#United States #Q1 2025 #Yardley #Smart Sand #Northern White Sand

Smart Sand, Inc. Unveils First Quarter 2025 Results

Smart Sand, Inc., a prominent player in the frac and industrial sand supply industry, has announced its financial performance for the first quarter of 2025. The company has made significant strides despite facing a tough market landscape. The results showcase both the challenges and resilient strategies implemented by Smart Sand's management.

Sales Performance

In the first quarter of 2025, Smart Sand sold approximately 1.1 million tons of sand. This reflects a significant change compared to the previous quarter, which saw sales reaching 1.46 million tons, marking a 27% sequential decline, and also a 20% decrease year-over-year. This dip was attributed to the exceptionally robust demand seen in the fourth quarter of 2024, which had overstressed sales capacity before the typical seasonal slowdown.

Financial Overview

The company reported a total revenue of $65.6 million for the first quarter, a drop from $91.4 million in the fourth quarter of 2024. This decline is primarily due to reduced sales volumes and a moderation in average selling prices, as the supply and demand for Northern White sand shifted towards a more balanced state over the past year. The cost of goods sold also saw a decrease, amounting to $62.8 million, down from $77.9 million in the preceding quarter, which sparked a gross profit of $2.8 million.

Charles Young, CEO of Smart Sand, expressed optimism about the company's cash flow and shareholder return strategy. He highlighted the generation of $5.2 million in free cash flow during the quarter, achieved alongside a $0.10 per share dividend paid out in the previous quarter.

Future Projections

Looking ahead, Smart Sand anticipates a significant recovery in sales volumes for the second quarter, estimating an increase ranging from 10% to 20% compared to the first quarter. This growth is expected to be driven by heightened activity in key regions such as the Marcellus, Utica, and Bakken basins, bolstered by seasonal demand trends.

Despite ongoing market challenges, including tariffs and geopolitical uncertainties, the company has decided to hold off on providing full-year guidance until sufficient visibility on the market dynamics is achieved. Smart Sand's commitment to operational excellence remains firm, as they plan a rise in capital expenditures within the next two quarters to support maintenance and growth initiatives.

Industrial Sales Growth

Intriguingly, Smart Sand reported a record-breaking quarter in its industrial sales, which saw a 9% sequential increase in volumes, contrasting with the temporary decline in frac sand volumes. This area of growth, although smaller historically, is projected to constitute approximately 5% of total sales volumes for the year, showcasing Smart Sand's diverse portfolio.

Challenges and Strategic Outlook

While the company has documented a net loss of $24.2 million for Q1 2025, driven largely by non-cash deferred income tax expenses, management is focused on enhancing shareholder value through strategies like stock buybacks and special dividends. The remaining capacity under its share repurchase program currently stands at $9.7 million.

Looking towards the latter half of the year, Smart Sand's leadership remains committed to monitoring the economic landscape closely, aiming to adapt strategies as needed while continuing to maximize operational efficiency and shareholder returns. Their solid financial position, complemented by $5.1 million in cash and $30 million available under their credit facility, provides a favorable backdrop for navigating potential market fluctuations.

Conclusion

Smart Sand, Inc.'s first quarter results illustrate a period of adjustment, navigating through market intricacies with strategic oversight. The positive cash flow and increased focus on capital expenditures signal a calculated approach toward fostering growth and stability in the upcoming quarters.