Mammoth Energy Services, Inc.

Ladies and gentlemen, and welcome to the Mammoth Energy Services Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded and will be available for replay on Mammoth Energy. Services website. I would now like to introduce your host for today's conference, Mr. Don Chris, Mammoth Energy Services Director of Investor Relations. Sir, you may begin.

Thank you, Daphne. Good afternoon and welcome to Mammoth Energy Services' third quarter 2020 earnings conference call. Joining me on today's call are Artie Strehler, Chief Executive Officer, and Mark Layton, Chief Financial Officer. Before I turn the call over to them, I'd like to read our safe harbor statement. Some of our comments today may include forward-looking statements reflecting Mammoth Energy Services' views about future events. These matters involve risks and uncertainties that could cause our actual results to materially differ from our forward-looking statements. These risks are discussed in Mammoth Energy Services Form 10-K, Forms 10-Q, current reports on Form 8-K, and other Securities and Exchange Commission filings. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Our comments today may also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures are included in our third quarter press release, which can be found on our website along with our updated presentation. Now I'd like to turn the call over to Artie.

Thank you, Don. And good afternoon, everyone. The third quarter of 2020 was a very active one as our team continued to adapt to the ongoing COVID-19 pandemic and the effects it's having on business today. Since the outbreak of the pandemic, nearly every aspect of our daily lives has been impacted, but our first priority is, and has always been the safety and health of our team. And we continue to take steps to protect our team members from the virus. Our infrastructure teams saw significant demand for their services during the third quarter. In addition to our normal operations, our teams responded to several natural disasters across the country during the third quarter. Storm work continues today on the Gulf Coast with our crews working to restore damage caused by Hurricane Laura, Delta, and Zeta in Louisiana. Given the current state of the electrical grid in that area, we would anticipate our crews to be active in the area throughout the fourth quarter. We have discussed our diversification strategy for several years, and it is now clear to see in our financials the effects the new infrastructure management team has made over the past year. The gross margin of the infrastructure division came in at 34 percent during the third quarter of 2020, with EBITDA growing over 300 percent, 350 percent quarter over quarter, when excluding interest on PREPA receivables. The new infrastructure management team is leveraging current operations to introduce our capabilities to potential customers. We believe industry demand and bidding opportunities will remain robust. With our cost structure streamlined and a core base of operations, we have built a solid foundation in our position to grow both our customer base and geographic footprint over the coming years. Our operating subsidiary is Higher Power and Five Star, are well respected amongst the utilities they work for and are expanding their customer base. These businesses have grown significantly since we acquired them and they are currently comprised of approximately 500 experienced field personnel spread across 120 crews. Our engineering business is expanding its footprint and we're looking at ways to integrate engineering into our infrastructure business and have bid some engineering procurement and construction or APC work In addition, we are exploring ways to integrate our manufacturing operation into our infrastructure offering through the manufacturing of equipment, materials, and products used by our infrastructure teams. We are encouraged by what our infrastructure engineering manufacturing teams have done over a short period of time and what the future holds for us. Turning to the oil field, the operating environment remains challenged as oil prices continue to be impacted by the effects of the COVID-19 pandemic. While we saw some stabilization of oil prices during the third quarter, current pricing continues to restrict a meaningful increase in activity levels. Our customers are indicating the possibility of incremental work over the coming months, but we believe activity levels will remain challenged for the remainder of the year. We are maintaining our oil field equipment and plan to be ready to ramp up our service lines when demand returns. During the third quarter of 2020, we pumped 449 stages with approximately one fleet utilized throughout the quarter on average. We have upgraded several of our pumps to dynamic gas blending, or DGB, and these units are in higher demand than our conventional units. Our sand division sold approximately 68,000 tons of sand during the third quarter of 2020. The average sales price for the sand sold during the third quarter was approximately $15.59 per ton. While the events of the past five months have caused significant impacts to both our daily and professional lives, Mammoth has adapted quickly to the changing environment. Our diverse portfolio of companies across several industries has performed as expected. The infrastructure business is positioned with a solid foundation from which to grow as it looks to ways to further integrate into our other businesses to lower costs. Let me turn the call over to Mark to take you through the financial performance during the third quarter, after which we will take questions.