Mammoth Energy Services Inc (NASDAQ:TUSK) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 05:00 pm ET

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Mammoth Energy Services Inc (NASDAQ:TUSK) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Mammoth Energy Services Second Quarter 2020 earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded and will be available for replay on Mammoth Energy Services' website.

I would like to introduce your host for today's conference, Mr. Don Crist, Mammoth Energy Services Director of Investor Relations. Sir, you may begin.

Executive
Don Crist

Thank you, Grace. Good afternoon, and welcome to Mammoth Energy Services second quarter 2020 earnings conference call. Joining me on today's call are Arty Straehla, Chief Executive Officer; and Mark Layton, Chief Financial Officer. Before I turn the call over to them, I'd like to read our safe harbor statement.

Some of our comments today may include forward-looking statements reflecting Mammoth Energy Services' views about future events. These matters involve risks and uncertainties that could cause our actual results to materially differ from our forward-looking statements. These risks are discussed in Mammoth Energy Services' Form 10-K, Forms 10-Q, current reports on Form 8-K and other Securities and Exchange Commission filings. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Our comments today may also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures are included in our second quarter press release, which can be found on our website along with our updated presentation.

Now, I'll turn the call over to Arty.

Executive
Arty Straehla

Thank you, Don, and good afternoon, everyone. I want to start today's call by discussing a very important report that we released to the public on June 9th, 2020, on Form 8-K. This report was prepared at the request of the Federal Emergency Management Agency, FEMA, by the Home Security Operation and Analysis Center, a federally funded research and development center operated by the RAND Corporation for the U.S. Department of Homeland Security. The report examines the contracting process, the work our teams performed and the rates that were charged in Puerto Rico. This is the second review of the contracting process and cost analysis following a determination memorandum, which was produced by FEMA on December 23rd, 2017, and is included in the 8-K public release on June 9th, 2020.

The RAND report is an in-depth examination of our work in Puerto Rico. And on Page 48, comes to the conclusion that PREPA's procurement process was reasonable and the billable rates charged by Cobra were reasonable for the work performed. I want to repeat this because it is very important. The contract was procured in a reasonable manner and the rates charged were reasonable.

Please bear with me while I read one quote from Page 22 of the report, which I also feel is very important. "Cobra was uniquely positioned for rapid response to the crisis, deploying heavy equipment to seaports to barge transports on the day after contract signature on October 20th, 2017. Transmission work on the island began on October 31, 2017, two weeks after Cobra was awarded the contract. Furthermore,