CONFIDENTIAL November 2016 Smart Sand, Inc. Jefferies 2016 Energy Conference
Management Presenters Chuck Young, Founder & CEO Over 20 years of executive and entrepreneurial experience in the high-technology, telecommunications, and renewable energy industries He previously served as the President and Founder…
Smart Sand Key Highlights Long-lived, strategically located, high-quality reserve base Intrinsic logistics advantage Significant organic growth potential Focus on safety and environmental stewardship Experienced…
Smart Sand Company Overview Company Overview Reserve Locations Smart Sand is a pure-play, low-cost producer of high-quality Oakdale, WI 1,196 acres Northern White raw frac sand (Monroe County, WI) The Company owns and operates a…
Oakdale Facility: High Quality Northern White Raw Frac Sand 1,196 contiguous acres with 244 million tons of proven reserves and 92 million tons of probable reserves(1) As of July 31, 2016, we have utilized 135 acres for facilities and…
Cost-Effective, Differentiated Process Onsite Mining / Excavation Conveyer Belt to Onsite Wet Plant Wet Plant Cleans and Sorts Dry Plant Dries and Sorts Product Unit Trains Deliver Dry Sand to Basin Low cost operating…
Expansive Logistics Capabilities Key Logistical Advantages Highly Competitive Delivery Capabilities On-site rail eliminates trucking to a rail load-out facility and associated costs Class I access current location on Canadian Pacific…
Significant Organic Growth Potential UP Rail Siding (Byron, WI) Commenced operations in June 2016 Dual-serve rail origination capability at Oakdale Ability to expand into a unit train capable facility Expected to result in…
Hixton Facility Opportunity Hixton Site Highlights Hixton Reserve Mix In addition to our Oakdale facility, we own a second site comprising 959 acres in Jackson County, Wisconsin 100 Mesh situated adjacent to a Class I rail line, the…
Committed to Highest Corporate Standards Management maintains close dialogue with its customers regarding the oil and gas industrys rigorous regulatory environment Legal & ISO registered Quality System and Environmental Management…
Our Strategy Focusing on increasing capacity utilization and processing capacity Continue to position ourselves as a pure play producer of high-quality Northern White raw frac sand Continue to evaluate economically attractive facility…
INDUSTRY OVERVIEW
Industry Trends Driving Growth in Sand Demand Average Active U.S. Rig Count U.S. Horizontal vs. Vertical Well Mix 2,000 100% 30,000 1,862 80% 36% 37% 37% 38% 38% 25,000 1,500 1,762 48% 42% 55% 1,089 20,000 983 1,047 60% 1,000 830…
Industry Trends Driving Growth in Sand Demand (contd) Improved drilling rig productivity x Completion of drilled but uncompleted wells x Increase in percentage of rigs drilling horizontal wells x Increase in length of horizontal…
Proppant Industry Outlook Total Market Proppant Demand (millions of tons) 25,000 23,674 85 90 78 80 20,236 20,000 70 73 Millions of tons of Proppant 59 16,860 New US Horizontal Wells 16,029 16,286 60 15,000 55 45…
Raw Sand Established as Proppant of Choice Comparison of Key Proppant Characteristics Brown Raw Frac Sand Northern White Raw Frac Sand Resin-coated Ceramics Product and Natural resource Natural resource Raw frac sand substrate with…
Growing Demand for Fine Sand Mesh Sizes Market Outlook for Fine Sand Proppant size is characterized by mesh size which is According to Kelrik LLC, a notable driver impacting determined by sieving the proppant through mesh demand for…
FINANCIAL INFORMATION
IPO Summary and Pro Forma Capitalization Sources ( in millio ns) As of 6/30/16 Adjustments Pro forma ( in millio ns) Cash 1.9 24.1 26.0 Net proceeds from IPO 119.2 Revolving credit facility 57.2 (57.2) Total 119.2 Series A Preferred…
Summary Financials Per Ton Revenue Adjusted EBITDA ( per ton) ( per ton) 31.82 63.52 26.53 58.70 19.88 54.34 2014A 2015A 1H 2016 2014A 2015A 1H 2016 Production costs ( per ton) 17.56 16.48 13.47 2014A 2015A 1H…
Summary Financials Year ended December 31, Six months ended June 30, ( in thousands, except per share data) 2015 2014 2016 2015 Statement of operations data: (unaudited) (unaudited) Revenues 47,698 68,170 18,853 23,525 Gross profit…
Financial Highlights Significant balance sheet flexibility and liquidity post IPO Debt free Approximately 22 million in cash available to support growth initiatives Minimal unused railcar exposure 710 of 855 leased railcars…
Summary of Smart Sands Strategic Assets Oakdale (Existing Operation) Hixton (Potential Future Development) Location Monroe County, WI Jackson County, WI Mine Processing Facility Rail Loading Facility Proven Reserves(1)…
Smart Sand Key Highlights Long-lived, strategically located, high-quality reserve base Intrinsic logistics advantage Significant organic growth potential Focus on safety and environmental stewardship Experienced…
APPENDIX
Income Statement For the Year ended Year ended 6 months ended Dec 31, 2014 Dec 31, 2015 June 30, 2016 ( in millions) (Audited) (Audited) (Unaudited) (1) Revenues 68.2 47.7 18.9 Cost of sales 29.9 21.0 11.9 Gross profit 38.2 26.7 7.0…
Balance Sheet As of December 31, 2014 December 31, 2015 June 30, 2016 ( in millions) (Audited) (Audited) (Unaudited) Current assets Cash and cash equivalents 0.8 3.9 1.9 Accounts receivable 8.6 6.0 2.6 Inventory ST 8.6 4.2 4.3 Prepaid…
Statement of Cash Flows For the Year ended Year ended 6 months ended December 31, 2014 December 31, 2015 June 30, 2016 ( in millions) (Audited) (Audited) (Unaudited) Operating activities Net income (loss) 7.6 5.0 (2.0) Adjustments…
EBITDA Reconciliation Year ended December 31, Six months ended June 30, ( in thousands) 2014 2015 2015 2016 LTM June 30, 2016 Net income (loss) 7,556 4,990 929 (1,967) 2,094 Depreciation, depletion, accretion and amortization 3,642…
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