- 2Q 2026 revenue of
$115.1 million - 2Q 2026 net income of
$10.2 million - 2Q 2026 cash flow provided by operations of
$3.4 million - 2Q 2026 contribution margin
$27.1 million - 2Q 2026 Adjusted EBITDA of
$18.7 million - 2Q 2026 free cash flow of
$(1.4) million
"The second quarter was one of the best quarters in Smart Sand's history," said
"Our outstanding operational and financial performance in the first half of 2026 demonstrates the dedication of our employees and the value of the Northern White sand franchise we have built," Young continued. "We have seen strong demand across the key operating basins we serve, and we expect this demand to continue into the second half of 2026. Expected long-term growth in North American natural gas demand, driven by expanding LNG export capacity and increased gas-fired power generation to support electricity demand from AI data centers, continues to support consistent well completion activity, particularly in the
"Our Industrial Product Solution sales volumes grew sequentially, and we expect to see continued growth in this business segment. Our redesigned SmartSystems fleet also continued to perform well in the quarter," Young said.
"We expect activity levels to remain strong through the third quarter and potentially into the fourth quarter. Based on our strong first half results and current demand levels, we expect 2026 sales volumes to increase by 10% to 20% compared with 2025 sales volumes. We expect to generate positive free cash flow in 2026."
Second Quarter 2026 Highlights
In the second quarter of 2026, tons sold totaled approximately 1,864,000, compared to 1,492,000 tons in the first quarter of 2026 and 1,424,000 tons in the second quarter of 2025, reflecting a 25% sequential increase and a 31% year-over-year increase.
Revenues in the second quarter of 2026 were
Cost of goods sold increased to
Gross profit for the second quarter of 2026 was
Operating expenses for the second quarter of 2026 were
Total other income for the second quarter of 2026 was
Total interest expense for the second quarter of 2026 was
In the second quarter of 2026, the Company recorded a net income of
Contribution margin in the second quarter of 2026 was
Adjusted EBITDA was
Free cash flow in the second quarter of 2026 was
The
Liquidity
In the second quarter of 2026, the Company repurchased 470,088 shares of its common stock for
On
On
Including the dividend to be paid on
The Company's primary sources of liquidity consist of cash on hand, cash flow from operations, and available borrowings under the Company's FCB ABL Credit Facility. As of
Leadership Transition
In
Effective
Additional Information
Investors are invited to view the Company's financial statements and investor presentations at www.smartsand.com. The Company also welcomes calls or emails to the Company's Chief Financial Officer,
Forward-looking Statements
All statements in this news release other than statements of historical facts are forward-looking statements that contain the Company's current expectations about its future results, including the Company's expectations regarding future sales. The Company has attempted to identify any forward-looking statements by using words such as "expect," "will," "estimate," "believe" and other similar expressions. Although the Company believes that the expectations reflected and the assumptions or bases underlying its forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause actual results, events or financial positions to differ materially from those included within or implied by such forward-looking statements.
Factors that could cause actual results to differ materially from the results contemplated by such forward-looking statements include, but are not limited to, fluctuations in product demand, delays in the completion of certain expansion and improvement projects at the Company's existing facilities or failure to recognize the anticipated benefits of such projects, regulatory changes, adverse weather conditions, increased fuel prices, higher transportation costs, access to capital, increased competition, changes in economic or political conditions, and such other factors discussed or referenced in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended
The reader should not place undue reliance on the Company's forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
About Smart Sand
Smart Sand is a fully integrated frac and industrial sand supply and services company, offering complete mine to wellsite proppant and logistics solutions to its frac sand customers, and a broad offering of products for industrial sand customers. The Company produces low-cost, high quality Northern White sand, which is a premium sand used as a proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. The Company's sand is also a high-quality product used in a variety of industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscaping, retail, recreation and more. The Company also offers logistics solutions to its customers through its in-basin transloading terminals and its SmartSystems wellsite storage capabilities. Smart Sand owns and operates premium sand mines and related processing facilities in
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
Three Months Ended | |||||
(unaudited) | (unaudited) | (unaudited) | |||
(in thousands, except per share amounts) | |||||
Revenues: | |||||
Sand revenue | $ 113,849 | $ 92,488 | $ 84,590 | ||
SmartSystems revenue | 1,201 | 623 | 1,180 | ||
Total revenue | 115,050 | 93,111 | 85,770 | ||
Cost of goods sold: | |||||
Sand cost of goods sold | 93,861 | 85,842 | 75,673 | ||
SmartSystems cost of goods sold | 1,364 | 1,161 | 1,140 | ||
Total cost of goods sold | 95,225 | 87,003 | 76,813 | ||
Gross profit | 19,825 | 6,108 | 8,957 | ||
Operating expenses: | |||||
Selling, general and administrative | 9,382 | 10,709 | 9,110 | ||
Depreciation and amortization | 552 | 569 | 604 | ||
(Gain) loss on disposal of fixed asset, net | (160) | (297) | (680) | ||
Total operating expenses | 9,774 | 10,981 | 9,034 | ||
Operating income | 10,051 | (4,873) | (77) | ||
Other income (expenses): | |||||
Interest expense, net | (303) | (255) | (316) | ||
Other income | 472 | 96 | 66 | ||
Total other income (expenses), net | 169 | (159) | (250) | ||
Income (loss) before income tax expense (benefit) | 10,220 | (5,032) | (327) | ||
Income tax expense (benefit) | 52 | (1,172) | (21,723) | ||
Net income (loss) | $ 10,168 | $ (3,860) | $ 21,396 | ||
Net income (loss) per common share: | |||||
Basic | $ 0.26 | $ (0.10) | $ 0.55 | ||
Diluted | $ 0.25 | $ (0.10) | $ 0.54 | ||
Weighted-average number of common shares: | |||||
Basic | 39,260 | 39,173 | 39,207 | ||
Diluted | 41,372 | 39,173 | 39,378 | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(unaudited) | |||
(in thousands) | |||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 10,197 | $ 22,551 | |
Accounts receivable | 45,048 | 30,519 | |
Unbilled receivables | 727 | — | |
Inventory | 31,636 | 31,081 | |
Prepaid expenses and other current assets | 4,979 | 3,991 | |
Total current assets | 92,587 | 88,142 | |
Property, plant and equipment, net | 220,721 | 223,254 | |
Operating lease right-of-use assets | 29,118 | 23,471 | |
Intangible assets, net | 3,896 | 4,292 | |
Other assets | 740 | 855 | |
Total assets | $ 347,062 | $ 340,014 | |
Liabilities and Stockholders' Equity | |||
Current liabilities: | |||
Accounts payable | $ 16,434 | $ 9,427 | |
Accrued expenses and other liabilities | 20,826 | 17,544 | |
Deferred revenue | 1,583 | 9,838 | |
Current portion of long-term debt | 6,066 | 4,366 | |
Current portion of operating lease liabilities | 9,948 | 8,765 | |
Total current liabilities | 54,857 | 49,940 | |
Long-term debt | 8,596 | 8,657 | |
Long-term operating lease liabilities | 18,754 | 14,392 | |
Deferred tax liabilities, net | 3,162 | 4,188 | |
Asset retirement obligations | 23,049 | 22,472 | |
Other non-current liabilities | 547 | 668 | |
Total liabilities | 108,965 | 100,317 | |
Commitments and contingencies | |||
Stockholders' equity | |||
Common stock | 38 | 39 | |
(22,713) | (17,393) | ||
Additional paid-in capital | 190,742 | 189,031 | |
Retained earnings | 70,082 | 68,073 | |
Accumulated other comprehensive loss | (52) | (53) | |
Total stockholders' equity | 238,097 | 239,697 | |
Total liabilities and stockholders' equity | $ 347,062 | $ 340,014 | |
SMART SAND, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
Three Months Ended | |||||
(unaudited) | (unaudited) | (unaudited) | |||
(in thousands) | |||||
Operating activities: | |||||
Net income (loss) | $ 10,168 | $ (3,860) | $ 21,396 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation, depletion and accretion of asset retirement obligations | 7,712 | 7,528 | 7,305 | ||
Amortization of intangible assets | 199 | 199 | 198 | ||
Loss (gain) on disposal of fixed assets | (160) | (297) | (680) | ||
Amortization of deferred financing cost | 65 | 64 | 75 | ||
Provision for bad debt | 13 | — | — | ||
Deferred income taxes | (44) | (982) | (21,273) | ||
Stock-based compensation | 712 | 960 | 987 | ||
Employee stock purchase plan compensation | 9 | 10 | 6 | ||
Changes in assets and liabilities: | |||||
Accounts receivable | (16,665) | 2,123 | (19,210) | ||
Unbilled receivables | (606) | (121) | 2,902 | ||
Inventory | (1,400) | 629 | (351) | ||
Prepaid expenses and other assets | (345) | (721) | 923 | ||
Deferred revenue | 542 | (8,797) | (459) | ||
Accounts payable | 4,982 | 1,534 | 2,777 | ||
Accrued and other expenses | (1,769) | 4,774 | 267 | ||
Net cash provided by operating activities | 3,413 | 3,043 | (5,137) | ||
Investing activities: | |||||
Purchases of property, plant and equipment | (4,768) | (2,201) | (2,676) | ||
Proceeds from disposal of assets | 1 | — | 739 | ||
Net cash used in investing activities | (4,767) | (2,201) | (1,937) | ||
Financing activities: | |||||
Dividend payments to shareholders | (4,143) | — | (72) | ||
Repayments of notes payable | (1,085) | (1,188) | (807) | ||
Payments under finance leases | (63) | (61) | (54) | ||
Payment of deferred financing and debt issuance costs | — | — | (10) | ||
Proceeds from revolving credit facility | — | — | 14,000 | ||
Repayment of revolving credit facility | — | — | (5,000) | ||
Proceeds from equity issuance | — | 20 | — | ||
Repurchase of treasury stock from restricted stock vesting | (112) | (1,238) | (36) | ||
Repurchase of treasury stock from Repurchase Program | (2,500) | (1,472) | (1,762) | ||
Net cash (used in) provided by financing activities | (7,903) | (3,939) | 6,259 | ||
Net (decrease) increase in cash and cash equivalents | (9,257) | (3,097) | (815) | ||
Cash and cash equivalents at beginning of period | 19,454 | 22,551 | 5,108 | ||
Cash and cash equivalents at end of period | $ 10,197 | $ 19,454 | $ 4,293 | ||
Non-GAAP Financial Measures
Contribution Margin
The Company uses contribution margin, which is defined as total revenues less costs of goods sold excluding depreciation, depletion and accretion of asset retirement obligations, to measure its financial and operating performance. Contribution margin excludes other operating expenses and income, including costs not directly associated with the operations of the Company's business such as accounting, human resources, information technology, legal, sales and other administrative activities.
Management believes that reporting contribution margin and contribution margin per ton sold provides useful performance metrics to management and external users of the Company's financial statements, such as investors and commercial banks, because these metrics provide an operating and financial measure of the Company's ability, as a combined business, to generate margin in excess of its 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. Because contribution margin may be defined differently by other companies in the industry, the Company's 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 | |||||
(in thousands, except per ton amounts) | |||||
Revenue | $ 115,050 | $ 93,111 | $ 85,770 | ||
Cost of goods sold | 95,225 | 87,003 | 76,813 | ||
Gross profit | 19,825 | 6,108 | 8,957 | ||
Depreciation, depletion, and accretion of asset retirement | 7,282 | 7,081 | 6,827 | ||
Contribution margin | $ 27,107 | $ 13,189 | $ 15,784 | ||
Contribution margin per ton | $ 14.54 | $ 8.84 | $ 11.08 | ||
Total tons sold | 1,864 | 1,492 | 1,424 | ||
EBITDA and Adjusted EBITDA
EBITDA is defined as net income, plus: (i) depreciation, depletion and amortization expense; (ii) income tax expense (benefit) and other results of operations based taxes; and (iii) interest expense. Adjusted EBITDA is defined 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 (vii) non-cash items and unusual or non-recurring items. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of the Company's financial statements, such as investors and commercial banks, to assess:
- the financial performance of the Company's assets without regard to the impact of financing methods, capital structure or historical cost basis of such assets;
- the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities;
- the Company's ability to incur and service debt and fund capital expenditures;
- the Company's operating performance as compared to those of other companies in its industry without regard to the impact of financing methods or capital structure; and
- the Company's debt covenant compliance, as Adjusted EBITDA is a key component of critical covenants to the FCB ABL Credit Facility.
Management believes that the presentation of EBITDA and Adjusted EBITDA will provide useful information to investors in assessing the Company's 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 the Company's industry, the Company's 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 income (loss) to EBITDA and Adjusted EBITDA for each of the periods indicated.
Three Months Ended | |||||
(in thousands) | |||||
Net income (loss) | $ 10,168 | $ (3,860) | $ 21,396 | ||
Depreciation, depletion and amortization | 7,622 | 7,439 | 7,236 | ||
Income tax expense (benefit) and other taxes | 52 | (1,172) | (21,723) | ||
Interest expense | 378 | 394 | 344 | ||
EBITDA | $ 18,220 | $ 2,801 | $ 7,253 | ||
Net (gain) loss on disposal of fixed assets | (160) | (297) | (680) | ||
Equity compensation | 722 | 913 | 909 | ||
Acquisition and development costs | — | 71 | — | ||
Accretion of asset retirement obligations | 289 | 288 | 269 | ||
Equipment cost recovery | (419) | — | — | ||
Adjusted EBITDA | $ 18,652 | $ 3,776 | $ 7,751 | ||
Free Cash Flow
Free cash flow, which is defined as net cash provided by operating activities less purchases of property, plant and equipment, is used as a supplemental financial measure by the Company's management and by external users of the Company's financial statements, such as investors and commercial banks, to measure the liquidity of its business.
Net cash provided by operating activities is the GAAP measure most directly comparable to free cash flow. Free cash flow 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 the Company's industry, the Company's definition of free cash flow 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 operating activities to free cash flow.
Three Months Ended | |||||
(in thousands) | |||||
Net cash provided by (used in) operating activities | $ 3,413 | $ 3,043 | $ (5,137) | ||
Purchases of property, plant and equipment | (4,768) | (2,201) | (2,676) | ||
Free cash flow | $ (1,355) | $ 842 | $ (7,813) | ||
Investor Contacts:
Chief Financial Officer
(281) 231-2660
lbeckelman@smartsand.com
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