Q2 2021 Mammoth Energy Services Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Mammoth Energy services second quarter 2021 earnings Conference call.
At this time all participants on.
On a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During this session you will need to press. The Star then the 1 key on you touched on telephone if he would call offer assistance. Please press Star then zero.
I would now like to hand, the conference over to your Speaker host Rick Black Investor Relations. Please go ahead.
Thank you operator, and good morning, everyone. We appreciate you joining us for the Mammoth Energy Conference call to review second quarter 2021 results. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the Investor Relations section of Mammoth Energy Dot Com, Inc.
Information recorded on this call speaks only as of today July 32021. So please be advised that any time sensitive information may no longer be accurate as of the date of any replay.
I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements for expectations or future.
Future events or future financial performance.
Are considered forward looking statements made pursuant to the safe Harbor's provision for the private Securities Litigation Reform Act of 1095.
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.
<unk> 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 net income.
Loss and adjusted EBITDA reconciliations to the nearest GAAP measures can be found at the end of our 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 CEO already shale already.
Thank you Rick and good morning, everyone.
Second quarter results did not meet our expectations. However, we are extremely focused on improving near term results as we continue migrating the company further into the infrastructure space as a part of our shift to a broader industrial focus to enhance long term growth on sustainability.
<unk> <unk>.
During the quarter, our oilfield businesses did observed some positive green shoots while oil prices have rebounded from recent lows activity levels remain depressed industry wide due to capital discipline amongst e&ps. We currently believe E&ps will generally keep production flat with year end levels.
For we're currently seeing some upticks in pricing and utilization for our oilfield services in general our customers are taking a very measured and conservative approach to new projects and capital spending but it does now appear we're moving away from the extreme down cycles that occurred over the past year on behalf.
For example, we are in the process of staffing and an additional.
However, our crew that is currently scheduled to start working in mid August. In addition, we expect increased market activity and our sand business in the second half of 2021.
During the second quarter of 2021, we pumped 520 stages with approximately 1 fleet utilized throughout the quarter on average our sand.
Division sold approximately 255000 tons of sand during the second quarter of 2021, and the average sales price for the sand sold was approximately $15.80 per.
Per ton.
While northern White sand price remains challenged we believe a significant reduction in supply has positioned our minds well.
<unk> benefit from an increase in completion activity levels.
Despite the events of the past year, having had significant impacts on our company and the sectors in which we operate mammoth has adapted quickly to the changing environment, we believe our diverse portfolio and migration into the infrastructure.
<unk> to base provides a solid foundation from which to grow in the future.
Our infrastructure business underperformed during the second quarter, primarily due to management and crew turnover that we are actively working to mitigate.
While there are always challenges to growing expanding I believe we are well equipped experience.
<unk> engaged to lead these businesses to more sustainable operating performance going forward.
On the infrastructure space, improving macro trends related to increased project bidding levels and funding capacity in the sector persists.
We continue to pursue opportunities within this sector as we strategically.
<unk> structure, our service offerings for growth.
In both the geographic footprint and the depth of projects.
The need for in recognition of infrastructure projects.
For repairs hardening and modernization of the electrical grid and shift to renewables continues to grow across the country.
Bidding levels continue to be robust. In addition, we believe that at some point for federal government will pass as an infrastructure Bill.
As we mentioned last quarter, our infrastructure companies signed 2 significant multiyear contracts with major utilities, which we expect will provide a base of business and to date. These projects are progressing.
We continue to build our offerings in the infrastructure space, including our engineering group today, we employ 25 people in that group, which reflects significant growth from 1 engineer a short time ago. We currently anticipate continued growth in this group as additional jobs are assigned to them. In addition.
<unk>, our engineering group continues to work closely with our infrastructure team.
This allows us to jointly bid projects as we progress towards expanding the engineering procurement and construction oriented EPC capabilities of our company.
Likewise, our manufacturing equipment refurbishment facility has converted from primarily.
Primarily oilfield service equipment to very specific and specialized infrastructure equipment and products. We believe this capability will provide a competitive advantage going forward.
In addition, a few months ago, we entered the fiber optic space and hired an experienced industry veteran to lead our new subsidiary company.
We believe this is a large market that represents additional opportunities for our company and we've already begun bidding on new projects.
We are pleased with our continued strategic efforts to build out and scale, our engineering design T&D services and equipment capabilities to compete for infrastructure projects to grow.
So in this space.
Having vertically integrated services and equipment manufacturing capabilities will be a key component to scaling operations controlling costs and differentiating.
<unk> in a very competitive landscape, we continue to believe that the future of our company will reside primarily in the infrastructure space.
Which we believe has tremendous growth potential.
Before I turn the call over to Mark to take you through the numbers.
Let me give you an update on Puerto Rico.
We are continuing on our efforts to collect our outstanding receivable from PREPA.
Puerto Rico electrical power authority for work performed.
Cieri Cobra in Puerto Rico, we believe that published documentation documentation to day continues to show that our team performed a difficult job in a difficult environment to save lives and aid the people of Puerto Rico in their time of need.
As a reminder, we earned and we're paid over 1.
<unk> for the work.
Debt cohort performed for PREPA.
Also please note that on June 8 we posted to our website additional information addressing 2 documents recently released by the Federal Emergency Management Agency.
And then related that relate to hurricane.
Repair work performed by Cobra.
1 of these documents were released as a FEMA determination memorandum dated May 26, 2021 related to the first of 2 contracts Cobra successfully performed for PREPA.
And the determination memorandum FEMA concluded based on its review of search.
Billion documents that $890 million of the total contract amount of $945 million were eligible contract costs and net $47 million or 5.5% of the total contract were to be disallowed.
In addition to the determination memorandum the company also recently obtained a draft cost analysis.
It was prepared by FEMA.
This cost analysis represented yet another confirmation that the work performed by Cobra in Puerto Rico was both within the scope of the PREPA contract in all material respects and was at a lower and lower overall cost than other contractors on the island.
As of June.
32021, <unk> $227 million for services performed and $92 million in interest for an aggregate aggregate amount.
Approximately $319 million.
Yesterday, we issued a press release announcing that on July.
July 23, 2021, with our aid PREPA filed an appeal of the entire $47 million that FEMA D. Obligated in May 2000.
'twenty 1 determination memorandum for.
<unk> has 90 days following the receipt of the appeal to notify prep of the depth.
<unk> of the appeal or request additional information.
<unk> does not receive a decision within 180 days. After the appeal was filed PREPA can file a demand for arbitration.
We think this appeal by PREPA for the entire day obligated amount is significant.
Lastly, we have recently sought and obtained help from Senate and congressional members in pursuit of collecting the receivable due from PREPA.
We believe the assistance of these senators and congressional members will be beneficial to the efforts to collect the receivables from PREPA and we continue to pursue multi.
Revenues to collect the money owed.
Again, please visit our website to review these documents.
Let me turn the call over to Mark to take you through the financial performance during the quarter before we open the call to questions.
Thank you Aarti and Hello, everyone.
I hope that all of you have had a chance.
Multiple of read our press release, so I will keep my financial comments brief and focus on certain highlights.
Mammoth revenue during the second quarter of 2021 came in at $47.4 million as compared to $60.1 million during the prior year quarter at $66.8 million.
During the first quarter of this year on the.
Majority of the change quarter over quarter was due to a decrease in infrastructure revenue as a result of management and crew turnover.
As already indicated in his remarks, we believe we are well equipped experienced and engaged to lead these businesses to more sustainable.
<unk> operating performance going forward.
The net loss for the second quarter of 2021 was $34.8 million for 75.
Per share loss as compared to a net loss of $15.2 million for 33 cents.
Per share loss for.
For the same quarter last year.
And a net loss of $12.4 million for 2007 loss per share for the first quarter of 2021.
Adjusted EBITDA as defined and reconciled in our earnings press release was negative $5.5 million for the second quarter of 2000.
1.
As compared to $6.9 million for the same quarter last year and $6.4 million for the first quarter of 2021.
Capex during the second quarter of 2021 was.
<unk> 561000.
We have reduced our full year.
2021, Capex budget to 2 to $4.5 million from $9 million.
As of June 32021, we had cash on hand for approximately $11 million and debt of approximately $64 million.
In conclusion, we would like to thank our 800 employees throughout the company for.
Their hard work dedication and commitment to maintaining safe work sites for themselves on their teammates. We also want to thank all of our stakeholders for their support as we work diligently to enhance stockholder value.
Operator, we would now like to open up the call for questions.
Okay.
Ladies and gentlemen, as a reminder to ask a question. Please press the Star then the 1 on your thoughts.
Non cash.
A question for Keith please standby, while we compile the Q&A roster.
And we have a question coming from the line of Daniel Burke from Johnson Rice. Your line is now open.
Yes, good morning already good morning, Mark.
Hey, good morning, Daniel how are you.
Im doing fine.
Hope you do hope you're doing well as well.
So, let's see I mean I think.
1.1 day.
They're in place to go with with questions. This morning can you guys, maybe talk about the path to repair in the in the infrastructure segment.
I guess last quarter it hadn't felt evident to me that hum the debt.
So this could see sort of the dip it experienced in Q2, so just kind of wondering what the what the performance of the business is as we now sit 1 month into the third quarter has it improved from the levels. We see in Q2 or is it still a day.
Tough place in the very near term.
Good morning, Daniel I think as you look at Q3, we certainly seen.
Ongoing bidding activity for the infrastructure business. So we're excited about that we're excited about that.
Continued integration of the infrastructure business with both our engineering offerings.
The business as well as our recent entry into the fiber business that already spoke about inside of his comments. So I think that's probably.
A long answer for we're seeing increased opportunities and it will likely take through Q3 absent storm work to increase our crew count.
Offering and restore profitability of the infrastructure business, but we are seeing strong demand and we believe we made the right pivot into the infrastructure side, Yeah, I would add on to that and say that.
Macro wise.
I think we're we're into a perfect spot.
And to all the reasons.
We alluded to with the vertical integration and the manufacturing we think equipment is going to get short in this space and we.
We think that will be perfectly situated because we can refurbish and <unk> manufacturers some of the pieces and parts.
That we do and again, our engineering group continuing to grow up to 25.
<unk> started with 1 we started with 1 or fiber optics, and we are bidding is becoming more and more robust with that you still got to execute on a day to day basis and the things that caused us issues in Q2 were crew turnover.
That type of things some of it we wanted to happen.
Since that time, we have gotten a little bit more bidding activity a little bit more profitable business.
But that's not something that you fix overnight so go.
All forward, we're going to we're going to work our way, we're going to stay disciplined with our approach and we're going to continue to work our way through.
That aspect of.
Our performance and execution.
It's not that everything is broken.
I think Daniel you'd also.
<unk> probably be interested on what's going on from our perspective in the oilfield as well.
We're seeing a little bit.
Better opportunities obviously, it helps when you've got $4 gas.
In late August.
Your futures are out there we are seeing some additional bidding activity coming from the private while the publics have a tendency to remain pretty.
Pretty disciplined in that type of thing we are seeing some additional from from the privates.
And.
We believe that debt bodes well for US we're partners second.
Crew together.
A little bit of improved pricing from where we had been earlier with our frac crews. So we will have 2 frac crews running.
You always give a little bit of plus or minus with when youre dealing with the e&ps.
And well preparation, but by mid August we should have 2.2 running.
So we feel good about debt our forward indicators on our sand seem to be.
Stronger than they had been in the past with sand companies actually are with E&ps actually looking out to the October November timeframe start start.
Accumulating sand for the Frac shop, Frac jobs that they're doing so but again, we're focused on on the day to day of fixing the infrastructure aspect.
<unk> the crews that we have and making money on just the core.
Aspects of the distribution.
Transmission business.
Got it.
All right, let me, let me ask 1 more kind of on the same topics but.
I can kind of span both Oss here and infrastructure. So you've got some need then to staff up a little bit on the oilfield side, if youre, adding that second fleet and obviously, we're storing crew count on.
<unk> in the infrastructure side is it imperative and I guess.
I'm just looking for general.
Thoughts on sort of the challenges of ramping up and maintaining personnel given given challenges around labor I guess.
Across across the United States really broadly.
Yes.
On the <unk>.
<unk> gone back and ramped up on.
On the Frac side.
It has been relatively easy.
Easier compared to some of our.
For example.
We were losing.
A lot of different companies were because of the.
As for our drivers.
Truck drivers had optionality not only ours, but other companies that were there.
Net hauling sand to the well site.
Truck drivers have a lot of options and things like that we were able to staff. Our frac crews, we did go up and our sand.
Facilities with some additional.
<unk>.
People and that type of thing but.
I think as we ease into fall it will become.
Labor shortages that were there we will take care of themselves and we're finding it a little bit easier too.
To bring people on.
Okay.
<unk>.
Look guys I'll leave it there I appreciate the chance to checking this morning. Thank you.
No. We appreciate it day, 1 thing I would bring your attention to that.
I know you haven't had a lot of time to go through the documents and all that type of thing but.
Our long term debt.
All right current position.
Remember 31.2020.
Was it $81 million and some change.
Today, it's at 62.8 so despite.
A little bit of a lack of execution and performance in Q2, we're still continuing to take down debt long term debt and as you know we are.
We're very debt averse.
And.
If in wind.
But when the PREPA receivable comes.
Certainly we'll be in very very good shape.
I would say that.
The conversations between us and PREPA.
Have been more intense.
Net of more intense more.
Engaging in the last 60 to 90 days than they were on the previous 2 years.
You see overtures at Puerto Rico is going to try to get out of bankruptcy.
PREPA is going to try to follow them.
Obviously, we are close.
A petition post bankruptcy petition creditor and we feel like our position.
<unk> is very strong so.
I don't think anybody in the marketplace is giving us credit for the $300 million receivable.
But.
We continue to pursue that with every bit of the.
Studies, we have including as we mentioned in our press release yesterday with the congressional incentive Hill.
Understood understood.
I appreciate it.
The magnitude of that effort.
Thank you. Thank you guys for the time.
Thank you Daniel.
And I'm showing no further questions at this time I would now like to turn the call back over to management for any closing remarks.
Thank you very much we believe the future is bright for mammoth and our team members as we continued to strategically develop our service offerings to grow and deliver stockholder value in the years to come we look forward to talking to you.
Bill the conclusion of the third quarter. Thank you very much.
Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.
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Ladies and gentlemen, thank you for standing by and welcome to the Mammoth Energy services second.
Quarter 2021 earnings conference call.
At this time, all participants on a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During this session you will need to press. The Star then the 1 key on you touched on telephone if he will call operator assistance. Please press Star then zero.
I would now.
I would like to hand, the conference over to your Speaker host Rick Black Investor Relations. Please go ahead.
Thank you operator, and good morning, everyone. We appreciate you joining us for the Mammoth Energy Conference call to review second quarter 2021 results. This call is also being webcast and can be accessed through the audio link on the events and presentations.
<unk> page of the Investor Relations section of Mammoth energy Dot com.
Information recorded on this call speaks only as of today July 32021. So please be advised that any time sensitive information may no.
The longer be accurate as of the date of any replay.
I would also like to remind you that the statements made in today's disk.
Discussion that are not historical facts, including statements, where expectations or future events or future financial performance.
And are considered forward looking statements made pursuant to the safe harbor's provision for the private Securities Litigation Reform Act of 1095.
We will be making forward looking statements as part of today's call.
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.
Exchange Commission.
Management May also refer to non-GAAP measures, including adjusted net income loss and adjusted EBITDA reconciliations to the nearest GAAP measures can be found at the end of our earnings press release Mammoth energy assumes no obligation to publicly update or revise any forward looking statements.
And now.
Now I would like to turn the call over to Mammoth Energy CEO, Australia already.
Thank you Rick and good morning, everyone.
Second quarter results did not meet our expectations. However, we are extremely focused on improving near term results as we continue migrating the company further into the infrastructure space.
As a part of our shift to a broader industrial focus to enhance long term growth and sustainability during.
During the quarter, our oilfield business is good observed some positive green shoots.
While oil prices have rebounded from recent lows activity levels remain depressed industry wide due to capital discipline amongst E&P.
Base. We currently believe E&ps will generally keep production flat with year end levels.
However, we are currently seeing some upticks in pricing and utilization for our oilfield services in general our customers are taking a very measured and conservative approach to new projects and capital spending but it does now appear we're moving away from the <unk>.
Cycle that occurred over the past year on a half.
For example, we are in the process of staffing in an additional Frac crew that is currently scheduled to start working in mid August. In addition, we expect increased market activity and our sand business in the second half of 2021.
During the second quarter of 2021, we pumped 520.
20 stages with approximately 1 fleet utilized throughout the quarter on average our sand division sold approximately 255000 tons of sand during the second quarter of 2021, and the average sales price for the sand sold was approximately $15.80.
Per ton.
While northern White sand.
Sand price remains challenged we believe a significant reduction in supply has positioned our minds well to benefit from an increase in completion activity levels.
Despite the events of the past year, having had significant impacts on our company and the sectors in which we operate mammoth has adapted quickly to the changing environment.
We believe our diverse portfolio and migration into the infrastructure space provides a solid foundation from which to grow in the future.
Our infrastructure business underperformed during the second quarter, primarily due to management and crew turnover that we are actively working to mitigate.
While there are always challenges to growing expanding I believe we are well equipped experienced engaged to lead these businesses to more sustainable operating performance going forward.
On the infrastructure space, improving macro trends related to increased project bidding levels and funding capacity in the sector.
Per steps.
We continue to pursue opportunities within this sector as we strategically structure our service offerings for growth.
In both the geographic footprint and the depth of projects.
The need for in recognition of infrastructure projects.
<unk> hardening and Mark.
<unk> of the electrical grid and shift to renewables continues to grow across the country bidding levels continue to be robust. In addition, we believe that at some point for federal government will pass as an infrastructure Bill.
As we mentioned last quarter, our infrastructure companies signed 2 significant multiyear contracts with major.
For utilities, which we expect will provide a base of business and to date. These projects are progressing.
We continue to build our offerings in the infrastructure space, including our engineering group today, we employ 25 people in that group, which reflects significant growth from 1 engineer a short time ago.
We currently anticipate.
Dissipate continued growth in this group is additional jobs are assigned to them. In addition, our engineering group continues to work closely with our infrastructure team.
This allows us to jointly bid projects as we progress towards expanding the engineering procurement and construction oriented EPC capabilities of our company.
Yeah.
Likewise, our manufacturing equipment refurbishment facility has converted from primarily oilfield service equipment, 2 very specific and specialized infrastructure equipment and products. We believe this capability will provide a competitive advantage going forward.
In addition, a few months ago, we entered the fiber.
Fiber optic space and hired an experienced industry veteran to lead our new subsidiary company called Falcon. We believe this is a large market that represents additional opportunities for our company and we've already begun bidding on new projects.
We are pleased with our continued strategic efforts to build out and scale.
Our engineering design, T&D services and equipment capabilities to compete for infrastructure projects to grow in this space.
Having vertically integrated services and equipment manufacturing capabilities will be a key component to scaling operations controlling costs and differentiating <unk>.
In a very competitive landscape we.
To believe that the future of our company will reside primarily in the infrastructure space, which we believe has tremendous growth potential.
Before I turn the call over to Mark to take you through the numbers, let me give you an update on Puerto Rico.
We are continuing on our efforts to collect our.
Continued receivable from PREPA, the Puerto Rico Electrical power authority for work performed by our subsidiary Cobra in Puerto Rico, We believe that published documentation documentation to day continues to show that our team performed.
Difficult job in a difficult environment to save lives and aid.
Standing on our Puerto Rico in their time of need.
As a reminder, we earned and we're paid over $1 billion for the work.
That cohort performed for PREPA.
Also please note that on June 8 we posted to our website additional information addressing 2 documents recently released by.
People on emergency management agency.
Then related that relate to hurricane repair work performed by Cobra 1.
1 of these documents were released as a FEMA determination memorandum dated May 26, 2021 related to the first of 2 contracts Cobra successfully performed for PREPA.
Hello.
And the determination memorandum FEMA concluded based on its review of certain documents that $890 million of the total contract amount of $945 million were eligible contract costs and net $47 million or 5.5% of the total contract were to be disallowed.
The Federal addition to the determination memorandum. The company also recently obtained a draft cost analysis prepared by FEMA.
This cost analysis represented yet another confirmation that the work performed by Cobra in Puerto Rico was both within the scope of the PREPA contract in all material respects and was at a low.
Lower overall cost than other contractors on the island.
As of June 32021, PREPA owed us $227 million for.
For services performed and $92 million in interest for an aggregate aggregate amount of approximately 319 million.
Interest.
Yesterday, we issued a press release announcing that on July 23, 2021, with our aid PREPA filed an appeal of the entire $47 million that FEMA day obligated in the May 2000.
'twenty 1 determination of memorandum.
And that has 90 days following the receipt of the appeal to notify prep of the depth disposition of the appeal or request additional information if PREPA does not receive a decision within 180 days. After the appeal was filed PREPA can file a demand for arbitration.
We think this appeal.
Claimed by PREPA for the entire day obligated amount is significant.
Lastly, we have recently sought and obtained help from Senate and congressional members in pursuit of collecting the receivable due from PREPA. We believe the assistance of these senators and congressional members will.
An official to the efforts to collect the receivables from PREPA and we continue to pursue multiple avenues to collect the money owed.
Again, please visit our website to review these documents.
Let me turn the call over to Mark to take you through the financial performance during the quarter before we open the call to questions.
B.
Thank you Aarti and Hello, everyone I hope that all of you have had a chance to read our press release. So I will keep my financial comments brief and focus on certain highlights.
<unk> revenue during the second quarter of 2021 came in at $47.4 million as compared.
<unk> $8.1 million during the prior year quarter of $66.8 million during the first quarter of this year.
A majority of the change quarter over quarter was due to a decrease in infrastructure revenue as a result of management and crew turnover.
As already indicated in his remarks.
We believe we are well equipped experienced and engaged to lead these businesses to more sustainable operating performance going forward.
The net loss for the second quarter of 2021 was $34.8 million for <unk> 75.
Per share loss as compared to a net losses.
Loss of $15.2 million for 33.
Per share loss for the same quarter last year.
And a net loss of $12.4 million for 2007 loss per share for the first quarter of 2021.
Adjusted EBITDA as defined and reconciled in our earnings.
Earnings Press release was negative $5.5 million for the second quarter of 2021 at.
As compared to $6.9 million for the same quarter last year and $6.4 million for the first quarter of 2021.
Capex during the second quarter of 2021.
1 for.
Was approximately 561000.
We have reduced our full year 2021, capex budget to 2 to $4.5 million from $9 million.
As of June 32021, we had cash on hand for approximately $11 million and debt of approximately 64.
Yes.
In conclusion, we would like to thank our 800 employees throughout the company for their hard work dedication and commitment to maintaining safe work sites for themselves on their teammates. We also want to thank all of our stakeholders for their support as we work diligently to enhance stockholder value.
Operator, we would now like to open up the call for questions.
Ladies and gentlemen asked your line is now ask a question. Please press the Star then the 1 on your price.
Cash can be doing a question pressed upon key please standby, while we compile the Q&A roster.
And we have a question coming from the line of Daniel Burke from Johnson Rice. Your line is open.
Yes, good morning already good morning, Mark.
Hey, good morning, Daniel how are you doing.
I'm doing fine.
Hope you do hope you're doing well as well.
Okay. So, let's see I mean I think.
Sort of what pretty glaring place to go with questions. This morning can you guys, maybe talk about the path to repair in the infrastructure segment.
Yes.
I guess last.
Last quarter it hadn't felt evident to me that.
But the business.
See sort of the dip it experienced in Q2, so just kind of wondering what the what the performance of the business is as we now sit 1 month into the third quarter has it improved from the levels. We see in Q2 was.
Is it still in a tough place in the very near term.
Good morning, Daniel I think as you look at Q3, we certainly seen.
Ongoing bidding activity for the infrastructure business. So we're excited about that we're excited about.
Continued integral.
Integration of the infrastructure business with both our engineering offerings as well as our recent entry into the fiber business that already spoke about inside of his comments.
Think that's probably a.
Long answer for we're seeing increased opportunities.
It will likely take through Q3 absent storm work to increase our crew count and restore profitability of the infrastructure business, but we are seeing strong demand and we believe we made the right pivot into the infrastructure side, Yeah, I would add on to that and say that.
Macro wise.
We think we're into a perfect spot.
And to all the reasons that we alluded to with the vertical integration and the manufacturing we think equipment is going to get short in the space.
And.
We think that will be perfectly situated because we can refurbish and <unk> manufacturers some of the pieces and parts.
Is that.
Debt, we do and again, our engineering group continuing to grow up to 25 people starting with 1 we started with 1 for fiber optics and we are bidding is becoming more and more robust with that you still got to execute on a day to day basis and the things that caused us issues in Q2 were.
<unk> turnover.
That type of things some of it we wanted to happen.
Since that time, we have gotten a little bit more bidding activity a little bit more profitable business.
That's not something that you can fix overnight so.
Going forward, we're going on we're going to work our way, we're going to stay disciplined with.
Our coach and we're going to continue to work our way through.
That aspect of performance and execution.
It's not that everything is broken and I.
Daniel you would also.
You'd probably be interested in what's going on from our perspective in the oilfield as well.
We're seeing a little bit.
Better opportunities obviously it helps when you've got $4 gas in late August and.
Your futures are out there we are seeing some additional bidding activity coming from the private is while the publics have a tendency to remain pretty.
Pretty disciplined.
And that type of thing we are seeing some additional from from the privates.
And we believe that debt bodes well for US who are partners second.
Crew together.
A little bit of improved pricing from where we had been earlier with our frac crews. So we will have 2 frac crews running.
<unk>.
You always give a little bit of plus or minus with when youre dealing with the e&ps in wealth preparation, but by mid August we should have 2.2 running.
So we feel good about debt our forward indicators on our sand seem to be <unk>.
Stronger than they had been in the past with sand companies.
Our with E&ps actually looking out to the October November timeframe start start.
Accumulating sand for the Frac shop, Frac jobs that they're doing so but again, we're focused on the day to day of fixing the infrastructure aspect.
Stabilizing the crews that we.
Actual and making money on just the core.
For aspects of the distribution and transmission business.
Got it.
All right, let me, let me ask 1 more kind of on the same topics but.
I can kind of span both Oss here and infrastructure. So you've got some need then the staff.
Up a little bit on the ortho side, if youre, adding that second fleet.
Obviously, we're storing crew count on the infrastructure side as an imperative and I guess I guess I'm just looking for general.
Thoughts on sort of the challenges of ramping up and maintaining personnel given given challenges around labor I guess.
Yes.
Across across the United States really broadly.
Yes.
As we've gone back and ramped up.
On the Frac side.
On.
It has been relatively easy.
Easier compared to some of our for.
For example.
We were losing I think a lot of different companies were because of the lack of truck drivers.
On truck drivers had optionality not only ours, but other companies that were debt.
Hauling sand to the well site.
Drivers have a lot of options and things like that we were able to.
Except for Frac crews, we did go up and our sand.
Facilities with some additional people in that type of thing but.
I think as we ease into fall it will become.
Labor shortages that were there we will take care of themselves and we're finding it a little bit easier too.
2.
To bring people on.
Okay.
Alright.
Look guys I'll leave it there I appreciate the chance to checking this morning. Thank you.
No. We appreciate it and 1 thing I would bring your attention to.
Debt.
I know you haven't had a lot of time.
On to go through the documents and all that type of thing but.
Our long term debt net of current position.
December 31.2020.
Was it $81 million and some change today.
Today, it's at 62.8 so despite.
A little bit of a lack of execution and performance.
Q2, we're still continuing to take down debt long term debt and as you know we are very debt averse and.
If in wind.
But when the PREPA receivable comes.
Certainly will.
We will be in very very good shape.
I would say that.
Net.
The conversations between us and PREPA.
Have been more intense more intense more.
Engaging in the last 60 days.
<unk> 90 days than they were on the previous 2 years.
You see overtures at Puerto Rico is going to try to get out of.
Bankruptcy and PREPA is going to try to follow on obviously, we are post petition.
Post bankruptcy petition creditor.
And we feel like our position.
<unk> is very strong so.
I don't think anybody in the marketplace is giving us credit for the $300 million receivable.
<unk>.
But.
We continue to pursue that.
Every bit of the abilities, we have including as we mentioned in our press release yesterday.
Congressional incentive health.
Understood understood.
Appreciate that.
The magnitude of that effort.
Again, thank you thank.
You guys for the time.
Thank you Daniel.
And I'm showing no further questions at this time I would now like to turn the call back over to management for any closing remarks.
Thank you very much we believe the future is bright for mammoth and our team members as we continued to strategically.
All of our service offerings to grow and deliver stockholder value in the years to come we look forward to talking to you.
At the conclusion of the third quarter. Thank you very much.
Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.