior.
• SG&A expenses surged to $41.9 million, representing 73% of total revenue.

OKLAHOMA CITY, Nov. 5, 2021 /PRNewswire/ -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ: TUSK) today reported financial and operational results for the third quarter ended September 30, 2021.

Financial Overview for the Third Quarter 2021:

Total revenue was $57.5 million for the third quarter of 2021, as compared to $70.5 million for the same quarter last year and $47.4 million for the second quarter of 2021.

Net loss for the third quarter of 2021 was $40.9 million, or a $0.88 loss per share, as compared to net income of $3.4 million, or a $0.07 income per share, for the same quarter last year, and a net loss of $34.8 million, or a $0.75 loss per share, for the second quarter of 2021.

Adjusted EBITDA (as defined and reconciled below) was ($29.7) million for the third quarter of 2021, as compared to $22.1 million for the same quarter last year and ($5.5) million for the second quarter of 2021. During the third quarter of 2021, Mammoth recognized expense of $32.6 million related to its settlement with Gulfport Energy Corporation. Excluding this non-recurring expense, adjusted EBITDA was $2.9 million for the third quarter of 2021.

Arty Straehla, Chief Executive Officer of Mammoth commented, "We are pleased with the positive trajectory throughout our business segments during the third quarter compared to the second quarter, which led to higher revenue and an improved bottom line. We are also encouraged by the positive trends in our infrastructure business in the third quarter, including increased storm work relative to the second quarter, a new fiber maintenance and installation contract and increased bidding activity, as well as internal personnel changes that are gaining traction in this segment. Funding for projects in the infrastructure space remains strong with the added opportunity of a new federal infrastructure bill, which we are optimistic will be passed in the near future. While this is a sector impacted by near-term seasonality, we remain focused on improving results as we continue migrating the Company further into the infrastructure space to enhance long-term growth and sustainability.

"In our oilfield businesses, improved commodities pricing continues to contribute to positive industry movement and increased equipment utilization as we ramped up a second hydraulic fracturing fleet during the quarter. In our sand business, we continue to see increased market activity."

Straehla continued, "Lastly, as documented in several recent press releases, we are continuing to pursue numerous avenues in our efforts to collect our receivable from PREPA for work performed by our subsidiary Cobra Acquisitions LLC in Puerto Rico. We believe that published documentation to date continues to show that our team performed a difficult job in a difficult environment to save lives and aid the people of Puerto Rico in their time of need."

Infrastructure Services
Mammoth's infrastructure services division contributed revenue of $23.5 million, or approximately 41% of Mammoth's total revenue, for the third quarter of 2021, as compared to $43.6 million for the same quarter last year and $17.2 million for the second quarter of 2021. The decrease in revenue compared to the same quarter of 2020 is primarily due to a decline in storm activity, resulting in lower storm restoration revenue, as well as management and crew turnover.

Well Completion Services
Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $22.7 million on 688 stages for the third quarter of 2021, as compared to $15.8 million on 449 stages for the same quarter last year and $17.4 million on 520 stages for the second quarter of 2021. On average, 1.2 of the Company's fleets were active for the third quarter, compared to an average utilization of 0.9 fleets during the same quarter last year and during the second quarter of 2021.

Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $8.4 million for the third quarter of 2021, as compared to $6.0 million for the same quarter last year and $6.9 million for the second quarter of 2021. In the third quarter of 2021, the Company sold approximately 315,000 tons of sand at an average sales price of $16.58 per ton, as compared to sales of approximately 68,000 tons of sand at an average sales price of $15.59 per ton during the same quarter last year. In the second quarter of 2021, sales were approximately 255,000 tons of sand at an average price of $15.80 per ton.

Drilling Services
Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $1.2 million for the third quarter of 2021, as compared to $1.2 million for the same quarter last year and $1.1 million for the second quarter of 2021.

As a result of market conditions, the Company temporarily shut down its contract land drilling operations beginning in December 2019 and its rig hauling operations beginning in April 2020.

Other Services
Mammoth's other services, including aviation, coil tubing, pressure control, equipment rentals, crude oil hauling, full-service transportation, remote accommodations, equipment manufacturing and infrastructure engineering and design services, contributed revenue (inclusive of inter-segment revenue) of $6.2 million for the third quarter of 2021, as compared to $4.7 million for the same quarter last year and $5.5 million for the second quarter of 2021.

As a result of market conditions, the Company temporarily shut down its cementing and acidizing operations as well as its flowback operations beginning in July 2019, its coil tubing and full-service transportation operations beginning in July 2020 and its crude oil hauling operations beginning in July 2021.

Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses were $41.9 million for the third quarter of 2021, as compared to $12.2 million for the same quarter last year and $12.0 million for the second quarter of 2021.

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

	Three Months Ended												Nine Months Ended
	September 30,								June 30,				September 30,
	2021				2020				2021				2021				2020
Cash expenses:
Compensation and benefits	$	3,353			$	3,449			$	3,333			$	11,379			$	11,138
Professional services	4,571				5,651				5,806				13,783				15,335
Other(a)	2,252				2,163				2,464				7,058				6,572
Total cash SG&A expense	10,176				11,263				11,603				32,220				33,045
Non-cash expenses:
Bad debt provision(b)	31,449				626				76				41,650				2,306
Stock based compensation	241				291				304				827				1,326
Total non-cash SG&A expense	31,690				917				380				42,477				3,632
Total SG&A expense	$	41,866			$	12,180			$	11,983			$	74,697			$	36,677

a.	Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.
b.	The bad debt provision for the three and nine months ended September 30, 2021, includes $31.2 million and $41.2 million, respectively, for settlement of our accounts with Gulfport Energy Corporation and its subsidiaries.

SG&A expenses, as a percentage of total revenue, were 73% for the third quarter of 2021, as compared to 17% for the same quarter last year and 25% for the second quarter of 2021.

Liquidity
As of September 30, 2021, Mammoth had cash on hand of $8.0 million, outstanding borrowings under its revolving credit facility of $77.0 million and $43.2 million of available borrowing capacity under its revolving credit facility, after giving effect to $9.0 million of outstanding letters of credit. As of September 30, 2021, Mammoth had total liquidity of $51.2 million.

On November 3, 2021, Mammoth entered into a third amendment to its revolving credit facility, providing, among other things, for a limited waiver and suspension of the leverage ratio and fixed charges coverage ratio covenants for the quarters ending September 30, 2021 and December 31, 2021 and permanently reducing the maximum revolving advance amount under its revolving credit facility from $130 million to $120 million. As of November 3, 2021, Mammoth had cash on hand of $6.5 million, outstanding borrowings under its revolving credit facility of $76.1 million and $24.1 million of available borrowing capacity under its revolving credit facility, after giving effect to $9.0 million of outstanding letters of credit, the $10 million reduction in the borrowing base and the requirement to maintain a $10 million reserve out of the available borrowing capacity during the limited waiver period, which will end on May 15, 2022, but may terminate earlier upon the occurrence of certain events.

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

	Three Months Ended												Nine Months Ended
	September 30,								June 30,				September 30,
	2021				2020				2021				2021				2020
Infrastructure services(a)	$	181			$	178			$	104			$	474			$	221
Well completion services(b)	2,392				698				388				3,192				3,752
Natural sand proppant services(c)	16				194				5				429				1,069
Drilling services(d)	4				132				1				42				199
Other(e)	172				323				63				337				708
Total capital expenditures	$	2,765			$	1,525			$	561			$	4,474			$	5,949

a.	Capital expenditures primarily for tooling and other equipment for the periods presented.
b.	Capital expenditures primarily for upgrades to our pressure pumping fleet to reduce greenhouse gas emissions and water transfer equipment 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 Friday, November 5, 2021 at 8:00 a.m. Central time (9:00 a.m. Eastern time) to discuss its third quarter 2021 financial and operational results. The telephone number to access the conference call is 216-562-0385. 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: the severity and duration of the COVID-19 pandemic, related global and national health concerns and economic repercussions and the resulting negative impact on 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; 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; the failure to receive or delays in receiving governmental authorizations, approvals and/or payments; 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 by the Puerto Rico Electric Power Authority; 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; whether a federal infrastructure bill is implemented and the terms thereof; 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 settlements with Gulfport Energy Corporation and 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 regain compliance 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		September 30,				December 31,
		2021				2020
CURRENT ASSETS		(in thousands)
Cash and cash equivalents		$	7,953			$	14,822
Short-term investment		1,760				1,750
Accounts receivable, net		402,035				393,112
Receivables from related parties, net		238				28,461
Inventories		9,438				12,020
Prepaid expenses		3,859				13,825
Other current assets		754				758
Total current assets		426,037				464,748
Property, plant and equipment, net		194,478				251,262
Sand reserves		64,806				65,876
Operating lease right-of-use assets		14,766				20,179
Intangible assets, net - customer relationships		277				408
Intangible assets, net - trade names		3,194				4,366
Goodwill		12,608				12,608
Deferred income tax asset		8,094				—
Other non-current assets		4,247				5,115
Total assets		$	728,507			$	824,562
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable		$	43,628			$	40,316
Payables to related parties		5				3
Accrued expenses and other current liabilities		54,724				44,408
Current operating lease liability		6,996				8,618
Current portion of long-term debt		1,449				1,165
Income taxes payable		39,283				34,088
Total current liabilities		146,085				128,598
Long-term debt, net of current portion		79,195				81,338
Deferred income tax liabilities		687				24,741
Long-term operating lease liability		7,591				11,377
Asset retirement obligation		3,682				4,746
Other liabilities		15,003				10,435
Total liabilities		252,243				261,235
COMMITMENTS AND CONTINGENCIES
EQUITY
Equity:
Common stock, $0.01 par value, 200,000,000 shares authorized, 46,684,065 and 45,769,283 issued and outstanding at September 30, 2021 and December 31, 2020		467				458
Additional paid in capital		537,980				537,039
Retained earnings		(59,236)				28,895
Accumulated other comprehensive loss		(2,947)				(3,065)
Total equity		476,264				563,327
Total liabilities and equity		$	728,507			$	824,562

MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
	Three Months Ended												Nine Months Ended
	September 30,								June 30,				September 30,
	2021				2020				2021				2021				2020
	(in thousands, except per share amounts)
REVENUE
Services revenue	$	52,417			$	55,279			$	40,867			$	135,975			$	169,002
Services revenue - related parties	601				8,565				90				15,678				35,228
Product revenue	4,467				4,815				6,483				17,932				18,171
Product revenue - related parties	—				1,875				—				2,145				5,625
Total revenue	57,485				70,534				47,440				171,730				228,026
COST AND EXPENSES
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $35,857, $20,424, $17,861, $53,448 and $65,728, respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)	43,538				41,445				43,103				128,703				154,397
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 September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)	181				131				107				397				329
Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $4,667, $2,689, $2,384, $7,051 and $7,344, respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)	9,865				4,353				7,165				22,939				21,862
Selling, general and administrative	41,866				11,979				11,791				74,312				36,063
Selling, general and administrative - related parties	—				201				192				385				614
Depreciation, depletion, amortization and accretion	19,148				23,132				20,265				60,559				73,130
Impairment of goodwill	—				—				—				—				54,973
Impairment of other long-lived assets	547				—				—				547				12,897
Total cost and expenses	115,145				81,241				82,623				287,842				354,265
Operating loss	(57,660)				(10,707)				(35,183)				(116,112)				(126,239)
OTHER INCOME (EXPENSE)
Interest expense, net	(1,484)				(1,098)				(1,169)				(3,878)				(4,207)
Other income (expense), net	11,056				7,943				(14,998)				6,004				23,489
Other income (expense), net - related parties	—				1,099				—				(515)				2,232
Total other income (expense)	9,572				7,944				(16,167)				1,611				21,514
Loss before income taxes	(48,088)				(2,763)				(51,350)				(114,501)				(104,725)
Benefit for income taxes	(7,187)				(6,193)				(16,560)				(26,370)				(8,979)
Net (loss) income	$	(40,901)			$	3,430			$	(34,790)			$	(88,131)			$	(95,746)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment, net of tax of ($69), ($95), $63, $36  and $116, respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020	(289)				324				239				118				(422)
Comprehensive (loss) income	$	(41,190)			$	3,754			$	(34,551)			$	(88,013)			$	(96,168)
Net (loss) income per share (basic)	$	(0.88)			$	0.07			$	(0.75)			$	(1.90)			$	(2.10)
Net (loss) income per share (diluted)	$	(0.88)			$	0.07			$	(0.75)			$	(1.90)			$	(2.10)
Weighted average number of shares outstanding (basic)	46,683				45,764				46,402				46,342				45,603
Weighted average number of shares outstanding (diluted)	46,683				46,571				46,402				46,342				45,603

 

MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS
	Nine Months Ended
	September 30,
	2021				2020
	(in thousands)
Cash flows from operating activities:
Net loss	$	(88,131)			$	(95,746)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
Stock based compensation	950				1,598
Depreciation, depletion, accretion and amortization	60,559				73,130
Amortization of coil tubing strings	—				359
Amortization of debt origination costs	469				703
Bad debt expense	41,650				2,306
Gain on disposal of property and equipment	(4,632)				(927)
Impairment of goodwill	—				54,973
Impairment of other long-lived assets	547				12,897
Deferred income taxes	(32,183)				(7,334)
Other	502				581
Changes in assets and liabilities:
Accounts receivable, net	(50,666)				(11,707)
Receivables from related parties	28,224				(31,152)
Inventories	2,582				3,827
Prepaid expenses and other assets	9,947				8,803
Accounts payable	2,597				(5,211)
Payables to related parties	2				(508)
Accrued expenses and other liabilities	6,627				(3,166)
Income taxes payable	5,192				(1,644)
Net cash (used in) provided by operating activities	(15,764)				1,782
Cash flows from investing activities:
Purchases of property and equipment	(4,474)				(5,873)
Purchases of property and equipment from related parties	—				(76)
Proceeds from disposal of property and equipment	9,581				4,859
Net cash provided by (used in) investing activities	5,107				(1,090)
Cash flows from financing activities:
Borrowings on long-term debt	31,700				30,800
Repayments of long-term debt	(33,571)				(21,000)
Proceeds from sale leaseback transaction	9,473				—
Payments on sale leaseback transaction	(2,106)				—
Principal payments on financing leases and equipment financing notes	(1,716)				(1,423)
Debt issuance costs	—				(1,000)
Net cash provided by financing activities	3,780				7,377
Effect of foreign exchange rate on cash	8				(57)
Net change in cash and cash equivalents	(6,869)				8,012
Cash and cash equivalents at beginning of period	14,822				5,872
Cash and cash equivalents at end of period	$	7,953			$	13,884
Supplemental disclosure of cash flow information:
Cash paid for interest	$	3,236			$	3,637
Cash paid for income taxes, net of refunds received	$	978			$	13
Supplemental disclosure of non-cash transactions:
Purchases of property and equipment included in accounts payable	$	2,028			$	2,032

 

MAMMOTH ENERGY SERVICES, INC. SEGMENT INCOME STATEMENTS (in thousands)
Three months ended September  30, 2021	Infrastructure			Well Completion(a)			Sand			Drilling			All Other			Eliminations			Total
Revenue from external customers	$	23,489		$	22,702		$	4,439		$	1,184		$	5,671		$	—		$	57,485
Intersegment revenues	—			30			3,980			23			482			(4,515)			—
Total revenue	23,489			22,732			8,419			1,207			6,153			(4,515)			57,485
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion	20,541			18,125			9,368			1,566			4,917			—			54,517
Intersegment cost of revenues	54			3,204			—			—			324			(4,515)			(933)
Total cost of revenue	20,595			21,329			9,368			1,566			5,241			(4,515)			53,584
Selling, general and administrative	4,586			34,606			1,068			288			1,318			—			41,866
Depreciation, depletion, amortization and accretion	4,933			6,538			2,533			1,942			3,202			—			19,148
Impairment of other long-lived assets	—			—			—			—			547			—			547
Operating loss	(6,625)			(39,741)			(4,550)			(2,589)			(4,155)			—			(57,660)
Interest expense, net	971			215			107			56			135			—			1,484
Other (income) expense, net	(9,256)			755			(46)			(66)			(2,443)			—			(11,056)
Income (loss) before income taxes	$	1,660		$	(40,711)		$	(4,611)		$	(2,579)		$	(1,847)		$	—		$	(48,088)
Three months ended September 30, 2020	Infrastructure			Well Completion(a)			Sand			Drilling			All Other			Eliminations			Total
Revenue from external customers	$	43,582		$	15,738		$	6,031		$	1,193		$	3,990		$	—		$	70,534
Intersegment revenues	—			27			—			11			687			(725)			—
Total revenue	43,582			15,765			6,031			1,204			4,677			(725)			70,534
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion	28,883			6,510			4,154			1,955			4,427			—			45,929
Intersegment cost of revenues	162			449			—			—			114			(725)			—
Total cost of revenue	29,045			6,959			4,154			1,955			4,541			(725)			45,929
Selling, general and administrative	7,227			1,721			1,056			382			1,794			—			12,180
Depreciation, depletion, amortization and accretion	7,294			7,189			2,700			2,294			3,655			—			23,132
Operating income (loss)	16			(104)			(1,879)			(3,427)			(5,313)			—			(10,707)
Interest expense, net	623			253			70			60			92			—			1,098
Other (income) expense, net	(8,375)			(1,156)			1,792			20			(1,323)			—			(9,042)
Income (loss) before income taxes	$	7,768		$	799		$	(3,741)		$	(3,507)		$	(4,082)		$	—		$	(2,763)
Three months ended June 30, 2021	Infrastructure			Well Completion(a)			Sand			Drilling			All Other			Eliminations			Total
Revenue from external customers	$	17,220		$	17,337		$	6,886		$	1,130		$	4,867		$	—		$	47,440
Intersegment revenues	—			36			—			17			682			(735)			—
Total revenue	17,220			17,373			6,886			1,147			5,549			(735)			47,440
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion	19,881			16,396			7,400			1,568			5,130			—			50,375
Intersegment cost of revenues	50			666			—			—			19			(735)			—
Total cost of revenue	19,931			17,062			7,400			1,568			5,149			(735)			50,375
Selling, general and administrative	7,383			1,893			991			395			1,321			—			11,983
Depreciation, depletion, amortization and accretion	5,899			6,447			2,387			2,079			3,453			—			20,265
Operating loss	(15,993)			(8,029)			(3,892)			(2,895)			(4,374)			—			(35,183)
Interest expense, net	656			219			90			58			146			—			1,169
Other expense (income), net	15,904			1			(53)			(127)			(727)			—			14,998
Loss before income taxes	$	(32,553)		$	(8,249)		$	(3,929)		$	(2,826)		$	(3,793)		$	—		$	(51,350)
Nine months ended September 30, 2021	Infrastructure			Well Completion(a)			Sand			Drilling			All Other			Eliminations			Total
Revenue from external customers	$	69,965		$	62,939		$	20,031		$	3,234		$	15,561		$	—		$	171,730
Intersegment revenues	—			120			3,980			54			1,804			(5,958)			—
Total revenue	69,965			63,059			24,011			3,288			17,365			(5,958)			171,730
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion	66,864			42,339			22,631			4,739			15,466			—			152,039
Intersegment cost of revenues	165			5,449			—			—			344			(5,958)			—
Total cost of revenue	67,029			47,788			22,631			4,739			15,810			(5,958)			152,039
Selling, general and administrative	18,222			47,111			4,108			1,105			4,151			—			74,697
Depreciation, depletion, amortization and accretion	17,499			19,668			7,059			6,185			10,148			—			60,559
Impairment of other long-lived assets	—			—			—			—			547			—			547
Operating loss	(32,785)			(51,508)			(9,787)			(8,741)			(13,291)			—			(116,112)
Interest expense, net	2,287			688			291			177			435			—			3,878
Other (income) expense, net	(2,663)			1,196			(892)			(201)			(2,929)			—			(5,489)
Loss before income taxes	$	(32,409)		$	(53,392)		$	(9,186)		$	(8,717)		$	(10,797)		$	—		$	(114,501)
Nine months ended September 30, 2020	Infrastructure			Well Completion(a)			Sand			Drilling			All Other			Eliminations			Total
Revenue from external customers	$	99,307		$	74,549		$	22,421		$	7,166		$	24,583		$	—		$	228,026
Intersegment revenues	—			1,080			95			16			2,046			(3,237)			—
Total revenue	99,307			75,629			22,516			7,182			26,629			(3,237)			228,026
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion	80,780			40,454			21,845			9,592			23,917			—			176,588
Intersegment cost of revenues	197			1,410			—			151			1,479			(3,237)			—
Total cost of revenue	80,977			41,864			21,845			9,743			25,396			(3,237)			176,588
Selling, general and administrative	19,001			5,347			3,737			2,776			5,816			—			36,677
Depreciation, depletion, amortization and accretion	22,416			23,346			7,380			7,814			12,174			—			73,130
Impairment of goodwill	—			53,406			—			—			1,567			—			54,973
Impairment of other long-lived assets	—			4,203			—			326			8,368			—			12,897
Operating loss	(23,087)			(52,537)			(10,446)			(13,477)			(26,692)			—			(126,239)
Interest expense, net	2,091			857			217			450			592			—			4,207
Other (income) expense, net	(24,082)			(2,444)			1,753			(251)			(697)			—			(25,721)
Loss before income taxes	$	(1,096)		$	(50,950)		$	(12,416)		$	(13,676)		$	(26,587)		$	—		$	(104,725)

a.	Mammoth changed the name of its pressure pumping segment to the well completion segment during the fourth quarter of 2020.

 

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, 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 and interest on trade accounts receivable) 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												Nine Months Ended
	September 30,								June 30,				September 30,
Reconciliation of Adjusted EBITDA to net (loss) income:	2021				2020				2021				2021				2020
Net (loss) income	$	(40,901)			$	3,430			$	(34,790)			$	(88,131)			$	(95,746)
Depreciation, depletion, amortization and accretion expense	19,148				23,132				20,265				60,559				73,130
Impairment of goodwill	—				—				—				—				54,973
Impairment of other long-lived assets	547				—				—				547				12,897
Public offering costs	13				—				77				91				—
Stock based compensation	252				353				354				950				1,598
Interest expense, net	1,484				1,098				1,169				3,878				4,207
Other (income) expense, net	(11,056)				(9,042)				14,998				(5,489)				(25,721)
Benefit for income taxes	(7,187)				(6,193)				(16,560)				(26,370)				(8,979)
Interest on trade accounts receivable	7,963				9,285				9,017				25,138				26,052
Adjusted EBITDA	$	(29,737)			$	22,063			$	(5,470)			$	(28,827)			$	42,411

 

Infrastructure Services
	Three Months Ended												Nine Months Ended
	September 30,								June 30,				September 30,
Reconciliation of Adjusted EBITDA to net (loss) income:	2021				2020				2021				2021				2020
Net (loss) income	$	(2,288)			$	6,123			$	(23,715)			$	(29,946)			$	(6,182)
Depreciation and amortization expense	4,933				7,294				5,899				17,499				22,416
Public offering costs	(7)				—				43				37				—
Stock based compensation	96				139				158				388				424
Interest expense	971				623				656				2,287				2,091
Other (income) expense, net	(9,256)				(8,375)				15,904				(2,663)				(24,082)
Provision (benefit) for income taxes	3,947				1,645				(8,838)				(2,463)				5,085
Interest on trade accounts receivable	9,290				8,170				9,017				26,980				23,796
Adjusted EBITDA	$	7,686			$	15,619			$	(876)			$	12,119			$	23,548

 

Well Completion Services
	Three Months Ended												Nine Months Ended
	September 30,								June 30,				September 30,
Reconciliation of Adjusted EBITDA to net (loss) income:	2021				2020				2021				2021				2020
Net (loss) income	$	(40,711)			$	799			$	(8,249)			$	(53,391)			$	(50,951)
Depreciation and amortization expense	6,538				7,189				6,447				19,668				23,346
Impairment of goodwill	—				—				—				—				53,406
Impairment of other long-lived assets	—				—				—				—				4,203
Public offering costs	19				—				12				31				—
Stock based compensation	95				76				75				253				458
Interest expense	215				253				219				688				857
Other expense (income), net	755				(1,156)				1				1,196				(2,444)
Interest on trade accounts receivable	(1,327)				1,073				—				(1,841)				2,206
Adjusted EBITDA	$	(34,416)			$	8,234			$	(1,495)			$	(33,396)			$	31,081

 

Natural Sand Proppant Services
	Three Months Ended												Nine Months Ended
	September 30,								June 30,				September 30,
Reconciliation of Adjusted EBITDA to net loss:	2021				2020				2021				2021				2020
Net loss	$	(4,611)			$	(3,741)			$	(3,929)			$	(9,186)			$	(12,415)
Depreciation, depletion, amortization and accretion expense	2,533				2,700				2,387				7,059				7,380
Public offering costs	—				—				12				12				—
Stock based compensation	32				77				65				163				354
Interest expense	107				70				90				291				217
Other income (expense), net	(46)				1,792				(53)				(892)				1,753
Interest on trade accounts receivable	—				26				—				(1)				26
Adjusted EBITDA	$	(1,985)			$	924			$	(1,428)			$	(2,554)			$	(2,685)

 

Drilling Services
	Three Months Ended												Nine Months Ended
	September 30,								June 30,				September 30,
Reconciliation of Adjusted EBITDA to net loss:	2021				2020				2021				2021				2020
Net loss	$	(2,579)			$	(3,508)			$	(2,826)			$	(8,717)			$	(13,676)
Depreciation expense	1,942				2,294				2,079				6,185				7,814
Impairment of other long-lived assets	—				—				—				—				326
Acquisition related costs	—				—				—				—				—
Public offering costs	—				—				2				2				—
Stock based compensation	6				38				28				71				166
Interest expense	56				60				58				177				449.501
Other (income) expense, net	(66)				20				(127)				(201)				(251)
Adjusted EBITDA	$	(641)			$	(1,096)			$	(786)			$	(2,483)			$	(5,171)

 

Other Services(a)
	Three Months Ended												Nine Months Ended
	September 30,								June 30,				September 30,
Reconciliation of Adjusted EBITDA to net income (loss):	2021				2020				2021				2021				2020
Net income (loss)	$	9,288			$	3,756			$	3,929			$	13,109			$	(12,522)
Depreciation, amortization and accretion expense	3,202				3,655				3,453				10,148				12,174
Impairment of goodwill	—				—				—				—				1,567
Impairment of other long-lived assets	547				—				—				547				8,368
Public offering costs	1				—				8				9				—
Stock based compensation	23				23				28				75				196
Interest expense, net	135				92				146				435				592
Other (income) expense, net	(2,443)				(1,323)				(727)				(2,929)				(697)
Benefit for income taxes	(11,134)				(7,838)				(7,722)				(23,907)				(14,064)
Interest on trade accounts receivable	—				16				—				—				25
Adjusted EBITDA	$	(381)			$	(1,619)			$	(885)			$	(2,513)			$	(4,361)

a.	Includes results for Mammoth's aviation, coil tubing, pressure control, equipment rentals, crude oil hauling, full-service transportation and remote accommodations, equipment manufacturing and infrastructure engineering and design services and corporate related activities. The Company's corporate related activities do not generate revenue.

Adjusted Net (Loss) Income and Adjusted (Loss) Income per Share

Adjusted net (loss) income and adjusted basic and diluted (loss) income per share are supplemental non-GAAP financial measures that are used by management to evaluate the Company's operating and financial performance. 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												Nine Months Ended
	September 30,								June 30,				September 30,
	2021				2020				2021				2021				2020
	(in thousands, except per share amounts)
Net (loss) income, as reported	$	(40,901)			$	3,430			$	(34,790)			$	(88,131)			$	(95,746)
Impairment of goodwill	—				—				—				—				54,973
Impairment of other long-lived assets	547				—				—				547				12,897
Adjusted net (loss) income	$	(40,354)			$	3,430			$	(34,790)			$	(87,584)			$	(27,876)
Basic (loss) income per share, as reported	$	(0.88)			$	0.07			$	(0.75)			$	(1.90)			$	(2.10)
Impairment of goodwill	—				—				—				—				1.21
Impairment of other long-lived assets	0.01				—				—				0.01				0.28
Adjusted basic (loss) income per share	$	(0.87)			$	0.07			$	(0.75)			$	(1.89)			$	(0.61)
Diluted (loss) income per share, as reported	$	(0.88)			$	0.07			$	(0.75)			$	(1.90)			$	(2.10)
Impairment of goodwill	—				—				—				—				1.21
Impairment of other long-lived assets	0.01				—				—				0.01				0.28
Adjusted diluted (loss) income per share	$	(0.87)			$	0.07			$	(0.75)			$	(1.89)			$	(0.61)

 

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SOURCE Mammoth Energy Services, Inc.

FAQ

What were Mammoth Energy's Q3 2021 earnings results?

Mammoth Energy reported Q3 2021 revenue of $57.5 million, a net loss of $40.9 million, and adjusted EBITDA of ($29.7) million.

How did the Q3 2021 revenues compare to previous quarters for TUSK?

Revenue decreased from $70.5 million in Q3 2020, but increased from $47.4 million in Q2 2021.

What significant expenses did Mammoth incur in Q3 2021?

The company incurred a $32.6 million expense related to a settlement with Gulfport Energy.

What is the future outlook for Mammoth Energy's infrastructure services?

CEO Arty Straehla expressed optimism about increased bidding activity and funding opportunities from a new federal infrastructure bill.