Smart Sand(US:SND)2024-11-12 21:16Financial 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]