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CST: 18/09/2019 21:02:38   

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

140 Days ago

  • First Quarter net income of $28 million, or $0.63 per diluted share
  • First Quarter Adjusted EBITDA of $83 million
  • Trailing twelve months after tax return on invested capital (ROIC) of 29%
  • Declared $0.125 dividend for the first quarter of 2019

OKLAHOMA CITY, May 01, 2019 (GLOBE NEWSWIRE) -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ: TUSK) today reported financial and operational results for the quarter ended March 31, 2019.

Financial Highlights for the First Quarter of 2019:

Total revenue was $262.1 million for the three months ended March 31, 2019, down 6% sequentially from $278.2 million for the three months ended December 31, 2018 and down 47% from $494.2 million for the three months ended March 31, 2018.

Net income for the three months ended March 31, 2019 was $28.3 million, or $0.63 per fully diluted share, a 58% decrease from $68.2 million, or $1.51 per fully diluted share, for the three months ended December 31, 2018 and a 49% decrease from $55.5 million, or $1.24 per fully diluted share, for the three months ended March 31, 2018.

Adjusted EBITDA (as defined and reconciled below) was $82.8 million for the three months ended March 31, 2019, a slight decrease from $84.3 million for the three months ended December 31, 2018 and a 37% decline from $130.8 million for the three months ended March 31, 2018.

Arty Straehla, Mammoth's Chief Executive Officer, stated, "The first quarter of 2019 saw improved utilization of our oilfield completions focused businesses as E&P budgets were reset and oil prices experienced a steady increase throughout the quarter.  While pressure pumping pricing remains challenged, conversations with customers suggest the possibility for tighter industry conditions for the back half of the year. Demand for Northern White sand is strengthening, with our average pricing up approximately 90% from the lows experienced in fourth quarter of 2018. The movement of our infrastructure equipment from Puerto Rico back to the continental U.S. is progressing and beginning to displace equipment currently being rented, allowing us to deploy additional crews for our Continental U. S. customers."

Infrastructure Services

Mammoth's infrastructure services segment contributed revenues of $108.7 million for the three months ended March 31, 2019, a 32% decrease from $159.6 million for the three months ended December 31, 2018 and a 67% decrease from $325.5 million for the three months ended March 31, 2018. During the first quarter of 2019, our crew staffing levels in Puerto Rico reached a high of approximately 500 in January. As of March 31, 2019, a small contingent of non-billable personnel remained on the island to facilitate the demobilization of our remaining equipment.

Pressure Pumping Services

Mammoth's pressure pumping division contributed revenues (inclusive of inter-segment revenues) of $92.1 million for the three months ended March 31, 2019, a 27% increase from $72.8 million for the three months ended December 31, 2018 and a 9% decrease from $101.1 million for the three months ended March 31, 2018.

Mammoth's pressure pumping division completed a total of 1,889 stages for the three months ended March 31, 2019, a 62% increase from 1,164 stages for the three months ended December 31, 2018 and a 13% increase from 1,672 stages for the three months ended March 31, 2018. An average of 4.4 of our 6 fleets remained active throughout the first quarter of 2019.

Natural Sand Proppant Services

Mammoth's natural sand proppant division contributed revenues (inclusive of inter-segment revenues) of $37.9 million for the three months ended March 31, 2019, a 38% increase from $27.4 million for the three months ended December 31, 2018 and a 26% decrease from $51.0 million for the three months ended March 31, 2018.

The Company sold 665,806 tons of sand during the three months ended March 31, 2019, a 17% increase from the 569,195 tons sold during the three months ended December 31, 2018 and a 9% decrease from the 735,584 tons sold during the three months ended March 31, 2018. The Company's average production costs were approximately $12 per ton during the first quarter of 2019.

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 $38.5 million for the three months ended March 31, 2019, a slight decrease from $38.8 million for the three months ended December 31, 2018 and a slight increase from $38.1 million for the three months ended March 31, 2018. The Company’s rental division drove a majority of the increase from the prior periods with the average amount of equipment on rent increasing from 357 for the three months ended March 31, 2018 to 500 for the three months ended December 31, 2018.  An average of 621 pieces of equipment were rented during the three months ended March 31, 2019.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses were $17.3 million for the three months ended March 31, 2019, compared to $14.8 million for the three months ended December 31, 2018 and $38.5 million for the three months ended March 31, 2018.

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

  Three Months Ended
  March 31,   December 31,
  2019   2018   2018
Cash expenses:          
Compensation and benefits $ 9,230     $ 7,699     $ 9,409  
Professional services 3,789     2,587     3,018  
Other(a) 3,244     1,607     1,475  
Total cash SG&A expense 16,263     11,893     13,902  
Non-cash expenses:          
Bad debt provision(b) 4     25,527     (34 )
Stock based compensation 1,069     1,091     915  
Total non-cash SG&A expense 1,073     26,618     881  
Total SG&A expense $ 17,336     $ 38,511     $ 14,783  


   
a. Includes travel-related costs, IT expenses, rent, utilities and other general and administrative-related costs.
b. $25.4 million of the bad debt expense recognized during the three months ended March 31, 2018 was subsequently reversed during the third quarter of 2018.

SG&A expenses, as a percentage of total revenue, were 7% for the three months ended March 31, 2019 compared to 5% for the three months ended December 31, 2018 and 8% for the three months ended March 31, 2018.

Liquidity

As of March 31, 2019, Mammoth had cash on hand totaling $21.3 million and outstanding borrowings under its revolving credit facility of $82.0 million. As of March 31, 2019, the Company had $93.5 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 $114.8 million. As of April 30, 2019, the Company had cash on hand totaling $32.5 million and outstanding borrowings under its revolving credit facility of $108.6 million.

Capital Expenditures

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

  Three Months Ended
  March 31,   December 31,
  2019   2018   2018
Infrastructure services(a) $ 3,254     $ 15,778     $ 22,409  
Pressure pumping services(b) 7,329     7,866     9,632  
Natural sand proppant services(c) 985     5,700     2,132  
Other(d) 8,705     6,430     8,240  
Total capital expenditures $ 20,273     $ 35,774     $ 42,413  


   
a. Capital expenditures primarily for truck, tooling and other equipment for the periods presented.
b. Capital expenditures primarily for pressure pumping and water transfer equipment for the for the periods presented
c. Capital expenditures primarily for maintenance for the three months ended March 31, 2019 and December 31, 2018 and plant upgrades for the three months ended March 31, 2018.
d. 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 to be 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 Thursday, May 2, 2019 at 10:00 a.m. CDT (11:00 am EDT) to discuss its first 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 9185999. 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

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; risks relating to economic conditions; delays in or failure of delivery of current or future orders of specialized equipment; 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   March 31,   December 31,
    2019   2018
CURRENT ASSETS   (in thousands)
Cash and cash equivalents   $ 21,343     $ 67,625  
Accounts receivable, net   404,389     337,460  
Receivables from related parties   45,032     11,164  
Inventories   18,913     21,302  
Prepaid expenses   8,913     11,317  
Other current assets   706     688  
     Total current assets   499,296     449,556  
         
Property, plant and equipment, net   428,280     436,699  
Sand reserves   71,496     71,708  
Operating lease right-of-use assets   56,234      
Intangible assets, net - customer relationships   1,637     1,711  
Intangible assets, net - trade names   5,835     6,045  
Goodwill   101,245     101,245  
Other non-current assets   6,484     6,127  
     Total assets   $ 1,170,507     $ 1,073,091  
LIABILITIES AND EQUITY        
CURRENT LIABILITIES        
Accounts payable   $ 67,542     $ 68,843  
Payables to related parties   609     370  
Accrued expenses and other current liabilities   55,258     59,652  
Current operating lease liability   17,533      
Income taxes payable   60,272     104,958  
     Total current liabilities   201,214     233,823  
         
Long-term debt   82,037      
Deferred income tax liabilities   63,923     79,309  
Long-term operating lease liability   38,572      
Asset retirement obligation   3,056     3,164  
Other liabilities   3,285     2,743  
     Total liabilities   392,087     319,039  
         
COMMITMENTS AND CONTINGENCIES        
         
EQUITY        
Equity:        
Common stock, $0.01 par value, 200,000,000 shares authorized, 44,876,649 issued
and outstanding at March 31, 2019 and December 31, 2018, respectively
  449     449  
Additional paid in capital   532,208     530,919  
Retained earnings   249,488     226,765  
Accumulated other comprehensive loss   (3,725 )   (4,081 )
     Total equity   778,420     754,052  
     Total liabilities and equity   $ 1,170,507     $ 1,073,091  


MAMMOTH ENERGY SERVICES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
   
  Three Months Ended
  March 31,   December 31,
  2019   2018   2018
  (in thousands, except per share amounts)
REVENUE  
Services revenue $ 193,101     $ 408,659     $ 260,513  
Services revenue - related parties 44,073     49,088     9,551  
Product revenue 12,309     25,040     8,063  
Product revenue - related parties 12,655     11,462     71  
Total revenue 262,138     494,249     278,198  
           
COST AND EXPENSES          
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $25,682, $24,575
and $26,999, respectively, for the three months ended March 31, 2019, March 31, 2018 and December 31, 2018)
158,106     290,979     151,273  
Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of
$0, $0 and $0, respectively, for the three months ended March 31, 2019, March 31, 2018 and December 31, 2018)
713     1,792     240  
Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $2,871, $2,314 and
$3,136, respectively, for the three months ended March 31, 2019, March 31, 2018 and December 31, 2018)
30,251     33,330     28,797  
Selling, general and administrative 16,902     38,082     14,283  
Selling, general and administrative - related parties 434     429     500  
Depreciation, depletion, amortization and accretion 28,576     26,908     30,159  
Impairment of long-lived assets         4,086  
Total cost and expenses 234,982     391,520     229,338  
Operating income 27,156     102,729     48,860  
           
OTHER INCOME (EXPENSE)          
Interest expense, net (523 )   (1,237 )   (533 )
Other, net 24,557     (28 )   (1,122 )
Total other income (expense) 24,034     (1,265 )   (1,655 )
Income before income taxes 51,190     101,464     47,205  
Provision (benefit) for income taxes 22,857     45,918     (21,002 )
Net income $ 28,333     $ 55,546     $ 68,207  
           
OTHER COMPREHENSIVE INCOME          
Foreign currency translation adjustment, net of tax of ($90), $186 and $212, respectively,
for the three months ended March 31, 2019, March 31, 2018 and December 31, 2018
356     (461 )   (961 )
Comprehensive income $ 28,689     $ 55,085     $ 67,246  
           
Net income per share (basic) $ 0.63     $ 1.24     $ 1.52  
Net income per share (diluted) $ 0.63     $ 1.24     $ 1.51  
Weighted average number of shares outstanding (basic) 44,929     44,650     44,845  
Weighted average number of shares outstanding (diluted) 45,063     44,884     45,048  
Dividends declared per share $ 0.125         $ 0.125  


MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
   
  Three Months Ended
  March 31,
  2019   2018
  (in thousands)
Cash flows from operating activities:      
Net income $ 28,333     $ 55,546  
Adjustments to reconcile net income to cash provided by operating activities:      
Stock based compensation 1,289     1,256  
Depreciation, depletion, accretion and amortization 28,576     26,908  
Amortization of coil tubing strings 535     565  
Amortization of debt origination costs 82     100  
Bad debt expense 4     25,527  
Loss (gain) on disposal of property and equipment 94     (184 )
Deferred income taxes (15,476 )   (12,117 )
Other 41      
Changes in assets and liabilities, net of acquisitions of businesses:      
     Accounts receivable, net (67,093 )   (25,722 )
     Receivables from related parties (33,868 )   (12,550 )
     Inventories 1,854     5,060  
     Prepaid expenses and other assets 2,389     294  
     Accounts payable (353 )   8,302  
     Payables to related parties 239     851  
     Accrued expenses and other liabilities (4,956 )   1,636  
     Income taxes payable (44,684 )   25,851  
Net cash (used in) provided by operating activities (102,994 )   101,323  
       
Cash flows from investing activities:      
Purchases of property and equipment (20,273 )   (35,176 )
Purchases of property and equipment from related parties     (598 )
Contributions to equity investee (480 )    
Proceeds from disposal of property and equipment 1,500     286  
Net cash used in investing activities (19,253 )   (35,488 )
       
Cash flows from financing activities:      
Borrowings from lines of credit 82,000     31,000  
Repayments of lines of credit     (91,900 )
Dividends paid (5,610 )    
Principal payments on financing leases and equipment financing notes (457 )   (72 )
Net cash provided by (used in) financing activities 75,933     (60,972 )
Effect of foreign exchange rate on cash 32     (53 )
Net change in cash and cash equivalents (46,282 )   4,810  
Cash and cash equivalents at beginning of period 67,625     5,637  
Cash and cash equivalents at end of period $ 21,343     $ 10,447  
       
Supplemental disclosure of cash flow information:      
Cash paid for interest $ 294     $ 1,442  
Cash paid for income taxes $ 91,955     $ 32,184  
Supplemental disclosure of non-cash transactions:      
Purchases of property and equipment included in accounts payable $ 5,016     $ 16,558  


MAMMOTH ENERGY SERVICES, INC.
SEGMENT INCOME STATEMENTS
(in thousands)
             
Three months ended March 31, 2019 Infrastructure Pressure
Pumping
Sand All Other Eliminations Total
Revenue from external customers $ 108,721   $ 90,595   $ 24,964   $ 37,858   $   $ 262,138  
Intersegment revenues   1,544   12,897   658   (15,099 )  
Total revenue 108,721   92,139   37,861   38,516   (15,099 ) 262,138  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 58,965   64,211   30,252   35,642     189,070  
Intersegment cost of revenues   13,537   1,047   497   (15,081 )  
Total cost of revenue 58,965   77,748   31,299   36,139   (15,081 ) 189,070  
Selling, general and administrative 9,517   3,213   1,519   3,087     17,336  
Depreciation, depletion, amortization and accretion 7,719   9,893   2,873   8,091     28,576  
Operating income (loss) 32,520   1,285   2,170   (8,801 ) (18 ) 27,156  
Interest expense, net 39   198   30   256     523  
Other (income) expense, net (24,824 ) (1 )   268     (24,557 )
Income (loss) before income taxes $ 57,305   $ 1,088   $ 2,140   $ (9,325 ) $ (18 ) $ 51,190  


Three months ended March 31, 2018 Infrastructure Pressure
Pumping
Sand All Other Eliminations Total
Revenue from external customers $ 325,459   $ 96,579   $ 36,503   $ 35,708   $   $ 494,249  
Intersegment revenues   4,559   14,512   2,417   (21,488 )  
Total revenue 325,459   101,138   51,015   38,125   (21,488 ) 494,249  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 194,076   66,612   33,330   32,083     326,101  
Intersegment cost of revenues 1,791   15,402   4,286   267   (21,746 )  
Total cost of revenue 195,867   82,014   37,616   32,350   (21,746 ) 326,101  
Selling, general and administrative 31,851   2,663   1,644   2,353     38,511  
Depreciation, depletion, amortization and accretion 2,407   13,986   2,316   8,199     26,908  
Operating income (loss) 95,334   2,475   9,439   (4,777 ) 258   102,729  
Interest expense, net 76   504   80   577     1,237  
Other expense (income), net 2   12   (13 ) 27     28  
Income (loss) before income taxes $ 95,256   $ 1,959   $ 9,372   $ (5,381 ) $ 258   $ 101,464  


Three months ended December 31, 2018 Infrastructure Pressure
Pumping
Sand All Other Eliminations Total
Revenue from external customers $ 159,610   $ 72,219   $ 8,133   $ 38,236   $   $ 278,198  
Intersegment revenues   560   19,273   542   (20,375 )  
Total revenue 159,610   72,779   27,406   38,778   (20,375 ) 278,198  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 75,486   39,601   28,796   36,427     180,310  
Intersegment cost of revenues   19,787   253   308   (20,348 )  
Total cost of revenue 75,486   59,388   29,049   36,735   (20,348 ) 180,310  
Selling, general and administrative 9,689   1,768   1,170   2,156     14,783  
Depreciation, depletion, amortization and accretion 7,425   10,952   3,138   8,644     30,159  
Impairment of long-lived assets 308       3,778     4,086  
Operating income (loss) 66,702   671   (5,951 ) (12,535 ) (27 ) 48,860  
Interest expense, net 82   177   40   234     533  
Other expense, net 60   340   304   418     1,122  
Income (loss) before income taxes $ 66,560   $ 154   $ (6,295 ) $ (13,187 ) $ (27 ) $ 47,205  

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, acquisition related costs, 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 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
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net income: 2019   2018   2018
Net income $ 28,333     $ 55,546     $ 68,207  
Depreciation, depletion, accretion and amortization expense 28,576     26,908     30,159  
Impairment of long-lived assets         4,086  
Acquisition related costs     (46 )   61  
Public offering costs         (10 )
Stock based compensation 1,289     1,256     1,094  
Interest expense, net 523     1,237     533  
Other (income) expense, net (24,557 )   28     1,122  
Interest on trade accounts receivable 25,735          
Provision (benefit) for income taxes 22,857     45,918     (21,002 )
Adjusted EBITDA $ 82,756     $ 130,847     $ 84,250  

Infrastructure Services

  Three Months Ended
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net income: 2019   2018   2018
Net income $ 35,665     $ 47,299     $ 141,875  
Depreciation and amortization expense 7,719     2,407     7,425  
Impairment of long-lived assets         308  
Acquisition related costs     (8 )   61  
Public offering costs         (10 )
Stock based compensation 462     457     470  
Interest expense 39     76     82  
Other (income) expense, net (24,824 )   2     60  
Interest on trade accounts receivable 25,735          
Provision (benefit) for income taxes 21,639     47,957     (75,315 )
Adjusted EBITDA $ 66,435     $ 98,190     $ 74,956  

Pressure Pumping Services

  Three Months Ended
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net income: 2019   2018   2018
Net income $ 1,088     $ 1,959     $ 154  
Depreciation and amortization expense 9,893     13,986     10,952  
Stock based compensation 410     418     318  
Interest expense 198     504     177  
Other (income) expense, net (1 )   12     340  
Adjusted EBITDA $ 11,588     $ 16,879     $ 11,941  

Natural Sand Proppant Services

  Three Months Ended
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net income (loss): 2019   2018   2018
Net income (loss) $ 2,140     $ 9,372     $ (6,295 )
Depreciation, depletion, accretion and amortization expense 2,873     2,316     3,138  
Acquisition related costs     (38 )    
Stock based compensation 203     186     181  
Interest expense 30     80     40  
Other (income) expense, net     (13 )   304  
Adjusted EBITDA $ 5,246     $ 11,903     $ (2,632 )

Other Services(a)

  Three Months Ended
  March 31,   December 31,
Reconciliation of Adjusted EBITDA to net income (loss): 2019   2018   2018
Net (loss) income $ (10,542 )   $ (3,342 )   $ (67,500 )
Depreciation and amortization expense 8,091     8,199     8,644  
Impairment of long-lived assets         3,778  
Stock based compensation 214     195     125  
Interest expense, net 256     577     234  
Other expense, net 268     27     418  
Provision (benefit) for income taxes 1,217     (2,039 )   54,313  
Adjusted EBITDA $ (496 )   $ 3,617     $ 12  


   
a. 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.

After Tax Return on Invested Capital

After tax return on invested capital is a supplemental non-GAAP measure that is used by management to evaluate the Company's performance. Mammoth defines after tax return on invested capital as net income divided by total capital employed, which is the average of ending debt and equity for the last two years. Management believes after tax return on invested capital is a useful measure of how effectively the Company uses capital to generate profits and it provides additional insight for analysts and investors in evaluating the Company's financial and operating performance. After tax return on invested capital should not be considered in isolation or as a substitute for financial measures reported in accordance with GAAP. The following table provides the calculation of after tax return on invested capital using the GAAP financial measures of net income, total debt and total equity.

  Twelve Months Ended
  March 31,
  2019   2018   2017
  (in thousands)
Net income $ 208,752     $ 119,491      
Capital Employed          
Total debt $ 82,037     $ 39,000     $  
Total equity 778,420     564,137     418,597  
Total capital employed $ 860,457     $ 603,137     $ 418,597  
           
Average capital employed(a) $ 731,797     $ 510,867      
Trailing twelve month after tax return on invested capital(b) 29 %   23 %    


   
a. Average capital employed is the average of total capital employed as of end of the period and end of the prior period.
b. After tax return on invested capital is the ratio of net income for the period to average capital employed.

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