Mammoth Energy Services, Inc. Announces PREPA's Payment of $50.6 Million and Reports Fourth Quarter and Full Year 2023 Operational and Financial Results
OKLAHOMA CITY, March 1, 2024 /PRNewswire/ -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ: TUSK) today announced payment of $50.6 million from the Puerto Rico Electric Power Authority ("PREPA") for a portion of the work its wholly-owned subsidiary Cobra Acquisitions LLC ("Cobra") completed in the aftermath of Hurricane Maria. This is in addition to $13.4 million paid by PREPA in January 2024. As previously announced, on December 1, 2023, Cobra entered into an agreement to transfer approximately $54.4 million of its outstanding receivable with PREPA to SPCP Group, LLC ("SPCP Group"). The aggregate payments from PREPA in 2024 totaling $64.0 million fully satisfied the obligations to SPCP Group and resulted in Cobra receiving approximately $9.6 million in cash.
Mark Layton, Chief Financial Officer of Mammoth commented, "We're pleased to have received these payments from PREPA, which has allowed us to extinguish the liability owed to SPCP Group and collect nearly $10 million in cash. We continue to pursue payment of the outstanding amounts owed to Cobra, including the associated interest, as these payments represent only a portion of the amounts still owed to us."
In addition, today Mammoth reported financial and operational results for the fourth quarter and full year ended December 31, 2023.
Financial Overview for the Fourth Quarter and Full Year 2023:
Total revenue was $52.8 million for the fourth quarter of 2023 compared to $102.9 million for the same quarter of 2022 and $65.0 million for the third quarter of 2023. Total revenue for the full year of 2023 was $309.5 million, a decrease of 15% compared to $362.1 million in 2022.
Net loss for the fourth quarter of 2023 was $6.0 million, or $0.12 loss per diluted share, compared to net income of $4.8 million, or $0.10 per diluted share, for the same quarter of 2022 and net loss of $1.1 million, or $0.02 loss per diluted share, for the third quarter of 2023. Net loss for the full year of 2023 was $3.2 million, or $0.07 per fully diluted share, compared to net loss of $0.6 million, or $0.01 per fully diluted share for 2022.
Adjusted EBITDA (as defined and reconciled below) was $10.5 million for the fourth quarter of 2023, compared to $24.1 million for the same quarter of 2022 and $13.4 million for the third quarter of 2023. Adjusted EBITDA was $71.0 million for the full year of 2023 compared to $86.1 million for 2022.
Arty Straehla, Chief Executive Officer of Mammoth commented, "The fourth quarter proved to be challenging, largely due to additional deferred activity by exploration and production companies, commodity price fluctuations, and customer budget exhaustion. Despite the operational softness we experienced this year, 2023 marked several accomplishments for Mammoth as we completed a significant debt refinancing transaction, began receiving payments from PREPA on our outstanding receivable and entered into an agreement to monetize a portion of our outstanding PREPA receivable.
"In 2023, we entered into a new revolving credit facility agreement and a new term loan agreement, which refinanced, in full, Mammoth's indebtedness outstanding under our previous revolving credit facility. We believe these new agreements provide Mammoth with a solid liquidity base for years to come. During 2023, we also received our first payments from PREPA in more than four years totaling $22.2 million. In addition, we entered into an agreement to monetize a portion of our outstanding receivable with PREPA, which allowed us to increase liquidity and invest in our business. We used a portion of the proceeds to repay in full our outstanding borrowings under the new revolving credit facility, which currently remains undrawn. We plan to use the remainder of the proceeds to invest back into our business, which may include upgrading an additional hydraulic fracturing fleet with dual fuel capabilities. This incremental dual fuel fleet would result in three of our six fleets having dual fuel capabilities."
Commenting further, Straehla said, "We exited 2023 with a strong balance sheet and a secure financing structure that positions Mammoth for future growth. We have entered 2024 with an improving line of sight, particularly in our infrastructure and sand divisions, and we will be opportunistic in our well completions business as commodity prices improve and activity increases. I am proud of the hard work and perseverance that our teams have demonstrated across our organization. Our continued commitment to safety and high-quality standards propels our organization forward."
Well Completion Services
Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $16.1 million on 669 stages for the fourth quarter of 2023, compared to $51.4 million on 1,837 stages for the same quarter of 2022 and $20.3 million on 577 stages for the third quarter of 2023. On average, 0.9 of the Company's fleets were active for the fourth quarter of 2023 compared to an average utilization of 3.4 fleets during the same quarter of 2022 and 1.2 fleets during the third quarter of 2023.
The well completion services division contributed revenues (inclusive of inter-segment revenues) of $131.3 million on 4,220 stages for the full year of 2023, down from $170.7 million on 6,149 stages for 2022. On average, 1.8 of the Company's fleets were active in 2023 compared to 3.0 fleets in 2022.
Infrastructure Services
Mammoth's infrastructure services division contributed revenue of $27.2 million for the fourth quarter of 2023 compared to $29.6 million for the same quarter of 2022 and $26.7 million for the third quarter of 2023. Average crew count was 78 crews during the fourth quarter of 2023 compared to 93 crews during the same quarter of 2022 and 81 crews during the third quarter of 2023.
The infrastructure services division contributed revenues of $110.5 million for the full year of 2023 compared to $111.5 million for 2022. Average crew count declined to 83 crews for 2023 compared to 91 crews for 2022.
Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $4.5 million for the fourth quarter of 2023 compared to $13.8 million for the same quarter of 2022 and $10.6 million for the third quarter of 2023. In the fourth quarter of 2023, the Company sold approximately 104,000 tons of sand at an average sales price of $23.62 per ton compared to sales of approximately 366,000 tons of sand at an average sales price of $29.80 per ton during the same quarter of 2022. In the third quarter of 2023, sales were approximately 352,000 tons of sand at an average price of $30.18 per ton.
The natural sand proppant division contributed revenues (inclusive of inter-segment revenues) of $39.1 million for the full year of 2023 compared to $51.4 million for 2022. The Company sold 1.2 million tons of sand during 2023, a decrease from 1.4 million tons of sand during 2022. The Company's average sales price for the sand sold during 2023 was $29.86 per ton, an increase from $27.11 per ton average sales price during 2022.
Drilling Services
Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $0.6 million for the fourth quarter of 2023 compared to $1.9 million for the same quarter of 2022 and $2.3 million for the third quarter of 2023. The drilling services division contributed revenues of $7.1 million for the full year of 2023, compared to $8.4 million for 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 $4.9 million for the fourth quarter of 2023 compared to $6.9 million for the same quarter of 2022 and $6.0 million for the third quarter of 2023. The Company's other services contributed revenues of $24.1 million for the full year of 2023, compared to $25.2 million for 2022.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses were $8.3 million for the fourth quarter of 2023 compared to $13.0 million for the same quarter of 2022 and $10.4 million for the third quarter of 2023. SG&A expenses were $37.5 million for the full year of 2023 compared to $39.6 million for 2022.
Following is a breakout of SG&A expense (in thousands):
Three Months Ended |
Twelve Months Ended |
||||||||
December 31, |
September 30, |
December 31, |
|||||||
2023 |
2022 |
2023 |
2023 |
2022 |
|||||
Cash expenses: |
|||||||||
Compensation and benefits |
$ 3,898 |
$ 3,932 |
$ 3,392 |
$ 15,563 |
$ 13,729 |
||||
Professional services |
2,559 |
3,434 |
4,684 |
13,448 |
13,501 |
||||
Other(a) |
1,808 |
1,885 |
2,105 |
7,693 |
8,012 |
||||
Total cash SG&A expense |
8,265 |
9,251 |
10,181 |
36,704 |
35,242 |
||||
Non-cash expenses: |
|||||||||
Change in provision for expected credit losses |
(177) |
3,501 |
11 |
(591) |
3,389 |
||||
Stock based compensation |
219 |
241 |
219 |
1,345 |
923 |
||||
Total non-cash SG&A expense |
42 |
3,742 |
230 |
754 |
4,312 |
||||
Total SG&A expense |
$ 8,307 |
$ 12,993 |
$ 10,411 |
$ 37,458 |
$ 39,554 |
||||
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 16% for the fourth quarter of 2023 compared to 13% for the same quarter of 2022 and 16% for the third quarter of 2023. SG&A expenses, as a percentage of total revenue, were 12% for the full year of 2023 compared to 11% for 2022.
Interest Expense and Financing Charges, net
Interest expense and financing charges, net were $6.8 million for the fourth quarter of 2023 compared to $3.2 million for the same quarter of 2022 and $2.9 million for the third quarter of 2023. Interest expense and financing charges, net were $16.2 million for the full year of 2023 compared to $11.5 million for 2022.
On December 1, 2023, Cobra entered into an agreement to transfer approximately $54.4 million of its outstanding receivable with PREPA to SPCP Group in exchange for net proceeds of $46.1 million. During the fourth quarter of 2023, the Company incurred financing charges totaling $2.8 million in relation to this transaction. Mammoth expects to recognize a financing charge totaling approximately $5.5 million during the first quarter of 2024 related to the termination of the Assignment Agreement.
Liquidity
As of December 31, 2023, Mammoth had cash on hand of $16.6 million. As of December 31, 2023, the Company's revolving credit facility was undrawn, the borrowing base was $27.0 million and there was $20.7 million of available borrowing capacity under the revolving credit facility, after giving effect to $6.3 million of outstanding letters of credit. As of December 31, 2023, Mammoth had total liquidity of $37.3 million.
As of February 28, 2024, Mammoth had cash on hand of $10.5 million, no outstanding borrowings under its revolving credit facility, and a borrowing base of $23.3 million. As of February 28, 2024, the Company had $17.0 million of available borrowing capacity under its revolving credit facility and total liquidity of $27.5 million. These amounts do not include $9.6 million in cash received on February 29, 2024.
Capital Expenditures
The following table summarizes Mammoth's capital expenditures by operating division for the periods indicated (in thousands):
Three Months Ended |
Twelve Months Ended |
||||||||
December 31, |
September 30, |
December 31, |
|||||||
2023 |
2022 |
2023 |
2023 |
2022 |
|||||
Well completion services(a) |
$ 3,170 |
$ 3,374 |
$ 4,651 |
$ 17,931 |
$ 11,421 |
||||
Infrastructure services(b) |
373 |
62 |
69 |
716 |
885 |
||||
Natural sand proppant services(c) |
223 |
54 |
— |
223 |
88 |
||||
Drilling services(c) |
13 |
54 |
98 |
110 |
95 |
||||
Other(d) |
229 |
121 |
72 |
312 |
401 |
||||
Eliminations |
124 |
(26) |
(165) |
103 |
(153) |
||||
Total capital expenditures |
$ 4,132 |
$ 3,639 |
$ 4,725 |
$ 19,395 |
$ 12,737 |
||||
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 equipment for the Company's rental businesses for the periods presented. |
Mammoth's full year 2024 capital expenditure budget is approximately $15 million.
Conference Call Information
Mammoth will host a conference call on Friday, March 1, 2024 at 9:00 a.m. Central time (10:00 a.m. Eastern time) to discuss its fourth quarter and full year 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 [email protected].
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, plans for stock repurchases under its stock repurchase program, 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: 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 and the Israel-Hamas war on the global energy and capital markets and global stability; performance of contracts and supply chain disruptions; inflationary pressures; high 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 by 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 comply with the applicable financial covenants and other terms and conditions under Mammoth's revolving credit facility and term loan; 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 |
December 31, |
December 31, |
||
2023 |
2022 |
|||
CURRENT ASSETS |
(in thousands) |
|||
Cash and cash equivalents |
$ 16,556 |
$ 17,282 |
||
Restricted Cash |
7,742 |
— |
||
Accounts receivable, net |
447,155 |
456,465 |
||
Receivables from related parties, net |
47 |
223 |
||
Inventories |
12,653 |
8,883 |
||
Prepaid expenses |
12,181 |
13,219 |
||
Other current assets |
591 |
620 |
||
Total current assets |
496,925 |
496,692 |
||
Property, plant and equipment, net |
113,905 |
138,066 |
||
Sand reserves |
58,528 |
61,830 |
||
Operating lease right-of-use assets |
9,551 |
10,656 |
||
Intangible assets, net |
913 |
1,782 |
||
Goodwill |
9,214 |
11,717 |
||
Deferred income tax asset |
1,844 |
— |
||
Other non-current assets |
7,599 |
3,935 |
||
Total assets |
$ 698,479 |
$ 724,678 |
||
LIABILITIES AND EQUITY |
||||
CURRENT LIABILITIES |
||||
Accounts payable |
$ 27,508 |
$ 47,391 |
||
Accrued expenses and other current liabilities |
86,713 |
52,297 |
||
Accrued expenses and other current liabilities - related parties |
1,241 |
— |
||
Current operating lease liability |
5,771 |
5,447 |
||
Current portion of long-term debt |
— |
83,520 |
||
Income taxes payable |
61,320 |
48,557 |
||
Total current liabilities |
182,553 |
237,212 |
||
Long-term debt from related parties |
42,809 |
— |
||
Deferred income tax liabilities |
628 |
471 |
||
Long-term operating lease liability |
3,534 |
4,913 |
||
Asset retirement obligation |
4,140 |
3,981 |
||
Other long-term liabilities |
4,715 |
15,485 |
||
Total liabilities |
238,379 |
262,062 |
||
COMMITMENTS AND CONTINGENCIES |
||||
EQUITY |
||||
Equity: |
||||
Common stock, $0.01 par value, 200,000,000 shares authorized, 47,941,652 and 47,312,270 |
479 |
473 |
||
Additional paid in capital |
539,558 |
539,138 |
||
Accumulated deficit |
(76,317) |
(73,154) |
||
Accumulated other comprehensive loss |
(3,620) |
(3,841) |
||
Total equity |
460,100 |
462,616 |
||
Total liabilities and equity |
$ 698,479 |
$ 724,678 |
||
MAMMOTH ENERGY SERVICES, INC. |
|||||||||
Three Months Ended |
Twelve Months Ended |
||||||||
December 31, |
September 30, |
December 31, |
|||||||
2023 |
2022 |
2023 |
2023 |
2022 |
|||||
(in thousands, except per share amounts) |
|||||||||
REVENUE |
|||||||||
Services revenue |
$ 48,087 |
$ 88,963 |
$ 54,025 |
$ 269,227 |
$ 311,968 |
||||
Services revenue - related parties |
139 |
110 |
252 |
980 |
1,133 |
||||
Product revenue |
4,556 |
13,836 |
10,682 |
39,285 |
48,985 |
||||
Total revenue |
52,782 |
102,909 |
64,959 |
309,492 |
362,086 |
||||
COST AND EXPENSES |
|||||||||
Services cost of revenue (exclusive of depreciation, |
40,972 |
67,502 |
45,082 |
219,876 |
241,323 |
||||
Services cost of revenue - related parties |
114 |
135 |
120 |
475 |
541 |
||||
Product cost of revenue (exclusive of depreciation, |
4,692 |
9,226 |
7,615 |
27,489 |
36,723 |
||||
Selling, general and administrative |
8,307 |
12,993 |
10,411 |
37,458 |
39,554 |
||||
Depreciation, depletion, amortization and accretion |
8,271 |
13,786 |
11,233 |
45,110 |
64,271 |
||||
Gains on disposal of assets, net |
(2,757) |
(170) |
(2,450) |
(6,041) |
(3,908) |
||||
Impairment of goodwill |
— |
— |
1,810 |
1,810 |
— |
||||
Total cost and expenses |
59,599 |
103,472 |
73,821 |
326,177 |
378,504 |
||||
Operating loss |
(6,817) |
(563) |
(8,862) |
(16,685) |
(16,418) |
||||
OTHER INCOME (EXPENSE) |
|||||||||
Interest expense and financing charges, net |
(5,570) |
(3,237) |
(2,876) |
(14,955) |
(11,506) |
||||
Interest expense and financing charges, net - related parties |
(1,241) |
— |
— |
(1,241) |
— |
||||
Other income, net |
10,964 |
10,737 |
14,088 |
42,015 |
40,912 |
||||
Total other income |
4,153 |
7,500 |
11,212 |
25,819 |
29,406 |
||||
(Loss) income before income taxes |
(2,664) |
6,937 |
2,350 |
9,134 |
12,988 |
||||
Provision for income taxes |
3,291 |
2,165 |
3,438 |
12,297 |
13,607 |
||||
Net (loss) income |
$ (5,955) |
$ 4,772 |
$ (1,088) |
$ (3,163) |
$ (619) |
||||
OTHER COMPREHENSIVE (LOSS) INCOME |
|||||||||
Foreign currency translation adjustment |
266 |
(59) |
(275) |
221 |
(910) |
||||
Comprehensive (loss) income |
$ (5,689) |
$ 4,713 |
$ (1,363) |
$ (2,942) |
$ (1,529) |
||||
Net (loss) income per share (basic) |
$ (0.12) |
$ 0.10 |
$ (0.02) |
$ (0.07) |
$ (0.01) |
||||
Net (loss) income per share (diluted) |
$ (0.12) |
$ 0.10 |
$ (0.02) |
$ (0.07) |
$ (0.01) |
||||
Weighted average number of shares outstanding (basic) |
47,942 |
47,312 |
47,942 |
47,777 |
47,175 |
||||
Weighted average number of shares outstanding (diluted) |
47,942 |
47,963 |
47,942 |
47,777 |
47,175 |
||||
MAMMOTH ENERGY SERVICES, INC. |
|||
Twelve Months Ended |
|||
December 31, |
|||
2023 |
2022 |
||
(in thousands) |
|||
Cash flows from operating activities: |
|||
Net loss |
$ (3,163) |
$ (619) |
|
Adjustments to reconcile net loss to cash provided by operating activities: |
|||
Stock based compensation |
1,345 |
923 |
|
Depreciation, depletion, accretion and amortization |
45,110 |
64,271 |
|
Amortization of debt origination costs |
1,288 |
777 |
|
Change in provision for expected credit losses |
(591) |
3,389 |
|
Gains on disposal of assets |
(6,041) |
(3,908) |
|
Gains from sales of equipment damaged or lost down-hole |
(335) |
(604) |
|
Impairment of goodwill |
1,810 |
— |
|
Gain on sale of business |
(2,080) |
— |
|
Deferred income taxes |
(1,687) |
7,700 |
|
Other |
(693) |
(117) |
|
Changes in assets and liabilities: |
|||
Accounts receivable, net |
11,099 |
(52,392) |
|
Receivables from related parties, net |
176 |
(135) |
|
Inventories |
(3,770) |
(517) |
|
Prepaid expenses and other assets |
354 |
(710) |
|
Accounts payable |
(18,485) |
6,680 |
|
Accrued expenses and other liabilities |
(6,949) |
(15,272) |
|
Accrued expenses and other liabilities - related parties |
1,241 |
— |
|
Income taxes payable |
12,757 |
5,800 |
|
Net cash provided by operating activities |
31,386 |
15,266 |
|
Cash flows from investing activities: |
|||
Purchases of property and equipment |
(19,395) |
(12,737) |
|
Business divestitures, net of cash transferred |
3,276 |
— |
|
Proceeds from disposal of property and equipment |
7,333 |
10,613 |
|
Net cash used in investing activities |
(8,786) |
(2,124) |
|
Cash flows from financing activities: |
|||
Borrowings on long-term debt |
201,091 |
197,975 |
|
Borrowings on long-term debt - related parties |
43,874 |
— |
|
Repayments of long-term debt |
(284,610) |
(199,430) |
|
Proceeds from financing transaction |
46,120 |
— |
|
Proceeds from sale-leaseback transaction |
— |
4,589 |
|
Payments on sale-leaseback transaction |
(4,958) |
(4,429) |
|
Principal payments on financing leases and equipment financing notes |
(12,212) |
(4,306) |
|
Debt issuance costs |
(3,972) |
— |
|
Other |
(919) |
— |
|
Net cash used in financing activities |
(15,586) |
(5,601) |
|
Effect of foreign exchange rate on cash |
2 |
(158) |
|
Net change in cash, cash equivalents and restricted cash |
7,016 |
7,383 |
|
Cash, cash equivalents and restricted cash at beginning of period |
17,282 |
9,899 |
|
Cash, cash equivalents and restricted cash at end of period |
$ 24,298 |
$ 17,282 |
|
Supplemental disclosure of cash flow information: |
|||
Cash paid for interest |
$ 12,017 |
$ 10,164 |
|
Cash paid for income taxes, net of refunds received |
$ 897 |
$ 106 |
|
Supplemental disclosure of non-cash transactions: |
|||
Purchases of property and equipment included in accounts payable |
$ 3,339 |
$ 4,736 |
|
Right-of-use assets obtained for financing lease liabilities |
$ 1,417 |
$ 3,058 |
|
MAMMOTH ENERGY SERVICES, INC. |
|||||||
Three Months Ended December 31, 2023 |
Well |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ 15,962 |
$ 27,229 |
$ 4,464 |
$ 625 |
$ 4,502 |
$ — |
$ 52,782 |
Intersegment revenues |
116 |
— |
— |
— |
360 |
(476) |
— |
Total revenue |
16,078 |
27,229 |
4,464 |
625 |
4,862 |
(476) |
52,782 |
Cost of revenue, exclusive of depreciation, |
14,248 |
22,668 |
4,419 |
1,059 |
3,384 |
— |
45,778 |
Intersegment cost of revenues |
216 |
119 |
— |
— |
141 |
(476) |
— |
Total cost of revenue |
14,464 |
22,787 |
4,419 |
1,059 |
3,525 |
(476) |
45,778 |
Selling, general and administrative |
1,365 |
4,987 |
973 |
193 |
789 |
— |
8,307 |
Depreciation, depletion, amortization and accretion |
3,506 |
1,023 |
1,339 |
1,017 |
1,386 |
— |
8,271 |
(Gains) losses on disposal of assets, net |
(75) |
(71) |
3 |
(1,577) |
(1,037) |
— |
(2,757) |
Operating (loss) income |
(3,182) |
(1,497) |
(2,270) |
(67) |
199 |
— |
(6,817) |
Interest expense and financing charges, net |
1,975 |
4,394 |
119 |
113 |
210 |
— |
6,811 |
Other expense (income), net |
1 |
(10,539) |
(5) |
(33) |
(388) |
— |
(10,964) |
(Loss) income before income taxes |
$ (5,158) |
$ 4,648 |
$ (2,384) |
$ (147) |
$ 377 |
$ — |
$ (2,664) |
Three Months Ended December 31, 2022 |
Well |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ 51,292 |
$ 29,559 |
$ 13,817 |
$ 1,919 |
$ 6,322 |
$ — |
$ 102,909 |
Intersegment revenues |
147 |
— |
25 |
— |
602 |
(774) |
— |
Total revenue |
51,439 |
29,559 |
13,842 |
1,919 |
6,924 |
(774) |
102,909 |
Cost of revenue, exclusive of depreciation, |
36,108 |
24,387 |
10,081 |
1,756 |
4,531 |
— |
76,863 |
Intersegment cost of revenues |
475 |
23 |
— |
32 |
242 |
(772) |
— |
Total cost of revenue |
36,583 |
24,410 |
10,081 |
1,788 |
4,773 |
(772) |
76,863 |
Selling, general and administrative |
2,328 |
5,091 |
4,397 |
184 |
993 |
— |
12,993 |
Depreciation, depletion, amortization and accretion |
4,140 |
3,675 |
2,015 |
1,390 |
2,566 |
— |
13,786 |
(Gains) losses on disposal of assets, net |
(68) |
— |
1 |
— |
(103) |
— |
(170) |
Operating income (loss) |
8,456 |
(3,617) |
(2,652) |
(1,443) |
(1,305) |
(2) |
(563) |
Interest expense and financing charges, net |
617 |
2,046 |
201 |
134 |
239 |
— |
3,237 |
Other expense (income), net |
1 |
(10,522) |
(4) |
— |
(212) |
— |
(10,737) |
Income (loss) before income taxes |
$ 7,838 |
$ 4,859 |
$ (2,849) |
$ (1,577) |
$ (1,332) |
$ (2) |
$ 6,937 |
Three months ended September 30, 2023 |
Well |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ 20,166 |
$ 26,712 |
$ 10,633 |
$ 2,336 |
$ 5,112 |
$ — |
$ 64,959 |
Intersegment revenues |
161 |
— |
— |
— |
909 |
(1,070) |
— |
Total revenue |
20,327 |
26,712 |
10,633 |
2,336 |
6,021 |
(1,070) |
64,959 |
Cost of revenue, exclusive of depreciation, |
17,528 |
22,042 |
6,977 |
2,194 |
4,076 |
— |
52,817 |
Intersegment cost of revenues |
325 |
10 |
— |
— |
735 |
(1,070) |
— |
Total cost of revenue |
17,853 |
22,052 |
6,977 |
2,194 |
4,811 |
(1,070) |
52,817 |
Selling, general and administrative |
1,579 |
6,495 |
1,224 |
215 |
898 |
— |
10,411 |
Depreciation, depletion, amortization and accretion |
3,971 |
1,557 |
2,836 |
1,114 |
1,755 |
— |
11,233 |
Gains on disposal of assets, net |
(2,016) |
(311) |
— |
— |
(123) |
— |
(2,450) |
Impairment of goodwill |
— |
— |
— |
— |
1,810 |
— |
1,810 |
Operating loss |
(1,060) |
(3,081) |
(404) |
(1,187) |
(3,130) |
— |
(8,862) |
Interest expense and financing charges, net |
774 |
1,647 |
117 |
117 |
221 |
— |
2,876 |
Other income, net |
— |
(11,348) |
(6) |
— |
(2,734) |
— |
(14,088) |
(Loss) income before income taxes |
$ (1,834) |
$ 6,620 |
$ (515) |
$ (1,304) |
$ (617) |
$ — |
$ 2,350 |
Year ended December 31, 2023 |
Well |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ 130,771 |
$ 110,537 |
$ 39,106 |
$ 7,126 |
$ 21,952 |
$ — |
$ 309,492 |
Intersegment revenues |
517 |
— |
25 |
— |
2,102 |
(2,644) |
$ — |
Total revenue |
131,288 |
110,537 |
39,131 |
7,126 |
24,054 |
(2,644) |
309,492 |
Cost of revenue, exclusive of depreciation, |
107,405 |
90,478 |
26,324 |
7,095 |
16,538 |
— |
247,840 |
Intersegment cost of revenues |
1,246 |
149 |
— |
26 |
1,223 |
(2,644) |
$ — |
Total cost of revenue |
108,651 |
90,627 |
26,324 |
7,121 |
17,761 |
(2,644) |
247,840 |
Selling, general and administrative |
7,212 |
22,078 |
3,655 |
746 |
3,767 |
— |
37,458 |
Depreciation, depletion, amortization and accretion |
16,794 |
8,390 |
7,737 |
4,514 |
7,675 |
— |
45,110 |
Gains on disposal of assets, net |
(2,091) |
(510) |
(13) |
(1,577) |
(1,850) |
— |
(6,041) |
Impairment of goodwill |
— |
— |
— |
— |
1,810 |
— |
1,810 |
Operating income (loss) |
722 |
(10,048) |
1,428 |
(3,678) |
(5,109) |
— |
(16,685) |
Interest expense and financing charges, net |
4,502 |
9,753 |
540 |
489 |
912 |
— |
16,196 |
Other expense (income), net |
2 |
(39,252) |
(18) |
(33) |
(2,714) |
— |
(42,015) |
(Loss) income before income taxes |
$ (3,782) |
$ 19,451 |
$ 906 |
$ (4,134) |
$ (3,307) |
$ — |
$ 9,134 |
Year ended December 31, 2022 |
Well |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ 169,872 |
$ 111,452 |
$ 48,916 |
$ 8,380 |
$ 23,466 |
$ — |
$ 362,086 |
Intersegment revenues |
791 |
— |
2,475 |
— |
1,708 |
(4,974) |
— |
Total revenue |
170,663 |
111,452 |
51,391 |
8,380 |
25,174 |
(4,974) |
362,086 |
Cost of revenue, exclusive of depreciation, |
124,848 |
91,577 |
36,783 |
7,514 |
17,865 |
— |
278,587 |
Intersegment cost of revenues |
3,894 |
72 |
— |
85 |
923 |
(4,974) |
— |
Total cost of revenue |
128,742 |
91,649 |
36,783 |
7,599 |
18,788 |
(4,974) |
278,587 |
Selling, general and administrative |
8,642 |
19,147 |
7,171 |
606 |
3,988 |
— |
39,554 |
Depreciation, depletion, amortization and accretion |
22,103 |
16,171 |
8,732 |
5,811 |
11,454 |
— |
64,271 |
Gains on disposal of assets, net |
(615) |
(795) |
(89) |
— |
(2,409) |
— |
(3,908) |
Operating income (loss) |
11,791 |
(14,720) |
(1,206) |
(5,636) |
(6,647) |
— |
(16,418) |
Interest expense and financing charges, net |
1,940 |
7,390 |
753 |
435 |
988 |
— |
11,506 |
Other income, net |
(343) |
(40,470) |
(14) |
— |
(85) |
— |
(40,912) |
Income (loss) before income taxes |
$ 10,194 |
$ 18,360 |
$ (1,945) |
$ (6,071) |
$ (7,550) |
$ — |
$ 12,988 |
MAMMOTH ENERGY SERVICES, INC. |
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 (loss) income before depreciation, depletion, amortization and accretion expense, gains on disposal of assets, net, impairment of goodwill, stock based compensation, interest expense and financing charges, 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 (loss) income 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 (loss) income 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 (loss) income on a consolidated basis and for each of the Company's segments (in thousands): |
Consolidated |
|||||||||
Three Months Ended |
Years Ended |
||||||||
December 31, |
September 30, |
December 31, |
|||||||
Reconciliation of net (loss) income to Adjusted EBITDA: |
2023 |
2022 |
2023 |
2023 |
2022 |
||||
Net (loss) income |
$ (5,955) |
$ 4,772 |
$ (1,088) |
$ (3,163) |
$ (619) |
||||
Depreciation, depletion, amortization and accretion expense |
8,271 |
13,786 |
11,233 |
45,110 |
64,271 |
||||
Gains on disposal of assets, net |
(2,757) |
(170) |
(2,450) |
(6,041) |
(3,908) |
||||
Impairment of goodwill |
— |
— |
1,810 |
1,810 |
— |
||||
Stock based compensation |
219 |
241 |
219 |
1,345 |
923 |
||||
Interest expense and financing charges, net |
6,811 |
3,237 |
2,876 |
16,196 |
11,506 |
||||
Other income, net |
(10,964) |
(10,737) |
(14,088) |
(42,015) |
(40,912) |
||||
Provision for income taxes |
3,291 |
2,165 |
3,438 |
12,297 |
13,607 |
||||
Interest on trade accounts receivable |
11,543 |
10,785 |
11,443 |
45,440 |
41,276 |
||||
Adjusted EBITDA |
$ 10,459 |
$ 24,079 |
$ 13,393 |
$ 70,979 |
$ 86,144 |
||||
Well Completion Services |
|||||||||
Three Months Ended |
Years Ended |
||||||||
December 31, |
September 30, |
December 31, |
|||||||
Reconciliation of net (loss) income to Adjusted EBITDA: |
2023 |
2022 |
2023 |
2023 |
2022 |
||||
Net (loss) income |
$ (5,158) |
$ 7,838 |
$ (1,834) |
$ (3,782) |
$ 10,194 |
||||
Depreciation and amortization expense |
3,506 |
4,140 |
3,971 |
16,794 |
22,103 |
||||
Gains on disposal of assets, net |
(75) |
(68) |
(2,016) |
(2,091) |
(615) |
||||
Stock based compensation |
57 |
106 |
64 |
508 |
380 |
||||
Interest expense and financing charges, net |
1,975 |
617 |
774 |
4,502 |
1,940 |
||||
Other expense (income), net |
1 |
1 |
— |
2 |
(343) |
||||
Adjusted EBITDA |
$ 306 |
$ 12,634 |
$ 959 |
$ 15,933 |
$ 33,659 |
||||
Infrastructure Services |
|||||||||
Three Months Ended |
Years Ended |
||||||||
December 31, |
September 30, |
December 31, |
|||||||
Reconciliation of net income to Adjusted EBITDA: |
2023 |
2022 |
2023 |
2023 |
2022 |
||||
Net income |
$ 1,844 |
$ 1,609 |
$ 3,239 |
$ 8,237 |
$ 4,933 |
||||
Depreciation and amortization expense |
1,023 |
3,675 |
1,557 |
8,390 |
16,171 |
||||
Gains on disposal of assets, net |
(71) |
— |
(311) |
(510) |
(795) |
||||
Stock based compensation |
103 |
88 |
99 |
538 |
349 |
||||
Interest expense and financing charges, net |
4,394 |
2,046 |
1,647 |
9,753 |
7,390 |
||||
Other income, net |
(10,539) |
(10,522) |
(11,348) |
(39,252) |
(40,470) |
||||
Provision for income taxes |
2,804 |
3,250 |
3,381 |
11,214 |
13,427 |
||||
Interest on trade accounts receivable |
11,543 |
10,785 |
11,443 |
45,440 |
41,276 |
||||
Adjusted EBITDA |
$ 11,101 |
$ 10,931 |
$ 9,707 |
$ 43,810 |
$ 42,281 |
||||
Natural Sand Proppant Services |
|||||||||
Three Months Ended |
Years Ended |
||||||||
December 31, |
September 30, |
December 31, |
|||||||
Reconciliation of net (loss) income to Adjusted EBITDA: |
2023 |
2022 |
2023 |
2023 |
2022 |
||||
Net (loss) income |
$ (2,384) |
$ (2,849) |
$ (515) |
$ 906 |
$ (1,945) |
||||
Depreciation, depletion, amortization and accretion expense |
1,339 |
2,015 |
2,836 |
7,737 |
8,732 |
||||
Losses (gains) on disposal of assets, net |
3 |
1 |
— |
(13) |
(89) |
||||
Stock based compensation |
38 |
29 |
37 |
187 |
119 |
||||
Interest expense and financing charges, net |
119 |
201 |
117 |
540 |
753 |
||||
Other income, net |
(5) |
(4) |
(6) |
(18) |
(14) |
||||
Adjusted EBITDA |
$ (890) |
$ (607) |
$ 2,469 |
$ 9,339 |
$ 7,556 |
||||
Drilling Services |
|||||||||
Three Months Ended |
Years Ended |
||||||||
December 31, |
September 30, |
December 31, |
|||||||
Reconciliation of net loss to Adjusted EBITDA: |
2023 |
2022 |
2023 |
2023 |
2022 |
||||
Net loss |
$ (147) |
$ (1,577) |
$ (1,304) |
$ (4,134) |
$ (6,071) |
||||
Depreciation expense |
1,017 |
1,390 |
1,114 |
4,514 |
5,811 |
||||
Gains on disposal of assets, net |
(1,577) |
— |
— |
(1,577) |
— |
||||
Stock based compensation |
5 |
3 |
5 |
23 |
11 |
||||
Interest expense and financing charges, net |
113 |
134 |
117 |
489 |
435 |
||||
Other income, net |
(33) |
— |
— |
(33) |
— |
||||
Adjusted EBITDA |
$ (622) |
$ (50) |
$ (68) |
$ (718) |
$ 186 |
||||
Other Services(a) |
|||||||||
Three Months Ended |
Years Ended |
||||||||
December 31, |
September 30, |
December 31, |
|||||||
Reconciliation of net loss to Adjusted EBITDA: |
2023 |
2022 |
2023 |
2023 |
2022 |
||||
Net loss |
$ (110) |
$ (249) |
$ (674) |
$ (4,390) |
$ (7,730) |
||||
Depreciation, amortization and accretion expense |
1,386 |
2,566 |
1,755 |
7,675 |
11,454 |
||||
Gains on disposal of assets, net |
(1,037) |
(103) |
(123) |
(1,850) |
(2,409) |
||||
Impairment of goodwill |
— |
— |
1,810 |
1,810 |
— |
||||
Stock based compensation |
16 |
15 |
14 |
89 |
64 |
||||
Interest expense and financing charges, net |
210 |
239 |
221 |
912 |
988 |
||||
Other income, net |
(388) |
(212) |
(2,734) |
(2,714) |
(85) |
||||
Provision (benefit) for income taxes |
487 |
(1,085) |
57 |
1,083 |
180 |
||||
Adjusted EBITDA |
$ 564 |
$ 1,171 |
$ 326 |
$ 2,615 |
$ 2,462 |
||||
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. |
Adjusted Net (Loss) Income and Adjusted (Loss) Earnings per Share |
Adjusted net (loss) income and adjusted basic and diluted (loss) earnings per share are supplemental non-GAAP financial measures that are used by management to evaluate the Company's operating and financial performance. Mammoth defines adjusted net (loss) income as net (loss) income before impairment of goodwill. Mammoth defines adjusted basic and diluted (loss) earnings per share as (loss) earnings per share before the effects of impairment of goodwill and impairment of other long-lived assets. Management believes these measures provide meaningful information about the Company's performance by excluding certain non-cash charges, such as impairment of goodwill and impairment of other long-lived assets, that may not be indicative of the Company's ongoing operating results. Adjusted net (loss) income and adjusted (loss) earnings per share should not be considered in isolation or as a substitute for net (loss) income and (loss) earnings 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) income and adjusted (loss) earnings per share to the GAAP financial measures of net (loss) income and (loss) earnings per share for the periods specified. |
Three Months Ended |
Years Ended |
||||||||
December 31, |
September 30, |
December 31, |
|||||||
2023 |
2022 |
2023 |
2023 |
2022 |
|||||
(in thousands, except per share amounts) |
|||||||||
Net (loss) income, as reported |
$ (5,955) |
$ 4,772 |
$ (1,088) |
$ (3,163) |
$ (619) |
||||
Impairment of goodwill |
— |
— |
— |
1,810 |
— |
||||
Adjusted net (loss) income |
$ (5,955) |
$ 4,772 |
$ (1,088) |
$ (1,353) |
$ (619) |
||||
Basic (loss) earnings per share, as reported |
$ (0.12) |
$ 0.10 |
$ (0.02) |
$ (0.07) |
$ (0.01) |
||||
Impairment of goodwill |
— |
— |
— |
0.04 |
— |
||||
Adjusted basic (loss) earnings per share |
$ (0.12) |
$ 0.10 |
$ (0.02) |
$ (0.03) |
$ (0.01) |
||||
Diluted (loss) earnings per share, as reported |
$ (0.12) |
$ 0.10 |
$ (0.02) |
$ (0.07) |
$ (0.01) |
||||
Impairment of goodwill |
— |
— |
— |
0.04 |
— |
||||
Adjusted diluted (loss) earnings per share |
$ (0.12) |
$ 0.10 |
$ (0.02) |
$ (0.03) |
$ (0.01) |
||||
SOURCE Mammoth Energy Services, Inc.
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