SMART SAND, INC. ANNOUNCES UPDATES ON MANAGING MARKET VOLATILITY
April 07 2020 - 6:00AM
Smart Sand, Inc. (NASDAQ: SND) (the “Company”) provided an update
on the current market environment.
The recent decline in oil prices resulting from a combination of
oversupply from Russia and Saudi Arabia and reduced demand related
to the COVID-19 pandemic has led many exploration and production
companies and oilfield service companies to announce plans to slow
or stop well completions activity. In response, Smart Sand
has reduced its total capital expenditure budget by up to $20
million, including a significant reduction in its SmartSystems™
manufacturing plans. The Company now estimates that full year
2020 capital expenditures will be approximately $5 million to $10
million. The Company also put in place several SG&A
cost-cutting measures, including salary reductions of its executive
management team between 15% and 20% and suspension of its variable
cash compensation programs for all employees, which the Company
expects will result in a savings of approximately 25% over 2019
levels.
Prior to these unexpected events, the Company’s first quarter
sales volumes were strong at approximately 757,000 tons, an
increase of more than 60% over fourth quarter 2019 sales volumes of
462,000 tons.
Chuck Young, Founder and CEO stated, “In these uncertain times,
we felt action was needed to minimize our costs to be able to
effectively manage through what is expected to be an extended
turbulent market environment. These cuts in capex and compensation,
while difficult decisions, will help us manage our cash flow needs.
Remember, this is why we took a measured approach to spending in
the ups... so we can manage through the downs. Our principle
operating philosophies haven’t changed. Now more than ever we will
strive to live within our cash flow so we can continue to operate
in this difficult market environment while maintaining a strong
balance sheet. At our core, we remain committed to offering the
highest quality products and the highest quality service while
maintaining low leverage. With this strategy, we believe, as we
always have, that we will ultimately prevail in any market.”
About Smart Sand:
Smart Sand is a fully integrated frac sand
supply and services company, offering complete mine to wellsite
proppant supply and logistics solutions to its customers. The
Company produces low-cost, high quality Northern White frac sand
and offers proppant logistics and wellsite storage solutions to
customers through its in-basin transloading terminal and
SmartSystems wellsite proppant storage capabilities. The Company
provides products and services primarily to oil and natural gas
exploration and production companies and oilfield service
companies. For more information, please visit
www.smartsand.com.
Contact:
Josh JaynePhone: (281) 231-2660Email: jjayne@smartsand.com
Lee BeckelmanPhone: (281) 231-2660E-mail:
lbeckelman@smartsand.com
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