Mammoth Energy Services(US:TUSK)2020-08-01 08:34Financial 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]