YARDLEY, Pa. - Smart Sand, Inc. (NASDAQ: NASDAQ:SND), a fully integrated frac and industrial sand supplier, declared a special cash dividend and unveiled a share repurchase initiative. The company's board of directors has approved a special cash dividend of $0.10 per share, which is scheduled to be paid on October 28, 2024, to shareholders on record as of October 15, 2024.
In addition to the dividend, Smart Sand announced a new share repurchase program. The company is authorized to buy back up to $10 million of its outstanding common stock through April 3, 2026. The repurchase plan allows the company to conduct transactions on the open market or through private agreements. The specifics of the repurchases, including timing and volume, are at the company's discretion, and the program may be adjusted, paused, or terminated at any time.
Charles Young, Smart Sand's Chief Executive Officer, expressed the company's commitment to shareholder value, attributing the ability to declare the special dividend and initiate the buyback program to the company's consistent efforts in reducing costs, maintaining low leverage, and increasing operational efficiency. Young stated that Smart Sand aims to continue its focus on financial discipline and opportunistic value return to stockholders.
Smart Sand specializes in providing mine to wellsite proppant and logistics solutions for hydraulic fracturing in the oil and gas industry, with a product range also catering to various industrial applications. The company operates sand mines and processing facilities in Wisconsin and Illinois, which are strategically located with access to major rail lines, enabling nationwide delivery.
This announcement is based on a press release statement from Smart Sand, Inc. detailing the new financial measures aimed at enhancing shareholder returns.
In other recent news, Smart Sand Inc . has secured a new $30 million asset-based credit facility, replacing its previous one. This move is part of the company's broader efforts to bolster its financial flexibility and support its operational needs. The new credit facility will provide Smart Sand with up to $30 million in non-amortizing revolving loans, with interest rates set at an applicable margin of 2.75% plus the secured overnight financing rate (SOFR).
In addition to this strategic financial move, Smart Sand reported robust financial results for the second quarter of 2024, exceeding expectations with sales volumes reaching nearly 1.3 million tons and generating a significant $13.5 million in free cash flow. Despite a decrease in earnings from the previous quarter due to higher costs, the company showcased improved contribution margins and adjusted EBITDA.
The company is also making strategic moves to expand its market share, with expansion efforts underway in the Bakken and Marcellus basins, and into the Canadian market. Two new terminals in Ohio will target the Utica Shale formation market. These are recent developments for Smart Sand Inc.
InvestingPro Insights
Smart Sand's recent announcement of a special dividend and share repurchase program aligns with its commitment to shareholder value, despite facing some financial challenges. According to InvestingPro data, the company's market capitalization stands at $84.99 million, with a price-to-book ratio of 0.35, indicating that the stock may be undervalued relative to its book value.
However, Smart Sand's financial performance has been mixed. The company's revenue for the last twelve months as of Q2 2023 was $295.7 million, with a slight decline of 2.26% compared to the previous period. This aligns with an InvestingPro Tip noting that net income is expected to drop this year.
The gross profit margin for the same period was 14.24%, which supports another InvestingPro Tip highlighting that the company suffers from weak gross profit margins. This could potentially impact Smart Sand's ability to sustain its shareholder-friendly initiatives in the long term.
Despite these challenges, Smart Sand maintains a strong liquidity position. An InvestingPro Tip reveals that the company's liquid assets exceed short-term obligations, which may provide some financial flexibility for the announced dividend and share repurchase program.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Smart Sand, providing a deeper understanding of the company's financial health and market position.
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