FALSE000152962800015296282024-05-132024-05-13

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________
FORM 8-K
________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 13, 2024
SMART SAND, INC.
(Exact name of registrant as specified in its charter)
Delaware001-3793645-2809926
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(I.R.S. Employer
Identification No.)
1000 Floral Vale Boulevard, Suite 225
Yardley, Pennsylvania 19067
(Address of principal executive offices and zip code)
 
Registrant’s telephone number, including area code: (215) 795-7900
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 Securities registered pursuant to Section 12(b) of the Act:

Title of Each ClassTrading SymbolName of each exchange on which registered
Common Stock, $0.001 par valueSNDNASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ 



Item 2.02 Results of Operations and Financial Condition.
On May 13, 2024, Smart Sand, Inc. issued a press release providing information regarding earnings for the first quarter ended March 31, 2024. A copy of the press release is attached hereto as Exhibit 99.1.
The information, including Exhibit 99.1, in this Form 8-K is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall otherwise be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d)    Exhibits. The following exhibit is furnished herewith:
Exhibit Number
Description
99.1
104.0The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.









SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
SMART SAND, INC.
Dated:
May 13, 2024
By:/s/ Lee E. Beckelman
Lee E. Beckelman
Chief Financial Officer
 




Smart Sand, Inc. Announces First Quarter 2024 Results
•1Q 2024 total tons sold of approximately 1.3 million
•1Q 2024 revenue of $83.1 million
•1Q 2024 net loss of $(0.2) million
•1Q 2024 adjusted EBITDA of $9.3 million


YARDLEY, Pennsylvania, May 13, 2024 – Smart Sand, Inc. (NASDAQ: SND) (the “Company” or “Smart Sand”), a fully integrated frac and industrial sand supply and services company, a low-cost producer of high quality Northern White frac sand, a proppant logistics solutions provider through both its in-basin transloading terminals and SmartSystemsTM products and services and a provider of industrial product solutions, today announced results for the first quarter of 2024.
“Smart Sand had a strong first quarter” stated Charles Young, Smart Sand’s Chief Executive Officer. “Compared to the fourth quarter of 2023, sales volumes increased by over 30%, contribution margin doubled and Adjusted EBITDA increased by almost $9 million. We saw an increase in demand for our sand in all the major basins we serve and we increased our utilization of our SmartSytems fleet. We invested in our new terminals in northeast Ohio and these terminals are now available to allow us to begin serving the Utica shale formation.”
“Free cash flow was negatively impacted by the increase in working capital needed in the quarter to support the higher sales levels. We expect working capital growth to moderate beginning in the second quarter and currently we expect free cash flow to be positive for 2024. We are focused on being more efficient in our operations and in the utilization of our combined assets to improve our cost structure which should allow us to generate positive cash flow through the operating cycles in our industry. ”

First Quarter 2024 Highlights
Tons sold were approximately 1,336,000 in the first quarter of 2024, compared to approximately 1,016,000 tons in the fourth quarter of 2023 and 1,195,000 tons in the first quarter of 2023, an increase of 31% sequentially and 12% over the comparable period in 2023.
Revenues were $83.1 million in the first quarter of 2024, compared to $61.9 million in the fourth quarter of 2023 and $82.4 million in the first quarter of 2023. Revenues increased in the first quarter of 2024, compared to the fourth quarter of 2023, primarily due to higher total sand sales and increased utilization of our SmartSystems fleet. First quarter 2024 revenues increased sightly compared to first quarter 2023, due to higher utilization of our SmartSystems fleet and higher sales volumes, which were offset by lower average selling prices.
For the first quarter of 2024, we had net loss of $0.2 million, or $(0.01) per basic and diluted share, compared to a net loss of $4.8 million, or $(0.12) per basic and diluted share, for the fourth quarter of 2023 and a net loss of $3.6 million, or $(0.09) per basic and diluted share, for the first quarter of 2023. For the first quarter of 2024, we had net income before income tax expense due to higher volumes sold and realized savings on cost-saving measures to reduce our overall operating costs. The net loss recorded in the fourth quarter of 2023 was primarily attributable to lower sales volumes. The net loss recorded in the first quarter of 2023 was primarily attributable to a $1.9 million of net loss on disposal of fixed assets as we reconfigured one of our wet plants to increase the efficiency of its operations and upgraded some of our mining equipment in that period.
First quarter 2024 contribution margin of $18.5 million, or $13.85 per ton sold, was an increase compared to $9.2 million, or $9.07 per ton sold, for the fourth quarter of 2023, and first quarter 2023 contribution margin of $17.8 million, or $14.89 per ton sold. The increase in contribution margin, compared to the fourth quarter of 2023,









was due primarily higher tons sold in the current period and higher utilization of our SmartSystems fleet. The increase in total contribution margin, compared to the first quarter of 2023, was primarily due to higher utilization of our SmartSystems fleet and an increase in total volumes sold and production cost savings in the current period, partially mitigated by lower average selling prices.
Adjusted EBITDA was $9.3 million for the first quarter of 2024, compared to $0.7 million for the fourth quarter of 2023 and $8.3 million for the first quarter of 2023. The increase in Adjusted EBITDA in the first quarter of 2024 compared to the prior quarter and the first quarter of 2023 was primarily due to higher volumes of sand sold and increased utilization of our SmartSystems fleet.
Net cash used in operating activities was $(3.9) million in the first quarter of 2024, compared to net cash used in operating activities of $(2.7) million in the fourth quarter of 2023 and net cash provided by operating activities of $5.1 million in the first quarter of 2023. The decrease in cash flow from operations in the first quarter of 2024 compared to the fourth quarter of 2023 and the first quarter of 2023 was primarily due to the increase in working capital to support sales increases of 31% sequentially and 12% over the comparable period in 2023.
Free cash flow was $(5.5) million for the first quarter of 2024. Net cash used in operating activities was $(3.9) million and capital expenditures were $1.6 million in the first quarter of 2024. We currently estimate that full year 2024 capital expenditures will be between $15.0 million and $20.0 million.
Liquidity
Our primary sources of liquidity are cash on hand, cash flow generated from operations and available borrowings under our ABL Credit Facility. As of March 31, 2024, cash on hand was $4.6 million and we had $6.0 million in undrawn availability on our ABL Credit Facility.
Conference Call
Smart Sand will host a conference call and live webcast for analysts and investors on May 14, 2024 at 10:00 a.m. Eastern Time to discuss its first quarter 2024 financial results. Investors are invited to join the conference by dialing (646)-357-8785 or 1-800-836-8184 and referencing “Smart Sand” when connected to the operator. Additionally, the call may also be streamed via webcast at https://app.webinar.net/r5vOQAPdGzN or within the “Investors” section of the Company’s website at www.smartsand.com. A replay will be available shortly after the call and can be accessed on the “Investors” section of the Company’s website.
Forward-looking Statements
All statements in this news release other than statements of historical facts are forward-looking statements that contain our Company’s current expectations about our future results, including the Company’s expectations regarding future sales. We have attempted to identify any forward-looking statements by using words such as “expect,” “will,” “estimate,” “believe” and other similar expressions. Although we believe that the expectations reflected and the assumptions or bases underlying our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause our actual results, events or financial positions to differ materially from those included within or implied by such forward-looking statements.
Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include, but are not limited to, fluctuations in product demand, delays in the completion of certain expansion and improvement projects at our existing facilities or failure to recognize the anticipated benefits of such projects, regulatory changes, adverse weather conditions, increased fuel prices, higher transportation costs, access to capital, increased competition, changes in economic or political conditions, and such other factors discussed or referenced in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed by the Company with the U.S. Securities and Exchange Commission (“SEC”)









on March 11, 2024, and in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed by the Company with the SEC on May 13, 2024.
You should not place undue reliance on our forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
About Smart Sand
Smart Sand is a fully integrated frac and industrial sand supply and services company, offering complete mine to wellsite proppant and logistic solutions to our frac sand customers, and a broad offering of products for industrial sand customers. The Company produces low-cost, high quality Northern White sand, which is a premium sand used as a proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. The Company’s sand is also a high-quality product used in a variety of industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscaping, retail, recreation and more. The Company also offers logistics solutions to our customers through its in-basin transloading terminals and our SmartSystems wellsite storage capabilities. Smart Sand owns and operates premium sand mines and related processing facilities in Wisconsin and Illinois, which have access to four Class I rail lines, allowing the Company to deliver products substantially anywhere in the United States and Canada. For more information, please visit www.smartsand.com.











SMART SAND, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended
March 31, 2024December 31, 2023March 31, 2023
(unaudited)(unaudited)(unaudited)
Revenues:
Sand revenue$79,719 $60,148 $80,019 
SmartSystems revenue3,333 1,799 2,331 
Total revenue83,052 61,947 82,350 
Cost of goods sold:
Sand cost of goods sold68,967 57,865 68,738 
SmartSystems cost of goods sold2,274 1,251 1,975 
Total cost of goods sold71,241 59,116 70,713 
Gross profit11,811 2,831 11,637 
Operating expenses:
Selling, general and administrative10,350 10,088 10,764 
Depreciation and amortization674 667 592 
Loss (gain) on disposal of fixed asset, net3 (19)1,889 
Total operating expenses11,027 10,736 13,245 
Operating income784 (7,905)(1,608)
Other income (expenses):
Interest expense, net(489)(332)(441)
Other income96 119 48 
Total other expenses, net(393)(213)(393)
Income (loss) before income tax expense (benefit)391 (8,118)(2,001)
Income tax expense (benefit)607 (3,332)1,598 
Net loss$(216)$(4,786)$(3,599)
Net loss per common share:
Basic$(0.01)$(0.12)$(0.09)
Diluted$(0.01)$(0.12)$(0.09)
Weighted-average number of common shares:
Basic38,555 38,339 41,272 
Diluted38,555 38,499 41,272 










SMART SAND, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2024December 31, 2023
(unaudited)
 (in thousands)
Assets  
Current assets:  
Cash and cash equivalents$4,598 $6,072 
Accounts receivable37,698 23,231 
Unbilled receivables79 2,561 
Inventory25,584 26,823 
Prepaid expenses and other current assets3,210 3,217 
Total current assets71,169 61,904 
Property, plant and equipment, net251,384 255,092 
Operating lease right-of-use assets20,472 23,265 
Intangible assets, net5,678 5,876 
Other assets558 163 
Total assets$349,261 $346,300 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$9,935 $16,041 
Accrued expenses and other liabilities15,402 11,024 
Deferred revenue2,375 1,154 
Current portion of long-term debt22,045 15,711 
Current portion of operating lease liabilities9,554 10,536 
Total current liabilities59,311 54,466 
Long-term debt2,445 3,449 
Long-term operating lease liabilities12,070 14,056 
Deferred tax liabilities, net12,697 12,101 
Asset retirement obligations20,172 19,923 
Other non-current liabilities38 38 
Total liabilities106,733 104,033 
Commitments and contingencies
Stockholders’ equity
Common stock
39 39 
Treasury stock
(14,419)(14,249)
Additional paid-in capital182,646 181,973 
Retained earnings74,323 74,539 
Accumulated other comprehensive loss(61)(35)
Total stockholders’ equity242,528 242,267 
Total liabilities and stockholders’ equity$349,261 $346,300 













SMART SAND, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31, 2024December 31, 2023March 31, 2023
(unaudited)(unaudited)(unaudited)
(in thousands)
Operating activities:
Net loss(216)(4,786)(3,599)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and accretion of asset retirement obligations7,241 7,113 6,553 
Amortization of intangible assets199 197 199 
Loss (gain) on disposal of fixed assets3 (19)1,889 
Amortization of deferred financing cost26 26 26 
Accretion of debt discount47 46 47 
Deferred income taxes596 (2,041)1,669 
Stock-based compensation642 1,035 779 
Employee stock purchase plan compensation6 4 7 
Changes in assets and liabilities:
Accounts receivable(9,344)784 (74)
Unbilled receivables(2,640)(2,396)(1,363)
Inventory1,240 (868)101 
Prepaid expenses and other assets(240)(2,860)(676)
Deferred revenue1,220 (863)(1,058)
Asset retirement obligation settlement— (197)— 
Accounts payable(6,730)5,845 1,165 
Accrued and other expenses4,087 (3,679)(560)
Net cash (used in) provided by operating activities(3,863)(2,659)5,105 
Investing activities:
Purchases of property, plant and equipment(1,646)(6,905)(4,018)
Proceeds from disposal of assets1 6 1 
Net cash used in investing activities(1,645)(6,899)(4,017)
Financing activities:
Repayments of notes payable(1,340)(1,483)(1,513)
Payments under equipment financing obligations(56)(71)(86)
Payment of deferred financing and debt issuance costs(425)— — 
Proceeds from revolving credit facility6,000 8,000 14,000 
Repayment of revolving credit facility— — (7,000)
Proceeds from equity issuance25 — 33 
Purchase of treasury stock(170)(125)(4,428)
Net cash provided by financing activities4,034 6,321 1,006 
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents(1,474)(3,237)2,094 
Cash and cash equivalents at beginning of period6,072 9,309 5,510 
Cash and cash equivalents at end of period$4,598 $6,072 $7,604 









Non-GAAP Financial Measures
Contribution Margin

We also use contribution margin, which we define as total revenues less costs of goods sold excluding depreciation, depletion and accretion of asset retirement obligations, to measure its financial and operating performance. Contribution margin excludes other operating expenses and income, including costs not directly associated with the operations of the Company’s business such as accounting, human resources, information technology, legal, sales and other administrative activities. 
We believe that reporting contribution margin and contribution margin per ton sold provides useful performance metrics to management and external users of our financial statements, such as investors and commercial banks, because these metrics provide an operating and financial measure of our ability, as a combined business, to generate margin in excess of our operating cost base.
Gross profit is the GAAP measure most directly comparable to contribution margin. Contribution margin should not be considered an alternative to gross profit presented in accordance with GAAP. Because contribution margin may be defined differently by other companies in the industry, our definition of contribution margin may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. The following table presents a reconciliation of gross profit to contribution margin.
Three Months Ended
March 31, 2024December 31, 2023March 31, 2023
(in thousands, except per ton amounts)
Revenue$83,052 $61,947 $82,350 
Cost of goods sold71,241 59,116 70,713 
Gross profit11,811 2,831 11,637 
Depreciation, depletion, and accretion of asset retirement obligations included in cost of goods sold6,697 6,381 6,159 
Contribution margin$18,508 $9,212 $17,796 
Contribution margin per ton$13.85 $9.07 $14.89 
Total tons sold1,336 1,016 1,195 
EBITDA and Adjusted EBITDA
We define EBITDA as net income, plus: (i) depreciation, depletion and amortization expense; (ii) income tax expense (benefit) and other results of operations based taxes; and (iii) interest expense. We define Adjusted EBITDA as EBITDA, plus: (i) gain or loss on sale of fixed assets or discontinued operations; (ii) integration and transition costs associated with specified transactions; (iii) equity compensation; (iv) acquisition and development costs; (v) non-recurring cash charges related to restructuring, retention and other similar actions; (vi) earn-out, contingent consideration obligations; and (vii) non-cash charges and unusual or non-recurring charges. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors and commercial banks, to assess:
•the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets;
•the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities;
•our ability to incur and service debt and fund capital expenditures;
•our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods or capital structure; and









•our debt covenant compliance, as Adjusted EBITDA is a key component of critical covenants to the ABL Credit Facility.
We believe that our presentation of EBITDA and Adjusted EBITDA will provide useful information to investors in assessing our financial condition and results of operations. Net income is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA should not be considered alternatives to net income presented in accordance with GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. The following table presents a reconciliation of net (loss) income to EBITDA and Adjusted EBITDA for each of the periods indicated.
Three Months Ended
March 31, 2024December 31, 2023March 31, 2023
(in thousands)
Net loss$(216)$(4,786)$(3,599)
Depreciation, depletion and amortization7,200 7,078 6,551 
Income tax expense (benefit) and other taxes607 (3,332)1,845 
Interest expense496 329 442 
EBITDA$8,087 $(711)$5,239 
Net loss (gain) on disposal of fixed assets3 (19)1,889 
Equity compensation582 1,003 736 
Acquisition and development costs308 204 271 
Cash charges related to restructuring and retention107 14 — 
Accretion of asset retirement obligations249 234 200 
Adjusted EBITDA$9,336 $725 $8,335 
Free Cash Flow
Free cash flow, which we define as net cash provided by operating activities less purchases of property, plant and equipment, is used as a supplemental financial measure by our management and by external users of our financial statements, such as investors and commercial banks, to measure the liquidity of our business.
Net cash provided by operating activities is the GAAP measure most directly comparable to free cash flow. Free cash flow should not be considered an alternative to net cash provided by operating activities presented in accordance with GAAP. Because free cash flows may be defined differently by other companies in our industry, our definition of free cash flow may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. The following table presents a reconciliation of net cash provided by (used in) operating activities to free cash flow.
Three Months Ended
March 31, 2024December 31, 2023March 31, 2023
(in thousands)
Net cash (used in) provided by operating activities$(3,863)$(2,659)$5,105 
Purchases of property, plant and equipment(1,646)(6,905)(4,018)
Free cash flow$(5,509)$(9,564)$1,087 










Investor Contacts:
Lee Beckelman
Chief Financial Officer
(281) 231-2660
lbeckelman@smartsand.com









v3.24.1.1.u2
Document
May 13, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 13, 2024
Entity Registrant Name SMART SAND, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-37936
Entity Tax Identification Number 45-2809926
Entity Address, Address Line One 1000 Floral Vale Boulevard
Entity Address, Address Line Two Suite 225
Entity Address, City or Town Yardley
Entity Address, State or Province PA
Entity Address, Postal Zip Code 19067
City Area Code 215
Local Phone Number 795-7900
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001529628
Security Exchange Name NASDAQ
Trading Symbol SND
Title of 12(b) Security Common Stock, $0.001 par value
Smart Sand (NASDAQ:SND)
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