August 6, 2018 - 4:01 PM EDT
Print Email Article Font Down Font Up Charts

Mammoth Energy Services, Inc. Announces Second Quarter 2018 Operational and Financial Results
  • Record revenues of $534 million, up 443% Y/Y
  • Fully repaid credit facility, resulting in zero long term debt outstanding
  • Initiated regular quarterly dividend
  • Signed a new one-year $900 million contract with the Puerto Rico Electric Power Authority ("PREPA")
  • Extended pressure pumping and sand contracts with Gulfport Energy through 2021
  • Closed two acquisitions

OKLAHOMA CITY, Aug. 06, 2018 (GLOBE NEWSWIRE) -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ: TUSK) today reported financial and operational results for the three and six months ended June 30, 2018.

Financial Highlights for the Second Quarter 2018:

Total revenue was $533.6 million for the three months ended June 30, 2018, up 8% sequentially from $494.2 million for the three months ended March 31, 2018 and up 443% from $98.3 million for the three months ended June 30, 2017.

Net income for the three months ended June 30, 2018 was $42.7 million or $0.95 on a per share basis, a $12.8 million decrease from $55.5 million for the three months ended March 31, 2018 and an improvement of $43.9 million from a net loss of $1.2 million for the three months ended June 30, 2017.

Adjusted net income (as defined and reconciled below) for the three months ended June 30, 2018 was $60.2 million, or $1.34 on an adjusted diluted per share basis.

Adjusted EBITDA (as defined and reconciled below) was $148.6 million for the three months ended June 30, 2018, up 14% sequentially from $130.8 million for the three months ended March 31, 2018 and up 878% from $15.2 million for the three months ended June 30, 2017.

CEO Comment

Arty Straehla, Mammoth's Chief Executive Officer, stated, "The second quarter marked a milestone for Mammoth as we were able to completely repay our debt, further expand our services through two acquisitions and organically grow our current businesses all with internally generated cash flows. Most importantly, we initiated a regular quarterly dividend to return some cash to our stockholders. As we look to the future, we see significant growth potential in various areas of the industrial space to bring additional balance to our asset base and revenue stream."

Pressure Pumping Services

Mammoth's pressure pumping division contributed revenues (inclusive of inter-segment revenues) of $101.4 million on 1,815 stages for the three months ended June 30, 2018, a slight increase from $101.1 million on 1,672 stages for the three months ended March 31, 2018 and a 102% increase from $50.2 million on 1,287 stages for the three months ended June 30, 2017.

Infrastructure Services

Mammoth's infrastructure services segment contributed revenues of $360.3 million for the three months ended June 30, 2018, an 11% increase from $325.5 million for the three months ended March 31, 2018 and a $358.6 million increase from $1.7 million the three months ended June 30, 2017.

On May 26, 2018, Mammoth’s wholly owned subsidiary Cobra Acquisitions LLC (“Cobra”), signed a one-year $900 million contract with PREPA to complete the restoration of the critical electrical transmission and distribution system components damaged as a result of Hurricane Maria as well as to support the initial phase of reconstruction of the electrical power system in Puerto Rico.

Natural Sand Proppant Services

Mammoth's natural sand proppant division contributed revenues (inclusive of inter-segment revenues) of $52.8 million for the three months ended June 30, 2018, up 4% from $51.0 million for the three months ended March 31, 2018 and up 113% from $24.8 million for the three months ended June 30, 2017. The Company sold 777,850 tons of sand for the three months ended June 30, 2018, a 6% increase from 735,584 for the three months ended March 31, 2018 and a 117% increase from 359,053 for the three months ended June 30, 2017.

The Company is currently upgrading certain equipment at its Piranha facility, which is expected to increase Mammoth's total sand processing capacity to approximately 4.4 million tons per year.

Contract Land and Directional Drilling Services

Mammoth's contract land and directional drilling services division contributed revenues (inclusive of inter-segment revenues) of $17.2 million for the three months ended June 30, 2018, a 13% increase from $15.2 million for the three months ended March 31, 2018 and a 38% increase from $12.5 million for the three months ended June 30, 2017. The average drilling day rate was $17,229, $16,541 and $14,100, respectively, for the three months ended June 30, 2018, March 31, 2018 and June 30, 2017.

Mammoth anticipates that it will operate, on average, five to six rigs throughout 2018.

Other Services

Mammoth's other services, including coil tubing, pressure control, flowback, cementing, acidizing, equipment rentals, crude oil hauling and remote accommodations, contributed revenues (inclusive of inter-segment revenues) of $20.2 million for the three months ended June 30, 2018, a 12% decrease from $22.9 million for the three months ended March 31, 2018 and a 98% increase from $10.2 million for the three months ended June 30, 2017.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses increased to $65.1 million for the three months ended June 30, 2018 from $38.5 million for the three months ended March 31, 2018 and $7.7 million for the three months ended June 30, 2017. The increase from the second quarter of 2017 to the second quarter of 2018 is primarily attributable to $28.3 million in bad debt expense and $17.5 million in non-employee non-cash equity compensation expense. The increase from the first quarter of 2018 to the second quarter of 2018 is primarily attributable to $17.5 million in non-employee non-cash equity compensation expense and a $2.7 million increase in bad debt expense.

SG&A expenses, as a percentage of total revenue, were 12% for the three months ended June 30, 2018 compared to 8% for the three months ended March 31, 2018 and 8% for the three months ended June 30, 2017. Excluding bad debt and non-employee non-cash equity compensation expenses, SG&A expenses as a percentage of total revenue were 3.6% for the three months ended June 30 2018, compared to 2.6% for the three months ended March 31, 2018 and 7.8% for the three months ended June 30, 2017.

Acquisitions

During the second quarter of 2018, Mammoth acquired WTL Oil LLC ("WTL"), a company engaged in the hauling of crude oil in Oklahoma. Immediately following the closing of the transaction, WTL embarked on an expansion program to grow its fleet to 49 crude hauling trucks (from 20 at the time of acquisition) and entered the west Texas market.

Additionally, during the second quarter of 2018, Mammoth acquired RTS Energy Services LLC ("RTS"), a company engaged in the cementing and acidizing of oil and gas wells in west Texas. Through the RTS transaction, Mammoth expanded its service offerings into the Permian Basin with top quality operators.

Initiation of Quarterly Cash Dividend

On July 16, 2018, Mammoth announced that its Board of Directors initiated a quarterly dividend policy and declared its first quarterly cash dividend of $0.125 per share of common stock, to be paid on August 14, 2018 to stockholders of record as of the close of business on August 7, 2018.

Strong financial results and a favorable outlook support some balanced return of capital to Mammoth's stockholders. The regular quarterly cash dividend provides benefit to Mammoth’s existing stockholders as well as broadening Mammoth’s exposure to additional income oriented investors.

Liquidity

As of June 30, 2018, Mammoth had cash on hand totaling $10.7 million and no borrowings outstanding under its revolving credit facility. As of June 30, 2018, the Company had approximately $162.7 million of available borrowing capacity under its revolving credit facility, after giving effect to $6.5 million of outstanding letters of credit, resulting in total liquidity of approximately $173.4 million.

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,
 2018 2017 2018 2018 2017
Pressure pumping services(a)$8,233  $24,737  $7,866  $16,099  $53,402 
Infrastructure services(b)40,778  3,958  15,778  56,556  3,958 
Natural sand proppant services(c)6,958  2,795  5,700  12,658  2,970 
Contract and directional drilling services(d)7,083  3,632  3,618  10,701  5,901 
Other(e)9,959  344  2,812  12,771  344 
Total capital expenditures$73,011  $35,466  $35,774  $108,785  $66,575 

   a.   Capital expenditures primarily for pressure pumping equipment for the periods presented.
   b.   Capital expenditures primarily for trucks and other equipment for the periods presented.
   c.   Capital expenditures primarily for plant upgrades for the periods presented.
   d.   Capital expenditures primarily for upgrades to our rig fleet and real estate purchases for the periods presented.
   e.   Capital expenditures primarily for equipment for our rental and crude oil hauling businesses for 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 Report filed on Form 10-K with the Securities and Exchange Commission ("SEC") on February 28, 2018, 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.

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 Tuesday, August 7, 2018 at 10:00 a.m. CDT (11:00 am EDT) to discuss its second quarter 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 9885197. 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 Crist
Director of Investor Relations
[email protected]
405-608-6048

Media Contact:
Peter Mirijanian
[email protected]
(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 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: risks relating to economic conditions; volatility of crude oil and natural gas commodity prices; 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; solvency of counterparties to our contracts and their ability to timely pay for our services; oil and gas market conditions; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; operating risks; the adequacy of our capital resources and liquidity; weather; 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.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

     
ASSETS June 30, December 31,
  2018 2017
CURRENT ASSETS (in thousands)
Cash and cash equivalents $10,702  $5,637 
Accounts receivable, net 312,850  243,746 
Receivables from related parties 30,674  33,788 
Inventories 12,717  17,814 
Prepaid expenses 13,811  12,552 
Other current assets 816  886 
   Total current assets 381,570  314,423 
     
Property, plant and equipment, net 423,315  351,017 
Sand reserves 73,759  74,769 
Intangible assets, net - customer relationships 6,204  9,623 
Intangible assets, net - trade names 6,726  6,516 
Goodwill 101,511  99,811 
Deferred income tax asset 31,892  6,739 
Other non-current assets 4,146  4,345 
Total assets $1,029,123  $867,243 
LIABILITIES AND EQUITY    
CURRENT LIABILITIES    
Accounts payable $177,353  $141,306 
Payables to related parties 1,916  1,378 
Accrued expenses and other current liabilities 54,701  40,895 
Income taxes payable 131,210  36,409 
   Total current liabilities 365,180  219,988 
     
Long-term debt   99,900 
Deferred income tax liabilities 31,036  34,147 
Asset retirement obligation 3,138  2,123 
Other liabilities 4,100  3,289 
Total liabilities 403,454  359,447 
     
COMMITMENTS AND CONTINGENCIES    
     
EQUITY    
Equity:    
  Common stock, $0.01 par value, 200,000,000 shares authorized, 44,752,765 and 44,589,306
  issued and outstanding at June 30, 2018 and December 31, 2017, respectively
 448  446 
  Additional paid in capital 528,421  508,010 
  Retained earnings 100,247  2,001 
  Accumulated other comprehensive loss (3,447) (2,661)
    Total equity 625,669  507,796 
    Total liabilities and equity $1,029,123  $867,243 
 



MAMMOTH ENERGY SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) 

  
 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
 2018 2017 2018 2018 2017
 (in thousands, except per share amounts)
REVENUE 
Services revenue$455,545  $29,659  $408,659  $864,204  $56,751 
Services revenue - related parties40,611  44,603  49,088  89,699  77,565 
Product revenue27,708  10,395  25,040  52,748  13,767 
Product revenue - related parties9,730  13,605  11,462  21,192  25,145 
Total revenue533,594  98,262  494,249  1,027,843  173,228 
          
COST AND EXPENSES         
Services cost of revenue (exclusive of depreciation,
depletion, amortization and accretion of $26,898, $51,473,
$24,575, $17,651 and $33,489, respectively, for the three
and six months ended June 30, 2018, three month ended
March 31, 2018 and three and six months ended June 30,
2017)
302,283  57,104  290,979  593,262  102,565 
Services cost of revenue - related parties (exclusive of
depreciation, depletion, amortization and accretion of $0,
$0, $0, $0 and $0, respectively, for the three and six months
ended June 30, 2018, three months ended March 31, 2018
and three and six months ended June 30, 2017)
2,428  262  1,792  4,220  692 
Product cost of revenue (exclusive of depreciation,
depletion, amortization and accretion of $3,879, $6,193,
$2,314, $2,204 and $3,566, respectively, for the three and
six months ended June 30, 2018, three months ended March
31, 2018 and three and six months ended June 30, 2017)
35,117  19,974  33,330  68,447  32,581 
Selling, general and administrative64,595  7,393  38,082  102,677  13,806 
Selling, general and administrative - related parties532  307  429  961  631 
Depreciation, depletion, amortization and accretion30,795  19,893  26,908  57,703  37,130 
Impairment of long-lived assets187      187   
Total cost and expenses435,937  104,933  391,520  827,457  187,405 
Operating income (loss)97,657  (6,671) 102,729  200,386  (14,177)
          
OTHER (EXPENSE) INCOME         
Interest expense, net(959) (1,112) (1,237) (2,196) (1,509)
Bargain purchase gain, net of tax  4,012      4,012 
Other, net(486) (203) (28) (514) (387)
Total other (expense) income(1,445) 2,697  (1,265) (2,710) 2,116 
Income (loss) before income taxes96,212  (3,974) 101,464  197,676  (12,061)
Provision (benefit) for income taxes53,512  (2,804) 45,918  99,430  (5,910)
Net income (loss)$42,700  $(1,170) $55,546  $98,246  $(6,151)
          
OTHER COMPREHENSIVE INCOME (LOSS)         
Foreign currency translation adjustment, net of tax of $86,
$272, $186, $434 and $454, respectively, for the three and
six months ended June 30, 2018, three months ended March
31, 2018 and three and six months ended June 30, 2017
(325) 181  (461) (786) 409 
Comprehensive income (loss)$42,375  $(989) $55,085  $97,460  $(5,742)
          
Net income (loss) per share (basic)$0.95  $(0.03) $1.24  $2.20  $(0.16)
Net income (loss) per share (diluted)$0.95  $(0.03) $1.24  $2.18  $(0.16)
Weighted average number of shares outstanding (basic)44,737  39,500  44,650  44,700  38,506 
Weighted average number of shares outstanding (diluted)45,059  39,500  44,884  44,977  38,506 
               


MAMMOTH ENERGY SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 
 Six Months Ended
 June 30,
 2018 2017
 (in thousands)
Cash flows from operating activities:   
Net income (loss)$98,246  $(6,151)
Adjustments to reconcile net income (loss) to cash provided by operating activities:   
Equity based compensation17,487   
Stock based compensation2,916  1,620 
Depreciation, depletion, accretion and amortization57,703  37,130 
Amortization of coil tubing strings1,120  1,046 
Amortization of debt origination costs199  199 
Bad debt expense53,790  19 
(Gain) loss on disposal of property and equipment(128) 127 
Gain on bargain purchase  (4,012)
Impairment of long-lived assets187   
Deferred income taxes(27,906) (6,529)
Changes in assets and liabilities, net of acquisitions of businesses:   
       Accounts receivable, net(122,908) (4,793)
       Receivables from related parties3,114  (12,995)
       Inventories4,156  (4,932)
       Prepaid expenses and other assets(1,195) 1,528 
       Accounts payable34,186  20,557 
       Payables to related parties538  (83)
       Accrued expenses and other liabilities10,193  1,301 
       Income taxes payable94,753  (28)
Net cash provided by operating activities226,451  24,004 
    
Cash flows from investing activities:   
Purchases of property and equipment(105,349) (66,575)
Purchases of property and equipment from related parties(3,436)  
Business acquisitions(13,356) (39,570)
Proceeds from disposal of property and equipment898  781 
Business combination cash acquired  2,671 
Net cash used in investing activities(121,243) (102,693)
    
Cash flows from financing activities:   
Borrowings from lines of credit52,000  79,150 
Repayments of lines of credit(151,900) (14,150)
Repayments of equipment financing note(145)  
Repayment of Stingray acquisition long-term debt  (7,074)
Net cash (used in) provided by financing activities(100,045) 57,926 
Effect of foreign exchange rate on cash(98) 73 
Net change in cash and cash equivalents5,065  (20,690)
Cash and cash equivalents at beginning of period5,637  29,239 
Cash and cash equivalents at end of period$10,702  $8,549 
    
Supplemental disclosure of cash flow information:   
Cash paid for interest$2,543  $1,086 
Cash paid for income taxes$32,584  $912 
Supplemental disclosure of non-cash transactions:   
Purchases of property and equipment included in accounts payable and accrued expenses$20,897  $7,836 
Acquisition of Sturgeon, Stingray Cementing LLC and Stingray Energy Services LLC$  $23,091 
        


MAMMOTH ENERGY SERVICES, INC.

SEGMENT INCOME STATEMENTS (unaudited)
(in thousands)

 
Three months ended June 30, 2018Pressure
Pumping
InfrastructureSandDrillingAll OtherEliminationsTotal
Revenue from external customers$100,333 $360,250 $37,439 $17,126 $18,446 $ $533,594 
Intersegment revenues1,073  15,406 84 1,721 (18,284) 
Total revenue101,406 360,250 52,845 17,210 20,167 (18,284)533,594 
Cost of revenue, exclusive of depreciation,
depletion, amortization and accretion
61,593 210,189 35,117 15,280 17,649  339,828 
Intersegment cost of revenues16,174 754 1,019 (40)129 (18,036) 
Total cost of revenue77,767 210,943 36,136 15,240 17,778 (18,036)339,828 
Selling, general and administrative20,822 39,786 1,787 1,591 1,141  65,127 
Depreciation, depletion, amortization and accretion13,829 4,094 3,881 5,349 3,642  30,795 
Impairment of long-lived assets   187   187 
Operating income (loss)(11,012)105,427 11,041 (5,157)(2,394)(248)97,657 
Interest expense, net341 106 76 265 171  959 
Other expense80 330 36 32 8  486 
Income (loss) before income taxes$(11,433)$104,991 $10,929 $(5,454)$(2,573)$(248)$96,212 


Three months ended June 30, 2017Pressure
Pumping
InfrastructureSandDrillingAll OtherEliminationsTotal
Revenue from external customers$49,924 $1,709 $24,000 $12,472 $10,157 $ $98,262 
Intersegment revenues272  762  85 (1,119) 
Total revenue50,196 1,709 24,762 12,472 10,242 (1,119)98,262 
Cost of revenue, exclusive of depreciation,
depletion, amortization and accretion
35,826 1,626 19,974 12,033 7,881  77,340 
Intersegment cost of revenues847  267  5 (1,119) 
Total cost of revenue36,673 1,626 20,241 12,033 7,886 (1,119)77,340 
Selling, general and administrative2,403 307 2,416 1,435 1,139  7,700 
Depreciation, depletion, amortization and accretion9,626 340 2,206 4,974 2,747  19,893 
Operating income (loss)1,494 (564)(101)(5,970)(1,530) (6,671)
Interest expense, net303 4 353 440 12  1,112 
Bargain purchase gain  (4,012)   (4,012)
Other expense4  140 60 (1) 203 
Income (loss) before income taxes$1,187 $(568)$3,418 $(6,470)$(1,541)$ $(3,974)


Three months ended March 31, 2018Pressure
Pumping
InfrastructureSandDrillingAll OtherEliminationsTotal
Revenue from external customers$96,579 $325,459 $36,503 $15,228 $20,480 $ $494,249 
Intersegment revenues4,559  14,512 2 2,415 (21,488) 
Total revenue101,138 325,459 51,015 15,230 22,895 (21,488)494,249 
Cost of revenue, exclusive of depreciation,
depletion, amortization and accretion
66,612 194,076 33,330 14,475 17,608  326,101 
Intersegment cost of revenues15,402 1,791 4,286 162 105 (21,746) 
Total cost of revenue82,014 195,867 37,616 14,637 17,713 (21,746)326,101 
Selling, general and administrative2,663 31,851 1,644 1,253 1,100  38,511 
Depreciation, depletion, amortization and accretion13,986 2,407 2,316 4,355 3,844  26,908 
Operating income (loss)2,475 95,334 9,439 (5,015)238 258 102,729 
Interest expense, net504 76 80 395 182  1,237 
Other expense12 2 (13)40 (13) 28 
Income (loss) before income taxes$1,959 $95,256 $9,372 $(5,450)$69 $258 $101,464 


Six months ended June 30, 2018Pressure
Pumping
InfrastructureSandDrillingAll OtherEliminationsTotal
Revenue from external customers$196,912 $685,709 $73,942 $32,354 $38,926 $ $1,027,843 
Intersegment revenues5,632  29,918 86 4,136 (39,772) 
Total revenue202,544 685,709 103,860 32,440 43,062 (39,772)1,027,843 
Cost of revenue, exclusive of depreciation,
depletion, amortization and accretion
128,205 404,265 68,447 29,755 35,257  665,929 
Intersegment cost of revenues31,576 2,545 5,305 122 234 (39,782) 
Total cost of revenue159,781 406,810 73,752 29,877 35,491 (39,782)665,929 
Selling, general and administrative23,485 71,637 3,431 2,844 2,241  103,638 
Depreciation, depletion, amortization and accretion27,815 6,501 6,197 9,704 7,486  57,703 
Impairment of long-lived assets   187   187 
Operating income (loss)(8,537)200,761 20,480 (10,172)(2,156)10 200,386 
Interest expense, net845 182 156 660 353  2,196 
Other expense92 332 23 72 (5) 514 
Income (loss) before income taxes$(9,474)$200,247 $20,301 $(10,904)$(2,504)$10 $197,676 


Six months ended June 30, 2017Pressure
Pumping
InfrastructureSandDrillingAll OtherEliminationsTotal
Revenue from external customers$90,377 $1,709 $38,912 $23,223 $19,007 $ $173,228 
Intersegment revenues459  1,447  85 (1,991) 
Total revenue90,836 1,709 40,359 23,223 19,092 (1,991)173,228 
Cost of revenue, exclusive of depreciation,
depletion, amortization and accretion
64,533 1,712 32,582 22,986 14,025  135,838 
Intersegment cost of revenues1,532  454  5 (1,991) 
Total cost of revenue66,065 1,712 33,036 22,986 14,030 (1,991)135,838 
Selling, general and administrative4,180 355 4,474 2,728 2,700  14,437 
Depreciation, depletion, amortization and accretion18,784 340 3,569 9,942 4,495  37,130 
Operating income (loss)1,807 (698)(720)(12,433)(2,133) (14,177)
Interest expense, net431 4 486 657 (69) 1,509 
Bargain purchase gain  (4,012)   (4,012)
Other expense7  154 224 2  387 
Income (loss) before income taxes$1,369 $(702)$2,652 $(13,314)$(2,066)$ $(12,061)
                      


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 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 Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss):2018 2017 2018 2018 2017
Net income (loss)$42,700  $(1,170) $55,546  $98,246  $(6,151)
Depreciation, depletion, accretion and amortization expense30,795  19,893  26,908  57,703  37,130 
Impairment of long-lived assets187      187   
Acquisition related costs77  961  (46) 31  2,208 
Public offering costs731      731   
Equity based compensation17,487      17,487   
Stock based compensation1,660  1,050  1,256  2,916  1,620 
Bargain purchase gain  (4,012)     (4,012)
Interest expense, net959  1,112  1,237  2,196  1,509 
Other expense, net486  203  28  514  387 
Provision (benefit) for income taxes53,512  (2,804) 45,918  99,430  (5,910)
Adjusted EBITDA$148,594  $15,233  $130,847  $279,441  $26,781 


Pressure Pumping Services

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss):2018 2017 2018 2018 2017
Net income$(11,433) $1,187  $1,959  $(9,474) $1,369 
Depreciation and amortization expense13,829  9,626  13,986  27,815  18,784 
Acquisition related costs33      33   
Public offering costs202      202   
Equity based compensation17,487      17,487   
Stock based compensation453  503  418  871  774 
Interest expense341  303  504  845  431 
Other expense, net80  4  12  92  7 
Adjusted EBITDA$20,992  $11,623  $16,879  $37,871  $21,365 


Infrastructure Services

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss):2018 2017 2018 2018 2017
Net income (loss)$52,359  $(568) $47,299  $99,658  $(702)
Depreciation and amortization expense4,094  340  2,407  6,501  340 
Acquisition related costs4  42  (8) (4) 42 
Public offering costs360      360   
Stock based compensation606    457  1,063   
Interest expense106  4  76  182  4 
Other expense, net330    2  332   
Provision for income taxes52,632    47,957  100,569   
Adjusted EBITDA$110,491  $(182) $98,190  $208,681  $(316)


Natural Sand Proppant Services

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss):2018 2017 2018 2018 2017
Net income$10,929  $3,409  $9,372  $20,301  $2,643 
Depreciation, depletion, accretion and amortization expense3,881  2,206  2,316  6,197  3,569 
Acquisition related costs  916  (38) (38) 1,954 
Public offering costs95      95   
Stock based compensation205  182  186  391  252 
Bargain purchase gain  (4,012)     (4,012)
Interest expense76  353  80  156  486 
Other expense, net36  140  (13) 23  154 
Provision for income taxes  9      9 
Adjusted EBITDA$15,222  $3,203  $11,903  $27,125  $5,055 


Contract Land and Directional Drilling Services

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss):2018 2017 2018 2018 2017
Net loss$(5,454) $(6,470) $(5,450) $(10,904) $(13,314)
Depreciation and amortization expense5,349  4,974  4,355  9,704  9,942 
Impairment of long-lived assets187      187   
Acquisition related costs  3      25 
Public offering costs34      34   
Stock based compensation301  180  107  408  292 
Interest expense, net265  440  395  660  657 
Other expense, net32  60  40  72  224 
Adjusted EBITDA$714  $(813) $(553) $161  $(2,174)


Other Services(a)

 Three Months Ended Six Months Ended
 June 30, March 31, June 30,
Reconciliation of Adjusted EBITDA to net income (loss):2018 2017 2018 2018 2017
Net (loss) income$(3,453) $1,272  $2,107  $(1,346) $3,853 
Depreciation and amortization expense3,642  2,747  3,844  7,486  4,495 
Acquisition related costs40      40  187 
Public offering costs40      40   
Stock based compensation94  184  89  183  301 
Interest expense, net171  12  182  353  (69)
Other expense, net8  (1) (13) (5) 2 
Provision (benefit) for income taxes880  (2,813) (2,038) (1,158) (5,919)
Adjusted EBITDA$1,422  $1,401  $4,171  $5,593  $2,850 

(a)  Includes results for our coil tubing, pressure control, flowback, cementing, acidizing, equipment rentals, crude oil hauling and remote accommodations services and corporate related activities. Our 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. 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 Six Months Ended
 June 30, June 30,
 2018 2017 2018 2017
 (in thousands, except per share amounts)
Net income, as reported$42,700  $(1,170) $98,246  $(6,151)
Equity based compensation17,487    17,487   
Adjusted net income$60,187  $(1,170) $115,733  $(6,151)
        
Basic earnings per share, as reported$0.95  $(0.03) $2.20  $(0.16)
Equity based compensation0.40    0.40   
Adjusted basic earnings per share$1.35  $(0.03) $2.60  $(0.16)
        
Diluted earnings per share, as reported$0.95  $(0.03) $2.18  $(0.16)
Equity based compensation0.39    0.39   
Adjusted diluted earnings per share$1.34  $(0.03) $2.57  $(0.16)
 

Primary Logo


Source: GlobeNewswire (August 6, 2018 - 4:01 PM EDT)

News by QuoteMedia
www.quotemedia.com

Legal Notice