Smart Sand, Inc. Q4 FY2022 earnings call

• Share buyback: Purchased 5.18 million shares from Clearlake Capital for approximately $8.85 million, representing ~11.3% of outstanding shares.
• Financial results: Fourth quarter 2022 sold just under 1.2 million tons, full year 2022 delivered 4.3 million tons (annual record). Fourth quarter 2022 adjusted EBITDA was $10.7 million, full year 2022 adjusted EBITDA was $29.3 million.
• Contract extension: Signed an extension of the contract with a Marcellus customer, extending the term and increasing volumes.
• Blair mine: Moving forward with a $5 million investment to bring the Blair mine and processing facility online, expect to start selling into the Canadian market in Q2 2023.
• Operating strengths: High-quality reserve base of majority finer mesh sands, efficient mining and processing facilities, direct access to Class 1 rail lines, high-volume in-basin terminals, efficient wellsite sand storage/delivery fleets, and growth in Industrial Product Solutions with 30% sales volume increase in Q4 2022.

In the fourth quarter of 2022, Smart Sand sold approximately 1.175 million tons, a 6% increase from the third quarter's 1.1 million tons. For the full year 2022, total tons sold were 4.33 million, a 36% increase year-over-year. Fourth quarter 2022 revenues were $73.8 million, compared to $71.6 million in the third quarter, and full year 2022 revenues were $255.7 million, up from $126.6 million in 2021. The fourth quarter 2022 contribution margin was $17.4 million and adjusted EBITDA was $10.7 million. For the full year 2022, contribution margin was $54.6 million and adjusted EBITDA was $29.3 million. The Industrial Product Solutions division saw a 30% increase in sales volume in the fourth quarter, demonstrating growth in this segment.

• Q1 2023 sales volumes expected to be in the $1 million to $1.2 million range.
• 2023 capital expenditures expected to be in the $20 million to $25 million range, including approximately $5 million related to the startup of the Blair facility.