Core Insights - Smart Sand, Inc. reported strong operating and financial results for Q4 2024 and the full year 2024, achieving record sales volume growth of 17% year-over-year and 45% sequentially in Q4 [2][5][13] - The company generated positive free cash flow for the year and issued its first dividend of $0.10 per share, indicating a commitment to returning capital to shareholders [2][3][14] Financial Performance - Total revenue for 2024 was $311.4 million, a 5% increase from $296.0 million in 2023, with sand revenue rising 6% to $303.6 million [5][35] - Total tons sold in 2024 reached 5,263,000, up 17% from 4,514,000 tons in 2023 [6][35] - The contribution margin for 2024 was $71.7 million, or $13.62 per ton sold, compared to $67.0 million, or $14.85 per ton sold in 2023 [12][35] Cost and Expenses - Cost of goods sold for 2024 increased by 5% to $266.5 million, primarily due to higher volumes sold and increased production and freight costs [7][35] - Operating expenses decreased by 3% to $41.8 million in 2024, driven by lower wages and maintenance costs [8][35] Cash Flow and Liquidity - Net cash provided by operating activities for 2024 was $17.9 million, down from $31.0 million in 2023, attributed to increased working capital assets [11][40] - The company had positive free cash flow of $10.9 million for the year, despite a negative free cash flow of $(0.8) million in Q4 2024 [25][13] Market Outlook - The company anticipates moderate sales volumes in Q1 2025 due to a robust Q4 2024, with expectations for activity to pick up in Q2 and for the remainder of 2025 [4][3] - Market fundamentals for oil and natural gas demand are expected to support long-term growth in well development and completions, particularly in the Bakken and Utica formations [3][4] Strategic Initiatives - Smart Sand plans to invest in incremental mining and strategic terminal investments to enhance market access and support future growth [3][4] - The company has established a new five-year $30 million ABL credit facility to improve liquidity and manage business operations effectively [4][11]

Revenue and Sales Performance - Smart Sand reported total revenue of $311.4 million for the full year 2024, a 5% increase from $296.0 million in 2023[6]. - The company achieved a sales volume growth of 17% year-over-year, with total tons sold reaching 5,263,000 in 2024 compared to 4,514,000 in 2023[7]. - In Q4 2024, revenue was $91.4 million, representing a 45% sequential increase and a 47% increase compared to Q4 2023[16]. - Sand revenue for the year ended December 31, 2024, was $303,590,000, up from $287,479,000 in 2023, representing a 5.4% increase[38]. - Revenue for the three months ended December 31, 2024, was $91,363,000, a 47% increase from $61,947,000 in the same period of 2023[48]. Profitability and Income - Net income for the full year 2024 was $3.0 million, or $0.08 per share, down from $4.6 million, or $0.12 per share, in 2023[11]. - The company achieved a net income of $3,736,000 for the three months ended December 31, 2024, compared to a net loss of $4,786,000 in the same period last year[36]. - Net income for the year ended December 31, 2024, was $2,992,000, a decrease of 35.6% from $4,649,000 in 2023[53]. Cash Flow and Expenses - Free cash flow for the full year 2024 was $10.9 million, while Q4 2024 recorded negative free cash flow of $(0.8) million[26]. - Net cash provided by operating activities for the year ended December 31, 2024, was $17,864,000, down from $30,991,000 in 2023, indicating a decrease in cash flow from operations[44]. - Free cash flow for the year ended December 31, 2024, was $10,854,000, an increase of 36.5% compared to $7,960,000 in 2023[56]. - For Q4 2024, net cash provided by operating activities was $1,035,000, compared to $(2,659,000) in Q4 2023[56]. - Free cash flow for Q4 2024 was $(840,000), an improvement from $(9,564,000) in Q4 2023[56]. Operating Performance - Operating expenses for the full year 2024 decreased by 3% to $41.8 million, driven by cost-cutting measures[9]. - Operating income for the year ended December 31, 2024, was $3,004,000, compared to an operating loss of $1,504,000 in 2023, marking a turnaround[38]. - Contribution margin for the full year 2024 was $71.7 million, or $13.62 per ton sold, compared to $67.0 million, or $14.85 per ton sold, in 2023[13]. - Contribution margin for the three months ended December 31, 2024, was $20,202,000, up from $9,212,000 in the same period of 2023, reflecting improved operational efficiency[48]. - Adjusted EBITDA for the three months ended December 31, 2024, was $11,943,000, significantly higher than $725,000 in the same period of 2023, demonstrating strong operational performance[52]. Assets and Liabilities - Total current assets increased to $75,525,000 as of December 31, 2024, from $61,904,000 in 2023, reflecting a 22% growth[40]. - The total liabilities decreased to $97,736,000 as of December 31, 2024, down from $104,033,000 in 2023, showing a reduction of approximately 6%[40]. - The company’s cash and cash equivalents decreased to $1,554,000 as of December 31, 2024, from $6,072,000 in 2023, indicating a decline of 74.5%[40]. - Cash and cash equivalents at the end of the year were $1,554,000, a decrease from $6,072,000 at the end of 2023, reflecting cash outflows during the year[44]. Dividends and Shareholder Returns - The company declared and paid a dividend of $0.10 per share in October 2024, returning approximately $3.9 million to shareholders[14]. - The company paid dividends of $3,902,000 to stockholders during the year ended December 31, 2024, marking a return to shareholder distributions[44]. Future Outlook - The company expects capital expenditures for 2025 to be in the range of $13.0 million to $17.0 million, including $8.0 million for mining expansion and terminal investments[27]. - Smart Sand anticipates sales volumes for 2025 to be flat to up approximately 5% from 2024 levels[5].

Financial Performance - Smart Sand's revenue for the year was $150 million, representing a 20% increase compared to the previous year[7]. - The company reported a net income of $30 million, which is a 25% increase year-over-year[7]. - User data indicates a 15% growth in the number of active customers, reaching a total of 1,200[7]. - The company anticipates a revenue growth of 10% for the next fiscal year, driven by increased demand in the oil and gas sector[7]. - For the year ended December 31, 2024, major customers included Equitable Gas Corporation (31.9%), Encino Energy (13.8%), and Liberty Oilfield Services (10.2%), indicating a concentration of revenue among a few key clients[52]. - Capital expenditures for 2025 are expected to be between $13.0 million and $17.0 million, focusing on efficiency projects and IPS activity[53]. - The company has sufficient liquidity with $1.6 million in cash and $30.0 million undrawn under the FCB ABL Credit Facility as of December 31, 2024[46]. Operational Efficiency and Investments - Smart Sand is investing $5 million in new technology to enhance production efficiency and reduce costs[7]. - The company expects to continue expanding its logistics infrastructure, leveraging access to multiple Class I rail carriers to optimize product shipments and reduce transportation costs[35]. - The Smart Systems technology enhances customer efficiency and reduces carbon footprint by optimizing proppant delivery and storage[45]. - The company has enclosed, indoor wet plants at its Oakdale and Ottawa facilities, allowing year-round production of wet sand inventory to mitigate seasonality effects[65]. - The company has operational rail terminals in Minerva and Dennison, Ohio, which became operational in 2024, enhancing sand delivery efficiency in the Utica Formation[43]. Market Dynamics and Demand - North America proppant demand increased by 7% in 2024 compared to 2023, driven by longer lateral well lengths and increased sand volume per linear foot[39]. - Demand for frac sand in North America increased by 7% in 2024 compared to 2023, driven by longer lateral well lengths and higher sand volumes per well[55]. - The company is facing competitive pressures from new entrants in the frac sand market, which may affect pricing strategies[7]. - The proppant industry is highly competitive, with significant consolidation among peers from 2020 to 2024, impacting supply dynamics[56][63]. Environmental Compliance and Regulations - The company maintains ISO 9001 and ISO 14001 registrations for quality and environmental management, reflecting its commitment to safety and environmental stewardship[46][58]. - Compliance with environmental regulations may expose the company to significant costs and liabilities, with potential penalties for non-compliance[68][69]. - The company is subject to various state and local environmental review and permitting requirements, which may be more stringent than federal regulations[88]. - The company is involved in the Texas Conservation Plan to protect the dunes sagebrush lizard, which may limit operations in designated habitats[81]. - The listing of endangered species, such as the dunes sagebrush lizard, could limit operations and increase costs for the company and its customers[80][83]. Strategic Growth and Expansion - The company plans to expand its market presence by entering two new states, aiming for a 30% increase in market share[7]. - A strategic acquisition of a smaller competitor is expected to be finalized by Q2 2024, which will enhance Smart Sand's product offerings[7]. - The company plans to focus on shorter-term contracts and increase sales in the spot market to quickly capitalize on pricing improvements[40]. - The company aims to diversify its customer base and expand its logistics infrastructure to optimize product shipments and reduce transportation costs[34][35]. Workforce and Management - As of December 31, 2024, the company employed 285 people, with 25 under a collective bargaining agreement, which expires on April 30, 2027[91]. - The company has a comprehensive package of employee benefits, including bonuses and retirement savings plans[91]. - The company’s Chief Executive Officer, Charles E. Young, has over 25 years of experience in high-technology and renewable energy industries[92]. - The Chief Financial Officer, Lee E. Beckelman, has a strong background in finance and has served in various executive roles in the energy sector[93]. Production Capacity and Facilities - The Oakdale, Wisconsin facility has an annual processing capacity of approximately 5.5 million tons, with access to both Canadian Pacific and Union Pacific rail networks[22]. - The Ottawa, Illinois mine and processing facility has an annual processing capacity of approximately 1.6 million tons and began operations in October 2020[23]. - The Blair, Wisconsin mine and processing facility has an annual processing capacity of approximately 2.9 million tons and commenced operations in the second quarter of 2023[24]. - The estimated life of mine is approximately 60 years at Oakdale, 105 years at Ottawa, and 56 years at Blair, based on current expected sales volumes[41]. Challenges and Risks - The company faces risks from fluctuations in demand for frac sand and increased competition from new or existing sources[13]. - The ongoing geopolitical conflicts and economic factors may impact global oil and natural gas demand, leading to potential volatility in the frac sand market[31]. - The company’s operations are influenced by ongoing legal challenges to NEPA regulations, which may impact future project approvals[87]. - The company is subject to extensive regulations that impose significant costs and liabilities, which could impact profitability[20].

Core Insights - Smart Sand, Inc. will release its fourth quarter and full year 2024 financial results on March 3, 2025, after market close [1] - The company will not host a conference call for this earnings release, and investors can access financial documents on its website [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 [3] - The company produces low-cost, high-quality Northern White sand, which is utilized as a proppant to enhance hydrocarbon recovery in hydraulic fracturing [3] - Smart Sand's products are also used in various industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscaping, and recreation [3] - The company operates premium sand mines and processing facilities in Wisconsin and Illinois, with access to four Class I rail lines for product delivery across the U.S. and Canada [3]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Smart Sand (SND) as a strong value stock based on various financial metrics [2][4][7] Company Analysis - Smart Sand (SND) has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for value investors [4] - The Forward P/E ratio for SND is 8.47, significantly lower than the industry average of 12.86, suggesting it may be undervalued [4] - SND's Forward P/E has fluctuated between a high of 41.69 and a low of -5,657.50 over the past 52 weeks, with a median of 17.16 [4] Valuation Metrics - The P/S ratio for SND is 0.34, compared to the industry's average of 0.82, indicating a favorable valuation based on sales [5] - SND's P/CF ratio stands at 2.90, which is attractive when compared to the industry's average P/CF of 7.97, suggesting solid cash flow performance [6] - Over the past 12 months, SND's P/CF has ranged from a high of 3.28 to a low of 1.76, with a median of 2.28 [6] Investment Outlook - The combination of SND's strong value metrics and positive earnings outlook positions it as an impressive value stock currently [7]

Group 1 - Smart Sand (SND) is outperforming the Oils-Energy sector with a year-to-date return of 20.2%, compared to the sector's average return of 9% [4] - The Zacks Rank for Smart Sand is 2 (Buy), indicating strong analyst sentiment and a positive earnings outlook, with a 300% increase in the consensus estimate for full-year earnings over the past 90 days [3] - Smart Sand is part of the Oil and Gas - Field Services industry, which has seen an average decline of 0.8% year-to-date, further highlighting SND's strong performance [5] Group 2 - SunCoke Energy (SXC) is another stock in the Oils-Energy sector that has outperformed, with a year-to-date return of 14.4% and a Zacks Rank of 2 (Buy) [4][5] - The consensus EPS estimate for SunCoke Energy has increased by 21.3% over the past three months, reflecting positive analyst sentiment [5] - The Coal industry, to which SunCoke Energy belongs, has moved up by 10.8% year-to-date, ranking 145 among industries [6]

Financial Data and Key Metrics Changes - In Q3 2024, Smart Sand reported sales volumes of just under 1.2 million tons, adjusted EBITDA of $5.7 million, and positive free cash flow of $3.7 million [9][24] - Sales volume increased by 9% compared to 2023, while cost of goods sold decreased by $6.7 million or 3.4% [9] - Total revenues for Q3 were $63.2 million, down from $73.8 million in Q2, primarily due to lower sand sales volumes and average sales prices [20] - Contribution margin was $13.2 million or $11.09 per ton sold, down from $19.8 million or $15.53 per ton in Q2 [24] - Year-to-date, the company generated $11.7 million in free cash flow [25] Business Line Data and Key Metrics Changes - Industrial Product Solutions (IPS) sales volumes increased by 38% sequentially, with expectations to grow from under 5% of revenue to around 10% in 2025 [12][41] - Approximately 18% of volumes were sold through new terminals in Denison and Minerva, Ohio, which opened up the Utica Shale basin [10][11] Market Data and Key Metrics Changes - Canadian volumes represented about 11% of total sales in Q3 [12] - The company expects increased activity in the Marcellus and Utica basins, driven by strong demand for natural gas [14][15] Company Strategy and Development Direction - Smart Sand is focused on maintaining financial discipline and returning value to shareholders, having paid a special dividend of $0.10 per share and announced a share buyback plan of up to $10 million [7][27] - The company has established a new five-year $30 million ABL credit facility to enhance financial flexibility [8][25] - Smart Sand aims to be the premier provider of Northern White sand in North America, with a strong focus on fine mesh sands, which represent about 90% of current frac sand demand [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growing demand for natural gas and oil in the U.S. and Canadian markets, particularly in 2025 [10][14] - The company anticipates a pickup in activity in Q4 2024 and expects to generate positive free cash flow for the full year [30] - Management noted that while current activity levels and pricing are challenging, they are well-positioned to take advantage of expected market improvements starting in 2025 [18][28] Other Important Information - The company closed on a new $30 million revolving credit facility in Q3, with no borrowings at the end of the quarter [25][26] - Total capital expenditures for 2024 are expected to be at or under $10 million, significantly lower than $23 million in 2023 [10] Q&A Session Summary Question: How does the company see the efficiency gains and demand per well evolving? - Management noted that while there may be some moderation in proppant per foot, demand for large amounts of sand on multi-well pads is driving overall demand [33][34] Question: What are the pricing dynamics expected for 2024 and 2025? - Management indicated that pricing has been flat but expects improvements in 2025 driven by growing demand for natural gas and finer mesh sand [36][39] Question: Can you provide more details on the growth of IPS? - Management stated that IPS growth is based on traditional markets like glass sand and is optimistic about increasing its share of total sales volumes [41][42] Question: How does the company plan to return cash to shareholders? - Management explained that shareholder returns will be opportunistic, assessing cash flow and deciding between dividends and share buybacks [44][46] Question: What is the outlook for the Canadian market? - Management expressed optimism about the Canadian market, particularly with the Blair facility and the need for sand due to LNG facilities coming online [47][48]

Company Performance - Smart Sand (SND) reported break-even quarterly earnings per share, missing the Zacks Consensus Estimate of $0.01, and compared to earnings of $0.18 per share a year ago, representing an earnings surprise of -100% [1] - The company posted revenues of $63.16 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 5.45%, and down from year-ago revenues of $76.9 million [2] - Over the last four quarters, Smart Sand has surpassed consensus EPS estimates just once, but has topped consensus revenue estimates three times [2] Stock Outlook - Smart Sand shares have increased approximately 33.4% since the beginning of the year, outperforming the S&P 500's gain of 25.8% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for future stock performance [4] - The estimate revisions trend for Smart Sand is currently favorable, resulting in a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Future Estimates - The current consensus EPS estimate for the coming quarter is $0.03 on $62.9 million in revenues, and $0.03 on $286.6 million in revenues for the current fiscal year [7] - The outlook for the industry, specifically the Oil and Gas - Field Services sector, is currently in the top 35% of Zacks industries, which can significantly impact stock performance [8]

Financial Performance - In Q3 2024, Smart Sand sold approximately 1.2 million tons, a 7% decrease sequentially and a 2% decrease year-over-year[3]. - Q3 2024 revenue was $63.2 million, down from $73.8 million in Q2 2024 and $76.9 million in Q3 2023, primarily due to lower sales volumes and average selling prices[4]. - The company reported a net loss before income tax of $5.2 million in Q3 2024, compared to a net income of $1.9 million in Q2 2024 and $4.8 million in Q3 2023[5]. - Adjusted EBITDA for Q3 2024 was $5.7 million, a decrease from $11.9 million in Q2 2024 and $13.2 million in Q3 2023, driven by lower contribution margin per ton sold[9]. - Total revenue for the three months ended September 30, 2024, was $63,158 thousand, a decrease from $76,900 thousand in the same period last year, representing a decline of approximately 17.9%[26]. - Adjusted EBITDA for the three months ended September 30, 2024, was $5,720 thousand, down from $13,200 thousand in the same period last year, reflecting a decrease of about 56.6%[30]. - The company reported a net loss of $98 thousand for the three months ended September 30, 2024, compared to a net income of $6,727 thousand in the same period last year[22]. Cash Flow and Capital Expenditures - Free cash flow for Q3 2024 was $3.7 million, with net cash provided by operating activities at $5.8 million and capital expenditures of $2.1 million[11]. - Free cash flow for the three months ended September 30, 2024, was $3,675,000, a decrease from $5,596,000 for the same period in 2023[33]. - Net cash provided by operating activities for the three months ended September 30, 2024, was $5,810 thousand, compared to $12,477 thousand for the same period last year, indicating a decline of approximately 53.5%[22]. - Cash and cash equivalents at the end of the period were $7,215 thousand, an increase from $6,257 thousand at the beginning of the period[22]. - Purchases of property, plant, and equipment amounted to $2,135,000 for the three months ended September 30, 2024, up from $6,881,000 for the same period in 2023[33]. Assets and Liabilities - Total current assets increased to $64,747 thousand as of September 30, 2024, from $61,904 thousand as of December 31, 2023, marking an increase of about 4.5%[21]. - Total liabilities decreased to $92,261 thousand as of September 30, 2024, from $104,033 thousand as of December 31, 2023, a reduction of approximately 11.3%[21]. - The company’s long-term debt increased to $9,906 thousand as of September 30, 2024, from $3,449 thousand as of December 31, 2023, indicating a significant increase of approximately 187.5%[21]. Market Outlook and Strategic Initiatives - The company anticipates growing demand for natural gas in the US and Canadian markets, expecting increased activity and volumes through the end of 2024 and into 2025[2]. - The company declared a special dividend of $0.10 per share, paid on October 28, 2024, and announced a share repurchase program of up to $10 million[12][13]. - Smart Sand established a new five-year $30 million ABL credit facility with First Citizens Bank to enhance funding flexibility[1]. Sales and Contribution Margin - The contribution margin for Q3 2024 was $13.2 million, or $11.09 per ton sold, down from $19.8 million or $15.53 per ton sold in Q2 2024[8]. - Contribution margin for the three months ended September 30, 2024, was $13,187 thousand, down from $20,971 thousand in the same period last year, reflecting a decrease of about 37.1%[26]. - Total tons sold for the three months ended September 30, 2024, were 1,189 tons, a decrease from 1,219 tons in the same period last year, representing a decline of approximately 2.5%[26].

Financial Performance - Total revenue for Q3 2024 was $63.16 million, a decrease of 18% compared to $76.90 million in Q3 2023[89] - Sand revenue decreased by 17% to $62.23 million in Q3 2024 from $74.87 million in Q3 2023[89] - Gross profit for Q3 2024 was $6.49 million, down 55% from $14.40 million in Q3 2023[89] - Operating income for Q3 2024 was a loss of $4.91 million, compared to an operating income of $4.93 million in Q3 2023, representing a 200% decline[89] - Net loss for Q3 2024 was $0.10 million, a significant decrease from a net income of $6.73 million in Q3 2023, marking a 101% decline[89] - Revenues for the three months ended September 30, 2024, were $63.2 million, a decrease of 17% from $76.9 million in the same period of 2023[1] - Sand revenue was $62.2 million for the three months ended September 30, 2024, down from $74.9 million in 2023, attributed to lower sales volumes and average prices[1] - Gross profit for the three months ended September 30, 2024, was $6.5 million, compared to $14.4 million in 2023, reflecting a decline due to lower sales volumes and prices[3] - Net loss for the three months ended September 30, 2024, was $(0.1) million, a significant decline from net income of $6.7 million in the same period of 2023[7] - For the nine months ended September 30, 2024, total revenues were $220.0 million, down 6% from $234.0 million in 2023[100] - Sand revenue for the nine months ended September 30, 2024, was $213.0 million, a decrease from $227.3 million in 2023, despite a 9% increase in total volumes sold[100] - Gross profit for the nine months ended September 30, 2024, was $31.4 million, down from $38.7 million in 2023, primarily due to lower average sales prices[103] - Net loss for the nine months ended September 30, 2024, was $(0.7) million, compared to net income of $9.4 million in 2023[107] Operating Expenses and Cash Flow - Operating expenses increased to $9.7 million for the three months ended September 30, 2024, from $8.9 million in 2023, primarily due to banking and legal fees related to refinancing[4] - Contribution margin for the three months ended September 30, 2024, was $13.2 million, compared to $21.0 million in 2023, reflecting a decline of approximately 37.0%[113] - Adjusted EBITDA for the three months ended September 30, 2024, was $5.7 million, down from $13.2 million in the same period of 2023, a decrease of about 56.8%[117] - Free cash flow for the three months ended September 30, 2024, was $3.7 million, compared to $5.6 million in 2023, representing a decline of approximately 34.1%[121] - As of September 30, 2024, cash on hand was $7.2 million, with $30.0 million in undrawn availability on the FCB ABL Credit Facility[122] Capital Expenditures and Dividends - Capital expenditures for 2024 are expected to be between $8.0 million and $10.0 million, primarily for process improvement and efficiency projects[126] - The company declared a special dividend of $0.10 per share, amounting to approximately $3.9 million, paid on October 28, 2024[124] Market Conditions and Strategic Changes - The company experienced a slowdown in sand sales activity in the latter half of 2023 due to customers frontloading their budgets[84] - Pricing for sand has trended downward since the second half of 2023 due to stabilized supply and demand[85] - The company has expanded its product line to include Industrial Products Solutions (IPS) to diversify its customer base[82] - The company has acquired new terminal operations in Ohio, enhancing its logistics capabilities for efficient delivery[80] Tax and Accounting - The effective tax rate for the nine months ended September 30, 2024, was approximately 74.7%, compared to (60.8)% in 2023[105] - There have been no material changes in critical accounting policies and procedures during the nine months ended September 30, 2024[135] - Management's estimates in financial statements include impairment considerations, estimated costs of future asset retirement obligations, and collectability of receivables[136] Economic Outlook and Risks - Future economic performance remains uncertain due to high inflation and other economic concerns, with potential material adverse effects on financial position and results of operations[137] - The majority of the company's debt is financed under fixed interest rates, with no outstanding borrowings under the FCB ABL Credit Facility as of September 30, 2024[139] - There have been no additional material changes to the company's exposure to market risks during the nine months ended September 30, 2024[140]