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

Friday, 30. July 2021 12:00

OKLAHOMA CITY, July 30, 2021 (GLOBE NEWSWIRE) -- Mammoth Energy Services, Inc. (“Mammoth” or the “Company”) (NASDAQ: TUSK) today reported financial and operational results for the second quarter ended June 30, 2021.

Financial Overview for the Second Quarter 2021:

Total revenue was $47.4 million for the second quarter of 2021, as compared to $60.1 million for the same quarter last year and $66.8 million for the first quarter of 2021.

Net loss for the second quarter of 2021 was $34.8 million, or a $0.75 loss per share, as compared to a net loss of $15.2 million, or a $0.33 loss per share, for the same quarter last year, and a net loss of $12.4 million, or a $0.27 loss per share, for the first quarter of 2021.

Adjusted EBITDA (as defined and reconciled below) was ($5.5) million for the second quarter of 2021, as compared to $6.9 million for the same quarter last year and $6.4 million for the first quarter of 2021.

Arty Straehla, Chief Executive Officer of Mammoth commented, “While second quarter results did not meet expectations, internally we remain focused on improving near-term results as we continue migrating the Company further into the infrastructure space to enhance long-term growth and sustainability. In our energy businesses, improved commodities pricing is generating some positive industry movement and increased equipment utilization as we are ramping up to put a second hydraulic fracturing fleet to work in mid-August. We are also beginning to experience increased market activity in our sand business.”

“In the infrastructure space, improving macro trends related to increased project bidding levels and funding capacity in the sector persists. We continue to pursue opportunities within this sector as we strategically structure our service offerings for growth, both the geographic footprint and depth of projects.”

Straehla continued, “Lastly, we are continuing our efforts to collect our receivable from PREPA for work performed by our subsidiary Cobra 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 (inclusive of inter-segment revenue) of $17.2 million, or approximately 36% of Mammoth's total revenue, for the second quarter of 2021, as compared to $30.2 million for the same quarter last year and $29.3 million for the first quarter of 2021. The decrease in revenue compared to the same quarter of 2020 and first quarter of 2021 is primarily due to management and crew turnover.

Well Completion Services
Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $17.4 million on 520 stages for the second quarter of 2021, as compared to $16.5 million on 658 stages for the same quarter last year and $23.0 million on 445 stages for the first quarter of 2021. On average, 0.9 of the Company's fleets were active for the second quarter, compared to an average utilization of 1.9 fleets during the same quarter last year and an average utilization of 0.9 fleets during the first quarter of 2021.
  
Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $6.9 million for the second quarter of 2021, as compared to $6.2 million for the same quarter last year and $8.7 million for the first quarter of 2021. In the second quarter of 2021, the Company sold approximately 255,000 tons of sand at an average sales price of $15.80 per ton, as compared to sales of approximately 82,000 tons of sand at an average sales price of $15.18 per ton during the same quarter last year. In the first quarter of 2021, sales were approximately 171,000 tons of sand at an average price of $16.83 per ton.

Drilling Services
Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $1.1 million for the second quarter of 2021, as compared to $1.2 million for the same quarter last year and $0.9 million for the first quarter of 2021.

As a result of market conditions, the Company has 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 $5.5 million for the second quarter of 2021, as compared to $6.8 million for the same quarter last year and $5.7 million for the first quarter of 2021.

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

Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses were $12.0 million for the second quarter of 2021, as compared to $13.7 million for the same quarter last year and $20.8 million for the first quarter of 2021.

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

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
 2021 2020 2021 2021 2020
Cash expenses:         
Compensation and benefits$3,333   $3,720   $4,694   $8,027   $7,690  
Professional services5,806   6,147   3,405   9,211   9,684  
Other(a)2,464   2,100   2,342   4,806   4,409  
Total cash SG&A expense11,603   11,967   10,441   22,044   21,783  
Non-cash expenses:         
Bad debt provision76   1,624   10,125   10,201   1,679  
Stock based compensation304   135   282   586   1,035  
Total non-cash SG&A expense380   1,759   10,407   10,787   2,714  
Total SG&A expense$11,983   $13,726   $20,848   $32,831   $24,497  
a.        Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.                   

SG&A expenses, as a percentage of total revenue, were 25% for the second quarter of 2021, as compared to 23% for the same quarter last year and 31% for the first quarter of 2021. The bad debt provision for the first quarter of 2021 includes $10.0 million related to the voluntary petitions for relief filed on November 13, 2020, by Gulfport Energy Corporation and its subsidiaries.

Liquidity
As of June 30, 2021, Mammoth had cash on hand of $11.0 million, outstanding borrowings under its revolving credit facility of $60.2 million and $51.1 million of available borrowing capacity under its revolving credit facility, after giving effect to $13.0 million of outstanding letters of credit. As of June 30, 2021, Mammoth had total liquidity of $62.1 million.

As of July 27, 2021, Mammoth had cash on hand of $13.7 million, outstanding borrowings under its revolving credit facility of $61.4 million and $49.8 million of available borrowing capacity under its revolving credit facility, after giving effect to $13.0 million of outstanding letters of credit.

Capital Expenditures
The 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,
 2021 2020 2021 2021 2020
Infrastructure services(a)$104  $43  $189  $293  $43 
Well completion services(b)388  2,450  412  800  3,054 
Natural sand proppant services(c)5  354  408  413  875 
Drilling services(d)1  67  37  38  67 
Other(e)63  10  102  165  385 
Total capital expenditures$561  $2,924  $1,148  $1,709  $4,424 
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, July 30, 2021 at 8:00 a.m. CDT (9:00 a.m. EDT) to discuss its second 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; the duration and magnitude of the unprecedented disruption in the oil and gas industry currently resulting from the impact of the foregoing factors, which is negatively impacting our business; 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 and contracts for our pressure pumping services and natural sand proppant services; 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; the loss of or interruption in operations of one or more of Mammoth's significant suppliers or customers; the outcome or settlement of our litigation matters, including our litigation 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; 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,
  2021 2020
CURRENT ASSETS (in thousands)
Cash and cash equivalents $11,038   $14,822  
Short-term investment 1,757   1,750  
Accounts receivable, net 413,245   393,112  
Receivables from related parties, net 80   28,461  
Inventories 10,212   12,020  
Prepaid expenses 7,936   13,825  
Other current assets 708   758  
Other current assets - related parties      
Total current assets 444,976   464,748  
     
Property, plant and equipment, net 210,397   251,262  
Sand reserves 65,491   65,876  
Operating lease right-of-use assets 15,777   20,179  
Intangible assets, net - customer relationships 321   408  
Intangible assets, net - trade names 3,946   4,366  
Goodwill 12,608   12,608  
Deferred income tax asset 8,094     
Other non-current assets 4,329   5,115  
Total assets $765,939   $824,562  
LIABILITIES AND EQUITY    
CURRENT LIABILITIES    
Accounts payable $39,505   $40,316  
Payables to related parties 4   3  
Accrued expenses and other current liabilities 63,375   44,408  
Current operating lease liability 7,255   8,618  
Current portion of long-term debt 1,430   1,165  
Income taxes payable 35,198   34,088  
Total current liabilities 146,767   128,598  
     
Long-term debt, net of current portion 62,811   81,338  
Deferred income tax liabilities 12,041   24,741  
Long-term operating lease liability 8,293   11,377  
Asset retirement obligation 3,666   4,746  
Other liabilities 15,159   10,435  
Total liabilities 248,737   261,235  
     
COMMITMENTS AND CONTINGENCIES    
     
EQUITY    
Equity:    
Common stock, $0.01 par value, 200,000,000 shares authorized, 46,680,731 and 45,769,283 issued and outstanding at June 30, 2021 and December 31, 2020 467   458  
Additional paid in capital 537,728   537,039  
Retained earnings (18,335)  28,895  
Accumulated other comprehensive loss (2,658)  (3,065) 
Total equity 517,202   563,327  
Total liabilities and equity $765,939   $824,562  

MAMMOTH ENERGY SERVICES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
 2021 2020 2021 2021 2020
 (in thousands, except per share amounts)
REVENUE 
Services revenue$40,867   $44,878   $42,691   $83,558   $113,723  
Services revenue - related parties90   8,650   14,986   15,076   26,663  
Product revenue6,483   4,706   6,982   13,465   13,356  
Product revenue - related parties   1,875   2,145   2,145   3,750  
Total revenue47,440   60,109   66,804   114,244   157,492  
          
COST AND EXPENSES         
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $17,861, $21,750, $18,989, $36,850 and $45,305, respectively, for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020)43,103   42,255   42,062   85,165   112,952  
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 June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020)107   97   109   216   198  
Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $2,384, $2,346, $2,137, $4,521 and $4,654, respectively, for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020)7,165   6,401   5,909   13,074   17,509  
Selling, general and administrative11,791   13,528   20,655   32,446   24,084  
Selling, general and administrative - related parties192   198   193   385   413  
Depreciation, depletion, amortization and accretion20,265   24,116   21,146   41,411   49,998  
Impairment of goodwill            54,973  
Impairment of other long-lived assets            12,897  
Total cost and expenses82,623   86,595   90,074   172,697   273,024  
Operating loss(35,183)  (26,486)  (23,270)  (58,453)  (115,532) 
          
OTHER INCOME (EXPENSE)         
Interest expense, net(1,169)  (1,471)  (1,225)  (2,394)  (3,109) 
Other (expense) income, net(14,998)  8,137   9,947   (5,051)  15,546  
Other (expense) income, net - related parties   1,133   (515)  (515)  1,133  
Total other (expense) income(16,167)  7,799   8,207   (7,960)  13,570  
Loss before income taxes(51,350)  (18,687)  (15,063)  (66,413)  (101,962) 
Benefit for income taxes(16,560)  (3,482)  (2,623)  (19,183)  (2,786) 
Net loss$(34,790)  $(15,205)  $(12,440)  $(47,230)  $(99,176) 
          
OTHER COMPREHENSIVE INCOME (LOSS)         
Foreign currency translation adjustment, net of tax of $63, ($150), ($42), $680 and $211, respectively, for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020239   668   168   407   (746) 
Comprehensive loss$(34,551)  $(14,537)  $(12,272)  $(46,823)  $(99,922) 
          
Net loss per share (basic)$(0.75)  $(0.33)  $(0.27)  $(1.02)  $(2.18) 
Net loss per share (diluted)$(0.75)  $(0.33)  $(0.27)  $(1.02)  $(2.18) 
Weighted average number of shares outstanding (basic)46,402   45,727   45,932   46,168   45,521  
Weighted average number of shares outstanding (diluted)46,402   45,727   45,932   46,168   45,521  


MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

 Six Months Ended
 June 30,
 2021 2020
 (in thousands)
Cash flows from operating activities:   
Net loss$(47,230)  $(99,176) 
Adjustments to reconcile net loss to cash provided by operating activities:   
Stock based compensation698   1,246  
Depreciation, depletion, accretion and amortization41,411   49,998  
Amortization of coil tubing strings   359  
Amortization of debt origination costs296   577  
Bad debt expense10,201   1,679  
Gain on disposal of property and equipment(1,599)  (1,451) 
Impairment of goodwill   54,973  
Impairment of other long-lived assets   12,897  
Deferred income taxes(20,898)  931  
Other548   623  
Changes in assets and liabilities:   
Accounts receivable, net(30,386)  7,782  
Receivables from related parties28,381   (19,793) 
Inventories1,808   4,651  
Prepaid expenses and other assets5,923   6,079  
Accounts payable(1,546)  (7,514) 
Payables to related parties1   (512) 
Accrued expenses and other liabilities15,756   (2,818) 
Income taxes payable1,107   (3,697) 
Net cash provided by operating activities4,471   6,834  
    
Cash flows from investing activities:   
Purchases of property and equipment(1,709)  (4,348) 
Purchases of property and equipment from related parties   (76) 
Proceeds from disposal of property and equipment4,632   2,544  
Net cash provided by (used in) investing activities2,923   (1,880) 
    
Cash flows from financing activities:   
Borrowings on long-term debt12,000   22,800  
Repayments of long-term debt(30,269)  (13,550) 
Proceeds from sale leaseback transaction9,473     
Payments on sale leaseback transaction(1,278)    
Principal payments on financing leases and equipment financing notes(1,140)  (914) 
Debt issuance costs   (1,000) 
Net cash (used in) provided by financing activities(11,214)  7,336  
Effect of foreign exchange rate on cash36   (137) 
Net change in cash and cash equivalents(3,784)  12,153  
Cash and cash equivalents at beginning of period14,822   5,872  
Cash and cash equivalents at end of period$11,038   $18,025  
    
Supplemental disclosure of cash flow information:   
Cash paid for interest$2,134   $2,683  
Cash paid (recovered) for income taxes$964   $(6) 
Supplemental disclosure of non-cash transactions:   
Purchases of property and equipment included in accounts payable$2,035   $2,780  


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

Three months ended June 30, 2021InfrastructureWell
Completion
(a)
SandDrillingAll OtherEliminationsTotal
Revenue from external customers$17,220  $17,337  $6,886  $1,130  $4,867  $  $47,440  
Intersegment revenues  36    17  682  (735)   
Total revenue17,220  17,373  6,886  1,147  5,549  (735) 47,440  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion19,881  16,396  7,400  1,568  5,130    50,375  
Intersegment cost of revenues50  666      19  (735)   
Total cost of revenue19,931  17,062  7,400  1,568  5,149  (735) 50,375  
Selling, general and administrative7,383  1,893  991  395  1,321    11,983  
Depreciation, depletion, amortization and accretion5,899  6,447  2,387  2,079  3,453    20,265  
Operating loss(15,993) (8,029) (3,892) (2,895) (4,374)   (35,183) 
Interest expense, net656  219  90  58  146    1,169  
Other expense (income), net15,904  1  (53) (127) (727)   14,998  
Loss before income taxes$(32,553) $(8,249) $(3,929) $(2,826) $(3,793) $  $(51,350) 


Three months ended June 30, 2020InfrastructureWell
Completion
(a)
SandDrillingAll OtherEliminationsTotal
Revenue from external customers$30,249  $16,125  $6,237  $1,250  $6,248  $  $60,109  
Intersegment revenues  419      584  (1,003)   
Total revenue30,249  16,544  6,237  1,250  6,832  (1,003) 60,109  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion25,217  8,375  6,394  2,012  6,755    48,753  
Intersegment cost of revenues27  333    21  622  (1,003)   
Total cost of revenue25,244  8,708  6,394  2,033  7,377  (1,003) 48,753  
Selling, general and administrative7,830  1,456  1,378  1,331  1,731    13,726  
Depreciation, depletion, amortization and accretion7,500  7,675  2,358  2,671  3,912    24,116  
Operating loss(10,325) (1,295) (3,893) (4,785) (6,188)   (26,486) 
Interest expense, net716  329  69  132  225    1,471  
Other (income) expense, net(8,004) (1,179) (2) (298) 213    (9,270) 
Loss before income taxes$(3,037) $(445) $(3,960) $(4,619) $(6,626) $  $(18,687) 


Three months ended March 31, 2021InfrastructureWell
Completion
(a)
SandDrillingAll OtherEliminationsTotal
Revenue from external customers$29,257  $22,901  $8,705  $919  $5,022  $  $66,804  
Intersegment revenues  54    14  640  (708)   
Total revenue29,257  22,955  8,705  933  5,662  (708) 66,804  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion26,458  9,003  5,862  1,604  5,153    48,080  
Intersegment cost of revenues45  394      269  (708)   
Total cost of revenue26,503  9,397  5,862  1,604  5,422  (708) 48,080  
Selling, general and administrative6,253  10,612  2,049  422  1,512    20,848  
Depreciation, depletion, amortization and accretion6,667  6,683  2,140  2,165  3,491    21,146  
Operating loss(10,166) (3,737) (1,346) (3,258) (4,763)   (23,270) 
Interest expense, net661  254  93  63  154    1,225  
Other (income) expense, net(9,310) 439  (794) (9) 242    (9,432) 
Loss before income taxes$(1,517) $(4,430) $(645) $(3,312) $(5,159) $  $(15,063) 


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

Six months ended June 30, 2021InfrastructureWell
Completion
(a)
SandDrillingAll OtherEliminationsTotal
Revenue from external customers$46,476  $40,238  $15,592  $2,049  $9,889  $  $114,244  
Intersegment revenues  90    31  1,322  (1,443)   
Total revenue46,476  40,328  15,592  2,080  11,211  (1,443) 114,244  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion46,340  25,399  13,262  3,173  10,281    98,455  
Intersegment cost of revenues95  1,060      288  (1,443)   
Total cost of revenue46,435  26,459  13,262  3,173  10,569  (1,443) 98,455  
Selling, general and administrative13,635  12,505  3,040  818  2,833    32,831  
Depreciation, depletion, amortization and accretion12,566  13,130  4,527  4,242  6,946    41,411  
Operating loss(26,160) (11,766) (5,237) (6,153) (9,137)   (58,453) 
Interest expense, net1,317  473  183  121  300    2,394  
Other expense (income), net6,593  440  (847) (135) (485)   5,566  
Loss before income taxes$(34,070) $(12,679) $(4,573) $(6,139) $(8,952) $  $(66,413) 


Six months ended June 30, 2020InfrastructureWell
Completion
(a)
SandDrillingAll OtherEliminationsTotal
Revenue from external customers$55,724  $58,811  $16,391  $5,973  $20,593  $  $157,492  
Intersegment revenues  1,052  95  5  1,360  (2,512)   
Total revenue55,724  59,863  16,486  5,978  21,953  (2,512) 157,492  
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion51,897  33,943  17,691  7,637  19,491    130,659  
Intersegment cost of revenues35  961    152  1,364  (2,512)   
Total cost of revenue51,932  34,904  17,691  7,789  20,855  (2,512) 130,659  
Selling, general and administrative11,774  3,627  2,680  2,394  4,022    24,497  
Depreciation, depletion, amortization and accretion15,122  16,157  4,681  5,520  8,518    49,998  
Impairment of goodwill  53,406      1,567    54,973  
Impairment of other long-lived assets  4,203    326  8,368    12,897  
Operating loss(23,104) (52,434) (8,566) (10,051) (21,377)   (115,532) 
Interest expense, net1,467  605  147  389  501    3,109  
Other (income) expense, net(15,707) (1,288) (39) (271) 626    (16,679) 
Loss before income taxes$(8,864) $(51,751) $(8,674) $(10,169) $(22,504) $  $(101,962) 
a. Mammoth changed the name of its pressure pumping segment to the well completion segment during the fourth quarter of 2020.

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 goodwill, impairment of other long-lived assets, 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 interest on trade accounts receivable) 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. 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 Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net loss:2021 2020 2021 2021 2020
Net loss$(34,790)  $(15,205)  $(12,440)  $(47,230)  $(99,176) 
Depreciation, depletion, amortization and accretion expense20,265   24,116   21,146   41,411   49,998  
Impairment of goodwill            54,973  
Impairment of other long-lived assets            12,897  
Public offering costs77         77     
Stock based compensation354   196   344   698   1,246  
Interest expense, net1,169   1,471   1,225   2,394   3,109  
Other expense (income), net14,998   (9,270)  (9,432)  5,566   (16,679) 
Benefit for income taxes(16,560)  (3,482)  (2,623)  (19,183)  (2,786) 
Interest on trade accounts receivable9,017   9,071   8,158   17,175   16,767  
Adjusted EBITDA$(5,470)  $6,897   $6,378   $908   $20,349  

MAMMOTH ENERGY SERVICES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Infrastructure Services

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net loss:2021 2020 2021 2021 2020
Net loss$(23,715)  $(3,985)  $(3,945)  $(27,658)  $(12,303) 
Depreciation and amortization expense5,899   7,500   6,667   12,566   15,122  
Public offering costs43         43     
Stock based compensation158   44   135   293   286  
Interest expense656   716   661   1,317   1,467  
Other expense (income), net15,904   (8,004)  (9,310)  6,593   (15,707) 
(Benefit) provision for income taxes(8,838)  949   2,428   (6,410)  3,440  
Interest on trade accounts receivable9,017   7,930   8,673   17,690   15,626  
Adjusted EBITDA$(876)  $5,150   $5,309   $4,434   $7,931  

Well Completion Services

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net loss:2021 2020 2021 2021 2020
Net loss$(8,249)  $(446)  $(4,430)  $(12,680)  $(51,750) 
Depreciation and amortization expense6,447   7,675   6,683   13,130   16,157  
Impairment of goodwill            53,406  
Impairment of other long-lived assets            4,203  
Public offering costs12         12     
Stock based compensation75   53   83   158   381  
Interest expense219   329   254   473   605  
Other expense (income), net1   (1,179)  439   440   (1,288) 
Interest on trade accounts receivable   1,133   (514)  (514)  1,133  
Adjusted EBITDA$(1,495)  $7,565   $2,515   $1,019   $22,847  

Natural Sand Proppant Services

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net loss:2021 2020 2021 2021 2020
Net loss$(3,929)  $(3,960)  $(645)  $(4,573)  $(8,676) 
Depreciation, depletion, amortization and accretion expense2,387   2,358   2,140   4,527   4,681  
Public offering costs12        12     
Stock based compensation65   46   64   130   278  
Interest expense90   69   93   183   147  
Other income, net(53)  (2)  (794)  (847)  (39) 
Interest on trade accounts receivable      (1)  (1)    
Adjusted EBITDA$(1,428)  $(1,489)  $857   $(569)  $(3,609) 


MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Drilling Services

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net loss:2021 2020 2021 2021 2020
Net loss$(2,826)  $(4,620)  $(3,312)  $(6,139)  $(10,169) 
Depreciation expense2,079   2,671   2,165   4,242   5,520  
Impairment of other long-lived assets            326  
Acquisition related costs              
Public offering costs2        2     
Stock based compensation28   34   38   65   128  
Interest expense58   132   63   121   389.172  
Other income, net(127)  (298)  (9)  (135)  (271) 
Adjusted EBITDA$(786)  $(2,081)  $(1,055)  $(1,844)  $(4,077) 

Other Services(a)

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss):2021 2020 2021 2021 2020
Net income (loss)$3,929   $(2,195)  $(108)  $3,820   $(16,279) 
Depreciation, amortization and accretion expense3,453   3,912   3,491   6,946   8,518  
Impairment of goodwill            1,567  
Impairment of other long-lived assets            8,368  
Public offering costs8        8     
Stock based compensation28   20   24   52   173  
Interest expense, net146   225   154   300   501  
Other (income) expense, net(727)  213   242   (485)  626  
Benefit for income taxes(7,722)  (4,430)  (5,051)  (12,773)  (6,226) 
Interest on trade accounts receivable   9         9  
Adjusted EBITDA$(885)  $(2,246)  $(1,248)  $(2,132)  $(2,743) 
a.   Includes results for Mammoth's aviation, coil tubing, pressure control, equipment rentals, crude oil hauling, full service transportation and remote
accommodations, equipment manufacturing and infrastructure engineering and design services and corporate related activities. The Company's corporate
related activities do not generate revenue.


MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Adjusted Net Loss and Adjusted Loss per Share

Adjusted net loss and adjusted basic and diluted loss per share are supplemental non-GAAP financial measures that are used by management to evaluate the Company's operating and financial performance. Management believes these measures provide meaningful information about the Company's performance by excluding certain non-cash charges, such as impairment of goodwill and impairment of other long-lived assets, that may not be indicative of the Company's ongoing operating results. Adjusted net loss and adjusted loss per share should not be considered in isolation or as a substitute for net loss and loss per share prepared in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. The following tables provide a reconciliation of adjusted net loss and adjusted loss per share to the GAAP financial measures of net loss and loss per share for the periods specified.

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
 2021 2020 2021 2021 2020
 (in thousands, except per share amounts)
Net loss, as reported$(34,790)  $(15,205)  $(12,440)  $(47,230)  $(99,176) 
Impairment of goodwill—    —    —    —    54,973   
Impairment of other long-lived assets—    —    —    —    12,897   
Adjusted net loss$(34,790)  $(15,205)  $(12,440)  $(47,230)  $(31,306) 
          
Basic loss per share, as reported$(0.75)  $(0.33)  $(0.27)  $(1.02)  $(2.18) 
Impairment of goodwill—    —    —    —    1.21   
Impairment of other long-lived assets—    —    —    —    0.28   
Adjusted basic loss per share$(0.75)  $(0.33)  $(0.27)  $(1.02)  $(0.69) 
          
Diluted loss per share, as reported$(0.75)  $(0.33)  $(0.27)  $(1.02)  $(2.18) 
Impairment of goodwill—    —    —    —    1.21   
Impairment of other long-lived assets—    —    —    —    0.28   
Adjusted diluted loss per share$(0.75)  $(0.33)  $(0.27)  $(1.02)  $(0.69) 

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