What: Shares of Fairmount Santrol Holdings Inc (NYSE: FMSA) were blasted down 22% on November 12, following the company's earnings report for the third quarter. The company's net loss came in much wider than expected, and management also declined to give guidance for the future, citing the uncertainty surrounding onshore drilling in the U.S. in the current low-oil-price environment.

So what: The company reported a net loss of $46 million for the quarter, good for a roughly $0.29 per-share loss. However, CEO Jenniffer Deckard said that the number "included charges of $38.9 million associated with the after-tax effect of restructuring, asset impairments and a change in our full-year tax rate." However, even after adjusting for these non-recurring charges, the company's adjusted loss was still wider than expected. 

Factor in a 30%-plus decline in revenue as volume has shrunk and competition increased, and Fairmount has had a tough go of it, along with many of its peers and competitors. Only U.S. Silica Holdings (NYSE:SLCA) and its more-diversified business is keeping it from feeling the full impact of the energy downturn.

U.S. Silica reported third-quarter earnings in late October, and also saw its sales fall more than 30%; but the company reported a net profit of $0.04 per share versus a loss by most of the rest of the industry. While U.S. Silica experienced the same plummeting results in its oil and gas supplying segment, it actually has seen higher profits from its segment that supplies industrial and specialty users, and that's helping out the company. 

Now what: Fairmount reported that, even with the big loss, it was cash-flow positive for the period, but the company's balance sheet has continued to deteriorate during the past year. Fairmount Santrol Holdings has $100 million more cash on hand now, and slightly less debt than it did at the beginning of the year, but working capital has shrunk by about $95 million over that time as the company has reduced inventory by almost half, and holds 58% less in accounts-payable balances. 

Factor in two straight days of big drops in the price of crude oil, and the market is getting itchy (again) about anything related to oil production. Even U.S. Silica shares were down more than 5% today, and there wasn't any material news out there about it. 

Eventually, demand for frac sand will rebound, but it's still quite unclear how long before that happens. It's probably prudent to remain on the sidelines for now, and let the dust settle before investing in the industry. With just about every company relying on cash and debt to fund shortfalls right now, there's a lot of risk trying to pick the winners before the turnaround begins.