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)

Smart Sand, Inc. Announces Second Quarter 2025 Results YARDLEY, Pennsylvania, August 12, 2025 – Smart Sand, Inc. (NASDAQ: SND) (the "Company" or "Smart Sand"), a leading supplier of premium Northern White frac sand and industrial sand and a proppant logistics solutions provider, today announced results for the second quarter of 2025. "Smart Sand delivered robust sales volumes and improved profitability in the second quarter" stated Charles Young, Smart Sand's Chief Executive Officer. "Our sales volumes rose ...

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]

Investor Presentation – August 2025 Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward- lookin ...

Core Viewpoint - Smart Sand, Inc. is set to release its second quarter 2025 financial results on August 12, 2025, after market close, inviting investors to access related documents on its website [1]. Company Overview - Smart Sand is a fully integrated frac and industrial sand supply and services company, providing complete solutions from mine to wellsite for frac sand customers and a wide range of products for industrial sand customers [2]. - The company produces low-cost, high-quality Northern White sand, which is utilized as a proppant to enhance hydrocarbon recovery rates in hydraulic fracturing of oil and natural gas wells [2]. - Smart Sand's products are also used in various industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscaping, retail, and recreation [2]. - The company offers logistics solutions through in-basin transloading terminals and SmartSystems™ for wellsite storage and sand management [2]. - Smart Sand owns and operates premium sand mines and processing facilities in Wisconsin and Illinois, with access to four Class I rail lines for product delivery across the United States and Canada [2].

Core Viewpoint - Smart Sand, Inc. has declared a special cash dividend of $0.10 per share, reflecting the company's strategy to return value to its stockholders [1][2]. Company Overview - Smart Sand is a fully integrated frac and industrial sand supply and services company, providing complete solutions from mine to wellsite for frac sand customers and a wide range of products for industrial sand customers [2]. - The company produces low-cost, high-quality Northern White sand, which is utilized as a proppant to enhance hydrocarbon recovery rates in hydraulic fracturing [2]. - Smart Sand's products are also used in various industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscaping, and recreation [2]. - The company operates premium sand mines and processing facilities in Wisconsin and Illinois, with access to four Class I rail lines, enabling product delivery across the United States and Canada [2]. Financial Strategy - The CEO of Smart Sand emphasized the commitment to managing costs and maximizing efficiency to create further opportunities for returning value to stockholders [2].

Financial Performance - In Q1 2025, Smart Sand sold approximately 1.1 million tons, a 27% sequential decrease and a 20% year-over-year decline compared to Q4 2024 and Q1 2024 respectively[3]. - Revenue for Q1 2025 was $65.6 million, down from $91.4 million in Q4 2024 and $83.1 million in Q1 2024, primarily due to lower sales volumes and moderated average selling prices[4]. - The company reported a net loss of $(24.2) million, or $(0.62) per share, compared to a net income of $3.7 million, or $0.10 per share in Q4 2024[8]. - Gross profit for Q1 2025 was $2.8 million, down from $13.5 million in Q4 2024, driven by lower sales volumes and moderating average sales prices[6]. - Contribution margin in Q1 2025 was $9.6 million, or $8.96 per ton sold, compared to $20.2 million, or $13.80 per ton sold in Q4 2024[9]. - For the three months ended March 31, 2025, the company reported a net loss of $24,231,000 compared to a net income of $3,736,000 for the previous quarter[27]. - Total revenue for the same period was $65,558,000, a decrease of 28.3% from $91,363,000 in the previous quarter[31]. - The contribution margin for the three months ended March 31, 2025, was $9,577,000, down 52.6% from $20,202,000 in the previous quarter[31]. - The company sold a total of 1,069 tons during the quarter, a decrease of 27% from 1,464 tons sold in the previous quarter[31]. - Adjusted EBITDA for the three months ended March 31, 2025, was $1,426,000, a significant decrease from $11,943,000 in the previous quarter[34]. Cash Flow and Liquidity - Free cash flow for Q1 2025 was $5.2 million, with net cash provided by operating activities at $8.7 million, reflecting a significant improvement from previous quarters[12][11]. - Free cash flow for the three months ended March 31, 2025, was $5,188,000, compared to a negative free cash flow of $(840,000) in the previous quarter[37]. - Cash and cash equivalents at the end of the period increased to $5,444,000 from $1,554,000 at the end of the previous quarter[27]. - As of March 31, 2025, the company had cash on hand of $5.1 million and $30.0 million in undrawn availability on its credit facility[14]. Capital Expenditures and Share Repurchase - Capital expenditures for Q1 2025 were $3.5 million, with projected full-year capital expenditures ranging between $13.0 million and $17.0 million[12]. - Smart Sand repurchased 135,196 shares for $0.3 million under its share repurchase program, with $9.7 million remaining for future repurchases[13]. Assets and Liabilities - Total assets decreased to $326,908,000 as of March 31, 2025, from $341,546,000 as of December 31, 2024[25]. - Total liabilities increased to $106,999,000 as of March 31, 2025, compared to $97,736,000 as of December 31, 2024[25]. Future Outlook - The company anticipates a sales volume increase of 10% to 20% in Q2 2025 compared to Q1 2025, driven by activity in the Marcellus and Utica basins[1].

[Filing Information](index=1&type=section&id=Filing%20Information) This section details the quarterly report filing specifics, including the registrant, filer status, and common stock outstanding - This is a Quarterly Report on Form 10-Q for the period ended March 31, 2025[2](index=2&type=chunk) - Registrant: SMART SAND, INC. (Commission file number 001-37936)[2](index=2&type=chunk) - Filer Status: Non-accelerated Filer and Smaller reporting company[3](index=3&type=chunk) Common Stock Outstanding as of May 6, 2025 | Shares Outstanding | | :----------------- | | 44,083,342 | [PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Certain Definitions](index=3&type=section&id=Certain%20Definitions) This section provides key definitions used throughout the quarterly report, including terms for the Company itself, its common stock, and specific financial agreements like the FCB ABL Credit Facility and VFI Equipment Financing, as well as regulatory and accounting acronyms - The Company is defined as Smart Sand, Inc., a Delaware company, and its subsidiaries[9](index=9&type=chunk) - FCB ABL Credit Facility refers to a new five-year senior secured asset-based credit facility entered into on September 3, 2024, with First-Citizens Bank & Trust Company[9](index=9&type=chunk) - VFI Equipment Financing is a four-year Master Lease Agreement (May 9, 2024) structured as a sale-leaseback of SmartSystems wellsite proppant storage equipment, treated as a financing arrangement for accounting purposes[9](index=9&type=chunk) [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Smart Sand, Inc., including the balance sheets, statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, inventory, property, plant and equipment, debt, leases, segment reporting, income taxes, and commitments [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202025%20%28Unaudited%29%20and%20December%2031%2C%202024) This section presents the company's financial position, detailing assets, liabilities, and equity as of March 31, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | $5,108 | $1,554 | | Accounts receivable | $27,966 | $40,981 | | Inventory | $28,309 | $25,044 | | Total current assets | $67,231 | $75,525 | | Property, plant and equipment, net | $233,345 | $236,692 | | Total assets | $326,908 | $341,546 | | **Liabilities & Equity** | | |\ | Accounts payable | $12,441 | $16,988 | | Total current liabilities | $38,399 | $43,210 | | Total liabilities | $106,999 | $97,736 | | Total stockholders' equity | $219,909 | $243,810 | | Total liabilities and stockholders' equity | $326,908 | $341,546 | - Cash and cash equivalents increased significantly from **$1,554 thousand** at December 31, 2024, to **$5,108 thousand** at March 31, 2025[11](index=11&type=chunk) - Accounts receivable decreased from **$40,981 thousand** to **$27,966 thousand**, while inventory increased from **$25,044 thousand** to **$28,309 thousand**[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024%20%28Unaudited%29) This section outlines the company's financial performance, including revenues, costs, gross profit, operating income/loss, and net loss for the three months ended March 31, 2025 and 2024 Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (2025 vs 2024) | | :------------------------ | :-------------------------------- | :-------------------------------- | :-------------------- | | Sand revenue | $64,464 | $79,719 | $(15,255) | | SmartSystems revenue | $1,094 | $3,333 | $(2,239) | | Total revenue | $65,558 | $83,052 | $(17,494) | | Total cost of goods sold | $62,786 | $71,241 | $(8,455) | | Gross profit | $2,772 | $11,811 | $(9,039) | | Operating (loss) income | $(7,050) | $784 | $(7,834) | | Net loss | $(24,231) | $(216) | $(24,015) | | Basic net loss per common share | $(0.62) | $(0.01) | $(0.61) | | Diluted net loss per common share | $(0.62) | $(0.01) | $(0.61) | - Total revenue decreased by **21%** from **$83.1 million** in Q1 2024 to **$65.6 million** in Q1 2025, primarily due to a **19%** decline in Sand revenue and a **67%** decline in SmartSystems revenue[14](index=14&type=chunk) - The company reported a significant net loss of **$24.2 million** in Q1 2025, compared to a net loss of **$0.2 million** in Q1 2024, largely driven by a substantial increase in income tax expense[14](index=14&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024%20%28Unaudited%29) This section details the company's comprehensive loss, including net loss and other comprehensive income/loss items for the three months ended March 31, 2025 and 2024 Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss | $(24,231) | $(216) | | Foreign currency translation adjustment | $4 | $(26) | | Comprehensive loss | $(24,227) | $(242) | - Comprehensive loss significantly increased to **$24.2 million** in Q1 2025 from **$0.2 million** in Q1 2024, mirroring the increase in net loss[16](index=16&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024%20%28Unaudited%29) This section presents the changes in the company's stockholders' equity, reflecting net loss, stock-based compensation, and treasury stock transactions for the three months ended March 31, 2025 and 2024 Changes in Stockholders' Equity (in thousands, except share amounts) | Metric | Balance at Dec 31, 2024 | Net Loss | Stock-based Compensation | Treasury Stock Purchases | Balance at Mar 31, 2025 | | :--------------------------------- | :---------------------- | :--------- | :----------------------- | :----------------------- | :---------------------- | | Common Stock (Par Value) | $39 | — | — | — | $40 | | Treasury Stock (Amount) | $(14,671) | — | — | $(641) | $(15,312) | | Additional Paid-in Capital | $185,263 | — | $934 | — | $186,229 | | Retained Earnings | $73,239 | $(24,231) | — | — | $49,008 | | Accumulated Other Comprehensive Loss | $(60) | — | — | — | $(56) | | Total Stockholders' Equity | $243,810 | $(24,231) | $934 | $(641) | $219,909 | - Total stockholders' equity decreased from **$243.8 million** at December 31, 2024, to **$219.9 million** at March 31, 2025, primarily due to the net loss of **$24.2 million** and treasury stock repurchases[19](index=19&type=chunk) - The company repurchased **135,196 shares** of treasury stock for **$305 thousand** and **151,386 shares** for **$336 thousand** related to restricted stock buy back during Q1 2025[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024%20%28Unaudited%29) This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $8,724 | $(3,863) | | Net cash used in investing activities | $(3,535) | $(1,645) | | Net cash (used in) provided by financing activities | $(1,635) | $4,034 | | Net increase (decrease) in cash and cash equivalents | $3,554 | $(1,474) | | Cash and cash equivalents at end of period | $5,108 | $4,598 | - Net cash provided by operating activities significantly improved to **$8.7 million** in Q1 2025 from a use of **$3.9 million** in Q1 2024, despite a higher net loss[26](index=26&type=chunk) - Cash and cash equivalents increased by **$3.6 million** in Q1 2025, ending the period at **$5.1 million**, compared to a decrease of **$1.5 million** in Q1 2024[26](index=26&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, inventory, property, debt, leases, and other financial commitments [NOTE 1 — Organization and Nature of Business](index=9&type=section&id=NOTE%201%20%E2%80%94%20Organization%20and%20Nature%20of%20Business) This note describes Smart Sand, Inc.'s operations as a fully integrated frac and industrial sand supply and services company, including its mining facilities and logistics solutions - Smart Sand, Inc. operates as a fully integrated frac and industrial sand supply and services company, offering mine-to-wellsite proppant solutions and industrial sand for various uses[29](index=29&type=chunk) - The company operates multiple sand mines and processing facilities in Wisconsin (Oakdale, Blair) and Illinois (Ottawa), with a total annual processing capacity of approximately **10.0 million tons**[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - Smart Sand provides transload and logistics solutions through company-controlled terminals in North Dakota, Oklahoma, Pennsylvania, and Ohio, and offers SmartSystems for wellsite proppant storage[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [NOTE 2 — Summary of Significant Accounting Policies](index=10&type=section&id=NOTE%202%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting policies and estimates used in preparing the interim financial statements, addressing areas like asset impairment, revenue recognition, and the impact of market conditions - The interim financial statements are prepared in accordance with SEC rules for Form 10-Q and GAAP, relying on management estimates for items like asset impairment, asset retirement obligations, and deferred tax assets[40](index=40&type=chunk)[41](index=41&type=chunk) - Ongoing global conflicts, trade policies, and OPEC output changes may affect oil and natural gas prices, creating volatility in the oilfield service sector. Sales to Canada and Mexico are subject to **25% tariffs**, impacting approximately **10% of Q1 2025 sand volumes**[42](index=42&type=chunk) - The company had **$118,787 thousand** in unsatisfied performance obligations as of March 31, 2025, with **$108,131 thousand** expected to be recognized in the remainder of 2025 and **$10,656 thousand** in 2026[44](index=44&type=chunk) [NOTE 3 — Inventory](index=11&type=section&id=NOTE%203%20%E2%80%94%20Inventory) This note provides a detailed breakdown of the company's inventory components, including raw material, work in progress, finished goods, and spare parts Inventory Breakdown (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--------------- | :------------- | :---------------- | | Raw material | $805 | $584 | | Work in progress | $4,182 | $6,740 | | Finished goods | $11,367 | $6,507 | | Spare parts | $11,955 | $11,213 | | Total inventory | $28,309 | $25,044 | - Total inventory increased from **$25.0 million** at December 31, 2024, to **$28.3 million** at March 31, 2025, driven primarily by increases in finished goods and spare parts[49](index=49&type=chunk) [NOTE 4 — Property, Plant and Equipment, net](index=12&type=section&id=NOTE%204%20%E2%80%94%20Property%2C%20Plant%20and%20Equipment%2C%20net) This note details the company's property, plant, and equipment, net of accumulated depreciation, across categories like machinery, plant, land, and construction in progress Net Property, Plant and Equipment (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :------------------------------- | :------------- | :---------------- |\ | Machinery, equipment and tooling | $44,188 | $43,041 | | Plant and building | $219,398 | $218,546 | | Land and land improvements | $40,627 | $40,627 | | Construction in progress | $4,385 | $3,216 | | Total property, plant and equipment, net | $233,345 | $236,692 | - Net property, plant and equipment decreased slightly from **$236.7 million** at December 31, 2024, to **$233.3 million** at March 31, 2025[52](index=52&type=chunk) - Depreciation expense was **$6,998 thousand** for the three months ended March 31, 2025, consistent with **$6,981 thousand** in the prior year period[52](index=52&type=chunk) [NOTE 5 — Accrued and Other Expenses](index=12&type=section&id=NOTE%205%20%E2%80%94%20Accrued%20and%20Other%20Expenses) This note presents a breakdown of accrued liabilities and other expenses, including employee-related costs, royalties, and freight charges Accrued and Other Expenses (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :------------- | :---------------- | | Employee related expenses | $2,099 | $1,630 | | Accrued royalties | $2,934 | $3,224 | | Accrued freight and delivery charges | $3,205 | $2,331 | | Total accrued liabilities | $13,618 | $12,561 | - Total accrued liabilities increased from **$12.6 million** at December 31, 2024, to **$13.6 million** at March 31, 2025, primarily due to increases in employee-related expenses and accrued freight and delivery charges[53](index=53&type=chunk) [NOTE 6 — Debt](index=13&type=section&id=NOTE%206%20%E2%80%94%20Debt) This note details the company's debt obligations, including current and long-term portions, and provides information on its credit facilities and equipment financing arrangements Debt Breakdown (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :------------------------------ | :------------- | :---------------- | | Current portion of long-term debt | $3,519 | $3,554 | | Long-term debt | $8,488 | $9,130 | | Total Debt | $12,007 | $12,684 | - The company has a **$30.0 million** FCB ABL Credit Facility with no outstanding borrowings as of March 31, 2025, and **$30.0 million** available to be drawn[60](index=60&type=chunk)[62](index=62&type=chunk) - The VFI Equipment Financing, with a principal of **$10.0 million**, had an outstanding balance of **$7.8 million** as of March 31, 2025, bearing a fixed interest rate of **8.56%** and maturing in May 2028[63](index=63&type=chunk)[149](index=149&type=chunk) [NOTE 7 — Leases](index=15&type=section&id=NOTE%207%20%E2%80%94%20Leases) This note provides information on the company's lease arrangements, including right-of-use assets, lease liabilities, lease costs, and cash flows related to operating and financing leases Lease Liabilities and Right-of-Use Assets (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :---------------------------- | :------------- | :---------------- | | Operating right-of-use assets | $20,402 | $23,153 | | Financing right-of-use assets | $582 | $582 | | Total right-of-use assets | $20,984 | $23,735 | | Operating lease liabilities | $20,593 | $24,539 | | Financing lease liabilities | $490 | $545 | | Total lease liabilities | $21,083 | $25,084 | Lease Costs and Cash Flows (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Total lease cost | $3,232 | $3,471 | | Operating cash flows used for operating leases | $4,457 | $3,553 | - Weighted average remaining lease term for operating leases is **2.8 years** with a weighted average discount rate of **7.31%** as of March 31, 2025[69](index=69&type=chunk) [NOTE 8 — Asset Retirement Obligations](index=16&type=section&id=NOTE%208%20%E2%80%94%20Asset%20Retirement%20Obligations) This note details the company's asset retirement obligations, primarily related to post-closure reclamation and site restoration costs for its mining operations Asset Retirement Obligations (in thousands) | Metric | Amount | | :--------------------------- | :------ | | Balance at December 31, 2024 | $21,292 |\ | Accretion expense | $293 | | Balance at March 31, 2025 | $21,585 | - The post-closure reclamation and site restoration obligation increased to **$21.6 million** as of March 31, 2025, from **$21.3 million** at December 31, 2024, due to accretion expense[70](index=70&type=chunk)[71](index=71&type=chunk) [NOTE 9 — Segment Reporting](index=16&type=section&id=NOTE%209%20%E2%80%94%20Segment%20Reporting) This note presents financial information for the company's two reportable segments: Sand (frac sand and industrial production solutions) and SmartSystems (wellsite proppant storage equipment and services) - The Company operates in two reportable segments: Sand (frac sand and Industrial Production Solutions) and SmartSystems (rental of wellsite proppant storage equipment and services)[76](index=76&type=chunk)[77](index=77&type=chunk) Segment Revenue and Gross Profit (Three Months Ended March 31, 2025, in thousands) | Segment | Revenue | Gross Profit | | :----------- | :------ | :----------- | | Sand | $64,464 | $2,791 | | SmartSystems | $1,094 | $(19) | | Total | $65,558 | $2,772 | Segment Revenue and Gross Profit (Three Months Ended March 31, 2024, in thousands) | Segment | Revenue | Gross Profit | | :----------- | :------ | :----------- | | Sand | $79,719 | $10,752 | | SmartSystems | $3,333 | $1,059 | | Total | $83,052 | $11,811 | [NOTE 10 — Income Taxes](index=18&type=section&id=NOTE%2010%20%E2%80%94%20Income%20Taxes) This note explains the company's income tax position, including its effective tax rate, deferred tax assets and liabilities, and the impact of valuation allowances - The effective tax rate for Q1 2025 was approximately **(233.6)%** compared to **155.2%** for Q1 2024, with the statutory rate at **21.0%**. The depletion deduction calculation is a significant driver of the effective tax rate[84](index=84&type=chunk)[123](index=123&type=chunk) - The Company recorded a partial valuation allowance against gross deferred tax assets due to uncertainty in realizing tax benefits from certain deductions, included in long-term deferred tax liabilities[86](index=86&type=chunk)[124](index=124&type=chunk) [NOTE 11 — Concentrations](index=18&type=section&id=NOTE%2011%20%E2%80%94%20Concentrations) This note discloses significant concentrations of credit risk with customers and vendors, as well as geographic risks related to the company's mining operations and product sales - As of March 31, 2025, **five customers** accounted for **73%** of total accounts and unbilled receivables, and **four customers** accounted for **74%** of total revenues for the three months ended March 31, 2025[88](index=88&type=chunk) - **Two vendors** accounted for **35%** of accounts payable as of March 31, 2025, and **40%** of cost of goods sold for the three months ended March 31, 2025[91](index=91&type=chunk) - The company faces geographic risk due to its primary product being Northern White sand and mining operations limited to Wisconsin and Illinois, serving oil and natural gas basins[92](index=92&type=chunk) [NOTE 12 — Commitments and Contingencies](index=19&type=section&id=NOTE%2012%20%E2%80%94%20Commitments%20and%20Contingencies) This note outlines the company's commitments and contingencies, including legal proceedings, performance bonds, and other contractual obligations - The company is subject to various legal proceedings in the normal course of business, including a class action lawsuit (Cory Berg, et al. v. Hi-Crush Blair LLC) which was settled in February 2025[93](index=93&type=chunk)[94](index=94&type=chunk) - Total aggregate principal amount of performance bonds outstanding was **$19,727 thousand** as of March 31, 2025[95](index=95&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, liquidity, and cash flows, including an overview of its business, market trends, detailed analysis of GAAP and non-GAAP financial results, and a discussion of liquidity and capital resources [Overview](index=20&type=section&id=Overview) This section provides an overview of Smart Sand's business model, operational capacity, and market trends influencing the frac and industrial sand industry - Smart Sand is a fully integrated frac and industrial sand supply and services company, producing Northern White sand for hydraulic fracturing and industrial applications, and offering SmartSystems wellsite logistics[99](index=99&type=chunk)[105](index=105&type=chunk) - The company's total annual processing capacity from its operating facilities (Oakdale, Ottawa, Blair) is approximately **10.0 million tons**, supported by **five company-controlled** in-basin transloading facilities[102](index=102&type=chunk)[103](index=103&type=chunk) - Market trends indicate a slowdown in sand volumes in Q1 2025 due to cyclical and seasonal factors, but long-term demand for frac sand is expected to moderately increase due to longer lateral wells and increased sand per linear foot[107](index=107&type=chunk) [GAAP Results of Operations](index=23&type=section&id=GAAP%20Results%20of%20Operations) This section analyzes the company's financial performance based on Generally Accepted Accounting Principles (GAAP), detailing revenue, cost of goods sold, gross profit, operating income/loss, and net loss Key GAAP Financial Results (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | Change (Dollars) | Change (Percentage) | | :------------------------ | :--------- | :--------- | :--------------- | :------------------ | | Total revenue | $65,558 | $83,052 | $(17,494) | (21)% | | Gross profit | $2,772 | $11,811 | $(9,039) | (77)% | | Operating (loss) income | $(7,050) | $784 | $(7,834) | (999)% | | Income tax expense | $16,968 | $607 | $16,361 | 2,695% | | Net loss | $(24,231) | $(216) | $(24,015) | 11,118% | - Sand revenue decreased by **19%** to **$64.5 million**, and SmartSystems revenue declined by **67%** to **$1.1 million**, primarily due to lower volumes and reduced SmartSystems fleet utilization[116](index=116&type=chunk)[118](index=118&type=chunk) - Cost of goods sold decreased by **12%** to **$62.8 million**, but per-ton logistics and production costs increased due to a shift in delivery locations and lost efficiencies from lower production volumes[119](index=119&type=chunk) [Non-GAAP Financial Measures](index=25&type=section&id=Non-GAAP%20Financial%20Measures) This section presents and reconciles non-GAAP financial measures such as Contribution Margin, EBITDA, Adjusted EBITDA, and Free Cash Flow, used by management to evaluate performance - The company uses non-GAAP measures like Contribution Margin, EBITDA, Adjusted EBITDA, and Free Cash Flow to assess financial performance, as GAAP income tax expense can distort results[128](index=128&type=chunk)[127](index=127&type=chunk) Contribution Margin (Three Months Ended March 31, in thousands, except per ton) | Metric | 2025 | 2024 | | :---------------------------------------------- | :------ | :------ | | Revenue | $65,558 | $83,052 | | Cost of goods sold | $62,786 | $71,241 | | Gross profit | $2,772 | $11,811 | | Depreciation, depletion, and accretion of asset retirement obligations | $6,805 | $6,697 | | Contribution margin | $9,577 | $18,508 | | Contribution margin per ton | $8.96 | $13.85 | | Total tons sold | 1,069 | 1,336 | Adjusted EBITDA (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | | :-------------------------------------- | :--------- | :------ | | Net loss | $(24,231) | $(216) | | Depreciation, depletion and amortization | $7,205 | $7,200 | | Income tax expense and other taxes | $16,968 | $607 | | Interest expense | $372 | $496 | | EBITDA | $314 | $8,087 | | Adjusted EBITDA | $1,426 | $9,335 | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's financial liquidity, cash position, available credit facilities, share repurchase program, and planned capital expenditures - As of March 31, 2025, the company had **$5.1 million** in cash and **$30.0 million** in undrawn availability under its FCB ABL Credit Facility, believing it has sufficient liquidity for the next twelve months[143](index=143&type=chunk)[144](index=144&type=chunk) - The Board approved an eighteen-month share repurchase program for up to **$10.0 million** on October 3, 2024; **$0.3 million** was repurchased in Q1 2025, leaving **$9.7 million** remaining[146](index=146&type=chunk)[147](index=147&type=chunk) - Expected full-year 2025 capital expenditures are between **$13.0 million and $17.0 million**, primarily for new mining areas, efficiency projects, and terminal expansions, to be funded by cash from operations, equipment financing, or the FCB ABL Credit Facility[148](index=148&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reported no material changes to its exposure to market risks during the three months ended March 31, 2025, compared to those described in its Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes in market risk exposure were identified for the three months ended March 31, 2025[163](index=163&type=chunk) [ITEM 4. Controls and Procedures](index=29&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, with the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of March 31, 2025, concluding they were effective. There were no material changes in internal control over financial reporting during the first quarter of fiscal year 2025 - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2025[164](index=164&type=chunk) - No material changes occurred in internal control over financial reporting during the first quarter of fiscal year 2025[165](index=165&type=chunk) [PART II OTHER INFORMATION](index=31&type=section&id=PART%20II%20OTHER%20INFORMATION) This part includes additional information such as legal proceedings, risk factors, equity sales, defaults, mine safety disclosures, and a list of exhibits [ITEM 1. Legal Proceedings](index=31&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in routine litigation arising from its operations, with outcomes generally not expected to materially affect financial statements. Specific details on legal proceedings are incorporated by reference from Note 12 of the financial statements - Information on legal proceedings is incorporated by reference from Part I, Item 1. Note 12 - Commitments and Contingencies - Litigation of the notes to the condensed consolidated financial statements[166](index=166&type=chunk) [ITEM 1A. Risk Factors](index=31&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously described in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors were reported compared to the Annual Report on Form 10-K for the year ended December 31, 2024[167](index=167&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the three months ended March 31, 2025. The company repurchased 135,196 shares of common stock for $0.3 million under its $10.0 million share repurchase program approved in October 2024, with $9.7 million remaining available - No shares were sold by the Company without registration under the Securities Act of 1933 during the three months ended March 31, 2025[168](index=168&type=chunk) Share Repurchase Program Activity (Q1 2025) | Month | Total Shares Purchased | Average Price Paid per Share | Remaining Value for Repurchase | | :----------- | :--------------------- | :--------------------------- | :----------------------------- | | January 2025 | — | $— | $9,694,780 | | February 2025| — | $— | $9,694,780 | | March 2025 | 135,196 | $2.22 | $9,694,780 | | **Total** | **135,196** | **$2.22** | | - As of March 31, 2025, the maximum number of shares that could be repurchased under the current repurchase authority was **4,143,068 shares**[170](index=170&type=chunk) [ITEM 3. Defaults upon Senior Securities](index=31&type=section&id=ITEM%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[171](index=171&type=chunk) [ITEM 4. Mine Safety Disclosures](index=31&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) The company prioritizes mine safety and is subject to MSHA regulations, which include unannounced inspections and standards for health and safety, particularly regarding respirable silica exposure. Compliance is critical, and failure to adhere to standards or changes in enforcement could materially affect the business - Smart Sand's mining operations are regulated by the U.S. Mining Safety and Health Administration (MSHA), which conducts at least two unannounced inspections annually per above-ground facility[173](index=173&type=chunk) - The company monitors airborne respirable silica closely, a known health hazard, and is subject to MSHA rules on permissible exposure limits and medical surveillance[174](index=174&type=chunk) - Information concerning mine safety violations is included in Exhibit 95.1 to this Report, as required by the Dodd-Frank Act[175](index=175&type=chunk) [ITEM 5. Other Information](index=32&type=section&id=ITEM%205.%20Other%20Information) No other information was reported in this section - No other information was disclosed in this section[176](index=176&type=chunk) [ITEM 6. Exhibits](index=32&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, certifications under the Sarbanes-Oxley Act, mine safety disclosures, and XBRL interactive data files - Exhibits include certifications pursuant to Rule 13a-14(a) and 18 U.S.C. 1350 (Sections 302 and 906 of Sarbanes-Oxley Act)[178](index=178&type=chunk) - Mine Safety Disclosure Exhibit 95.1 is filed herewith[178](index=178&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, Presentation Linkbase, and Cover Page Interactive Data File are included[178](index=178&type=chunk) [SIGNATURES](index=34&type=section&id=SIGNATURES) This section contains the official signatures of the company's Chief Financial Officer and Vice President of Accounting, certifying the accuracy of the report - The report was signed on May 13, 2025, by Lee E. Beckelman, Chief Financial Officer, and Christopher M. Green, Vice President of Accounting[183](index=183&type=chunk)

Core Insights - Smart Sand, Inc. reported a net loss of $24.2 million for Q1 2025, primarily due to non-cash deferred income tax expenses, following a profitable Q4 2024 [8][12][31] - The company generated $5.2 million in free cash flow and repurchased 135,196 shares during the quarter, indicating a commitment to returning value to shareholders [2][13][14] - Sales volumes decreased by 27% sequentially and 20% year-over-year, totaling approximately 1.1 million tons sold, attributed to a strong demand in the previous quarter [3][10][29] Financial Performance - Revenues for Q1 2025 were $65.6 million, down from $91.4 million in Q4 2024 and $83.1 million in Q1 2024, driven by lower sales volumes and moderated average selling prices [4][10][29] - Cost of goods sold decreased to $62.8 million, reflecting lower sales volumes and reduced logistics costs [5][10] - Gross profit was $2.8 million, a decline from $13.5 million in Q4 2024 and $11.8 million in Q1 2024, due to lower sales volumes and average selling prices [6][10][29] Operational Highlights - Operating expenses remained stable at $9.8 million compared to Q4 2024, down from $11.0 million in Q1 2024, primarily due to reduced wages and royalties [7][10] - Contribution margin for Q1 2025 was $9.6 million, or $8.96 per ton sold, down from $20.2 million and $13.80 per ton in the previous quarter [9][11][29] - Adjusted EBITDA was $1.4 million, significantly lower than $11.9 million in Q4 2024 and $9.3 million in Q1 2024 [9][30][31] Market Outlook - The company anticipates a significant increase in sales volumes for Q2 2025, projecting a rise of 10% to 20% compared to Q1 2025, driven by activity in the Marcellus and Utica basins [2][3] - Industrial sales reached a record high, with a 9% sequential increase, expected to account for about 5% of total sales volumes this year [2][3] - Capital expenditures are projected to increase over the next two quarters, aimed at maintenance and growth investments, while still maintaining positive free cash flow for the year [2][13] Liquidity and Capital Management - As of March 31, 2025, the company had $5.1 million in cash and $30.0 million in undrawn availability under its credit facility [15][10] - The share repurchase program allows for up to $10.0 million in ordinary shares to be repurchased, with $9.7 million remaining as of the end of Q1 2025 [14][10]