Company Highlights - Smart Sand has a total plant annual capacity of approximately 10 million tons [23, 50] - The CEO owns approximately 18% of the company, and insiders own approximately 36% [19, 105] - The company has repurchased approximately 62 million shares since January 2023 [19, 105] - Dividends of $010 per common share were paid in October 2024 and August 2025 [19, 105] Financial Performance - Q2 2025 sales volume was 1424 thousand tons [26] - Q2 2025 revenue was $858 million [28] - Q2 2025 contribution margin per ton was $1108 [29] - Q2 2025 adjusted EBITDA was $7751 thousand [29, 119] Logistics and Operations - The Oakdale facility has 243 million tons of reserves and a 40+ year reserve life [19] - The Ottawa facility has 127 million tons of reserves and a 75+ year reserve life [19] - The Blair facility has 114 million tons of reserves and a 35+ year reserve life [19]

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]

Core Viewpoint - Smart Sand, Inc. is set to release its first quarter 2025 financial results on May 13, 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]

Company Overview - Smart Sand, Inc. is a fully integrated frac and industrial sand supply and services company, providing complete mine to wellsite proppant and logistics solutions to frac sand customers and a broad range of products for industrial sand customers [4] - 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 [4] - 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 [4] - The company operates premium sand mines and processing facilities in Wisconsin and Illinois, with access to four Class I rail lines, enabling delivery of products across the United States and Canada [4] Event Participation - Smart Sand will present and host one-on-one meetings with investors at the Sidoti March Virtual Investor Conference on March 19-20, 2025 [1] - The presentation is scheduled to begin at 10:00 am ET on March 20, 2025, and will be accessible live [2] - Registration for the presentation and one-on-one meetings is free and does not require being a Sidoti client [2] Sidoti Events Overview - Sidoti & Company, LLC formed Sidoti Events, LLC in 2023 to focus on its growing conference business and better serve presenters and attendees [3] - Sidoti has 25 years of experience in independent securities research, primarily covering small and microcap companies with market caps between $200 million and $5 billion [3] - Sidoti Events hosts eight investor conferences annually, providing corporate access and facilitating interactions between small and microcap issuers and interested investors [3]

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].