Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ:
TUSK) today reported financial and operational results for the
fourth quarter and full year ended December 31, 2018.
Financial Highlights for the Fourth Quarter and Full
Year 2018:
Total revenue was $278.2 million for the three months ended
December 31, 2018, down 28% sequentially from $384.0 million
for the three months ended September 30, 2018 and down 25%
from $369.0 million for the three months ended December 31,
2017. Total revenue was $1.7 billion for the year ended
December 31, 2018, a 144% increase from $691.5 million for the
year ended December 31, 2017.
Net income for the three months ended December 31, 2018 was
$68.2 million, or $1.51 per fully diluted share, a $1.2 million
decrease from $69.5 million, or $1.54 per fully diluted share, for
the three months ended September 30, 2018 and an increase of
$2.3 million from $65.9 million, or $1.48 per fully diluted share,
for the three months ended December 31, 2017. Net income was
$236.0 million, or $5.24 per fully diluted share, for the year
ended December 31, 2018, a 300% increase from $59.0 million,
or $1.42 per fully diluted share, for the year ended
December 31, 2017.
Adjusted EBITDA (as defined and reconciled below) was $84.3
million for the three months ended December 31, 2018, a $99.3
million decrease from $183.6 million for the three months ended
September 30, 2018 and a $26.2 million decline from $110.5
million for the three months ended December 31, 2017. Adjusted
EBITDA was $547.3 million for the year ended December 31,
2018, a 231% increase from $165.3 million for the year ended
December 31, 2017.
Arty Straehla, Mammoth's Chief Executive Officer, stated, "2018
was another strong year for Mammoth as we posted record levels of
total revenue, net income and adjusted EBITDA. In addition, we
strategically invested in high margin businesses, returned $11
million to stockholders through dividends and positioned ourselves
to take advantage of M&A opportunities. Since going public in
late 2016, adjusted EBITDA has grown more than 12 times to $547
million in 2018 from $41 million in 2016. Despite continuing
volatility in commodity prices and reductions in capital
expenditure budgets at many of our customers, oilfield activity
levels have been improving so far in 2019 from the levels
experienced in the fourth quarter of 2018. Our six frac
fleets have experienced full utilization since late January and
demand and pricing for our sand is getting stronger."
Infrastructure Services
Mammoth's infrastructure services segment contributed revenues
of $159.6 million for the three months ended December 31,
2018, a 33% decrease from $237.1 million for the three months ended
September 30, 2018 and a 24% decrease from $209.2 million the
three months ended December 31, 2017. During the fourth
quarter of 2018, our staffing levels in Puerto Rico generally
ranged from 475 to 550, dropping to approximately 130 at year end
for a period of three days due to the holidays.
The infrastructure segment contributed revenues of $1.1 billion
for the year ended December 31, 2018, a 382% increase from
$224.4 million for the year ended December 31, 2017.
Pressure Pumping Services
Mammoth's pressure pumping division contributed revenues
(inclusive of inter-segment revenues) of $72.8 million on 1,164
stages for the three months ended December 31, 2018, a 23%
decrease from $94.2 million on 1,594 stages for the three months
ended September 30, 2018 and a 35% decrease from $111.9
million on 1,375 stages for the three months ended
December 31, 2017.
The pressure pumping division contributed revenues (inclusive of
inter-segment revenues) of $369.5 million for the year ended
December 31, 2018, a 32% increase from $279.4 million for the
year ended December 31, 2017. During 2018, Mammoth’s pressure
pumping division completed a total of 6,245 stages, an increase of
22% from 2017.
An average of 3.7 fleets remained active throughout the fourth
quarter of 2018.
Natural Sand Proppant Services
Mammoth's natural sand proppant division contributed revenues
(inclusive of inter-segment revenues) of $27.4 million for the
three months ended December 31, 2018, a 26% decrease from
$37.0 million for the three months ended September 30, 2018
and a 38% decrease from $43.9 million for the three months ended
December 31, 2017. The Company sold 569,195 tons of sand
during the three months ended December 31, 2018, a 5% decrease
from 598,438 during the three months ended September 30, 2018
and a 5% decrease from 600,182 during the three months ended
December 31, 2017.
The natural sand proppant division contributed revenues
(inclusive of inter-segment revenues) of $168.3 million for the
year ended December 31, 2018, a 44% increase from $117.0
million for the year ended December 31, 2017. The Company sold
2.7 million tons of sand during the year ended December 31,
2018, a 59% increase from 1.7 million during the year ended
December 31, 2017.
During 2018, Mammoth's total sand processing capacity increased
to approximately 4.4 million tons per year. Due to market
conditions, our Muskie facility was temporarily idled during the
third quarter of 2018 and continues to be idled. The Company's
average production costs were approximately $12 per ton during the
fourth quarter of 2018.
Other Services
Mammoth's other services, including contract land and
directional drilling, coil tubing, pressure control, flowback,
cementing, acidizing, equipment rentals, crude oil hauling and
remote accommodations, contributed revenues (inclusive of
inter-segment revenues) of $38.8 million for the three months ended
December 31, 2018, a 9% increase from $35.7 million for the
three months ended September 30, 2018 and a 34% increase from
$28.9 million for the three months ended December 31,
2017.
The Company's other services contributed revenues (inclusive of
inter-segment revenues) of $149.9 million for the year ended
December 31, 2018, a 47% increase from $102.2 million for the
year ended December 31, 2017.
Selling, General and Administrative
Expenses
Selling, general and administrative ("SG&A") expenses were
$14.8 million for the three months ended December 31, 2018,
compared to a credit of $45.3 million for the three months ended
September 30, 2018 and $27.4 million for the three months
ended December 31, 2017.
Following is a breakout of SG&A expense (in thousands):
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Cash expenses: |
|
|
|
|
|
|
|
|
|
Compensation and
benefits |
$ |
9,409 |
|
|
$ |
6,364 |
|
|
$ |
14,864 |
|
|
$ |
42,950 |
|
|
$ |
15,322 |
|
Professional services |
3,018 |
|
|
2,690 |
|
|
3,267 |
|
|
11,854 |
|
|
7,765 |
|
Other(a) |
1,475 |
|
|
1,802 |
|
|
3,701 |
|
|
10,718 |
|
|
7,503 |
|
Total
cash SG&A expense |
13,902 |
|
|
10,856 |
|
|
21,832 |
|
|
65,522 |
|
|
30,590 |
|
Non-cash expenses: |
|
|
|
|
|
|
|
|
|
Bad debt
provision(b) |
(34 |
) |
|
16,020 |
|
|
(68,333 |
) |
|
(14,578 |
) |
|
16,098 |
|
Equity
based compensation(c) |
— |
|
|
— |
|
|
— |
|
|
17,487 |
|
|
— |
|
Stock
based compensation |
915 |
|
|
550 |
|
|
1,177 |
|
|
4,666 |
|
|
3,198 |
|
Total
non-cash SG&A expense |
881 |
|
|
16,570 |
|
|
(67,156 |
) |
|
7,575 |
|
|
19,296 |
|
Total
SG&A expense |
$ |
14,783 |
|
|
$ |
27,426 |
|
|
$ |
(45,324 |
) |
|
$ |
73,097 |
|
|
$ |
49,886 |
|
a. |
Includes
travel-related costs, IT expenses, rent, utilities and other
general and administrative-related costs. |
b. |
During the
three months ended September 30, 2018, the Company received
payment for amounts previously reserved in 2017. As a result,
during the three months ended September 30, 2018, the Company
reversed bad debt expense of $16.0 million recognized in 2017 and
$53.6 million recognized in the first half of 2018. The Company
expects to receive payment for the 2018 amounts once the Company
files its 2018 Puerto Rico tax return and pays any taxes due as
calculated by the return. The Company expects that the Puerto Rico
2018 tax return will be filed in mid-2019. |
c. |
Represents
compensation expense for non-employee awards, which were issued and
are payable by certain affiliates of Wexford (the sponsor
level). |
|
|
SG&A expenses, as a percentage of total revenue, were 5% for
the three months ended December 31, 2018 compared to (12%) for
the three months ended September 30, 2018 and 7% for the three
months ended December 31, 2017. Excluding bad debt expenses,
SG&A expenses as a percentage of total revenue were 5% for the
three months ended December 31, 2018, compared to 6% for the
three months ended September 30, 2018 and 3% for the three
months ended December 31, 2017.
Income Tax Expense
During the fourth quarter of 2018, the Company recognized a tax
benefit of $21.0 million related to a change in the mix of earnings
between our United States and Puerto Rico operations as compared to
the three months ended September 30, 2018. For the full year
of 2018, the Company’s effective tax rate was 39%.
Liquidity
On October 19, 2018, Mammoth entered into an amended and
restated five-year asset backed revolving credit facility led by
PNC Capital Markets with a maximum revolving advance amount at
closing of $185 million and the potential to increase the facility
by up to an additional $165 million.
As of December 31, 2018, Mammoth had cash on hand totaling
$67.6 million and no borrowings outstanding under its revolving
credit facility. As of December 31, 2018, the Company had
approximately $175.8 of available borrowing capacity under its
revolving credit facility, after giving effect to $8.4 million of
outstanding letters of credit, resulting in total liquidity of
approximately $243.4 million. On March 13, 2019, the
Company borrowed $82.0 million under its revolving credit facility
for 2018 Puerto Rico income taxes to be paid on March 15, 2019.
Pursuant to the terms of its original contract with the Puerto Rico
Electric Power Authority, or PREPA, once the Company's 2018 Puerto
Rico income taxes are paid and the applicable returns are filed the
Company is entitled to receive payment from PREPA of $44.8 million
related to a contractual income tax provision.
Capital Expenditures
The following table summarizes Mammoth's capital expenditures by
operating division for the periods indicated (in thousands):
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Infrastructure
services(a) |
$ |
22,409 |
|
|
$ |
8,131 |
|
|
$ |
21,737 |
|
|
$ |
100,701 |
|
|
$ |
20,144 |
|
Pressure pumping
services(b) |
9,632 |
|
|
12,870 |
|
|
8,042 |
|
|
33,774 |
|
|
85,853 |
|
Natural sand proppant
services(c) |
2,132 |
|
|
8,478 |
|
|
3,145 |
|
|
17,935 |
|
|
16,376 |
|
Other(d) |
8,240 |
|
|
2,100 |
|
|
7,821 |
|
|
39,533 |
|
|
11,480 |
|
Total capital
expenditures |
$ |
42,413 |
|
|
$ |
31,579 |
|
|
$ |
40,745 |
|
|
$ |
191,943 |
|
|
$ |
133,853 |
|
a. |
Capital
expenditures primarily for truck, tooling and equipment purchases
for new infrastructure crews for periods presented. |
b. |
Capital
expenditures primarily for pressure pumping equipment, including
three new fleets, for 2017 and various pressure pumping and water
transfer equipment for 2018. |
c. |
Capital
expenditures primarily for the upgrade and expansion of our plants
for 2018 and plant upgrades for 2017. |
d. |
Capital
expenditures primarily for equipment for our equipment rental and
crude hauling businesses for 2018 and upgrades to our rig fleet and
purchase of other equipment for 2017. |
|
|
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 Report to be 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.
Based on its assessment of Financial Accounting Standards Board
guidance at December 31, 2018, the Company identified three
reportable segments: infrastructure services, pressure pumping
services and natural sand proppant services. For the year ended
December 31, 2017, the Company identified four reportable segments
consisting of infrastructure services, pressure pumping services,
natural sand proppant services and contract land and directional
drilling services. The Company changed its reportable segment
presentation in 2018, as it determined based upon both a
quantitative and qualitative basis that the contract land and
directional drilling services segment, which previously included
Bison Drilling and Field Services LLC, Bison Trucking LLC, Panther
Drilling Systems LLC, Mako Acquisitions LLC and White Wing Tubular
LLC, is not of continuing significance. The Company now includes
the results of the entities previously included in the contract
land and directional drilling services segment in its reconciling
column titled "All Other" in the tables below. The financial
results by segment below for the three months ended September 30,
2018 and the three months and year ended December 31, 2017
have been retroactively adjusted to reflect this change in
reportable segments.
On June 5, 2017, the Company completed the acquisition of (1)
Sturgeon Acquisitions, LLC and its wholly owned subsidiaries Taylor
Frac LLC, Taylor RE, LLC and South River, LLC (collectively,
"Sturgeon"), (2) Stingray Energy Services and (3) Stingray
Cementing (together with Stingray Energy Services, the “Stingray
Acquisition”) in exchange for the issuance by Mammoth of an
aggregate of 7,000,000 shares of its common stock.
Prior to the acquisition, the Company and Sturgeon were under
common control and it is required under accounting principles
generally accepted in the Unites States of America ("GAAP") to
account for this common control acquisition in a manner similar to
the pooling of interest method of accounting. Therefore, the
Company's historical financial information has been recast to
combine Sturgeon with the Company as if the acquisition had been
completed at commencement of Sturgeon's operations on September 13,
2014.
Conference Call Information
Mammoth will host a conference call on Friday, March 15, 2019 at
10:00 a.m. CDT (11:00 am EDT) to discuss its fourth quarter and
full year 2018 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 1357129. 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 company serving both
the oil and gas and the electric utility industries in North
America and US territories. Mammoth's subsidiaries provide a
diversified set of drilling and completion services to the
exploration and production industry including pressure pumping,
coil tubing, natural sand and proppant services as well as
trucking, drilling, cementing, water transfer among others. In
addition, its infrastructure division provides transmission,
distribution and logistics services to various public and private
owned utilities throughout the US and Puerto Rico.
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
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 we expect, believe
or anticipate 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 our 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 our existing operations, experience and
perception of historical trends, current conditions, anticipated
future developments and their effect on us, 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, our
forward-looking statements are subject to significant risks and
uncertainties, including those described in our Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form
8-K and other filings we make with the SEC, including those
relating to our acquisitions and our contracts, many of which are
beyond our control, which may cause actual results to differ
materially from our historical experience and our 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
failure to receive or delays in receiving governmental
authorizations, approvals and/or payments; risks relating to
economic conditions; delays in or failure of delivery of current or
future orders of specialized equipment; 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; 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.
|
MAMMOTH ENERGY SERVICES, INC. |
CONSOLIDATED BALANCE SHEETS |
|
ASSETS |
|
December 31, |
|
December 31, |
|
|
2018 |
|
2017 |
|
|
|
CURRENT ASSETS |
|
(in thousands) |
Cash and cash
equivalents |
|
$ |
67,625 |
|
|
$ |
5,637 |
|
Accounts
receivable, net |
|
337,460 |
|
|
243,746 |
|
Receivables from related parties |
|
11,164 |
|
|
33,788 |
|
Inventories |
|
21,302 |
|
|
17,814 |
|
Prepaid
expenses |
|
11,317 |
|
|
12,552 |
|
Other
current assets |
|
688 |
|
|
886 |
|
Total
current assets |
|
449,556 |
|
|
314,423 |
|
|
|
|
|
|
Property, plant and
equipment, net |
|
436,699 |
|
|
351,017 |
|
Sand reserves |
|
71,708 |
|
|
74,769 |
|
Intangible assets, net
- customer relationships |
|
1,711 |
|
|
9,623 |
|
Intangible assets, net
- trade names |
|
6,045 |
|
|
6,516 |
|
Goodwill |
|
101,245 |
|
|
99,811 |
|
Deferred income tax
asset |
|
— |
|
|
6,739 |
|
Other non-current
assets |
|
6,127 |
|
|
4,345 |
|
Total
assets |
|
$ |
1,073,091 |
|
|
$ |
867,243 |
|
LIABILITIES AND EQUITY |
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
Accounts
payable |
|
$ |
68,843 |
|
|
$ |
141,306 |
|
Payables
to related parties |
|
370 |
|
|
1,378 |
|
Accrued
expenses and other current liabilities |
|
59,652 |
|
|
40,895 |
|
Income
taxes payable |
|
104,958 |
|
|
36,409 |
|
Total
current liabilities |
|
233,823 |
|
|
219,988 |
|
|
|
|
|
|
Long-term debt |
|
— |
|
|
99,900 |
|
Deferred income tax
liabilities |
|
79,309 |
|
|
34,147 |
|
Asset retirement
obligation |
|
3,164 |
|
|
2,123 |
|
Other liabilities |
|
2,743 |
|
|
3,289 |
|
Total
liabilities |
|
319,039 |
|
|
359,447 |
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
Equity: |
|
|
|
|
Common
stock, $0.01 par value, 200,000,000 shares authorized, 44,876,649
and 44,589,306 issued and outstanding at December 31, 2018 and
2017 |
|
449 |
|
|
446 |
|
Additional paid in capital |
|
530,919 |
|
|
508,010 |
|
Retained
earnings |
|
226,765 |
|
|
2,001 |
|
Accumulated other comprehensive loss |
|
(4,081 |
) |
|
(2,661 |
) |
Total
equity |
|
754,052 |
|
|
507,796 |
|
Total
liabilities and equity |
|
$ |
1,073,091 |
|
|
$ |
867,243 |
|
|
MAMMOTH ENERGY SERVICES, INC. |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS) |
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
|
|
|
(in thousands, except per share
amounts) |
REVENUE |
|
Services revenue |
$ |
260,513 |
|
|
$ |
315,545 |
|
|
$ |
346,368 |
|
|
$ |
1,471,085 |
|
|
$ |
435,409 |
|
Services
revenue - related parties |
9,551 |
|
|
31,639 |
|
|
18,933 |
|
|
118,183 |
|
|
166,064 |
|
Product
revenue |
8,063 |
|
|
18,024 |
|
|
14,955 |
|
|
75,766 |
|
|
47,067 |
|
Product
revenue - related parties |
71 |
|
|
3,755 |
|
|
3,787 |
|
|
25,050 |
|
|
42,956 |
|
Total revenue |
278,198 |
|
|
368,963 |
|
|
384,043 |
|
|
1,690,084 |
|
|
691,496 |
|
|
|
|
|
|
|
|
|
|
|
COST AND EXPENSES |
|
|
|
|
|
|
|
|
|
Services
cost of revenue (exclusive of depreciation, depletion, amortization
and accretion of $26,999, $25,044 and $27,810, respectively, for
the three months ended December 31, 2018, December 31, 2017 and
September 30, 2018 and $106,282 and $82,686, respectively, for the
years ended December 31, 2018 and 2017) |
151,273 |
|
|
198,201 |
|
|
216,670 |
|
|
961,205 |
|
|
390,112 |
|
Services
cost of revenue - related parties (exclusive of depreciation,
depletion, amortization and accretion of $0, $0 and $0,
respectively, for the three months ended December 31, 2018,
December 31, 2017 and September 30, 2018 and $0 and $0,
respectively, for the years ended December 31, 2018 and 2017) |
240 |
|
|
707 |
|
|
1,425 |
|
|
5,885 |
|
|
1,408 |
|
Product
cost of revenue (exclusive of depreciation, depletion,
amortization and accretion of $3,136, $2,790 and $4,183,
respectively, for the three months ended December 31, 2018,
December 31, 2017 and September 30, 2018 and $13,512 and $9,389,
respectively, for the years ended December 31, 2018 and 2017) |
28,797 |
|
|
33,290 |
|
|
29,470 |
|
|
126,714 |
|
|
91,049 |
|
Selling,
general and administrative |
14,283 |
|
|
26,931 |
|
|
(45,761 |
) |
|
71,199 |
|
|
48,405 |
|
Selling,
general and administrative - related parties |
500 |
|
|
495 |
|
|
437 |
|
|
1,898 |
|
|
1,481 |
|
Depreciation, depletion, amortization and accretion |
30,159 |
|
|
27,770 |
|
|
32,015 |
|
|
119,877 |
|
|
92,124 |
|
Impairment of long-lived assets |
4,086 |
|
|
4,146 |
|
|
4,582 |
|
|
8,855 |
|
|
4,146 |
|
Total cost and
expenses |
229,338 |
|
|
291,540 |
|
|
238,838 |
|
|
1,295,633 |
|
|
628,725 |
|
Operating income |
48,860 |
|
|
77,423 |
|
|
145,205 |
|
|
394,451 |
|
|
62,771 |
|
|
|
|
|
|
|
|
|
|
|
OTHER (EXPENSE)
INCOME |
|
|
|
|
|
|
|
|
|
Interest
expense, net |
(533 |
) |
|
(1,381 |
) |
|
(458 |
) |
|
(3,187 |
) |
|
(4,310 |
) |
Bargain
purchase gain, net of tax |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,012 |
|
Other,
net |
(1,122 |
) |
|
28 |
|
|
(400 |
) |
|
(2,036 |
) |
|
(677 |
) |
Total other
expense |
(1,655 |
) |
|
(1,353 |
) |
|
(858 |
) |
|
(5,223 |
) |
|
(975 |
) |
Income before income
taxes |
47,205 |
|
|
76,070 |
|
|
144,347 |
|
|
389,228 |
|
|
61,796 |
|
(Benefit) provision for
income taxes |
(21,002 |
) |
|
10,155 |
|
|
74,835 |
|
|
153,263 |
|
|
2,832 |
|
Net income |
$ |
68,207 |
|
|
$ |
65,915 |
|
|
$ |
69,512 |
|
|
$ |
235,965 |
|
|
$ |
58,964 |
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment, net of tax of $212, ($167) and
($87), respectively, for the three months ended December 31, 2018,
December 31, 2017 and September 30, 2018 and $397 and $645,
respectively, for the years ended December 31, 2018 and 2017 |
(961 |
) |
|
(482 |
) |
|
327 |
|
|
(1,420 |
) |
|
555 |
|
Comprehensive
income |
$ |
67,246 |
|
|
$ |
65,433 |
|
|
$ |
69,839 |
|
|
$ |
234,545 |
|
|
$ |
59,519 |
|
|
|
|
|
|
|
|
|
|
|
Net income per share
(basic) |
$ |
1.52 |
|
|
$ |
1.48 |
|
|
$ |
1.55 |
|
|
$ |
5.27 |
|
|
$ |
1.42 |
|
Net income per share
(diluted) |
$ |
1.51 |
|
|
$ |
1.48 |
|
|
$ |
1.54 |
|
|
$ |
5.24 |
|
|
$ |
1.42 |
|
Weighted average number
of shares outstanding (basic) |
44,845 |
|
|
44,579 |
|
|
44,756 |
|
|
44,750 |
|
|
41,548 |
|
Weighted average number
of shares outstanding (diluted) |
45,048 |
|
|
44,683 |
|
|
45,082 |
|
|
45,021 |
|
|
41,639 |
|
Dividends declared per
share |
$ |
0.125 |
|
|
— |
|
|
$ |
0.125 |
|
|
$ |
0.25 |
|
|
— |
|
|
MAMMOTH ENERGY SERVICES,
INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
Twelve Months Ended |
|
December 31, |
|
2018 |
|
2017 |
|
|
|
(in thousands) |
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
235,965 |
|
|
$ |
58,964 |
|
Adjustments to reconcile net income to cash provided by operating
activities: |
|
|
|
Equity
based compensation |
17,487 |
|
|
— |
|
Stock
based compensation |
5,425 |
|
|
3,741 |
|
Depreciation, depletion, accretion and amortization |
119,877 |
|
|
92,124 |
|
Amortization of coil tubing strings |
2,193 |
|
|
2,855 |
|
Amortization of debt origination costs |
387 |
|
|
399 |
|
Bad debt
expense |
(14,578 |
) |
|
16,206 |
|
Loss on
disposal of property and equipment |
947 |
|
|
69 |
|
Gain on
bargain purchase |
— |
|
|
(4,012 |
) |
Impairment of long-lived assets |
8,855 |
|
|
4,146 |
|
Deferred
income taxes |
52,226 |
|
|
(34,425 |
) |
Loss from
equity investee |
16 |
|
|
— |
|
Changes
in assets and liabilities, net of acquisitions of businesses: |
|
|
|
Accounts
receivable, net |
(78,840 |
) |
|
(231,751 |
) |
Receivables from related parties |
22,624 |
|
|
(1,096 |
) |
Inventories |
(5,502 |
) |
|
(14,238 |
) |
Prepaid
expenses and other assets |
1,423 |
|
|
(7,628 |
) |
Accounts
payable |
(64,966 |
) |
|
101,725 |
|
Payables
to related parties |
(1,008 |
) |
|
1,174 |
|
Accrued
expenses and other liabilities |
15,445 |
|
|
32,968 |
|
Income
taxes payable |
68,692 |
|
|
36,395 |
|
Net cash provided by
operating activities |
386,668 |
|
|
57,616 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Purchases
of property and equipment |
(187,285 |
) |
|
(132,295 |
) |
Purchases
of property and equipment from related parties |
(4,658 |
) |
|
(1,558 |
) |
Business
acquisitions |
(20,824 |
) |
|
(42,008 |
) |
Contributions to equity investee |
(702 |
) |
|
— |
|
Proceeds
from disposal of property and equipment |
1,514 |
|
|
907 |
|
Business
combination cash acquired |
— |
|
|
2,671 |
|
Net cash used in
investing activities |
(211,955 |
) |
|
(172,283 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Borrowings from lines of credit |
77,000 |
|
|
156,850 |
|
Repayments of lines of credit |
(176,900 |
) |
|
(56,950 |
) |
Dividends
paid |
(11,201 |
) |
|
— |
|
Repayments of equipment financing note |
(292 |
) |
|
— |
|
Debt
issuance costs |
(1,199 |
) |
|
— |
|
Repayment
of acquisition long-term debt |
— |
|
|
(8,851 |
) |
Net cash (used in)
provided by financing activities |
(112,592 |
) |
|
91,049 |
|
Effect of foreign
exchange rate on cash |
(133 |
) |
|
16 |
|
Net change in cash and
cash equivalents |
61,988 |
|
|
(23,602 |
) |
Cash and cash
equivalents at beginning of period |
5,637 |
|
|
29,239 |
|
Cash and cash
equivalents at end of period |
$ |
67,625 |
|
|
$ |
5,637 |
|
Supplemental disclosure
of cash flow information: |
|
Cash paid for
interest |
$ |
3,212 |
|
|
$ |
3,656 |
|
Cash paid
for income taxes |
$ |
32,757 |
|
|
$ |
840 |
|
Supplemental disclosure
of non-cash transactions: |
|
|
|
Acquisition of Stingray Cementing LLC and Stingray Energy Services
LLC |
$ |
— |
|
|
$ |
23,091 |
|
Purchases
of property and equipment included in accounts payable |
$ |
11,908 |
|
|
$ |
15,038 |
|
|
MAMMOTH ENERGY SERVICES, INC. |
SEGMENT INCOME STATEMENTS |
(in thousands) |
|
Three
months ended December 31, 2018 |
Infrastructure |
PressurePumping |
Sand |
All Other |
Eliminations |
Total |
Revenue from external
customers |
$ |
159,610 |
|
$ |
72,219 |
|
$ |
8,133 |
|
$ |
38,236 |
|
$ |
— |
|
$ |
278,198 |
|
Intersegment
revenues |
— |
|
560 |
|
19,273 |
|
542 |
|
(20,375 |
) |
— |
|
Total revenue |
159,610 |
|
72,779 |
|
27,406 |
|
38,778 |
|
(20,375 |
) |
278,198 |
|
Cost of revenue,
exclusive of depreciation, depletion, amortization and
accretion |
75,486 |
|
39,601 |
|
28,796 |
|
36,427 |
|
— |
|
180,310 |
|
Intersegment cost of
revenues |
— |
|
19,787 |
|
253 |
|
308 |
|
(20,348 |
) |
— |
|
Total cost of
revenue |
75,486 |
|
59,388 |
|
29,049 |
|
36,735 |
|
(20,348 |
) |
180,310 |
|
Selling, general and
administrative |
9,689 |
|
1,768 |
|
1,170 |
|
2,156 |
|
— |
|
14,783 |
|
Depreciation,
depletion, amortization and accretion |
7,425 |
|
10,952 |
|
3,138 |
|
8,644 |
|
— |
|
30,159 |
|
Impairment of
long-lived assets |
308 |
|
— |
|
— |
|
3,778 |
|
— |
|
4,086 |
|
Operating income
(loss) |
66,702 |
|
671 |
|
(5,951 |
) |
(12,535 |
) |
(27 |
) |
48,860 |
|
Interest expense,
net |
82 |
|
177 |
|
40 |
|
234 |
|
— |
|
533 |
|
Other expense, net |
60 |
|
340 |
|
304 |
|
418 |
|
— |
|
1,122 |
|
Income (loss) before
income taxes |
$ |
66,560 |
|
$ |
154 |
|
$ |
(6,295 |
) |
$ |
(13,187 |
) |
$ |
(27 |
) |
$ |
47,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended December 31, 2017 |
Infrastructure |
PressurePumping |
Sand |
All Other |
Eliminations |
Total |
Revenue from external
customers |
$ |
209,229 |
|
$ |
111,244 |
|
$ |
21,779 |
|
$ |
26,711 |
|
$ |
— |
|
$ |
368,963 |
|
Intersegment
revenues |
— |
|
617 |
|
22,167 |
|
2,154 |
|
(24,938 |
) |
— |
|
Total revenue |
209,229 |
|
111,861 |
|
43,946 |
|
28,865 |
|
(24,938 |
) |
368,963 |
|
Cost of revenue,
exclusive of depreciation, depletion, amortization and
accretion |
108,289 |
|
65,594 |
|
33,289 |
|
25,026 |
|
— |
|
232,198 |
|
Intersegment cost of
revenues |
1,443 |
|
22,928 |
|
373 |
|
159 |
|
(24,903 |
) |
— |
|
Total cost of
revenue |
109,732 |
|
88,522 |
|
33,662 |
|
25,185 |
|
(24,903 |
) |
232,198 |
|
Selling, general and
administrative |
20,365 |
|
2,810 |
|
1,875 |
|
2,376 |
|
— |
|
27,426 |
|
Depreciation,
depletion, amortization and accretion |
1,805 |
|
13,590 |
|
2,791 |
|
9,584 |
|
— |
|
27,770 |
|
Impairment of
long-lived assets |
— |
|
— |
|
324 |
|
3,822 |
|
— |
|
4,146 |
|
Operating income
(loss) |
77,327 |
|
6,939 |
|
5,294 |
|
(12,102 |
) |
(35 |
) |
77,423 |
|
Interest expense,
net |
168 |
|
599 |
|
107 |
|
507 |
|
— |
|
1,381 |
|
Other (income) expense,
net |
(4 |
) |
2 |
|
(40 |
) |
14 |
|
— |
|
(28 |
) |
Income (loss) before
income taxes |
$ |
77,163 |
|
$ |
6,338 |
|
$ |
5,227 |
|
$ |
(12,623 |
) |
$ |
(35 |
) |
$ |
76,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended September 30, 2018 |
Infrastructure |
PressurePumping |
Sand |
All Other |
Eliminations |
Total |
Revenue from external
customers |
$ |
237,052 |
|
$ |
93,360 |
|
$ |
18,742 |
|
$ |
34,889 |
|
$ |
— |
|
$ |
384,043 |
|
Intersegment
revenues |
— |
|
809 |
|
18,268 |
|
781 |
|
(19,858 |
) |
— |
|
Total revenue |
237,052 |
|
94,169 |
|
37,010 |
|
35,670 |
|
(19,858 |
) |
384,043 |
|
Cost of revenue,
exclusive of depreciation, depletion, amortization and
accretion |
128,267 |
|
55,490 |
|
29,470 |
|
34,338 |
|
— |
|
247,565 |
|
Intersegment cost of
revenues |
37 |
|
19,002 |
|
546 |
|
263 |
|
(19,848 |
) |
— |
|
Total cost of
revenue |
128,304 |
|
74,492 |
|
30,016 |
|
34,601 |
|
(19,848 |
) |
247,565 |
|
Selling, general and
administrative |
(54,200 |
) |
4,508 |
|
1,618 |
|
2,750 |
|
— |
|
(45,324 |
) |
Depreciation,
depletion, amortization and accretion |
6,591 |
|
12,720 |
|
4,184 |
|
8,520 |
|
— |
|
32,015 |
|
Impairment of
long-lived assets |
— |
|
143 |
|
— |
|
4,439 |
|
— |
|
4,582 |
|
Operating income
(loss) |
156,357 |
|
2,306 |
|
1,192 |
|
(14,640 |
) |
(10 |
) |
145,205 |
|
Interest expense,
net |
159 |
|
150 |
|
37 |
|
112 |
|
— |
|
458 |
|
Other expense, net |
181 |
|
2 |
|
199 |
|
18 |
|
— |
|
400 |
|
Income (loss) before
income taxes |
$ |
156,017 |
|
$ |
2,154 |
|
$ |
956 |
|
$ |
(14,770 |
) |
$ |
(10 |
) |
$ |
144,347 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended December 31, 2018 |
Infrastructure |
PressurePumping |
Sand |
All Other |
Eliminations |
Total |
Revenue from external
customers |
$ |
1,082,371 |
|
$ |
362,491 |
|
$ |
100,816 |
|
$ |
144,406 |
|
$ |
— |
|
$ |
1,690,084 |
|
Intersegment
revenues |
— |
|
7,001 |
|
67,459 |
|
5,516 |
|
(79,976 |
) |
— |
|
Total revenue |
1,082,371 |
|
369,492 |
|
168,275 |
|
149,922 |
|
(79,976 |
) |
1,690,084 |
|
Cost of revenue,
exclusive of depreciation, depletion, amortization and
accretion |
608,017 |
|
223,296 |
|
126,714 |
|
135,777 |
|
— |
|
1,093,804 |
|
Intersegment cost of
revenues |
2,583 |
|
70,365 |
|
6,103 |
|
898 |
|
(79,949 |
) |
— |
|
Total cost of
revenue |
610,600 |
|
293,661 |
|
132,817 |
|
136,675 |
|
(79,949 |
) |
1,093,804 |
|
Selling, general and
administrative |
27,126 |
|
29,761 |
|
6,218 |
|
9,992 |
|
— |
|
73,097 |
|
Depreciation,
depletion, amortization and accretion |
20,516 |
|
51,487 |
|
13,519 |
|
34,355 |
|
— |
|
119,877 |
|
Impairment of
long-lived assets |
308 |
|
143 |
|
— |
|
8,404 |
|
— |
|
8,855 |
|
Operating income
(loss) |
423,821 |
|
(5,560 |
) |
15,721 |
|
(39,504 |
) |
(27 |
) |
394,451 |
|
Interest expense,
net |
423 |
|
1,171 |
|
234 |
|
1,359 |
|
— |
|
3,187 |
|
Other expense, net |
573 |
|
434 |
|
525 |
|
504 |
|
— |
|
2,036 |
|
Income (loss) before
income taxes |
$ |
422,825 |
|
$ |
(7,165 |
) |
$ |
14,962 |
|
$ |
(41,367 |
) |
$ |
(27 |
) |
$ |
389,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended December 31, 2017 |
Infrastructure |
PressurePumping |
Sand |
All Other |
Eliminations |
Total |
Revenue from external
customers |
$ |
224,425 |
|
$ |
277,326 |
|
$ |
90,023 |
|
$ |
99,722 |
|
$ |
— |
|
$ |
691,496 |
|
Intersegment
revenues |
— |
|
2,026 |
|
27,014 |
|
2,527 |
|
(31,567 |
) |
— |
|
Total revenue |
224,425 |
|
279,352 |
|
117,037 |
|
102,249 |
|
(31,567 |
) |
691,496 |
|
Cost of revenue,
exclusive of depreciation, depletion, amortization and
accretion |
120,117 |
|
183,089 |
|
91,049 |
|
88,314 |
|
— |
|
482,569 |
|
Intersegment cost of
revenues |
1,443 |
|
28,147 |
|
1,731 |
|
211 |
|
(31,532 |
) |
— |
|
Total cost of
revenue |
121,560 |
|
211,236 |
|
92,780 |
|
88,525 |
|
(31,532 |
) |
482,569 |
|
Selling, general and
administrative |
21,606 |
|
9,501 |
|
8,190 |
|
10,589 |
|
— |
|
49,886 |
|
Depreciation,
depletion, amortization and accretion |
3,185 |
|
45,413 |
|
9,394 |
|
34,132 |
|
— |
|
92,124 |
|
Impairment of
long-lived assets |
— |
|
— |
|
324 |
|
3,822 |
|
— |
|
4,146 |
|
Operating income
(loss) |
78,074 |
|
13,202 |
|
6,349 |
|
(34,819 |
) |
(35 |
) |
62,771 |
|
Interest expense,
net |
241 |
|
1,622 |
|
679 |
|
1,768 |
|
— |
|
4,310 |
|
Bargain purchase
gain |
— |
|
— |
|
(4,012 |
) |
— |
|
— |
|
(4,012 |
) |
Other expense, net |
6 |
|
129 |
|
211 |
|
331 |
|
— |
|
677 |
|
Income (loss) before
income taxes |
$ |
77,827 |
|
$ |
11,451 |
|
$ |
9,471 |
|
$ |
(36,918 |
) |
$ |
(35 |
) |
$ |
61,796 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 long-lived assets, acquisition related
costs, public offering costs, equity based compensation, stock
based compensation, bargain purchase gain, 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. 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,
none of which are components of Adjusted EBITDA. 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 |
|
Twelve Months Ended |
|
December 31, |
|
September 30, |
|
December 31, |
Reconciliation
of Adjusted EBITDA to net income: |
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Net income |
$ |
68,207 |
|
|
$ |
65,915 |
|
|
$ |
69,512 |
|
|
$ |
235,965 |
|
|
$ |
58,964 |
|
Depreciation,
depletion, accretion and amortization expense |
30,159 |
|
|
27,770 |
|
|
32,015 |
|
|
119,877 |
|
|
92,124 |
|
Impairment of
long-lived assets |
4,086 |
|
|
4,146 |
|
|
4,582 |
|
|
8,855 |
|
|
4,146 |
|
Acquisition related
costs |
61 |
|
|
51 |
|
|
99 |
|
|
191 |
|
|
2,506 |
|
Public offering
costs |
(10 |
) |
|
— |
|
|
260 |
|
|
982 |
|
|
— |
|
Equity based
compensation |
— |
|
|
— |
|
|
— |
|
|
17,487 |
|
|
— |
|
Stock based
compensation |
1,094 |
|
|
1,093 |
|
|
1,415 |
|
|
5,425 |
|
|
3,741 |
|
Bargain purchase
gain |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,012 |
) |
Interest expense,
net |
533 |
|
|
1,381 |
|
|
458 |
|
|
3,187 |
|
|
4,310 |
|
Other expense (income),
net |
1,122 |
|
|
(28 |
) |
|
400 |
|
|
2,036 |
|
|
677 |
|
(Benefit) provision for
income taxes |
(21,002 |
) |
|
10,155 |
|
|
74,835 |
|
|
153,263 |
|
|
2,832 |
|
Adjusted EBITDA |
$ |
84,250 |
|
|
$ |
110,483 |
|
|
$ |
183,576 |
|
|
$ |
547,268 |
|
|
$ |
165,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infrastructure Services
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
September 30, |
|
December 31, |
Reconciliation
of Adjusted EBITDA to net income: |
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Net income |
$ |
141,875 |
|
|
$ |
47,873 |
|
|
$ |
78,405 |
|
|
$ |
319,940 |
|
|
$ |
48,537 |
|
Depreciation and
amortization expense |
7,425 |
|
|
1,805 |
|
|
6,591 |
|
|
20,516 |
|
|
3,185 |
|
Impairment of
long-lived assets |
308 |
|
|
— |
|
|
— |
|
|
308 |
|
|
— |
|
Acquisition related
costs |
61 |
|
|
8 |
|
|
— |
|
|
58 |
|
|
98 |
|
Public offering
costs |
(10 |
) |
|
— |
|
|
123 |
|
|
473 |
|
|
— |
|
Stock based
compensation |
470 |
|
|
316 |
|
|
555 |
|
|
2,089 |
|
|
345 |
|
Interest expense |
82 |
|
|
168 |
|
|
159 |
|
|
423 |
|
|
241 |
|
Other expense (income),
net |
60 |
|
|
(4 |
) |
|
181 |
|
|
573 |
|
|
6 |
|
(Benefit) provision for
income taxes |
(75,315 |
) |
|
29,290 |
|
|
77,612 |
|
|
102,885 |
|
|
29,290 |
|
Adjusted EBITDA |
$ |
74,956 |
|
|
$ |
79,456 |
|
|
$ |
163,626 |
|
|
$ |
447,265 |
|
|
$ |
81,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pressure Pumping Services
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
September 30, |
|
December 31, |
Reconciliation
of Adjusted EBITDA to net income (loss): |
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Net income (loss) |
$ |
154 |
|
|
$ |
6,338 |
|
|
$ |
2,154 |
|
|
$ |
(7,165 |
) |
|
$ |
11,451 |
|
Depreciation and
amortization expense |
10,952 |
|
|
13,590 |
|
|
12,720 |
|
|
51,487 |
|
|
45,413 |
|
Impairment of
long-lived assets |
— |
|
|
— |
|
|
143 |
|
|
143 |
|
|
— |
|
Acquisition related
costs |
— |
|
|
— |
|
|
6 |
|
|
39 |
|
|
1 |
|
Public offering
costs |
— |
|
|
— |
|
|
62 |
|
|
264 |
|
|
— |
|
Equity based
compensation |
— |
|
|
— |
|
|
— |
|
|
17,487 |
|
|
— |
|
Stock based
compensation |
318 |
|
|
438 |
|
|
423 |
|
|
1,612 |
|
|
1,641 |
|
Interest expense |
177 |
|
|
599 |
|
|
150 |
|
|
1,171 |
|
|
1,622 |
|
Other expense, net |
340 |
|
|
2 |
|
|
2 |
|
|
434 |
|
|
129 |
|
Adjusted EBITDA |
$ |
11,941 |
|
|
$ |
20,967 |
|
|
$ |
15,660 |
|
|
$ |
65,472 |
|
|
$ |
60,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Sand Proppant Services
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
September 30, |
|
December 31, |
Reconciliation
of Adjusted EBITDA to net income (loss): |
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Net (loss) income |
$ |
(6,295 |
) |
|
$ |
5,263 |
|
|
$ |
956 |
|
|
$ |
14,962 |
|
|
$ |
9,474 |
|
Depreciation,
depletion, accretion and amortization expense |
3,138 |
|
|
2,791 |
|
|
4,184 |
|
|
13,519 |
|
|
9,394 |
|
Impairment of
long-lived assets |
— |
|
|
324 |
|
|
— |
|
|
— |
|
|
324 |
|
Acquisition related
costs |
— |
|
|
42 |
|
|
— |
|
|
(38 |
) |
|
2,163 |
|
Public offering
costs |
— |
|
|
— |
|
|
49 |
|
|
144 |
|
|
— |
|
Stock based
compensation |
181 |
|
|
184 |
|
|
211 |
|
|
783 |
|
|
708 |
|
Bargain purchase
gain |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,012 |
) |
Interest expense |
40 |
|
|
107 |
|
|
37 |
|
|
234 |
|
|
679 |
|
Other expense (income),
net |
304 |
|
|
(40 |
) |
|
199 |
|
|
525 |
|
|
211 |
|
Benefit for income
taxes |
— |
|
|
(36 |
) |
|
— |
|
|
— |
|
|
(4 |
) |
Adjusted EBITDA |
$ |
(2,632 |
) |
|
$ |
8,635 |
|
|
$ |
5,636 |
|
|
$ |
30,129 |
|
|
$ |
18,937 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Services(a)
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
September 30, |
|
December 31, |
Reconciliation
of Adjusted EBITDA to net income (loss): |
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Net (loss) income |
$ |
(67,500 |
) |
|
$ |
6,476 |
|
|
$ |
(11,993 |
) |
|
$ |
(91,745 |
) |
|
$ |
(10,464 |
) |
Depreciation and
amortization expense |
8,644 |
|
|
9,584 |
|
|
8,520 |
|
|
34,355 |
|
|
34,132 |
|
Impairment of
long-lived assets |
3,778 |
|
|
3,822 |
|
|
4,439 |
|
|
8,404 |
|
|
3,822 |
|
Acquisition related
costs |
— |
|
|
1 |
|
|
93 |
|
|
132 |
|
|
244 |
|
Public offering
costs |
— |
|
|
— |
|
|
26 |
|
|
101 |
|
|
— |
|
Stock based
compensation |
125 |
|
|
155 |
|
|
226 |
|
|
941 |
|
|
1,047 |
|
Interest expense,
net |
234 |
|
|
507 |
|
|
112 |
|
|
1,359 |
|
|
1,768 |
|
Other expense, net |
418 |
|
|
14 |
|
|
18 |
|
|
504 |
|
|
331 |
|
Provision (benefit) for
income taxes |
54,313 |
|
|
(19,099 |
) |
|
(2,777 |
) |
|
50,378 |
|
|
(26,454 |
) |
Adjusted EBITDA |
$ |
12 |
|
|
$ |
1,460 |
|
|
$ |
(1,336 |
) |
|
$ |
4,429 |
|
|
$ |
4,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. |
Includes
results for Mammoth's contract land and directional drilling, coil
tubing, pressure control, flowback, cementing, acidizing, equipment
rentals, crude oil hauling and remote accommodations services and
corporate related activities. The Company's corporate related
activities do not generate revenue. |
|
|
Adjusted Net Income and Adjusted Earnings per
Share
Adjusted net income and adjusted 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 that may not be indicative of the Company's
ongoing operating results, such as equity based compensation, that
may not be indicative of the Company's ongoing operating results.
Adjusted net income and adjusted earnings per share should not be
considered in isolation or as a substitute for net income and
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
income and adjusted earnings per share to the GAAP financial
measures of net income and earnings per share for the periods
specified.
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
|
|
|
(in thousands, except per share
amounts) |
Net income, as
reported |
$ |
68,207 |
|
|
$ |
65,915 |
|
|
$ |
69,512 |
|
|
$ |
235,965 |
|
|
$ |
58,964 |
|
Equity
based compensation |
— |
|
|
— |
|
|
— |
|
|
17,487 |
|
|
— |
|
Adjusted net
income |
$ |
68,207 |
|
|
$ |
65,915 |
|
|
$ |
69,512 |
|
|
$ |
253,452 |
|
|
$ |
58,964 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share, as reported |
$ |
1.52 |
|
|
$ |
1.48 |
|
|
$ |
1.55 |
|
|
$ |
5.27 |
|
|
$ |
1.42 |
|
Equity
based compensation |
— |
|
|
— |
|
|
— |
|
|
0.39 |
|
|
— |
|
Adjusted basic earnings
per share |
$ |
1.52 |
|
|
$ |
1.48 |
|
|
$ |
1.55 |
|
|
$ |
5.66 |
|
|
$ |
1.42 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share, as reported |
$ |
1.51 |
|
|
$ |
1.48 |
|
|
$ |
1.54 |
|
|
$ |
5.24 |
|
|
$ |
1.42 |
|
Equity
based compensation |
— |
|
|
— |
|
|
— |
|
|
0.39 |
|
|
— |
|
Adjusted diluted
earnings per share |
$ |
1.51 |
|
|
$ |
1.48 |
|
|
$ |
1.54 |
|
|
$ |
5.63 |
|
|
$ |
1.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After Tax Return on Invested Capital
After tax return on invested capital is a supplemental non-GAAP
measure that is used by management to evaluate the Company's
performance. Mammoth defines after tax return on invested capital
as net income divided by total capital employed, which is the
average of ending debt and equity for the last two years.
Management believes after tax return on invested capital is a
useful measure of how effectively the Company uses capital to
generate profits and it provides additional insight for analysts
and investors in evaluating the Company's financial and operating
performance. After tax return on invested capital should not be
considered in isolation or as a substitute for financial measures
reported in accordance with GAAP. The following table provides the
calculation of after tax return on invested capital using the GAAP
financial measures of net income, total debt and total equity.
|
|
Twelve Months Ended |
|
December 31, |
|
2018 |
|
2017 |
|
2016 |
|
|
|
(in thousands) |
Net income |
$ |
235,965 |
|
|
$ |
58,964 |
|
|
|
Capital Employed |
|
|
|
|
|
Total debt |
$ |
— |
|
|
$ |
99,900 |
|
|
$ |
— |
|
Total equity |
754,052 |
|
|
507,796 |
|
|
422,781 |
|
Total capital
employed |
$ |
754,052 |
|
|
$ |
607,696 |
|
|
$ |
422,781 |
|
|
|
|
|
|
|
Average capital
employed(a) |
$ |
680,874 |
|
|
$ |
515,239 |
|
|
|
After tax return on
invested capital(b) |
35 |
% |
|
11 |
% |
|
|
a. |
Average
capital employed is the average of total capital employed as of end
of the period and end of the prior period. |
b. |
After tax
return on invested capital is the ratio of net income for the
period to average capital employed. |
|
|
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