Smart Sand, Inc. · NASDAQ:SND
Smart Sand — Investor Presentation (May 2024)
38 slides from Smart Sand's investor presentation, May 2024
Slide 1: Investor Presentation – May 2024
Investor Presentation – May 2024
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: 243 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) 1,336 $82.4 $83.1 1,195 1,219 $74.8 $76.9 1,084 1,016 $61.9 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q1'23 (1) Q2'23 Q3'23(2) Q4'23 Q1'24 • Contribution Margin/Ton • Quarterly Adjusted EBITDA ($ in millions) $1
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 Q1 2024 Proppant Report 9
Slide 10: Smart Sand now has Second Largest Annual Capacity of Northern White Sand Providers in North America
Smart Sand now has Second Largest Annual Capacity of Northern White Sand Providers in North America 10
Slide 11: 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 12: The Value of Northern White Sand (continued)
The Value of Northern White Sand (continued) 12
Slide 13: The Value of Northern White Sand (continued)
The Value of Northern White Sand (continued) 13
Slide 14: Mining and Production
Mining and Production 14
Slide 15: 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 16: Cost-Effective, Differentiated Process
Cost-Effective, Differentiated Process On-site Mining / Excavation Hydro Mining direct feed to 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
Slide 17: 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 18: 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 19: Utica Facility: Efficient Operations with Enclosed Wet Plant
Utica Facility: Efficient Operations with Enclosed Wet Plant to Allow Year-Round Mining Operations
Slide 20: Blair Facility: Efficient Operation Providing Opportunity to Expand into Canadian Market
Blair Facility: Efficient Operation that provides Opportunity to Expand into the Canadian Market while increasing our access to the Northeast United States Markets.
Slide 21: Logistics and Wellsite Solutions
Logistics and Wellsite Solutions 21
Slide 22: 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 23: 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 24: 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 ◼ Completed expansion of Waynesburg
Slide 25: New Ohio Terminals
New Ohio Terminals ◼ Locations: Minerva, OH & Dennison, OH ◼ We acquired the rights to operate these two terminals in the growing oil-based Utica shale in December 2023. These new locations provide us with the opportunity to expand sand and logistics services to new and existing customers in the Mar
Slide 26: 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 27: 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 28: SmartPath Proppant Handling System
SmartPath® Proppant Handling System ▪ SmartPath 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 SmartDepotTM
Slide 29: SmartBelt
SmartBelt TM ▪ The SmartBelt is a belt system that is paired with our SmartPath, which allows feeding sand directly into the blender hopper at the wellsite, leading to more efficient delivery of the sand.
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) 3/31/2023 6/30/2023 9/30/2023 12/31/2023 3/31/2024 Revenue $ 82,350 $ 74,776 $ 76,900 $ 61,947 $ 83,052 Cost of goods sold 70,713 62,087 62,502 59,116 71,241 Gross profit 11,637 12,689 14,398 2,831 11,811 Depre
Slide 37: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation Quarter ended ($ in thousands) 3/31/2023 6/30/2023 9/30/2023 12/31/2023 3/31/2024 Net income (loss) $ (3,599) $ 6,307 $ 6,727 $ (4,786) $ (216) Depreciation, depletion, accretion and amortization 6,551 6,750 6,985 7,078 7,200 Income tax expense (benefit) 1,8
Slide 38: Free Cash Flow
Free Cash Flow Quarter ended ($ in thousands) 3/31/2023 6/30/2023 9/30/2023 12/31/2023 3/31/2024 Net cash (used in) provided by operating activities $ 5,105 $ 16,068 $ 12,477 $ (2,659) $ (3,863) Purchases of property, plant and equipment (4,018) (5,227) (6,881) (6,905) (1,646) Free Cash Flow $ 1,087