Mammoth Energy Services (TUSK) 2 May 242024 Q1 Earnings call transcript

Greetings, and welcome to the Mammoth Energy Services First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.It is now my pleasure to introduce your host, [ Zach Vaughan ]. Thank you, sir.

You may begin.

Thank you, operator, and good morning, everyone. us first Mammoth quarter joining to conference you XXXX review results. appreciate for Energy the call We This call and is accessed the through also Relations being webcast audio Investor on and link the at Events section Presentations in the page www.mammothenergy.com. can be this on as only speaks X, of call May XXXX. reported Information today, pursuant historical the time-sensitive that may date.I future to Private financial like would longer advised of the including performance statements in are accurate discussion to of be forward-looking facts, are the that Reform today's control. today's Litigation company's part harbor made be not forward-looking XXXX.We the expectations nature, Please events information statements as of that are call of as also remind and any be by or making made no statements or uncertain provisions of subsequent statements outside Act will you safe Securities of any future that, materially. differ may results Actual for Please refer on earnings that press forward-looking release to issued the our statements. disclosure today was factors may and with Exchange risks and in described non-GAAP Securities the company's are Commission.Management in uncertainties the refer including detail adjusted filings to measures, EBITDA. These also and other of and most comparable at the be can measure website. measure reconciliations to our directly and found our this the investor can definition be earnings of which presentation, non-GAAP GAAP end release its our The in found on Mammoth it to update any statements.And forward-looking over would CEO, revise to to or Energy assumes no turn publicly obligation Mammoth now, I Arty like Energy's Straehla.

Mark in continued a resulted This had experienced later defer month low results I of infrastructure space results more expectations from softness in operators cover morning, gas quarter of before Then do was in first than resulting year that for in this everybody energy also underperformance will storm-related our to detail.Our Most recent the the our as about quarter business in experiencing quarter our you, serve on caused XXXX. March experienced but division the challenged the division and year. everyone. our activity calendar revenue softness discussing the over adjusted the quarter financials EBITDA quarter, impact remainder notably, our first start call in to the comments moment, a overview to activity expectations. for well updated our update and visibility lower and watermark in revenue earnings and Zach, reasons. to decline first I'll quarter a prices this quarter, XXXX.Our the work for natural less for storm-related Infrastructure the for to services in segment.Our in turn and and Thank services slight activity. quarter and were particularly primarily completion direct we with anticipated, to challenged this good number electing some for we in white expect division both our due from and sequential stemming on a a developments the relative for to less I'll had the of

market. transmission are capabilities specialized uptick differentiated all capitalize we engineering, to an which opportunities However, to of bidding seeing on areas, have and believe, fiber, and now in related we opportunities I in are the distribution,

XXXX. where being are we engineering Our such improvements and fiber projects funds excited engineering Infrastructure currently.The group continues distribution, T&D and for areas are we're continues this And in Investment to -- more well optimism released as space being do the transmission infrastructure to released remain for participants. well, building Act give up and throughout and projects as Jobs us as

the business U.S. onshore in continued feel entered gas we improved be been so and and is this continued natural that storm weakness experienced and will may the potential result remainder quarter, well forecasting quarter XXXX. we positioned teams prepared to historical but season second this and the be storm activity in for the an far Although line encouraged We of lower which associated persistent about underutilization with benign in for in sector, to infrastructure has well basins in sustained and year, completions remain the XXXX the active long-term for first is strongly in we operate. visibility growth.Our business impacted. of that XXXX This relative in standards, growth Mammoth's areas in to we the challenges season deploy with in NOAA sight

and costs year ramps anticipation positioned We sold up.As focused we extremely will was on to in capital back to sufficient to revolver basins, an and remains to move have and and uptick with half are gas XXXX.Despite component in the continue yet and see we with start cost to decision-making, in the Western to structure, demand opportunities to XXXX on it we to oily is as on relative opportunities. had if assets a well demand in our the and slow anticipated America opportunity cash the improvements increased when natural to the demand, and believe North by the increased the The higher our sheet, second associated We we seeing would align indications and this a of driven capitalize relocation. near-term more our activity increased analysis undrawn Mammoth expenditures with activity always primarily Canada, entered internal capitalize on and year, poised of expect experienced additional balance haven't levels of we'll half of quarter. we of demand.In across weigh resulting in demand improvement potentially levels quarter we we sequential division, in but strategically continue pricing remain as in allow us the sustain to first manage calendar our our to efficiently sand the fourth demand be tonnage that slight

we'll we solutions and quickly find our resilient ability environment to to safety and that believe We have customer PREPA. these a us hard-working talented history, change and our continue diversified teams to of throughout optimize with comprised now well demonstrated a adapt operational our positions segments.Turning have portfolio in we focus. diverse in business As and to first efficiencies and

announced, respect our PREPA $XX so paid previously with receivable. has XXXX to As in million far

with December. funding While these are holding payments, we we are been PREPA work owed Cobra's million since related still million pleased approximately $XXX FEMA to interest. and principal in has in $XX.X specifically

the entered forward, second and to the with improved vigorously to our the litigate $XX.X we as PREPA is outstanding of mediation amounts, us. We intend PREPA's expect claims. in our a with continue to meaningful step-up remain million unsuccessful, visibility mediation progress payment through engaged XXXX. If quarter especially We from withholding pursue the we results disputed issues.Looking regarding we take

anticipated in demand the the activity well and second conversations customer by encouraged in and half of this completions are ramp associated year. We

generate results Our we XXXX. in remaining the each adjusted current line EBITDA confidence of of quarters sight will improved that gives us of

have positioned balance our revolving me over loan growth the detail. We performance term credit for remain in greater to agreement, a in through we new XXXX.Now, financial strengthened sheet, a let and take well to a and facility agreement you new turn Mark call

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

QX from during reset which to in expectation of moving improvements will in now the much the on and is meaningful and basins to decline going first division some year.As that fleets of detailed sequential the stages we to utilized slow attributable our an to was sight fourth take earnings approximately As the fleets better do, of the we compared optimistic highlights. compared file XXXX. in stages this of begin the price results demand came softness many white quarter. uncertainty for year. of budgets, quarter to A total $XX.X at resulted first the that overall gas that the we pumped on associated natural horizon, to $XX.X ramp gas key usually Operators operate of low natural this we headwinds space view XXX sustained once with with half up XXXX, our watermark to and completion along meaningfully X.X for calls, it in quarter on be for total our quarter with their and SEC.Mammoth's implications during in activity average XXXX. several line during additional the XXXX. as lower the there revenues is I'm the this but utilization average North decline our release XX-Q remain we quarter. results energy their elect on revenue of forward.In on We later and activity continued commodity XXXX well of XXX continued were X.X utilization our to resulted of lead in million in the activity to fourth breakdown services primarily believe are prices the that first decrease and to The their XX% natural a gas-heavy in in have we quarter and American positive XXXX This continued the peers experienced to a have the feel the an second finalize push of We on to that in for calendar, increases noted activity metrics million right prices anticipate and I later found details provide time in can in

demand continue and million of services that an our price fourth for sand quarter the spending are tons stewards $XX.XX the revenue to that of lower $X to during seeing XXX,XXX sequential in none infrastructure the customers.Our at disciplined division sand quarter.Our was a in from of approximately sales decrease for average average division contributed recognized with of represents XXXX remain average shortfall sold at quarter quarter revenue in tons will sequential to in the stem compared when sand XXXX, and of we increase despite compared XXX,XXX an ton the an of price $XX.X quarter We XXXX. sold appropriately sales sales the revenue fourth first quarter. capital from our The first first which per million $XX.XX million align XXXX tons to the in of both of fourth approximately of of $XX compared price

As in it in resulted start a work already and the previous than anticipated. than first lower was slower years XXXX to storm much mentioned, in quarter

an we bidding uptick are seeing However, activity. in

pursue for this structure strategically XXXX opportunities execution of of focus million the to service around especially $X within quarter XXXX. operational compared million projects.Our and loss net sector first continue the net growth, and our fiber we as offerings was fourth million, T&D $X.X for a of in million $XX.X We first the Adjusted for and quarter $XX.X of to on was EBITDA release fourth line first in CapEx as of the million quarter of XXXX quarter was was quarter XXXX, compared approximately for for of the a reconciled fourth for to quarter sequentially XXXX. which the earnings our $X.X defined XXXX.CapEx in our with decrease loss

the to We continue costs our reflect manage prudently more to activity customers. of levels our accurately

our our budget we and for we provision spend general March the demand for guidance.This to previous revising the The X% in infrastructure we million first spending the SG&A for weighted for compared sequential approximately budget of fees.As was pumping. But decrease expenses in million increase million we We monitor XXXX, manage related first heavily quarter on towards change are expected most trends $X.X during up segment administrative had represents to CapEx order hand in XXXX. our cash to as now to XXXX, quarter and audit pressure credit of well a effectively fourth million. the XXXX, always, see $XX to will remains in activity XX, $X $X customer of the from approximately losses of year, which continue market.Selling, with as our capital in expect to as align quarter million $X.X a totaled

million we $XX and credit capacity. available borrowing of revolving undrawn was Our facility had approximately

would total have credit PREPA we maintaining teams And Group satisfy and aggregate $XX.X approximately commitment the dedication $XX we sustainable to and the the that previously XXXX, refinancing our work maintain that our employees facility belief XXX hard was to paid receivables remain reported to far financing to our liquidity under our in that for to million with their year pleased million throughout SPCP Despite we Our to occurred the in our enabled work, we full while to so us $X.X by liquidity -- respect $XX their million.The with bolstered was soft thank call, our teammates. fourth quarter.To obligation cash million arrangement, safe and conclude for are for company our position. the adding start our this direction sites headed. and we to in themselves the are like

for rebounds to and strategically improved later Mammoth We results have activity taken appropriate demand this with year. position as business steps our align

disciplined prioritize drive coupled with to shareholder strategic and to we continue call balance we when like for sheet, which, believe will now will our We capital efficiency operations, allocation, would up open in the strong value.Operator, improvements questions.

[Operator with Instruction] McLean from Energy Daniel comes Blake first question Our Partners.

a labor how in are had a picture of balance market I hoping talk I and staff maintaining the hands to of bigger of you environment? a the guys and bit was us kind about between you thinking little bit kind could about and wages question. a competitive good

labor because bit little business right where that is With attract market -- to was to is say, as on find labor to decrease to type we that's them. people it a the ago. and I'm are little -- able now. and talented bit the T&D biggest still on have those crews market transmission thing, grow start of very are in been little add Yes, and We improved primarily of and able competitive, labor individuals the do we take a bit where over that oil shortage that we but as I'll the is bringing in one. X And activity businesses we go. about gas, But months grow talking is what over, a distribution, we

there's hearing this thoughts the that to activity I activity how and of customers they've could useful what and they're mean big shape got share half 'XX helpful. about would demand the color hoping a for That's pull shape thinking any uptick it. kind they're year also know maybe at in you what and could I But and the that us. around I you're be you feed. from of the back was early of kind looking provide some of recovery of around

late especially really saying, pretty has going process defer kind this to rates dynamic at can lower schedule get that we're "No, pricing our of because where on been in reason produce. the the cost with to other to coming because we And -- side Yes. a of little customers -- frac on with some later bit and is water," or the would better

fair number right. slid getting So this where those the we've everything a seen of the anticipate they But is still to work done year.

time will things at looking the fruition. into and frame believe that to already we're we mean, July August I So come

with next Our question Singular comes Mathison from Research. Michael

see. Let's

of Just a the things on revenue side. couple

this infrastructure, there's mentioned infrastructure. bidding lot be new in But volume of behind would that First, you that looking a Low build of storm imminent significant? a close you you activity have left little quarter. do to kind any bit at in seem

primarily We've as and projects well won fairly substation some as see as it to recently robust pipeline transmission to a continue bids projects. relates

to think do more of the is do get one to transmission And want that. emphasis Yes, the I this area. we been improved able year in we've

right now. a going concurrently of more couple is jobs bidding have Our We that in currently a lot transmission robust area.

in, distribution that obviously, we're it of or where home with customer we not the bid.It it. T&D we're get in mean starting would On get to and is it trying but to and It going from. to the already us. to doesn't the get just growth it. we come side T&D we're offer on going precursors. XX that think But think achieve helpful that going in in or certainly that doesn't the in the competitive -- see We're a that crew of we who we're It very and one will area to to brings be side, major that I'm a the guarantee -- tell you anything midst and utility are just

business. we just And $XX to scratch that Our will from continue million They revenue. do million a years a contract. business back few that $XX engineering to in they started were awarded nice build

So that the T&D we a that activity, and vertical opportunity view is a integration to precursor as we as progress. obviously

of grid articles hear a need with coming read grid X online. I about and report Texas and centers that.We demand. So XX up we about next good the stay data with years the in all to they the demand years for size of feel the out the to twice AI the that very saw infrastructure

we're So lot growth at a from. and come that bodes of well for our where will where functional

encouraging. very That's Terrific.

the a you interest nitpicky noticed the though Just of Through What's reconcile in debt that? help of statement, down a proceeds and couple financing questions. me that I PREPA Can relative income even spike to the QX there year, going was charges paid on here? from we using last payment. some

was The SPCP Sure. spike the into relates that entered largest to that of December. in agreement component

And that the about QX it is impacted 'XX. impacted SPCP 'XX expense million interest of that round QX of So just $X that's relative under deal. number hitting million a $X was to

Terrific.

expect going So I those wouldn't interest levels forward?

was The agreement. number in that correct. extinguishes SPCP are QX the That's fully onetime $X million round Those charges. included

This now the now back floor concludes over to for closing like our would management question-and-answer session. comments. I to turn

Thank you call you, on joining today. us again Maria. Thank for the

Mammoth and and growth call, This to made to we success, conference it's talented forward position team continue speaking its for by results, all look improved our to and and you members. quarter. next again concludes our We possible skilled

your may you lines participation. Thank your this at disconnect time. for You