Q3 2024 Mammoth Energy Services Inc Earnings Call

Operator: Greetings and welcome to the Mammoth Energy Services 3rd Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Greetings and welcome to the Mammoth Energy services third quarter 2024 earnings Conference call.

At this time all participants are in a listen only mode.

Operator: A brief question and answer session will follow the formal presentation.

A brief question and answer session will follow the formal presentation.

Operator: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

Zach Vaughan: It is now my pleasure to introduce your host, Zach Vaughan.

Speaker Change: He is now my pleasure to introduce your host Zach Vaughan. Thank you Sir you may begin.

Operator: Thank you, sir. You may begin.

Arty Straehla: Thank you, Christine, and good morning, everyone. We appreciate you joining us for the Mammoth Energy conference call to review 2024 third quarter 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 www.mammothenergy.com.

Zach Vaughan: Thank you Christine and good morning, everyone. We appreciate you joining us for the Mammoth Energy Conference call to review 2024 third quarter 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 Www Dot Mammoth energy Dot com.

Arty Straehla: Information reported on this call speaks only as of today, November 1st, 2024. Please be advised that any time-sensitive information may no longer be accurate as of any subsequent 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 Provision of the Private Securities Litigation Reform Act of 1995. We'll be making forward-looking statements as part of today's call that by their nature are uncertain and outside of the company's control.

Zach Vaughan: Information reported on this call speaks only as of today November one 2024.

Zach Vaughan: Be advised that any time sensitive information may no longer be accurate as of.

Zach Vaughan: Any subsequent date.

Zach Vaughan: 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 provision of the private Securities Litigation Reform Act of back to 95.

Zach Vaughan: 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.

Arty Straehla: Actual results made different material.

Zach Vaughan: Actual results may differ materially.

Arty Straehla: Please refer to the earnings press release that was issued today for our disclosure on forward looking.

Zach Vaughan: Please refer to the earnings press release that was issued today for our disclosure on forward looking statements.

Arty Straehla: Unknown Attendee, Ken Dennard, Arty Straehla, Mark Layton, Michael Mathison, Mammoth Energy Management may also refer to non-GAP measures, including adjusted even... The definition of this non-gap measure and its reconciliation of the most directly comparable gap. can be found at the end of our earnings release and in our investor press.

Zach Vaughan: These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission.

Zach Vaughan: Management May also refer to non-GAAP measures, including adjusted EBITDA.

Zach Vaughan: But definitely the definition of this non-GAAP measure and its reconciliation to the most directly comparable GAAP measure can be found at the end of our earnings release and in our Investor presentation, which can be found on our website.

Arty Straehla: Mammoth Energy assumes no obligation to publicly update or revise any forward.

Zach Vaughan: Its energy assumes no obligation to publicly update or revise any forward looking statements.

Arty Straehla: And now I'd like to turn it over to Mammoth Energy CEO Arty Thank you, Zach, and good morning, everyone. I'll start with some commentary around several highlights and recent developments for Mammoth before discussing our third quarter results. I'll then provide commentary about our outlook before turning the call over to Mark to cover the financials in more detail.

Speaker Change: Now I'd like to turn it over to Mammoth energy CEO already streamlined.

Arty Straehla: Thank you Zach and good morning, everyone I'll start with some commentary around several highlights and recent developments for <unk> before discussing our third quarter results. I'll, then provide commentary about our outlook before turning the call over to Mark to cover the financials in more detail.

Arty Straehla: We have several positive developments to share with you all today and plenty to look forward to as we work to strengthen Mammoth in the future. I'll begin with an update on where things stand regarding COBRA and the previously announced settlement agreement with the Puerto Rican Electric Power Authority, or PREPA. So far, we have received two of the three agreed upon installments totaling $168.4 million. The final installment of $20 million will be paid upon the confirmation of PREPA's plan of adjustment in their bankruptcy proceedings. We look forward to receiving this final amount and concluding our business with them after seven long years.

Arty Straehla: Several positive developments to share with you all today and plenty to look forward to as we work to strengthen mandates in the future I'll begin with an update on where things stand regarding Cobra and the previously announced settlement agreement with the Puerto Rican electric power authority or PREPA. So far we have received two of the three agreed upon us installments totaling a 100.

Third and $68 $4 million the final installment of $20 million will be paid upon the confirmation of prep as plan of adjustment and their bankruptcy proceedings. We look forward to receiving this final amount and concluding our business with them after seven long years.

Arty Straehla: As announced in early October, we utilized a portion of the settlement proceeds to pay off our term credit facility, including accrued and unpaid interest, which had an aggregate balance of $50.9 million. This allowed us to terminate the facility, and as of today, Mammoth is debt free. We intend to use the remaining amount, which will be approximately $137.5 million, after the final $20 million installment is received, as cash on the balance sheet to invest back in our business and for general corporate purposes. As we evaluate our capital allocation strategy in the near term, we believe the greatest area of emphasis for us will be to grow our infrastructure business through investments in T&D and engineering, which are areas that we see immense opportunity.

Arty Straehla: As announced in early October we utilized a portion of the settlement proceeds to pay off our term credit facility, including accrued and unpaid interest, which had an aggregate balance of $59 million. This allowed us to terminate the facility and as of today Mammoth is debt free.

We intend to use the remaining amount, which will be approximately $137 $5 million. After the final $20 million installment is received as cash on the balance sheet.

Arty Straehla: First back in our business and for general corporate purposes, as we evaluate our capital allocation strategy in the near term. We believe the greatest area of emphasis for us will be to grow our infrastructure business through investments in T&D and engineering, which are areas that we see immense opportunity. We also in play.

Arty Straehla: We also plan to invest in our pressure pumping assets to modernize our fleets through Tier 4 dual-fuel Fun.

To invest in our pressure pumping assets to modernize their fleets through tier four dual fuel.

Arty Straehla: Oh, great. Turning now to our results. Our third quarter results were challenged due to industry softness that particularly impacted natural gas basins where we operate and constrained our well completion services division and other oil field services. This demand softness continued to result in the underutilization of our assets. However, contrary to the typical seasonality and budget exhaustion at the end of the year, our Well Completion Service Division is seeing a rebound in activity in the fourth quarter. After activity bottomed in the third quarter, we recently activated a fleet and expect to activate a second fleet in the coming weeks.

Arty Straehla: Upgrades.

Arty Straehla: Now to our results.

Arty Straehla: Our third quarter results were challenged due to industry softness, particularly impacted natural gas basins, where we operate and constrained our well completion services division and other oilfield services. This demand softness continued to result in the under utilization of our assets.

Arty Straehla: However, contrary to the typical seasonality and budget exhaustion at the end of the year, our well completion service division is seeing a rebound in activity in the fourth quarter.

Arty Straehla: After activity bottomed in the third quarter, we recently activated a fleet and expect to activate a second fleet in the coming weeks. We believe activity will remain challenged throughout the first half of 2025, but do expect to see a ramp in activity in the back half of the year as numerous macro tailwind are expected to materialize and support incremental natural gas.

Arty Straehla: We believe activity will remain challenged throughout the first half of 2025, but do expect to see a rampant activity in the back half of the year as numerous macro tailwinds are expected to materialize and support incremental natural gas production. As I mentioned, we plan to invest in this division over the next year to upgrade our pumps. do more efficient technology, which we believe will better position us to capitalize on demand as the market improves. As always, we remain committed to efficiently managing our capital expenditures to align with expected activity levels and the demand of our customers.

Arty Straehla: Sure.

Arty Straehla: As I mentioned, we plan to invest in this division over the next year to upgrade our pumps.

Arty Straehla: More efficient technology, which we believe will better position us to capitalize on demand as the market improves.

Arty Straehla: As always we remain committed to it.

Arty Straehla: Efficiently managing our capital expenditures to align with expected activity levels and the demand of our customers.

Arty Straehla: Turning now to our infrastructure service business, we deployed approximately one-third of our crews in response to Helene and other storms, and these weather-related events have continued to impact the early parts of the fourth quarter with Milton, which has resulted in sustained demand. We are continuing to see bidding opportunities related to engineering, fiber, transmission, and distribution, all of which are areas that I believe we have differentiated and specialized capabilities to capitalize on opportunities in the market. Our engineering group continues to do well, and we have secured a strong backlog of business that will enable us to continue to grow.

Arty Straehla: Turning now to our infrastructure services business, we deployed approximately one third of our crews in response to Helene.

Arty Straehla: And other storms.

Arty Straehla: These weather related events have continued to impact the early parts of the fourth quarter with Milton, which was which has resulted in a sustained demand. We are continuing to see bidding opportunities related to engineering fiber transmission and distribution all of which are areas that I believe we have differentiated and specialized capabilities to <unk>.

Arty Straehla: Lives on opportunities in the market.

Arty Straehla: Our engineering group continues to do well and we have secured a strong backlog of business that will enable us to continue to grow.

Arty Straehla: The release of the Infrastructure Investment and Jobs Act funds also provides wind in the sails for this business, and we remain optimistic for improved financial results in the coming quarter. Given our favorable outlook for the Infrastructure Services Division and the macro tailwinds that are supporting the demand cycle such as data centers, AI, and nuclear developments, we are making strategic investments to add equipment and crews which will improve our positioning within the market and drive long-term growth. Although we have better visibility than we've had in the past, our teams across the organization remain focused on efficient and effective cost management to align with the activity levels of our customers.

Arty Straehla: Release of the infrastructure investment and jobs Act.

Arty Straehla: <unk> also provides women wind in the sales for this business and we remain optimistic for improved financial results in the coming quarters, given our favorable outlook for the infrastructure services division and the macro tail winds that are supporting the demand cycles, such as data centers AI and nuclear developments, we are making strategic.

Arty Straehla: Investments to add equipment, and crews, which will improve our positioning within the market and drive long term growth.

Arty Straehla: Although we have better visibility than we've had in the past our teams across the organization remain remained focused on efficient and effective cost management to align with the activity levels of our customers with their our improved debt free balance sheet and our significant cash position, we have new opportunities that are available to us.

Arty Straehla: With our improved debt-free balance sheet and our significant cash position, we have new opportunities that are available. It has become increasingly critical that we operate as prudent stewards of capital to strengthen Mammoth when the anticipated demand increases later next year. Moving forward, we intend to use the resources at our disposal to enhance Mammoth's positioning within the markets that we operate in. Additionally, we are now open to potential strategic opportunities that would allow us to add a creative scale and high quality assets, while still giving us the ability to maintain the strength of our balance sheet.

Arty Straehla: It has become increasingly critical that we operate as prudent stewards of capital the strengthened mamma's anticipated.

Demand increases later next year moving forward, we intend to use the resources at our disposal.

Arty Straehla: <unk> positioning within the markets that we operate in.

Arty Straehla: Additionally, we are now open to potential strategic opportunities that would allow us to add accretive scale and high quality assets, while still giving us the ability to maintain the strength of our balance sheet.

Arty Straehla: I'm excited for us to explore new opportunities to create value and look forward to delivering improved results for all stakeholders.

Arty Straehla: I am excited for us to explore new opportunities to create value and look forward to delivering improved results for all stakeholders now.

Mark Layton: Now let me turn the call over to Mark to take you through our financial performance in greater detail.

Speaker Change: Now, let me turn the call over to Mark to take you through our financial performance in greater detail.

Mark Layton: Thank you, Arty. I hope everyone is doing well, and we appreciate you joining us today. As I usually do, I'm going to take this time to provide additional details on some meaningful metrics and several key highlights.

Mark: Thank you already I hope everyone is doing well and we appreciate you joining us today as I, usually do I'm going to take this time to provide additional details on some meaningful metrics and several key highlights.

Mark Layton: A detailed breakdown of our results can be found in our earnings release and in our 10-Q once it is on file with the SEC. Mammoth's total revenue during the third quarter of 2024 came in at $40 million, compared to $51.5 million in the second quarter of 2024. The 22% sequential decrease in total revenues was primarily attributable to the continued activity softness in the natural gas basins that our Well Completion Services Division operates. We continue to believe there are positive demand implications for natural gas on the horizon, and we remain optimistic that associated activity increases will occur in 2025.

Mark: A detailed breakdown of our results can be found in our earnings release and in our 10-Q once it is on file with the SEC.

Mark: <unk> total revenue during the third quarter of 2024 came in at $40 million compared to $51 5 million in the second quarter of 2024.

Mark: 22% sequential decrease in total revenues was primarily attributable to the continued activity softness and the natural gas basins that are well completion services Division operates.

Mark: We continue to believe there are positive demand implications for natural gas on the horizon and we remain optimistic that associated activity increases will occur in 2025.

Mark Layton: Additionally, the strategic investments we are making across our business divisions will support further financial improvement. In Q3 of 2024, we had one pump down crew active, which accounted for the division's $2.2 million of revenue during the quarter. The Well Completion Services Division remained challenged during the third quarter due to continued activity softness felt across the industry, as well as sustained lower natural gas prices and commodity price uncertainty that impacted utilization. Operators continued to push much of their activity to the right, and this resulted in persistent white space on the calendar. While we largely expected these trends to linger throughout the remainder of 2024 due to typical seasonality and end-of-year budget exhaustion, we recently activated a pressure-pumping fleet and anticipate activating a second fleet in the coming weeks.

Mark: Additionally, the strategic investments, we are making across our business divisions will support further financial improvement.

Mark: In Q3 of 2024, we had one popped down crew active which accounted for the divisions $2 2 million of revenue during the quarter.

Mark: The well completion services Division remained challenged during the third quarter due to continued activity softness felt across the industry.

Mark: As well as sustained lower natural gas prices and commodity price uncertainty that impacted utilization.

Mark: Operators continue to push much of their activity to the right and this resulted in persistent white space on the calendar.

Mark: While we largely expect these trends to linger throughout the remainder of 2024 due to typical seasonality and end of year budget exhaustion. We recently activated a pressure pumping fleet and anticipate activating a second fleet in the coming weeks.

Mark Layton: We currently expect that both of these fleets will be utilized through the end of the year. Looking forward, our current visibility points to relatively flat activity levels in the first half of 2025, but we believe there will be demand-driven improvements later next year. We will remain disciplined stewards of capital and continue to align our spending appropriately with the demand that we see from our customers. But as already mentioned, we intend to invest to upgrade our pressure pumping equipment to more efficient technology in preparation for rampant demand later next year. Our sand division sold approximately 163,000 tons of sand in the third quarter of 2024 at an average sales price of $22.89 per ton.

Mark: We currently expect that both of these fleets will be utilized through the end of the year.

Mark: Looking forward, our current visibility points to relatively flat activity levels in the first half of 2025.

Mark: But we believe there will be demand driven improvements later next year.

Mark: We will remain disciplined stewards of capital and continue to align our spending appropriately with the demand that we see from our customers.

Mark: But as already mentioned, we intend to invest to upgrade our pressure pumping equipment to more efficient technology in preparation for a ramp in demand later next year.

Mark: Our sand division sold approximately 163000 tons of sand in the third quarter of 2024 at an average sales price of $22 89 per ton.

Mark Layton: compared to 141,000 tons of sand at an average sales price of $22.73 per ton during the second quarter of 2024. We continue to be encouraged by discussions with our customers and expect further improvements in the coming quarter. Our Infrastructure Services Division contributed revenue of $26 million for the third quarter of 2024, which represents a sequential decline when compared to $31.4 million for the second quarter. We had approximately one week of storm-related work at the end of the quarter that utilized roughly one-third of our crews in response to Hurricane Helene. This storm related work continued into the fourth quarter as we responded to the aftermath of Hurricane Milton.

Mark: Third to 141000 tons of sand at an average sales price of $22 73 per ton during the second quarter of 2024.

Mark: We continue to be encouraged by discussions with our customers and expect further improvements in the coming quarters.

Mark: Our infrastructure services Division contributed revenue of 26 million for the third quarter of 2024.

Mark: Which represents a sequential decline when compared to $31 4 million for the second quarter.

Mark: Got approximately one week of storm related work at the end of the quarter that utilized roughly one third of our crews and response to hurricane Helene.

Mark: This storm related work continued into the fourth quarter as we responded to the aftermath of Hurricane Milton.

Mark Layton: We are seeing an uptick in bidding activity and are focused on operational execution. We will continue to pursue opportunities within this sector as we strategically structure our service offerings for growth. especially around T&D and fiber projects. We have allocated additional capital this year and in 2025 for investments in our infrastructure services division related to T&D. which will entail the purchase and lease of various incremental equipment. As already mentioned, we also have a great engineering team, and we are seeing significant traction with our service offering. which we plan to support with additional investments over time. Our net loss for the third quarter of 2024 was $23.4 million for a loss of $0.50 per deleted share.

Mark: We are seeing an uptick in bidding activity and our focus on operational execution.

Mark: We will continue to pursue opportunities within this sector as we strategically structure, our service offerings for growth, especially around T&D and fiber projects.

Mark: We have allocated additional capital this year and in 2025 for investments in our infrastructure services division related to TNT.

Mark: Which will entail the purchase and lease of various incremental equipment.

Mark: As already mentioned, we also have a great engineering team and we are seeing significant traction with our service offerings, which we plan to support with additional investments over time.

Mark: Our net loss for the third quarter of 2024 was $23 4 million or a loss of <unk> 50 per diluted share.

Mark Layton: Adjusted EBITDA, as defined and reconciled in our earnings release, was a negative $6.4 million for the third quarter of 2024. CapEx for the third quarter of 2024 was approximately $1.9 million, which was down sequentially compared to our CapEx of $4.9 million for the second quarter. However, although we remain focused on prudently managing our capital to align our spending with the activity levels of our customers, following the receipt of settlement funds from PREPA, we have adjusted our current CapEx budget for 2024 to $23 million, which represents an increase from the previously announced CapEx guidance of $12 million.

Mark: Adjusted EBITDA as defined and reconciled in our earnings release was a negative $6 4 million for the third quarter of 2024.

Capex for the third quarter of 2024 was approximately $1 9 million, which was down sequentially compared to our capex of $4 9 million for the second quarter.

Mark: However, although we remain focused on prudently managing our capital to align our spending with the activity level levels of our customers. Following the receipt of settlements bonds from PREPA. We have adjusted our current Capex budget for 2024 to 23 million, which represents an increase from the previously announced Capex guidance.

Mark: A $12 million.

Mark Layton: This increase relates to the investments we are making in our infrastructure and well-completion services divisions to upgrade equipment, add scale, and grow our capabilities in order to improve our service offerings ahead of the anticipated rampant demand. Selling general and administrative expenses totaled approximately $8.7 million during the third quarter of 2024. Professional fees related to Puerto Rico totaled $1.4 million for the third quarter of 2024 and $4.1 million year-to-date. We expect these fees to decline substantially in future periods as a result of the settlement agreement with PREPA. As of September 30, 2024, he had cash on hand of $4.2 million.

Mark: This increase relates to the investments, we are making in our infrastructure and well completion services divisions.

Mark: Upgrade equipment add scale and grow our capabilities in order to improve our service offerings ahead of the anticipated ramp in demand.

Mark: Selling general and administrative expenses totaled approximately $8 7 million during the third quarter of 2024.

Mark: Professional fees related to Puerto Rico totaled $1 4 million for the third quarter of 2024, and $4 1 million year to date we.

Mark: We expect these fees to decline substantially in future periods as a result of the settlement agreement with PREPA.

Mark: As of September 32024, we had cash on hand of $4 2 million.

Mark Layton: A revolving credit facility was undrawn and we had approximately $13.7 million in available borrowing capacity. Our total liquidity was approximately $17.9 million. Subsequent to Quarter End, as you know, COBRA received the first two installment payments totaling $168.4 million in connection with the previously disclosed settlement agreement with PrEPA. Company used a portion of these funds to pay, in full, all amounts owed under the term credit facility with Wexford, including the accrued and unpaid interest, which totaled $50.9 million. term credit facility was terminated. As of today, Mammoth is debt-free and has approximately $86 million of cash. This cash balance excludes restricted cash of approximately $21 million.

Mark: Our revolving credit facility was Undrawn and we had approximately $13 7 million in available borrowing capacity.

Mark: Our total liquidity was approximately $17 9 million.

Mark: Subsequent to quarter end as you know Cobra received the first two installment payments totaling $168 4 million in connection with the previously disclosed settlement agreement with PREPA.

Mark: Company used a portion of these funds to pay in full all amounts owed under the term credit facility with Wexford, including the accrued and unpaid interest which totaled $50 9 million.

Mark: The term credit facility was terminated.

Mark: As of today Mammoth is debt free and has approximately $86 million of cash.

This cash balance excludes restricted cash of approximately $21 million.

Mark Layton: To conclude our call, we would like to thank our 740 employees throughout the company for their hard work, dedication, and commitment to maintain safe and sustainable work sites for themselves and their teammates. We are excited for the opportunities that lay ahead for Mammoth. The funds we've received from PREPA will enable us to substantially invest in the company for future growth. We intend to use our enhanced liquidity to strategically position the company for success while remaining focused on improving our operating results in 2025 as both demand and activity improve. We now have the means to add scale, increase our capabilities and upgrade equipment, which we expect will build a stronger, more resilient business for the future.

Mark: To conclude our call we would like to thank our 740 employees throughout the company for their hard work dedication and commitment to maintain safe and sustainable work sites for themselves and their teammates.

Mark: We're excited for the opportunities that lay ahead for mammoth.

Mark: Funds, we've received from PREPA will enable us to substantially invest in the company for future growth we.

Mark: We intend to use our enhanced liquidity to.

Mark: <unk> positioned the company for success.

Mark: While remaining focused on improving our operating results in 2025.

Mark: As both demand and activity improve.

We now have the means to add scale increase our capabilities and upgrade equipment, which we expect will build a stronger more resilient business for the future.

Mark Layton: We will continue to prioritize disciplined operations, efficiency, and strategic capital allocation. which when coupled with our strong balance sheet we believe will drive meaningful improvement in shareholder value.

Mark: We will continue to prioritize disciplined operations efficiency and strategic capital allocation, which.

Which when coupled with our strong balance sheet, we believe will drive meaningful improvement in shareholder value.

Operator: Operator, we would now like to open the call up for questions.

Mark: Operator, we would now like to open the call up for questions.

Operator: Thank you.

Speaker Change: Thank you we will now be conducting a question and answer session.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.

Speaker Change: If you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue.

Speaker Change: You May press Star two if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment, please while we poll for questions.

Operator: Thank you.

Thank you. Our first question comes from the line of Josh Jayne with Daniel Energy Partners. Please proceed with your question.

Josh Jane: Our first question comes from line of Josh Jane with Daniel Energy Partners.

Josh Jane: Please repeat your question. Thanks, good morning. First question, just on the pressure pumping side, when we think about upgrading equipment and demand increasing into the second half of next year, could you talk about lead times for equipment that you're currently seeing if you're having discussions?

Josh Jayne: Thanks. Good morning first question just on the pressure pumping side, when we think about upgrading equipment and demand increasing into the second half of next year could you talk about lead times for equipment that you're currently seeing if you're having discussions and I'm just curious on your on your outlook there for the capital equipment market.

Arty Straehla: And I'm just curious on your on your outlook there for the capital equipment market.

Arty Straehla: We're making, as I think you know, Josh, we're making moves to move to and Ken Daniel, Blake McLean, Unknown Attendee, Ken Dennard, Arty Straehla, Mark Layton, Michael Okay, so ultimately, you could be adding fleets by when then? We're going to we're going to modernize that fleet, because we're doing the work internally and saving ourselves significant sums of money. We're going to do it over the next eight to 10 months. Okay.

Speaker Change: Well, we're making.

Speaker Change: So I think you know Josh we're making.

Speaker Change: Moves to move to.

Speaker Change: Tier four dual fuel, which are the more efficient.

Speaker Change: Our pumps and the availability of engines right now is extremely good and in fact, we've got them. We're doing it I mean change in amount at our own manufacturing facility.

Speaker Change: And where we have no issue getting.

Speaker Change: Those engines.

Speaker Change: Okay. So ultimately.

Speaker Change: You could be adding fleets by by wearing them.

Speaker Change: We're going to we're going to modernize that fleet, because we're doing the work internally and saving ourselves significant sums of money we're.

Speaker Change: We're going to do it over the next eight to 10 months.

Josh Jane: And then, and then second question for me, you highlighted the just where the cash balance stands today. Sounds like opportunities for M&A. Could you just speak to when you when you think about scale? Are you looking for to break out into sort of verticals that you aren't involved in today? Or would it be in the in the business lines that you're already involved in today?

Speaker Change: Okay, and then and then the second question from me you highlighted the just where the cash balance stands today sounds like opportunities for M&A could you just speak to when you. When you think about scale are you looking for to break out into sort of verticals that you aren't involved in today or would it be in the <unk>.

Speaker Change: And the business lines that you're already involved in today I'm, just curious how youre thinking about M&A going forward and how to position that how to best position. The company over the next couple of years.

Arty Straehla: I'm just curious how you're thinking about M&A going forward and how to position the how to best position the company over the next couple of years. Well, we think about it both ways that you talked about there. Some of it is internal, and we really are focused on the T&D business right now. We've seen a change in customer behavior where they are requesting more crews as we go out into the future, and we feel very good about it. We've also always had our eyes on the ability to acquire, integrate, and grow strategic acquisitions that we like in that space that may bring us a different regional customer or may bring us a different management group and that type of thing.

Speaker Change: Well, we think about it both ways that you're talking about there are some of it is internal and we really are focused on the T&D business.

Speaker Change: Right now we've seen a change in customer behavior.

Where they are requesting more crews as we go out into the future and we feel very good about it. We've also always had our eyes on the ability to.

Speaker Change: Acquire integrate and grow strategic acquisitions that we like in that space that may bring us a different regional customer or may bring us to a different management group and that type of thing so very excited about that business and where it's pointing to but.

Arty Straehla: So very excited about that business and where it's pointing to. But I think one of the things that you know about us since inception that we try to be entrepreneurial, and we try to see investments in all areas. We're not necessarily confined just to the oilfield services or just to the T&D. And then we have a history of starting businesses. We started our engineering group with one engineer, and we've grown her to 64, and it's giving and adding significant cash flow to us. We did the same thing with our fiber group, and we're starting to see some traction there because you're starting to see the release of monies that are coming from the previous infrastructure acts.

Speaker Change: One of the things that you know about us since inception that we tried to be entrepreneurial and we tried to see investments.

Speaker Change: And in all areas.

Speaker Change: We're not necessarily confined just to the.

Speaker Change: Oilfield services or just the T&D and and then we have a history of starting businesses. We started our engineering group with one engineer and we've grown up to 64 and it's.

Speaker Change: Giving and adding significant cash flow to us.

Speaker Change: We did the same thing with our fiber growth and we're starting to see some traction there because you're starting to see the release of monies that are coming from the previous infrastructure acts. So we're starting to see that was released in our bidding activity is going up significantly so.

Mark Layton: So we're starting to see those released, and our bidding activity is going up significantly. So, we see it both ways. Yeah, I'll just add, you know, Arty already touched on some of the organic demand we're seeing on the T&D business, the customer demand has changed. So we're seeing organic demand in the range of 25 to 30% over our current run rate relative to the T&D business.

We see it both ways.

Speaker Change: Yeah, Thanks for taking my call.

Speaker Change: You know it.

Speaker Change: Already already touched on some of the organic demand, we're seeing on the T&D business that if the customer demand.

Speaker Change: Demand has changed so we're seeing organic demand in the range of 25% to 30% over our current run rate relative to the T&D business.

Josh Jane: Thank you very much.

Speaker Change: Okay. Thank you very much I'll turn it back.

Operator: I'll turn it back.

Operator: Thank you.

Speaker Change: Thank you. This concludes the question and answer session I would like to turn the floor back over to management for closing comments.

Operator: This concludes the question and answer session.

Arty Straehla: I would like to turn the floor back over to management for closing comments. Thank you again for joining us in the call today. We continue our focus on positioning Mammoth for future growth, improvement in operating results and success, which we expect to achieve with the help from our talented and skilled team members.

Speaker Change: Thank you again for joining us in the call today, we continue our focus on positioning mammoth for future growth improvement in operating results and success, which we expect to achieve with the help from our talented and skilled team members. This concludes our conference call and we look forward to speaking to you all again next quarter. Thank you.

Operator: This concludes our conference call, and we look forward to speaking to you all again next quarter. Thank you.

Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.