Mammoth Energy Services Inc (TUSK) Faces Headwinds in Q3 2023 Despite Strategic Financial Moves
Q3 2023 revenue dropped to $65.0 million from $107.2 million in Q3 2022.
Net loss reported at $1.1 million in Q3 2023, a decrease from $7.7 million net income in Q3 2022.
Adjusted EBITDA stood at $13.4 million, down from $29.8 million in the same quarter last year.
New credit facilities established to strengthen liquidity base for future operations.
Mammoth Energy Services Inc (NASDAQ:TUSK) released its earnings report for the third quarter ended September 30, 2023, revealing a challenging period marked by a significant revenue decline and a net loss. The company reported total revenue of $65.0 million, a substantial decrease from the $107.2 million recorded in the same quarter of the previous year, and down from $75.4 million in the second quarter of 2023. The net loss for the quarter was $1.1 million, or $0.02 loss per diluted share, compared to a net income of $7.7 million, or $0.16 per diluted share, in Q3 2022, and a net loss of $4.5 million, or $0.09 loss per diluted share, in the preceding quarter.
Adjusted EBITDA for Q3 2023 was $13.4 million, a decrease from $29.8 million in Q3 2022 and $16.4 million in Q2 2023. CEO Arty Straehla acknowledged the market pressures, particularly in natural gas basins, that impacted the company's pressure pumping fleet utilization and overall performance. Despite these challenges, Straehla expressed optimism about signs of increasing activity and customer planning for 2024, anticipating an improvement in frac fleet counts.
"We are pleased to have announced that we entered into a new revolving credit facility agreement and a new term loan agreement, which refinanced, in full, Mammoths indebtedness outstanding under our previous revolving credit facility. We believe these new agreements will provide Mammoth with a strong base of liquidity for years to come," said Arty Straehla, CEO of Mammoth.
The well completion services division saw a revenue decrease to $20.3 million in Q3 2023 from $51.5 million in Q3 2022, with a reduction in stages completed. The infrastructure services division reported $26.7 million in revenue, down from $33.3 million in the same quarter of the previous year. The natural sand proppant services division's revenue was $10.6 million, a slight decrease from $12.9 million in Q3 2022, with a marginal increase in the average sales price per ton of sand. Drilling services and other services also experienced revenue declines.
Selling, general, and administrative (SG&A) expenses remained relatively stable at $10.4 million for Q3 2023, compared to $9.7 million for the same quarter of 2022. The company's liquidity position was bolstered by new credit agreements, providing a total liquidity of $21.5 million as of September 30, 2023.
Capital expenditures for the quarter were $4.7 million, with the majority allocated to well completion services. Mammoth will host a conference call to discuss its third quarter financial and operational results, providing an opportunity for investors and analysts to gain further insights into the company's performance and strategies.
Despite the downturn in Q3 2023, Mammoth Energy Services Inc (NASDAQ:TUSK) is taking strategic steps to navigate the current market environment and prepare for anticipated future demand. The company's proactive management of its cost structure and the establishment of new credit facilities are aimed at positioning it for recovery as market conditions improve.
Explore the complete 8-K earnings release (here) from Mammoth Energy Services Inc for further details.
This article first appeared on GuruFocus.
