PR Newswire | Nov 5, 2021 06:00AM EDT

Financial Results

11/05 05:00 CDT

Mammoth Energy Services, Inc. Announces Third Quarter 2021 Operational and Financial Results OKLAHOMA CITY, Nov. 5, 2021

OKLAHOMA CITY, Nov. 5, 2021 /PRNewswire/ -- Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ: TUSK) today reported financial and operational results for the third quarter ended September 30, 2021.

Financial Overview for the Third Quarter 2021:

Total revenue was $57.5 million for the third quarter of 2021, as compared to $70.5 million for the same quarter last year and $47.4 million for the second quarter of 2021.

Net loss for the third quarter of 2021 was $40.9 million, or a $0.88 loss per share, as compared to net income of $3.4 million, or a $0.07 income per share, for the same quarter last year, and a net loss of $34.8 million, or a $0.75 loss per share, for the second quarter of 2021.

Adjusted EBITDA (as defined and reconciled below) was ($29.7) million for the third quarter of 2021, as compared to $22.1 million for the same quarter last year and ($5.5) million for the second quarter of 2021. During the third quarter of 2021, Mammoth recognized expense of $32.6 million related to its settlement with Gulfport Energy Corporation. Excluding this non-recurring expense, adjusted EBITDA was $2.9 million for the third quarter of 2021.

Arty Straehla, Chief Executive Officer of Mammoth commented, "We are pleased with the positive trajectory throughout our business segments during the third quarter compared to the second quarter, which led to higher revenue and an improved bottom line. We are also encouraged by the positive trends in our infrastructure business in the third quarter, including increased storm work relative to the second quarter, a new fiber maintenance and installation contract and increased bidding activity, as well as internal personnel changes that are gaining traction in this segment. Funding for projects in the infrastructure space remains strong with the added opportunity of a new federal infrastructure bill, which we are optimistic will be passed in the near future. While this is a sector impacted by near-term seasonality, we remain focused on improving results as we continue migrating the Company further into the infrastructure space to enhance long-term growth and sustainability.

"In our oilfield businesses, improved commodities pricing continues to contribute to positive industry movement and increased equipment utilization as we ramped up a second hydraulic fracturing fleet during the quarter. In our sand business, we continue to see increased market activity."

Straehla continued, "Lastly, as documented in several recent press releases, we are continuing to pursue numerous avenues in our efforts to collect our receivable from PREPA for work performed by our subsidiary Cobra Acquisitions LLC 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 ServicesMammoth's infrastructure services division contributed revenue of $23.5 million, or approximately 41% of Mammoth's total revenue, for the third quarter of 2021, as compared to $43.6 million for the same quarter last year and $17.2 million for the second quarter of 2021. The decrease in revenue compared to the same quarter of 2020 is primarily due to a decline in storm activity, resulting in lower storm restoration revenue, as well as management and crew turnover.

Well Completion ServicesMammoth's well completion services division contributed revenue (inclusive of inter-segment revenue) of $22.7 million on 688 stages for the third quarter of 2021, as compared to $15.8 million on 449 stages for the same quarter last year and $17.4 million on 520 stages for the second quarter of 2021. On average, 1.2 of the Company's fleets were active for the third quarter, compared to an average utilization of 0.9 fleets during the same quarter last year and during the second quarter of 2021.

Natural Sand Proppant ServicesMammoth's natural sand proppant services division contributed revenue (inclusive of inter-segment revenue) of $8.4 million for the third quarter of 2021, as compared to $6.0 million for the same quarter last year and $6.9 million for the second quarter of 2021. In the third quarter of 2021, the Company sold approximately 315,000 tons of sand at an average sales price of $16.58 per ton, as compared to sales of approximately 68,000 tons of sand at an average sales price of $15.59 per ton during the same quarter last year. In the second quarter of 2021, sales were approximately 255,000 tons of sand at an average price of $15.80 per ton.

Drilling ServicesMammoth's drilling services division contributed revenue (inclusive of inter-segment revenue) of $1.2 million for the third quarter of 2021, as compared to $1.2 million for the same quarter last year and $1.1 million for the second quarter of 2021.

As a result of market conditions, the Company temporarily shut down its contract land drilling operations beginning in December 2019 and its rig hauling operations beginning in April 2020.

Other ServicesMammoth's other services, including aviation, coil tubing, pressure control, equipment rentals, crude oil hauling, full-service transportation, remote accommodations, equipment manufacturing and infrastructure engineering and design services, contributed revenue (inclusive of inter-segment revenue) of $6.2 million for the third quarter of 2021, as compared to $4.7 million for the same quarter last year and $5.5 million for the second quarter of 2021.

As a result of market conditions, the Company temporarily shut down its cementing and acidizing operations as well as its flowback operations beginning in July 2019, its coil tubing and full-service transportation operations beginning in July 2020 and its crude oil hauling operations beginning in July 2021.

Selling, General and Administrative ExpensesSelling, general and administrative ("SG&A") expenses were $41.9 million for the third quarter of 2021, as compared to $12.2 million for the same quarter last year and $12.0 million for the second quarter of 2021.

Following is a breakout of SG&A expense (in thousands):

Three Months Ended Nine Months Ended

September 30, June 30, September 30,

2021 2020 2021 2021 2020

Cash expenses:

Compensation and benefits$3,353 $3,449 $3,333 $11,379$11,138

Professional services 4,571 5,651 5,806 13,783 15,335

Other^(a) 2,252 2,163 2,464 7,058 6,572

Total cash SG&A expense 10,176 11,263 11,603 32,220 33,045

Non-cash expenses:

Bad debt provision^(b) 31,449 626 76 41,650 2,306

Stock based compensation 241 291 304 827 1,326

Total non-cash SG&A 31,690 917 380 42,477 3,632 expense

Total SG&A expense $41,866$12,180$11,983$74,697$36,677

a. Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.

The bad debt provision for the three and nine months ended September 30,b. 2021, includes $31.2 million and $41.2 million, respectively, for settlement of our accounts with Gulfport Energy Corporation and its subsidiaries.

SG&A expenses, as a percentage of total revenue, were 73% for the third quarter of 2021, as compared to 17% for the same quarter last year and 25% for the second quarter of 2021.

LiquidityAs of September 30, 2021, Mammoth had cash on hand of $8.0 million, outstanding borrowings under its revolving credit facility of $77.0 million and $43.2 million of available borrowing capacity under its revolving credit facility, after giving effect to $9.0 million of outstanding letters of credit. As of September 30, 2021, Mammoth had total liquidity of $51.2 million.

On November 3, 2021, Mammoth entered into a third amendment to its revolving credit facility, providing, among other things, for a limited waiver and suspension of the leverage ratio and fixed charges coverage ratio covenants for the quarters ending September 30, 2021 and December 31, 2021 and permanently reducing the maximum revolving advance amount under its revolving credit facility from $130 million to $120 million. As of November 3, 2021, Mammoth had cash on hand of $6.5 million, outstanding borrowings under its revolving credit facility of $76.1 million and $24.1 million of available borrowing capacity under its revolving credit facility, after giving effect to $9.0 million of outstanding letters of credit, the $10 million reduction in the borrowing base and the requirement to maintain a $10 million reserve out of the available borrowing capacity during the limited waiver period, which will end on May 15, 2022, but may terminate earlier upon the occurrence of certain events.

Capital ExpendituresThe following table summarizes Mammoth's capital expenditures by operating division for the periods indicated (in thousands):

Three Months Ended Nine Months Ended

September 30, June September 30, 30,

2021 2020 2021 2021 2020

Infrastructure services^(a) $181 $178 $104 $474 $221

Well completion services^(b) 2,392 698 388 3,192 3,752

Natural sand proppant services16 194 5 429 1,069 ^(c)

Drilling services^(d) 4 132 1 42 199

Other^(e) 172 323 63 337 708

Total capital expenditures $2,765$1,525$561 $4,474$5,949

a. Capital expenditures primarily for tooling and other equipment for the periods presented.

Capital expenditures primarily for upgrades to our pressure pumping fleet tob. 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 InformationMammoth will host a conference call on Friday, November 5, 2021 at 8:00 a.m. Central time (9:00 a.m. Eastern time) to discuss its third quarter 2021 financial and operational results. The telephone number to access the conference call is 216-562-0385. The conference call will also be webcast live on https://ir.mammothenergy.com/events-presentations.

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.

Contacts:Mark Layton, CFOMammoth Energy Services, Incinvestors@mammothenergy.com

Rick Black / Ken DennardDennard Lascar Investor RelationsTUSK@dennardlascar.com

Forward-Looking Statements and Cautionary StatementsThis 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; 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; 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; whether a federal infrastructure bill is implemented and the terms thereof; 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 settlements 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; Mammoth's ability to regain compliance with certain financial covenants and comply with other terms and conditions under our recently amended revolving credit facility; 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. CONSOLIDATED BALANCE SHEETS



ASSETS September 30,December 31,

2021 2020

CURRENT ASSETS (in thousands)

Cash and cash equivalents $7,953 $14,822

Short-term investment 1,760 1,750

Accounts receivable, net 402,035 393,112

Receivables from related parties, net 238 28,461

Inventories 9,438 12,020

Prepaid expenses 3,859 13,825

Other current assets 754 758

Total current assets 426,037 464,748



Property, plant and equipment, net 194,478 251,262

Sand reserves 64,806 65,876

Operating lease right-of-use assets 14,766 20,179

Intangible assets, net - customer relationships 277 408

Intangible assets, net - trade names 3,194 4,366

Goodwill 12,608 12,608

Deferred income tax asset 8,094 -

Other non-current assets 4,247 5,115

Total assets $728,507 $824,562

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Accounts payable $43,628 $40,316

Payables to related parties 5 3

Accrued expenses and other current liabilities 54,724 44,408

Current operating lease liability 6,996 8,618

Current portion of long-term debt 1,449 1,165

Income taxes payable 39,283 34,088

Total current liabilities 146,085 128,598



Long-term debt, net of current portion 79,195 81,338

Deferred income tax liabilities 687 24,741

Long-term operating lease liability 7,591 11,377

Asset retirement obligation 3,682 4,746

Other liabilities 15,003 10,435

Total liabilities 252,243 261,235



COMMITMENTS AND CONTINGENCIES



EQUITY

Equity:

Common stock, $0.01 par value, 200,000,000 shares authorized, 46,684,065 and 45,769,283 issued 467 458 and outstanding at September 30, 2021 and December 31, 2020

Additional paid in capital 537,980 537,039

Retained earnings (59,236) 28,895

Accumulated other comprehensive loss (2,947) (3,065)

Total equity 476,264 563,327

Total liabilities and equity $728,507 $824,562

MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME



Three Months Ended Nine Months Ended

September 30, June 30, September 30,

2021 2020 2021 2021 2020

(in thousands, except per share amounts)

REVENUE

Services $52,417 $55,279$40,867 $135,975 $169,002 revenue

Services revenue - 601 8,565 90 15,678 35,228 related parties

Product revenue4,467 4,815 6,483 17,932 18,171

Product revenue - related - 1,875 - 2,145 5,625 parties

Total revenue 57,485 70,534 47,440 171,730 228,026



COST AND EXPENSES

Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $35,857, $20,424, $17,861, $53,448 and $65,728, 43,538 41,445 43,103 128,703 154,397 respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)

Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of $0, $0, $0, $0 and $0, respectively, 181 131 107 397 329 for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)

Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $4,667, $2,689, $2,384, $7,051 and $7,344, 9,865 4,353 7,165 22,939 21,862 respectively, for the three months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020)

Selling, general and 41,866 11,979 11,791 74,312 36,063 administrative

Selling, general and administrative - 201 192 385 614 - related parties

Depreciation, depletion, 19,148 23,132 20,265 60,559 73,130 amortization and accretion

Impairment of - - - - 54,973 goodwill

Impairment of other 547 - - 547 12,897 long-lived assets

Total cost and 115,145 81,241 82,623 287,842 354,265 expenses

Operating loss (57,660) (10,707)(35,183) (116,112) (126,239)



OTHER INCOME (EXPENSE)

Interest (1,484) (1,098) (1,169) (3,878) (4,207) expense, net

Other income 11,056 7,943 (14,998) 6,004 23,489 (expense), net

Other income (expense), net - 1,099 - (515) 2,232 - related parties

Total other income 9,572 7,944 (16,167) 1,611 21,514 (expense)

Loss before (48,088) (2,763) (51,350) (114,501) (104,725) income taxes

Benefit for (7,187) (6,193) (16,560) (26,370) (8,979) income taxes

Net (loss) $(40,901)$3,430 $(34,790)$(88,131)$(95,746)income



OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation adjustment, net of tax of ($69), ($95), $63, $36 and $116, respectively, for the three (289) 324 239 118 (422) months ended September 30, 2021, September 30, 2020 and June 30, 2021 and nine months ended September 30, 2021 and 2020

Comprehensive $(41,190)$3,754 $(34,551)$(88,013)$(96,168)(loss) income



Net (loss) income per $(0.88) $0.07 $(0.75) $(1.90) $(2.10) share (basic)

Net (loss) income per $(0.88) $0.07 $(0.75) $(1.90) $(2.10) share (diluted)

Weighted average number of shares 46,683 45,764 46,402 46,342 45,603 outstanding (basic)

Weighted average number of shares 46,683 46,571 46,402 46,342 45,603 outstanding (diluted)

MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS



Nine Months Ended

September 30,

2021 2020

(in thousands)

Cash flows from operating activities:

Net loss $(88,131)$(95,746)

Adjustments to reconcile net loss to cash (used in) provided by operating activities:

Stock based compensation 950 1,598

Depreciation, depletion, accretion and amortization 60,559 73,130

Amortization of coil tubing strings - 359

Amortization of debt origination costs 469 703

Bad debt expense 41,650 2,306

Gain on disposal of property and equipment (4,632) (927)

Impairment of goodwill - 54,973

Impairment of other long-lived assets 547 12,897

Deferred income taxes (32,183) (7,334)

Other 502 581

Changes in assets and liabilities:

Accounts receivable, net (50,666) (11,707)

Receivables from related parties 28,224 (31,152)

Inventories 2,582 3,827

Prepaid expenses and other assets 9,947 8,803

Accounts payable 2,597 (5,211)

Payables to related parties 2 (508)

Accrued expenses and other liabilities 6,627 (3,166)

Income taxes payable 5,192 (1,644)

Net cash (used in) provided by operating activities (15,764) 1,782



Cash flows from investing activities:

Purchases of property and equipment (4,474) (5,873)

Purchases of property and equipment from related - (76) parties

Proceeds from disposal of property and equipment 9,581 4,859

Net cash provided by (used in) investing activities 5,107 (1,090)



Cash flows from financing activities:

Borrowings on long-term debt 31,700 30,800

Repayments of long-term debt (33,571) (21,000)

Proceeds from sale leaseback transaction 9,473 -

Payments on sale leaseback transaction (2,106) -

Principal payments on financing leases and equipment(1,716) (1,423) financing notes

Debt issuance costs - (1,000)

Net cash provided by financing activities 3,780 7,377

Effect of foreign exchange rate on cash 8 (57)

Net change in cash and cash equivalents (6,869) 8,012

Cash and cash equivalents at beginning of period 14,822 5,872

Cash and cash equivalents at end of period $7,953 $13,884



Supplemental disclosure of cash flow information:

Cash paid for interest $3,236 $3,637

Cash paid for income taxes, net of refunds received $978 $13

Supplemental disclosure of non-cash transactions:

Purchases of property and equipment included in $2,028 $2,032 accounts payable

MAMMOTH ENERGY SERVICES, INC. SEGMENT INCOME STATEMENTS (in thousands)



Three months ended InfrastructureWell Sand Drilling All Other EliminationsTotal September 30, Completion^(a) 2021

Revenue from external $23,489 $22,702 $4,439 $1,184 $5,671 $- $57,485 customers

Intersegment - 30 3,980 23 482 (4,515) - revenues

Total revenue 23,489 22,732 8,419 1,207 6,153 (4,515) 57,485

Cost of revenue, exclusive of depreciation, 20,541 18,125 9,368 1,566 4,917 - 54,517 depletion, amortization and accretion

Intersegment cost of 54 3,204 - - 324 (4,515) (933) revenues

Total cost of 20,595 21,329 9,368 1,566 5,241 (4,515) 53,584 revenue

Selling, general and 4,586 34,606 1,068 288 1,318 - 41,866 administrative

Depreciation, depletion, 4,933 6,538 2,533 1,942 3,202 - 19,148 amortization and accretion

Impairment of other - - - - 547 - 547 long-lived assets

Operating loss(6,625) (39,741) (4,550) (2,589) (4,155) - (57,660)

Interest 971 215 107 56 135 - 1,484 expense, net

Other (income)(9,256) 755 (46) (66) (2,443) - (11,056) expense, net

Income (loss) before income $1,660 $(40,711) $(4,611) $(2,579) $(1,847) $- $(48,088) taxes



Three months ended InfrastructureWell Sand Drilling All Other EliminationsTotal September 30, Completion^(a) 2020

Revenue from external $43,582 $15,738 $6,031 $1,193 $3,990 $- $70,534 customers

Intersegment - 27 - 11 687 (725) - revenues

Total revenue 43,582 15,765 6,031 1,204 4,677 (725) 70,534

Cost of revenue, exclusive of depreciation, 28,883 6,510 4,154 1,955 4,427 - 45,929 depletion, amortization and accretion

Intersegment cost of 162 449 - - 114 (725) - revenues

Total cost of 29,045 6,959 4,154 1,955 4,541 (725) 45,929 revenue

Selling, general and 7,227 1,721 1,056 382 1,794 - 12,180 administrative

Depreciation, depletion, 7,294 7,189 2,700 2,294 3,655 - 23,132 amortization and accretion

Operating 16 (104) (1,879) (3,427) (5,313) - (10,707) income (loss)

Interest 623 253 70 60 92 - 1,098 expense, net

Other (income)(8,375) (1,156) 1,792 20 (1,323) - (9,042) expense, net

Income (loss) before income $7,768 $799 $(3,741) $(3,507) $(4,082) $- $(2,763) taxes



Three months Well ended June 30,InfrastructureCompletion^(a)Sand Drilling All Other EliminationsTotal 2021

Revenue from external $17,220 $17,337 $6,886 $1,130 $4,867 $- $47,440 customers

Intersegment - 36 - 17 682 (735) - revenues

Total revenue 17,220 17,373 6,886 1,147 5,549 (735) 47,440

Cost of revenue, exclusive of depreciation, 19,881 16,396 7,400 1,568 5,130 - 50,375 depletion, amortization and accretion

Intersegment cost of 50 666 - - 19 (735) - revenues

Total cost of 19,931 17,062 7,400 1,568 5,149 (735) 50,375 revenue

Selling, general and 7,383 1,893 991 395 1,321 - 11,983 administrative

Depreciation, depletion, 5,899 6,447 2,387 2,079 3,453 - 20,265 amortization and accretion

Operating loss(15,993) (8,029) (3,892) (2,895) (4,374) - (35,183)

Interest 656 219 90 58 146 - 1,169 expense, net

Other expense 15,904 1 (53) (127) (727) - 14,998 (income), net

Loss before $(32,553) $(8,249) $(3,929) $(2,826) $(3,793) $- $(51,350) income taxes



Nine months ended InfrastructureWell Sand Drilling All Other EliminationsTotal September 30, Completion^(a) 2021

Revenue from external $69,965 $62,939 $20,031 $3,234 $15,561 $- $171,730 customers

Intersegment - 120 3,980 54 1,804 (5,958) - revenues

Total revenue 69,965 63,059 24,011 3,288 17,365 (5,958) 171,730

Cost of revenue, exclusive of depreciation, 66,864 42,339 22,631 4,739 15,466 - 152,039 depletion, amortization and accretion

Intersegment cost of 165 5,449 - - 344 (5,958) - revenues

Total cost of 67,029 47,788 22,631 4,739 15,810 (5,958) 152,039 revenue

Selling, general and 18,222 47,111 4,108 1,105 4,151 - 74,697 administrative

Depreciation, depletion, 17,499 19,668 7,059 6,185 10,148 - 60,559 amortization and accretion

Impairment of other - - - - 547 - 547 long-lived assets

Operating loss(32,785) (51,508) (9,787) (8,741) (13,291) - (116,112)

Interest 2,287 688 291 177 435 - 3,878 expense, net

Other (income)(2,663) 1,196 (892) (201) (2,929) - (5,489) expense, net

Loss before $(32,409) $(53,392) $(9,186) $(8,717) $(10,797)$- $(114,501)income taxes



Nine months ended InfrastructureWell Sand Drilling All Other EliminationsTotal September 30, Completion^(a) 2020

Revenue from external $99,307 $74,549 $22,421 $7,166 $24,583 $- $228,026 customers

Intersegment - 1,080 95 16 2,046 (3,237) - revenues

Total revenue 99,307 75,629 22,516 7,182 26,629 (3,237) 228,026

Cost of revenue, exclusive of depreciation, 80,780 40,454 21,845 9,592 23,917 - 176,588 depletion, amortization and accretion

Intersegment cost of 197 1,410 - 151 1,479 (3,237) - revenues

Total cost of 80,977 41,864 21,845 9,743 25,396 (3,237) 176,588 revenue

Selling, general and 19,001 5,347 3,737 2,776 5,816 - 36,677 administrative

Depreciation, depletion, 22,416 23,346 7,380 7,814 12,174 - 73,130 amortization and accretion

Impairment of - 53,406 - - 1,567 - 54,973 goodwill

Impairment of other - 4,203 - 326 8,368 - 12,897 long-lived assets

Operating loss(23,087) (52,537) (10,446) (13,477) (26,692) - (126,239)

Interest 2,091 857 217 450 592 - 4,207 expense, net

Other (income)(24,082) (2,444) 1,753 (251) (697) - (25,721) expense, net

Loss before $(1,096) $(50,950) $(12,416)$(13,676)$(26,587)$- $(104,725)income taxes

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 accountsreceivable) 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 energyservice 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 historiccosts of depreciable assets. Mammoth's computations of Adjusted EBITDA may notbe 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 abilityto 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 ofthe Company's segments (in thousands):



Consolidated



Three Months Ended Nine Months Ended

September 30, June 30, September 30,

Reconciliation of Adjusted 2021 2020 2021 2021 2020 EBITDA to net (loss) income:

Net (loss) $(40,901)$3,430 $(34,790)$(88,131)$(95,746)income

Depreciation, depletion, amortization and19,148 23,132 20,265 60,559 73,130 accretion expense

Impairment of - - - - 54,973 goodwill

Impairment of other long-lived547 - - 547 12,897 assets

Public offering 13 - 77 91 - costs

Stock based 252 353 354 950 1,598 compensation

Interest 1,484 1,098 1,169 3,878 4,207 expense, net

Other (income) (11,056) (9,042) 14,998 (5,489) (25,721) expense, net

Benefit for (7,187) (6,193) (16,560) (26,370) (8,979) income taxes

Interest on trade accounts 7,963 9,285 9,017 25,138 26,052 receivable

Adjusted EBITDA $(29,737)$22,063$(5,470) $(28,827)$42,411

Infrastructure Services



Three Months Ended Nine Months Ended

September 30, June 30, September 30,

Reconciliation of Adjusted EBITDA 2021 2020 2021 2021 2020 to net (loss) income:

Net (loss) income$(2,288)$6,123 $(23,715)$(29,946)$(6,182)

Depreciation and amortization 4,933 7,294 5,899 17,499 22,416 expense

Public offering (7) - 43 37 - costs

Stock based 96 139 158 388 424 compensation

Interest expense 971 623 656 2,287 2,091

Other (income) (9,256) (8,375) 15,904 (2,663) (24,082) expense, net

Provision (benefit) for 3,947 1,645 (8,838) (2,463) 5,085 income taxes

Interest on trade accounts 9,290 8,170 9,017 26,980 23,796 receivable

Adjusted EBITDA $7,686 $15,619$(876) $12,119 $23,548

Well Completion Services



Three Months Ended Nine Months Ended

September 30, June 30, September 30,

Reconciliation of Adjusted EBITDA 2021 2020 2021 2021 2020 to net (loss) income:

Net (loss) income$(40,711)$799 $(8,249)$(53,391)$(50,951)

Depreciation and amortization 6,538 7,189 6,447 19,668 23,346 expense

Impairment of - - - - 53,406 goodwill

Impairment of other long-lived - - - - 4,203 assets

Public offering 19 - 12 31 - costs

Stock based 95 76 75 253 458 compensation

Interest expense 215 253 219 688 857

Other expense 755 (1,156)1 1,196 (2,444) (income), net

Interest on trade accounts (1,327) 1,073 - (1,841) 2,206 receivable

Adjusted EBITDA $(34,416)$8,234$(1,495)$(33,396)$31,081

Natural Sand Proppant Services



Three Months Ended Nine Months Ended

September 30, June 30, September 30,

Reconciliation of Adjusted EBITDA 2021 2020 2021 2021 2020 to net loss:

Net loss $(4,611)$(3,741)$(3,929)$(9,186)$(12,415)

Depreciation, depletion, 2,533 2,700 2,387 7,059 7,380 amortization and accretion expense

Public offering - - 12 12 - costs

Stock based 32 77 65 163 354 compensation

Interest expense 107 70 90 291 217

Other income (46) 1,792 (53) (892) 1,753 (expense), net

Interest on trade accounts - 26 - (1) 26 receivable

Adjusted EBITDA $(1,985)$924 $(1,428)$(2,554)$(2,685)

Drilling Services



Three Months Ended Nine Months Ended

September 30, June 30, September 30,

Reconciliation of Adjusted EBITDA 2021 2020 2021 2021 2020 to net loss:

Net loss $(2,579)$(3,508)$(2,826)$(8,717)$(13,676)

Depreciation 1,942 2,294 2,079 6,185 7,814 expense

Impairment of other long-lived - - - - 326 assets

Acquisition - - - - - related costs

Public offering - - 2 2 - costs

Stock based 6 38 28 71 166 compensation

Interest expense 56 60 58 177 449.501

Other (income) (66) 20 (127) (201) (251) expense, net

Adjusted EBITDA $(641) $(1,096)$(786) $(2,483)$(5,171)

Other Services^(a)



Three Months Ended Nine Months Ended

September 30, June 30,September 30,

Reconciliation of Adjusted EBITDA to 2021 2020 2021 2021 2020 net income (loss):

Net income (loss) $9,288 $3,756 $3,929$13,109 $(12,522)

Depreciation, amortization and 3,202 3,655 3,453 10,148 12,174 accretion expense

Impairment of - - - - 1,567 goodwill

Impairment of other 547 - - 547 8,368 long-lived assets

Public offering 1 - 8 9 - costs

Stock based 23 23 28 75 196 compensation

Interest expense, 135 92 146 435 592 net

Other (income) (2,443) (1,323) (727) (2,929) (697) expense, net

Benefit for income (11,134)(7,838) (7,722)(23,907) (14,064) taxes

Interest on trade - 16 - - 25 accounts receivable

Adjusted EBITDA $(381) $(1,619)$(885)$(2,513)$(4,361)

Includes results for Mammoth's aviation, coil tubing, pressure control, equipment rentals, crude oil hauling, full-service transportation and remotea. accommodations, equipment manufacturing and infrastructure engineering and design services and corporate related activities. The Company's corporate related activities do not generate revenue.

Adjusted Net (Loss) Income and Adjusted (Loss) Income per Share

Adjusted net (loss) income and adjusted basic and diluted (loss) income 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 Nine Months Ended

September 30, June 30, September 30,

2021 2020 2021 2021 2020

(in thousands, except per share amounts)

Net (loss) income,$(40,901)$3,430$(34,790)$(88,131)$(95,746)as reported

Impairment of - - - - 54,973 goodwill

Impairment of other long-lived 547 - - 547 12,897 assets

Adjusted net $(40,354)$3,430$(34,790)$(87,584)$(27,876)(loss) income



Basic (loss) income per share, $(0.88) $0.07 $(0.75) $(1.90) $(2.10) as reported

Impairment of - - - - 1.21 goodwill

Impairment of other long-lived 0.01 - - 0.01 0.28 assets

Adjusted basic (loss) income per $(0.87) $0.07 $(0.75) $(1.89) $(0.61) share



Diluted (loss) income per share, $(0.88) $0.07 $(0.75) $(1.90) $(2.10) as reported

Impairment of - - - - 1.21 goodwill

Impairment of other long-lived 0.01 - - 0.01 0.28 assets

Adjusted diluted (loss) income per $(0.87) $0.07 $(0.75) $(1.89) $(0.61) share

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SOURCE Mammoth Energy Services, Inc.