Mammoth Energy Services, Inc. (NASDAQ:TUSK) Q4 2020 Earnings Conference Call February 25, 2021 5:00 PM ET Company Participants Don Crist – Director of Investor Relations Arty Straehla – Chief Executive Officer Mark Layton – Chief Financial Officer Conference Call Participants Daniel Burke – Johnson Rice & Company, LLC Operator Welcome, ladies and gentlemen, and welcome to the Mammoth Energy Services Fourth Quarter and Full Year 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this confe ...

PART I [Business](index=9&type=section&id=Item%201.%20Business) Mammoth Energy Services, Inc. is an integrated company serving North America's electric utility and oil and gas industries, facing 2020 pandemic impacts, customer concentration, and a strategic shift towards broader industrial focus - The company operates four primary reportable segments: infrastructure services, well completion services, natural sand proppant services, and drilling services[27](index=27&type=chunk) - The company is strategically shifting towards a broader industrial focus, having commenced infrastructure engineering and equipment manufacturing operations in late 2019[21](index=21&type=chunk)[303](index=303&type=chunk) - For the year ended December 31, 2020, the top five customers accounted for **50% of total revenue**, with Gulfport Energy Corporation representing **16%**, indicating significant customer concentration risk[22](index=22&type=chunk)[86](index=86&type=chunk) - The company has temporarily shut down several oilfield service lines due to adverse market conditions, including contract land drilling, rig moving, flowback, cementing, acidizing, and coil tubing operations[48](index=48&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) [Our Services](index=10&type=section&id=Our%20Services) The company provides diverse services including infrastructure, well completion, natural sand proppant, and drilling, with past infrastructure revenue heavily reliant on PREPA and most oilfield services idled due to market conditions - A substantial portion of past infrastructure revenue was generated from storm restoration work for the Puerto Rico Electric Power Authority (PREPA) As of December 31, 2020, PREPA owed the company approximately **$227 million** for services, plus **$74 million** in interest[29](index=29&type=chunk)[31](index=31&type=chunk) - In Well Completion Services, only **one of six** pressure pumping fleets was staffed and operating as of December 31, 2020, reflecting depressed market conditions[33](index=33&type=chunk) - The company's natural sand proppant facility in Pierce County, Wisconsin, has been temporarily idled since September 2018 due to market conditions[44](index=44&type=chunk) - Contract land drilling operations were temporarily shut down in December 2019, and rig moving operations were shut down in April 2020 due to poor market conditions[48](index=48&type=chunk)[55](index=55&type=chunk) [Our Industries](index=15&type=section&id=Our%20Industries) The company operates in electric infrastructure, oil and natural gas, and natural sand proppant industries, all significantly impacted by utility spending, volatile commodity prices, and market oversupply - Demand in the electric infrastructure industry is driven by utility capital expenditures for repair and maintenance of aging networks, as well as responses to natural disasters[70](index=70&type=chunk) - The sharp decline in oil prices starting in March 2020 significantly reduced utilization and pricing for the company's oilfield services, with depressed activity expected to continue[74](index=74&type=chunk)[75](index=75&type=chunk) - The frac sand market became oversupplied in 2019 and 2020 due to industry capacity expansion and reduced oil demand, causing prices to fall significantly and impacting segment profitability[78](index=78&type=chunk) [Regulation](index=21&type=section&id=Regulation) The company's operations are subject to extensive federal, state, and local regulations across worker safety, transportation, environmental protection, and mining, with potential for increased costs from new climate policies - Operations are subject to a wide range of regulations covering worker safety (OSHA), transportation (DOT, FMCSA), environmental protection (EPA), and mine safety (MSHA)[100](index=100&type=chunk)[102](index=102&type=chunk)[106](index=106&type=chunk)[130](index=130&type=chunk) - Hydraulic fracturing is regulated by state commissions, but federal agencies like the EPA have asserted authority over aspects such as the use of diesel fluids and wastewater disposal, creating potential for increased costs and restrictions[123](index=123&type=chunk) - The Biden administration's executive orders regarding climate change, methane emissions, and leasing on public lands create regulatory uncertainty that could increase costs for the company's oilfield services operations[229](index=229&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from the COVID-19 pandemic, high customer concentration, non-payment from PREPA, Gulfport bankruptcy, government investigations, and oil and gas market volatility, alongside common stock ownership concentration - The business is adversely affected by the COVID-19 pandemic, which has disrupted the economy and reduced demand for oil and natural gas[145](index=145&type=chunk) - The company has significant customer concentration, with the top five customers accounting for **50% of revenue in 2020**, and potential loss or non-payment from major customers like PREPA (owed ~**$301 million** including interest) or Gulfport (filed for Chapter 11 bankruptcy) presents a material risk[146](index=146&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - The company is subject to ongoing investigations by the SEC and DOJ, as well as multiple lawsuits, related to its contracts with PREPA, which could have a material adverse effect on the business[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - Two major stockholders, Wexford (**48.2%**) and Gulfport (**21.5%**), control a significant percentage of the common stock, and their interests may conflict with those of other stockholders[246](index=246&type=chunk) [Unresolved Staff Comments](index=55&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[266](index=266&type=chunk) [Properties](index=55&type=section&id=Item%202.%20Properties) The company's headquarters are in Oklahoma City, with 15 owned and 35 leased properties, including Wisconsin sand proppant facilities with a total permitted capacity of **5.7 million tons per year** and **62.7 million tons** of proven reserves Sand Plant Annual Rated Production Capacity (as of Dec 31, 2020) | Plant Location | Type | Annual Rated Capacity (Thousands of Tons) | | :--- | :--- | :--- | | Taylor, WI | Wet | 2,646 | | Piranha, WI | Wet | 4,704 | | Muskie, WI | Wet | 1,314 | | Taylor, WI | Dry | 2,190 | | Piranha, WI | Dry | 2,628 | | Muskie, WI | Dry | 876 | Estimated Proven Sand Reserves (Thousands of Tons) | Mine Location | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | :--- | | Taylor, WI | 24,691 | 25,121 | 26,325 | | Piranha, WI | 38,050 | 41,001 | 42,358 | | **Total** | **62,741** | **66,122** | **68,683** | - Production at the Muskie facility in Plum City, Wisconsin has been temporarily idled since September 2018 due to adverse market conditions[272](index=272&type=chunk) [Legal Proceedings](index=58&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in significant investigations and legal proceedings related to PREPA receivables, DOJ and SEC inquiries, and litigation with Gulfport, alongside other routine business disputes - The company is involved in significant legal proceedings and investigations, particularly related to its contracts with PREPA and disputes with Gulfport Energy[281](index=281&type=chunk) [Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company's mining operations are subject to the Federal Mine Safety and Health Act of 1977, with detailed safety violation information provided in Exhibit 95.1 - The company's operations are subject to stringent health and safety standards from the Mine Safety and Health Administration (MSHA)[284](index=284&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=60&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "TUSK," with **39 holders of record** as of February 2021, and quarterly dividends suspended in July 2019 due to market conditions - The company's common stock is traded on the Nasdaq Global Select Market under the symbol "TUSK"[286](index=286&type=chunk) - The quarterly cash dividend was suspended in July 2019 due to oilfield market conditions and issues with collections from PREPA[289](index=289&type=chunk) [Selected Financial Data](index=61&type=section&id=Item%206.%20Selected%20Financial%20Data) The company presents five years of selected historical financial data, showing a significant revenue decline from **$1.69 billion in 2018** to **$313 million in 2020**, with net losses in 2019 and 2020 Selected Historical Financial Data (in thousands, except per share data) | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | $313,076 | $625,012 | $1,690,084 | $691,496 | $230,625 | | **Operating (loss) income** | $(149,317) | $(128,383) | $394,451 | $62,771 | $(34,630) | | **Net (loss) income** | $(107,607) | $(79,044) | $235,965 | $58,964 | $(92,453) | | **Net (loss) income per share (diluted)** | $(2.36) | $(1.76) | $5.24 | $1.42 | $(2.94) | | **Cash flows from operations** | $6,967 | $(95,318) | $386,668 | $57,616 | $29,689 | | **Total assets** | $824,562 | $952,385 | $1,073,091 | $867,243 | $502,362 | | **Long-term debt** | $81,338 | $80,000 | $— | $99,900 | $— | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=64&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 2020 financial decline to the COVID-19 pandemic and commodity price volatility, resulting in a **50% revenue fall**, a **$108 million net loss**, and **$68 million in impairment charges**, with a conservative **$9 million** 2021 capital budget [Results of Operations](index=70&type=section&id=Results%20of%20Operations) Revenue decreased **50% to $313 million** in 2020 due to the PREPA contract conclusion and oilfield activity decline, leading to a wider operating loss of **$149 million** and **$68 million** in impairment charges Revenue by Segment (2020 vs. 2019, in thousands) | Segment | 2020 | 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Infrastructure services | $155,241 | $213,264 | $(58,023) | -27% | | Well completion services | $88,325 | $243,802 | $(155,477) | -64% | | Natural sand proppant services | $34,360 | $97,063 | $(62,703) | -65% | | Drilling services | $7,785 | $31,964 | $(24,179) | -76% | | **Total Revenue** | **$313,076** | **$625,012** | **$(311,936)** | **-50%** | - The company recorded goodwill impairment of **$55.0 million** and other long-lived asset impairment of **$12.9 million** in 2020, compared to **$33.7 million** and **$7.4 million**, respectively, in 2019[344](index=344&type=chunk)[345](index=345&type=chunk) - Revenue in 2019 decreased by **$1.1 billion (63%)** compared to 2018, primarily due to an **$873 million** decline in infrastructure services revenue following the conclusion of the PREPA contract on March 31, 2019[349](index=349&type=chunk) [Non-GAAP Financial Measures](index=79&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA and Adjusted Net Loss as non-GAAP measures, with Consolidated Adjusted EBITDA at **$50.0 million** in 2020 and Adjusted Net Loss at **$39.7 million** Consolidated Adjusted EBITDA Reconciliation (in thousands) | | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net (loss) income | $(107,607) | $(79,044) | $235,965 | | Adjustments... | ... | ... | ... | | **Adjusted EBITDA** | **$49,952** | **$77,283** | **$547,268** | Adjusted Net (Loss) Income Reconciliation (in thousands) | | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net (loss) income, as reported | $(107,607) | $(79,044) | $235,965 | | Impairment of goodwill | 54,973 | 33,664 | 3,203 | | Impairment of other long-lived assets | 12,897 | 7,358 | 5,652 | | Equity based compensation | — | — | 17,487 | | **Adjusted net (loss) income** | **$(39,737)** | **$(38,022)** | **$262,307** | [Liquidity and Capital Resources](index=82&type=section&id=Liquidity%20and%20Capital%20Resources) Primary liquidity sources are cash from operations and a revolving credit facility, with **$14.8 million** cash and **$39 million** available capacity as of December 2020, and a **$9 million** capital budget for 2021 - As of December 31, 2020, the company had **$14.8 million** in cash and **$39 million** available under its revolving credit facility[383](index=383&type=chunk)[394](index=394&type=chunk) - Capital expenditures were reduced to **$6.8 million** in 2020, down from **$35.8 million** in 2019 and **$191.9 million** in 2018[389](index=389&type=chunk) - The capital expenditure budget for 2021 is estimated at **$9 million**, with **$6 million** allocated to the infrastructure segment[398](index=398&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=91&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from oil and natural gas industry volatility, interest rate risk on its revolving credit facility, and significant customer credit risk exacerbated by the pandemic - The company's primary market risk is its exposure to the volatility of the oil and natural gas industry, which is influenced by commodity prices and E&P spending[431](index=431&type=chunk) - The company has interest rate risk on its **$78 million** of borrowings under its revolving credit facility, where a **1%** change in interest rates would affect annual interest expense by approximately **$1 million**[435](index=435&type=chunk) - The company is subject to significant customer credit risk, which is enhanced by the COVID-19 pandemic and depressed commodity price environment[437](index=437&type=chunk) [Financial Statements and Supplementary Data](index=92&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements and supplementary data which begin on page F-1 of the report - The information required by this item appears beginning on page F-1 of the report[440](index=440&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=92&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - Not applicable[441](index=441&type=chunk) [Controls and Procedures](index=92&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[444](index=444&type=chunk) - Management determined that the company maintained effective internal control over financial reporting as of December 31, 2020, based on the 2013 COSO framework[447](index=447&type=chunk) [Other Information](index=94&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - Not applicable[449](index=449&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=95&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's definitive Proxy Statement - Information required by this item is incorporated by reference from the company's definitive Proxy Statement[452](index=452&type=chunk) [Executive Compensation](index=95&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive Proxy Statement - Information required by this item is incorporated by reference from the company's definitive Proxy Statement[454](index=454&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=95&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners, management, and related stockholder matters is incorporated by reference from the company's definitive Proxy Statement - Information required by this item is incorporated by reference from the company's definitive Proxy Statement[455](index=455&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=95&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive Proxy Statement - Information required by this item is incorporated by reference from the company's definitive Proxy Statement[456](index=456&type=chunk) [Principal Accountant Fees and Services](index=95&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's definitive Proxy Statement - Information required by this item is incorporated by reference from the company's definitive Proxy Statement[457](index=457&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=96&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K report, with schedules omitted if not applicable - This section contains a list of all exhibits filed with the 10-K, including corporate governance documents, material contracts, and certifications[462](index=462&type=chunk) [Form 10-K Summary](index=98&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not provide a Form 10-K summary - None[466](index=466&type=chunk)

Financial Performance - 4Q 2020 revenues were approximately $85 million, with a net loss of approximately $12 million and adjusted EBITDA of approximately $8 million[7] - Approximately 66% of the revenue in 4Q 2020 was generated from the infrastructure segment[7, 48] - The company's capex for the period was approximately $1 million[7] - Operating cash flows were approximately $5 million[7] Infrastructure Segment - Infrastructure revenues increased significantly, reaching $55.9 million in 4Q 2020[32] - Infrastructure EBITDA has stabilized and commenced a growth trajectory[31] - Approximately 50% of the company's 2020 revenue was generated from the Infrastructure segment[48] Oil Field Services - The company has a fully integrated oil field service capability, including pressure pumping fleets and sand mines[40] Strategy and Outlook - The company is focused on identifying growth opportunities and integrating them into its culture[41, 42] - The company's 2021 capex budget is approximately $9 million, with allocations for well completions, infrastructure, and other projects[54] - Utilities are investing heavily in the electrical grid, driving growth in the infrastructure sector[33]

Financial Data and Key Metrics Changes - The company's revenue for Q3 2020 was $71 million, an increase from $60 million in Q2 2020, primarily driven by higher infrastructure revenue [17] - Net income for Q3 2020 was $3 million, compared to a net loss of $15 million in Q2 2020, resulting in a net profit of $0.07 per diluted share [18] - Adjusted EBITDA for Q3 2020 was $22 million, up from $7 million in Q2 2020 [18] - Capital expenditures (CapEx) for Q3 2020 were approximately $2 million, with a total of $6 million spent in the first nine months of the year [19] Business Line Data and Key Metrics Changes - The infrastructure division's gross margin was 34% in Q3 2020, with EBITDA growth exceeding 300% to 350% quarter-over-quarter when excluding interest on PREPA receivables [9] - The oil field segment faced challenges due to ongoing low oil prices, with 449 stages pumped using one fleet on average during Q3 2020 [13][14] - The sand division sold approximately 68,000 tons of sand at an average price of $15.59 per ton during Q3 2020 [14] Market Data and Key Metrics Changes - The infrastructure business is experiencing significant demand, particularly due to storm recovery efforts from hurricanes Laura, Delta, and Zeta [8] - The oil field service market remains constrained, with customers indicating limited incremental work due to ongoing pricing challenges [13] Company Strategy and Development Direction - The company is focusing on a diversification strategy, integrating engineering and manufacturing operations into its infrastructure offerings to lower costs and expand its customer base [10][12] - The management team is optimistic about future growth opportunities in the infrastructure sector, particularly in engineering, procurement, and construction (EPC) bidding [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing challenges posed by the COVID-19 pandemic but noted that the infrastructure business is positioned for growth [7][15] - The company is actively pursuing various avenues to collect receivables from PREPA, with ongoing communication and legal efforts [35][36] Other Important Information - The company ended Q3 2020 with approximately $14 million in cash and $90 million in debt [19] - The management team emphasized the importance of maintaining cost controls and preparing for a potential market recovery in the oil field segment [30] Q&A Session Summary Question: How to assess the performance of infrastructure in Q3 regarding storm-driven work versus structural changes? - Management indicated that while storm work contributed, the infrastructure team was already performing well prior to the storms, with growing bidding opportunities [24][25] Question: Will infrastructure results in Q4 differ materially from Q3? - Management expects Q4 results for infrastructure to be in a similar range as Q3 [27] Question: What capital allocation might be considered for infrastructure in 2021? - Management is still formulating the annual operating plan but is optimistic about cash position improvements and bidding opportunities [28][29] Question: What is the current status of the sand market? - The company noted a decline in Northern White mines and a challenging pricing environment, but demand has picked up slightly recently [31][32] Question: Update on efforts to collect from PREPA? - Management continues to pursue various avenues for collection, including communication with PREPA and legal actions [35][36]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File No. 001-37917 Mammoth Energy Services, Inc. (Exact name of registrant as specified in its charter) Delaware 32-0498321 (State or other jurisdiction o ...

3Q 2020 Earnings October 2020 Forward Looking and Cautionary Statements Forward-Looking Statements The information in this investor presentation of Mammoth Energy Services, Inc. ("Mammoth" or "Mammoth Energy") includes "forward-looking statements." 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," "e ...

Financial Data and Key Metrics Changes - Operating cash flows for the first half of 2020 were positive at $7 million, with debt remaining relatively flat at $89 million and cash increasing by $5 million to $18 million [19][20] - Capital expenditures (CapEx) during Q2 2020 were approximately $3 million, with a total of $4 million spent in the first half of the year, and the full-year CapEx budget is expected to be $10 million [19] Business Line Data and Key Metrics Changes - The infrastructure division, excluding Puerto Rico operations, achieved a gross margin of 17% in Q2 2020, with EBITDA growing nearly 50% per quarter over the past two quarters when excluding interest on the PREPA receivable [13] - The oilfield service segment faced challenges due to fluctuating oil prices, with 658 stages pumped using an average of 1.9 fleets during Q2 2020 [16][17] Market Data and Key Metrics Changes - The operating environment for the oilfield services remains challenged, with oil prices impacted by the COVID-19 pandemic, although prices have stabilized but remain below historical norms [16] - The infrastructure business is positioned for growth, with a diverse customer base and ongoing bidding opportunities [14] Company Strategy and Development Direction - The company is focusing on diversifying its operations away from the cyclicality of oil and gas, with plans to expand into engineering and manufacturing to bid for EPC (engineering, procurement, and construction) contracts [15][25] - There is a strong emphasis on renewable energy projects, with the company exploring opportunities in solar energy, which is expected to see significant growth in the coming years [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the positive performance of the infrastructure business and the potential for growth despite current challenges in the oilfield market [42][43] - The management team is confident in their ability to continue growing revenue and improving margins in the infrastructure segment, despite disruptions caused by COVID-19 [31][32] Other Important Information - The company has been pursuing avenues to collect outstanding payments related to its work in Puerto Rico, with a recent RAND report validating the reasonableness of their procurement process and rates charged [8][11] Q&A Session Summary Question: Progression of infrastructure business into the second half of 2020 - Management indicated that they are moving towards larger EPC projects and are optimistic about growth in the infrastructure segment, particularly in renewables [24][25] Question: Outlook for margins in the infrastructure side - Management noted that EBITDA margins for the infrastructure segment were approximately 8.5% in Q2 and expect continued improvement in Q3 and Q4 [30] Question: Ability to grow revenue in the second half of the year - Management confirmed that they have the ability to grow revenue, with successful bidding on contracts contributing to revenue stabilization [31] Question: Update on take-or-pay contracts and sand business - Management stated that take-or-pay contracts remain in force and they have negotiated cost savings in their sand business, which should help improve competitiveness [34][36] Question: Outlook for fleet activity in the third quarter - Management indicated that Q3 is expected to have flat activity levels compared to Q2 [38]

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The company reported a net loss of **$15.2 million** in Q2 2020 and **$99.2 million** for the six months, primarily due to **$67.9 million** in asset impairments, while operating cash flow improved significantly Condensed Consolidated Balance Sheet Data (in thousands of USD) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $418,702 | $406,980 | | Property, plant and equipment, net | $293,150 | $352,772 | | Goodwill | $12,608 | $67,581 | | **Total assets** | **$838,470** | **$952,385** | | **Total current liabilities** | $111,737 | $130,397 | | Long-term debt | $89,250 | $80,000 | | **Total liabilities** | **$268,405** | **$283,644** | | **Total equity** | **$570,065** | **$668,741** | Condensed Consolidated Statement of Comprehensive (Loss) Income (in thousands of USD, except per share amounts) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | $60,109 | $181,820 | $157,492 | $443,958 | | Operating (loss) income | $(26,486) | $(25,795) | $(115,532) | $1,361 | | **Net (loss) income** | **$(15,205)** | **$(10,889)** | **$(99,176)** | **$17,444** | | Net (loss) income per share (diluted) | $(0.33) | $(0.24) | $(2.18) | $0.39 | - For the six months ended June 30, 2020, the company recorded significant impairment charges, including **$55.0 million** for goodwill and **$12.9 million** for other long-lived assets, which were not present in the same period of 2019[21](index=21&type=chunk)[24](index=24&type=chunk) Condensed Consolidated Statement of Cash Flows (in thousands of USD) | Cash Flow Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $6,834 | $(101,855) | | Net cash used in investing activities | $(1,880) | $(28,435) | | Net cash provided by financing activities | $7,336 | $69,825 | | **Net change in cash and cash equivalents** | **$12,153** | **$(60,380)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the significant revenue decline and net loss to the COVID-19 pandemic and depressed commodity prices, leading to cost reductions, service line shutdowns, and significant credit risks from large receivables, yet liquidity is deemed sufficient [Recent Developments and Industry Overview](index=47&type=section&id=Recent%20Developments%20and%20Industry%20Overview) The company's performance was severely impacted by the COVID-19 pandemic and oil price drops, leading to cost-cutting, service line shutdowns, challenges with the PREPA contract, and an oversupplied natural sand proppant market - The company has taken mitigating steps to preserve liquidity in response to the COVID-19 pandemic and depressed commodity markets, including reducing headcount, adjusting pay, and limiting spending[163](index=163&type=chunk) - As of June 30, 2020, PREPA owed the company approximately **$227 million** for services, excluding interest, with collection dependent on FEMA funding due to PREPA's bankruptcy proceedings[166](index=166&type=chunk) - In response to adverse market conditions, the company has temporarily shut down several oilfield service lines, including cementing, acidizing, flowback, contract drilling, rig hauling, coil tubing, and full service transportation operations[171](index=171&type=chunk) - The natural sand proppant market is oversupplied, causing pricing to fall significantly, with two of the company's three sand facilities idled or running at approximately **10% capacity**[175](index=175&type=chunk)[176](index=176&type=chunk) [Results of Operations](index=52&type=section&id=Results%20of%20Operations) Q2 2020 total revenue plummeted **67%** to **$60 million**, with a **$26 million** operating loss, while six-month revenue fell **65%** to **$157 million**, resulting in a **$116 million** operating loss due to significant impairment charges Revenue by Segment - Three Months Ended June 30 (in thousands of USD) | Segment | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | Infrastructure services | $30,579 | $41,821 | -27% | | Pressure pumping services | $16,571 | $84,641 | -80% | | Natural sand proppant services | $6,237 | $40,393 | -85% | | Drilling services | $1,275 | $7,657 | -83% | | **Total Revenue (Consolidated)** | **$60,109** | **$181,820** | **-67%** | Revenue by Segment - Six Months Ended June 30 (in thousands of USD) | Segment | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | Infrastructure services | $56,285 | $150,542 | -63% | | Pressure pumping services | $60,192 | $176,780 | -66% | | Natural sand proppant services | $16,486 | $78,254 | -79% | | Drilling services | $6,054 | $21,452 | -72% | | **Total Revenue (Consolidated)** | **$157,492** | **$443,958** | **-65%** | - For the six months ended June 30, 2020, the company recorded impairment expenses of **$55 million** for goodwill and **$13 million** for other long-lived assets, which significantly contributed to the operating loss of **$116 million**[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk) [Non-GAAP Financial Measures](index=61&type=section&id=Non-GAAP%20Financial%20Measures) Consolidated Adjusted EBITDA decreased to **$6.9 million** in Q2 2020 and **$20.3 million** for the six months, reflecting reduced operational activity, while Adjusted Net Loss for the six months was **$31.3 million** after excluding impairments Consolidated Adjusted EBITDA Reconciliation (in thousands of USD) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Net (loss) income | $(15,205) | $(10,889) | $(99,176) | $17,444 | | **Adjusted EBITDA** | **$6,897** | **$8,573** | **$20,349** | **$91,329** | Adjusted Net (Loss) Income Reconciliation (in thousands of USD) | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net (loss) income, as reported | $(99,176) | $17,444 | | Impairment of goodwill | $54,973 | $— | | Impairment of other long-lived assets | $12,897 | $— | | **Adjusted net (loss) income** | **$(31,306)** | **$17,444** | [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2020, the company had **$18.0 million** cash and **$18.5 million** available credit, with operating cash flow improving to **$6.8 million** and capital expenditures significantly reduced, though future liquidity depends on receivable collections - As of July 29, 2020, the company had **$16 million** in cash and **$20 million** of available borrowing capacity under its revolving credit facility[238](index=238&type=chunk) - The company has reduced its 2020 capital expenditure estimate to a maximum of **$10 million**, a significant decrease from prior spending levels[252](index=252&type=chunk) - The board of directors suspended the quarterly cash dividend in July 2019 due to market conditions and collection delays from PREPA[236](index=236&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to significant market risks from volatile oil and natural gas prices, exacerbated by COVID-19, interest rate risk on its variable-rate debt, foreign currency risk from Canadian operations, and substantial customer credit risk from large receivables with uncertain collectability - The company's business is highly dependent on the volatile oil and natural gas industry, with the COVID-19 pandemic and commodity price drops in 2020 adversely affecting pricing and utilization for its oilfield services[259](index=259&type=chunk)[260](index=260&type=chunk) - The company has interest rate risk on its **$89 million** of borrowings under its revolving credit facility, where a **1%** change in interest rates would affect annual interest expense by approximately **$1 million**[263](index=263&type=chunk) - Significant customer credit risk exists due to large receivable balances from customers involved in legal disputes or bankruptcy proceedings, which could adversely affect financial results if not collected[265](index=265&type=chunk) [Item 4. Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2020, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective[268](index=268&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the quarter ended June 30, 2020[269](index=269&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including class action lawsuits, derivative lawsuits, government investigations, and disputes with PREPA and Gulfport, as detailed in Note 18 of the financial statements - The company is involved in various legal proceedings, which are detailed in Note 18 of the financial statements, including disputes with PREPA and Gulfport, class action lawsuits, and government investigations[130](index=130&type=chunk)[135](index=135&type=chunk)[137](index=137&type=chunk)[142](index=142&type=chunk) [Item 1A. Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) Existing risk factors remain consistent with prior disclosures, but their negative impacts may be heightened or exacerbated by the ongoing COVID-19 pandemic and its economic repercussions - The company states that existing risk factors may be heightened or exacerbated by the COVID-19 pandemic and its economic consequences[272](index=272&type=chunk) [Item 4. Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company's sand mining operations are subject to federal mine safety regulations, with required disclosures provided in Exhibit 95.1 of this report - The company's mining operations are subject to federal mine safety regulations, and required disclosures are provided in Exhibit 95.1[274](index=274&type=chunk)

2Q 2020 Earnings Presentation July 2020 Forward Looking and Cautionary Statements Forward-Looking Statements The information in this investor presentation of Mammoth Energy Services, Inc. ("Mammoth" or "Mammoth Energy") includes "forward-looking statements." 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," "e ...

Mammoth Energy Services, Inc. (NASDAQ:TUSK) Q1 2020 Results Conference Call May 11, 2020 4:00 PM ET Company Participants Don Crist - Director-Investor Relations Arty Straehla - Chief Executive Officer Mark Layton - Chief Financial Officer Conference Call Participants Daniel Burke - Johnson Rice Stephen Gengaro - Stifel Tommy Moll - Stephens Operator Good day, ladies and gentlemen, and welcome to the Mammoth Energy Services First Quarter 2020 Earnings Conference Call. At this time, all participants are in li ...