What Is Going On With Fairmount Santrol Holdings Inc (NYSE:FMSA)?


In the last trading session, the stock price of Fairmount Santrol Holdings Inc (NYSE:FMSA) jumped more than 8% to close the day at around $5. The gains came at a share volume of 37.25 million compared to average share volume of 5.74 million. Earlier in the month of August, the firm released its second quarter 2017 financial report, wherein it stated that volumes came at 3.3 million tons, a jump of 22% sequentially.

The details

During the Q2 2017, revenue came at $233.2 million, an increase of 35% sequentially, with more than 40% increase in Proppant Solutions revenues and robust 9% growth in recreational and industrial revenues. Net income came at $10.5 million while adjusted EBITDA stood at $47 million, excluding non-cash stock compensation expense of $2.8 million and the write-off of deferred financing expenses worth $0.4 million

Jenniffer Deckard, the CEO and President of Fairmount Santrol, expressed that their second-quarter results showcase their ability to capture growth, in raw sand as well as coated proppants, from enhancing conditions in the oil and gas markets and to offer solid, steady growth in their I&R division. Deckard continued that they have prudently increased capacity in their Proppant Solutions division as consumer demand has increased and pricing has improved, and they have leveraged their logistics network to offer strong profitability growth in Q2 2017.

Fairmount Santrol reported plans for a new facility in the Permian basin that is anticipated to add 3 million tons of yearly proppant sand production. The Kermit facility expands the firm’s product portfolio, and with the relaunch of the Shakopee, Minnesota, mine, will allow the firm to capitalize on increasing market demand.

As of the close of June 2017, cash and cash equivalents came at $178.5 million, while total debt was $796.1 million, leading in net debt of $617.6 million, recording a quarterly decline in net debt of $16.9 million.