10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36670

FAIRMOUNT SANTROL HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware	34-1831554
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)	Identification No.)

8834 Mayfield Road

Chesterland, Ohio 44026

(Address of Principal Executive Offices) (Zip Code)

(800) 255-7263

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer	☐		Accelerated filer	☒
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒

Number of shares of Common Stock outstanding, par value $0.01 per share, as of August 7, 2017:  224,080,573

Fairmount Santrol Holdings Inc. and Subsidiaries

Quarterly Report on Form 10-Q

For the Quarter Ended June 30, 2017

Table of Contents

	Page
Part I – Financial Information
Item 1 – Financial Statements (Unaudited)
Condensed Consolidated Statements of Income (Loss)	3
Condensed Consolidated Statements of Comprehensive Income (Loss)	4
Condensed Consolidated Balance Sheets	5
Condensed Consolidated Statements of Equity	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3 – Quantitative and Qualitative Disclosures about Market Risk	35
Item 4 – Controls and Procedures	36
Part II – Other Information	36
Item 1 – Legal Proceedings	36
Item 1A – Risk Factors	36
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3 – Defaults upon Senior Securities	36
Item 4 – Mine Safety Disclosures	37
Item 5 – Other Information	37
Item 6 – Exhibits	37
Signatures	38
Exhibit Index	39

2

Fairmount Santrol Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Loss)

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
	(in thousands, except per share amounts)					(in thousands, except per share amounts)
Revenues	$	233,226	$	114,249		$	405,809		$	259,707
Cost of goods sold (excluding depreciation, depletion,
and amortization shown separately)		163,136		114,129			294,888			232,593
Operating expenses
Selling, general and administrative expenses		25,863		25,040			48,333			43,318
Depreciation, depletion and amortization expense		19,846		18,056			39,288			36,642
Asset impairments		-		90,578			-			90,654
Restructuring charges		-		1,155			-			1,155
Other operating expense (income)		355		(426	)		(705	)		(96	)
Income (loss) from operations		24,026		(134,283	)		24,005			(144,559	)
Interest expense, net		12,983		16,606			25,520			33,868
Other non-operating income		-		-			-			(5	)
Income (loss) before provision (benefit) for income taxes		11,043		(150,889	)		(1,515	)		(178,422	)
Provision (benefit) for income taxes		520		(63,019	)		(628	)		(78,773	)
Net income (loss)		10,523		(87,870	)		(887	)		(99,649	)
Less: Net income attributable to the non-controlling interest		40		16			218			13
Net income (loss) attributable to Fairmount Santrol Holdings Inc.	$	10,483	$	(87,886	)	$	(1,105	)	$	(99,662	)
Earnings (loss) per share
Basic	$	0.05	$	(0.54	)	$	-		$	(0.62	)
Diluted	$	0.05	$	(0.54	)	$	-		$	(0.62	)
Weighted average number of shares outstanding
Basic		224,015		161,647			223,878			161,547
Diluted		228,184		161,647			223,878			161,547

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Fairmount Santrol Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
	(in thousands)					(in thousands)
Net income (loss)	$	10,523	$	(87,870	)	$	(887	)	$	(99,649	)
Other comprehensive income (loss), before tax
Foreign currency translation adjustment		481		(507	)		442			(360	)
Pension obligations		61		34			122			108
Change in fair value of derivative agreements		560		(5,296	)		2,173			(8,214	)
Total other comprehensive income (loss), before tax		1,102		(5,769	)		2,737			(8,466	)
Provision (benefit) for income taxes related to items of other comprehensive income (loss)		609		(2,436	)		1,925			(3,160	)
Comprehensive income (loss), net of tax		11,016		(91,203	)		(75	)		(104,955	)
Comprehensive income attributable to the non-controlling interest		40		16			218			13
Comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc.	$	10,976	$	(91,219	)	$	(293	)	$	(104,968	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Fairmount Santrol Holdings Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30, 2017			December 31, 2016
	(in thousands)
Assets
Current assets
Cash and cash equivalents	$	178,527		$	194,069
Accounts receivable, net of allowance for doubtful accounts of $2,465 and $3,055
at June 30, 2017 and December 31, 2016, respectively		123,753			78,942
Inventories, net		60,807			52,650
Prepaid expenses and other assets		5,628			7,065
Refundable income taxes		2,487			21,077
Total current assets		371,202			353,803
Property, plant and equipment, net		716,362			727,735
Deferred income taxes		1,244			1,244
Goodwill		15,301			15,301
Intangibles, net		92,524			95,341
Other assets		8,206			9,486
Total assets	$	1,204,839		$	1,202,910
Liabilities and Equity
Current liabilities
Current portion of long-term debt	$	12,172		$	10,707
Accounts payable		51,654			37,263
Accrued expenses and deferred revenue		48,912			26,185
Total current liabilities		112,738			74,155
Long-term debt		783,946			832,306
Deferred income taxes		7,839			7,057
Other long-term liabilities		43,311			38,272
Total liabilities		947,834			951,790
Commitments and contingent liabilities (Note 13)
Equity
Preferred stock: $0.01 par value, 100,000 authorized shares
Shares outstanding: 0 at June 30, 2017 and December 31, 2016		-			-
Common stock: $0.01 par value, 1,850,000 authorized shares
Shares outstanding: 224,081 and 223,601 at June 30, 2017
and December 31, 2016, respectively		2,423			2,422
Additional paid-in capital		298,038			297,649
Retained earnings		263,314			264,852
Accumulated other comprehensive loss		(18,190	)		(19,002	)
Total equity attributable to Fairmount Santrol Holdings Inc. before treasury stock		545,585			545,921
Less: Treasury stock at cost
Shares in treasury: 18,285 and 18,666 at June 30, 2017
and December 31, 2016, respectively		(288,849	)		(294,874	)
Total equity attributable to Fairmount Santrol Holdings Inc.		256,736			251,047
Non-controlling interest		269			73
Total equity		257,005			251,120
Total liabilities and equity	$	1,204,839		$	1,202,910

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Fairmount Santrol Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Equity

(Unaudited)

	Equity (deficit) attributable to Fairmount Santrol Holdings Inc.
					Additional						Other												Non-
	Common		Common		Paid-in			Retained			Comprehensive			Treasury			Treasury						Controlling
	Stock		StockUnits		Capital			Earnings			Income (Loss)			Stock			StockUnits			Subtotal			Interest			Total
	(in thousands)
Balances at December 31, 2015	$	2,391		161,433	$	776,705		$	405,044		$	(17,693	)	$	(1,227,663	)		77,765		$	(61,216	)	$	848		$	(60,368	)
Stock options exercised		6		587		2,001			-			-			-			-			2,007			-			2,007
Stock compensation expense		-		-		5,567			-			-			-			-			5,567			-			5,567
Tax effect of stock options exercised, forfeited, or expired		-		-		(1,297	)		-			-			-			-			(1,297	)		-			(1,297	)
Transactions with non-controlling interest		-		-		-			-			-			-			-			-			(551	)		(551	)
Net income (loss)		-		-		-			(99,662	)		-			-			-			(99,662	)		13			(99,649	)
Other comprehensive loss		-		-		-			-			(5,306	)		-			-			(5,306	)		-			(5,306	)
Balances at June 30, 2016	$	2,397		162,020	$	782,976		$	305,382		$	(22,999	)	$	(1,227,663	)		77,765		$	(159,907	)	$	310		$	(159,597	)
Balances at December 31, 2016	$	2,422		223,601	$	297,649		$	264,852		$	(19,002	)	$	(294,874	)		18,666		$	251,047		$	73		$	251,120
Re-issuance of treasury stock		-		381		-			-			-			6,025			(381	)		6,025			-			6,025
Share-based awards exercised or distributed		1		99		(5,490	)		-			-			-			-			(5,489	)		-			(5,489	)
Stock compensation expense		-		-		5,879			-			-			-			-			5,879			-			5,879
Impact of adoption of ASU 2016-09 (See Note 9)		-		-		-			(699	)		-			-			-			(699	)		-			(699	)
Tax impact of adoption of ASU 2016-09		-		-		-			266			-			-			-			266			-			266
Transactions with non-controlling interest		-		-		-			-			-			-			-			-			(22	)		(22	)
Net income (loss)		-		-		-			(1,105	)		-			-			-			(1,105	)		218			(887	)
Other comprehensive income		-		-		-			-			812			-			-			812			-			812
Balances at June 30, 2017	$	2,423		224,081	$	298,038		$	263,314		$	(18,190	)	$	(288,849	)		18,285		$	256,736		$	269		$	257,005

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Fairmount Santrol Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
	2017			2016
	(in thousands)
Net loss	$	(887	)	$	(99,649	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and depletion		35,508			34,284
Amortization		6,305			5,745
Reserve for doubtful accounts		(209	)		1,954
Write-off of deferred financing costs		389			-
Asset impairments		-			90,654
Inventory write-downs and reserves		1,266			10,302
(Gain) loss on sale of fixed assets		(552	)		35
Deferred income taxes and taxes payable		1,044			(59,913	)
Refundable income taxes		18,591			(15,535	)
Stock compensation expense		5,179			5,567
Change in operating assets and liabilities:
Accounts receivable		(44,602	)		10,524
Inventories		(9,423	)		3,500
Prepaid expenses and other assets		(991	)		3,745
Accounts payable		11,024			298
Accrued expenses and deferred revenue		31,606			(4,450	)
Net cash provided by (used in) operating activities		54,248			(12,939	)
Cash flows from investing activities
Proceeds from sale of fixed assets		1,216			3,918
Capital expenditures and stripping costs		(14,236	)		(21,948	)
Earnout payments		(250	)		-
Other investing activities		-			(150	)
Net cash used in investing activities		(13,270	)		(18,180	)
Cash flows from financing activities
Payments on long-term debt		(4,299	)		(5,899	)
Prepayments on term loans		(50,000	)		(69,580	)
Payments on capital leases and other long-term debt		(2,087	)		(4,109	)
Proceeds from option exercises		536			2,007
Tax payments for withholdings on share-based awards exercised or distributed		(1,091	)		(292	)
Tax effect of stock options exercised, forfeited, or expired		-			(1,297	)
Transactions with non-controlling interest		(22	)		(551	)
Net cash used in financing activities		(56,963	)		(79,721	)
Change in cash and cash equivalents related to assets classified as held-for-sale		-			1,376
Foreign currency adjustment		443			(387	)
Decrease in cash and cash equivalents		(15,542	)		(109,851	)
Cash and cash equivalents:
Beginning of period		194,069			171,486
End of period	$	178,527		$	61,635

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

1. Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of Fairmount Santrol Holdings Inc. and its consolidated subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (which are of a normal, recurring nature) and disclosures necessary for a fair statement of the financial position, results of operations, comprehensive income, and cash flows of the reported interim periods.  The condensed consolidated balance sheet as of December 31, 2016 was derived from audited financial statements, but does not include all disclosures required by GAAP.  Interim results are not necessarily indicative of the results to be expected for the full year or any other interim period.  These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements as filed in the 2016 Annual Report on Form 10-K and notes thereto and information included elsewhere in this Quarterly Report on Form 10-Q.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 – Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e. lessees and lessors).  The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.  This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively.  A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.  Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today.  The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases.  The Update is expected to impact the Company’s consolidated financial statements as the Company has certain operating and land lease arrangements for which it is the lessee.  ASC 842 supersedes the previous leases standard, ASC 840 – Leases.  The standard is effective on January 1, 2019, with early adoption permitted.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In April and May 2016, the FASB issued ASU No. 2016-10 – Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing, ASU No. 2016-11 – Revenue Recognition and Derivatives and Hedging – Recession of SEC Guidance, ASU No. 2016-12 – Revenue from Contracts with Customers – Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20 – Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.  These ASU’s each affect the guidance of the new revenue recognition standard in ASU No. 2014-09 – Revenue from Contracts with Customers and related subsequent ASUs.  This guidance is effective beginning January 1, 2018.  The Company is in the process of reviewing its various customer contracts in both of its business segments with a combination of applicable sales, legal, and accounting

8

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

personnel.  The review of a sample of contracts has been completed.  In this review, the Company has identified several indicators of potential variable consideration, including price adjustments in the contracts as well as provisions similar to take-or-pay arrangements that could modify the timing of revenue recognition.  The Company is in the process of further review of these indicators and whether they will result in a change in the timing of revenue recognition.  The Company intends to continue this analysis in the quarter ending September 30, 2017 and then apply this guidance to all contracts in order to be prepared for a January 1, 2018 implementation.  The Company intends to use the modified retrospective method and will record cumulative effect of initially applying the standard as an adjustment to opening retained earnings.  This review is in data-gathering and contract review stages and, therefore, the effect of the new guidance on the Company’s financial statements and disclosures is not yet readily determinable.

In January 2017, the FASB issued ASU 2017-04 – Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment.  The ASU eliminates Step 2 from goodwill impairment testing.  Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.  As a result of the ASU, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.  The ASU is effective beginning January 1, 2020, with early adoption permitted, and applied prospectively.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In March 2017, the FASB issued ASU 2017-07 – Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.  The ASU requires that an employer report the service cost component in the same line item in the income statement as other compensation costs arising from services rendered by the pertinent employees during the period as well as appropriately described relevant line items.  The ASU also requires only the service cost component to be eligible for capitalization when applicable.  The ASU is effective beginning January 1, 2018 with early adoption permitted.  The income statement components of the ASU should be applied retrospectively while the balance sheet component should be applied prospectively.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In May 2017, the FASB issued ASU 2017-09 – Compensation – Stock Compensation (Topic 718) – Scope of Modification Accounting.  The ASU provides further guidance on changes to the terms or conditions of a share-based payment award and which changes require the application of modification accounting.  Further, an entity should apply modification accounting unless the following conditions are met:

• The award’s fair value is the same immediately before and after the original award is modified;

• The vesting conditions of the modified award are the same immediately before and after the award is modified; and

• The classification of the modified award, as either an equity instrument or liability instrument, is the same immediately before and after the award is modified.

This guidance is effective beginning January 1, 2018, with early adoption permitted, and should be applied prospectively.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.  

9

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

2. Inventories, net

At June 30, 2017 and December 31, 2016, inventories consisted of the following:

	June 30, 2017			December 31, 2016
Raw materials	$	8,447		$	7,465
Work-in-process		11,162			12,681
Finished goods		42,439			33,760
		62,048			53,906
Less: LIFO reserve		(1,241	)		(1,256	)
Inventories, net	$	60,807		$	52,650

3. Property, Plant, and Equipment, net

At June 30, 2017 and December 31, 2016, property, plant, and equipment consisted of the following:

	June 30, 2017			December 31, 2016
Land and improvements	$	82,408		$	86,298
Mineral reserves and mine development		255,679			253,766
Machinery and equipment		588,637			596,962
Buildings and improvements		187,619			161,057
Furniture, fixtures, and other		3,456			3,440
Construction in progress		14,062			6,748
		1,131,861			1,108,271
Accumulated depletion and depreciation		(415,499	)		(380,536	)
Property, plant, and equipment, net	$	716,362		$	727,735

Under ASC 360 Property, Plant, and Equipment, the Company is required to evaluate the recoverability of the carrying amount of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.  Based on the adverse business conditions and the idling of certain assets in 2016, the Company evaluated certain of its asset groups that contained mineral reserves and other long-lived assets contained in the Proppant Solutions segment and concluded that the carrying amounts of those assets were not recoverable.  Fair value was determined by prices obtained from third parties for the assets and from estimating the net present value of the future cash flows over the life of the assets.  Using Level 3 inputs of the fair value hierarchy, critical assumptions for these valuations included future selling prices of products, future operating costs, and the cost of capital.  The Company incurred $90,578 and $90,654 of such asset impairments in the three and six months ended June 30, 2016, respectively.  These impairments are recorded as asset impairments in operating expenses in the Condensed Consolidated Statements of Income (Loss).  There were no such impairments included in the six months ended June 30, 2017.

10

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

4. Long-Term Debt

At June 30, 2017 and December 31, 2016, long-term debt consisted of the following:

	June 30, 2017			December 31, 2016
Term B-2 Loans		673,316			719,632
Extended Term B-1 Loans		110,048			117,634
Industrial Revenue bond		10,000			10,000
Revolving credit facility and other		72			88
Capital leases, net		8,800			3,634
Deferred financing costs, net		(6,118	)		(7,975	)
		796,118			843,013
Less: current portion		(12,172	)		(10,707	)
Long-term debt including leases	$	783,946		$	832,306

On April 28, 2016, the Company entered into an amendment to the 2013 Amended Credit Agreement that extended the maturity of certain of the Term B-1 Loans to July 15, 2018 (the “2016 Extended Term Loans”).  The Company made a prepayment of principal of $69,580 and accrued interest of $227 on April 28, 2016 to the lenders consenting to the amendment.  The extended remainder of the Term B-1 Loans, plus accrued interest, was due at maturity on July 15, 2018.  Accrued interest related to the $16,723 principal payment (net of original issue discount) due on March 17, 2017 was also due on the same date.

On October 17, 2016, the Company repurchased $3,000 of the Extended Term B-1 Loans at 91.5% of par.  On November 17, 2016, the Company fully prepaid the $16,766 of the Term B-1 Loans due March 2017 as well as the $69,580 of the 2016 Extended Term Loans.  On November 29, 2016, the Company repurchased, at an average of 96.3% of par, a total of $213,000 of term loans, which consisted of $37,867 of the Extended Term B-1 Loans and $175,133 of the Term B-2 Loans.  The related net gain on the October and November 2016 debt repurchases was $5,110.  On June 27, 2017, the Company prepaid $50,000 of term loans at par, which consisted of $42,979 of the Term B-2 Loans and $7,021 of the Extended Term B-1 Loans and recognized expenses of $389 relating to the write-off of unamortized capitalized debt issuance costs.

As of June 30, 2017, the Term B-2 Loans, Extended Term B-1 Loans, and the Revolving Credit Facility had actual interest rates of 4.8%, 4.8%, and 4.3%, respectively.

Beginning in 2017, the full amount of the Revolving Credit Facility ($100,000) is available, so long as the Company’s leverage ratio does not exceed a revised limit (6.50:1.00 for the first quarter of 2017 declining quarterly to 4.75:1.00 for the fourth quarter of 2017).  The Revolving Credit Facility termination date is September 6, 2018.  As of June 30, 2017, the Company’s leverage ratio exceeded the revised limits so there was $15,980 available unused capacity on the Revolving Credit Facility and $15,270 committed to outstanding letters of credit.  As of June 30, 2017, the Company had not drawn on the Revolving Credit Facility.

The Company has a $10,000 Industrial Revenue Bond outstanding related to the construction of a manufacturing facility in Wisconsin.  The bond bears interest, which is payable monthly, at a variable rate.  The rate was 0.91% at June 30, 2017.  The bond matures on September 1, 2027 and is collateralized by a letter of credit of $10,000.

5. Accrued Expenses and Deferred Revenue

At June 30, 2017 and December 31, 2016, accrued expenses and deferred revenue consisted of the following:

11

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

	June 30, 2017		December 31, 2016
Accrued payroll and fringe benefits	$	8,145	$	7,018
Accrued bonus		14,669		3,536
Contingent consideration		3,220		2,507
Accrued income taxes		347		421
Accrued real estate taxes		3,834		4,821
Deferred revenue		9,316		75
Other accrued expenses		9,381		7,807
Accrued expenses and deferred revenue	$	48,912	$	26,185

6. Earnings (Loss) per Share  

The table below shows the computation of basic and diluted earnings (loss) per share for the three and six months ended June 30, 2017 and 2016, respectively:

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
Numerator:
Net income (loss) attributable to Fairmount Santrol Holdings Inc.	$	10,483	$	(87,886	)	$	(1,105	)	$	(99,662	)
Denominator:
Basic weighted average shares outstanding		224,015		161,647			223,878			161,547
Dilutive effect of employee stock options, RSUs, and PRSUs		4,169		-			-			-
Diluted weighted average shares outstanding		228,184		161,647			223,878			161,547
Earnings (loss) per common share - basic	$	0.05	$	(0.54	)	$	-		$	(0.62	)
Earnings (loss) per common share - diluted	$	0.05	$	(0.54	)	$	-		$	(0.62	)

Potentially dilutive shares were excluded from the calculation of diluted weighted average shares outstanding and diluted earnings per share in the six months ended June 30, 2017 and the three and six months ended June 30, 2016 because the Company was in a loss position in those periods.  The calculation of diluted weighted average shares outstanding for the three months ended June 30, 2017 excludes 6,858 potential common shares because the effect of including these potential common shares would be antidilutive.

As a result of ASU No. 2016-09 – Compensation – Stock Compensation (Topic 718), windfalls and excess tax benefits are no longer included in the calculation of assumed proceeds and the calculation of diluted weighted average shares outstanding.  The Company adopted this guidance as of January 1, 2017 on a prospective basis, which could impact the comparability of earnings per share between periods presented.  However, the Company was in a loss position for prior periods presented and, accordingly, basic and diluted earnings per share are calculated in the same manner.  

As of June 30, 2017, the amount of outstanding options, restricted stock units (“RSUs”), and performance restricted stock units (“PRSUs”) was 13,697, 1,534, and 581, respectively.

7. Derivative Instruments

The Company enters into interest rate swap agreements as a means to partially hedge its variable interest rate risk on debt instruments.  The notional value of these swap agreements is $420,000, which represents a total of approximately 54% of term debt outstanding at June 30, 2017 and effectively fixes the variable rate in a range of 2.92%  to 3.12% for the portion of the debt that is hedged.  The interest rate swap agreements mature on September 5, 2019.

12

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

The derivative instruments are recorded on the balance sheet at their fair values.  Changes in the fair value of derivatives are recorded each period in current earnings or in other comprehensive income, depending on whether a derivative is designated as part of a hedging relationship and, if it is, depending on the type of hedging relationship.  For cash flow hedges in which the Company is hedging the variability of cash flows related to a variable-rate liability, the effective portion of the gain or loss on the derivative instrument is reported in other comprehensive income in the periods during which earnings are impacted by the variability of the cash flows of the hedged item.  The ineffective portion of all hedges is recognized in current period earnings.  As interest expense is accrued on the debt obligation, amounts in accumulated other comprehensive income (loss) related to the interest rate swaps are reclassified into income to obtain a net cost on the debt obligation equal to the effective yield of the fixed rate of each swap.  In the event that an interest rate swap is terminated prior to maturity, gains or losses in accumulated other comprehensive income (loss) remain deferred and are reclassified into earnings in the periods in which the hedged forecasted transaction affects earnings.

The Company formally designates and documents instruments at inception that qualify for hedge accounting of underlying exposures in accordance with GAAP.  Both at inception and for each reporting period, the Company assesses whether the financial instruments used in hedging transactions are effective in offsetting changes in cash flows of the related underlying exposure.

The following table summarizes the fair values and the respective classification in the Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016:

		Assets (Liabilities)
Interest Rate Swap Agreements	Balance Sheet Classification	June 30, 2017			December 31, 2016
Designated as cash flow hedges	Other long-term liabilities	$	(11,957	)	$	(14,488	)
Designated as cash flow hedges	Other assets		-			39
		$	(11,957	)	$	(14,449	)

In order to represent the ineffective portion of interest rate swap agreements designated as hedges, the Company recognized in interest expense the following in the three and six months ended June 30, 2017 and 2016:

Derivatives in	Location of Gain (Loss)
ASC 815-20 Cash Flow	Recognized in Income on	Three Months Ended June 30,				Six Months Ended June 30,
Hedging Relationships	Derivative (Ineffective Portion)	2017		2016		2017			2016
Interest rate swap agreements	Interest expense (income)	$	3	$	109	$	(74	)	$	199
		$	3	$	109	$	(74	)	$	199

The Company expects 6,068 to be reclassified from accumulated other comprehensive income (loss) into interest expense within the next twelve months.

8. Fair Value Measurements

Financial instruments held by the Company include cash equivalents, accounts receivable, accounts payable, long-term debt (including the current portion thereof) and interest rate swaps.  The Company is also liable for contingent consideration from the acquisition of Self-Suspending Proppant LLC (“SSP”) that is subject to fair value measurement.  Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.  In determining fair value, the Company utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique.

13

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

Based on the examination of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy.  The fair value hierarchy ranks the quality and reliability of the information used to determine fair values.  Financial assets and liabilities at fair value will be classified and disclosed in one of the following three categories:

Level 1	Quoted market prices in active markets for identical assets or liabilities
Level 2	Observable market based inputs or unobservable inputs that are corroborated by market data
Level 3	Unobservable inputs that are not corroborated by market data

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The carrying value of cash equivalents, accounts receivable and accounts payable are considered to be representative of their fair values because of their short maturities.  The carrying value of the Company’s long-term debt (including the current portion thereof) is recognized at amortized cost.  The fair value of the Extended Term B-1 Loans and the Term B-2 Loans differs from amortized costs and is valued at prices obtained from a readily-available source for trading non-public debt, which represent quoted prices for identical or similar assets in markets that are not active, and therefore is considered Level 2.  The following table presents the fair value as of June 30, 2017 and December 31, 2016 for the Company’s long-term debt:

	QuotedPrices		Other
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
Long-Term Debt Fair Value Measurements	(Level 1)		(Level 2)		(Level 3)		Total
June 30, 2017
Term B-2 Loans		-		639,199		-		639,199
Extended Term B-1 Loans		-		103,321		-		103,321
	$	-	$	742,520	$	-	$	742,520
December 31, 2016
Term B-2 Loans		-		699,683		-		699,683
Extended Term B-1 Loans		-		114,308		-		114,308
	$	-	$	813,991	$	-	$	813,991

The following table presents the amounts carried at fair value as of June 30, 2017 and December 31, 2016 for the Company’s other financial instruments.  Fair value of interest rate swap agreements in based on the present value of the expected future cash flows, considering the risks involved, and using discount rates appropriate for the maturity date.  These are determined using Level 2 inputs.

	QuotedPrices		Other
	in Active		Observable			Unobservable
	Markets		Inputs			Inputs
Recurring Fair Value Measurements	(Level 1)		(Level 2)			(Level 3)		Total
June 30, 2017
Interest rate swap agreements	$	-	$	(11,957	)	$	-	$	(11,957	)
	$	-	$	(11,957	)	$	-	$	(11,957	)
December 31, 2016
Interest rate swap agreements	$	-	$	(14,449	)	$	-	$	(14,449	)
	$	-	$	(14,449	)	$	-	$	(14,449	)

14

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

9. Common Stock and Stock-Based Compensation

The Company granted options to purchase 448 and 1,731 shares of common stock in the six months ended June 30, 2017 and 2016, respectively.  The average grant date fair value was $9.98 and $2.21 for options issued in the six months ended June 30, 2017 and 2016, respectively.  The Company issued RSUs of 369 and 1,020 in the six months ended June 30, 2017 and 2016, respectively.  The Company issued PRSUs of 139 and 481 in the six months ended June 30, 2017 and 2016, respectively.    

				Weighted					Weighted		Performance			Weighted
				Average Exercise		Restricted			Average Price at		Restricted			Average Price at
	Options			Price, Options		Stock Units			RSU Issue Date		Stock Units			PRSU Issue Date
Outstanding at December 31, 2016		13,598		$	6.45		1,459		$	5.10		458		$	2.28
Granted		448			9.98		369			9.99		139			10.03
Exercised		(155	)		3.45		(250	)		2.60		-			-
Forfeited		(181	)		7.84		(44	)		6.70		(16	)		3.54
Expired		(13	)		15.91		-			-		-			-
Outstanding at June 30, 2017		13,697		$	6.57		1,534		$	6.64		581		$	4.10

The Company recorded $5,179 and $5,567 of stock compensation expense related to these options, RSUs, and PRSUs for the six months ended June 30, 2017 and 2016, respectively.  Stock compensation expense in the second quarter of 2016 included approximately $2,135 related to a modification of the retirement provisions of the Company’s Long Term Incentive Plans.  The modification allows retirement-eligible individuals (defined as age 55, plus 10 years of service) to continue to vest in options following retirement and also allows retired participants to exercise options for up to 10 years from grant date.  The modification also accelerates vesting and related expense for awards granted to retirement-eligible individuals.  Stock compensation expense is included in selling, general, and administrative expenses on the Consolidated Statements of Income (Loss) and in additional paid-in capital on the Consolidated Balance Sheets.

10. Income Taxes

The Company computes and applies to ordinary income an estimated annual effective tax rate on a quarterly basis based on current and forecasted business levels and activities, including the mix of domestic and foreign results and enacted tax laws.  The estimated annual effective tax rate is updated quarterly based on actual results and updated operating forecasts.  Ordinary income refers to income (loss) before income tax expense excluding significant, unusual, or infrequently occurring items.  The tax effect of an unusual or infrequently occurring item is recorded in the interim period in which it occurs as a discrete item of tax.

For the three months ended June 30, 2017, the Company recorded tax expense of $520 on income before income taxes of $11,043 resulting in an effective tax rate of 4.7%, compared to a tax benefit of $63,019 on a loss before income taxes of $150,889 resulting in an effective tax rate of 41.8% for the same period of 2016.  The decrease in the effective tax rate is primarily attributable to the impact of a tax benefit from a loss carryback recorded in 2016 and an increase in depletion applied against forecasted results in 2017 as compared to 2016.  The effective rate differs from the U.S. federal statutory rate due primarily to depletion and the valuation allowance against certain U.S. tax attributes.

For the six months ended June 30, 2017, the Company recorded a tax benefit of $628 on a loss before income taxes of $1,515 resulting in an effective tax rate of 41.5%, compared to a tax benefit of $78,773 on a loss before income taxes of $178,422 resulting in an effective tax rate of 44.1% for the same period of 2016.  The decrease in the effective tax rate is primarily attributable to the impact of a tax benefit from a loss carryback recorded in 2016, partially offset by the increase in depletion applied against forecasted results in 2017, as compared to 2016, and discrete tax benefits related to stock compensation.  The effective rate differs from the U.S. federal statutory rate due primarily to depletion and the valuation allowance against certain U.S. tax attributes.

15

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

11. Defined Benefit Plans

The Company maintains two defined benefit pension plans, the Wedron pension plan and the Troy Grove pension plan, covering union employees at certain facilities that provide benefits based upon years of service or a combination of employee earnings and length of service.  The benefits under the Wedron plan were frozen effective December 31, 2012 and the benefits under the Troy Grove plan were frozen effective December 31, 2016.

Net periodic benefit cost recognized for other Company defined benefit pension plans for the three and six months ended June 30, 2017 and 2016 is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Components of net periodic benefit cost
Service cost	$	-			21		$	-		$	42
Interest cost		89			87			178			174
Expected return on plan assets		(127	)		(120	)		(254	)		(240	)
Amortization of prior service cost		-			-			-			-
Amortization of net actuarial loss		61			35			122			109
Net periodic benefit cost	$	23		$	23		$	46		$	85

The Company contributed $36 and $42 during the six months ended June 30, 2017 and 2016, respectively.  Total expected employer contributions during the year ending December 31, 2017 are $69.

12. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc. at June 30, 2017 and December 31, 2016 were as follows:

	June 30, 2017
	Gross			Tax Effect		Net Amount
Foreign currency translation	$	(10,362	)	$	1,387	$	(8,975	)
Additional pension liability		(3,467	)		1,291		(2,176	)
Unrealized gain (loss) on interest rate hedges		(10,973	)		3,934		(7,039	)
	$	(24,802	)	$	6,612	$	(18,190	)

	December 31, 2016
	Gross			Tax Effect		Net Amount
Foreign currency translation	$	(10,804	)	$	2,533	$	(8,271	)
Additional pension liability		(3,589	)		1,291		(2,298	)
Unrealized gain (loss) on interest rate hedges		(13,146	)		4,713		(8,433	)
	$	(27,539	)	$	8,537	$	(19,002	)

16

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

The following table presents the changes in accumulated other comprehensive income by component for the six months ended June 30, 2017:

	Six Months Ended June 30, 2017
							Unrealized
	Foreign			Additional			gain (loss)
	currency			pension			on interest
	translation			liability			rate hedges			Total
Beginning balance	$	(8,271	)	$	(2,298	)	$	(8,433	)	$	(19,002	)
Other comprehensive income (loss)
before reclassifications		(704	)		-			(811	)		(1,515	)
Amounts reclassified from accumulated
other comprehensive income (loss)		-			122			2,205			2,327
Ending balance	$	(8,975	)	$	(2,176	)	$	(7,039	)	$	(18,190	)

The following table presents the reclassifications out of accumulated other comprehensive income during the six months ended June 30, 2017:

	Amountreclassified
	from accumulated
Details about accumulated other	other comprehensive			Affected line item on
comprehensive income	income			the statement of income
Change in fair value of derivative swap agreements
Interest rate hedging contracts	$	3,438		Interest expense
Tax effect		(1,233	)	Taxexpense (benefit)
	$	2,205		Net of tax
Amortization of pension obligations
Prior service cost	$	-		Cost of sales
Actuarial losses		122		Cost of sales
		122		Total before tax
Tax effect		-		Tax expense
		122		Net of tax
Total reclassifications for the period	$	2,327		Net of tax

13. Commitments and Contingent Liabilities

The Company has entered into numerous mineral rights agreements, in which payments under the agreements are expensed as incurred.  Certain agreements require annual payments while other agreements require payments based upon annual tons mined and others require a combination thereof.

The Company has entered into agreements with third party terminal operators whereby certain minimum payments are due regardless of terminal utilization.  

The Company leases certain machinery, equipment (including railcars), buildings and office space under operating lease arrangements.  Total rent expense associated with these leases was $27,199 and $35,156 for the six months ended June 30, 2017 and 2016, respectively.

The Company is subject to a contingent consideration arrangement related to the purchase of SSP, which was accounted for as an acquisition of a group of assets.  The contingent consideration is based on a fixed percentage of the cumulative product margin, less certain adjustments, generated by sales of Propel SSP® and other products incorporating the SSP technology for five years commencing on October 1, 2015.  The Company entered into an amendment to the SSP purchase agreement on December 17, 2015.  This amendment (a) extends the period during which the aggregate earnout payments must equal or exceed $45,000 from the two-year period ending October 1,

17

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

2017 until the three-year period ending October 1, 2018; and (b) provides that the aggregate earnout payments during the two-year period ending October 1, 2017 must equal or exceed $15,000 and granted the Seller a security interest in 51% of the equity interests in the Company to secure such $15,000.  The amendment does not alter the final threshold earnout amount, which continues to be $195,000 (inclusive of the $45,000 payment, if any) by October 1, 2020.  The contingent consideration is accrued and capitalized as part of the cost of the acquired technology from the SSP acquisition at the time a payment is probable and reasonably estimable.  Based upon current information, the Company accrued and capitalized an additional $964 in the six months ended June 30, 2017.

Certain subsidiaries are defendants in lawsuits in which the alleged injuries are claimed to be silicosis-related and to have resulted, in whole or in part, from exposure to silica-containing products, allegedly including those sold by certain subsidiaries.  In the majority of cases, there are numerous other defendants.  In accordance with its insurance obligations, the defense of these actions has been tendered to and the cases are being defended by the subsidiaries’ insurance carriers.  Management believes that the Company’s substantial level of existing and available insurance coverage combined with various open indemnities is more than sufficient to cover any exposure to silicosis-related expenses.  An estimate of the possible loss, if any, cannot be made at this time.

14. Transactions with Related Parties

The Company had purchases from an affiliated entity for freight, logistic services and consulting services related to its operations in China of $85 and $372 in the six months ended June 30, 2017 and 2016, respectively.  

The Company pays American Securities LLC (“American Securities”), in accordance with its policy, for Board of Directors’ fees and Company-related expenses, including reimbursement for travel and lodging, market research, and other miscellaneous expenses.  Fees and expenses paid to American Securities were $134 and $169 in the six months ended June 30, 2017 and 2016, respectively.  

15. Segment Reporting

The Company organizes its business into two reportable segments, Proppant Solutions and Industrial & Recreational Products.  The reportable segments are consistent with how management views the markets served by the Company and the financial information reviewed by the chief operating decision maker in deciding how to allocate resources and assess performance.

The chief operating decision maker primarily evaluates an operating segment’s performance based on segment gross profit, which does not include any selling, general, and administrative costs or corporate costs.  

18

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
Revenues
Proppant Solutions	$	198,812	$	82,102		$	339,805		$	199,565
Industrial & Recreational Products		34,414		32,147			66,004			60,142
Total revenues		233,226		114,249			405,809			259,707
Segment gross profit
Proppant Solutions		54,373		(13,529	)		81,719			3,063
Industrial & Recreational Products		15,717		13,649			29,202			24,051
Total segment gross profit		70,090		120			110,921			27,114
Operating expenses excluded from segment gross profit
Selling, general, and administrative		25,863		25,040			48,333			43,318
Depreciation, depletion, and amortization		19,846		18,056			39,288			36,642
Asset impairments		-		90,578			-			90,654
Restructuring charges		-		1,155			-			1,155
Other operating expense (income)		355		(426	)		(705	)		(96	)
Interest expense, net		12,983		16,606			25,520			33,868
Other non-operating income		-		-			-			(5	)
Income (loss) before provision (benefit) for income taxes	$	11,043	$	(150,889	)	$	(1,515	)	$	(178,422	)

The Company's three largest customers accounted for 20%, 13%, and 12%, respectively, of consolidated net revenues in the six months ended June 30, 2017.  In the six months ended June 30, 2016, the Company's two largest customers accounted for 34% and 10%, respectively, of consolidated net revenues.  These customers are part of the Company’s Proppant Solutions segment.  

16. Definite and Indefinite-Lived Intangibles

As of June 30, 2017, the balance of Goodwill was $15,301, which represents goodwill related to acquisitions in the Company’s Industrial & Recreational Products segment.  As part of Company policy in its normal course of business, the Company performed a review of qualitative factors and concluded that, as of June 30, 2017, there were no events or changes in circumstances that would more likely than not result in an impairment of the carrying value of its intangible assets, including goodwill.  With the current volatile market conditions in the oil and gas industry, there could be future changes that impact the carrying value of other long-lived intangibles, including the supply agreement with FTS International Services, LLC (“FTSI”) or the value of the acquired technology from the SSP acquisition.  As of June 30, 2017, the balance of the FTSI supply agreement, net of accumulated amortization, was $32,955.    

Beginning in the first quarter of 2017, the Company began selling products using the SSP technology in full commercial protocol.  Accordingly, the Company began to amortize this intangible asset over a 20-year useful life, which is based upon the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the Company.  Amortization expense of the SSP technology was $1,526 in the six months ended June 30, 2017.  Based on future results of sales of products utilizing the SSP technology, it is possible the fair value of the intangible asset could decline below its cost such that an impairment in carrying value exists.  

19

Fairmount Santrol Holdings Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share and acreage data)

(Unaudited)

17. Subsequent Event

On July 18, 2017, the Company entered into a 40-year lease agreement for approximately 3,250 acres of sand reserves in Winkler County, Texas.  The reserves are estimated to contain approximately 165,000 tons of fine grade 40/70 and 100 mesh proppant sand.  The Company is obligated for a $40,000 leasehold interest payment, as well as royalties based on volumes sold.  Upon signing the lease, $20,000 of the leasehold interest payment was made and is non-refundable.  The remaining $20,000 of the leasehold interest is payable upon the occurrence of future events, such as mine permitting.  

20

Introduction to Part I, Item 2 and Part II, Item 1 and Item 1A

We define various terms to simplify the presentation of information in this Quarterly Report on Form 10-Q (this “Report”).  Unless we state otherwise or the context otherwise requires, the terms “we,” “us,” “our,” “Fairmount Santrol,” “our business” and “our company” refer to Fairmount Santrol Holdings Inc. and its consolidated subsidiaries and predecessor companies.  We use Adjusted EBITDA herein as a non-GAAP measure of our financial performance.  See further discussion of Adjusted EBITDA at Item 2 – Management’s Discussion and Analysis.

FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements that are subject to risks and uncertainties.  All statements other than statements of historical fact included in this Report are forward-looking statements.  Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business.  You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.  For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth or initiatives, strategies or the expected outcome or impact of pending or threatened litigation are forward-looking statements.  All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

• weakness in the price of oil and gas resulting in lower capital expenditures by our end-user oil and gas customers;

• the level of cash flows generated to provide adequate liquidity to meet our working capital needs, capital expenditures, and our lease and debt obligations;

• increasing costs or a lack of dependability or availability of transportation services or infrastructure and geographic shifts in demand;

• changes to leased terminal arrangements impacting our distribution network and ability to deliver our products to our customers;

• actions of our competitors, including, but not limited to, their ability to increase production capacity to levels which cause an imbalance in supply and demand resulting in lower market prices, especially in certain geographic areas;

• end-user oil and gas customers, oilfield service companies, or both, purchasing or opening proppant facilities reducing market demand for us due to their vertical integration;

• our rights and ability to mine our properties and our renewal or receipt of the required permits and approvals from governmental authorities and other third parties;

• fluctuations in demand and pricing for raw and coated sand-based proppants or the development of either effective alternative proppants or new processes to replace hydraulic fracturing;

• downward pressure on market-based pricing;

• lower of cost or market inventory adjustments and/or obsolete inventory due to lower proppant demand from the oil and gas industry;

• our ability to protect our intellectual property rights;

• our ability to continue to commercialize Propel SSP® proppants;

• our ability to succeed in competitive markets;

• loss of, or reduction in, business from our largest customers;

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• our exposure to the credit risk of our customers and any potential material non-payments, bankruptcies, and/or nonperformance by our customers;

• our transactions in, and operating subsidiaries with, functional currencies other than the U.S. dollar.  We are exposed to fluctuations in exchange rates of these currencies compared to the U.S. dollar, which is the primary currency in which we operate.  These fluctuations may be significant, and may not be fully mitigated by risk management techniques, such as foreign currency hedging;  

• changes in U.S. or international political or economic conditions that could adversely impact our operating results;

• fluctuations in demand for industrial and recreational sand;

• operating risks that are beyond our control, such as changes in the price and availability of transportation, natural gas or electricity; unusual or unexpected geological formations or pressures; cave-ins, pit wall failures or rock falls; or unanticipated ground, grade or water conditions;

• our dependence on our Wedron Silica sand-mining facility for a significant portion of our sales, which currently supplies a large majority of our Northern White™ frac sand and a portion of our Industrial & Recreational (“I&R”) Products segment sand sold into our markets;

• the availability of raw materials to support our manufacturing of coated proppants;

• diminished access to water;

• challenges to our title to our mineral properties and water rights;

• our ability to make capital expenditures to maintain, develop and increase our asset base and our ability to obtain needed capital or financing on satisfactory terms, including financing for existing commitments such as future railcar deliveries;

• the potential impairment of our property, including our mineral reserves, plant, equipment, goodwill, and intangible assets as a result of market conditions;

• substantial indebtedness, lease and pension obligations;

• restrictions imposed by our indebtedness and lease obligations on our current and future operations;

• the accuracy of our estimates of our mineral reserves and our ability to mine them;

• potential disruption of our operations due to severe weather conditions, such as wind storms, ice storms, tornadoes, electrical storms, and floods, which occur in areas where we operate;

• a shortage of skilled labor and rising labor costs in the mining industry;

• increases in the prices of, or interruptions in the supply of, natural gas and electricity, or any other energy sources;

• our ability to attract and retain key personnel;

• our ability to maintain satisfactory labor relations;

• silica-related health issues and corresponding litigation;

• our ability to maintain effective quality control systems at our mining, processing, production, and terminal facilities;

• fluctuations in our sales and results of operations due to seasonality and other factors;

• interruptions or failures in our information technology systems;

• failure to comply with the provisions of the Foreign Corrupt Practices Act (“FCPA”);

• the impact of a terrorist attack or armed conflict;

• cybersecurity breaches;

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• our failure to maintain adequate internal controls;

• extensive and evolving environmental, mining, health and safety, licensing, reclamation and other regulation (and changes in their enforcement or interpretation);

• our ability to acquire, maintain or renew financial assurances related to the reclamation and restoration of mining property; and

• other factors disclosed in the section entitled “Risk Factors” and elsewhere in this Report.

We derive many of our forward-looking statements from our knowledge of our operations, our asset base, and our operating forecasts, which are based on many detailed assumptions.  While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results.  Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report.  All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications.  You should evaluate all forward-looking statements made in this Report in the context of these risks and uncertainties.

We caution you that the important factors referenced above may not contain all of the factors that are important to you.  In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect.  The forward-looking statements included in this Report are made only as of the date hereof.  We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of our company as of and for the periods presented below.  The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related information contained herein and our audited financial statements as of December 31, 2016 and 2015 included in our Annual Report on Form 10-K.  This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management.  Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed herein, particularly in the section entitled “Risk Factors.”

Overview

We are one of the world’s largest providers of sand-based proppant solutions and for nearly 40 years have been a pioneer in the development of high performance proppants used by Exploration & Production (“E&P”) companies to enhance the productivity of their oil and gas wells.  Additionally, for more than 120 years, we and our predecessor companies have provided high quality sand-based products, strong technical leadership and applications knowledge to end users in the I&R markets.

As one of the industry leaders, our asset base at December 31, 2016 included 742 million tons of proven and probable mineral reserves, which we believe is one of the largest reserve bases in the industry.  As of August 2017, we have ten sand processing facilities (nine of which are active) with 16.9 million tons of annual sand processing capacity.  We restarted our Brewer, Missouri and Maiden Rock, Wisconsin mines in the first quarter and recently opened our Shakopee, Minnesota mine to serve the increased demand in the proppant market.  We also have nine coating facilities (six of which are active) providing in excess of 2.0 million tons of annual coating capacity.  In early 2017, we re-opened our Cutler, Missouri coating facility to serve regional coating sand needs and increased demand.  

As disclosed in Note 17 of the condensed consolidated financial statements, on July 18, 2017, we entered into a 40-year lease agreement for approximately 3,250 acres of sand reserves in Winkler County, Texas.  The reserves are estimated to contain approximately 165 million tons of fine grade 40/70 and 100 mesh proppant sand.  We are obligated for a $40 million leasehold interest payment, as well as royalties based on volumes sold.  Upon signing the lease, $20 million of the leasehold interest payment was made and is non-refundable.  The remaining $20 million of the leasehold interest is payable upon the occurrence of future events, such as mine permitting.  We intend to build a mine and processing facility on the leased land with a capacity of approximately 3.0 million tons of proppant sand production annually.  Capital expenditures over the next twelve months related to this new mine and facility are estimated to be $60 million to $70 million.  We expect to fund this investment through a combination of cash on hand and cash flow generated from operations.  An average royalty of less than $3 per ton, which includes water rights, will be paid over the term of the lease on sand sold from this new facility, with no minimum annual royalty.

We are capable of Class I railroad deliveries to each of North America’s major oil and gas producing basins and also have the flexibility to ship our product via barge, marine terminals and trucks to reach our customers as needed.  We operate an integrated logistics platform consisting of 45 proppant distribution terminals and a fleet of approximately 10,285 railcars, which includes 1,280 customer railcars, considering subleases.  Our unit train capabilities include four production facilities and eleven in-basin terminals, which reduce freight costs and improve cycle times for our railcar fleet.  In order to continually align our logistics network with changes in customer demand, we have reactivated and opened nine terminals, established two new unit train terminals, and closed one terminal in 2017.  

Our operations are organized into two segments based on the primary end markets we serve: (i) Proppant Solutions and (ii) Industrial & Recreational Products (“I&R”).  Our Proppant Solutions segment predominantly provides sand-based proppants for use in hydraulic fracturing operations throughout the U.S. and Canada, Argentina, Mexico, China, northern Europe and the United Arab Emirates.  Our I&R segment provides raw, coated, and custom blended sands to the foundry, building products, glass, turf and landscape and filtration industries primarily in North America.  We believe our two market segments are complementary.  Our ability to sell to a wide range of customers

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across multiple end markets allows us to maximize the recovery of our reserve base within our mining operations and to reduce the cyclicality of our earnings.

Segment Gross Profit

Segment gross profit is a key metric that management uses to evaluate our operating performance and to determine resource allocation between segments.  Segment gross profit does not include any selling, general, and administrative costs or corporate costs.  

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are supplemental non-GAAP financial measures that are used by management and certain external users of our financial statements in evaluating our operating performance.

We define EBITDA as net income before interest expense, income tax expense, depreciation, depletion and amortization.  Adjusted EBITDA is defined as EBITDA before non-cash stock-based compensation, impairment of assets, and certain other income or expenses.

Management believes EBITDA and Adjusted EBITDA are useful because they allow us to more effectively evaluate our operations from period to period without regard to our financing methods or capital structure.  EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered as alternatives to, or more meaningful than, net income as determined in accordance with GAAP as indicators of our operating performance.  Certain items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of EBITDA or Adjusted EBITDA.  Although we attempt to determine EBITDA and Adjusted EBITDA in a manner that is consistent with other companies in our industry, our computations of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.  We believe that EBITDA and Adjusted EBITDA are widely followed measures of operating performance.

Adjusted EBITDA is presented as a performance measure because certain charges or expenses may occur in a particular period and are not indicative of true operating performance.  For this reason, management believes Adjusted EBITDA is useful to investors as well.  

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The following table sets forth a reconciliation of net income, the most directly comparable GAAP financial measure, to EBITDA and Adjusted EBITDA:

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
	(in thousands)					(in thousands)
Reconciliation of Adjusted EBITDA
Net income (loss) attributable to Fairmount Santrol Holdings Inc.	$	10,483	$	(87,886	)	$	(1,105	)	$	(99,662	)
Interest expense, net		12,983		16,606			25,520			33,868
Provision (benefit) for income taxes		520		(63,019	)		(628	)		(78,773	)
Depreciation, depletion, and amortization expense		19,846		18,056			39,288			36,642
EBITDA		43,832		(116,243	)		63,075			(107,925	)
Non-cash stock compensation expense(1)		2,763		3,914			5,179			5,567
Asset impairments(2)		-		90,578			-			90,654
Write-off of deferred financing costs(3)		389		-			389			-
Adjusted EBITDA	$	46,984	$	(21,751	)	$	68,643		$	(11,704	)

(1) Represents the non-cash expense for stock-based awards issued to our employees and outside directors.

(2) Non-cash charges associated with the impairment of mineral reserves and other long-lived assets.

(3) Represents the write-off of deferred financing fees in relation to term loan prepayment.

Results of Operations

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
	(in thousands)					(in thousands)
Other Financial Data
Net income (loss) attributable to Fairmount Santrol Holdings Inc.	$	10,483	$	(87,886	)	$	(1,105	)	$	(99,662	)
EBITDA		43,832		(116,243	)		63,075			(107,925	)
Adjusted EBITDA	$	46,984	$	(21,751	)	$	68,643		$	(11,704	)
Operating Data
Proppant Solutions
Total tons sold		2,587		1,290			4,669			2,816
Revenues	$	198,812	$	82,102		$	339,805		$	199,565
Segment gross profit	$	54,373	$	(13,529	)	$	81,719		$	3,063
Industrial & Recreational Products
Total tons sold		687		661			1,282			1,248
Revenues	$	34,414	$	32,147		$	66,004		$	60,142
Segment gross profit	$	15,717	$	13,649		$	29,202		$	24,051

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016

Revenues

Revenues increased $119.0 million, or 104%, to $233.2 million for the three months ended June 30, 2017 compared to $114.2 million for the three months ended June 30, 2016.

Average North American rig counts increased approximately 21% from the first quarter of 2017 through the second quarter of 2017 and have more than doubled the levels of the second quarter of 2016.  Average oil prices decreased

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slightly to an average of approximately $48 per barrel of oil for the second quarter of 2017 versus approximately $52 per barrel in the first quarter of 2017.  However, average oil prices have increased over 7% from approximately $45 in the second quarter of 2016 to $48 per barrel in the second quarter of 2017.  Even with oil prices at current levels, proppant markets continue to grow as a result of modified well designs, which increase the amount of proppant used per well.  

Total volumes in the Proppant Solutions segment increased 101% to 2.6 million tons in the three months ended June 30, 2017 compared to 1.3 million tons in the three months ended June 30, 2016.  Raw frac sand volumes increased 95% to 2.4 million tons in the three months ended June 30, 2017 compared to 1.2 million tons in the three months ended June 30, 2016.  Coated proppant volumes increased 223% to 0.2 million tons in the three months ended June 30, 2017 compared to 0.1 million tons in the three months ended June 30, 2016.  Revenues in the Proppant Solutions segment increased $116.7 million, or 142%, to $198.8 million for the three months ended June 30, 2017 compared to $82.1 million for the three months ended June 30, 2016.  The increase in Proppant Solutions revenue was largely due to higher overall volumes, which increased revenues by approximately $100 million.  Revenues also increased by approximately $17 million from higher pricing and change in product mix largely due to growth in value-added proppants.

Volumes in the I&R segment increased slightly to 0.7 million tons in the three months ended June 30, 2017 compared to the three months ended June 30, 2016.  Revenues in the I&R segment increased $2.3 million, or 7%, to $34.4 million for the three months ended June 30, 2017 compared to $32.1 million for the three months ended June 30, 2016.  I&R segment revenue was impacted by increases in sales of raw sand as well as value-added products, particularly in the glass, sports & recreation, and building products markets.

Revenues in our I&R segment are driven by macroeconomic factors, such as housing starts, light vehicle sales, repair and remodel activity, and industrial production.  

Segment Gross Profit

Gross profit increased $70.0 million to $70.1 million for the three months ended June 30, 2017 compared to $0.1 million for the three months ended June 30, 2016.    

Gross profit in the Proppant Solutions segment increased $67.9 million to $54.4 million for the three months ended June 30, 2017 compared to a negative $13.5 million for the three months ended June 30, 2016.  Gross profit for the three months ended June 30, 2017 included $1.5 million of charges due to mine start-ups and one-time expenses of $3.2 million to move over 1,200 railcars that were previously in storage to our active fleet in the second quarter.  Gross profit for the three months ended June 30, 2016 included non-cash inventory write-downs of $9.9 million.  Excluding these charges in 2017 and 2016, respectively, gross profit for the quarter ended June 30, 2017 would have increased approximately $63 million compared to gross profit for the quarter ended June 30, 2016.  The volume increases in the Proppant Solutions segment improved gross profit for the three months ended June 30, 2017 by approximately $30 million compared to the three months ended June 30, 2016.  The remaining gross profit improvement of $33 million is attributed to pricing improvements and favorable changes in product mix noted above as well as lower costs due to higher fixed cost leverage from greater volumes.

Gross profit in the I&R segment increased $2.1 million to $15.7 million for the three months ended June 30, 2017 compared to $13.6 million for the three months ended June 30, 2016.  Gross profit for the three months ended June 30, 2016 included non-cash inventory write-downs of $0.4 million.  Excluding this charge in 2016, gross profit would have increased approximately $2.4 million for the quarter ended June 30, 2017 compared to gross profit for the quarter ended June 30, 2016.  Approximately $1.4 million of the I&R gross profit improvement was attributed to increased prices over prior year period and improved cost per ton due to higher fixed cost leverage.  The remaining gross profit improvement of $0.7 million is attributed to higher volumes particularly in the glass, sports & recreation, and building products businesses.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) increased $0.8 million, or 3%, to $25.9 million for the three months ended June 30, 2017 compared to $25.0 million for the three months ended June 30, 2016.  SG&A includes stock compensation expense of $2.8 million and $3.9 million for the three months ended June 30, 2017 and 2016, respectively.  Stock compensation expense in the second quarter of 2016 included approximately $2.1 million due to a modification in the retirement provisions of the Company’s Long Term Incentive Plans that accelerates vesting and related expense for equity-based compensation awarded to retirement-eligible individuals (defined as age 55, plus 10 years of service).  Excluding this amount, stock compensation expense was higher in 2017 due to increases in our stock price and the related impact of current year awards to employees.  The increase in SG&A from the three months ended June 30, 2016 is the result of accruals for higher base compensation and benefits in 2017 from the additional staffing of our re-opened facilities as well as increased estimated variable compensation and pension and profit-sharing contributions based on our current 2017 performance run rate.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization increased $1.8 million to $19.8 million for the three months ended June 30, 2017 compared to $18.1 million in the three months ended June 30, 2016.  The increase in this expense was primarily due to incremental amortization of the acquired technology from the SSP acquisition, which began in 2017 with the commercialization of Propel SSP®.  

Income (Loss) from Operations

Income (loss) from operations increased $158.3 million to $24.0 million for the three months ended June 30, 2017 compared to a loss of $134.3 million for the three months ended June 30, 2016.  Second quarter earnings were largely impacted by increases in gross profit due to increased demand for proppant, including value-added proppant, and price improvements.  

Interest Expense

Interest expense decreased $3.6 million, or 22%, to $13.0 million for the three months ended June 30, 2017 compared to $16.6 million for the three months ended June 30, 2016.  The change in interest expense is primarily due to the prepayments and repurchases of our term loans in 2016, which reduced outstanding principal and overall interest expense, partially offset by interest rate increases.

Provision (Benefit) for Income Taxes

The provision for income taxes increased $63.5 million to $0.5 million for the three months ended June 30, 2017 compared to a benefit of $63.0 million for the three months ended June 30, 2016.  Income before income taxes increased $161.9 million to $11.0 million for the three months ended June 30, 2017 compared to a loss of $150.9 million for the three months ended June 30, 2016.  The increase in tax expense recorded during the second quarter of 2017 was primarily related to the increase in income before income taxes, partially offset by the benefit from a loss carryback recognized in 2016.  The effective tax rate was 4.7% and 41.8% for the three months ended June 30, 2017 and 2016, respectively.  The decrease in the effective tax rate was primarily attributable to the impact of the tax benefit from a loss carryback recorded in 2016 and an increase in depletion applied against forecasted results in 2017 as compared to 2016.  The effective rate differs from the U.S. federal statutory rate due primarily to depletion and the valuation allowance against certain U.S. tax attributes.

The provision (benefit) for income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items that are taken into account in the relevant period.  Each quarter, we update our estimate of the annual effective tax rate.  If our estimated effective tax rate changes, we make a cumulative adjustment.  

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Net Income (Loss) Attributable to Fairmount Santrol Holdings Inc.

Net income (loss) attributable to Fairmount Santrol Holdings Inc. increased $98.4 million to $10.5 million for the three months ended June 30, 2017 compared to a loss of $87.9 million for the three months ended June 30, 2016 due to the factors noted above.

Adjusted EBITDA

Adjusted EBITDA increased $68.7 million to $47.0 million for the three months ended June 30, 2017 compared to a loss of $21.8 million for the three months ended June 30, 2016.  Adjusted EBITDA for the second quarter of 2017 excludes the impact of $2.8 million of non-cash stock compensation expense.  Adjusted EBITDA for the second quarter of 2017 includes $1.5 million of charges due to mine start-ups and one-time expenses of $3.2 million to move 1,200 railcars previously in storage to our active fleet.  Adjusted EBITDA for the second quarter of 2016 excludes the impact of $94.5 million of non-cash stock compensation expense and impairment charges.  Adjusted EBITDA for the second quarter of 2016 includes non-cash inventory write-downs of $10.3 million.  The increase in Adjusted EBITDA is largely due to increased gross profit which as noted above is attributed to higher proppant and I&R volumes, improved pricing, and higher fixed cost leverage due to greater volumes.

Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016

Revenues  

Revenues increased $146.1 million, or 56%, to $405.8 million for the six months ended June 30, 2017 compared to $259.7 million for the six months ended June 30, 2016.

The average year-to-date North American rig counts increased approximately 94% in the six months ended June 30, 2017 compared to the six months ended June 30, 2016.  Additionally, average oil prices increased 28% to approximately $50 per barrel in the six months ended June 30, 2017 compared to $39 per barrel the six months ended June 30, 2016.  As previously noted, demand for proppants continues to grow with accelerated trends in proppant intensity as a result of modified well designs.  

Total volumes in the Proppant Solutions segment increased 66% to 4.7 million tons in the six months ended June 30, 2017 compared to 2.8 million tons in the six months ended June 30, 2016.  Raw frac sand volumes increased 63% to 4.3 million tons in the six months ended June 30, 2017 compared to 2.6 million tons in the six months ended June 30, 2016.  Coated proppant volumes increased 106% to 0.4 million tons in the six months ended June 30, 2017 compared to 0.2 million tons in the six months ended June 30, 2016.  Revenues in the Proppant Solutions segment increased $140.2 million, or 70%, to $339.8 million for the six months ended June 30, 2017 compared to $199.6 million for the six months ended June 30, 2016.  The increase in Proppant Solutions segment revenue was largely due to higher overall volumes, which increased revenues by approximately $135 million.  Revenues also increased approximately $5 million from higher pricing and change in product mix largely due to growth in value-added products.

Volumes in the I&R segment increased slightly to 1.3 million tons in the six months ended June 30, 2017 compared to the six months ended June 30, 2016.  Revenues in the I&R segment increased $5.9 million, or 10%, to $66.0 million for the six months ended June 30, 2017 compared to $60.1 million for the six months ended June 30, 2016.  I&R segment revenue was impacted by increases in sales of raw sand primarily in the sports and recreation and specialty building product markets.  

Segment Gross Profit

Gross profit increased $83.8 million to $110.9 million for the six months ended June 30, 2017 compared to $27.1 million for the six months ended June 30, 2016.    

Gross profit in the Proppant Solutions segment increased $78.7 million to $81.7 million for the six months ended June 30, 2017 compared to $3.1 million for the six months ended June 30, 2016.  Gross profit for the six months ended June 30, 2017 included $2.4 million of charges due to mine start-ups and one-time expenses of $4.2 million to

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move over 2,400 railcars from storage to our active fleet during the first half of the year.  Gross profit for six months ended June 30, 2016 included non-cash inventory write-downs of $9.9 million.  Excluding these charges in 2017 and 2016, respectively, gross profit would have increased approximately $75 million.  The volume increases in the Proppant Solutions segment improved gross profit for the six months ended June 30, 2017 by approximately $35 million compared to the six months ended June 30, 2016.  The remaining gross profit improvement of $40 million is attributed to pricing improvements and favorable changes in product mix noted above as well as lower costs due to higher fixed cost leverage from greater volumes.    

Gross profit in the I&R segment increased $5.2 million to $29.2 million for the six months ended June 30, 2017 compared to $24.1 million for the six months ended June 30, 2016.  Gross profit for the six months ended June 30, 2016 included non-cash inventory write-downs of $0.4 million.  Excluding this charge in 2016, gross profit would have increased approximately $5.5 million.  Approximately $3.9 million of the I&R segment gross profit improvement was attributed to increased prices over prior year period and improved cost per ton due to higher fixed cost leverage.  The remaining gross profit improvement of $1.6 million is attributed to higher volumes particularly in the sports & recreation and specialty building product markets.

Selling, General and Administrative Expenses

SG&A increased $5.0 million, or 12%, to $48.3 million for the six months ended June 30, 2017 compared to $43.3 million for the six months ended June 30, 2016.  SG&A includes stock compensation expense of $5.2 million and $5.6 million for the six months ended June 30, 2017 and 2016, respectively.  Stock compensation expense in the second quarter of 2016 included approximately $2.1 million due to a modification in the retirement provisions of the Company’s Long Term Incentive Plans that accelerates vesting and related expense for equity-based compensation awarded to retirement-eligible individuals (defined as age 55, plus 10 years of service).  Excluding this amount, stock compensation expense was higher in 2017 due to increases in our stock price and related impact of current year awards.  The increase in SG&A from the six months ended June 30, 2016 is the result of higher base compensation and benefits in 2017 from the additional staffing of our re-opened facilities as well as estimated variable compensation and pension and profit-sharing contributions based on our current 2017 performance run rate.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization increased $2.6 million to $39.3 million for the six months ended June 30, 2017 compared to $36.6 million in the six months ended June 30, 2016.  The increase in this expense was primarily due to incremental amortization of the acquired technology from the SSP acquisition, which began in 2017 with the commercialization of Propel SSP®.  

Income (Loss) from Operations

Income (loss) from operations increased $168.6 million to $24.0 million for the six months ended June 30, 2017 compared to a loss of $144.6 million for the six months ended June 30, 2016.  Year-to-date earnings were largely impacted by increases in gross profits due to increased demand for proppant and price improvements.  

Interest Expense

Interest expense decreased $8.3 million, or 25%, to $25.5 million for the six months ended June 30, 2017 compared to $33.9 million for the six months ended June 30, 2016.  The change in interest expense is primarily due to the prepayments and repurchases of the term loans, which reduced the principal balance of the loans and overall interest expense, partially offset by interest rate increases.

Provision (Benefit) for Income Taxes

The benefit for income taxes decreased $78.1 million to a benefit of $0.6 million for the six months ended June 30, 2017 compared to a benefit of $78.8 million for the six months ended June 30, 2016.  The loss before income taxes decreased $176.9 million to a loss of $1.5 million for the six months ended June 30, 2017 compared to a loss of $178.4 million for the six months ended June 30, 2016.  The decrease in the benefit recorded during the first half of

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2017 was primarily related to the increase in income before income taxes and the benefit from a loss carryback recognized in 2016.  The effective tax rate was 41.5% and 44.1% for the six months ended June 30, 2017 and 2016, respectively.  The decrease in the effective tax rate is primarily attributable to the impact of a tax benefit from a loss carryback recorded in 2016, partially offset by the increase in depletion applied against forecasted results in 2017, as compared to 2016, and discrete tax benefits related to stock compensation.  The effective rate differs from the U.S. federal statutory rate due primarily to depletion and the valuation allowance against certain U.S. tax attributes.

The provision (benefit) for income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items that are taken into account in the relevant period.  Each quarter, we update our estimate of the annual effective tax rate.  If our estimated effective tax rate changes, we make a cumulative adjustment.  

Net Income (Loss) Attributable to Fairmount Santrol Holdings Inc.

Net loss attributable to Fairmount Santrol Holdings Inc. increased $98.6 million to a loss of $1.1 million for the six months ended June 30, 2017 compared to a loss of $99.7 million for the six months ended June 30, 2016 due to the factors noted above.

Adjusted EBITDA

Adjusted EBITDA increased $80.3 million to $68.6 million for the six months ended June 30, 2017 compared to a loss of $11.7 million for the six months ended June 30, 2016.  Adjusted EBITDA for the first half of 2017 excludes the impact of $5.2 million of non-cash stock compensation expense.  Adjusted EBITDA for six months ended June 30, 2017 includes $2.4 million of charges due to mine start-ups and one-time expenses of $4.2 million to move over 2,400 railcars from storage to our active fleet for the first six months of the year.  Adjusted EBITDA for the first half of 2016 excludes the impact of $96.2 million of non-cash stock compensation expense and impairment charges. Adjusted EBITDA for the six months ended June 30, 2016 includes non-cash inventory write-downs of $10.3 million and $6.5 million of restructuring and professional fees for refinancing and cost improvement initiatives.  The increase in Adjusted EBITDA is largely due to increased gross profit which, as noted above, is due to higher proppant and I&R volumes, improved pricing, and higher fixed cost leverage due to greater volumes.

Liquidity and Capital Resources

Overview

Our liquidity is principally used to service our debt and to meet our working capital and capital expenditure needs.  Historically, we have met our liquidity needs in part with funds generated from operations as well as through periodic capital market transactions, such as the issuance of shares of our common stock.

On June 27, 2017, we prepaid $50 million of term loans, which consisted of $43.0 million of the Term B-2 Loans and $7.0 million of the Extended Term B-1 Loans.  We believe that, given the improving business environment for the oil and gas industry, the increasing demand for proppants, our cash balance, and our strengthening balance sheet, this $50 million prepayment does not cause us to forgo other growth initiatives, such as the Winkler County, Texas development opportunity discussed previously.

As of June 30, 2017, we had outstanding term loan borrowings of $783.4 million and cash on hand of $178.5 million.  In addition, we have a Revolving Credit Facility that can provide additional liquidity, if needed.  As of June 30, 2017, we had $31.3 million of availability under our Revolving Credit Facility with $15.3 million committed to letters of credit, leaving net availability at $16.0 million.  

As of the date of this report, we believe that our cash on-hand, cash generated from operations, and amounts available under the Revolving Credit Facility will be sufficient to meet cash obligations, such as working capital requirements, anticipated capital expenditures, and scheduled debt payments.  We also believe that we have the ability to refinance our debt, as well as replace our existing Revolving Credit Facility that expires in September 2018, and we plan to address that over the next few quarters as our operating results continue to improve.  We may

31

continue to use cash at times to make debt prepayments at par or to negotiate market-priced repurchases of our term debt to the extent permitted under our credit agreement.  See “Credit Facilities” below for more information.

A downturn in our business’s key markets could significantly impact our forecasts.  While we believe that our operating forecasts are reasonable, the forecasts are based on assumptions and market conditions that continue to vacillate and impact the industry, primarily the proppant business.  We continue to have contingency plans allowing us to address fluctuations in market conditions that could adversely affect liquidity, including, but not limited to, implementing reductions in operating costs, idling or closing mines and processing facilities, reducing selling, general, and administrative costs, reducing planned capital spending, and improving working capital.  

Working Capital

Working capital is the amount by which current assets exceed current liabilities and represents a measure of liquidity.  Our working capital was $258.5 million at June 30, 2017 and $279.6 million at December 31, 2016.    

Accounts Receivable

Accounts receivable increased $44.8 million to $123.8 million at June 30, 2017 compared to $78.9 million at December 31, 2016.  The increase is primarily the result of increased sales from year-end levels.  Approximately 30% and 45% of our accounts receivable balance at June 30, 2017 and December 31, 2016, respectively, was outstanding from two customers.  During the six months ended June 30, 2017 and 2016, our top ten proppant customers collectively represented 74% and 70% of our revenues, respectively.  Sales in the aggregate to our top three customers accounted for 20%, 13%, and 12% of our revenues, respectively, in the six months ended June 30, 2017.  In the six months ended June 30, 2016, our two largest customers accounted for 34% and 10%, respectively, of our revenues.  

Inventory

Inventory consists of raw materials, work-in-process and finished goods. The cost of finished goods includes processing costs and transportation costs to terminals.  The increase in inventory to $60.8 million at June 30, 2017 compared to $52.7 million at December 31, 2016 relates to increased production to match current and projected demand.  

Prepaid Expenses and Other Assets

Prepaid expenses and other assets decreased $1.4 million to $5.6 million at June 30, 2017 from $7.1 million at December 31, 2016, primarily due to a decrease in prepaid insurance.

Refundable Income Taxes

Refundable income taxes decreased $18.6 million to $2.5 million at June 30, 2017 from $21.1 million at December 31, 2016.  The decrease primarily represents the receipt in the quarter ended June 30, 2017 of the $16 million refund relating to a loss carryback to a prior year.  

Accounts Payable

Accounts payable increased $14.4 million to $51.7 million at June 30, 2017 compared to $37.3 million at December 31, 2016.  The increase in accounts payable is due to increased purchasing and freight activity driven by higher sales volumes compared to the prior year period.  

Accrued Expenses and Deferred Revenue

The increase in accrued expenses and deferred revenue to $48.9 million at June 30, 2017 compared to $26.2 million at December 31, 2016 is primarily due to approximately $10.0 million of prepayments on customer contracts as well as an increase in the accrual of 2017 projected performance-based compensation.

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Cash Flow Analysis

Net Cash Provided (Used in) by Operating Activities

Operating activities consist primarily of net income adjusted for non-cash items, including depreciation, depletion, and amortization, asset impairments, and the effect of changes in working capital.

Net cash provided by operating activities was $54.2 million for the six months ended June 30, 2017 compared with $12.9 million used in the six months ended June 30, 2016.  This $67.2 million variance was primarily the result of a $98.8 million increase in net income and an $18.6 decrease in refundable income taxes as a result of the $16 million refund received, partially offset by a $44.8 increase in accounts receivable from increased sales.  

Net Cash Used in Investing Activities

Investing activities consist primarily of capital expenditures for growth and maintenance.  Capital expenditures generally are for expansions of production or terminal capacities, or for stripping costs.  Maintenance capital expenditures generally are for asset replacement and health, safety, and quality improvements.

Net cash used in investing activities was $13.3 million for the six months ended June 30, 2017 compared to $18.2 million used for the six months ended June 30, 2016.  The $4.9 million variance was primarily the result of a decrease in capital expenditures.

Capital expenditures of $14.2 million in the six months ended June 30, 2017 were primarily focused on maintenance and the re-opening of idled mines and processing facilities.  Capital expenditures were $21.9 million in the six months ended June 30, 2016 and were primarily associated with the early 2016 completion of the Wedron facility expansion.  

Net Cash Used in Financing Activities

Financing activities consist primarily of borrowings and repayments under our Term Loans and Revolving Credit Facility.

Net cash used in financing activities was $57.0 million in the six months ended June 30, 2017 compared to $79.7 million used in the six months ended June 30, 2016.  The $22.8 million variance is due to the approximately $43.0 million and $7.0 million prepayments on our Term B-2 Loans and Extended Term B-1 Loans, respectively, in the six months ended June 30, 2017 compared to the approximately $70 million prepayment on the Term B-1 Loans in the six months ended June 30, 2016.

Credit Facilities

On June 27, 2017, we prepaid $50 million of term loans, which consisted of $43.0 million of the Term B-2 Loans and $7.0 million of the Extended Term B-1 Loans.

As of June 30, 2017, there was $16.0 million available capacity remaining on the Revolving Credit Facility and $15.3 million committed to outstanding letters of credit.  As of June 30, 2017, we have not drawn on the Revolving Credit Facility.

As of June 30, 2017, the Term B-2 Loans, Extended Term B-1 Loans, and the Revolving Credit Facility had actual interest rates of 4.8%, 4.8%, and 4.3%, respectively.

We have a $10 million Industrial Revenue Bond outstanding related to the construction of a manufacturing facility in Wisconsin.  The bond bears interest, which is payable monthly, at a variable rate.  The rate was 0.91% at June 30, 2017.  The bond matures on September 1, 2027 and is collateralized by a letter of credit of $10 million.

33

As of the date of this Report, we believe that the amount available under the Revolving Credit Facility, cash generated from operations, and our cash and cash equivalents on hand will provide adequate liquidity to allow us to meet our cash obligations over the next twelve months.  

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are likely to have a current or future material effect on our financial condition, changes in financial condition, revenues and expenses, results of operations, liquidity, capital expenditures or capital resources.

Contractual Obligations

As of June 30, 2017, we have contractual obligations for long-term debt, capital leases, operating leases, purchase obligations, terminal operating costs, and other long-term liabilities.  Substantially all of the operating lease obligations are for railcars.    

In the six months ended June 30, 2017, there have been no material changes to our contractual obligations as reported in our 2016 Annual Report on Form 10-K.  

Environmental Matters

We are subject to various federal, state and local laws and regulations governing, among other things, hazardous materials, air and water emissions, environmental contamination and reclamation and the protection of the environment and natural resources.  We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures.  We may also incur fines and penalties from time to time associated with noncompliance with such laws and regulations.  

There have been no significant changes to environmental liabilities or future reclamation costs since December 31, 2016.

We discuss certain environmental matters relating to our various production and other facilities, certain regulatory requirements relating to human exposure to crystalline silica and our mining activity and how such matters may affect our business in the future under “Regulation and Legislation” in our 2016 Annual Report on Form 10-K.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.  The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported revenues and expenses during the reporting periods.  We evaluate these estimates and assumptions on an ongoing basis and base our estimates on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances.  The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies.  Our actual results may materially differ from these estimates.  These critical accounting policies and estimates should be read in conjunction with our consolidated financial statements as filed in our 2016 Annual Report on Form 10-K.

Among the critical accounting policies and estimates are estimates of the fair values of our reporting units used in determining whether the amount of recorded goodwill at our I&R segment reporting unit has been impaired.  The determination of the fair value of the reporting unit is based in part on management’s estimates of future cash flows from operations, multiples of future cash flows as determined by market participants, and discount rates used in evaluating the net present value of these cash flows.  The expected amount of and variations in future cash flows from operations is highly judgmental, and is based on part of estimates from management’s internal planning

34

processes.  The multiples and present values used in these calculations are estimates based on data that is available from the public record, such as analyst reports.  

Similarly, these future cash flows from operations are used in determining whether other long-lived tangible and intangible assets have a fair value in excess of carrying value.  In the second quarter of 2016, we recorded an impairment for long-lived assets at several Proppant Solutions locations since the recoverability of these locations could not be assured.  The value of the supply agreement in the FTSI agreement is based on estimates of discounted future cash flows from sales under the agreement.  As of June 30, 2017, the fair value of the supply agreement exceeded its carrying value.  Should FTSI undergo financial difficulties or not comply with the terms of this agreement, the fair value of this supply agreement could decline such that an impairment in carrying value exists.  The carrying value of the SSP asset is based on its cost under ASC 805 and is amortized over its estimated 20-year estimated life.  As of June 30, 2017, the estimated fair value of the SSP asset exceeded its carrying value.  If the SSP technology cannot continue to be successfully commercialized, the fair value of this intangible asset could decline below its cost such that an impairment in carrying value exists.

If materially adverse business conditions in oil and gas markets were to reoccur, it is possible that additional assets, both tangible and intangible, could be subject to additional impairment losses in future periods.

There have been no changes in our accounting policies and estimates during the six months ended June 30, 2017.  

Recent Accounting Pronouncements

New accounting guidance that has been recently issued but not yet adopted by us, is included in Note 1 to our unaudited condensed consolidated financial statements included in this Report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Swaps

Due to our variable-rate indebtedness, we are exposed to fluctuations in interest rates.  We use interest rate swaps to manage this exposure.  These derivative instruments are recorded on the balance sheet at their fair values.  Changes in the fair value of derivatives are recorded each period in current earnings or in other comprehensive income, depending on whether a derivative is designated as part of a hedging relationship and, if it is, depending on the type of hedging relationship.  For cash flow hedges in which we are hedging the variability of cash flows related to a variable-rate liability, the effective portion of the gain or loss on the derivative instrument is reported in other comprehensive income in the periods during which earnings are impacted by the variability of the cash flows of the hedged item.  The ineffective portion of all hedges is recognized in current period earnings.

We do not use derivative financial instruments for trading or speculative purposes.  By their nature, all such instruments involve risk, including the possibility that a loss may occur from the failure of another party to perform according to the terms of a contract (credit risk) or the possibility that future changes in market price may make a financial instrument less valuable or more onerous (market risk).  As is customary for these types of instruments, we do not require collateral or other security from other parties to these instruments.  In management’s opinion, there is no significant risk of loss in the event of nonperformance of the counterparties to these financial instruments.

We formally designate and document instruments at inception that qualify for hedge accounting of underlying exposures in accordance with GAAP.  We assess, both at inception and for each reporting period, whether the financial instruments used in hedging transactions are effective in offsetting changes in cash flows of the related underlying exposure.

As of June 30, 2017, the fair value of the interest rate swaps was a liability of $12.0 million.

A hypothetical increase or decrease in interest rates by 1.0% would have had an approximate $0.2 million impact on our interest expense in the six months ended June 30, 2017.

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Market Risk

We are exposed to various market risks, including changes in interest rates.  Market risk related to interest rates is the potential loss arising from adverse changes in interest rates.  We do not believe that inflation has a material impact on our financial position or results of operations during periods covered by the financial statements included in this Report.

Credit Risk

We are subject to risks of loss resulting from nonpayment or nonperformance by our customers.  For the six months ended June 30, 2017, our top three customers collectively accounted for 45% of our sales.  Approximately 30% of our accounts receivable balance at June 30, 2017 was outstanding from two customers.  We examine the creditworthiness of third-party customers to whom we extend credit and manage our exposure to credit risk through credit analysis, credit approval, credit limits and monitoring procedures, and for certain transactions, we may request letters of credit, prepayments or guarantees, although collateral is generally not required.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure of Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended).  Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2017.  

Changes in Internal Control Over Financial Reporting

There have been no changes in internal control over financial reporting for the quarter ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We and/or our predecessors have been named as a defendant, usually among many defendants, in numerous products liability lawsuits brought by or on behalf of current or former employees of our customers alleging damages caused by silica exposure.  As of June 30, 2017, we were subject to approximately four active silica exposure cases.  In accordance with our insurance obligations, these claims are being defended by our subsidiaries’ insurance carriers, subject to our payment of approximately 7% of the costs associated with these claims, subject to this cost sharing, we believe that our level of existing and available insurance coverage combined with various open third party indemnities is sufficient to cover any additional exposure to silicosis-related expenses.  Should our insurance coverage or indemnities prove to be insufficient or unavailable, it could have an adverse effect on our business, reputation, financial condition, cash flows and prospects.

ITEM 1A. RISK FACTORS

In addition to other information set forth in this Report, you should carefully consider the risk factors discussed under the caption “Risk Factors” in our other filings with the SEC, including our 2016 Annual Report on Form 10-K filed with the SEC on March 9, 2017.  There have been no material changes to the risk factors previously reported.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 4. MINE SAFETY DISCLOSURES

The Fairmount Santrol Safety & Health Management System (SHMS) establishes the system for promoting a safety culture that encourages incident prevention and continually strives to improve its safety and health performance.

The SHMS includes as its domain all established safety and health specific programs and initiatives for the Company’s compliance with all local, state and federal legislation, standards, and regulations and SHMS Policy as they apply to a safe and healthy employee, stakeholder and work environment.

The SHMS has the ultimate goal of the identification, elimination or control of all risks to personnel, stakeholders, and facilities, that can be controlled and directly managed, and those it does not control or directly manage, but can expect to have an influence upon.

The operation of our U.S. based mines is subject to regulation by the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”).  MSHA inspects our mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act.  Following passage of The Mine Improvement and New Emergency Response Act of 2006, MSHA significantly increased the numbers of citations and orders charged against mining operations.  The dollar penalties assessed for citations issued has also increased in recent years.

Fairmount Santrol is required to report certain mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, and that required information is included in Exhibit 95.1 and is incorporated by reference into this Report.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The Exhibits to this Report are listed in the Exhibit Index.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Fairmount Santrol Holdings Inc. (Registrant)

By:	/s/ Michael F. Biehl
	Michael F. Biehl
	Executive Vice President and Chief Financial Officer
Date:	August 9, 2017

38

FAIRMOUNT SANTROL HOLDINGS INC.

EXHIBIT INDEX

The following Exhibits are filed with this Quarterly Report on Form 10-Q or are incorporated by reference to a prior filing in accordance with Rule 12b-32 under the Securities and Exchange Act of 1934.  All Exhibits not so designated are incorporated by reference to a prior filing as indicated.  

(x)  Filed herewith

(*)  Management contract or compensatory plan or arrangement

Exhibit No.	Description
10.1*	Fairmount Santrol Holdings Inc. 2014 Long Term Incentive Plan, as amended, which is incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement, as filed with the Securities and Exchange Commission on April 6, 2017 (File No. 001-36670).
31.1(x)	Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Principal Executive Officer.
31.2(x)	Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Principal Financial Officer.
32.1(x)	Statement Required by 18 U.S.C. Section 1350 by the Principal Executive Officer.
32.2(x)	Statement Required by 18 U.S.C. Section 1350 by the Principal Financial Officer.
95.1(x)	Mine Safety Disclosure Exhibit
101.INS(x)	XBRL Instance Document
101.SCH(x)	XBRL Taxonomy Extension Schema Document
101.CAL(x)	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF(x)	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB(x)	XBRL Taxonomy Extension Label Linkbase Document
101.PRE(x)	XBRL Taxonomy Extension Presentation Linkbase Document

39

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

(Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

I, Jenniffer D. Deckard, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for Fairmount Santrol Holdings Inc. for the quarter ended June 30, 2017;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 9, 2017
By:	/s/ Jenniffer D. Deckard
	Jenniffer D. Deckard
	President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

(Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

I, Michael F. Biehl, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for Fairmount Santrol Holdings Inc. for the quarter ended June 30, 2017;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 9, 2017
By:	/s/ Michael F. Biehl
	Michael F. Biehl
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

(Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 of Fairmount Santrol Holdings Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”) and pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Jenniffer D. Deckard, President and Chief Executive Officer of the Company, certify, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 9, 2017
By:	/s/ Jenniffer D. Deckard
	Jenniffer D. Deckard
	President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

(Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 of Fairmount Santrol Holdings Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”) and pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Michael F. Biehl, Executive Vice President and Chief Financial Officer of the Company, certify, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 9, 2017
By:	/s/ Michael F. Biehl
	Michael F. Biehl
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-95.1

Exhibit 95.1

MINE SAFETY DISCLOSURES

The following disclosures are provided pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) and Item 104 of Regulation S-K, which requires certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”).

Mine Safety Information.  Whenever the Federal Mine Safety and Health Administration (“MSHA”) believes a violation of the Mine Act, any health or safety standard or any regulation has occurred, it may issue a citation which describes the alleged violation and fixes a time within which the U.S. mining operator must abate the alleged violation.  In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA may issue an order removing miners from the area of the mine affected by the condition until the alleged hazards are corrected.  When MSHA issues a citation or order, it generally proposes a civil penalty, or fine, as a result of the alleged violation, that the operator is ordered to pay.  Citations and orders can be contested and appealed, and as part of that process, are often reduced in severity and amount, and are sometimes dismissed.  The number of citations, orders and proposed assessments vary depending on the size and type (underground or surface) of the mine as well as by the MSHA inspector(s) assigned.

The below table reflects citations and orders issued to FMSA by MSHA during the second quarter of the fiscal year from April 1, 2017 to June 30, 2017.  The proposed assessments were obtained from the MSHA data retrieval system.  The tables below do not include any orders or citations issued to independent contractors at our mines.

		Section				Section						Proposed
		104		Section		104(d)		Section		Section		Assessments(7)
	Mine ID	S&S		104(b)		Citations		110(b)(2)		107(a)		($, amounts
Mine(1)	Number	Citations(2)		Orders(3)		& Orders(4)		Violations(5)		Orders(6)		in dollars)
Best Sand	33-00015		-		-		-		-		-		232
Best Southern	33-03877		1		-		-		-		-		881
Brewer Sand	23-02364		1		-		-		-		-		348
Maiden Rock	47-03110		1		-		-		-		-		4,752
Menomonie	47-03512		-		-		-		-		-		116
TOTALS			3		-		-		-		-		6,329

(1) The definition of a mine under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools, and minerals preparation facilities.  Unless otherwise indicated, any of these other items associated with a single mine have been aggregated in the totals for that mine.  MSHA assigns an identification number to each mine and may or may not assign separate identification numbers to related facilities such as preparation facilities.  We are providing the information in the table by mine rather than MSHA identification number because that is how we manage and operate our mining business and we believe this presentation will be more useful to investors than providing information based on MSHA identification numbers.

(2) Mine Act section 104 S&S citations shown above are for alleged violations of mandatory health or safety standards that could significantly and substantially contribute to a mine health and safety hazard.  It should be noted that, for purposes of this table, S&S citations that are included in another column, such as Section 104(d) citations, are not also included as Section 104 S&S citations in this column.

(3) Mine Act section 104(b) orders are for alleged failures to totally abate a citation within the time period specified in the citation.

(4) Mine Act section 104(d) citations and orders are for an alleged unwarrantable failure (i.e., aggravated conduct constituting more than ordinary negligence) to comply with mandatory health or safety standards.

(5) Mine Act section 110(b)(2) violations are for an alleged “flagrant” failure (i.e., reckless or repeated) to make reasonable efforts to eliminate a known violation of a mandatory safety or health standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury.

(6) Mine Act section 107(a) orders are for alleged conditions or practices which could reasonably be expected to cause death or serious physical harm before such condition or practice can be abated and result in orders of immediate withdrawal from the area of the mine affected by the condition.

(7) Represents the total dollar value of the proposed assessment from MSHA under the Mine Act including those citations and orders that are not required to be included within the above chart. Specific orders and/or citations for a Mine may not have had assessments posted to the MSHA data retrieval system or made available to the Company by MSHA.

Pending Legal Actions.  The number of legal actions pending before the Federal Mine Safety and Health Review Commission as of June 30, 2017 that fall into each of the following categories is as follows:

				Received Notice
				of Pattern of		Legal Actions
		Mining		Violations under		Pending as of		Legal Actions		Legal Actions
	Mine ID	Related		Section 104(e)		Last Day		Initiated		Resolved
Mine	Number	Fatalities		(yes/no)(8)		of Period		during Period		during Period
Voca Sand	41-04746		-		-		3		-		-
Wedron Silica	11-01578		-		-		2		2		-
TOTALS			-		-		5		2		-

(8) Mine Act section 104(e) written notices are for an alleged pattern of violations of mandatory health or safety standards that could significantly and substantially contribute to a mine safety or health hazard.

Complaints of

Applications

Contests of

Contests of

Discharge/

for

Appeals of

Mine ID

Citations

Proposed

Complaints for

Discrimination/

Temporary

Judges

Mine

Number

& Orders

Penalties

Compensation

Interference

Relief

Rulings

Wedron Silica

11-01578

-

2

-

-

-

-

TOTALS

-

2

-

-

-

-

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 31, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Trading Symbol	FMSA
Entity Registrant Name	Fairmount Santrol Holdings Inc.
Entity Central Index Key	0001010858
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock Shares Outstanding		224,080,573

XML

Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Revenues	$ 233,226,000	$ 114,249,000	$ 405,809,000	$ 259,707,000
Cost of goods sold (excluding depreciation, depletion, and amortization shown separately)	163,136,000	114,129,000	294,888,000	232,593,000
Operating expenses
Selling, general and administrative expenses	25,863,000	25,040,000	48,333,000	43,318,000
Depreciation, depletion and amortization expense	19,846,000	18,056,000	39,288,000	36,642,000
Asset impairments		90,578,000	0	90,654,000
Restructuring charges		1,155,000		1,155,000
Other operating expense (income)	355,000	(426,000)	(705,000)	(96,000)
Income (loss) from operations	24,026,000	(134,283,000)	24,005,000	(144,559,000)
Interest expense, net	12,983,000	16,606,000	25,520,000	33,868,000
Other non-operating income				(5,000)
Income (loss) before provision (benefit) for income taxes	11,043,000	(150,889,000)	(1,515,000)	(178,422,000)
Provision (benefit) for income taxes	520,000	(63,019,000)	(628,000)	(78,773,000)
Net income (loss)	10,523,000	(87,870,000)	(887,000)	(99,649,000)
Less: Net income attributable to the non-controlling interest	40,000	16,000	218,000	13,000
Net income (loss) attributable to Fairmount Santrol Holdings Inc.	$ 10,483,000	$ (87,886,000)	$ (1,105,000)	$ (99,662,000)
Earnings (loss) per share
Basic	$ 0.05	$ (0.54)		$ (0.62)
Diluted	$ 0.05	$ (0.54)		$ (0.62)
Weighted average number of shares outstanding
Basic	224,015	161,647	223,878	161,547
Diluted	228,184	161,647	223,878	161,547

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net income (loss)	$ 10,523	$ (87,870)	$ (887)	$ (99,649)
Other comprehensive income (loss), before tax
Foreign currency translation adjustment	481	(507)	442	(360)
Pension obligations	61	34	122	108
Change in fair value of derivative agreements	560	(5,296)	2,173	(8,214)
Total other comprehensive income (loss), before tax	1,102	(5,769)	2,737	(8,466)
Provision (benefit) for income taxes related to items of other comprehensive income (loss)	609	(2,436)	1,925	(3,160)
Comprehensive income (loss), net of tax	11,016	(91,203)	(75)	(104,955)
Comprehensive income attributable to the non-controlling interest	40	16	218	13
Comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc.	$ 10,976	$ (91,219)	$ (293)	$ (104,968)

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 178,527	$ 194,069
Accounts receivable, net of allowance for doubtful accounts of $2,465 and $3,055 at June 30, 2017 and December 31, 2016, respectively	123,753	78,942
Inventories, net	60,807	52,650
Prepaid expenses and other assets	5,628	7,065
Refundable income taxes	2,487	21,077
Total current assets	371,202	353,803
Property, plant and equipment, net	716,362	727,735
Deferred income taxes	1,244	1,244
Goodwill	15,301	15,301
Intangibles, net	92,524	95,341
Other assets	8,206	9,486
Total assets	1,204,839	1,202,910
Current liabilities
Current portion of long-term debt	12,172	10,707
Accounts payable	51,654	37,263
Accrued expenses and deferred revenue	48,912	26,185
Total current liabilities	112,738	74,155
Long-term debt	783,946	832,306
Deferred income taxes	7,839	7,057
Other long-term liabilities	43,311	38,272
Total liabilities	947,834	951,790
Commitments and contingent liabilities (Note 13)
Equity
Preferred stock: $0.01 par value, 100,000 authorized shares Shares outstanding: 0 at June 30, 2017 and December 31, 2016
Common stock: $0.01 par value, 1,850,000 authorized shares Shares outstanding: 224,081 and 223,601 at June 30, 2017 and December 31, 2016, respectively	2,423	2,422
Additional paid-in capital	298,038	297,649
Retained earnings	263,314	264,852
Accumulated other comprehensive loss	(18,190)	(19,002)
Total equity attributable to Fairmount Santrol Holdings Inc. before treasury stock	545,585	545,921
Less: Treasury stock at cost Shares in treasury: 18,285 and 18,666 at June 30, 2017 and December 31, 2016, respectively	(288,849)	(294,874)
Total equity attributable to Fairmount Santrol Holdings Inc.	256,736	251,047
Non-controlling interest	269	73
Total equity	257,005	251,120
Total liabilities and equity	$ 1,204,839	$ 1,202,910

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Statement Of Financial Position [Abstract]
Allowance for doubtful accounts	$ 2,465	$ 3,055
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,850,000,000	1,850,000,000
Common stock, shares outstanding	224,081,000	223,601,000
Shares in treasury	18,285,000	18,666,000

XML

Condensed Consolidated Statements of Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Subtotal [Member]	Non-controlling Interest [Member]
Beginning balances at Dec. 31, 2015	$ (60,368)	$ 2,391	$ 776,705	$ 405,044	$ (17,693)	$ (1,227,663)	$ (61,216)	$ 848
Beginning balances, shares at Dec. 31, 2015		161,433				77,765
Stock options exercised	2,007	$ 6	2,001				2,007
Stock options exercised, shares		587
Stock compensation expense	5,567		5,567				5,567
Tax effect of stock options exercised, forfeited, or expired	(1,297)		(1,297)				(1,297)
Transactions with non-controlling interest	(551)							(551)
Net income (loss)	(99,649)			(99,662)			(99,662)	13
Other comprehensive income (loss)	(5,306)				(5,306)		(5,306)
Ending balances at Jun. 30, 2016	(159,597)	$ 2,397	782,976	305,382	(22,999)	$ (1,227,663)	(159,907)	310
Ending balances, shares at Jun. 30, 2016		162,020				77,765
Beginning balances at Dec. 31, 2016	251,120	$ 2,422	297,649	264,852	(19,002)	$ (294,874)	251,047	73
Beginning balances, shares at Dec. 31, 2016		223,601				18,666
Re-issuance of treasury stock	6,025					$ 6,025	6,025
Re-issuance of treasury stock, shares		381				(381)
Share-based awards exercised or distributed	$ (5,489)	$ 1	(5,490)				(5,489)
Share-based awards exercised or distributed, shares		99
Stock options exercised, shares	155
Stock compensation expense	$ 5,879		5,879				5,879
Impact of adoption of ASU 2016-09 (See Note 9) | ASU 2016-09 [Member]	(699)			(699)			(699)
Tax impact of adoption of ASU 2016-09 | ASU 2016-09 [Member]	266			266			266
Transactions with non-controlling interest	(22)							(22)
Net income (loss)	(887)			(1,105)			(1,105)	218
Other comprehensive income (loss)	812				812		812
Ending balances at Jun. 30, 2017	$ 257,005	$ 2,423	$ 298,038	$ 263,314	$ (18,190)	$ (288,849)	$ 256,736	$ 269
Ending balances, shares at Jun. 30, 2017		224,081				18,285

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Statement Of Cash Flows [Abstract]
Net loss	$ (887)	$ (99,649)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and depletion	35,508	34,284
Amortization	6,305	5,745
Reserve for doubtful accounts	(209)	1,954
Write-off of deferred financing costs	389
Asset impairments		90,654
Inventory write-downs and reserves	1,266	10,302
(Gain) loss on sale of fixed assets	(552)	35
Deferred income taxes and taxes payable	1,044	(59,913)
Refundable income taxes	18,591	(15,535)
Stock compensation expense	5,179	5,567
Change in operating assets and liabilities:
Accounts receivable	(44,602)	10,524
Inventories	(9,423)	3,500
Prepaid expenses and other assets	(991)	3,745
Accounts payable	11,024	298
Accrued expenses and deferred revenue	31,606	(4,450)
Net cash provided by (used in) operating activities	54,248	(12,939)
Cash flows from investing activities
Proceeds from sale of fixed assets	1,216	3,918
Capital expenditures and stripping costs	(14,236)	(21,948)
Earnout payments	(250)
Other investing activities		(150)
Net cash used in investing activities	(13,270)	(18,180)
Cash flows from financing activities
Payments on long-term debt	(4,299)	(5,899)
Prepayments on term loans	(50,000)	(69,580)
Payments on capital leases and other long-term debt	(2,087)	(4,109)
Proceeds from option exercises	536	2,007
Tax payments for withholdings on share-based awards exercised or distributed	(1,091)	(292)
Tax effect of stock options exercised, forfeited, or expired		(1,297)
Transactions with non-controlling interest	(22)	(551)
Net cash used in financing activities	(56,963)	(79,721)
Change in cash and cash equivalents related to assets classified as held-for-sale		1,376
Foreign currency adjustment	443	(387)
Decrease in cash and cash equivalents	(15,542)	(109,851)
Cash and cash equivalents:
Beginning of period	194,069	171,486
End of period	$ 178,527	$ 61,635

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Significant Accounting Policies

1. Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of Fairmount Santrol Holdings Inc. and its consolidated subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (which are of a normal, recurring nature) and disclosures necessary for a fair statement of the financial position, results of operations, comprehensive income, and cash flows of the reported interim periods.  The condensed consolidated balance sheet as of December 31, 2016 was derived from audited financial statements, but does not include all disclosures required by GAAP.  Interim results are not necessarily indicative of the results to be expected for the full year or any other interim period.  These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements as filed in the 2016 Annual Report on Form 10-K and notes thereto and information included elsewhere in this Quarterly Report on Form 10-Q.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 – Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e. lessees and lessors).  The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.  This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively.  A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.  Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today.  The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases.  The Update is expected to impact the Company’s consolidated financial statements as the Company has certain operating and land lease arrangements for which it is the lessee.  ASC 842 supersedes the previous leases standard, ASC 840 – Leases.  The standard is effective on January 1, 2019, with early adoption permitted.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In April and May 2016, the FASB issued ASU No. 2016-10 – Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing, ASU No. 2016-11 – Revenue Recognition and Derivatives and Hedging – Recession of SEC Guidance, ASU No. 2016-12 – Revenue from Contracts with Customers – Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20 – Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.  These ASU’s each affect the guidance of the new revenue recognition standard in ASU No. 2014-09 – Revenue from Contracts with Customers and related subsequent ASUs.  This guidance is effective beginning January 1, 2018.  The Company is in the process of reviewing its various customer contracts in both of its business segments with a combination of applicable sales, legal, and accounting personnel.  The review of a sample of contracts has been completed.  In this review, the Company has identified several indicators of potential variable consideration, including price adjustments in the contracts as well as provisions similar to take-or-pay arrangements that could modify the timing of revenue recognition.  The Company is in the process of further review of these indicators and whether they will result in a change in the timing of revenue recognition.  The Company intends to continue this analysis in the quarter ending September 30, 2017 and then apply this guidance to all contracts in order to be prepared for a January 1, 2018 implementation.  The Company intends to use the modified retrospective method and will record cumulative effect of initially applying the standard as an adjustment to opening retained earnings.  This review is in data-gathering and contract review stages and, therefore, the effect of the new guidance on the Company’s financial statements and disclosures is not yet readily determinable.

In January 2017, the FASB issued ASU 2017-04 – Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment.  The ASU eliminates Step 2 from goodwill impairment testing.  Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.  As a result of the ASU, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.  The ASU is effective beginning January 1, 2020, with early adoption permitted, and applied prospectively.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In March 2017, the FASB issued ASU 2017-07 – Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.  The ASU requires that an employer report the service cost component in the same line item in the income statement as other compensation costs arising from services rendered by the pertinent employees during the period as well as appropriately described relevant line items.  The ASU also requires only the service cost component to be eligible for capitalization when applicable.  The ASU is effective beginning January 1, 2018 with early adoption permitted.  The income statement components of the ASU should be applied retrospectively while the balance sheet component should be applied prospectively.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In May 2017, the FASB issued ASU 2017-09 – Compensation – Stock Compensation (Topic 718) – Scope of Modification Accounting.  The ASU provides further guidance on changes to the terms or conditions of a share-based payment award and which changes require the application of modification accounting.  Further, an entity should apply modification accounting unless the following conditions are met:

• The award’s fair value is the same immediately before and after the original award is modified;

• The vesting conditions of the modified award are the same immediately before and after the award is modified; and

• The classification of the modified award, as either an equity instrument or liability instrument, is the same immediately before and after the award is modified.

This guidance is effective beginning January 1, 2018, with early adoption permitted, and should be applied prospectively.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.  

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Inventories, net

6 Months Ended

Jun. 30, 2017

Inventory Disclosure [Abstract]

Inventories, net

2. Inventories, net

At June 30, 2017 and December 31, 2016, inventories consisted of the following:

	June 30, 2017			December 31, 2016
Raw materials	$	8,447		$	7,465
Work-in-process		11,162			12,681
Finished goods		42,439			33,760
		62,048			53,906
Less: LIFO reserve		(1,241	)		(1,256	)
Inventories, net	$	60,807		$	52,650

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Property, Plant, and Equipment, net

6 Months Ended

Jun. 30, 2017

Property Plant And Equipment [Abstract]

Property, Plant, and Equipment, net

3. Property, Plant, and Equipment, net

At June 30, 2017 and December 31, 2016, property, plant, and equipment consisted of the following:

	June 30, 2017			December 31, 2016
Land and improvements	$	82,408		$	86,298
Mineral reserves and mine development		255,679			253,766
Machinery and equipment		588,637			596,962
Buildings and improvements		187,619			161,057
Furniture, fixtures, and other		3,456			3,440
Construction in progress		14,062			6,748
		1,131,861			1,108,271
Accumulated depletion and depreciation		(415,499	)		(380,536	)
Property, plant, and equipment, net	$	716,362		$	727,735

Under ASC 360 Property, Plant, and Equipment, the Company is required to evaluate the recoverability of the carrying amount of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.  Based on the adverse business conditions and the idling of certain assets in 2016, the Company evaluated certain of its asset groups that contained mineral reserves and other long-lived assets contained in the Proppant Solutions segment and concluded that the carrying amounts of those assets were not recoverable.  Fair value was determined by prices obtained from third parties for the assets and from estimating the net present value of the future cash flows over the life of the assets.  Using Level 3 inputs of the fair value hierarchy, critical assumptions for these valuations included future selling prices of products, future operating costs, and the cost of capital.  The Company incurred $90,578 and $90,654 of such asset impairments in the three and six months ended June 30, 2016, respectively.  These impairments are recorded as asset impairments in operating expenses in the Condensed Consolidated Statements of Income (Loss).  There were no such impairments included in the six months ended June 30, 2017.

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Long-Term Debt

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Long-Term Debt

4. Long-Term Debt

At June 30, 2017 and December 31, 2016, long-term debt consisted of the following:

	June 30, 2017			December 31, 2016
Term B-2 Loans		673,316			719,632
Extended Term B-1 Loans		110,048			117,634
Industrial Revenue bond		10,000			10,000
Revolving credit facility and other		72			88
Capital leases, net		8,800			3,634
Deferred financing costs, net		(6,118	)		(7,975	)
		796,118			843,013
Less: current portion		(12,172	)		(10,707	)
Long-term debt including leases	$	783,946		$	832,306

On April 28, 2016, the Company entered into an amendment to the 2013 Amended Credit Agreement that extended the maturity of certain of the Term B-1 Loans to July 15, 2018 (the “2016 Extended Term Loans”).  The Company made a prepayment of principal of $69,580 and accrued interest of $227 on April 28, 2016 to the lenders consenting to the amendment.  The extended remainder of the Term B-1 Loans, plus accrued interest, was due at maturity on July 15, 2018.  Accrued interest related to the $16,723 principal payment (net of original issue discount) due on March 17, 2017 was also due on the same date.

On October 17, 2016, the Company repurchased $3,000 of the Extended Term B-1 Loans at 91.5% of par.  On November 17, 2016, the Company fully prepaid the $16,766 of the Term B-1 Loans due March 2017 as well as the $69,580 of the 2016 Extended Term Loans.  On November 29, 2016, the Company repurchased, at an average of 96.3% of par, a total of $213,000 of term loans, which consisted of $37,867 of the Extended Term B-1 Loans and $175,133 of the Term B-2 Loans.  The related net gain on the October and November 2016 debt repurchases was $5,110.  On June 27, 2017, the Company prepaid $50,000 of term loans at par, which consisted of $42,979 of the Term B-2 Loans and $7,021 of the Extended Term B-1 Loans and recognized expenses of $389 relating to the write-off of unamortized capitalized debt issuance costs.

As of June 30, 2017, the Term B-2 Loans, Extended Term B-1 Loans, and the Revolving Credit Facility had actual interest rates of 4.8%, 4.8%, and 4.3%, respectively.

Beginning in 2017, the full amount of the Revolving Credit Facility ($100,000) is available, so long as the Company’s leverage ratio does not exceed a revised limit (6.50:1.00 for the first quarter of 2017 declining quarterly to 4.75:1.00 for the fourth quarter of 2017).  The Revolving Credit Facility termination date is September 6, 2018.  As of June 30, 2017, the Company’s leverage ratio exceeded the revised limits so there was $15,980 available unused capacity on the Revolving Credit Facility and $15,270 committed to outstanding letters of credit.  As of June 30, 2017, the Company had not drawn on the Revolving Credit Facility.

The Company has a $10,000 Industrial Revenue Bond outstanding related to the construction of a manufacturing facility in Wisconsin.  The bond bears interest, which is payable monthly, at a variable rate.  The rate was 0.91% at June 30, 2017.  The bond matures on September 1, 2027 and is collateralized by a letter of credit of $10,000.

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Accrued Expenses and Deferred Revenue

6 Months Ended

Jun. 30, 2017

Payables And Accruals [Abstract]

Accrued Expenses and Deferred Revenue

5. Accrued Expenses and Deferred Revenue

At June 30, 2017 and December 31, 2016, accrued expenses and deferred revenue consisted of the following:

	June 30, 2017		December 31, 2016
Accrued payroll and fringe benefits	$	8,145	$	7,018
Accrued bonus		14,669		3,536
Contingent consideration		3,220		2,507
Accrued income taxes		347		421
Accrued real estate taxes		3,834		4,821
Deferred revenue		9,316		75
Other accrued expenses		9,381		7,807
Accrued expenses and deferred revenue	$	48,912	$	26,185

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Earnings (Loss) per Share

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Earnings (Loss) per Share

6. Earnings (Loss) per Share  

The table below shows the computation of basic and diluted earnings (loss) per share for the three and six months ended June 30, 2017 and 2016, respectively:

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
Numerator:
Net income (loss) attributable to Fairmount Santrol Holdings Inc.	$	10,483	$	(87,886	)	$	(1,105	)	$	(99,662	)
Denominator:
Basic weighted average shares outstanding		224,015		161,647			223,878			161,547
Dilutive effect of employee stock options, RSUs, and PRSUs		4,169		-			-			-
Diluted weighted average shares outstanding		228,184		161,647			223,878			161,547
Earnings (loss) per common share - basic	$	0.05	$	(0.54	)	$	-		$	(0.62	)
Earnings (loss) per common share - diluted	$	0.05	$	(0.54	)	$	-		$	(0.62	)

Potentially dilutive shares were excluded from the calculation of diluted weighted average shares outstanding and diluted earnings per share in the six months ended June 30, 2017 and the three and six months ended June 30, 2016 because the Company was in a loss position in those periods.  The calculation of diluted weighted average shares outstanding for the three months ended June 30, 2017 excludes 6,858 potential common shares because the effect of including these potential common shares would be antidilutive.

As a result of ASU No. 2016-09 – Compensation – Stock Compensation (Topic 718), windfalls and excess tax benefits are no longer included in the calculation of assumed proceeds and the calculation of diluted weighted average shares outstanding.  The Company adopted this guidance as of January 1, 2017 on a prospective basis, which could impact the comparability of earnings per share between periods presented.  However, the Company was in a loss position for prior periods presented and, accordingly, basic and diluted earnings per share are calculated in the same manner.  

As of June 30, 2017, the amount of outstanding options, restricted stock units (“RSUs”), and performance restricted stock units (“PRSUs”) was 13,697, 1,534, and 581, respectively.

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Derivative Instruments

6 Months Ended

Jun. 30, 2017

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments

7. Derivative Instruments

The Company enters into interest rate swap agreements as a means to partially hedge its variable interest rate risk on debt instruments.  The notional value of these swap agreements is $420,000, which represents a total of approximately 54% of term debt outstanding at June 30, 2017 and effectively fixes the variable rate in a range of 2.92%  to 3.12% for the portion of the debt that is hedged.  The interest rate swap agreements mature on September 5, 2019.

The derivative instruments are recorded on the balance sheet at their fair values.  Changes in the fair value of derivatives are recorded each period in current earnings or in other comprehensive income, depending on whether a derivative is designated as part of a hedging relationship and, if it is, depending on the type of hedging relationship.  For cash flow hedges in which the Company is hedging the variability of cash flows related to a variable-rate liability, the effective portion of the gain or loss on the derivative instrument is reported in other comprehensive income in the periods during which earnings are impacted by the variability of the cash flows of the hedged item.  The ineffective portion of all hedges is recognized in current period earnings.  As interest expense is accrued on the debt obligation, amounts in accumulated other comprehensive income (loss) related to the interest rate swaps are reclassified into income to obtain a net cost on the debt obligation equal to the effective yield of the fixed rate of each swap.  In the event that an interest rate swap is terminated prior to maturity, gains or losses in accumulated other comprehensive income (loss) remain deferred and are reclassified into earnings in the periods in which the hedged forecasted transaction affects earnings.

The Company formally designates and documents instruments at inception that qualify for hedge accounting of underlying exposures in accordance with GAAP.  Both at inception and for each reporting period, the Company assesses whether the financial instruments used in hedging transactions are effective in offsetting changes in cash flows of the related underlying exposure.

The following table summarizes the fair values and the respective classification in the Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016:

		Assets (Liabilities)
Interest Rate Swap Agreements	Balance Sheet Classification	June 30, 2017			December 31, 2016
Designated as cash flow hedges	Other long-term liabilities	$	(11,957	)	$	(14,488	)
Designated as cash flow hedges	Other assets		-			39
		$	(11,957	)	$	(14,449	)

In order to represent the ineffective portion of interest rate swap agreements designated as hedges, the Company recognized in interest expense the following in the three and six months ended June 30, 2017 and 2016:

Derivatives in	Location of Gain (Loss)
ASC 815-20 Cash Flow	Recognized in Income on	Three Months Ended June 30,				Six Months Ended June 30,
Hedging Relationships	Derivative (Ineffective Portion)	2017		2016		2017			2016
Interest rate swap agreements	Interest expense (income)	$	3	$	109	$	(74	)	$	199
		$	3	$	109	$	(74	)	$	199

The Company expects 6,068 to be reclassified from accumulated other comprehensive income (loss) into interest expense within the next twelve months.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

8. Fair Value Measurements

Financial instruments held by the Company include cash equivalents, accounts receivable, accounts payable, long-term debt (including the current portion thereof) and interest rate swaps.  The Company is also liable for contingent consideration from the acquisition of Self-Suspending Proppant LLC (“SSP”) that is subject to fair value measurement.  Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.  In determining fair value, the Company utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique.

Based on the examination of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy.  The fair value hierarchy ranks the quality and reliability of the information used to determine fair values.  Financial assets and liabilities at fair value will be classified and disclosed in one of the following three categories:

Level 1	Quoted market prices in active markets for identical assets or liabilities
Level 2	Observable market based inputs or unobservable inputs that are corroborated by market data
Level 3	Unobservable inputs that are not corroborated by market data

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The carrying value of cash equivalents, accounts receivable and accounts payable are considered to be representative of their fair values because of their short maturities.  The carrying value of the Company’s long-term debt (including the current portion thereof) is recognized at amortized cost.  The fair value of the Extended Term B-1 Loans and the Term B-2 Loans differs from amortized costs and is valued at prices obtained from a readily-available source for trading non-public debt, which represent quoted prices for identical or similar assets in markets that are not active, and therefore is considered Level 2.  The following table presents the fair value as of June 30, 2017 and December 31, 2016 for the Company’s long-term debt:

	QuotedPrices		Other
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
Long-Term Debt Fair Value Measurements	(Level 1)		(Level 2)		(Level 3)		Total
June 30, 2017
Term B-2 Loans		-		639,199		-		639,199
Extended Term B-1 Loans		-		103,321		-		103,321
	$	-	$	742,520	$	-	$	742,520
December 31, 2016
Term B-2 Loans		-		699,683		-		699,683
Extended Term B-1 Loans		-		114,308		-		114,308
	$	-	$	813,991	$	-	$	813,991

The following table presents the amounts carried at fair value as of June 30, 2017 and December 31, 2016 for the Company’s other financial instruments.  Fair value of interest rate swap agreements in based on the present value of the expected future cash flows, considering the risks involved, and using discount rates appropriate for the maturity date.  These are determined using Level 2 inputs.

	QuotedPrices		Other
	in Active		Observable			Unobservable
	Markets		Inputs			Inputs
Recurring Fair Value Measurements	(Level 1)		(Level 2)			(Level 3)		Total
June 30, 2017
Interest rate swap agreements	$	-	$	(11,957	)	$	-	$	(11,957	)
	$	-	$	(11,957	)	$	-	$	(11,957	)
December 31, 2016
Interest rate swap agreements	$	-	$	(14,449	)	$	-	$	(14,449	)
	$	-	$	(14,449	)	$	-	$	(14,449	)

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Common Stock and Stock-Based Compensation

6 Months Ended

Jun. 30, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Common Stock and Stock-Based Compensation

9. Common Stock and Stock-Based Compensation

The Company granted options to purchase 448 and 1,731 shares of common stock in the six months ended June 30, 2017 and 2016, respectively.  The average grant date fair value was $9.98 and $2.21 for options issued in the six months ended June 30, 2017 and 2016, respectively.  The Company issued RSUs of 369 and 1,020 in the six months ended June 30, 2017 and 2016, respectively.  The Company issued PRSUs of 139 and 481 in the six months ended June 30, 2017 and 2016, respectively.    

				Weighted					Weighted		Performance			Weighted
				Average Exercise		Restricted			Average Price at		Restricted			Average Price at
	Options			Price, Options		Stock Units			RSU Issue Date		Stock Units			PRSU Issue Date
Outstanding at December 31, 2016		13,598		$	6.45		1,459		$	5.10		458		$	2.28
Granted		448			9.98		369			9.99		139			10.03
Exercised		(155	)		3.45		(250	)		2.60		-			-
Forfeited		(181	)		7.84		(44	)		6.70		(16	)		3.54
Expired		(13	)		15.91		-			-		-			-
Outstanding at June 30, 2017		13,697		$	6.57		1,534		$	6.64		581		$	4.10

The Company recorded $5,179 and $5,567 of stock compensation expense related to these options, RSUs, and PRSUs for the six months ended June 30, 2017 and 2016, respectively.  Stock compensation expense in the second quarter of 2016 included approximately $2,135 related to a modification of the retirement provisions of the Company’s Long Term Incentive Plans.  The modification allows retirement-eligible individuals (defined as age 55, plus 10 years of service) to continue to vest in options following retirement and also allows retired participants to exercise options for up to 10 years from grant date.  The modification also accelerates vesting and related expense for awards granted to retirement-eligible individuals.  Stock compensation expense is included in selling, general, and administrative expenses on the Consolidated Statements of Income (Loss) and in additional paid-in capital on the Consolidated Balance Sheets.

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Income Taxes

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes

The Company computes and applies to ordinary income an estimated annual effective tax rate on a quarterly basis based on current and forecasted business levels and activities, including the mix of domestic and foreign results and enacted tax laws.  The estimated annual effective tax rate is updated quarterly based on actual results and updated operating forecasts.  Ordinary income refers to income (loss) before income tax expense excluding significant, unusual, or infrequently occurring items.  The tax effect of an unusual or infrequently occurring item is recorded in the interim period in which it occurs as a discrete item of tax.

For the three months ended June 30, 2017, the Company recorded tax expense of $520 on income before income taxes of $11,043 resulting in an effective tax rate of 4.7%, compared to a tax benefit of $63,019 on a loss before income taxes of $150,889 resulting in an effective tax rate of 41.8% for the same period of 2016.  The decrease in the effective tax rate is primarily attributable to the impact of a tax benefit from a loss carryback recorded in 2016 and an increase in depletion applied against forecasted results in 2017 as compared to 2016.  The effective rate differs from the U.S. federal statutory rate due primarily to depletion and the valuation allowance against certain U.S. tax attributes.

For the six months ended June 30, 2017, the Company recorded a tax benefit of $628 on a loss before income taxes of $1,515 resulting in an effective tax rate of 41.5%, compared to a tax benefit of $78,773 on a loss before income taxes of $178,422 resulting in an effective tax rate of 44.1% for the same period of 2016.  The decrease in the effective tax rate is primarily attributable to the impact of a tax benefit from a loss carryback recorded in 2016, partially offset by the increase in depletion applied against forecasted results in 2017, as compared to 2016, and discrete tax benefits related to stock compensation.  The effective rate differs from the U.S. federal statutory rate due primarily to depletion and the valuation allowance against certain U.S. tax attributes.

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Defined Benefit Plans

6 Months Ended

Jun. 30, 2017

Compensation And Retirement Disclosure [Abstract]

Defined Benefit Plans

11. Defined Benefit Plans

The Company maintains two defined benefit pension plans, the Wedron pension plan and the Troy Grove pension plan, covering union employees at certain facilities that provide benefits based upon years of service or a combination of employee earnings and length of service.  The benefits under the Wedron plan were frozen effective December 31, 2012 and the benefits under the Troy Grove plan were frozen effective December 31, 2016.

Net periodic benefit cost recognized for other Company defined benefit pension plans for the three and six months ended June 30, 2017 and 2016 is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Components of net periodic benefit cost
Service cost	$	-			21		$	-		$	42
Interest cost		89			87			178			174
Expected return on plan assets		(127	)		(120	)		(254	)		(240	)
Amortization of prior service cost		-			-			-			-
Amortization of net actuarial loss		61			35			122			109
Net periodic benefit cost	$	23		$	23		$	46		$	85

The Company contributed $36 and $42 during the six months ended June 30, 2017 and 2016, respectively.  Total expected employer contributions during the year ending December 31, 2017 are $69.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

12. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc. at June 30, 2017 and December 31, 2016 were as follows:

	June 30, 2017
	Gross			Tax Effect		Net Amount
Foreign currency translation	$	(10,362	)	$	1,387	$	(8,975	)
Additional pension liability		(3,467	)		1,291		(2,176	)
Unrealized gain (loss) on interest rate hedges		(10,973	)		3,934		(7,039	)
	$	(24,802	)	$	6,612	$	(18,190	)

	December 31, 2016
	Gross			Tax Effect		Net Amount
Foreign currency translation	$	(10,804	)	$	2,533	$	(8,271	)
Additional pension liability		(3,589	)		1,291		(2,298	)
Unrealized gain (loss) on interest rate hedges		(13,146	)		4,713		(8,433	)
	$	(27,539	)	$	8,537	$	(19,002	)

The following table presents the changes in accumulated other comprehensive income by component for the six months ended June 30, 2017:

	Six Months Ended June 30, 2017
							Unrealized
	Foreign			Additional			gain (loss)
	currency			pension			on interest
	translation			liability			rate hedges			Total
Beginning balance	$	(8,271	)	$	(2,298	)	$	(8,433	)	$	(19,002	)
Other comprehensive income (loss)
before reclassifications		(704	)		-			(811	)		(1,515	)
Amounts reclassified from accumulated
other comprehensive income (loss)		-			122			2,205			2,327
Ending balance	$	(8,975	)	$	(2,176	)	$	(7,039	)	$	(18,190	)

The following table presents the reclassifications out of accumulated other comprehensive income during the six months ended June 30, 2017:

	Amountreclassified
	from accumulated
Details about accumulated other	other comprehensive			Affected line item on
comprehensive income	income			the statement of income
Change in fair value of derivative swap agreements
Interest rate hedging contracts	$	3,438		Interest expense
Tax effect		(1,233	)	Taxexpense (benefit)
	$	2,205		Net of tax
Amortization of pension obligations
Prior service cost	$	-		Cost of sales
Actuarial losses		122		Cost of sales
		122		Total before tax
Tax effect		-		Tax expense
		122		Net of tax
Total reclassifications for the period	$	2,327		Net of tax

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Commitments and Contingent Liabilities

6 Months Ended

Jun. 30, 2017

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

13. Commitments and Contingent Liabilities

The Company has entered into numerous mineral rights agreements, in which payments under the agreements are expensed as incurred.  Certain agreements require annual payments while other agreements require payments based upon annual tons mined and others require a combination thereof.

The Company has entered into agreements with third party terminal operators whereby certain minimum payments are due regardless of terminal utilization.  

The Company leases certain machinery, equipment (including railcars), buildings and office space under operating lease arrangements.  Total rent expense associated with these leases was $27,199 and $35,156 for the six months ended June 30, 2017 and 2016, respectively.

The Company is subject to a contingent consideration arrangement related to the purchase of SSP, which was accounted for as an acquisition of a group of assets.  The contingent consideration is based on a fixed percentage of the cumulative product margin, less certain adjustments, generated by sales of Propel SSP® and other products incorporating the SSP technology for five years commencing on October 1, 2015.  The Company entered into an amendment to the SSP purchase agreement on December 17, 2015.  This amendment (a) extends the period during which the aggregate earnout payments must equal or exceed $45,000 from the two-year period ending October 1, 2017 until the three-year period ending October 1, 2018; and (b) provides that the aggregate earnout payments during the two-year period ending October 1, 2017 must equal or exceed $15,000 and granted the Seller a security interest in 51% of the equity interests in the Company to secure such $15,000.  The amendment does not alter the final threshold earnout amount, which continues to be $195,000 (inclusive of the $45,000 payment, if any) by October 1, 2020.  The contingent consideration is accrued and capitalized as part of the cost of the acquired technology from the SSP acquisition at the time a payment is probable and reasonably estimable.  Based upon current information, the Company accrued and capitalized an additional $964 in the six months ended June 30, 2017.

Certain subsidiaries are defendants in lawsuits in which the alleged injuries are claimed to be silicosis-related and to have resulted, in whole or in part, from exposure to silica-containing products, allegedly including those sold by certain subsidiaries.  In the majority of cases, there are numerous other defendants.  In accordance with its insurance obligations, the defense of these actions has been tendered to and the cases are being defended by the subsidiaries’ insurance carriers.  Management believes that the Company’s substantial level of existing and available insurance coverage combined with various open indemnities is more than sufficient to cover any exposure to silicosis-related expenses.  An estimate of the possible loss, if any, cannot be made at this time.

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Transactions with Related Parties

6 Months Ended

Jun. 30, 2017

Related Party Transactions [Abstract]

Transactions with Related Parties

14. Transactions with Related Parties

The Company had purchases from an affiliated entity for freight, logistic services and consulting services related to its operations in China of $85 and $372 in the six months ended June 30, 2017 and 2016, respectively.  

The Company pays American Securities LLC (“American Securities”), in accordance with its policy, for Board of Directors’ fees and Company-related expenses, including reimbursement for travel and lodging, market research, and other miscellaneous expenses.  Fees and expenses paid to American Securities were $134 and $169 in the six months ended June 30, 2017 and 2016, respectively.  

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Segment Reporting

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Segment Reporting

15. Segment Reporting

The Company organizes its business into two reportable segments, Proppant Solutions and Industrial & Recreational Products.  The reportable segments are consistent with how management views the markets served by the Company and the financial information reviewed by the chief operating decision maker in deciding how to allocate resources and assess performance.

The chief operating decision maker primarily evaluates an operating segment’s performance based on segment gross profit, which does not include any selling, general, and administrative costs or corporate costs.  

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
Revenues
Proppant Solutions	$	198,812	$	82,102		$	339,805		$	199,565
Industrial & Recreational Products		34,414		32,147			66,004			60,142
Total revenues		233,226		114,249			405,809			259,707
Segment gross profit
Proppant Solutions		54,373		(13,529	)		81,719			3,063
Industrial & Recreational Products		15,717		13,649			29,202			24,051
Total segment gross profit		70,090		120			110,921			27,114
Operating expenses excluded from segment gross profit
Selling, general, and administrative		25,863		25,040			48,333			43,318
Depreciation, depletion, and amortization		19,846		18,056			39,288			36,642
Asset impairments		-		90,578			-			90,654
Restructuring charges		-		1,155			-			1,155
Other operating expense (income)		355		(426	)		(705	)		(96	)
Interest expense, net		12,983		16,606			25,520			33,868
Other non-operating income		-		-			-			(5	)
Income (loss) before provision (benefit) for income taxes	$	11,043	$	(150,889	)	$	(1,515	)	$	(178,422	)

The Company's three largest customers accounted for 20%, 13%, and 12%, respectively, of consolidated net revenues in the six months ended June 30, 2017.  In the six months ended June 30, 2016, the Company's two largest customers accounted for 34% and 10%, respectively, of consolidated net revenues.  These customers are part of the Company’s Proppant Solutions segment.  

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Definite and Indefinite-Lived Intangibles

6 Months Ended

Jun. 30, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Definite and Indefinite-Lived Intangibles

16. Definite and Indefinite-Lived Intangibles

As of June 30, 2017, the balance of Goodwill was $15,301, which represents goodwill related to acquisitions in the Company’s Industrial & Recreational Products segment.  As part of Company policy in its normal course of business, the Company performed a review of qualitative factors and concluded that, as of June 30, 2017, there were no events or changes in circumstances that would more likely than not result in an impairment of the carrying value of its intangible assets, including goodwill.  With the current volatile market conditions in the oil and gas industry, there could be future changes that impact the carrying value of other long-lived intangibles, including the supply agreement with FTS International Services, LLC (“FTSI”) or the value of the acquired technology from the SSP acquisition.  As of June 30, 2017, the balance of the FTSI supply agreement, net of accumulated amortization, was $32,955.    

Beginning in the first quarter of 2017, the Company began selling products using the SSP technology in full commercial protocol.  Accordingly, the Company began to amortize this intangible asset over a 20-year useful life, which is based upon the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the Company.  Amortization expense of the SSP technology was $1,526 in the six months ended June 30, 2017.  Based on future results of sales of products utilizing the SSP technology, it is possible the fair value of the intangible asset could decline below its cost such that an impairment in carrying value exists.  

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Subsequent Event

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

Subsequent Event

17. Subsequent Event

On July 18, 2017, the Company entered into a 40-year lease agreement for approximately 3,250 acres of sand reserves in Winkler County, Texas.  The reserves are estimated to contain approximately 165,000 tons of fine grade 40/70 and 100 mesh proppant sand.  The Company is obligated for a $40,000 leasehold interest payment, as well as royalties based on volumes sold.  Upon signing the lease, $20,000 of the leasehold interest payment was made and is non-refundable.  The remaining $20,000 of the leasehold interest is payable upon the occurrence of future events, such as mine permitting.  

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited condensed consolidated financial statements of Fairmount Santrol Holdings Inc. and its consolidated subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (which are of a normal, recurring nature) and disclosures necessary for a fair statement of the financial position, results of operations, comprehensive income, and cash flows of the reported interim periods.  The condensed consolidated balance sheet as of December 31, 2016 was derived from audited financial statements, but does not include all disclosures required by GAAP.  Interim results are not necessarily indicative of the results to be expected for the full year or any other interim period.  These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements as filed in the 2016 Annual Report on Form 10-K and notes thereto and information included elsewhere in this Quarterly Report on Form 10-Q.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 – Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e. lessees and lessors).  The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.  This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively.  A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.  Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today.  The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases.  The Update is expected to impact the Company’s consolidated financial statements as the Company has certain operating and land lease arrangements for which it is the lessee.  ASC 842 supersedes the previous leases standard, ASC 840 – Leases.  The standard is effective on January 1, 2019, with early adoption permitted.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In April and May 2016, the FASB issued ASU No. 2016-10 – Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing, ASU No. 2016-11 – Revenue Recognition and Derivatives and Hedging – Recession of SEC Guidance, ASU No. 2016-12 – Revenue from Contracts with Customers – Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20 – Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.  These ASU’s each affect the guidance of the new revenue recognition standard in ASU No. 2014-09 – Revenue from Contracts with Customers and related subsequent ASUs.  This guidance is effective beginning January 1, 2018.  The Company is in the process of reviewing its various customer contracts in both of its business segments with a combination of applicable sales, legal, and accounting personnel.  The review of a sample of contracts has been completed.  In this review, the Company has identified several indicators of potential variable consideration, including price adjustments in the contracts as well as provisions similar to take-or-pay arrangements that could modify the timing of revenue recognition.  The Company is in the process of further review of these indicators and whether they will result in a change in the timing of revenue recognition.  The Company intends to continue this analysis in the quarter ending September 30, 2017 and then apply this guidance to all contracts in order to be prepared for a January 1, 2018 implementation.  The Company intends to use the modified retrospective method and will record cumulative effect of initially applying the standard as an adjustment to opening retained earnings.  This review is in data-gathering and contract review stages and, therefore, the effect of the new guidance on the Company’s financial statements and disclosures is not yet readily determinable.

In January 2017, the FASB issued ASU 2017-04 – Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment.  The ASU eliminates Step 2 from goodwill impairment testing.  Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.  As a result of the ASU, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.  The ASU is effective beginning January 1, 2020, with early adoption permitted, and applied prospectively.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In March 2017, the FASB issued ASU 2017-07 – Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.  The ASU requires that an employer report the service cost component in the same line item in the income statement as other compensation costs arising from services rendered by the pertinent employees during the period as well as appropriately described relevant line items.  The ASU also requires only the service cost component to be eligible for capitalization when applicable.  The ASU is effective beginning January 1, 2018 with early adoption permitted.  The income statement components of the ASU should be applied retrospectively while the balance sheet component should be applied prospectively.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In May 2017, the FASB issued ASU 2017-09 – Compensation – Stock Compensation (Topic 718) – Scope of Modification Accounting.  The ASU provides further guidance on changes to the terms or conditions of a share-based payment award and which changes require the application of modification accounting.  Further, an entity should apply modification accounting unless the following conditions are met:

• The award’s fair value is the same immediately before and after the original award is modified;

• The vesting conditions of the modified award are the same immediately before and after the award is modified; and

• The classification of the modified award, as either an equity instrument or liability instrument, is the same immediately before and after the award is modified.

This guidance is effective beginning January 1, 2018, with early adoption permitted, and should be applied prospectively.  The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.  

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Inventories, net (Tables)

6 Months Ended

Jun. 30, 2017

Inventory Disclosure [Abstract]

Schedule of Inventories

At June 30, 2017 and December 31, 2016, inventories consisted of the following:

	June 30, 2017			December 31, 2016
Raw materials	$	8,447		$	7,465
Work-in-process		11,162			12,681
Finished goods		42,439			33,760
		62,048			53,906
Less: LIFO reserve		(1,241	)		(1,256	)
Inventories, net	$	60,807		$	52,650

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Property, Plant, and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2017

Property Plant And Equipment [Abstract]

Schedule of Property, Plant, and Equipment

At June 30, 2017 and December 31, 2016, property, plant, and equipment consisted of the following:

	June 30, 2017			December 31, 2016
Land and improvements	$	82,408		$	86,298
Mineral reserves and mine development		255,679			253,766
Machinery and equipment		588,637			596,962
Buildings and improvements		187,619			161,057
Furniture, fixtures, and other		3,456			3,440
Construction in progress		14,062			6,748
		1,131,861			1,108,271
Accumulated depletion and depreciation		(415,499	)		(380,536	)
Property, plant, and equipment, net	$	716,362		$	727,735

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

At June 30, 2017 and December 31, 2016, long-term debt consisted of the following:

	June 30, 2017			December 31, 2016
Term B-2 Loans		673,316			719,632
Extended Term B-1 Loans		110,048			117,634
Industrial Revenue bond		10,000			10,000
Revolving credit facility and other		72			88
Capital leases, net		8,800			3,634
Deferred financing costs, net		(6,118	)		(7,975	)
		796,118			843,013
Less: current portion		(12,172	)		(10,707	)
Long-term debt including leases	$	783,946		$	832,306

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Accrued Expenses and Deferred Revenue (Tables)

6 Months Ended

Jun. 30, 2017

Payables And Accruals [Abstract]

Summary of Accrued Expenses and Deferred Revenue

At June 30, 2017 and December 31, 2016, accrued expenses and deferred revenue consisted of the following:

	June 30, 2017		December 31, 2016
Accrued payroll and fringe benefits	$	8,145	$	7,018
Accrued bonus		14,669		3,536
Contingent consideration		3,220		2,507
Accrued income taxes		347		421
Accrued real estate taxes		3,834		4,821
Deferred revenue		9,316		75
Other accrued expenses		9,381		7,807
Accrued expenses and deferred revenue	$	48,912	$	26,185

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Earnings (Loss) per Share (Tables)

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings (Loss) per Share

The table below shows the computation of basic and diluted earnings (loss) per share for the three and six months ended June 30, 2017 and 2016, respectively:

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
Numerator:
Net income (loss) attributable to Fairmount Santrol Holdings Inc.	$	10,483	$	(87,886	)	$	(1,105	)	$	(99,662	)
Denominator:
Basic weighted average shares outstanding		224,015		161,647			223,878			161,547
Dilutive effect of employee stock options, RSUs, and PRSUs		4,169		-			-			-
Diluted weighted average shares outstanding		228,184		161,647			223,878			161,547
Earnings (loss) per common share - basic	$	0.05	$	(0.54	)	$	-		$	(0.62	)
Earnings (loss) per common share - diluted	$	0.05	$	(0.54	)	$	-		$	(0.62	)

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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2017

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Fair Values of Derivative Instrument and Respective Classification in Condensed Consolidated Balance Sheets

The following table summarizes the fair values and the respective classification in the Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016:

		Assets (Liabilities)
Interest Rate Swap Agreements	Balance Sheet Classification	June 30, 2017			December 31, 2016
Designated as cash flow hedges	Other long-term liabilities	$	(11,957	)	$	(14,488	)
Designated as cash flow hedges	Other assets		-			39
		$	(11,957	)	$	(14,449	)

Schedule of Interest Expense Recognized on Derivative

In order to represent the ineffective portion of interest rate swap agreements designated as hedges, the Company recognized in interest expense the following in the three and six months ended June 30, 2017 and 2016:

Derivatives in	Location of Gain (Loss)
ASC 815-20 Cash Flow	Recognized in Income on	Three Months Ended June 30,				Six Months Ended June 30,
Hedging Relationships	Derivative (Ineffective Portion)	2017		2016		2017			2016
Interest rate swap agreements	Interest expense (income)	$	3	$	109	$	(74	)	$	199
		$	3	$	109	$	(74	)	$	199

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair Value for Long-term Debt

The following table presents the fair value as of June 30, 2017 and December 31, 2016 for the Company’s long-term debt:

	QuotedPrices		Other
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
Long-Term Debt Fair Value Measurements	(Level 1)		(Level 2)		(Level 3)		Total
June 30, 2017
Term B-2 Loans		-		639,199		-		639,199
Extended Term B-1 Loans		-		103,321		-		103,321
	$	-	$	742,520	$	-	$	742,520
December 31, 2016
Term B-2 Loans		-		699,683		-		699,683
Extended Term B-1 Loans		-		114,308		-		114,308
	$	-	$	813,991	$	-	$	813,991

Financial Instruments Carried at Fair Value

The following table presents the amounts carried at fair value as of June 30, 2017 and December 31, 2016 for the Company’s other financial instruments.  Fair value of interest rate swap agreements in based on the present value of the expected future cash flows, considering the risks involved, and using discount rates appropriate for the maturity date.  These are determined using Level 2 inputs.

	QuotedPrices		Other
	in Active		Observable			Unobservable
	Markets		Inputs			Inputs
Recurring Fair Value Measurements	(Level 1)		(Level 2)			(Level 3)		Total
June 30, 2017
Interest rate swap agreements	$	-	$	(11,957	)	$	-	$	(11,957	)
	$	-	$	(11,957	)	$	-	$	(11,957	)
December 31, 2016
Interest rate swap agreements	$	-	$	(14,449	)	$	-	$	(14,449	)
	$	-	$	(14,449	)	$	-	$	(14,449	)

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Common Stock and Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Share Based Compensation Activity of Option and Non-option Instruments

				Weighted					Weighted		Performance			Weighted
				Average Exercise		Restricted			Average Price at		Restricted			Average Price at
	Options			Price, Options		Stock Units			RSU Issue Date		Stock Units			PRSU Issue Date
Outstanding at December 31, 2016		13,598		$	6.45		1,459		$	5.10		458		$	2.28
Granted		448			9.98		369			9.99		139			10.03
Exercised		(155	)		3.45		(250	)		2.60		-			-
Forfeited		(181	)		7.84		(44	)		6.70		(16	)		3.54
Expired		(13	)		15.91		-			-		-			-
Outstanding at June 30, 2017		13,697		$	6.57		1,534		$	6.64		581		$	4.10

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Defined Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2017

Net Periodic Benefit Cost [Member]

Summary of Defined Benefit Plans

Net periodic benefit cost recognized for other Company defined benefit pension plans for the three and six months ended June 30, 2017 and 2016 is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Components of net periodic benefit cost
Service cost	$	-			21		$	-		$	42
Interest cost		89			87			178			174
Expected return on plan assets		(127	)		(120	)		(254	)		(240	)
Amortization of prior service cost		-			-			-			-
Amortization of net actuarial loss		61			35			122			109
Net periodic benefit cost	$	23		$	23		$	46		$	85

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Components of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc. at June 30, 2017 and December 31, 2016 were as follows:

	June 30, 2017
	Gross			Tax Effect		Net Amount
Foreign currency translation	$	(10,362	)	$	1,387	$	(8,975	)
Additional pension liability		(3,467	)		1,291		(2,176	)
Unrealized gain (loss) on interest rate hedges		(10,973	)		3,934		(7,039	)
	$	(24,802	)	$	6,612	$	(18,190	)

	December 31, 2016
	Gross			Tax Effect		Net Amount
Foreign currency translation	$	(10,804	)	$	2,533	$	(8,271	)
Additional pension liability		(3,589	)		1,291		(2,298	)
Unrealized gain (loss) on interest rate hedges		(13,146	)		4,713		(8,433	)
	$	(27,539	)	$	8,537	$	(19,002	)

Changes in Accumulated Other Comprehensive Income by Component

The following table presents the changes in accumulated other comprehensive income by component for the six months ended June 30, 2017:

	Six Months Ended June 30, 2017
							Unrealized
	Foreign			Additional			gain (loss)
	currency			pension			on interest
	translation			liability			rate hedges			Total
Beginning balance	$	(8,271	)	$	(2,298	)	$	(8,433	)	$	(19,002	)
Other comprehensive income (loss)
before reclassifications		(704	)		-			(811	)		(1,515	)
Amounts reclassified from accumulated
other comprehensive income (loss)		-			122			2,205			2,327
Ending balance	$	(8,975	)	$	(2,176	)	$	(7,039	)	$	(18,190	)

Reclassifications out of Accumulated Other Comprehensive Income

The following table presents the reclassifications out of accumulated other comprehensive income during the six months ended June 30, 2017:

	Amountreclassified
	from accumulated
Details about accumulated other	other comprehensive			Affected line item on
comprehensive income	income			the statement of income
Change in fair value of derivative swap agreements
Interest rate hedging contracts	$	3,438		Interest expense
Tax effect		(1,233	)	Taxexpense (benefit)
	$	2,205		Net of tax
Amortization of pension obligations
Prior service cost	$	-		Cost of sales
Actuarial losses		122		Cost of sales
		122		Total before tax
Tax effect		-		Tax expense
		122		Net of tax
Total reclassifications for the period	$	2,327		Net of tax

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Summarized Financial Information for Reportable Segments

The chief operating decision maker primarily evaluates an operating segment’s performance based on segment gross profit, which does not include any selling, general, and administrative costs or corporate costs.  

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
Revenues
Proppant Solutions	$	198,812	$	82,102		$	339,805		$	199,565
Industrial & Recreational Products		34,414		32,147			66,004			60,142
Total revenues		233,226		114,249			405,809			259,707
Segment gross profit
Proppant Solutions		54,373		(13,529	)		81,719			3,063
Industrial & Recreational Products		15,717		13,649			29,202			24,051
Total segment gross profit		70,090		120			110,921			27,114
Operating expenses excluded from segment gross profit
Selling, general, and administrative		25,863		25,040			48,333			43,318
Depreciation, depletion, and amortization		19,846		18,056			39,288			36,642
Asset impairments		-		90,578			-			90,654
Restructuring charges		-		1,155			-			1,155
Other operating expense (income)		355		(426	)		(705	)		(96	)
Interest expense, net		12,983		16,606			25,520			33,868
Other non-operating income		-		-			-			(5	)
Income (loss) before provision (benefit) for income taxes	$	11,043	$	(150,889	)	$	(1,515	)	$	(178,422	)

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Inventories, net - Schedule of Inventories (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Raw materials	$ 8,447	$ 7,465
Work-in-process	11,162	12,681
Finished goods	42,439	33,760
Inventory gross	62,048	53,906
Less: LIFO reserve	(1,241)	(1,256)
Inventories, net	$ 60,807	$ 52,650

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Property, Plant, and Equipment, net - Schedule of Property, Plant, and Equipment (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property, plant and equipment gross	$ 1,131,861	$ 1,108,271
Accumulated depletion and depreciation	(415,499)	(380,536)
Property, plant, and equipment, net	716,362	727,735
Land and Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment gross	82,408	86,298
Mineral Reserves and Mine Development [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment gross	255,679	253,766
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment gross	588,637	596,962
Buildings and Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment gross	187,619	161,057
Furniture, Fixtures and Other [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment gross	3,456	3,440
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment gross	$ 14,062	$ 6,748

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Property, Plant, and Equipment, net - Additional Information (Detail) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Property Plant And Equipment Capitalized Interest Costs [Abstract]
Asset impairments	$ 90,578,000	$ 0	$ 90,654,000

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Long-Term Debt - Schedule of Long-Term Debt (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Industrial Revenue bond	$ 10,000	$ 10,000
Revolving credit facility and other	72	88
Capital leases, net	8,800	3,634
Long term debt	796,118	843,013
Less: current portion	(12,172)	(10,707)
Long-term debt including leases	783,946	832,306
Term B-2 Loans [Member]
Debt Instrument [Line Items]
Term Loans	673,316	719,632
Extended Term B-1 Loans [Member]
Debt Instrument [Line Items]
Term Loans	110,048	117,634
Term Loans [Member]
Debt Instrument [Line Items]
Deferred financing costs, net	$ (6,118)	$ (7,975)

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Long-Term Debt - Additional Information (Detail) - USD ($)				2 Months Ended	6 Months Ended
	Jun. 27, 2017	Nov. 17, 2016	Apr. 28, 2016	Nov. 30, 2016	Jun. 30, 2017	Dec. 31, 2016	Nov. 29, 2016	Oct. 17, 2016
Debt Instrument [Line Items]
Prepayment of principal amount	$ 50,000,000		$ 69,580,000
Prepayment of accrued interest			$ 227,000
Debt instrument borrowings, maturity date					Sep. 01, 2027
Outstanding term loans					$ 72,000	$ 88,000
Repurchases of term loans							$ 213,000,000
Net gain on repurchases of debt				$ 5,110,000
Write-off of unamortized capitalized debt issuance costs	389,000				389,000
Outstanding letters of credit					15,270,000
Industrial revenue bond outstanding					$ 10,000,000
Applicable margin on interest rate					0.91%
Letter of credit					$ 10,000,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Revolving Credit Facility termination date					Sep. 06, 2018
Available capacity remaining on the revolving credit facility					$ 15,980,000
Revolving Credit Facility [Member] | Borrowings [Member]
Debt Instrument [Line Items]
Interest rate of borrowings					4.30%
3/17/2017 [Member]
Debt Instrument [Line Items]
Debt instrument borrowings, maturity date					Mar. 17, 2017
Outstanding term loans					$ 16,723,000
First Quarter of 2017 [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Total Revolving Credit Facility					$ 100,000,000
First Quarter of 2017 [Member] | Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Leverage ratio					650.00%
Fourth Quarter of 2017 [Member] | Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Leverage ratio					475.00%
2016 Extended Term Loans [Member]
Debt Instrument [Line Items]
Prepayment of principal amount		$ 69,580,000
Debt instrument borrowings, maturity date			Jul. 15, 2018
Extended Term B-1 Loans [Member]
Debt Instrument [Line Items]
Prepayment of principal amount	7,021,000
Repurchases of term loans							$ 37,867,000	$ 3,000,000
Repurchased term loan as percentage of par								91.50%
Repurchased term loan as average percentage of par							96.30%
Extended Term B-1 Loans [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Interest rate of borrowings					4.80%
Term B-1 Loans [Member] | March 2017 [Member]
Debt Instrument [Line Items]
Prepayment of principal amount		$ 16,766,000
Term B-2 Loans [Member]
Debt Instrument [Line Items]
Prepayment of principal amount	$ 42,979,000
Repurchases of term loans							$ 175,133,000
Repurchased term loan as average percentage of par							96.30%
Term B-2 Loans [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Interest rate of borrowings					4.80%

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Accrued Expenses and Deferred Revenue - Summary of Accrued Expenses and Deferred Revenue (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Payables And Accruals [Abstract]
Accrued payroll and fringe benefits	$ 8,145	$ 7,018
Accrued bonus	14,669	3,536
Contingent consideration	3,220	2,507
Accrued income taxes	347	421
Accrued real estate taxes	3,834	4,821
Deferred revenue	9,316	75
Other accrued expenses	9,381	7,807
Accrued expenses and deferred revenue	$ 48,912	$ 26,185

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Earnings (Loss) per Share - Computation of Basic and Diluted Earnings (Loss) per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Numerator:
Net income (loss) attributable to Fairmount Santrol Holdings Inc.	$ 10,483	$ (87,886)	$ (1,105)	$ (99,662)
Denominator:
Basic weighted average shares outstanding	224,015,000	161,647,000	223,878,000	161,547,000
Dilutive effect of employee stock options, RSUs, and PRSUs	4,169,000	0	0	0
Diluted weighted average shares outstanding	228,184,000	161,647,000	223,878,000	161,547,000
Earnings (loss) per common share - basic	$ 0.05	$ (0.54)		$ (0.62)
Earnings (loss) per common share - diluted	$ 0.05	$ (0.54)		$ (0.62)

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Earnings (Loss) per Share - Additional Information (Detail) - shares shares in Thousands	3 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Earnings Per Share Basic [Line Items]
Securities excluded from computation of earning per share	6,858
Outstanding options	13,697	13,598
Restricted Stock Units (RSUs) [Member]
Earnings Per Share Basic [Line Items]
Performance restricted stock units, outstanding	1,534	1,459
Performance Restricted Stock Units (PRSUs) [Member]
Earnings Per Share Basic [Line Items]
Performance restricted stock units, outstanding	581	458

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Derivative Instruments - Additional Information (Detail) - Interest Rate Swap Agreements [Member] - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2018
Derivative [Line Items]
Notional amount of swap agreements	$ 420,000,000
Notional amount as percent of term debt outstanding	54.00%
Interest rate swap agreement, maturity date	Sep. 05, 2019
Scenario, Forecast [Member] | Interest Expense [Member]
Derivative [Line Items]
Reclassification from Accumulated other comprehensive income (loss)		$ 6,068,000
Minimum [Member]
Derivative [Line Items]
Derivative variable interest rate	2.92%
Maximum [Member]
Derivative [Line Items]
Derivative variable interest rate	3.12%

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Derivative Instruments - Fair Values of Derivative Instrument and Respective Classification in Condensed Consolidated Balance Sheets (Detail) - Interest Rate Swap Agreements [Member] - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Derivatives Fair Value [Line Items]
Derivative, fair value	$ (11,957)	$ (14,449)
Designated as Cash Flow Hedges [Member] | Other Long-Term Liabilities [Member]
Derivatives Fair Value [Line Items]
Derivative liabilities	$ (11,957)	(14,488)
Designated as Cash Flow Hedges [Member] | Other Assets [Member]
Derivatives Fair Value [Line Items]
Derivative assets		$ 39

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Derivative Instruments - Schedule of Interest Expense Derivatives (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Derivatives Fair Value [Line Items]
Interest expense (income)	$ (12,983)	$ (16,606)	$ (25,520)	$ (33,868)
Interest Rate Swap Agreements [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest [Member]
Derivatives Fair Value [Line Items]
Interest expense (income)	3	109	(74)	199
Interest Rate Swap Agreements [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest [Member] | Interest Income Expense [Member]
Derivatives Fair Value [Line Items]
Interest expense (income)	$ 3	$ 109	$ (74)	$ 199

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Fair Value Measurements - Schedule of Fair Value for Long-term Debt (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long term debt	$ 742,520	$ 813,991
Term B-2 Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long term debt	639,199	699,683
Extended Term B-1 Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long term debt	103,321	114,308
Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long term debt	742,520	813,991
Other Observable Inputs (Level 2) [Member] | Term B-2 Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long term debt	639,199	699,683
Other Observable Inputs (Level 2) [Member] | Extended Term B-1 Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long term debt	$ 103,321	$ 114,308

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Fair Value Measurements - Financial Instruments Carried at Fair Value (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Interest Rate Swap Agreements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap agreements	$ (11,957)	$ (14,449)
Recurring Fair Value Measurements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Net Asset (Liability)	(11,957)	(14,449)
Recurring Fair Value Measurements [Member] | Interest Rate Swap Agreements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap agreements	(11,957)	(14,449)
Other Observable Inputs (Level 2) [Member] | Recurring Fair Value Measurements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Net Asset (Liability)	(11,957)	(14,449)
Other Observable Inputs (Level 2) [Member] | Recurring Fair Value Measurements [Member] | Interest Rate Swap Agreements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap agreements	$ (11,957)	$ (14,449)

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Common Stock and Stock Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted to purchase		448	1,731
Average grant date fair value of options issued		$ 9.98	$ 2.21
Stock compensation expense	$ 2,135	$ 5,179	$ 5,567
Modification of retirement provision, description		The modification allows retirement-eligible individuals (defined as age 55, plus 10 years of service) to continue to vest in options following retirement and also allows retired participants to exercise options for up to 10 years from grant date.
Retired participants options exercise period from grant date		10 years
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units issued		369	1,020
Performance Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units issued		139	481

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Common Stock and Stock Based Compensation - Summary of Share Based Compensation Activity of Option and Non-option Instruments (Detail) - $ / shares shares in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, Outstanding Beginning Balance	13,598
Options, Granted	448	1,731
Options, Exercised	(155)
Options, Forfeited	(181)
Options, Expired	(13)
Options, Outstanding Ending Balance	13,697
Weighted Average Exercise Price, Options, Outstanding Beginning Balance	$ 6.45
Weighted Average Exercise Price, Options, Granted	9.98
Weighted Average Exercise Price, Options, Exercised	3.45
Weighted Average Exercise Price, Options, Forfeited	7.84
Weighted Average Exercise Price, Options, Expired	15.91
Weighted Average Exercise Price, Options, Outstanding Ending Balance	$ 6.57
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Beginning Balance	1,459
Granted	369
Exercised	(250)
Forfeited	(44)
Outstanding Ending Balance	1,534
Weighted Average Price at Issue Date, Outstanding Beginning Balance	$ 5.10
Weighted Average Price at Issue Date, Granted	9.99
Weighted Average Price at Issue Date, Exercised	2.60
Weighted Average Price at Issue Date, Forfeited	6.70
Weighted Average Price at Issue Date, Outstanding Ending Balance	$ 6.64
Performance Restricted Stock Units (PRSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Beginning Balance	458
Granted	139
Forfeited	(16)
Outstanding Ending Balance	581
Weighted Average Price at Issue Date, Outstanding Beginning Balance	$ 2.28
Weighted Average Price at Issue Date, Granted	10.03
Weighted Average Price at Issue Date, Forfeited	3.54
Weighted Average Price at Issue Date, Outstanding Ending Balance	$ 4.10

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Provision (benefit) for income taxes	$ 520	$ (63,019)	$ (628)	$ (78,773)
Income (Loss) before income taxes	$ 11,043	$ (150,889)	$ (1,515)	$ (178,422)
Effective income tax rate	4.70%	41.80%	41.50%	44.10%

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Defined Benefit Plans - Additional Information (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($) Pension_Plan	Jun. 30, 2016 USD ($)	Dec. 31, 2017 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Number of defined benefit pension plans | Pension_Plan	2
Pension and postretirement contributions	$ 36	$ 42
Scenario, Forecast [Member]
Defined Benefit Plan Disclosure [Line Items]
Expected contribution for pension plan remaining fiscal year			$ 69

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Defined Benefit Plans - Summary of Defined Benefit Plans (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Compensation And Retirement Disclosure [Abstract]
Service cost		$ 21		$ 42
Interest cost	$ 89	87	$ 178	174
Expected return on plan assets	(127)	(120)	(254)	(240)
Amortization of net actuarial loss	61	35	122	109
Net periodic benefit cost	$ 23	$ 23	$ 46	$ 85

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Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss), Gross	$ (24,802)	$ (27,539)
Accumulated other comprehensive income (loss), Tax Effect	6,612	8,537
Accumulated other comprehensive income (loss)	(18,190)	(19,002)
Foreign Currency Translation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss), Gross	(10,362)	(10,804)
Accumulated other comprehensive income (loss), Tax Effect	1,387	2,533
Accumulated other comprehensive income (loss)	(8,975)	(8,271)
Additional Pension Liability [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss), Gross	(3,467)	(3,589)
Accumulated other comprehensive income (loss), Tax Effect	1,291	1,291
Accumulated other comprehensive income (loss)	(2,176)	(2,298)
Unrealized Gain (Loss) on Interest Rate Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss), Gross	(10,973)	(13,146)
Accumulated other comprehensive income (loss), Tax Effect	3,934	4,713
Accumulated other comprehensive income (loss)	$ (7,039)	$ (8,433)

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Accumulated Other Comprehensive Income (Loss) - Changes in Accumulated Other Comprehensive Income by Component (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balances	$ 251,120
Other comprehensive income (loss) before reclassifications	(1,515)
Amounts reclassified from accumulated other comprehensive income (loss)	2,327
Ending balances	257,005
Foreign Currency Translation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balances	(8,271)
Other comprehensive income (loss) before reclassifications	(704)
Ending balances	(8,975)
Additional Pension Liability [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balances	(2,298)
Amounts reclassified from accumulated other comprehensive income (loss)	122
Ending balances	(2,176)
Unrealized Gain (Loss) on Interest Rate Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balances	(8,433)
Other comprehensive income (loss) before reclassifications	(811)
Amounts reclassified from accumulated other comprehensive income (loss)	2,205
Ending balances	(7,039)
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balances	(19,002)
Ending balances	$ (18,190)

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Accumulated Other Comprehensive Income (Loss) - Reclassifications out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense	$ 12,983	$ 16,606	$ 25,520	$ 33,868
Income (loss) before provision (benefit) for income taxes	11,043	(150,889)	(1,515)	(178,422)
Tax expense (benefit)	520	(63,019)	(628)	(78,773)
Net income (loss)	10,523	(87,870)	(887)	(99,649)
Cost of sales	$ 163,136	$ 114,129	294,888	$ 232,593
Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income (loss)			2,327
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on Interest Rate Hedges [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense			3,438
Tax expense (benefit)			(1,233)
Net income (loss)			2,205
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment, Net Unamortized Gain (Loss) [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of sales			122
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Additional Pension Liability [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) before provision (benefit) for income taxes			122
Net income (loss)			$ 122

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Commitments and Contingent Liabilities - Additional Information (Detail) - USD ($) $ in Thousands		6 Months Ended
	Dec. 17, 2015	Jun. 30, 2017	Jun. 30, 2016
Commitments and Contingencies [Line Items]
Rent expense for lease		$ 27,199	$ 35,156
Self-Suspending Proppant LLC [Member]
Commitments and Contingencies [Line Items]
Commitment period of sales		5 years
Commitment commencing date		Oct. 01, 2015
Aggregate earnout payment from the two-year period ending October 1, 2017 until the three-year period ending October 1, 2018	$ 45,000
Aggregate earnout payment during the two-year period ending October 1, 2017	$ 15,000
Security interest percentage of equity in contingent consideration	51.00%
Contingent consideration	$ 195,000
Additional contingent consideration accrued and capitalized		$ 964

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Transactions with Related Parties - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Affiliated Entity [Member]
Related Party Transaction [Line Items]
Purchases from an affiliated entity	$ 85	$ 372
American Securities [Member]
Related Party Transaction [Line Items]
Management fees and expense payment	$ 134	$ 169

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Segment Reporting - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2017 Segment Customer	Jun. 30, 2016 Customer
Segment Reporting Information [Line Items]
Number of reportable segments | Segment	2
Number of customers | Customer	3	2
Customer Concentration Risk [Member] | Net Revenues [Member] | Customer One [Member]
Segment Reporting Information [Line Items]
Consolidated net revenues	20.00%	34.00%
Customer Concentration Risk [Member] | Net Revenues [Member] | Customer Two [Member]
Segment Reporting Information [Line Items]
Consolidated net revenues	13.00%	10.00%
Customer Concentration Risk [Member] | Net Revenues [Member] | Customer Three [Member]
Segment Reporting Information [Line Items]
Consolidated net revenues	12.00%

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Segment Reporting - Summarized Financial Information for Reportable Segments (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues
Revenues	$ 233,226,000	$ 114,249,000	$ 405,809,000	$ 259,707,000
Segment gross profit
Segment gross profit	70,090,000	120,000	110,921,000	27,114,000
Operating expenses excluded from segment gross profit
Selling, general, and administrative	25,863,000	25,040,000	48,333,000	43,318,000
Depreciation, depletion, and amortization	19,846,000	18,056,000	39,288,000	36,642,000
Asset impairments		90,578,000	0	90,654,000
Restructuring charges		1,155,000		1,155,000
Other operating expense (income)	355,000	(426,000)	(705,000)	(96,000)
Interest expense, net	12,983,000	16,606,000	25,520,000	33,868,000
Other non-operating income				(5,000)
Income (loss) before provision (benefit) for income taxes	11,043,000	(150,889,000)	(1,515,000)	(178,422,000)
Proppant Solutions [Member]
Revenues
Revenues	198,812,000	82,102,000	339,805,000	199,565,000
Segment gross profit
Segment gross profit	54,373,000	(13,529,000)	81,719,000	3,063,000
Industrial & Recreational Products [Member]
Revenues
Revenues	34,414,000	32,147,000	66,004,000	60,142,000
Segment gross profit
Segment gross profit	$ 15,717,000	$ 13,649,000	$ 29,202,000	$ 24,051,000

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Definite and Indefinite-Lived Intangibles - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Goodwill [Line Items]
Goodwill	$ 15,301	$ 15,301
Industrial & Recreational Products [Member]
Goodwill [Line Items]
Goodwill	15,301
FTSI Supply Agreement [Member]
Goodwill [Line Items]
Supply agreement, net of accumulated amortization	$ 32,955
SSP Technology [Member]
Goodwill [Line Items]
Useful life of intangible asset	20 years
Amortization expense of intangible asset	$ 1,526

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Subsequent Event - Additional Information (Detail) - Subsequent Event [Member] Ton in Thousands, $ in Thousands	Jul. 18, 2017 USD ($) a Ton
Subsequent Event [Line Items]
Term of lease agreement	40 years
Area of sand reserves under lease agreement | a	3,250
Estimated tons of sand in reserves | Ton	165,000
Grades of mesh proppant sand	40/70 and 100
Leasehold interest obligated for payment	$ 40,000
Non-Refundable Leasehold interest Payments	20,000
Contingent leasehold Interest payments	$ 20,000