Smart Sand Reports Strong Q1 Results Amid Rising Demand

Smart Sand

YARDLEY, PA — Smart Sand, Inc. (NASDAQ: SND) has announced its financial results for the first quarter of 2024, highlighting a significant increase in sales and revenue driven by rising demand in major basins.

The company sold approximately 1.3 million tons of sand during the quarter. This led to a revenue of $83.1 million. Despite these gains, Smart Sand reported a modest net loss of $0.2 million, while adjusted EBITDA—a measure of operational performance—reached $9.3 million. Charles Young, Smart Sand’s CEO, pointed out the robust performance compared to the previous quarter. “Sales volumes increased by over 30%, contribution margin doubled, and Adjusted EBITDA increased by almost $9 million,” stated Young.

A key factor in this growth was the heightened demand for Smart Sand’s product across various basins, coupled with increased utilization of the company’s SmartSystems fleet. The company also invested in new terminals in northeast Ohio, now operational and serving the Utica shale formation, which contributed to the improved sales volumes.

However, the company faced challenges with free cash flow, which was negatively impacted due to an increase in working capital needed to support higher sales levels. Young expects this issue to stabilize starting in the second quarter, projecting positive free cash flow for the rest of 2024. “We are focused on being more efficient in our operations and in the utilization of our combined assets to improve our cost structure,” he added.

Smart Sand’s liquidity remains stable, with primary sources including cash on hand, cash flow from operations, and available borrowings under its ABL Credit Facility. As of March 31, 2024, the company had $4.6 million in cash and $6.0 million in undrawn availability on the credit facility.

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This strong performance in the first quarter reflects Smart Sand’s ability to adapt to market demands and effectively manage its operational assets. The increased sales volumes and improved margins suggest a positive trajectory for the company, particularly in addressing the growing needs of the energy sector.

The implications of these results are significant. With the energy sector showing signs of robust activity, Smart Sand’s strategic investments in infrastructure and operational efficiency position it well to capture further market share. These efforts could lead to sustained revenue growth and improved profitability. Additionally, the company’s focus on enhancing its cost structure may provide resilience against market fluctuations, allowing it to maintain positive cash flow even during variable operating cycles.

Smart Sand’s performance in Q1 sets a promising tone for the rest of the year. By continuing to leverage its assets and focusing on operational efficiency, the company aims to navigate the complexities of the energy market effectively. As demand for sand in hydraulic fracturing processes remains strong, Smart Sand’s strategic initiatives and financial health could drive long-term success.

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