Mammoth Energy Services, Inc. Announces Second Quarter 2021 Operational and Financial Results
07/30/2021 - 06:00 AM
OKLAHOMA CITY, July 30, 2021 (GLOBE NEWSWIRE) -- Mammoth Energy Services, Inc. (“Mammoth” or the “Company”) (NASDAQ: TUSK) today reported financial and operational results for the second quarter ended June 30, 2021.
Financial Overview for the Second Quarter 2021:
Total revenue was $47.4 million for the second quarter of 2021, as compared to $60.1 million for the same quarter last year and $66.8 million for the first quarter of 2021.
Net loss for the second quarter of 2021 was $34.8 million , or a $0.75 loss per share, as compared to a net loss of $15.2 million , or a $0.33 loss per share, for the same quarter last year, and a net loss of $12.4 million , or a $0.27 loss per share, for the first quarter of 2021.
Adjusted EBITDA (as defined and reconciled below) was ($5.5) million for the second quarter of 2021, as compared to $6.9 million for the same quarter last year and $6.4 million for the first quarter of 2021.
Arty Straehla, Chief Executive Officer of Mammoth commented, “While second quarter results did not meet expectations, internally we remain focused on improving near-term results as we continue migrating the Company further into the infrastructure space to enhance long-term growth and sustainability. In our energy businesses, improved commodities pricing is generating some positive industry movement and increased equipment utilization as we are ramping up to put a second hydraulic fracturing fleet to work in mid-August. We are also beginning to experience increased market activity in our sand business.”
“In the infrastructure space, improving macro trends related to increased project bidding levels and funding capacity in the sector persists. We continue to pursue opportunities within this sector as we strategically structure our service offerings for growth, both the geographic footprint and depth of projects.”
Straehla continued, “Lastly, we are continuing our efforts to collect our receivable from PREPA for work performed by our subsidiary Cobra in Puerto Rico. We believe that published documentation to date continues to show that our team performed a difficult job in a difficult environment to save lives and aid the people of Puerto Rico in their time of need.”
Infrastructure Services $17.2 million , or approximately 36% of Mammoth's total revenue, for the second quarter of 2021, as compared to $30.2 million for the same quarter last year and $29.3 million for the first quarter of 2021. The decrease in revenue compared to the same quarter of 2020 and first quarter of 2021 is primarily due to management and crew turnover.
Well Completion Services $17.4 million on 520 stages for the second quarter of 2021, as compared to $16.5 million on 658 stages for the same quarter last year and $23.0 million on 445 stages for the first quarter of 2021. On average, 0.9 of the Company's fleets were active for the second quarter, compared to an average utilization of 1.9 fleets during the same quarter last year and an average utilization of 0.9 fleets during the first quarter of 2021.Natural Sand Proppant Services $6.9 million for the second quarter of 2021, as compared to $6.2 million for the same quarter last year and $8.7 million for the first quarter of 2021. In the second quarter of 2021, the Company sold approximately 255,000 tons of sand at an average sales price of $15.80 per ton, as compared to sales of approximately 82,000 tons of sand at an average sales price of $15.18 per ton during the same quarter last year. In the first quarter of 2021, sales were approximately 171,000 tons of sand at an average price of $16.83 per ton.
Drilling Services $1.1 million for the second quarter of 2021, as compared to $1.2 million for the same quarter last year and $0.9 million for the first quarter of 2021.
As a result of market conditions, the Company has temporarily shut down its contract land drilling operations beginning in December 2019 and its rig hauling operations beginning in April 2020.
Other Services $5.5 million for the second quarter of 2021, as compared to $6.8 million for the same quarter last year and $5.7 million for the first quarter of 2021.
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 $12.0 million for the second quarter of 2021, as compared to $13.7 million for the same quarter last year and $20.8 million for the first quarter of 2021.
Following is a breakout of SG&A expense (in thousands):
Three Months Ended Six Months Ended June 30, March 31, June 30, 2021 2020 2021 2021 2020 Cash expenses: Compensation and benefits $ 3,333 $ 3,720 $ 4,694 $ 8,027 $ 7,690 Professional services 5,806 6,147 3,405 9,211 9,684 Other(a) 2,464 2,100 2,342 4,806 4,409 Total cash SG&A expense 11,603 11,967 10,441 22,044 21,783 Non-cash expenses: Bad debt provision 76 1,624 10,125 10,201 1,679 Stock based compensation 304 135 282 586 1,035 Total non-cash SG&A expense 380 1,759 10,407 10,787 2,714 Total SG&A expense $ 11,983 $ 13,726 $ 20,848 $ 32,831 $ 24,497 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 25% for the second quarter of 2021, as compared to 23% for the same quarter last year and 31% for the first quarter of 2021. The bad debt provision for the first quarter of 2021 includes $10.0 million related to the voluntary petitions for relief filed on November 13, 2020, by Gulfport Energy Corporation and its subsidiaries.
Liquidity $11.0 million , outstanding borrowings under its revolving credit facility of $60.2 million and $51.1 million of available borrowing capacity under its revolving credit facility, after giving effect to $13.0 million of outstanding letters of credit. As of June 30, 2021, Mammoth had total liquidity of $62.1 million .
As of July 27, 2021, Mammoth had cash on hand of $13.7 million , outstanding borrowings under its revolving credit facility of $61.4 million and $49.8 million of available borrowing capacity under its revolving credit facility, after giving effect to $13.0 million of outstanding letters of credit.
Capital Expenditures
Three Months Ended Six Months Ended June 30, March 31, June 30, 2021 2020 2021 2021 2020 Infrastructure services(a) $ 104 $ 43 $ 189 $ 293 $ 43 Well completion services(b) 388 2,450 412 800 3,054 Natural sand proppant services(c) 5 354 408 413 875 Drilling services(d) 1 67 37 38 67 Other(e) 63 10 102 165 385 Total capital expenditures $ 561 $ 2,924 $ 1,148 $ 1,709 $ 4,424 a. Capital expenditures primarily for tooling and other equipment for the periods presented. b. Capital expenditures primarily for upgrades to our pressure pumping fleet to reduce greenhouse gas emissions and water transfer equipment for the periods presented. c. Capital expenditures primarily for maintenance for the periods presented. d. Capital expenditures primarily for maintenance for the periods presented. e. Capital expenditures primarily for equipment for the Company's rental businesses for the periods presented.
Conference Call Information https://ir.mammothenergy.com/events-presentations
About Mammoth Energy Services, Inc.
Contacts: investors@mammothenergy.com
Rick Black / Ken DennardTUSK@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: 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 volatility of oil and natural gas prices and actions by OPEC members and other exporting nations affecting commodities prices and production levels; 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 or settlement of our litigation matters, including our litigation with Gulfport Energy Corporation and 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; 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.
ASSETS June 30, December 31, 2021 2020 CURRENT ASSETS (in thousands) Cash and cash equivalents $ 11,038 $ 14,822 Short-term investment 1,757 1,750 Accounts receivable, net 413,245 393,112 Receivables from related parties, net 80 28,461 Inventories 10,212 12,020 Prepaid expenses 7,936 13,825 Other current assets 708 758 Other current assets - related parties — — Total current assets 444,976 464,748 Property, plant and equipment, net 210,397 251,262 Sand reserves 65,491 65,876 Operating lease right-of-use assets 15,777 20,179 Intangible assets, net - customer relationships 321 408 Intangible assets, net - trade names 3,946 4,366 Goodwill 12,608 12,608 Deferred income tax asset 8,094 — Other non-current assets 4,329 5,115 Total assets $ 765,939 $ 824,562 LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable $ 39,505 $ 40,316 Payables to related parties 4 3 Accrued expenses and other current liabilities 63,375 44,408 Current operating lease liability 7,255 8,618 Current portion of long-term debt 1,430 1,165 Income taxes payable 35,198 34,088 Total current liabilities 146,767 128,598 Long-term debt, net of current portion 62,811 81,338 Deferred income tax liabilities 12,041 24,741 Long-term operating lease liability 8,293 11,377 Asset retirement obligation 3,666 4,746 Other liabilities 15,159 10,435 Total liabilities 248,737 261,235 COMMITMENTS AND CONTINGENCIES EQUITY Equity: Common stock, $0.01 par value, 200,000,000 shares authorized, 46,680,731 and 45,769,283 issued and outstanding at June 30, 2021 and December 31, 2020 467 458 Additional paid in capital 537,728 537,039 Retained earnings (18,335 ) 28,895 Accumulated other comprehensive loss (2,658 ) (3,065 ) Total equity 517,202 563,327 Total liabilities and equity $ 765,939 $ 824,562
MAMMOTH ENERGY SERVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Three Months Ended Six Months Ended June 30, March 31, June 30, 2021 2020 2021 2021 2020 (in thousands, except per share amounts) REVENUE Services revenue $ 40,867 $ 44,878 $ 42,691 $ 83,558 $ 113,723 Services revenue - related parties 90 8,650 14,986 15,076 26,663 Product revenue 6,483 4,706 6,982 13,465 13,356 Product revenue - related parties — 1,875 2,145 2,145 3,750 Total revenue 47,440 60,109 66,804 114,244 157,492 COST AND EXPENSES Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $17,861 , $21,750 , $18,989 , $36,850 and $45,305 , respectively, for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020) 43,103 42,255 42,062 85,165 112,952 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 June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020) 107 97 109 216 198 Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $2,384 , $2,346 , $2,137 , $4,521 and $4,654 , respectively, for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020) 7,165 6,401 5,909 13,074 17,509 Selling, general and administrative 11,791 13,528 20,655 32,446 24,084 Selling, general and administrative - related parties 192 198 193 385 413 Depreciation, depletion, amortization and accretion 20,265 24,116 21,146 41,411 49,998 Impairment of goodwill — — — — 54,973 Impairment of other long-lived assets — — — — 12,897 Total cost and expenses 82,623 86,595 90,074 172,697 273,024 Operating loss (35,183 ) (26,486 ) (23,270 ) (58,453 ) (115,532 ) OTHER INCOME (EXPENSE) Interest expense, net (1,169 ) (1,471 ) (1,225 ) (2,394 ) (3,109 ) Other (expense) income, net (14,998 ) 8,137 9,947 (5,051 ) 15,546 Other (expense) income, net - related parties — 1,133 (515 ) (515 ) 1,133 Total other (expense) income (16,167 ) 7,799 8,207 (7,960 ) 13,570 Loss before income taxes (51,350 ) (18,687 ) (15,063 ) (66,413 ) (101,962 ) Benefit for income taxes (16,560 ) (3,482 ) (2,623 ) (19,183 ) (2,786 ) Net loss $ (34,790 ) $ (15,205 ) $ (12,440 ) $ (47,230 ) $ (99,176 ) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustment, net of tax of $63 , ($150) , ($42) , $680 and $211 , respectively, for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021 and six months ended June 30, 2021 and 2020 239 668 168 407 (746 ) Comprehensive loss $ (34,551 ) $ (14,537 ) $ (12,272 ) $ (46,823 ) $ (99,922 ) Net loss per share (basic) $ (0.75 ) $ (0.33 ) $ (0.27 ) $ (1.02 ) $ (2.18 ) Net loss per share (diluted) $ (0.75 ) $ (0.33 ) $ (0.27 ) $ (1.02 ) $ (2.18 ) Weighted average number of shares outstanding (basic) 46,402 45,727 45,932 46,168 45,521 Weighted average number of shares outstanding (diluted) 46,402 45,727 45,932 46,168 45,521
MAMMOTH ENERGY SERVICES, INC.
Six Months Ended June 30, 2021 2020 (in thousands) Cash flows from operating activities: Net loss $ (47,230 ) $ (99,176 ) Adjustments to reconcile net loss to cash provided by operating activities: Stock based compensation 698 1,246 Depreciation, depletion, accretion and amortization 41,411 49,998 Amortization of coil tubing strings — 359 Amortization of debt origination costs 296 577 Bad debt expense 10,201 1,679 Gain on disposal of property and equipment (1,599 ) (1,451 ) Impairment of goodwill — 54,973 Impairment of other long-lived assets — 12,897 Deferred income taxes (20,898 ) 931 Other 548 623 Changes in assets and liabilities: Accounts receivable, net (30,386 ) 7,782 Receivables from related parties 28,381 (19,793 ) Inventories 1,808 4,651 Prepaid expenses and other assets 5,923 6,079 Accounts payable (1,546 ) (7,514 ) Payables to related parties 1 (512 ) Accrued expenses and other liabilities 15,756 (2,818 ) Income taxes payable 1,107 (3,697 ) Net cash provided by operating activities 4,471 6,834 Cash flows from investing activities: Purchases of property and equipment (1,709 ) (4,348 ) Purchases of property and equipment from related parties — (76 ) Proceeds from disposal of property and equipment 4,632 2,544 Net cash provided by (used in) investing activities 2,923 (1,880 ) Cash flows from financing activities: Borrowings on long-term debt 12,000 22,800 Repayments of long-term debt (30,269 ) (13,550 ) Proceeds from sale leaseback transaction 9,473 — Payments on sale leaseback transaction (1,278 ) — Principal payments on financing leases and equipment financing notes (1,140 ) (914 ) Debt issuance costs — (1,000 ) Net cash (used in) provided by financing activities (11,214 ) 7,336 Effect of foreign exchange rate on cash 36 (137 ) Net change in cash and cash equivalents (3,784 ) 12,153 Cash and cash equivalents at beginning of period 14,822 5,872 Cash and cash equivalents at end of period $ 11,038 $ 18,025 Supplemental disclosure of cash flow information: Cash paid for interest $ 2,134 $ 2,683 Cash paid (recovered) for income taxes $ 964 $ (6 ) Supplemental disclosure of non-cash transactions: Purchases of property and equipment included in accounts payable $ 2,035 $ 2,780
MAMMOTH ENERGY SERVICES, INC.
Three months ended June 30, 2021 Infrastructure Well (a) Sand Drilling All Other Eliminations Total Revenue from external customers $ 17,220 $ 17,337 $ 6,886 $ 1,130 $ 4,867 $ — $ 47,440 Intersegment revenues — 36 — 17 682 (735 ) — Total revenue 17,220 17,373 6,886 1,147 5,549 (735 ) 47,440 Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 19,881 16,396 7,400 1,568 5,130 — 50,375 Intersegment cost of revenues 50 666 — — 19 (735 ) — Total cost of revenue 19,931 17,062 7,400 1,568 5,149 (735 ) 50,375 Selling, general and administrative 7,383 1,893 991 395 1,321 — 11,983 Depreciation, depletion, amortization and accretion 5,899 6,447 2,387 2,079 3,453 — 20,265 Operating loss (15,993 ) (8,029 ) (3,892 ) (2,895 ) (4,374 ) — (35,183 ) Interest expense, net 656 219 90 58 146 — 1,169 Other expense (income), net 15,904 1 (53 ) (127 ) (727 ) — 14,998 Loss before income taxes $ (32,553 ) $ (8,249 ) $ (3,929 ) $ (2,826 ) $ (3,793 ) $ — $ (51,350 )
Three months ended June 30, 2020 Infrastructure Well (a) Sand Drilling All Other Eliminations Total Revenue from external customers $ 30,249 $ 16,125 $ 6,237 $ 1,250 $ 6,248 $ — $ 60,109 Intersegment revenues — 419 — — 584 (1,003 ) — Total revenue 30,249 16,544 6,237 1,250 6,832 (1,003 ) 60,109 Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 25,217 8,375 6,394 2,012 6,755 — 48,753 Intersegment cost of revenues 27 333 — 21 622 (1,003 ) — Total cost of revenue 25,244 8,708 6,394 2,033 7,377 (1,003 ) 48,753 Selling, general and administrative 7,830 1,456 1,378 1,331 1,731 — 13,726 Depreciation, depletion, amortization and accretion 7,500 7,675 2,358 2,671 3,912 — 24,116 Operating loss (10,325 ) (1,295 ) (3,893 ) (4,785 ) (6,188 ) — (26,486 ) Interest expense, net 716 329 69 132 225 — 1,471 Other (income) expense, net (8,004 ) (1,179 ) (2 ) (298 ) 213 — (9,270 ) Loss before income taxes $ (3,037 ) $ (445 ) $ (3,960 ) $ (4,619 ) $ (6,626 ) $ — $ (18,687 )
Three months ended March 31, 2021 Infrastructure Well (a) Sand Drilling All Other Eliminations Total Revenue from external customers $ 29,257 $ 22,901 $ 8,705 $ 919 $ 5,022 $ — $ 66,804 Intersegment revenues — 54 — 14 640 (708 ) — Total revenue 29,257 22,955 8,705 933 5,662 (708 ) 66,804 Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 26,458 9,003 5,862 1,604 5,153 — 48,080 Intersegment cost of revenues 45 394 — — 269 (708 ) — Total cost of revenue 26,503 9,397 5,862 1,604 5,422 (708 ) 48,080 Selling, general and administrative 6,253 10,612 2,049 422 1,512 — 20,848 Depreciation, depletion, amortization and accretion 6,667 6,683 2,140 2,165 3,491 — 21,146 Operating loss (10,166 ) (3,737 ) (1,346 ) (3,258 ) (4,763 ) — (23,270 ) Interest expense, net 661 254 93 63 154 — 1,225 Other (income) expense, net (9,310 ) 439 (794 ) (9 ) 242 — (9,432 ) Loss before income taxes $ (1,517 ) $ (4,430 ) $ (645 ) $ (3,312 ) $ (5,159 ) $ — $ (15,063 )
MAMMOTH ENERGY SERVICES, INC.
Six months ended June 30, 2021 Infrastructure Well (a) Sand Drilling All Other Eliminations Total Revenue from external customers $ 46,476 $ 40,238 $ 15,592 $ 2,049 $ 9,889 $ — $ 114,244 Intersegment revenues — 90 — 31 1,322 (1,443 ) — Total revenue 46,476 40,328 15,592 2,080 11,211 (1,443 ) 114,244 Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 46,340 25,399 13,262 3,173 10,281 — 98,455 Intersegment cost of revenues 95 1,060 — — 288 (1,443 ) — Total cost of revenue 46,435 26,459 13,262 3,173 10,569 (1,443 ) 98,455 Selling, general and administrative 13,635 12,505 3,040 818 2,833 — 32,831 Depreciation, depletion, amortization and accretion 12,566 13,130 4,527 4,242 6,946 — 41,411 Operating loss (26,160 ) (11,766 ) (5,237 ) (6,153 ) (9,137 ) — (58,453 ) Interest expense, net 1,317 473 183 121 300 — 2,394 Other expense (income), net 6,593 440 (847 ) (135 ) (485 ) — 5,566 Loss before income taxes $ (34,070 ) $ (12,679 ) $ (4,573 ) $ (6,139 ) $ (8,952 ) $ — $ (66,413 )
Six months ended June 30, 2020 Infrastructure Well (a) Sand Drilling All Other Eliminations Total Revenue from external customers $ 55,724 $ 58,811 $ 16,391 $ 5,973 $ 20,593 $ — $ 157,492 Intersegment revenues — 1,052 95 5 1,360 (2,512 ) — Total revenue 55,724 59,863 16,486 5,978 21,953 (2,512 ) 157,492 Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 51,897 33,943 17,691 7,637 19,491 — 130,659 Intersegment cost of revenues 35 961 — 152 1,364 (2,512 ) — Total cost of revenue 51,932 34,904 17,691 7,789 20,855 (2,512 ) 130,659 Selling, general and administrative 11,774 3,627 2,680 2,394 4,022 — 24,497 Depreciation, depletion, amortization and accretion 15,122 16,157 4,681 5,520 8,518 — 49,998 Impairment of goodwill — 53,406 — — 1,567 — 54,973 Impairment of other long-lived assets — 4,203 — 326 8,368 — 12,897 Operating loss (23,104 ) (52,434 ) (8,566 ) (10,051 ) (21,377 ) — (115,532 ) Interest expense, net 1,467 605 147 389 501 — 3,109 Other (income) expense, net (15,707 ) (1,288 ) (39 ) (271 ) 626 — (16,679 ) Loss before income taxes $ (8,864 ) $ (51,751 ) $ (8,674 ) $ (10,169 ) $ (22,504 ) $ — $ (101,962 ) a. Mammoth changed the name of its pressure pumping segment to the well completion segment during the fourth quarter of 2020.
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, public offering 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 Six Months Ended June 30, March 31, June 30, Reconciliation of Adjusted EBITDA to net loss: 2021 2020 2021 2021 2020 Net loss $ (34,790 ) $ (15,205 ) $ (12,440 ) $ (47,230 ) $ (99,176 ) Depreciation, depletion, amortization and accretion expense 20,265 24,116 21,146 41,411 49,998 Impairment of goodwill — — — — 54,973 Impairment of other long-lived assets — — — — 12,897 Public offering costs 77 — — 77 — Stock based compensation 354 196 344 698 1,246 Interest expense, net 1,169 1,471 1,225 2,394 3,109 Other expense (income), net 14,998 (9,270 ) (9,432 ) 5,566 (16,679 ) Benefit for income taxes (16,560 ) (3,482 ) (2,623 ) (19,183 ) (2,786 ) Interest on trade accounts receivable 9,017 9,071 8,158 17,175 16,767 Adjusted EBITDA $ (5,470 ) $ 6,897 $ 6,378 $ 908 $ 20,349
MAMMOTH ENERGY SERVICES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Infrastructure Services
Three Months Ended Six Months Ended June 30, March 31, June 30, Reconciliation of Adjusted EBITDA to net loss: 2021 2020 2021 2021 2020 Net loss $ (23,715 ) $ (3,985 ) $ (3,945 ) $ (27,658 ) $ (12,303 ) Depreciation and amortization expense 5,899 7,500 6,667 12,566 15,122 Public offering costs 43 — — 43 — Stock based compensation 158 44 135 293 286 Interest expense 656 716 661 1,317 1,467 Other expense (income), net 15,904 (8,004 ) (9,310 ) 6,593 (15,707 ) (Benefit) provision for income taxes (8,838 ) 949 2,428 (6,410 ) 3,440 Interest on trade accounts receivable 9,017 7,930 8,673 17,690 15,626 Adjusted EBITDA $ (876 ) $ 5,150 $ 5,309 $ 4,434 $ 7,931
Well Completion Services
Three Months Ended Six Months Ended June 30, March 31, June 30, Reconciliation of Adjusted EBITDA to net loss: 2021 2020 2021 2021 2020 Net loss $ (8,249 ) $ (446 ) $ (4,430 ) $ (12,680 ) $ (51,750 ) Depreciation and amortization expense 6,447 7,675 6,683 13,130 16,157 Impairment of goodwill — — — — 53,406 Impairment of other long-lived assets — — — — 4,203 Public offering costs 12 — — 12 — Stock based compensation 75 53 83 158 381 Interest expense 219 329 254 473 605 Other expense (income), net 1 (1,179 ) 439 440 (1,288 ) Interest on trade accounts receivable — 1,133 (514 ) (514 ) 1,133 Adjusted EBITDA $ (1,495 ) $ 7,565 $ 2,515 $ 1,019 $ 22,847
Natural Sand Proppant Services
Three Months Ended Six Months Ended June 30, March 31, June 30, Reconciliation of Adjusted EBITDA to net loss: 2021 2020 2021 2021 2020 Net loss $ (3,929 ) $ (3,960 ) $ (645 ) $ (4,573 ) $ (8,676 ) Depreciation, depletion, amortization and accretion expense 2,387 2,358 2,140 4,527 4,681 Public offering costs 12 — 12 — Stock based compensation 65 46 64 130 278 Interest expense 90 69 93 183 147 Other income, net (53 ) (2 ) (794 ) (847 ) (39 ) Interest on trade accounts receivable — — (1 ) (1 ) — Adjusted EBITDA $ (1,428 ) $ (1,489 ) $ 857 $ (569 ) $ (3,609 )
MAMMOTH ENERGY SERVICES, INC.
Drilling Services
Three Months Ended Six Months Ended June 30, March 31, June 30, Reconciliation of Adjusted EBITDA to net loss: 2021 2020 2021 2021 2020 Net loss $ (2,826 ) $ (4,620 ) $ (3,312 ) $ (6,139 ) $ (10,169 ) Depreciation expense 2,079 2,671 2,165 4,242 5,520 Impairment of other long-lived assets — — — — 326 Acquisition related costs — — — — — Public offering costs 2 — 2 — Stock based compensation 28 34 38 65 128 Interest expense 58 132 63 121 389.172 Other income, net (127 ) (298 ) (9 ) (135 ) (271 ) Adjusted EBITDA $ (786 ) $ (2,081 ) $ (1,055 ) $ (1,844 ) $ (4,077 )
Other Services (a)
Three Months Ended Six Months Ended June 30, March 31, June 30, Reconciliation of Adjusted EBITDA to net income (loss): 2021 2020 2021 2021 2020 Net income (loss) $ 3,929 $ (2,195 ) $ (108 ) $ 3,820 $ (16,279 ) Depreciation, amortization and accretion expense 3,453 3,912 3,491 6,946 8,518 Impairment of goodwill — — — — 1,567 Impairment of other long-lived assets — — — — 8,368 Public offering costs 8 — 8 — Stock based compensation 28 20 24 52 173 Interest expense, net 146 225 154 300 501 Other (income) expense, net (727 ) 213 242 (485 ) 626 Benefit for income taxes (7,722 ) (4,430 ) (5,051 ) (12,773 ) (6,226 ) Interest on trade accounts receivable — 9 — — 9 Adjusted EBITDA $ (885 ) $ (2,246 ) $ (1,248 ) $ (2,132 ) $ (2,743 ) a. Includes results for Mammoth's aviation, coil tubing, pressure control, equipment rentals, crude oil hauling, full service transportation and remote
MAMMOTH ENERGY SERVICES, INC.
Adjusted Net Loss and Adjusted Loss per Share
Adjusted net loss and adjusted basic and diluted loss 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 and adjusted loss per share should not be considered in isolation or as a substitute for net loss and loss 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 and adjusted loss per share to the GAAP financial measures of net loss and loss per share for the periods specified.
Three Months Ended Six Months Ended June 30, March 31, June 30, 2021 2020 2021 2021 2020 (in thousands, except per share amounts) Net loss, as reported $ (34,790 ) $ (15,205 ) $ (12,440 ) $ (47,230 ) $ (99,176 ) Impairment of goodwill — — — — 54,973 Impairment of other long-lived assets — — — — 12,897 Adjusted net loss $ (34,790 ) $ (15,205 ) $ (12,440 ) $ (47,230 ) $ (31,306 ) Basic loss per share, as reported $ (0.75 ) $ (0.33 ) $ (0.27 ) $ (1.02 ) $ (2.18 ) Impairment of goodwill — — — — 1.21 Impairment of other long-lived assets — — — — 0.28 Adjusted basic loss per share $ (0.75 ) $ (0.33 ) $ (0.27 ) $ (1.02 ) $ (0.69 ) Diluted loss per share, as reported $ (0.75 ) $ (0.33 ) $ (0.27 ) $ (1.02 ) $ (2.18 ) Impairment of goodwill — — — — 1.21 Impairment of other long-lived assets — — — — 0.28 Adjusted diluted loss per share $ (0.75 ) $ (0.33 ) $ (0.27 ) $ (1.02 ) $ (0.69 )
