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☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Delaware			45-2809926
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)
1725 Hughes Landing Blvd, Suite 800
The Woodlands, Texas 77380			(281) 231-2660
(Address of principal executive offices)			(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class			Name of each exchange on which registered
Common Stock, par value $0.001 per share			The NASDAQ Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None

Large accelerated filer  ☐

Accelerated Filer  ☐

Non-accelerated Filer  ý

Smaller reporting company ☒

Emerging growth company ☒

									PAGE
PART I
ITEM 1			Business						8
ITEM 1A			Risk Factors						21
ITEM 1B			Unresolved Staff Comments						39
ITEM 2			Properties						39
ITEM 3			Legal Proceedings						41
ITEM 4			Mine Safety Disclosures						41
PART II
ITEM 5			Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities						42
ITEM 6			Selected Financial Data						44
ITEM 7			Management’s Discussion and Analysis of Financial Condition and Results of Operations						45
ITEM 7A			Quantitative and Qualitative Disclosures About Market Risk						66
ITEM 8			Financial Statements and Supplementary Data						67
ITEM 9			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure						100
ITEM 9A			Controls and Procedures						100
ITEM 9B			Other Information						100
PART III
ITEM 10			Directors, Executive Officers and Corporate Governance						101
ITEM 11			Executive Compensation						101
ITEM 12			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters						101
ITEM 13			Certain Relationships and Related Transactions, and Director Independence						101
ITEM 14			Principal Accounting Fees and Services						101
PART IV
ITEM 15			Exhibits, Financial Statement Schedules						102
ITEM 16			Form 10-K Summary						104
SIGNATURES

“We”, “Us”, “Company”, “Smart Sand” or “Our”						Smart Sand, Inc., a company organized under the laws of Delaware, and its subsidiaries.
“shares”, “stock”						The common stock of Smart Sand, Inc., nominal value $0.001 per share.
“ABL Credit Facility”, “ABL Credit Agreement”, “ABL Security Agreement”						The five-year senior secured asset-based lending credit facility (the “ABL Credit Facility”) pursuant to: (i) an ABL Credit Agreement, dated December 13, 2019, between the Company, and Jefferies Finance LLC (the “ABL Credit Agreement”); and (ii) a Guarantee and Collateral Agreement, dated December 13, 2019, between the Company and Jefferies Finance LLC, as agent (the “Security Agreement”).
“Oakdale Equipment Financing”, “MLA”						The five-year Master Lease Agreement, dated December 13, 2019, between Nexseer Capital (“Nexseer”) and related lease schedules in connection therewith (collectively, the “MLA”). The MLA is structured as a sale-leaseback of substantially all of the equipment at the Company’s mining and processing facility located near Oakdale, Wisconsin. The Oakdale Equipment Financing is considered a lease under article 2A of the Uniform Commercial Code but is considered a financing arrangement (and not a lease) for accounting or financial reporting purposes.
“Former Credit Agreement”, “Former Credit Facility”						The $45 million 3-year senior secured revolving credit facility (the “Former Credit Facility”) under a revolving credit agreement, dated December 8, 2016, with Jefferies Finance LLC, as administrative and collateral agent (as amended, the “Former Credit Agreement”). The Former Credit Facility was paid in full and terminated with proceeds from the Oakdale Equipment Financing.
“Loan Agreement”, “Acquisition Liquidity Support Facility”						In connection with the Company’s acquisition of Eagle Oil and Gas Proppants Holdings LLC from Eagle Materials Inc., which acquisition was completed on September 18, 2020, the Company, as borrower, entered into a Loan and Security Agreement, dated September 18, 2020 (the “Loan Agreement”), with Eagle Materials Inc., as lender, secured by certain property rights and assets of the acquired business, whereby the Company may draw loans in an aggregate amount up to $5.0 million during the twelve month period ending September 19, 2021 (the “Acquisition Liquidity Support Facility”).
“Exchange Act”						The Securities Exchange Act of 1934, as amended.
“Securities Act”						The Securities Act of 1933, as amended.
“FCA”, “DAT”, “DAP”						Free Carrier, Delivered at Terminal, Delivered at Place, respectively, Incoterms 2010.
“FASB”, “ASU”, “ASC”, “GAAP”						Financial Accounting Standards Board, Accounting Standards Update, Accounting Standards Codification, Accounting Principles Generally Accepted in the United States, respectively.

•fluctuations in demand for frac sand;

•the cyclical nature of our customers’ businesses;

•operating risks that are beyond our control, such as changes in the price and availability of transportation, natural gas or electricity; unusual or unexpected geological formations or pressures; pit wall failures or rock falls: or unanticipated ground, grade or water conditions;

•our dependence on our Oakdale mine and processing facility for a significant portion of our current sales;

•the level of activity in the oil and natural gas industries;

•the development of either effective alternative proppants or new processes to replace hydraulic fracturing;

•increased competition from new or existing sources of frac sand supply, including frac sand mines in locations such as the Permian Basin of West Texas, and elsewhere;

•federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing and the potential for related regulatory action or litigation affecting our customers’ operations, including restrictions on oil and gas development and possible bans on hydraulic fracturing;

•potential negative outcomes under our current or future litigation;

•actions by the Organization of the Petroleum Exporting Countries, or OPEC;

•our rights and ability to mine our properties and our renewal or receipt of the required permits and approvals from governmental authorities and other third parties;

•our ability to successfully compete in the frac sand market;

•loss of, or reduction in, business from our largest customers;

•increasing costs or a lack of dependability or availability of transportation services and transload network access or infrastructure;

•increases in the prices of, or interruptions in the supply of, natural gas, electricity, or any other energy sources;

•increases in the price of diesel fuel;

•loss of or diminished access to water;

•our ability to successfully complete acquisitions or integrate acquired businesses;

•our ability to fully protect our intellectual property rights;

•our ability to make capital expenditures to maintain, develop and increase our asset base and our ability to obtain needed capital or financing on satisfactory terms;

•restrictions imposed by our indebtedness on our current and future operations;

•border restrictions;

•global pandemics, including the ongoing COVID-19 coronavirus pandemic;

•contractual obligations that require us to deliver minimum amounts of frac sand or purchase minimum amounts of products or services;

•the accuracy of our estimates of mineral reserves and resource deposits;

•a shortage of skilled labor and rising costs in the frac sand mining and manufacturing industries;

•our ability to attract and retain key personnel;

•our ability to maintain satisfactory labor relations;

•our ability to maintain effective quality control systems at our mining, processing and production facilities;

•seasonal and severe weather conditions;

•the results of political and civil unrest;

•fluctuations in our sales and results of operations due to seasonality and other factors;

•interruptions or failures in our information technology systems, including cyber-attacks;

•the impact of a international or domestic terrorism or armed conflict;

•extensive and evolving environmental, mining, health and safety, licensing, reclamation and other regulation (and changes in their enforcement or interpretation);

•silica-related health issues and corresponding litigation;

•our ability to acquire, maintain or renew financial assurances related to the reclamation and restoration of mining property; and

•other factors disclosed in Item I A. “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

•our business and financial performance depend on the level of activity in the oil and natural gas industry;

•a substantial portion of our revenues have been generated under contracts with a limited number of customers;

•we are exposed to the credit risk of our customers;

•our proppant sales are subject to fluctuations in market pricing;

•we face significant competition that may cause us to lose market share;

•we may be required to make substantial capital expenditures to maintain and grow our asset base and we may not realize enough of a return on such capital expenditures to cover their costs;

•the inability to obtain needed capital or financing on satisfactory terms, or at all;

•inaccuracies in estimates of volumes and qualities of our sand reserves could result in lower than expected sales and higher than expected cost of production;

•if we are unable to make acquisitions on economically acceptable terms, our future growth would be limited;

•restrictions in our ABL Credit Facility may limit our ability to capitalize on potential acquisitions and other business opportunities;

•we face distribution and logistical challenges in our business;

•we may be adversely affected by decreased demand for frac sand due to the development of effective alternative proppants or new processes to replace hydraulic fracturing;

•an increase in the supply of frac sand having similar characteristics as the frac sand we produce could make it more difficult for us to renew or replace our existing contracts on favorable terms, or at all;

•a substantial portion of our accounts and unbilled receivables consists of shortfall payments due from one customer under a long-term take-or-pay contract, which is currently subject to litigation;

•our long-term take-or-pay contracts may preclude us from taking advantage of increasing prices for frac sand or mitigating the effect of increased operational costs during the term of those contracts;

•our operations are subject to operational hazards and unforeseen interruptions for which we may not be adequately insured;

•increases in the price or a significant interruption in the supply of natural gas, electricity or any other energy sources of which our production process consumes large amounts;

•increases in the price of diesel fuel;

•a facility closure entails substantial costs, and if we close our facility sooner than anticipated, our results of operations may be adversely affected;

•our operations are dependent on our rights and ability to mine our properties and on our having renewed or received the required permits and approvals from governmental authorities and other third parties;

•a shortage of skilled labor together with rising labor costs in the excavation industry, which may further increase operating costs;

•our business may suffer if we lose, or are unable to attract and retain, key personnel;

•failure to maintain effective quality control systems at our mining, processing and production facilities;

•seasonal and severe weather conditions;

•our cash flow fluctuates on a seasonal basis;

•we do not own the land on which our Van Hook, North Dakota terminal facility is located;

•a terrorist attack or armed conflict;

•diminished access to water;

•we may be subject to interruptions or failures in our information technology systems, including cyber-attacks;

•if we are unable to fully protect our intellectual property rights, we may suffer a loss in our competitive advantage;

•we may be adversely affected by disputes regarding intellectual property rights of third parties;

•we currently rely on a limited number of suppliers for certain equipment and materials to build our SmartSystems, and our reliance on a limited number of suppliers for such equipment and materials exposes us to risks including price and timing of delivery;

•unsatisfactory safety performance may negatively affect our customer relationships and cause us to fail to retain existing customers or attract new customers;

•we may be subject to legal claims, such as personal injury and property damage;

•a financial downturn could negatively us;

•our acquisition of Eagle Oil and Gas Proppants Holdings LLC (“Eagle Proppants Holdings”) may not achieve its intended results, and we may be unable to successfully integrate the operations of Eagle Proppants Holdings;

•our future results will suffer if we do not effectively manage our expanded operations;

•federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing, such as oil and gas leasing moratoriums, and the potential for related litigation could result in increased costs, additional operating restrictions or delays for our customers, which could cause a decline in the demand for our frac sand;

•we and our customers are subject to extensive regulations, including environmental and occupational health and safety regulations, that impose, and will continue to impose, significant costs and liabilities, and future regulations, or more stringent enforcement of existing regulations, could increase those costs and liabilities;

•we are subject to the Federal Mine Safety and Health Act of 1977, which imposes stringent health and safety standards on numerous aspects of our operations;

•our inability to acquire, maintain or renew financial assurances related to the reclamation and restoration of mining property; and

•climate change legislation and regulatory initiatives could result in increased compliance costs for us and our customers.

We are a fully integrated frac sand supply and services company, offering complete mine to wellsite proppant supply and logistics solutions to our customers. We produce low-cost, high quality Northern White frac sand, which is a premium proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. We also offer proppant logistics solutions to our customers through our in-basin transloading terminal and our SmartSystemsTM wellsite proppant storage capabilities. We market our products and services primarily to oil and natural gas exploration and production companies and oilfield service companies, sell our sand under a combination of long-term take-or-pay contracts and spot sales in the open market, and provide wellsite proppant storage solutions services and equipment under flexible contract terms custom tailored to meet customers’ needs. We believe that, among other things, the size and favorable geologic characteristics of our sand reserves, the strategic location and logistical advantages of our facilities, our proprietary SmartDepotTM portable wellsite proppant storage silos, SmartPathTM transloader and the industry experience of our senior management team make us as a highly attractive provider of frac sand and proppant logistics services from the mine to the wellsite. 

Our principal business objective is to be the premier provider of sustainable frac sand supply and logistics solutions to our customers. We do this through supporting our existing customers, expanding our market share, being a low-cost producer of high-quality Northern White Sand, maintaining low debt leverage and managing efficient and sustainable supply chain logistics from the mine to the wellsite. We believe that by executing these business strategies, we will be able to increase long-term stockholder value. We expect to achieve this objective through the following business strategies:

•Expanding and optimizing our existing logistics infrastructure and developing additional origination and destination points. We expect to continue to capitalize on our Oakdale facility’s ability to ship on two Class I rail carriers to maximize our product shipment rates, increase our railcar utilization and lower our transportation costs. We have the ability to simultaneously accommodate multiple unit trains on-site with the Canadian Pacific rail network while also having the ability to ship our frac sand directly to our customers on a second Class I rail carrier through our transloading facility located on the Union Pacific rail network approximately three miles from our Oakdale facility. This access to two Class I rail carriers from Oakdale provides increased delivery options for our customers, greater competition between our rail carriers and potentially lower freight costs.

In September 2020, we significantly expanded our existing logistics infrastructure through the acquisition of Eagle Proppants Holdings, which added new origination and destination points to our existing capabilities. Our newly acquired Peru transload terminal located in close proximity to our newly acquired Utica mine and frac sand processing facility offers additional capability to ship products on a third Class I rail carrier, the BNSF.

In 2018, we added a multi-unit train capable terminal in Van Hook, North Dakota, which we further expanded in 2019. We believe this allows us to be one of the most efficient and low-cost sources of frac sand in the Bakken Formation in the Williston Basin.

Additionally, our SmartSystem wellsite storage and proppant management systems allows us to offer expanded logistics services to our customers.

The benefits of our long-term growth strategy for in-basin delivery of sand include expanding our customer base by marketing through our own terminals, more opportunity for spot sales by forward deploying sand and the opportunity to capture incremental margin on the sale of sand farther down the supply chain by managing the cost of rail, terminal and wellsite storage operations. Additionally, having a presence in-basin gives us an opportunity to have a base of operations from which to market our SmartSystems wellsite proppant storage solutions. Through the expansion of our SmartSystems fleet and addition of new origination and destination options, we continue evaluating ways to reduce the landed cost of our products in-basin and to the wellsite for our customers while increasing our customized service offerings to provide our customers with additional delivery and pricing alternatives, including selling product on an “as-delivered” basis to the wellsite.

•Focusing on organic growth by increasing the utilization of our mine and frac sand processing facilities. We intend to continue pursuing opportunities to maximize the value and the utilization of our Oakdale and Utica facilities through the addition of new customers and increased sales volumes. Despite the emergence of regional sand in oil and natural gas producing basins, we believe the proppant market continues to offer attractive long-term growth fundamentals for Northern White frac sand due to its superior well results outweighing the incremental cost savings of regional sand. We believe that coupling our premium proppant with long-term sustainable logistics supply services may mitigate the potential cost savings of using regional sand.

•Focusing on being a low-cost provider and continuing to make process improvements. We continue to focus on being a low-cost provider, which we believe will allow us to compete effectively for sales of frac sand and to achieve attractive operating margins. Our low-cost structure results from a number of key attributes, including,

among others, our (i) relatively low royalty rates, (ii) majority of fine mineral reserve deposits, (iii) our facilities proximity to three Class I rail lines creates competition between railroads and other sand logistics infrastructure advantages, and (iv) our low levels of debt. We have strategically designed our operations to provide for low-cost production, including having dryers and wet plants enclosed in our Oakdale and Utica processing facilities that allow for year-round operation at both facilities. This allows us to more efficiently match our wet sand production with our drying capacity and to better utilize our workforce with a goal to reduce the overall cost of production. We continue to invest in capital projects and consider strategic acquisitions that increase efficiencies and offer the opportunity for a high return on investment. In addition, we seek to maximize our mining yields on an ongoing basis by targeting sales volumes that more closely match our reserve gradation in order to minimize waste in our processing. We also continue to evaluate other mining techniques to reduce the overall cost of our mining operations.

•Creating flexible sales activities. We believe that demand for our products will remain strong in basins where regional sand is not widely available, such as the Bakken in North Dakota, the Marcellus and Utica formations in the Northeast region of the United States and the Colorado and Wyoming basins. We continue to have discussions with operators in these regions regarding new relationship and growth opportunities. We also believe that the long-term benefits of high quality Northern White sand outweighs the short-term cost savings provided by regional sand in the Permian, Eagle Ford and SCOOP/STACK basins. We believe there are additional opportunities for customers in the Permian and other basins, which have regional supply, who are focused on the long-term performance of their production and on the long-term efficiency of their logistics.

While we continue to look for long-term contract opportunities, we intend to increase focus on shorter term contracts and increase sales in the spot market given the reluctance of our customers to enter into long-term take-or-pay contracts in the current market environment.

We believe that we will be able to successfully execute our business strategies because of the following competitive strengths:

•Long-lived, strategically located, high-quality reserve base. We believe our Oakdale facility is one of the few frac sand mine and production facilities that has the unique combination of a large high-quality reserve base of primarily fine mesh sand that is contiguous to its production and primary rail loading facilities. We have a minimum implied proven reserve life of approximately 57 years based on our current annual processing capacity of 5.5 million tons at our Oakdale facility.

We believe our reserve base positions us well to take advantage of current market trends of increasing demand for finer mesh frac sand. We also believe that having our mine, processing facilities and primary rail loading facilities in close proximity provides us with an overall low-cost structure, which enables us to compete effectively for sales of Northern White frac sand and to achieve attractive operating margins.

•Intrinsic logistics advantage. We believe that we are one of the few frac sand producers with a facility custom-designed for the specific purpose of delivering frac sand to all of the major U.S. oil and natural gas producing basins by an on-site rail facility that can simultaneously accommodate multiple unit trains. Our on-site transportation assets at Oakdale include approximately nine miles of rail track in a triple-loop configuration and four railcar loading facilities that are connected to a Class I rail line owned by Canadian Pacific. We believe our customized on-site logistical configuration yields lower operating and transportation costs compared to manifest train or single-unit train facilities as a result of our higher railcar utilization, more efficient use of locomotive power and more predictable movement of product between mine and destination. In addition, we have a transload facility on a Class I rail line owned by Union Pacific in Byron Township, Wisconsin, approximately three miles from the Oakdale facility. This transload facility, which is also capable of handling multiple unit trains simultaneously, allows us to ship sand directly from Oakdale to our customers on more than one Class I rail carrier. We believe that we are the only sand facility in Oakdale, Wisconsin that has dual-served rail capabilities, which should create competition between our rail carriers and allow us to provide more competitive logistics options for our customers.

Our recently acquired frac sand mine and processing facility and transloading terminal in Illinois adds significant quality reserves and logistics assets that further increase our logistics advantage by providing access to another Class I rail line through our owned, multiple unit train capable Peru transload facility with direct access to the BNSF rail line. Additionally, the CSX, NS rail and barge access on the Illinois River to access the Mississippi River are available within short trucking distances. These additional logistics options give us greater access to operating basins in the Western United States allowing us to offer more competitive pricing to existing and new customers in these markets.

•Expanded logistics solutions. Our transloading terminal in Van Hook, North Dakota, became operational in April 2018 and was expanded in 2019. This terminal is capable of handling multiple unit trains simultaneously, and we have been providing in-basin sand at this terminal to our customers since operations began. This terminal has allowed us to expand our customer base and offer more efficient delivery options to customers operating in the Bakken Formation in the Williston Basin.

Our SmartSystems wellsite proppant storage and management products provide our customers with the capability to unload, store and deliver proppant at the wellsite, as well as the ability to rapidly set up, takedown and transport the entire system. This capability creates efficiencies, flexibility, enhanced safety and reliability for customers. Through our SmartSystems wellsite proppant storage solutions we offer the SmartDepot and SmartDepotXL silo systems, SmartPath transloader, and our rapid deployment trailers. We have also developed a proprietary software program, the SmartSystem Tracker, which allows our SmartSystems customers to monitor silo-specific information, including location, proppant type and proppant inventory.

We are capable of delivering sand to any onshore operating basin in the United States and Canada. We have direct access to 3 class I rail lines and additional access to 2 other class I rail lines and barge access to the Mississippi River, all of which give us superior advantage over many of our competitors by allowing us to offer more competitive pricing and delivery options to our customers.

•Sufficient liquidity and financial flexibility. We believe we have sufficient liquidity to support our operations and pursue our growth initiatives. As of December 31, 2020, we have cash on hand of $11.7 million. Further, we have a $20 million five-year senior secured asset-based lending credit facility with Jefferies Finance LLC, under which we had undrawn availability of $9.5 million as of December 31, 2020 and no outstanding borrowings. The available borrowing amount under the ABL Credit Facility is based on the Company’s eligible accounts receivable and inventory. The ABL Credit Facility matures on December 13, 2024. Additionally, in connection with our acquisition of Eagle Proppants Holdings, the Company, as borrower, also entered into a $5.0 million Acquisition Liquidity Support Facility. We may draw on the Acquisition Liquidity Support Facility to support our working capital needs of the acquired business during the twelve month period ending September 18, 2021. There were no borrowings outstanding on these facilities as of December 31, 2020 and our total available liquidity among cash and available borrowings was $26.2 million as of December 31, 2020.

•Experienced management team. The members of our senior management team bring significant experience to the market environment in which we operate. Their expertise covers a range of disciplines, including industry-specific operating and technical knowledge and experience managing businesses in a variety of operating conditions.

Generally, customers under long-term take-or-pay contracts are required to take minimum volumes of sand or make shortfall payments for a specified period of time. We recognize revenue in our results of operations in the period in which the obligation becomes due.

For the year ended December 31, 2020, Rice Energy (a subsidiary of EQT Corporation), Liberty and U.S. Well Services accounted for 28.1%, 21.7%, and 14.0%, respectively, of total revenue, and the remainder of our revenues were from 20 customers. For the year ended December 31, 2019, Liberty, Rice Energy (a subsidiary of EQT Corporation), Hess Corporation, and U.S. Well Services accounted for 23.8%, 19.0%, 15.5%, and 14.7%, respectively, of our total revenues, and the remainder of our revenues were from 20 customers. For the year ended December 31, 2018, Liberty, EQT, WPX Energy, and Hess accounted for 22.8%, 21.4%, 11.6%, and 10.6%, respectively, of our total revenues, and the remainder of our revenues were from 18 customers. Please read “Risk Factors—Risks Inherent in Our Business—A substantial majority of our revenues have been generated under contracts with a limited number of customers, and the loss of, material nonpayment or nonperformance by or significant reduction in purchases by any of them could adversely affect our business, results of operations and financial condition.” For the years ended December 31, 2020, 2019, and 2018, we generated approximately 83.4%, 92.5%, and 80.1%, respectively, of our revenues from frac sand delivered under long-term take-or-pay contracts.

We expect to continue expanding our SmartSystems wellsite proppant storage solutions and evaluate other proposed projects and related expenditures, such as improvements at our mines and processing facilities and investments in transload facilities located in various operating basins, in light of customer demand and energy market trends. There can be no assurance, however, that all or any of these initiatives will be executed or that the results therefrom will be materially beneficial to our financial performance.

In 2020, we refined our scope of setting a Company objective of adopting a formal Environmental, Social & Governance (“ESG”) program. Smart Sand already has a strong record of environmental performance. In 2014, we joined the Wisconsin Green Tier program, a marquee public/private partnership, under which the Wisconsin Department of Natural Resources worked with us on a plan to meet applicable legal requirements and to improve our facility from an environmental perspective. In addition to documenting seven years of compliant operations, we have worked on, among other things, protecting wetlands, reducing usage and impact of heavy equipment, reducing fuel usage of equipment and vehicles and defining best practices for onsite water management. We are also a member of Wisconsin’s sustainability initiative, Green Masters. As part of this program, we have completed a detailed survey of our sustainability and social responsibility activities and started the process of a complete carbon inventory. As a mining company, we invest and plan for reclamation, ensuring that the land is returned to beneficial use. Smart Sand has held ISO 9001/14001-2015 environmental and quality management systems for the past five years. Smart Sand is also a member of the Wisconsin Industrial Sand Association, a select group of mining companies focused on safety, environmental and public policy.

One of the goals of the United Nations’ Paris Agreement is a carbon neutral world by the year 2050 and we are aligned with this goal. We believe that reducing our carbon footprint will lead to a better world. As a mining company, we are an energy consumer, and we have already seen that we can reduce greenhouse gas emissions by using the best technologies and taking a thoughtful approach to our energy choices. We know that energy consumption is only one part of ethical operations. For additional information regarding the United Nations’ Paris Agreement, see “Item 1A Risk Factors-Risks Related to Environmental, Mining and Other Regulation-Climate change legislation and regulatory initiatives could result in increased compliance costs for us and our customers.”

We provide social value through our excellent employment opportunities. Our first priority is keeping our employees safe, which we accomplish through daily training and inspections. Our business supports hundreds of families and we are proud to offer rewarding and interesting work with competitive compensation and benefits. We promote from within, provide continuous training, hire with a passion for diversity and provide every employee with the opportunity to participate in retirement plans and ownership of the Company. Smart Sand is an active charitable partner in the communities in which it operates, making both financial and time investments in those communities.

Sustainability has always been part of the Smart Sand story, but we are looking forward to evaluating what we have done and identifying improvement opportunities. We are embracing this growing movement and designing an area in our website to articulate our ESG goals and report on our performance.

We operate in a highly regulated environment overseen by many governmental regulatory and enforcement bodies at the local, state and federal levels. To conduct our operations, we are required to have obtained permits and approvals that address environmental, land use and safety issues at our operating facilities. Our current and planned areas for excavation at our mining facilities are permitted for extraction of our proven reserves. Portions of our facilities lie in areas designated as wetlands, which will require additional local, state and federal permits prior to mining and reclaiming those areas.

We also must meet requirements for certain international standards concerning safety, greenhouse gases and rail operations. We have voluntarily agreed to meet the standards of the Wisconsin Department of Natural Resources’ Green Tier program, the National Industrial Sand Association (“NISA”) and the Wisconsin Industrial Sand Association. Further, for Oakdale, we have agreed to meet the standards required to maintain our ISO 9001-2015 and ISO 14001-2015 quality/environmental management system registrations. These voluntary requirements are tracked and managed along with our permits.

While resources invested in securing permits are significant, this cost has not had a material adverse effect on our results of operations or financial condition. We cannot ensure that existing environmental laws and regulations will not be reinterpreted or revised or that new environmental laws and regulations will not be adopted or become applicable to us. Revised or additional environmental requirements that result in increased compliance costs or additional operating restrictions could have a material adverse effect on our business.

The proppant industry is highly competitive. Please read “Risk Factors—Risks Inherent in Our Business—We face significant competition that may cause us to lose market share.” There are numerous large and small producers in all sand producing regions of North America with whom we compete, many of which also offer solutions for unloading, storing and delivering proppant to the wellsite. Our main competitors include Badger Mining Corporation, Hi-Crush, Inc., Covia Holdings Corporation, U.S. Silica Holdings, Inc., Black Mountain Sand, Vista Proppants and Logistics, Atlas Sand, Capital Sand Company and Solaris Oilfield Infrastructure, Inc.

Although some of our competitors may have greater financial or natural resources than we do, we believe that we are well-positioned competitively due to our low cost of sand production, low debt levels, logistics infrastructure and high-quality, balanced reserve profile and patented SmartSystems wellsite proppant storage solutions, which offer numerous benefits over our competition. The most important factors on which we compete are our service capabilities, product quality, proven performance, sand characteristics, transportation capabilities, reliability of supply, price, logistics services and the performance of patented SmartSystems wellsite proppant storage solutions technology. Demand for frac sand and logistics solutions and the prices that we will be able to obtain for our products, to the extent not subject to a fixed price or take-or-pay contract, are closely linked to proppant consumption patterns for the completion of oil and natural gas wells in North America. These consumption patterns are influenced by numerous factors, including, among other things, the price for oil and natural gas and hydraulic fracturing activity, including the number of stages completed and the amount of proppant used per stage. Further, these consumption patterns are also influenced by the location, quality, price and availability of frac sand and other types of proppants such as resin-coated sand and ceramic proppant.

Our business is affected to some extent by seasonal fluctuations in weather that impact the production levels for a portion of our wet sand processing capacity. While our dry plants are able to process finished product volumes evenly throughout the year, our excavation and our wet sand processing activities have historically been limited to primarily non-winter months. As a consequence, we have experienced lower cash operating costs in the first and fourth quarter of each calendar year, and higher cash operating costs in the second and third quarter of each calendar year when we overproduced wet sand to meet demand in the winter months.  These higher cash operating costs are capitalized into inventory and expensed when these tons are sold, which can lead to us having higher overall costs in the first and fourth quarters of each calendar year as we expense inventory costs that were previously capitalized. However, we have enclosed, indoor wet plants at both of our processing facilities, which allow us to produce wet sand inventory year-round to support a large portion of our dry sand processing capacity, which may reduce certain of the effects of this seasonality. We may also sell frac sand for use in oil and natural gas producing basins where severe weather conditions may curtail drilling activities and, as a result, our sales volumes to those areas may be reduced during such severe weather periods. For a discussion of the impact of weather on our operations, please read “Risk Factors—Seasonal and severe weather conditions could have a material adverse impact on our business, results of operations and financial condition” and “Risk Factors—Our cash flow fluctuates on a seasonal basis.”

We believe that our insurance coverage is customary for the industry in which we operate and adequate for our business. As is customary in the proppant industry, we review our safety equipment and procedures and carry insurance against most, but not all, risks of our business. Losses and liabilities not covered by insurance would increase our costs. To address the hazards inherent in our business, we maintain insurance coverage that includes physical damage coverage, third-party general liability insurance, employer’s liability, business interruption, environmental and pollution and other coverage, although coverage for environmental and pollution-related losses is subject to significant limitations. For additional discussion regarding our insurance, please read “Risk Factors–Our operations are subject to operational hazards and unforeseen interruptions for which we may not be adequately insured.”

We are subject to stringent and complex federal, state, local and international laws and regulations governing the discharge of materials into the environment or otherwise relating to protection of worker health, safety and the environment. Compliance with these laws and regulations may expose us to significant costs and liabilities and cause us to incur significant capital expenditures in our operations. Any failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, imposition of remedial obligations, and the issuance of injunctions delaying or prohibiting operations. Private parties may also have the right to pursue legal actions to enforce compliance as well as to seek damages for non-compliance with environmental laws and regulations or for personal injury or property damage. In addition, the trend in environmental regulation is to place more restrictions on activities that may affect the environment, and thus, any changes in, or more stringent enforcement of, these laws and regulations that result in more stringent and costly pollution control equipment, the occurrence of delays in the permitting or performance of projects, or waste handling, storage, transport, disposal or remediation requirements could have a material adverse effect on our operations and financial position.

We do not believe that compliance by us with federal, state, local or international environmental laws and regulations will have a material adverse effect on our business, financial position or results of operations or cash flows. We cannot be assured, however, that future events, such as changes in existing laws or enforcement policies, the promulgation of new laws or regulations or the development or discovery of new facts or conditions adverse to our operations will not cause us to incur significant costs. The following is a discussion of material environmental and worker health and safety laws, as amended from time to time that relate to our operations or those of our customers that could have a material adverse effect on our business.

Our operations are subject to the federal Clean Air Act (“CAA”) and related state and local laws, which restrict the emission of air pollutants and impose permitting, monitoring and reporting requirements on various sources. Over the next several years, we may be required to incur certain capital expenditures for air pollution control equipment or to address other air emissions-related issues. Changing and increasingly stringent requirements, future non-compliance, or failure to maintain necessary permits or other authorizations could require us to incur substantial costs or suspend or terminate our operations.

In recent years, the U.S. Congress has considered legislation to reduce emissions of greenhouse gases (“GHG”). We are unable to predict actions that may be taken by the Federal government however, a number of states are addressing GHG emissions, primarily through the development of emission inventories or regional GHG cap and trade programs. Depending on the particular program, we could be required to control GHG emissions or to purchase and surrender allowances for GHG

President Biden and the Democratic Party, which now controls Congress, have identified climate change as a priority, and it is likely that new executive orders, regulatory action, and/or legislation targeting GHG emissions, or prohibiting, delaying or restricting oil and gas development activities in certain areas, will be proposed and/or promulgated during the Biden Administration. For example, the acting Secretary of the Department of the Interior recently issued an order preventing staff from producing any new federal fossil fuel leases or permits without sign-off from a top political appointee, and President Biden recently announced a moratorium on new oil and gas leasing on federal lands and offshore waters pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices. President Biden’s order also established climate change as a primary foreign policy and national security consideration, affirms that achieving net-zero GHG emissions by or before midcentury is a critical priority, affirms the Biden Administration’s desire to establish the United States as a leader in addressing climate change, generally further integrates climate change and environmental justice considerations into government agencies’ decision-making, and eliminates fossil fuel subsidies, among other measures. President Biden also announced that the United States is taking steps to reenter the Paris Agreement.

The Clean Water Act (“CWA”) and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into state waters or waters of the United States. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. The CWA and regulations implemented thereunder also prohibit the discharge of dredge and fill material into regulated waters, including jurisdictional wetlands, unless authorized by the Army Corps of Engineers (“Corps”) pursuant to an appropriately issued permit. In addition, the CWA and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities. Compliance with new rules and legislation could require us to face increased costs and delays with respect to obtaining permits for expansion activities. Federal and state regulatory agencies can impose administrative, civil and criminal penalties as well as other enforcement mechanisms for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulations.

We supply frac sand to hydraulic fracturing operators in the oil and natural gas industry. Hydraulic fracturing is an industry practice that is used to stimulate production of oil and natural gas from low permeability hydrocarbon bearing subsurface rock formations. The hydraulic fracturing process involves the injection of water, proppants, and chemicals under pressure into the formation to fracture the surrounding rock, increase permeability and stimulate production. Although we do not directly engage in hydraulic fracturing activities, our customers purchase our frac sand for use in their hydraulic fracturing activities.

The adoption of new laws or regulations at the federal or state levels imposing reporting obligations on, or otherwise limiting or delaying, the hydraulic fracturing process could make it more difficult to complete natural gas wells, increase our customers’ costs of compliance and doing business, and otherwise adversely affect the hydraulic fracturing services they perform, which could negatively impact demand for our frac sand.

The Resource Conservation and Recovery Act (“RCRA”) and comparable state laws control the management and disposal of hazardous and non-hazardous waste. These laws and regulations govern the generation, storage, treatment, transfer and disposal of wastes that we generate. In the course of our operations, we generate waste that are regulated as non-hazardous wastes and hazardous wastes, obligating us to comply with applicable standards relating to the management and disposal of such wastes. In addition, drilling fluids, produced waters, and most of the other wastes associated with the exploration, development, and production of oil or natural gas, if properly handled, are currently exempt from regulation as hazardous waste under RCRA and, instead, are regulated under RCRA’s less stringent non-hazardous waste provisions, state laws or other federal laws. However, it is possible that certain oil and natural gas drilling and production wastes now classified as non-hazardous could be classified as hazardous wastes in the future. A loss of the RCRA exclusion for drilling fluids, produced waters and related wastes could result in an increase in our customers’ costs to manage and dispose of generated wastes and a corresponding decrease in their drilling operations, which developments could have a material adverse effect on our business.

The Comprehensive Environmental Response, Compensation, and Liability Act, as amended (“CERCLA”) and comparable state laws impose strict, joint and several liability without regard to fault or the legality of the original conduct on certain classes of persons that contributed to the release of a hazardous substance into the environment. These persons include the owner and operator of a disposal site where a hazardous substance release occurred and any company that transported, disposed of, or arranged for the transport or disposal of hazardous substances released at the site. Under CERCLA, such persons may be liable for the costs of remediating the hazardous substances that have been released into the environment, for damages to natural resources, and for the costs of certain health studies. In addition, where contamination may be present, it is not uncommon for the neighboring landowners and other third parties to file claims for personal injury, property damage and recovery of response costs. We have not received notification that we may be potentially responsible for cleanup costs under CERCLA at any site.

The Endangered Species Act (“ESA”) restricts activities that may result in a “take” of endangered or threatened species and provides for substantial penalties in cases where listed species are taken by being harmed. Harm under the ESA includes acts that actually kill or injure wildlife as well as significant habitat modification or degradation that significantly impairs essential behavioral patterns, including breeding, feeding or sheltering. Take prohibitions also protect migratory birds under the MBTA.

Our sand mining operations are subject to mining safety regulation. The U.S. Mining Safety and Health Administration (“MSHA”) is the primary regulatory organization governing frac sand mining and processing. Accordingly, MSHA regulates quarries, surface mines, underground mines and the industrial mineral processing facilities associated with and located at quarries and mines. The mission of MSHA is to administer the provisions of the Federal Mine Safety and Health Act of 1977 and to enforce compliance with mandatory miner safety and health standards. As part of MSHA’s oversight, representatives perform at least two unannounced inspections annually for each above-ground facility.

OSHA has promulgated new rules for workplace exposure to respirable silica for several other industries. Respirable silica is a known health hazard for workers exposed over long periods. MSHA is expected to adopt similar rules as part of its

Our operations may be subject to broad environmental review under the National Environmental Policy Act, as amended, (“NEPA”). NEPA requires federal agencies to evaluate the environmental impact of all “major federal actions” significantly affecting the quality of the human environment. The granting of a federal permit for a major development project, such as a mining operation, may be considered a “major federal action” that requires review under NEPA. As part of this evaluation, the federal agency considers a broad array of environmental impacts, including, among other things, impacts on air quality, water quality, wildlife (including threatened and endangered species), historic and archeological resources, geology, socioeconomics, and aesthetics. NEPA also requires the consideration of alternatives to the project. The NEPA review process, especially the preparation of a full environmental impact statement, can be time consuming and expensive. The purpose of the NEPA review process is to inform federal agencies’ decision-making on whether federal approval should be granted for a project and to provide the public with an opportunity to comment on the environmental impacts of a proposed project. Though NEPA requires only that an environmental evaluation be conducted and does not mandate a particular result, a federal agency could decide to deny a permit or impose certain conditions on its approval, based on its environmental review under NEPA, or a third party could challenge the adequacy of a NEPA review and thereby delay the issuance of a federal permit or approval. In January 2020, the White House Council on Environmental Quality (“CEQ”) published a Notice of Proposed Rulemaking that would revise NEPA’s implementing regulations, with the stated purpose of facilitating more efficient and timely NEPA reviews. CEQ is currently soliciting public comments on its proposal through March 10, 2020. At this time we cannot predict what revisions, if any, will be made to NEPA’s implementing regulations, and what impacts, if any, they will have on our operations.

We are subject to a variety of state and local environmental review and permitting requirements. Some states, including Wisconsin where our current projects are located, have state laws similar to NEPA; thus, our development of a new site or the expansion of an existing site may be subject to comprehensive state environmental reviews even if it is not subject to NEPA. In some cases, the state environmental review may be more stringent than the federal review. Our operations may require state-law based permits in addition to federal permits, requiring state agencies to consider a range of issues, many the same as federal agencies, including, among other things, a project’s impact on wildlife and their habitats, historic and archaeological sites, aesthetics, agricultural operations, and scenic areas. Wisconsin has specific permitting and review processes for commercial silica mining operations, and state agencies may impose different or additional monitoring or mitigation requirements than federal agencies. The development of new sites and our existing operations also are subject to a variety of local environmental and regulatory requirements, including land use, zoning, building, and transportation requirements.

Demand for frac sand in the oil and natural gas industry drove a significant increase in the production of frac sand. As a result, some local communities expressed concern regarding silica sand mining operations. These concerns have generally included exposure to ambient silica sand dust, truck traffic, water usage and blasting. In response, certain state and local communities have developed or are in the process of developing regulations or zoning restrictions intended to minimize dust from becoming airborne, control the flow of truck traffic, significantly curtail the amount of practicable area for mining activities, provide compensation to local residents for potential impacts of mining activities and, in some cases, ban issuance of new permits for mining activities. To date, we have not experienced any material impact to our existing mining operations or planned capacity expansions as a result of these types of concerns. We would expect this trend to continue as oil and natural gas production increases.

In August 2014, we were accepted as a Tier 1 participant in Wisconsin’s voluntary Green Tier program, which encourages, recognizes and rewards companies for voluntarily exceeding environmental, health and safety legal requirements. Successful Tier 1 participants are required to demonstrate a strong record of environmental compliance, develop and implement an environmental management system meeting certain criteria, conduct and submit annual performance reviews to the Wisconsin Department of Natural Resources, promptly correct any findings of non-compliance discovered during these annual performance reviews, and make certain commitments regarding future environmental program improvements. Our most recent annual report required under the Tier 1 protocol was submitted to the Green Tier Program contact on August 1, 2019.

As of December 31, 2020, we employed 228 people, of which 28 were employed under collective bargaining agreements. We offer competitive salaries and a comprehensive package of employee benefits, including bonuses, retirement savings plans, medical, dental, life and disability coverage. We consider our employee relations to be good.

Charles E. Young was named Chief Executive Officer in July 2014. Mr. Young has also served as a director since September 2011. Mr. Young founded Smart Sand, LLC (our predecessor) and served as its President from November 2009 to August 2011. Mr. Young served as our President and Secretary from September 2011 to July 2014. Mr. Young has over 25 years of executive and entrepreneurial experience in the high-technology, telecommunications and renewable energy industries. He previously served as the President and Founder of Premier Building Systems, a construction, solar, geothermal and energy audit company in Pennsylvania and New Jersey from 2006 to 2011. Mr. Young serves as a director for Gravity Oilfield Services, Inc., a privately-held company. Mr. Young received a B.A. in Political Science from Miami University. Mr. Young is the brother of William John Young, our Chief Operating Officer, and James D. Young, our Executive Vice President, General Counsel and Secretary. We believe that Mr. Young’s industry experience and deep knowledge of our business makes him well suited to serve as Chief Executive Officer and Director.

Lee E. Beckelman was named Chief Financial Officer in August 2014. From December 2009 to February 2014, Mr. Beckelman served as Executive Vice President and Chief Financial Officer of Hilcorp Energy Company, an exploration and production company. From February 2008 to October 2009, he served as the Executive Vice President and Chief Financial Officer of Price Gregory Services, Incorporated, a crude oil and natural gas pipeline construction firm until its sale to Quanta Services. Prior thereto, Mr. Beckelman served in various roles from 2002 to 2007 at Hanover Compressor Company, an international oilfield service company, until its merger with Universal Compression to form Exterran Holdings. Mr. Beckelman received his BBA in Finance with High Honors from the University of Texas at Austin.

William John Young was named Chief Operating Officer in April 2018. Prior to that time, he served as Executive Vice President of Sales and Logistics from October 2016 to April 2018. Mr. Young served as Vice President of Sales and Logistics from May 2014 to September 2016 and Director of Sales from November 2011 to April 2014. Prior to joining us, Mr. Young was a Director of Sales for Comcast Corporation from 2002 to 2011. Mr. Young brings over 25 years of experience in the mining, commercial telecommunications and broadband industries. Mr. Young received a BSc in Biology from Dalhousie University. Mr. Young is the brother of Charles E. Young, our Chief Executive Officer and member of our board of directors, and James D. Young, our Executive Vice President, General Counsel and Secretary.

Robert Kiszka was named Executive Vice President of Operations in May 2014. Previously, Mr. Kiszka served as the Vice President of Operations from September 2011 to May 2014. Mr. Kiszka has over 25 years of construction, real estate, renewable energy and mining experience. Mr. Kiszka has been the owner of A-1 Bracket Group Inc. since 2005 and was a member of Premier Building Systems LLC from 2010 to 2011. Mr. Kiszka attended Pedagogical University in Krakow, Poland and Rutgers University.

Ronald P. Whelan was named Executive Vice President of Sales in June 2018. Prior to that time, he served as Executive Vice President of Business Development from April 2017 to June 2018, Vice President of Business Development from September 2016 to March 2017 and as Director of Business Development from April 2014 to August 2016. Prior to being named Director of Business Development, Mr. Whelan was the Operations Manager responsible for the design, development and production of the Oakdale facility from November 2011 to April 2014. Before joining Smart Sand, Mr. Whelan ran his own software design company from 2004 to 2011 and was a member of Premier Building Systems LLC from 2008 to 2009. Mr.

James D. Young was named Executive Vice President, General Counsel and Secretary in June 2017.  Prior to joining us, Mr. Young was a partner of the law firm Fox Rothschild LLP, where he worked for thirteen years and served as our outside general counsel.  Mr. Young received a J.D. from Rutgers University School of Law and a B.A. in History and Political Science from the University of Toronto.  Mr. Young is the brother of Charles E. Young, our Chief Executive Officer and member of our board of directors, and William John Young, our Chief Operating Officer.

Susan Neumann was named Vice President of Accounting and Controller in October 2016. Previously, Ms. Neumann was named Controller and Secretary in April 2013 and July 2014, respectively. Prior to joining us in April 2013, Ms. Neumann was an assurance senior manager at BDO USA, LLP (“BDO”). At BDO, she served in various roles in the assurance group from September 2000 to March 2013. Ms. Neumann received an MBA with a Global Perspective from Arcadia University and a B.A. in Accounting from Beaver College (currently Arcadia University).

Our website address is www.smartsand.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are available on our website, without charge, as soon as reasonably practicable after they are filed electronically with the SEC. The SEC also maintains a website that contains reports, proxy and information statements and other information statements and other information regarding issuers who file electronically with the SEC. The SEC’s website address is www.sec.gov.

•geological and mining conditions and/or effects from prior mining that may not be fully identified by available data or that may differ from experience;

•assumptions concerning future prices of frac sand, operating costs, mining technology improvements, development costs and reclamation costs; and

•assumptions concerning future effects of regulation, including wetland mitigation requirements, the issuance of required permits and the assessment of taxes by governmental agencies.

•mistaken assumptions about revenues and costs, including synergies;

•inability to integrate successfully the businesses we acquire;

•inability to hire, train or retain qualified personnel to manage and operate our business and newly acquired assets;

•the assumption of unknown liabilities;

•limitations on rights to indemnity from the seller;

•mistaken assumptions about the overall costs of equity or debt;

•diversion of management’s attention from other business concerns;

•unforeseen difficulties operating in new product areas or new geographic areas; and

•customer or key employee losses at the acquired businesses.

•grant liens;

•incur additional indebtedness;

•engage in a merger, consolidation or dissolution;

•enter into transactions with affiliates;

•sell or otherwise dispose of assets, businesses and operations;

•materially alter the character of our business as conducted at the time of filing of this annual report; and

•make acquisitions, investments and capital expenditures.

We hold numerous governmental, environmental, mining and other permits, water rights and approvals authorizing operations at our mining and operating facilities. For our extraction and processing in Wisconsin and Illinois, the permitting process is subject to federal, state and local authority. For example, on the federal level, a Mine Identification Request (MSHA Form 7000-51) must be filed and obtained before mining commences. If wetlands are impacted, a U.S. Army Corps of Engineers Wetland Permit is required. At the state level, a series of permits are required related to air quality, wetlands, water quality (waste water, storm water), grading permits, endangered species, archeological assessments and high capacity wells in addition to others depending upon site specific factors and operational detail. At the local level, zoning, building, storm water, erosion control, wellhead protection, road usage and access are all regulated and require permitting to some degree. A non-metallic mining reclamation permit is required. A decision by a governmental agency or other third party to deny or delay issuing a new or renewed permit or approval, or to revoke or substantially modify an existing permit or approval, could have a material adverse effect on our business, results of operations and financial condition.

•issuance of administrative, civil, or criminal penalties;

•denial, modification, or revocation of permits or other authorizations;

•occurrence of delays in permitting or performance of projects;

•imposition of injunctive obligations or other limitations on our operations, including cessation of operations; and

•requirements to perform site investigatory, remedial, or other corrective actions.

•the lack of availability, higher expense, or unreasonable terms of such financial assurances;

•the ability of current and future financial assurance counterparties to increase required collateral; and

•the exercise by financial assurance counterparties of any rights to refuse to renew the financial assurance instruments.

•our operating and financial performance;

•quarterly variations in the rate of growth of our financial indicators, such as revenues, EBITDA, Adjusted EBITDA, contribution margin, free cash flow, net income, and net income per share;

•the public reaction to our press releases, our other public announcements, and our filings with the SEC;

•strategic actions by our competitors;

•our failure to meet revenue or earnings estimates by research analysts or other investors;

•changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts;

•speculation in the press or investment community;

•the failure of research analysts to cover our common stock;

•sales of our common stock by us or our, stockholders, or the perception that such sales may occur;

•changes in accounting principles, policies, guidance, interpretations, or standards;

•additions or departures of key management personnel;

•actions by our stockholders;

•general market conditions, including fluctuations in commodity prices, sand-based proppants, or industrial and recreational sand-based products;

•domestic and international economic, legal and regulatory factors unrelated to our performance; and

•the realization of any risks described under this “Risk Factors” section.

•advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders;

•provisions that divide our board of directors into three classes of directors, with the classes to be as nearly equal in number as possible;

•provisions that prohibit stockholder action by written consent after the date on which our Principal Stockholders collectively cease to beneficially own at least 50% of the voting power of the outstanding shares of our stock entitled to vote;

•provisions that provide that special meetings of stockholders may be called only by the board of directors or, for so long as a Principal Stockholder continues to beneficially own at least 20% of the voting power of the outstanding shares of our stock, such Principal Stockholder;

•provisions that provide that our stockholders may only amend our certificate of incorporation or bylaws with the approval of at least 66 2/3% of the voting power of the outstanding shares of our stock entitled to vote, or for so long as our Principal Stockholders collectively continue to beneficially own at least 50% of the voting power of the outstanding shares of our stock entitled to vote, with the approval of a majority of the voting power of the outstanding shares of our stock entitled to vote;

•provisions that provide that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and

•provisions that establish advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

Facility Characteristic						Description
Site geography						Approximately 1,256 contiguous acres, with on-site processing and rail loading facilities.
Proven recoverable reserves						315 million tons.
Deposits						Sand reserves of up to 200 feet; grade mesh sizes 20/40, 30/50, 40/70 and 100 mesh.
Proven reserve mix						Approximately 19% of 20/40 and coarser substrate, 41% of finer 40/70 mesh substrate and approximately 40% of fine 100 mesh substrate. Our 30/50 gradation is a derivative of the 20/40 and 40/70 blends.
Excavation technique						Generally shallow overburden allowing for surface excavation.
Annual processing capacity						5.5 million tons.
Logistics capabilities						Dual served rail line logistics capabilities. On-site transportation infrastructure capable of simultaneously accommodating multiple unit trains and connected to the Canadian Pacific rail network. Additional unit train capable transload facility located approximately three miles from the Oakdale facility in Byron Township that provides access to the Union Pacific rail network.
Royalties						$0.50 per ton sold of 70 mesh and coarser substrate.

Facility Characteristic						Description
Site geography						Approximately 1,176 acres, with on-site processing and truck loadout facilities.
Proven and probable recoverable reserves						130 million tons.
Deposits						Sand reserves of up to 100 feet; grade mesh sizes 20/40, 30/50, 40/70 and 100 mesh.
Proven and probable reserve mix						Approximately 29% of 20/40 and coarser substrate, 58% of finer 40/70 mesh substrate and approximately 13% of fine 70/100 mesh substrate. Our 30/50 gradation is a derivative of the 20/40 and 40/70 blends.
Excavation technique						Average overburden of approximately 66ft allowing for surface excavation.
Annual processing capacity						1.6 million tons
Logistics capabilities						Unit train capable transload facility located approximately seven miles from the Utica facility in Peru, Illinois that provides access to the BNSF rail network. Additional access to CSX railway, NS railway and Illinois River barge terminal within 15 miles.
Royalties						None

			Year Ended December 31,
			2020						2019						2018						2017						2016(4)
			(in thousands, except per share and per ton amounts)
Income Statement Data:
Revenues			$	122,340					$	233,073					$	212,470					$	137,212					$	59,231
Cost of goods sold (1)			104,221						152,021						143,103						100,304						26,569
Gross profit			18,119						81,052						69,367						36,908						32,662
Operating expenses			31,136						37,569						41,688						18,203						12,271
Operating (loss) income			(13,017)						43,483						27,679						18,705						20,391
Net income (1)			37,954						31,623						20,101						21,526						10,379
Net income per common share (1):
Basic			$	0.94					$	0.79					$	0.50					$	0.54					$	0.43
Diluted			$	0.94					$	0.78					$	0.50					$	0.53					$	0.42
Balance Sheet Data (at period end):
Property, plant and equipment, net (1)			$	274,676					$	230,461					$	248,396					$	171,762					$	104,096
Total assets			427,677						363,403						320,292						246,802						173,452
Long-term debt, net			22,445						28,240						47,893						—						860
Total stockholders’ equity (1)			288,807						245,556						210,773						190,022						142,442
Cash Flow Statement Data:
Net cash provided by operating activities			$	25,541					$	44,633					$	50,909					$	15,628					$	26,703
Net cash used in investing activities			(8,559)						(25,425)						(125,989)						(51,148)						(2,470)
Net cash provided by financing activities			(7,896)						(18,035)						41,319						23,213						19,405
Other Data:
Adjusted EBITDA (2)			$	20,456					$	87,071					$	67,793					$	30,615					$	37,839
Contribution margin (2)			$	39,141					$	106,464					$	85,664					$	44,197					$	38,738
Contribution margin per ton (2)			$	20.75					$	43.24					$	28.60					$	18.05					$	46.90
Free cash flow(2)			$	16,921					$	19,107					$	(45,181)					$	(35,534)					$	24,184
Capital expenditures (3)			$	9,143					$	25,525					$	110,761					$	69,378					$	(546)
Tons Sold			1,886						2,462						2,995						2,449						826

•Acquisition of Eagle Proppants Holdings. In September 2020, we acquired from Eagle Materials Inc., a Delaware corporation (“Eagle”), all of the issued and outstanding interests in Eagle Oil and Gas Proppants Holdings LLC, a Delaware limited liability company and wholly-owned subsidiary of Eagle (“Eagle Proppants Holdings”). The primary assets of Eagle Proppants Holdings and its subsidiaries include two frac sand mines and related processing facilities in Utica, Illinois and New Auburn, Wisconsin, with approximately 3.5 million tons of total combined annual processing capacity, 1.6 million tons of which has access to the BNSF Class I rail line through the Peru, Illinois transload facility. We began operating the Utica, Illinois mine and Peru, Illinois transload facility in October 2020. We currently have no intention of operating the New Auburn, Wisconsin mine. The estimated aggregate fair value of the net assets acquired was $41.7 million which exceeded the total consideration and resulted in a bargain purchase gain of $39.6 million.

•Increased supply and reduced demand. At the beginning of the second quarter of 2020, demand dropped dramatically as a result of the decline in oil prices to all-time lows caused by the COVID-19 coronavirus pandemic and a temporary increase in global oil supply driven by disagreements with respect to oil pricing between Russia and members of the Organization of the Petroleum Exporting Countries (“OPEC”), particularly Saudi Arabia. The COVID-19 coronavirus pandemic has caused a global decrease in all means of travel, the closure of borders between countries and a general slowing of economic activity worldwide which has decreased the demand for oil. In early March, discussions between Russia and Saudi Arabia deteriorated and the countries ended a three-year supply level agreement, which resulted in each country increasing its oil production. Subsequently, Russia and OPEC agreed to certain production cuts to mitigate the decline in the price of oil; however, such cuts may not be sufficient to stabilize the oil market over the long term if the decline in demand due to the COVID-19 coronavirus pandemic continues. Oil and natural gas prices are expected to continue to be volatile as a result of these events, and we cannot predict when prices will stabilize.

•Impairment loss. In 2020, we recorded an impairment loss of $5.1 million to fully write down the value of our long-lived assets in the Permian basin as we have no intentions to develop these properties in the foreseeable future. In 2019, we recorded impairment losses of $15.5 million, of which $7.6 million related to our finite-lived developed technology intangible assets and $7.9 million relates to our Hixton, Wisconsin property. In 2018, we recorded an impairment loss of $17.8 million, which related to our goodwill and indefinite-lived trade name intangible asset.

•Market Trends. From early 2017 through the second quarter of 2018, improvements in oil and natural gas prices created a more stable market environment. During the second half of 2018, the demand for Northern White sand decreased, which we believe was due primarily to insufficient takeaway capacity for the incremental oil and natural gas production coming online in the Permian Basin, along with increased availability of regional sand as a source of proppant in the Permian basin. Additionally, oil and natural gas companies reduced their spending in the latter portion of the year due to strong spending in the first half of 2018 and lower oil prices, particularly in the fourth quarter of 2018. Demand briefly recovered during the summer of 2019 before declining toward the end of 2019 as oil and gas companies exhausted their budgets and managed their capital spending to be in line with their expected operating cash flows. During the first quarter of 2020, demand again briefly increased before declining as a result of the decline in oil prices to all-time lows caused by the COVID-19 coronavirus pandemic and an increase in global oil supply driven by disagreements with respect to oil pricing between Russia and members of OPEC. Supply side pressure has subdued while the effects of the COVID-19 coronavirus pandemic continue to drive reduced demand leading to volatility in oil prices.

We are a fully integrated frac sand supply and services company, offering complete mine to wellsite proppant supply and logistics solutions to our customers. We produce low-cost, high quality Northern White frac sand, which is a premium proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. We also offer proppant logistics solutions to our customers through our in-basin transloading terminal and our SmartSystemsTM wellsite proppant storage capabilities. We market our products and services, as one operating segment, primarily to oil and natural gas exploration and production companies and oilfield service companies, sell our sand under a combination of long-term take-or-pay contracts and spot sales in the open market, and provide wellsite proppant storage solutions services and equipment under flexible contract terms custom tailored to meet customers’ needs. We believe that, among other things, the size and favorable geologic characteristics of our sand reserves, the strategic location and logistical advantages of our facilities, our proprietary SmartDepotTM portable wellsite proppant storage silos, SmartPathTM transloader and the industry experience of our senior management team make us as a highly attractive provider of frac sand and proppant logistics services from the mine to the wellsite. 

Our Utica facility also has a large high-quality reserve base of primarily fine-mesh sand that is contiguous to the production facility and in close proximity to our Peru transload facility located on the BNSF railway. We have a minimum proven and probable reserve life of approximately 81 years based on our current annual processing capacity of 1.6 million tons at our Utica facility.

This recently acquired sand mine and processing facility adds significant logistics assets that further increases our logistics advantage, including access to BNSF, a Class I rail line, through our owned Peru transload facility. Additionally, the CSX and NS rail lines and barge access on the Illinois River to access the Mississippi River are available within short trucking distances. This facility is also capable of handling multiple unit trains simultaneously. These additional logistics options give us greater access to operating basins in the Western United States allowing us to offer more competitive pricing to existing and new customers in these markets.

We believe our patented SmartDepot silos will outperform our competitors in that they can be set up or taken down rapidly, they include industry-leading passive and active dust suppression technology, they have the capability of gravity-fed operation and they can be filled by both pneumatic and gravity dump trailers. Our trailers detach, which reduces their footprint on the wellsite. In 2020, we developed a self-contained SmartPath transloader, which is a mobile sand transloading system designed to work with bottom dump trailers and features a drive over conveyor, surge bin, and dust collection system, and we

In 2020, we significantly expanded our existing logistics infrastructure through the acquisition of Eagle Proppants Holdings by adding new origination and destination points to our existing capabilities. We expect to continue to capitalize on our Oakdale facility’s ability to simultaneously accommodate multiple unit trains on-site with the Canadian Pacific rail network and ship on two Class I rail carriers to maximize our product shipment rates, increase our railcar utilization and lower our transportation costs. Through our transloading facility located on the Union Pacific rail network approximately three miles from our Oakdale facility, we have the ability to ship our frac sand directly to our customers on a second Class I rail carrier. Our newly acquired Peru transload terminal, located just minutes away from our Utica mine and frac sand processing facility, offers additional capability to ship products on a third Class I rail carrier, the BNSF. Additionally, the CSX and NS rail line and barge access on the Illinois River to access the Mississippi River are available within short trucking distances.

Supplies of high-quality Northern White frac sand are limited to select areas, predominantly in western Wisconsin and limited areas of Minnesota and Illinois. We believe the ability to obtain large contiguous reserves in these areas is a key constraint and can be an important supply consideration when assessing the economic viability of a potential frac sand facility. Further constraining the supply and throughput of Northern White frac sand is that not all of the large reserve mines have on-site excavation, processing or logistics capabilities. Historically, much of the capital investment in Northern White frac sand mines was used for the development of coarser deposits in western Wisconsin, which is inconsistent with the increasing demand for finer mesh frac sand in recent years. As such, we’ve seen competitors in the Northern White frac sand market reduce their capacity by shuttering or idling operations as the shift to finer sands in hydraulic fracturing of oil and natural gas wells erodes the ongoing economic viability of producing coarser grades of sand.

						Year Ended December 31,												Change
						2020						2019						Dollars						Percentage
						(in thousands, except percentage change)
Revenues:
Sand sales revenue						$	70,902					$	109,621					$	(38,719)					(35)		%
Shortfall revenue						23,281						49,259						(25,978)						(53)		%
Logistics revenue						28,157						74,193						(46,036)						(62)		%
Total revenue						122,340						233,073						(110,733)						(48)		%
Cost of goods sold						104,221						152,021						(47,800)						(31)		%
Gross profit						18,119						81,052						(62,933)						(78)		%
Operating (expense) income:
Salaries, benefits and payroll taxes						9,993						11,560						(1,567)						(14)		%
Depreciation and amortization						1,911						2,411						(500)						(21)		%
Selling, general and administrative						15,527						11,328						4,199						37		%
Change in estimated fair value of contingent consideration						(1,410)						(3,272)						1,862						(57)		%
Impairment loss						5,115						15,542						(10,427)						(67)		%
Total operating expenses						31,136						37,569						(6,433)						(17)		%
Operating (expense) income						(13,017)						43,483						(56,500)						(130)		%
Other income (expenses):
Gain on bargain purchase						39,600						—						39,600						Not meaningful
Interest expense, net						(2,091)						(3,621)						1,530						(42)		%
Loss on extinguishment of debt						—						(561)						561						Not meaningful
Other income						482						131						351						268		%
Total other income (expenses), net						37,991						(4,051)						42,042						(1,038)		%
Income before income tax (benefit) expense						24,974						39,432						(14,458)						(37)		%
Income tax (benefit) expense						(12,980)						7,809						(20,789)						(266)		%
Net income						$	37,954					$	31,623					$	6,331					20		%

•Sand sales revenue decreased from $109.6 million for the year ended December 31, 2019 to $70.9 million for the year ended December 31, 2020, as a result of lower total volumes sold. The volumes sold in 2020 were negatively impacted by depressed oil prices driven by continued oversupply relative to the decreased demand due to the COVID-19 coronavirus pandemic.

•We had $23.3 million of contractual shortfall revenue for the year ended December 31, 2020 and $49.3 million for the year ended December 31, 2019, respectively. Our contracts with customers dictate whether shortfall is earned quarterly or at the end of their respective contract year. We recognize revenue to the extent of the unfulfilled minimum contracted quantity at the shortfall price per ton as stated in the contract. In 2020 and 2019, shortfall

			Year Ended December 31,												Change
			2019						2018						Dollars						Percentage
			(in thousands, except percentage change)
Revenues:
Sand sales revenue			$	109,621					$	143,533					$	(33,912)					(24)		%
Shortfall revenue			49,259						6,032						43,227						717		%
Logistics revenue			74,193						62,905						11,288						18		%
Total revenue			233,073						212,470						20,603						10		%
Cost of goods sold			152,021						143,103						8,918						6		%
Gross profit			81,052						69,367						11,685						17		%
Operating expenses:
Salaries, benefits and payroll taxes			11,560						11,043						517						5		%
Depreciation and amortization			2,411						1,843						568						31		%
Selling, general and administrative			11,328						12,825						(1,497)						(12)		%
Change in estimated fair value of contingent consideration			(3,272)						(1,858)						(1,414)						76		%
Impairment loss			15,542						17,835						(2,293)						(13)		%
Total operating expenses			37,569						41,688						(4,119)						(10)		%
Operating income			43,483						27,679						15,804						57		%
Other income (expenses):
Interest expense, net			(3,621)						(2,266)						(1,355)						60		%
Loss on extinguishment of debt			(561)						—						(561)						Not meaningful
Other income			131						197						(66)						(34)		%
Total other income (expenses), net			(4,051)						(2,069)						(1,982)						96		%
Income before income tax expense			39,432						25,610						13,822						54		%
Income tax expense			7,809						5,509						2,300						42		%
Net income			$	31,623					$	20,101					$	11,522					57		%

•We had $49.3 million in contractual shortfall revenue for the year ended December 31, 2019 and $6.0 million for the year ended December 31, 2018, respectively. Our contracts with customers dictate whether shortfall is earned quarterly or at the end of their respective contract year. We recognize revenue to the extent of the unfulfilled minimum contracted quantity at the shortfall price per ton as stated in the contract. In 2019, shortfall revenue of $24.8 million was from a customer with which we have pending litigation.

•Logistics revenue, which includes freight for certain mine gate sand sales, railcar usage, logistics services and SmartSystems rentals, was $74.2 million for the year ended December 31, 2019, an increase of $11.3 million when compared to logistics revenue of $62.9 million for the year ended December 31, 2018. The increase in logistics revenue was due to higher in-basin sales and rentals of our SmartSystems equipment. At December 31, 2019, we had four fleets of SmartSystems in the field.

•Sand sales revenue decreased to $109.6 million for the year ended December 31, 2019 compared to $143.1 million for the year ended December 31, 2018, primarily due to decreased sales volumes.

•the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets;

•the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities;

•our ability to incur and service debt and fund capital expenditures;

•our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods or capital structure; and

•our debt covenant compliance, as Adjusted EBITDA is a key component of critical covenants to the ABL Credit Facility.

			Year Ended December 31,
			2020						2019						2018
			(in thousands)
Net income			$	37,954					$	31,623					$	20,101
Depreciation, depletion and amortization			22,536						27,135						18,165
Income tax (benefit) expense			(12,980)						7,809						5,509
Interest expense			2,129						3,626						2,320
Franchise taxes			275						285						442
EBITDA			$	49,914					$	70,478					$	46,537
Loss (gain) on sale of fixed assets			237						(42)						321
Equity compensation (1)			3,431						2,755						2,670
Acquisition and development costs (2)			(369)						(3,047)						(218)
Non-cash impairment of long-lived and intangible assets(3)			5,115						15,542						17,835
Gain on bargain purchase			(39,600)						—						—
Cash charges related to restructuring and retention of employees			82						137						674
Accretion of asset retirement obligations			396						687						(26)
Loss on extinguishment of debt			—						561						—
Sales tax audit settlement			$	1,250					$	—					$	—
Adjusted EBITDA			$	20,456					$	87,071					$	67,793

Adjusted EBITDA was $20.5 million for the year ended December 31, 2020 compared to $87.1 million for the year ended December 31, 2019. The decrease in Adjusted EBITDA for the year ended December 31, 2020, as compared to the prior year, was primarily due to lower total volumes sold and decreased shortfall revenue in the current period.

Adjusted EBITDA was $87.1 million for the year ended December 31, 2019 compared to $67.8 million for the year ended December 31, 2018. The increase in Adjusted EBITDA for the year ended December 31, 2019, as compared to the prior year, was primarily due to higher shortfall and logistics revenue, partially offset by increased transportation charges and lower overall volumes of sand sold.

			Year Ended December 31,
			2020						2019						2018
			(in thousands)
Revenue			$	122,340					$	233,073					$	212,470
Cost of goods sold			104,221						152,021						143,103
Gross profit			18,119						81,052						69,367
Depreciation, depletion, and accretion of asset retirement obligations included in cost of goods sold			21,022						25,412						16,297
Contribution margin			$	39,141					$	106,464					$	85,664
Contribution margin per ton			$	20.75					$	43.24					$	28.60
Total tons sold			1,886						2,462						2,995

			Year Ended December 31,
			2020						2019						2018
			(in thousands)
Net cash provided by operating activities			$	25,541					$	44,632					$	50,909
Purchases of property, plant and equipment			(8,620)						(25,525)						(96,090)
Free cash flow			$	16,921					$	19,107					$	(45,181)

			Year Ended December 31,
			2020						2019
			(in thousands)
Total current assets			$	112,086					$	92,177
Total current liabilities			37,263						40,018
Working capital			$	74,823					$	52,159

			Year Ended December 31,
			2020						2019						2018
			(in thousands)
Net cash provided by operating activities			$	25,541					$	44,632					$	50,909
Net cash used in investing activities			$	(8,559)					$	(25,425)					$	(125,989)
Net cash (used in) provided by financing activities			$	(7,896)					$	(18,035)					$	41,319

			Oakdale Equipment Financing, Net						ABL Credit Facility						Notes Payable						Finance Leases						Total
			(in thousands)
2021			$	4,639					—						$	3,649					$	152					$	8,440
2022			4,639						—						3,655						136						8,430
2023			4,639						—						2,372						245						7,256
2024			6,888						—						807						—						7,695
2025 and thereafter			1,724						—						542						—						2,266
Total			$	22,529					$	—					$	11,025					$	533					$	34,087

			Year Ended
			December 31, 2020
Shares repurchased			778,300
Average price per share			$	1.26
Aggregate repurchase cost (including broker costs)			$	1.0	million

			Total						Less than 1 year						1-3 years						3-5 years						More than 5 years
			(in thousands)
Debt service			$	34,087					$	8,440					$	15,686					$	9,961					$	—
Operating leases			39,118						8,835						16,611						9,672						4,000
Asset retirement obligations			14,996						477						221						—						14,298
Land rights obligations			39,277						2,419						5,040						4,931						26,887
Total			$	127,478					$	20,171					$	37,558					$	24,564					$	45,185

Our business is affected to some extent by seasonal fluctuations in weather that impact the production levels for a portion of our wet sand processing capacity. While our dry plants are able to process finished product volumes evenly throughout the year, our excavation and our wet sand processing activities have historically been limited to primarily non-winter months. As a consequence, we have experienced lower cash operating costs in the first and fourth quarter of each calendar year, and higher cash operating costs in the second and third quarter of each calendar year when we overproduced to meet demand in the winter months.  These higher cash operating costs were capitalized into inventory and expensed when these tons are sold, which can lead to us having higher overall cost of production in the first and fourth quarters of each calendar year as we expense inventory costs that were previously capitalized. We have indoor wet processing facilities at each of our plant locations which allow us to produce wet sand inventory year-round to support a portion of our dry sand processing capacity, which may reduce certain of the effects of this seasonality. We may also sell frac sand for use in oil and natural gas producing basins where severe weather conditions may curtail drilling activities and, as a result, our sales volumes to those areas may be reduced during such severe weather periods.

			Number of Shares Granted (in thousands)						Weighted Average Grant Date Fair Value
For the year ended December 31, 2020			—						$	—
For the year ended December 31, 2019			1,884						$	2.58
For the year ended December 31, 2018			746						$	6.61

			PAGE
Report of Independent Registered Public Accounting Firm			68
Consolidated Balance Sheets			69
Consolidated Income Statements			70
Consolidated Statements of Comprehensive Income			71
Consolidated Statements of Changes in Stockholders’ Equity			72
Consolidated Statements of Cash Flows			74
Notes to the Consolidated Financial Statements			75

			December 31,
			2020						2019
			(in thousands)
Assets
Current assets:
Cash and cash equivalents			$	11,725					$	2,639
Accounts receivable, net			69,720						58,925
Unbilled receivables			127						4,765
Inventories			19,136						21,415
Prepaid expenses and other current assets			11,378						4,433
Total current assets			112,086						92,177
Property, plant and equipment, net			274,676						230,461
Operating lease right-of-use assets			32,099						28,178
Intangible assets, net			8,253						9,046
Other assets			563						3,541
Total assets			$	427,677					$	363,403
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable			$	3,268					$	3,961
Accrued expenses and other liabilities			13,142						8,578
Deferred revenue, current			6,875						7,654
Income taxes payable			—						542
Long-term debt, net, current			6,901						6,175
Operating lease liabilities, current			7,077						13,108
Total current liabilities			37,263						40,018
Deferred revenue, net			3,482						1,670
Long-term debt, net			22,445						28,240
Operating lease liabilities, long-term			27,020						15,469
Deferred tax liabilities, long-term, net			32,981						24,408
Asset retirement obligation			14,996						6,142
Contingent consideration			180						1,900
Other non-current liabilities			503						—
Total liabilities			138,870						117,847
Commitments and contingencies (Note 17)
Stockholders’ equity
Common stock, $0.001 par value, 350,000,000 shares authorized; 43,193,394    issued and 41,575,129 outstanding at December 31, 2020; 40,975,408    issued and 40,234,451 outstanding at December 31, 2019			42						40
Treasury stock, at cost, 1,618,265 and 740,957 shares at    December 31, 2020 and 2019, respectively			(4,134)						(2,979)
Additional paid-in capital			171,209						165,223
Retained earnings			121,267						83,313
Accumulated other comprehensive income (loss)			423						(41)
Total stockholders’ equity			288,807						245,556
Total liabilities and stockholders’ equity			$	427,677					$	363,403

			Year Ended December 31,
			2020						2019						2018
			(in thousands, except per share amounts)
Revenues:
Sand sales revenue			$	70,902					$	109,621					$	143,533
Shortfall revenue			23,281						49,259						6,032
Logistics revenue			28,157						74,193						62,905
Total revenue			122,340						233,073						212,470
Cost of goods sold			104,221						152,021						143,103
Gross profit			18,119						81,052						69,367
Operating expenses:
Salaries, benefits and payroll taxes			9,993						11,560						11,043
Depreciation and amortization			1,911						2,411						1,843
Selling, general and administrative			15,527						11,328						12,825
Change in the estimated fair value of contingent consideration			(1,410)						(3,272)						(1,858)
Impairment loss			5,115						15,542						17,835
Total operating expenses			31,136						37,569						41,688
Operating (loss) income			(13,017)						43,483						27,679
Other income (expenses):
Gain on bargain purchase			39,600						—						—
Interest expense, net			(2,091)						(3,621)						(2,266)
Loss on extinguishment of debt			—						(561)						—
Other income			482						131						197
Total other income (expenses), net			37,991						(4,051)						(2,069)
Income before income tax (benefit) expense			24,974						39,432						25,610
Income tax (benefit) expense			(12,980)						7,809						5,509
Net income			$	37,954					$	31,623					$	20,101
Net income per common share:
Basic			$	0.94					$	0.79					$	0.50
Diluted			$	0.94					$	0.78					$	0.50
Weighted-average number of common shares:
Basic			40,260						40,135						40,427
Diluted			40,260						40,337						40,449