Smart Sand, Inc. (NASDAQ:SND) Q4 2022 Earnings Conference Call March 1, 2023 10:00 AM ET Company Participants Chris Green - Principal Accounting Officer Chuck Young - Founder and Chief Executive Officer Lee Beckelman - Chief Financial Officer Conference Call Participants Operator Good day and thank you for standing by. Welcome to the Q4 2022 Smart Sand, Inc. Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________ FORM 10-K __________________________________________________ ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Annual Period Ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ___ to ___ Commission file number 001-37936 __________________________ ...

Financial Data and Key Metrics Changes - In Q3 2022, Smart Sand reported sales volumes of 1.1 million tons, a 7% decrease from 1.196 million tons in Q2 2022 [23] - Revenues increased to $71.6 million in Q3 2022 from $68.7 million in Q2 2022, driven by improved average sales prices and increased utilization of SmartSystems [24] - Contribution margin reached $17.8 million and adjusted EBITDA was $11.3 million, up from $15.3 million and $9.2 million in Q2 2022 respectively [26] - Net income for Q3 2022 was $2.7 million, compared to a net loss of $90,000 in Q2 2022 [25] - Free cash flow for the quarter was $6.4 million after capital expenditures of $4.4 million [27] Business Line Data and Key Metrics Changes - Industrial Product Solutions division saw a 28% increase in sales volume during the quarter [14] - SmartSystems last mile offering is gaining momentum, generating positive contribution margin year-to-date [12] Market Data and Key Metrics Changes - Sales volume into the Bakken Basin increased by approximately 40% sequentially [11] - Pricing improved in Q3 2022, with expectations to maintain current pricing levels due to strong market supply and demand fundamentals [9] Company Strategy and Development Direction - Smart Sand aims to diversify its business beyond oil and gas through its Industrial Product Solutions division, which is expected to grow significantly in 2023 and beyond [15] - The company is focused on maintaining a strong balance sheet and disciplined capital spending while pursuing long-term value-generating projects [16] - Smart Sand has over 400 million tons of Northern White sand reserves and the capability to flex annual processing capacity from 5.5 million tons to 10 million tons [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted that Northern White supply and demand fundamentals remain positive, with growing demand particularly in the Appalachian basins [36] - The company expects to achieve record sales volumes for the full year 2022, with contribution margin per ton remaining in the double-digit range in Q4 2022 [30] Other Important Information - The company ended Q3 2022 with approximately $10.4 million in cash and cash equivalents, and $23 million in available liquidity [28] - Management is evaluating the timing of opening the Blair facility and expects to provide updates in the year-end earnings call [18] Q&A Session Summary Question: Perspective on supply-demand fundamentals for frac sand in 2023 - Management indicated that Northern White supply and demand fundamentals are positive, with growing demand in the Appalachian basins and steady activity in the Bakken [36][38] Question: Contribution margin per ton in Q4 - Management explained that consistent volumes and stable pricing are expected to help maintain contribution margin per ton at levels seen in Q2 and Q3 [39][41] Question: Contracts and visibility into future volumes - Management confirmed the addition of smaller contracts and good visibility with spot customers regarding future volumes [47] Question: Shareholder return program - Management stated that while evaluating shareholder return options, the focus remains on maintaining positive free cash flow before making decisions [48][49]

PART I FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the company as of and for the periods ended September 30, 2022 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly increased to $375.4 million as of September 30, 2022, while total liabilities also saw a minor increase to $135.8 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 (Unaudited) | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | **$72,588** | **$73,863** | | Cash and cash equivalents | $10,371 | $25,588 | | Accounts receivable | $32,902 | $17,481 | | Inventory | $20,618 | $15,024 | | Property, plant and equipment, net | $267,210 | $262,465 | | **Total Assets** | **$375,398** | **$374,019** | | **Total Current Liabilities** | **$54,861** | **$48,550** | | Long-term debt | $16,289 | $15,353 | | Asset retirement obligation | $25,006 | $16,155 | | **Total Liabilities** | **$135,837** | **$132,859** | | **Total Stockholders' Equity** | **$239,561** | **$241,160** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net income of $2.7 million in Q3 2022, a significant turnaround from a net loss in Q3 2021, driven by a 108% revenue increase Statement of Operations Summary (in thousands, except per share amounts) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$71,592** | **$34,479** | **$181,911** | **$91,568** | | Sand sales revenue | $66,663 | $31,343 | $172,063 | $83,291 | | **Gross Profit (Loss)** | **$11,429** | **($2,047)** | **$18,419** | **($9,384)** | | Operating Income (Loss) | $3,777 | ($8,756) | ($4,784) | ($48,492) | | **Net Income (Loss)** | **$2,683** | **($7,262)** | **($3,330)** | **($38,441)** | | Diluted EPS | $0.06 | ($0.17) | ($0.08) | ($0.92) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $0.2 million for the nine months ended September 30, 2022, a sharp decline from cash provided in the prior year Cash Flow Summary for the Nine Months Ended September 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($169) | $37,544 | | Net cash used in investing activities | ($15,087) | ($6,898) | | Net cash provided by (used in) financing activities | $39 | ($5,692) | | **Net decrease in cash and cash equivalents** | **($15,217)** | **$24,954** | | Cash and cash equivalents at end of period | $10,371 | $36,679 | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail the company's business, the $6.5 million Blair facility acquisition, revenue sources, debt structure, and significant customer concentrations - The company is a fully integrated frac and industrial sand supply and services company, offering mine-to-wellsite proppant solutions and logistics[30](index=30&type=chunk) - On March 4, 2022, the company acquired the Blair, Wisconsin facility for approximately **$6.5 million in cash**, with the potential to add **2.9 million tons of annual processing capacity**[43](index=43&type=chunk)[44](index=44&type=chunk) Revenue Disaggregation for the Nine Months Ended Sep 30 (in thousands) | Revenue Type | 2022 | 2021 | | :--- | :--- | :--- | | Sand sales revenue | $172,063 | $83,291 | | Shortfall revenue | $4,596 | $4,421 | | Logistics revenue | $5,252 | $3,856 | | **Total revenue** | **$181,911** | **$91,568** | - The company exhibits **significant customer concentration**, with four customers accounting for **65% of total revenues** and three customers accounting for **67% of total accounts receivable** for the nine months ended September 30, 2022[90](index=90&type=chunk)[91](index=91&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses improved financial results driven by higher sand volume and prices, highlights non-GAAP metrics, and confirms sufficient liquidity [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Revenues and gross profit significantly increased in Q3 and the first nine months of 2022 compared to 2021, reflecting stronger market demand Q3 2022 vs Q3 2021 Performance (in thousands) | Metric | Q3 2022 | Q3 2021 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$71,592** | **$34,479** | **$37,113** | **108%** | | Tons Sold | 1,110 | 790 | 320 | 41% | | Gross Profit (Loss) | $11,429 | ($2,047) | $13,476 | 658% | | Net Income (Loss) | $2,683 | ($7,262) | $9,945 | 137% | Nine Months 2022 vs 2021 Performance (in thousands) | Metric | 9M 2022 | 9M 2021 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$181,911** | **$91,568** | **$90,343** | **99%** | | Tons Sold | 3,158 | 2,317 | 841 | 36% | | Gross Profit (Loss) | $18,419 | ($9,384) | $27,803 | 296% | | Net Loss | ($3,330) | ($38,441) | $35,111 | 91% | [Non-GAAP Financial Measures](index=26&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP metrics like Contribution Margin and Adjusted EBITDA showed substantial improvement, reflecting stronger operational performance in Q3 2022 Contribution Margin Reconciliation (in thousands) | Metric | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :--- | :--- | :--- | :--- | :--- | | Gross profit (loss) | $11,429 | ($2,047) | $18,419 | ($9,384) | | Add: Dep, Dep & Acc | $6,340 | $6,145 | $18,854 | $18,009 | | **Contribution margin** | **$17,769** | **$4,098** | **$37,273** | **$8,625** | | Contribution margin per ton | $16.01 | $5.19 | $11.80 | $3.72 | Adjusted EBITDA Reconciliation (in thousands) | Metric | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $2,683 | ($7,262) | ($3,330) | ($38,441) | | EBITDA | $10,727 | ($740) | $15,869 | ($23,830) | | **Adjusted EBITDA** | **$11,291** | **($1,009)** | **$18,550** | **($25,999)** | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through cash and its ABL Credit Facility, with 2022 capital expenditures projected at $20.0 to $25.0 million - Primary sources of liquidity are cash from operations and the ABL Credit Facility, with **$10.4 million in cash** and **$13.0 million available** on the ABL facility as of September 30, 2022[165](index=165&type=chunk) - Full-year 2022 capital expenditures are projected to be between **$20.0 million and $25.0 million**, including the $6.5 million acquisition of the Blair facility[167](index=167&type=chunk) - Total debt outstanding as of September 30, 2022, was approximately **$22.5 million**[168](index=168&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=32&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's market risk, primarily from interest rates, is considered minimal due to its fixed-rate debt structure - The majority of the company's debt is financed under **fixed interest rates**, mitigating interest rate risk[183](index=183&type=chunk) - The ABL Credit Facility has a variable interest rate, but with an outstanding balance of only **$6.0 million**, this is not considered a material risk[183](index=183&type=chunk) [Controls and Procedures](index=32&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of the end of the period covered by the report[185](index=185&type=chunk) - **No material changes** to the internal control over financial reporting occurred during the quarter ended September 30, 2022[186](index=186&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=33&type=section&id=ITEM%201.%20Legal%20Proceedings) Routine legal proceedings are not expected to have a material adverse effect on the company's financial statements - The company is subject to various legal proceedings in the normal course of business, but management **does not expect them to have a material adverse effect** on its financial statements[95](index=95&type=chunk)[188](index=188&type=chunk) [Risk Factors](index=33&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes were reported to the risk factors previously disclosed in the company's 2021 Annual Report on Form 10-K - **No material changes** to the risk factors from the Annual Report on Form 10-K for the year ended December 31, 2021, were reported[189](index=189&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) The company's mining operations are subject to stringent MSHA and OSHA regulations, particularly concerning respirable silica exposure - Operations are subject to stringent health and safety standards from the **U.S. Mining Safety and Health Administration (MSHA)** and the **Occupational Safety and Health Administration (OSHA)**[192](index=192&type=chunk)[193](index=193&type=chunk) - The company closely monitors airborne respirable silica and may be required to incur capital expenditures if workplace exposure limits are lowered significantly[193](index=193&type=chunk) [Exhibits](index=34&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications, agreements, and interactive data files - Lists all exhibits filed with the quarterly report, including certifications required by the Sarbanes-Oxley Act and interactive data files (XBRL)[197](index=197&type=chunk)

Smart Sand, Inc. (NASDAQ:SND) Q2 2022 Earnings Conference Call August 10, 2022 10:00 AM ET Company Participants Josh Jayne - Director, Finance & Treasurer Chuck Young - Founder & Chief Executive Officer Lee Beckelman - Chief Financial Officer John Young - Chief Operating Officer Conference Call Participants Stephen Gengaro - Stifel Operator Hello. Thank you for standing by and welcome to the Second Quarter Smart Sand Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. Af ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________________ OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ___ to ___ Commission file number 001-37936 SMART SAND, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) FORM 10-Q ________________________________ ...

Smart Sand, Inc. (NASDAQ:SND) Q1 2022 Earnings Conference Call May 12, 2022 10:00 AM ET Company Participants Josh Jayne - Finance Manager Charles Young - CEO & Director Lee Beckelman - CFO William Young - COO Conference Call Participants John Daniel - Daniel Energy Stephen Gengaro - Stifel, Nicolaus & Company Operator Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Smart Sand's First Quarter 2022 Earnings Conference Call. [Operator Instructions]. I would now like to hand the co ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________________ FORM 10-Q _____________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ___ to ___ Commission file number 001-37936 SMART SAND, INC. ...

Financial Data and Key Metrics Changes - Fourth quarter volumes reached 872,000 tons, a 43% increase from Q4 2020 and a 10% increase from Q3 2021 [5][19] - Total revenues for Q4 2021 were $35.1 million, up from $34.5 million in Q3 2021, with sand revenues at $34.1 million, a 9% sequential increase [20] - The company reported a net loss of $12.2 million for Q4 2021, compared to a net loss of $7.3 million in Q3 2021, driven by higher expenses and a $2.2 million inventory impairment [22][23] - Contribution margin for Q4 2021 was $1.9 million, down from $4.1 million in Q3 2021, with adjusted EBITDA at negative $4.5 million compared to negative $1 million in Q3 2021 [22] Business Line Data and Key Metrics Changes - The Industrial Product Solutions division began generating sales in Q4 2021, with expectations for rapid growth and diversification into this segment [11] - The Waynesburg terminal is operational, expected to transload over 1 million tons of frac sand annually, enhancing logistics and market share in the Appalachian Basin [9][10] Market Data and Key Metrics Changes - The sand market is anticipated to experience strong demand and higher prices in 2022, with FOB mine pricing currently in the $30-plus range compared to $15-$20 last year [6][32] - The company has less than 20% of its capacity under long-term contracts, indicating potential for increased spot sales as demand rises [6][48] Company Strategy and Development Direction - The company aims to expand its logistics footprint and operational efficiency through acquisitions, such as the Blair frac sand mine, which adds significant capacity and direct rail access [7][8] - The focus on ESG benefits through reduced trucking mileage and carbon emissions aligns with the company's strategy to enhance sustainability in logistics [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving record volumes in 2022, driven by improved commodity pricing and customer spending [5][6] - The company is committed to maintaining a strong balance sheet, with $11 million in cash and $30 million in liquidity, while pursuing disciplined capital spending [13][24] Other Important Information - The company reduced its debt levels by $7 million in 2021 and remains focused on maintaining low leverage and adequate liquidity [18] - Capital expenditures for 2022 are projected to be in the $25 million to $30 million range, including investments in the Blair facility and other terminals [27] Q&A Session Summary Question: Guidance on price moves relative to input costs - Management indicated that pricing is currently higher than last year, with expectations for continued increases due to strong demand [32] Question: Operational status of the Blair facility - The Blair facility has been idle since June 2020, and management is assessing what is needed to bring it back online, with updates expected in the next quarter [38] Question: Interest in long-term contracts - There is increased interest in long-term contracts as spot pricing rises, with discussions ongoing to secure these contracts [52] Question: Impact of Smart system on margins - The Smart system had a negative impact on contribution margins last year, estimated at $2 million to $3 million, but is expected to generate positive margins in 2022 [54] Question: Current market conditions for frac sand - Management noted that a significant amount of Northern White capacity has been taken off the market, leading to improved supply-demand balance and pricing [70][72]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________ FORM 10-K __________________________________________________ ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Annual Period Ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ___ to ___ Commission file number 001-37936 SMART SAND, INC. (Exact na ...