Smart Sand Inc. announced results for the second quarter 2022. Revenues were $68.7 million in the second quarter of 2022, compared to $41.6 million in the first quarter of 2022 and $29.6 million in the second quarter of 2021. Revenues increased in the second quarter, compared to both the first quarter of 2022 and the second quarter of 2021, due primarily to higher sand sales volumes and a higher average sales price for sand.
Sand volumes and sales prices have increased due to improvement in the supply and demand fundamentals for frac sand. “We believe that this improvement has been driven by increased prices in oil and natural gas, which has led to stronger oil and natural gas drilling and completions activity in 2022,” the company stated.
Tons sold were approximately 1,196,000 in the second quarter of 2022, compared to approximately 852,000 tons in the first quarter of 2022 and 767,000 tons in the second quarter of 2021, an increase of 40% and increase of 56%, respectively. Sales volumes increased due to increased primarily due to increased market activity.
Gross profit was $9.0 million in the second quarter of 2022, compared to a loss of $2.0 million in the first quarter of 2022 and $2.4 million in the second quarter of 2021. Gross profit improved in the second quarter of 2022 compared to the first quarter of 2022 and the second quarter of 2021 primarily due to higher sales volumes and higher average sales prices for our sand relative to the cost to produce and deliver products to our customers.
Net cash used in operating activities was $2.3 million in the second quarter of 2022, compared to net cash used in operating activities of $8.7 million in the first quarter of 2022 and net cash provided by operating activities of $36.5 million in the second quarter of 2021. Lower net cash used in operating activities in the second quarter of 2022 compared to the first quarter of 2022 was primarily due to improved financial results from higher sales volumes and higher sand prices. Net cash provided by operating activities was higher in the second quarter of 2021, as compared to the second quarter of 2022, due primarily to the company’s receipt of a of $35.0 million cash payment from U.S. Well Services LLC in settlement of certain litigation with U.S. Well.
For the second quarter of 2022, the company had a net loss of $0.1 million, or $0.00 per basic and diluted share, compared to a net loss of $5.9 million, or
$0.14 per basic and diluted share, for the first quarter of 2022 and a net loss of $27.3 million, or $0.65 per basic and diluted share, for the second quarter of 2021.
The improvement in net loss in the second quarter of 2022 compared to the first quarter of 2022 was primarily due to an increase in sales volumes and higher average sales prices for our sand. The decrease in net loss year-over-year was primarily due to improved gross profit from higher sales volumes and higher pricing in the current quarter compared to the same period a year ago.
The second quarter of 2021 also included a $19.7 million non-cash bad debt expense which was the difference between the $54.6 million accounts receivable balance that was subject to the company’s litigation with U.S. Well and the $35.0 million cash payment received in settlement of this litigation.
Contribution margin was $15.3 million, or $12.75 per ton sold, for the second quarter of 2022 compared to $4.3 million, or $4.99 per ton sold for the first quarter of 2022, and $3.5 million, or $4.55 per ton sold, for the second quarter of 2021. The increase in contribution margin and contribution margin per ton in the second quarter of 2022 compared to both the first quarter of 2022 and second quarter of 2021 was primarily due to higher sales volumes sold, and higher average prices on sand sold.
“Smart Sand continued to deliver improving operating and financial results in the second quarter,” stated Charles Young, Smart Sand’s chief executive officer. “Activity improved at both our Utica and Oakdale facilities. Second quarter sales volumes of approximately 1.2 million tons are a quarterly record for the company. Given strong commodity prices and our ability to continue to deliver sand to multiple basins across the United States, we anticipate that we will sell record volumes in 2022. Additionally, our SmartSystems last mile offering had increased deployments in the second quarter, and our industrial sand sales increased sequentially. We expect to continue to deliver strong financial results in the second half of the year.”