Greetings and welcome to the Mammoth Energy Services Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. . As a reminder, this conference is being recorded. It’s now my pleasure to introduce your host, Rick Black, Investor Relations from Mammoth Energy Services. Thank you. You may begin.

Thank you, operator and good morning everyone. We appreciate you joining us for the Mammoth Energy Conference Call to review fourth quarter and year-end 2021 results. This call is also being webcast and can be accessed through the audio link on the Events & Presentations page of the Investor Relations section of mammothenergy.com. Information recorded on this call speaks only as of today, March, 4, 2022. So, please be advised that any time-sensitive information may no longer be accurate as of the date of any replay, listening or transcript reading. I would also like to remind you that the statements made in today’s discussion that are not historical facts, including statements of expectations or future events, or future financial performance are forward-looking statements made pursuant to the Safe Harbor’s provision for the Private Securities Litigation Reform Act of 1995. We 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 this morning 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 Securities and Exchange Commission. Management may also refer to non-GAAP measures, including adjusted income loss and adjusted EBITDA, reconciliations to the nearest GAAP measures can be found at the end of the earnings press release. Mammoth Energy assumes no obligation to publicly update or revise any forward-looking statements. And now, I would like to turn the call over to Mammoth Energy’s CEO, Arty Straehla. Arty?

Thank you, Rick, and good morning everyone. I'll begin with a review of the fourth quarter of 2021 and an overview of each of our businesses. Following that I'll touch on the macro trends that continue to emerge, we believe the trend lines look positive for our business across the board as we head into 2022. I'll then turn the call over to Mark to review our financials in more detail. We ended the year sustaining sequential quarterly momentum on top-line revenues and reducing our net loss. We are experiencing ongoing improvement in our infrastructure business, which became cashflow positive, exceeding 2021 and has continued that trend in the first two months of 2022. Clearly, the macroeconomic infrastructure backdrop is strong, especially with the recent passage of the federal infrastructure bill. We're focused on operational execution in this business segment and believe we now have the right people and processes in place to gain stronger momentum in this large and growing market. The opportunities we see in this area, especially around fiber maintenance and installation contracts and MSAs are encouraging heading into the next year. Funding for projects in the infrastructure space remain strong. Mammoth will continue to pursue opportunities within infrastructure services as we strategically structure our service offerings for growth in both the geographic footprint and the depth of projects. This type of work is very much needed in our country to improve infrastructure, repairs, hardening and modernization of the electric grid along with a shift towards renewables continues nationwide. As a result, bidding levels continue to be robust. Mammoth's vertical integration of service offerings through engineering, procurement, and construction capabilities as well as our manufacturing equipment refurbishment facility continue to differentiate our offerings in the infrastructure project area. We believe these capabilities along with our ability to…

Thank you, Arty, and hello everyone. As I did in the third quarter of 2021, I'm going to take this time to provide additional details on some meaningful metrics and several key highlights. A detailed breakdown of our results can be found in our earnings release and in our 10-K. Mammoth's total revenue during the fourth quarter of 2021 came in at 57.2 million as compared to 85.1 million during the fourth quarter of 2020, and 57.5 million during the third quarter of 2021. Although product revenues were up over $6 million, quarter-over-quarter, there was a decline in storm-related activity during the fourth quarter of 2021, which essentially offset our product-related upside. As Arty alluded to earlier, we are well positioned to differentiate our offerings and optimize our operational execution, which we believe will drive meaningful revenue growth now that the macro economic environment surrounding industrials and oil and gas appears to be strengthening. During the fourth quarter of 2021, we pumped 891 stages, with approximately 1.6 fleets utilized on average. This compared to an average utilization of 0.6 fleets during the same quarter last year, and 1.2 fleets during the third quarter of 2021. For the full year 2021 we pumped 2544 stages, with approximately 1.1 fleet utilized on average. Our sand division sold approximately 270,000 tons of sand during the fourth quarter of 2021 and 1 million tons of sand during the full year ended December 31, 2021. The average price for the sand sold during the fourth quarter of 2021 was approximately $17.84 per ton, while the full year average price was $16.76 per ton. On a year-over-year basis, we doubled our tonnage of sand sold and the average price per ton increased $2.20 when compared to 2020s average. The net loss for the fourth quarter of…

Thank you. We will now be conducting a question-and-answer session. Our first question comes from the line of Don Crist with Johnson Rice. Please proceed with your question.

Arty, I'm really happy to see the movement within PREPA, I know it's been a long time since things were going back and forth there. Any kind of timeline that you can give on when you think that things should start breaking loose? Or do you think that that we're moving in a general direction to where we get paid sometime in the backup?

Well, Don, really a good question. And I don't know if you had a chance to see about 30 minutes ago we released a press release on Whitefish and entering that. We think a lot of momentum is carrying forward there's no absolute date set that we can discuss. But you can see and when you start looking at it the macro and go from the macro down to the micro, of course, we saw Puerto Rico's plan of adjustment that was approved, they're coming out of bankruptcy. The FOMB, who controls those affairs for the island is putting a lot of pressure on PREPA to emerge from bankruptcy, there's been a lot of talk that we've heard where they are talking about emergent before the end of the year. And of course, you look at the way it stacks up, they just got through with Whitefish and that's one of the administrative claims that they had to get out of the way. And Whitefish started before we did. So we think it's a very positive development with the Whitefish, and showing that they're going to try to get out of bankruptcy. The words we've heard is, they've been trying to do it for the end of the year. And we believe they have to go through us in order to get there because of our administrative claim status. So it's a very positive development and Don, Mark and I spent last week in Washington DC and the reception is really very positive. And we've had some good help from our hometown legislators where we reside, Representative Bice, Senator Lankford have helped out in enquiries and we've even reached out, I met with Rand Paul, earlier in February. He came to our facility in Play, Kentucky to congratulate our team for the work they've done on the tornado restoration. And I met with his aide last week, or his chief, and we believe there's a lot of forward momentum. Doesn't mean that we're there yet and to be able to give you a timeline, not quite sure, but it is moving in the right direction.

I know that you all fought a good fight for a long time, and I'm very happy to hear that everything's breaking loose. Shifting gears a little bit to the oil field. Obviously, there's been a lot of talk industry-wide about the tightness in pressure pumping and saying, can you just talk about number one, when the third fleet you expect to actually start pumping? And number two, what the overall environment looks like today?

Yes. We are staffing up our third fleet, we believe it's -- we have the MSA signed and sealed and it'll start in April. We have line of sight. And Don, I think alluded to this on the third quarter conference call last year that we had line of sight to four fleets and we still have that. We think the fourth fleet will start up in June. And the thing that's going on, of course, is pricing is increasing as it had to. At the end of the day, when you use natural gas and/or diesel for whether you're running dual fuel or regular diesel engines, those costs have gone up. So there's some inflationary pressures, but we're finally seeing some pricing as I think most others are. Pricing is better than it was in the fourth quarter. And we think it's going to be very strong moving forward.

And I know you have a large manufacturing background, can you just talk about what lead times are today on a Tier-2 or Tier-4 engine? And that goes to the broader question of, are 50 more fleets going to come off of the fence lines, industry-wide and kind of flood the market which it doesn't seem like that's possible today? But can you just talk about, if somebody wanted to refurbish a fleet today, what would the lead times look like?

Cat 35 wells which are pretty much the standard in the industry. Either Tier-4 engines, you're looking at about 54 weeks, the latest numbers that we've seen. Don, I will tell you the supply chain and you're seeing it, we’re even just getting parts and I think you probably saw a lot of the commentary from last week. We are even just getting parts for things is getting more and more difficult with the supply chains the way they are.

Yes, it definitely looks like we're going to stay where we are on fleets today. Shifting gears a little bit over to the fiber and infrastructure side. Seems like you're getting a lot of good momentum there, any code you can provide on the fiber side or on the contracts that you signed in the fourth quarter for either the engineering side or on the fiber side?

On the fiber side, we kicked off our first project inside of Q4 and that's going well. Recently since that time, we've executed a couple of MSAs, which should come with some projects and time. The bidding opportunities for fiber are fairly robust right now. And we would expect those to continue to pick up throughout 2022, as we see some of the funding related to the infrastructure bill, that hit some of the states.

Yes, Don, I think Mark brings up a good point that the infrastructure bill was signed and everything late last year. But the government is going through studies to see who is unserved and who is underserved with. Unserved, meaning they have no internet access whatsoever, there's about 4 million in this country. Underserved is about 22 million where speeds are so slow, it's about to the 90s dial up type of situation. So they're going through that. The point is, the release of monies to the state is going to be coming probably in the next four to six months. And in anticipation of that there's bidding going on and people wanting to lock up crews. And in some cases, you have equipment shortages, which again comes back to our vertical integration process and the manufacturing facility that we have, where we refurb our own equipment. You use a lot of the same type of equipment, certainly not in the underground, but in polls and attaching to items there. So you need bucket trucks. And of course, we have bucket trucks and the capability of refurbishing those bucket trucks. So we feel good about where that that part of the business is going. The other thing I would add is our engineering group continues to grow. We've got 39 engineers, and you'll remember when we started that with one person. We continue to grow and we continue to get additional work for them to keep them busy there. They're running at about a 82%, 83% utilization factor, which is very good when you factor in SG&A as a part of that. So we feel good about that aspect of the business as well.

Then on the contract side, for the engineering group, as you saw they entered into the contract relative to the EV charging stations of last year, it's really provided a springboard for additional opportunities in that same area for the engineering group. So I think it bodes well for their opportunities for the remainder of 2022.

Very, very happy to hear that. It sounds like the majority of your businesses have really turned the corner. One final one for me, Mark on the financial side. SG&A fell quite considerably in the fourth quarter. What do you think it looks like going forward in the '22? Should it stay at that kind of $4 million or $5 million level? Or do you think it's a little bit higher than that?

Yes. So if you look at Q4 that included a reclassification of about $5 million relative to some legal fees incurred. So on a run rate basis, looking into 2022, SG&A should hover in that $8 million to $8.5 million range.

Okay. I appreciate all the time today and best luck going forward. I'll turn it back.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to management for any final comments.

Thank you, Melissa. We believe the future is bright for Mammoth and our team members as we continue to strategically develop our service offerings to grow and deliver shareholder and stockholder value years to come. This concludes our conference call. Thank you for joining.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.