Smart Sand, Inc. · NASDAQ:SND
Smart Sand — Investor Presentation (March 2021)
30 slides from Smart Sand's investor presentation, March 2021
Slide 1: March 2021 Investor Presentation
March 2021 Investor Presentation
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words “believe,” “expect,” “anticipate
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) Reserves Mineral resources and reserves are typically classified by confidence (reliability) levels based on the level of exploration, consistency and assurance of geologic knowledge of the deposit. This classification system considers different levels of geoscientific knowledge
Slide 4: Company Highlights
Company Highlights The Right Operating Model ▪ Oakdale is one of the largest single operating Northern White raw frac mines in United States ▪ 300+ million tons of high quality fine mesh reserves with 5.5 million tons current operating capacity ▪ 14+ miles of rail track servicing Oakdale from two Cl
Slide 5: Well Positioned in Current Market
Well Positioned in Current Market ▪ Market fundamentals improving ▪ Low cost structure and access to multiple Class 1 rail lines positions Smart Sand well to compete for new business as activity improves ▪ Sand Industry needs consolidation ▪ Customers are consolidating and may be looking to consolid
Slide 6: Company Overview
Company Overview 5
Slide 7: Smart Sand, Inc. (NASDAQ: SND)
Smart Sand, Inc. (NASDAQ: SND) Overview Wisconsin/Illinois Reserve Locations • Fully integrated provider of high quality Northern White frac sand • Large fine mesh (40/70 and 100 Mesh) Northern White reserve base • Low cost and efficient operations • Cost-efficient provider of mine to wellsite solut
Slide 8: Vertical Integration – A Key Differentiator
Vertical Integration – A Key Differentiator Smart Sand’s Business Offerings Premium Northern White Reserve Gigantic Rail Capacity Terminal & Forward Staging Management Last Mile Logistics Wellsite Storage Solutions Large Finer Mesh Northern White Reserve Class 1 rail (CP, UP, BNSF) Planning ahead re
Slide 9: Insiders own ~50% of Smart Sand Equity
Insiders own ~50% of Smart Sand Equity % Equity Ownership of SND 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Clearlake Capital Partners II Charles E. Young, CEO Other Officers & Directors (Master), L.P. Source: Smart Sand proxy statement 8
Slide 10: Summary Financials
Summary Financials Quarterly Sales Volumes Quarterly Revenue (thousands of tons) ($ in millions) 757 $47.7 $47.5 612 462 $26.1 $25.3 $23.4 309 208 Q4'19A Q1'20A Q2'20A Q3'20A Q4'20A Q4'19A(1) Q1'20A (2) Q2'20A (3) Q3'20A (4) Q4'20A(5) Contribution Margin/Ton Quarterly Adjusted EBITDA ($ in millions)
Slide 11: Industry Overview
Industry Overview 10
Slide 12: Industry Trends Continue to Support Increasing Use of Frac Sand per Well
Industry Trends Continue to Support Increasing Use of Frac Sand per Well Source: Spears and Associates 4Q 2020 Proppant Market Report. 11
Slide 13: Industry Trends Continue to Support Increasing Use of Frac Sand per Well
Industry Trends Continue to Support Increasing Use of Frac Sand per Well Lateral lengths continue to get longer 12,000 South Texas 10,000 Permian MidContinent 8,000 Eastern 6,000 Bakken East Tx/NoLa 4,000 Rockies 2,000 Other US Canada - Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19 Q1 20 Source: Spears and As
Slide 14: The Value of Northern White Sand
The Value of Northern White Sand ▪ A 2020 study by Rystad Energy has linked proppant type to decreased production and profitability – while local sand has been cheaper to deliver to the wellsite than Northern White sand, the loss in cash flow from lower production as a result of using the inferior p
Slide 15: The Value of Northern White Sand (continued)
The Value of Northern White Sand (continued) 14
Slide 16: Mining and Production
Mining and Production 15
Slide 17: Cost-Effective, Differentiated Process
Cost-Effective, Differentiated Process On-site Mining / Excavation Conveyer Belt to On-site Wet Plant Wet Plant Cleans and Sorts Product Dry Plant Dries and Sorts Product Unit Trains Deliver Dry Sand to Basins ◼ Low Cost Structure Due to Several Key Attributes: − Low royalty rates ($0.50 per ton sol
Slide 18: Oakdale Facility: High Quality Northern White Raw Frac Sand in an Efficient Configuration
Oakdale Facility: High Quality Northern White Raw Frac Sand in an Efficient Configuration 17
Slide 19: Logistics and Wellsite Solutions
Logistics and Wellsite Solutions 18
Slide 20: Expansive Logistics Capabilities
Expansive Logistics Capabilities Key Logistical Advantages Highly Competitive Delivery Capabilities ◼ Dual Served Class 1 Rail Access at Oakdale – onsite service on Canadian Pacific rail line coupled with nearby terminal on Union Pacific rail line allows access to multiple oil and gas plays, avoids
Slide 21: Van Hook Terminal
Van Hook Terminal ◼ Location: Van Hook, ND ◼ Commenced operations in April 2018 ◼ We shipped 43% of our volumes in 2020 through this terminal as customers recognized the value of Van Hook’s strategic location and efficient logistics solutions Van Hook Terminal 20
Slide 22: SmartSystems Wellsite Storage Solutions Features
SmartSystemsTM Wellsite Storage Solutions Features • Transported using specialized trailer for unassisted setup in five minutes. • Tri-axle trailer design with reinforced steel frame and remote control operation. • Direct to blender delivery, controls dust, stops and starts proppant flow. • Passive
Slide 23: Our SmartSystems Storage vs. the Competition
Our SmartSystemsTM Storage vs. the Competition Competitive Options SmartSystemsTM Storage Equipment Smart Sand: Silos: • Multiple Size Options With Custom • Belts Required, No Direct To Configurations Blender Offload • Engineered and Designed Specifically • Dust Can Be a Concern For Sand Storage on
Slide 24: SmartPath Proppant Handling System
SmartPathTM Proppant Handling System ▪ SmartPathTM is a patent-pending mobile transloading system, designed to work with bottom dump trailers, featuring a drive over conveyor, surge bin, dust collection system, on-board generator, and redundant conveyance circuits for transferring proppant into Smar
Slide 25: Summary: Smart Sand Long Term Value Drivers
Summary: Smart Sand Long Term Value Drivers Sustainable Operating Model ▪ Large, high quality reserve base ▪ Low cost operations ▪ Efficient and sustainable logistics capabilities with access to all operating basins Prudent Capital Structure ▪ Low leverage levels (0.9x Net Debt / TTM EBITDA) provide
Slide 26: Appendix
Appendix 25
Slide 27: Committed to Highest Corporate Standards
Committed to Highest Corporate Standards ◼ Management maintains close dialogue with customers regarding the oil and gas industry’s rigorous regulatory environment Legal & ◼ ISO registered Quality System and Environmental Management System in Regulatory place ◼ Minimal environmental and community imp
Slide 28: EBITDA Reconciliation
EBITDA Reconciliation Year ended December 31, ($ in thousands) 2016 2017 2018 2019 2020 Net income (loss) $10,379 $21,526 $18,688 $31,623 $37,954 Depreciation, depletion, accretion and amortization 6,445 7,300 18,165 27,135 22,536 Income tax (benefit) expense 9,394 (2,809) 5,122 7,809 (12,980) Inter
Slide 29: EBITDA Reconciliation
EBITDA Reconciliation Quarter ended ($ in thousands) 12/31/2019 3/31/2020 6/30/2020 9/30/2020 12/31/2020 Net income (loss) $2,388 ($84) $4,640 $36,282 ($2,884) Depreciation, depletion, accretion and amortization 7,250 5,487 5,450 5,529 6,070 Income tax expense (benefit) 294 165 3,470 1,941 (18,556)
Slide 30: Contribution Margin Reconciliation
Contribution Margin Reconciliation Quarter ended ($ in thousands, except per ton amounts) 12/31/2019 3/31/2020 6/30/2020 9/30/2020 12/31/2020 Revenue $47,667 $47,488 $26,106 $23,409 $25,337 Cost of goods sold 29,793 41,089 11,906 18,227 32,999 Gross profit 17,874 6,399 14,200 5,182 (7,662) Depreciat