Mammoth Energy Services (TUSK) 28 Oct 222022 Q3 Earnings call transcript

Greetings, and welcome to the Mammoth Energy Services Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Ken Dennard. sir. ahead, go Please

webcast. and the everyone. to Mammoth results. also third operator, joining the review of be page & XXXX. today, appreciate of us Information quarter being is October call of for Energy link This can good call you, We this section Presentations reported Relations afternoon, XX, you Events XXXX It Thank conference on accessed Investor speaks audio through mammothenergy.com. the on the only as call

that any the that as made advised as to the Litigation financial can Energy revise future Securities to be the on or information at to to the found be statements obligation outside can in results that publicly materially. The over to control. of may refer assumes be with statements. Actual found Harbor Arty? replay not behind accurate made and its a to Mammoth Reform making Please in please of or website, forward-looking So of also that end measure are may Management nature with transcript the was differ me, I in filings the release pursuant performance Company's like GAAP Company's uncertain earnings part Arty be Exchange like longer the the time-sensitive that the expectations, and are definition These Straehla. are forward-looking call and by today's factors future XXXX. turn would for Management of forward-looking historical Act now, would Energy's to update of the nearest any events, statements provision investor the measure that, today forward-looking to are Securities may no discussion remind described disclosure the you including statements. non-GAAP also on Mammoth And in will refer date measures, facts, of other or the Private risks detail no CEO, and reconciliations issued today's of adjusted earnings any reading. be including presentation, these statements of Commission. uncertainties Safe and non-GAAP listening, or of I and release statements and which EBITDA. call

you, Ken, Thank afternoon, and good everyone.

financials we extremely We and across Mark our our third then the your to are I'll pleased detail, major we these turning before our over an performance are of business three momentum more quarter overview of the call and in with will provide each take segments. businesses questions. review to In resulted the This third in grew of quarter, $XX.X year-over-year, million and adjusted up sequentially. EBITDA performance to to increase a year and XX% of an last $XXX.X a sequential representing XX% quarter. of compared in QX of XX% total compared last to revenue million, loss increase strong seeing

these three Services by we demonstrated across strong our Infrastructure to continue and experience environments Sand results, Well Completion largest As business. segments, Services, demand our

demand both strong which continues in add and during of the fifth have where through the spread expect We fourth full currently and pressure the top Our of line, Services to have macro improve end the schedules Completion pumping operating, division spreads robust. a bottom growth the to the year, six generating Well remains pumping pressure industry performance, our at four we quarter.

the sixth our fleet activate year. half the to plan we XXXX, of in first to Looking

adjusted We fuel million. roughly EBITDA of X, annualized $XX of In would one This fleet plans to three million net addition, income fuel. exited per fleet us a in dual Tier spreads fleets. total upgrade our $XX per with QX have to of we give existing dual annualized

in the business. by pricing. trend into XXXX. increased supported remained We will is quarter Demand believe Turning this also to and continue our and Sand strong fourth

improvements inflationary quarter Infrastructure the transportation during division, In constraints was our railroad on some to business. project that to opportunities forward. of infrastructure, passed all fall, anticipate for and investment driving through the overall storm well of as to present up team's constraints we come perseverance commitment, a in that operational our results, a constraints are about crew prospects last of manage that the our environment. add supply and the our going sector work Across chain volume, has experienced proud infrastructure have constraint Services a a for enhanced and nation's as continued relative government sharply, continues need macro in seasonal ease The to were we bidding restoration healthy hard services pricing by and I'm and business was total historic to federal as capacity growth for we challenges. the While result today's which labor this segments, continue environment

ability have and portfolio we As we these stated adapt in us well our before, to changing diverse environments, believe segments. to positions quickly

demand. for see believe increased Mammoth future our stakeholders. and believe to to continue past, of value drive brighter all that the we trends macroeconomic Moving for improved remain committed will enhancing We than the is forward, we we

Turning now update an to on PREPA.

filed hold contractual adjustment, and look early We plan financial We PREPA's accountable to forward continued December. for we our will anticipate obligations. of currently their which efforts in seeing be PREPA to

financial to open performance before call to turn the you Mark the the through we call during questions. to third quarter Now me Mammoth's let take over

hello, and Arty, you, Thank everyone.

usually of third to and in be million during of our in can do, at XX-Q. the favorable notably well quarter going in the of increase and business second to third A quarter key I teams. performance XX% metrics The some results breakdown of the sequential release came compared highlights. As million $XX.X provide detailed by services XXXX. during is earnings on several total take and attributable as as our $XXX.X $XX.X macroeconomic enhanced completion meaningful key quarter million our our XXXX primarily segments, surrounding XXXX found well revenue our to revenue most to as environment operational the during additional I'm time in details Mammoth's this more

increased of into and well seeing businesses, pricing through XXXX. we across our and infrastructure also which year are the demand believe the sand in continue will completions, We remainder

XXXX, the we during quarter of stages on year compared with X.X utilization average. quarter second fleets quarter average fleets fleets utilized This approximately and During X.X during average XXXX. last of X,XXX X.X the to third an the pumped same of

during and Our and the during Sand of division of year the compared of ton quarter during the second sold third XXXX. tons last per XXXX. to compared tons the per sand of XXX,XXX second during quarter The average of ton price as the approximately same sand XXX,XXX third quarter to $XX.XX tons during during for last $XX.XX XXXX sand per the XXX,XXX ton quarter quarter XXXX $XX.XX same sand quarter year approximately sold was of the of

revenue quarter. second The million in XXXX in of to of revenue primarily income coupled net with XXXX to Net of quarter XXXX of quarter as $XX.X contributed XXXX. Infrastructure services the crew CapEx quarter well Our and execution, $XX.X negative XXXX for XXXX. second related compared as for is third Services we million the increase the quarter million CapEx million was in third of compared $XX.X XXXX for we to $XX.X as of quarter EBITDA, quarter completion million in anticipated the our income of the third million for and $X.X the second was to an the $X.X for third and for of last approximately second a the million $X.X third quarter and quarter XXXX Adjusted of $XX.X up $X.X for which third This for earnings $XX.X increase loss compared of million that of incurred business, the count. of million the was of third in reconciled division increase due quarter and million. The operational in of improved net defined our the release, towards million XXXX. during quarter. $XX XXXX was CapEx guided was from quarter the sequential to

for expect we under flow fund intend operations, cash to cash facility. $XX on revolving We which with be credit and CapEx to hand our from borrowings XXXX approximately million,

of $XX.X XXXX, $XX.X million XX, and September debt of on cash hand we million. had of approximately As

liquidity maintaining sustainable and work, million. teammates. was like conclusion, X,XXX we the and employees thank themselves throughout In work total to their sites for Our dedication would company our hard their and approximately commitment safe $XX.X to for

year surrounding to industrial backdrop ahead look remainder and XXXX gas the oil significant as that macroeconomic capture we As the into opportunity gives of in well and market a XXXX, to share. strong as we the believe us additional

believe maintain on up always, excellence will drive our execution As we to now we value. the call we like which shareholder would meaningful for Operator, will and questions. open efficient operational emphasis

you, Thank sir.

proceed now begin Dunlap comes question Instructions] question, Equity Carter. [Operator will the first question-and-answer from from Dunlap Carter Please session. Our your with Management. We

a couple – business, afternoon, gentlemen. In questions. the Good have you frac of

in For you the you last – will sorry, number speculate six X.X I'm I'd on referenced, mentioned quarter, go have will go? will I'm the four I basins five And the – were guess, – go and same fall sorry, say, five where three where last and spring. units

question, for We the – Carter. thanks actually are

have Marcellus, two in Utica we area. We are the in have area, [indiscernible] we – in Oklahoma the actually two up and down Northeast in here

the up customer fifth ready spreads and start. and it's got fourth for that be the got it's a We running and sometime all when during have designated anticipate spread we So already will running. four quarter, to up

two those of one In basins?

be up fifth in Yes. This one likely. the will Northeast, the be than will more – one

back meet Orleans to crew about in issues of crew in you facing and and May, that? availability New Could able the is everybody were we when And is else you were comment Okay. one facing retention.

Yes.

a We ease have little seen up hiring just bit. additional

some one So the on distributors we equipment. and we're crews, we've But we bringing systems the feel honestly, feel of is to of hire incentive the when of and being parts out people on. a good our about constraints our the chain of some people able timely changed basis. and around, able availability about Quite good the of on to bring supply getting

together. time always try out they close So it's – that come pretty where to we

Orleans. are think half spread, we come we New when are a And the would better way, that on back bit sixth bright finding So future. talked the in success XXXX. first a we anticipating the of in it's we little And by than

Okay. ahead question – being terms off the spots kept I'll rest ahead aren't staying of around that of get business. any global hot sort costs in aren't of one with of? you the Is there of

No.

of a average that's the curve about the stay QX, of from was per pricing where see part beginning. little We're And $XX up We that spread, – weaker at inflation capability strong that's and were. bit ahead with what million and in results. that significantly have annualized our is very up you to for very to we

strengthened actually we've it's as So gone.

CapEx? last saying production of reasonably limit you I capacity this And without, a as let's thing say, is one, keep material can the a is the what such but Okay. sand there or sell

not our we're because good at full pretty on feel production We yet sand.

As constraints we that call, with our rail of some had in and type talked we about thing.

for we that entering have sand which you piles and significant that the prepare that. so winter them and is winter are like do that wet can in business you them everything size you Now the dry are very because sand

a wet We significant with pile. are very going into winter

seen So different look a and we we to of business. try our have aspects other lot at the of competitors,

into us in very think I significant with going wintertime. very it's a pile with large wet

plan to So we hit.

Or talking wet slurry dry remember a can't sand letting Is like ever is all was bringing I down a that me in that basin? to the was to, for that but out. producers unique? I that month last stuff? opposed time particular one Or it they crazy at of were telling Pickering the is as who their

basins that. seen rail be heard expects we not either it operating. what bring to Everybody dry – we're it widespread at we've via seen. that where We've via whether least or the truck we've in in from It's

very you success. thank much, to such Well, Okay. hear Great gentlemen.

you. Thank

question Thank Partners. Daniel question, from John. comes you. your The proceed next from Energy Daniel John with Please

Thank guys. including me you. Thanks for

impressed time, been So been decisions, the good of making over timing years a you start-ups, cetera. opportunistic M&A Arty, et long following I've for project and or I've

the As expansion, your kind create that. M&A? tactical, market the around product of where Just do is opportunity you small look today, either best thoughts to value at you think

Well, you. I'll tell

going And this understand it be up end XXXX, we that piece. you'll we think quarter the well that we're think is I near-term, And the significant seeing think sand that XXXX, still where in – to having advantage. gotten we've in the John, wet with very capabilities. a competitive and we pricing pile to first start in

units, the example. as you've all other conference there demand the side, with frac demand. I'll frac robust, an the all the to enough On And frac calls, is out heard give spreads not you carry

waiting a of chain completely up. are We we us position on where a not really issues for but seem in has wait. where a fifth of are be better, And put we supply timing little we to but the people, because in customer a a off that things yet. bit are been XX that fleet will and position getting few still coming there And because days, to not they week

Okay.

is other providers to et I'm of been sand, if if with wet issues, it of you're us wanted curious to One questions use just pump you it I'm Carter's because what of the would wet to, a fluids, the close you customer – providers. you've came cetera. told the do about on lot capital equipment in and pretty the have but equipment depends of – have of tied they then not I a said it? who mean, the to the a sand. some embraced purported follow-on I necessarily talk equipment, damage to as and

know. don't I

and You're significant our are thing up for one folks to piles blaze plants. wet that for capabilities. that sand at certainly, wet done and type of running piles rail, And when you're us, water there. that do ship before, take those shipping have where other you risk our It's trail. and having of But not weight some kind via sand the unlike our we it of

have think they're Texas be – muds, appropriately, slurry West trucking the seeing is produce that of they're what and well. expensive in where probably to waiting And XX/XX so for multiple and really produce is sand, but doing of considerations John, XX/XX grades we would I is kind our not there. it think. one and of most a we dried they're out it lot also we the XX/XX of that as sized I regionals you're the

to for it what have specifications we So are. the customer size

Okay. Well, guys I appreciate that's including you me. all I had.

talking John. you. with Thanks, Good

Yes, sir. Bye-bye.

how after few a sand, down QX and frac, other? I'd here is Maybe Arty, and and T&D you had great I a of questions. your Ken, we've questions John's EBITDA pop provide breaks thought Carter this email in Can sense whichever. Mark, between

take was million just $XX sure. Yes, at level $X EBITDA; represented at the of completions In $XX one. million; had We and that million. well $X million. drilling represented above other EBITDA our I'll infrastructure breakeven QX, sand

of everything? Thanks. And seasonality some take. looks then to one want one more question provide Could QX like either on color in you what you the with

two QX relation OFS in to expect continue a see services largest robust our segments. demand We and specifically for strong more to our

event QX EBITDA We with to versus as to increase in some potential be work. expect for completions similar QX, and in infrastructure in expect well storm range the a EBITDA their of QX upside

Thanks.

think have I questions the other on don't we any line.

So up the we'll the get to move to don't you wrap on quarter. fourth and Arty, and why it holidays

well everyone joining. Ken, This growth hear and believe today conference our members team all to about right. you, All for thanks, Thank the Thank concludes best business. is continued by Mammoth business. call. joining and for We our for Goodbye. the supported positioned you in us

today's concludes This sir. much, teleconference. very you Thank

this at lines and your much your for disconnect time, very participation. now may You thank you