Q1 2024 Smart Sand Inc Earnings Call Transcript
Key Points
- Record sales volumes of 1.3 million tons in Q1 2024, a 31% increase from the previous quarter, demonstrating strong market demand.
- Contribution margin and adjusted EBITDA saw significant improvements, with contribution margin reaching $18.5 million and adjusted EBITDA at $9.3 million.
- Expansion into new markets with investments in two new terminals in Northeast Ohio, enhancing market presence in the Utica shale basin.
- Strategic focus on organizational improvements aimed at increasing efficiency and sustainability in mining, processing, and logistics operations.
- Continued focus on Northern White sand, leveraging its superior qualities for both energy and industrial applications, ensuring long-term value creation.
- Negative free cash flow of $5.5 million in Q1 2024, primarily due to increased working capital investments required to support sales ramp-up.
- Current lower natural gas prices may impact sales volumes in the short term, particularly in the Marcellus market.
- Despite high sales volumes, the company still faces challenges in consistently generating positive free cash flow.
- The need for further adjustments in capital expenditures, indicating potential financial strain or reevaluation of investment strategies.
- Dependence on the oil and gas sectors, which are susceptible to volatile market conditions and price fluctuations.
Good morning, ladies and gentlemen, and welcome to the Smart Sand Q1 2024 earnings call. (Operator Instructions) This call is being recorded on Tuesday, May, 14, 2024.
I would now like to turn the conference over to Christopher Green, Vice President of Accounting. Please go ahead.
Good morning, and thank you for joining us for Smart Sand's first quarter 2024 earnings call. On the call today, we have Charles Young, Founder and Chief Executive Officer,Lee Beckelman , Chief Financial Officer, and John Young , Chief Operating Officer.
Before we begin, I would like to remind all participants that our comments made today will include forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results or events to materially differ from those anticipated.
For a complete discussion of such risks and uncertainties, please refer to the company's press release and our documents on file with the SEC. Smart
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