Mammoth Energy Services, Inc. Announces Second Quarter 2024 Operational and Financial Results

OKLAHOMA CITY, Aug. 9, 2024 /PRNewswire/ — Mammoth Energy Services, Inc. (“Mammoth” or the “Company”) (NASDAQ: TUSK) today reported financial and operational results for the second quarter ended June 30, 2024.

Financial Overview for the Second Quarter 2024:Total revenue was $51.5 million for the second quarter of 2024 compared to $43.2 million for the first quarter of 2024.

Net loss for the second quarter of 2024 was $156.0 million, or $3.25 loss per diluted share, compared to net loss of $11.8 million, or $0.25 loss per diluted share, for the first quarter of 2024.

Adjusted EBITDA (as defined and reconciled below) was ($160.7) million for the second quarter of 2024 compared to $4.5 million for the first quarter of 2024. During the second quarter of 2024, the Company recognized expense of $170.7 million related to the settlement between Mammoth’s subsidiary Cobra Acquisitions LLC (“Cobra”) and the Puerto Rico Electric Power Authority (“PREPA”). Excluding this non-recurring expense and interest income previously accrued on the receivable with PREPA, Adjusted EBITDA would have been ($0.3) million for the second quarter of 2024 compared to ($6.0) million for the first quarter of 2024.

Settlement AgreementAs previously announced, on July 22, 2024, Mammoth’s subsidiary Cobra entered into a release and settlement agreement to settle all outstanding matters between Cobra and PREPA (the “Settlement Agreement”). As a result of the Settlement Agreement, the Company expects to receive $188.4 million in total settlement proceeds. During the second quarter of 2024, the Company recorded a non-cash, pre-tax charge of approximately $170.7 million, of which $89.2 million was charged to credit loss expense, which is included in “selling, general and administrative” and $81.5 million was charged to interest on delinquent accounts receivable, which is included in “other income, net” in relation to the Settlement Agreement.

Arty Straehla, Chief Executive Officer of Mammoth commented, “We are pleased to report sequential improvement in our second quarter results, compared to the first quarter, despite continued challenges that persist due to industry activity softness, especially in the natural gas basins that we operate, constraining our Well Completion Services division and other oilfield services. Our Infrastructure Services business continues to perform well and is demonstrating growth both sequentially and year over year. As we enter the second half of the year, our teams across the organization remain focused on efficient and effective cost management to align with the activity levels of our customers. We enter the second half of the year with an undrawn revolver and cash on the balance sheet, as well as a recently announced resolution with PREPA. With the anticipated collection of the PREPA receivable as a result of the Settlement Agreement, we believe Mammoth will be better positioned to capitalize on improved market fundamentals we anticipate in 2025.

“We look forward to receiving the PREPA settlement proceeds and plan to use a portion of the $188.4 million to pay off our term credit facility, which had a balance of approximately $49.3 million as of June 30, 2024. The remaining amount of approximately $139.1 million will be cash on our balance sheet to be used to invest back into our business and for general corporate purposes,” concluded Straehla.

Well Completion ServicesMammoth’s well completion services division contributed revenue (inclusive of inter-segment revenue) of $10.0 million on 292 stages for the second quarter of 2024 compared to $8.3 million on 380 stages for the first quarter of 2024. On average, 0.3 of the Company’s fleets were active for the second quarter of 2024 compared to an average utilization of 0.6 fleets during the first quarter of 2024.

Infrastructure ServicesMammoth’s infrastructure services division contributed revenue of $31.4 million for the second quarter of 2024 compared to $25.0 million for the first quarter of 2024. Average crew count increased to 79 crews during the second quarter of 2024 compared to 75 crews during the first quarter of 2024.

Natural Sand Proppant ServicesMammoth’s natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $4.7 million for the second quarter of 2024 compared to $4.3 million for the first quarter of 2024. In the second quarter of 2024, the Company sold approximately 141,000 tons of sand at an average sales price of $22.73 per ton compared to sales of approximately 146,000 tons of sand at an average price of $24.38 per ton during the first quarter of 2024. Additionally, during the second quarter of 2024, the Company recognized shortfall revenue totaling $1.1 million.

Drilling ServicesMammoth’s drilling services division contributed revenue (inclusive of inter-segment revenue) of $0.7 million for the second quarter of 2024 compared to $0.5 million for the first quarter of 2024. The increase in drilling services revenue is primarily attributable to an increase in utilization for our directional drilling business.

Other ServicesMammoth’s other services, including aviation, equipment rentals, remote accommodations and equipment manufacturing, contributed revenue (inclusive of inter-segment revenue) of $7.1 million for the second quarter of 2024 compared to $6.2 million for the first quarter of 2024.

Selling, General and Administrative ExpensesSelling, general and administrative (“SG&A”) expenses were $97.5 million for the second quarter of 2024 compared to $8.8 million for the first quarter of 2024. Included in the amount for the second quarter of 2024 are credit loss charges totaling $89.2 million related to Cobra’s Settlement Agreement with PREPA.

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

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2024

2023

2024

2024

2023

Cash expenses:

Compensation and benefits

$           3,116

$           3,996

$           4,104

$           7,220

$           8,273

Professional services

3,056

4,276

2,457

5,513

6,205

Other(a)

1,702

1,868

1,773

3,475

3,779

Total cash SG&A expense

7,874

10,140

8,334

16,208

18,257

Non-cash expenses:

Change in provision for expected credit losses(b)

89,383

(44)

229

89,612

(425)

Stock based compensation

219

261

219

438

908

Total non-cash SG&A expense

89,602

217

448

90,050

483

Total SG&A expense

$         97,476

$         10,357

$           8,782

$       106,258

$         18,740

a.

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

b.

Included in the three and six months ended June 30, 2024 amounts is a charge of $89.2 million related to Cobra’s Settlement Agreement with PREPA.

SG&A expenses, as a percentage of total revenue, were 189% for the second quarter of 2024 compared to 20% for the first quarter of 2024.

Interest Expense and Financing Charges, netInterest expense and financing charges, net were $2.5 million for the second quarter of 2024 compared to $8.1 million for the first quarter of 2024. The Company recognized a financing charge totaling $5.5 million during the first quarter of 2024 related to the termination of the Assignment Agreement with SPCP Group LLC.

LiquidityAs of June 30, 2024, Mammoth had cash on hand of $10.3 million. As of June 30, 2024, the Company’s revolving credit facility was undrawn, the borrowing base was $21.0 million and there was $14.3 million of available borrowing capacity under the revolving credit facility, after giving effect to $6.7 million of outstanding letters of credit. As of June 30, 2024, Mammoth had total liquidity of $24.6 million.

As of August 7, 2024, Mammoth had cash on hand of $9.1 million, no outstanding borrowings under its revolving credit facility, and a borrowing base of $25.7 million. As of August 7, 2024, the Company had $19.0 million of available borrowing capacity under its revolving credit facility and total liquidity of $28.1 million.

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

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2024

2023

2024

2024

2023

Well completion services(a)

$              2,081

$              4,348

$              2,663

$              4,738

$            10,120

Infrastructure services(b)

275

72

683

963

275

Drilling services(c)

85

87

Other(d)

196

146

342

Eliminations(a)

2,282

83

659

2,940

144

Total capital expenditures

$              4,919

$              4,503

$              4,151

$              9,070

$            10,539

a.

Capital expenditures primarily for upgrades and maintenance to our pressure pumping fleet for the periods presented.

b.

Capital expenditures primarily for truck, tooling and equipment purchases for the periods presented.

c.

Capital expenditures primarily for maintenance for the periods presented.

d.

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

Conference Call InformationMammoth will host a conference call on Friday, August 9, 2024 at 9:00 a.m. Central time (10:00 a.m. Eastern time) to discuss its second quarter financial and operational results. The telephone number to access the conference call is 1-201-389-0872. The conference call will also be webcast live on https://ir.mammothenergy.com/events-presentations. Please submit any questions for management prior to the call via email to [email protected].

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

Contacts:Mark Layton, CFO
Mammoth Energy Services, Inc
[email protected]

Rick Black / Ken Dennard
Dennard Lascar Investor Relations
[email protected]

Forward-Looking Statements and Cautionary StatementsThis news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein) contains certain statements and information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts that address activities, events or developments that Mammoth expects, believes or anticipates will or may occur in the future are forward-looking statements. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “plan,” “estimate,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “potential,” “would,” “may,” “probable,” “likely” and similar expressions, and the negative thereof, are intended to identify forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company’s business outlook and plans, future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, plans for stock repurchases under its stock repurchase program, costs and other guidance regarding future developments. Forward-looking statements are not assurances of future performance. These forward-looking statements are based on management’s current expectations and beliefs, forecasts for the Company’s existing operations, experience and perception of historical trends, current conditions, anticipated future developments and their effect on Mammoth, and other factors believed to be appropriate. Although management believes that the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Moreover, the Company’s forward-looking statements are subject to significant risks and uncertainties, including those described in its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings it makes with the SEC, including those relating to the Company’s acquisitions and contracts, many of which are beyond the Company’s control, which may cause actual results to differ materially from historical experience and present expectations or projections which are implied or expressed by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: demand for our services; the volatility of oil and natural gas prices and actions by OPEC members and other exporting nations affecting commodities prices and production levels; the impact of the war in Ukraine and the Israel-Hamas war on the global energy and capital markets and global stability; performance of contracts and supply chain disruptions; inflationary pressures; higher interest rates and their impact on the cost of capital; instability in the banking and financial services sectors; the outcome of ongoing government investigations and other legal proceedings; the failure to receive or delays in receiving the Title III Court approval relating to the settlement agreement between Cobra ,PREPA and the Financial Oversight and Management Board for Puerto Rico, in its capacity as Title III representative for PREPA, to settle all outstanding litigation and other dispute matters between Cobra and PREPA, and/or any payments under the settlement agreement discussed in this news release; the Company’s inability to replace the prior levels of work in its business segments, including its infrastructure and well completion services segments; risks relating to economic conditions, including concerns over a potential economic slowdown or recession; impacts of the recent federal infrastructure bill on the infrastructure industry and our infrastructure services business; the loss of or interruption in operations of one or more of Mammoth’s significant suppliers or customers; the loss of management and/or crews; the outcome or settlement of our litigation matters and the effect on our financial condition and results of operations; the effects of government regulation, permitting and other legal requirements; operating risks; the adequacy of capital resources and liquidity; Mammoth’s ability to comply with the applicable financial covenants and other terms and conditions under Mammoth’s revolving credit facility and term loan; weather; natural disasters; litigation; volatility in commodity markets; competition in the oil and natural gas and infrastructure industries; and costs and availability of resources.

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

MAMMOTH ENERGY SERVICES, INC.CONSOLIDATED BALANCE SHEETS

ASSETS

June 30,

December 31,

2024

2023

CURRENT ASSETS

(in thousands)

Cash and cash equivalents

$                     10,266

$                     16,556

Restricted cash

7,742

Accounts receivable, net

235,795

447,202

Inventories

12,387

12,653

Prepaid expenses

6,450

12,181

Other current assets

589

591

Total current assets

265,487

496,925

Property, plant and equipment, net

109,517

113,905

Sand reserves

58,215

58,528

Operating lease right-of-use assets

6,403

9,551

Goodwill

9,214

9,214

Deferred income tax asset

1,844

Other non-current assets

6,671

8,512

Total assets

$                   455,507

$                   698,479

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Accounts payable

$                     24,136

$                     27,508

Accrued expenses and other current liabilities

31,151

86,713

Accrued expenses and other current liabilities – related parties

1,241

Current operating lease liability

4,352

5,771

Income taxes payable

43,625

61,320

Total current liabilities

103,264

182,553

Long-term debt from related parties

47,275

42,809

Deferred income tax liabilities

2,505

628

Long-term operating lease liability

1,983

3,534

Asset retirement obligation

4,194

4,140

Other long-term liabilities

3,910

4,715

Total liabilities

163,131

238,379

COMMITMENTS AND CONTINGENCIES

EQUITY

Equity:

Common stock, $0.01 par value, 200,000,000 shares authorized, 48,127,369 and 47,941,652 issued and outstanding at June 30, 2024 and December 31, 2023

481

479

Additional paid in capital

539,994

539,558

Accumulated deficit

(244,121)

(76,317)

Accumulated other comprehensive loss

(3,978)

(3,620)

Total equity

292,376

460,100

Total liabilities and equity

$                   455,507

$                   698,479

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

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2024

2023

2024

2024

2023

(in thousands, except per share amounts)

REVENUE

Services revenue

$          46,770

$          63,478

$          38,814

$          85,584

$        167,115

Services revenue – related parties

66

369

68

133

589

Product revenue

4,693

11,584

4,307

8,999

24,047

Total revenue

51,529

75,431

43,189

94,716

191,751

COST AND EXPENSES

Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $4,780, $10,270, $5,874, $10,654, $22,032, respectively, for the three months ended June 30, 2024, June 30, 2023, and March 31, 2024 and six months ended June 30, 2024 and 2023)

38,962

52,846

34,483

73,445

133,823

Services cost of revenue – related parties

118

210

118

236

240

Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $1,271, $2,373, $1,146, $2,417, $3,559, respectively, for the three months ended June 30, 2024, June 30, 2023, and March 31, 2024 and six months ended June 30, 2024 and 2023)

4,761

7,196

5,983

10,744

15,181

Selling, general and administrative

97,476

10,357

8,782

106,258

18,740

Depreciation, depletion, amortization and accretion

6,051

12,650

7,021

13,073

25,606

Gains on disposal of assets, net

(1,036)

(473)

(1,166)

(2,203)

(834)

Total cost and expenses

146,332

82,786

55,221

201,553

192,756

Operating loss

(94,803)

(7,355)

(12,032)

(106,837)

(1,005)

OTHER INCOME (EXPENSE)

Interest expense and financing charges, net

(1,005)

(3,220)

(6,637)

(7,642)

(6,509)

Interest expense and financing charges, net – related parties

(1,529)

(1,500)

(3,028)

Other (expense) income, net

(73,678)

8,339

10,143

(63,536)

16,963

Total other (expense) income

(76,212)

5,119

2,006

(74,206)

10,454

(Loss) income before income taxes

(171,015)

(2,236)

(10,026)

(181,043)

9,449

(Benefit) provision for income taxes

(15,022)

2,234

1,785

(13,239)

5,568

Net (loss) income

$      (155,993)

$          (4,470)

$        (11,811)

$      (167,804)

$            3,881

OTHER COMPREHENSIVE (LOSS) INCOME

Foreign currency translation adjustment

(114)

227

(244)

(358)

230

Comprehensive (loss) income

$      (156,107)

$          (4,243)

$        (12,055)

$      (168,162)

$            4,111

Net (loss) income per share (basic)

$            (3.25)

$            (0.09)

$            (0.25)

$            (3.50)

$             0.08

Net (loss) income per share (diluted)

$            (3.25)

$            (0.09)

$            (0.25)

$            (3.50)

$             0.08

Weighted average number of shares outstanding (basic)

48,040

47,718

47,964

48,002

47,581

Weighted average number of shares outstanding (diluted)

48,040

47,718

47,964

48,002

47,966

MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

June 30,

2024

2023

(in thousands)

Cash flows from operating activities:

Net (loss) income

$                      (167,804)

$                           3,881

Adjustments to reconcile net (loss) income to cash provided by operating activities:

Stock based compensation

438

908

Depreciation, depletion, accretion and amortization

13,073

25,606

Amortization of debt origination costs

714

377

Change in provision for expected credit losses

171,076

(425)

Gains on disposal of assets

(2,203)

(834)

Gains from sales of equipment damaged or lost down-hole

(46)

Deferred income taxes

3,722

(46)

Other

1,099

387

Changes in assets and liabilities:

Accounts receivable, net

39,073

7,880

Inventories

265

(1,306)

Prepaid expenses and other assets

5,703

5,162

Accounts payable

(2,276)

466

Accrued expenses and other liabilities

(7,688)

(13,924)

Accrued expenses and other liabilities – related parties

3,028

Income taxes payable

(17,692)

4,523

Net cash provided by operating activities

40,528

32,609

Cash flows from investing activities:

Purchases of property and equipment

(9,070)

(10,539)

Proceeds from disposal of property and equipment

4,548

806

Net cash used in investing activities

(4,522)

(9,733)

Cash flows from financing activities:

Borrowings on long-term debt

118,900

Repayments of long-term debt

(143,064)

Payments on financing transaction

(46,837)

Payments on sale-leaseback transaction

(2,148)

(2,449)

Principal payments on financing leases and equipment financing notes

(966)

(3,791)

Debt issuance costs

(37)

Other

(919)

Net cash used in financing activities

(49,988)

(31,323)

Effect of foreign exchange rate on cash

(50)

15

Net change in cash, cash equivalents and restricted cash

(14,032)

(8,432)

Cash, cash equivalents and restricted cash at beginning of period

24,298

17,282

Cash, cash equivalents and restricted cash at end of period

$                         10,266

$                           8,850

Supplemental disclosure of cash flow information:

Cash paid for interest

$                           1,440

$                           6,321

Cash paid for income taxes, net of refunds received

$                              722

$                              752

Supplemental disclosure of non-cash transactions:

Interest paid in kind – related parties

$                           4,269

$                                —

Purchases of property and equipment included in accounts payable

$                           2,258

$                           6,732

Right-of-use assets obtained for financing lease liabilities

$                           1,369

$                              306

MAMMOTH ENERGY SERVICES, INC.
SEGMENT INCOME STATEMENTS
(in thousands)

Three Months Ended June 30, 2024

Well
Completion

Infrastructure

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$            9,935

$           31,433

$            4,693

$               736

$            4,732

$                 —

$           51,529

Intersegment revenues

109

27

2,359

(2,495)

Total revenue

10,044

31,433

4,720

736

7,091

(2,495)

51,529

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion

10,096

24,630

4,589

1,155

3,371

43,841

Intersegment cost of revenues

234

1

1

2,257

(2,493)

Total cost of revenue

10,330

24,631

4,589

1,156

5,628

(2,493)

43,841

Selling, general and administrative

1,196

94,450

943

176

711

97,476

Depreciation, depletion, amortization and accretion

2,691

627

1,271

613

849

6,051

Gains on disposal of assets, net

(105)

(460)

(110)

(1)

(360)

(1,036)

Operating (loss) income

(4,068)

(87,815)

(1,973)

(1,208)

263

(2)

(94,803)

Interest expense and financing charges, net

522

1,577

131

121

183

2,534

Other expense (income), net

72,687

(1)

992

73,678

Loss before income taxes

$           (4,590)

$       (162,079)

$           (2,103)

$           (1,329)

$             (912)

$                 (2)

$       (171,015)

Three Months Ended June 30, 2023

Well
Completion

Infrastructure

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$           27,466

$           28,315

$           11,567

$            2,810

$            5,273

$                 —

$           75,431

Intersegment revenues

118

383

(501)

Total revenue

27,584

28,315

11,567

2,810

5,656

(501)

75,431

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion

23,594

23,292

7,067

2,375

3,924

60,252

Intersegment cost of revenues

227

9

12

253

(501)

Total cost of revenue

23,821

23,301

7,067

2,387

4,177

(501)

60,252

Selling, general and administrative

1,776

6,385

954

193

1,049

10,357

Depreciation, depletion, amortization and accretion

4,500

2,436

2,374

1,154

2,186

12,650

Gains on disposal of assets, net

(473)

(473)

Operating (loss) income

(2,513)

(3,807)

1,172

(924)

(1,283)

(7,355)

Interest expense and financing charges, net

824

1,869

149

133

245

3,220

Other expense (income), net

1

(8,557)

(4)

221

(8,339)

(Loss) income before income taxes

$           (3,338)

$            2,881

$            1,027

$           (1,057)

$           (1,749)

$                 —

$           (2,236)

Three Months Ended March 31, 2024

Well
Completion

Infrastructure

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$            8,159

$           25,038

$            4,307

$               511

$            5,174

$                 —

$           43,189

Intersegment revenues

114

1,005

(1,119)

Total revenue

8,273

25,038

4,307

511

6,179

(1,119)

43,189

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion

8,338

21,533

5,840

1,050

3,823

40,584

Intersegment cost of revenues

218

25

2

874

(1,119)

Total cost of revenue

8,556

21,558

5,840

1,052

4,697

(1,119)

40,584

Selling, general and administrative

1,073

5,617

1,031

212

849

8,782

Depreciation, depletion, amortization and accretion

3,264

718

1,146

874

1,019

7,021

Losses (gains) on disposal of assets, net

250

(483)

2

(935)

(1,166)

Operating (loss) income

(4,870)

(2,372)

(3,710)

(1,629)

549

(12,032)

Interest expense and financing charges, net

569

7,099

142

128

199

8,137

Other (income) expense, net

(10,258)

(1)

116

(10,143)

(Loss) income before income taxes

$           (5,439)

$               787

$           (3,851)

$           (1,757)

$               234

$                 —

$         (10,026)

Six Months ended June 30, 2024

Well
Completion

Infrastructure

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$          18,093

$          56,471

$            8,999

$            1,247

$            9,906

$                —

$         94,716

Intersegment revenues

222

28

3,364

(3,614)

$                —

Total revenue

18,315

56,471

9,027

1,247

13,270

(3,614)

94,716

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion

18,434

46,164

10,430

2,203

7,194

84,425

Intersegment cost of revenues

452

26

3

3,131

(3,612)

$                —

Total cost of revenue

18,886

46,190

10,430

2,206

10,325

(3,612)

84,425

Selling, general and administrative

2,269

100,068

1,974

388

1,559

106,258

Depreciation, depletion, amortization and accretion

5,955

1,346

2,417

1,488

1,867

13,073

Losses (gains) on disposal of assets, net

145

(943)

(110)

1

(1,296)

(2,203)

Operating (loss) income

(8,940)

(90,190)

(5,684)

(2,836)

815

(2)

(106,837)

Interest expense and financing charges, net

1,091

8,675

273

250

381

10,670

Other expense (income), net

1

62,429

(1)

1,107

63,536

Loss before income taxes

$        (10,032)

$      (161,294)

$          (5,956)

$          (3,086)

$             (673)

$                (2)

$      (181,043)

Six Months ended June 30, 2023

Well
Completion

Infrastructure

Sand

Drilling

All Other

Eliminations

Total

Revenue from external customers

$          94,644

$          56,596

$          24,009

$            4,165

$          12,337

$                —

$        191,751

Intersegment revenues

240

25

833

(1,098)

Total revenue

94,884

56,596

24,034

4,165

13,170

(1,098)

191,751

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion

75,630

45,768

14,927

3,841

9,078

149,244

Intersegment cost of revenues

704

20

26

348

(1,098)

Total cost of revenue

76,334

45,788

14,927

3,867

9,426

(1,098)

149,244

Selling, general and administrative

4,268

10,595

1,458

339

2,080

18,740

Depreciation, depletion, amortization and accretion

9,317

5,810

3,561

2,383

4,535

25,606

Gains on disposal of assets, net

(127)

(16)

(691)

(834)

Operating income (loss)

4,965

(5,470)

4,104

(2,424)

(2,180)

(1,005)

Interest expense and financing charges, net

1,753

3,714

305

259

478

6,509

Other expense (income), net

1

(17,365)

(6)

407

(16,963)

Income (loss) before income taxes

$            3,211

$            8,181

$            3,805

$          (2,683)

$          (3,065)

$                —

$            9,449

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 (loss) income before depreciation, depletion, amortization and accretion expense, gains on disposal of assets, net, stock based compensation, interest expense and financing charges, net, other (income) expense, net (which is comprised of interest on trade accounts receivable and certain legal expenses) and provision (benefit) for income taxes, further adjusted to add back interest on trade accounts receivable. The Company excludes the items listed above from net (loss) income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within the energy service industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net (loss) income or cash flows from operating activities as determined in accordance with GAAP or as an indicator of Mammoth’s operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets. Mammoth’s computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure its ability to meet debt service requirements.

The following tables provide a reconciliation of Adjusted EBITDA to the GAAP financial measure of net (loss) income on a consolidated basis and for each of the Company’s segments (in thousands):

Consolidated

Three Months Ended

Years Ended

June 30,

March 31,

June 30,

Reconciliation of net (loss) income to Adjusted EBITDA:

2024

2023

2024

2024

2023

Net (loss) income

$    (155,993)

$        (4,470)

$      (11,811)

$    (167,804)

$          3,881

Depreciation, depletion, amortization and accretion expense

6,051

12,650

7,021

13,073

25,606

Gains on disposal of assets, net

(1,036)

(473)

(1,166)

(2,203)

(834)

Stock based compensation

219

261

219

438

908

Interest expense and financing charges, net

2,534

3,220

8,137

10,670

6,509

Other expense (income), net

73,678

(8,339)

(10,143)

63,536

(16,963)

(Benefit) provision for income taxes

(15,022)

2,234

1,785

(13,239)

5,568

Interest on trade accounts receivable

(71,171)

11,341

10,485

(60,686)

22,454

Adjusted EBITDA

$    (160,740)

$        16,424

$          4,527

$    (156,215)

$        47,129

Well Completion Services

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

Reconciliation of net (loss) income to Adjusted EBITDA:

2024

2023

2024

2024

2023

Net (loss) income

$     (4,590)

$        (3,338)

$        (5,439)

$      (10,032)

$          3,211

Depreciation and amortization expense

2,691

4,500

3,264

5,955

9,317

(Gains) losses on disposal of assets, net

(105)

250

145

Stock based compensation

46

97

44

90

387

Interest expense and financing charges, net

522

824

569

1,091

1,753

Other expense, net

1

1

1

Adjusted EBITDA

$     (1,436)

$          2,084

$        (1,312)

$        (2,750)

$       14,669

Infrastructure Services

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

Reconciliation of net (loss) income to Adjusted EBITDA:

2024

2023

2024

2024

2023

Net (loss) income

$  (144,861)

$             697

$            (405)

$    (145,267)

$          3,151

Depreciation and amortization expense

627

2,436

718

1,346

5,810

Gains on disposal of assets, net

(460)

(483)

(943)

(127)

Stock based compensation

123

107

117

240

337

Interest expense and financing charges, net

1,577

1,869

7,099

8,675

3,714

Other expense (income), net

72,687

(8,557)

(10,258)

62,429

(17,365)

(Benefit) provision for income taxes

(17,218)

2,184

1,192

(16,027)

5,030

Interest on trade accounts receivable

(71,171)

11,341

10,485

(60,686)

22,454

Adjusted EBITDA

$  (158,696)

$       10,077

$          8,465

$    (150,233)

$        23,004

Natural Sand Proppant Services

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

Reconciliation of net (loss) income to Adjusted EBITDA:

2024

2023

2024

2024

2023

Net (loss) income

$        (2,103)

$          1,027

$        (3,851)

$        (5,956)

$          3,805

Depreciation, depletion, amortization and accretion expense

1,271

2,374

1,146

2,417

3,561

Gains on disposal of assets, net

(110)

(110)

(16)

Stock based compensation

32

36

38

69

113

Interest expense and financing charges, net

131

149

142

273

305

Other income, net

(1)

(4)

(1)

(1)

(6)

Adjusted EBITDA

$           (780)

$          3,582

$        (2,526)

$        (3,308)

$          7,762

Drilling Services

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

Reconciliation of net loss to Adjusted EBITDA:

2024

2023

2024

2024

2023

Net loss

$        (1,329)

$        (1,057)

$        (1,757)

$        (3,086)

$        (2,683)

Depreciation expense

613

1,154

874

1,488

2,383

(Gains) losses on disposal of assets, net

(1)

2

1

Stock based compensation

5

5

5

10

13

Interest expense and financing charges, net

121

133

128

250

259

Adjusted EBITDA

$           (591)

$             235

$           (748)

$        (1,337)

$             (28)

Other Services(a)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

Reconciliation of net loss to Adjusted EBITDA:

2024

2023

2024

2024

2023

Net loss

$        (3,108)

$        (1,799)

$           (359)

$        (3,461)

$        (3,603)

Depreciation, amortization and accretion expense

849

2,186

1,019

1,867

4,535

Gains on disposal of assets, net

(360)

(473)

(935)

(1,296)

(691)

Stock based compensation

13

16

15

29

58

Interest expense and financing charges, net

183

245

199

381

478

Other expense, net

992

221

116

1,107

407

Provision for income taxes

2,196

50

593

2,788

538

Adjusted EBITDA

$             765

$             446

$             648

$          1,415

$          1,722

a.

Includes results for Mammoth’s aviation, equipment rentals, remote accommodations and equipment manufacturing and corporate related activities. The Company’s corporate related activities do not generate revenue.

SOURCE Mammoth Energy Services, Inc.


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