Mammoth Energy Services(TUSK) - 2025 Q1 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements Forward-Looking Statements This report contains forward-looking statements based on management's current expectations, estimates, and assumptions. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those detailed in the company's 10-K. Actual results may differ materially from those projected - Forward-looking statements cover a wide range of topics, including customer capital expenditures, oil and gas price volatility, the impact of recent divestitures, employee retention, economic conditions, and the ability to receive payments from the PREPA settlement[8] - The company cautions readers that these statements are identifiable by words like 'may,' 'expect,' 'plan,' 'believe,' and 'anticipate,' and are subject to risks that are difficult to predict and often beyond the company's control[9][10] - The company does not intend to publicly update or revise any forward-looking statements, which speak only as of the date of this report[10] PART I. FINANCIAL INFORMATION Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for the quarter ended March 31, 2025. It includes the balance sheets, statements of operations, changes in equity, and cash flows, along with detailed notes. The company reported a net loss of $0.5 million, a significant improvement from the prior year, driven by a 45% increase in revenue Condensed Consolidated Balance Sheets As of March 31, 2025, total assets were $374.4 million and total liabilities were $121.8 million, compared to $384.0 million and $131.2 million, respectively, at December 31, 2024. The decrease in assets was primarily driven by depreciation and reclassification of drilling rigs to assets held for sale. Total equity remained relatively stable at $252.5 million Key Balance Sheet Data (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $186,573 | $188,587 | | Total Assets | $374,354 | $384,031 | | Total Current Liabilities | $105,026 | $114,507 | | Total Liabilities | $121,843 | $131,213 | | Total Equity | $252,511 | $252,818 | - The company classified $5.8 million of drilling rig assets as 'Assets held for sale' as of March 31, 2025[14][64] Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the three months ended March 31, 2025, the company generated total revenue of $62.5 million, a 45% increase from $43.2 million in the same period of 2024. This led to a significantly reduced net loss of $0.5 million ($0.01 per share), compared to a net loss of $11.8 million ($0.25 per share) in Q1 2024 Q1 2025 vs. Q1 2024 Performance (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total Revenue | $62,465 | $43,189 | | Operating Income (Loss) | $509 | $(12,032) | | Net Loss | $(537) | $(11,811) | | Net Loss Per Share (diluted) | $(0.01) | $(0.25) | - A key driver of improved operating results was a $4.0 million gain on the disposal of assets, compared to a $1.2 million gain in the prior-year period[17] Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities was $2.7 million in Q1 2025, a significant decrease from $47.3 million in Q1 2024, primarily due to a large collection of accounts receivable in the prior year. Net cash used in investing activities increased to $3.0 million due to higher equipment purchases. Net cash used in financing activities decreased to $3.8 million from $48.5 million, as the prior year included a $46.8 million payment on a financing transaction Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $2,711 | $47,349 | | Net Cash from Investing Activities | $(2,993) | $(1,102) | | Net Cash from Financing Activities | $(3,798) | $(48,489) | | Net Decrease in Cash | $(4,075) | $(2,277) | Notes to Unaudited Condensed Consolidated Financial Statements The notes provide critical details on accounting policies and financial items. Key disclosures include the settlement with PREPA, which has a remaining receivable of $20.0 million; segment performance, showing strong revenue growth in Well Completion; debt structure, with the term facility paid off and the revolver undrawn; and significant subsequent events, including the $108.7 million divestiture of certain infrastructure businesses and an $11.5 million aircraft purchase - As of March 31, 2025, PREPA owes the company a final payment of $20.0 million under the Settlement Agreement, which is payable following the effective date of PREPA's bankruptcy plan of adjustment[36] - On April 11, 2025, the company sold its subsidiaries 5 Star Electric, Higher Power Electrical, and Python Equipment for an aggregate price of approximately $108.7 million. The results of these divested entities will be reported as discontinued operations starting in Q2 2025[135][136][138] - The company's revolving credit facility was undrawn at March 31, 2025, with $22.7 million of borrowing capacity. The term credit facility with Wexford was paid in full and terminated in October 2024[76][82] - On April 3, 2025, the company's subsidiary, Cobra Aviation, purchased eight small passenger aircraft for approximately $11.5 million[140] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 45% year-over-year revenue growth to increased activity across its Well Completion, Infrastructure, and Natural Sand Proppant segments. The Well Completion segment saw a 161% revenue surge due to a 118% increase in stages completed. The company's liquidity was significantly bolstered post-quarter-end by the $108.7 million sale of certain infrastructure assets. Management plans to deploy this capital for accretive returns and estimates total 2025 capital expenditures at $12 million Segment Revenue Performance (in thousands) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Well Completion Services | $20,921 | $8,034 | +161% | | Infrastructure Services | $30,725 | $25,038 | +23% | | Natural Sand Proppant Services | $6,739 | $4,307 | +56% | - The improvement in net loss from $(11.8) million in Q1 2024 to $(0.5) million in Q1 2025 was primarily due to increased utilization across key service lines[155] - As of May 2, 2025, following the asset sale, the company had unrestricted cash of $135.4 million and available borrowing capacity of $67.5 million under its revolving credit facility[181] - The company estimates total capital expenditures for 2025 will be approximately $12 million for its existing entities[206] Quantitative and Qualitative Disclosures About Market Risk The company is exposed to several market risks, primarily the volatility of oil and natural gas prices which influences demand for its services. Other risks include interest rate fluctuations on its variable-rate credit facility (currently undrawn), foreign currency risk from its Canadian operations, and significant customer credit risk, highlighted by a $20.0 million receivable from PREPA, which is in bankruptcy - The business is highly dependent on the activity levels of the U.S. oil and natural gas industry, which are influenced by commodity prices and other factors beyond the company's control[211] - The company has foreign currency risk from its Canadian operations. At March 31, 2025, it held C$3.1 million in Canadian accounts[216] - A significant customer credit risk exists with PREPA, which owes the company $20.0 million and is currently in bankruptcy proceedings[218] Controls and Procedures Based on an evaluation conducted by management, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of March 31, 2025. There were no material changes to the company's internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[222] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[223] PART II. OTHER INFORMATION Legal Proceedings The company is involved in various legal proceedings and regulatory matters in the ordinary course of business. Management does not expect any pending litigation to have a material adverse effect, except as disclosed in Note 18 of the financial statements - Details regarding significant litigation are provided in Note 18, 'Commitments and Contingencies,' of the financial statements[225] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - The company's operations continue to be subject to the risk factors disclosed in its 2024 Form 10-K[226] Mine Safety Disclosures The company's mining operations are subject to the Federal Mine Safety and Health Act. Required disclosures regarding mine safety violations are included as Exhibit 95.1 to this report - Information concerning mine safety violations as required by Section 1503(a) of the Dodd-Frank Act is included in Exhibit 95.1[229] Other Information During the first quarter ended March 31, 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer trading plans were adopted or terminated during Q1 2025[230] Exhibits This section lists the exhibits filed as part of the 10-Q report, including corporate governance documents, material contracts, CEO/CFO certifications, and XBRL data files - Key exhibits filed include the Equity Interest Purchase Agreement for the recent divestiture (10.1), an amendment to the Revolving Credit Agreement (10.2), and CEO/CFO certifications (31.1, 31.2, 32.1, 32.2)[231]