OKLAHOMA CITY - Mammoth Energy Services, Inc. ('Mammoth' or the 'Company') (NASDAQ: TUSK) reported strong financial and operational results for the third quarter ended September 30, 2022.
Financial Overview for the Third Quarter 2022:
Total revenue was $107.2 million for the third quarter of 2022, as compared to $57.5 million for the same quarter last year and $89.7 million for the second quarter of 2022.
Net income for the third quarter of 2022 was $7.7 million, or $0.16 per share, as compared to a net loss of $40.9 million, or a $0.88 loss per share, for the same quarter last year, and net income of $1.7 million, or $0.04 per share, for the second quarter of 2022.
Adjusted EBITDA (as defined and reconciled below) was $29.8 million for the third quarter of 2022, as compared to ($29.3) million for the same quarter last year and $23.0 million for the second quarter of 2022.
Arty Straehla, Chief Executive Officer of Mammoth commented, 'Our businesses exhibited strong performance in the third quarter with substantial revenue growth in all of our segments year-over-year, leading to significant net income and Adjusted EBITDA growth. We continue to experience strong demand environments across our three largest segments, Infrastructure Services, Well Completion Services and our Sand business.
'In our Infrastructure Services division, operational improvements are driving enhanced results and we continue to add crew capacity for a sector that has a healthy bidding environment. The need for seasonal storm restoration services as well as the overall infrastructure project opportunities supported by the historic investment in our Nation's infrastructure passed by the federal government last fall present continued prospects for growth in this business. Our Well Completion Services division continues to improve performance, generating strong growth both at the top and bottom line where the macro demand in the pressure pumping industry remains robust. We currently have four of our six pressure pumping spreads operating, which have full schedules through the end of the year, and we expect to add a fifth spread during the fourth quarter. We anticipate activating our sixth fleet in the first half of 2023. In addition, we have plans to upgrade one of our existing spreads to Tier 4, dual fuel. This would give us a total of three dual fuel fleets. The sand business also continues to maintain strong demand at increased prices. We believe this trend in sand demand will continue in the fourth quarter and into 2023. Across all our business segments, I am proud of our team's continued commitment, hard work and perseverance to manage through today's macro-economic climate relative to supply chain constrains and labor and inflationary challenges. We believe the future for Mammoth is bright and we remain committed to enhancing value for all of our stakeholders.'
Infrastructure Services
Mammoth's infrastructure services division contributed revenue of $33.3 million for the third quarter of 2022, as compared to $25.1 million for the same quarter last year and $25.6 million for the second quarter of 2022. The increase in revenue is primarily due to improved operational execution, coupled with an increase in crew count. Average crew count grew to 96 crews during the third quarter of 2022, as compared to 77 crews during the same quarter last year and 88 crews during the second quarter of 2022.
Well Completion Services
Mammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $51.5 million on 1,897 stages for the third quarter of 2022, as compared to $22.7 million on 688 stages for the same quarter of 2021 and $43.8 million on 1,716 stages for the second quarter of 2022. On average, 3.5 of the Company's fleets were active for the third quarter of 2022, compared to an average utilization of 1.2 fleets during the same quarter last year and 3.5 fleets during the second quarter of 2022.
Natural Sand Proppant Services
Mammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $12.9 million for the third quarter of 2022, as compared to $8.4 million for the same quarter last year and $15.5 million for the second quarter of 2022. In the third quarter of 2022, the Company sold approximately 341,000 tons of sand at an average sales price of $29.95 per ton, as compared to sales of approximately 315,000 tons of sand at an average sales price of $16.58 per ton during the same quarter last year. In the second quarter of 2022, sales were approximately 350,000 tons of sand at an average price of $26.86 per ton.
Drilling Services
Mammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $3.1 million for the third quarter of 2022, as compared to $1.2 million for the same quarter last year and $2.0 million for the second quarter of 2022.
Other Services
Mammoth's other services, including aviation, equipment rentals, crude oil hauling, remote accommodations and equipment manufacturing, contributed revenue (inclusive of inter-segment revenue) of $7.0 million for the third quarter of 2022, as compared to $4.6 million for the same quarter last year and $5.0 million for the second quarter of 2022.
Selling, General and Administrative Expenses
Selling, general and administrative ('SG&A') expenses were $9.7 million for the third quarter of 2022, as compared to $41.4 million for the same quarter last year and $8.2 million for the second quarter of 2022.
SG&A expenses, as a percentage of total revenue, were 9% for the third quarter of 2022, as compared to 73% for the same quarter last year and 9% for the second quarter of 2022.
Liquidity
As of September 30, 2022, Mammoth had cash on hand of $10.6 million, outstanding borrowings under its revolving credit facility of $92.8 million and $6.9 million of available borrowing capacity under its revolving credit facility, after giving effect to $7.1 million of outstanding letters of credit and the requirement to maintain a $10.0 million reserve out of the available borrowing capacity. As of September 30, 2022, Mammoth had total liquidity of $17.5 million.
As of October 26, 2022, Mammoth had cash on hand of $10.3 million and outstanding borrowings under its revolving credit facility of $89.7 million. As of October 26, 2022, the Company had $13.0 million of available borrowing capacity under its revolving credit facility, after giving effect to $7.1 million of outstanding letters of credit and the requirement to maintain a $10.0 million reserve out of the available borrowing capacity
Conference Call Information
Mammoth will host a conference call on Thursday, October 27, 2022 at 4:00 p.m. Central time (5:00 p.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 TUSK@dennardlascar.com.
About Mammoth Energy Services, Inc.
Mammoth is an integrated, growth-oriented energy services company focused on the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its infrastructure services businesses. The Company also provides products and services to enable 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 more information, please visit www.mammothenergy.com.
Contact:
Mark Layton
CFO
Mammoth Energy Services, Inc
E: investors@mammothenergy.com
Investor
Rick Black
Ken Dennard
Dennard Lascar
E: TUSK@dennardlascar.com
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: any continuing impacts of the COVID-19 pandemic, related global and national health concerns and economic repercussions; 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 on the global energy and capital markets and global stability; 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; inflationary pressures; rising interest rates and their impact on the cost of capital; 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 ('Cobra') by the Puerto Rico Electric Power Authority ('PREPA'); the failure to receive or delays in receiving governmental authorizations, approvals and/or payments, including payments with respect to the PREPA account receivable for prior services to PREPA performed by Cobra; 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, including the adverse impact of the recent settlement with MasTec Renewables Puerto Rico, LLC, 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 (i) continue to comply with or, if applicable, obtain a waiver of forecasted or actual non-compliance with certain financial covenants from its lenders and comply with other terms and conditions under its amended revolving credit facility, as amended, (ii) extend or refinance our revolving credit facility at or prior to maturity on the terms acceptable to Mammoth or at all and (iii) meet its financial projections associated with reducing its debt; 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. 
