Mammoth Energy Services (TUSK) 23 Feb 232022 Q4 Earnings call transcript

Greetings and welcome to the Mammoth Energy Services Fourth Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Ken Dennard of Investor Relations. Please proceed.

Thank you, operator and good afternoon everyone. us fourth Mammoth results. quarter joining to conference you XXXX review and appreciate for Energy the call We full year call the webcast the being section at of is can Relations This through access the and Investor audio and Events you on mammothenergy.com. Presentations page link also today, reported Information of this XXXX. speaks call XX, on as only February listening be the date as advised be longer accurate that Please any any or replay no reading. time-sensitive information may transcript of

discussion financial today’s are you or pursuant that forward-looking provision statements facts, Litigation Private Harbor also statements not statements of Safe I’d to including Securities in historical Reform like remind future made events performance, made that of of expectations Act the the or to future are XXXX.

as issued and their filings forward-looking Securities for that, today’s of was earnings statements the part differ and results company’s Exchange outside our the with We of nature, that and company’s uncertain afternoon Please in will by in control. Actual materially. press on the described Commission. risks may are making call other and disclosure are this detail to be refer release factors the These statements. uncertainties forward-looking

end to any earnings found forward-looking and release our in publicly the statements. refer adjusted definitions measures revise presentation, adjusted adjusted measures, non-GAAP no income or of website. on the reconciliations to share. net their and GAAP loss, also be found including of comparable which may And investor update at earnings Management measures can per can to Mammoth loss non-GAAP or EBITDA, These be these most our assumes or obligation the

Energy’s Arty the Arty? behind call Straehla. that me, to now I’d over to turn Mammoth CEO, And like

you over Mark great and owed of everyone. our financials the the PREPA year call Thank on before ongoing discuss to We strong to afternoon with more pursuit call to happy am had good our full you, to I today. in us also detail. fourth discuss turning Ken will quarter a that I the a review and receivable

the fourth up the same quarter, Demand the to was top XXXX businesses XX% growth. full of of compared for to our for each quarter In year this compared line generated XXXX. and total it revenue in services our grew XX%

also previously adjusted for year. during to we point was compared full to legal up settlement. profitability and important fourth that quarter addition, debt of XXXX. a also $X.X to the XXXX. quarter grew disclosed million a In In It This substantially recognized fourth expense of was EBITDA the the bad quarter of QX, is out the XX% related

up quarter adjusted this for the XX%. expense, Excluding have would EBITDA been

For the of full was year, adjusted XXXX by continued million, weather million. during EBITDA million. year’s EBITDA teams displayed Last Despite our loss of debt productivity, that constraints I am chain supply throughout and excluding impacted our quarter was $XX.X hard proud bad organization. $XX.X and adverse adjusted was perseverance the the fourth $XX.X and the of expense, a talented work

phrase the over of how supply Let it are what I know were year, common become is has chain here our me in and this constraints. related the business. we provide some field the to examples just experiencing a impact shop past but we seeing

constraints for business. We our pressure suppliers of key to one supply at see continue our chain pumping

least the working issues chain supply we they XXXX. persist of supply first is this While will supplier actively reduce the expect facing, these to at that chain are half factors through

X we growth business operating pumping of pressure XXXX. into walk macro performance, in as services major spread January generating X you of XXXX through Completion added strong of industry demand to continue our will in our each fifth operations segments. I improve the the exited the Well and spreads pressure we We pumping remains Now, division, our robust. a In with

and a put our us total operation to would fleets. existing X fuel upgrade to X fuel, of market of in and planning two back both are half the we Tier addition, it and dual This spread to XXXX, X conditions of give constraints. In dual-fuel into spreads dual chain Tier subject another upgrade to supply

about dual-fuel fleet, benefits, the for are another not impact. opportunity reduced economic to We only the add of excited environmental the also because but

net that approximately as emissions efficiently. approximately produce step important through annualized becoming of those aren’t For EBITDA significantly $XX engines, just believe as we as that operate displacement. Mammoth. and our environmentally QX reducing adjusted is engines release same a aware, amount costs for power And to they towards dual-fuel per operate income annualized of this diesel to it the us also diesel million. is It’s $X next fleet million for per but of responsible exited with less conventional better us We while fleet

Turning historic healthy the with improvements, the expected a There’s opportunities in to our Act. crews Infrastructure team performance footprint added higher throughout Jobs infrastructure our environment the nation’s of to and our from and bidding drive division, federal utilization operational continue and services equipment for through our and infrastructure our improved results. investment Infrastructure Investment pricing

a for this the am view Mammoth progress are we continued sector the long-term driver with to as key pleased achieving. continue growth I over We and

As the a this grown over division reminder, we past X have years. organically

team’s demand, are The and to also Sand business pleased our continued performance. we strong maintain with

pricing sand November, supply for at predictable foundation attractive proppant solid despite high we reported that agreements performing by the and presented our segments flow providing last our higher two all challenges labor believe well chain demand entered sand constraints, a into are with division. We supply environments inflation strategic natural costs. third-party are cash business customers As in we daily continued of in

improving future enhance efficiencies segments driving financial on intend bullish to and focus and of the shareholder performance are across Mammoth operational to to business our continue on value. We

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

Mammoth. forward, for for we bright will believe our macroeconomic that services. support future to continue see the believe we Moving remains further We trends demand

over the I’d an call turn I provide to regarding to like PREPA. Mark, Before update

island of cost status month, pursue eligible Determination Congressional a case, $XXX owed money PREPA, last outstanding from FEMA members important report Senate that to $XX.X avenues in as PREPA to multiple In on PREPA. we and subject million bipartisan from and joint indicated vigorously to last continue we reimbursement. for we the funding from can pursue in addition, invoices. year Both PREPA’s payment PREPA our work would to approximately website. the million sought Determination two approximately that collecting the be help from reported found continues available we the receivable affirmed Memorandums by released asserted late Separately, and in the our Memorandums PREPA on FEMA and completed As collect PREPA outstanding November company $XX.X January over pursuit offsets bankruptcy from in December have in million in obtained filed the to be

me let call detail. over performance greater turn to in our financial Now Mark the take to you through

appreciate everyone Thank is and we you well, doing joining Arty. I today. you, hope us

am some file As and do, our and our meaningful to to expect I detailed breakdown A results time key our metrics usually this can take additional several I which we of release tomorrow. details earnings XX-K, be in highlights. going in on to provide found

$XX.X to full revenue $XXX in December million during Total the revenue million compared Mammoth’s quarter for XXXX. during came fourth year $XXX.X million of XXXX XXXX, ended XX, at the to total from attributable the quarter to as compared full of year-over-year segments, of increase was macroeconomic as amalgamation fourth XX% the results execution. Completions, Mammoth’s the is Well of most XXXX. year for all and improved improved a sustained million of operational This result favorable business notably conditions $XXX

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

For year X approximately stages XXXX, utilized the we’ve on with full average. X,XXX pumped fleets

average. XXXX fourth of of sold XXXX sand year average $XX.XX per and price ton full sand was ton. during and average XXXX while the sand the tons sold average was prior approximately the more compared per XXXX. XX% $XX.XX increased year-over-year during year price the we On ton the basis, the per division per to a Sand price during when X.X tons quarter XXXX XX% than XXX,XXX quarter Our fourth sand or sold The of approximately in million of $XX.XX

revenue million coupled year-over-year The increase revenue compared the of contributed due was XXXX services division for $XXX.X of million is XXXX. $XX.X of the $XX.X infrastructure quarter Services million the in crew Total XXXX XXXX. of quarter fourth primarily for Infrastructure year increase fourth in to execution, in million count. Our operational compared revenue in improved with $XX.X to an to

the for million last for year. quarter loss of compared as Adjusted of quarter fourth Net net the last defined compared million of $XX.X for our to of XXXX $XX.X earnings quarter a the to release, fourth as for of in and reconciled was was EBITDA, XXXX income year. the million as $X.X million fourth quarter $XX.X fourth

our bad the million an have quarter Sand was debt the incurred been division would Full million XXXX, increase $X.X EBITDA non-recurring that quarter. in year-over-year. Excluding XXXX, $XX.X for $XX.X of during of EBITDA year the adjusted fourth million million adjusted expense $XX.X of

right was of million, CapEx expenditures for that This to engine was down caused $X.X than delays million. the XXXX. that for $XX the and supply approximately delivery had in lighter CapEx million $X.X was which was These chain quarter we XXXX due delays. largely capital the XXXX year. significantly dual-fuel CapEx resulted quarter. the that came projected of during into move approximately This fourth for $XX.X incurred the million from we in to third constraints Total the have to

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

was liquidity approximately total $XX Our million.

would like sustainable work, hard the company their of all commitment for conclude to As to was and the favorable conditions our XXXX year-over-year. our a in safe full thank for key themselves of capitalize employees financial teammates. on We maintaining call, sites always, our year improvements were dedication work metrics throughout X,XXX to Mammoth. for we able and market to and to improvement significant generate their

on for in we that to service ability offerings. value further optimistic through efficient and And execution XXXX. driving this our differentiated excellence, are shareholder focus stage in continue meaningful sets growth our confident We’re operational the

up would to Operator, we like now the for open call questions.

Instructions] [Operator you. Thank

questions, came e-mail think astute more you’re from I in that is which supply on a an Arty, that mentioned detail gotten pretty Can an elaborate in you actually we’ve you while Latonya, question. during call chain investor the topic, said, polling that for issues.

the of manufacturing one that know chain our supply expect supply to to not the made I of found things continue. behind the of visit the number and questions absolutely. through which factory, Yes, as do factory shortages, problems reason supply those out a other of we of hear a January that aspect And a the pressure XX, pumping a On in – completing detail shortages largest always and went everything. had the me asked I background, for you shortage,

of wiring were and crank shafts, even of Some of that us specific not to down while. we looking lot to this breather parts the short hope we were so harnesses stay specific that that a the specific parts fabricate a – they they quickly, were bolts at. did connecting offer of very rods, out assemblies, getting to expect use with supply They chain risks good of for

With everything, did that we that we we relationships better get into should understanding help some and of future. a formed us said, think the

continuing get about those optimistic parts in pretty to we’re in. bringing parts So

are the So have our to turn of product one we and Ken. to see suppliers. we’re before actually them of observe you get asked We I in is about I own to from our them, – back I’ll additional working it the shortages their back suppliers’ factory it turn just for things all situation any trying the And the that there factories, over if out. to about said, will other employees paying visit they

them face took what that, said they when So I were we at – believe they and value I and saying.

So are a will and continue short one their this while. for supplies

[Operator Instructions]

through This in we’re release receivable. me not that Operator, press seen the from that about This on little documentation. PREPA a our let said talked the other rates and step we forward. much that But contract funds. the release excuses of type all that and and all were And color thing. was we of release compliance a aspect FEMA PREPA go for bit our the did was everything. call They the a thing while away Determination and in same we’ve more their to reiterated takes the Determination and Memorandums Memorandums on waiting, give reasonable. We reasons huge

it are situation agency. a the paid. paid was to have to appropriates And FEMA and money a obligates But money like the for getting federal then it out. running this where PREPA, case, You excuses we Congress that In not haven’t still been feels FEMA.

pursue to help with designed continue very to that collect we as we – visit monies. those we’re So week early and next will will continue is as a

as current count $XXX think are at is. per million are worth – $X.XX worth you those know, that monies about total for all our I the of share share

over So Ken, Anything I’ll turn to else? it back you.

Yes. around board. Latonya question got another the has

comes question Dunlap from The Please with Management. proceed. Equity Carter Dunlap

two be a, Hi. more dependent Could do interplays service to out directly those supply supply that those are for those are converting you your I spreads convey to and mean string together to chain chains how dual when the you do – of the schedule on shortages. how and with spreads fuel going to projects two importantly, customers you how convert? the

parts X go spreads directly that get for are to with They are Yes. primary fuels. to Tier our conversion. related they our that modifications dual And

working tell where we’re through them right with at, So that we now, solutions. we customers, and and exactly we’re communicate our

just appreciated the they did factory through and on, and work into went pass shortage supply dive just supplier we think a try take a and to didn’t it chain with our solutions. I to just it deep that

think lot we that, So sitting and that be just listening that to waiting telling to them is going short. better it’s than and a

unknown to we’re it do do predict too allows receive just yet, the I at I when supply chain can us going can’t that to point. So this it? everything is

I’m But I came afternoon in. this hold for tell part of for insulation got that an a short assembly, factory hold update you what shipment, availability. hold from to here’s that got And availability, pieces I three part for equipment, the going

three key equipment pieces them waiting of come parts. in for So are them hold on in, of have factory, five the of to out

used are replacement parts same these as Now parts.

industry. attrition So having the pressure it that’s correct issue We major to is with equipment And this the attrition of have other, in for as very real. you to pumping as not business some a run see going the hard. on is out this many spreads parts as

the just there now, think rate bid job, single a the new dual If because of a putting ever what hands I difference on follow what’s I asked customer’s this don’t is could a On versus I’ve question? in fuel the for fuel?

it’s standpoint. Well, an emission economical. more it’s – more and from It’s more efficient

going only spreads But efficient fuel. So the is is is The set Even up are dual to go as make are dual converted some conversion there cases, the customer, and them converting or to are they quickly the about of over And through either are in get the very running to point they more process is running run spreads. – of really this But a fuel industry fuel, a rest half we this. want dual diesel. possible. Permian, it to in entire friendly. to electrification long for about more to valid those really it as where economical

table either put some won’t sound able stakes a but it question being out higher mean doesn’t I at – mean it’s Okay. machine to point the at realized I rate. be a not a it’s investment, a I it’s non-dual like fuels marketable, back but of it’s the

correct. That’s

Okay, thank you.

questions. no to like time, management call to I there the back comments. At would for are turn over closing further this

forward the today. we This well maintain operator, to conference among you, members and for and our you again, next Thank business. call, for joining on thank the that continued to positioned look growth in supported everybody, is call are concludes and again Mammoth you We by belief best the quarter. that team our experienced us speaking

today’s does This conclude you. Thank teleconference.

have this You you may great thank disconnect time your participation, lines your for at and a day. and