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OKLAHOMA CITY - Mammoth Energy Services, Inc. (NASDAQ: TUSK), currently trading at $1.89 with a market capitalization of $91 million, has sold its infrastructure subsidiaries to Peak Utility Services Group, Inc. for $108.7 million, significantly boosting its cash reserves. The sale was finalized with Lion Power Services LLC, a Mammoth subsidiary, receiving $98.3 million in cash and the remainder placed in escrow. According to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment.
Mammoth’s CEO, Phil Lancaster, is set to join Peak following the appointment of his successor at Mammoth by July 1, 2025. Concurrently, Mammoth has expanded its aircraft rental services by purchasing eight small passenger aircraft for approximately $11.5 million, which are already leased to a commuter airline. The company’s strong liquidity position, with a current ratio of 1.65 and more cash than debt on its balance sheet, supports this expansion.
Arthur Amron, chairman of Mammoth’s Board of Directors, expressed confidence that the transaction would benefit shareholders and highlighted the company’s active search for new investment opportunities. Mark Layton, Mammoth’s CFO, noted the sale reflects the company’s growth and anticipates favorable financial results in the first quarter of 2025.
The company has also amended its credit agreement with Fifth Third Bank, allowing for a stock repurchase program and expanding investment opportunities. This strategic move is expected to enhance shareholder value and improve liquidity.
The information in this article is based on a press release statement from Mammoth Energy Services, Inc.
In other recent news, Mammoth Energy Services reported a challenging fourth quarter for 2024, with earnings per share (EPS) of -$0.32, significantly missing the forecasted -$0.01. Despite this, the company’s revenue of $53.2 million exceeded expectations, marking a 33% increase from the previous quarter. The full-year revenue for 2024 was $187.9 million, a sharp decline from $309.5 million in 2023, highlighting ongoing operational challenges. Mammoth Energy remains debt-free and is considering strategic capital deployment and potential acquisitions to drive future growth. Analyst feedback was not directly provided, but the company’s leadership expressed optimism about future demand in the utility and infrastructure sectors. CEO Phil Lancaster emphasized the company’s focus on positioning for future growth and unlocking shareholder value. The company also highlighted the addition of 20 crews to its infrastructure services division to meet growing utility demand. Looking forward, Mammoth Energy anticipates steady activity in 2025, with potential growth driven by natural gas and LNG demand.
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