Mammoth Energy Services, Inc. Announces Third Quarter 2024 Operational and Financial Results
OKLAHOMA CITY, Nov. 1, 2024 /PRNewswire/ -- Mammoth Energy Services, Inc. (NASDAQ:TUSK) ("Mammoth" or the "Company") today reported financial and operational results for the third quarter ended September 30, 2024.
Arty Straehla, Chief Executive Officer of Mammoth commented, "Softness across our Well Completion Services markets appeared to have bottomed in the third quarter, and we expect a rebound in the fourth quarter. More importantly, we were pleased to have recently received a total of $168.4 million of the $188.4 million owed to our subsidiary through the Settlement Agreement with the Puerto Rico Electric Power Authority, or PREPA. We are now debt free and have plans to invest in both our Infrastructure Services and Well Completion Services divisions over the next year. In Infrastructure Services, we will be investing in additional crews and our engineering services capabilities to better serve our customers. In our Well Completion Services division, we will be upgrading pressure pumping equipment to more efficient dual fuel Tier 4 technology. We believe this investment positions us to capitalize on rising demand as markets are anticipated to improve later next year. Now that we are debt free and have significant capital to invest into our businesses, we believe we have an excellent platform to increase shareholder value."
Financial Overview for the Third Quarter 2024:Total revenue was $40.0 million for the third quarter compared to $65.0 million for the same quarter last year.
Net loss for the third quarter was $24.0 million, or $0.50 loss per diluted share, compared to net loss of $1.1 million, or $0.02 loss per diluted share, for the same quarter last year.
Adjusted EBITDA (as defined and reconciled below) was ($6.4) million for the third quarter of 2024, compared to $13.4 million for the same quarter last year.
Well Completion ServicesMammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $2.2 million for the third quarter, compared to $20.3 million for the same quarter of 2023. The Company had no pressure pumping fleets active during the third quarter of 2024 compared to an average utilization of 1.2 pressure pumping fleets during the same quarter of 2023. The third quarter 2024 revenue in the well completion services division was primarily attributable to one active pump-down crew.
Infrastructure ServicesMammoth's infrastructure services division contributed revenue of $26.0 million for the third quarter compared to $26.7 million for the same quarter of 2023. Average crew count was 77 crews during the third quarter compared to 81 crews during the same quarter of 2023.
Natural Sand Proppant ServicesMammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $4.9 million for the third quarter compared to $10.6 million for the same quarter of 2023. In the third quarter, the Company sold approximately 163,000 tons of sand at an average sales price of $22.89 per ton compared to sales of approximately 352,000 tons of sand at an average sales price of $30.18 per ton during the same quarter of 2023.
Drilling ServicesMammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $1.6 million for the third quarter compared to $2.3 million for the same quarter of 2023.
Other ServicesMammoth's other services, including aviation, equipment rentals, remote accommodations and equipment manufacturing, contributed revenue (inclusive of inter-segment revenue) of $7.0 million for the third quarter compared to $6.0 million for the same quarter of 2023.
Selling, General and Administrative ExpensesSelling, general and administrative ("SG&A") expenses were $8.7 million for the third quarter compared to $10.4 million for the same quarter of 2023.
Following is a breakout of SG&A expense (in thousands):
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Cash expenses:
Compensation and benefits
$ 3,173
$ 3,392
$ 10,394
$ 11,665
Professional services
3,503
4,684
9,016
10,889
Other(a)
1,775
2,105
5,249
5,884
Total cash SG&A expense
8,451
10,181
24,659
28,438
Non-cash expenses:
Change in provision for expected credit losses(b)
32
11
89,645
(414)
Stock based compensation
219
219
657
1,127
Total non-cash SG&A expense
251
230
90,302
713
Total SG&A expense
$ 8,702
$ 10,411
$ 114,961
$ 29,151
a.
Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.
b.
Included in the nine months ended September 30, 2024 amounts is a charge of $89.2 million related to Cobra's Settlement Agreement with PREPA.
SG&A expenses, as a percentage of total revenue, were 22% for the third quarter compared to 16% for the same quarter of 2023.
Interest Expense and Financing Charges, netInterest expense and financing charges, net were $9.7 million for the third quarter compared to $2.9 million for the same quarter of 2023. The Company recognized a charge to interest expense totaling $7.1 million during the third quarter of 2024 related to its sale leaseback agreements.
LiquidityAs of September 30, 2024, Mammoth had unrestricted cash on hand of $4.2 million. As of September 30, 2024, the Company's revolving credit facility was undrawn, the borrowing base was $20.4 million and there was $13.7 million of available borrowing capacity under the revolving credit facility, after giving effect to $6.7 million of outstanding letters of credit. As of September 30, 2024, Mammoth had total liquidity of $17.9 million.
As previously announced, Cobra has received the first two installment payments of $150.0 million and $18.4 million, respectively, in connection with the previously disclosed Settlement Agreement with PREPA in October 2024. Subsequent to the receipt of the first installment payment, the Company paid, in full, all amounts owed under the term credit facility with Wexford Capital LP, including the accrued and unpaid interest, in the aggregate amount of $50.9 million, and terminated the facility on October 2, 2024. In connection with the receipt of the second installment payment from PREPA, as required under the terms of the Settlement Agreement, Cobra instructed Fifth Third Bank, National Association ("Fifth Third Bank") to issue a letter of credit to PREPA in the amount of $18.4 million and transferred a total of $19.3 million to a restricted cash account maintained by Fifth Third Bank as collateral for the letter of credit.
As of October 30, 2024, Mammoth had cash on hand of $86.2 million, no outstanding borrowings under its revolving credit facility, and a borrowing base of $18.2 million. As of October 30, 2024, the Company had $11.5 million of available borrowing capacity under its revolving credit facility and total liquidity of $97.7 million.
Capital ExpendituresThe following table summarizes Mammoth's capital expenditures by operating division for the periods indicated (in thousands):
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Well completion services(a)
$ 3,812
$ 4,651
$ 8,549
$ 14,762
Infrastructure services(b)
88
69
1,051
344
Drilling services(c)
15
98
102
97
Other(d)
323
72
665
82
Eliminations(a)
(2,341)
(165)
600
(20)
Total capital expenditures
$ 1,897
$ 4,725
$ 10,967
$ 15,265
a.
Capital expenditures primarily for upgrades and maintenance to our pressure pumping fleet for the periods presented.
b.
Capital expenditures primarily for truck, tooling and equipment purchases for the periods presented.
c.
Capital expenditures primarily for maintenance for the periods presented.
d.
Capital expenditures primarily for equipment for the Company's rental businesses for the periods presented.
Conference Call InformationMammoth will host a conference call on Friday, November 1, 2024 at 9:00 a.m. Central time (10:00 a.m. Eastern time) to discuss its third quarter financial and operational results. The telephone number to access the conference call is 1-201-389-0872. The conference call will also be webcast live on https://ir.mammothenergy.com/events-presentations. Please submit any questions for management prior to the call via email to
About Mammoth Energy Services, Inc.Mammoth is an integrated, growth-oriented energy services company focused on the providing products and services to enable the exploration and development of North American onshore unconventional oil and natural gas reserves as well as the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its infrastructure services businesses. Mammoth's suite of services and products include: well completion services, infrastructure services, natural sand and proppant services, drilling services and other energy services. For more information, please visit www.mammothenergy.com.
Contacts:Mark Layton, CFOMammoth Energy Services,
Rick Black / Ken DennardDennard Lascar Investor
Forward-Looking Statements and Cautionary StatementsThis news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein) contains certain statements and information that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts that address activities, events or developments that Mammoth expects, believes or anticipates will or may occur in the future are forward-looking statements. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "plan," "estimate," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "potential," "would," "may," "probable," "likely" and similar expressions, and the negative thereof, are intended to identify forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this news release specifically include statements, estimates and projections regarding the Company's business outlook and plans, future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, plans for stock repurchases under its stock repurchase program, costs and other guidance regarding future developments. Forward-looking statements are not assurances of future performance. These forward-looking statements are based on management's current expectations and beliefs, forecasts for the Company's existing operations, experience and perception of historical trends, current conditions, anticipated future developments and their effect on Mammoth, and other factors believed to be appropriate. Although management believes that the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Moreover, the Company's forward-looking statements are subject to significant risks and uncertainties, including those described in its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings it makes with the SEC, including those relating to the Company's acquisitions and contracts, many of which are beyond the Company's control, which may cause actual results to differ materially from historical experience and present expectations or projections which are implied or expressed by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: demand for our services; the volatility of oil and natural gas prices and actions by OPEC members and other exporting nations affecting commodities prices and production levels; the impact of the war in Ukraine and the Israel-Hamas war on the global energy and capital markets and global stability; performance of contracts and supply chain disruptions; inflationary pressures; higher interest rates and their impact on the cost of capital; instability in the banking and financial services sectors; the outcome of ongoing government investigations and other legal proceedings; the failure to receive or delays in receiving the remaining payments under the settlement agreement with PREPA; the Company's inability to replace the prior levels of work in its business segments, including its infrastructure and well completion services segments; risks relating to economic conditions, including concerns over a potential economic slowdown or recession; impacts of the recent federal infrastructure bill on the infrastructure industry and our infrastructure services business; the loss of or interruption in operations of one or more of Mammoth's significant suppliers or customers; the loss of management and/or crews; the outcome or settlement of our litigation matters and the effect on our financial condition and results of operations; the effects of government regulation, permitting and other legal requirements; operating risks; the adequacy of capital resources and liquidity; Mammoth's ability to comply with the applicable financial covenants and other terms and conditions under its revolving credit facility; weather; natural disasters; litigation; volatility in commodity markets; competition in the oil and natural gas and infrastructure industries; and costs and availability of resources.
Investors are cautioned not to place undue reliance on any forward-looking statement which speaks only as of the date on which such statement is made. We undertake no obligation to correct, revise or update any forward-looking statement after the date such statement is made, whether as a result of new information, future events or otherwise, except as required by applicable law.
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30,
December 31,
2024
2023
CURRENT ASSETS
(in thousands)
Cash and cash equivalents
$ 4,165
$ 16,556
Restricted cash
2,000
7,742
Accounts receivable, net
232,032
447,202
Inventories
13,498
12,653
Prepaid expenses
2,912
12,181
Other current assets
581
591
Total current assets
255,188
496,925
Property, plant and equipment, net
109,394
113,905
Sand reserves, net
57,497
58,528
Operating lease right-of-use assets
5,010
9,551
Goodwill
9,214
9,214
Deferred income tax asset
—
1,844
Other non-current assets
6,675
8,512
Total assets
$ 442,978
$ 698,479
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable
$ 30,065
$ 27,508
Accrued expenses and other current liabilities
35,433
86,713
Accrued expenses and other current liabilities - related parties
—
1,241
Current operating lease liability
3,428
5,771
Income taxes payable
44,512
61,320
Total current liabilities
113,438
182,553
Long-term debt from related parties
49,009
42,809
Deferred income tax liabilities
2,272
628
Long-term operating lease liability
1,556
3,534
Asset retirement obligation
4,244
4,140
Other long-term liabilities
3,781
4,715
Total liabilities
174,300
238,379
COMMITMENTS AND CONTINGENCIES
EQUITY
Equity:
Common stock, $0.01 par value, 200,000,000 shares authorized, 48,127,369 and 47,941,652 issued and outstanding at September 30, 2024 and December 31, 2023
481
479
Additional paid in capital
540,213
539,558
Accumulated deficit
(268,163)
(76,317)
Accumulated other comprehensive loss
(3,853)
(3,620)
Total equity
268,678
460,100
Total liabilities and equity
$ 442,978
$ 698,479
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
(in thousands, except per share amounts)
REVENUE
Services revenue
$ 34,069
$ 54,025
$ 119,653
