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Core Insights - Z4 Energy Research has been recognized by Tipranks as being in the top 2% of financial bloggers and top 5% of overall experts as of January 2021 [1] Company Overview - Z4 Energy Research has been providing energy market insights since 2006, posting content six days a week and has been active in the markets since the early 1990s [1] - The company offers weekly slide shows on oil and natural gas inventory reports and daily analyses on individual companies and various energy segments [1] Services Offered - Z4 Energy Research provides in-depth discussions on oil, natural gas, wind, solar, fuel cells, and other renewable energy sources [1] - The company maintains a trading history that is fully searchable by ticker and topic, dating back to 2006 [1] - While the company does not provide direct investment advice, it shares its thoughts on market movements and trading activities via its platform [1]

Accessibility StatementSkip Navigation YARDLEY, Pa., Nov. 18, 2025 /PRNewswire/ --Â Smart Sand, Inc. (NASDAQ: SND) ("Smart Sand" or the "Company") announced today that its board of directors has declared a special cash dividend on the Company's common stock of $0.05 per share, payable on December 16, 2025, to stockholders of record as of the close of business on December 2, 2025. "We are happy to return value to our stockholders and will continue to focus on ways to manage our costs and maximize efficiencie ...

Core Insights - Smart Sand, Inc. reported strong performance in Q3 2025, with increases in sales volumes, contribution margin, Adjusted EBITDA, and free cash flow compared to Q2 2025 [2][3] Financial Performance - In Q3 2025, tons sold reached approximately 1,472,000, a 3% increase from Q2 2025 and a 24% increase year-over-year [4] - Revenues for Q3 2025 were $92.8 million, up from $85.8 million in Q2 2025 and $63.2 million in Q3 2024, driven by higher sales volumes and average selling prices [5] - Cost of goods sold increased to $77.8 million in Q3 2025, up from $76.8 million in Q2 2025 and $56.7 million in Q3 2024, primarily due to increased sales volumes [6] - Gross profit for Q3 2025 was $14.9 million, compared to $9.0 million in Q2 2025 and $6.5 million in Q3 2024, reflecting higher sales volumes and a $4.4 million excess tons payment [7] - Operating expenses were $9.6 million in Q3 2025, up from $9.0 million in Q2 2025 but down from $11.4 million in Q3 2024 [8] - Net income for Q3 2025 was $3.0 million, or $0.08 per share, compared to $21.4 million in Q2 2025 and a net loss of $(0.1) million in Q3 2024 [10] - Contribution margin in Q3 2025 was $21.7 million, or $14.76 per ton sold, compared to $15.8 million in Q2 2025 and $13.2 million in Q3 2024 [11] - Adjusted EBITDA for Q3 2025 was $13.6 million, up from $7.8 million in Q2 2025 and $5.7 million in Q3 2024 [11] Cash Flow and Capital Management - Net cash provided by operating activities in Q3 2025 was $18.2 million, compared to $(5.1) million in Q2 2025 and $5.8 million in Q3 2024 [13] - Free cash flow for Q3 2025 was $14.8 million, resulting from net cash provided by operating activities of $18.2 million and capital expenditures of $3.4 million [14] - The company anticipates being free cash flow positive for the year 2025 [14] Shareholder Returns - In August 2025, the company paid a special cash dividend of $0.10 per share, totaling $4.3 million [18] - Year-to-date, Smart Sand has returned $6.4 million to shareholders through share repurchases and special dividends in 2025 [3] Market Position and Outlook - Smart Sand continues to expand its market presence, achieving record sales volumes in Canada and strengthening its customer base in Industrial Product Solutions [3] - The company is well-positioned to benefit from the increasing demand for natural gas production to support growing LNG export capacity in the U.S. and Canada [3] - Despite potential seasonal slowdowns, the company expects sales volumes for the year to be in the range of 5.1 million to 5.4 million tons [3]

Smart Sand, Inc. Announces Third Quarter 2025 Results In the third quarter of 2025, tons sold totaled approximately 1,472,000, compared to 1,424,000 tons in the second quarter of 2025 and 1,189,000 tons in the third quarter of 2024, reflecting a 3% sequential increase and a 24% year-over- year increase. Revenues in the third quarter of 2025 were $92.8 million, compared to $85.8 million in the second quarter of 2025 and $63.2 million in the third quarter of 2024. The increase in revenue sequentially and year ...

Revenue and Profitability - Revenue for the three months ended September 30, 2025, was $92.8 million, a 47% increase from $63.2 million in the same period of 2024, driven by higher sand volumes and average prices [130]. - Sand revenue reached $91.6 million for the three months ended September 30, 2025, compared to $62.2 million in 2024, with a significant contribution of $4.4 million from contractual charges recognized in the current period [131]. - Gross profit for the three months ended September 30, 2025, was $14.9 million, up from $6.5 million in the same period of 2024, attributed to higher sales volumes and excess tons payment [134]. - Net income for the three months ended September 30, 2025, was $3.0 million, compared to a net loss of $0.1 million for the same period in 2024, primarily due to increased demand and lower operating expenses [139]. - Total revenue for the nine months ended September 30, 2025, was $244.1 million, an increase of 11% from $220.0 million in the same period of 2024, driven by a 13% increase in sand revenue [141]. - Sand revenue increased to $240.7 million for the nine months ended September 30, 2025, compared to $213.0 million for the same period in 2024, with total volumes sold increasing by approximately 4% [142]. - Gross profit for the nine months ended September 30, 2025, was $26.7 million, a decrease of 15% from $31.4 million in the same period of 2024, attributed to lower utilization of the SmartSystems fleet and increased freight costs [146]. - Contribution margin for the three months ended September 30, 2025, was $21.7 million, or $14.76 per ton sold, compared to $13.2 million, or $11.09 per ton sold in 2024, reflecting a significant increase in sales volumes [159]. - Adjusted EBITDA for the three months ended September 30, 2025, was $13.6 million, up from $5.7 million in the same period in 2024, primarily due to higher sales volumes and excess ton payments [163]. Costs and Expenses - Total cost of goods sold increased to $77.8 million in Q3 2025 from $56.7 million in Q3 2024, primarily due to higher sales volumes and increased mining, freight, and transloading costs [133]. - Cost of goods sold for the nine months ended September 30, 2025, was $217.4 million, up 15% from $188.6 million in 2024, primarily due to higher volumes sold and increased production costs [145]. - Selling, general and administrative expenses decreased to $27.4 million for the nine months ended September 30, 2025, from $28.9 million in 2024, mainly due to reduced banking and legal costs [147]. - Net interest expense for the nine months ended September 30, 2025, was $1.0 million, down from $1.2 million in the same period of 2024, reflecting improved financial management [148]. Operational Capacity and Growth - The company has an annual processing capacity of approximately 10.0 million tons across all operating facilities, following recent acquisitions and expansions [118]. - The demand for frac sand is expected to moderately increase due to longer lateral well lengths and increased sand volume per linear foot, alongside potential growth in LNG export capacity [123]. - The Industrial Products Solutions (IPS) business is anticipated to grow, diversifying sales into stable, consumer-driven products across various industries [125]. - The company operates five in-basin transloading facilities and has expanded its terminal operations in Ohio, enhancing logistical capabilities [119]. Cash Flow and Financial Position - Free cash flow for the three months ended September 30, 2025, was $14.8 million, compared to $3.7 million in 2024, driven by positive cash flows from operating activities [168]. - As of September 30, 2025, cash on hand was $5.1 million, with $30.0 million in undrawn availability on the FCB ABL Credit Facility [169]. - The company declared a special dividend of $0.10 per share, returning approximately $4.4 million to shareholders on August 14, 2025 [171]. - Capital expenditures for 2025 are expected to be between $15.0 million and $17.0 million, primarily for opening new mining areas and efficiency projects [177]. Liabilities and Financial Management - The outstanding balance under the VFI Equipment Financing as of September 30, 2025, was $6.9 million, with minimum cash payments anticipated to be $0.7 million for the remainder of 2025 [178]. - Operating lease liabilities as of September 30, 2025, were $26.0 million, with minimum cash payments expected to be $2.5 million for the remainder of 2025 [179]. - The company had outstanding performance bonds of $19.7 million as of September 30, 2025 [181]. - The company recorded a liability for uncertain tax positions as of September 30, 2025, indicating challenges in realizing certain deductible temporary differences [150]. Market and Economic Conditions - The company is actively monitoring geopolitical events and trade policies that may impact its financial position and operations, particularly regarding tariffs and market volatility [122]. - The company continues to monitor the global impact of current events, with future economic performance being uncertain due to high inflation [190]. - There have been no material changes to market risk exposure as of September 30, 2025 [191]. Compliance and Internal Controls - Management has concluded that disclosure controls and procedures were effective as of the end of the reporting period [192]. - There have been no changes in internal control over financial reporting that materially affected the company during the third quarter of fiscal year 2025 [193]. - The company is committed to maintaining a culture prioritizing mine safety, adhering to regulations set by the U.S. Mining Safety and Health Administration [200]. - There have been no material changes in critical accounting policies during the nine months ended September 30, 2025 [188]. Share Repurchase Program - The company has an eighteen-month share repurchase program approved for up to $10.0 million of ordinary shares [197]. - The total number of shares purchased as part of the repurchase program in July 2025 was 13,627 at an average price of $2.07 per share [198].

Summary of Smart Sand Inc. Presentation at Lithium Partners Fall 2025 Investor Conference Company Overview - Smart Sand Inc. is a leading provider of Northern White sand in North America, primarily serving the oil and gas market and industrial applications [2][3] - The company has a mining and processing capacity of 10 million tons of high-quality Northern White sand with access to all Class 1 rail lines, enabling efficient shipping to various operating basins in the U.S. [2][3] Key Strengths - **Low-Cost Operating Structure**: Smart Sand operates with a bulk commodity mindset, focusing on efficiency in large quantities, resulting in low processing costs and logistics costs [3][4] - **Logistics Advantage**: The company has invested in high-quality mines and terminals, allowing efficient sand shipment across North America [4][5] - **Natural Gas Demand**: 70% of Smart Sand's sales are directed towards natural gas basins, positioning the company to benefit from the projected growth in natural gas demand due to LNG export capacity and power generation for AI data centers [5][16] Financial Performance - The company sold approximately 2.5 million tons in the first half of the year and expects similar sales in the second half [12] - Smart Sand has maintained a prudent capital structure with low debt levels, allowing it to navigate industry cycles effectively [8][9] Market Dynamics - The demand for natural gas is projected to increase significantly, with LNG capacity expected to double from 15 BCF per day to nearly 30 BCF per day by the end of the decade [16][17] - The company is also expanding its industrial applications segment, which has grown over 80% year-over-year, aiming to increase its contribution to sales from 5% to 10% or more [5][36] Product Offering - Smart Sand produces various sand products for fracking, with a focus on fine mesh sand, which constitutes over 70% of its reserves [6][7] - The company has a long-lived reserve base of over 500 million tons, with a reserve life exceeding 30 years [7] Strategic Initiatives - Smart Sand is focused on expanding its market share in key regions, including the Appalachian basins and the Bakken, while also exploring opportunities in Canada [12][13][28] - The company has invested in terminals to enhance its logistics capabilities, which account for roughly two-thirds of its costs [29][34] Management and Shareholder Alignment - The management team, including founder Chuck Young, holds over 36% of the company, aligning their interests with those of shareholders [9][39] - Smart Sand has returned nearly $20 million to shareholders through buybacks and dividends over the past three years [10] Conclusion - Smart Sand Inc. is well-positioned to capitalize on the growing demand for natural gas and industrial applications, supported by its efficient operations, strong logistics capabilities, and prudent financial management [39][40]

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This part presents the company's comprehensive financial data and management's analysis of its performance and condition [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, inventory, property, debt, leases, segment reporting, income taxes, and commitments [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change (k) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Cash and cash equivalents | $4,293 | $1,554 | $2,739 | 176.26% | | Total current assets | $83,120 | $75,525 | $7,595 | 10.06% | | Total assets | $345,849 | $341,546 | $4,303 | 1.26% | | Total current liabilities | $44,783 | $43,210 | $1,573 | 3.64% | | Long-term debt | $17,594 | $9,130 | $8,464 | 92.71% | | Total liabilities | $105,349 | $97,736 | $7,613 | 7.79% | | Total stockholders' equity | $240,500 | $243,810 | $(3,310) | -1.36% | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income or loss over specific periods Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (k) | Change (%) | | :---------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Total revenue | $85,770 | $73,800 | $11,970 | 16.22% | | Gross profit | $8,957 | $13,073 | $(4,116) | -31.48% | | Operating (loss) income | $(77) | $3,528 | $(3,605) | -102.18% | | Net income (loss) | $21,396 | $(430) | $21,826 | 5075.81% | | Basic EPS | $0.55 | $(0.01) | $0.56 | -5600.00% | | Diluted EPS | $0.54 | $(0.01) | $0.55 | -5500.00% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (k) | Change (%) | | :---------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total revenue | $151,328 | $156,852 | $(5,524) | -3.52% | | Gross profit | $11,729 | $24,884 | $(13,155) | -52.87% | | Operating (loss) income | $(7,127) | $4,312 | $(11,439) | -265.28% | | Net income (loss) | $(2,835) | $(646) | $(2,189) | 338.85% | | Basic EPS | $(0.07) | $(0.02) | $(0.05) | 250.00% | | Diluted EPS | $(0.07) | $(0.02) | $(0.05) | 250.00% | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents the company's net income or loss and other comprehensive income or loss components Condensed Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (k) | Change (%) | | :------------------------ | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net income (loss) | $21,396 | $(430) | $21,826 | 5075.81% | | Comprehensive income (loss) | $21,396 | $(457) | $21,853 | 4781.84% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (k) | Change (%) | | :------------------------ | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net income (loss) | $(2,835) | $(646) | $(2,189) | 338.85% | | Comprehensive income (loss) | $(2,831) | $(699) | $(2,132) | 304.99% | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section outlines the changes in the company's equity accounts over the reporting period Changes in Stockholders' Equity (Six Months Ended June 30, 2025) (in thousands) | Item | Balance at Dec 31, 2024 | Net Loss/Income | Treasury Stock Purchases | Other Changes | Balance at Jun 30, 2025 | | :--------------------------------- | :---------------------- | :-------------- | :----------------------- | :------------ | :---------------------- | | Common Stock (Par Value) | $39 | — | — | $0 | $39 | | Treasury Stock (Amount) | $(14,671) | — | $(2,067) | $336 | $(17,109) | | Additional Paid-in Capital | $185,263 | — | — | $1,953 | $187,222 | | Retained Earnings | $73,239 | $(2,835) | — | — | $70,404 | | Accumulated Other Comprehensive Loss | $(60) | — | — | $4 | $(56) | | **Total Stockholders' Equity** | **$243,810** | **$(2,835)** | **$(2,067)** | **$2,000** | **$240,500** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports on the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) (in thousands) | Cash Flow Activity | 2025 | 2024 | Change (k) | Change (%) | | :-------------------------------- | :-------- | :-------- | :--------- | :--------- | | Net cash provided by operating activities | $3,587 | $11,019 | $(7,432) | -67.45% | | Net cash used in investing activities | $(5,472) | $(2,998) | $(2,474) | 82.52% | | Net cash provided by (used in) financing activities | $4,624 | $(7,836) | $12,460 | -159.01% | | Net increase in cash and cash equivalents | $2,739 | $185 | $2,554 | 1380.54% | | Cash and cash equivalents at end of period | $4,293 | $6,257 | $(1,964) | -31.39% | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [NOTE 1 — Organization and Nature of Business](index=10&type=section&id=NOTE%201%20%E2%80%94%20Organization%20and%20Nature%20of%20Business) This note describes the company's operations as a fully integrated frac and industrial sand supply and services provider - Smart Sand, Inc. operates as a **fully integrated frac and industrial sand supply and services company**, offering mine-to-wellsite proppant solutions and diversifying into industrial uses (IPS) since late 2021[31](index=31&type=chunk) - The company's mining facilities include Oakdale, Wisconsin (**5.5M tons** annual capacity), Ottawa, Illinois (**1.6M tons**), and Blair, Wisconsin (**2.9M tons**), with strategic rail access[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - Logistics solutions include transload terminals in North Dakota, Oklahoma, and the Appalachian Basin (Pennsylvania, Ohio), alongside SmartSystems for portable wellsite proppant storage[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [NOTE 2 — Summary of Significant Accounting Policies](index=11&type=section&id=NOTE%202%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and estimates used in preparing the financial statements - The interim financial statements are unaudited and prepared in accordance with SEC rules for Form 10-Q, not including all GAAP information, and rely on significant management estimates for various financial items[42](index=42&type=chunk)[43](index=43&type=chunk) - Geopolitical conflicts, changing trade policies, and OPEC output changes may affect oil and natural gas prices, creating volatility in the oilfield service sector, though current sales to Canada and Mexico are tariff-exempt (**8%** of Q2 2025 sand volumes)[44](index=44&type=chunk)[45](index=45&type=chunk) - The company has **$65,683k** in unsatisfied performance obligations as of June 30, 2025, with **$55,027k** expected to be recognized in the remainder of 2025 and **$10,656k** in 2026[47](index=47&type=chunk) - Recent accounting pronouncements (ASU 2023-09 and ASU 2024-03) are being evaluated, with expected primary effects on note disclosures and disaggregation of cost of goods sold and SG&A[50](index=50&type=chunk)[51](index=51&type=chunk) [NOTE 3 — Inventory](index=12&type=section&id=NOTE%203%20%E2%80%94%20Inventory) This note details the composition and valuation of the company's inventory Inventory Composition (in thousands) | Category | June 30, 2025 | December 31, 2024 | Change (k) | Change (%) | | :-------------- | :------------ | :---------------- | :--------- | :--------- | | Raw material | $387 | $584 | $(197) | -33.73% | | Work in progress| $5,894 | $6,740 | $(846) | -12.55% | | Finished goods | $9,928 | $6,507 | $3,421 | 52.57% | | Spare parts | $12,451 | $11,213 | $1,238 | 11.04% | | **Total inventory** | **$28,660** | **$25,044** | **$3,616** | **14.44%** | [NOTE 4 — Property, Plant and Equipment, net](index=13&type=section&id=NOTE%204%20%E2%80%94%20Property,%20Plant%20and%20Equipment,%20net) This note provides information on the company's property, plant, and equipment, including depreciation Property, Plant and Equipment, net (in thousands) | Category | June 30, 2025 | December 31, 2024 | Change (k) | Change (%) | | :------------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Total property, plant and equipment | $429,075 | $421,358 | $7,717 | 1.83% | | Less: accumulated depreciation and depletion | $198,348 | $184,666 | $13,682 | 7.41% | | **Total property, plant and equipment, net** | **$230,727** | **$236,692** | **$(5,965)** | **-2.52%** | - Depreciation expense for the three months ended June 30, 2025, was **$7,026k**, a slight increase from **$6,997k** in the prior year. For the six months, it was **$14,024k** in 2025, up from **$13,978k** in 2024[55](index=55&type=chunk) [NOTE 5 — Accrued and Other Expenses](index=13&type=section&id=NOTE%205%20%E2%80%94%20Accrued%20and%20Other%20Expenses) This note details the various accrued liabilities and other expenses of the company Accrued and Other Expenses (in thousands) | Category | June 30, 2025 | December 31, 2024 | Change (k) | Change (%) | | :------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Employee related expenses | $1,545 | $1,630 | $(85) | -5.21% | | Accrued royalties | $2,831 | $3,224 | $(393) | -12.19% | | Accrued freight and delivery charges | $3,482 | $2,331 | $1,151 | 49.38% | | Sales tax liability | $517 | $158 | $359 | 227.22% | | Other accrued liabilities | $1,962 | $1,267 | $695 | 54.85% | | **Total accrued liabilities** | **$13,976** | **$12,561** | **$1,415** | **11.26%** | [NOTE 6 — Debt](index=14&type=section&id=NOTE%206%20%E2%80%94%20Debt) This note provides details on the company's debt obligations, including credit facilities and maturity schedules Debt Overview (in thousands) | Category | June 30, 2025 | December 31, 2024 | Change (k) | Change (%) | | :---------------------------- | :------------ | :---------------- | :--------- | :--------- | | Current portion of long-term debt | $4,041 | $3,554 | $487 | 13.70% | | Long-term debt | $17,594 | $9,130 | $8,464 | 92.71% | | **Total Debt** | **$21,635** | **$12,684** | **$8,951** | **70.57%** | - The FCB ABL Credit Facility provides up to **$30,000k** in revolving loans, with **$9,000k** outstanding and **$21,000k** available as of June 30, 2025. It matures in September 2029 and bears interest at SOFR plus **2.75%**[63](index=63&type=chunk)[65](index=65&type=chunk) - The VFI Equipment Financing, with a principal of **$10,000k** and a fixed interest rate of **8.56%**, matures on May 8, 2028, and is collateralized by SmartSystems equipment[66](index=66&type=chunk) Debt Maturity Schedule (in thousands) | Year | FCB ABL Credit Facility | VFI Equipment Financing | Notes Payable | Finance Leases | Total Minimum Payments | | :---------------- | :---------------------- | :---------------------- | :------------ | :------------- | :--------------------- | | Remainder of 2025 | $— | $1,470 | $818 | $136 | $2,424 | | 2026 | $— | $2,940 | $1,603 | $262 | $4,805 | | 2027 | $— | $2,940 | $1,344 | $65 | $4,349 | | 2028 | $— | $1,225 | $1,002 | $7 | $2,234 | | 2029 | $9,000 | $— | $590 | $— | $9,590 | | 2030 and thereafter | $— | $— | $105 | $— | $105 | | **Total** | **$9,000** | **$8,575** | **$5,462** | **$470** | **$23,507** | [NOTE 7 — Leases](index=16&type=section&id=NOTE%207%20%E2%80%94%20Leases) This note outlines the company's lease arrangements, including right-of-use assets and lease liabilities Lease Liabilities and Assets (in thousands) | Category | June 30, 2025 | December 31, 2024 | Change (k) | Change (%) | | :------------------------ | :------------ | :---------------- | :--------- | :--------- | | Total right-of-use assets | $26,925 | $23,735 | $3,190 | 13.44% | | Total lease liabilities | $27,791 | $25,084 | $2,707 | 10.80% | Lease Cost (Six Months Ended June 30) (in thousands) | Lease Cost Category | 2025 | 2024 | Change (k) | Change (%) | | :------------------ | :------ | :------ | :--------- | :--------- | | Finance lease cost | $139 | $149 | $(10) | -6.71% | | Operating lease cost| $6,439 | $6,780 | $(341) | -5.03% | | Short-term lease cost | $— | $18 | $(18) | -100.00% | | **Total lease cost**| **$6,578**| **$6,947**| **$(369)** | **-5.31%** | - The weighted average remaining lease term for operating leases is **2.9 years** (2025) and **2.8 years** (2024), with weighted average discount rates of **7.55%** (2025) and **6.99%** (2024)[72](index=72&type=chunk) Maturities of Lease Liabilities (as of June 30, 2025) (in thousands) | Year | Operating Leases | Finance Leases | Total Cash Lease Payments | | :---------------- | :--------------- | :------------- | :------------------------ | | Remainder of 2025 | $6,757 | $136 | $6,893 | | 2026 | $10,624 | $262 | $10,886 | | 2027 | $6,791 | $65 | $6,856 | | 2028 | $4,193 | $7 | $4,200 | | 2029 | $1,988 | $— | $1,988 | | Thereafter | $160 | $— | $160 | | **Total** | **$30,513** | **$470** | **$30,983** | [NOTE 8 — Asset Retirement Obligations](index=17&type=section&id=NOTE%208%20%E2%80%94%20Asset%20Retirement%20Obligations) This note details the company's obligations related to the retirement of long-lived assets Reconciliation of Asset Retirement Obligations (in thousands) | Item | Amount | | :------------------------- | :----- | | Balance at December 31, 2024 | $21,292 | | Accretion expense | $562 | | **Balance at June 30, 2025** | **$21,854** | [NOTE 9 — Segment Reporting](index=17&type=section&id=NOTE%209%20%E2%80%94%20Segment%20Reporting) This note provides financial information for the company's operating segments: Sand and SmartSystems - The Company operates in two reportable segments: Sand (frac sand and Industrial Production Solutions) and SmartSystems (rental of wellsite proppant storage equipment and services)[75](index=75&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) Segment Revenue and Gross Profit (Three Months Ended June 30) (in thousands) | Segment | 2025 Revenue | 2025 Gross Profit | 2024 Revenue | 2024 Gross Profit | | :----------- | :----------- | :---------------- | :----------- | :---------------- | | Sand | $84,590 | $8,917 | $71,020 | $12,117 | | SmartSystems | $1,180 | $40 | $2,780 | $956 | | **Total** | **$85,770** | **$8,957** | **$73,800** | **$13,073** | Segment Revenue and Gross Profit (Six Months Ended June 30) (in thousands) | Segment | 2025 Revenue | 2025 Gross Profit | 2024 Revenue | 2024 Gross Profit | | :----------- | :----------- | :---------------- | :----------- | :---------------- | | Sand | $149,054 | $11,723 | $150,739 | $22,869 | | SmartSystems | $2,274 | $6 | $6,113 | $2,015 | | **Total** | **$151,328** | **$11,729** | **$156,852** | **$24,884** | [NOTE 10 — Income Taxes](index=21&type=section&id=NOTE%2010%20%E2%80%94%20Income%20Taxes) This note explains the company's income tax provisions, including effective tax rates and deferred tax assets Effective Tax Rates | Period | 2025 Effective Tax Rate | 2024 Effective Tax Rate | | :-------------------------- | :---------------------- | :---------------------- | | Three Months Ended June 30 | 6643.1% | 122.6% | | Six Months Ended June 30 | 62.6% | 128.2% | - The statutory tax rate for both periods was **21.0%**. The high effective tax rates are primarily driven by the depletion deduction calculation, which is not directly related to net income[94](index=94&type=chunk) - The Company does not expect to be a federal income tax payer in 2025 and anticipates an immaterial amount of state income taxes[94](index=94&type=chunk) - A liability for uncertain tax positions of **$2,240k** and a partial valuation allowance of **$2,156k** against deferred tax assets were recorded as of December 31, 2024, with no material change for the six months ended June 30, 2025[95](index=95&type=chunk)[96](index=96&type=chunk) - The recently signed One Big Beautiful Bill Act (OBBBA) is being evaluated, but the Company does not expect a material impact on its results of operations[98](index=98&type=chunk) [NOTE 11 — Concentrations](index=21&type=section&id=NOTE%2011%20%E2%80%94%20Concentrations) This note discloses significant concentrations in customers, vendors, and geographic risks - As of June 30, 2025, three customers accounted for **50%** of total accounts and unbilled receivables, compared to four customers for **84%** as of December 31, 2024[99](index=99&type=chunk) - Customer revenue concentration for the three months ended June 30, 2025, was **39%** from two customers (down from **72%** from five customers in 2024). For the six months, it was **54%** from three customers (up from **45%** from two customers in 2024)[100](index=100&type=chunk) - Vendor concentration for accounts payable was **23%** from two vendors as of June 30, 2025 (vs **17%** from one vendor as of December 31, 2024). For cost of goods sold, two vendors accounted for **34%** (Q2 2025) and **36%** (YTD Q2 2025)[101](index=101&type=chunk)[102](index=102&type=chunk) - The Company faces geographic risk due to its primary product (Northern White sand) and mining operations being limited to Wisconsin and Illinois[103](index=103&type=chunk) [NOTE 12 — Commitments and Contingencies](index=22&type=section&id=NOTE%2012%20%E2%80%94%20Commitments%20and%20Contingencies) This note details the company's legal commitments, contingent liabilities, and performance bonds - A nuisance lawsuit (Cory Berg, et al. v. Hi-Crush Blair LLC, et al.) alleging excessive noise, light, and dust was settled and closed in February 2025[107](index=107&type=chunk) - Total aggregate principal amount of performance bonds outstanding was **$19,727k** as of June 30, 2025, for reclamation, permitting, and maintenance of public roadways[108](index=108&type=chunk) [NOTE 13 — Subsequent Events](index=22&type=section&id=NOTE%2013%20%E2%80%94%20Subsequent%20Events) This note reports on significant events that occurred after the balance sheet date - On July 23, 2025, the Board of Directors declared a special dividend of **$0.10** per share of common stock, totaling approximately **$4,354k**, payable on August 14, 2025[109](index=109&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, operating results, liquidity, and cash flows, including an overview of the business, market trends, GAAP and non-GAAP financial performance analysis, and discussions on capital resources and material cash requirements [Overview](index=23&type=section&id=Overview) This section provides a general description of the company's business model and operational capabilities - Smart Sand, Inc. is a **fully integrated frac and industrial sand supply and services company**, offering mine-to-wellsite proppant solutions and diversifying into Industrial Products Solutions (IPS)[114](index=114&type=chunk)[120](index=120&type=chunk) - The company produces high-quality Northern White sand and provides SmartSystems for wellsite proppant storage, leveraging strategic locations, rail access, and proprietary technology[114](index=114&type=chunk)[116](index=116&type=chunk)[119](index=119&type=chunk) - Total annual processing capacity across its operating facilities (Oakdale, Ottawa, Blair) is approximately **10.0 million tons**, supported by five company-controlled in-basin transloading facilities[117](index=117&type=chunk)[118](index=118&type=chunk) [Market Trends](index=24&type=section&id=Market%20Trends) This section discusses external factors and industry trends influencing the company's business and financial performance - Geopolitical conflicts, trade policy changes, and OPEC output adjustments may affect oil and natural gas prices, leading to volatility in the oilfield service sector[121](index=121&type=chunk) - Sand volumes increased in 2024, slowed in Q1 2025, and then increased in Q2 2025 due to higher customer activity. Frac sand demand is expected to moderately increase, driven by longer lateral wells and higher sand volumes per foot[122](index=122&type=chunk) - Demand in the IPS business is stable, influenced by macroeconomic factors, and is expected to diversify sales and mitigate price volatility from the oil and gas industry[124](index=124&type=chunk) - President Trump's executive orders signal a shift towards expediting conventional energy projects and deregulatory actions, though the impact on the company's financial position is currently unquantifiable[125](index=125&type=chunk) [GAAP Results of Operations](index=26&type=section&id=GAAP%20Results%20of%20Operations) This section analyzes the company's financial performance based on Generally Accepted Accounting Principles [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=26&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024) This subsection compares the company's financial results for the three-month periods ended June 30, 2025 and 2024 Key Financial Changes (Three Months Ended June 30) (in thousands) | Metric | 2025 | 2024 | Change (k) | Change (%) | | :---------------------- | :-------- | :-------- | :--------- | :--------- | | Total revenue | $85,770 | $73,800 | $11,970 | 16% | | Sand revenue | $84,590 | $71,020 | $13,570 | 19% | | SmartSystems revenue | $1,180 | $2,780 | $(1,600) | -58% | | Total cost of goods sold| $76,813 | $60,727 | $16,086 | 26% | | Gross profit | $8,957 | $13,073 | $(4,116) | -31% | | Operating (loss) income | $(77) | $3,528 | $(3,605) | -102% | | Net income (loss) | $21,396 | $(430) | $21,826 | 5076% | - Sand revenue increased due to higher volumes (**1,424k tons** vs **1,274k tons**) and higher average sand prices, primarily driven by changes in delivery location mix[130](index=130&type=chunk) - SmartSystems revenue decreased due to lower utilization of the SmartSystems fleet[132](index=132&type=chunk) - Gross profit declined primarily due to higher freight and transloading costs related to delivery location, and increased mining costs[133](index=133&type=chunk)[134](index=134&type=chunk) - Net income significantly improved due to an income tax benefit of **$(21,723)k** in 2025, compared to an expense of **$2,330k** in 2024, largely influenced by the depletion deduction calculation[137](index=137&type=chunk)[139](index=139&type=chunk) [Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=28&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024) This subsection compares the company's financial results for the six-month periods ended June 30, 2025 and 2024 Key Financial Changes (Six Months Ended June 30) (in thousands) | Metric | 2025 | 2024 | Change (k) | Change (%) | | :---------------------- | :-------- | :-------- | :--------- | :--------- | | Total revenue | $151,328 | $156,852 | $(5,524) | -4% | | Sand revenue | $149,054 | $150,739 | $(1,685) | -1% | | SmartSystems revenue | $2,274 | $6,113 | $(3,839) | -63% | | Total cost of goods sold| $139,599 | $131,968 | $7,631 | 6% | | Gross profit | $11,729 | $24,884 | $(13,155) | -53% | | Operating (loss) income | $(7,127) | $4,312 | $(11,439) | -265% | | Net income (loss) | $(2,835) | $(646) | $(2,189) | 339% | - Total revenue declined due to lower sand volumes (**2,493k tons** vs **2,610k tons**) and significantly lower SmartSystems utilization[144](index=144&type=chunk) - Cost of goods sold increased despite lower sales volumes, driven by higher logistics and production costs due to delivery location shifts, lost efficiencies from lower production, and increased mining costs[145](index=145&type=chunk) - Gross profit decreased substantially due to lower sales volumes, higher freight/delivery costs, and increased production costs[146](index=146&type=chunk) - Net loss increased, primarily due to non-cash deferred income taxes and lower gross profit, partially offset by reduced selling, general, and administrative expenses[151](index=151&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) This section presents financial metrics not prepared in accordance with GAAP, providing additional insights into performance [Contribution Margin](index=31&type=section&id=Contribution%20Margin) This subsection defines and analyzes the company's contribution margin, a key non-GAAP profitability metric - Contribution margin is defined as total revenues less cost of goods sold, excluding depreciation, depletion, and accretion of asset retirement obligations[154](index=154&type=chunk) Contribution Margin (in thousands, except per ton amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (k) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Contribution margin | $15,784 | $19,788 | $(4,004) | -20.23% | | Contribution margin per ton | $11.08 | $15.53 | $(4.45) | -28.65% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (k) | Change (%) | | :-------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Contribution margin | $25,362 | $38,295 | $(12,933) | -33.77% | | Contribution margin per ton | $10.17 | $14.67 | $(4.50) | -30.67% | - The decline in contribution margin for both periods was primarily due to higher logistics costs related to frac sand sales delivery location, increased unit production costs from lower plant utilization, and higher mining costs[157](index=157&type=chunk) [EBITDA and Adjusted EBITDA](index=32&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) This subsection defines and analyzes EBITDA and Adjusted EBITDA, providing insights into operational profitability - EBITDA is defined as net income plus depreciation, depletion, amortization, income tax expense (benefit), and interest expense. Adjusted EBITDA further adjusts for non-recurring and non-cash items[160](index=160&type=chunk) EBITDA and Adjusted EBITDA (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (k) | Change (%) | | :-------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | EBITDA | $7,253 | $9,522 | $(2,269) | -23.83% | | Adjusted EBITDA | $7,751 | $11,853 | $(4,102) | -34.61% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (k) | Change (%) | | :-------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | EBITDA | $7,567 | $17,609 | $(10,042) | -57.03% | | Adjusted EBITDA | $9,179 | $21,188 | $(12,009) | -56.68% | - The decrease in Adjusted EBITDA for both periods was primarily due to lower sales volumes, combined with higher logistics and production costs[165](index=165&type=chunk) [Free Cash Flow](index=33&type=section&id=Free%20Cash%20Flow) This subsection defines and analyzes free cash flow, indicating the cash available for discretionary purposes - Free cash flow is defined as net cash provided by operating activities less purchases of property, plant and equipment[166](index=166&type=chunk) Free Cash Flow (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (k) | Change (%) | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net cash (used in) provided by operating activities | $(5,137) | $14,882 | $(20,019) | -134.52% | | Purchases of property, plant and equipment | $(2,676) | $(1,354) | $(1,322) | 97.64% | | **Free cash flow** | **$(7,813)** | **$13,528** | **$(21,341)**| **-157.76%** | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (k) | Change (%) | | :-------------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $3,587 | $11,019 | $(7,432) | -67.45% | | Purchases of property, plant and equipment | $(6,212) | $(3,000) | $(3,212) | 107.07% | | **Free cash flow** | **$(2,625)** | **$8,019** | **$(10,644)**| **-132.73%** | - Negative free cash flow in 2025 was primarily due to the timing of accounts receivable conversion to cash and higher capital expenditures[168](index=168&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its short-term and long-term financial obligations - Primary liquidity sources are cash flow from operations and availability under the FCB ABL Credit Facility and other equipment financing[169](index=169&type=chunk) - As of June 30, 2025, the company had **$4.3 million** in cash and **$21.0 million** in undrawn availability on its FCB ABL Credit Facility[169](index=169&type=chunk) - Management believes the company has sufficient liquidity and capital resources to meet cash needs for the next twelve months[170](index=170&type=chunk) [Material Cash Requirements](index=33&type=section&id=Material%20Cash%20Requirements) This section outlines significant future cash outflows for dividends, share repurchases, and capital expenditures - A special dividend of **$0.10** per share, totaling approximately **$4.4 million**, was declared on July 23, 2025, payable on August 14, 2025[171](index=171&type=chunk) - The company has an eighteen-month share repurchase program approved for up to **$10.0 million**, with **$7.9 million** remaining as of June 30, 2025, after repurchasing **$2.1 million**[174](index=174&type=chunk)[175](index=175&type=chunk) - Expected capital expenditures for full year 2025 are between **$13.0 million** and **$17.0 million**, primarily for new mining areas, efficiency projects, and terminal expansions[177](index=177&type=chunk) [Indebtedness](index=34&type=section&id=Indebtedness) This section details the company's various debt instruments and their outstanding balances - As of June 30, 2025, the VFI Equipment Financing had an outstanding balance of **$7.5 million**, with **$1.5 million** in minimum cash payments anticipated for the remainder of 2025[178](index=178&type=chunk) - Notes payable totaled **$4.7 million** as of June 30, 2025, with **$0.8 million** in minimum cash payments anticipated for the remainder of 2025[178](index=178&type=chunk) - The FCB ABL Credit Facility had **$9.0 million** outstanding as of June 30, 2025[178](index=178&type=chunk) [Operating Leases](index=34&type=section&id=Operating%20Leases) This section provides information on the company's operating lease liabilities and future payment obligations - Operating lease liabilities amounted to **$27.4 million** as of June 30, 2025, with anticipated minimum cash payments of **$6.8 million** for the remainder of 2025[179](index=179&type=chunk) [Mineral Rights Property](index=34&type=section&id=Mineral%20Rights%20Property) This section describes the company's obligations related to mineral rights contracts - The company is obligated to make annual minimum payments of approximately **$2.5 million** for the next **12 years** for mineral rights contracts[180](index=180&type=chunk) [Off-Balance Sheet Arrangements](index=34&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses the company's off-balance sheet commitments, such as performance bonds - Outstanding performance bonds totaled **$19.7 million** as of June 30, 2025[181](index=181&type=chunk) [Contractual Obligations](index=35&type=section&id=Contractual%20Obligations) This section summarizes the company's various contractual commitments and payment schedules - Contractual obligations include debt facilities (FCB ABL, VFI, notes payable), operating and finance leases, sand delivery, royalties, minimum mining payments, capital expenditures, asset retirement obligations, and municipal commitments[184](index=184&type=chunk) [Environmental Matters](index=35&type=section&id=Environmental%20Matters) This section discusses the company's compliance with environmental regulations and related expenditures - The company is subject to various federal, state, and local environmental laws and regulations and expects to incur future expenditures for compliance, though the full amount is unpredictable[185](index=185&type=chunk) [Seasonality](index=35&type=section&id=Seasonality) This section explains how seasonal weather patterns impact the company's operations and financial results - Seasonal weather impacts wet sand processing, leading to lower cash operating costs in Q1/Q4 and higher in Q2/Q3 due to overproduction for winter demand, which is capitalized into inventory[186](index=186&type=chunk) - Indoor wet processing facilities at two plant locations help mitigate seasonality by allowing year-round wet sand inventory production[186](index=186&type=chunk) - Severe weather in oil and natural gas producing basins can curtail drilling activities and reduce sales volumes[186](index=186&type=chunk) [Customer Concentration](index=35&type=section&id=Customer%20Concentration) This section identifies key customers that account for a significant portion of the company's revenue - For the six months ended June 30, 2025, Equitable Gas Corporation (**28.4%**), Encino Energy (**14.9%**), and Expand Energy Corporation (**11%**) collectively accounted for **54.3%** of total revenue[187](index=187&type=chunk) - For the six months ended June 30, 2024, Equitable Gas Corporation (**32.7%**) and Encino Energy (**12.2%**) accounted for **44.9%** of total revenue[187](index=187&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the accounting policies and estimates that require significant management judgment - There have been no material changes to critical accounting policies and procedures during the six months ended June 30, 2025[188](index=188&type=chunk) - Significant estimates include impairment considerations, asset retirement obligations, fair values of acquired assets, deferred tax assets, inventory reserve, and collectability of receivables[189](index=189&type=chunk) - Future economic performance remains uncertain due to high inflation and other economic concerns, with the impact of future events on financial position and results of operations being unquantifiable[190](index=190&type=chunk)[193](index=193&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section confirms that there have been no material changes to the company's exposure to market risks since the previous annual report - No material changes to market risk exposure occurred during the six months ended June 30, 2025, compared to the disclosures in the Annual Report on Form 10-K for the year ended December 31, 2024[195](index=195&type=chunk) [ITEM 4. Controls and Procedures](index=37&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and procedures and confirms no material changes to internal control over financial reporting - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of the end of the reporting period[196](index=196&type=chunk) - No changes occurred during the second quarter of fiscal year 2025 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[197](index=197&type=chunk) [PART II OTHER INFORMATION](index=38&type=section&id=PART%20II%20OTHER%20INFORMATION) This part includes additional information not covered in the financial statements, such as legal proceedings and risk factors [ITEM 1. Legal Proceedings](index=38&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to the detailed disclosure of legal proceedings within the notes to the condensed consolidated financial statements - Information regarding legal proceedings is incorporated by reference from Note 12 - Commitments and Contingencies - Litigation of the notes to the condensed consolidated financial statements[198](index=198&type=chunk) [ITEM 1A. Risk Factors](index=38&type=section&id=ITEM%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously identified in the company's annual report - There have been no material changes to the risk factors described in Part I, Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2024[199](index=199&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered sales of equity securities and details the company's share repurchase program activities during the quarter - No shares were sold by the Company without registration under the Securities Act of 1933 during the three months ended June 30, 2025[200](index=200&type=chunk) - Under the **$10.0 million** share repurchase program approved in October 2024, the company repurchased **854,779 shares** for an average price of **$2.06** during Q2 2025, leaving **$7,933,034** available for repurchase as of June 30, 2025[201](index=201&type=chunk)[202](index=202&type=chunk) [ITEM 3. Defaults upon Senior Securities](index=38&type=section&id=ITEM%203.%20Defaults%20upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[203](index=203&type=chunk) [ITEM 4. Mine Safety Disclosures](index=38&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section outlines the company's commitment to mine safety, compliance with MSHA regulations, and the potential impact of health and safety standards on operations - The company prioritizes mine safety and is regulated by the U.S. Mining Safety and Health Administration (MSHA), which conducts at least two unannounced inspections annually[204](index=204&type=chunk)[205](index=205&type=chunk) - Operations are subject to regulations regarding respirable silica exposure, with portions of MSHA's rule currently under legal challenge and stayed[206](index=206&type=chunk) - Compliance with the Federal Mine Safety and Health Act of 1977 is critical, as failure to adhere to stringent standards or changes in enforcement could materially affect the business[207](index=207&type=chunk) [ITEM 5. Other Information](index=39&type=section&id=ITEM%205.%20Other%20Information) This section indicates that there is no other information to report - None[208](index=208&type=chunk) [ITEM 6. Exhibits](index=40&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including certifications, mine safety disclosures, and XBRL documents - Exhibits include certifications (31.1, 31.2, 32.1, 32.2), the Mine Safety Disclosure Exhibit (95.1), and various XBRL taxonomy extension documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[210](index=210&type=chunk) [SIGNATURES](index=41&type=section&id=SIGNATURES) This section contains the official certifications and signatures for the financial report [Signatures](index=41&type=section&id=Signatures) This section contains the official signatures of the company's principal financial and accounting officers, certifying the filing of the Form 10-Q - The report was duly signed on August 12, 2025, by Lee E. Beckelman, Chief Financial Officer, and Christopher M. Green, Vice President of Accounting[215](index=215&type=chunk)

Financial Performance - In Q2 2025, Smart Sand sold approximately 1,424,000 tons, a 33% sequential increase from Q1 2025 and a 12% year-over-year increase[4]. - Revenues for Q2 2025 were $85.8 million, up from $65.6 million in Q1 2025 and $73.8 million in Q2 2024, primarily driven by higher sales volumes[5]. - Adjusted EBITDA for Q2 2025 was $7.8 million, an increase from $1.4 million in Q1 2025 but a decrease from $11.9 million in Q2 2024[11]. - Net income for Q2 2025 was $21.4 million, compared to a net loss of $(24.2) million in Q1 2025 and a net loss of $(0.4) million in Q2 2024[10]. - The contribution margin in Q2 2025 was $15.8 million, or $11.08 per ton sold, compared to $9.6 million, or $8.96 per ton sold, in Q1 2025[11]. - Total revenue for the three months ended June 30, 2025, was $85.77 million, a 30.7% increase from $65.56 million in the previous quarter and a 16.2% increase from $73.80 million in the same quarter last year[26]. - Gross profit for the same period was $8.96 million, compared to $2.77 million in the previous quarter and $13.07 million in the same quarter last year, indicating a significant recovery from the previous quarter[26]. - Net income for the three months ended June 30, 2025, was $21.40 million, a turnaround from a net loss of $24.23 million in the previous quarter and a loss of $0.43 million in the same quarter last year[26]. - Contribution margin for the three months ended June 30, 2025, was $15.78 million, up from $9.58 million in the previous quarter and down from $19.79 million in the same quarter last year[34]. - Contribution margin per ton sold increased to $11.08 for the three months ended June 30, 2025, compared to $8.96 in the previous quarter and $15.53 in the same quarter last year[34]. - Total tons sold during the three months ended June 30, 2025, were 1,424, an increase from 1,069 tons in the previous quarter but a decrease from 1,274 tons in the same quarter last year[34]. Cash Flow and Liquidity - Free cash flow for Q2 2025 was $(7.8) million, with net cash used in operating activities at $(5.1) million[14]. - Cash and cash equivalents at the end of the period were $4.29 million, a decrease from $5.11 million at the beginning of the period[30]. - Free cash flow for the three months ended June 30, 2025, was $(7,813,000), a decline from $5,188,000 in the previous quarter and $13,528,000 in the same quarter last year[40]. - Net cash used in operating activities for the three months ended June 30, 2025, was $(5,137,000), compared to $8,724,000 in the previous quarter and $14,882,000 in the same quarter last year[40]. - The company’s management emphasizes that free cash flow is a key measure of liquidity, although it may be defined differently by other companies in the industry[38]. Shareholder Returns - Smart Sand repurchased 854,779 shares for $1.8 million under its share repurchase program, with $7.9 million remaining for future repurchases[15]. - The company declared a special cash dividend of $0.10 per share, totaling $4.3 million, payable on August 14, 2025[16]. Market Position and Outlook - Smart Sand expects sales volumes in the second half of 2025 to align with the first half and anticipates being free cash flow positive for the year[3]. - The company is well-positioned to grow market share in key shale markets in Canada due to strong fundamentals in Northern White sand driven by natural gas development[3]. Balance Sheet - Total current assets increased to $83.12 million as of June 30, 2025, compared to $75.53 million as of December 31, 2024[28]. - Total liabilities increased to $105.35 million as of June 30, 2025, compared to $97.74 million as of December 31, 2024[28]. - The company reported a significant decrease in accounts receivable, which increased to $47.18 million from $40.98 million in the previous period[28]. Other Financial Metrics - Depreciation, depletion, and amortization for the three months ended June 30, 2025, was $7,236,000, slightly up from $7,206,000 in the previous quarter[37]. - Interest expense for the three months ended June 30, 2025, was $344,000, down from $372,000 in the previous quarter[37]. - The company reported a net loss on disposal of fixed assets of $(680,000) for the three months ended June 30, 2025[37]. - Equity compensation expenses increased to $909,000 for the three months ended June 30, 2025, compared to $859,000 in the previous quarter[37]. - The company’s cash charges related to restructuring and retention were $0 for the three months ended June 30, 2025, down from $41,000 in the same quarter last year[37].

Core Insights - Smart Sand, Inc. reported strong sales volumes and improved profitability in Q2 2025, with sales volumes increasing by 33% sequentially and Adjusted EBITDA growing by $6.3 million compared to Q1 2025 [2][3][10] - The company is focused on returning capital to shareholders while optimizing its Northern White sand assets, having repurchased approximately 1 million shares and declared a $0.10 per share dividend [2][15][14] - Long-term fundamentals for Northern White sand remain strong, driven by natural gas development, LNG investments, and increasing demand for data centers supporting AI [2][10] Sales and Revenue - In Q2 2025, tons sold totaled approximately 1,424,000, reflecting a 33% sequential increase and a 12% year-over-year increase [3] - Revenues for Q2 2025 were $85.8 million, up from $65.6 million in Q1 2025 and $73.8 million in Q2 2024, primarily driven by higher sales volumes [4][8] - The increase in revenues year-over-year was attributed to higher sales volumes and higher average selling prices [4] Cost and Profitability - Cost of goods sold increased to $76.8 million in Q2 2025, up from $62.8 million in Q1 2025 and $60.7 million in Q2 2024, primarily due to increased sales volumes [5] - Gross profit for Q2 2025 was $9.0 million, compared to $2.8 million in Q1 2025 and $13.1 million in Q2 2024, with the sequential increase attributed to higher sales volumes [6][11] - Contribution margin in Q2 2025 was $15.8 million, or $11.08 per ton sold, compared to $9.6 million, or $8.96 per ton sold, in Q1 2025 [10][32] Net Income and Cash Flow - The company recorded a net income of $21.4 million in Q2 2025, a significant improvement from a net loss of $(24.2) million in Q1 2025 [9][35] - Free cash flow for Q2 2025 was $(7.8) million, with net cash used in operating activities at $(5.1) million [13][40] - The company anticipates being free cash flow positive for the year 2025 [13] Shareholder Returns and Liquidity - Smart Sand has returned a total of $6.4 million to shareholders through share repurchases and special dividends in 2025 [15] - As of June 30, 2025, the company had cash on hand of $4.3 million and $21.0 million in undrawn availability on its credit facility [16]