Smart Sand Inc (SND) 2024 Q3 法說會逐字稿

Good morning ladies and gentlemen, and welcome to the Smart Sand Q3 2024 earning call. (Operator instruction) This call is being recorded on Wednesday, November 13, 2024.

女士們、先生們，早安，歡迎參加 Smart Sand 2024 年第三季財報電話會議。（接線員指示）此通話於 2024 年 11 月 13 日星期三錄製。

I would now like to turn over to Christopher Green, Vice President, Accounting Officer. Please go ahead.

現在我想把發言權交給副總裁兼會計官克里斯多福‧格林 (Christopher Green)。請繼續。

Good morning and thank you for joining us for Smart Sand third quarter 2024 earning call. On the call today we have Charles Young, Director and Chief Executive Officer; Lee Beckelman, Chief Financial Officer; and John Young, Chief Operating Officer.

早安，感謝您參加 Smart Sand 2024 年第三季財報電話會議。參加今天電話會議的有董事兼執行長查爾斯楊 (Charles Young)、財務長李貝克曼 (Lee Beckelman) 和營運長約翰楊 (John Young)。

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.

在我們開始之前，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，這些陳述受制於某些風險和不確定性，可能導致實際結果或事件與預期有重大差異。

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 disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information that is accurate only as of the live broadcast today, May 14, 2024.

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美國證券交易委員會提交的文件。Smart Sand 不承擔更新或修改任何財務預測或前瞻性聲明的意圖或義務，無論其原因是什麼，無論是由於新資訊、未來事件或其他原因。本次電話會議包含時間敏感訊息，僅截至今天（2024 年 5 月 14 日）的現場直播時準確。

Additionally, we will refer to the non-GAAP financial measures of contribution margin, adjusted EBITDA and free cash flow during this call. 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 to contribution margin, net income to adjusted EBITDA and cash flow provided by operating activities to free cash flow.

此外，我們將在本次電話會議中參考貢獻利潤率、調整後 EBITDA 和自由現金流量等非公認會計準則財務指標。這些指標與我們的 GAAP 結果結合使用，為我們和我們的投資者提供了有用的信息，以便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，以了解毛利與貢獻利潤率、淨收入與調整後 EBITDA 以及經營活動提供的現金流量與自由現金流量的調節。

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

現在我想將電話轉給我們的執行長 Chuck Young。

Thanks Chris, and good morning. We are pleased to report that our continued focus on proactively managing our cost structure and capital expenditures led to positive free cash flow for the quarter. We remain cash flow positive for 2024, and in keeping with our stated goal of returning capital to our shareholders this year, we recently paid a special dividend of $0.10 per share outstanding.

謝謝克里斯，早安。我們很高興地報告，我們繼續專注於積極管理我們的成本結構和資本支出，導致本季的自由現金流為正。2024 年我們的現金流仍為正，為了實現我們今年向股東返還資本的既定目標，我們最近支付了每股 0.10 美元的特別股息。

And we additionally announced a share buyback plan of up to $10 million. We remain committed to remaining financially disciplined, and returning value to our shareholders.

我們也宣布了一項高達 1000 萬美元的股票回購計畫。我們將繼續致力於保持財務紀律並為股東帶來價值回報。

Importantly, during the quarter we put in place a new five-year $30 million ABL credit facility, with our new lender, First Citizens Bank. This facility provides us with an efficient and flexible source of funding that allows us, to manage our business going forward, as well as the ability to act quickly on emerging opportunities.

重要的是，在本季度，我們與新的貸款機構第一公民銀行 (First Citizens Bank) 建立了新的五年期 3000 萬美元 ABL 信貸額度。此融資機制為我們提供了高效、靈活的資金來源，使我們能夠管理未來的業務，並能夠迅速抓住新興機會。

In the third quarter, Smart Sand delivered sales volumes of just under 1.2 million tons, adjusted EBITDA of $5.7 million, and positive free cash flow of $3.7 million. Our sales volume this year have increased 9% over 2023, while our cost of goods sold has decreased by $6.7 million or 3.4% for the same period. Our capital expenditures are down $11 million year-to-date through September, having spent $5.1 million through September 2024 in comparison to $16.1 million for the same period in 2023. We expect total capital expenditures for 2024 to be at, or under $10 million compared to $23 million in 2023.

第三季度，Smart Sand 的銷售量略低於 120 萬噸，調整後 EBITDA 為 570 萬美元，正自由現金流為 370 萬美元。我們今年的銷售額比 2023 年成長了 9%，而同期我們的銷售成本減少了 670 萬美元，即 3.4%。截至今年 9 月，我們的資本支出已下降 1,100 萬美元，截至 2024 年 9 月的支出為 510 萬美元，而 2023 年同期為 1,610 萬美元。我們預計 2024 年的總資本支出將達到或低於 1,000 萬美元，而 2023 年為 2,300 萬美元。

We continue to believe in long-term fundamentals of the oil and gas business, and although volumes decreased modestly quarter-over-quarter, demand remained strong through the fourth quarter. As for 2025, we are particularly excited about growing demand for natural gas in both the US and Canadian markets, coupled with oil activity that is expected to increase in the Utica.

我們仍然相信石油和天然氣業務的長期基本面，儘管產量較上季略有下降，但第四季需求依然強勁。展望 2025 年，我們對美國和加拿大市場對天然氣的需求不斷增長感到特別興奮，同時尤蒂卡的石油活動預計也會增加。

In the third quarter, several new initiatives started to contribute to the business. We began delivering sand to our two new terminals in Denison and Minerva, Ohio in the quarter. These terminals opened up the growing Utica Shale basin for Smart Sand. In the quarter, approximately 18% of our volumes were sold through these terminals.

第三季度，幾項新措施開始為業務做出貢獻。本季度，我們開始向位於俄亥俄州丹尼森和米納瓦的兩個新碼頭運送沙子。這些終端為智慧沙礦開闢了不斷擴大的尤蒂卡頁岩盆地。本季度，我們約有 18% 的銷量是透過這些終端銷售的。

In addition to establishing a new market for us, delivering sands through our own terminals, reduces our logistics costs and provides competitive advantage to serve this market going forward. We continue to grow our volumes from our Blair mining. This facility allows us not only to compete in the growing Canadian sand market, it also provides us additional supply route into the Marcellus and Utica basins in the Northeast United States.

除了為我們開拓新市場之外，透過我們自己的碼頭運送沙子還可以降低我們的物流成本，並為未來服務該市場提供競爭優勢。我們的布萊爾礦業產量持續成長。該設施不僅使我們在不斷增長的加拿大沙子市場中具有競爭力，還為我們提供了通往美國東北部馬塞勒斯和尤蒂卡盆地的額外供應路線。

In the third quarter, Canadian volumes represented about 11% of our sales. We continue to grow our industrial product solutions franchise. Our IPS sales volumes, increased by 38% sequentially. We are positioning ourselves to compete for new contracts in 2025, particularly with glass and foundry customers. We could see IPS grow from under 5% of our revenue base, to the 10% range of total sales volumes in 2025.

第三季度，加拿大銷量約占我們銷售額的 11%。我們繼續擴大我們的工業產品解決方案特許經營權。我們的 IPS 銷售量較上季成長了 38%。我們正準備在 2025 年爭奪新合同，尤其是玻璃和鑄造客戶。我們可以看到 IPS 占我們收入基礎的比重從不到 5% 成長到 2025 年總銷售額的 10% 左右。

We secured a new revolving credit facility. We closed on the new $30 million five-year revolving credit facility in the third quarter, and we look forward to working with our new lending partner, First Citizens Bank. We remain committed to being the premier provider of Northern White Sand in North America, and we're confident that the foundation of Northern White Sand demand is strong and will be durable over time.

我們獲得了新的循環信貸額度。我們在第三季完成了新的 3000 萬美元五年循環信貸額度，我們期待與我們的新貸款合作夥伴第一公民銀行合作。我們始終致力於成為北美首屈一指的北方白沙供應商，我們相信北方白沙的需求基礎強勁，並將長期保持持久。

We expect pickup in activity in the fourth quarter, as demand remains strong in the basins we serve. As demand remains robust, we are optimistic the pricing environment will improve in 2025. The trends for natural gas demand are positive, due to the increasing demand for LNG and natural gas fed power plants, to support growing demand from AI data centers.

由於我們服務的盆地需求依然強勁，我們預計第四季活動將會回升。由於需求依然強勁，我們樂觀地認為 2025 年的定價環境將會改善。由於對液化天然氣和天然氣發電廠的需求不斷增加，以支持人工智慧資料中心日益增長的需求，天然氣需求趨勢是積極的。

The Marcellus and Canadian basins that we support, are primarily natural gas basins. We expect activities in these markets will grow in 2025. We also see growing demand in the oil markets we serve in the Bakken and the Utica basins.

我們支持的馬塞勒斯盆地和加拿大盆地主要為天然氣盆地。我們預計這些市場的活動到 2025 年將會成長。我們也看到，我們所服務的巴肯盆地和尤蒂卡盆地的石油市場的需求正在不斷增長。

All these markets will continue to be primarily supplied by Northern White Sand. As demand for Northern White Sand continues to grow in these markets we serve, we believe incremental supply will be limited, due to increasing demand for fine mesh sands.

所有這些市場將繼續主要由北方白沙供應。隨著我們所服務的這些市場對北方白沙的需求持續增長，我們相信，由於對細網沙的需求不斷增加，增量供應將受到限制。

Fine mesh sands represent about 90% of current frac sand demand. Many of our competition's reserves, are heavily weighted towards producing coarser product that is not in favor. Our reserves are over 75% fine mesh sand, making us uniquely positioned to seize on our customers growing appetite for fine mesh frac sand.

細目砂約佔目前壓裂砂需求的 90%。我們許多競爭對手的儲備主要生產不受青睞的粗糙產品。我們的儲量超過 75% 為細網砂，這讓我們擁有獨特的優勢，可以滿足客戶對細網壓裂砂日益增長的需求。

Limited investment in new Northern White capacity, currently there is limited capital available to support new Northern White Sand development, or restart idle mines. Start-up costs for idle mines, are significant and the logistical market and reserve based challenges that led to these mines, to be shut down during the downturn remain. Thus, we do not expect to see significant additional Northern White capacity entering the marketplace.

北方白沙新產能投資有限，目前可用於支持北方白沙新產能開發或重啟閒置礦場的資金有限。閒置礦場的啟動成本很高，而導致這些礦場在經濟低迷時期關閉的物流市場和儲備挑戰仍然存在。因此，我們預計不會有大量北方白酒產能進入市場。

With our three facilities, efficient and sustainable access to all Class 1 rail lines, coupled with our low cost operations and large fine mesh reserves, Smart Sand is uniquely situated to take advantage of expected growth in Northern White Sand demand in 2025 and beyond.

憑藉我們的三個設施、高效且可持續地接入所有一級鐵路線，再加上我們的低成本運營和大量細網儲量，Smart Sand 具有獨特的優勢，可以利用 2025 年及以後北部白沙需求的預期增長。

While current activity levels and pricing are challenging, we continue to demonstrate that Smart Sand can operate effectively, through the operating cycles and is well positioned to take advantage, of expected -- improved market fundamentals starting in 2025.

儘管目前的活動水準和定價充滿挑戰，但我們繼續證明，智慧沙可以在整個營運週期內有效運作，並且能夠充分利用從 2025 年開始預期的市場基本面改善。

I want to thank all of the employees for their continued dedication to Smart Sand. As always, we will keep our employee and shareholder interests in mind, in everything we do.

我要感謝所有員工對 Smart Sand 的持續奉獻。一如既往，我們所做的每一件事都會把員工和股東的利益放在心上。

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

說完這些，我將把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 2024, compared to our second quarter 2024 results. We sold 1.19 million tons in the quarter, a 7% decrease from second quarter sales volumes of 1.27 million tons.

謝謝查克。現在，我將與 2024 年第二季的業績相比，回顧 2024 年第三季的一些亮點。本季我們的銷量為 119 萬噸，較第二季的 127 萬噸下降了 7%。

Total revenues for the third quarter were $63.2 million, compared to $73.8 million in the second quarter. Total revenues were lower in the third quarter, due primarily to lower sand sales volumes, lower average sales prices and lower SmartSystems revenues from reduced utilization of our fleet.

第三季總收入為 6,320 萬美元，而第二季總收入為 7,380 萬美元。第三季總收入較低，主要原因是沙子銷售量較低、平均銷售價格較低以及船隊利用率降低導致 SmartSystems 收入較低。

Our cost of sales for the third quarter were $56.7 million, compared to $60.7 million in the second quarter, a 7% decrease. The decrease was due primarily to lower sales volumes in the current quarter, coupled with ongoing cost and efficiency initiatives to reduce production costs.

我們第三季的銷售成本為 5,670 萬美元，而第二季的銷售成本為 6,070 萬美元，下降了 7%。下降的主要原因是本季銷售量下降，加上持續採取成本和效率措施以降低生產成本。

Total operating expenses were $11.4 million in the third quarter, compared to $9.5 million in the second quarter. In the quarter we had a $1.1 million non-cash charge, related to the closing of our fabrication facility in Canada.

第三季總營運費用為 1,140 萬美元，而第二季為 950 萬美元。本季我們有 110 萬美元的非現金費用，與我們在加拿大的製造工廠的關閉有關。

This facility was part of our acquisition of Quickthree technologies in 2018, and provided support for our SmartSystems last mile storage service business. We decided to close this facility in the third quarter, and to relocate our fabrication support to our Oakdale facility. Additionally, in the third quarter we had approximately $1.3 million in expenses, related to the process of refinancing our ABL revolving credit facility.

該設施是我們 2018 年收購 Quickthree 技術的一部分，為我們的 SmartSystems 最後一哩儲存服務業務提供支援。我們決定在第三季關閉該工廠，並將我們的製造支援遷至奧克代爾工廠。此外，第三季我們有大約 130 萬美元的支出，與再融資我們的 ABL 循環信貸額度的過程有關。

Other expenses was $1.3 million lower sequentially. During the second quarter, we had a $1.3 million loss on the extinguishment of debt. This expense was related to the payoff of some equipment leases that were part of the refinancing that we completed in June. Contribution margin was $13.2 million or $11.09 per ton sold in the third quarter. Second quarter contribution margin was $19.8 million or $15.53 per ton sold. Adjusted EBITDA in the third quarter, dropped to $5.7 million, compared to $11.9 million in the second quarter.

其他支出比上一季減少 130 萬美元。在第二季度，我們因債務清償而損失了 130 萬美元。這筆費用與我們 6 月完成的再融資中部分設備租賃的償還有關。第三季的貢獻利潤為 1,320 萬美元，即每噸銷售利潤為 11.09 美元。第二季的貢獻利潤為 1,980 萬美元，即每售出一噸利潤 15.53 美元。第三季調整後的 EBITDA 下降至 570 萬美元，而第二季為 1,190 萬美元。

Contribution margin and adjusted EBITDA were lower sequentially, due primarily to lower sales volumes and lower average selling prices. For the third quarter 2024, we had $5.8 million in cash provided by operating activities, which led to $3.7 million in free cash flow, after we spent $2.1 million on capital expenditures. Year-to-date, we have generated $11.7 million in free cash flow.

貢獻利潤率和調整後 EBITDA 環比下降，主要原因是銷售量下降和平均銷售價格下降。2024 年第三季度，我們在資本支出 210 萬美元後，經營活動提供的現金為 580 萬美元，產生了 370 萬美元的自由現金流。年初至今，我們已產生 1,170 萬美元的自由現金流。

In September, we closed on a new $30 million five-year revolving credit facility with First Citizens Bank, availability under this facility is governed by a borrowing base supported by our accounts receivables and inventory. Our current borrowing base is $30 million. We ended the third quarter with no borrowings on our credit facility. Currently we have approximately $8 million drawn on this facility

9 月份，我們與第一公民銀行達成了一項新的 3000 萬美元五年期循環信貸協議，該協議下的可用資金由我們的應收帳款和庫存支持的借款基礎決定。我們目前的借款基數是 3000 萬美元。第三季結束時，我們的信貸額度中沒有任何借款。目前我們已經從該貸款中提取了約 800 萬美元

Between cash and availability from our credit facility, we currently have available liquidity in excess of $28 million. Smart Sand is committed to returning capital to our shareholders. In 2023, we repurchased approximately 11% of our outstanding shares when we bought back Clearlake Capital's ownership in the company.

透過現金和信貸額度，我們目前擁有超過 2800 萬美元的可用流動資金。Smart Sand 致力於向股東返還資本。2023 年，當我們回購 Clearlake Capital 在該公司的所有權時，我們回購了約 11% 的流通股。

In September, we announced our first special dividend of $0.10 per share that was paid in October. Additionally, we have announced a new share buyback program of up to $10 million. While we expect our industry to continue to have a lot of variability quarter-to-quarter, due to changes in commodity prices, supply, demand dynamics, seasonal weather impact and political uncertainties, we have shown our ability to manage through these operating cycles.

9 月份，我們宣布首次特別股息為每股 0.10 美元，並於 10 月份支付。此外，我們還宣布了一項高達 1000 萬美元的新股票回購計畫。雖然我們預計，由於商品價格、供應、需求動態、季節性天氣影響和政治不確定性的變化，我們的行業每個季度仍將有很大的變化，但我們已經展示了我們管理這些營運週期的能力。

Through our focus on cost management and operational efficiency, coupled with improved financial flexibility and liquidity, we believe we'll be able to generate positive free cash flow more consistently, and we'll continue to look for ways to return capital to our shareholders going forward.

透過專注於成本管理和營運效率，再加上提高財務靈活性和流動性，我們相信我們將能夠更持續地產生正的自由現金流，並且我們將繼續尋找未來向股東返還資本的方法。

Currently, we expect fourth quarter sand sales volumes to be in the 1.1 million to 1.4 million ton range. We are seeing an increase in activity currently in the Marcellus. As Chuck highlighted, we expect to see a pickup in activity in 2025, due to increased demand, particularly for natural gas development. We currently expect to see demand in the first quarter of 2025, to be consistent to potentially higher than our first quarter 2024 results.

目前，我們預計第四季沙子銷售量將在 110 萬噸至 140 萬噸之間。我們看到馬塞勒斯目前的活動正在增加。正如查克所強調的，由於需求增加，特別是天然氣開發需求增加，我們預計 2025 年活動將會回升。我們目前預計 2025 年第一季的需求將與 2024 年第一季的業績保持一致，甚至可能更高。

In the fourth quarter, we will be completing most of our capital projects that we started early in the year. This will lead to higher capital expenditures this quarter. We currently expect total capital expenditures for the year, to be in the $8 million to $10 million range. We currently expect to generate positive free cash flow for the full year.

第四季度，我們將完成今年年初啟動的大部分資本項目。這將導致本季資本支出增加。我們目前預計今年的總資本支出將在 800 萬至 1,000 萬美元之間。我們目前預計全年將產生正的自由現金流。

However, we do expect lower free cash flow in the fourth quarter, due to higher capital expenditures in the quarter, and an increase in working capital to support sales activities, and the seasonal build-up of wet sand inventory, to support sales volumes over the winter.

然而，我們確實預計第四季度的自由現金流會減少，因為本季的資本支出增加，支持銷售活動的營運資本增加，以及濕沙庫存的季節性積累，以支持冬季的銷售量。

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

我們的準備好的評論到此結束，現在我們將開始提問。

Thank you. Ladies and gentlemen, we will now begin the question and answer session. (Operator Instructions)

謝謝。女士們、先生們，我們現在開始問答環節。（操作員指示）

Alec Scheibelhoffer, Stifel.

亞歷克·謝貝爾霍夫（Alec Scheibelhoffer），Stifel。

Great, thanks. Thanks and thanks for taking my question this morning.

太好了，謝謝。謝謝，也謝謝您今天早上回答我的問題。

Good morning.

早安.

Good morning. Just to start us off here, I was wondering, so just given what the efficiency gains we've seen regarding completion, and the rise in proppant demand per well, I was just curious like how you see that evolving going forward. Should we start to see a plateau around current levels or continue to rise, maybe at a more moderate pace. And just kind of overlaying that with your outlook - positive outlook for demand heading into '25?

早安.首先，我很好奇，鑑於我們在完井方面看到的效率提升，以及每口井支撐劑需求的增加，我很好奇您如何看待未來的發展。我們是否應該開始看到當前水平附近的穩定或繼續上升，也許以更溫和的速度。並將其與您的展望進行疊加——對 25 年的需求前景持樂觀態度嗎？

Yeah. Well, so it's a good question. Obviously we've seen proppant per foot kind of go almost hockey stick, like on a graph over the last few years. You probably could see a little bit of moderation. But what we are seeing is when you have these multi-well pads, we're seeing the demand for large amounts of sand to be on site on a consistent basis, which is driving kind of demand across the board, right.

是的。嗯，這是個好問題。顯然，我們已經看到每英尺支撐劑的數量幾乎呈現曲棍球棒狀，就像過去幾年的圖表所示。您可能會看到一點點的節制。但我們看到的是，當你擁有這些多井平台時，我們看到對現場大量沙子的需求是持續的，這推動了全面的需求，對吧。

So if you have a pad that's got five or six wells on it, you tend to have to have the ability to have that sand there, quicker and they're putting it down the hole faster. So you might see some moderation on proppant per foot. But certainly, proppant per well pad is, you know, in getting it there and doing more, well than a particular month, that seems to be the focus of our customer base.

因此，如果你的平台上有五到六口井，你往往必須有能力將沙子更快送到那裡，然後他們才能更快地將其放入井中。因此，您可能會看到每英尺支撐劑的數量減少。但可以肯定的是，每個井場的支撐劑的產量比某個特定月份的產量高得多，這似乎是我們客戶群關注的重點。

They're also extending their laterals too. So the laterals are getting longer per well, which is leading to more sand per, well, as you get to the longer laterals for that, they're drilling.

它們也在延伸它們的側向。因此，每個井的水平段越來越長，這導致每個井產生的沙子越來越多，當你鑽探到更長的水平段時，他們就會開始鑽探。

Yeah. The other thing I would add too is some of the other basins that we operate in. So certainly the Marcellus has always been a relatively high proppant per foot market, but we're seeing other basins, the Bakken, certainly with our new experience up in Canada, we're starting to see those markets expand their proppant per foot also.

是的。我還想補充一點，我們在其他一些盆地開展業務。因此，馬塞勒斯一直是一個每英尺支撐劑價格相對較高的市場，但我們看到其他盆地，巴肯，當然，憑藉我們在加拿大的新經驗，我們開始看到這些市場也在擴大其每英尺支撐劑價格。

Got it. That makes sense. Excellent color there. And then maybe shifting gears a little bit to pricing. So I was just curious if you could provide any kind of color or guidance on how we should think about pricing dynamics in relation to contribution margin, as we look out to '24, but more so into 2025 if you have any color there?

知道了。這很有道理。那裡的色彩非常漂亮。然後可能會稍微調整一下定價。所以我只是好奇，您是否可以提供任何細節或指導，說明我們應該如何考慮與貢獻利潤率相關的定價動態，因為我們展望'24 年，但更重要的是展望 2025 年，如果您有任何細節的話？

Yeah, I think as we've talked about on previous calls, pricing has kind of moderated over the last couple of quarters, and been relatively flat. So we haven't seen a lot of pricing improvement. But as we go into 2025, and particularly what we expect to be growing demand driven by the natural gas demand in particular, and the fact that the market continues to move to finer mesh sand, of which we're very well positioned in the Northern White market, to produce and provide finer mesh sand.

是的，我認為正如我們在之前的電話會議上討論的那樣，過去幾個季度的價格有所緩和，並且相對平穩。因此，我們並未看到價格有太大的改善。但隨著我們進入 2025 年，特別是我們預計需求將不斷增長，特別是受天然氣需求的推動，而且市場繼續轉向更細的網狀砂，我們在北方白色市場佔據非常有利的地位，可以生產和提供更細的網狀砂。

We think that should hopefully lead to some pricing improvement, throughout 2025. So we hadn't really seen it yet, but we are seeing volume starting to pick up, and we're seeing that carry into what looks like to be good activity going into the first part of 2025.

我們認為這有望在 2025 年帶來價格上的改善。因此，我們還沒有真正看到它，但我們看到交易量開始回升，我們看到這種趨勢將在 2025 年上半年延續下去，形成良好的活動。

And with that, we think that's going to kind of constrain some of the Northern White supply, because of their other competitor's ability to provide 100 mesh sand in particular. And that should lead to pricing improvement over time.

因此，我們認為這將在一定程度上限制北方白砂的供應，因為他們的其他競爭對手能夠提供 100 目的沙子。隨著時間的推移，這將導致價格改善。

Got it. Thanks again for the color there and that's all for me. So I'll turn it back.

知道了。再次感謝那裡的色彩，對我來說這就是全部了。所以我會把它轉回去。

Josh Jayne, Daniel Energy Partners.

喬許·傑恩（Josh Jayne），丹尼爾能源合作夥伴。

Thanks. Good morning.

謝謝。早安.

Good morning. Josh.

早安.喬希。

First question is on IPS. I think in your prepared remarks you noted that it could go from 5% of volumes to 10% of volumes in '25, which would be significant. Is that based on orders you already have today, or things you're still bidding on and what markets potentially would be driving this? Just a little more color there would be great?

第一個問題是關於IPS的。我認為您在準備好的發言中指出，到 25 年，這一比例可能會從 5% 上升到 10%，這將是意義重大的。這是基於您今天已有的訂單，還是您仍在競標的商品以及哪些市場可能會推動這一點？如果顏色再多一點就好了？

Yeah, sure. It's business we're working on Josh, and it consists of some of the traditional environments, glass sand being the one that drives the most volume in that space, right. So it's not frac sand volumes, right. Glass is the only one that even -- has any kind of volumes that kind of move the needle from that perspective. But there's a lot of recreational, there's foundry and those types of things.

是的，當然。喬希，我們正在進行的業務包括一些傳統環境，玻璃沙是該領域中推動銷量最大的環境，對吧。所以這不是壓裂砂體積，對吧。從這個角度來看，玻璃是唯一能帶來影響的產品。但這裡有很多娛樂活動，有鑄造廠和諸如此類的東西。

And so that business, we're excited about. But we think that as we grow from 5% kind of to 10%, I don't know that it'll get particularly bigger than that over time, but it is a market I'm kind of bullish on. But at the same time, frac is going to be the one that drives our, the bulk of our volumes going forward.

因此，我們對這項業務感到非常興奮。但我們認為，隨著我們的成長從 5% 到 10%，我不知道隨著時間的推移它是否會變得更大，但我對這個市場還是比較看好的。但同時，壓裂將成為我們未來產量的主要動力。

Okay, thanks. And then I want to touch on shareholder returns a little bit. Obviously you mentioned the special dividend that was paid. Just curious how you were thinking about shareholder returns going forward. I know you have the buyback as well, but why was the special dividend sort of the optimal way to return cash to shareholders? And how are you thinking about this going forward? Will you sort of assess, how cash builds over the course of a year, and then potentially pay it out or I'm just curious your thinking there?

好的，謝謝。然後我想稍微談談股東回報。顯然，您提到了支付的特別股息。只是好奇您如何看待未來的股東回報。我知道你們也有回購，但為什麼特別股利是向股東返還現金的最佳方式呢？您對此有何看法？您是否會評估一下，一年內現金是如何積累的，然後可能將其支付出去，或者我只是好奇您的想法？

Yeah, Josh, I think it's really going to be driven by, as we kind of stated in the comments today, and when we did the special dividend, it's really going to be driven by ours. We're getting more comfortable, and feeling like we're going to be able to more consistently deliver free cash flow. We also have a stronger capital structure with our new credit facility in place.

是的，喬希，我認為這真的會受到推動，正如我們今天的評論中所說的那樣，當我們發放特別股息時，這真的會受到我們自己的推動。我們變得更加安心，感覺我們將能夠更持續地提供自由現金流。隨著新信貸安排的到位，我們的資本結構也變得更強大。

So I think that's going to give us flexibility to be opportunistic. And at times, when we feel like we're generating excess cash, and the best use of that cash is returned to our shareholders. We'll kind of evaluate whether it makes sense to do a dividend versus potentially buyback shares.

所以我認為這將為我們提供抓住機會的靈活性。有時，當我們感覺自己產生了過多的現金時，最好的用途就是將這些現金回饋給我們的股東。我們會評估發放股利與回購股票是否合理。

And so, I think we're going to be opportunistic about it, and look at the return, kind of equation in terms of giving money directly to our shareholders or looking to buy shares, and our view of what the return on buying those shares back into the company are.

因此，我認為我們將抓住機會，專注於回報，從直接向股東提供資金或尋求購買股票的角度來考慮回報，以及我們對將這些股票回購回公司的回報的看法。

Okay. Thanks. And one more if I may, just you talked about the canadian market being 11% of your, your sales. And Blair continuing to ramp you just update us on your thoughts on the canadian market. How you see that going forward in 2025 and beyond and what you're seeing.

好的。謝謝。如果可以的話，我再問一句，你們剛才提到加拿大市場佔您們銷售額的 11%。布萊爾繼續向我們介紹您對加拿大市場的看法。您如何看待 2025 年及以後的發展以及您所看到的情況。

Yeah, look, the Canadian market, I think Josh, our Blair facility there, we're very excited about it. It's a 3 million ton a year facility, it's got fantastic logistics. The Canadian market, our customer base up there, has a lot of their own logistics capabilities. We're going to be adding our own up there and we think that that market is logistically constrained, but they've got pipelines in place to the West Coast that require, an awful lot of natural gas to be produced. And so, we're cautiously optimistic on the Canadian market. And I'm spending a good amount of time up there working on it.

是的，看看加拿大市場，我想喬希，我們在那裡的布萊爾工廠，我們對此感到非常興奮。該廠年產量為 300 萬噸，擁有一流的物流能力。加拿大市場，也就是我們在那裡的客戶群，擁有許多自己的物流能力。我們將在那裡增加我們自己的市場，我們認為該市場在物流方面受到限制，但他們已經鋪設了通往西海岸的管道，需要生產大量的天然氣。因此，我們對加拿大市場持謹慎樂觀的態度。我在那裡花了大量時間致力於此事。

Very excited about that market, Josh and at, at the LNG facilities and, and, and coming online and we think that's going to be a great place to be. They need a lot of sand.

喬希 (Josh) 對這個市場感到非常興奮，而且，在液化天然氣設施方面，以及，以及上線，我們認為那將是一個很棒的地方。他們需要大量的沙子。

Okay. Thanks. I'll turn it back.

好的。謝謝。我會把它轉回去。

There are no further questions at this time. I will turn the call over to Mr. Chuck Young for closing remarks.

目前沒有其他問題。我將把電話轉給查克楊先生，請他做最後發言。

Thanks for joining our third quarter earnings call. Look forward to speaking with you again in March.

感謝您參加我們的第三季財報電話會議。期待三月再次與您交談。

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.

女士們、先生們，今天的電話會議到此結束。感謝您的參與，並請您斷開線路。