Smart Sand, Inc. · NASDAQ:SND
Smart Sand — Investor Presentation (August 2023)
38 slides from Smart Sand's investor presentation, August 2023
Slide 1: Investor Presentation – August 2023
Investor Presentation – August 2023
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 This presentation includes frac sand reserve and resource estimates based on engineering, economic and geological data assembled, analyzed and periodically reviewed by the Company and its outside consultants. However, frac sand reserve estimates are by nature imprecise a
Slide 4: Company Highlights
Company Highlights • The Right Operating Model ▪ High quality Northern White Sand mining and processing facilities located on Class 1 rail lines ▪ Oakdale, WI: 247 million tons of reserves, 5.5 million tons of annual processing capacity, unit train capable access to CP and UP rail lines ▪ Utica, IL:
Slide 5: Company Overview
Company Overview 5
Slide 6: Smart Sand is a Fully Integrated Provider of Mine to Wellsite Solutions
Smart Sand is a Fully Integrated Provider of Mine to Wellsite Solutions 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,
Slide 7: Summary Financials
Summary Financials • Quarterly Sales Volumes • Quarterly Revenue (thousands of tons) ($ in millions) $82.4 1,196 1,175 1,195 1,110 1,084 $73.8 $74.8 $71.6 $68.7 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q2'22 Q3'22 (1) Q4'22 (2) Q1'23 (3) Q2'23 • Contribution Margin/Ton • Quarterly Adjusted EBITDA ($ in mi
Slide 8: Market Overview
Market Overview 8
Slide 9: Industry Trends Continue to Support Increasing Levels of Frac Sand Demand
Industry Trends Continue to Support Increasing Levels of Frac Sand Demand Source: Spears & Associates 2Q 2023 Proppant Report 9
Slide 10: 2023 North America Proppant Demand Projected to Increase by ~5%
2023 North America Proppant Demand Projected to Increase by ~5% Source: Spears & Associates 2Q 2023 Proppant Report 10
Slide 11: Northern White Sand Market Fundamentals Remain Positive
Northern White Sand Market Fundamentals Remain Positive Note: The chart above compares sand demand to sand supply by basin. Northern White Sand supply (WI/IL/MO) is available to meet frac sand demand in basins where in-basin supply is not sufficient to meet in-basin demand 11 Source: Spears & Associ
Slide 12: Smart Sand now has Second Largest Annual Capacity of Northern White Sand Providers
Smart Sand now has Second Largest Annual Capacity of Northern White Sand Providers in North America 12
Slide 13: The Value of Northern White Sand
The Value of Northern White Sand ▪ Rystad Energy has performed a study, commissioned by Wisconsin Industrial Sand Association (WISA), which has linked proppant type to decreased production and profitability ▪ The study was initially done in 2019 and has been updated in 2020 and 2022 to allow a data
Slide 14: The Value of Northern White Sand (continued)
The Value of Northern White Sand (continued) 14
Slide 15: The Value of Northern White Sand (continued)
The Value of Northern White Sand (continued) 15
Slide 16: Mining and Production
Mining and Production 16
Slide 17: Mining and Production Highlights
Mining and Production Highlights • Blair, WI mine began processing sand in Q2 2023 • Efficient operations at three facilities bringing total plant annual capacity to approximately 10 million tons • Direct access to four Class 1 rail lines with quality connections to the NS and CSX allows Smart Sand
Slide 18: 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 − Higher mining yi
Slide 19: 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 19
Slide 20: Oakdale Facility: High Quality Logistics Capabilities and Rail Access
Oakdale Facility: High Quality Logistics Capabilities and Rail Access provides access to all North American Sand Markets
Slide 21: Utica Facility: Efficient Operations with Enclosed Wet Plant
Utica Facility: Efficient Operations with Enclosed Wet Plant to Allow Year-Round Mining Operations
Slide 22: Blair Facility: Opportunity to Expand into the Canadian Market
Blair Facility: Efficient Operation that provides Opportunity to Expand into the Canadian Market
Slide 23: Logistics and Wellsite Solutions
Logistics and Wellsite Solutions 23
Slide 24: 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, avo
Slide 25: Van Hook Terminal
Van Hook Terminal ◼ Location: Van Hook, ND ◼ Commenced operations in April 2018 ◼ Customers recognize the value of Van Hook’s strategic location and efficient logistics solutions ◼ Approximately three million tons annual transload capacity Van Hook Terminal
Slide 26: Waynesburg Terminal
Waynesburg Terminal ◼ Location: Waynesburg, PA ◼ Commenced operations in January 2022 ◼ The unit train capable terminal has more than four miles of track, is located on Norfolk Southern’s Class 1 rail line, services the southwestern portion of the Marcellus basin ◼ Currently investing in Waynesburg
Slide 27: ESG Focus – Sand by Rail vs. In-Basin Sand
ESG Focus – Sand by Rail vs. In-Basin Sand ▪ Proppant customers have a choice: use in-basin Sand delivered by truck from the mine or Northern White Sand delivered by rail into a terminal. ▪ To deliver 1 million tons per year, ~40,000 truckloads required to deliver sand to the wellsite ▪ In-basin San
Slide 28: SmartSystem Wellsite Storage Solutions Features
SmartSystemTM 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 29: SmartPath Proppant Handling System
SmartPathTM Proppant Handling System ▪ SmartPathTM is a patented 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 SmartDepot
Slide 30: Our SmartSystem Storage vs. the Competition
Our SmartSystemTM Storage vs. the Competition Competitive Options SmartSystemsTM Storage Equipment Silos: Smart Sand: • Belts Required, No Direct To • Multiple Size Options With Blender Offload Custom Configurations • Dust Can Be a Concern • Engineered and Designed • Large Footprint Specifically For
Slide 31: Industrial Products Solutions
Industrial Products Solutions 31
Slide 32: Industrial Product Solutions (IPS)
Industrial Product Solutions (IPS) • Currently raising awareness and building our IPS brand in the marketplace • Broadening our IPS service capabilities with sand cooling and custom blending as well as adding finer grade products • IPS has begun to build positions in several key industrial markets i
Slide 33: 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 ▪ Unit Train capable connections to four Class 1 rail lines ▪ Efficient and sustainable logistics capabilities with access to all operating basins ▪ Last mile service of
Slide 34: Appendix
Appendix 34
Slide 35: Committed to Highest Corporate Standards
Committed to Highest Committed Corporate to Highest Standards 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 place Regulatory
Slide 36: Contribution Margin Reconciliation
Contribution Margin Reconciliation Quarter ended ($ in thousands, except per ton amounts) 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 Revenue $ 68,714 $ 71,592 $ 73,829 $ 82,350 $ 74,776 Cost of goods sold 59,743 60,163 62,657 70,713 62,087 Gross profit 8,971 11,429 11,172 11,637 12,689 Depre
Slide 37: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation Quarter ended ($ in thousands) 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 Net income (loss) $ (90) $ 2,683 $ 2,627 $ (3,599) $ 6,307 Depreciation, depletion, accretion and amortization 6,658 6,705 6,590 6,551 6,750 Income tax expense (benefit) 1,127
Slide 38: Free Cash Flow
Free Cash Flow Quarter ended ($ in thousands) 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 Net cash (used in) provided by operating activities $ (2,287) $ 10,780 $ 5,589 $ 5,105 $ 16,068 Purchases of property, plant and equipment (1,369) (4,398) (3,196) (4,018) (5,227) Free Cash Flow $ (3,656)