Smart Sand Tons Sold Up 41% Versus Year-Ago Quarter

Smart Sand Inc. announced results for the third quarter 2022. Tons sold were approximately 1,110,000 in the third quarter of 2022, compared to approximately 1,196,000 tons in the second quarter of 2022 and 790,000 tons in the third quarter of 2021, a decrease of 7% sequentially and an increase of 41% over the comparable period in the prior year.

Revenues were $71.6 million in the third quarter of 2022, compared to $68.7 million in the second quarter of 2022 and $34.5 million in the third quarter of 2021. Revenues increased in the third quarter, compared to the second quarter of 2022, primarily due to a higher average sales price of sand, increased utilization of its SmartSystems fleet and contractual shortfall revenue.

Revenues increased in the third quarter of 2022, compared to the third 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 since the third quarter of 2021 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.

Gross profit was $11.4 million in the third quarter of 2022, compared to $9.0 million in the second quarter of 2022 and a loss of $2.0 million in the third quarter of 2021. Gross profit improved in the third quarter of 2022 compared to the second quarter of 2022 primarily due to higher shortfall revenue and the increase compared to the third quarter of 2021 was primarily due to higher sales volumes and higher average sales prices for sand relative to the cost to produce and deliver products to its customers, noted the company.

For the third quarter of 2022, the company had net income of $2.7 million, or $0.06 per basic and diluted share, compared to a net loss of $0.1 million, or $0.00 per basic and diluted share, for the second quarter of 2022 and a net loss of $7.3 million, or $0.17 per basic and diluted share, for the third quarter of 2021.

The increase in net income in the third quarter of 2022 compared to the second quarter of 2022 was primarily due to higher average sales prices for our sand, higher utilization of our SmartSystems fleet and increased shortfall revenue. The increase in net income 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.

“Smart Sand delivered solid operating and financial results in the third quarter,” stated Charles Young, Smart Sand’s chief executive officer. “Activity levels continued to be strong at our Oakdale and Utica facilities and we increased the utilization of our SmartSystems last mile fleets during the quarter. Additionally, Smart Sand generated positive Free Cash Flow in the quarter as we continue to execute our plan to increase margins while efficiently managing our costs and capital expenditures. The outlook for completions activity in North America continues to be positive and we expect demand for our products and services to continue to be strong.”

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