10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

 _____________________________________________________

FORM 10-Q

 _____________________________________________________ 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ___ to ___

Commission file number 001-37936

SMART SAND, INC.

(Exact name of registrant as specified in its charter) 

Delaware	45-2809926
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
1725 Hughes Landing Blvd, Suite 800
The Woodlands, Texas 77380	(281) 231-2660
(Address of principal executive offices)	(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	SND	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.   Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐ Accelerated filer ☐ Non-accelerated Filer  ☒ Smaller reporting company ☒ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes ☐ No ☒

Number of shares of common stock outstanding, par value $0.001 per share, as of November 1, 2022: 45,276,607

TABLE OF CONTENTS

		PAGE
PART I	FINANCIAL INFORMATION
ITEM 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) Income for the Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2022 and 2021 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (Unaudited)	8
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	9
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	32
ITEM 4.	Controls and Procedures	32
PART II	OTHER INFORMATION	33
ITEM 1.	Legal Proceedings	33
ITEM 1A.	Risk Factors	33
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
ITEM 3.	Defaults upon Senior Securities	33
ITEM 4.	Mine Safety Disclosures	33
ITEM 5.	Other Information	33
ITEM 6.	Exhibits	34
SIGNATURES		35

1

Certain Definitions

The following definitions apply throughout this quarterly report unless the context requires otherwise:

“We”, “Us”, “Company”, “Smart Sand” or “Our”	Smart Sand, Inc., a company organized under the laws of Delaware, and its subsidiaries.
“shares”, “stock”	The common stock of Smart Sand, Inc., nominal value $0.001 per share.
“ABL Credit Facility”, “ABL Credit Agreement”, “ABL Security Agreement”	The five-year senior secured asset-based lending credit facility (the “ABL Credit Facility”) pursuant to: (i) an ABL Credit Agreement, dated December 13, 2019, between the Company and Jefferies Finance LLC, as amended from time to time (as amended, the “ABL Credit Agreement”); and (ii) a Guarantee and Collateral Agreement, dated December 13, 2019, between the Company and Jefferies Finance LLC, as agent, as amended from time to time (as amended, the “Security Agreement”).
“Oakdale Equipment Financing”, “MLA”	The five-year Master Lease Agreement, dated December 13, 2019, between Nexseer Capital (“Nexseer”) and related lease schedules in connection therewith (collectively, the “MLA”). The MLA is structured as a sale-leaseback of substantially all of the equipment at the Company’s mining and processing facility located near Oakdale, Wisconsin. The Oakdale Equipment Financing is considered a lease under article 2A of the Uniform Commercial Code but is considered a financing arrangement (and not a lease) for accounting or financial reporting purposes.
“Exchange Act”	The Securities Exchange Act of 1934, as amended.
“Securities Act”	The Securities Act of 1933, as amended.
“FASB”, “ASU”, “ASC”, “GAAP”	Financial Accounting Standards Board, Accounting Standards Update, Accounting Standards Codification, Accounting Principles Generally Accepted in the United States, respectively.

2

PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

SMART SAND, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2022		December 31, 2021
	(unaudited)
	(in thousands, except share amounts)
Assets
Current assets:
Cash and cash equivalents	$	10,371	$	25,588
Accounts receivable	32,902		17,481
Unbilled receivables	1,292		1,884
Inventory	20,618		15,024
Prepaid expenses and other current assets	7,405		13,886
Total current assets	72,588		73,863
Property, plant and equipment, net	267,210		262,465
Operating lease right-of-use assets	28,418		29,828
Intangible assets, net	6,867		7,461
Other assets	315		402
Total assets	$	375,398	$	374,019
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	11,634	$	8,479
Accrued expenses and other liabilities	16,267		14,073
Current portion of deferred revenue	9,905		9,842
Current portion of long-term debt	6,495		7,127
Current portion of operating lease liabilities	10,560		9,029
Total current liabilities	54,861		48,550
Long-term deferred revenue	—		6,428
Long-term debt	16,289		15,353
Long-term operating lease liabilities	19,989		23,690
Deferred tax liabilities, long-term, net	19,650		22,434
Asset retirement obligation	25,006		16,155
Other non-current liabilities	42		249
Total liabilities	135,837		132,859
Commitments and contingencies (Note 15)
Stockholders’ equity
Common stock, $0.001 par value, 350,000,000 shares authorized; 44,607,002 issued and 42,647,334 outstanding at September 30, 2022; 43,789,814 issued and 42,012,813 outstanding at December 31, 2021	42		42
Treasury stock, at cost, 1,959,668 and 1,777,001 shares at September 30, 2022 and December 31, 2021, respectively	(4,986)		(4,535)
Additional paid-in capital	176,992		174,486
Retained earnings	67,263		70,593
Accumulated other comprehensive income	250		574
Total stockholders’ equity	239,561		241,160
Total liabilities and stockholders’ equity	$	375,398	$	374,019

 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

SMART SAND, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED) 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands, except per share amounts)
Revenues:
Sand sales revenue	$	66,663	$	31,343	$	172,063	$	83,291
Shortfall revenue	2,681		2,680		4,596		4,421
Logistics revenue	2,248		456		5,252		3,856
Total revenue	71,592		34,479		181,911		91,568
Cost of goods sold	60,163		36,526		163,492		100,952
Gross profit	11,429		(2,047)		18,419		(9,384)
Operating expenses:
Salaries, benefits and payroll taxes	3,554		2,490		10,171		7,150
Depreciation and amortization	556		352		1,646		1,490
Selling, general and administrative	3,542		3,867		11,385		10,876
Bad debt expense	—		—		1		19,592
Total operating expenses	7,652		6,709		23,203		39,108
Operating income (loss)	3,777		(8,756)		(4,784)		(48,492)
Other income (expenses):
Interest expense, net	(411)		(467)		(1,244)		(1,527)
Other income	148		1,792		416		5,457
Total other income (expenses), net	(263)		1,325		(828)		3,930
Income (loss) before income tax expense (benefit)	3,514		(7,431)		(5,612)		(44,562)
Income tax expense (benefit)	831		(169)		(2,282)		(6,121)
Net income (loss)	$	2,683	$	(7,262)	$	(3,330)	$	(38,441)
Net income (loss) per common share:
Basic	$	0.06	$	(0.17)	$	(0.08)	$	(0.92)
Diluted	$	0.06	$	(0.17)	$	(0.08)	$	(0.92)
Weighted-average number of common shares:
Basic	42,522		41,850		42,265		41,743
Diluted	42,524		41,850		42,265		41,743

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

SMART SAND, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Net income (loss)	$	2,683	$	(7,262)	$	(3,330)	$	(38,441)
Other comprehensive income (loss):
Foreign currency translation adjustment	(266)		(239)		(324)		(70)
Comprehensive income (loss)	$	2,417	$	(7,501)	$	(3,654)	$	(38,511)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

SMART SAND, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED) 

Nine Months Ended September 30, 2022

	Common Stock			Treasury Stock			Additional Paid-in Capital				Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Outstanding Shares	Par Value		Shares	Amount				Retained Earnings
	(in thousands, except share amounts)
Balance at December 31, 2021	42,012,813	$	42	1,777,001	$	(4,535)	$	174,486	$	70,593	$	574	$	241,160
Foreign currency translation adjustment	—	—		—	—		—		—		16		16
Vesting of restricted stock	179,630	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		826		—		—		826
Employee stock purchase plan compensation	—	—		—	—		5		—		—		5
Employee stock purchase plan issuance	16,285	—		—	—		25		—		—		25
Purchase of treasury stock	(56,400)	—		56,400	(127)		—		—		—		(127)
Net loss	—	—		—	—		—		(5,923)		—		(5,923)
Balance at March 31, 2022	42,152,328	$	42	1,833,401	$	(4,662)	$	175,342	$	64,670	$	590	$	235,982
Foreign currency translation adjustment	—	—		—	—		—		—		(74)		(74)
Vesting of restricted stock	130,003	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		802		—		—		802
Employee stock purchase plan compensation	—	—		—	—		6		—		—		6
Purchase of treasury stock	(39,479)	—		39,479	(114)		—		—		—		(114)
Net loss	—	—		—	—		—		(90)		—		(90)
Balance at June 30, 2022	42,242,852	$	42	1,872,880	$	(4,776)	$	176,150	$	64,580	$	516	$	236,512
Foreign currency translation adjustment	—	—		—	—		—		—		(266)		(266)
Vesting of restricted stock	473,032	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		808		—		—		808
Employee stock purchase plan compensation	—	—		—	—		7		—		—		7
Employee stock purchase plan issuance	18,238	—		—	—		27		—		—		27
Purchase of treasury stock	(86,788)	—		86,788	(210)		—		—		—		(210)
Net income	—	—		—	—		—		2,683		—		2,683
Balance at September 30, 2022	42,647,334	$	42	1,959,668	$	(4,986)	$	176,992	$	67,263	$	250	$	239,561

6

SMART SAND, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (continued)

(UNAUDITED) 

Nine Months Ended September 30, 2021

	Common Stock			Treasury Stock			Additional Paid-in Capital				Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Outstanding Shares	Par Value		Shares	Amount				Retained Earnings
	(in thousands, except share amounts)
Balance at December 31, 2020	41,575,129	$	42	1,618,265	$	(4,134)	$	171,209	$	121,267	$	423	$	288,807
Foreign currency translation adjustment	—	—		—	—		—		—		125		125
Acquisition stock issuance	14,430	—		—	—		20		—		—		20
Vesting of restricted stock	158,364	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		678		—		—		678
Employee stock purchase plan compensation	—	—		—	—		7		—		—		7
Employee stock purchase plan issuance	19,483	—		—	—		17		—		—		17
Purchase of treasury stock	(48,077)	—		48,077	(140)		—		—		—		(140)
Net loss	—	—		—	—		—		(3,912)		—		(3,912)
Balance at March 31, 2021	41,719,329	$	42	1,666,342	$	(4,274)	$	171,931	$	117,355	$	548	285,602
Foreign currency translation adjustment	—	—		—	—		—		—		44		44
Vesting of restricted stock	162,253	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		574		—		—		574
Employee stock purchase plan compensation	—	—		—	—		7		—		—		7
Purchase of treasury stock	(48,793)	—		48,793	(148)		—		—		—		(148)
Net loss	—	—		—	—		—		(27,267)		—		(27,267)
Balance at June 30, 2021	41,832,789	$	42	1,715,135	$	(4,422)	$	172,512	$	90,088	$	592	$	258,812
Foreign currency translation adjustment	—	—		—	—		—		—		(239)		(239)
Vesting of restricted stock	4,875	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		879		—		—		879
Employee stock purchase plan compensation	—	—		—	—		10		—		—		10
Employee stock purchase plan issuance	14,944	—		—	—		25		—		—		25
Restricted stock buy back	(1,670)	—		1,670	(5)		—		—		—		(5)
Net loss	—	—		—	—		—		(7,262)		—		(7,262)
Balance at September 30, 2021	41,850,938	$	42	1,716,805	$	(4,427)	$	173,426	$	82,826	$	353	$	252,220

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

SMART SAND, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended September 30,
	2022		2021
	(in thousands)
Operating activities:
Net loss	$	(3,330)	$	(38,441)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, depletion and accretion of asset retirement obligation	19,904		18,937
Amortization of intangible assets	596		596
(Gain) loss on disposal of assets	(482)		223
Provision for bad debt	1		19,592
Amortization of deferred financing cost	79		79
Accretion of debt discount	140		140
Deferred income taxes	(2,784)		(7,543)
Stock-based compensation, net	2,436		2,131
Employee stock purchase plan compensation	18		24
Changes in assets and liabilities:
Accounts receivable	(14,238)		34,791
Unbilled receivables	(593)		(1,113)
Inventory	(5,594)		3,755
Prepaid expenses and other assets	3,072		(1,886)
Deferred revenue	(6,365)		6,092
Accounts payable	2,784		1,564
Accrued and other expenses	4,187		(1,397)
Net cash (used in) provided by operating activities	(169)		37,544
Investing activities:
Acquisition of Blair facility	(6,547)		—
Purchases of property, plant and equipment	(9,535)		(6,976)
Proceeds from disposal of assets	995		78
Net cash used in investing activities	(15,087)		(6,898)
Financing activities:
Repayments of notes payable	(5,474)		(5,168)
Payments under finance leases	(88)		(92)
Proceeds from revolving credit facility	6,000		—
Payment of contingent consideration	—		(180)
Employee stock purchase plan issuance	52		42
Purchase of treasury stock	(451)		(294)
Net cash provided by (used in) financing activities	39		(5,692)
Net decrease in cash and cash equivalents	(15,217)		24,954
Cash and cash equivalents at beginning of year	25,588		11,725
Cash and cash equivalents at end of period	$	10,371	$	36,679
Supplemental disclosure of cash flow information
Purchases of property, plant and equipment in accounts payable and accrued expenses	$	685	$	267
Issuance of acquisition common stock	$	—	$	—
Additions to asset retirement obligations	$	8,281	$	737

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

NOTE 1 — Organization and Nature of Business & Market Update

Organization and Nature of Business

The Company was incorporated in July 2011 and is headquartered in The Woodlands, Texas. The Company primarily operates as a fully integrated frac and industrial sand supply and services company. The Company offers complete mine to wellsite proppant supply and logistics solutions to our frac sand customers. These operations include the excavation, processing and sale of sand, or proppant, for use in hydraulic fracturing operations for the oil and natural gas industry. The Company also offers proppant logistics and wellsite storage solutions through its SmartSystemsTM products and services. In late 2021, the Company created its Industrial Products Solutions (“IPS”) business in order to diversify its customer base and markets it serves by offering sand to customers for industrial uses, such as glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation.

The Company commenced mining operations at its Oakdale, Wisconsin facility in July 2012. Through multiple expansions at Oakdale and the acquisition of the Utica, Illinois facility in September 2020, the Company has current annual processing capacity of approximately 7.1 million tons. With the acquisition of the Blair, Wisconsin mine and processing facility in March 2022, which is currently idled, we have the ability to expand to approximately 10.0 million tons should the Company decide to bring the Blair facility online.

The Company also has several in-basin rail terminals. The Company acquired rights in 2018 to operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin. In 2020, the Company, as part of its acquisition of the Utica, Illinois facility, obtained rights to use a rail terminal located in El Reno, Oklahoma. In September 2021, the Company acquired the rights to construct and operate another transloading terminal in Waynesburg, Pennsylvania to service the Appalachian Basin, including the Marcellus and Utica Formations, which became operational in January 2022.

The Company provides complete logistics solutions through its mine sites and transload facilities with direct access to four Class I rail lines, and has the ability to access all Class I rail lines within the United States and Canada.

The Company provides proppant storage and management solutions through its SmartSystems products and services under which it offers various solutions that create efficiencies, flexibility, enhanced safety and reliability for customers by providing the capability to unload, store and deliver proppant at the wellsite, as well as the ability to rapidly set up, takedown and transport the entire system. The SmartDepotTM silo system includes passive and active dust suppression technology, along with the capability of a gravity-fed operation. The self-contained SmartPathTM transloader, is a mobile sand transloading system designed to work with bottom dump trailers and features a drive over conveyor, surge bin, and dust collection system. Rapid deployment trailers are designed for quick setup, takedown and transportation of the entire SmartSystem, and they detach from the wellsite equipment, which allows for removal from the wellsite during operation. A proprietary software program, the SmartSystem TrackerTM allows customers to monitor silo-specific information, including location, proppant type and proppant inventory. We believe that our SmartSystems reduce trucking and related fuel consumption for our customers, helping them meet their goals to reduce their carbon footprint in their daily operations.

NOTE 2 — Summary of Significant Accounting Policies

The information presented below supplements the complete description of our significant accounting policies disclosed in our 2021 Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 8, 2022.

Basis of Presentation and Consolidation

The accompanying unaudited quarterly condensed consolidated financial statements (“interim statements”) of the Company are presented in accordance with the rules and regulations of the SEC for quarterly reports on Form 10-Q and therefore do not include all the information and notes required by GAAP. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. All adjustments are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. The consolidated balance sheet as of December 31, 2021 was derived from the audited consolidated

9

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

financial statements as of and for the year ended December 31, 2021. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2021.

Use of Estimates

The preparation of interim statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these financial statements include, but are not limited to: impairment considerations of assets, including intangible assets, fixed assets, and inventory; estimated cost of future asset retirement obligations; fair value of acquired assets and assume liabilities; recoverability of deferred tax assets; inventory reserve; and the collectability of receivables; and certain liabilities.

Actual results could differ materially from management’s best estimates as additional information or actual results become available in the future, and those differences could be material. The decreases in demand related to the coronavirus (“COVID-19”) pandemic in 2020 and 2021 and the ongoing conflict in Ukraine have caused dramatic swings in oil and natural gas prices and significant volatility in the oilfield service sector. Additionally, future economic performance is uncertain due to current high inflation and other economic concerns. The Company is currently unable to estimate the impact of these events on its future financial position and results of operations. Therefore, the Company can give no assurances that these events will not have a material adverse effect on its financial position or results of operations.

Employee Retention Credit

The Company qualified for federal government assistance through employee retention credit provisions of the Consolidated Appropriations Act of 2021. As of September 30, 2022 and December 31, 2021, the Company included $2,710 and, $4,676 respectively, in prepaid expenses and other current assets on its consolidated balance sheets related to receivables for the employee retention credits. The calculation of the credit was based on employees continued employment and represents a portion of the wages paid to them. For income tax purposes, the credit will result in decreased expense related to the wages it offsets in the period received.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that materially affect the financial statements of the Company.

NOTE 3 — Acquisition

Asset Acquisition Blair Facility

On March 4, 2022, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Hi-Crush Inc., a Delaware corporation (“HCR”), and Hi-Crush Blair LLC, a Delaware limited liability company and wholly-owned subsidiary of HCR (“Blair”), pursuant to which the Company acquired all of the issued and outstanding limited liability company interest of Blair from HCR for aggregate cash consideration of $6,450, subject to customary purchase price adjustments as set forth in the Purchase Agreement (the “Transaction”).

The primary assets of Blair consist of an idle frac sand mine and related processing facility located in Blair, Wisconsin. The Blair facility, once operational, will have approximately 2.9 million tons of total annual processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway.

The Company accounted for this transaction as an asset acquisition based on an evaluation of the guidance in ASC 805. The Company determined that there was not a substantive process in place that generates outputs that can be sold to a customer, and therefore the acquisition did not meet the definition of a business. The Company recognized identifiable assets acquired on a relative fair value basis. All assets acquired are allocated to property, plant and equipment, net on the balance sheet as of

10

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

March 31, 2022. The Company also recorded an increase to its asset retirement obligations and a corresponding increase in purchases of property plant and equipment in the amount of $8,281 for the nine months ended September 30, 2022.

The table below presents the calculation of the total purchase consideration:

Base price consideration	$	6,450
Net working capital adjustments and capitalized costs	97
Total purchase consideration	$	6,547

NOTE 4 — Inventory

Inventory consisted of the following:

	September 30, 2022		December 31, 2021
Raw material	$	728	$	293
Work in progress	5,871		3,082
Finished goods	8,815		7,269
Spare parts	5,204		4,380
Total inventory	$	20,618	$	15,024

NOTE 5 — Property, Plant and Equipment, net

Net property, plant and equipment consisted of:

	September 30, 2022		December 31, 2021
Machinery, equipment and tooling	$	34,411	$	30,813
SmartSystems	27,654		27,343
Vehicles	3,234		3,066
Furniture and fixtures	1,345		1,325
Plant and building	200,373		199,958
Real estate properties	6,523		6,496
Railroad and sidings	33,622		27,703
Land and land improvements	40,455		35,652
Asset retirement obligation	28,818		20,536
Mineral properties	7,442		7,442
Deferred mining costs	2,455		2,455
Construction in progress	9,708		9,574
	396,040		372,363
Less: accumulated depreciation and depletion	128,830		109,898
Total property, plant and equipment, net	$	267,210	$	262,465

Depreciation expense was $6,498 and $6,111 for the three months ended September 30, 2022 and 2021, respectively, and $19,309 and $18,325 for the nine months ended September 30, 2022 and 2021, respectively.

11

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

NOTE 6 — Accrued and Other Expenses

Accrued and other expenses were comprised of the following:

	September 30, 2022		December 31, 2021
Employee related expenses	$	2,493	$	806
Accrued equipment expense	5		58
Accrued professional fees	522		691
Accrued royalties	2,726		2,701
Accrued freight and delivery charges	4,393		2,164
Accrued real estate tax	1,745		1,010
Accrued utilities	1,709		1,264
Sales tax liability	1,118		665
Income tax payable	—		2,332
Other accrued liabilities	1,556		2,382
Total accrued liabilities	$	16,267	$	14,073

NOTE 7 — Debt

The current portion of long-term debt consists of the following:

	September 30, 2022		December 31, 2021
Oakdale Equipment Financing	3,983		3,814
Finance leases	230		117
Notes payable	2,282		3,196
Current portion of long-term debt	$	6,495	$	7,127

Long-term debt, net of current portion consists of the following:

	September 30, 2022		December 31, 2021
ABL Credit Facility	$	6,000	$	—
Oakdale Equipment Financing, net	8,738		11,608
Finance leases	33		234
Notes payable	1,518		3,511
Long-term debt	$	16,289	$	15,353

12

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

The follow summarizes the maturity of our debt:

	ABL Credit Facility		Oakdale Equipment Financing		Notes Payable		Finance Leases		Total
Remainder of 2022	$	—	$	1,160	$	666	$	33	$	1,859
2023	—		4,637		2,009		245		6,891
2024	6,000		6,888		807		—		13,695
2025	—		1,724		187		—		1,911
2026	—		—		181		—		181
2027 and thereafter	—		—		174		—		174
Total minimum payments	6,000		14,409		4,024		278		24,711
Amount representing interest	—		(1,281)		(224)		(15)		(1,520)
Amount representing unamortized lender fees	—		(407)		—		—		(407)
Present value of payments							263
Less: current portion	—		(3,983)		(2,282)		(230)		(6,495)
Total long-term debt	$	6,000	$	8,738	$	1,518	$	33	$	16,289

ABL Credit Facility

On December 13, 2019, the Company entered into a $20,000 five-year senior secured asset-based credit facility with Jefferies Finance LLC. The available borrowing amount under the ABL Credit Facility as of September 30, 2022 was $20,000 and is based on the Company’s eligible accounts receivable and inventory, as described in the ABL Credit Agreement. As of September 30, 2022, there was $6,000 outstanding under the ABL Credit Facility, $1,000 letters of credit and $13,000 was available to be drawn. As of September 30, 2022 and December 31, 2021, the Company was in compliance with all financial covenants.

Oakdale Equipment Financing

On December 13, 2019, the Company received net proceeds of $23,000 in an equipment financing arrangement with Nexseer. Substantially all of the Company’s mining and processing equipment at its Oakdale facility are pledged as collateral under the Oakdale Equipment Financing. The Oakdale Equipment Financing bears interest at a fixed rate of 5.79%.

Notes Payable

The Company has entered into various financing arrangements, primarily to finance its manufactured wellsite proppant storage solutions equipment. Upon completion of the equipment manufacturing, title to the subject equipment passes to the financial institutions as collateral. All notes payable bear interest at rates between 4.00% and 7.49%.

NOTE 8 — Leases

Lessee

The operating and financing components of the Company’s right-of-use assets and lease liabilities on the consolidated balance sheets were as follows:

13

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	Balance Sheet Location	September 30, 2022		December 31, 2021
Right-of-use assets
Operating	Operating right-of-use assets	$	28,418	$	29,828
Financing	Property, plant and equipment, net	161		262
Total right-of use assets		$	28,579	$	30,090
Lease liabilities
Operating	Operating lease liabilities, current and long-term portions	$	30,549	$	32,719
Financing	Long-term debt, current and long-term portions	263		351
Total lease liabilities		$	30,812	$	33,070

Operating lease costs are recorded as a single expense on the statement of operations and allocated to the right-of-use assets and the related lease liabilities as depreciation expense and interest expense, respectively. Lease cost recognized in the consolidated statement of operations for the three and nine months ended September 30, 2022 and 2021 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Finance lease cost
Amortization of right-of-use assets	$	30	$	35	$	96	$	105
Interest on lease liabilities	5		7		16		22
Operating lease cost	3,174		2,610		9,054		8,375
Short-term lease cost	101		86		547		120
Total lease cost	$	3,310	$	2,738	$	9,713	$	8,622

14

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

Other information related to the Company’s leasing activity for the nine months ended September 30, 2022 and 2021 is as follows:

	Nine Months Ended September 30,
	2022			2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	16		$	22
Operating cash flows used for operating leases	$	9,810		$	7,680
Financing cash flows used for finance leases	$	88		$	92
Right-of-use assets obtained in exchange for new operating lease liabilities	$	6,301		$	4,401
Weighted average remaining lease term - finance leases	1.1 years			1.9 years
Weighted average discount rate - finance leases	6.87		%	6.60		%
Weighted average remaining lease term - operating leases	3.0 years			3.8 years
Weighted average discount rate - operating leases	5.81		%	5.81		%

Maturities of the Company’s lease liabilities as of September 30, 2022 are as follows:

	Operating Leases		Finance Leases		Total
Remainder of 2022	$	2,540	$	33	$	2,573
2023	12,348		245		12,593
2024	9,299		—		9,299
2025	4,422		—		4,422
2026	3,191		—		3,191
Thereafter	1,806		—		1,806
Total cash lease payments	33,606		278		33,884
Less: amounts representing interest	(3,057)		(15)		(3,072)
Total lease liabilities	$	30,549	$	263	$	30,812

NOTE 9 — Asset Retirement Obligation

The Company had a post-closure reclamation and site restoration obligation of $25,006 as of September 30, 2022. The following is a reconciliation of the total reclamation liability for asset retirement obligations.

Balance at December 31, 2021	$	16,155
Additions and revisions of prior estimates	8,282
Accretion expense	569
Balance at September 30, 2022	$	25,006

15

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

NOTE 10 — Revenue

Disaggregation of Revenue

The following table presents the Company’s revenues disaggregated by type and percentage of total revenues for the periods indicated.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
	Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue
Sand sales revenue	$	66,663	93	%	$	31,343	91	%	$	172,063	94	%	$	83,291	91	%
Shortfall revenue	2,681		4	%	2,680		8	%	4,596		3	%	4,421		5	%
Logistics revenue	2,248		3	%	456		1	%	5,252		3	%	3,856		4	%
Total revenue	$	71,592	100	%	$	34,479	100	%	$	181,911	100	%	$	91,568	100	%

The Company recorded $16,270 of deferred revenue on the consolidated balance sheet as of December 31, 2021, of which $8,819 has been recognized in the nine months ended September 30, 2022. Of the remaining amount, the Company expects to recognize $938 through December 31, 2022 and the remainder through 2023.

NOTE 11 — Earnings Per Share

Basic net income per share of common stock is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the dilutive effects of restricted stock. Diluted net income per share of common stock is computed by dividing the net income attributable to common stockholders by the sum of the weighted-average number of shares of common stock outstanding during the period plus the potential dilutive effects of shares of restricted stock outstanding during the period calculated in accordance with the treasury stock method, although shares of restricted stock are excluded if their effect is anti-dilutive. The number of shares underlying equity-based awards that were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive was 2,625 for the three months ended September 30, 2022. Other periods presented below are in periods with a net loss and there was no difference between basic and diluted net loss per share of common stock. The following table reconciles the weighted-average common shares outstanding used in the calculation of basic net (loss) income per share to the weighted average common shares outstanding used in the calculation of diluted net income per share.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Weighted average common shares outstanding	42,522	41,850	42,265	41,743
Assumed conversion of restricted stock	2	—	—	—
Diluted weighted average common stock outstanding	42,524	41,850	42,265	41,743

NOTE 12 — Stock-Based Compensation

Equity Incentive Plan

In November 2016, in connection with its initial public offering, the Company adopted the 2016 Omnibus Incentive Plan (“2016 Plan”) which provides for the issuance of Awards (as defined in the 2016 Plan) of up to a maximum of 3,911 shares of the Company’s common stock to employees, non-employee members of the Company’s board of directors and consultants of the Company. On April 3, 2020, the Company’s board of directors adopted an amendment to the 2016 Plan to increase the

16

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

available shares of common stock authorized for issuance by an additional 2,088 shares. On July 27, 2021, the Company’s board of directors authorized 231 shares currently held in treasury stock for issuance under the 2016 Plan. On April 22, 2022, the board of directors adopted an amendment to the 2016 Plan to increase the number of shares of common stock authorized for issuance by an additional 3,900 shares.

During the nine months ended September 30, 2022 and 2021, 879 and 1,982 shares of restricted stock were issued under the 2016 Plan, respectively. The grant date fair value per share of all the outstanding restricted stock was $1.78 - $4.34. The shares vest over one to four years from their respective grant dates. For equity awards issued under the 2016 Plan, the grant date fair value was either the actual market price of the Company’s shares or an adjusted price using a Monte Carlo simulation for awards subject to the Company’s performance as compared to a defined peer group. The Company recognized, in operating expenses and cost of goods sold on the condensed consolidated statement of operations, $808 and $879 of compensation expense for the restricted stock during the three months ended September 30, 2022 and 2021, respectively. The Company recognized, in operating expenses and cost of goods sold on the condensed consolidated statement of operations, $2,436 and $2,131 of compensation expense for the restricted stock during the nine months ended September 30, 2022 and 2021, respectively. There is no impact to the cash flows of the Company related to stock-based compensation expense. At September 30, 2022, the Company had unrecognized compensation expense of $6,580 related to granted but unvested stock awards, which is to be recognized as follows:

Remainder of 2022	$	748
2023	2,753
2024	1,915
2025	1,002
2026	162
Total	$	6,580

The following table summarizes restricted stock activity under the Plans from December 31, 2021 through September 30, 2022:

	Number of Shares	Weighted Average
Unvested, December 31, 2021	3,151	$	3.06
Granted	879	$	3.56
Vested	(783)	$	3.74
Forfeited	(587)	$	2.68
Unvested, September 30, 2022	2,660	$	3.11

Employee Stock Purchase Plan

Shares of the Company’s common stock may be purchased by eligible employees under the Company’s 2016 Employee Stock Purchase Plan in six-month intervals at a purchase price equal to at least 85% of the lesser of the fair market value of the Company’s common stock on either the first day or the last day of each six-month offering period. Employee purchases may not exceed 20% of their gross compensation during an offering period.

NOTE 13 — Income Taxes

The Company calculates its interim income tax provision by estimating the annual expected effective tax rate and applying that rate to its ordinary year-to-date earnings or loss. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs.

For the three months ended September 30, 2022 and 2021, the effective tax rate was approximately 23.6% and 2.3%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the nine months ended September

17

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

30, 2022 and 2021, the effective tax rate was approximately 40.7% and 13.7%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the three and nine months ended September 30, 2022 and 2021, the statutory tax rate was 21.0%. The computation of the effective tax rate includes modifications from the statutory rate such as income tax credits, tax depletion deduction, carrybacks, and state apportionment changes, among other items.

The Company has recorded a liability for uncertain tax positions included in its consolidated balance sheet as of September 30, 2022, related to its depletion deduction methodology, and a corresponding increase to the income tax expense on its condensed consolidated statement of operations. There was $2,163 liability for uncertain tax positions as of December 31, 2021 and there was no material change for the nine months ended September 30, 2022.

As of September 30, 2022, the Company determined that it is more likely than not that it will not be able to fully realize the benefits of certain existing deductible temporary differences and has recorded a partial valuation allowance against the gross deferred tax assets, which is included in the deferred tax liabilities, long-term, net on its consolidated balance sheet, and a corresponding increase to the income tax expense on its condensed consolidated statement of operations. At December 31, 2021, the Company recorded a partial valuation allowance against the gross deferred tax assets on its consolidated balance sheet in the amount of $1,574 and a corresponding increase to the income tax expense on its consolidated statements of operations and there was no material change for the three and nine months ended September 30, 2022.

The Company’s federal income tax returns subsequent to 2017 remain open to audit by taxing authorities. The Company has not been informed that its tax returns are the subject of any audit or investigation by taxing authorities.

NOTE 14 — Concentrations

As of September 30, 2022 three customers accounted for 67% of the Company’s total accounts receivable. As of December 31, 2021, 59% of the Company’s total accounts receivable balance was with two customers.

During the three months ended September 30, 2022, 62% of the Company’s revenues were earned from four customers. During the three months ended September 30, 2021, 50% of the Company’s revenues were earned from three customers. During the nine months ended September 30, 2022, 65% of the Company’s revenues were earned from four customers. During the nine months ended September 30, 2021, 68% of the Company’s revenues were earned from four customers.

As of September 30, 2022, one vendor accounted for 10% of the Company’s accounts payable. As of December 31, 2021, one vendor accounted for 19% of the Company’s accounts payable.

During the three months ended September 30, 2022, two suppliers accounted for 37% of the Company’s cost of goods sold. During the three months ended September 30, 2021, one supplier accounted for 23% of the Company’s cost of goods sold. During the nine months ended September 30, 2022, two suppliers accounted for 33% of the Company’s cost of goods sold. During the nine months ended September 30, 2021, one supplier accounted for 22% of the Company’s cost of goods sold.

The Company’s primary product is Northern White sand and its mining operations are limited to Wisconsin and Illinois. There is a risk of loss if there are significant environmental, legal or economic changes to these geographic areas of our mines, the oil and natural gas producing basins they serve, or the transportation routes between them.

NOTE 15 — Commitments and Contingencies

Litigation

We may be subject to various legal proceedings, claims and governmental inspections, audits or investigations arising out of our operations in the normal course of business, which cover matters such as general commercial, governmental and trade regulations, product liability, environmental, intellectual property, employment and other actions. Although the outcomes of these routine claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on our financial statements.

18

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

Bonds

The Company has performance bonds with various public and private entities regarding reclamation, permitting and maintenance of public roadways. Total aggregate principal amount of performance bonds outstanding as of September 30, 2022 was $17,651.

19

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of the Company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related information contained herein and our audited financial statements as of December 31, 2021 contained in our Annual Report on Form 10-K. We use contribution margin, EBITDA, Adjusted EBITDA and free cash flow herein as non-GAAP measures of our financial performance. For further discussion of contribution margin, EBITDA, Adjusted EBITDA and free cash flow, see the section entitled “Non-GAAP Financial Measures.” We define various terms to simplify the presentation of information in this Quarterly Report on Form 10-Q (this “Report”). All share amounts are presented in thousands.

Forward-Looking Statements

This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed herein and in the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, 2021. Our estimates and forward-looking statements are primarily based on our current expectations and estimates of future events and trends, which affect or may affect our business and operations. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made in light of information currently available to us. Important factors, in addition to the factors described in this Report, may adversely affect our results as indicated in forward-looking statements. You should read this Report and the documents that we have filed as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect. The words “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “might,” “would,” “continue” or the negative of these terms or other comparable terminology and similar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only as of the date they were made, and, except to the extent required by law, we undertake no obligation to update, to revise or to review any estimate and/or forward-looking statement because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. As a result of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this Report might not occur and our future results, level of activity, performance or achievements may differ materially from those expressed in these forward-looking statements due to, including, but not limited to, the factors mentioned above, and the differences may be material and adverse. Because of these uncertainties, you should not place undue reliance on these forward-looking statements.

Overview 

The Company

We are a fully integrated frac and industrial sand supply and services company. We offer complete mine to wellsite proppant supply and logistics solutions to our frac sand customers. We produce low-cost, high quality Northern White sand, which is a premium sand used as proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications. We also offer proppant logistics solutions to our customers through our in-basin transloading terminals and our SmartSystemsTM wellsite storage capabilities. In late 2021, we created our Industrial Products Solutions (“IPS”) business in order to diversify our customer base and markets we serve by offering sand for industrial uses. We market our products and services to oil and natural gas exploration and production companies, oilfield service companies, and industrial manufacturers. We sell our sand through long-term contracts or spot sales in the open market. We provide wellsite proppant storage solutions services and equipment under flexible contract terms custom tailored to meet the needs of our customers. We believe that, among other things, the size and favorable geologic characteristics of our sand reserves, the strategic location and logistical advantages of our facilities, our proprietary SmartDepotTM portable wellsite

20

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

storage silos and SmartPathTM transloader, access to all Class I rail lines, and the industry experience of our senior management team make us as a highly attractive provider of sand and logistics services.

We incorporated in Delaware in July 2011 and began operations at our Oakdale facility with 1.1 million tons of annual processing capacity in July 2012. We currently have 7.1 million tons of annual capacity at our Oakdale and Utica facilities with the ability to expand annual processing capacity to approximately 10.0 million tons of sand should we bring our recently acquired Blair facility online.

We directly control two in-basin transloading facilities and have access to third party transloading terminals in all operating basins. We operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin. We operate this terminal under a long-term agreement with Canadian Pacific Railway to service the Van Hook terminal directly along with the other key oil and natural gas exploration and production basins of North America. In 2020, as part of our acquisition of the Utica, Illinois mining facility, we obtained rights to use a rail terminal located in El Reno, Oklahoma. In January 2022, we began operations at an additional unit train capable transloading terminal in Waynesburg, Pennsylvania to service the Appalachian Basin, including the Marcellus and Utica Formations. These terminals allow us to offer more efficient and sustainable delivery options to our customers. We have long-standing relationships with third party terminal operators that allow us access to all oil and natural gas exploration production basins of North America.

We also offer to our customers portable wellsite storage and management solutions through our SmartSystems products and services. Our SmartSystems provide our customers with the capability to unload, store and deliver proppant at the wellsite, as well as the ability to rapidly set up, takedown and transport the entire system. This capability creates efficiencies, flexibility, enhanced safety and reliability for customers. Through our SmartSystems wellsite proppant storage solutions, we offer the SmartDepot and SmartDepotXL™ silo systems, SmartPath transloader, and our rapid deployment trailers. Our SmartDepot silos include passive and active dust suppression technology, along with the capability of a gravity-fed operation. Our self-contained SmartPath transloader is a mobile sand transloading system designed to work with bottom dump trailers and features a drive over conveyor, surge bin, and dust collection system, and we believe the system has the ability to keep up with any hydraulic fracturing operation. Our rapid deployment trailers are designed for quick setup, takedown and transportation of the entire SmartSystem, and detach from the wellsite equipment, which allows for removal from the wellsite during operation. We have also developed a proprietary software program, the SmartSystem Tracker™, which allows our SmartSystems customers to monitor silo-specific information, including location, proppant type and proppant inventory. We believe that our SmartSystems reduce trucking and related fuel consumption for our customers, helping them meet their goals to reduce their carbon footprint in their daily operations.

In late 2021, we started our IPS business whereby we offer our sand to customers for various industrial purposes, such as glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation. While we are still in the early stages of this business, we believe that as it grows, it will provide us with the ability to diversify our sales into more stable, consumer-driven products to help mitigate price volatility in the oil and gas industry.

Recent Acquisitions

On March 4, 2022, we entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Hi-Crush Inc., a Delaware corporation (“HCR”), and Hi-Crush Blair LLC, a Delaware limited liability company and wholly-owned subsidiary of HCR (“Blair”) pursuant to which we acquired all of the issued and outstanding limited liability company interest of Blair from HCR for aggregate cash consideration of approximately $6.5 million, subject to customary working capital adjustments.

The primary assets of Blair consist of an idle frac sand mine and related processing facility located in Blair, Wisconsin. The Blair facility once operational, will have approximately 2.9 million tons of total annual processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway.

Market Trends

Our historical results of operations and cash flows are not indicative of results of operations and cash flows to be expected in the future.

21

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

During most of 2020, demand for frac sand declined significantly as a result of decreased demand for oil and natural gas as a result of the ongoing effects of the coronavirus (“COVID-19”) pandemic, which caused a global decrease in all means of travel, the closure of borders between countries and a general slowing of economic activity worldwide. Activity in the oil and gas industry began to rebound in the fourth quarter of 2020 and through 2021 as the global distribution of COVID-19 vaccines ramped up and travel restrictions lessened. However, the prices of frac sand remained depressed during 2021 as supply remained out of balance with demand even though market activity was improving. Through the first nine months of 2022, supply and demand fundamentals have continued to improve and frac sand prices continued recovering from previous historic lows. The ongoing conflict in the Ukraine has contributed to dramatic swings in oil and natural gas prices and significant volatility in the oilfield service sector. Additionally, current high inflation and other economic factors could lead to a global economic recession that could have a negative impact on global oil and natural gas demand, which may lead to continued volatility in the oil field service sector. We cannot predict if positive pricing trends will continue or if sand prices will increase, decrease or stabilize.

Northern White sand, which is found predominantly in Wisconsin and limited portions of Minnesota, Illinois, and Missouri, is considered a premium proppant due to its favorable physical characteristics. While we believe that regional sand will continue to affect the demand for Northern White sand in some of the oil and natural gas producing basins in which we operate, we believe there will continue to be demand for our high-quality Northern White sand. In particular, we believe that Northern White sand has logistical advantages in the Appalachian basin, Bakken basin, the western basins of Colorado, Wyoming, and in Canada. We expect demand for our frac sand to continue to be supported by customers who are focused on long-term well performance and ultimate recovery of reserves from the oil and natural gas wells they are completing as well as those interested in the efficiency of their logistics supply chain and delivery of sand to the wellsite. Additionally, we believe market trends continue to support increased proppant usage per well drilled due to operator focus on well efficiencies through increasing lengths of drilling laterals, use of simul-fracking techniques and other well enhancement strategies. As the amount of sand per well continues to increase, we believe the delivery of sand to the operating basins by rail in bulk shipments to terminals in close proximity to drilling activity provides more sustainable and efficient delivery of sand to meet a customer’s long term proppant needs. Finally, we believe that the adoption of our SmartSystems in the marketplace, which has a smaller footprint on customer sites than other sand storage solutions, will allow us to sell more sand when packaged with our last mile solutions. We believe the combination of our high quality Northern White sand delivered in bulk to in basin terminals and ultimately delivered to the wellsite through our SmartSystems wellsite proppant storage solutions provides our customers efficient and sustainable sand supply to the wellsite that will reduce trucking and related fuel consumption for our customers, helping them to meet their goals to reduce their carbon footprint in their daily operations.

Demand in the IPS business is relatively stable as customers are spread over a wide range of industries including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, recreation and more. The IPS business is primarily influenced by macroeconomic drivers such as consumer demand and population growth. We began our diversification into the IPS business in late 2021 and we expect to see continued growth throughout North America.

22

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

GAAP Results of Operations

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

The following table summarizes our revenue and expenses for the periods indicated.

	Three Months Ended September 30,				Change
	2022		2021		Dollars		Percentage
Revenues:
Sand sales revenue	$	66,663	$	31,343	$	35,320	113	%
Shortfall revenue	2,681		2,680		1		—	%
Logistics revenue	2,248		456		1,792		393	%
Total revenue	71,592		34,479		37,113		108	%
Cost of goods sold	60,163		36,526		23,637		65	%
Gross profit	11,429		(2,047)		13,476		658	%
Operating expenses:
Salaries, benefits and payroll taxes	3,554		2,490		1,064		43	%
Depreciation and amortization	556		352		204		58	%
Selling, general and administrative	3,542		3,867		(325)		(8)	%
Total operating expenses	7,652		6,709		943		14	%
Operating income (loss)	3,777		(8,756)		12,533		143	%
Other income (expenses):
Interest expense, net	(411)		(467)		56		12	%
Other income	148		1,792		(1,644)		(92)	%
Total other income (expenses), net	(263)		1,325		(1,588)		(120)	%
Income (loss) before income tax expense (benefit)	3,514		(7,431)		10,945		147	%
Income tax expense (benefit)	831		(169)		1,000		592	%
Net income (loss)	$	2,683	$	(7,262)	$	9,945	137	%

Revenues

Revenues were $71.6 million for the three months ended September 30, 2022, during which time we sold approximately 1,110,000 tons of sand. Revenues for the three months ended September 30, 2021 were $34.5 million, during which time we sold approximately 790,000 tons of sand. The key factors contributing to the increase in revenues for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021 were as follows:

•Sand sales revenue increased from $31.3 million for the three months ended September 30, 2021 to $66.7 million or 113% for the three months ended September 30, 2022 as a result of an increase in total volumes sold of approximately 41% and higher average sale prices of our sand. Higher demand relative to supply for oil and natural gas has led to increased prices in oil and natural gas which we believe has led to increased demand for frac sand resulting in higher sand prices.

•Logistics revenue, which includes freight for certain mine gate sand sales, logistics services, and SmartSystems rentals, were approximately $2.2 million for the three months ended September 30, 2022 compared to $0.5 million for the three months ended September 30, 2021. The increase in logistics revenue was due to a higher utilization of our SmartSystems fleet.

23

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

Cost of Goods Sold

Cost of goods sold was $60.2 million and $36.5 million for the three months ended September 30, 2022 and 2021, respectively. The increase was primarily due to higher volumes sold in the current period and the related increase in production costs and freight costs that accompany higher volumes, along with higher labor and utilities costs.

Gross Profit

Gross profit was $11.4 million for the three months ended September 30, 2022, compared to $(2.0) million for the three months ended September 30, 2021. The increase in profitability for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021 was primarily due to higher sales volumes and higher average sale prices of our sand relative to the cost to produce and deliver products to our customers.

Operating Expenses

Operating expenses were $7.7 million and $6.7 million for the three months ended September 30, 2022 and 2021, respectively. Salaries, benefits and payroll taxes increased to $3.6 million for the three months ended September 30, 2022 as compared to $2.5 million for the three months ended September 30, 2021, due primarily to accrued bonuses as management has reinstated a formal employee bonus plan based on company performance for 2022 and increased headcount to support higher sales volumes and our IPS business. Depreciation and amortization increased to $0.6 million for the three months ended September 30, 2022 from $0.4 million for the three months ended September 30, 2021, due to additional assets placed in service. Selling, general and administrative expenses were $3.5 million for the three months ended September 30, 2022 compared to $3.9 million for the three months ended September 30, 2021.

Other Income

In 2021 we qualified for federal government assistance through employee retention credit provisions of the Consolidated Appropriations Act of 2021. During the three months ended September 30, 2021, we recorded $1.7 million in employee retention credits. We did not record any employee retention credits for the three months ended September 30, 2022.

Interest Expense, net

We incurred $0.4 million and $0.5 million of net interest expense for the three months ended September 30, 2022 and 2021, respectively.

Income Tax Expense (Benefit)

For the three months ended September 30, 2022 and 2021, our effective tax rate was approximately 23.6% and 2.3%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. The computation of the effective tax rate includes modifications from the statutory rate such as income tax credits, tax depletion deduction, carrybacks, and state apportionment changes, among other items.

As of September 30, 2022, we have recorded a liability for uncertain tax positions included in deferred tax liabilities, long-term, net on our balance sheet, related to our depletion deduction methodology. As of September 30, 2022, we determined that it is more likely than not that we will not be able to fully realize the benefits of certain existing deductible temporary differences and have recorded a partial valuation allowance against the gross deferred tax assets, which is included in liabilities, long-term, net on our balance sheet, and a corresponding increase to the income tax expense on our condensed consolidated statement of operations.

Net Income (Loss)

Net income was $2.7 million for the three months ended September 30, 2022 as compared to net loss of $(7.3) million for the three months ended September 30, 2021. The improvement in net income in the current period relative to the prior period is primarily due to increased total volumes sold at higher average sales prices as increased demand has caused a positive shift in sand prices, partially offset by an increase in operating expenses.

24

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

The following table summarizes our revenue and expenses for the periods indicated.

	Nine Months Ended September 30,				Change
	2022		2021		Dollars		Percentage
	(in thousands)
Revenues:
Sand sales revenue	$	172,063	$	83,291	88,772		107	%
Shortfall revenue	4,596		4,421		175		4	%
Logistics revenue	5,252		3,856		1,396		36	%
Total revenue	181,911		91,568		90,343		99	%
Cost of goods sold	163,492		100,952		62,540		62	%
Gross profit	18,419		(9,384)		27,803		296	%
Operating expenses:
Salaries, benefits and payroll taxes	10,171		7,150		3,021		42	%
Depreciation and amortization	1,646		1,490		156		10	%
Selling, general and administrative	11,385		10,876		509		5	%
Bad debt expense	1		19,592		(19,591)		(100)	%
Total operating expenses	23,203		39,108		(15,905)		(41)	%
Operating income (loss)	(4,784)		(48,492)		43,708		90	%
Other income (expenses):
Interest expense, net	(1,244)		(1,527)		283		19	%
Other income	416		5,457		(5,041)		(92)	%
Total other income (expenses), net	(828)		3,930		(4,758)		(121)	%
Loss before income tax benefit	(5,612)		(44,562)		38,950		87	%
Income tax benefit	(2,282)		(6,121)		3,839		63	%
Net income (loss)	$	(3,330)	$	(38,441)	$	35,111	91	%

Revenues

Revenues were $181.9 million for the nine months ended September 30, 2022, during which time we sold approximately 3,158,000 tons of sand. Revenues for the nine months ended September 30, 2021 were $91.6 million, during which time we sold approximately 2,317,000 tons of sand. The key factors contributing to the increase in revenues for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021 were as follows:

•Sand sales revenue increased from $83.3 million for the nine months ended September 30, 2021 to $172.1 million for the nine months ended September 30, 2022 as a result of an approximately 36% increase in total volumes sold. In addition to an increase in our sales volumes, the 107% increase in our revenue is also attributable to higher average sale prices of our sand. Sand prices have increased due to a shift in supply and demand, which we believe is driven by increased prices in oil and natural gas leading to increased completion activity of new oil and natural gas wells.

•Logistics revenue, which includes freight for certain mine gate sand sales, logistics services, and SmartSystems rentals, was approximately $5.3 million for the nine months ended September 30, 2022 compared to $3.9 million for the nine months ended September 30, 2021. The increase in logistics revenue was due to higher utilization of our SmartSystems fleet.

25

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

Cost of Goods Sold

Cost of goods sold was $163.5 million and $101.0 million for the nine months ended September 30, 2022 and September 30, 2021, respectively. The increase was primarily due to higher volumes sold in the current period and the related increase in production costs and freight costs that accompany higher volumes, along with higher labor costs and utilities costs.

Gross Profit

Gross profit was $18.4 million and $(9.4) million for the nine months ended September 30, 2022 and September 30, 2021, respectively. The improvement in the gross profit for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021 was primarily due to higher sales volumes and higher average sale prices of our sand relative to the cost to produce and deliver products to our customers.

Operating Expenses

Operating expenses were $23.2 million and $39.1 million for the nine months ended September 30, 2022 and September 30, 2021, respectively. Salaries, benefits and payroll taxes increased to $10.2 million for the nine months ended September 30, 2022 as compared to $7.2 million for the nine months ended September 30, 2021, due primarily to accrued bonuses as management has reinstated a formal employee bonus plan based on company performance for 2022 and increased staffing to support our IPS business. Depreciation and amortization increased slightly from $1.5 million for the nine months ended September 30, 2021 to $1.6 million for the nine months ended September 30, 2022. Selling, general and administrative expenses increased to $11.4 million for the nine months ended September 30, 2022 compared to $10.9 million for the nine months ended September 30, 2021, primarily driven by increased travel costs post-COVID-19, increased royalty expense due to higher total volumes sold and development costs related to our Waynesburg terminal. In the second quarter of 2021, we recorded a $19.6 million non-cash charge related to the write-off of accounts receivable related to our legal settlement with U.S. Well Services, LLC. As part of the settlement we received $35 million in cash.

Interest Expense, net

We incurred $1.2 million and $1.5 million of net interest expense for the nine months ended September 30, 2022 and September 30, 2021, respectively. We continue to reduce debt levels and decrease interest expense through scheduled amortizing payments.

Income Tax Benefit

For the nine months ended September 30, 2022 and September 30, 2021, our effective tax rate was approximately 40.7% and 13.7%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. The computation of the effective tax rate includes modifications from the statutory rate such as income tax credits, tax depletion deduction, carrybacks, and state apportionment changes, among other items.

As of September 30, 2022, we have recorded a liability for uncertain tax positions included on our balance sheet, related to our depletion deduction methodology. As of September 30, 2022, we determined that it is more likely than not that we will not be able to fully realize the benefits of certain existing deductible temporary differences and have recorded a partial valuation allowance against the gross deferred tax assets, which is included in liabilities, long-term, net on our balance sheet, and a corresponding increase to the income tax expense on our condensed consolidated statement of operations.

Net Loss

Net loss was $(3.3) million for the nine months ended September 30, 2022 as compared to net loss of $(38.4) million for the nine months ended September 30, 2021. The decrease in net loss is attributable to an increase in total volumes sold and higher average sale prices of our sand in addition to non-cash bad debt expense recorded against the residual balance of accounts receivable that were previously the subject of litigation in the prior year.

Non-GAAP Financial Measures

Contribution margin, EBITDA, Adjusted EBITDA and free cash flow are not financial measures presented in accordance with GAAP. We believe that the presentation of these non-GAAP financial measures will provide useful information to

26

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

investors in assessing our financial condition and results of operations. Gross profit is the GAAP measure most directly comparable to contribution margin, net income is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA and net cash provided by operating activities is the GAAP measure most directly comparable to free cash flow. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures. Each of these non-GAAP financial measures has important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measures. You should not consider contribution margin, EBITDA, Adjusted EBITDA or free cash flow in isolation or as substitutes for an analysis of our results as reported under GAAP. Because contribution margin, EBITDA, Adjusted EBITDA and free cash flow may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Contribution Margin

We use contribution margin, which we define as total revenues less cost of goods sold excluding depreciation, depletion and accretion of asset retirement obligations, to measure our financial and operating performance. Contribution margin excludes other operating expenses and income, including costs not directly associated with the operations of our business such as accounting, human resources, information technology, legal, sales and other administrative activities. 

We believe that reporting contribution margin and contribution margin per ton sold provides useful performance metrics to management and external users of our financial statements, such as investors and commercial banks, because these metrics provide an operating and financial measure of our ability, as a combined business, to generate margin in excess of our operating cost base.

Gross profit is the GAAP measure most directly comparable to contribution margin. Contribution margin should not be considered an alternative to gross profit presented in accordance with GAAP. Since contribution margin may be defined differently by other companies in our industry, our definition of contribution margin may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. The following table presents a reconciliation of contribution margin to gross profit.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands, except per ton amounts)
Revenue	$	71,592	$	34,479	$	181,911	$	91,568
Cost of goods sold	60,163		36,526		163,492		100,952
Gross profit (loss)	11,429		(2,047)		18,419		(9,384)
Depreciation, depletion, and accretion of asset retirement obligations	6,340		6,145		18,854		18,009
Contribution margin	$	17,769	$	4,098	$	37,273	$	8,625
Contribution margin per ton	$	16.01	$	5.19	$	11.80	$	3.72
Total tons sold	1,110		790		3,158		2,317

Contribution margin was $17.8 million and $4.1 million, or $16.01 and $5.19 per ton sold, for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended contribution margin was $37.3 million and $8.6 million, or $11.80 and $3.72 per ton sold, for the nine months ended September 30, 2022 and 2021, respectively. The increase in overall contribution margin and contribution margin per ton was due primarily to higher sales volumes and higher average sale prices relative to the cost to produce and deliver products to our customers, along with increased IPS sales and higher utilization of our SmartSystems fleet in the current period.

EBITDA and Adjusted EBITDA 

We define EBITDA as net income, plus: (i) depreciation, depletion and amortization expense; (ii) income tax expense (benefit); (iii) interest expense; and (iv) franchise taxes. We define Adjusted EBITDA as EBITDA, plus: (i) gain or loss on sale of fixed assets or discontinued operations; (ii) integration and transition costs associated with specified transactions; (iii) equity

27

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

compensation; (iv) acquisition and development costs; (v) non-recurring cash charges related to restructuring, retention and other similar actions; (vi) earn-out, contingent consideration obligations and other acquisition and development costs; and (vii) non-cash charges and unusual or non-recurring charges. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors and commercial banks, to assess:

•the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets;

•the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities;

•our ability to incur and service debt and fund capital expenditures;

•our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods or capital structure; and

•our debt covenant compliance, as Adjusted EBITDA is a key component of critical covenants to the ABL Credit Facility.

We believe that our presentation of EBITDA and Adjusted EBITDA will provide useful information to investors in assessing our financial condition and results of operations. Net income is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA should not be considered alternatives to net income presented in accordance with GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. The following table presents a reconciliation of EBITDA and Adjusted EBITDA to net loss for each of the periods indicated.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Net income (loss)	$	2,683	$	(7,262)	$	(3,330)	$	(38,441)
Depreciation, depletion and amortization	6,705		6,165		19,931		18,941
Income tax expense (benefit)	831		(169)		(2,282)		(6,121)
Interest expense	431		484		1,282		1,554
Franchise taxes	77		42		268		237
EBITDA	$	10,727	$	(740)	$	15,869	$	(23,830)
(Gain) loss on sale of fixed assets	(466)		281		(482)		223
Equity compensation	713		784		2,023		2,050
Employee retention credit	—		(1,674)		—		(5,026)
Acquisition and development costs	97		—		434		17
Cash charges related to restructuring and retention of employees	31		8		137		9
Accretion of asset retirement obligations	189		332		569		558
Adjusted EBITDA	$	11,291	$	(1,009)	$	18,550	$	(25,999)

Adjusted EBITDA was $11.3 million for the three months ended September 30, 2022 compared to $(1.0) million for the three months ended September 30, 2021. Adjusted EBITDA was $18.6 million for the nine months ended September 30, 2022 compared to $(26.0) million for the nine months ended September 30, 2021. The increase in Adjusted EBITDA was primarily due to higher sales volumes, and higher average sale prices of our sand relative to the cost to produce and deliver products to our customers.

28

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

Free Cash Flow

Free cash flow, which we define as net cash provided by operating activities less purchases of property, plant and equipment, is used as a supplemental financial measure by our management and by external users of our financial statements, such as investors and commercial banks, to measure the liquidity of our business.

Net cash provided by operating activities is the GAAP measure most directly comparable to free cash flows. Free cash flows should not be considered an alternative to net cash provided by operating activities presented in accordance with GAAP. Because free cash flows may be defined differently by other companies in our industry, our definition of free cash flows may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. The following table presents a reconciliation of free cash flows to net cash provided by operating activities.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands, except per ton amounts)
Net cash (used in) provided by operating activities	$	10,780	$	1,064	$	(169)	$	37,544
Acquisition of Blair facility	—		—		(6,547)		—
Purchases of property, plant and equipment	(4,398)		(1,933)		(9,535)		(6,976)
Free cash flow	$	6,382	$	(869)	$	(16,251)	$	30,568

Free cash flow was $6.4 million for the three months ended September 30, 2022 compared to $(0.9) million for the three months ended September 30, 2021. The increase in free cash flow was primarily attributable to cash collections from customers on positive results of operations and measured spending during the quarter. Free cash flow was $(16.3) million for the nine months ended September 30, 2022 compared to $30.6 million for the nine months ended September 30, 2021. The decrease in free cash flow was primarily attributable to purchase of Blair for $6.5 million, increase in accounts receivable, repayment of tax refund IRS mistakenly provided in prior period of $2.3 million, and increase in unbilled receivables in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. We expect that the investments made in the current period will be cash-generating assets in the future.

Liquidity and Capital Resources

Our primary sources of liquidity are cash flow generated from operations and availability under our ABL Credit Facility and other equipment financing sources. As of September 30, 2022, cash on hand was $10.4 million and we had $13.0 million in undrawn availability on our ABL Credit Facility.

Based on our balance sheet, cash flows, current market conditions, and information available to us at this time, we believe that we have sufficient liquidity and other available capital resources, to meet our cash needs for the next twelve months.

Material Cash Requirements

Capital Requirements

We expect full year 2022 capital expenditures, including amounts relating to the acquisition of the Blair facility, to be between $20.0 million and $25.0 million, which we anticipate will primarily support efficiency projects at Oakdale and Utica and capital related to the Waynesburg terminal. We expect to fund these capital expenditures with cash from operations, equipment financing options available to us or borrowings under the ABL Credit Facility or other financing sources, such as equipment finance providers. For the nine months ended September 30, 2022, we spent approximately $9.5 million on capital expenditures and $6.5 million on the acquisition of the Blair facility.

29

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

Indebtedness

Our debt facilities include the Oakdale Equipment Financing, various notes payable and our ABL Credit Facility. Our Oakdale Equipment Financing is secured by substantially all of the assets at our Oakdale facility. The balance on this facility as of September 30, 2022 was $12.7 million. Minimum cash payments on this facility for the remainder of 2022 are anticipated to be $1.2 million. Our various notes payable are primarily secured by our manufactured SmartSystems equipment. Total debt under these notes payable as of September 30, 2022 was $3.8 million. Minimum cash payments on these notes payable for the remainder of 2022 are anticipated to be $0.7 million. There was $6.0 million outstanding on our ABL Credit Facility as of September 30, 2022.

Operating Leases

We use leases primarily to procure certain office space, railcars and heavy equipment as part of our operations. The majority of our lease payments are fixed and determinable. Our operating lease liabilities as of September 30, 2022 were $30.5 million. Minimum cash payments on operating leases for the remainder of 2022 are anticipated to be $2.5 million.

Mineral Rights Property

The Company is obligated under certain contracts for minimum payments for the right to use land for extractive activities. The annual minimum payments under these contracts are approximately $2.5 million per year in the aggregate for the next 15 years.

Off-Balance Sheet Arrangements

We had outstanding performance bonds of $17.7 million and $8.6 million at September 30, 2022 and December 31, 2021, respectively. The increase in performance bonds is due primarily to the acquisition of the Blair facility and the assumption of performance bonds related to its potential future reclamation obligations.

Contractual Obligations

As of September 30, 2022, we had contractual obligations for the ABL Credit Facility, Oakdale Equipment Financing, notes payable, operating and finance leases, minimum payments for the rights to mine land, capital expenditures, asset retirement obligations, and other commitments to municipalities for maintenance.

Environmental Matters

We are subject to various federal, state and local laws and regulations governing, among other things, hazardous materials, air and water emissions, environmental contamination and reclamation and the protection of the environment and natural resources. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures.

Seasonality

Our business is affected to some extent by seasonal fluctuations in weather that impact the production levels for a portion of our wet sand processing capacity. While our dry plants are able to process finished product volumes evenly throughout the year, our excavation and our wet sand processing activities have historically been limited during winter months. As a consequence, we have experienced lower cash operating costs in the first and fourth quarter of each calendar year, and higher cash operating costs in the second and third quarter of each calendar year when we overproduced to meet demand in the winter months. These higher cash operating costs were capitalized into inventory and expensed when these tons are sold, which can lead to us having higher overall cost of production in the first and fourth quarters of each calendar year as we expense inventory costs that were previously capitalized. We have indoor wet processing facilities at each of our plant locations, which allow us to produce wet sand inventory year-round to support a portion of our dry sand processing capacity, which may reduce certain of the effects of this seasonality. We may also sell frac sand for use in oil and natural gas producing basins where severe weather

30

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

conditions may curtail drilling activities and, as a result, our sales volumes to those areas may be reduced during such severe weather periods.

Customer Concentration

For the nine months ended September 30, 2022, revenue from EQT Production Corporation, Halliburton Energy Services, Encino Energy, and Liberty Oilfield Services accounted for 22.5%, 16.1%, 13.4%, and 13.0%, respectively, of total revenue. For the nine months ended September 30, 2021, EQT Production Corporation, Halliburton Energy Services, Liberty Oilfield Services, and Enerplus Resources Corporation accounted for 26.1%, 18.2%, 13.0%, and 10.6%, respectively, of total revenue.

Critical Accounting Policies and Estimates 

There have been no material changes in our critical accounting policies and procedures during the nine months ended September 30, 2022.

Use of Estimates

The preparation of interim statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these financial statements include, but are not limited to: impairment considerations of assets, including intangible assets, fixed assets, and inventory; estimated cost of future asset retirement obligations; fair values of acquired assets and assumed liabilities; recoverability of deferred tax assets; inventory reserve; and the collectability of receivables; and certain liabilities.

Actual results could differ from management’s best estimates as additional information or actual results become available in the future, and those differences could be material. The decreases in demand related to COVID-19 pandemic in 2020 and 2021 and the ongoing conflict in Ukraine have caused dramatic swings in oil and natural gas prices and significant volatility in the oilfield service sector. Additionally, future economic performance is uncertain due to current high inflation and other economic concerns. We continue to actively monitor the global impact of current events, but we are currently unable to estimate the impact of these events on our future financial position and results of operations or give any assurances that these events will not have a material adverse effect on our financial position or results of operations.

31

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

The majority of our debt is financed under fixed interest rates. Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to an applicable margin, plus, at our option, either a LIBOR rate or an alternate base rate (“ABR”). The applicable margin is 2.00% for LIBOR loans and 1.00% for ABR loans. The outstanding balance under our ABL Credit Facility as of September 30, 2022 was $6.0 million. We do not believe this represents a material interest rate risk.

We have considered other changes in our exposure to market risks during the nine months ended September 30, 2022 and have determined that there have been no additional material changes to our exposure to market risks from those described in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 8, 2022.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in internal control over financial reporting for the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

32

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

From time to time we may be involved in litigation relating to claims arising out of our operations in the normal course of business. The disclosure called for by Part II, Item 1 regarding our legal proceedings is incorporated by reference herein from Part I, Item 1. Note 15 - Commitments and Contingencies - Litigation of the notes to the condensed consolidated financial statements in this Form 10-Q for the three and nine months ended September 30, 2022.

ITEM 1A.  RISK FACTORS

There have been no material changes to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the quarter ended September 30, 2022, no shares were sold by the Company without registration under the Securities Act of 1933, as amended.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

We are committed to maintaining a culture that prioritizes mine safety. We believe that our commitment to safety, the environment and the communities in which we operate is critical to the success of our business. Our sand mining operations are subject to mining safety regulation. The U.S. Mining Safety and Health Administration (“MSHA”) is the primary regulatory organization governing frac sand mining and processing. Accordingly, MSHA regulates quarries, surface mines, underground mines and the industrial mineral processing facilities associated with and located at quarries and mines. The mission of MSHA is to administer the provisions of the Federal Mine Safety and Health Act of 1977 and to enforce compliance with mandatory miner safety and health standards. As part of MSHA’s oversight, representatives perform at least two unannounced inspections annually for each above-ground facility.

We are also subject to regulations by the U.S. Occupational Safety and Health Administration, which has promulgated rules for workplace exposure to respirable silica for several other industries. Respirable silica is a known health hazard for workers exposed over long periods. MSHA is expected to adopt similar rules as part of its “Long Term Items” for rulemaking. Airborne respirable silica is associated with work areas at our site and is monitored closely through routine testing and MSHA inspection. If the workplace exposure limit is lowered significantly, we may be required to incur certain capital expenditures for equipment to reduce this exposure.

Our operations are subject to the Federal Mine Safety and Health Act of 1977, as amended by the Mine Improvement and New Emergency Response Act of 2006, which imposes stringent health and safety standards on numerous aspects of mineral extraction and processing operations, including the training of personnel, operating procedures, operating equipment, and other matters. Our failure to comply with such standards, or changes in such standards or the interpretation or enforcement thereof, could have a material adverse effect on our business and financial condition or otherwise impose significant restrictions on our ability to conduct mineral extraction and processing operations. Following passage of The Mine Improvement and New Emergency Response Act of 2006, MSHA significantly increased the numbers of citations and orders charged against mining operations. The dollar penalties assessed for citations issued has also increased in recent years.  Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Report.

ITEM 5.  OTHER INFORMATION

None.

33

ITEM 6.  EXHIBITS

3.1	Second Amended and Restated Certificate of Incorporation of Smart Sand, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 15, 2016)
3.2	Second Amended and Restated Bylaws of Smart Sand, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 15, 2016)
10.1*	Amendment No. 3 to ABL Credit Agreement
31.1*	Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*†	Certification Pursuant to 18 U.S.C. adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*†	Certification Pursuant to 18 U.S.C. adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
95.1*	Mine Safety Disclosure Exhibit
101.INS	Extracted XBRL Instance Document - the instance document does not appear in the Interactive Data File as XBRL tags are embedded in the Inline XBRL document.
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed Herewith.
†	This certification is deemed not filed for purposes of section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

34

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. 

	Smart Sand, Inc.
November 8, 2022	By:	/s/ Charles E. Young
		Charles E. Young, Chief Executive Officer
		(Principal Executive Officer)

 

	Smart Sand, Inc.
November 8, 2022	By:	/s/ Lee E. Beckelman
		Lee E. Beckelman, Chief Financial Officer
		(Principal Financial Officer)

35

EX-10.1

Exhibit 10.1

[Execution]

THIRD AMENDMENT TO ABL CREDIT AGREEMENT

This THIRD AMENDMENT TO ABL CREDIT AGREEMENT, dated as of July 22, 2022 (this “Amendment”), is entered into by and among SMART SAND, INC., a Delaware corporation (“Parent”), the other Borrowers party hereto, each Guarantor party hereto, the Lenders party hereto, and JEFFERIES FINANCE LLC, as agent (in such capacity, including any successor thereto, the “Agent”) for the Lenders, and is made with reference to the Credit Agreement referred to below.

PRELIMINARY STATEMENTS

WHEREAS, Parent, the other Borrowers party hereto, the Guarantors party hereto, the Agent and the Lenders have entered into that certain ABL Credit Agreement dated as of December 13, 2019, as amended by that certain First Amendment to ABL Credit Agreement dated as of July 8, 2020 and that certain Second Amendment to ABL Credit Agreement dated as of September 18, 2020 (as may be further amended, amended and restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”);

WHEREAS, Borrowers have requested that the Agent and the Lenders make certain amendments to the Credit Agreement which the Agent and the Lenders have agreed to make, subject to the terms and provisions set forth in this Amendment.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. Definitions. Except as otherwise defined herein, capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

SECTION 2. Additional Definitions. Section 1.01 to the Credit Agreement is hereby amended by adding thereto, in addition and not in limitation, the following defined terms:

(a)“Amendment No. 3” shall mean the Third Amendment to ABL Credit Agreement, dated as of July __, 2022, by and among the Borrowers party thereto, the Guarantors party thereto, the Agent and the Lenders party thereto.

(b)“Amendment No. 3 Effective Date” shall mean July 22, 2022.

SECTION 3. Amendments to Section 6.05(b). Section 6.05(b) of the Credit Agreement is hereby amended by deleting the word “and” at the end of clause (v), replacing the period at the end of clause (vi) with “; and”, and adding a new clause (vii) as follows:

“(vii)    any Asset Sale consisting of the issuance or sale of Equity Interests to a Person in connection with any transaction otherwise permitted under this Agreement so long as, after giving effect thereto, no Change of Control shall occur.”

SECTION 4. Conditions to Effectiveness. This Amendment shall become effective only upon the satisfaction of all of the following conditions precedent:

(c)The execution and delivery of this Amendment by the Agent, the Lenders and each Loan Party; and

LEGAL02/41896618v2

(d)Borrowers shall have paid to the Agent all fees, costs and expenses incurred by the Agent in connection with the preparation, execution and delivery of this Amendment (including, without limitation, reasonable attorneys’ fees).

SECTION 5. Representations and Warranties. In order to induce the Agent and the Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, each Loan Party hereby represents and warrants to the Agent and the Lenders that, on and as of the Amendment No. 3 Effective Date:

(e)(i) each Loan Party has the power and authority to execute, deliver this Amendment and perform its obligations under this Amendment and the Credit Agreement, (ii) this Amendment has been duly authorized by all requisite corporate, partnership, limited liability company, and, if required, stockholder, partner or member action, as applicable, of each Loan Party, and (iii) this Amendment has been duly executed and delivered by each Loan Party;

(f)this Amendment constitutes a legal, valid and binding obligation of each Loan Party enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;

(g)each Loan Party’s execution, delivery and performance of this Amendment and each Loan Party’s performance of the Credit Agreement (i) will not violate any provision of the certificate or articles of incorporation or certificate of formation or other constitutive documents or by-laws, partnership agreement or limited liability company agreement of such Loan Party, (ii) (A) any provision of law, statute, rule or regulation, (B) any order of or undertaking with any Governmental Authority or (C) any provision of any indenture, agreement or other instrument to which any Loan Party is a party or by which any of them or any of their property is bound, except such violation as could not reasonably be expected to have a Material Adverse Effect, (iii) will not be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under, or give rise to any right to accelerate or to require the prepayment, repurchase or redemption of any obligation under any such indenture, agreement or other instrument, except where the consequences thereof could not reasonably be expected to have a Material Adverse Effect, or (iv) will not require any consent or approval of, registration or filing with, certificate, certification, permit, license or authorization from, or any other action by any Governmental Authority, in each case, except for (A) such as have been made or obtained and are in full force and effect and (B) those, which the failure to obtain could not reasonably be expected to have a Material Adverse Effect;

(h)at the time of and immediately after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing or would result therefrom; and

(i)the representations and warranties set forth in Article III of the Credit Agreement and in each other Loan Document are true and correct in all material respects on and as of the Amendment No. 3 Effective Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date; provided that any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language is (or was) true and correct (after giving effect to any qualification contained therein) in all respects.

SECTION 6. Reference to and Effect on the Credit Agreement.

    2    

LEGAL02/41896618v2

(j)Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Agent, any Lender or any Secured Party under the Credit Agreement or any Loan Documents, and shall not alter, modify, amend or in any way affect any of the Obligations or any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or of any Loan Documents, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle any Loan Party to a consent to, or a waiver, amendment, modification or other change of, any of the Obligations or any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any Loan Documents in similar or different circumstances.

(k)On the Amendment No. 3 Effective Date, the Credit Agreement shall be amended as provided herein. On and after the Amendment No. 3 Effective Date, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import referring to the Credit Agreement, and each reference in the Loan Documents to the “Credit Agreement,” “thereunder,” “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this Amendment. The parties hereto acknowledge and agree that: (i) this Amendment and any other document or instrument executed and delivered in connection herewith do not constitute a novation or termination of the Obligations as in effect prior to the Amendment No. 3 Effective Date; (ii) the Obligations are in all respects continuing with only the terms thereof being modified to the extent provided in this Amendment; and (iii) the guarantees and the Liens and security interests as granted or purported to be granted under or pursuant to the Credit Agreement and the Loan Documents securing payment of the Obligations are in all such respects continuing in full force and effect and secure the payment of the Obligations as provided therein.

SECTION 7. Severability. In the event any one or more of the provisions contained in this Amendment should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 8. Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract and shall become effective as provided in Section 6. Delivery of an executed signature page to this Amendment by facsimile or other customary means of electronic transmission, including by PDF file, shall be as effective as delivery of a manually signed counterpart of this Agreement.

SECTION 9. Successors and Assigns. Whenever in this Amendment any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of Loan Parties, the Agent, the Issuing Banks or the Lenders that are contained in this Amendment shall bind and inure to the benefit of their respective permitted successors and assigns.

SECTION 10. Governing Law; Miscellaneous. This Amendment, and the rights and obligations of the parties under this Amendment, shall be governed by, and construed and interpreted in accordance with, the law of the State of New York. The provisions of Sections 9.07, 9.11 and 9.15 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis, and shall apply with like effect to this Amendment as if fully set forth herein.

    3    

LEGAL02/41896618v2

SECTION 11. Headings. Section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.

[Signature Pages Follow]

    4    

LEGAL02/41896618v2

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective duly authorized officers as of the day and year first above written.

SMART SAND, INC.,
as Parent, a Borrower and
Administrative Loan Party

By:        /s/ Lee E. Beckelman            

Name: Lee E. Beckelman

Title: Chief Financial Officer

SMART SAND OAKDALE LLC,
as a Borrower

By:    SMART SAND, INC.,
its sole Member

By:        /s/ Lee E. Beckelman        

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

QUICKTHREE TECHNOLOGY, LLC,
as a Borrower

By:    SMART SAND, INC.,
its sole Member

By:        /s/ Lee E. Beckelman        

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

SSI BAKKEN I, LLC,
as a Borrower

By:    SMART SAND, INC.,
its sole Member

By:        /s/ Lee E. Beckelman        

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

SMART SAND HIXTON LLC,
as a Subsidiary Guarantor

By:    SMART SAND, INC.,
its sole Member

By:        /s/ Lee E. Beckelman        

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

[Signature Page to Third Amendment to ABL Credit Agreement]

LEGAL02/41896618v2

FAIRVIEW CRANBERRY COMPANY, LLC.,
as a Subsidiary Guarantor

By:    SMART SAND, INC.,
its Manager

By:        /s/ Lee E. Beckelman        

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

WILL LOGISTICS, LLC.,
as a Subsidiary Guarantor

By:    SMART SAND, INC.,
its Manager

By:        /s/ Lee E. Beckelman        

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

SSI OIL AND GAS PROPPANTS, LLC

as a Borrower

By:    SMART SAND, INC.,
its Manager

By:        /s/ Lee E. Beckelman            

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

SSI OIL AND GAS PROPPANTS HOLDINGS, LLC

as a Borrower

By:    SMART SAND, INC.,
its Manager

By:        /s/ Lee E. Beckelman        

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

NORTHERN WHITE SAND LLC

as a Borrower

By:    SMART SAND, INC.,
its Manager

[Signature Page to Third Amendment to ABL Credit Agreement]

LEGAL02/41896618v2

By:        /s/ Lee E. Beckelman        

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

CRS PROPPANTS LLC,

as a Borrower

By:    SMART SAND, INC.,
its Manager

By:        /s/ Lee E. Beckelman        

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

SMART SAND BLAIR, LLC,

as a Borrower

By:        /s/ Lee E. Beckelman        

    Name: Lee E. Beckelman

    Title: Chief Financial Officer

[Signature Page to Third Amendment to ABL Credit Agreement]

LEGAL02/41896618v2

JEFFERIES FINANCE LLC,

as Agent

By: /s/ J. R. Young    

Name: J.R. Young

Title: Managing Director

JFIN BUSINESS CREDIT FUND I LLC,

as Sole Lender

By: /s/ J. R. Young    

Name: J.R. Young

Title: Managing Director

[Signature Page to Third Amendment to ABL Credit Agreement]

LEGAL02/41896618v2

EX-31.1

Exhibit 31.1

CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER

I, Charles E. Young, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Smart Sand, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 8, 2022

/s/ Charles E. Young

Charles E. Young, Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION BY PRINCIPAL FINANCIAL OFFICER

I, Lee E. Beckelman, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Smart Sand, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 8, 2022

/s/ Lee E. Beckelman

Lee E. Beckelman, Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Smart Sand, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles E. Young, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 8, 2022

/s/ Charles E. Young

Charles E. Young, Chief Executive Officer

(Principle Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Smart Sand, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lee E. Beckelman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 8, 2022

/s/ Lee E. Beckelman

Lee E. Beckelman, Chief Financial Officer

(Principle Financial Officer)

EX-95.1

Exhibit 95.1

MINE SAFETY DISCLOSURES

The following disclosures are provided pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) and Item 104 of Regulation S-K, which requires certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”).

Mine Safety Information

Whenever the Federal Mine Safety and Health Administration (“MSHA”) believes a violation of the Mine Act, any health or safety standard or any regulation has occurred, it may issue a citation which describes the alleged violation and fixes a time within which the U.S. mining operator must abate the alleged violation. In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA may issue an order removing miners from the area of the mine affected by the condition until the alleged hazards are corrected. When MSHA issues a citation or order, it generally proposes a civil penalty, or fine, as a result of the alleged violation, that the operator is ordered to pay. Citations and orders can be contested and appealed, and as part of that process, may be reduced in severity and amount, and are sometimes dismissed. The number of citations, orders and proposed assessments vary depending on the size and type (underground or surface) of the mine as well as by the MSHA inspector(s) assigned.

Mine Safety Data

The following provides additional information about references used in the table below to describe the categories of violations, orders or citations issued by MSHA under the Mine Act:

•Section 104 S&S Citations: Citations received from MSHA under section 104 of the Mine Act for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard.

•Section 104(b) Orders: Orders issued by MSHA under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period of time prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated.

•Section 104(d) Citations and Orders: Citations and orders issued by MSHA under section 104(d) of the Mine Act for an unwarrantable failure to comply with mandatory health or safety standards.

•Section 110(b)(2) Violations: Flagrant violations issued by MSHA under section 110(b)(2) of the Mine Act.

•Section 107(a) Orders: Orders issued by MSHA under section 107(a) of the Mine Act for situations in which MSHA determined an “imminent danger” (as defined by MSHA) existed.

Pattern or Potential Pattern of Violations

The following provides additional information about references used in the table below to describe elevated pattern of violation enforcement actions taken by MSHA under the Mine Act:

•Pattern of Violations: A pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under section 104(e) of the Mine Act.

•Potential Pattern of Violations: The potential to have a pattern of violations under section 104(e).

Pending Legal Actions

The following provides additional information of the types of proceedings brought before the Federal Mine Safety and Health Review Commission (“FMSHRC”):

•Contest Proceedings: A contest proceeding may be filed by an operator to challenge the issuance of a citation or order issued by MSHA.

•Civil Penalty Proceedings: A civil penalty proceeding may be filed by an operator to challenge a civil penalty MSHA has proposed for a violation contained in a citation or order. The operator does not institute civil penalty proceedings based solely on the assessment amount of proposed penalties. Any initiated adjudications address substantive matters of law and policy instituted on conditions that are alleged to be in violation of mandatory standards of the Mine Act.

•Discrimination Proceedings: Involves a miner’s allegation that he or she has suffered adverse employment action because he or she engaged in activity protected under the Mine Act, such as making a safety complaint. Also includes temporary reinstatement proceedings involving cases in which a miner has filed a complaint with MSHA stating that he or she has suffered discrimination and the miner has lost his or her position.

•Compensation Proceedings: A compensation proceeding may be filed by miners entitled to compensation when a mine is closed by certain closure orders issued by MSHA. The purpose of the proceeding is to determine the amount of compensation, if any, due to miners idled by the orders.

•Temporary Relief: Applications for temporary relief are applications filed under section 105(b)(2) of the Mine Act for temporary relief from any modification or termination of any order.

•Appeals: An appeal may be filed by an operator to challenge judges’ decisions or orders to the Commission, including petitions for discretionary review and review by the Commission on its own motion.

For the Three Months Ended September 30, 2022:

Mine (1)	Oakdale, WI 4703625	Barron, WI 4703646	Barron, WI 4703740	Taylor, WI 4703759	Ottawa, IL 1103253
Section 104 citations for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard (#)	—	—	—	—	—
Section 104(b) orders (#)	—	—	—	—	—
Section 104(d) citations and orders (#)	—	—	—	—	—
Section 110(b)(2) violations (#)	—	—	—	—	—
Section 107(a) orders (#)	—	—	—	—	—
Proposed assessments under MSHA (2)	$1,284	$—	$—	$—	$—
Mining-related fatalities (#)	—	—	—	—	—
Section 104(e) notice	—	—	—	—	—
Notice of the potential for a pattern of violations under Section 104(e)	—	—	—	—	—
Legal actions before the FMSHRC initiated (#)	1	—	—	—	—
Legal actions before the FMSHRC resolved (#)	1	—	—	—	—
Legal actions pending before the FMSHRC, end of period:	1	—	—	—	—
Contests of citations and orders referenced in Subpart B of 29 CFR Part 2700 (#)	—	—	—	—	—
Contests of proposed penalties referenced in Subpart C of 29 CFR Part 2700 (#)	1	—	—	—	—
Complaints for compensation referenced in Subpart D of 29 CFR Part 2700 (#)	—	—	—	—	—
Complaints of discharge, discrimination or interference referenced in Subpart E of 29 CFR Part 2700 (#)	—	—	—	—	—
Applications for temporary relief referenced in Subpart F of 29 CFR Part 2700 (#)	—	—	—	—	—
Appeals of judges’ decisions or orders referenced in Subpart H of 29 CFR Part 2700 (#)	—	—	—	—	—
Total pending legal actions (#)	1	—	—	—	—

(1)The definition of mine under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools and minerals preparation facilities. Unless otherwise indicated, any of these other items associated with a single mine have been aggregated in the totals for that mine. MSHA assigns an identification number to each mine and may or may not assign separate identification numbers to related facilities such as preparation facilities. We are providing the information in the table by mine rather than MSHA identification number because that is how we manage and operate our mining business and we believe this presentation will be more useful to investors than providing information based on MSHA identification numbers.

(2)Represents the total dollar value of the proposed assessments from MSHA under the Mine Act, for the three months preceding September 30, 2022, for all citations / orders assessed, not just those disclosed in the rows preceding such dollar value.

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Cover Page - shares	9 Months Ended
	Sep. 30, 2022	Nov. 01, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-37936
Entity Registrant Name	SMART SAND, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-2809926
Entity Address, Address Line One	1725 Hughes Landing Blvd
Entity Address, Address Line Two	Suite 800
Entity Address, City or Town	The Woodlands
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77380
City Area Code	281
Local Phone Number	231-2660
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	SND
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		45,276,607
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Central Index Key	0001529628
Entity Small Business	true

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 10,371	$ 25,588
Accounts receivable	32,902	17,481
Unbilled receivables	1,292	1,884
Inventory	20,618	15,024
Prepaid expenses and other current assets	7,405	13,886
Total current assets	72,588	73,863
Property, plant and equipment, net	267,210	262,465
Operating lease right-of-use assets	28,418	29,828
Intangible assets, net	6,867	7,461
Other assets	315	402
Total assets	375,398	374,019
Current liabilities:
Accounts payable	11,634	8,479
Accrued expenses and other liabilities	16,267	14,073
Current portion of deferred revenue	9,905	9,842
Current portion of long-term debt	6,495	7,127
Current portion of operating lease liabilities	10,560	9,029
Total current liabilities	54,861	48,550
Long-term deferred revenue	0	6,428
Long-term debt	16,289	15,353
Long-term operating lease liabilities	19,989	23,690
Deferred tax liabilities, long-term, net	19,650	22,434
Asset retirement obligation	25,006	16,155
Other Liabilities, Noncurrent	42	249
Total liabilities	135,837	132,859
Commitments and contingencies (Note 15)
Stockholders’ equity
Treasury stock, at cost, 1,959,668 and 1,777,001 shares at September 30, 2022 and December 31, 2021, respectively	42	42
Treasury stock, at cost, 1,959,668 and 1,777,001 shares at September 30, 2022 and December 31, 2021, respectively	(4,986)	(4,535)
Additional paid-in capital	176,992	174,486
Retained earnings	67,263	70,593
Accumulated other comprehensive income	250	574
Total stockholders’ equity	239,561	241,160
Total liabilities and stockholders’ equity	$ 375,398	$ 374,019

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	350,000,000	350,000,000
Common stock, shares issued (in shares)	44,607,002	43,789,814
Common stock, shares outstanding (in shares)	42,647,334	42,012,813
Treasury stock, shares (in shares)	1,959,668	1,777,001

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CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues:	$ 71,592	$ 34,479	$ 181,911	$ 91,568
Cost of goods sold	60,163	36,526	163,492	100,952
Gross profit	11,429	(2,047)	18,419	(9,384)
Operating expenses:
Salaries, benefits and payroll taxes	3,554	2,490	10,171	7,150
Depreciation and amortization	556	352	1,646	1,490
Selling, general and administrative	3,542	3,867	11,385	10,876
Total operating expenses	7,652	6,709	23,203	39,108
Operating income (loss)	3,777	(8,756)	(4,784)	(48,492)
Interest expense, net	(411)	(467)	(1,244)	(1,527)
Other income	148	1,792	416	5,457
Total other income (expenses), net	(263)	1,325	(828)	3,930
Income (loss) before income tax expense (benefit)	3,514	(7,431)	(5,612)	(44,562)
Income tax expense (benefit)	831	(169)	(2,282)	(6,121)
Net income (loss)	$ 2,683	$ (7,262)	$ (3,330)	$ (38,441)
Net income (loss) per common share:
Basic (in dollars per share)	$ 0.06	$ (0.17)	$ (0.08)	$ (0.92)
Diluted (in dollars per share)	$ 0.06	$ (0.17)	$ (0.08)	$ (0.92)
Weighted-average number of common shares:
Basic (in shares)	42,522	41,850	42,265	41,743
Diluted (in shares)	42,524	41,850	42,265	41,743
Bad debt expense	$ 0	$ 0	$ 1	$ 19,592
Shortfall Revenues [Member]
Revenues:	2,681	2,680	4,596	4,421
Logistics [Member]
Revenues:	2,248	456	5,252	3,856
Sand
Revenues:	$ 66,663	$ 31,343	$ 172,063	$ 83,291

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 2,683	$ (7,262)	$ (3,330)	$ (38,441)
Other comprehensive income (loss):
Foreign currency translation adjustment	(266)	(239)	(324)	(70)
Comprehensive income (loss)	$ 2,417	$ (7,501)	$ (3,654)	$ (38,511)

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Restricted Stock	Common Stock	Common Stock Restricted Stock	Treasury Stock	Treasury Stock Restricted Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income
Beginning balance (in shares) at Dec. 31, 2020			41,575,129		1,618,265
Beginning balance at Dec. 31, 2020	$ 288,807		$ 42		$ (4,134)		$ 171,209	$ 121,267	$ 423
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	125								125
Stock Issued During Period, Value, Acquisitions	20						20
Stock Issued During Period, Shares, Acquisitions			14,430
Vesting of restricted stock (in shares)			158,364
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	678						678
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	7						7
Employee stock purchase plan issuance (in shares)			19,483
Stock Issued During Period, Value, Employee Stock Purchase Plan	17						17
Stock buy back (in shares)				(48,077)		48,077
Stock buy back		$ (140)				$ (140)
Net income (loss)	(3,912)							(3,912)
Ending balance (in shares) at Mar. 31, 2021			41,719,329		1,666,342
Ending balance at Mar. 31, 2021	285,602		$ 42		$ (4,274)		171,931	117,355	548
Beginning balance (in shares) at Dec. 31, 2020			41,575,129		1,618,265
Beginning balance at Dec. 31, 2020	288,807		$ 42		$ (4,134)		171,209	121,267	423
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(70)
Net income (loss)	(38,441)
Ending balance (in shares) at Sep. 30, 2021			41,850,938		1,716,805
Ending balance at Sep. 30, 2021	252,220		$ 42		$ (4,427)		173,426	82,826	353
Beginning balance (in shares) at Mar. 31, 2021			41,719,329		1,666,342
Beginning balance at Mar. 31, 2021	285,602		$ 42		$ (4,274)		171,931	117,355	548
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	44								44
Vesting of restricted stock (in shares)			162,253
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	574						574
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	7						7
Stock buy back (in shares)				(48,793)		48,793
Stock buy back		(148)				$ (148)
Net income (loss)	(27,267)							(27,267)
Ending balance (in shares) at Jun. 30, 2021			41,832,789		1,715,135
Ending balance at Jun. 30, 2021	258,812		$ 42		$ (4,422)		172,512	90,088	592
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(239)								(239)
Vesting of restricted stock (in shares)			4,875
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	879						879
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	10						10
Employee stock purchase plan issuance (in shares)			14,944
Stock Issued During Period, Value, Employee Stock Purchase Plan	25						25
Stock buy back (in shares)				(1,670)		1,670
Stock buy back		(5)				$ (5)
Net income (loss)	(7,262)							(7,262)
Ending balance (in shares) at Sep. 30, 2021			41,850,938		1,716,805
Ending balance at Sep. 30, 2021	252,220		$ 42		$ (4,427)		173,426	82,826	353
Beginning balance (in shares) at Dec. 31, 2021			42,012,813		1,777,001
Beginning balance at Dec. 31, 2021	241,160		$ 42		$ (4,535)		174,486	70,593	574
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	16								16
Vesting of restricted stock (in shares)			179,630
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	826						826
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	5						5
Employee stock purchase plan issuance (in shares)			16,285
Stock Issued During Period, Value, Employee Stock Purchase Plan	25						25
Stock buy back (in shares)				(56,400)		56,400
Stock buy back		$ (127)				$ (127)
Net income (loss)	(5,923)							(5,923)
Ending balance (in shares) at Mar. 31, 2022			42,152,328		1,833,401
Ending balance at Mar. 31, 2022	235,982		$ 42		$ (4,662)		175,342	64,670	590
Beginning balance (in shares) at Dec. 31, 2021			42,012,813		1,777,001
Beginning balance at Dec. 31, 2021	241,160		$ 42		$ (4,535)		174,486	70,593	574
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(324)
Vesting of restricted stock (in shares)		783,000
Net income (loss)	(3,330)
Ending balance (in shares) at Sep. 30, 2022			42,647,334		1,959,668
Ending balance at Sep. 30, 2022	239,561		$ 42		$ (4,986)		176,992	67,263	250
Beginning balance (in shares) at Mar. 31, 2022			42,152,328		1,833,401
Beginning balance at Mar. 31, 2022	235,982		$ 42		$ (4,662)		175,342	64,670	590
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(74)								(74)
Vesting of restricted stock (in shares)			130,003
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	802						802
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	6						6
Stock buy back (in shares)			(39,479)		39,479
Stock buy back	(114)				$ (114)
Net income (loss)	(90)							(90)
Ending balance (in shares) at Jun. 30, 2022			42,242,852		1,872,880
Ending balance at Jun. 30, 2022	236,512		$ 42		$ (4,776)		176,150	64,580	516
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(266)								(266)
Vesting of restricted stock (in shares)			473,032
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	808						808
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	7						7
Employee stock purchase plan issuance (in shares)			18,238
Stock Issued During Period, Value, Employee Stock Purchase Plan	27						27
Stock buy back (in shares)			(86,788)		86,788
Stock buy back	(210)				$ (210)
Net income (loss)	2,683							2,683
Ending balance (in shares) at Sep. 30, 2022			42,647,334		1,959,668
Ending balance at Sep. 30, 2022	$ 239,561		$ 42		$ (4,986)		$ 176,992	$ 67,263	$ 250

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Operating activities:
Net loss	$ (3,330)	$ (38,441)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, depletion and accretion of asset retirement obligation	19,904	18,937
Amortization of intangible assets	596	596
(Gain) loss on disposal of assets	(482)	223
Bad debt expense	1	19,592
Amortization of deferred financing cost	79	79
Accretion of debt discount	140	140
Deferred income taxes	(2,784)	(7,543)
Stock-based compensation, net	2,436	2,131
Employee stock purchase plan compensation	18	24
Changes in assets and liabilities:
Accounts receivable	(14,238)	34,791
Unbilled receivables	(593)	(1,113)
Inventory	(5,594)	3,755
Prepaid expenses and other assets	3,072	(1,886)
Deferred revenue	(6,365)	6,092
Accounts payable	2,784	1,564
Accrued and other expenses	4,187	(1,397)
Net cash (used in) provided by operating activities	(169)	37,544
Investing activities:
Acquisition of Blair facility	(6,547)	0
Purchases of property, plant and equipment	(9,535)	(6,976)
Proceeds from disposal of assets	995	78
Net cash used in investing activities	(15,087)	(6,898)
Financing activities:
Repayments of notes payable	(5,474)	(5,168)
Payments under finance leases	(88)	(92)
Proceeds from revolving credit facility	6,000	0
Payment of contingent consideration	0	(180)
Employee stock purchase plan issuance	52	42
Purchase of treasury stock	(451)	(294)
Net cash provided by (used in) financing activities	39	(5,692)
Net decrease in cash and cash equivalents	(15,217)	24,954
Cash and cash equivalents at beginning of year	25,588	11,725
Cash and cash equivalents at end of period	10,371	36,679
Noncash Investing and Financing Items [Abstract]
Purchases of property, plant and equipment in accounts payable and accrued expenses	685	267
Issuance of acquisition common stock	0	0
Additions to asset retirement obligations	$ 8,281	$ 737

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Organization and Nature of Business & Market Update

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature of Business & Market Update

Organization and Nature of Business & Market Update

Organization and Nature of Business

The Company was incorporated in July 2011 and is headquartered in The Woodlands, Texas. The Company primarily operates as a fully integrated frac and industrial sand supply and services company. The Company offers complete mine to wellsite proppant supply and logistics solutions to our frac sand customers. These operations include the excavation, processing and sale of sand, or proppant, for use in hydraulic fracturing operations for the oil and natural gas industry. The Company also offers proppant logistics and wellsite storage solutions through its SmartSystemsTM products and services. In late 2021, the Company created its Industrial Products Solutions (“IPS”) business in order to diversify its customer base and markets it serves by offering sand to customers for industrial uses, such as glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation.

The Company commenced mining operations at its Oakdale, Wisconsin facility in July 2012. Through multiple expansions at Oakdale and the acquisition of the Utica, Illinois facility in September 2020, the Company has current annual processing capacity of approximately 7.1 million tons. With the acquisition of the Blair, Wisconsin mine and processing facility in March 2022, which is currently idled, we have the ability to expand to approximately 10.0 million tons should the Company decide to bring the Blair facility online.

The Company also has several in-basin rail terminals. The Company acquired rights in 2018 to operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin. In 2020, the Company, as part of its acquisition of the Utica, Illinois facility, obtained rights to use a rail terminal located in El Reno, Oklahoma. In September 2021, the Company acquired the rights to construct and operate another transloading terminal in Waynesburg, Pennsylvania to service the Appalachian Basin, including the Marcellus and Utica Formations, which became operational in January 2022.

The Company provides complete logistics solutions through its mine sites and transload facilities with direct access to four Class I rail lines, and has the ability to access all Class I rail lines within the United States and Canada.

The Company provides proppant storage and management solutions through its SmartSystems products and services under which it offers various solutions that create efficiencies, flexibility, enhanced safety and reliability for customers by providing the capability to unload, store and deliver proppant at the wellsite, as well as the ability to rapidly set up, takedown and transport the entire system. The SmartDepotTM silo system includes passive and active dust suppression technology, along with the capability of a gravity-fed operation. The self-contained SmartPathTM transloader, is a mobile sand transloading system designed to work with bottom dump trailers and features a drive over conveyor, surge bin, and dust collection system. Rapid deployment trailers are designed for quick setup, takedown and transportation of the entire SmartSystem, and they detach from the wellsite equipment, which allows for removal from the wellsite during operation. A proprietary software program, the SmartSystem TrackerTM allows customers to monitor silo-specific information, including location, proppant type and proppant inventory. We believe that our SmartSystems reduce trucking and related fuel consumption for our customers, helping them meet their goals to reduce their carbon footprint in their daily operations.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The information presented below supplements the complete description of our significant accounting policies disclosed in our 2021 Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 8, 2022.

Basis of Presentation and Consolidation

The accompanying unaudited quarterly condensed consolidated financial statements (“interim statements”) of the Company are presented in accordance with the rules and regulations of the SEC for quarterly reports on Form 10-Q and therefore do not include all the information and notes required by GAAP. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. All adjustments are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. The consolidated balance sheet as of December 31, 2021 was derived from the audited consolidated

financial statements as of and for the year ended December 31, 2021. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2021.

Use of Estimates

The preparation of interim statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these financial statements include, but are not limited to: impairment considerations of assets, including intangible assets, fixed assets, and inventory; estimated cost of future asset retirement obligations; fair value of acquired assets and assume liabilities; recoverability of deferred tax assets; inventory reserve; and the collectability of receivables; and certain liabilities.

Actual results could differ materially from management’s best estimates as additional information or actual results become available in the future, and those differences could be material. The decreases in demand related to the coronavirus (“COVID-19”) pandemic in 2020 and 2021 and the ongoing conflict in Ukraine have caused dramatic swings in oil and natural gas prices and significant volatility in the oilfield service sector. Additionally, future economic performance is uncertain due to current high inflation and other economic concerns. The Company is currently unable to estimate the impact of these events on its future financial position and results of operations. Therefore, the Company can give no assurances that these events will not have a material adverse effect on its financial position or results of operations.

Employee Retention Credit

The Company qualified for federal government assistance through employee retention credit provisions of the Consolidated Appropriations Act of 2021. As of September 30, 2022 and December 31, 2021, the Company included $2,710 and, $4,676 respectively, in prepaid expenses and other current assets on its consolidated balance sheets related to receivables for the employee retention credits. The calculation of the credit was based on employees continued employment and represents a portion of the wages paid to them. For income tax purposes, the credit will result in decreased expense related to the wages it offsets in the period received.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that materially affect the financial statements of the Company.

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Acquisition

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisition

Acquisition

Asset Acquisition Blair Facility

On March 4, 2022, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Hi-Crush Inc., a Delaware corporation (“HCR”), and Hi-Crush Blair LLC, a Delaware limited liability company and wholly-owned subsidiary of HCR (“Blair”), pursuant to which the Company acquired all of the issued and outstanding limited liability company interest of Blair from HCR for aggregate cash consideration of $6,450, subject to customary purchase price adjustments as set forth in the Purchase Agreement (the “Transaction”).

The primary assets of Blair consist of an idle frac sand mine and related processing facility located in Blair, Wisconsin. The Blair facility, once operational, will have approximately 2.9 million tons of total annual processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway.

The Company accounted for this transaction as an asset acquisition based on an evaluation of the guidance in ASC 805. The Company determined that there was not a substantive process in place that generates outputs that can be sold to a customer, and therefore the acquisition did not meet the definition of a business. The Company recognized identifiable assets acquired on a relative fair value basis. All assets acquired are allocated to property, plant and equipment, net on the balance sheet as of

March 31, 2022. The Company also recorded an increase to its asset retirement obligations and a corresponding increase in purchases of property plant and equipment in the amount of $8,281 for the nine months ended September 30, 2022.

The table below presents the calculation of the total purchase consideration:

Base price consideration	$	6,450
Net working capital adjustments and capitalized costs	97
Total purchase consideration	$	6,547

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Inventory

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Inventory

InventoryInventory consisted of the following:

	September 30, 2022		December 31, 2021
Raw material	$	728	$	293
Work in progress	5,871		3,082
Finished goods	8,815		7,269
Spare parts	5,204		4,380
Total inventory	$	20,618	$	15,024

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Property, Plant and Equipment, net

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, net

Property, Plant and Equipment, net

Net property, plant and equipment consisted of:

	September 30, 2022		December 31, 2021
Machinery, equipment and tooling	$	34,411	$	30,813
SmartSystems	27,654		27,343
Vehicles	3,234		3,066
Furniture and fixtures	1,345		1,325
Plant and building	200,373		199,958
Real estate properties	6,523		6,496
Railroad and sidings	33,622		27,703
Land and land improvements	40,455		35,652
Asset retirement obligation	28,818		20,536
Mineral properties	7,442		7,442
Deferred mining costs	2,455		2,455
Construction in progress	9,708		9,574
	396,040		372,363
Less: accumulated depreciation and depletion	128,830		109,898
Total property, plant and equipment, net	$	267,210	$	262,465

Depreciation expense was $6,498 and $6,111 for the three months ended September 30, 2022 and 2021, respectively, and $19,309 and $18,325 for the nine months ended September 30, 2022 and 2021, respectively.

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Accrued and Other Expenses

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Accrued and Other Expenses

Accrued and Other ExpensesAccrued and other expenses were comprised of the following:

	September 30, 2022		December 31, 2021
Employee related expenses	$	2,493	$	806
Accrued equipment expense	5		58
Accrued professional fees	522		691
Accrued royalties	2,726		2,701
Accrued freight and delivery charges	4,393		2,164
Accrued real estate tax	1,745		1,010
Accrued utilities	1,709		1,264
Sales tax liability	1,118		665
Income tax payable	—		2,332
Other accrued liabilities	1,556		2,382
Total accrued liabilities	$	16,267	$	14,073

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Debt

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt

Debt

The current portion of long-term debt consists of the following:

	September 30, 2022		December 31, 2021
Oakdale Equipment Financing	3,983		3,814
Finance leases	230		117
Notes payable	2,282		3,196
Current portion of long-term debt	$	6,495	$	7,127

Long-term debt, net of current portion consists of the following:

	September 30, 2022		December 31, 2021
ABL Credit Facility	$	6,000	$	—
Oakdale Equipment Financing, net	8,738		11,608
Finance leases	33		234
Notes payable	1,518		3,511
Long-term debt	$	16,289	$	15,353

The follow summarizes the maturity of our debt:

	ABL Credit Facility		Oakdale Equipment Financing		Notes Payable		Finance Leases		Total
Remainder of 2022	$	—	$	1,160	$	666	$	33	$	1,859
2023	—		4,637		2,009		245		6,891
2024	6,000		6,888		807		—		13,695
2025	—		1,724		187		—		1,911
2026	—		—		181		—		181
2027 and thereafter	—		—		174		—		174
Total minimum payments	6,000		14,409		4,024		278		24,711
Amount representing interest	—		(1,281)		(224)		(15)		(1,520)
Amount representing unamortized lender fees	—		(407)		—		—		(407)
Present value of payments							263
Less: current portion	—		(3,983)		(2,282)		(230)		(6,495)
Total long-term debt	$	6,000	$	8,738	$	1,518	$	33	$	16,289

ABL Credit Facility

On December 13, 2019, the Company entered into a $20,000 five-year senior secured asset-based credit facility with Jefferies Finance LLC. The available borrowing amount under the ABL Credit Facility as of September 30, 2022 was $20,000 and is based on the Company’s eligible accounts receivable and inventory, as described in the ABL Credit Agreement. As of September 30, 2022, there was $6,000 outstanding under the ABL Credit Facility, $1,000 letters of credit and $13,000 was available to be drawn. As of September 30, 2022 and December 31, 2021, the Company was in compliance with all financial covenants.

Oakdale Equipment Financing

On December 13, 2019, the Company received net proceeds of $23,000 in an equipment financing arrangement with Nexseer. Substantially all of the Company’s mining and processing equipment at its Oakdale facility are pledged as collateral under the Oakdale Equipment Financing. The Oakdale Equipment Financing bears interest at a fixed rate of 5.79%.

Notes Payable

The Company has entered into various financing arrangements, primarily to finance its manufactured wellsite proppant storage solutions equipment. Upon completion of the equipment manufacturing, title to the subject equipment passes to the financial institutions as collateral. All notes payable bear interest at rates between 4.00% and 7.49%.

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Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

Leases

Lessee

The operating and financing components of the Company’s right-of-use assets and lease liabilities on the consolidated balance sheets were as follows:

	Balance Sheet Location	September 30, 2022		December 31, 2021
Right-of-use assets
Operating	Operating right-of-use assets	$	28,418	$	29,828
Financing	Property, plant and equipment, net	161		262
Total right-of use assets		$	28,579	$	30,090
Lease liabilities
Operating	Operating lease liabilities, current and long-term portions	$	30,549	$	32,719
Financing	Long-term debt, current and long-term portions	263		351
Total lease liabilities		$	30,812	$	33,070

Operating lease costs are recorded as a single expense on the statement of operations and allocated to the right-of-use assets and the related lease liabilities as depreciation expense and interest expense, respectively. Lease cost recognized in the consolidated statement of operations for the three and nine months ended September 30, 2022 and 2021 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Finance lease cost
Amortization of right-of-use assets	$	30	$	35	$	96	$	105
Interest on lease liabilities	5		7		16		22
Operating lease cost	3,174		2,610		9,054		8,375
Short-term lease cost	101		86		547		120
Total lease cost	$	3,310	$	2,738	$	9,713	$	8,622

Other information related to the Company’s leasing activity for the nine months ended September 30, 2022 and 2021 is as follows:

	Nine Months Ended September 30,
	2022			2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	16		$	22
Operating cash flows used for operating leases	$	9,810		$	7,680
Financing cash flows used for finance leases	$	88		$	92
Right-of-use assets obtained in exchange for new operating lease liabilities	$	6,301		$	4,401
Weighted average remaining lease term - finance leases	1.1 years			1.9 years
Weighted average discount rate - finance leases	6.87		%	6.60		%
Weighted average remaining lease term - operating leases	3.0 years			3.8 years
Weighted average discount rate - operating leases	5.81		%	5.81		%

Maturities of the Company’s lease liabilities as of September 30, 2022 are as follows:

	Operating Leases		Finance Leases		Total
Remainder of 2022	$	2,540	$	33	$	2,573
2023	12,348		245		12,593
2024	9,299		—		9,299
2025	4,422		—		4,422
2026	3,191		—		3,191
Thereafter	1,806		—		1,806
Total cash lease payments	33,606		278		33,884
Less: amounts representing interest	(3,057)		(15)		(3,072)
Total lease liabilities	$	30,549	$	263	$	30,812

Leases

Leases

Lessee

The operating and financing components of the Company’s right-of-use assets and lease liabilities on the consolidated balance sheets were as follows:

	Balance Sheet Location	September 30, 2022		December 31, 2021
Right-of-use assets
Operating	Operating right-of-use assets	$	28,418	$	29,828
Financing	Property, plant and equipment, net	161		262
Total right-of use assets		$	28,579	$	30,090
Lease liabilities
Operating	Operating lease liabilities, current and long-term portions	$	30,549	$	32,719
Financing	Long-term debt, current and long-term portions	263		351
Total lease liabilities		$	30,812	$	33,070

Operating lease costs are recorded as a single expense on the statement of operations and allocated to the right-of-use assets and the related lease liabilities as depreciation expense and interest expense, respectively. Lease cost recognized in the consolidated statement of operations for the three and nine months ended September 30, 2022 and 2021 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Finance lease cost
Amortization of right-of-use assets	$	30	$	35	$	96	$	105
Interest on lease liabilities	5		7		16		22
Operating lease cost	3,174		2,610		9,054		8,375
Short-term lease cost	101		86		547		120
Total lease cost	$	3,310	$	2,738	$	9,713	$	8,622

Other information related to the Company’s leasing activity for the nine months ended September 30, 2022 and 2021 is as follows:

	Nine Months Ended September 30,
	2022			2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	16		$	22
Operating cash flows used for operating leases	$	9,810		$	7,680
Financing cash flows used for finance leases	$	88		$	92
Right-of-use assets obtained in exchange for new operating lease liabilities	$	6,301		$	4,401
Weighted average remaining lease term - finance leases	1.1 years			1.9 years
Weighted average discount rate - finance leases	6.87		%	6.60		%
Weighted average remaining lease term - operating leases	3.0 years			3.8 years
Weighted average discount rate - operating leases	5.81		%	5.81		%

Maturities of the Company’s lease liabilities as of September 30, 2022 are as follows:

	Operating Leases		Finance Leases		Total
Remainder of 2022	$	2,540	$	33	$	2,573
2023	12,348		245		12,593
2024	9,299		—		9,299
2025	4,422		—		4,422
2026	3,191		—		3,191
Thereafter	1,806		—		1,806
Total cash lease payments	33,606		278		33,884
Less: amounts representing interest	(3,057)		(15)		(3,072)
Total lease liabilities	$	30,549	$	263	$	30,812

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Asset Retirement Obligation

9 Months Ended

Sep. 30, 2022

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation

Asset Retirement Obligation

The Company had a post-closure reclamation and site restoration obligation of $25,006 as of September 30, 2022. The following is a reconciliation of the total reclamation liability for asset retirement obligations.

Balance at December 31, 2021	$	16,155
Additions and revisions of prior estimates	8,282
Accretion expense	569
Balance at September 30, 2022	$	25,006

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Contingent Consideration

9 Months Ended

Sep. 30, 2022

Business Combinations [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation

We may be subject to various legal proceedings, claims and governmental inspections, audits or investigations arising out of our operations in the normal course of business, which cover matters such as general commercial, governmental and trade regulations, product liability, environmental, intellectual property, employment and other actions. Although the outcomes of these routine claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on our financial statements.

Bonds

The Company has performance bonds with various public and private entities regarding reclamation, permitting and maintenance of public roadways. Total aggregate principal amount of performance bonds outstanding as of September 30, 2022 was $17,651.

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Revenue

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Disaggregation of Revenue

The following table presents the Company’s revenues disaggregated by type and percentage of total revenues for the periods indicated.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
	Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue
Sand sales revenue	$	66,663	93	%	$	31,343	91	%	$	172,063	94	%	$	83,291	91	%
Shortfall revenue	2,681		4	%	2,680		8	%	4,596		3	%	4,421		5	%
Logistics revenue	2,248		3	%	456		1	%	5,252		3	%	3,856		4	%
Total revenue	$	71,592	100	%	$	34,479	100	%	$	181,911	100	%	$	91,568	100	%

The Company recorded $16,270 of deferred revenue on the consolidated balance sheet as of December 31, 2021, of which $8,819 has been recognized in the nine months ended September 30, 2022. Of the remaining amount, the Company expects to recognize $938 through December 31, 2022 and the remainder through 2023.

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Earnings Per Share (Notes)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per ShareBasic net income per share of common stock is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the dilutive effects of restricted stock. Diluted net income per share of common stock is computed by dividing the net income attributable to common stockholders by the sum of the weighted-average number of shares of common stock outstanding during the period plus the potential dilutive effects of shares of restricted stock outstanding during the period calculated in accordance with the treasury stock method, although shares of restricted stock are excluded if their effect is anti-dilutive. The number of shares underlying equity-based awards that were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive was 2,625 for the three months ended September 30, 2022. Other periods presented below are in periods with a net loss and there was no difference between basic and diluted net loss per share of common stock. The following table reconciles the weighted-average common shares outstanding used in the calculation of basic net (loss) income per share to the weighted average common shares outstanding used in the calculation of diluted net income per share.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Weighted average common shares outstanding	42,522	41,850	42,265	41,743
Assumed conversion of restricted stock	2	—	—	—
Diluted weighted average common stock outstanding	42,524	41,850	42,265	41,743

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Equity Incentive Plan

In November 2016, in connection with its initial public offering, the Company adopted the 2016 Omnibus Incentive Plan (“2016 Plan”) which provides for the issuance of Awards (as defined in the 2016 Plan) of up to a maximum of 3,911 shares of the Company’s common stock to employees, non-employee members of the Company’s board of directors and consultants of the Company. On April 3, 2020, the Company’s board of directors adopted an amendment to the 2016 Plan to increase the

available shares of common stock authorized for issuance by an additional 2,088 shares. On July 27, 2021, the Company’s board of directors authorized 231 shares currently held in treasury stock for issuance under the 2016 Plan. On April 22, 2022, the board of directors adopted an amendment to the 2016 Plan to increase the number of shares of common stock authorized for issuance by an additional 3,900 shares.

During the nine months ended September 30, 2022 and 2021, 879 and 1,982 shares of restricted stock were issued under the 2016 Plan, respectively. The grant date fair value per share of all the outstanding restricted stock was $1.78 - $4.34. The shares vest over one to four years from their respective grant dates. For equity awards issued under the 2016 Plan, the grant date fair value was either the actual market price of the Company’s shares or an adjusted price using a Monte Carlo simulation for awards subject to the Company’s performance as compared to a defined peer group. The Company recognized, in operating expenses and cost of goods sold on the condensed consolidated statement of operations, $808 and $879 of compensation expense for the restricted stock during the three months ended September 30, 2022 and 2021, respectively. The Company recognized, in operating expenses and cost of goods sold on the condensed consolidated statement of operations, $2,436 and $2,131 of compensation expense for the restricted stock during the nine months ended September 30, 2022 and 2021, respectively. There is no impact to the cash flows of the Company related to stock-based compensation expense. At September 30, 2022, the Company had unrecognized compensation expense of $6,580 related to granted but unvested stock awards, which is to be recognized as follows:

Remainder of 2022	$	748
2023	2,753
2024	1,915
2025	1,002
2026	162
Total	$	6,580

The following table summarizes restricted stock activity under the Plans from December 31, 2021 through September 30, 2022:

	Number of Shares	Weighted Average
Unvested, December 31, 2021	3,151	$	3.06
Granted	879	$	3.56
Vested	(783)	$	3.74
Forfeited	(587)	$	2.68
Unvested, September 30, 2022	2,660	$	3.11

Employee Stock Purchase Plan

Shares of the Company’s common stock may be purchased by eligible employees under the Company’s 2016 Employee Stock Purchase Plan in six-month intervals at a purchase price equal to at least 85% of the lesser of the fair market value of the Company’s common stock on either the first day or the last day of each six-month offering period. Employee purchases may not exceed 20% of their gross compensation during an offering period.

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Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company calculates its interim income tax provision by estimating the annual expected effective tax rate and applying that rate to its ordinary year-to-date earnings or loss. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs.

For the three months ended September 30, 2022 and 2021, the effective tax rate was approximately 23.6% and 2.3%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the nine months ended September

30, 2022 and 2021, the effective tax rate was approximately 40.7% and 13.7%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the three and nine months ended September 30, 2022 and 2021, the statutory tax rate was 21.0%. The computation of the effective tax rate includes modifications from the statutory rate such as income tax credits, tax depletion deduction, carrybacks, and state apportionment changes, among other items.

The Company has recorded a liability for uncertain tax positions included in its consolidated balance sheet as of September 30, 2022, related to its depletion deduction methodology, and a corresponding increase to the income tax expense on its condensed consolidated statement of operations. There was $2,163 liability for uncertain tax positions as of December 31, 2021 and there was no material change for the nine months ended September 30, 2022.

As of September 30, 2022, the Company determined that it is more likely than not that it will not be able to fully realize the benefits of certain existing deductible temporary differences and has recorded a partial valuation allowance against the gross deferred tax assets, which is included in the deferred tax liabilities, long-term, net on its consolidated balance sheet, and a corresponding increase to the income tax expense on its condensed consolidated statement of operations. At December 31, 2021, the Company recorded a partial valuation allowance against the gross deferred tax assets on its consolidated balance sheet in the amount of $1,574 and a corresponding increase to the income tax expense on its consolidated statements of operations and there was no material change for the three and nine months ended September 30, 2022.

The Company’s federal income tax returns subsequent to 2017 remain open to audit by taxing authorities. The Company has not been informed that its tax returns are the subject of any audit or investigation by taxing authorities.

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Concentrations

9 Months Ended

Sep. 30, 2022

Risks and Uncertainties [Abstract]

Concentrations

Concentrations

As of September 30, 2022 three customers accounted for 67% of the Company’s total accounts receivable. As of December 31, 2021, 59% of the Company’s total accounts receivable balance was with two customers.

During the three months ended September 30, 2022, 62% of the Company’s revenues were earned from four customers. During the three months ended September 30, 2021, 50% of the Company’s revenues were earned from three customers. During the nine months ended September 30, 2022, 65% of the Company’s revenues were earned from four customers. During the nine months ended September 30, 2021, 68% of the Company’s revenues were earned from four customers.

As of September 30, 2022, one vendor accounted for 10% of the Company’s accounts payable. As of December 31, 2021, one vendor accounted for 19% of the Company’s accounts payable.

During the three months ended September 30, 2022, two suppliers accounted for 37% of the Company’s cost of goods sold. During the three months ended September 30, 2021, one supplier accounted for 23% of the Company’s cost of goods sold. During the nine months ended September 30, 2022, two suppliers accounted for 33% of the Company’s cost of goods sold. During the nine months ended September 30, 2021, one supplier accounted for 22% of the Company’s cost of goods sold.

The Company’s primary product is Northern White sand and its mining operations are limited to Wisconsin and Illinois. There is a risk of loss if there are significant environmental, legal or economic changes to these geographic areas of our mines, the oil and natural gas producing basins they serve, or the transportation routes between them.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation

We may be subject to various legal proceedings, claims and governmental inspections, audits or investigations arising out of our operations in the normal course of business, which cover matters such as general commercial, governmental and trade regulations, product liability, environmental, intellectual property, employment and other actions. Although the outcomes of these routine claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on our financial statements.

Bonds

The Company has performance bonds with various public and private entities regarding reclamation, permitting and maintenance of public roadways. Total aggregate principal amount of performance bonds outstanding as of September 30, 2022 was $17,651.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

The accompanying unaudited quarterly condensed consolidated financial statements (“interim statements”) of the Company are presented in accordance with the rules and regulations of the SEC for quarterly reports on Form 10-Q and therefore do not include all the information and notes required by GAAP. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. All adjustments are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. The consolidated balance sheet as of December 31, 2021 was derived from the audited consolidated

financial statements as of and for the year ended December 31, 2021. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2021.

Use of Estimates

Use of Estimates

The preparation of interim statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these financial statements include, but are not limited to: impairment considerations of assets, including intangible assets, fixed assets, and inventory; estimated cost of future asset retirement obligations; fair value of acquired assets and assume liabilities; recoverability of deferred tax assets; inventory reserve; and the collectability of receivables; and certain liabilities.

Actual results could differ materially from management’s best estimates as additional information or actual results become available in the future, and those differences could be material. The decreases in demand related to the coronavirus (“COVID-19”) pandemic in 2020 and 2021 and the ongoing conflict in Ukraine have caused dramatic swings in oil and natural gas prices and significant volatility in the oilfield service sector. Additionally, future economic performance is uncertain due to current high inflation and other economic concerns. The Company is currently unable to estimate the impact of these events on its future financial position and results of operations. Therefore, the Company can give no assurances that these events will not have a material adverse effect on its financial position or results of operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

There are no recent accounting pronouncements that materially affect the financial statements of the Company.

Employee Retention Credit

Employee Retention Credit

The Company qualified for federal government assistance through employee retention credit provisions of the Consolidated Appropriations Act of 2021. As of September 30, 2022 and December 31, 2021, the Company included $2,710 and, $4,676 respectively, in prepaid expenses and other current assets on its consolidated balance sheets related to receivables for the employee retention credits. The calculation of the credit was based on employees continued employment and represents a portion of the wages paid to them. For income tax purposes, the credit will result in decreased expense related to the wages it offsets in the period received.

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Acquisition (Tables)

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions, by Acquisition

The table below presents the calculation of the total purchase consideration:

Base price consideration	$	6,450
Net working capital adjustments and capitalized costs	97
Total purchase consideration	$	6,547

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Inventory (Tables)

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventory consisted of the following:

	September 30, 2022		December 31, 2021
Raw material	$	728	$	293
Work in progress	5,871		3,082
Finished goods	8,815		7,269
Spare parts	5,204		4,380
Total inventory	$	20,618	$	15,024

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Property, Plant and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Schedule of net property, plant and equipment

Net property, plant and equipment consisted of:

	September 30, 2022		December 31, 2021
Machinery, equipment and tooling	$	34,411	$	30,813
SmartSystems	27,654		27,343
Vehicles	3,234		3,066
Furniture and fixtures	1,345		1,325
Plant and building	200,373		199,958
Real estate properties	6,523		6,496
Railroad and sidings	33,622		27,703
Land and land improvements	40,455		35,652
Asset retirement obligation	28,818		20,536
Mineral properties	7,442		7,442
Deferred mining costs	2,455		2,455
Construction in progress	9,708		9,574
	396,040		372,363
Less: accumulated depreciation and depletion	128,830		109,898
Total property, plant and equipment, net	$	267,210	$	262,465

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Accrued and Other Expenses (Tables)

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Schedule of Accrued and Other Expenses

Accrued and other expenses were comprised of the following:

	September 30, 2022		December 31, 2021
Employee related expenses	$	2,493	$	806
Accrued equipment expense	5		58
Accrued professional fees	522		691
Accrued royalties	2,726		2,701
Accrued freight and delivery charges	4,393		2,164
Accrued real estate tax	1,745		1,010
Accrued utilities	1,709		1,264
Sales tax liability	1,118		665
Income tax payable	—		2,332
Other accrued liabilities	1,556		2,382
Total accrued liabilities	$	16,267	$	14,073

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Debt (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Schedule of long-term debt

The current portion of long-term debt consists of the following:

	September 30, 2022		December 31, 2021
Oakdale Equipment Financing	3,983		3,814
Finance leases	230		117
Notes payable	2,282		3,196
Current portion of long-term debt	$	6,495	$	7,127

Long-term debt, net of current portion consists of the following:

	September 30, 2022		December 31, 2021
ABL Credit Facility	$	6,000	$	—
Oakdale Equipment Financing, net	8,738		11,608
Finance leases	33		234
Notes payable	1,518		3,511
Long-term debt	$	16,289	$	15,353

Schedule of Maturities of Long-term Debt

The follow summarizes the maturity of our debt:

	ABL Credit Facility		Oakdale Equipment Financing		Notes Payable		Finance Leases		Total
Remainder of 2022	$	—	$	1,160	$	666	$	33	$	1,859
2023	—		4,637		2,009		245		6,891
2024	6,000		6,888		807		—		13,695
2025	—		1,724		187		—		1,911
2026	—		—		181		—		181
2027 and thereafter	—		—		174		—		174
Total minimum payments	6,000		14,409		4,024		278		24,711
Amount representing interest	—		(1,281)		(224)		(15)		(1,520)
Amount representing unamortized lender fees	—		(407)		—		—		(407)
Present value of payments							263
Less: current portion	—		(3,983)		(2,282)		(230)		(6,495)
Total long-term debt	$	6,000	$	8,738	$	1,518	$	33	$	16,289

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Leases (Tables)

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Assets And Liabilities, Lessee

The operating and financing components of the Company’s right-of-use assets and lease liabilities on the consolidated balance sheets were as follows:

	Balance Sheet Location	September 30, 2022		December 31, 2021
Right-of-use assets
Operating	Operating right-of-use assets	$	28,418	$	29,828
Financing	Property, plant and equipment, net	161		262
Total right-of use assets		$	28,579	$	30,090
Lease liabilities
Operating	Operating lease liabilities, current and long-term portions	$	30,549	$	32,719
Financing	Long-term debt, current and long-term portions	263		351
Total lease liabilities		$	30,812	$	33,070

Lease, Cost

Lease cost recognized in the consolidated statement of operations for the three and nine months ended September 30, 2022 and 2021 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Finance lease cost
Amortization of right-of-use assets	$	30	$	35	$	96	$	105
Interest on lease liabilities	5		7		16		22
Operating lease cost	3,174		2,610		9,054		8,375
Short-term lease cost	101		86		547		120
Total lease cost	$	3,310	$	2,738	$	9,713	$	8,622

Other information related to the Company’s leasing activity for the nine months ended September 30, 2022 and 2021 is as follows:

	Nine Months Ended September 30,
	2022			2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	16		$	22
Operating cash flows used for operating leases	$	9,810		$	7,680
Financing cash flows used for finance leases	$	88		$	92
Right-of-use assets obtained in exchange for new operating lease liabilities	$	6,301		$	4,401
Weighted average remaining lease term - finance leases	1.1 years			1.9 years
Weighted average discount rate - finance leases	6.87		%	6.60		%
Weighted average remaining lease term - operating leases	3.0 years			3.8 years
Weighted average discount rate - operating leases	5.81		%	5.81		%

Finance Lease, Liability, Maturity

Maturities of the Company’s lease liabilities as of September 30, 2022 are as follows:

	Operating Leases		Finance Leases		Total
Remainder of 2022	$	2,540	$	33	$	2,573
2023	12,348		245		12,593
2024	9,299		—		9,299
2025	4,422		—		4,422
2026	3,191		—		3,191
Thereafter	1,806		—		1,806
Total cash lease payments	33,606		278		33,884
Less: amounts representing interest	(3,057)		(15)		(3,072)
Total lease liabilities	$	30,549	$	263	$	30,812

Lessee, Operating Lease, Liability, Maturity

Maturities of the Company’s lease liabilities as of September 30, 2022 are as follows:

	Operating Leases		Finance Leases		Total
Remainder of 2022	$	2,540	$	33	$	2,573
2023	12,348		245		12,593
2024	9,299		—		9,299
2025	4,422		—		4,422
2026	3,191		—		3,191
Thereafter	1,806		—		1,806
Total cash lease payments	33,606		278		33,884
Less: amounts representing interest	(3,057)		(15)		(3,072)
Total lease liabilities	$	30,549	$	263	$	30,812

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Asset Retirement Obligation (Tables)

9 Months Ended

Sep. 30, 2022

Asset Retirement Obligation Disclosure [Abstract]

Reconciliation of total reclamation liability for asset retirement obligations

The following is a reconciliation of the total reclamation liability for asset retirement obligations.

Balance at December 31, 2021	$	16,155
Additions and revisions of prior estimates	8,282
Accretion expense	569
Balance at September 30, 2022	$	25,006

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Revenue (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of revenue

Disaggregation of Revenue

The following table presents the Company’s revenues disaggregated by type and percentage of total revenues for the periods indicated.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
	Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue
Sand sales revenue	$	66,663	93	%	$	31,343	91	%	$	172,063	94	%	$	83,291	91	%
Shortfall revenue	2,681		4	%	2,680		8	%	4,596		3	%	4,421		5	%
Logistics revenue	2,248		3	%	456		1	%	5,252		3	%	3,856		4	%
Total revenue	$	71,592	100	%	$	34,479	100	%	$	181,911	100	%	$	91,568	100	%

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

The following table reconciles the weighted-average common shares outstanding used in the calculation of basic net (loss) income per share to the weighted average common shares outstanding used in the calculation of diluted net income per share.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Weighted average common shares outstanding	42,522	41,850	42,265	41,743
Assumed conversion of restricted stock	2	—	—	—
Diluted weighted average common stock outstanding	42,524	41,850	42,265	41,743

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Unrecognized compensation expense is expected to be recognized

At September 30, 2022, the Company had unrecognized compensation expense of $6,580 related to granted but unvested stock awards, which is to be recognized as follows:

Remainder of 2022	$	748
2023	2,753
2024	1,915
2025	1,002
2026	162
Total	$	6,580

Summary of restricted stock activity

The following table summarizes restricted stock activity under the Plans from December 31, 2021 through September 30, 2022:

	Number of Shares	Weighted Average
Unvested, December 31, 2021	3,151	$	3.06
Granted	879	$	3.56
Vested	(783)	$	3.74
Forfeited	(587)	$	2.68
Unvested, September 30, 2022	2,660	$	3.11

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Organization and Nature of Business & Market Update (Detail) T in Millions	Sep. 30, 2022 T
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Processing capacity	7.1
Future Potential Annual Processing Capacity	10.0

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Other income	$ 148	$ 1,792	$ 416	$ 5,457
Prepaid expenses and other current assets	7,405		7,405		$ 13,886
Employee Retention Credit
Prepaid expenses and other current assets	$ 2,710		$ 2,710		$ 4,676

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Acquisition - Asset Acquisition (Details) $ in Thousands, T in Millions		3 Months Ended	9 Months Ended
	Mar. 04, 2022 USD ($) T	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Asset Acquisition [Line Items]
Acquisition of Blair facility		$ 6,547	$ 6,547	$ 0
Additions to asset retirement obligations			$ 8,281	$ 737
Blair
Asset Acquisition [Line Items]
Acquisition of Blair facility	$ 6,450
Asset Acquisition, Annual Processing Capacity Once Operational | T	2.9
Base price consideration	$ 6,450
Net working capital adjustments and capitalized costs	$ 97

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Inventory - Schedule of Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory [Line Items]
Inventory, Net, Total	$ 20,618	$ 15,024
Sand
Inventory [Line Items]
Raw material	728	293
Work in progress	5,871	3,082
Finished goods	8,815	7,269
Spare parts	5,204	4,380
Inventory, Net, Total	$ 20,618	$ 15,024

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Property, Plant and Equipment, Net - Schedule of Net Property, Plant and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 396,040	$ 372,363
Less: accumulated depreciation and depletion	128,830	109,898
Total property, plant and equipment, net	267,210	262,465
Machinery, equipment and tooling
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	34,411	30,813
SmartSystems
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	27,654	27,343
Vehicles
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	3,234	3,066
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	1,345	1,325
Plant and building
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	200,373	199,958
Real estate properties
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	6,523	6,496
Railroad and sidings
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	33,622	27,703
Land and land improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	40,455	35,652
Asset retirement obligation
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	28,818	20,536
Mineral properties
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	7,442	7,442
Deferred mining costs
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	2,455	2,455
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 9,708	$ 9,574

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Property, Plant and Equipment, Net - Narrative (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Property, Plant and Equipment [Abstract]
Depreciation expenses	$ 6,498	$ 6,111	$ 19,309	$ 18,325

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Accrued and Other Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Employee related expenses	$ 2,493	$ 806
Accrued equipment expense	5	58
Accrued professional fees	522	691
Accrued royalties	2,726	2,701
Accrued freight and delivery charges	4,393	2,164
Accrued real estate tax	1,745	1,010
Accrued utilities	1,709	1,264
Sales tax liability	1,118	665
Accrued Income Taxes, Current	0	2,332
Other accrued liabilities	1,556	2,382
Total accrued liabilities	$ 16,267	$ 14,073

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Debt Long-Term Debt, Net (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Line of Credit Facility [Line Items]
Current portion of long-term debt	$ 6,495	$ 7,127
Long-term debt	16,289	15,353
Debt Instrument [Line Items]
Remainder of 2022	1,859
2023	6,891
2024	13,695
2025	1,911
2026	181
2027 and thereafter	174
Total minimum payments	24,711
Amount representing interest	(1,520)
Amount representing unamortized lender fees	(407)
Present value of payments	263	351
Less: current portion	(6,495)	(7,127)
Long-term debt	16,289	15,353
Finance leases
Line of Credit Facility [Line Items]
Current portion of long-term debt	230	117
Long-term debt	33	234
Debt Instrument [Line Items]
Remainder of 2022	33
2023	245
2024	0
2025	0
2026	0
2027 and thereafter	0
Total minimum payments	278
Amount representing interest	(15)
Amount representing unamortized lender fees	0
Present value of payments	263
Less: current portion	(230)	(117)
Long-term debt	33	234
Notes payable
Line of Credit Facility [Line Items]
Current portion of long-term debt	2,282	3,196
Long-term debt	1,518	3,511
Debt Instrument [Line Items]
Remainder of 2022	666
2023	2,009
2024	807
2025	187
2026	181
2027 and thereafter	174
Total minimum payments	4,024
Amount representing interest	(224)
Amount representing unamortized lender fees	0
Less: current portion	(2,282)	(3,196)
Long-term debt	1,518	3,511
Oakdale Equipment Financing, net
Line of Credit Facility [Line Items]
Current portion of long-term debt	3,983	3,814
Long-term debt	8,738	11,608
Debt Instrument [Line Items]
Remainder of 2022	1,160
2023	4,637
2024	6,888
2025	1,724
2026	0
2027 and thereafter	0
Total minimum payments	14,409
Amount representing interest	(1,281)
Amount representing unamortized lender fees	(407)
Less: current portion	(3,983)	(3,814)
Long-term debt	8,738	11,608
ABL Credit Facility
Line of Credit Facility [Line Items]
Current portion of long-term debt	0
Long-term debt	6,000	0
Debt Instrument [Line Items]
Remainder of 2022	0
2023	0
2024	6,000
2025	0
2026	0
2027 and thereafter	0
Total minimum payments	6,000
Amount representing interest	0
Amount representing unamortized lender fees	0
Less: current portion	0
Long-term debt	$ 6,000	$ 0

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Credit Facility - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 13, 2019	Sep. 30, 2022
Minimum
Line of Credit Facility [Line Items]
Interest rates on notes		4.00%
Maximum
Line of Credit Facility [Line Items]
Interest rates on notes		7.49%
Nexseer Capital [Member] | Oakdale Equipment Financing, net
Line of Credit Facility [Line Items]
Proceeds from secured notes payable	$ 23
Interest rates on notes		5.79%
ABL Revolving Credit Facility | Jeffries Finance L L C [Member]
Line of Credit Facility [Line Items]
Revolving credit facility	$ 20
Term	5 years
Current borrowing capacity		$ 20,000
Letters of credit outstanding, amount		1,000
Remaining borrowing capacity		$ 13,000

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Leases - Right of Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Leases [Abstract]
Operating lease right-of-use assets	$ 28,418	$ 29,828
Property, plant and equipment, net	161	262
Total right-of use assets	28,579	30,090
Operating lease liabilities, current and long-term portions	30,549	32,719
Long-term debt, current and long-term portions	263	351
Total lease liabilities	$ 30,812	$ 33,070

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Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Amortization of right-of-use assets	$ 30	$ 35	$ 96	$ 105
Interest on lease liabilities	5	7	16	22
Operating lease cost	3,174	2,610	9,054	8,375
Short-term lease cost	101	86	547	120
Total lease cost	$ 3,310	$ 2,738	$ 9,713	$ 8,622

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Leases - Other Lease (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Operating cash flows used for finance leases	$ 16	$ 22
Operating cash flows used for operating leases	9,810	7,680
Payments under finance leases	88	92
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 6,301	$ 4,401
Weighted average remaining lease term - finance leases	1 year 1 month 6 days	1 year 10 months 24 days
Weighted average discount rate - finance leases	6.87%	6.60%
Weighted average remaining lease term - operating leases	3 years	3 years 9 months 18 days
Weighted average discount rate - operating leases	5.81%	5.81%

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Leases - Lease Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Operating Leases
Remainder of 2022	$ 2,540
2023	12,348
2024	9,299
2025	4,422
2026	3,191
Thereafter	1,806
Total cash lease payments	33,606
Less: amounts representing interest	(3,057)
Operating lease liabilities, current and long-term portions	30,549	$ 32,719
Finance Leases
Remainder of 2022	33
2023	245
2024	0
2025	0
2026	0
Thereafter	0
Total cash lease payments	278
Less: amounts representing interest	(15)
Long-term debt, current and long-term portions	263	$ 351
Total
Remainder of 2022	2,573
2023	12,593
2024	9,299
2025	4,422
2026	3,191
Thereafter	1,806
Total cash lease payments	33,884
Less: amounts representing interest	(3,072)
Total lease liabilities	$ 30,812

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Asset Retirement Obligation - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Asset Retirement Obligation Disclosure [Abstract]
Post-closure reclamation and site restoration obligation	$ 25,006	$ 16,155

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Asset Retirement Obligation - Reconciliation of Total Reclamation Liability for Asset Retirement Obligations (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
December 31, 2021	$ 16,155
Accretion expense	569
September 30, 2022	25,006
Additions and revisions of prior estimates	$ 8,282

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Revenue Disaggregation of Revenue (Details) - Product Concentration Risk - Revenue from Contract with Customer Benchmark [Member]	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Concentration Risk, Percentage	100.00%	100.00%	100.00%	100.00%
Sand [Member]
Disaggregation of Revenue [Line Items]
Concentration Risk, Percentage	93.00%	91.00%	94.00%	91.00%
Shortfall Revenues [Member]
Disaggregation of Revenue [Line Items]
Concentration Risk, Percentage	4.00%	8.00%	3.00%	5.00%
Logistics [Member]
Disaggregation of Revenue [Line Items]
Concentration Risk, Percentage	3.00%	1.00%	3.00%	4.00%

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Revenue Deferred Revenue (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Revenue Recognition and Deferred Revenue [Abstract]
Contract with customer, liability		$ 16,270
Revenue recognized	$ 8,819
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 938

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Revenue Performance Obligation (Details)	Sep. 30, 2022
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction, period	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction, period	1 year

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Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average common shares outstanding (in shares)	42,522	41,850	42,265	41,743
Assumed conversion of restricted stock (in shares)	2	0	0	0
Diluted weighted average common stock outstanding (in shares)	42,524	41,850	42,265	41,743
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares (in shares)	2,625

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Apr. 22, 2022	Jul. 27, 2021	Apr. 03, 2020	Nov. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock based compensation expense	$ 6,580		$ 6,580
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock shares issued (in shares)			879,000
Grant date fair value per share (in dollars per share)			$ 3.56
2012 Equity Incentive Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock shares issued (in shares)			879,000	1,982,000
2012 Equity Incentive Plan | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vest over period			1 year
2012 Equity Incentive Plan | Minimum | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date fair value per share (in dollars per share)			$ 1.78
2012 Equity Incentive Plan | Maximum | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date fair value per share (in dollars per share)			$ 4.34
Shares vest over period			4 years
2016 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares authorized for issuance (in shares)					3,900,000	231,000	2,088,000	3,911,000
2016 Omnibus Incentive Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense recognized	$ 808	$ 879	$ 2,436	$ 2,131
2016 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase interval period			6 months
Percentage of purchase price to fair market value			85.00%
Percentage of purchase limit on gross compensation	20.00%		20.00%

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Stock-Based Compensation - Unrecognized Compensation Expense is to be Recognized (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Unrecognized stock based compensation expense	$ 6,580
2016 Employee Stock Purchase Plan
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Purchase interval period	6 months
Remainder of 2022
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Unrecognized stock based compensation expense	$ 748
2023
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Unrecognized stock based compensation expense	2,753
2024
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Unrecognized stock based compensation expense	1,915
2025
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Unrecognized stock based compensation expense	1,002
2026
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Unrecognized stock based compensation expense	$ 162

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Stock-Based Compensation - Summary of Restricted Stock Activity (Detail) - $ / shares shares in Thousands	9 Months Ended
	Sep. 30, 2022
2016 Employee Stock Purchase Plan
Weighted Average
Percentage of purchase limit on gross compensation	20.00%
Restricted Stock
Number of Shares
Unvested, Beginning balance (in shares)	3,151
Granted (in shares)	879
Vested (in shares)	(783)
Forfeited (in shares)	(587)
Unvested, Ending balance (in shares)	2,660
Weighted Average
Unvested, Beginning balance (in dollars per share)	$ 3.06
Granted (in dollars per share)	3.56
Vested (in dollars per share)	3.74
Forfeited (in dollars per share)	2.68
Unvested, Ending balance (in dollars per share)	$ 3.11

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Statutory tax rate	23.60%		2.30%	40.70%	13.70%
Unrecognized Tax Benefits, Period Increase (Decrease)		$ 2,163
Tax Credit Carryforward, Valuation Allowance						$ 1,574

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Concentrations - Additional Information (Detail)				3 Months Ended		9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accounts Receivable | Customer Concentration Risk | Two Customers
Concentration Risk [Line Items]
Concentration Risk, Percentage			59.00%
Accounts Receivable | Customer Concentration Risk | Three Customers
Concentration Risk [Line Items]
Concentration Risk, Percentage		67.00%
Revenue | Customer Concentration Risk | Four Customers
Concentration Risk [Line Items]
Concentration Risk, Percentage				62.00%		65.00%	68.00%
Revenue | Customer Concentration Risk | Three Customers
Concentration Risk [Line Items]
Concentration Risk, Percentage					50.00%
Accounts Payables | Supplier Concentration Risk | One Vendor
Concentration Risk [Line Items]
Concentration Risk, Percentage	10.00%		19.00%
Cost of Goods Sold | Supplier Concentration Risk | Two Suppliers
Concentration Risk [Line Items]
Concentration Risk, Percentage				37.00%		33.00%
Cost of Goods Sold | Supplier Concentration Risk | One Supplier
Concentration Risk [Line Items]
Concentration Risk, Percentage					23.00%		22.00%

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Commitments and Contingencies Litigation (Details)	Sep. 30, 2022 USD ($)
Permit Bond
Accounts, Notes, Loans and Financing Receivable [Line Items]
Guarantor Obligations, Current Carrying Value	$ 17,651