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Cover Page - shares	6 Months Ended
Cover Page - shares	Jun. 30, 2020	Jul. 29, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-37936
Entity Registrant Name	SMART SAND, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-2809926
Entity Address, Address Line One	1725 Hughes Landing Blvd
Entity Address, Address Line Two	Suite 800
Entity Address, City or Town	The Woodlands
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77380
City Area Code	281
Local Phone Number	231-2660
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	SND
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		42,025,249
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Central Index Key	0001529628

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 16,643	$ 2,639
Accounts receivable, net	55,968	58,925
Unbilled receivables	48	4,765
Inventories	20,287	21,415
Prepaid expenses and other current assets	4,107	4,433
Total current assets	97,053	92,177
Property, plant and equipment, net	225,165	230,461
Operating lease right-of-use assets	24,892	28,178
Intangible assets, net	8,649	9,046
Other assets	3,475	3,541
Total assets	359,234	363,403
Current liabilities:
Accounts payable	3,234	3,961
Accrued and other expenses	4,337	8,578
Deferred revenue, current	6,717	7,654
Long-term debt, net, current	6,430	6,175
Operating lease liabilities, current	8,202	13,108
Total current liabilities	33,107	40,018
Deferred revenue, net	277	1,670
Long-term debt, net	24,865	28,240
Operating lease liabilities, long-term	17,248	15,469
Deferred tax liabilities, long-term, net	25,546	24,408
Asset retirement obligation	6,293	6,142
Contingent consideration	570	1,900
Total liabilities	107,906	117,847
Commitments and contingencies (Note 15)
Stockholders’ equity
Common stock, $0.001 par value, 350,000,000 shares authorized; 41,314,469 issued and 39,754,071 outstanding at June 30, 2020; 40,975,408 issued and 40,234,451 outstanding at December 31, 2019	40	40
Treasury stock, at cost, 1,560,398 and 740,957 shares at June 30, 2020 and December 31, 2019, respectively	(4,024)	(2,979)
Additional paid-in capital	167,263	165,223
Retained earnings	87,869	83,313
Accumulated other comprehensive income (loss)	180	(41)
Total stockholders’ equity	251,328	245,556
Total liabilities and stockholders’ equity	359,234	363,403
Accrued Income Taxes, Current	$ 4,187	$ 542

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	350,000,000	350,000,000
Common stock, shares issued (in shares)	41,314,469	40,975,408
Common stock, shares outstanding (in shares)	39,754,071	40,234,451
Treasury stock, shares (in shares)	1,560,398	740,957

CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Revenues	$ 26,106	$ 67,941	$ 73,594	$ 119,716
Cost of goods sold	11,906	43,068	52,995	83,673
Gross profit	14,200	24,873	20,599	36,043
Operating expenses:
Salaries, benefits and payroll taxes	2,155	2,798	5,057	5,508
Depreciation and amortization	461	655	914	1,331
Selling, general and administrative	2,930	2,790	6,460	5,590
Change in the estimated fair value of contingent consideration	0	(575)	(1,020)	(1,542)
Total operating expenses	5,546	5,668	11,411	10,887
Operating income	8,654	19,205	9,188	25,156
Other income (expenses):
Interest expense, net	(607)	(994)	(1,079)	(1,975)
Other income	63	37	82	74
Total other income (expenses), net	(544)	(957)	(997)	(1,901)
Income before income tax expense	8,110	18,248	8,191	23,255
Income tax expense	3,470	3,972	3,635	4,946
Net income	$ 4,640	$ 14,276	$ 4,556	$ 18,309
Net income per common share:
Basic (in dollars per share)	$ 0.12	$ 0.36	$ 0.11	$ 0.46
Diluted (in dollars per share)	$ 0.12	$ 0.36	$ 0.11	$ 0.46
Weighted-average number of common shares:
Basic (in shares)	39,644	40,074	39,867	40,035
Diluted (in shares)	39,644	40,173	39,867	40,117

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 4,640	$ 14,276	$ 4,556	$ 18,309
Other comprehensive income:
Foreign currency translation adjustment	384	91	221	236
Comprehensive income	$ 5,024	$ 14,367	$ 4,777	$ 18,545

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Restricted Stock	Common Stock	Common Stock Restricted Stock	Treasury Stock	Treasury Stock Restricted Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Dec. 31, 2018			39,974,478		699,035
Beginning balance at Dec. 31, 2018	$ 207,947		$ 40		$ (2,839)		$ 162,195	$ 48,864	$ (313)
Increase (Decrease) in Stockholders' Equity
Foreign currency translation adjustment	145								145
Vesting of restricted stock (in shares)			30,729
Stock-based compensation	790						790
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	9						9
Employee stock purchase plan issuance (in shares)			20,954
Employee stock purchase plan issuance	40						40
Stock buy back (in shares)				(5,714)		5,714
Stock buy back		$ (23)				$ (23)
Net income	4,033							4,033
Ending balance (in shares) at Mar. 31, 2019			40,020,447		704,749
Ending balance at Mar. 31, 2019	212,941		$ 40		$ (2,862)		163,034	52,897	(168)
Beginning balance (in shares) at Dec. 31, 2018			39,974,478		699,035
Beginning balance at Dec. 31, 2018	207,947		$ 40		$ (2,839)		162,195	48,864	(313)
Increase (Decrease) in Stockholders' Equity
Foreign currency translation adjustment	236
Net income	18,309
Ending balance (in shares) at Jun. 30, 2019			40,209,409		740,440
Ending balance at Jun. 30, 2019	227,955		$ 40		$ (2,978)		163,797	67,173	(77)
Beginning balance (in shares) at Mar. 31, 2019			40,020,447		704,749
Beginning balance at Mar. 31, 2019	212,941		$ 40		$ (2,862)		163,034	52,897	(168)
Increase (Decrease) in Stockholders' Equity
Foreign currency translation adjustment	91								91
Vesting of restricted stock (in shares)			224,653
Stock-based compensation	754						754
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	9						9
Employee stock purchase plan issuance (in shares)			0
Employee stock purchase plan issuance	0						0
Stock buy back (in shares)				(35,691)		35,691
Stock buy back		(116)				$ (116)
Net income	14,276							14,276
Ending balance (in shares) at Jun. 30, 2019			40,209,409		740,440
Ending balance at Jun. 30, 2019	227,955		$ 40		$ (2,978)		163,797	67,173	(77)
Beginning balance (in shares) at Dec. 31, 2019			40,234,451		740,957
Beginning balance at Dec. 31, 2019	245,556		$ 40		$ (2,979)		165,223	83,313	(41)
Increase (Decrease) in Stockholders' Equity
Foreign currency translation adjustment	(163)								(163)
Vesting of restricted stock (in shares)			139,947
Stock-based compensation	1,025						1,025
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	14						14
Employee stock purchase plan issuance (in shares)			21,486
Employee stock purchase plan issuance	46						46
Stock buy back (in shares)			(778,300)	(10,468)	778,300	10,468
Stock buy back	(1,000)	$ (14)			$ (1,000)	$ (14)
Net income	(84)							(84)
Ending balance (in shares) at Mar. 31, 2020			39,607,116		1,529,725
Ending balance at Mar. 31, 2020	245,380		$ 40		$ (3,993)		166,308	83,229	(204)
Beginning balance (in shares) at Dec. 31, 2019			40,234,451		740,957
Beginning balance at Dec. 31, 2019	245,556		$ 40		$ (2,979)		165,223	83,313	(41)
Increase (Decrease) in Stockholders' Equity
Foreign currency translation adjustment	221
Vesting of restricted stock (in shares)		318,000
Net income	4,556
Ending balance (in shares) at Jun. 30, 2020			39,754,071		1,560,398
Ending balance at Jun. 30, 2020	251,328		$ 40		$ (4,024)		167,263	87,869	180
Beginning balance (in shares) at Mar. 31, 2020			39,607,116		1,529,725
Beginning balance at Mar. 31, 2020	245,380		$ 40		$ (3,993)		166,308	83,229	(204)
Increase (Decrease) in Stockholders' Equity
Foreign currency translation adjustment	384								384
Vesting of restricted stock (in shares)			177,628
Stock-based compensation	943						943
APIC, Share-based Payment Arrangement, ESPP, Increase for Cost Recognition	12						12
Employee stock purchase plan issuance (in shares)			0
Employee stock purchase plan issuance	0						0
Stock buy back (in shares)			(30,673)		(30,673)
Stock buy back	(31)				$ (31)
Net income	4,640							4,640
Ending balance (in shares) at Jun. 30, 2020			39,754,071		1,560,398
Ending balance at Jun. 30, 2020	$ 251,328		$ 40		$ (4,024)		$ 167,263	$ 87,869	$ 180

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating activities:
Net income	$ 4,556	$ 18,309
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, depletion and accretion of asset retirement obligation	10,697	12,501
Amortization of intangible assets	398	837
Asset retirement obligation settlement	0	(1,883)
Gain on disposal of assets	275	0
Amortization of deferred financing cost	53	117
Accretion of debt discount	92	331
Deferred income taxes	1,004	4,287
Stock-based compensation, net	1,968	1,544
Employee stock purchase plan compensation	25	18
Change in contingent consideration fair value	(1,020)	(1,542)
Imputed interest	61	0
Changes in assets and liabilities:
Accounts receivable	2,957	(26,663)
Unbilled receivables	4,717	512
Inventories	1,128	6,194
Prepaid expenses and other assets	460	1,587
Deferred revenue	(2,196)	(694)
Accounts payable	(361)	(1,977)
Accrued and other expenses	(2,618)	3,925
Income taxes payable	3,646	0
Net cash provided by operating activities	25,842	17,403
Investing activities:
Purchases of property, plant and equipment	(6,423)	(13,869)
Net cash used in investing activities	(6,423)	(13,869)
Financing activities:
Proceeds from the issuance of notes payable	952	4,696
Repayments of notes payable	(2,482)	(734)
Payments under equipment financing obligations	(56)	(50)
Payment of deferred financing and debt issuance costs	(20)	(835)
Proceeds from revolving credit facility	6,000	22,750
Repayment of revolving credit facility	(8,500)	(28,250)
Payment of contingent consideration	(310)	(1,225)
Proceeds from equity issuance	46	40
Purchase of treasury stock	(1,045)	(139)
Net cash provided by financing activities	(5,415)	(3,747)
Net increase in cash and cash equivalents	14,004	(213)
Cash and cash equivalents at beginning of year	2,639	1,466
Cash and cash equivalents at end of period	16,643	1,253
Noncash Investing and Financing Items [Abstract]
Asset retirement obligation	0	3,301
Capitalized expenditures in accounts payable and accrued expenses	$ 225	$ 1,237

Organization and Nature of Business	6 Months Ended
Organization and Nature of Business	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Nature of Business	Organization and Nature of Business & Market Update Organization and Nature of Business The Company was incorporated in July 2011 and is headquartered in The Woodlands, Texas. The Company is a fully integrated frac sand supply and services company, offering complete mine to wellsite proppant logistics and storage solutions. The Company is engaged in the excavation, processing and sale of sand, or proppant, for use in hydraulic fracturing operations for the oil and natural gas industry and offers proppant logistics and wellsite storage solutions through its SmartSystems^TMproducts and services. The Company completed construction of the first phase of its frac sand mine and related processing facility in Oakdale, Wisconsin and commenced operations in July 2012, and subsequently expanded its operations in 2014, 2015 and 2018 to the current annual processing capacity of approximately 5.5 million tons. The Company provides complete logistics solutions through both its integrated Oakdale facility, with on-site rail infrastructure, with access to two Class I rail lines and its in-basin unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin. These logistics solutions enable the Company to cost-effectively deliver products to its customers anywhere in the United States. The Company provides proppant storage and management solutions through its SmartSystems products and services under which it offers various solutions that create efficiencies, flexibility, enhanced safety and reliability for customers by providing 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. The SmartDepot^TM silo system includes passive and active dust suppression technology, along with the capability of a gravity-fed operation. SmartSystems operate with proprietary the SmartSystem Tracker^TM software program, which allows users to monitor silo-specific information, including location, proppant type, and proppant inventory. The Company is currently developing a new transload technology to complement its existing solutions. Market Update Generally, the price of frac sand correlates with the level of drilling and completions activity for oil and natural gas in the United States and Canada. In recent years, the increasing supply of sand, particularly in-basin sand, relative to demand, has led to a continued depression of frac sand prices. The willingness of exploration and production companies to engage in drilling and completing new wells is determined by a number of factors, the most important of which are the prevailing and projected prices of oil and natural gas, the cost to drill, complete and operate a well, the availability and cost of capital and environmental and government regulations, as well as their ability to acquire the sand at the wellsite. Recently, oil prices declined to all-time lows as a result of decreased demand for oil from the COVID-19 coronavirus pandemic, as well as an 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 if the decline in demand due to the COVID-19 coronavirus pandemic continues. Oil and natural gas prices are expected to continue to be depressed as a result of the increase of near-term supply and the decrease in overall demand caused by these events, and the Company cannot predict when prices will improve or stabilize. In response to market conditions, the Company has reduced its total capital expenditure budget, primarily a reduction to SmartSystems manufacturing plans. The Company has also put in place several cost-cutting measures, including headcount reductions at its Oakdale and Saskatoon, Canada operating facilities, salary reductions and suspension of certain variable cash compensation programs for all employees, and reduced compensation for board members. The Company has also taken steps to limit cash outflows in the near-term by negotiating for deferred payments on certain of its operating leases, debt and minimum royalty payments. The Company has put in place multiple initiatives to protect the health and well-being of its workforce and its customers, including work-from-home arrangements for all employees that are able to do so and implementing social distancing requirements as prescribed by the federal, state and local government authorities. The ultimate disruption caused by these events is uncertain; however they may result in a material adverse impact on the Company’s financial position, results of operations and cash flows. Possible effects may include, but are not limited to, disruption to the Company’s customers and revenue, absenteeism in the Company’s labor workforce, unavailability of products and supplies used in operations, a decline in value of assets held by the Company, including accounts receivable, inventories, property, plant and equipment and intangible assets, and a decrease in liquidity due to lower cash flows from operations being generated, a reduction in the availability to borrow under the ABL Credit Facility and inability to access other sources of liquidity and capital, such as equipment financings or the capital markets. Management is actively monitoring these global events, but given the rapidly changing nature of these events, the Company is currently unable to estimate the impact of these events on its future financial position and results of operations. Therefore, the Company can give no assurances that the events will not have a material adverse effect on its financial position or results of operations.

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jun. 30, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies The information presented below supplements the complete description of our significant accounting policies disclosed in our 2019 Form 10-K, filed with the SEC on February 26, 2020. Basis of Presentation and Consolidation The accompanying unaudited quarterly condensed consolidated financial statements (“interim statements”) of the Company are presented in accordance with the rules and regulations of the Securities and Exchange Commission for quarterly reports on Form 10-Q and therefore do not include all the information and notes required by GAAP. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. All adjustments are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. The consolidated balance sheet as of December 31, 2019 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2019. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2019. Revision of Previously Issued Financial Statements for Immaterial Misstatements During the quarter ended June 30, 2020, the Company identified an error in costs of goods sold in the Company’s audited financial statements for the year ended December 31, 2018. The error related to a vendor rebate the company received during the current period, $1,800 of which related to expenses attributable to fiscal year 2018. As a result of the error, the Company reduced costs of goods sold by $1,800 and increased income tax expense by $387 in its audited financial statements for the year ended December 31, 2018, and increased prepaid expenses and other current assets by $1,800, increased deferred tax liability by $387 and increased retained earnings by $1,413 in its audited financial statements for the year ended December 31, 2019. Additionally, certain 2019 balance sheet items have been reclassified to conform to the current financial statement presentation. These reclassifications have no effect on previously reported net income. Pursuant to the guidance of Staff Accounting Bulletin (“SAB”) No. 99, “Materiality”, the Company evaluated the materiality of these errors quantitatively and qualitatively and concluded that the errors described above were not material to any of its prior annual or quarterly financial statements or trends of financial results. However, due to reduced activity and the current economic environment, the errors could be considered material to the Company’s current period financial statements. As such, the Company has revised the prior period financial statements in accordance with SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” The Company expects to similarly revise previously presented historical financial statements for these immaterial errors in future filings, including the annual audited financial statements to be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these financial statements include, but are not limited to: the sand reserves and their impact on calculating the depletion expense under the units-of-production method; depreciation and amortization associated with property, plant and equipment and definite-lived intangible assets; impairment considerations of assets (including impairment of identified intangible assets and other long-lived assets); estimated cost of future asset retirement obligations; stock-based compensation; recoverability of deferred tax assets; inventory reserve; collectability of receivables; and certain liabilities. Actual results could differ from management’s best estimates as additional information or actual results become available in the future, and those differences could be material. The increased supply of oil and the decreased demand related to the COVID-19 coronavirus pandemic have caused a dramatic decline in oil prices and significant volatility in the oilfield services sector. The Company is currently unable to estimate the impact of these events on its future financial position and results of operations. Therefore, the Company can give no assurances that the events will not have a material adverse effect on its financial position or results of operations. Recent Accounting Pronouncements Not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which modifies how companies recognize expected credit losses on financial instruments and other commitments to extend credit held by an entity at each reporting date. Existing GAAP requires an “incurred loss” methodology whereby companies are prohibited from recording an expected loss until it is probable that the loss has been incurred. ASU 2016-13 requires companies to use a methodology that reflects current expected credit losses (“CECL”) and requires consideration of a broad range of reasonable and supportable information to record and report credit loss estimates, even when the CECL is remote. Companies will be required to record the allowance for credit losses and deduct that amount from the basis of the asset and a related expense will be recognized in selling, general and administrative expenses on the income statement, similar to bad debt expense under existing GAAP. There is much latitude given to entities in determining the methodology for calculating the CECL. The guidance is effective for the Company for financial statement periods beginning after December 15, 2022, although early adoption is permitted. While the Company is still in the process of evaluating the effects of ASU 2016-13 and its related updates on its consolidated financial statements, it believes the primary effect will be an allowance recorded against its accounts and unbilled receivables on its balance sheet and related expense on its income statement upon adoption. The Company cannot determine the financial impact on its consolidated financial statements upon adoption as its accounts and unbilled receivables balances are affected by ongoing transactions with customers. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which intends to simplify the guidance by removing certain exceptions to the general principles and clarifying or amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Although the Company is currently evaluating the impact of the adoption of ASU 2019-12, it does not expect it to have a material impact on its consolidated financial statements.

Contingent Consideration

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Contingent Consideration

The Company recorded contingent consideration of $9,200 at June 1, 2018, related to its acquisition of its SmartSystems business. Each reporting period, the Company reassesses its inputs, including market comparable information and management assessments regarding potential future scenarios, and then discounts the liabilities to present value. The Company recorded adjustments to the fair value of contingent consideration in the amount of $0 and $575 for the three months ended June 30, 2020 and 2019, respectively, on the condensed consolidated income statements. The Company recorded adjustments to the fair value of contingent consideration in the amount of $1,020 and $1,542 for the six months ended June 30, 2020 and 2019, respectively, on the condensed consolidated income statements. The Company will continue to reassess earn-out calculations related to the contingent consideration in future periods.

The Company’s contingent consideration is remeasured at fair value on a recurring basis and is comprised of payments for production of silos and related equipment during the three-year period after the acquisition. Contingent liabilities are valued using significant inputs that are not observable in the market, which are defined as Level 3 inputs according to fair value measurement accounting. The Company used a probability-weighted average between 1 and 5 manufactured SmartDepot fleets over the remaining earnout period, as the basis of its fair value determination. The actual contingent consideration could vary from the determined amount based on the actual number of SmartDepot silos and related equipment produced and the timing thereof. The Company estimates the fair value of contingent liabilities using a Monte Carlo simulation-based, real option pricing methodology implementation of the Income Approach. This approach utilizes inputs including market comparable information and management assessments regarding potential future scenarios, and then discounts the liabilities to present value. The Company believes its estimates and assumptions are reasonable, however, there is significant judgment involved. The Company’s financial instruments remeasured and carried at fair value were as follows:


	June 30, 2020		Level 1		Level 2		Level 3
Contingent consideration	$	570	$	—	$	—	$	570
Total liabilities	$	570	$	—	$	—	$	570

The following table provides a summary of changes in the fair value of the Company’s Level 3 financial instruments for the six months ended June 30, 2020.


Balance as of December 31, 2019	$	1,900
Payment of contingent consideration	(310)
Fair value adjustment	(1,020)
Balance as of June 30, 2020	$	570

Inventory

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Inventory

Inventory consisted of the following:


	June 30, 2020		December 31, 2019
Raw material	$	899	$	527
Work in progress	12,309		14,173
Finished goods	4,158		4,097
Spare parts	2,921		2,618
Total sand inventory	$	20,287	$	21,415

Property, Plant and Equipment, net

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, net

Net property, plant and equipment consisted of:


	June 30, 2020		December 31, 2019
Machinery, equipment and tooling	$	20,145	$	19,683
SmartSystems	20,538		15,811
Vehicles	2,708		2,419
Furniture and fixtures	1,214		1,228
Plant and building	170,401		170,283
Real estate properties	4,678		4,946
Railroad and sidings	27,703		27,701
Land and land improvements	21,337		21,320
Asset retirement obligation	11,480		11,480
Mineral properties	7,442		7,442
Deferred mining costs	2,104		2,004
Construction in progress	9,012		9,208
	298,762		293,525
Less: accumulated depreciation and depletion	73,597		63,064
Total property, plant and equipment, net	$	225,165	$	230,461

Depreciation expense was $5,253 and $6,171 for the three months ended June 30, 2020 and 2019, respectively, and $10,529 and $12,038 for the six months ended June 30, 2020 and 2019, respectively.

Accrued and Other Expenses

6 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Accrued and Other Expenses

Accrued and other expenses were comprised of the following:


	June 30, 2020		December 31, 2019
Employee related expenses	$	749	$	2,233
Accrued construction related expenses	4		188
Accrued equipment	14		429
Accrued professional fees	695		750
Accrued royalties	1,581		2,419
Accrued freight and delivery charges	539		882
Accrued real estate tax	605		806
Accrued utilities	178		10
Sales tax liability	70		424
Other accrued liabilities	(98)		437
Total accrued liabilities	$	4,337	$	8,578

Debt

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Debt

The current portion of long-term debt consists of the following:


	June 30, 2020		December 31, 2019
Oakdale Equipment Financing	$	3,516	$	3,431
Notes payable	2,796		2,628
Finance leases	118		116
Long-term debt, net, current	$	6,430	$	6,175

Long-term debt, net of current portion consists of the following:


	June 30, 2020		December 31, 2019
Oakdale Equipment Financing, net	$	16,656	$	18,074
ABL Credit Facility	—		2,500
Notes payable	7,796		7,192
Finance leases	413		474
Long-term debt, net	$	24,865	$	28,240

The follow summarizes the maturity of our debt:


	Oakdale Equipment Financing, Net		ABL Credit Facility		Notes Payable		Finance leases		Total
Remainder 2020	$	1,641	$	—	$	1,229	$	58	$	2,928
2021	3,435		—		3,086		121		6,642
2022	3,650		—		3,033		116		6,799
2023	3,877		—		2,100		236		6,213
2024	7,569		—		1,144		—		8,713
Total	$	20,172	$	—	$	10,592	$	531	$	31,295

ABL Credit Facility

On December 13, 2019, the Company entered into a $20,000 five-year senior secured asset-based credit facility with Jefferies Finance LLC. The available borrowing amount under the ABL Credit Facility as of June 30, 2020 was $8,035 and is based on the Company’s eligible accounts receivable and inventory, as described in the ABL Credit Agreement. As of June 30, 2020, there were no borrowings outstanding. The weighted average interest rate on borrowings for the three and six months ended June 30, 2020 was 3.25% and 3.31%, respectively. As of June 30, 2020 and December 31, 2019, the Company was in compliance with all covenants.

Oakdale Equipment Financing

On December 13, 2019, the Company received net proceeds of $23,000 in an equipment financing arrangement with Nexseer. Substantially all of the Company’s mining and processing equipment at its Oakdale facility are pledged as collateral under the Oakdale Equipment Financing. The Oakdale Equipment Financing bears interest at a fixed rate of 5.79%. The Company used the net proceeds to repay in full and terminate the Former Credit Facility, pay transaction costs, and the remainder was used for working capital purposes.

Notes Payable

The Company enters into various financing arrangements, primarily to finance its manufactured wellsite proppant storage solutions equipment. Upon completion of the equipment manufacturing, the Company signs a note payable and title to the equipment passes to the financial institutions as collateral. In June 2020, the Company executed a note payable to defer certain near-term minimum royalty payments. All notes payable bear interest at rates between 4.00% and 7.49%.

Leases (Notes)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

Lessee

The operating and financing components of the Company’s right-of-use assets and lease liabilities on the consolidated balance sheet were as follows:


	Balance Sheet Location	June 30, 2020		December 31, 2019
Right-of-use assets
Operating	Operating right-of-use assets	$	24,892	$	28,178
Financing	Property, plant and equipment, net	440		505
Total right-of use assets		$	25,332	$	28,683

Lease liabilities
Operating	Operating lease liabilities, current and long-term portions	$	25,450	$	28,577
Financing	Long-term debt, current and long-term portions	531		590
Total lease liabilities		$	25,981	$	29,167

Operating lease costs are recorded as a single expense on the income statement and allocated to the right-of-use assets and the related lease liabilities as depreciation expense and interest expense, respectively. Lease cost recognized in the consolidated income statement for the three and six months ended June 30, 2020 and 2019 was as follows:


	Three Months Ended June 30,					Six Months Ended June 30,
	2020		2019		2020	2019
Finance lease cost
Amortization of right-of-use assets	$	35	$	34	69	64
Interest on lease liabilities	9		11		19	22
Operating lease cost	3,105		4,257		7,095	7,364
Short-term lease cost	64		120		234	134


Total lease cost	$	3,213	$	4,422	7,417	7,584

Other information related to the Company’s leasing activity for the six months ended June 30, 2020 is as follows:


	Six months ended June 30,
	2020			2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	19		$	20
Operating cash flows used for operating leases	$	6,902		$	7,288
Financing cash flows used for finance leases	$	56		$	58

Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	55
Right-of-use assets recorded upon adoption	N/A			$	35,939
Right-of-use assets obtained in exchange for new operating lease liabilities	$	4,322		$	4,100


Weighted average remaining lease term - finance leases	3.2 years			4.0 years
Weighted average discount rate - finance leases	6.60		%	6.69		%
Weighted average remaining lease term - operating leases	3.2 years			2.9 years
Weighted average discount rate - operating leases	5.68		%	5.50		%

Maturities of the Company’s lease liabilities as of June 30, 2020 are as follows:


	Operating Leases		Finance Leases		Total
Remainder of 2020	$	4,257	$	72	$	4,329
2021	9,404		151		9,555
2022	6,976		136		7,112
2023	4,476		245		4,721
2024	2,735		—		2,735
Thereafter	158		—		158
Total cash lease payments	28,006		604		28,610
Less: amounts representing interest	(2,556)		(73)		(2,629)
Total lease liabilities	$	25,450	$	531	$	25,981

Leases

Lessee

The operating and financing components of the Company’s right-of-use assets and lease liabilities on the consolidated balance sheet were as follows:


	Balance Sheet Location	June 30, 2020		December 31, 2019
Right-of-use assets
Operating	Operating right-of-use assets	$	24,892	$	28,178
Financing	Property, plant and equipment, net	440		505
Total right-of use assets		$	25,332	$	28,683

Lease liabilities
Operating	Operating lease liabilities, current and long-term portions	$	25,450	$	28,577
Financing	Long-term debt, current and long-term portions	531		590
Total lease liabilities		$	25,981	$	29,167


	Three Months Ended June 30,					Six Months Ended June 30,
	2020		2019		2020	2019
Finance lease cost
Amortization of right-of-use assets	$	35	$	34	69	64
Interest on lease liabilities	9		11		19	22
Operating lease cost	3,105		4,257		7,095	7,364
Short-term lease cost	64		120		234	134


Total lease cost	$	3,213	$	4,422	7,417	7,584

Other information related to the Company’s leasing activity for the six months ended June 30, 2020 is as follows:


	Six months ended June 30,
	2020			2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	19		$	20
Operating cash flows used for operating leases	$	6,902		$	7,288
Financing cash flows used for finance leases	$	56		$	58

Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	55
Right-of-use assets recorded upon adoption	N/A			$	35,939
Right-of-use assets obtained in exchange for new operating lease liabilities	$	4,322		$	4,100


Weighted average remaining lease term - finance leases	3.2 years			4.0 years
Weighted average discount rate - finance leases	6.60		%	6.69		%
Weighted average remaining lease term - operating leases	3.2 years			2.9 years
Weighted average discount rate - operating leases	5.68		%	5.50		%

Maturities of the Company’s lease liabilities as of June 30, 2020 are as follows:


	Operating Leases		Finance Leases		Total
Remainder of 2020	$	4,257	$	72	$	4,329
2021	9,404		151		9,555
2022	6,976		136		7,112
2023	4,476		245		4,721
2024	2,735		—		2,735
Thereafter	158		—		158
Total cash lease payments	28,006		604		28,610
Less: amounts representing interest	(2,556)		(73)		(2,629)
Total lease liabilities	$	25,450	$	531	$	25,981

Asset Retirement Obligation

6 Months Ended

Jun. 30, 2020

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation

The Company had a post-closure reclamation and site restoration obligation of $6,293 as of June 30, 2020. The following is a reconciliation of the total reclamation liability for asset retirement obligations.


Balance at December 31, 2019	$	6,142

Accretion expense	151

Balance at June 30, 2020	$	6,293

Revenue (Notes)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue

Disaggregation of Revenue

The following table presents the Company’s revenues disaggregated by type and percentage of total revenues for the periods indicated.


	Three Months Ended June 30,														Six Months Ended June 30,
	2020						2019						2020				2019
	Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue		Revenue		Percentage of Total Revenue
Sand sales revenue	$	7,375	28	%	$	31,362	46	%	$	38,362	52	%	$	57,008	48	%
Shortfall revenue	14,000		54	%	16,283		24	%	15,307		21	%	22,039		18	%
Logistics revenue	4,731		18	%	20,296		30	%	19,925		27	%	40,669		34	%
Total revenues	$	26,106	100	%	$	67,941	100	%	$	73,594	100	%	$	119,716	100	%

The Company recorded $9,324 of deferred revenue on the balance sheet on December 31, 2019, of which $2,684 has been recognized in the six months ended June 30, 2020. Of the remaining amount, the Company expects to recognize $4,970 in 2020 and $1,670 in 2021.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Earnings Per Share (Notes)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Basic net income per share of common stock is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the dilutive effects of restricted stock. Diluted net income per share of common stock is computed by dividing the net income attributable to common stockholders by the sum of the weighted-average number of shares of common stock outstanding during the period plus the potential dilutive effects of restricted stock outstanding during the period calculated in accordance with the treasury stock method, although restricted stock is excluded if their effect is anti-dilutive. The number of shares underlying equity-based awards that were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive was 2,253 and 765 for the three months ended June 30, 2020 and 2019, respectively. The number of shares underlying equity-based awards that were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive was 2,253 and 765 for the six months ended June 30, 2020 and 2019, respectively. The following table reconciles the weighted-average common shares outstanding used in the calculation of basic net (loss) income per share to the weighted average common shares outstanding used in the calculation of diluted net income per share.


	Three Months Ended June 30,			Six Months Ended June 30,
	2020	2019	2020	2019
Weighted average common shares outstanding	39,644	40,074	39,867	40,035
Assumed conversion of restricted stock	—	99	—	82
Diluted weighted average common stock outstanding	39,644	40,173	39,867	40,117

Stock-Based Compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Equity Incentive Plans

In May 2012, the board of directors approved the 2012 Equity Incentive Plan (“2012 Plan”), which provides for the issuance of equity awards of up to a maximum of 440 shares of the Company’s common stock to employees, non-employee members of the board of directors, and consultants of the Company. During 2014, the 2012 Plan was amended to provide for

the issuance of equity awards of up to 880 shares of the Company’s common stock. The awards can be issued in the form of incentive stock options, non-qualified stock options or restricted stock, and have expiration dates of 5 or 10 years after issuance, depending on whether the recipient already holds above 10% of the voting power of all classes of the Company’s shares. The exercise price will be based on the fair market value of the share on the date of issuance; vesting periods will be determined by the board of directors upon issuance of the equity award. Subsequent to the Company’s initial public offering, no additional equity awards were made under the 2012 Plan.

In November 2016, in connection with its initial public offering, the Company adopted the 2016 Omnibus Incentive Plan (“2016 Plan”) which provides for the issuance of equity awards of up to a maximum of 3,911 shares of the Company’s common stock to employees, non-employee members of the board of directors and consultants of the Company. Together the 2012 Plan and the 2016 Plan are referenced to as the “Plans”.

On April 3, 2020, the board of directors, upon recommendation of the compensation committee, adopted the Smart Sand, Inc. Amended and Restated 2016 Omnibus Incentive Plan (the “amended plan”). The amended plan increases the number of shares of common stock authorized for issuance by an additional 2,088 shares. The stockholders approved the amended plan on June 2, 2020.

During the six months ended June 30, 2020 and 2019, 0 and 335 shares of restricted stock were issued under the Plans, respectively. The grant date fair value per share of all the outstanding restricted stock was $2.44 - $19.00. The shares vest over one to four years from their respective grant dates. For equity awards issued under the 2016 Plan, the grant date fair value was either the actual market price of the Company’s shares or an adjusted price using a Monte Carlo simulation for awards subject to the Company’s performance as compared to a defined peer group. For equity awards issued under the 2012 Plan, the grant date fair value was calculated based on a weighted analysis of (i) publicly-traded companies in a similar line of business to the Company (market comparable method)—Level 2 inputs, and (ii) discounted cash flows of the Company—Level 3 inputs. The Company recognized, in operating expenses and cost of goods sold on the condensed consolidated income statements, $943 and $652 of compensation expense for the restricted stock during the three months ended June 30, 2020 and 2019, respectively. The Company recognized, in operating expenses and cost of goods sold on the condensed consolidated income statements, $1,968 and $2,196 of compensation expense for the restricted stock during the six months ended June 30, 2020 and 2019, respectively. At June 30, 2020, the Company had unrecognized compensation expense of $5,579 related to granted but unvested stock awards, which is to be recognized as follows:


Remainder of 2020	$	1,865
2021	2,327
2022	874
2023	513
2024	—
Total	$	5,579

The following table summarizes restricted stock activity under the Plans from December 31, 2019 through June 30, 2020:


	Number of Shares	Weighted Average
Unvested, December 31, 2019	2,618	$	6.91
Granted	—	$	—
Vested	(318)	$	11.84
Forfeited	(47)	$	13.86
Unvested, June 30, 2020	2,253	$	4.84

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company calculates its interim income tax provision by estimating the annual expected effective tax rate and applying that rate to its ordinary year-to-date earnings or loss. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs. On March 27, 2020, the President signed into law the Coronavirus Aid, Relief and Economic Security (“CARES”) Act which introduced and revised numerous provisions which include, but are not limited to, (a) a five-year carryback period for net operating losses arising in tax years beginning tax after December 31, 2017 and before January 1, 2021, (b) a technical correction to qualified improvement property for assets placed in service after 2017 through 2022 to allow for immediate depreciation to be claimed on these assets, and (c) temporary increases to the limitations on certain deductions such as interest expense and charitable contributions. As a result of the CARES Act, during the quarter ended March 31, 2020, the Company recorded a discrete tax benefit of $821 related to the anticipated benefit received from the carryback of net operating losses to tax years with a 35% corporate tax rate. In addition, the Company remeasured certain deferred tax assets and liabilities based on the rates they are expected to reverse when carrying back the net operating losses. For the three months ended June 30, 2020 and 2019, the effective tax rate was approximately 42.8% and 21.8%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the six months ended June 30, 2020 and 2019, the effective tax rate was approximately 44.4% and 21.3%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the three and six months ended June 30, 2020 and 2019, the statutory tax rate was 21.0%. The computation of the effective tax rate includes modifications from the statutory rate such as income tax credits, carrybacks and state apportionment changes, among other items. In assessing the realizability of deferred tax assets, the Company considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. At June 30, 2020 and December 31, 2019, based on the Company’s future income projections and reversal of taxable temporary differences, management determined it was more likely than not that the Company will be able to realize the benefits of the deductible temporary differences. As of June 30, 2020 and December 31, 2019, the Company determined no valuation allowance was necessary. The Company has evaluated its tax positions taken as of June 30, 2020 and December 31, 2019 and believes all positions taken would be upheld under examination from income taxing authorities. Therefore, no liability for the effects of uncertain tax positions has been recorded in the accompanying consolidated balance sheets as of June 30, 2020 or December 31, 2019. The Company is open to examination by taxing authorities beginning with the 2014 tax year.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Concentrations	6 Months Ended
Concentrations	Jun. 30, 2020
Risks and Uncertainties [Abstract]
Concentrations	Concentrations As of June 30, 2020, one customer accounted for 98% of the Company’s total accounts receivable. As of December 31, 2019, two customers accounted for 81% of the Company’s total accounts receivable. During the three months ended June 30, 2020, 91% of the Company’s revenues were earned from two customers. During the three months ended June 30, 2019, 62% of the Company’s revenues were earned from three customers. During the six months ended June 30, 2020, 80% of the Company’s revenues were earned from four customers. During the six months ended June 30, 2019, 60% of the Company’s revenues were earned from three customers. As of June 30, 2020, two vendors accounted for 29% of the Company’s accounts payable. As of December 31, 2019, one vendor accounted for 26% of the Company’s accounts payable. During the three months ended June 30, 2020, three suppliers accounted for 50% of the Company’s cost of goods sold. During the three months ended June 30, 2019, two suppliers accounted for 53% of the Company’s cost of goods sold. During the six months ended June 30, 2020, three suppliers accounted for 57% of the Company’s cost of goods sold. During the six months ended June 30, 2019, three suppliers accounted for 64% of the Company’s cost of goods sold. Currently, the Company’s inventory and operations are primarily located in Wisconsin. There is a risk of loss if there are significant public health, environmental, legal or economic changes to this geographic area. The Company primarily utilizes one third-party rail company to ship its products to customers from its plant. There is a risk of business loss if there are significant impacts to this third party’s operations.

Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Future Minimum Commitments

The Company is obligated under certain contracts for minimum payments for the right to use land for extractive activities, which is not within the scope of leases under ASC 842. Future minimum annual commitments under such contracts at June 30, 2020 are as follows:



Remainder of 2020	$	256
2021	2,418
2022	2,466
2023	2,716
2024	2,469
Thereafter	30,117
Total	$	40,442

Litigation

In addition to the matters described below, we may be subject to various legal proceedings, claims and governmental inspections, audits or investigations arising out of the Company’s operations in the normal course of business, which cover matters such as general commercial, governmental and trade regulations, product liability, environmental, intellectual property, employment and other actions. Although the outcomes of these routine claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters would not have a material adverse effect on the Company’s financial statements.

U.S. Well Services, LLC

On January 14, 2019, Smart Sand, Inc. (plaintiff) filed suit against U.S. Well Services, LLC (defendant) (“U.S. Well”) in the Superior Court of the State of Delaware in and for New Castle County (C.A. No. N19C-01-144-PRW [CCLD]). In the suit, plaintiff alleges that defendant is in breach of contract for failure to pay amounts due and payable under a long-term take-or-pay Master Product Purchase Agreement and coterminous Railcar Usage Agreement and is seeking unspecified monetary damages and other appropriate relief. Plaintiff is also seeking a declaratory judgment that the relevant agreements continued in full force and effect (until the term expired on April 30, 2020) despite defendant’s purported notice of termination to the contrary. Defendant has filed an Answer, Affirmative Defenses and Amended Counterclaim seeking unspecified monetary damages and declaratory relief. The Company intends to both vigorously prosecute its claims and defend against U.S. Well’s counterclaims. At this time, the Company is unable to express an opinion as to the likely outcome of the matter.

The Company recorded $14,792 and $13,173 of revenue for the three months ended June 30, 2020 and 2019, respectively, related to U.S. Well. The Company recorded $17,170 and $15,550 of revenue for the six months ended June 30, 2020 and 2019, respectively, related to U.S. Well. As of June 30, 2020 and December 31, 2019, $54,592 and $37,422 of accounts and unbilled receivables, respectively, is attributable to U.S. Well. Amounts recorded as accounts and unbilled receivables do not represent the full amounts sought in this lawsuit.

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and ConsolidationThe accompanying unaudited quarterly condensed consolidated financial statements (“interim statements”) of the Company are presented in accordance with the rules and regulations of the Securities and Exchange Commission for quarterly reports on Form 10-Q and therefore do not include all the information and notes required by GAAP. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. All adjustments are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. The consolidated balance sheet as of December 31, 2019 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2019. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2019.
Reclassification	Revision of Previously Issued Financial Statements for Immaterial Misstatements During the quarter ended June 30, 2020, the Company identified an error in costs of goods sold in the Company’s audited financial statements for the year ended December 31, 2018. The error related to a vendor rebate the company received during the current period, $1,800 of which related to expenses attributable to fiscal year 2018. As a result of the error, the Company reduced costs of goods sold by $1,800 and increased income tax expense by $387 in its audited financial statements for the year ended December 31, 2018, and increased prepaid expenses and other current assets by $1,800, increased deferred tax liability by $387 and increased retained earnings by $1,413 in its audited financial statements for the year ended December 31, 2019. Additionally, certain 2019 balance sheet items have been reclassified to conform to the current financial statement presentation. These reclassifications have no effect on previously reported net income. Pursuant to the guidance of Staff Accounting Bulletin (“SAB”) No. 99, “Materiality”, the Company evaluated the materiality of these errors quantitatively and qualitatively and concluded that the errors described above were not material to any of its prior annual or quarterly financial statements or trends of financial results. However, due to reduced activity and the current economic environment, the errors could be considered material to the Company’s current period financial statements. As such, the Company has revised the prior period financial statements in accordance with SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” The Company expects to similarly revise previously presented historical financial statements for these immaterial errors in future filings, including the annual audited financial statements to be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Use of Estimates, Policy	Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these financial statements include, but are not limited to: the sand reserves and their impact on calculating the depletion expense under the units-of-production method; depreciation and amortization associated with property, plant and equipment and definite-lived intangible assets; impairment considerations of assets (including impairment of identified intangible assets and other long-lived assets); estimated cost of future asset retirement obligations; stock-based compensation; recoverability of deferred tax assets; inventory reserve; collectability of receivables; and certain liabilities. Actual results could differ from management’s best estimates as additional information or actual results become available in the future, and those differences could be material. The increased supply of oil and the decreased demand related to the COVID-19 coronavirus pandemic have caused a dramatic decline in oil prices and significant volatility in the oilfield services sector. The Company is currently unable to estimate the impact of these events on its future financial position and results of operations. Therefore, the Company can give no assurances that the events will not have a material adverse effect on its financial position or results of operations.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which modifies how companies recognize expected credit losses on financial instruments and other commitments to extend credit held by an entity at each reporting date. Existing GAAP requires an “incurred loss” methodology whereby companies are prohibited from recording an expected loss until it is probable that the loss has been incurred. ASU 2016-13 requires companies to use a methodology that reflects current expected credit losses (“CECL”) and requires consideration of a broad range of reasonable and supportable information to record and report credit loss estimates, even when the CECL is remote. Companies will be required to record the allowance for credit losses and deduct that amount from the basis of the asset and a related expense will be recognized in selling, general and administrative expenses on the income statement, similar to bad debt expense under existing GAAP. There is much latitude given to entities in determining the methodology for calculating the CECL. The guidance is effective for the Company for financial statement periods beginning after December 15, 2022, although early adoption is permitted. While the Company is still in the process of evaluating the effects of ASU 2016-13 and its related updates on its consolidated financial statements, it believes the primary effect will be an allowance recorded against its accounts and unbilled receivables on its balance sheet and related expense on its income statement upon adoption. The Company cannot determine the financial impact on its consolidated financial statements upon adoption as its accounts and unbilled receivables balances are affected by ongoing transactions with customers. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which intends to simplify the guidance by removing certain exceptions to the general principles and clarifying or amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Although the Company is currently evaluating the impact of the adoption of ASU 2019-12, it does not expect it to have a material impact on its consolidated financial statements.

Contingent Consideration (Tables)

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Schedule of contingent consideration

The Company’s financial instruments remeasured and carried at fair value were as follows:


	June 30, 2020		Level 1		Level 2		Level 3
Contingent consideration	$	570	$	—	$	—	$	570
Total liabilities	$	570	$	—	$	—	$	570

The following table provides a summary of changes in the fair value of the Company’s Level 3 financial instruments for the six months ended June 30, 2020.


Balance as of December 31, 2019	$	1,900
Payment of contingent consideration	(310)
Fair value adjustment	(1,020)
Balance as of June 30, 2020	$	570

Inventory (Tables)

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventory consisted of the following:


	June 30, 2020		December 31, 2019
Raw material	$	899	$	527
Work in progress	12,309		14,173
Finished goods	4,158		4,097
Spare parts	2,921		2,618
Total sand inventory	$	20,287	$	21,415

Property, Plant and Equipment, net (Tables)	6 Months Ended
Property, Plant and Equipment, net (Tables)	Jun. 30, 2020
Property, Plant and Equipment [Abstract]
Schedule of net property, plant and equipment	Net property, plant and equipment consisted of: