Why Mammoth Energy Shares Are Falling Today

Mammoth Energy Services, Inc. TUSK shares are trading lower Friday morning after missing the earnings estimates in the second quarter.

TUSK reported Q2 revenues of $75.43 million, missing the consensus of $86.07 million. Revenues fell 16% Y/Y.

The company reported an EPS loss of $(0.09), missing the street view of $0.10. 

Q2 Adjusted EBITDA decreased to $16.4 million from $23 million a year ago.

Selling, general and administrative expenses were $10.4 million for the second quarter of 2023, higher than $8.2 million a year ago.

Also Read: Mammoth Energy Services' Fundamentals Are Undervalued, Analyst Says; Sees Sharp Upside

Arty Straehla, Chief Executive Officer of Mammoth, commented, "During the second quarter we experienced a decrease in our pressure pumping fleet utilization, as lower oil and gas demand negatively impacted the overall frac market." 

"While we expect the second half of the year will be challenging, we are encouraged by recent bid activity in our Infrastructure Services segment. Initial funds from the Infrastructure Investment and Jobs Act are being released for infrastructure projects such as fiber, transmission and distribution, areas where we are excited participants, which gives us optimism for improvements later in 2023 and into 2024."

Stock Repurchase Program: TUSK approved a stock repurchase program to repurchase up to the lesser of $55 million or 10 million shares of its common stock, subject to the expected repayment and refinancing of its credit facility and other factors.

As of August 9, 2023, Mammoth had cash on hand of $10.6 million, outstanding borrowings under its revolving credit facility of $72.3 million, and a borrowing base of $95.6 million.

On August 10, 2023, Mammoth entered into two non-binding agreements with lenders to repay and refinance its existing credit facility. The company expects to close these refinancing transactions before the maturity of its existing credit facility on October 19, 2023.

Price Action: TUSK shares are trading lower by 22.9% to $4.24 on the last check Friday.