Mammoth Energy Services, Inc.

Greetings and welcome to the Managed Energy Services first quarter earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ian DeNard. Thank you, Ian. You may begin.

Thanks, Operator. Good afternoon, everyone. We appreciate you joining us for the Mammoth Energy conference call to review 2023 first quarter results. This call is also being webcast and can be accessed through the audio link of the events and presentations page of the investor relations section at mammothenergy.com. Information reported on this call speaks only as of today, April 27, 2023. Please be advised that time-sensitive information may no longer be accurate as of the time of any subsequent date. Pardon me. I would also like to remind you that statements made in today's discussion that are not historical facts include statements of expectations or future events or future financial performance. Our forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Management will be making forward-looking statements as part of today's call that by their nature are uncertain and outside of the company's control. Actual results may differ materially. Please refer to the earnings press release that was issued today for our disclosure on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the SEC. Management may also refer to non-GAAP measures, including adjusted EBITDA. The definitions of these non-GAAP measures and their reconciliations to the most comparable GAAP measures can be found at the end of the earnings release and in our investor relations presentation, which can be found on the website. Mammoth Energy assumes no obligation to publicly update or revise any forward-looking statements. And now with that behind me, I'd like to turn the call over to Mammoth Energy CEO, Artie Strehler. Artie.

Thank you, Ken. And good afternoon, everyone. We had a solid first quarter that I'm pleased to discuss on today's call. I will also provide an update regarding our ongoing pursuit of the PREPA receivables owed to us before turning the call over to Mark to review our financials in more detail. Our first quarter performance was in line with our expectations, contributing to significant year-over-year growth in revenue, net income, and adjusted EBITDA. For the first quarter of 2023, net income came in at $8.4 million compared to a net loss of $14.8 million in Q1 of last year. First quarter 2023 adjusted EBITDA was $30.7 million compared to $9.3 million in Q1 of last year. I'm proud of the hard work across all of our business segments by our talented teams that contributed to the meaningful growth we have realized over the last year in this most recent quarter. While we face no shortage of challenges every day and have experienced persistent supply chain constraints and logistical problems over the last few years, we have and intend to continue to operate to the best of our ability to meet the needs of our customers. Recently, we have experienced some improvements throughout the supply chain and we anticipate More improvement to come in the back half of the year, but we believe it is important to note that these constraints still remain an obstacle that we must navigate. While we may never return to the way things were pre-COVID, we're proud of the adaptability of our team to adjust to this new normal. Now I'll walk you through each of our major business segments. In our well completion services, we generated strong growth in the quarter. We exited the quarter with three of our six pressure pumping spreads actively operating Today, we are seeing regional production slowdowns due to lower natural gas prices, particularly in the northeast where we have a concentration of crack crews. Natural gas prices have been cut nearly in half compared to what they were at the end of 2022. While we remain bullish long term on natural gas, in the near term, the lower prices are reducing activity in our well completion segment are leading to more calendar white space. We have a deep understanding of how this pullback impacts our business and have already made changes to manage the large variable cost in the well completion segment. However, we expect this will reduce near-term utilization as we adjust to current market conditions. We plan to offset this reduction by significantly lowering our capital expenditures for the year. Turning to our Infrastructure Services Division, operational improvements, team performance, and higher utilizations of crews and equipment continue to drive improved results. Revenue, net income, and adjusted EBITDA grew year-over-year in this segment despite increases in SG&A and legal expenses. But we expect these expenses to have less of an impact in the coming quarters. The bidding and pricing environment for infrastructure services throughout our footprint continue to be robust, with added opportunities expected from the historic federal investment in our nation's infrastructure through the Infrastructure Investment and Jobs Act. We continue to view this sector as a key growth driver for Mammoth over the long term, and I'm pleased with the continual progress we're achieving. As a reminder, we have grown this division strictly by organic means over the past five years. The sand business also grew in the quarter, and we are pleased with our team's performance. As we have mentioned before, we entered into two strategic sand supply agreements late last year at attractive prices. These contracts are providing a solid foundation for predictable cash flow in our natural sand profit division. As we have stated before, we believe our diverse portfolio and ability to adapt quickly to changing environments positions as well in these segments. Before I turn the call over to Mark, I'd like to provide an update regarding PREPA. On March 27, 2023, COBRA was notified that FEMA had approved $233 million in COBRA invoices related to the December 21, 2022 determination memorandum. The 90% federal cost share of the approved amount was $210 million, which was obligated and made available for drawdown on March 27, 2023. Of this $210 million, approximately $99 million has been represented by both PREPA and FEMA as intended to pay COBRA for outstanding invoices And the remaining $111 million is a reimbursement to PREPA for payments already made on COBRA invoices. PREPA inexplicably refuses to pay COBRA for the work accomplished in the aftermath of Hurricane Maria and has so far failed to take the steps necessary to obtain the funds from Core 3, funds that were appropriated by Congress to FEMA and then obligated to Core 3 for payments to COBRA. We continue to vigorously pursue payment of the over $390 million owed to us from PREPA and continue to exhaust efforts with congressional members, legal teams, and frequent meetings with decision makers. Now let me turn the call over to Mark to take you through our financial performance in greater detail. Thank you, Artie.