Loading, Please Wait...

CST: 13/11/2019 06:50:10   

Mammoth Energy Services, Inc. Announces Third Quarter 2019 Operational and Financial Results

5 Days ago

OKLAHOMA CITY, Nov. 07, 2019 (GLOBE NEWSWIRE) -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ: TUSK) today reported financial and operational results for the third quarter ended September 30, 2019.

Financial Highlights for the Third Quarter of 2019:

Total revenue was $113.4 million for the three months ended September 30, 2019, down from $181.8 million for the three months ended June 30, 2019 and down from $384.0 million for the three months ended September 30, 2018.

Net loss for the three months ended September 30, 2019 was $35.7 million, or $0.79 per fully diluted share, as compared to net loss of $10.9 million, or $0.24 per fully diluted share, for the three months ended June 30, 2019 and net income of $69.5 million, or $1.54 per fully diluted share, for the three months ended September 30, 2018.

Adjusted EBITDA (as defined and reconciled below) was ($3.8) million for the three months ended September 30, 2019, down from $8.6 million for the three months ended June 30, 2019 and down from $183.6 million for the three months ended September 30, 2018.

Arty Straehla, Mammoth's Chief Executive Officer, stated, “Given the current state of the oilfield services market, we continue to look for investment opportunities in the industrial sector that enhance our current service offerings and further diversify our cash flow. With that objective in mind, during the third quarter we started two new businesses organically, engineering services and equipment manufacturing. The startup of a manufacturing business will enable us to repair our existing equipment in-house as well as manufacture equipment used across our businesses.”

Infrastructure Services

Mammoth's infrastructure services segment contributed revenues of $37.3 million for the three months ended September 30, 2019, a decrease from $41.8 million for the three months ended June 30, 2019 and a decline from $237.1 million for the three months ended September 30, 2018.

As of September 30, 2019, Mammoth had a total of approximately 140 transmission and distribution crews in the continental United States. Revenues for the Company's infrastructure operations in the continental United States increased approximately 21% from $30.9 million for the three months ended June 30, 2019 to $37.3 million for the three months ended September 30, 2019.

Pressure Pumping Services

Mammoth's pressure pumping division contributed revenues (inclusive of inter-segment revenues) of $44.6 million for the three months ended September 30, 2019, a decrease from $84.6 million for the three months ended June 30, 2019 and a decrease from $94.2 million for the three months ended September 30, 2018.

Mammoth's pressure pumping division completed a total of 783 stages for the three months ended September 30, 2019, as compared to 1,717 stages for the three months ended June 30, 2019 and 1,594 stages for the three months ended September 30, 2018. On average, 1.2 of our fleets were active for the three months ended September 30, 2019, compared to average utilization of 2.7 fleets during the three months ended June 30, 2019 and an average utilization of 3.5 fleets during the three months ended September 30, 2018.

Natural Sand Proppant Services

Mammoth's natural sand proppant division contributed revenues (inclusive of inter-segment revenues) of $18.4 million for the three months ended September 30, 2019, a decrease from $40.4 million for the three months ended June 30, 2019 and a decrease from $37.0 million for the three months ended September 30, 2018.

The Company sold 456,471 tons of sand during the three months ended September 30, 2019, a 44% decrease from the 812,611 tons sold during the three months ended June 30, 2019 and a 24% decrease from the 598,438 tons sold during the three months ended September 30, 2018. The Company's average sales price for the sand sold during the three months ended September 30, 2019 was $26.84 per ton, an 11% decrease from the $30.09 per ton average sales price during the three months ended June 30, 2019 and a 29% decrease from the $37.88 per ton average sales price during the three months ended September 30, 2018.

Blended production costs were approximately $12 per ton during the three months ended September 30, 2019, unchanged from the three months ended June 30, 2019 production costs and an 18% decrease from production costs of approximately $14.56 per ton during the three months ended September 30, 2018.

Other Services

Mammoth's other services, including contract land and directional drilling, coil tubing, pressure control, flowback, cementing, acidizing, equipment rentals, crude oil hauling and remote accommodations, contributed revenues (inclusive of inter-segment revenues) of $20.0 million for the three months ended September 30, 2019, a decrease from $28.4 million for the three months ended June 30, 2019 and a decrease from $35.7 million for the three months ended September 30, 2018.

An average of 541 pieces of equipment were rented during the three months ended September 30, 2019, down 10% from an average of 601 pieces of equipment rented during the three months ended June 30, 2019 and a 42% increase from an average of 381 pieces of equipment rented for the three months ended September 30, 2018. As a result of market conditions, the Company temporarily shut down its cementing and acidizing operations as well as its flowback operations during the third quarter of 2019.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses were $14.4 million for the three months ended September 30, 2019, as compared to $9.5 million for the three months ended June 30, 2019 and ($45.3) million for the three months ended September 30, 2018.

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

  Three Months Ended   Nine Months Ended
  September 30,   June 30,   September 30,
  2019   2018   2019   2019   2018
Cash expenses:                  
Compensation and benefits $ 4,777     $ 14,864     $ 2,154     $ 16,161     $ 33,541  
Professional services 6,104     3,267     2,934     12,827     8,835  
Other(a) 1,665     3,701     3,381     8,290     9,243  
Total cash SG&A expense 12,546     21,832     8,469     37,278     51,619  
Non-cash expenses:                  
Bad debt provision(b) 964     (68,333 )   262     1,230     (14,543 )
Equity based compensation(c)                 17,487  
Stock based compensation 913     1,177     724     2,705     3,751  
Total non-cash SG&A expense 1,877     (67,156 )   986     3,935     6,695  
Total SG&A expense $ 14,423     $ (45,324 )   $ 9,455     $ 41,213     $ 58,314  
  1. Includes travel-related costs, IT expenses, rent, utilities and other general and administrative-related costs.
  2. During the three months ended September 30, 2018, the Company received payment for amounts previously reserved in 2017. As a result, during the three months ended September 30, 2018, the Company reversed bad debt expense of $16.0 million recognized in 2017 and $53.6 million of the bad debt expense recognized in the first half of 2018.
  3. Represents compensation expense for non-employee awards, which were issued and are payable by certain affiliates of Wexford (the sponsor level).

SG&A expenses, as a percentage of total revenue, were 13% for the three months ended September 30, 2019 as compared to 5% for the three months ended June 30, 2019 and (12%) for the three months ended September 30, 2018. Excluding bad debt expense, SG&A expenses as a percentage of total revenue were 12% for the three months ended September 30, 2019 as compared to 5% for the three months ended June 30, 2019 and 6% for the three months ended September 30, 2018.

Liquidity

As of September 30, 2019, Mammoth had cash on hand totaling $9.6 million and outstanding borrowings under its revolving credit facility of $80.0 million. As of September 30, 2019, the Company had $96.1 million of available borrowing capacity under its revolving credit facility, after giving effect to $8.7 million of outstanding letters of credit, resulting in total liquidity of approximately $105.7 million. As of November 5, 2019, the Company had cash on hand of $9.7 million and outstanding borrowings under its revolving credit facility of $80.0 million.

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,
  2019   2018   2019   2019   2018
Infrastructure services(a) $ 122     $ 21,737     $ 2,177     $ 5,553     $ 78,293  
Pressure pumping services(b) 2,963     8,042     4,013     14,305     24,141  
Natural sand proppant services(c) 728     3,145     990     2,703     15,803  
Other(d) 857     7,821     2,767     12,329     31,293  
Total capital expenditures $ 4,670     $ 40,745     $ 9,947     $ 34,890     $ 149,530  
  1. Capital expenditures primarily for truck, tooling and other equipment for the periods presented.
  2. Capital expenditures primarily for pressure pumping and water transfer equipment for the periods presented.
  3. Capital expenditures primarily for maintenance for the 2019 periods presented and plant upgrades for the 2018 periods presented.
  4. Capital expenditures primarily for equipment for the Company's rental business and upgrades to its rig fleet for the periods presented.

Explanatory Note Regarding Financial Information

The financial information contained in this release should be read in conjunction with the financial information contained in Mammoth’s Annual Report filed on Form 10-K with the Securities and Exchange Commission ("SEC"), Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings.

The Company's Chief Executive Officer and Chief Financial Officer comprise the Company's Chief Operating Decision Maker function ("CODM"). Segment information is prepared on the same basis that the CODM manages the segments, evaluates the segment financial statements and makes key operating and resource utilization decisions. Segment evaluation is determined on a quantitative basis based on a function of operating income (loss) as well as a qualitative basis, such as nature of the product and service offerings and types of customers.

Conference Call Information

Mammoth will host a conference call on Friday, November 8, 2019 at 2:00 p.m. CST (3:00 p.m. EST) to discuss its third quarter 2019 financial and operational results. The telephone number to access the conference call is 844-265-1561 in the U.S. and the international dial in is 216-562-0385. The conference ID for the call is 6576647. The conference call will also be webcast live on www.mammothenergy.com in the “Investors” section.

About Mammoth Energy Services, Inc.

Mammoth is an integrated, growth-oriented energy service company serving companies engaged in the exploration and development of North American onshore unconventional oil and natural gas reserves and government-funded utilities, private utilities, public investor-owned utilities and co-operative utilities through its energy infrastructure services. Mammoth’s suite of services and products include: pressure pumping services, infrastructure services, natural sand and proppant services and other energy services.

For additional information about Mammoth, please visit its website at www.mammothenergy.com, where Mammoth routinely posts announcements, updates, events, investor information and presentations and recent news releases.

Investor Contact:
Don Crist
Director of Investor Relations
dcrist@mammothenergy.com 
405-608-6048

Media Contact:
Peter Mirijanian
peter@pmpadc.com 
(202) 464-8803

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 we expect, believe or anticipate 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 our 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 our existing operations, experience and perception of historical trends, current conditions, anticipated future developments and their effect on us, 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, our forward-looking statements are subject to significant risks and uncertainties, including those described in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings we make with the SEC, including those relating to our acquisitions and our contracts, many of which are beyond our control, which may cause actual results to differ materially from our historical experience and our 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 failure to receive or delays in receiving governmental authorizations, approvals and/or payments; the outcome of an ongoing government investigation and legal proceedings relating to the contracts awarded to our subsidiary Cobra Acquisitions LLC by the Puerto Rico Electric Power Authority; our inability to replace the prior levels of work in our infrastructure segment; risks relating to economic conditions; the loss of or interruption in operations of one or more key suppliers or customers; the effects of government regulation, permitting and other legal requirements; operating risks; the adequacy of capital resources and liquidity; weather; natural disasters; litigation; 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,
    2019   2018
CURRENT ASSETS   (in thousands)
Cash and cash equivalents   $ 9,598     $ 67,625  
Accounts receivable, net   369,313     337,460  
Receivables from related parties   8,542     11,164  
Inventories   17,303     21,302  
Prepaid expenses   7,613     11,317  
Other current assets   682     688  
Total current assets   413,051     449,556  
         
Property, plant and equipment, net   381,656     436,699  
Sand reserves   68,423     71,708  
Operating lease right-of-use assets   47,959      
Intangible assets, net - customer relationships   1,433     1,711  
Intangible assets, net - trade names   5,415     6,045  
Goodwill   98,051     101,245  
Other non-current assets   7,101     6,127  
Total assets   $ 1,023,089     $ 1,073,091  
LIABILITIES AND EQUITY        
CURRENT LIABILITIES        
Accounts payable   $ 36,898     $ 68,843  
Payables to related parties   486     370  
Accrued expenses and other current liabilities   40,552     59,652  
Current operating lease liability   17,142      
Income taxes payable   32,453     104,958  
Total current liabilities   127,531     233,823  
         
Long-term debt   80,000      
Deferred income tax liabilities   47,260     79,309  
Long-term operating lease liability   30,827      
Asset retirement obligation   3,559     3,164  
Other liabilities   5,485     2,743  
Total liabilities   294,662     319,039  
         
COMMITMENTS AND CONTINGENCIES        
         
EQUITY        
Equity:        
Common stock, $0.01 par value, 200,000,000 shares authorized, 45,021,461 and 44,876,649 issued and outstanding at September 30, 2019 and December 31, 2018   450     449  
Additional paid in capital   534,284     530,919  
Retained earnings   197,281     226,765  
Accumulated other comprehensive loss   (3,588 )   (4,081 )
Total equity   728,427     754,052  
Total liabilities and equity   $ 1,023,089     $ 1,073,091  


MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
       
  Three Months Ended   Nine Months Ended
  September 30,   June 30,   September 30,
  2019   2018   2019   2019   2018
  (in thousands, except per share amounts)
REVENUE  
Services revenue $ 85,783     $ 346,368     $ 115,760     $ 394,645     $ 1,210,572  
Services revenue - related parties 15,000     18,933     36,837     95,910     108,632  
Product revenue 9,710     14,955     18,362     40,381     67,703  
Product revenue - related parties 2,924     3,787     10,861     26,439     24,979  
Total revenue 113,417     384,043     181,820     557,375     1,411,886  
                   
COST AND EXPENSES                  
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $25,749, $27,810, $25,597, $77,028 and $79,283, respectively, for the three months ended September 30, 2019, September 30, 2018 and June 30, 2019 and nine months ended September 30, 2019 and 2018) 91,813     216,670     132,688     382,607     809,932  
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, 2019, September 30, 2018 and June 30, 2019 and nine months ended September 30, 2019 and 2018) 774     1,425     2,650     4,138     5,645  
Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $4,019, $4,183, $4,525, $11,414 and $10,376, respectively, for the three months ended September 30, 2019, September 30, 2018 and June 30, 2019 and nine months ended September 30, 2019 and 2018) 18,547     29,470     32,677     81,475     97,917  
Selling, general and administrative 14,029     (45,761 )   8,796     39,726     56,916  
Selling, general and administrative - related parties 394     437     659     1,487     1,398  
Depreciation, depletion, amortization and accretion 29,791     32,015     30,145     88,512     89,718  
Impairment of long-lived assets 6,542     4,582         6,542     4,769  
Total cost and expenses 161,890     238,838     207,615     604,487     1,066,295  
Operating (loss) income (48,473 )   145,205     (25,795 )   (47,112 )   345,591  
                   
OTHER INCOME (EXPENSE)                  
Interest expense, net (1,398 )   (458 )   (1,551 )   (3,472 )   (2,654 )
Other, net 6,368     (400 )   4,019     34,944     (914 )
Total other income (expense) 4,970     (858 )   2,468     31,472     (3,568 )
(Loss) income before income taxes (43,503 )   144,347     (23,327 )   (15,640 )   342,023  
(Benefit) provision for income taxes (7,794 )   74,835     (12,438 )   2,625     174,265  
Net (loss) income $ (35,709 )   $ 69,512     $ (10,889 )   $ (18,265 )   $ 167,758  
                   
OTHER COMPREHENSIVE (LOSS) INCOME                  
Foreign currency translation adjustment, net of tax of ($49), ($87), $92, $134 and $185, respectively, for the three months ended September 30, 2019, September 30, 2018 and June 30, 2019 and nine months ended September 30, 2019 and 2018) (213 )   327     350     493     (459 )
Comprehensive (loss) income $ (35,922 )   $ 69,839     $ (10,539 )   $ (17,772 )   $ 167,299  
                   
Net (loss) income per share (basic) $ (0.79 )   $ 1.55     $ (0.24 )   $ (0.41 )   $ 3.75  
Net (loss) income per share (diluted) $ (0.79 )   $ 1.54     $ (0.24 )   $ (0.41 )   $ 3.73  
Weighted average number of shares outstanding (basic) 45,020     44,756     45,003     44,984     44,718  
Weighted average number of shares outstanding (diluted) 45,020     45,082     45,003     44,984     45,012  
Dividends declared per share $     0.125     $ 0.125     $ 0.25     0.125  


MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
   
  Nine Months Ended
  September 30,
  2019   2018
  (in thousands)
Cash flows from operating activities:      
Net (loss) income $ (18,265 )   $ 167,758  
Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities:      
Equity based compensation     17,487  
Stock based compensation 3,367     4,331  
Depreciation, depletion, accretion and amortization 88,512     89,718  
Amortization of coil tubing strings 1,236     1,473  
Amortization of debt origination costs 245     299  
Bad debt expense 1,230     (14,543 )
Loss (gain) on disposal of property and equipment 245     (185 )
Impairment of long-lived assets 6,542     4,769  
Inventory obsolescence 1,349      
Deferred income taxes (32,183 )   6,418  
Other (539 )    
Changes in assets and liabilities, net of acquisitions of businesses:      
Accounts receivable, net (33,042 )   (132,553 )
Receivables from related parties 2,622     8,453  
Inventories 1,415     (2,665 )
Prepaid expenses and other assets 3,713     1,814  
Accounts payable (27,187 )   (5,179 )
Payables to related parties 117     24  
Accrued expenses and other liabilities (19,121 )   (405 )
Income taxes payable (72,501 )   135,578  
Net cash (used in) provided by operating activities (92,245 )   282,592  
       
Cash flows from investing activities:      
Purchases of property and equipment (34,637 )   (144,898 )
Purchases of property and equipment from related parties (253 )   (4,632 )
Business acquisitions     (14,456 )
Contributions to equity investee (680 )    
Proceeds from disposal of property and equipment 2,491     1,213  
Net cash used in investing activities (33,079 )   (162,773 )
       
Cash flows from financing activities:      
Borrowings from lines of credit 138,000     77,000  
Repayments of lines of credit (58,000 )   (176,900 )
Dividends paid (11,219 )   (5,594 )
Principal payments on financing leases and equipment financing notes (1,534 )   (219 )
Net cash provided by (used in) financing activities 67,247     (105,713 )
Effect of foreign exchange rate on cash 50     (51 )
Net change in cash and cash equivalents (58,027 )   14,055  
Cash and cash equivalents at beginning of period 67,625     5,637  
Cash and cash equivalents at end of period $ 9,598     $ 19,692  
       
Supplemental disclosure of cash flow information:      
Cash paid for interest $ 3,280     $ 2,726  
Cash paid for income taxes $ 116,448     $ 32,269  
Supplemental disclosure of non-cash transactions:      
Purchases of property and equipment included in accounts payable $ 1,203     $ 21,124  


MAMMOTH ENERGY SERVICES, INC.
SEGMENT INCOME STATEMENTS
(in thousands)
             
Three months ended September 30, 2019 Infrastructure Pressure Pumping Sand All Other Eliminations Total
Revenue from external customers $ 37,289   $ 43,887   $ 12,634   $ 19,607   $   $ 113,417  
Intersegment revenues   725   5,727   367   (6,819 )  
Total revenue 37,289   44,612   18,361   19,974   (6,819 ) 113,417  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 36,940   33,059   18,547   22,588     111,134  
Intersegment cost of revenues   6,054   326   439   (6,819 )  
Total cost of revenue 36,940   39,113   18,873   23,027   (6,819 ) 111,134  
Selling, general and administrative 7,322   3,669   1,314   2,118     14,423  
Depreciation, depletion, amortization and accretion 7,953   10,176   4,022   7,640     29,791  
Impairment of long-lived assets       6,542     6,542  
Operating (loss) income (14,926 ) (8,346 ) (5,848 ) (19,353 )   (48,473 )
Interest expense, net 599   316   43   440     1,398  
Other (income) expense, net (6,239 ) (3 ) 99   (225 )   (6,368 )
(Loss) income before income taxes $ (9,286 ) $ (8,659 ) $ (5,990 ) $ (19,568 ) $   $ (43,503 )


 
             
Three months ended September 30, 2018 Infrastructure Pressure Pumping Sand All Other Eliminations Total
Revenue from external customers $ 237,052   $ 93,360   $ 18,742   $ 34,889   $   $ 384,043  
Intersegment revenues   809   18,268   781   (19,858 )  
Total revenue 237,052   94,169   37,010   35,670   (19,858 ) 384,043  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 128,267   55,490   29,470   34,338     247,565  
Intersegment cost of revenues 37   19,002   546   263   (19,848 )  
Total cost of revenue 128,304   74,492   30,016   34,601   (19,848 ) 247,565  
Selling, general and administrative (54,200 ) 4,508   1,618   2,750     (45,324 )
Depreciation, depletion, amortization and accretion 6,591   12,720   4,184   8,520     32,015  
Impairment of long-lived assets   143     4,439     4,582  
Operating income (loss) 156,357   2,306   1,192   (14,640 ) (10 ) 145,205  
Interest expense, net 159   150   37   112     458  
Other expense, net 181   2   199   18     400  
Income (loss) before income taxes $ 156,017   $ 2,154   $ 956   $ (14,770 ) $ (10 ) $ 144,347  


Three months ended June 30, 2019 Infrastructure Pressure Pumping Sand All Other Eliminations Total
Revenue from external customers $ 41,821   $ 82,973   $ 29,223   $ 27,803   $   $ 181,820  
Intersegment revenues   1,668   11,170   584   (13,422 )  
Total revenue 41,821   84,641   40,393   28,387   (13,422 ) 181,820  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 44,864   59,835   32,676   30,640     168,015  
Intersegment cost of revenues   11,797   1,141   562   (13,500 )  
Total cost of revenue 44,864   71,632   33,817   31,202   (13,500 ) 168,015  
Selling, general and administrative 3,035   2,664   1,380   2,376     9,455  
Depreciation, depletion, amortization and accretion 7,818   10,174   4,528   7,625     30,145  
Operating income (loss) (13,896 ) 171   668   (12,816 ) 78   (25,795 )
Interest expense, net 386   452   72   641     1,551  
Other expense, net (4,045 ) 9   (32 ) 49     (4,019 )
Income (loss) before income taxes $ (10,237 ) $ (290 ) $ 628   $ (13,506 ) $ 78   $ (23,327 )


Nine months ended September 30, 2019 Infrastructure Pressure Pumping Sand All Other Eliminations Total
Revenue from external customers $ 187,831   $ 217,456   $ 66,820   $ 85,268   $   $ 557,375  
Intersegment revenues   3,936   29,795   1,610   (35,341 )  
Total revenue 187,831   221,392   96,615   86,878   (35,341 ) 557,375  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 140,768   157,106   81,475   88,871     468,220  
Intersegment cost of revenues 1   31,388   2,513   1,499   (35,401 )  
Total cost of revenue 140,769   188,494   83,988   90,370   (35,401 ) 468,220  
Selling, general and administrative 19,874   9,544   4,214   7,581     41,213  
Depreciation, depletion, amortization and accretion 23,490   30,244   11,423   23,355     88,512  
Impairment of long-lived assets       6,542     6,542  
Operating income (loss) 3,698   (6,890 ) (3,010 ) (40,970 ) 60   (47,112 )
Interest expense, net 1,024   965   145   1,338     3,472  
Other (income) expense, net (35,108 ) 5   67   92     (34,944 )
Income (loss) before income taxes $ 37,782   $ (7,860 ) $ (3,222 ) $ (42,400 ) $ 60   $ (15,640 )


Nine months ended September 30, 2018 Infrastructure Pressure Pumping Sand All Other Eliminations Total
Revenue from external customers $ 922,761   $ 290,272   $ 92,684   $ 106,169   $   $ 1,411,886  
Intersegment revenues   6,441   48,186   4,974   (59,601 )  
Total revenue 922,761   296,713   140,870   111,143   (59,601 ) 1,411,886  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 532,532   183,695   97,917   99,350     913,494  
Intersegment cost of revenues 2,582   50,578   5,851   590   (59,601 )  
Total cost of revenue 535,114   234,273   103,768   99,940   (59,601 ) 913,494  
Selling, general and administrative 17,437   27,993   5,049   7,835     58,314  
Depreciation, depletion, amortization and accretion 13,092   40,535   10,381   25,710     89,718  
Impairment of long-lived assets   143     4,626     4,769  
Operating income (loss) 357,118   (6,231 ) 21,672   (26,968 )   345,591  
Interest expense, net 341   995   193   1,125     2,654  
Other expense (income), net 513   94   222   85     914  
Income (loss) before income taxes $ 356,264   $ (7,320 ) $ 21,257   $ (28,178 ) $   $ 342,023  


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 long-lived assets, inventory obsolescence charges, acquisition related costs, public offering costs, equity based compensation, 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 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, none of which are components of Adjusted EBITDA. 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: 2019   2018   2019   2019   2018
Net (loss) income $ (35,709 )   $ 69,512     $ (10,889 )   $ (18,265 )   $ 167,758  
Depreciation, depletion, accretion and amortization expense 29,791     32,015     30,145     88,512     89,718  
Impairment of long-lived assets 6,542     4,582         6,542     4,769  
Inventory obsolescence charges 1,349             1,349      
Acquisition related costs     99     45     45     130  
Public offering costs     260             991  
Equity based compensation                 17,487  
Stock based compensation 1,134     1,415     944     3,367     4,331  
Interest expense, net 1,398     458     1,551     3,472     2,654  
Other (income) expense, net (6,368 )   400     (4,019 )   (34,944 )   914  
Interest on trade accounts receivable 5,896         3,234     34,865      
(Benefit) provision for income taxes (7,794 )   74,835     (12,438 )   2,625     174,265  
Adjusted EBITDA $ (3,761 )   $ 183,576     $ 8,573     $ 87,568     $ 463,017  

Infrastructure Services

  Three Months Ended   Nine Months Ended
  September 30,   June 30,   September 30,
Reconciliation of Adjusted EBITDA to net (loss) income: 2019   2018   2019   2019   2018
Net (loss) income $ (10,763 )   $ 78,405     $ 6,210     $ 31,113     $ 178,064  
Depreciation and amortization expense 7,953     6,591     7,818     23,490     13,092  
Acquisition related costs         12     12     (4 )
Public offering costs     123             483  
Stock based compensation 217     555     9     688     1,618  
Interest expense 599     159     386     1,024     341  
Other (income) expense, net (6,239 )   181     (4,045 )   (35,108 )   513  
Interest on trade accounts receivable 5,896         3,234     34,865      
Provision (benefit) for income taxes 1,477     77,612     (16,447 )   6,670     178,200  
Adjusted EBITDA $ (860 )   $ 163,626     $ (2,823 )   $ 62,754     $ 372,307  

Pressure Pumping Services

  Three Months Ended   Nine Months Ended
  September 30,   June 30,   September 30,
Reconciliation of Adjusted EBITDA to net (loss) income: 2019   2018   2019   2019   2018
Net (loss) income $ (8,659 )   $ 2,154     $ (290 )   $ (7,860 )   $ (7,320 )
Depreciation and amortization expense 10,176     12,720     10,174     30,244     40,535  
Impairment of long-lived assets     143             143  
Acquisition related costs     6     18     18     39  
Public offering costs     62             264  
Equity based compensation                 17,487  
Stock based compensation 503     423     489     1,402     1,294  
Interest expense 316     150     452     965     995  
Other (income) expense, net (3 )   2     9     5     94  
Adjusted EBITDA $ 2,333     $ 15,660     $ 10,852     $ 24,774     $ 53,531  

Natural Sand Proppant Services

  Three Months Ended   Nine Months Ended
  September 30,   June 30,   September 30,
Reconciliation of Adjusted EBITDA to net (loss) income: 2019   2018   2019   2019   2018
Net (loss) income $ (5,990 )   $ 956     $ 628     $ (3,222 )   $ 21,257  
Depreciation, depletion, accretion and amortization expense 4,022     4,184     4,528     11,423     10,381  
Acquisition related costs         8     8     (38 )
Public offering costs     49             144  
Stock based compensation 216     211     236     656     602  
Interest expense 43     37     72     145     193  
Other expense (income), net 99     199     (32 )   67     222  
Adjusted EBITDA $ (1,610 )   $ 5,636     $ 5,440     $ 9,077     $ 32,761  

Other Services(a)

  Three Months Ended   Nine Months Ended
  September 30,   June 30,   September 30,
Reconciliation of Adjusted EBITDA to net loss: 2019   2018   2019   2019   2018
Net loss $ (10,297 )   $ (11,993 )   $ (17,515 )   $ (38,356 )   $ (24,243 )
Depreciation and amortization expense 7,640     8,520     7,625     23,355     25,710  
Impairment of long-lived assets 6,542     4,439         6,542     4,626  
Inventory obsolescence charges 1,349             1,349      
Acquisition related costs     93     7     7     133  
Public offering costs     26             100  
Stock based compensation 198     226     210     621     817  
Interest expense, net 440     112     641     1,338     1,125  
Other (income) expense, net (225 )   18     49     92     85  
(Benefit) provision for income taxes (9,271 )   (2,777 )   4,009     (4,045 )   (3,935 )
Adjusted EBITDA $ (3,624 )   $ (1,336 )   $ (4,974 )   $ (9,097 )   $ 4,418  
  1. Includes results for Mammoth's contract land and directional drilling, coil tubing, pressure control, flowback, cementing, acidizing, equipment rentals, crude oil hauling and remote accommodations services and corporate related activities. The Company's corporate related activities do not generate revenue.

 

Is your business listed correctly on America’s largest city directory network of 1,000 portals?