SND - Earnings call transcript Q2 2022

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Operator

Hello. Thank you for standing by and welcome to the Second Quarter Smart Sand Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. advised conference be be Please Instructions] that may today's recorded. [Operator the now Director to Treasurer. like would conference of to and Jayne, I Josh hand over today, your Finance speaker ahead. go Please

Josh Jayne

for thank for earnings and second morning Good call. joining us quarter Smart you XXXX Sand's

call Officer. Chuck Young, today Officer; Chief Founder John and have, Financial Chief Beckelman, Officer; we Young, the and Executive On Lee Chief Operating

certain made which like differ begin remind all events to comments I are our statements, forward-looking would or to and could today we from that include Before that will results uncertainties cause risks subject participants those actual anticipated. materially to

any For This projections the or new or update such company's of whether broadcast or on or obligation risks to as and revise of release statements please disclaims future our documents the refer events XXXX. SEC. is a only today intention complete conference XX, forward-looking press contains financial the accurate file because to and call discussion with live information, uncertainties, any of Sand August time-sensitive and information otherwise. Smart

with measures financial Young. used to we turn or over free profit, by adjusted with now better press our public for call. of of the to cash filings to release Please to these provided cash recent refer our adjusted business. net Chuck to to believe flow I the refer measures may and operating EBITDA gross our information EBITDA GAAP our this call would CEO, income margin us and provide flow and most non-GAAP to during our like our reconciliations activities. to that contribution free contribution EBITDA margin combination cash Additionally, in results useful flow We EBITDA when investors understand our and

Chuck Young

volume Thanks Josh delivered a positive return with and to morning. great X.X adjusted sales a EBITDA. We tons quarter million of and second good

single quarter. XX% the we ever represent a are most quarter-over-quarter million X.X volumes have quarter sold frac sand up in Second and tons sold

commodity to we strong to the prices deliver sand in are Given to sell confident XXXX. ability will volumes across continue basins we multiple record and our US,

Our expect in at prices pricing improved second the future. business. and remain we strong these quarter results Pricing levels foreseeable reflected remains for continued to our

caused able inflation labor of to in by overcome the quarter have shortages pricing. increased sales increasing volume costs been by second the We and and our

best-in-class operating We continue our facilities are being to reduce of our focused for to at maximize on ways terms cost the and our we'll structure cost look and profitability. our in

the Waynesburg, pleased results our quarter. seen shipped Tons are through and with up in grow XX% we train from first the Pennsylvania. the have we terminal at terminal transloading third unit volumes We the were in very capable to expect quarter

substantial volume second volumes quarter where saw also We than during terminal our sequentially. Van doubled more the through growth Hook

commodities believe bulk belong activity. we past, As rail times include logistics the to the in said we that sustainable many on customers' must drilling close and terminals have our

Our rail terminal a approach safer, and and provides our reliable wellsite mine more chain. supply cost-efficient mile to last customers

grow our first sold We each and expect year. quarter Products acceleration see continue We in to Industrial our the time the to for division. volumes the quarter of for balance doubled an

add to the can us customers new continue We provide. and product offerings we brought

the growth second up at for for as services customers beyond. an trucks high reduce of in us packaging sand very XX% Utilization increase sand as second momentum sets this our equipment, the in delivered to providing for our increased company. with receiving SmartSystems to products versus We than the and penetrate our with this the we're and with number capabilities deliver half by to the adding our customers' customers we believe finer expanding more and the start wellhead. well as needed remains during XXXX substantial of We wellsite our SmartPath grade We cost and are blending saw savings SmartPath year. the utilization a our strong all-time using technology. to market can quarter By of

reducing SmartSystems emission, carbon to goals achieve its reducing and important ESG goals Additionally by are our noise the trucks and we taking off Smart benefited helped improving and Sand dust. communities customers accidents, road, by efficiency by and these impact.

strong. have remains and sheet in balance Our cash approximately $XX Today balance in $X million our million approximately sheet we on liquidity.

long-term continue capital to with that generate remain projects disciplined will value. We spending pursuing while will

are excited We number future our a of about for reasons.

in have railroads our in the I mile strong all to cash over efficiently deliver last in customers provide financial will which expanding I assets strong successfully remains to to Industrial we diversification SmartPath are on place remains to in sheet with Product rapidly the increasing shape operating. more profile. and sand wherever that allow to Class for quarter logistics four business Solutions mines Our year, grow us time railroads, situated in operated place we the will flow they third generate Having market market balance deployment and continues generate our The look margins results cycle. our forward and an field With to the access a free beyond. have to earnings sand to great during share. tight, Class and its up we diversifying than our more

and continue future, we our do. everything employees in to we shareholders' Beckelman. call and with in will I'll eye our keep the to mind our we'll Lee over on the turn CFO, always interest And keep As always, that,

Lee Beckelman

Thanks, Chuck.

and XXXX, recognize the quarter. revenue quarter the quarter through improved go results. volumes second increase strength guidance quarter. sold second across exceeded Volumes XX% as $XX.X higher increase million volumes Sand basins XX% of Now, XXXX the did shortfall and were the with XX% million throughout We compared revenues the Starting up due to our $XX.X first We in of Total highlights XXX,XXX. second to the quarter the compared pricing. quarter tons our in not quarter sales a tight multiple the volume. XXXX market a of were to saw quarter we second for first first sequentially of a million, some both I'll $XX.X revenues of XXXX. from X,XXX,XXX in any

sales expenses compared prices to gas of higher and up higher costs natural were Total excavation a of expenses. in The to Production increased Our due costs in-basin million SG&A $X.X quarter. $XX.X for decrease cost and to last lower sales driven last $X.X quarter. freight utility higher sequentially compared to were by the result $XX.X million the increased due were quarter, expenses was costs primarily quarter. million million operating

quarter net $XX,XXX of and XXXX, $X.XX second quarter XXXX. diluted of $X.X per or of basic a loss $X.XX net a the negative of basic the share or For for million share, and company the diluted per to a loss had first compared

$X.X EBITDA adjusted margin second For the quarter $X.X margin XXXX, quarter contribution was million adjusted $XX.X first million $X.X to compared contribution of of million million. and of and was EBITDA negative

$X.XX contribution per quarter. compared per $XX.XX ton to per quarter, margin second was ton ton the For last

timing of operating For increase increased the basin, of cash quarter, only to cash flows expenditures. sales to we the the more paying working due we but us second cash in million in and the where due did flow a cash in cost sell more we activity capital an quarter. perspective. $X.X negative tons $X.X which short-term the in in had $X.X quarter from we flow million the XXXX, impacted in are negatively significantly million negative free in freight second a by flow capital and Not was also sold Operating second impacts tons

We capital of second the expect the the working to half cash of impact flow year. our operating on changes moderate in

ended timing second issues $X working in the capital a our on mentioned of outstanding XXXX As quarter result with revolver our we quarter drew second million and on previously, facility. the

$X.X also second million we and drawn have had in equipment on we Since under our additional facility approximately $X $XX credit. second of an $X million. today, notes paid revolver end letters of We We million against availability quarter. the financings in million the of our have the outstanding and payables quarter, down the

Our our available approximately current we our cash currently million is facilities million. and $XX Between balance have on $X availability in liquidity. approximately cash

in we million of terms the the quarter, tons In volumes tons. X.X X for between and range to third currently million sales be expect guidance

fundamentals quarter. quarter in shifted potential customers expect timing significantly market and still up we the our some lower has of third strong to levels. be sales of from first strong remains While to of remain Activity volumes the activity leading

and XXXX range slightly While but capital will in in in have working achieving this to our the and six financial we capital call at in another will currently X% free improve the strong $X.X to lower planned and year, some ton for strong currently expect positive, year. mid we We help over per IPS expect to results capital margin in months per We believe third to be and margin quarter on We spent levels any low per $XX achieved the be The investments ton ton buildup the of previously quarter. the sales strong quarter. our remainder which This concludes business double-digit quarter. ton prepared current can the quarter expenditures million across year we margin discussed the the first contribution had at currently volumes per second combined acquisitions, the for if should efficiency We in remain double-digit support growing Further questions. maintain goal capital our half throughout pricing we expenditures the spent million our point planned of quarter, third quarter. to excluding with expect the in $XX the a our pricing million results projects in margin pricing to contribution XX% to moderate on open lead the contribution contribution million sales environment and Utica should we the in of $XX.X in fundamentals that should range, remain third now business. Oakdale additional cash comments additional in third XXXX. basis, continued the second second We of to spent flow.

Operator

Gengaro Instructions] [Operator first question you. Stifel. from comes Thank Stephen Our with

proceed. may You

Stephen Gengaro

morning Good gentlemen. you. Thank

Chuck Young

Good morning.

Lee Beckelman

morning, Good Stephen.

Stephen Gengaro

me of if you couple things don't a mind. So, for

you're with addressable you pumpers what not at based think it to integration there. your or curious the are -- when strategy? seeing was any there the your How first does the are some overall just of Just any And this more on business, wellsite. The of the do how we impact about market? size changes does what pressure -- doing

John Young

Well, interest right? many pumping side seeing the that definitely of be fleets buy for that our perspective, at and other things, from a available, last wellhead we're that more side. on a through the on at it the ones need in sand certainly of of Stephen mile versus is I there's out bit continue I were with if us that look delivering we that of easier we particularly our there's to think, been that some there our the one customers quite includes making bit there, found customers our And From So to that of would E&P there. are think equipment. little systems

And of so really this year. and systems good success really kind of to out kind of second we in most there. look at We've those had first equipment on this quarter a our deploying continue get that of to try and

are pretty E&Ps in and we're that. about So, excited that. And pressure pumpers both interested

Stephen Gengaro

are keep stream. you been there's Great. as going and concerns sand and impacts feel been What as capacity coming seems but that's that discipline the have incremental demand Based strong capacity obviously we that what it doesn't on we've should help the potential additions market guys forward? far fundamentals. tight. of how and frac mentioned one had, like of a that supply expectations seen, new you on your I whole seeing And there's lot like the on of generally it sand capacity mean,

Chuck Young

Yes.

marketplace need out we these capacity. do a I John a do lot White the -- story separate that's this. think don't two So I mesh think we there's spaces. lot after fine A on what that out And into there capacity XXXX But today. demand side, the sand for see available pick to of And not of they there. can up we mines start really that's you can't Northern just

John Young

Yes.

they've of has one area we ago the elsewhere. our things so of up space picked White equipment picked influence seen many of in And these apart years of Northern over. that tour the is mines A the moved did we've as lot been there exist

appears pretty White a good here. to So runway Northern have

And we market One with commodity gas on that things this necessarily price strong of we're interesting in nat dealing oil. seen that's both the and is haven't before.

markets natural the where And so to are our we strong. again sand deliver fine Northeast. sand gas in Those very mesh

DJ those out River and markets Our oil into are the in the strong Bakken also. Powder and

don't particularly I demand come that the where is of the we for a be strong White these one but White continue Northern it's So to to Northern anticipate mesh finer capacity huge things sands. going to amount anticipate of on on

Chuck Young

of kind downturn those we not few mines as we of be shut when economics around the sand two example of look same at And would Yes. during our which that down. fine and a the Steve we an the just they're have And mines. bought mines

Stephen Gengaro

one just one me. And Great. final for

more heard equipment about in based bit. in than XXXX E&P's seeing about extend and that discussions frac even a more further and We frac have XXXX Are needs? normal concern you any out on customer sand

John Young

certainly base supply. sustainability sand of frac on sand of there's from supply customer concern and our Well, frac reliability

out. of call. this any amount there talking the we certainly, concern conversations kind not stuff. so of sand pumping equipment and it's frac with it's mile we've a interest about we're in definite last not is and And to looking folks just talk to not good that not all are on about had just pressure that further regard -- But And as it's contracting of decided

And it looks so positive.

and runway here. that high Assuming price we oil natural stays commodity pay good think a gas there's long high

Stephen Gengaro

you. Thank Great. Okay.

Operator

call Instructions] One comments. moment time. this Young for I'm the at And any not showing back Chuck Thank you. closing any like to would I questions. questions further to now over [Operator for turn

Chuck Young

quarter Thanks you forward again speaking look second for with joining in We for call. us our November. to

Operator

conference for you. call. Thank concludes Thank This you today's participating.

disconnect. now may You

Smart Sand (SND) 10 Aug 222022 Q2 Earnings call transcript