U.S. Markets closed
  • S&P 500

    4,397.94
    -84.79 (-1.89%)
     
  • Dow 30

    34,265.37
    -450.03 (-1.30%)
     
  • Nasdaq

    13,768.92
    -385.08 (-2.72%)
     
  • Russell 2000

    1,987.92
    -36.12 (-1.78%)
     
  • Crude Oil

    84.83
    -0.72 (-0.84%)
     
  • Gold

    1,836.10
    -6.50 (-0.35%)
     
  • Silver

    24.34
    -0.37 (-1.50%)
     
  • EUR/USD

    1.1348
    +0.0031 (+0.2724%)
     
  • 10-Yr Bond

    1.7470
    -0.0860 (-4.69%)
     
  • Vix

    28.85
    +3.26 (+12.74%)
     
  • GBP/USD

    1.3555
    -0.0045 (-0.3321%)
     
  • USD/JPY

    113.6500
    -0.4500 (-0.3944%)
     
  • BTC-USD

    35,777.58
    -2,264.10 (-5.95%)
     
  • CMC Crypto 200

    870.86
    +628.18 (+258.85%)
     
  • FTSE 100

    7,494.13
    -90.88 (-1.20%)
     
  • Nikkei 225

    27,522.26
    -250.64 (-0.90%)
     

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

  • Oops!
    Something went wrong.
    Please try again later.
·13 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • TUSK
Cision

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

Financial Overview for the Third Quarter 2021:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


2021


2020


2021


2021


2020

Cash expenses:










Compensation and benefits

$

3,353



$

3,449



$

3,333



$

11,379



$

11,138


Professional services

4,571



5,651



5,806



13,783



15,335


Other(a)

2,252



2,163



2,464



7,058



6,572


Total cash SG&A expense

10,176



11,263



11,603



32,220



33,045


Non-cash expenses:










Bad debt provision(b)

31,449



626



76



41,650



2,306


Stock based compensation

241



291



304



827



1,326


Total non-cash SG&A expense

31,690



917



380



42,477



3,632


Total SG&A expense

$

41,866



$

12,180



$

11,983



$

74,697



$

36,677




a.

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

b.

The bad debt provision for the three and nine months ended September 30, 2021, includes $31.2 million and $41.2 million, respectively, for settlement of our accounts with Gulfport Energy Corporation and its subsidiaries.

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

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

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

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


Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


2021


2020


2021


2021


2020

Infrastructure services(a)

$

181



$

178



$

104



$

474



$

221


Well completion services(b)

2,392



698



388



3,192



3,752


Natural sand proppant services(c)

16



194



5



429



1,069


Drilling services(d)

4



132



1



42



199


Other(e)

172



323



63



337



708


Total capital expenditures

$

2,765



$

1,525



$

561



$

4,474



$

5,949




a.

Capital expenditures primarily for tooling and other equipment for the periods presented.

b.

Capital expenditures primarily for upgrades to our pressure pumping fleet to reduce greenhouse gas emissions and water transfer equipment for the periods presented.

c.

Capital expenditures primarily for maintenance for the periods presented.

d.

Capital expenditures primarily for maintenance for the periods presented.

e.

Capital expenditures primarily for equipment for the Company's rental businesses for the periods presented.

Conference Call Information
Mammoth will host a conference call on Friday, November 5, 2021 at 8:00 a.m. Central time (9:00 a.m. Eastern time) to discuss its third quarter 2021 financial and operational results. The telephone number to access the conference call is 216-562-0385. The conference call will also be webcast live on https://ir.mammothenergy.com/events-presentations.

About Mammoth Energy Services, Inc.
Mammoth is an integrated, growth-oriented energy services company focused on the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its infrastructure services businesses. The Company also provides products and services to enable the exploration and development of North American onshore unconventional oil and natural gas reserves. Mammoth's suite of services and products include: infrastructure services, well completion services, natural sand and proppant services, drilling services and other energy services. For more information, please visit www.mammothenergy.com.

Contacts:
Mark Layton, CFO
Mammoth Energy Services, Inc
investors@mammothenergy.com

Rick Black / Ken Dennard
Dennard Lascar Investor Relations
TUSK@dennardlascar.com

Forward-Looking Statements and Cautionary Statements
This news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein) contains certain statements and information that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts that address activities, events or developments that Mammoth expects, believes or anticipates will or may occur in the future are forward-looking statements. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "plan," "estimate," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "potential," "would," "may," "probable," "likely" and similar expressions, and the negative thereof, are intended to identify forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's business outlook and plans, future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, costs and other guidance regarding future developments. Forward-looking statements are not assurances of future performance. These forward-looking statements are based on management's current expectations and beliefs, forecasts for the Company's existing operations, experience and perception of historical trends, current conditions, anticipated future developments and their effect on Mammoth, and other factors believed to be appropriate. Although management believes that the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Moreover, the Company's forward-looking statements are subject to significant risks and uncertainties, including those described in its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings it makes with the SEC, including those relating to the Company's acquisitions and contracts, many of which are beyond the Company's control, which may cause actual results to differ materially from historical experience and present expectations or projections which are implied or expressed by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: the severity and duration of the COVID-19 pandemic, related global and national health concerns and economic repercussions and the resulting negative impact on demand for our services; the volatility of oil and natural gas prices and actions by OPEC members and other exporting nations affecting commodities prices and production levels; operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; the failure to receive or delays in receiving governmental authorizations, approvals and/or payments; the outcome of ongoing government investigations and other legal proceedings, including those relating to the contracts awarded to the Company's subsidiary Cobra Acquisitions LLC by the Puerto Rico Electric Power Authority; the Company's inability to replace the prior levels of work in its business segments, including its infrastructure and well completion services segments; risks relating to economic conditions; whether a federal infrastructure bill is implemented and the terms thereof; the loss of or interruption in operations of one or more of Mammoth's significant suppliers or customers; the loss of management and/or crews; the outcome or settlement of our litigation matters, including the adverse impact of the recent settlements with Gulfport Energy Corporation and MasTec Renewables Puerto Rico, LLC, and the effect on our financial condition and results of operations ; the effects of government regulation, permitting and other legal requirements; operating risks; the adequacy of capital resources and liquidity; Mammoth's ability to regain compliance with certain financial covenants and comply with other terms and conditions under our recently amended revolving credit facility; weather; natural disasters; litigation; volatility in commodity markets; competition in the oil and natural gas and infrastructure industries; and costs and availability of resources.

Investors are cautioned not to place undue reliance on any forward-looking statement which speaks only as of the date on which such statement is made. We undertake no obligation to correct, revise or update any forward-looking statement after the date such statement is made, whether as a result of new information, future events or otherwise, except as required by applicable law.


MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED BALANCE SHEETS


ASSETS


September 30,


December 31,



2021


2020

CURRENT ASSETS


(in thousands)

Cash and cash equivalents


$

7,953



$

14,822


Short-term investment


1,760



1,750


Accounts receivable, net


402,035



393,112


Receivables from related parties, net


238



28,461


Inventories


9,438



12,020


Prepaid expenses


3,859



13,825


Other current assets


754



758


Total current assets


426,037



464,748







Property, plant and equipment, net


194,478



251,262


Sand reserves


64,806



65,876


Operating lease right-of-use assets


14,766



20,179


Intangible assets, net - customer relationships


277



408


Intangible assets, net - trade names


3,194



4,366


Goodwill


12,608



12,608


Deferred income tax asset


8,094




Other non-current assets


4,247



5,115


Total assets


$

728,507



$

824,562


LIABILITIES AND EQUITY





CURRENT LIABILITIES





Accounts payable


$

43,628



$

40,316


Payables to related parties


5



3


Accrued expenses and other current liabilities


54,724



44,408


Current operating lease liability


6,996



8,618


Current portion of long-term debt


1,449



1,165


Income taxes payable


39,283



34,088


Total current liabilities


146,085



128,598







Long-term debt, net of current portion


79,195



81,338


Deferred income tax liabilities


687



24,741


Long-term operating lease liability


7,591



11,377


Asset retirement obligation


3,682



4,746


Other liabilities


15,003



10,435


Total liabilities


252,243



261,235







COMMITMENTS AND CONTINGENCIES










EQUITY





Equity:





Common stock, $0.01 par value, 200,000,000 shares authorized, 46,684,065 and 45,769,283 issued
and outstanding at September 30, 2021 and December 31, 2020


467



458


Additional paid in capital


537,980



537,039


Retained earnings


(59,236)



28,895


Accumulated other comprehensive loss


(2,947)



(3,065)


Total equity


476,264



563,327


Total liabilities and equity


$

728,507



$

824,562



MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME



Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


2021


2020


2021


2021


2020


(in thousands, except per share amounts)

REVENUE


Services revenue

$

52,417



$

55,279



$

40,867



$

135,975



$

169,002


Services revenue - related parties

601



8,565



90



15,678



35,228


Product revenue

4,467



4,815



6,483



17,932



18,171


Product revenue - related parties



1,875





2,145



5,625


Total revenue

57,485



70,534



47,440



171,730



228,026












COST AND EXPENSES










Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $35,857, $20,424, $17,861, $53,448 and $65,728, respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)

43,538



41,445



43,103



128,703



154,397


Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of $0, $0, $0, $0 and $0, respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)

181



131



107



397



329


Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $4,667, $2,689, $2,384, $7,051 and $7,344, respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)

9,865



4,353



7,165



22,939



21,862


Selling, general and administrative

41,866



11,979



11,791



74,312



36,063


Selling, general and administrative - related parties



201



192



385



614


Depreciation, depletion, amortization and accretion

19,148



23,132



20,265



60,559



73,130


Impairment of goodwill









54,973


Impairment of other long-lived assets

547







547



12,897


Total cost and expenses

115,145



81,241



82,623



287,842



354,265


Operating loss

(57,660)



(10,707)



(35,183)



(116,112)



(126,239)












OTHER INCOME (EXPENSE)










Interest expense, net

(1,484)



(1,098)



(1,169)



(3,878)



(4,207)


Other income (expense), net

11,056



7,943



(14,998)



...

6,004



23,489


Other income (expense), net - related parties



1,099





(515)



2,232


...