Smart Sand, Inc. · NASDAQ:SND
Smart Sand — Investor Presentation (November 2022)
33 slides from Smart Sand's investor presentation, November 2022
Slide 1: Investor Presentation – November 2022
Investor Presentation – November 2022
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 ▪ High quality Northern White Sand mining and processing facilities located on Class 1 rail lines ▪ Oakdale, WI: 250 million tons of reserves, 5.5 million tons processing capacity, unit train capable access to CP and UP rail lines ▪ Utica, IL: 129 milli
Slide 5: Company Overview
Company Overview 5
Slide 6: Summary of Initiatives/Opportunities
Summary of Initiatives/Opportunities 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, CN) Planning ahead reduc
Slide 7: Summary Financials
Summary Financials • Quarterly Sales Volumes • Quarterly Revenue (thousands of tons) ($ in millions) 1,196 $68.7 $71.6 1,110 872 852 790 $41.6 $34.5 $35.1 Q3'21 Q4'21 Q1 '22 Q2 '22 Q3 '22 Q3'21 (1) Q4'21 Q1'22 (2) Q2'22 Q3'22 (3) • Contribution Margin/Ton • Quarterly Adjusted EBITDA ($ in millions)
Slide 8: Industry Overview
Industry Overview 8
Slide 9: 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 & Associates 3Q 2022 Proppant Report 9
Slide 10: 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 11: The Value of Northern White Sand (continued)
The Value of Northern White Sand (continued) 11
Slide 12: The Value of Northern White Sand (continued)
The Value of Northern White Sand (continued) 12
Slide 13: Mining and Production
Mining and Production 13
Slide 14: 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 15: 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 15
Slide 16: Utica Facility: Efficient Operations with enclosed wet plant
Utica Facility: Efficient Operations with enclosed wet plant to allow year round mining operations
Slide 17: Blair Facility
Blair Facility • Equity Purchase (Facility owner became wholly-owned subsidiary of Smart Sand, Inc.) • Facility Overview • Located at Blair, Wisconsin • Over 1,200 Contiguous Acres • 43,000 Feet of Track • 20,000 Tons of Silo Storage Capacity • Nameplate Capacity – Approximately 2.8MM Tons per year
Slide 18: Logistics and Wellsite Solutions
Logistics and Wellsite Solutions 18
Slide 19: 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 20: Van Hook Terminal
Van Hook Terminal ◼ Location: Van Hook, ND ◼ Commenced operations in April 2018 ◼ Tons shipped to Van Hook increased 40% in the third quarter of 2022 through this terminal as customers recognized the value of Van Hook’s strategic location and efficient logistics solutions Van Hook Terminal
Slide 21: 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 and has initial transloading capacit
Slide 22: 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 NWS 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 sand typically
Slide 23: 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 24: 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 25: Our SmartSystems Storage vs. the Competition
Our SmartSystemsTM 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 Fo
Slide 26: Industrial Products Solutions
Industrial Products Solutions 26
Slide 27: Industrial Products Solutions
Industrial Products Solutions • Currently raising awareness and building our IPS brand in the marketplace • Broadening our IPS service capabilities with sand cooling, custom blending as well as adding finer grade products. • IPS has begun to build positions in several key industrial markets includin
Slide 28: 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 29: Appendix
Appendix 29
Slide 30: 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 31: EBITDA Reconciliation
EBITDA Reconciliation Year ended December 31, ($ in thousands) 2017 2018 2019 2020 2021 Net income (loss) $21,526 $18,688 $31,623 $37,954 ($50,674) Depreciation, depletion, accretion and amortization 7,300 18,165 27,135 22,536 25,495 Income tax (benefit) expense (2,809) 5,122 7,809 (12,980) (9,017)
Slide 32: EBITDA Reconciliation
EBITDA Reconciliation Quarter ended ($ in thous ands ) 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 Net income (loss) ($7,262) ($12,233) ($5,923) ($90) $2,683 Depreciation, depletion, accretion and amortization 6,165 6,554 6,568 6,658 6,705 Income tax expense (benefit) (169) (2,896) (4,240) 1,
Slide 33: Contribution Margin Reconciliation
Contribution Margin Reconciliation Quarter ended ($ in thousands, except per ton amounts) 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 Revenue $34,479 $35,080 $41,605 $68,714 $71,592 Cost of goods sold 36,526 39,432 43,586 59,743 60,163 Gross profit (2,047) (4,352) (1,981) 8,971 11,429 Depreci