Mammoth Energy Services(US:TUSK)2020-10-31 10:48Financial 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]