ROG - Select Sands Reports Results for First Quarter 2023

(TheNewswire)

MAY 30, 2023 – TheNewswire - HOUSTON, TX, USA –Select Sands Corp. (“Select Sands”, “We” or the “Company”)(TSXV:SNS ) , ( OTC:SLSDF) today announced operationaland financial results for the three months ended March 31, 2023 (“Q12023”), and the filing of its financial statements and associatedmanagement’s discussion and analysis on www.sedar.com . All dollarreferences in this release are in U.S. dollars.

KEY HIGHLIGHTS

• Sold 83,027 tons of frac and industrial sand during Q1 2023 compared to81,451 tons in the three months ended December 31, 2022 (“Q42022”) and 107,428 tons in the three months ended March 31, 2022(“Q1 2022”).

• Recorded revenue of $5.1million and gross margin of $0.4 million in Q1 2023 versus $5.4million of revenue and gross margin of $0.5 million in Q4 2022, andrevenue of $6.2 million and gross margin of $0.7 million for Q1 2022.
• Reported a net loss of $0.5 million, or$0.01 per share, in Q1 2023 compared to a net loss of $0.7 million, or$0.01 per share, in Q4 2022 and a net loss of $0.1 million, or $0.00per share, in Q1 2022.

• Generated Adjusted EBITDA (1) of $0.1million for Q1 2023 versus $0.2 million in Q4 2022 and $0.5 millionfor Q1 2022.

• As of March 31, 2023, cash and cash equivalents were$0.4 million, accounts receivable was $1.1 million, inventory was $5.0million, working capital was $0.8 million and total debt was $8.1million (including $7.0 million long-term).  Of note, the Company hasreceived full payment on all of its accounts receivable balanceoutstanding on March 31, 2023.

1. (1) Adjusted EBITDA is a non-IFRSfinancial measure and is described and reconciled to net (loss) incomein the table later in this release under the section titled“Non-IFRS Financial Measures”.

Zig Vitols, President and Chief Executive Officer,commented, “We were pleased to see higher sequential sales volumesduring the first quarter and remain focused on supporting oil and gasoperators in their ongoing field development efforts designed tomaximize the ultimate recovery of their inventory of assets. Theseoperators recognize the superior benefits afforded by our premiumNorthern White Sand product offerings that are  located much closer to key oil basins in the Southern U.S. comparedto the majority of other Northern White Sand producers. As in thepast, I want to thank our workforce for their tireless efforts as westrive to continue to provide our customers with a superior productand exemplary service.”

FINANCIAL SUMMARY

The following table includes summarized financialresults for the three months ended March 31, 2023, December 31, 2022and March 31, 2022:

Click Image To View Full Size

SALES VOLUMES

Select Sands sold 83,027 tons of frac and industrialsand during Q1 2023, which was 2% higher than sales of 81,451 tons inQ4 2022. Sales volume levels for Q1 2023 were below the full shipmentcapability of the Company’s Arkansas’ operations (approximately150,000 tons per quarter). This presents the opportunity for continuedimprovement in sales volumes (and the ability to spread fixed costsover a wider base of tons produced) over time.

For Q2 2023, the Company expects frac and industrialsand sales volumes of approximately 45,000 to 60,000 tons.

OPERATIONS UPDATE

Contributing to Select Sands’ outlook is BakerHughes’ recently published weekly drilling rig count estimates thatshow a U.S. onshore count of 720 rigs as of May 19, 2023, which wassubstantially flat with the same time last year. The Company remainsfocused on positioning its operations to capitalize on this positivetrend by further leveraging its high-quality product offerings. Thisincludes serving the needs of customers in the Eagle Ford shale basinin South Texas. Select Sands’ George West transload facilitycontinues to operate 24 hours per day and seven days per week,including offering transload for other rail shippers as appropriate.The facility has recently enhanced its tons per day capabilities tomeet the requests who have short notice spot demand.

OUTLOOK

Mr. Vitols concluded, “Our second quarter salesvolumes outlook reflects the continued evolvement of one of ourlargest customer’s schedule of field development activities andprevious product purchase obligations. We view the anticipated declinein sales volumes for the second quarter as temporary and expect to seean increase to more recent historical activity levels in the secondhalf of 2023 assuming a continued solid industry commodity pricingbackdrop and an anticipated improvement in the spot sales environment.As in the past, we will continue to capitalize on available opportunities to strategically enhance our cost structurefor the benefit of our shareholders. We appreciate the ongoing supportof our shareholders as we remain focused on growing the businessthrough targeted internal initiatives and evaluation of externalopportunities designed to prudently expand the business and provide asolid risk-adjusted return on investment.”

ADDITIONAL MANAGEMENT COMMENTARY

An audio recording ofmanagement’s additional comments related to its results and outlookwill be posted to the Company’s website(https://www.selectsands.com/) under the Investors section in the nextweek.

ABOUTSELECT SANDS CORP.

Select SandsCorporation is an industrial silica productcompany, which wholly owns a Northern White silica sands property andrelated production facilities located near Sandtown, Arkansas. SelectSands’ goal is to become a key supplier of premium industrial silicasand and frac sand to North American markets. Select Sands’ Arkansasproperties have a significant logistical advantage of beingsignificantly closer to oil and gas markets located in Oklahoma,Texas, Louisiana, and New Mexico than the majority of sources ofsimilar sands from the Northern mid-west area such as Wisconsin.Select Sands also operates a transload facility in George West, Texasin Live Oak County that serves customers operating in the Eagle FordShale Basin. The facility has a capacity for 180 rail cars and isequipped with two offload/loading stations with dedicated silos for ahigh throughput capacity. In addition to transloading Select Sandsproducts, the Company sells other sand products from this facility andis able to offer transload services.

FORWARD-LOOKING STATEMENTS

This news release includes forward-looking informationand statements, which may include, but are not limited to, informationand statements regarding or inferring the future business, operations,financial performance, prospects, and other plans, intentions,expectations, estimates, and beliefs of the Company. Information andstatements which are not purely historical fact are forward-lookingstatements. The forward-looking statements in this press releaserelate to comments that include, but are not limited to, statementsrelated to expected current and future state of operations, salesvolumes for 2023, customer activity levels, and the unique marketposition of the Company. Forward-looking information and statementsinvolve and are subject to assumptions and known and unknown risks,uncertainties, and other factors which may cause actual events,results, performance, or achievements of the Company to be materiallydifferent from future events, results, performance, and achievementsexpressed or implied by forward-looking information and statementsherein. Although the Company believes that any forward-lookinginformation and statements herein are reasonable, in light of the useof assumptions and the significant risks and uncertainties inherent insuch information and statements, there can be no assurance that anysuch forward-looking information and statementswill prove to be accurate, and accordingly readers are advised to relyon their own evaluation of such risks and uncertainties and should notplace undue reliance upon such forward-looking information andstatements. Any forward-looking information and statements herein aremade as of the date hereof, and except as required by applicable laws,the Company assumes no obligation and disclaims any intention toupdate or revise any forward-looking information and statements hereinor to update the reasons that actual events or results could or dodiffer from those projected in any forward-looking information andstatements herein, whether as a result of new information, futureevents or results, or otherwise, except as required by applicablelaws.

COMPANY CONTACTS

Please visit www.selectsands.com orcontact:

Neither TSXVenture Exchange nor its Regulation Services Provider (as that term isdefined in the policies of the TSX Venture Exchange) acceptsresponsibility for the adequacy or accuracy of this release.

Click Image To View Full Size

Click Image To View Full Size

Click Image To View Full Size

NON-IFRS FINANCIAL MEASURES

The following information is included for convenience only. Generally,a non-IFRS financial measure is a numerical measure of a company’sperformance, cash flows or financial position that either excludes orincludes amounts that are not normally excluded or included in themost directly comparable measure calculated and presented inaccordance with IFRS. Adjusted EBITDA is not a measure of financialperformance (nor does it have a standardized meaning) under IFRS. Inevaluating non-IFRS financial measures, investors should consider thatthe methodology applied in calculating such measures may differ amongcompanies and analysts.

The Company uses both IFRS and certain non-IFRS measures to assessoperational performance and as a component of employee remuneration.Management believes certain non-IFRS measures provide usefulsupplemental information to investors in order that they may evaluateSelect Sands' financial performance using the same measures asmanagement. Management believes that, as a result, the investor isafforded greater transparency in assessing the financial performanceof the Company. These non-IFRS financial measures should not beconsidered as a substitute for, nor superior to, measures of financialperformance prepared in accordance with IFRS.

As reflected in the above tables for the periodspresented, the Company defines EBITDA as net loss adjusted for itemslisted. The Company defines Adjusted EBITDA as net loss adjusted forselect items used to estimate EBITDA with additional adjustments aslisted in the above table to estimate Adjusted EBITDA. Select Sandsuses Adjusted EBITDA as a supplemental financial measure of itsoperational performance. Management believes Adjusted EBITDA to be animportant measure as they exclude the effects of items that primarilyreflect the impact of long-term investment and financing decisions,rather than the performance of the Company’s day-to-day operations.As compared to net loss according to IFRS, this measure is limited inthat it does not reflect the periodic costs of certain capitalizedtangible and intangible assets used in generating revenues in theCompany's business, the charges associated with impairments,termination costs, transaction costs or other items management viewsas unusual or one-time in nature. Management evaluates such itemsthrough other financial measures such as capital expenditures and cashflow provided by operating activities. The Company believes that thesemeasurements are useful to measure a company’s ability to servicedebt and to meet other payment obligations or as a valuationmeasurement.

INDICATED RESOURCES DISCLOSURE

The Company advises thatthe production decision on the Sandtown deposit (the Company’scurrent “Sand Operations”) was not based on a Feasibility Study ofmineral reserves, demonstrating economic and technical viability, and,as a result, there may be an increased uncertainty of achieving anylevel of recovery of minerals or the cost of such recovery, includingincreased risks associated with developing a commercially mineabledeposit. Historically, such projects have a much higher risk ofeconomic and technical failure. There is no guarantee that productionwill occur as anticipated or that anticipated production costs will beachieved.

Copyright (c) 2023 TheNewswire - All rights reserved.