• Mammoth Energy Services, Inc. Announces Fourth Quarter and Full Year 2020 Operational and Financial Results

    来源: Nasdaq GlobeNewswire / 25 2月 2021 15:01:01   America/Chicago

    OKLAHOMA CITY, Feb. 25, 2021 (GLOBE NEWSWIRE) -- 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, 2020.

    Financial Highlights for the Fourth Quarter and Full Year 2020:

    Total revenue was $85.1 million for the three months ended December 31, 2020, up 21% from $70.5 million for the three months ended September 30, 2020 and up 26% from $67.6 million for the three months ended December 31, 2019. Total revenue was $313.1 million for the year ended December 31, 2020, down 50% from $625.0 million for the year ended December 31, 2019.

    Net loss for the three months ended December 31, 2020 was $11.9 million, or $0.26 per fully diluted share, as compared to net income of $3.4 million, or $0.07 per fully diluted share, for the three months ended September 30, 2020 and a net loss of $60.8 million, or $1.35 per fully diluted share, for the three months ended December 31, 2019. Net loss for the year ended December 31, 2020 was $107.6 million, or $2.36 per fully diluted share, as compared to net loss of $79.0 million, or $1.76 per fully diluted share for the year ended December 31, 2019.

    Adjusted EBITDA (as defined and reconciled below) was $7.5 million for the three months ended December 31, 2020, as compared to $22.1 million for the three months ended September 30, 2020 and ($10.3) million for the three months ended December 31, 2019. Adjusted EBITDA was $50.0 million for the year ended December 31, 2020, as compared to $77.3 million for the year ended December 31, 2019.

    “The fourth quarter of 2020 clearly shows that Mammoth continues to execute on its transition to an industrial focused company, with approximately 66% of our revenues derived from the industrial sector during the quarter. Given the anticipated demand in the industrial sector, we are well positioned to continue to grow our industrial business rapidly over the coming years. We expect to be ready to ramp up our oilfield service offerings when oilfield demand, pricing and margins strengthen. The recent signing of an agreement by our engineering group allows for significant expansion and brings us one step closer to being a fully integrated Engineering, Procurement and Construction “EPC” company,” commented Arty Straehla, Chief Executive Officer of Mammoth.

    Infrastructure Services

    Mammoth's infrastructure services division contributed revenue of $55.9 million, or approximately 66% of Mammoth's total revenue, for the three months ended December 31, 2020, an increase of 28% from $43.6 million for the three months ended September 30, 2020 and an increase of 118% from $25.6 million for the three months ended December 31, 2019 reflecting a strong demand for our services.

    The infrastructure segment contributed revenues of $155.2 million for the year ended December 31, 2020, down from $213.3 million for the year ended December 31, 2019.

    Mammoth had approximately 115 crews operating in the continental United States throughout 2020.

    Well Completion Services

    Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $12.7 million on 291 stages for the three months ended December 31, 2020, a decrease of 20% from $15.8 million on 449 stages for the three months ended September 30, 2020 and a decrease of 49% from $24.9 million on 989 stages for the three months ended December 31, 2019. On average, 0.6 of the Company's fleets were active for the three months ended December 31, 2020, compared to average utilization of 0.9 fleets during the three months ended September 30, 2020 and an average utilization of 1.7 fleets during the three months ended December 31, 2019.

    The well completion division contributed revenues (inclusive of inter-segment revenues) of $88.3 million on 2,880 stages for the year ended December 31, 2020, down from $243.8 million on 5,378 stages for the year ended December 31, 2019. On average, 1.5 of the Company's fleets were active for the year ended December 31, 2020 compared to 2.4 fleets for the year ended December 31, 2019.
      
    Natural Sand Proppant Services

    Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $11.8 million for the three months ended December 31, 2020, an increase of 97% from $6.0 million for the three months ended September 30, 2020 and an increase of 307% from $2.9 million for the three months ended December 31, 2019. The Company sold approximately 100,000 tons of sand during the three months ended December 31, 2020, an increase of 47% from approximately 68,000 tons sold during the three months ended September 30, 2020 and an increase of 32% from approximately 76,000 tons sold during the three months ended December 31, 2019. The Company's average sales price for the sand sold during the three months ended December 31, 2020 remained flat at $15.59 per ton, compared to the three months ended September 30, 2020 and decreased from the $19.95 per ton average sales price during the three months ended December 31, 2019.

    The natural sand proppant division contributed revenues (inclusive of inter-segment revenues) of $34.4 million for the year ended December 31, 2020, as compared to $97.1 million for the year ended December 31, 2019. The Company sold 0.5 million tons of sand during the year ended December 31, 2020, a decline from 2.0 million tons of sand during the year ended December 31, 2019. The Company's average sales price for the sand sold during the year ended December 31, 2020 was $14.58 per ton, a decline from $29.70 per ton average sales price during the year ended December 31, 2019.

    Drilling Services

    Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $0.6 million for the three months ended December 31, 2020, a decrease of 50% from $1.2 million for the three months ended September 30, 2020 and a decrease of 87% from $4.7 million for the three months ended December 31, 2019. The drilling services division contributed revenues of $7.8 million for the year ended December 31, 2020, as compared to $32.0 million for the year ended December 31, 2019.

    As a result of market conditions, the Company temporarily shut down its contract land drilling operations beginning in December 2019 and its rig hauling operations beginning in April 2020.

    Other Services

    Mammoth's other services, including aviation, coil tubing, pressure control, flowback, cementing, acidizing, equipment rentals, crude oil hauling, full service transportation, remote accommodations, equipment manufacturing and infrastructure engineering and design services, contributed revenue (inclusive of inter-segment revenue) of $4.7 million for the three months ended December 31, 2020, unchanged from the $4.7 million for the three months ended September 30, 2020 and a decrease of 54% from $10.3 million for the three months ended December 31, 2019.

    The Company's other services contributed revenues of $31.3 million for the year ended December 31, 2020, as compared to $88.6 million for the year ended December 31, 2019.

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

    Selling, General and Administrative Expenses

    Selling, general and administrative (“SG&A”) expenses were $30.5 million for the three months ended December 31, 2020, as compared to $12.2 million for the three months ended September 30, 2020 and $10.3 million for the three months ended December 31, 2019.

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

     Three Months Ended Years Ended December 31,
     December 31, September 30, December 31,
     2020 2019 2020 2020 2019
    Cash expenses:         
    Compensation and benefits$3,738  $3,203  $3,449  $14,876  $19,364 
    Professional services4,570  4,301  5,651  19,905  17,128 
    Other(a)2,256  2,010  2,163  8,828  10,300 
    Total cash SG&A expense10,564  9,514  11,263  43,609  46,792 
    Non-cash expenses:         
    Bad debt provision19,652  204  626  21,958  1,434 
    Stock based compensation292  620  291  1,618  3,326 
    Total non-cash SG&A expense19,944  824  917  23,576  4,760 
    Total SG&A expense$30,508  $10,338  $12,180  $67,185  $51,552 

    a.   Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.

    SG&A expenses, as a percentage of total revenue, were 36% for the three months ended December 31, 2020, as compared to 17% for the three months ended September 30, 2020 and 15% for the three months ended December 31, 2019. SG&A expenses, as a percentage of total revenue, were 21% for the year ended December 31, 2020, as compared to 8% for the year ended December 31, 2019. The bad debt provision for the three months ended December 31, 2020, includes $19.4 million related to the voluntary petitions for relief filed on November 13, 2020, by Gulfport Energy Corporation and certain of its subsidiaries.

    Liquidity

    As of December 31, 2020, Mammoth had cash on hand of $14.8 million and outstanding borrowings under its revolving credit facility of $78.0 million. As of December 31, 2020, the Company had $38.7 million of available borrowing capacity under its revolving credit facility, after giving effect to $13.0 million of outstanding letters of credit. As of December 31, 2020, Mammoth had total liquidity of $53.5 million.

    As of February 24, 2021, Mammoth had cash on hand of $21.4 million and outstanding borrowings under its revolving credit facility of $75.0 million. As of February 24, 2021, the Company had $41.7 million of available borrowing capacity under its revolving credit facility, after giving effect to $13.0 million of outstanding letters of credit.

    Capital Expenditures

    The following table summarizes Mammoth's capital expenditures by operating division for the periods indicated (in thousands):

     Three Months Ended Years Ended December 31,
     December 31, September 30, December 31,
     2020 2019 2020 2020 2019
    Infrastructure services(a)$37  $—  $178  $258  $3,456 
    Well completion services(b)606  398  698  4,358  14,703 
    Natural sand proppant services(c)4  174  194  1,073  2,877 
    Drilling services(d)234  84  131  432  3,156 
    Other(e)7  215  324  716  11,569 
    Total capital expenditures$888  $871  $1,525  $6,837  $35,761 

    a.   Capital expenditures primarily for truck, tooling and other equipment for the periods presented.
    b.   Capital expenditures primarily for well completion and water transfer equipment for the periods presented.
    c.   Capital expenditures primarily for maintenance for the periods presented.
    d.   Capital expenditures primarily for upgrades to the Company's rig fleet for the periods presented.
    e.   Capital expenditures primarily for equipment for the Company's rental businesses for the periods presented.

    Explanatory Note Regarding Financial Information

    The financial information contained in this release should be read in conjunction with the financial information contained in Mammoth’s Annual Reports filed on Form 10-K with the Securities and Exchange Commission (“SEC”), Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the SEC.

    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.

    As of December 31, 2020, the Company’s four reportable segments include infrastructure services (“Infrastructure”), well completion services (“Well Completion”), natural sand proppant services (“Sand”) and drilling services (“Drilling”). In 2019, the Company included Barracuda Logistics LLC, or Barracuda, in its Well Completion segment, Cobra Aviation Services LLC, or Cobra Aviation, Air Rescue Systems Corporation, or ARS, and Leopard Aviation LLC, or Leopard, in its Infrastructure segment and Mako Acquisitions LLC, or Mako, in its Drilling segment. Based on its assessment of FASB ASC 280, Segment Reporting, guidance at December 31, 2020, the Company changed its presentation in 2020 to move Barracuda to the Sand segment and Cobra Aviation, ARS, Leopard and Mako to the reconciling column titled “All Other”. Additionally, Mammoth changed the name of its pressure pumping segment to the well completion segment in 2020. The results for the year ended December 31, 2019 have been retroactively adjusted to reflect these changes.

    Conference Call Information

    Mammoth will host a conference call on Thursday, February 25, 2021 at 4:00 p.m. CDT (5:00 p.m. EDT) to discuss its fourth quarter and full year 2020 financial and operational results. The telephone number to access the conference call is 844-265-1561 in the U.S. and the international dial in is 216-562-0385. The conference ID for the call is 7435949. The conference call will also be webcast live on www.mammothenergy.com in the “Investors” section.

    About Mammoth Energy Services, Inc.

    Mammoth is an integrated, growth-oriented energy service company serving companies engaged in the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its energy infrastructure services and the exploration and development of North American onshore unconventional oil and natural gas reserves. Mammoth’s suite of services and products include: infrastructure services, well completion services, natural sand and proppant services, drilling services and other energy services.

    For 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
    dcrist@mammothenergy.com
    405-608-6048

    Media Contact:
    Peter Mirijanian
    peter@pmpadc.com
    (202) 464-8803

    Forward-Looking Statements and Cautionary Statements

    This news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein) contains certain statements and information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts that address activities, events or developments that Mammoth expects, believes or anticipates will or may occur in the future are forward-looking statements. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “plan,” “estimate,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “potential,” “would,” “may,” “probable,” “likely” and similar expressions, and the negative thereof, are intended to identify forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's business outlook and plans, future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, costs and other guidance regarding future developments. Forward-looking statements are not assurances of future performance. These forward-looking statements are based on management’s current expectations and beliefs, forecasts for the Company's existing operations, experience and perception of historical trends, current conditions, anticipated future developments and their effect on Mammoth, and other factors believed to be appropriate. Although management believes that the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Moreover, the Company's forward-looking statements are subject to significant risks and uncertainties, including those described in its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings it makes with the SEC, including those relating to the Company's acquisitions and contracts, many of which are beyond the Company's control, which may cause actual results to differ materially from historical experience and present expectations or projections which are implied or expressed by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: the severity and duration of the COVID-19 pandemic, related global and national health concerns and economic repercussions and the resulting negative impact on demand for our services; the current significant surplus in the supply of oil and the ability of the OPEC+ countries to agree on and comply with supply limitations; the duration and magnitude of the unprecedented disruption in the oil and gas industry currently resulting from the impact of the foregoing factors, which is negatively impacting our business; operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; the failure to receive or delays in receiving governmental authorizations, approvals and/or payments; the outcome of ongoing government investigations and other legal proceedings, including those relating to the contracts awarded to the Company's subsidiary Cobra Acquisitions LLC by the Puerto Rico Electric Power Authority and contracts for our pressure pumping services and natural sand proppant services; the Company's inability to replace the prior levels of work in its business segments, including its infrastructure and well completion services segments; risks relating to economic conditions; the loss of or interruption in operations of one or more of Mammoth's significant suppliers or customers; the outcome of Gulfport Energy Corporation's chapter 11 bankruptcy filing and the treatment of Mammoth's contracts and claims in such proceeding; the effects of government regulation, permitting and other legal requirements; operating risks; the adequacy of capital resources and liquidity; weather; natural disasters; litigation; volatility in commodity markets; competition in the oil and natural gas and infrastructure industries; and costs and availability of resources.

    Investors are cautioned not to place undue reliance on any forward-looking statement which speaks only as of the date on which such statement is made. We undertake no obligation to correct, revise or update any forward-looking statement after the date such statement is made, whether as a result of new information, future events or otherwise, except as required by applicable law.

     
    MAMMOTH ENERGY SERVICES, INC.
    CONSOLIDATED BALANCE SHEETS
     
    ASSETS December 31, December 31,
      2020 2019
    CURRENT ASSETS (in thousands)
    Cash and cash equivalents $14,822   $5,872  
    Short-term investment 1,750   —  
    Accounts receivable, net 393,112   363,053  
    Receivables from related parties 28,461   7,523  
    Inventories 12,020   17,483  
    Prepaid expenses 13,825   12,354  
    Other current assets 758   695  
    Total current assets 464,748   406,980  
         
    Property, plant and equipment, net 251,262   352,772  
    Sand reserves 65,876   68,351  
    Operating lease right-of-use assets 20,179   43,446  
    Intangible assets, net - customer relationships 408   583  
    Intangible assets, net - trade names 4,366   5,205  
    Goodwill 12,608   67,581  
    Other non-current assets 5,115   7,467  
    Total assets $824,562   $952,385  
    LIABILITIES AND EQUITY    
    CURRENT LIABILITIES    
    Accounts payable $40,316   $39,220  
    Payables to related parties 3   526  
    Accrued expenses and other current liabilities 44,408   40,754  
    Current operating lease liability 8,618   16,432  
    Current portion of long-term debt 1,165   —  
    Income taxes payable 34,088   33,465  
    Total current liabilities 128,598   130,397  
         
    Long-term debt 81,338   80,000  
    Deferred income tax liabilities 24,741   36,873  
    Long-term operating lease liability 11,377   27,102  
    Asset retirement obligation 4,746   4,241  
    Other liabilities 10,435   5,031  
    Total liabilities 261,235   283,644  
         
    COMMITMENTS AND CONTINGENCIES    
         
    EQUITY    
    Equity:    
    Common stock, $0.01 par value, 200,000,000 shares authorized, 45,769,283 and 45,108,545 issued and outstanding at December 31, 2020 and 2019 458   451  
    Additional paid in capital 537,039   535,094  
    Retained earnings 28,895   136,502  
    Accumulated other comprehensive loss (3,065)  (3,306) 
    Total equity 563,327   668,741  
    Total liabilities and equity $824,562   $952,385  


     
    MAMMOTH ENERGY SERVICES, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
     
     Three Months Ended Years Ended December 31,
     December 31, September 30, December 31,
     2020 2019 2020 2020 2019
              
     (in thousands, except per share amounts)
    REVENUE 
    Services revenue$65,079   $57,950   $55,279   $234,081   $452,594  
    Services revenue - related parties7,862   6,714   8,565   43,091   102,624  
    Product revenue10,234   1,724   4,815   28,404   42,105  
    Product revenue - related parties1,875   1,249   1,875   7,500   27,689  
    Total revenue85,050   67,637   70,534   313,076   625,012  
              
    COST AND EXPENSES         
    Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $19,780, $25,872, $26,416, $85,481 and $102,901, respectively, for the three months ended December 31, 2020, December 31, 2019 and September 30, 2020 and years ended December 31, 2020 and 2019)51,260   68,599   41,445   205,657   451,206  
    Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of $0, $0, $0, $0 and $0, respectively, for the three months ended December 31, 2020, December 31, 2019 and September 30, 2020 and years ended December 31, 2020 and 2019)90   633   131   418   4,770  
    Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $2,387, $2,625, $2,697, $9,758 and $14,039, respectively, for the three months ended December 31, 2020, December 31, 2019 and September 30, 2020 and years ended December 31, 2020 and 2019)4,083   6,337   4,353   25,946   87,812  
    Selling, general and administrative30,364   9,978   11,979   66,427   49,705  
    Selling, general and administrative - related parties144   360   201   758   1,847  
    Depreciation, depletion, amortization and accretion22,187   28,521   23,132   95,317   117,033  
    Impairment of goodwill—   30,470   —   54,973   33,664  
    Impairment of other long-lived assets—   4,010   —   12,897   7,358  
    Total cost and expenses108,128   148,908   81,241   462,393   753,395  
    Operating loss(23,078)  (81,271)  (10,707)  (149,317)  (128,383) 
              
    OTHER INCOME (EXPENSE)         
    Interest expense, net(1,191)  (1,486)  (1,098)  (5,397)  (4,958) 
    Other, net9,559   7,272   7,943   33,048   42,216  
    Other, net - related parties(341)  —   1,099   1,890   —  
    Total other income8,027   5,786   7,944   29,541   37,258  
    Loss before income taxes(15,051)  (75,485)  (2,763)  (119,776)  (91,125) 
    Benefit for income taxes(3,190)  (14,706)  (6,193)  (12,169)  (12,081) 
    Net (loss) income$(11,861)  $(60,779)  $3,430   $(107,607)  $(79,044) 
              
    OTHER COMPREHENSIVE INCOME (LOSS)         
    Foreign currency translation adjustment, net of tax of ($170), $69, ($95), ($54) and ($203), respectively, for the three months ended December 31, 2020, December 31, 2019 and September 30, 2020 and years ended December 31, 2020 and 2019663   (213)  324   241   775  
    Comprehensive (loss) income$(11,198)  $(60,992)  $3,754   $(107,366)  $(78,269) 
              
    Net (loss) income per share (basic)$(0.26)  $(1.35)  $0.07   $(2.36)  $(1.76) 
    Net (loss) income per share (diluted)$(0.26)  $(1.35)  $0.07   $(2.36)  $(1.76) 
    Weighted average number of shares outstanding (basic)45,769   45,092   45,764   45,644   45,011  
    Weighted average number of shares outstanding (diluted)45,769   45,092   46,571   45,644   45,011  
    Dividends declared per share$—   $—   $—   $—   $0.25  


     
    MAMMOTH ENERGY SERVICES, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
      
     Years Ended December 31,
     December 31,
     2020 2019
     (in thousands)
    Cash flows from operating activities:   
    Net loss$(107,607)  $(79,044) 
    Adjustments to reconcile net loss to cash provided by (used in) operating activities:   
    Stock based compensation1,952   4,177  
    Depreciation, depletion, accretion and amortization95,317   117,033  
    Amortization of coil tubing strings359   1,641  
    Amortization of debt origination costs831   326  
    Bad debt expense21,958   1,434  
    (Gain) loss on disposal of property and equipment(1,379)  55  
    Impairment of goodwill54,973   33,664  
    Impairment of other long-lived assets12,897   7,358  
    Inventory obsolescence—   1,349  
    Deferred income taxes(12,186)  (42,639) 
    Other(143)  (986) 
    Changes in assets and liabilities:   
    Accounts receivable, net(32,621)  (27,006) 
    Receivables from related parties(40,333)  3,641  
    Inventories5,103   830  
    Prepaid expenses and other assets1,996   (1,040) 
    Accounts payable2,526   (25,968) 
    Payables to related parties(522)  156  
    Accrued expenses and other liabilities3,198   (18,800) 
    Income taxes payable648   (71,499) 
    Net cash provided by (used in) operating activities6,967   (95,318) 
        
    Cash flows from investing activities:   
    Purchases of property and equipment(6,761)  (35,417) 
    Purchases of property and equipment from related parties(76)  (344) 
    Contributions to equity investee(490)  (680) 
    Proceeds from disposal of property and equipment6,782   3,217  
    Purchase of short-term investment(1,750)  —  
    Net cash used in investing activities(2,295)  (33,224) 
        
    Cash flows from financing activities:   
    Borrowings from lines of credit35,351   156,000  
    Repayments of lines of credit(32,800)  (76,000) 
    Proceeds from sale leaseback transaction5,000   —  
    Payments on sale leaseback transaction(268)  —  
    Dividends paid—   (11,219) 
    Principal payments on financing leases and equipment financing notes(1,966)  (2,079) 
    Debt issuance costs(1,051)  —  
    Net cash provided by financing activities4,266   66,702  
    Effect of foreign exchange rate on cash12   87  
    Net change in cash and cash equivalents8,950   (61,753) 
    Cash and cash equivalents at beginning of period5,872   67,625  
    Cash and cash equivalents at end of period$14,822   $5,872  
        
    Supplemental disclosure of cash flow information:   
    Cash paid for interest$4,729   $4,741  
    Cash (recovered) paid for income taxes$(617)  $110,848  
    Supplemental disclosure of non-cash transactions:   
    Purchases of property and equipment included in accounts payable$1,312   $2,303  
    Right-of-use assets obtained for financing lease liabilities$2,431   $3,721  


     
    MAMMOTH ENERGY SERVICES, INC.
    SEGMENT INCOME STATEMENTS
    (in thousands)
     
    Three months ended December 31, 2020InfrastructureWell CompletionSandDrillingAll OtherEliminationsTotal
    Revenue from external customers$55,934  $12,653  $11,843  $580  $4,040  $—  $85,050  
    Intersegment revenues—  44  —  23  670  (737) —  
    Total revenue55,934  12,697  11,843  603  4,710  (737) 85,050  
    Cost of revenue, exclusive of depreciation, depletion, amortization and accretion41,265  5,194  4,110  1,165  3,699  —  55,433  
    Intersegment cost of revenues127  426  —  —  184  (737) —  
    Total cost of revenue41,392  5,620  4,110  1,165  3,883  (737) 55,433  
    Selling, general and administrative7,057  17,691  4,070  373  1,317  —  30,508  
    Depreciation, depletion, amortization and accretion6,957  7,066  2,390  2,224  3,550  —  22,187  
    Operating income (loss)528  (17,680) 1,273  (3,159) (4,040) —  (23,078) 
    Interest expense, net685  273  95  5  133  —  1,191  
    Other (income) expense, net(8,355) 170  86  23  (1,142) —  (9,218) 
    Income (loss) before income taxes$8,198  $(18,123) $1,092  $(3,187) $(3,031) $—  $(15,051) 


    Three months ended December 31, 2019InfrastructureWell CompletionSandDrillingAll OtherEliminationsTotal
    Revenue from external customers$25,601  $24,515  $2,946  $4,637  $9,938  $—  $67,637  
    Intersegment revenues—  414  —  14  407  (835) —  
    Total revenue25,601  24,929  2,946  4,651  10,345  (835) 67,637  
    Cost of revenue, exclusive of depreciation, depletion, amortization and accretion29,925  20,354  6,162  6,927  12,201  —  75,569  
    Intersegment cost of revenues—  339  —  206  290  (835) —  
    Total cost of revenue29,925  20,693  6,162  7,133  12,491  (835) 75,569  
    Selling, general and administrative5,097  1,428  792  1,063  1,958  —  10,338  
    Depreciation, depletion, amortization and accretion7,662  9,985  2,628  3,361  4,885  —  28,521  
    Impairment of goodwill—  23,423  2,684  —  4,363  —  30,470  
    Impairment of other long-lived assets—  —  —  2,955  1,055  —  4,010  
    Operating loss(17,083) (30,600) (9,320) (9,861) (14,407) —  (81,271) 
    Interest expense, net660  304  48  217  257  —  1,486  
    Other (income) expense, net(7,236) 574  —  14  (624) —  (7,272) 
    Loss before income taxes$(10,507) $(31,478) $(9,368) $(10,092) $(14,040) $—  $(75,485) 


    Three months ended September 30, 2020InfrastructureWell CompletionSandDrillingAll OtherEliminationsTotal
    Revenue from external customers$43,582  $15,738  $6,031  $1,193  $3,990  $—  $70,534  
    Intersegment revenues—  27  —  11  687  (725) —  
    Total revenue43,582  15,765  6,031  1,204  4,677  (725) 70,534  
    Cost of revenue, exclusive of depreciation, depletion, amortization and accretion28,883  6,510  4,154  1,955  4,427  —  45,929  
    Intersegment cost of revenues162  449  —  —  114  (725) —  
    Total cost of revenue29,045  6,959  4,154  1,955  4,541  (725) 45,929  
    Selling, general and administrative7,227  1,721  1,056  382  1,794  —  12,180  
    Depreciation, depletion, amortization and accretion7,294  7,189  2,700  2,294  3,655  —  23,132  
    Operating income (loss)16  (104) (1,879) (3,427) (5,313) —  (10,707) 
    Interest expense, net623  253  70  60  92  —  1,098  
    Other (income) expense, net(8,375) (1,156) 1,792  20  (1,323) —  (9,042) 
    Income (loss) before income taxes$7,768  $799  $(3,741) $(3,507) $(4,082) $—  $(2,763) 


    Year ended December 31, 2020InfrastructureWell CompletionSandDrillingAll OtherEliminationsTotal
    Revenue from external customers$155,241  $87,201  $34,265  $7,746  $28,623  $—  $313,076  
    Intersegment revenues—  1,124  95  39  2,716  (3,974) —  
    Total revenue155,241  88,325  34,360  7,785  31,339  (3,974) 313,076  
    Cost of revenue, exclusive of depreciation, depletion, amortization and accretion122,046  45,647  25,955  10,757  27,616  —  232,021  
    Intersegment cost of revenues323  1,836  —  152  1,663  (3,974) —  
    Total cost of revenue122,369  47,483  25,955  10,909  29,279  (3,974) 232,021  
    Selling, general and administrative26,058  23,039  7,807  3,149  7,132  —  67,185  
    Depreciation, depletion, amortization and accretion29,373  30,411  9,771  10,039  15,723  —  95,317  
    Impairment of goodwill—  53,406  —  —  1,567  —  54,973  
    Impairment of other long-lived assets—  4,203  —  326  8,368  —  12,897  
    Operating loss(22,559) (70,217) (9,173) (16,638) (30,730) —  (149,317) 
    Interest expense, net2,775  1,130  312  454  726  —  5,397  
    Other (income) expense, net(32,437) (2,274) 1,839  (227) (1,839) —  (34,938) 
    Income (loss) before income taxes$7,103  $(69,073) $(11,324) $(16,865) $(29,617) $—  $(119,776) 


    Year ended December 31, 2019InfrastructureWell CompletionSandDrillingAll OtherEliminationsTotal
    Revenue from external customers$210,691  $241,951  $67,267  $31,728  $73,375  $—  $625,012  
    Intersegment revenues2,573  1,851  29,796  236  15,232  (49,688) —  
    Total revenue213,264  243,802  97,063  31,964  88,607  (49,688) 625,012  
    Cost of revenue, exclusive of depreciation, depletion, amortization and accretion160,449  174,816  87,637  35,925  84,961  —  543,788  
    Intersegment cost of revenues12,820  31,727  15  1,028  4,158  (49,748) —  
    Total cost of revenue173,269  206,543  87,652  36,953  89,119  (49,748) 543,788  
    Selling, general and administrative23,235  10,889  5,006  4,177  8,245  —  51,552  
    Depreciation, depletion, amortization and accretion30,349  40,159  14,050  13,143  19,332  —  117,033  
    Impairment of goodwill—  23,423  2,684  —  7,557  —  33,664  
    Impairment of other long-lived assets—  —  —  2,955  4,403  —  7,358  
    Operating loss(13,589) (37,212) (12,329) (25,264) (40,049) 60  (128,383) 
    Interest expense, net1,674  1,228  193  862  1,001  —  4,958  
    Other (income) expense, net(41,949) 580  67  (9) (905) —  (42,216) 
    Income (loss) before income taxes$26,686  $(39,020) $(12,589) $(26,117) $(40,145) $60  $(91,125) 


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

    Adjusted EBITDA

    Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. Mammoth defines Adjusted EBITDA as net income (loss) before depreciation, depletion, amortization and accretion expense, impairment of goodwill, impairment of other long-lived assets, inventory obsolescence charges, acquisition related costs, stock based compensation, interest expense, net, other (income) expense, net (which is comprised of the (gain) or loss on disposal of long-lived assets and interest on trade accounts receivable) and provision (benefit) for income taxes, further adjusted to add back interest on trade accounts receivable. The Company excludes the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within the energy service industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) or cash flows from operating activities as determined in accordance with GAAP or as an indicator of Mammoth's operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets. Mammoth's computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure its ability to meet debt service requirements.

    The following tables provide a reconciliation of Adjusted EBITDA to the GAAP financial measure of net income (loss) on a consolidated basis and for each of the Company's segments (in thousands):

    Consolidated

     Three Months Ended Years Ended December 31,
     December 31, September 30, December 31,
    Reconciliation of Adjusted EBITDA to net (loss) income:2020 2019 2020 2020 2019
    Net (loss) income$(11,861)  $(60,779)  $3,430   $(107,607)  $(79,044) 
    Depreciation, depletion, amortization and accretion expense22,187   28,521   23,132   95,317   117,033  
    Impairment of goodwill—   30,470   —   54,973   33,664  
    Impairment of other long-lived assets—   4,010   —   12,897   7,358  
    Inventory obsolescence charges—   —   —   —   1,349  
    Acquisition related costs—   —   —   —   45  
    Stock based compensation354   811   353   1,952   4,177  
    Interest expense, net1,191   1,486   1,098   5,397   4,958  
    Other income, net(9,218)  (7,272)  (9,042)  (34,938)  (42,216) 
    Benefit for income taxes(3,190)  (14,706)  (6,193)  (12,169)  (12,081) 
    Interest on trade accounts receivable8,077   7,174   9,285   34,130   42,040  
    Adjusted EBITDA$7,540   $(10,285)  $22,063   $49,952   $77,283  

    Infrastructure Services

     Three Months Ended Years Ended December 31,
     December 31, September 30, December 31,
    Reconciliation of Adjusted EBITDA to net income (loss):2020 2019 2020 2020 2019
    Net income (loss)$6,150   $(13,161)  $6,122   $(30)  $18,778  
    Depreciation and amortization expense6,957   7,662   7,294   29,373   30,349  
    Acquisition related costs—   —   —   —   12  
    Stock based compensation156   175   139   580   822  
    Interest expense685   660   623   2,775   1,674  
    Other income, net(8,355)  (7,236)  (8,375)  (32,437)  (41,949) 
    Provision for income taxes2,048   2,654   1,646   7,133   7,908  
    Interest on trade accounts receivable8,418   7,174   8,170   32,214   42,040  
    Adjusted EBITDA$16,059   $(2,072)  $15,619   $39,608   $59,634  

    Well Completion Services

     Three Months Ended Years Ended December 31,
     December 31, September 30, December 31,
    Reconciliation of Adjusted EBITDA to net (loss) income:2020 2019 2020 2020 2019
    Net (loss) income$(18,123)  $(31,478)  $799   $(69,073)  $(39,020) 
    Depreciation and amortization expense7,066   9,985   7,189   30,411   40,159  
    Impairment of goodwill—   23,423   —   53,406   23,423  
    Impairment of other long-lived assets—   —   —   4,203   —  
    Acquisition related costs—   —   —   —   18  
    Stock based compensation70   296   76   527   1,693  
    Interest expense273   304   253   1,130   1,228  
    Other expense (income), net170   574   (1,156)  (2,274)  580  
    Interest on trade accounts receivable(318)  —   1,073   1,888   —  
    Adjusted EBITDA$(10,862)  $3,104   $8,234   $20,218   $28,081  

    Natural Sand Proppant Services

     Three Months Ended Years Ended December 31,
     December 31, September 30, December 31,
    Reconciliation of Adjusted EBITDA to net income (loss):2020 2019 2020 2020 2019
    Net income (loss)$1,092   $(9,368)  $(3,741)  $(11,324)  $(12,589) 
    Depreciation, depletion, amortization and accretion expense2,390   2,628   2,700   9,771   14,050  
    Impairment of goodwill—   2,684   —   —   2,684  
    Acquisition related costs—   —   —   —   8  
    Stock based compensation70   156   77   425   812  
    Interest expense95   48   70   312   193  
    Other expense, net86   —   1,792   1,839   67  
    Interest on trade accounts receivable(23)  —   26   3   —  
    Adjusted EBITDA$3,710   $(3,852)  $924   $1,026   $5,225  

    Drilling Services

     Three Months Ended Years Ended December 31,
     December 31, September 30, December 31,
    Reconciliation of Adjusted EBITDA to net loss:2020 2019 2020 2020 2019
    Net loss$(3,187)  $(10,092)  $(3,507)  $(16,865)  $(26,117) 
    Depreciation expense2,224   3,361   2,294   10,039   13,143  
    Impairment of other long-lived assets—   2,955   —   326   2,955  
    Acquisition related costs—   —   —   —   2  
    Stock based compensation36   82   38   203   361  
    Interest expense5   217   60   454   862  
    Other expense (income), net23   14   20   (227)  (9) 
    Adjusted EBITDA$(899)  $(3,463)  $(1,095)  $(6,070)  $(8,803) 

    Other Services(a)

     Three Months Ended Years Ended December 31,
     December 31, September 30, December 31,
    Reconciliation of Adjusted EBITDA to net income (loss):2020 2019 2020 2020 2019
    Net income (loss)$2,207   $3,320   $3,757   $(10,315)  $(20,156) 
    Depreciation, amortization and accretion expense3,550   4,885   3,655   15,723   19,332  
    Impairment of goodwill—   4,363   —   1,567   7,557  
    Impairment of other long-lived assets—   1,055   —   8,368   4,403  
    Inventory obsolescence charges—   —   —   —   1,349  
    Acquisition related costs—   —   —   —   5  
    Stock based compensation22   102   23   217   489  
    Interest expense, net133   257   92   726   1,001  
    Other income, net(1,142)  (624)  (1,323)  (1,839)  (905) 
    Benefit for income taxes(5,238)  (17,360)  (7,839)  (19,302)  (19,989) 
    Interest on trade accounts receivable—   —   16   25   —  
    Adjusted EBITDA$(468)  $(4,002)  $(1,619)  $(4,830)  $(6,914) 


    a. Includes results for Mammoth's aviation, coil tubing, pressure control, flowback, cementing, acidizing, equipment rentals, crude oil hauling, full service transportation and remote accommodations, equipment manufacturing and infrastructure engineering and design services and corporate related activities. The Company's corporate related activities do not generate revenue.

    Adjusted Net (Loss) Income and Adjusted (Loss) Earnings per Share

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

     Three Months Ended Years Ended December 31,
     December 31, September 30, December 31,
     2020 2019 2020 2020 2019
     (in thousands, except per share amounts)
    Net (loss) income, as reported$(11,861)  $(60,779)  $3,430  $(107,607)  $(79,044) 
    Impairment of goodwill—   30,470   —  54,973   33,664  
    Impairment of other long-lived assets—   4,010   —  12,897   7,358  
    Adjusted net (loss) income$(11,861)  $(26,299)  $3,430  $(39,737)  $(38,022) 
              
    Basic (loss) earnings per share, as reported$(0.26)  $(1.35)  $0.07  $(2.36)  $(1.76) 
    Impairment of goodwill—   0.68   —  1.20   0.75  
    Impairment of other long-lived assets—   0.09   —  0.28   0.16  
    Adjusted basic (loss) earnings per share$(0.26)  $(0.58)  $0.07  $(0.88)  $(0.85) 
              
    Diluted (loss) earnings per share, as reported$(0.26)  $(1.35)  $0.07  $(2.36)  $(1.76) 
    Impairment of goodwill—   0.68   —  1.20   0.75  
    Impairment of other long-lived assets—   0.09   —  0.28   0.16  
    Adjusted diluted (loss) earnings per share$(0.26)  $(0.58)  $0.07  $(0.88)  $(0.85) 

     


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