Mammoth Energy Services, Inc. (“Mammoth” or the “Company”) (NASDAQ:
TUSK) today reported financial and operational results for the
first quarter ended March 31, 2020.
Financial Highlights for the First Quarter
2020:
Total revenue was $97.4 million for the three months ended
March 31, 2020, up from $67.6 million for the three months
ended December 31, 2019 and down from $262.1 million for the
three months ended March 31, 2019.
Net loss for the three months ended March 31, 2020 was
$84.0 million, or $1.85 per fully diluted share, as compared to net
loss of $60.8 million, or $1.35 per fully diluted share, for the
three months ended December 31, 2019 and net income of $28.3
million, or $0.63 per fully diluted share, for the three months
ended March 31, 2019.
Adjusted net loss (as defined and reconciled below) for the
three months ended March 31, 2020 was $16.1 million, or $0.36
per fully diluted share, as compared to adjusted net loss of $26.3
million, or $0.58 per fully diluted share, for the three months
ended December 31, 2019 and adjusted net income of $28.3
million, or $0.63 per fully diluted share, for the three months
ended March 31, 2019.
Adjusted EBITDA (as defined and reconciled below) was $13.5
million for the three months ended March 31, 2020, as compared
to a loss of $10.3 million for the three months ended
December 31, 2019 and a positive $82.8 million for the three
months ended March 31, 2019.
Arty Straehla, Mammoth's Chief Executive Officer, stated, “The
diversification strategy we implemented nearly three years ago is
allowing us to focus on our infrastructure business. Infrastructure
results are improving and we are encouraged by our new bidding
opportunities. Working with our new infrastructure management team,
we are cutting costs, streamlining operations and improving our
operating margins. Conversely, our oilfield business remains under
fundamental pressure from the volatility in oil prices. The
unprecedented volatility in oil prices has been exacerbated by the
outbreak of the COVID-19 pandemic, which has resulted in global oil
demand destruction and economic decline. Our oilfield activity has
been, and will likely continue to be, challenged by significantly
reduced levels of capital expenditures by our customers. As a
result, we have temporarily idled several of our oilfield services
businesses and expect lower pricing and utilization in those that
remain in operation.”
Infrastructure Services
Mammoth's infrastructure services division contributed revenue
of $25.7 million for the three months ended March 31, 2020, a
decrease from $26.6 million for the three months ended
December 31, 2019 and from $108.7 million for the three months
ended March 31, 2019.
As of March 31, 2020, Mammoth had a total of approximately
130 transmission and distribution crews operating in the
continental United States.
Pressure Pumping Services
Mammoth's pressure pumping services division contributed revenue
(inclusive of inter-segment revenue) of $43.6 million on 1,482
stages for the three months ended March 31, 2020, an increase
from $25.0 million on 989 stages for the three months ended
December 31, 2019 and a decrease from $92.1 million on 1,889
stages for the three months ended March 31, 2019. On average,
2.7 of the Company's fleets were active for the three months ended
March 31, 2020, compared to average utilization of 1.7 fleets
during the three months ended December 31, 2019 and an average
utilization of 4.4 fleets during the three months ended
March 31, 2019.
The conversion of our pressure pumping fleets to dynamic gas
blending capabilities is progressing, with nine units converted,
all of which are operating today.
Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed
revenue (inclusive of inter-segment revenue) of $10.2 million for
the three months ended March 31, 2020, an increase from $3.0
million for the three months ended December 31, 2019 and a
decrease from $37.9 million for the three months ended
March 31, 2019. The Company sold approximately 239,000 tons of
sand during the three months ended March 31, 2020, an increase
from approximately 76,000 tons sold during the three months ended
December 31, 2019 and a decrease from approximately 666,000
tons sold during the three months ended March 31, 2019. The
Company's average sales price for the sand sold during the three
months ended March 31, 2020 was $13.67 per ton, a decrease
from the $19.95 per ton average sales price during the three months
ended December 31, 2019 and the $32.30 per ton average sales
price during the three months ended March 31, 2019.
Drilling Services
Mammoth's drilling services division contributed revenue
(inclusive of inter-segment revenue) of $4.8 million for the three
months ended March 31, 2020, a slight increase from $4.7
million for the three months ended December 31, 2019 and a
decrease from $13.8 million for the three months ended
March 31, 2019. The decline is primarily due to reduced
utilization. As a result of market conditions, the Company
temporarily shut down its contract land drilling operations
beginning in December 2019.
Other Services
Mammoth's other services, including coil tubing, pressure
control, flowback, cementing, acidizing, equipment rentals, crude
oil hauling, full service transportation, remote accommodations,
oilfield equipment manufacturing and infrastructure engineering and
design services, contributed revenue (inclusive of inter-segment
revenue) of $14.9 million for the three months ended March 31,
2020, an increase from $9.3 million for the three months ended
December 31, 2019 and a decrease from $25.0 million for the
three months ended March 31, 2019. An average of 490 pieces of
equipment were rented to customers during the three months ended
March 31, 2020, up 5% from an average of 467 pieces of
equipment rented to customers during the three months ended
December 31, 2019 and down 21% from an average of 621 pieces
of equipment rented to customers for the three months ended
March 31, 2019.
Selling, General and Administrative
Expenses
Selling, general and administrative (“SG&A”) expenses were
$10.8 million for the three months ended March 31, 2020, as
compared to $10.3 million for the three months ended
December 31, 2019 and $17.3 million for the three months ended
March 31, 2019.
Following is a breakout of SG&A expense (in thousands):
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
2020 |
|
2019 |
|
2019 |
Cash expenses: |
|
|
|
|
|
Compensation and benefits |
$ |
3,969 |
|
|
$ |
9,230 |
|
|
$ |
3,203 |
|
Professional services |
3,538 |
|
|
3,789 |
|
|
4,301 |
|
Other(a) |
2,309 |
|
|
3,244 |
|
|
2,010 |
|
Total cash SG&A expense |
9,816 |
|
|
16,263 |
|
|
9,514 |
|
Non-cash expenses: |
|
|
|
|
|
Bad debt provision |
55 |
|
|
4 |
|
|
204 |
|
Stock based compensation |
900 |
|
|
1,069 |
|
|
620 |
|
Total non-cash SG&A expense |
955 |
|
|
1,073 |
|
|
824 |
|
Total SG&A expense |
$ |
10,771 |
|
|
$ |
17,336 |
|
|
$ |
10,338 |
|
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 11%
for the three months ended March 31, 2020, as compared to 15%
for the three months ended December 31, 2019 and 7% for the
three months ended March 31, 2019.
Impairment Expenses
As a result of the significant decline in oil prices as a result
of geopolitical events coupled with effects of COVID-19, Mammoth
recognized impairment of goodwill totaling $55.0 million during the
three months ended March 31, 2020, primarily related to its
pressure pumping services division. Additionally, the Company
recognized impairment of other long-lived assets totaling $12.9
million, primarily related to water transfer, crude oil hauling,
coil tubing and rental equipment during the three months ended
March 31, 2020.
During the three months ended December 31, 2019, the
Company recognized impairment of goodwill totaling $30.5 million,
primarily related to its pressure pumping services division.
Additionally, the Company recognized impairment of other long-lived
assets totaling $4.0 million, primarily related to drilling rigs
and related equipment during the three months ended
December 31, 2019.
Liquidity
As of March 31, 2020, Mammoth had cash on hand of $13.2
million and outstanding borrowings under its revolving credit
facility of $88.4 million. As of March 31, 2020, the Company
had $19.4 million of available borrowing capacity under its
revolving credit facility. This available borrowing capacity
reflects (i) a minimum excess availability covenant of 10% of the
maximum revolving advance amount and (ii) $9.0 million of
outstanding letters of credit. As of March 31, 2020, Mammoth
had total liquidity of $32.6 million.
As of May 6, 2020, Mammoth had cash on hand of $16.8
million and outstanding borrowings under its revolving credit
facility of $94.0 million. As of May 6, 2020, the Company had
$13.8 million of available borrowing capacity under its revolving
credit facility. This available borrowing capacity reflects (i) a
minimum excess availability covenant of 10% of the maximum
revolving advance amount and (ii) $9.0 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 |
|
March 31, |
|
December 31, |
|
2020 |
|
2019 |
|
2019 |
Infrastructure services(a) |
$ |
77 |
|
|
$ |
3,254 |
|
|
$ |
90 |
|
Pressure pumping
services(b) |
604 |
|
|
7,329 |
|
|
398 |
|
Natural sand proppant
services(c) |
521 |
|
|
985 |
|
|
174 |
|
Drilling services(d) |
8 |
|
|
2,267 |
|
|
84 |
|
Other(e) |
290 |
|
|
6,438 |
|
|
125 |
|
Total capital
expenditures |
$ |
1,500 |
|
|
$ |
20,273 |
|
|
$ |
871 |
|
a. Capital expenditures primarily for truck,
tooling and other equipment for the periods presented.b.
Capital expenditures primarily for pressure
pumping and water transfer equipment for the periods
presented.c. Capital expenditures primarily
for maintenance for the periods
presented.d. Capital expenditures primarily
for upgrades to the Company's rig fleet for the periods
presented.e. Capital expenditures primarily
for equipment for the Company's rental businesses for the periods
presented.
Explanatory Note Regarding Financial
Information
The financial information contained in this release should be
read in conjunction with the financial information contained in
Mammoth’s Annual Reports filed on Form 10-K with the Securities and
Exchange Commission (“SEC”), Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and other filings.
The Company's Chief Executive Officer and Chief Financial
Officer comprise the Company's Chief Operating Decision Maker
function (“CODM”). Segment information is prepared on the same
basis that the CODM manages the segments, evaluates the segment
financial statements and makes key operating and resource
utilization decisions. Segment evaluation is determined on a
quantitative basis based on a function of operating income (loss)
as well as a qualitative basis, such as nature of the product and
service offerings and types of customers.
Conference Call Information
Mammoth will host a conference call on Monday, May 11, 2020 at
3:00 p.m. CDT (4:00 p.m. EDT) to discuss its first quarter 2020
financial and operational results. The telephone number to access
the conference call is 844-265-1561 in the U.S. and the
international dial in is 216-562-0385. The conference ID for the
call is 9880304. The conference call will also be webcast live
on www.mammothenergy.com in the “Investors” section.
About Mammoth Energy Services,
Inc.
Mammoth is an integrated, growth-oriented energy service company
serving companies engaged in the exploration and development of
North American onshore unconventional oil and natural gas reserves
and government-funded utilities, private utilities, public
investor-owned utilities and co-operative utilities through its
energy infrastructure services. Mammoth’s suite of services and
products include: pressure pumping services, infrastructure
services, natural sand and proppant services, drilling services and
other energy services.
For additional information about Mammoth, please visit its
website at www.mammothenergy.com, where Mammoth routinely posts
announcements, updates, events, investor information and
presentations and recent news releases.
Investor Contact:Don CristDirector of Investor
Relationsdcrist@mammothenergy.com405-608-6048
Media Contact:Peter
Mirijanianpeter@pmpadc.com(202) 464-8803
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 economic repercussions and the resulting negative impact on
demand for oil and gas; the current significant surplus in the
supply of oil and the ability of the OPEC+ countries to agree on
and comply with supply limitations; 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; the Company's
inability to replace the prior levels of work in its business
segments, including its infrastructure and pressure pumping
segments; risks relating to economic conditions; the loss of or
interruption in operations of one or more key suppliers or
customers; the effects of government regulation, permitting and
other legal requirements; operating risks; the adequacy of capital
resources and liquidity; weather; natural disasters; global or
national health concerns, including the outbreak of pandemic or
contagious disease, such as the coronavirus; litigation;
competition in the oil and natural gas and infrastructure
industries; and costs and availability of resources.
Investors are cautioned not to place undue reliance on any
forward-looking statement which speaks only as of the date on which
such statement is made. We undertake no obligation to correct,
revise or update any forward-looking statement after the date such
statement is made, whether as a result of new information, future
events or otherwise, except as required by applicable law.
ASSETS |
|
March 31, |
|
December 31, |
|
|
2020 |
|
2019 |
CURRENT ASSETS |
|
(in thousands) |
Cash and cash equivalents |
|
$ |
13,180 |
|
|
|
$ |
5,872 |
|
|
Accounts receivable, net |
|
371,755 |
|
|
|
363,053 |
|
|
Receivables from related parties |
|
17,790 |
|
|
|
7,523 |
|
|
Inventories |
|
13,193 |
|
|
|
17,483 |
|
|
Prepaid expenses |
|
8,250 |
|
|
|
12,354 |
|
|
Other current assets |
|
866 |
|
|
|
695 |
|
|
Total current assets |
|
425,034 |
|
|
|
406,980 |
|
|
|
|
|
|
|
Property, plant and equipment,
net |
|
316,068 |
|
|
|
352,772 |
|
|
Sand reserves |
|
68,351 |
|
|
|
68,351 |
|
|
Operating lease right-of-use
assets |
|
38,838 |
|
|
|
43,446 |
|
|
Intangible assets, net -
customer relationships |
|
540 |
|
|
|
583 |
|
|
Intangible assets, net - trade
names |
|
4,996 |
|
|
|
5,205 |
|
|
Goodwill |
|
12,608 |
|
|
|
67,581 |
|
|
Other non-current assets |
|
7,576 |
|
|
|
7,467 |
|
|
Total assets |
|
$ |
874,011 |
|
|
|
$ |
952,385 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts payable |
|
$ |
42,993 |
|
|
|
$ |
39,220 |
|
|
Payables to related parties |
|
82 |
|
|
|
526 |
|
|
Accrued expenses and other current liabilities |
|
39,727 |
|
|
|
40,754 |
|
|
Current operating lease liability |
|
15,484 |
|
|
|
16,432 |
|
|
Income taxes payable |
|
28,699 |
|
|
|
33,465 |
|
|
Total current liabilities |
|
126,985 |
|
|
|
130,397 |
|
|
|
|
|
|
|
Long-term debt |
|
88,350 |
|
|
|
80,000 |
|
|
Deferred income tax
liabilities |
|
41,873 |
|
|
|
36,873 |
|
|
Long-term operating lease
liability |
|
23,236 |
|
|
|
27,102 |
|
|
Asset retirement
obligation |
|
4,586 |
|
|
|
4,241 |
|
|
Other liabilities |
|
4,573 |
|
|
|
5,031 |
|
|
Total liabilities |
|
289,603 |
|
|
|
283,644 |
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
Equity: |
|
|
|
|
Common stock, $0.01 par value, 200,000,000 shares authorized,
45,713,563 and 45,108,545 issued and outstanding at March 31, 2020
and December 31, 2019 |
|
457 |
|
|
|
451 |
|
|
Additional paid in capital |
|
536,140 |
|
|
|
535,094 |
|
|
Retained earnings |
|
52,531 |
|
|
|
136,502 |
|
|
Accumulated other comprehensive loss |
|
(4,720 |
) |
|
|
(3,306 |
) |
|
Total equity |
|
584,408 |
|
|
|
668,741 |
|
|
Total liabilities and equity |
|
$ |
874,011 |
|
|
|
$ |
952,385 |
|
|
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
2020 |
|
2019 |
|
2019 |
|
(in thousands, except per share amounts) |
REVENUE |
|
Services revenue |
$ |
68,845 |
|
|
|
$ |
193,101 |
|
|
|
$ |
57,950 |
|
|
Services revenue - related parties |
18,013 |
|
|
|
44,073 |
|
|
|
6,714 |
|
|
Product revenue |
8,650 |
|
|
|
12,309 |
|
|
|
1,724 |
|
|
Product revenue - related parties |
1,875 |
|
|
|
12,655 |
|
|
|
1,249 |
|
|
Total revenue |
97,383 |
|
|
|
262,138 |
|
|
|
67,637 |
|
|
|
|
|
|
|
|
COST AND EXPENSES |
|
|
|
|
|
Services cost of revenue (exclusive of depreciation, depletion,
amortization and accretion of $23,554, $25,682 and $25,872,
respectively, for the three months ended March 31, 2020, March 31,
2019 and December 31, 2019) |
70,697 |
|
|
|
158,106 |
|
|
|
68,599 |
|
|
Services cost of revenue - related parties (exclusive of
depreciation, depletion, amortization and accretion of $0, $0 and
$0, respectively, for the three months ended March 31, 2020, March
31, 2019 and December 31, 2019) |
101 |
|
|
|
713 |
|
|
|
633 |
|
|
Product cost of revenue (exclusive of depreciation, depletion,
amortization and accretion of $2,309, $2,871 and $2,626,
respectively, for the three months ended March 31, 2020, March 31,
2019 and December 31, 2019) |
11,108 |
|
|
|
30,251 |
|
|
|
6,337 |
|
|
Selling, general and administrative |
10,556 |
|
|
|
16,902 |
|
|
|
9,978 |
|
|
Selling, general and administrative - related parties |
215 |
|
|
|
434 |
|
|
|
360 |
|
|
Depreciation, depletion, amortization and accretion |
25,882 |
|
|
|
28,576 |
|
|
|
28,521 |
|
|
Impairment of goodwill |
54,973 |
|
|
|
— |
|
|
|
30,470 |
|
|
Impairment of other long-lived assets |
12,897 |
|
|
|
— |
|
|
|
4,010 |
|
|
Total cost and expenses |
186,429 |
|
|
|
234,982 |
|
|
|
148,908 |
|
|
Operating (loss) income |
(89,046 |
) |
|
|
27,156 |
|
|
|
(81,271 |
) |
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
Interest expense, net |
(1,638 |
) |
|
|
(523 |
) |
|
|
(1,486 |
) |
|
Other, net |
7,409 |
|
|
|
24,557 |
|
|
|
7,272 |
|
|
Total other income
(expense) |
5,771 |
|
|
|
24,034 |
|
|
|
5,786 |
|
|
(Loss) income before income
taxes |
(83,275 |
) |
|
|
51,190 |
|
|
|
(75,485 |
) |
|
Provision (benefit) for income
taxes |
696 |
|
|
|
22,857 |
|
|
|
(14,706 |
) |
|
Net (loss) income |
$ |
(83,971 |
) |
|
|
$ |
28,333 |
|
|
|
$ |
(60,779 |
) |
|
|
|
|
|
|
|
OTHER COMPREHENSIVE (LOSS)
INCOME |
|
|
|
|
|
Foreign currency translation adjustment, net of tax of $361, ($90)
and $69, respectively, for the three months ended March 31, 2020,
March 31, 2019 and December 31, 2019 |
(1,414 |
) |
|
|
356 |
|
|
|
282 |
|
|
Comprehensive (loss)
income |
$ |
(85,385 |
) |
|
|
$ |
28,689 |
|
|
|
$ |
(60,497 |
) |
|
|
|
|
|
|
|
Net (loss) income per share
(basic) |
$ |
(1.85 |
) |
|
|
$ |
0.63 |
|
|
|
$ |
(1.35 |
) |
|
Net (loss) income per share
(diluted) |
$ |
(1.85 |
) |
|
|
$ |
0.63 |
|
|
|
$ |
(1.35 |
) |
|
Weighted average number of
shares outstanding (basic) |
45,314 |
|
|
|
44,929 |
|
|
|
45,092 |
|
|
Weighted average number of
shares outstanding (diluted) |
45,314 |
|
|
|
45,063 |
|
|
|
45,092 |
|
|
Dividends declared per
share |
$ |
— |
|
|
|
0.125 |
|
|
|
$ |
— |
|
|
|
Three Months Ended |
|
March 31, |
|
2020 |
|
2019 |
|
(in thousands) |
Cash flows from operating
activities: |
|
|
|
Net (loss) income |
$ |
(83,971 |
) |
|
|
$ |
28,333 |
|
|
Adjustments to reconcile net (loss) income to cash provided by
(used in) operating activities: |
|
|
|
Stock based compensation |
1,049 |
|
|
|
1,289 |
|
|
Depreciation, depletion, accretion and amortization |
25,882 |
|
|
|
28,576 |
|
|
Amortization of coil tubing strings |
237 |
|
|
|
535 |
|
|
Amortization of debt origination costs |
452 |
|
|
|
82 |
|
|
Bad debt expense |
55 |
|
|
|
4 |
|
|
(Gain) loss on disposal of property and equipment |
(673 |
) |
|
|
94 |
|
|
Impairment of goodwill |
54,973 |
|
|
|
— |
|
|
Impairment of other long-lived assets |
12,897 |
|
|
|
— |
|
|
Deferred income taxes |
5,361 |
|
|
|
(15,476 |
) |
|
Other |
432 |
|
|
|
41 |
|
|
Changes in assets and liabilities, net of acquisitions of
businesses: |
|
|
|
Accounts receivable, net |
(8,569 |
) |
|
|
(67,093 |
) |
|
Receivables from related parties |
(10,267 |
) |
|
|
(33,868 |
) |
|
Inventories |
4,053 |
|
|
|
1,854 |
|
|
Prepaid expenses and other assets |
3,929 |
|
|
|
2,389 |
|
|
Accounts payable |
2,078 |
|
|
|
(353 |
) |
|
Payables to related parties |
(444 |
) |
|
|
239 |
|
|
Accrued expenses and other liabilities |
(1,220 |
) |
|
|
(4,956 |
) |
|
Income taxes payable |
(4,713 |
) |
|
|
(44,684 |
) |
|
Net cash provided by (used in)
operating activities |
1,541 |
|
|
|
(102,994 |
) |
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Purchases of property and equipment |
(1,424 |
) |
|
|
(20,273 |
) |
|
Purchases of property and equipment from related parties |
(76 |
) |
|
|
— |
|
|
Contributions to equity investee |
— |
|
|
|
(480 |
) |
|
Proceeds from disposal of property and equipment |
558 |
|
|
|
1,500 |
|
|
Net cash used in investing
activities |
(942 |
) |
|
|
(19,253 |
) |
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Borrowings from lines of credit |
17,300 |
|
|
|
82,000 |
|
|
Repayments of lines of credit |
(8,950 |
) |
|
|
— |
|
|
Dividends paid |
— |
|
|
|
(5,610 |
) |
|
Principal payments on financing leases and equipment financing
notes |
(452 |
) |
|
|
(457 |
) |
|
Debt issuance costs |
(1,000 |
) |
|
|
— |
|
|
Net cash provided by financing
activities |
6,898 |
|
|
|
75,933 |
|
|
Effect of foreign exchange
rate on cash |
(189 |
) |
|
|
32 |
|
|
Net change in cash and cash
equivalents |
7,308 |
|
|
|
(46,282 |
) |
|
Cash and cash equivalents at
beginning of period |
5,872 |
|
|
|
67,625 |
|
|
Cash and cash equivalents at
end of period |
$ |
13,180 |
|
|
|
$ |
21,343 |
|
|
|
|
|
|
Supplemental disclosure of
cash flow information: |
|
|
|
Cash paid for interest |
$ |
1,285 |
|
|
|
$ |
294 |
|
|
Cash paid for income taxes |
$ |
62 |
|
|
|
$ |
91,955 |
|
|
Supplemental disclosure of
non-cash transactions: |
|
|
|
Purchases of property and equipment included in accounts
payable |
$ |
4,347 |
|
|
|
$ |
5,016 |
|
|
Three months ended March 31,
2020 |
Infrastructure |
Pressure Pumping |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ |
25,705 |
|
|
$ |
42,686 |
|
|
$ |
10,154 |
|
|
$ |
4,723 |
|
|
$ |
14,115 |
|
|
$ |
— |
|
|
$ |
97,383 |
|
|
Intersegment revenues |
— |
|
|
936 |
|
|
95 |
|
|
55 |
|
|
775 |
|
|
(1,861 |
) |
|
— |
|
|
Total revenue |
25,705 |
|
|
43,622 |
|
|
10,249 |
|
|
4,778 |
|
|
14,890 |
|
|
(1,861 |
) |
|
97,383 |
|
|
Cost of revenue, exclusive of
depreciation, depletion, amortization and accretion |
26,946 |
|
|
26,208 |
|
|
10,657 |
|
|
5,635 |
|
|
12,460 |
|
|
— |
|
|
81,906 |
|
|
Intersegment cost of
revenues |
8 |
|
|
627 |
|
|
302 |
|
|
130 |
|
|
794 |
|
|
(1,861 |
) |
|
— |
|
|
Total cost of revenue |
26,954 |
|
|
26,835 |
|
|
10,959 |
|
|
5,765 |
|
|
13,254 |
|
|
(1,861 |
) |
|
81,906 |
|
|
Selling, general and
administrative |
4,297 |
|
|
2,222 |
|
|
1,251 |
|
|
1,063 |
|
|
1,938 |
|
|
— |
|
|
10,771 |
|
|
Depreciation, depletion,
amortization and accretion |
7,934 |
|
|
8,492 |
|
|
2,312 |
|
|
2,877 |
|
|
4,267 |
|
|
— |
|
|
25,882 |
|
|
Impairment of goodwill |
— |
|
|
53,406 |
|
|
— |
|
|
— |
|
|
1,567 |
|
|
— |
|
|
54,973 |
|
|
Impairment of other long-lived
assets |
— |
|
|
4,203 |
|
|
— |
|
|
326 |
|
|
8,368 |
|
|
— |
|
|
12,897 |
|
|
Operating loss |
(13,480 |
) |
|
(51,536 |
) |
|
(4,273 |
) |
|
(5,253 |
) |
|
(14,504 |
) |
|
— |
|
|
(89,046 |
) |
|
Interest expense, net |
757 |
|
|
293 |
|
|
61 |
|
|
268 |
|
|
259 |
|
|
— |
|
|
1,638 |
|
|
Other (income) expense,
net |
(7,276 |
) |
|
(109 |
) |
|
(37 |
) |
|
27 |
|
|
(14 |
) |
|
— |
|
|
(7,409 |
) |
|
Loss before income taxes |
$ |
(6,961 |
) |
|
$ |
(51,720 |
) |
|
$ |
(4,297 |
) |
|
$ |
(5,548 |
) |
|
$ |
(14,749 |
) |
|
$ |
— |
|
|
$ |
(83,275 |
) |
|
Three months ended March 31,
2019 |
Infrastructure |
Pressure Pumping |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ |
108,721 |
|
|
$ |
90,595 |
|
|
$ |
24,964 |
|
$ |
13,576 |
|
|
$ |
24,282 |
|
|
$ |
— |
|
|
$ |
262,138 |
|
|
Intersegment revenues |
— |
|
|
1,544 |
|
|
12,897 |
|
219 |
|
|
766 |
|
|
(15,426 |
) |
|
— |
|
|
Total revenue |
108,721 |
|
|
92,139 |
|
|
37,861 |
|
13,795 |
|
|
25,048 |
|
|
(15,426 |
) |
|
262,138 |
|
|
Cost of revenue, exclusive of
depreciation, depletion, amortization and accretion |
58,965 |
|
|
64,211 |
|
|
30,252 |
|
12,652 |
|
|
22,990 |
|
|
— |
|
|
189,070 |
|
|
Intersegment cost of
revenues |
— |
|
|
13,537 |
|
|
1,047 |
|
272 |
|
|
552 |
|
|
(15,408 |
) |
|
— |
|
|
Total cost of revenue |
58,965 |
|
|
77,748 |
|
|
31,299 |
|
12,924 |
|
|
23,542 |
|
|
(15,408 |
) |
|
189,070 |
|
|
Selling, general and
administrative |
9,517 |
|
|
3,213 |
|
|
1,519 |
|
1,363 |
|
|
1,724 |
|
|
— |
|
|
17,336 |
|
|
Depreciation, depletion,
amortization and accretion |
7,719 |
|
|
9,893 |
|
|
2,873 |
|
3,578 |
|
|
4,513 |
|
|
— |
|
|
28,576 |
|
|
Operating income (loss) |
32,520 |
|
|
1,285 |
|
|
2,170 |
|
(4,070 |
) |
|
(4,731 |
) |
|
(18 |
) |
|
27,156 |
|
|
Interest expense, net |
39 |
|
|
198 |
|
|
30 |
|
127 |
|
|
129 |
|
|
— |
|
|
523 |
|
|
Other (income) expense,
net |
(24,824 |
) |
|
(1 |
) |
|
— |
|
(22 |
) |
|
290 |
|
|
— |
|
|
(24,557 |
) |
|
Income (loss) before income
taxes |
$ |
57,305 |
|
|
$ |
1,088 |
|
|
$ |
2,140 |
|
$ |
(4,175 |
) |
|
$ |
(5,150 |
) |
|
$ |
(18 |
) |
|
$ |
51,190 |
|
|
Three months ended December
31, 2019 |
Infrastructure |
Pressure Pumping |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ |
26,618 |
|
|
$ |
24,515 |
|
|
$ |
2,974 |
|
|
$ |
4,637 |
|
|
$ |
8,893 |
|
|
$ |
— |
|
|
$ |
67,637 |
|
|
Intersegment revenues |
— |
|
|
442 |
|
|
— |
|
|
14 |
|
|
362 |
|
|
(818 |
) |
|
— |
|
|
Total revenue |
26,618 |
|
|
24,957 |
|
|
2,974 |
|
|
4,651 |
|
|
9,255 |
|
|
(818 |
) |
|
67,637 |
|
|
Cost of revenue, exclusive of
depreciation, depletion, amortization and accretion |
30,988 |
|
|
20,891 |
|
|
6,162 |
|
|
6,934 |
|
|
10,594 |
|
|
— |
|
|
75,569 |
|
|
Intersegment cost of
revenues |
— |
|
|
339 |
|
|
28 |
|
|
160 |
|
|
291 |
|
|
(818 |
) |
|
— |
|
|
Total cost of revenue |
30,988 |
|
|
21,230 |
|
|
6,190 |
|
|
7,094 |
|
|
10,885 |
|
|
(818 |
) |
|
75,569 |
|
|
Selling, general and
administrative |
5,516 |
|
|
1,449 |
|
|
792 |
|
|
1,042 |
|
|
1,539 |
|
|
— |
|
|
10,338 |
|
|
Depreciation, depletion,
amortization and accretion |
7,961 |
|
|
9,996 |
|
|
2,627 |
|
|
3,389 |
|
|
4,548 |
|
|
— |
|
|
28,521 |
|
|
Impairment of goodwill |
434 |
|
|
23,423 |
|
|
2,684 |
|
|
— |
|
|
3,929 |
|
|
|
30,470 |
|
|
Impairment of other long-lived
assets |
— |
|
|
— |
|
|
— |
|
|
2,955 |
|
|
1,055 |
|
|
— |
|
|
4,010 |
|
|
Operating loss |
(18,281 |
) |
|
(31,141 |
) |
|
(9,319 |
) |
|
(9,829 |
) |
|
(12,701 |
) |
|
— |
|
|
(81,271 |
) |
|
Interest expense, net |
665 |
|
|
318 |
|
|
48 |
|
|
227 |
|
|
228 |
|
|
— |
|
|
1,486 |
|
|
Other (income) expense,
net |
(7,679 |
) |
|
574 |
|
|
— |
|
|
14 |
|
|
(181 |
) |
|
— |
|
|
(7,272 |
) |
|
Loss before income taxes |
$ |
(11,267 |
) |
|
$ |
(32,033 |
) |
|
$ |
(9,367 |
) |
|
$ |
(10,070 |
) |
|
$ |
(12,748 |
) |
|
$ |
— |
|
|
$ |
(75,485 |
) |
|
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, impairment of goodwill, impairment of other long-lived
assets, stock based compensation, interest expense, net, other
(income) expense, net (which is comprised of the (gain) or loss on
disposal of long-lived assets) and provision (benefit) for income
taxes, further adjusted to add back interest on trade accounts
receivable. The Company excludes the items listed above from net
(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 |
|
March 31, |
|
December 31, |
Reconciliation of
Adjusted EBITDA to net (loss) income: |
2020 |
|
2019 |
|
2019 |
Net (loss) income |
$ |
(83,971 |
) |
|
|
$ |
28,333 |
|
|
|
$ |
(60,779 |
) |
|
Depreciation, depletion,
amortization and accretion expense |
25,882 |
|
|
|
28,576 |
|
|
|
28,521 |
|
|
Impairment of goodwill |
54,973 |
|
|
|
— |
|
|
|
30,470 |
|
|
Impairment of other long-lived
assets |
12,897 |
|
|
|
— |
|
|
|
4,010 |
|
|
Stock based compensation |
1,049 |
|
|
|
1,289 |
|
|
|
811 |
|
|
Interest expense, net |
1,638 |
|
|
|
523 |
|
|
|
1,486 |
|
|
Other (income) expense,
net |
(7,409 |
) |
|
|
(24,557 |
) |
|
|
(7,272 |
) |
|
Provision (benefit) for income
taxes |
696 |
|
|
|
22,857 |
|
|
|
(14,706 |
) |
|
Interest on trade accounts
receivable |
7,696 |
|
|
|
25,735 |
|
|
|
7,174 |
|
|
Adjusted EBITDA |
$ |
13,451 |
|
|
|
$ |
82,756 |
|
|
|
$ |
(10,285 |
) |
|
Infrastructure Services
|
Three Months Ended |
|
March 31, |
|
December 31, |
Reconciliation of
Adjusted EBITDA to net (loss) income: |
2020 |
|
2019 |
|
2019 |
Net (loss) income |
$ |
(9,452 |
) |
|
|
$ |
35,665 |
|
|
|
$ |
(14,005 |
) |
|
Depreciation and amortization
expense |
7,934 |
|
|
|
7,719 |
|
|
|
7,961 |
|
|
Impairment of goodwill |
— |
|
|
|
— |
|
|
|
434 |
|
|
Stock based compensation |
251 |
|
|
|
462 |
|
|
|
183 |
|
|
Interest expense |
757 |
|
|
|
39 |
|
|
|
665 |
|
|
Other (income) expense,
net |
(7,276 |
) |
|
|
(24,824 |
) |
|
|
(7,679 |
) |
|
Provision for income
taxes |
2,491 |
|
|
|
21,639 |
|
|
|
2,738 |
|
|
Interest on trade accounts
receivable |
7,696 |
|
|
|
25,735 |
|
|
|
7,174 |
|
|
Adjusted EBITDA |
$ |
2,401 |
|
|
|
$ |
66,435 |
|
|
|
$ |
(2,529 |
) |
|
Pressure Pumping Services
|
Three Months Ended |
|
March 31, |
|
December 31, |
Reconciliation of
Adjusted EBITDA to net (loss) income: |
2020 |
|
2019 |
|
2019 |
Net (loss) income |
$ |
(51,720 |
) |
|
|
$ |
1,088 |
|
|
|
$ |
(32,033 |
) |
|
Depreciation and amortization
expense |
8,492 |
|
|
|
9,893 |
|
|
|
9,996 |
|
|
Impairment of goodwill |
53,406 |
|
|
|
— |
|
|
|
23,423 |
|
|
Impairment of other long-lived
assets |
4,203 |
|
|
|
— |
|
|
|
— |
|
|
Stock based compensation |
335 |
|
|
|
410 |
|
|
|
297 |
|
|
Interest expense |
293 |
|
|
|
198 |
|
|
|
318 |
|
|
Other (income) expense,
net |
(109 |
) |
|
|
(1 |
) |
|
|
574 |
|
|
Adjusted EBITDA |
$ |
14,900 |
|
|
|
$ |
11,588 |
|
|
|
$ |
2,575 |
|
|
Natural Sand Proppant Services
|
Three Months Ended |
|
March 31, |
|
December 31, |
Reconciliation of
Adjusted EBITDA to net (loss) income: |
2020 |
|
2019 |
|
2019 |
Net (loss) income |
$ |
(4,297 |
) |
|
|
$ |
2,140 |
|
|
$ |
(9,367 |
) |
|
Depreciation, depletion,
amortization and accretion expense |
2,312 |
|
|
|
2,873 |
|
|
2,627 |
|
|
Impairment of goodwill |
— |
|
|
|
— |
|
|
2,684 |
|
|
Stock based compensation |
225 |
|
|
|
203 |
|
|
156 |
|
|
Interest expense |
61 |
|
|
|
30 |
|
|
48 |
|
|
Other expense (income),
net |
(37 |
) |
|
|
— |
|
|
— |
|
|
Adjusted EBITDA |
$ |
(1,736 |
) |
|
|
$ |
5,246 |
|
|
$ |
(3,852 |
) |
|
Drilling Services
|
Three Months Ended |
|
March 31, |
|
December 31, |
Reconciliation of
Adjusted EBITDA to net (loss) income: |
2020 |
|
2019 |
|
2019 |
Net loss |
$ |
(5,548 |
) |
|
|
$ |
(4,175 |
) |
|
|
$ |
(10,070 |
) |
|
Depreciation expense |
2,877 |
|
|
|
3,578 |
|
|
|
3,389 |
|
|
Impairment of other long-lived
assets |
326 |
|
|
|
— |
|
|
|
2,955 |
|
|
Stock based compensation |
94 |
|
|
|
100 |
|
|
|
82 |
|
|
Interest expense |
268 |
|
|
|
127 |
|
|
|
227 |
|
|
Other expense (income),
net |
27 |
|
|
|
(22 |
) |
|
|
14 |
|
|
Adjusted EBITDA |
$ |
(1,956 |
) |
|
|
$ |
(392 |
) |
|
|
$ |
(3,403 |
) |
|
Other Services(a)
|
Three Months Ended |
|
March 31, |
|
December 31, |
Reconciliation of
Adjusted EBITDA to net loss: |
2020 |
|
2019 |
|
2019 |
Net (loss) income |
$ |
(12,954 |
) |
|
|
$ |
(6,367 |
) |
|
|
$ |
4,695 |
|
|
Depreciation, amortization and
accretion expense |
4,267 |
|
|
|
4,513 |
|
|
|
4,548 |
|
|
Impairment of goodwill |
1,567 |
|
|
|
— |
|
|
|
3,929 |
|
|
Impairment of other long-lived
assets |
8,368 |
|
|
|
— |
|
|
|
1,055 |
|
|
Stock based compensation |
144 |
|
|
|
114 |
|
|
|
93 |
|
|
Interest expense, net |
259 |
|
|
|
129 |
|
|
|
228 |
|
|
Other (income) expense,
net |
(14 |
) |
|
|
290 |
|
|
|
(181 |
) |
|
(Benefit) provision for income
taxes |
(1,795 |
) |
|
|
1,217 |
|
|
|
(17,443 |
) |
|
Adjusted EBITDA |
$ |
(158 |
) |
|
|
$ |
(104 |
) |
|
|
$ |
(3,076 |
) |
|
a. Includes results for Mammoth's coil
tubing, pressure control, flowback, cementing, acidizing, equipment
rentals, crude oil hauling, full service transportation and remote
accommodations, oilfield equipment manufacturing and infrastructure
engineering and design services and corporate related activities.
The Company's corporate related activities do not generate
revenue.
Adjusted Net (Loss) Income and Adjusted (Loss) Earnings
per Share
Adjusted net (loss) income and adjusted basic and diluted (loss)
earnings 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)
income and adjusted (loss) earnings per share should not be
considered in isolation or as a substitute for net (loss) income
and (loss) earnings 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) income and adjusted (loss) earnings per share
to the GAAP financial measures of net (loss) income and (loss)
earnings per share for the periods specified.
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
2020 |
|
2019 |
|
2019 |
|
(in thousands, except per share amounts) |
Net (loss) income, as reported |
$ |
(83,971 |
) |
|
|
$ |
28,333 |
|
|
$ |
(60,779 |
) |
|
Impairment of goodwill |
54,973 |
|
|
|
— |
|
|
30,470 |
|
|
Impairment of other long-lived assets |
12,897 |
|
|
|
— |
|
|
4,010 |
|
|
Adjusted net (loss)
income |
$ |
(16,101 |
) |
|
|
$ |
28,333 |
|
|
$ |
(26,299 |
) |
|
|
|
|
|
|
|
Basic (loss) earnings per
share, as reported |
$ |
(1.85 |
) |
|
|
$ |
0.63 |
|
|
$ |
(1.35 |
) |
|
Impairment of goodwill |
1.21 |
|
|
|
— |
|
|
0.68 |
|
|
Impairment of other long-lived assets |
0.28 |
|
|
|
— |
|
|
0.09 |
|
|
Adjusted basic (loss) earnings
per share |
$ |
(0.36 |
) |
|
|
$ |
0.63 |
|
|
$ |
(0.58 |
) |
|
|
|
|
|
|
|
Diluted (loss) earnings per
share, as reported |
$ |
(1.85 |
) |
|
|
$ |
0.63 |
|
|
$ |
(1.35 |
) |
|
Impairment of goodwill |
1.21 |
|
|
|
— |
|
|
0.68 |
|
|
Impairment of other long-lived assets |
0.28 |
|
|
|
— |
|
|
0.09 |
|
|
Adjusted diluted (loss)
earnings per share |
$ |
(0.36 |
) |
|
|
$ |
0.63 |
|
|
$ |
(0.58 |
) |
|
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