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Smart Sand Posts Highest Revenues in Its History

Smart Sand Inc. announced results for the fourth quarter and full year ended Dec. 31, 2018.

Charles Young, Smart Sand’s chief executive officer, stated, “Smart Sand had a good quarter and we've responded well to the challenging conditions in the fourth quarter. We recently contracted two sets of last mile storage solutions and have two additional sets ready to be deployed. Our investment in the Van Hook terminal in the Bakken is a strong contributor to our operating performance. We remained focused on our long-term objectives and we've proven that we’re profitable through all operating cycles with consistent results of operations. Looking forward, we plan to stay the course in continuing to execute on our already-profitable plan to provide long-term value to the Company, our employees, our customers, and our shareholders.”

Revenues of $212.5 million for the full year 2018 were the highest in the history of the company representing a 55 percent increase over full year 2017 revenue of $137.2 million.  

The increase in revenues was primarily due to higher sales volumes resulting from increased exploration and production activity; higher average selling prices of proppant due to increased in-basin sales generated from its Van Hook terminal in the Bakken; and favorable price adjustments under certain take-or-pay contracts based on the Average Cushing Oklahoma WTI Spot prices.

Overall tons sold were approximately 2,995,000 in the full year 2018, compared to full year 2017 volume of 2,449,000 tons. Tons sold increased by 22.3 percent due to increased exploration and production activity in the oil and natural gas industry in 2018 compared to 2017.

Net income was $18.7 million, or $0.46 per basic share and $0.46 per diluted share, for the full year 2018, compared with net income of $21.5 million, or $0.54 per basic share and $0.53 per diluted share, for the full year 2017, a decrease of 13 percent year over year.  

Affecting the 2018 earnings per share was a non-cash impairment charge of $17.8 million, or $0.44 per basic and diluted share, related to goodwill and an indefinite-lived intangible asset that was recorded in the fourth quarter of 2018. The impairment charge relates primarily to the decline in our stock price in 2018 and the relationship between the resulting market capitalization and the equity recorded on our balance sheet. Increased sales volumes during 2018 and favorable pricing trends in the first half of the year led to higher gross profit, which partially offset the impairment charge.

Adjusted EBITDA was $66.0 million for the full year 2018 compared to Adjusted EBITDA of $30.6 million for the full year 2017, an increase of 116 percent year over year. The increase in Adjusted EBITDA was primarily due to higher sales volumes, including in-basin sales, and higher average selling prices, partially offset by increased staffing, utilities and equipment expenses, along with increased transportation charges.