Smart Sand, Inc. Announces First Quarter 2025 Results
- Generated $8.7 million in operating cash flow and $5.2 million in free cash flow
- Record-breaking quarter for industrial sales with 9% sequential growth
- SmartSystems business showed progress with increased fleet utilization and positive contribution margin
- Management expects 10-20% sales volume increase in Q2 2025
- Strong liquidity position with $5.1 million cash on hand and $30.0 million in undrawn credit facility
- Net loss of $(24.2) million, or $(0.62) per share in Q1 2025
- Sales volumes decreased 27% sequentially and 20% year-over-year
- Gross profit declined to $2.8 million from $13.5 million in previous quarter
- Revenue decreased to $65.6 million from $91.4 million in Q4 2024
- Company deferred full year guidance due to economic uncertainty
Insights
SND reports weaker Q1 with decreased volumes and margins, but maintains positive cash flow and shareholder returns amid seasonal slowdown.
Smart Sand delivered a mixed Q1 2025 performance with some significant declines in key metrics but maintained positive cash generation. Revenue dropped to
The quarter's profitability metrics deteriorated substantially. Gross profit fell to
Despite these challenges, cash flow metrics showed resilience. Operating cash flow increased to
Management attributes the volume decline to seasonal factors and timing, with the typical winter slowdown shifting from Q4 2024 into Q1 2025 due to customers' year-end push. They project a
Two bright spots were record industrial sales (up
Smart Sand continues to return value to shareholders, repurchasing 135,196 shares for
- 1Q 2025 total tons sold of approximately 1.1 million
- 1Q 2025 revenue of
$65.6 million - 1Q 2025 cash flow from operations of
$8.7 million
"During the first quarter of 2025, Smart Sand continued to demonstrate its commitment to delivering positive free cash flow through the operating cycles of our business and returning value to our shareholders," stated Charles Young, Smart Sand's Chief Executive Officer. "In the quarter, the Company generated
"As expected, sales volumes moderated in the first quarter, following a record breaking fourth quarter in 2024, driven by our customers' strong year-end push. With a robust start to the second quarter, we anticipate sales volumes to rise significantly, increasing between
"Industrial sales marked a record-breaking quarter, with sales volumes increasing
"As part of our budgeted project timeline, we anticipate an increase in capital expenditures over the next two quarters, driven by a combination of essential maintenance to ensure continued operational excellence together with targeted investments to support future growth. While these investments may temporarily impact free cash flow, we remain on track to deliver positive free cash flow for the year and are actively exploring opportunities to enhance shareholder value through additional stock buybacks and/or special dividends."
First Quarter 2025 Highlights
In the first quarter of 2025, tons sold totaled approximately 1,069,000, compared to 1,464,000 tons in the fourth quarter of 2024 and 1,336,000 tons in the first quarter of 2024, reflecting a
Revenues in the first quarter of 2025 were
Cost of goods sold declined to
Gross profit for the first quarter 2025 was
Operating expenses in the first quarter of 2025 were
Total other expenses for first quarter of 2025 were
In the first quarter of 2025, the Company recorded a net loss of
Contribution margin in the first quarter of 2025 was
The sequential and year-over-year declines in contribution margin, and adjusted EBITDA were primarily driven by lower sales volumes and moderated average selling prices, which reduced revenues, though partially offset by a decrease in cost of goods sold.
Net cash provided by operating activities in the first quarter of 2025 was
In the first quarter of 2025, free cash flow was
Liquidity
In the first quarter of 2025, the Company repurchased 135,196 shares of its common stock for
The Company's primary sources of liquidity include cash on hand, cash flow from operations, and available borrowings under the Company's FCB ABL Credit Facility. As of March 31, 2025, cash on hand was
Additional Information
Investors are invited to view the Company's Financial Statements and Investor Presentations at www.smartsand.com. The Company also welcomes calls or emails to the Company's CFO, Lee Beckelman, with any specific questions.
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, 2024, 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, 2025, filed by the Company with the SEC on May 13, 2025.
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
SMART SAND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
Three Months Ended | |||||
March 31, 2025 | December 31, 2024 | March 31, 2024 | |||
(unaudited) | (unaudited) | (unaudited) | |||
Revenues: | |||||
Sand revenue | $ 64,464 | $ 90,619 | $ 79,719 | ||
SmartSystems revenue | 1,094 | 744 | 3,333 | ||
Total revenue | 65,558 | 91,363 | 83,052 | ||
Cost of goods sold: | |||||
Sand cost of goods sold | 61,673 | 75,342 | 68,967 | ||
SmartSystems cost of goods sold | 1,113 | 2,569 | 2,274 | ||
Total cost of goods sold | 62,786 | 77,911 | 71,241 | ||
Gross profit | 2,772 | 13,452 | 11,811 | ||
Operating expenses: | |||||
Selling, general and administrative | 9,243 | 9,237 | 10,350 | ||
Depreciation and amortization | 619 | 618 | 674 | ||
(Gain) loss on disposal of fixed asset, net | (40) | (7) | 3 | ||
Total operating expenses | 9,822 | 9,848 | 11,027 | ||
Operating income | (7,050) | 3,604 | 784 | ||
Other income (expenses): | |||||
Interest expense, net | (342) | (543) | (489) | ||
Other income | 129 | 134 | 96 | ||
Total other expenses, net | (213) | (409) | (393) | ||
(Loss) income before income tax expense (benefit) | (7,263) | 3,195 | 391 | ||
Income tax expense (benefit) | 16,968 | (541) | 607 | ||
Net (loss) income | $ (24,231) | $ 3,736 | $ (216) | ||
Net (loss) income per common share: | |||||
Basic | $ (0.62) | $ 0.10 | $ (0.01) | ||
Diluted | $ (0.62) | $ 0.09 | $ (0.01) | ||
Weighted-average number of common shares: | |||||
Basic | 39,257 | 39,027 | 38,555 | ||
Diluted | 39,257 | 39,482 | 38,555 | ||
SMART SAND, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
March 31, 2025 | December 31, 2024 | ||
(unaudited) | |||
(in thousands) | |||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 5,108 | $ 1,554 | |
Accounts receivable | 27,966 | 40,981 | |
Unbilled receivables | 2,903 | 5,311 | |
Inventory | 28,309 | 25,044 | |
Prepaid expenses and other current assets | 2,945 | 2,635 | |
Total current assets | 67,231 | 75,525 | |
Property, plant and equipment, net | 233,345 | 236,692 | |
Operating lease right-of-use assets | 20,402 | 23,153 | |
Intangible assets, net | 4,886 | 5,084 | |
Other assets | 1,044 | 1,092 | |
Total assets | $ 326,908 | $ 341,546 | |
Liabilities and Stockholders' Equity | |||
Current liabilities: | |||
Accounts payable | $ 12,441 | $ 16,988 | |
Accrued expenses and other liabilities | 13,618 | 12,561 | |
Deferred revenue | 476 | 54 | |
Current portion of long-term debt | 3,519 | 3,554 | |
Current portion of operating lease liabilities | 8,345 | 10,053 | |
Total current liabilities | 38,399 | 43,210 | |
Long-term debt | 8,488 | 9,130 | |
Long-term operating lease liabilities | 12,248 | 14,486 | |
Deferred tax liabilities, net | 25,979 | 9,316 | |
Asset retirement obligations | 21,585 | 21,292 | |
Other non-current liabilities | 300 | 302 | |
Total liabilities | 106,999 | 97,736 | |
Commitments and contingencies | |||
Stockholders' equity | |||
Common stock | 40 | 39 | |
Treasury stock | (15,312) | (14,671) | |
Additional paid-in capital | 186,229 | 185,263 | |
Retained earnings | 49,008 | 73,239 | |
Accumulated other comprehensive loss | (56) | (60) | |
Total stockholders' equity | 219,909 | 243,810 | |
Total liabilities and stockholders' equity | $ 326,908 | $ 341,546 | |
SMART SAND, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
Three Months Ended | |||||
March 31, 2025 | December 31, 2024 | March 31, 2024 | |||
(unaudited) | (unaudited) | (unaudited) | |||
(in thousands) | |||||
Operating activities: | |||||
Net (loss) income | $ (24,231) | $ 3,736 | $ (216) | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation, depletion and accretion of asset retirement obligations | 7,299 | 7,846 | 7,241 | ||
Amortization of intangible assets | 198 | 196 | 199 | ||
Loss (gain) on disposal of fixed assets | (40) | (7) | 3 | ||
Amortization of deferred financing cost | 46 | 56 | 26 | ||
Accretion of debt discount | — | — | 47 | ||
Deferred income taxes | 16,662 | (567) | 596 | ||
Stock-based compensation | 934 | 868 | 642 | ||
Employee stock purchase plan compensation | 6 | 5 | 6 | ||
Changes in assets and liabilities: | |||||
Accounts receivable | 13,015 | (16,817) | (9,344) | ||
Unbilled receivables | 2,408 | (2,569) | (2,640) | ||
Inventory | (3,265) | 2,794 | 1,240 | ||
Prepaid expenses and other assets | (1,712) | 251 | (240) | ||
Deferred revenue | 423 | (1,297) | 1,220 | ||
Accounts payable | (4,061) | 6,272 | (6,730) | ||
Accrued and other expenses | 1,042 | 268 | 4,087 | ||
Net cash provided by (used in) operating activities | 8,724 | 1,035 | (3,863) | ||
Investing activities: | |||||
Purchases of property, plant and equipment | (3,536) | (1,875) | (1,646) | ||
Proceeds from disposal of assets | 1 | 8 | 1 | ||
Net cash used in investing activities | (3,535) | (1,867) | (1,645) | ||
Financing activities: | |||||
Dividend payments to shareholders | (7) | (3,902) | — | ||
Repayments of notes payable | (955) | (723) | (1,340) | ||
Payments under finance leases | (58) | (54) | (56) | ||
Payment of deferred financing and debt issuance costs | — | (103) | (425) | ||
Proceeds from revolving credit facility | 11,000 | 14,000 | 6,000 | ||
Repayment of revolving credit facility | (11,000) | (14,000) | — | ||
Proceeds from equity issuance | 26 | — | 25 | ||
Purchase of treasury stock | (305) | (47) | (170) | ||
Net cash (used in) provided by financing activities | (1,299) | (4,829) | 4,034 | ||
Net increase (decrease) in cash and cash equivalents | 3,890 | (5,661) | (1,474) | ||
Cash and cash equivalents at beginning of period | 1,554 | 7,215 | 6,072 | ||
Cash and cash equivalents at end of period | $ 5,444 | $ 1,554 | $ 4,598 | ||
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, 2025 | December 31, 2024 | March 31, 2024 | |||
(in thousands, except per ton amounts) | |||||
Revenue | $ 65,558 | $ 91,363 | $ 83,052 | ||
Cost of goods sold | 62,786 | 77,911 | 71,241 | ||
Gross profit | 2,772 | 13,452 | 11,811 | ||
Depreciation, depletion, and accretion of asset retirement obligations included in cost of goods sold | 6,805 | 6,750 | 6,697 | ||
Contribution margin | $ 9,577 | $ 20,202 | $ 18,508 | ||
Contribution margin per ton | $ 8.96 | $ 13.80 | $ 13.85 | ||
Total tons sold | 1,069 | 1,464 | 1,336 | ||
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, 2025 | December 31, 2024 | March 31, 2024 | |||
(in thousands) | |||||
Net (loss) income | $ (24,231) | $ 3,736 | $ (216) | ||
Depreciation, depletion and amortization | 7,206 | 7,161 | 7,200 | ||
Income tax expense (benefit) and other taxes | 16,968 | (541) | 607 | ||
Interest expense | 372 | 552 | 496 | ||
EBITDA | $ 315 | $ 10,908 | $ 8,087 | ||
Net loss (gain) on disposal of fixed assets | (40) | (7) | 3 | ||
Equity compensation | 859 | 783 | 581 | ||
Acquisition and development costs | — | 9 | 308 | ||
Cash charges related to restructuring and retention | — | 1 | 107 | ||
Accretion of asset retirement obligations | 292 | 249 | 249 | ||
Adjusted EBITDA | $ 1,426 | $ 11,943 | $ 9,335 | ||
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 operating activities to free cash flow.
Three Months Ended | |||||
March 31, 2025 | December 31, 2024 | March 31, 2024 | |||
(in thousands) | |||||
Net cash provided by (used in) operating activities | $ 8,724 | $ 1,035 | $ (3,863) | ||
Purchases of property, plant and equipment | (3,536) | (1,875) | (1,646) | ||
Free cash flow | $ 5,188 | $ (840) | $ (5,509) | ||
Investor Contacts:
Lee Beckelman
Chief Financial Officer
(281) 231-2660
lbeckelman@smartsand.com
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SOURCE Smart Sand, Inc.
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