Smart Sand Inc (SND) 2023 Q3 法說會逐字稿

Good morning and welcome to the Smart Sand's Inc third quarter 2023 earnings conference call. (Operator Instructions) Please note this event is being recorded. And now I would like to turn the conference over to Christopher Green, Vice President of Accounting. Please go ahead.

早安，歡迎參加 Smart Sand's Inc 2023 年第三季財報電話會議。 （操作員說明）請注意此事件正在被記錄。現在我想將會議交給會計副總裁 Christopher Green。請繼續。

Good morning. And thank you for joining us for Smart Sand's third quarter 2023 earnings call. On the call today we have Chuck Young, Founder and Chief Executive Officer; Lee Beckelman, Chief Financial Officer, and John Young, Chief Operating Officer.

早安.感謝您參加 Smart Sand 2023 年第三季財報電話會議。今天的電話會議由創始人兼首席執行官查克楊 (Chuck Young) 主持。李貝克曼 (Lee Beckelman) 擔任財務官，約翰楊 (John Young) 擔任營運長。

Before we begin, I would like to remind all participants that our comments made today will include forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results or events to materially differ from those anticipated.

在開始之前，我想提醒所有參與者，我們今天發表的評論將包括前瞻性陳述，這些陳述受到某些風險和不確定性的影響，可能導致實際結果或事件與預期產生重大差異。

For a complete discussion of such risks and uncertainties, please refer to the company's press release and our documents on file with the SEC. Smart Sand at this times, any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise.

有關此類風險和不確定性的完整討論，請參閱本公司的新聞稿和我們向 SEC 備案的文件。 Smart Sand 此時並未更新或修改任何財務預測或前瞻性聲明的任何意圖或義務，無論是由於新資訊、未來事件或其他原因。

This conference call contains time-sensitive information that is accurate only as of the live broadcast today, November 8, 2023. Additionally, we will refer to the non-GAAP financial measures of contribution margin, adjusted EBITDA and free cash flow during this call.

本次電話會議所包含的時間敏感資訊僅截至今天（2023 年11 月8 日）直播時準確。此外，我們將在本次電話會議中參考貢獻邊際、調整後EBITDA 和自由現金流的非GAAP 財務指標。

These measures when used in combination with our GAAP results, provide us and our investors with useful information to better understand our business. Please refer to our most recent press release or our public filings for our reconciliations of gross profit, contribution margin, net income to adjusted EBITDA and cash flow provided by operating activities to free cash flow.

當這些措施與我們的公認會計原則結果結合使用時，可以為我們和我們的投資者提供有用的信息，以更好地了解我們的業務。請參閱我們最新的新聞稿或公開文件，以了解我們對毛利、邊際貢獻、淨利潤與調整後 EBITDA 以及經營活動提供的現金流量與自由現金流的調節。

I would now like to turn the call over to our CEO, Chuck Young.

我現在想將電話轉給我們的執行長 Chuck Young。

Thanks, Chris, and good morning. Smart Sand delivered another quarter of strong operating and financial results. In the third quarter, we sold approximately 1.2 million tons. We generated $21 million in contribution margin and $13.3 million in adjusted EBITDA. Both solid improvements over third quarter 2022 results and second quarter 2023 results.

謝謝克里斯，早安。 Smart Sand 又一個季度實現了強勁的營運和財務業績。第三季度，我們銷售了約120萬噸。我們產生了 2,100 萬美元的邊際貢獻和 1,330 萬美元的調整後 EBITDA。與 2022 年第三季的業績和 2023 年第二季的業績相比，均取得了顯著改善。

Additionally, in the quarter, we continued to generate positive free cash flow. For the first nine months of 2023, we have generated $17.5 million in free cash flow. And I'm pleased to report that Smart Sand will be cash flow positive for 2023.

此外，在本季度，我們繼續產生正的自由現金流。 2023 年前 9 個月，我們產生了 1,750 萬美元的自由現金流。我很高興地報告，Smart Sand 在 2023 年將實現正現金流。

We have used our free cash flow this year to continue to delever our balance sheet. We paid off over $9 million in debt through the first nine months of 2023. Return value to shareholders, earlier this year, we bought back approximately 11% of our common shares outstanding.

今年我們利用自由現金流繼續降低資產負債表的槓桿率。到 2023 年前 9 個月，我們還清了超過 900 萬美元的債務。為股東帶來回報，今年早些時候，我們回購了約 11% 的已發行普通股。

Smart Sand will continue to focus on generating free cash flow, maintaining balance sheet discipline and returning value to our shareholders. We plan to remain true to our core business principles and operating philosophy.

Smart Sand 將繼續專注於產生自由現金流、維持資產負債表紀律並為股東回報價值。我們計劃忠於我們的核心業務原則和經營理念。

Our goal is simple to be the premier provider of Northern White sand and logistics services in North America. We strive to not only be a supplier of sand to our customer, but to be their partner in efficiently providing high quality efficient, environmentally friendly and sustainable long-term sand supply.

我們的目標很簡單，成為北美北部白沙和物流服務的首要供應商。我們努力不僅成為客戶的砂子供應商，而且成為他們的合作夥伴，高效地提供優質、高效、環保和可持續的長期砂子供應。

We may not have achieved these results without the dedication and hard work of our employees. I want to thank our employees for their efforts and continued commitment to Smart Sand. Demand for Northern White frac sand continues to be strong. We had consistent demand in the Bakken and Appalachian basins during the quarter.

沒有員工的奉獻和辛勤工作，我們不可能取得這些成果。我要感謝我們的員工為 Smart Sand 所做的努力和持續承諾。對北方白壓裂砂的需求持續強勁。本季巴肯和阿巴拉契亞盆地的需求持續穩定。

Our sales in Canada increased as well. This was our first quarter fully operating of our Blair facility. Canadian sales represented approximately 10% of third quarter sales volume. We are excited about the Blair mines growth potential as part of our continuing effort to expand our Northern White sand franchise.

我們在加拿大的銷售額也有所增加。這是我們布萊爾工廠全面運作的第一個季度。加拿大銷售額約佔第三季銷售額的 10%。我們對布萊爾礦山的成長潛力感到興奮，這是我們不斷努力擴大北白沙特許經營權的一部分。

With respect to our industrial product solutions, we are constructing improvements at our Utica facility in the fourth quarter to add cooling and blending capabilities. The expansion of our industrial products capabilities will allow us to serve a broader, moderate market segment. Industrial sand sales volumes have been approximately 5% of our sales volume over the last few quarters, and we expect those sales to grow in 2024.

關於我們的工業產品解決方案，我們將在第四季度對尤蒂卡工廠進行改進，以增加冷卻和混合能力。我們工業產品能力的擴展將使我們能夠服務更廣泛、適度的細分市場。過去幾個季度，工業砂銷量約占我們銷量的 5%，我們預計這些銷量將在 2024 年成長。

We continue to make progress penetrating the Last Mile market with the introduction of our Smartbelt [director] blender technology. We're delivering the customers what they want, faster fracs and less trucking through maximizing payload per truck and minimizing unload times.

透過引入 Smartbelt [總監] 攪拌機技術，我們繼續在滲透最後一英里市場方面取得進展。我們透過最大限度地提高每輛卡車的有效載荷並最大限度地減少卸載時間，為客戶提供他們想要的東西：更快的壓裂和更少的卡車運輸。

In response to customer demand, our SmartSystems fleet offering now includes our Smartbelt conveyor system and our proprietary SmartPath transloader. During the quarter, we operated four SmartSystem fleets and four silo only fleets. Based on customer feedback and demand, we're excited about the prospects for growing our Last Mile business in 2024.

為了滿足客戶需求，我們的 SmartSystems 車隊產品現在包括我們的 Smartbelt 輸送系統和我們專有的 SmartPath 轉運裝置。本季度，我們營運了四個 SmartSystem 車隊和四個僅筒倉車隊。根據客戶回饋和需求，我們對 2024 年「最後一哩路」業務的成長前景感到興奮。

Looking at the fourth quarter, we currently expect to see normal seasonal slowdown in the Bakken as we move into the winter months. Additionally, we are seeing some budget exhaustion from customers who accelerated spending in the first nine months of the year.

展望第四季度，隨著進入冬季，我們目前預期巴肯地區將出現正常的季節性放緩。此外，我們也看到今年前九個月加速支出的客戶出現了一些預算耗盡的情況。

However, we do expect similar sales in Canada in the fourth quarter, and we're expecting increased activity in the Appalachian Basin starting in November. We expect industrial sales in the fourth quarter to be in line with third quarter results.

然而，我們確實預計第四季度加拿大的銷售量會類似，我們預計阿巴拉契亞盆地的銷售活動將從 11 月開始增加。我們預計第四季工業銷售將與第三季結果一致。

We are excited about our prospects in 2024. In October, we signed three new contracts. We currently have approximately 50% of our expected sales volumes contracted for 2024. Two of these new contracts are for customers in the Appalachian basins, and one is for a customer in the Bakken.

我們對 2024 年的前景感到興奮。10 月，我們簽署了三份新合約。目前，我們的 2024 年預期銷售量約佔 50%。其中兩份新合約是針對阿巴拉契亞盆地的客戶，一份是針對巴肯地區的客戶。

Based on the current market conditions and commodity prices, we expect volumes in these two key markets for Smart Sand to be strong in 2024. Natural gas fundamentals continued to be positive with continued growth in natural gas plants for electricity generation and increased LNG demand as new capacity in North America comes online.

根據目前的市場狀況和大宗商品價格，我們預計 2024 年這兩個關鍵市場的智慧砂銷售將強勁。隨著天然氣發電廠的持續成長以及液化天然氣需求的增加，天然氣基本面繼續向好。北美產能上線。

To support the expected long-term positive market fundamentals in the Marcellus, we have expanded our Waynesburg, Pennsylvania terminal. We now have the capability to handle multiple products at this location and increased volumes.

為了支持馬塞勒斯預期的長期積極市場基本面，我們擴建了賓州韋恩斯堡碼頭。我們現在有能力在這個地點處理多種產品並增加數量。

With our improvements completed, we are anticipating higher industrial sales volume in 2024. Our new cooling and blending capabilities allow us to compete more effectively in the foundry and glass industrial sand markets.

隨著我們的改進完成，我們預計 2024 年工業銷量將會更高。我們新的冷卻和混合能力使我們能夠在鑄造和玻璃工業砂市場中更有效地競爭。

We are still in our budgeting process for 2024. So we'll have more details for our expectations for 2024 on our 2024 year-end call. However, based on current market conditions, we expect overall sand sales volumes for 2024 to be at least 10% higher than 2023 sales levels.

我們仍在製定 2024 年的預算流程。因此，我們將在 2024 年年終電話會議上提供有關 2024 年預期的更多詳細資訊。然而，根據目前的市場狀況，我們預計 2024 年沙子整體銷量將比 2023 年銷量水準高出至少 10%。

For our Last Mile business, by year-end, we will have 10 SmartSystems with Smartpath and Smartbelt technology ready to deploy in the field. Going into 2024, we expect to have increase in our utilization of our SmartSystems fleet over the course of the year.

對於我們的「最後一哩路」業務，到年底，我們將擁有 10 個配備 Smartpath 和 Smartbelt 技術的 SmartSystems，準備在現場部署。進入 2024 年，我們預計 SmartSystems 車隊的使用率將在這一年中增加。

Building our Northern White sand franchise will continue to be our primary focus. Our goal is to increase the utilization of our three operating mines, Oakdale, Utica and Blair. And to expand our market share in every basin we serve.

建造我們的北部白沙特許經營權將繼續是我們的首要重點。我們的目標是提高奧克代爾、尤蒂卡和布萊爾這三個營運礦場的利用率。並擴大我們服務的每個盆地的市場份額。

We have approximately 10 million tons of high-quality Northern White sand capacity available to serve the frac sand and industrial markets. This capacity is tied directly into four Class I railroads. We have the best-in-class terminals serving the key Bakken and Appalachian basins and a network of high quality well-positioned third-party terminal partners.

我們擁有約 1,000 萬噸優質北方白砂產能，可用於服務壓裂砂和工業市場。這一容量直接與四條一級鐵路相關。我們擁有一流的碼頭，為主要的巴肯和阿巴拉契亞盆地提供服務，並擁有優質、定位良好的第三方碼頭合作夥伴網路。

We can serve every market in North America through our efficient, low-cost logistics footprint. With our SmartSystems technology, we can meet increasing demand of customers looking for higher volume of sand delivered to the wellsite in a safe and efficient manner.

我們可以透過高效率、低成本的物流足跡為北美的每個市場提供服務。透過我們的 SmartSystems 技術，我們可以滿足客戶日益增長的需求，尋求以安全高效的方式將更多沙子運送到井場。

We also have a well tenured management team that are owners of the business and are focusing on delivering long-term value for our employees and shareholders. Most of the current executive team has been with Smart Sand for over 10 years and are committed to the company's long-term success.

我們也擁有一支長期任職的管理團隊，他們是企業的所有者，致力於為我們的員工和股東提供長期價值。目前的管理團隊中的大多數人已在 Smart Sand 工作了 10 多年，並致力於公司的長期成功。

We will continue to look for ways to increase shareholder value. We have a strong balance sheet with one of the lowest leverage levels in the industry, which allows us to manage effectively through the cycles in the energy business and provides us the ability to move quickly to take advantage of new opportunities in the market.

我們將繼續尋找增加股東價值的方法。我們擁有強大的資產負債表，其槓桿水平是業內最低的之一，這使我們能夠有效地管理能源業務的周期，並使我們能夠迅速採取行動，利用市場上的新機會。

Our goal is to continue to deliver positive free cash flow, while taking advantage of opportunities to grow the business, we will also continue to look for ways to return value to our shareholders. We believe the Northern White sand will continue to be a key product for both the energy and industrial sand markets.

我們的目標是繼續提供正的自由現金流，在利用發展業務的機會的同時，我們也將繼續尋找為股東回報價值的方法。我們相信北方白砂將繼續成為能源和工業砂市場的關鍵產品。

And Smart Sand is committed to being a leading provider of Northern White sand. As always, we'll keep our employee and shareholders' interests in mind in everything we do. We continue to evaluate ways we can return value to our shareholders. We have bought back approximately 11% of our shares this year. And there will be more to come on our year-end earnings call in early 2024.

Smart Sand 致力於成為北方白砂的領先供應商。一如既往，我們所做的一切都會牢記員工和股東的利益。我們將繼續評估為股東回報價值的方式。今年我們回購了約11%的股份。我們在 2024 年初的年終財報電話會議上也將發布更多內容。

And with that, I'll turn the call over to our CFO, Lee Beckelman.

接下來，我會將電話轉給我們的財務長 Lee Beckelman。

Thanks, Chuck. Now I'll go through some of the highlights of the third quarter 2023 compared to our second quarter 2023 results. We sold 1.2 million tons in the third quarter, a 12% increase over second quarter sales volumes of 1.1 million tons.

謝謝，查克。現在，我將回顧 2023 年第三季與 2023 年第二季業績相比的一些亮點。第三季我們銷售了120萬噸，比第二季的110萬噸增加了12%。

Total revenues for the third quarter were $76.9 million compared to $74.8 million in the second quarter. Total revenues were higher in the third quarter, primarily due to contractual shortfall revenue recognized in the quarter.

第三季的總收入為 7,690 萬美元，而第二季的總收入為 7,480 萬美元。第三季總收入較高，主要是由於該季度確認的合約收入缺口。

Our cost of sales for the quarter were $62.5 million, basically flat with second quarter results. Total operating expenses of $9.5 million in the third quarter were marginally lower than second quarter operating expenses of $9.6 million.

我們本季的銷售成本為 6,250 萬美元，與第二季的業績基本持平。第三季的總營運支出為 950 萬美元，略低於第二季的 960 萬美元。

Contribution margin was $21 million or $17.20 per ton in the third quarter. Second quarter contribution margin was $19 million or $17.57 per ton. Adjusted EBITDA in the third quarter was $13.3 million compared to $11.4 million in the second quarter.

第三季貢獻毛利為 2,100 萬美元，每噸 17.20 美元。第二季貢獻獲利為 1,900 萬美元，每噸 17.57 美元。第三季調整後 EBITDA 為 1,330 萬美元，而第二季為 1,140 萬美元。

The sequential increase in contribution margin and adjusted EBITDA in the third quarter was primarily due to the shortfall revenue recognized in the quarter and relatively flat cost of goods sold and operating expenses.

第三季邊際貢獻率和調整後 EBITDA 環比成長主要是由於本季確認的收入缺口以及銷售成本和營運費用相對穩定。

For the third quarter 2023, we generated $12.5 million in net cash provided by operating activities leading to $5.6 million of free cash flow. After we spent $6.9 million on capital expenditures. Year-to-date through the end of September, we have generated $17.5 million in free cash flow from $33.6 million in net cash provided by operating activities, less $16.1 million in capital expenditures.

2023 年第三季度，我們透過經營活動產生了 1,250 萬美元的淨現金，從而產生了 560 萬美元的自由現金流。之後我們花了 690 萬美元的資本支出。今年迄今為止，截至 9 月底，我們從經營活動提供的 3,360 萬美元淨現金中產生了 1,750 萬美元的自由現金流，減去 1,610 萬美元的資本支出。

We ended the third quarter with no outstanding borrowings on our credit facility. We had approximately $9.3 million in cash and cash equivalents at the end of the third quarter. And between cash and availability from our credit facility, we currently have available liquidity in excess of $28 million.

截至第三季末，我們的信貸安排沒有未償還借款。截至第三季末，我們擁有約 930 萬美元的現金和現金等價物。在現金和信貸額度的可用性之間，我們目前擁有超過 2800 萬美元的可用流動資金。

[Subject] highlighted, we do expect demand to moderate some in the fourth quarter due to normal seasonal slowdown in the Bakken and budget exhaustion from customers at the end of the year. Currently, we expect fourth quarter sales volumes to be in the 900,000 to 1.1 million ton range.

[主題]強調，由於巴肯的正常季節性放緩以及年底客戶的預算耗盡，我們預計第四季度的需求將有所放緩。目前，我們預計第四季銷量將在 90 萬噸至 110 萬噸之間。

Normally as fourth quarter and first quarters of the calendar year, we have higher reported production costs due to drawing down on inventory that we have capitalized in the summer months to meet our winter sales volumes.

通常，在日曆年的第四季度和第一季度，我們報告的生產成本較高，因為我們在夏季利用庫存來滿足冬季銷售。

Currently for the fourth quarter, we believe contribution margin per ton will be in the mid double-digit range of $12 to $16 per ton. We expect capital expenditures for the year to be in the $20 million to [$23] million range, which includes the capital expenditures related to the startup of the Blair facility.

目前，我們認為第四季每噸的邊際貢獻將在每噸 12 至 16 美元的中間兩位數範圍內。我們預計今年的資本支出將在 2,000 萬美元至 2,300 萬美元之間，其中包括與布萊爾工廠啟動相關的資本支出。

The expansion of the Waynesburg terminal and investment in the cooling and blending capabilities at our Utica facility. As Chuck highlighted, we expect to be free cash flow positive for the year.

韋恩斯堡碼頭的擴建以及尤蒂卡工廠冷卻和混合能力的投資。正如查克所強調的那樣，我們預計今年自由現金流將為正值。

This concludes our prepared comments. And we will now open the call up for questions.

我們準備好的評論到此結束。我們現在開始接受提問。

Thank you. We will now begin the question-and-answer session. (Operator Instructions)

謝謝。我們現在開始問答環節。 （操作員說明）

John Daniel, Daniel Energy Partners.

約翰‧丹尼爾，丹尼爾能源合夥人。

Thank you. Good morning, guys. Just one question for me, if I may? The commentary about ['24] volumes being up 10%. Is it your sense, is that a 10% rise in activity?

謝謝。早上好傢伙。只是問我一個問題，可以嗎？關於 ['24] 交易量成長 10% 的評論。您的感覺是，活動量增加了 10% 嗎？

Is it completions design? Completion designs are changing as more volume per well and new customer. Just any incremental color would be appreciated.

是竣工設計嗎？隨著每口井產量的增加和新客戶的增加，完井設計正在改變。只要任何增量顏色都會受到讚賞。

Yeah. I'll start with that, John. I think some of it is actually -- we have actually signed a couple of new customers and increasing volumes with some existing customers. Some of that is increased activity related to that.

是的。我就從這個開始吧，約翰。我認為其中一些實際上是——我們實際上已經簽署了一些新客戶，並增加了一些現有客戶的數量。其中一些是與此相關的活動增加。

And then I think we continue to see trends with the longer laterals and more stages per lateral. We continue to see trends were more sand per well, which I think is helping driving. Even if you see kind of flat spending, more sand per well is the trends we've been seeing.

然後我認為我們繼續看到更長的支線和每條支線更多的階段的趨勢。我們繼續看到每口井沙子增多的趨勢，我認為這有助於推動。即使您看到支出持平，但我們所看到的趨勢是每口井使用更多的沙子。

Like the blend?

喜歡混合嗎？

Yeah. And what I would add to that is just is also as we continued to see our Canadian market ramp up at the new market that we hadn't participated in prior. So our Blair facility is positioned really well for attacking that market.

是的。我要補充的是，我們繼續看到我們的加拿大市場在我們之前沒有參與過的新市場上不斷成長。因此，我們的布萊爾工廠處於非常適合進軍該市場的位置。

Got it. Okay.

知道了。好的。

And I'll also add that, John, is that in the Appalachian Basin and some of the other basins that we're servicing, there's a higher demand for fine sand. And a lot of the existing Northern White infrastructure doesn't have as much fine sand as we do have. So we feel like we're still in a good space of servicing.

約翰，我還要補充一點，在阿巴拉契亞盆地和我們正在服務的其他一些盆地，對細沙的需求更高。許多現有的北懷特基礎設施沒有我們那麼多的細沙。所以我們覺得我們仍然處於良好的服務空間。

Perfect. Thank you all very much for including me.

完美的。非常感謝大家包容我。

Thank you.

謝謝。

Patrick Ouellette, Stifel.

派崔克歐萊特，史蒂菲爾。

Hey, It's Pat. I'm for [Stephen Gengaro]. Thanks for taking the questions. So in regards to the Canadian markets, obviously, part of the increased volumes attributable to Blair there. We were curious if you could provide any insight on how to think about margin there? If it the same as other regions or if the quarter-over-quarter step-up in margin attributable Canadian market at all?

嘿，我是帕特。我支持[史蒂芬·根加羅]。感謝您提出問題。因此，就加拿大市場而言，顯然，銷量增加的一部分歸功於布萊爾。我們很好奇您能否提供有關如何考慮利潤的見解？是否與其他地區相同，或者利潤率的季度環比增長是否歸因於加拿大市場？

Well, margins are relatively consistent with other regions. I think we -- it depends on the product. And so we're seeing maybe a little higher pricing in Canada, but it's not dramatically different than what we're seeing in the US currently.

嗯，利潤率與其他地區相對一致。我認為我們——這取決於產品。因此，我們在加拿大看到的價格可能會更高一些，但與我們目前在美國看到的價格並沒有太大不同。

Yeah. And the other thing I would add to that from an operational standpoint. As we continue to ramp up operations at Blair, unit production costs should come down to levels similar to wholesale. I mean, it's a very similarly logistically situated plant, mine wet and dry processing load out all on site.

是的。我想從營運的角度補充另一件事。隨著我們繼續擴大布萊爾的運營，單位生產成本應降至與批發類似的水平。我的意思是，這是一家物流位置非常相似的工廠，濕式和乾式加工負載均在現場進行。

So we have -- I think from driving margin out of that plant, we should be able to drive down production costs too as we get more utilization.

因此，我認為，透過提高該工廠的利潤率，隨著利用率的提高，我們也應該能夠降低生產成本。

We can utilize that plant. That's actually referring to the CN plant that we have in Blair, Wisconsin. Now, that plant can send sands for the US as well for the Appalachian Basin, but we're super excited because it gets us up to a Canadian market that we never had before on our other rail providers. So which looks to have some pretty good growth next year.

我們可以利用那個植物。這實際上指的是我們位於威斯康辛州布萊爾的 CN 工廠。現在，該工廠可以向美國以及阿巴拉契亞盆地輸送沙子，但我們非常興奮，因為它讓我們進入了加拿大市場，這是我們之前在其他鐵路供應商上從未有過的市場。因此，明年看起來會有一些相當不錯的成長。

Yeah. Okay, thanks. That's great color there. That's all from me. I'll turn it back.

是的。好的謝謝。那裡的顏色真棒。這就是我的全部。我會把它轉回來。

Thank you.

謝謝。

William Bremer, Vanquish Capital Partners.

威廉·布雷默，Vanquish Capital Partners。

Good morning, gentlemen.

早安，先生們。

Morning, William.

早上好，威廉。

Hey, Chuck. Well, first and foremost, the balance sheet is looking fantastic. You guys have done a fantastic job in capital allocation. And I give you a lot of credit on that. And echo the comments you made regarding your leverage compared to your peers. So well done there.

嘿，查克。嗯，首先也是最重要的是，資產負債表看起來非常棒。你們在資本配置方面做得非常出色。我對此非常信任。並回應您對與同行相比的槓桿作用的評論。那裡做得很好。

My question is on the industrial side. And I was wondering if you could provide us a little more granularity in terms of what end markets you're supplying? And secondly, have you been able to penetrate the Canadian industrial market at this time.

我的問題是工業方面的。我想知道您是否能為我們提供更多關於您所供應的終端市場的資訊？其次，你們現在是否能夠打入加拿大工業市場？

So John has been the focus on that on the industrial sands part along with [Berkshire]. So I'll let him answer that question. But yeah, we're definitely focused on Canada as well from the industrial sand from my standpoint.

因此，約翰和[伯克希爾]一直關注工業砂部分。那我就讓他來回答這個問題。但是，是的，從我的角度來看，我們肯定也關注加拿大的工業砂。

Yeah, William. So, yeah, I mean, we're focused on the traditional industrial markets in order of volume, it be glass, foundry and then your kind of it falls off their recreational and other type things.

是的，威廉。所以，是的，我的意思是，我們按照數量順序專注於傳統工業市場，它是玻璃、鑄造廠，然後是娛樂和其他類型的市場。

With the addition of our blending and cooling capability out of our Utica plant there, we expect to continue to grow that industrial market, having blending and cooling capability gets us into markets that we are incapable of pursuing prior to having that capability.

隨著我們尤蒂卡工廠的混合和冷卻能力的增加，我們預計將繼續擴大該工業市場，擁有混合和冷卻能力使我們進入了在擁有這種能力之前我們無法進入的市場。

So again, industrial is always going to be a lag from volume compared to frac. Frac is the big dog in the volume world. But our expectation is that, in some industrial applications, you can have relatively high margin specialized products. And that's really what we're focused on out of our industrial base.

再說一遍，與壓裂相比，工業產量總是落後的。 Frac 是體積世界中的大狗。但我們的期望是，在某些工業應用中，可以擁有利潤率相對較高的專業產品。這確實是我們工業基礎所關注的重點。

Well said, John, thank you.

說得好，約翰，謝謝你。

Next question.

下一個問題。

Thank you very much. And this concludes our question-and-answer session. I would like to turn the conference back over to Chuck Young for some closing remarks.

非常感謝。我們的問答環節到此結束。我想把會議轉回給查克楊（Chuck Young）做一些總結發言。

Thank you for joining us on the call today, and we look forward to speaking to you again. Our Q call -- Q4 call early next year.

感謝您今天加入我們的電話會議，我們期待再次與您交談。我們的 Q 電話會議—明年初的第四季電話會議。

And this concludes the conference. Thank you very much for attending today's presentation. You may now disconnect.

會議到此結束。非常感謝您參加今天的演講。您現在可以斷開連線。