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, 2023

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)
28420 Hardy Toll Road, Suite 130
Spring, Texas 77373	(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 October 31, 2023: 41,295,604

TABLE OF CONTENTS

		PAGE
PART I	FINANCIAL INFORMATION
ITEM 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of September 30, 2023 (Unaudited) and December 31, 2022	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2023 and 2022 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (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	19
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	31
ITEM 4.	Controls and Procedures	31
PART II	OTHER INFORMATION	32
ITEM 1.	Legal Proceedings	32
ITEM 1A.	Risk Factors	32
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
ITEM 3.	Defaults upon Senior Securities	32
ITEM 4.	Mine Safety Disclosures	32
ITEM 5.	Other Information	32
ITEM 6.	Exhibits	33
SIGNATURES		34

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, 2023		December 31, 2022
	(unaudited)
	(in thousands, except share amounts)
Assets
Current assets:
Cash and cash equivalents	$	9,309	$	5,510
Accounts receivable	24,015		35,746
Unbilled receivables	165		79
Inventory	25,955		20,185
Prepaid expenses and other current assets	712		6,593
Total current assets	60,156		68,113
Property, plant and equipment, net	255,644		258,843
Operating lease right-of-use assets	24,448		26,075
Intangible assets, net	6,074		6,669
Other assets	185		303
Total assets	$	346,507	$	360,003
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	10,439	$	14,435
Accrued expenses and other liabilities	15,461		13,430
Deferred revenue	2,018		6,959
Current portion of long-term debt	5,691		6,183
Current portion of operating lease liabilities	11,139		10,910
Total current liabilities	44,748		51,917
Long-term debt	6,895		9,807
Long-term operating lease liabilities	14,978		17,642
Long-term deferred tax liabilities, net	14,142		18,238
Asset retirement obligations	19,558		18,888
Other non-current liabilities	40		40
Total liabilities	100,361		116,532
Commitments and contingencies (Note 14)
Stockholders’ equity
Common stock, $0.001 par value, 350,000,000 shares authorized; 45,617,642 issued and 38,311,714 outstanding at September 30, 2023; 45,099,067 issued and 43,088,106 outstanding at December 31, 2022	38		43
Treasury stock, at cost, 7,305,928 and 2,010,961 shares at September 30, 2023 and December 31, 2022, respectively	(14,124)		(5,075)
Additional paid-in capital	180,934		178,386
Retained earnings	79,325		69,890
Accumulated other comprehensive income	(27)		227
Total stockholders’ equity	246,146		243,471
Total liabilities and stockholders’ equity	$	346,507	$	360,003

 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,
	2023		2022		2023		2022
	(in thousands, except per share amounts)
Revenues:
Sand sales revenue	$	72,480	$	66,663	$	223,013	$	172,063
Shortfall revenue	2,389		2,681		4,304		4,596
Logistics revenue	2,031		2,248		6,709		5,252
Total revenue	76,900		71,592		234,026		181,911
Cost of goods sold	62,502		60,163		195,302		163,492
Gross profit	14,398		11,429		38,724		18,419
Operating expenses:
Salaries, benefits and payroll taxes	4,292		3,554		13,800		10,171
Depreciation and amortization	647		556		1,868		1,646
Selling, general and administrative	4,625		4,008		14,834		11,867
Loss (gain) on disposal of fixed assets, net	(92)		(466)		1,821		(482)
Total operating expenses	9,472		7,652		32,323		23,202
Operating income (loss)	4,926		3,777		6,401		(4,783)
Other income (expenses):
Interest expense, net	(276)		(411)		(940)		(1,244)
Other income	198		148		405		416
Total other income (expenses), net	(78)		(263)		(535)		(828)
Income (loss) before income tax expense (benefit)	4,848		3,514		5,866		(5,611)
Income tax expense (benefit)	(1,879)		831		(3,569)		(2,282)
Net income (loss)	$	6,727	$	2,683	$	9,435	$	(3,329)
Net income (loss) per common share:
Basic	$	0.18	$	0.06	$	0.24	$	(0.08)
Diluted	$	0.18	$	0.06	$	0.24	$	(0.08)
Weighted-average number of common shares:
Basic	38,253		42,522		39,153		42,265
Diluted	38,412		42,524		39,239		42,265

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,
	2023		2022		2023		2022
	(in thousands)
Net income (loss)	$	6,727	$	2,683	$	9,435	$	(3,329)
Other comprehensive (loss) income:
Foreign currency translation adjustment	(147)		(266)		(254)		(324)
Comprehensive income (loss)	$	6,580	$	2,417	$	9,181	$	(3,653)

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, 2023

	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, 2022	43,088,106	$	43	2,010,961	$	(5,075)	$	178,386	$	69,890	$	227	$	243,471
Foreign currency translation adjustment	—	—		—	—		—		—		(66)		(66)
Vesting of restricted stock	4,750	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		779		—		—		779
Employee stock purchase plan compensation	—	—		—	—		7		—		—		7
Employee stock purchase plan issuance	21,810	—		—	—		33		—		—		33
Purchase of treasury stock	(5,177,306)	(5)		5,177,306	(8,848)		—		—		—		(8,853)
Net loss	—	—		—	—		—		(3,599)		—		(3,599)
Balance at March 31, 2023	37,937,360	$	38	7,188,267	$	(13,923)	$	179,205	$	66,291	$	161	$	231,772
Foreign currency translation adjustment	—	—		—	—		—		—		(41)		(41)
Vesting of restricted stock	228,036	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		833		—		—		833
Employee stock purchase plan compensation	—	—		—	—		8		—		—		8
Employee stock purchase plan issuance	—	—		—	—		—		—		—		—
Purchase of treasury stock	(48,131)	—		48,131	(77)		—		—		—		(77)
Net income	—	—		—	—		—		6,307		—		6,307
Balance at June 30, 2023	38,117,265	$	38	7,236,398	$	(14,000)	$	180,046	$	72,598	$	120	$	238,802
Foreign currency translation adjustment	—	—		—	—		—		—		(147)		(147)
Vesting of restricted stock	247,368	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		860		—		—		860
Employee stock purchase plan compensation	—	—		—	—		5		—		—		5
Employee stock purchase plan issuance	16,611	—		—	—		23		—		—		23
Purchase of treasury stock	(69,530)	—		69,530	(124)		—		—		—		(124)
Net income	—	—		—	—		—		6,727		—		6,727
Balance at September 30, 2023	38,311,714	$	38	7,305,928	$	(14,124)	$	180,934	$	79,325	$	(27)	$	246,146

6

SMART SAND, INC.

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

(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
Employee stock purchase plan issuance	—	—		—	—		—		—		—		—
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

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,
	2023		2022
	(in thousands)
Operating activities:
Net income (loss)	$	9,435	$	(3,329)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and accretion of asset retirement obligations	20,359		19,904
Amortization of intangible assets	596		596
Loss (gain) on disposal of fixed assets	1,821		(482)
Provision for bad debt	—		1
Amortization of deferred financing cost	79		79
Accretion of debt discount	140		140
Deferred income taxes	(4,096)		(2,784)
Stock-based compensation	2,472		2,436
Employee stock purchase plan compensation	20		18
Changes in assets and liabilities:
Accounts receivable	11,888		(14,238)
Unbilled receivables	(244)		(593)
Inventory	(5,770)		(5,594)
Prepaid expenses and other assets	4,856		3,072
Deferred revenue	(4,942)		(6,365)
Accounts payable	(3,871)		2,784
Accrued and other expenses	907		4,187
Net cash provided by (used in) operating activities	33,650		(168)
Investing activities:
Acquisition of Blair facility	—		(6,547)
Purchases of property, plant and equipment	(16,126)		(9,535)
Proceeds from disposal of assets	123		995
Net cash used in investing activities	(16,003)		(15,087)
Financing activities:
Repayments of notes payable	(8,952)		(5,474)
Payments under finance leases	(323)		(88)
Proceeds from revolving credit facility	15,000		6,000
Repayment of revolving credit facility	(15,000)		—
Employee stock purchase plan issuance	56		52
Purchase of treasury stock	(4,629)		(451)
Net cash used in financing activities	(13,848)		39
Net decrease in cash and cash equivalents	3,799		(15,216)
Cash and cash equivalents at beginning of year	5,510		25,588
Cash and cash equivalents at end of period	$	9,309	$	10,372
Supplemental disclosure of cash flow information
Purchases of property, plant and equipment in accounts payable and accrued expenses	$	2,351	$	685
Treasury stock purchased with debt	$	4,425	$	—
Additions to asset retirement obligations	$	—	$	8,281

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

The Company was incorporated in July 2011 and is headquartered in Spring, Texas. The Company 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 in the oil and natural gas industry. These operations include the excavation, processing and sale of sand, or proppant, for hydraulic fracturing operations as well as proppant logistics and wellsite storage solutions through its SmartSystemsTM products and services. The Company also provides sand to customers for industrial uses, such as glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation, all of which the Company calls its “Industrial Product Solutions (“IPS”).

Sand Mines and Processing Facilities

The Company’s integrated Oakdale facility, with on-site rail infrastructure and wet and dry sand processing facilities, has access to two Class I rail lines which enable the Company to process and cost effectively deliver products to its customers. The Company commenced operations at its mine and processing facility near Oakdale, Wisconsin in July 2012, and subsequently expanded its operations in 2014, 2015 and 2018. Currently, the annual processing capacity at the Company’s Oakdale facility is approximately 5.5 million tons.

In September 2020, the Company acquired two frac sand mines and related processing facilities in Utica, Illinois and New Auburn, Wisconsin. The Utica facility has an annual processing capacity of 1.6 million tons and access to the Burlington Northern Santa Fe Class I rail line through the Peru, Illinois transload facility. The Company began operating the Utica, Illinois mine and Peru, Illinois transload facility in October 2020. The Company has no plans to operate the New Auburn facility for the foreseeable future.

In March 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 interests of Blair from HCR for aggregate cash consideration of approximately $6,450, subject to customary purchase price adjustments as set forth in the Purchase Agreement (the “Transaction”).

The primary assets of Blair consisted of an idle frac sand mine and related processing facility located in Blair, Wisconsin. The Blair facility has 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 commenced operations at the Blair facility in April 2023.

Transload & Logistics Solutions

The Company also offers proppant logistics solutions to its customers through, among other things, its network of in-basin transloading terminals and its SmartSystemsTM wellsite proppant storage and management capabilities. The Company has direct access to four Class I rail lines and the ability to access all Class 1 rail lines within the United States and Canada.

The Company has several in-basin rail terminals. The Company acquired rights in March 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 a transloading terminal in Waynesburg, Pennsylvania to service the Appalachian Basin, including the Marcellus and Utica Formations, which became operational in January 2022. The Company is expanding the Waynesburg terminal and expects this expansion to be completed in the fourth quarter of 2023.

The Company’s SmartSystems offer proppant storage 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 includes passive and active dust suppression technology, along with the capability of gravity-fed operation. The 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. The Company has developed the SmartbeltTM a belt system to pair with its SmartPath, which allows for feeding sand directly into the hopper at the wellsite. Rapid deployment trailers are designed for quick setup, takedown and

9

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

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.

NOTE 2 — Summary of Significant Accounting Policies

The information presented below supplements the complete description of our significant accounting policies disclosed in our 2022 Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2023.

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, 2022 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2022. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2022.

Revision of Previously Issued Financial Statements for Immaterial Misstatements

During the quarter ended March 31, 2023, the Company identified a misclassification in the operating expenses section of the statement of operations in the audited financial statements for the year ended December 31, 2022. The misclassification was an overstatement of salaries, benefits and payroll taxes and an understatement of selling, general and administrative in the amount of $1,462. For the three and twelve months ended December 31, 2022, the Company has decreased salaries, benefits and payroll taxes and increased selling, general and administrative line items by $1,462. There was no effect to the amounts reported in the first, second or third quarter financial statements of 2022. Pursuant to the guidance of Staff Accounting Bulletin (“SAB”) No. 99, “Materiality”, the Company evaluated the materiality of this misclassification quantitatively and qualitatively and concluded that it was not material to any of its prior annual or quarterly financial statements or trends of financial results. The Company has reclassified the prior year financial statement presentation to conform to the current financial statement presentation. These reclassifications have no effect on previously reported net income. Additionally, certain 2022 operating expenses have been reclassified to conform to the current financial statement presentation. The reclassifications have no effect on previously reported net income.

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; 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. Additionally, global events such as the ongoing conflict in Ukraine and the recent conflict in the Middle East may affect oil and natural gas prices and significant volatility in the oilfield service sector. The Company is currently unable to estimate the effect of current or future 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, 2023 and December 31, 2022, the Company included $522 and $1,180, respectively, in prepaid expenses and other current assets on its consolidated balance sheets related to receivables for

10

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

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 consisted of an idle frac sand mine and related processing facility located in Blair, Wisconsin. The Blair facility, which has 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, became operational in April 2023.

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. 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 and subsequently revised the estimate to $1,988 based on its mine plan as of December 31, 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, 2023		December 31, 2022
Raw material	$	330	$	844
Work in progress	8,511		6,240
Finished goods	9,102		7,534
Spare parts	8,012		5,567
Total inventory	$	25,955	$	20,185

11

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

NOTE 5 — Property, Plant and Equipment, net

Net property, plant and equipment consisted of:

	September 30, 2023		December 31, 2022
Machinery, equipment and tooling	$	40,114	$	36,483
SmartSystems	30,229		28,376
Vehicles	4,066		3,835
Furniture and fixtures	1,452		1,421
Plant and building	208,685		200,480
Real estate properties	6,184		6,155
Railroad and sidings	33,765		33,698
Land and land improvements	40,506		40,433
Asset retirement obligations	22,583		22,583
Mineral properties	7,442		7,442
Deferred mining costs	3,802		2,470
Construction in progress	9,108		10,421
	407,936		393,797
Less: accumulated depreciation and depletion	152,292		134,954
Total property, plant and equipment, net	$	255,644	$	258,843

Depreciation expense was $6,776 and $6,498 for the three months ended September 30, 2023 and 2022, respectively, and $19,661 and $19,309 for the nine months ended September 30, 2023 and 2022, respectively.

NOTE 6 — Accrued and Other Expenses

Accrued and other expenses were comprised of the following:

	September 30, 2023		December 31, 2022
Employee related expenses	$	2,342	$	1,172
Accrued equipment expense	485		597
Accrued professional fees	481		295
Accrued royalties	2,961		3,470
Accrued freight and delivery charges	5,152		4,117
Accrued real estate tax	2,013		1,008
Accrued utilities	1,111		1,604
Sales tax liability	145		829
Income tax payable	247		—
Other accrued liabilities	524		338
Total accrued liabilities	$	15,461	$	13,430

12

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

NOTE 7 — Debt

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

	September 30, 2023		December 31, 2022
Oakdale Equipment Financing	$	4,220	$	4,041
Notes payable	1,273		1,782
Finance leases	198		360
Current portion of long-term debt	$	5,691	$	6,183

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

	September 30, 2023		December 31, 2022
ABL Credit Facility	$	—	$	—
Oakdale Equipment Financing, net	4,705		7,753
Notes payable	1,618		1,594
Finance leases	572		460
Long-term debt	$	6,895	$	9,807

The follow summarizes the maturity of our debt:

	ABL Credit Facility		Oakdale Equipment Financing		Notes Payable		Finance Leases		Total
Remainder of 2023	$	—	$	1,160	$	407	$	82	$	1,649
2024	—		6,889		1,290		257		8,436
2025	—		1,724		680		257		2,661
2026	—		—		622		246		868
2027	—		—		339		59		398
2028 and thereafter	—		—		—		7		7
Total minimum payments	—		9,773		3,338		908		14,019
Amount representing interest	—		(626)		(447)		(138)		(1,211)
Amount representing unamortized lender fees	—		(222)		—		—		(222)
Present value of payments							770
Less: current portion	—		(4,220)		(1,273)		(198)		(5,691)
Total long-term debt	$	—	$	4,705	$	1,618	$	572	$	6,895

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, 2023 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, 2023, there were $1,000 in letters of credit outstanding under the ABL Credit Facility with $19,000 available to

13

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

be drawn. As of September 30, 2023 and December 31, 2022, the Company was in compliance with all financial covenants. As of September 30, 2023, there were no outstanding borrowings under our credit facility.

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 heavy equipment purchases as well as 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. As of September 30, 2023, these notes payable bear interest at rates between 3.99% and 7.49%.

On February 28, 2023, the Company purchased 5,176 shares of the Company’s common stock from Clearlake Capital Partners II (Master), L.P., an affiliate of Clearlake Capital Group (“Clearlake”), for $8,850, of which $4,425 was paid in cash and the remainder was financed through an unsecured promissory note, bearing interest of 10%, issued to Clearlake. This purchase represented all of the common stock previously owned by Clearlake and approximately 11.3% of the number of outstanding shares of the Company’s common stock as of immediately prior to the purchase. At the time of purchase, Clearlake was a related party to the Company, and José Feliciano, the Co-Founder and Managing Partner of Clearlake, remains on our board of directors.As of September 30, 2023, the entire balance of the unsecured promissory note has been paid in full.

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:

	Balance Sheet Location	September 30, 2023		December 31, 2022
Right-of-use assets
Operating	Operating right-of-use assets	$	24,448	$	26,075
Financing	Property, plant and equipment, net	766		699
Total right-of use assets		$	25,214	$	26,774
Lease liabilities
Operating	Operating lease liabilities, current and long-term portions	$	26,117	$	28,552
Financing	Long-term debt, current and long-term portions	770		820
Total lease liabilities		$	26,887	$	29,372

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, 2023 and 2022 was as follows:

14

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Finance lease cost
Amortization of right-of-use assets	$	89	$	30	$	232	$	96
Interest on lease liabilities	21		5		55		16
Operating lease cost	3,692		3,174		10,305		9,054
Short-term lease cost	9		101		27		547
Total lease cost	$	3,811	$	3,310	$	10,619	$	9,713

Other information related to the Company’s leasing activity for the nine months ended September 30, 2023 and 2022 is as follows:

	Nine Months Ended September 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	55		$	16
Operating cash flows used for operating leases	$	11,112		$	9,810
Financing cash flows used for finance leases	$	323		$	88
Right-of-use assets obtained in exchange for new operating lease liabilities	$	7,805		$	6,301
Weighted average remaining lease term - finance leases	3.4 years			1.1 years
Weighted average discount rate - finance leases	9.63		%	6.87		%
Weighted average remaining lease term - operating leases	2.7 years			3.0 years
Weighted average discount rate - operating leases	6.32		%	5.81		%

Maturities of the Company’s lease liabilities as of September 30, 2023 are as follows:

	Operating Leases		Finance Leases		Total
Remainder of 2023	$	2,954	$	82	$	3,036
2024	12,074		257		12,331
2025	7,235		257		7,492
2026	3,912		246		4,158
2027	1,663		59		1,722
Thereafter	626		7		633
Total cash lease payments	28,464		908		29,372
Less: amounts representing interest	(2,347)		(138)		(2,485)
Total lease liabilities	$	26,117	$	770	$	26,887

15

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

NOTE 9 — Asset Retirement Obligations

The Company had a post-closure reclamation and site restoration obligation of $19,558 as of September 30, 2023. The following is a reconciliation of the total reclamation liability for asset retirement obligations.

Balance at December 31, 2022	$	18,888
Accretion expense	670
Balance at September 30, 2023	$	19,558

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,
	2023				2022				2023				2022
	Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue
Sand sales revenue	$	72,480	94	%	$	66,663	93	%	$	223,013	95	%	$	172,063	94	%
Shortfall revenue	2,389		3	%	2,681		4	%	4,304		2	%	4,596		3	%
Logistics revenue	2,031		3	%	2,248		3	%	6,709		3	%	5,252		3	%
Total revenue	$	76,900	100	%	$	71,592	100	%	$	234,026	100	%	$	181,911	100	%

The Company recorded $6,959 of deferred revenue on the consolidated balance sheet as of December 31, 2022, of which $6,824 has been recognized in the nine months ended September 30, 2023 and the remaining amount is expected to be recognized during the remainder of 2023. As of September 30, 2023, the Company had $159,418 in unsatisfied performance obligations related to contracts with customers. The Company expects to perform these obligations and recognize revenue of $15,696, $71,386, and $72,336 in the remainder of 2023, 2024 and 2025, respectively.

16

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

NOTE 11 — Earnings Per Share

Basic net income (loss) 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 (loss) 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 1,915 and 2,625 for the three months ended September 30, 2023 and 2022, respectively. 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 1,922 and 2,093 for the nine months ended September 30, 2023 and 2022, respectively. 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,
	2023	2022	2023	2022
Weighted average common shares outstanding	38,253	42,522	39,153	42,265
Assumed conversion of restricted stock	159	2	86	—
Diluted weighted average common stock outstanding	38,412	42,524	39,239	42,265

NOTE 12 — 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, 2023 and 2022, the effective tax rate was approximately (38.8)% and 23.6%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the nine months ended September 30, 2023 and 2022, the effective tax rate was approximately (60.8)% and 40.7%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the three and nine months ended September 30, 2023 and 2022, 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 of $2,240 as of December 31, 2022. There was no material change for the nine months ended September 30, 2023.

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 long-term deferred tax liabilities, net on its consolidated balance sheets. At December 31, 2022, the Company recorded a partial valuation allowance against the gross deferred tax assets on its consolidated balance sheet in the amount of $1,588. There was no material change for the three and nine months ended September 30, 2023.

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 13 — Concentrations

As of September 30, 2023, six customers accounted for 79% of the Company’s total accounts receivable. As of December 31, 2022, 65% of the Company’s total accounts receivable balance was with three customers.

17

SMART SAND, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

During the three months ended September 30, 2023, 40% of the Company’s revenues were earned from two customers. During the three months ended September 30, 2022, 62% of the Company’s revenues were earned from four customers. During the nine months ended September 30, 2023, 41% of the Company’s revenues were earned from two customers. During the nine months ended September 30, 2022, 65% of the Company’s revenues were earned from four customers.

As of September 30, 2023, one vendor accounted for 14% of the Company’s accounts payable. As of December 31, 2022, one vendor accounted for 17% of the Company’s accounts payable.

During the three months ended September 30, 2023, one supplier accounted for 21% of the Company’s cost of goods sold. During the three months ended September 30, 2022, two suppliers accounted for 37% of the Company’s cost of goods sold. During the nine months ended September 30, 2023, two suppliers accounted for 33% 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.

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 14 — Commitments and Contingencies

Litigation

In addition to the matters described below, the Company 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.

Cory Berg, et al. v. Hi-Crush Blair LLC, LLC et al., Case No. 2019-cv-65, Trempealeau County, Wisconsin

Leland Drangstveit, et al. v. Hi-Crush Blair, LLC, et al., Case No. 2019-cv-66, Trempealeau County, Wisconsin

On April 22, 2019 and September 29, 2021, Cory Berg, et al. and Leland Drangstveit, et al., respectively (collectively, the “Plaintiffs”), filed complaints and an amended complaint in separate actions against Blair, certain of its subcontractors and its and their respective insurance companies in the Circuit Court of the State of Wisconsin in and for Trempealeau County (Case Nos. 19-CV-65 and 19-CV-66, respectively). The Plaintiffs allege that Blair and its subcontractors were negligent and created a nuisance by, among other things, generating excessive noise, light and dust. The Plaintiffs are seeking unspecified monetary damages and other relief. The insurance companies included as defendants have asserted counterclaims seeking declarations as to their rights and liabilities under their respective applicable commercial general liability insurance policies. HCR has agreed under the Purchase Agreement to indemnify the Company for any actions or omissions of HCR or its affiliates (including Blair) that occurred prior to the closing of the Company’s acquisition of Blair. The cases are currently in the discovery phase and at this time, the Company is unable to express an opinion as to the likely outcome in the matter.

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, 2023 was $18,868.

18

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, 2022 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, 2022. 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 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, a network of third party in-basin transloading terminals and our SmartSystemsTM wellsite proppant storage services. Our IPS business offers sand for industrial uses to our customer base and provides diversification to markets other than the oil and gas industry.

We market our products and services to oil and natural gas exploration and production companies, oilfield service companies and industrial products distributors and 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 with access to all Class I rail lines, our

19

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

proprietary SmartDepotTM portable wellsite proppant storage silos, our proprietary SmartPath® transloader, 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, Wisconsin facility with 1.1 million tons of annual processing capacity in July 2012. After several expansions, our current annual processing capacity at our Oakdale facility is 5.5 million tons, which has access to both the Canadian Pacific and Union Pacific rail networks. In 2020, we acquired our Utica, Illinois mine and processing facility, which has an annual processing capacity of 1.6 million tons and access to the Burlington Northern Santa Fe rail network.

In March 2022, we acquired our Blair, Wisconsin facility, which has 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 rail network. We commenced operations at the Blair facility in the second quarter of 2023.

We sell frac sand through a network of in-basin rail terminals. We directly control three 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, which has been providing Northern White Sand in-basin to our customers since the Van Hook terminal became operational in April 2018. 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. We are expanding our terminal in Waynesburg and expect this expansion to be completed in the fourth quarter of 2023.

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, the Smartbelt conveyor, 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. We believe this system has the ability to keep up with any hydraulic fracturing operation. The Smartbelt is a belt system that is paired with our SmartPath which allows feeding sand directly into the hopper at the wellsite leading to more efficient delivery of the sand into hopper. 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. We believe this business 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. We are expanding our IPS processing at our Utica, Illinois plant to provide blending and cooling capabilities. We expect this expansion to be operational in the fourth quarter of 2023.

Market Trends

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

During most of 2020, demand for frac sand declined significantly due to 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

20

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

remained out of balance with demand even though market activity was improving. Beginning in the first quarter of 2022 and continuing through the third quarter of 2023, supply and demand fundamentals have shifted, which has led to pricing improvements in frac sand. Currently, completion activity has moderated due to normal reductions in spending and seasonal slowdowns in activity in the fourth quarter of the year leading to supply and demand for northern white sand being relatively balanced and average sand prices flattening out.

The ongoing conflict in Ukraine and recent developments in the Middle East may effect oil and natural gas prices and volatility in the oilfield service sector. Additionally, other economic factors, including continued high inflation and slower economic growth could lead to a global economic recession that could have a negative affect 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 for our products will continue, 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, 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 can deliver higher quantities of sand 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 provide 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 believe that as this business 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.

21

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, 2023 Compared to Three Months Ended September 30, 2022

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

	Three Months Ended September 30,				Change
	2023		2022		Dollars		Percentage
Revenues:
Sand sales revenue	$	72,480	$	66,663	$	5,817	9	%
Shortfall revenue	2,389		2,681		(292)		(11)	%
Logistics revenue	2,031		2,248		(217)		(10)	%
Total revenue	76,900		71,592		5,308		7	%
Cost of goods sold	62,502		60,163		2,339		4	%
Gross profit	14,398		11,429		2,969		26	%
Operating expenses:
Salaries, benefits and payroll taxes	4,292		3,554		738		21	%
Depreciation and amortization	647		556		91		16	%
Selling, general and administrative	4,625		4,008		617		15	%
Loss (gain) on disposal of fixed assets, net	(92)		(466)		374		80	%
Total operating expenses	9,472		7,652		1,820		24	%
Operating income (loss)	4,926		3,777		1,149		30	%
Other income (expenses):
Interest expense, net	(276)		(411)		135		33	%
Other income	198		148		50		34	%
Total other income (expenses), net	(78)		(263)		185		70	%
Income (loss) before income tax expense (benefit)	4,848		3,514		1,334		38	%
Income tax expense (benefit)	(1,879)		831		(2,710)		(326)	%
Net income (loss)	$	6,727	$	2,683	$	4,044	151	%

Revenues

Revenues were $76.9 million and tons sold were approximately 1,219,000 for the three months ended September 30, 2023. Revenues for the three months ended September 30, 2022 were $71.6 million, during which time we sold approximately 1,110,000 tons of sand. The key factors contributing to the increase in revenues for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022 were as follows:

•Sand sales revenue increased 9% from $66.7 million for the three months ended September 30, 2022 to $72.5 million for the three months ended September 30, 2023. Revenues increased as a result of greater tons sold. Frac sand demand remained strong due to continuing trends of utilizing more frac sand per well completed, higher oil and natural gas demand and higher oil prices.

•Logistics revenue, which is primarily SmartSystems rentals, was marginally lower at approximately $2.0 million for the three months ended September 30, 2023 compared to $2.2 million for the three months ended September 30, 2022. The drop in logistics revenue was due to lower fleet utilization in the third quarter of 2023 due to the timing of well completion activity of SmartSystem customers.

22

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 $62.5 million and $60.2 million for the three months ended September 30, 2023 and 2022, respectively. The increase was primarily due higher tons sold which led to an increase in freight costs, maintenance, and higher labor expenses, offset by lower utilities and excavation costs.

Gross Profit

Gross profit was $14.4 million for the three months ended September 30, 2023, compared to $11.4 million for the three months ended September 30, 2022. The increase in profitability for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022 was primarily due to higher tons sold.

Operating Expenses

Operating expenses were $9.5 million and $7.7 million for the three months ended September 30, 2023 and 2022, respectively. Salaries, benefits and payroll taxes increased to $4.3 million for the three months ended September 30, 2023 as compared to $3.6 million for the three months ended September 30, 2022, due primarily to increased wages as a result of increased headcount as we began production at our Blair facility. Selling, general and administrative expenses increased to $4.6 million for the three months ended September 30, 2023 compared to $4.0 million for the three months ended September 30, 2022, primarily due to an increase in royalties and real estate taxes paid related to our Blair facility.

Interest Expense, net

We incurred $0.3 million and 0.4 million of net interest expense for the three months ended September 30, 2023 and 2022, respectively.

Income Tax (Benefit) Expense

For the three months ended September 30, 2023 and 2022, our effective tax rate was approximately (38.8)% and 23.6%, 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, 2023, we have recorded a liability for uncertain tax positions included in our balance sheet, related to our depletion deduction methodology. As of September 30, 2023, 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

Net income was $6.7 million for the three months ended September 30, 2023 as compared to net income of $2.7 million for the three months ended September 30, 2022. The improvement in net income in the current period relative to the prior period is primarily due to increase in total tons sold due to higher demand, partially offset by an increase in operating expenses.

23

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

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

	Nine Months Ended September 30,				Change
	2023		2022		Dollars		Percentage
	(in thousands)
Revenues:
Sand sales revenue	$	223,013	$	172,063	$	50,950	30	%
Shortfall revenue	4,304		4,596		(292)		(6)	%
Logistics revenue	6,709		5,252		1,457		28	%
Total revenue	234,026		181,911		52,115		29	%
Cost of goods sold	195,302		163,492		31,810		19	%
Gross profit	38,724		18,419		20,305		110	%
Operating expenses:
Salaries, benefits and payroll taxes	13,800		10,171		3,629		36	%
Depreciation and amortization	1,868		1,646		222		13	%
Selling, general and administrative	14,834		11,867		2,967		25	%
Loss (gain) on disposal of fixed assets, net	1,821		(482)		2,303		478	%
Total operating expenses	32,323		23,202		9,121		39	%
Operating income (loss)	6,401		(4,783)		11,184		234	%
Other income (expenses):
Interest expense, net	(940)		(1,244)		304		24	%
Other income	405		416		(11)		(3)	%
Total other income (expenses), net	(535)		(828)		293		35	%
Income (loss) before income tax benefit	5,866		(5,611)		11,477		205	%
Income tax benefit	(3,569)		(2,282)		(1,287)		56	%
Net income (loss)	$	9,435	$	(3,329)	$	12,764	383	%

Revenues

Revenues were $234.0 million and tons sold were approximately 3,498,000 for the nine months ended September 30, 2023. Revenues for the nine months ended September 30, 2022 were $181.9 million, during which time we sold approximately 3,158,000 tons of sand. The key factors contributing to the increase in revenues for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 were as follows:

•Sand sales revenue increased 30% from $172.1 million for the nine months ended September 30, 2022 to $223.0 million for the nine months ended September 30, 2023 as a result of an approximately 11% increase in total volumes sold and higher average sales prices for our sand. Average sand prices improved in the first nine months of 2023 due to higher demand, compared to the same period in 2023, as customer completion activity accelerated in the first half of 2023.

•Logistics revenue, which includes primarily SmartSystems rentals, was approximately $6.7 million for the nine months ended September 30, 2023 compared to $5.3 million for the nine months ended September 30, 2022. The increase in logistics revenue was due to higher utilization of our SmartSystems fleet.

24

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 $195.3 million and $163.5 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The increase was primarily due to higher volumes sold in the current period and the related increase in production costs, and freight costs and transloading costs at in-basin terminals.

Gross Profit

Gross profit was $38.7 million and $18.4 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The increase in the gross profit for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 was primarily due to higher sales volumes and higher average sales prices of our sand relative to the cost to produce and deliver products to our customers.

Operating Expenses

Operating expenses were $32.3 million and $23.2 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. Salaries, benefits and payroll taxes increased to $13.8 million for the nine months ended September 30, 2023 as compared to $10.2 million for the nine months ended September 30, 2022, due primarily to increased staffing to support our business as we expand our Blair facility. Selling, general and administrative expenses increased to $14.8 million for the nine months ended September 30, 2023 compared to $11.9 million for the nine months ended September 30, 2022, due to higher royalties from increased sales activity at our Blair facility and increased insurance expense. In the first quarter of 2023, we recorded a $1.9 million net loss on disposal of fixed assets as we reconfigured one of our wet plants to increase the efficiency of its operations and upgraded some of our mining equipment.

Interest Expense, net

We incurred $0.9 million and 1.2 million of net interest expense for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Income Tax Benefit

For the nine months ended September 30, 2023 and September 30, 2022, our effective tax rate was approximately (60.8)% and 40.7%, 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, 2023, we have recorded a liability for uncertain tax positions included on our balance sheet, related to our depletion deduction methodology. As of September 30, 2023, 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

Net income was $9.4 million for the nine months ended September 30, 2023 as compared to net loss of $3.3 million for the nine months ended September 30, 2022. The increase in net income year-over-year is primarily attributable to an increase in total volumes sold and higher average sales prices of our sand, partially offset by cost of goods sold, higher operating expenses and a $1.9 million of net loss on disposal of fixed assets as we reconfigured one of our wet plants to increase the efficiency of its operations and upgraded some of our mining equipment in the current period.

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 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

25

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

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 gross profit to contribution margin.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in thousands, except per ton amounts)
Revenue	$	76,900	$	71,592	$	234,026	$	181,911
Cost of goods sold	62,502		60,163		195,302		163,492
Gross profit (loss)	14,398		11,429		38,724		18,419
Depreciation, depletion, and accretion of asset retirement obligations	6,573		6,340		19,088		18,854
Contribution margin	$	20,971	$	17,769	$	57,812	$	37,273
Contribution margin per ton	$	17.20	$	16.01	$	16.53	$	11.80
Total tons sold	1,219		1,110		3,498		3,158

Contribution margin was $21.0 million and $17.8 million, or $17.20 and $16.01 per ton sold, for the three months ended September 30, 2023 and 2022, respectively. Contribution margin was $57.8 million and $37.3 million, or $16.53 and $11.80 per ton sold, for the nine months ended September 30, 2023 and 2022, respectively. The increase in overall contribution margin and contribution margin per ton for the three months ended September 30, 2023, when compared to the same period in 2022, was primarily due to higher tons sold. The increase for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, was due primarily to higher sales volumes and higher average sales prices 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 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)

26

SMART SAND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(UNAUDITED)

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 net loss to EBITDA and Adjusted EBITDA for each of the periods indicated.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in thousands)
Net income (loss)	$	6,727	$	2,683	$	9,435	$	(3,329)
Depreciation, depletion and amortization	6,985		6,705		20,285		19,931
Income tax expense (benefit)	(1,879)		831		(3,569)		(2,282)
Interest expense	304		431		1,203		1,282
Franchise taxes	66		77		504		268
EBITDA	$	12,203	$	10,727	$	27,858	$	15,870
Net (gain) loss on disposal of fixed assets	(92)		(466)		1,821		(482)
Equity compensation	850		713		2,388		2,023
Acquisition and development costs	70		97		341		434
Cash charges related to restructuring and retention of employees	—		31		18		137
Accretion of asset retirement obligations	235		189		670		569
Adjusted EBITDA	$	13,266	$	11,291	$	33,096	$	18,551

Adjusted EBITDA was $13.3 million for the three months ended September 30, 2023 compared to $11.3 million for the three months ended September 30, 2022, with the increase primarily due to an increase in tons sold. Adjusted EBITDA was $33.1 million for the nine months ended September 30, 2023 compared to $18.6 million for the nine months ended September 30, 2022. The increase in Adjusted EBITDA for the nine months ended September 30, 2023, compared to the same period in 2022, was primarily due to higher sales volumes, and higher average sales prices of our sand along with increased IPS sales and higher utilization of our SmartSystems.

27

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 net cash provided by (used in) operating activities to free cash flows.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in thousands, except per ton amounts)
Net cash provided by (used in) operating activities	$	12,477	$	10,780	$	33,650	$	(169)
Acquisition of Blair facility	—		—		—		(6,547)
Purchases of property, plant and equipment, net	(6,881)		(4,398)		(16,126)		(9,535)
Free cash flow	$	5,596	$	6,382	$	17,524	$	(16,251)

Free cash flow was $5.6 million for the three months ended September 30, 2023 compared to $6.4 million for the three months ended September 30, 2022. Free cash flow was $17.5 million for the nine months ended September 30, 2023 compared to $(16.3) million for the nine months ended September 30, 2022. The decrease in free cash flow for the three months ended September 30, 2023 was due to increase in capital expenditures, and the increase in free cash flow for the nine months ended September 30, 2023 in comparison to the same period in 2022 was primarily attributable to positive cash flows from operating activities due to higher net income and higher conversion of working capital to cash .

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, 2023, cash on hand was $9.3 million and we had $19.0 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 2023 capital expenditures, to be between $20.0 million and $23.0 million. Our expected capital expenditures for 2023 are primarily for process improvement and efficiency projects at our Oakdale and Utica facilities, expansion of our Waynesburg, Pennsylvania rail terminal, and the commencement of operations at our Blair facility. We expect to fund these capital expenditures with cash from operations, equipment financing options available to us or borrowings under the ABL Credit Facility.

28

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 outstanding balance under the Oakdale Equipment Financing as of September 30, 2023 was $8.9 million. Minimum cash payments on this facility for the remainder of 2023 are anticipated to be $1.2 million. Our various notes payable are primarily secured by heavy equipment purchases as well as our manufactured SmartSystems. Total debt under these notes payable as of September 30, 2023 was $2.9 million. Minimum cash payments on these notes payable for the remainder of 2023 are anticipated to be $0.4 million. There was no outstanding balances on our ABL Credit Facility as of September 30, 2023.

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, 2023 were $26.1 million. Minimum cash payments on operating leases for the remainder of 2023 are anticipated to be $3.0 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 14 years.

Off-Balance Sheet Arrangements

We had outstanding performance bonds of $18.9 million at September 30, 2023.

Contractual Obligations

As of September 30, 2023, we had contractual obligations for the ABL Credit Facility, Oakdale Equipment Financing, notes payable, operating and finance leases, delivery of sand, royalties and similar 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, same of our excavation and our wet sand processing activities have historically been limited during winter months. As a consequence, we typically 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 have overproduced sand to meet demand in the winter months. These higher cash operating costs are 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 two 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 conditions may curtail drilling activities and, as a result, our sales volumes to those areas may be reduced during such severe weather periods.

29

Customer Concentration

For the nine months ended September 30, 2023, revenue from EQT Production Corporation, and Liberty Oilfield Services, and accounted for 27.6%, and 12.9% respectively, of total revenue. For the nine months ended September 30, 2022, 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.

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, 2023.

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. 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 unable to estimate the impact of future events on our 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.

30

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. There was no outstanding balance under our ABL Credit Facility as of September 30, 2023. 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, 2023 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, 2022, filed with the SEC on February 28, 2023.

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, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

31

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 14 - 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, 2023.

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, 2022.

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

During the three months ended September 30, 2023, 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.

32

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)
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.

33

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 7, 2023	By:	/s/ Lee E. Beckelman
		Lee E. Beckelman, Chief Financial Officer
		(Principal Financial Officer)

 

	Smart Sand, Inc.
November 7, 2023	By:	/s/ Christopher M. Green
		Christopher M. Green, Vice President of Accounting
		(Principal Accounting Officer)

34

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 7, 2023

/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 7, 2023

/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, 2023 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 7, 2023

/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, 2023 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 7, 2023

/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, 2023:

Mine (1)	Oakdale, WI 4703625	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)	$500	$—	$—
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 (#)	—	—	—
Legal actions before the FMSHRC resolved (#)	—	—	—
Legal actions pending before the FMSHRC, end of period:	—	—	—
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 (#)	—	—	—
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)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, 2023, for all citations / orders assessed, not just those disclosed in the rows preceding such dollar value.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Oct. 31, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
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	28420 Hardy Toll Road
Entity Address, Address Line Two	Suite 130
Entity Address, City or Town	Spring
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77373
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		41,295,604
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
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, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 9,309	$ 5,510
Accounts receivable	24,015	35,746
Unbilled receivables	165	79
Inventory	25,955	20,185
Prepaid expenses and other current assets	712	6,593
Total current assets	60,156	68,113
Property, plant and equipment, net	255,644	258,843
Operating lease right-of-use assets	24,448	26,075
Intangible assets, net	6,074	6,669
Other assets	185	303
Total assets	346,507	360,003
Current liabilities:
Accounts payable	10,439	14,435
Accrued expenses and other liabilities	15,461	13,430
Deferred revenue	2,018	6,959
Current portion of long-term debt	5,691	6,183
Current portion of operating lease liabilities	11,139	10,910
Total current liabilities	44,748	51,917
Long-term debt	6,895	9,807
Long-term operating lease liabilities	14,978	17,642
Long-term deferred tax liabilities, net	14,142	18,238
Asset retirement obligations	19,558	18,888
Other Liabilities, Noncurrent	40	40
Total liabilities	100,361	116,532
Commitments and contingencies (Note 14)
Stockholders’ equity
Common stock, $0.001 par value, 350,000,000 shares authorized; 45,617,642 issued and 38,311,714 outstanding at September 30, 2023; 45,099,067 issued and 43,088,106 outstanding at December 31, 2022	38	43
Treasury stock, at cost, 7,305,928 and 2,010,961 shares at September 30, 2023 and December 31, 2022, respectively	(14,124)	(5,075)
Additional paid-in capital	180,934	178,386
Retained earnings	79,325	69,890
Accumulated other comprehensive income	(27)	227
Total stockholders’ equity	246,146	243,471
Total liabilities and stockholders’ equity	$ 346,507	$ 360,003

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
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)	45,617,642	45,099,067
Common stock, shares outstanding (in shares)	38,311,714	43,088,106
Treasury stock, shares (in shares)	7,305,928	2,010,961

XML

CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:	$ 76,900	$ 71,592	$ 234,026	$ 181,911
Cost of goods sold	62,502	60,163	195,302	163,492
Gross profit	14,398	11,429	38,724	18,419
Operating expenses:
Salaries, benefits and payroll taxes	4,292	3,554	13,800	10,171
Depreciation and amortization	647	556	1,868	1,646
Selling, general and administrative	4,625	4,008	14,834	11,867
Loss (gain) on disposal of fixed assets, net	(92)	(466)	1,821	(482)
Total operating expenses	9,472	7,652	32,323	23,202
Operating income (loss)	4,926	3,777	6,401	(4,783)
Interest expense, net	(276)	(411)	(940)	(1,244)
Other income	198	148	405	416
Total other income (expenses), net	(78)	(263)	(535)	(828)
Income (loss) before income tax expense (benefit)	4,848	3,514	5,866	(5,611)
Income tax expense (benefit)	(1,879)	831	(3,569)	(2,282)
Net income (loss)	$ 6,727	$ 2,683	$ 9,435	$ (3,329)
Net income (loss) per common share:
Basic (in dollars per share)	$ 0.18	$ 0.06	$ 0.24	$ (0.08)
Diluted (in dollars per share)	$ 0.18	$ 0.06	$ 0.24	$ (0.08)
Weighted-average number of common shares:
Basic (in shares)	38,253	42,522	39,153	42,265
Diluted (in shares)	38,412	42,524	39,239	42,265
Sand [Member]
Revenues:	$ 72,480	$ 66,663	$ 223,013	$ 172,063
Shortfall Revenues [Member]
Revenues:	2,389	2,681	4,304	4,596
Logistics [Member]
Revenues:	$ 2,031	$ 2,248	$ 6,709	$ 5,252

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 6,727	$ 2,683	$ 9,435	$ (3,329)
Other comprehensive (loss) income:
Foreign currency translation adjustment	(147)	(266)	(254)	(324)
Comprehensive income (loss)	$ 6,580	$ 2,417	$ 9,181	$ (3,653)

XML

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, 2021			42,012,813
Beginning balance at Dec. 31, 2021	$ 241,160		$ 42		$ (4,535)		$ 174,486	$ 70,593	$ 574
Beginning balance (in shares) at Dec. 31, 2021					1,777,001
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
Ending balance at Mar. 31, 2022	235,982		$ 42		$ (4,662)		175,342	64,670	590
Ending balance (in shares) at Mar. 31, 2022					1,833,401
Beginning balance (in shares) at Dec. 31, 2021			42,012,813
Beginning balance at Dec. 31, 2021	241,160		$ 42		$ (4,535)		174,486	70,593	574
Beginning balance (in shares) at Dec. 31, 2021					1,777,001
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(324)
Net income (loss)	(3,329)
Ending balance (in shares) at Sep. 30, 2022			42,647,334
Ending balance at Sep. 30, 2022	239,561		$ 42		$ (4,986)		176,992	67,263	250
Ending balance (in shares) at Sep. 30, 2022					1,959,668
Beginning balance (in shares) at Mar. 31, 2022			42,152,328
Beginning balance at Mar. 31, 2022	235,982		$ 42		$ (4,662)		175,342	64,670	590
Beginning balance (in shares) at Mar. 31, 2022					1,833,401
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 Issued During Period, Value, Employee Stock Purchase Plan	0						0
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
Ending balance at Jun. 30, 2022	236,512		$ 42		$ (4,776)		176,150	64,580	516
Ending balance (in shares) at Jun. 30, 2022					1,872,880
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
Ending balance at Sep. 30, 2022	$ 239,561		$ 42		$ (4,986)		176,992	67,263	250
Ending balance (in shares) at Sep. 30, 2022					1,959,668
Beginning balance (in shares) at Dec. 31, 2022	43,088,106		43,088,106
Beginning balance at Dec. 31, 2022	$ 243,471		$ 43		$ (5,075)		178,386	69,890	227
Beginning balance (in shares) at Dec. 31, 2022	2,010,961				2,010,961
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	$ (66)								(66)
Vesting of restricted stock (in shares)			4,750
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	779						779
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	7						7
Employee stock purchase plan issuance (in shares)			21,810
Stock Issued During Period, Value, Employee Stock Purchase Plan	33						33
Stock buy back (in shares)				(5,177,306)		(5,177,306)
Stock buy back		$ (8,853)		$ (5)		$ (8,848)
Net income (loss)	(3,599)							(3,599)
Ending balance (in shares) at Mar. 31, 2023			37,937,360
Ending balance at Mar. 31, 2023	$ 231,772		$ 38		$ (13,923)		179,205	66,291	161
Ending balance (in shares) at Mar. 31, 2023					7,188,267
Beginning balance (in shares) at Dec. 31, 2022	43,088,106		43,088,106
Beginning balance at Dec. 31, 2022	$ 243,471		$ 43		$ (5,075)		178,386	69,890	227
Beginning balance (in shares) at Dec. 31, 2022	2,010,961				2,010,961
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	$ (254)
Net income (loss)	$ 9,435
Ending balance (in shares) at Sep. 30, 2023	38,311,714		38,311,714
Ending balance at Sep. 30, 2023	$ 246,146		$ 38		$ (14,124)		180,934	79,325	(27)
Ending balance (in shares) at Sep. 30, 2023	7,305,928				7,305,928
Beginning balance (in shares) at Mar. 31, 2023			37,937,360
Beginning balance at Mar. 31, 2023	$ 231,772		$ 38		$ (13,923)		179,205	66,291	161
Beginning balance (in shares) at Mar. 31, 2023					7,188,267
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(41)								(41)
Vesting of restricted stock (in shares)			228,036
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	833						833
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	8						8
Stock Issued During Period, Value, Employee Stock Purchase Plan	0						0
Stock buy back (in shares)			(48,131)		(48,131)
Stock buy back	(77)				$ (77)
Net income (loss)	6,307							6,307
Ending balance (in shares) at Jun. 30, 2023			38,117,265
Ending balance at Jun. 30, 2023	238,802		$ 38		$ (14,000)		180,046	72,598	120
Ending balance (in shares) at Jun. 30, 2023					7,236,398
Increase (Decrease) in Stockholders' Equity
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(147)								(147)
Vesting of restricted stock (in shares)			247,368
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	860						860
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	5						5
Employee stock purchase plan issuance (in shares)			16,611
Stock Issued During Period, Value, Employee Stock Purchase Plan	23						23
Stock buy back (in shares)			(69,530)		69,530
Stock buy back	(124)				$ (124)
Net income (loss)	$ 6,727							6,727
Ending balance (in shares) at Sep. 30, 2023	38,311,714		38,311,714
Ending balance at Sep. 30, 2023	$ 246,146		$ 38		$ (14,124)		$ 180,934	$ 79,325	$ (27)
Ending balance (in shares) at Sep. 30, 2023	7,305,928				7,305,928

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities:
Net income (loss)	$ 9,435	$ (3,329)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and accretion of asset retirement obligations	20,359	19,904
Amortization of intangible assets	596	596
Loss (gain) on disposal of fixed assets	1,821	(482)
Provision for bad debt	0	1
Amortization of deferred financing cost	79	79
Accretion of debt discount	140	140
Deferred income taxes	(4,096)	(2,784)
Stock-based compensation	2,472	2,436
Employee stock purchase plan compensation	20	18
Changes in assets and liabilities:
Accounts receivable	11,888	(14,238)
Unbilled receivables	(244)	(593)
Inventory	(5,770)	(5,594)
Prepaid expenses and other assets	4,856	3,072
Deferred revenue	(4,942)	(6,365)
Accounts payable	(3,871)	2,784
Accrued and other expenses	907	4,187
Net cash provided by (used in) operating activities	33,650	(168)
Investing activities:
Acquisition of Blair facility	0	(6,547)
Purchases of property, plant and equipment	(16,126)	(9,535)
Proceeds from disposal of assets	123	995
Net cash used in investing activities	(16,003)	(15,087)
Financing activities:
Repayments of notes payable	(8,952)	(5,474)
Payments under finance leases	(323)	(88)
Proceeds from revolving credit facility	15,000	6,000
Repayment of revolving credit facility	(15,000)	0
Employee stock purchase plan issuance	56	52
Purchase of treasury stock	(4,629)	(451)
Net cash used in financing activities	(13,848)	39
Net decrease in cash and cash equivalents	3,799	(15,216)
Cash and cash equivalents at beginning of year	5,510	25,588
Cash and cash equivalents at end of period	9,309	10,372
Noncash Investing and Financing Items [Abstract]
Purchases of property, plant and equipment in accounts payable and accrued expenses	2,351	685
Other Significant Noncash Transaction, Value of Consideration Given	4,425	0
Additions to asset retirement obligations	$ 0	$ 8,281

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Organization and Nature of Business

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature of Business

Organization and Nature of Business

The Company was incorporated in July 2011 and is headquartered in Spring, Texas. The Company 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 in the oil and natural gas industry. These operations include the excavation, processing and sale of sand, or proppant, for hydraulic fracturing operations as well as proppant logistics and wellsite storage solutions through its SmartSystemsTM products and services. The Company also provides sand to customers for industrial uses, such as glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation, all of which the Company calls its “Industrial Product Solutions (“IPS”).

Sand Mines and Processing Facilities

The Company’s integrated Oakdale facility, with on-site rail infrastructure and wet and dry sand processing facilities, has access to two Class I rail lines which enable the Company to process and cost effectively deliver products to its customers. The Company commenced operations at its mine and processing facility near Oakdale, Wisconsin in July 2012, and subsequently expanded its operations in 2014, 2015 and 2018. Currently, the annual processing capacity at the Company’s Oakdale facility is approximately 5.5 million tons.

In September 2020, the Company acquired two frac sand mines and related processing facilities in Utica, Illinois and New Auburn, Wisconsin. The Utica facility has an annual processing capacity of 1.6 million tons and access to the Burlington Northern Santa Fe Class I rail line through the Peru, Illinois transload facility. The Company began operating the Utica, Illinois mine and Peru, Illinois transload facility in October 2020. The Company has no plans to operate the New Auburn facility for the foreseeable future.

In March 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 interests of Blair from HCR for aggregate cash consideration of approximately $6,450, subject to customary purchase price adjustments as set forth in the Purchase Agreement (the “Transaction”).

The primary assets of Blair consisted of an idle frac sand mine and related processing facility located in Blair, Wisconsin. The Blair facility has 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 commenced operations at the Blair facility in April 2023.

Transload & Logistics Solutions

The Company also offers proppant logistics solutions to its customers through, among other things, its network of in-basin transloading terminals and its SmartSystemsTM wellsite proppant storage and management capabilities. The Company has direct access to four Class I rail lines and the ability to access all Class 1 rail lines within the United States and Canada.

The Company has several in-basin rail terminals. The Company acquired rights in March 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 a transloading terminal in Waynesburg, Pennsylvania to service the Appalachian Basin, including the Marcellus and Utica Formations, which became operational in January 2022. The Company is expanding the Waynesburg terminal and expects this expansion to be completed in the fourth quarter of 2023.

The Company’s SmartSystems offer proppant storage 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 includes passive and active dust suppression technology, along with the capability of gravity-fed operation. The 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. The Company has developed the SmartbeltTM a belt system to pair with its SmartPath, which allows for feeding sand directly into the hopper at the wellsite. 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.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

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 2022 Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2023.

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, 2022 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2022. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2022.

Revision of Previously Issued Financial Statements for Immaterial Misstatements

During the quarter ended March 31, 2023, the Company identified a misclassification in the operating expenses section of the statement of operations in the audited financial statements for the year ended December 31, 2022. The misclassification was an overstatement of salaries, benefits and payroll taxes and an understatement of selling, general and administrative in the amount of $1,462. For the three and twelve months ended December 31, 2022, the Company has decreased salaries, benefits and payroll taxes and increased selling, general and administrative line items by $1,462. There was no effect to the amounts reported in the first, second or third quarter financial statements of 2022. Pursuant to the guidance of Staff Accounting Bulletin (“SAB”) No. 99, “Materiality”, the Company evaluated the materiality of this misclassification quantitatively and qualitatively and concluded that it was not material to any of its prior annual or quarterly financial statements or trends of financial results. The Company has reclassified the prior year financial statement presentation to conform to the current financial statement presentation. These reclassifications have no effect on previously reported net income. Additionally, certain 2022 operating expenses have been reclassified to conform to the current financial statement presentation. The reclassifications have no effect on previously reported net income.

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; 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. Additionally, global events such as the ongoing conflict in Ukraine and the recent conflict in the Middle East may affect oil and natural gas prices and significant volatility in the oilfield service sector. The Company is currently unable to estimate the effect of current or future 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, 2023 and December 31, 2022, the Company included $522 and $1,180, 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, 2023

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 consisted of an idle frac sand mine and related processing facility located in Blair, Wisconsin. The Blair facility, which has 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, became operational in April 2023.

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. 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 and subsequently revised the estimate to $1,988 based on its mine plan as of December 31, 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, 2023

Inventory Disclosure [Abstract]

Inventory

InventoryInventory consisted of the following:

	September 30, 2023		December 31, 2022
Raw material	$	330	$	844
Work in progress	8,511		6,240
Finished goods	9,102		7,534
Spare parts	8,012		5,567
Total inventory	$	25,955	$	20,185

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Property, Plant and Equipment, net

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, net

Property, Plant and Equipment, net

Net property, plant and equipment consisted of:

	September 30, 2023		December 31, 2022
Machinery, equipment and tooling	$	40,114	$	36,483
SmartSystems	30,229		28,376
Vehicles	4,066		3,835
Furniture and fixtures	1,452		1,421
Plant and building	208,685		200,480
Real estate properties	6,184		6,155
Railroad and sidings	33,765		33,698
Land and land improvements	40,506		40,433
Asset retirement obligations	22,583		22,583
Mineral properties	7,442		7,442
Deferred mining costs	3,802		2,470
Construction in progress	9,108		10,421
	407,936		393,797
Less: accumulated depreciation and depletion	152,292		134,954
Total property, plant and equipment, net	$	255,644	$	258,843

Depreciation expense was $6,776 and $6,498 for the three months ended September 30, 2023 and 2022, respectively, and $19,661 and $19,309 for the nine months ended September 30, 2023 and 2022, respectively.

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Accrued and Other Expenses

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued and Other Expenses

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

	September 30, 2023		December 31, 2022
Employee related expenses	$	2,342	$	1,172
Accrued equipment expense	485		597
Accrued professional fees	481		295
Accrued royalties	2,961		3,470
Accrued freight and delivery charges	5,152		4,117
Accrued real estate tax	2,013		1,008
Accrued utilities	1,111		1,604
Sales tax liability	145		829
Income tax payable	247		—
Other accrued liabilities	524		338
Total accrued liabilities	$	15,461	$	13,430

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Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

Debt

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

	September 30, 2023		December 31, 2022
Oakdale Equipment Financing	$	4,220	$	4,041
Notes payable	1,273		1,782
Finance leases	198		360
Current portion of long-term debt	$	5,691	$	6,183

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

	September 30, 2023		December 31, 2022
ABL Credit Facility	$	—	$	—
Oakdale Equipment Financing, net	4,705		7,753
Notes payable	1,618		1,594
Finance leases	572		460
Long-term debt	$	6,895	$	9,807

The follow summarizes the maturity of our debt:

	ABL Credit Facility		Oakdale Equipment Financing		Notes Payable		Finance Leases		Total
Remainder of 2023	$	—	$	1,160	$	407	$	82	$	1,649
2024	—		6,889		1,290		257		8,436
2025	—		1,724		680		257		2,661
2026	—		—		622		246		868
2027	—		—		339		59		398
2028 and thereafter	—		—		—		7		7
Total minimum payments	—		9,773		3,338		908		14,019
Amount representing interest	—		(626)		(447)		(138)		(1,211)
Amount representing unamortized lender fees	—		(222)		—		—		(222)
Present value of payments							770
Less: current portion	—		(4,220)		(1,273)		(198)		(5,691)
Total long-term debt	$	—	$	4,705	$	1,618	$	572	$	6,895

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, 2023 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, 2023, there were $1,000 in letters of credit outstanding under the ABL Credit Facility with $19,000 available to

be drawn. As of September 30, 2023 and December 31, 2022, the Company was in compliance with all financial covenants. As of September 30, 2023, there were no outstanding borrowings under our credit facility.

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 heavy equipment purchases as well as 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. As of September 30, 2023, these notes payable bear interest at rates between 3.99% and 7.49%.

On February 28, 2023, the Company purchased 5,176 shares of the Company’s common stock from Clearlake Capital Partners II (Master), L.P., an affiliate of Clearlake Capital Group (“Clearlake”), for $8,850, of which $4,425 was paid in cash and the remainder was financed through an unsecured promissory note, bearing interest of 10%, issued to Clearlake. This purchase represented all of the common stock previously owned by Clearlake and approximately 11.3% of the number of outstanding shares of the Company’s common stock as of immediately prior to the purchase. At the time of purchase, Clearlake was a related party to the Company, and José Feliciano, the Co-Founder and Managing Partner of Clearlake, remains on our board of directors.

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Leases

9 Months Ended

Sep. 30, 2023

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, 2023		December 31, 2022
Right-of-use assets
Operating	Operating right-of-use assets	$	24,448	$	26,075
Financing	Property, plant and equipment, net	766		699
Total right-of use assets		$	25,214	$	26,774
Lease liabilities
Operating	Operating lease liabilities, current and long-term portions	$	26,117	$	28,552
Financing	Long-term debt, current and long-term portions	770		820
Total lease liabilities		$	26,887	$	29,372

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, 2023 and 2022 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Finance lease cost
Amortization of right-of-use assets	$	89	$	30	$	232	$	96
Interest on lease liabilities	21		5		55		16
Operating lease cost	3,692		3,174		10,305		9,054
Short-term lease cost	9		101		27		547
Total lease cost	$	3,811	$	3,310	$	10,619	$	9,713

Other information related to the Company’s leasing activity for the nine months ended September 30, 2023 and 2022 is as follows:

	Nine Months Ended September 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	55		$	16
Operating cash flows used for operating leases	$	11,112		$	9,810
Financing cash flows used for finance leases	$	323		$	88
Right-of-use assets obtained in exchange for new operating lease liabilities	$	7,805		$	6,301
Weighted average remaining lease term - finance leases	3.4 years			1.1 years
Weighted average discount rate - finance leases	9.63		%	6.87		%
Weighted average remaining lease term - operating leases	2.7 years			3.0 years
Weighted average discount rate - operating leases	6.32		%	5.81		%

Maturities of the Company’s lease liabilities as of September 30, 2023 are as follows:

	Operating Leases		Finance Leases		Total
Remainder of 2023	$	2,954	$	82	$	3,036
2024	12,074		257		12,331
2025	7,235		257		7,492
2026	3,912		246		4,158
2027	1,663		59		1,722
Thereafter	626		7		633
Total cash lease payments	28,464		908		29,372
Less: amounts representing interest	(2,347)		(138)		(2,485)
Total lease liabilities	$	26,117	$	770	$	26,887

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, 2023		December 31, 2022
Right-of-use assets
Operating	Operating right-of-use assets	$	24,448	$	26,075
Financing	Property, plant and equipment, net	766		699
Total right-of use assets		$	25,214	$	26,774
Lease liabilities
Operating	Operating lease liabilities, current and long-term portions	$	26,117	$	28,552
Financing	Long-term debt, current and long-term portions	770		820
Total lease liabilities		$	26,887	$	29,372

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, 2023 and 2022 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Finance lease cost
Amortization of right-of-use assets	$	89	$	30	$	232	$	96
Interest on lease liabilities	21		5		55		16
Operating lease cost	3,692		3,174		10,305		9,054
Short-term lease cost	9		101		27		547
Total lease cost	$	3,811	$	3,310	$	10,619	$	9,713

Other information related to the Company’s leasing activity for the nine months ended September 30, 2023 and 2022 is as follows:

	Nine Months Ended September 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	55		$	16
Operating cash flows used for operating leases	$	11,112		$	9,810
Financing cash flows used for finance leases	$	323		$	88
Right-of-use assets obtained in exchange for new operating lease liabilities	$	7,805		$	6,301
Weighted average remaining lease term - finance leases	3.4 years			1.1 years
Weighted average discount rate - finance leases	9.63		%	6.87		%
Weighted average remaining lease term - operating leases	2.7 years			3.0 years
Weighted average discount rate - operating leases	6.32		%	5.81		%

Maturities of the Company’s lease liabilities as of September 30, 2023 are as follows:

	Operating Leases		Finance Leases		Total
Remainder of 2023	$	2,954	$	82	$	3,036
2024	12,074		257		12,331
2025	7,235		257		7,492
2026	3,912		246		4,158
2027	1,663		59		1,722
Thereafter	626		7		633
Total cash lease payments	28,464		908		29,372
Less: amounts representing interest	(2,347)		(138)		(2,485)
Total lease liabilities	$	26,117	$	770	$	26,887

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Asset Retirement Obligation

9 Months Ended

Sep. 30, 2023

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation

Asset Retirement Obligations

The Company had a post-closure reclamation and site restoration obligation of $19,558 as of September 30, 2023. The following is a reconciliation of the total reclamation liability for asset retirement obligations.

Balance at December 31, 2022	$	18,888
Accretion expense	670
Balance at September 30, 2023	$	19,558

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Revenue

9 Months Ended

Sep. 30, 2023

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,
	2023				2022				2023				2022
	Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue
Sand sales revenue	$	72,480	94	%	$	66,663	93	%	$	223,013	95	%	$	172,063	94	%
Shortfall revenue	2,389		3	%	2,681		4	%	4,304		2	%	4,596		3	%
Logistics revenue	2,031		3	%	2,248		3	%	6,709		3	%	5,252		3	%
Total revenue	$	76,900	100	%	$	71,592	100	%	$	234,026	100	%	$	181,911	100	%

The Company recorded $6,959 of deferred revenue on the consolidated balance sheet as of December 31, 2022, of which $6,824 has been recognized in the nine months ended September 30, 2023 and the remaining amount is expected to be recognized during the remainder of 2023. As of September 30, 2023, the Company had $159,418 in unsatisfied performance obligations related to contracts with customers. The Company expects to perform these obligations and recognize revenue of $15,696, $71,386, and $72,336 in the remainder of 2023, 2024 and 2025, respectively.

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Earnings Per Share (Notes)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per ShareBasic net income (loss) 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 (loss) 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 1,915 and 2,625 for the three months ended September 30, 2023 and 2022, respectively. 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 1,922 and 2,093 for the nine months ended September 30, 2023 and 2022, respectively. 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,
	2023	2022	2023	2022
Weighted average common shares outstanding	38,253	42,522	39,153	42,265
Assumed conversion of restricted stock	159	2	86	—
Diluted weighted average common stock outstanding	38,412	42,524	39,239	42,265

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Income Taxes

9 Months Ended

Sep. 30, 2023

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, 2023 and 2022, the effective tax rate was approximately (38.8)% and 23.6%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the nine months ended September 30, 2023 and 2022, the effective tax rate was approximately (60.8)% and 40.7%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the three and nine months ended September 30, 2023 and 2022, 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 of $2,240 as of December 31, 2022. There was no material change for the nine months ended September 30, 2023.

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 long-term deferred tax liabilities, net on its consolidated balance sheets. At December 31, 2022, the Company recorded a partial valuation allowance against the gross deferred tax assets on its consolidated balance sheet in the amount of $1,588. There was no material change for the three and nine months ended September 30, 2023.

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, 2023

Risks and Uncertainties [Abstract]

Concentrations

ConcentrationsAs of September 30, 2023, six customers accounted for 79% of the Company’s total accounts receivable. As of December 31, 2022, 65% of the Company’s total accounts receivable balance was with three customers.

During the three months ended September 30, 2023, 40% of the Company’s revenues were earned from two customers. During the three months ended September 30, 2022, 62% of the Company’s revenues were earned from four customers. During the nine months ended September 30, 2023, 41% of the Company’s revenues were earned from two customers. During the nine months ended September 30, 2022, 65% of the Company’s revenues were earned from four customers.

As of September 30, 2023, one vendor accounted for 14% of the Company’s accounts payable. As of December 31, 2022, one vendor accounted for 17% of the Company’s accounts payable.

During the three months ended September 30, 2023, one supplier accounted for 21% of the Company’s cost of goods sold. During the three months ended September 30, 2022, two suppliers accounted for 37% of the Company’s cost of goods sold. During the nine months ended September 30, 2023, two suppliers accounted for 33% 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.

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, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation

In addition to the matters described below, the Company 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.

Cory Berg, et al. v. Hi-Crush Blair LLC, LLC et al., Case No. 2019-cv-65, Trempealeau County, Wisconsin

Leland Drangstveit, et al. v. Hi-Crush Blair, LLC, et al., Case No. 2019-cv-66, Trempealeau County, Wisconsin

On April 22, 2019 and September 29, 2021, Cory Berg, et al. and Leland Drangstveit, et al., respectively (collectively, the “Plaintiffs”), filed complaints and an amended complaint in separate actions against Blair, certain of its subcontractors and its and their respective insurance companies in the Circuit Court of the State of Wisconsin in and for Trempealeau County (Case Nos. 19-CV-65 and 19-CV-66, respectively). The Plaintiffs allege that Blair and its subcontractors were negligent and created a nuisance by, among other things, generating excessive noise, light and dust. The Plaintiffs are seeking unspecified monetary damages and other relief. The insurance companies included as defendants have asserted counterclaims seeking declarations as to their rights and liabilities under their respective applicable commercial general liability insurance policies. HCR has agreed under the Purchase Agreement to indemnify the Company for any actions or omissions of HCR or its affiliates (including Blair) that occurred prior to the closing of the Company’s acquisition of Blair. The cases are currently in the discovery phase and at this time, the Company is unable to express an opinion as to the likely outcome in the matter.

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, 2023 was $18,868.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

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, 2022 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2022. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2022.

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; 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. Additionally, global events such as the ongoing conflict in Ukraine and the recent conflict in the Middle East may affect oil and natural gas prices and significant volatility in the oilfield service sector. The Company is currently unable to estimate the effect of current or future 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, 2023 and December 31, 2022, the Company included $522 and $1,180, 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.

Reclassification

Revision of Previously Issued Financial Statements for Immaterial Misstatements

During the quarter ended March 31, 2023, the Company identified a misclassification in the operating expenses section of the statement of operations in the audited financial statements for the year ended December 31, 2022. The misclassification was an overstatement of salaries, benefits and payroll taxes and an understatement of selling, general and administrative in the amount of $1,462. For the three and twelve months ended December 31, 2022, the Company has decreased salaries, benefits and payroll taxes and increased selling, general and administrative line items by $1,462. There was no effect to the amounts reported in the first, second or third quarter financial statements of 2022. Pursuant to the guidance of Staff Accounting Bulletin (“SAB”) No. 99, “Materiality”, the Company evaluated the materiality of this misclassification quantitatively and qualitatively and concluded that it was not material to any of its prior annual or quarterly financial statements or trends of financial results. The Company has reclassified the prior year financial statement presentation to conform to the current financial statement presentation. These reclassifications have no effect on previously reported net income. Additionally, certain 2022 operating expenses have been reclassified to conform to the current financial statement presentation. The reclassifications have no effect on previously reported net income.

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Acquisition (Tables)

9 Months Ended

Sep. 30, 2023

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, 2023

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventory consisted of the following:

	September 30, 2023		December 31, 2022
Raw material	$	330	$	844
Work in progress	8,511		6,240
Finished goods	9,102		7,534
Spare parts	8,012		5,567
Total inventory	$	25,955	$	20,185

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Property, Plant and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of net property, plant and equipment

Net property, plant and equipment consisted of:

	September 30, 2023		December 31, 2022
Machinery, equipment and tooling	$	40,114	$	36,483
SmartSystems	30,229		28,376
Vehicles	4,066		3,835
Furniture and fixtures	1,452		1,421
Plant and building	208,685		200,480
Real estate properties	6,184		6,155
Railroad and sidings	33,765		33,698
Land and land improvements	40,506		40,433
Asset retirement obligations	22,583		22,583
Mineral properties	7,442		7,442
Deferred mining costs	3,802		2,470
Construction in progress	9,108		10,421
	407,936		393,797
Less: accumulated depreciation and depletion	152,292		134,954
Total property, plant and equipment, net	$	255,644	$	258,843

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Accrued and Other Expenses (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued and Other Expenses

Accrued and other expenses were comprised of the following:

	September 30, 2023		December 31, 2022
Employee related expenses	$	2,342	$	1,172
Accrued equipment expense	485		597
Accrued professional fees	481		295
Accrued royalties	2,961		3,470
Accrued freight and delivery charges	5,152		4,117
Accrued real estate tax	2,013		1,008
Accrued utilities	1,111		1,604
Sales tax liability	145		829
Income tax payable	247		—
Other accrued liabilities	524		338
Total accrued liabilities	$	15,461	$	13,430

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Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of long-term debt

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

	September 30, 2023		December 31, 2022
Oakdale Equipment Financing	$	4,220	$	4,041
Notes payable	1,273		1,782
Finance leases	198		360
Current portion of long-term debt	$	5,691	$	6,183

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

	September 30, 2023		December 31, 2022
ABL Credit Facility	$	—	$	—
Oakdale Equipment Financing, net	4,705		7,753
Notes payable	1,618		1,594
Finance leases	572		460
Long-term debt	$	6,895	$	9,807

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 2023	$	—	$	1,160	$	407	$	82	$	1,649
2024	—		6,889		1,290		257		8,436
2025	—		1,724		680		257		2,661
2026	—		—		622		246		868
2027	—		—		339		59		398
2028 and thereafter	—		—		—		7		7
Total minimum payments	—		9,773		3,338		908		14,019
Amount representing interest	—		(626)		(447)		(138)		(1,211)
Amount representing unamortized lender fees	—		(222)		—		—		(222)
Present value of payments							770
Less: current portion	—		(4,220)		(1,273)		(198)		(5,691)
Total long-term debt	$	—	$	4,705	$	1,618	$	572	$	6,895

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

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, 2023		December 31, 2022
Right-of-use assets
Operating	Operating right-of-use assets	$	24,448	$	26,075
Financing	Property, plant and equipment, net	766		699
Total right-of use assets		$	25,214	$	26,774
Lease liabilities
Operating	Operating lease liabilities, current and long-term portions	$	26,117	$	28,552
Financing	Long-term debt, current and long-term portions	770		820
Total lease liabilities		$	26,887	$	29,372

Lease, Cost

Lease cost recognized in the consolidated statement of operations for the three and nine months ended September 30, 2023 and 2022 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Finance lease cost
Amortization of right-of-use assets	$	89	$	30	$	232	$	96
Interest on lease liabilities	21		5		55		16
Operating lease cost	3,692		3,174		10,305		9,054
Short-term lease cost	9		101		27		547
Total lease cost	$	3,811	$	3,310	$	10,619	$	9,713

Other information related to the Company’s leasing activity for the nine months ended September 30, 2023 and 2022 is as follows:

	Nine Months Ended September 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	55		$	16
Operating cash flows used for operating leases	$	11,112		$	9,810
Financing cash flows used for finance leases	$	323		$	88
Right-of-use assets obtained in exchange for new operating lease liabilities	$	7,805		$	6,301
Weighted average remaining lease term - finance leases	3.4 years			1.1 years
Weighted average discount rate - finance leases	9.63		%	6.87		%
Weighted average remaining lease term - operating leases	2.7 years			3.0 years
Weighted average discount rate - operating leases	6.32		%	5.81		%

Finance Lease, Liability, Maturity

Maturities of the Company’s lease liabilities as of September 30, 2023 are as follows:

	Operating Leases		Finance Leases		Total
Remainder of 2023	$	2,954	$	82	$	3,036
2024	12,074		257		12,331
2025	7,235		257		7,492
2026	3,912		246		4,158
2027	1,663		59		1,722
Thereafter	626		7		633
Total cash lease payments	28,464		908		29,372
Less: amounts representing interest	(2,347)		(138)		(2,485)
Total lease liabilities	$	26,117	$	770	$	26,887

Lessee, Operating Lease, Liability, Maturity

Maturities of the Company’s lease liabilities as of September 30, 2023 are as follows:

	Operating Leases		Finance Leases		Total
Remainder of 2023	$	2,954	$	82	$	3,036
2024	12,074		257		12,331
2025	7,235		257		7,492
2026	3,912		246		4,158
2027	1,663		59		1,722
Thereafter	626		7		633
Total cash lease payments	28,464		908		29,372
Less: amounts representing interest	(2,347)		(138)		(2,485)
Total lease liabilities	$	26,117	$	770	$	26,887

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Asset Retirement Obligation (Tables)

9 Months Ended

Sep. 30, 2023

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, 2022	$	18,888
Accretion expense	670
Balance at September 30, 2023	$	19,558

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Revenue (Tables)

9 Months Ended

Sep. 30, 2023

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,
	2023				2022				2023				2022
	Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue
Sand sales revenue	$	72,480	94	%	$	66,663	93	%	$	223,013	95	%	$	172,063	94	%
Shortfall revenue	2,389		3	%	2,681		4	%	4,304		2	%	4,596		3	%
Logistics revenue	2,031		3	%	2,248		3	%	6,709		3	%	5,252		3	%
Total revenue	$	76,900	100	%	$	71,592	100	%	$	234,026	100	%	$	181,911	100	%

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2023

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,
	2023	2022	2023	2022
Weighted average common shares outstanding	38,253	42,522	39,153	42,265
Assumed conversion of restricted stock	159	2	86	—
Diluted weighted average common stock outstanding	38,412	42,524	39,239	42,265

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Organization and Nature of Business (Detail) $ in Thousands, T in Millions		3 Months Ended	9 Months Ended
	Mar. 04, 2022 USD ($) T	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) T	Sep. 30, 2022 USD ($)	Sep. 30, 2020 mine
Business Acquisition [Line Items]
Processing capacity			5.5
Acquisition of Blair facility | $		$ 6,547	$ 0	$ 6,547
Number Of Mines And Related Facilities Acquired | mine					2
Blair
Business Acquisition [Line Items]
Acquisition of Blair facility | $	$ 6,450
Asset Acquisition, Annual Processing Capacity Once Operational	2.9
Utica | BNSF [Member]
Business Acquisition [Line Items]
Processing capacity			1.6

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Other income	$ 198	$ 148	$ 405	$ 416
Prepaid expenses and other current assets	712		712		$ 6,593
Employee Retention Credit
Prepaid expenses and other current assets	$ 522		$ 522		$ 1,180

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Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accounting Policies [Abstract]
Selling, general and administrative	$ 4,625		$ 4,008	$ 14,834	$ 11,867
Selling, general and administrative	4,625		4,008	14,834	11,867
Operating Expenses	$ 9,472		$ 7,652	$ 32,323	$ 23,202
Revision of Prior Period, Reclassification, Adjustment
Operating Expenses		$ 1,462

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Acquisition - Asset Acquisition (Details) $ in Thousands, T in Millions		3 Months Ended	6 Months Ended	9 Months Ended
	Mar. 04, 2022 USD ($) T	Sep. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Asset Acquisition [Line Items]
Acquisition of Blair facility		$ 6,547		$ 0	$ 6,547
Additions to asset retirement obligations				$ 0	$ 8,281
Blair
Asset Acquisition [Line Items]
Acquisition of Blair facility	$ 6,450
Asset Acquisition, Annual Processing Capacity Once Operational | T	2.9
Additions to asset retirement obligations	$ 8,281
Base price consideration	6,450
Net working capital adjustments and capitalized costs	$ 97
Asset Retirement Obligation, Revision of Estimate			$ 1,988

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Inventory - Schedule of Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Inventory [Line Items]
Inventory, Net, Total	$ 25,955	$ 20,185
Sand [Member]
Inventory [Line Items]
Raw material	330	844
Work in progress	8,511	6,240
Finished goods	9,102	7,534
Spare parts	8,012	5,567
Inventory, Net, Total	$ 25,955	$ 20,185

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Property, Plant and Equipment, Net - Schedule of Net Property, Plant and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 407,936	$ 393,797
Less: accumulated depreciation and depletion	152,292	134,954
Total property, plant and equipment, net	255,644	258,843
Machinery, equipment and tooling
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	40,114	36,483
SmartSystems
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	30,229	28,376
Vehicles
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	4,066	3,835
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	1,452	1,421
Plant and building
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	208,685	200,480
Real estate properties
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	6,184	6,155
Railroad and sidings
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	33,765	33,698
Land and land improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	40,506	40,433
Asset retirement obligations
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	22,583	22,583
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	3,802	2,470
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 9,108	$ 10,421

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Property, Plant and Equipment, Net - Narrative (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expenses	$ 6,776	$ 6,498	$ 19,661	$ 19,309

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Accrued and Other Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Employee related expenses	$ 2,342	$ 1,172
Accrued equipment expense	485	597
Accrued professional fees	481	295
Accrued royalties	2,961	3,470
Accrued freight and delivery charges	5,152	4,117
Accrued real estate tax	2,013	1,008
Accrued utilities	1,111	1,604
Sales tax liability	145	829
Accrued Income Taxes, Current	247	0
Other accrued liabilities	524	338
Total accrued liabilities	$ 15,461	$ 13,430

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Debt Long-Term Debt, Net (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Current portion of long-term debt	$ 5,691	$ 6,183
Long-term debt	6,895	9,807
Debt Instrument [Line Items]
Remainder of 2023	1,649
2024	8,436
2025	2,661
2026	868
2027	398
2028 and thereafter	7
Total minimum payments	14,019
Amount representing interest	(1,211)
Amount representing unamortized lender fees	(222)
Present value of payments	770	820
Less: current portion	(5,691)	(6,183)
Long-term debt	6,895	9,807
Finance leases
Line of Credit Facility [Line Items]
Current portion of long-term debt	198	360
Long-term debt	572	460
Debt Instrument [Line Items]
Remainder of 2023	82
2024	257
2025	257
2026	246
2027	59
2028 and thereafter	7
Total minimum payments	908
Amount representing interest	(138)
Amount representing unamortized lender fees	0
Present value of payments	770
Less: current portion	(198)	(360)
Long-term debt	572	460
Notes payable
Line of Credit Facility [Line Items]
Current portion of long-term debt	1,273	1,782
Long-term debt	1,618	1,594
Debt Instrument [Line Items]
Remainder of 2023	407
2024	1,290
2025	680
2026	622
2027	339
2028 and thereafter	0
Total minimum payments	3,338
Amount representing interest	(447)
Amount representing unamortized lender fees	0
Less: current portion	(1,273)	(1,782)
Long-term debt	1,618	1,594
Oakdale Equipment Financing, net
Line of Credit Facility [Line Items]
Current portion of long-term debt	4,220	4,041
Long-term debt	4,705	7,753
Debt Instrument [Line Items]
Remainder of 2023	1,160
2024	6,889
2025	1,724
2026	0
2027	0
2028 and thereafter	0
Total minimum payments	9,773
Amount representing interest	(626)
Amount representing unamortized lender fees	(222)
Less: current portion	(4,220)	(4,041)
Long-term debt	4,705	7,753
ABL Credit Facility
Line of Credit Facility [Line Items]
Current portion of long-term debt	0
Long-term debt	0	0
Debt Instrument [Line Items]
Remainder of 2023	0
2024	0
2025	0
2026	0
2027	0
2028 and thereafter	0
Total minimum payments	0
Amount representing interest	0
Amount representing unamortized lender fees	0
Less: current portion	0
Long-term debt	$ 0	$ 0

XML

Credit Facility - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 13, 2019	Sep. 30, 2023
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		$ 19,000

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Notes Payable (Details) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
	Feb. 28, 2023	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2023	Sep. 30, 2022
Debt Instrument [Line Items]
Treasury Stock, Value, Acquired, Cost Method		$ 124	$ 77
Payments for Repurchase of Common Stock				$ 4,629	$ 451
Clearlake Capital Partners II (Master), L.P.
Debt Instrument [Line Items]
Restricted stock buy back (in shares)	5,176
Treasury Stock, Value, Acquired, Cost Method	$ 8,850
Payments for Repurchase of Common Stock	$ 4,425
Repurchase Of Common Stock, Percentage Of Outstanding Shares Before Transaction	11.30%
Clearlake Capital Group | Common Stock Repurchase, Promissory Note
Debt Instrument [Line Items]
Interest rates on notes	10.00%
Minimum | Product Financing Arrangement
Debt Instrument [Line Items]
Interest rates on notes		3.99%		3.99%
Maximum | Product Financing Arrangement
Debt Instrument [Line Items]
Interest rates on notes		7.49%		7.49%

XML

Leases - Right of Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Operating lease right-of-use assets	$ 24,448	$ 26,075
Property, plant and equipment, net	766	699
Total right-of use assets	25,214	26,774
Operating lease liabilities, current and long-term portions	26,117	28,552
Long-term debt, current and long-term portions	770	820
Total lease liabilities	$ 26,887	$ 29,372

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Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Amortization of right-of-use assets	$ 89	$ 30	$ 232	$ 96
Interest on lease liabilities	21	5	55	16
Operating lease cost	3,692	3,174	10,305	9,054
Short-term lease cost	9	101	27	547
Total lease cost	$ 3,811	$ 3,310	$ 10,619	$ 9,713

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Leases - Other Lease (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating cash flows used for finance leases	$ 55	$ 16
Operating cash flows used for operating leases	11,112	9,810
Payments under finance leases	323	88
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 7,805	$ 6,301
Weighted average remaining lease term - finance leases	3 years 4 months 24 days	1 year 1 month 6 days
Weighted average discount rate - finance leases	9.63%	6.87%
Weighted average remaining lease term - operating leases	2 years 8 months 12 days	3 years
Weighted average discount rate - operating leases	6.32%	5.81%

XML

Leases - Lease Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Operating Leases
Remainder of 2023	$ 2,954
2024	12,074
2025	7,235
2026	3,912
2027	1,663
Thereafter	626
Total cash lease payments	28,464
Less: amounts representing interest	(2,347)
Operating lease liabilities, current and long-term portions	26,117	$ 28,552
Finance Leases
Remainder of 2023	82
2024	257
2025	257
2026	246
2027	59
Thereafter	7
Total cash lease payments	908
Less: amounts representing interest	(138)
Long-term debt, current and long-term portions	770	$ 820
Total
Remainder of 2023	3,036
2024	12,331
2025	7,492
2026	4,158
2027	1,722
Thereafter	633
Total cash lease payments	29,372
Less: amounts representing interest	(2,485)
Total lease liabilities	$ 26,887

XML

Asset Retirement Obligation - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Asset Retirement Obligation Disclosure [Abstract]
Post-closure reclamation and site restoration obligation	$ 19,558	$ 18,888

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Asset Retirement Obligation - Reconciliation of Total Reclamation Liability for Asset Retirement Obligations (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
December 31, 2022	$ 18,888
Accretion expense	670
September 30, 2023	$ 19,558

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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, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
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	94.00%	93.00%	95.00%	94.00%
Shortfall Revenues [Member]
Disaggregation of Revenue [Line Items]
Concentration Risk, Percentage	3.00%	4.00%	2.00%	3.00%
Logistics [Member]
Disaggregation of Revenue [Line Items]
Concentration Risk, Percentage	3.00%	3.00%	3.00%	3.00%

XML

Revenue Deferred Revenue (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Revenue Recognition and Deferred Revenue [Abstract]
Contract with customer, liability		$ 6,959
Revenue recognized	$ 6,824
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	159,418
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	15,696
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	71,386
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 72,336

XML

Revenue Performance Obligation (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 159,418
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 15,696
Remaining performance obligation, expected timing of satisfaction, period	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 71,386
Remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 72,336
Remaining performance obligation, expected timing of satisfaction, period	2 years

XML

Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average common shares outstanding (in shares)	38,253	42,522	39,153	42,265
Assumed conversion of restricted stock (in shares)	159	2	86	0
Diluted weighted average common stock outstanding (in shares)	38,412	42,524	39,239	42,265
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares (in shares)	1,915	2,625	1,922	2,093

XML

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Statutory tax rate	(38.80%)	23.60%		(60.80%)	40.70%
Unrecognized Tax Benefits, Period Increase (Decrease)			$ 2,240
Tax Credit Carryforward, Valuation Allowance						$ 1,588
Statutory tax rate	21.00%	21.00%		21.00%	21.00%

XML

Concentrations - Additional Information (Detail)			3 Months Ended		9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accounts Receivable | Customer Concentration Risk | Six Customers
Concentration Risk [Line Items]
Concentration Risk, Percentage	79.00%
Accounts Receivable | Customer Concentration Risk | Three Customers
Concentration Risk [Line Items]
Concentration Risk, Percentage		6500.00%
Revenue | Customer Concentration Risk | Two Customers
Concentration Risk [Line Items]
Concentration Risk, Percentage			40.00%		41.00%
Revenue | Customer Concentration Risk | Four Customers
Concentration Risk [Line Items]
Concentration Risk, Percentage				6200.00%		65.00%
Accounts Payables | Supplier Concentration Risk | One Vendor
Concentration Risk [Line Items]
Concentration Risk, Percentage	14.00%	17.00%
Cost of Goods Sold | Supplier Concentration Risk | One Supplier
Concentration Risk [Line Items]
Concentration Risk, Percentage			21.00%
Cost of Goods Sold | Supplier Concentration Risk | Two Suppliers
Concentration Risk [Line Items]
Concentration Risk, Percentage				37.00%	33.00%	3300.00%

XML

Commitments and Contingencies Litigation (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Permit Bond
Accounts, Notes, Loans and Financing Receivable [Line Items]
Guarantor obligations, current carrying value	$ 18,868