CONFIDENTIAL March 16, 2017 Smart Sand, Inc. March 2017 Investor Presentation
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…
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)…
Oakdale Facility: High Quality Northern White Raw Frac Sand 1,196 contiguous acres with 332 million tons of proven reserves(1) As of December 31, 2016, we have utilized 135 acres for facilities and mining operations, only 11.3% of…
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% 30000 1,862 80% 37% 37% 38% 40% 41% 25000 1,500 1,762 49% 44% 1,180 55% 20000 983 1,079 60% 870 1,000 708…
Market Growth Potential Jefferies U.S. Land Framework 2016 Average 2017 Average 2018 Average 2014 Peak Rig Count 484 (-48% y/ y) t 825 (+70% y/ y) t 1,120 (+36% y/ y) t 1,789 Ave Rigs % HZ Rigs 83% (+344 bps y/ y) 82% (-35 bps y/…
Proppant Industry Outlook Total Market Proppant Demand 25,000 23,674 140 125 20,236 120 113 20,000 Millions of tons of Proppant 16,860 100 New US Horizontal Wells 16,029 85 15,755 15,000 80 12,656 65 74 10,520…
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
Summary Financials Sales Volumes Quarterly Sales Volumes (thousands of tons) (thousands of tons) 3,300 274 230 2,475 193 1,558 129 1,255 751 826 2014A(1) 2015A(2) 2016A Q1'16 A Q2'16 A Q3'16 A Q4'16 A Sales Volumes Effective…
Summary Financials Per Ton Revenue Production costs ( per ton) ( per ton) 71.71 16.48 15.40 63.52 13.47 54.34 2014A 2015A 2016A 2014A 2015A 2016A Adjusted EBITDA ( per ton) 45.81 31.82 26.53 2014A 2015A 2016A…
Financial Highlights Significant balance sheet flexibility and liquidity post IPO and following offering Debt free Approximately 70 million in cash available to support growth initiatives Minimal unused railcar exposure 1,010 of…
APPENDIX
Income Statement For the Year ended Year ended Year ended Dec 31, 2014 Dec 31, 2015 Dec 31, 2016 ( in millions) (Audited) (Audited) (Audited) Revenues (1) 68.2 47.7 59.2 Cost of sales 29.9 21.0 26.6 Gross profit 38.2 26.7 32.7…
Balance Sheet As of Decem ber 31, 2014 Decem ber 31, 2015 Decem ber 31, 2016 ( in millions) (Audited) (Audited) (Audited) Current assets Cash and cash equivalents 0.8 3.9 46.6 Accounts receivable 8.6 6.0 5.7 Inventory ST 8.6 4.2 10.3…
Statement of Cash Flows For the Year ended Year ended Year ended Decem ber 31, 2014 Decem ber 31, 2015 Decem ber 31, 2016 ( in millions) (Audited) (Audited) (Audited) Operating activities Net income (loss) 7.6 5.0 10.4 Adjustments to…
EBITDA Reconciliation Year ended Decem ber 31, ( in thousands) 2014 2015 2016 Net income (loss) 7,556 4,990 10,379 Depreciation, depletion, accretion and amortization 3,642 5,318 6,445 Income tax expense (benefit) 9,518 4,129 9,394…
Production Cost Reconciliation Three m onths ended Year ended Decem ber 31, Decem ber 31, ( in thousands) 2014 2015 2016 2016 Cost of goods sold 29,934 21,003 26,569 8,770 Depreciation, depletion, and accretion of asset retirment…
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