Commitments and Contingencies Customer Contracts The Company enters into sales contracts with customers. These contracts establish minimum annual sand volumes that the Company is required to make available to such customers under initial terms ranging from one to seven years. Through December 31, 2019 , no payments for non-delivery of minimum annual sand volumes have been made by the Company to customers under these contracts. Royalty Agreements The Company has entered into royalty agreements under which it is committed to pay royalties on sand sold from its production facilities for which the Company has received payment by the customer. Royalty expense is recorded as the sand is sold and is included in costs of goods sold. Royalty expense was $7,360 , $15,478 and $19,091 for the years ended December 31, 2019 , 2018 and 2017 , respectively. Certain acreage is subject to a minimum annual royalty payment. If not paid within 30 days after the annual period, the original landowner has the right to purchase the property for one dollar, subject to certain terms. If we have not made the minimum required royalty payments, we may satisfy our obligation by making a lump-sum cash make-whole payment. Accordingly, we believe there is no material risk that we will be required to sell back the subject property pursuant to this agreement. Property Value Guarantees The Company entered into mining agreements and land use agreements with the Wisconsin municipalities of Bridge Creek, Lincoln, Springfield and Preston that contain property value guarantees ("PVG") for certain property owners in proximity to each mine. The respective PVGs establish a process whereby we guarantee fair market value to the owners of residential property specifically identified within the body of the PVG document. According to the terms of the PVGs, the property owner must notify us in the event they wish to sell the subject residence and additional acreage in certain instances. Upon such notice, the PVGs establish a process by which an appraisal is conducted and the subject property is appraised to establish fair market value and is listed with a real estate broker. In the event the property is sold within 180 days of listing, we agree to pay the owner any shortfall between the sales price and the established fair market value. In the event the property is not sold within the 180 days ' time frame, we are obligated to purchase the property for fair market value. As of December 31, 2019 , we have not accrued a liability related to the PVGs because it is not possible to estimate how many of the owners will elect to avail themselves of the provisions of the PVGs and it cannot be determined if shortfalls will exist in the event of a sale nor can the value of the subject property be ascertained until appraised. As of December 31, 2019 , the Company has paid $3,085 under these guarantees since inception. Purchase Commitments We have entered into service agreements with certain transload service providers which requires us to purchase minimum amounts of services over specific periods of time at specific locations. Our failure to purchase the minimum level of services require us to pay shortfall fees. We have also entered into purchase commitments for the construction of certain equipment. As of December 31, 2019 , future minimum purchase commitments are as follows: Fiscal Year 2020 $ 14,240 2021 14,740 2022 3,425 2023 3,295 2024 979 Thereafter 271 $ 36,950 Contingent Consideration In connection with the acquisition of FB Industries, the agreement contained certain contingent consideration arrangements from the date of closing to December 31, 2021, dependent upon leases or sales of certain silo equipment to be paid quarterly. As of December 31, 2019 , the total estimated fair value of the contingent consideration is $400 and is recorded in accrued and other current liabilities on the Consolidated Balance Sheet. Changes in fair value of the contingent consideration, for facts and circumstances that existed at the time of the acquisition, prior to finalizing the purchase price allocation were accounted for as an adjustment to goodwill. Subsequent changes in fair value of the contingent consideration after the measurement period are recognized in earnings in the period identified. The estimated fair value assumes primarily leases are entered into during this period with minimal sales of silo equipment. A 10% increase in the assumed quantity of leases would result in an increase to $567 in the fair value of the contingent consideration. Conversely, a 50% shift in the assumed quantity of leases to sales of silo systems and conveyors would increase the contingent consideration to $895 . The following table provides a summary of changes in the fair value of the contingent consideration: Balance at December 31, 2018 $ 8,147 Changes in estimated fair value of contingent consideration liability (7,747 ) Balance at December 31, 2019 $ 400 Litigation From time to time the Company may be subject to various claims and legal proceedings which arise in the normal course of business, including claims involving various governmental agencies, including but not limited to the Texas Commission on Environmental Quality, Wisconsin Department of Natural Resources and U.S. Environmental Protection Agency, among others. Management is not aware of any legal matters that are likely to have a material adverse effect on the Companys financial position, results of operations or cash flows.