FREDERICK, Md., April 24, 2017 /PRNewswire/ -- U.S. Silica
Holdings, Inc. (NYSE: SLCA) today announced net income of
$2.5 million or $0.03 per basic and diluted share for the first
quarter ended March 31, 2017 compared
with a net loss of $11.0 million or
$(0.20) per basic and diluted share
for the first quarter of 2016. The first quarter results were
negatively impacted by $1.5 million
in business development related expenses and $6.3 million in costs related to the
restructuring of a vendor contract. Excluding these expenses, net
of the $2.9 million tax effect, EPS
was $0.09 per basic share for the
quarter.
''I'm very pleased with the strong performances we saw from both
of our operating segments during the quarter,'' said Bryan Shinn, president and chief executive
officer. ''Continued industry recovery and powerful secular trends
are driving record demand for our products and services in Oil and
Gas while our Industrial and Specialty Products segment continues
to make great progress in growing its bottom line through a
combination of strategic price increases and the roll out of more
higher margin products.''
First Quarter 2017 Highlights
Total Company
- Revenue totaled $244.8 million
compared with $122.5 million for the
same period last year, an increase of 100% on a year-over-year
basis and an increase of 34% sequentially from the fourth quarter
of 2016.
- Overall tons sold totaled 3.4 million, up 49% compared with 2.3
million tons sold in the first quarter of 2016 and an increase of
18% sequentially from the fourth quarter of 2016.
- Contribution margin for the quarter was $59.1 million, up 233% compared with $17.7 million in the same period of the prior
year and up 57% sequentially from the fourth quarter of 2016.
- Adjusted EBITDA was $42.7 million
compared with Adjusted EBITDA of $5.3
million for the same period last year, an increase of 713%
on a year-over-year basis and an increase of 107% sequentially from
the fourth quarter of 2016.
Oil and Gas
- Revenue for the quarter totaled $193.0
million compared with $73.9
million in the same period in 2016, an increase of 161% on a
year-over-year basis and an increase of 41% sequentially from the
fourth quarter of 2016.
- Tons sold totaled 2.5 million, an increase of 79% compared with
the 1.4 million tons sold in the first quarter of 2016 and an
increase of 22% sequentially compared with the tons sold in the
fourth quarter of 2016.
- 67% of tons were sold in basin compared with 75% sold in basin
in the fourth quarter of 2016.
- Segment contribution margin was $38.8
million versus $0.9 million in
the first quarter of 2016, an increase of 4,464% on a
year-over-year basis and an increase of 110% sequentially compared
with the fourth quarter of 2016.
Industrial and Specialty Products
- Revenue for the quarter totaled $51.8
million compared with $48.6
million for the same period in 2016, an increase of 7% on a
year-over-year basis and an increase of 14% on a sequential basis
from the fourth quarter of 2016.
- Tons sold totaled 0.9 million, relatively flat on a
year-over-year basis and an increase of 9% on a sequential basis
compared with the fourth quarter of 2016.
- Segment contribution margin was $20.2
million compared with $16.9
million in the first quarter of 2016, an increase of 20% on
a year-over-year basis and up 6% sequentially compared with the
fourth quarter of 2016.
Capital Update
As of March 31, 2017, the Company
had $660.9 million in cash and cash
equivalents and $46.0 million
available under its credit facilities. Total debt at March 31, 2017 was $512.5
million. Capital expenditures in the first quarter totaled
$23.6 million and were associated
largely with engineering, procurement and construction of the
Company's growth projects and maintenance and cost improvement
capital projects.
Outlook and Guidance
The Company anticipates that its capital expenditures for 2017
will be in the range of $125 million to $150
million.
Conference Call
U.S. Silica will host a conference call for investors tomorrow,
April 25, 2017 at 9:00 a.m. Eastern Time to discuss these results.
Hosting the call will be Bryan
Shinn, president and chief executive officer and
Don Merril, executive vice president
and chief financial officer. Investors are invited to listen to a
live webcast of the conference call by visiting the "Investor
Resources" section of the Company's website at www.ussilica.com.
The webcast will be archived for one year. The call can also be
accessed live over the telephone by dialing (877) 869-3847 or for
international callers, (201) 689-8261. A replay will be
available shortly after the call and can be accessed by dialing
(877) 660-6853. The conference ID number for the replay is
13658614. The replay of the call will be available through
May 25, 2017.
About U.S. Silica
U.S. Silica Holdings, Inc., a member of the Russell 2000, is a
leading producer of commercial silica used in the oil and gas
industry, and in a wide range of industrial applications. Over its
117-year history, U.S. Silica has developed core competencies in
mining, processing, logistics and materials science that enable it
to produce and cost-effectively deliver over 260 products to
customers across our end markets. The Company currently operates
nine industrial sand production plants and eight oil and gas sand
production plants. The Company is headquartered in Frederick, Maryland and also has offices
located in Chicago, Illinois, and
Houston, Texas.
Forward-looking Statements
Certain statements in this press release are "forward-looking
statements" made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and speak only as
of this date. Forward-looking statements made include any statement
that does not directly relate to any historical or current fact and
may include, but are not limited to, statements regarding U.S.
Silica's growth opportunities, strategy, future financial results,
forecasts, projections, plans and capital expenditures, and the
commercial silica industry. Forward-looking statements are based on
our current expectations and assumptions, which may not prove to be
accurate. These statements are not guarantees and are subject to
risks, uncertainties and changes in circumstances that are
difficult to predict. Many factors could cause actual results to
differ materially and adversely from these forward-looking
statements. Among these factors are: (1) fluctuations in demand for
commercial silica; (2) the cyclical nature of our customers'
businesses; (3) operating risks that are beyond our control; (4)
federal, state and local legislative and regulatory initiatives
relating to hydraulic fracturing; (5) our ability to implement our
capacity expansion plans within our current timetable and budget;
(6) loss of, or reduction in, business from our largest customers
or failure of our customers to pay amounts due to us; (7)
increasing costs or a lack of dependability or availability of
transportation services or infrastructure; (8) our substantial
indebtedness and pension obligations; (9) our ability to attract
and retain key personnel and truckload drivers; (10) silica-related
health issues and corresponding litigation; (11) seasonal and
severe weather conditions; and (12) extensive and evolving
environmental, mining, health and safety, licensing, reclamation,
trucking and other regulation (and changes in their enforcement or
interpretation). Additional information concerning these and other
factors can be found in U.S. Silica's filings with the Securities
and Exchange Commission. We undertake no obligation to publicly
update or revise any forward-looking statement as a result of new
information, future events or otherwise, except as otherwise
required by law.
U.S. SILICA
HOLDINGS, INC.
|
SELECTED FINANCIAL
DATA FROM CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(unaudited; in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
|
|
|
|
|
Total
sales
|
$
244,797
|
|
$
182,373
|
|
$
122,510
|
Total cost of sales
(excluding depreciation, depletion and amortization)
|
187,475
|
|
148,411
|
|
106,751
|
Operating
expenses:
|
|
|
|
|
|
Selling, general and
administrative
|
22,341
|
|
19,167
|
|
15,503
|
Depreciation,
depletion and amortization
|
21,599
|
|
21,194
|
|
14,556
|
Total operating expenses
|
43,940
|
|
40,361
|
|
30,059
|
Operating income
(loss)
|
13,382
|
|
(6,399)
|
|
(14,300)
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
(7,646)
|
|
(7,998)
|
|
(6,643)
|
Other income
(expense), net, including interest income
|
(4,928)
|
|
867
|
|
1,790
|
Total other expense
|
(12,574)
|
|
(7,131)
|
|
(4,853)
|
Income (loss)
before income taxes
|
808
|
|
(13,530)
|
|
(19,153)
|
Income tax
benefit
|
1,714
|
|
6,588
|
|
8,150
|
Net
income (loss)
|
$
2,522
|
|
$
(6,942)
|
|
$
(11,003)
|
Earnings (loss) per
share:
|
|
|
|
|
|
Basic
|
$0.03
|
|
($0.09)
|
|
($0.20)
|
Diluted
|
$0.03
|
|
($0.09)
|
|
($0.20)
|
Weighted average
shares outstanding:
|
|
|
|
|
|
Basic
|
80,983
|
|
75,539
|
|
54,470
|
Diluted
|
82,244
|
|
75,539
|
|
54,470
|
Dividends declared
per share
|
$0.06
|
|
$0.06
|
|
$0.06
|
U.S. SILICA
HOLDINGS, INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
|
(unaudited)
|
|
(audited)
|
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
660,903
|
|
$
711,225
|
|
Accounts receivable,
net
|
139,970
|
|
89,006
|
|
Inventories,
net
|
69,458
|
|
78,709
|
|
Prepaid expenses and
other current assets
|
12,401
|
|
12,323
|
|
Income tax
deposits
|
1,397
|
|
1,682
|
|
Total current
assets
|
884,129
|
|
892,945
|
|
Property, plant and
mine development, net
|
806,288
|
|
783,313
|
|
Goodwill
|
242,301
|
|
240,975
|
|
Trade
names
|
32,318
|
|
32,318
|
|
Intellectual
property, net
|
57,524
|
|
57,270
|
|
Customer
relationships, net
|
49,882
|
|
50,890
|
|
Other
assets
|
14,798
|
|
15,509
|
|
Total
assets
|
$
2,087,240
|
|
$
2,073,220
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
$
71,951
|
|
$
70,778
|
|
Dividends
payable
|
5,223
|
|
5,221
|
|
Accrued
liabilities
|
13,202
|
|
13,034
|
|
Accrued
interest
|
69
|
|
169
|
|
Current portion of
long-term debt
|
5,034
|
|
4,821
|
|
Current portion of
capital leases
|
2,190
|
|
2,237
|
|
Current portion of
deferred revenue
|
18,926
|
|
13,700
|
|
Total current
liabilities
|
116,595
|
|
109,960
|
|
Long-term
debt
|
507,484
|
|
508,417
|
|
Deferred
revenue
|
66,360
|
|
58,090
|
|
Obligations under
capital lease
|
425
|
|
717
|
|
Liability for pension
and other post-retirement benefits
|
56,363
|
|
56,746
|
|
Deferred income
taxes, net
|
49,643
|
|
50,075
|
|
Other long-term
obligations
|
16,474
|
|
15,925
|
|
Total
liabilities
|
813,344
|
|
799,930
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Preferred
stock
|
—
|
|
—
|
|
Common
stock
|
812
|
|
811
|
|
Additional paid-in
capital
|
1,131,253
|
|
1,129,051
|
|
Retained
earnings
|
160,600
|
|
163,173
|
|
Treasury stock, at
cost
|
(3,422)
|
|
(3,869)
|
|
Accumulated other
comprehensive loss
|
(15,347)
|
|
(15,876)
|
|
Total stockholders'
equity
|
1,273,896
|
|
1,273,290
|
|
Total liabilities and
stockholders' equity
|
$
2,087,240
|
|
$
2,073,220
|
|
Non-GAAP Financial Measures
Segment Contribution Margin
Segment contribution margin is a key metric that management uses
to evaluate our operating performance and to determine resource
allocation between segments. Segment contribution margin excludes
certain corporate costs not associated with the operations of the
segment. These unallocated costs include costs related to corporate
functional areas such as sales, production and engineering,
corporate purchasing, accounting, treasury, information technology,
legal and human resources.
The following table sets forth a reconciliation of net income
(loss) the most directly comparable GAAP financial measure, to
segment contribution margin.
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
|
(in
thousands)
|
|
Sales:
|
|
|
|
|
|
|
Oil & Gas
Proppants
|
$
192,959
|
|
$
136,977
|
|
$
73,865
|
|
Industrial &
Specialty Products
|
51,838
|
|
45,396
|
|
48,645
|
|
Total
sales
|
244,797
|
|
182,373
|
|
122,510
|
|
Segment contribution
margin:
|
|
|
|
|
|
|
Oil & Gas
Proppants
|
38,841
|
|
18,486
|
|
851
|
|
Industrial &
Specialty Products
|
20,216
|
|
19,021
|
|
16,893
|
|
Total segment
contribution margin
|
59,057
|
|
37,507
|
|
17,744
|
|
Operating activities
excluded from segment cost of sales
|
(1,735)
|
|
(3,545)
|
|
(1,985)
|
|
Selling, general and
administrative
|
(22,341)
|
|
(19,167)
|
|
(15,503)
|
|
Depreciation,
depletion and amortization
|
(21,599)
|
|
(21,194)
|
|
(14,556)
|
|
Interest
expense
|
(7,646)
|
|
(7,998)
|
|
(6,643)
|
|
Other income (loss),
net, including interest income
|
(4,928)
|
|
867
|
|
1,790
|
|
Income tax
benefit
|
1,714
|
|
6,588
|
|
8,150
|
|
Net income
(loss)
|
$
2,522
|
|
$
(6,942)
|
|
$
(11,003)
|
|
Adjusted EBITDA
Adjusted EBITDA is not a measure of our financial performance or
liquidity under GAAP and should not be considered as an alternative
to net income as a measure of operating performance, cash flows
from operating activities as a measure of liquidity or any other
performance measure derived in accordance with GAAP. Additionally,
Adjusted EBITDA is not intended to be a measure of free cash flow
for management's discretionary use, as it does not consider certain
cash requirements such as interest payments, tax payments and debt
service requirements. Adjusted EBITDA contains certain other
limitations, including the failure to reflect our cash
expenditures, cash requirements for working capital needs and cash
costs to replace assets being depreciated and amortized, and
excludes certain non-recurring charges that may recur in the
future. Management compensates for these limitations by relying
primarily on our GAAP results and by using Adjusted EBITDA only
supplementally. Our measure of Adjusted EBITDA is not necessarily
comparable to other similarly titled captions of other companies
due to potential inconsistencies in the methods of calculation.
The following table sets forth a reconciliation of net income
(loss) the most directly comparable GAAP financial measure, to
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
|
|
(in
thousands)
|
|
|
Net income
(loss)
|
$
2,522
|
|
$
(6,942)
|
|
$
(11,003)
|
|
|
Total interest
expense, net of interest income
|
6,311
|
|
7,048
|
|
6,370
|
|
|
Provision for
taxes
|
(1,714)
|
|
(6,588)
|
|
(8,150)
|
|
|
Total depreciation,
depletion and amortization expenses
|
21,599
|
|
21,194
|
|
14,556
|
|
|
EBITDA
|
28,718
|
|
14,712
|
|
1,773
|
|
|
Non-cash incentive
compensation(1)
|
5,510
|
|
3,032
|
|
1,906
|
|
|
Post-employment
expenses (excluding service costs)(2)
|
489
|
|
260
|
|
765
|
|
|
Business development
related expenses(3)
|
1,486
|
|
2,571
|
|
107
|
|
|
Other adjustments
allowable under our existing credit
agreements(4)
|
6,509
|
|
96
|
|
701
|
|
|
Adjusted EBITDA
|
$
42,712
|
|
$
20,671
|
|
$
5,252
|
|
|
|
|
|
|
|
|
|
(1)
|
Reflects equity-based
compensation expense.
|
|
|
|
|
|
|
(2)
|
Includes net pension
cost and net post-retirement cost relating to pension and other
post-retirement benefit obligations during the applicable period,
but in each case excluding the service cost relating to benefits
earned during such period. See Note L - Pension and Post-retirement
Benefits to our Financial Statements in Part 1, Item 1 of this
Quarterly Report on Form 10-Q.
|
|
(3)
|
Reflects expenses
related to business development activities in connection with our
growth and expansion initiatives.
|
|
(4)
|
Reflects
miscellaneous adjustments permitted under our existing credit
agreement. The 2017 amount includes a contract restructuring cost
of $6.3 million.
|
|
Investor Contact:
Michael
Lawson
Vice President of Investor Relations and Corporate
Communications
(301) 682-0304
lawsonm@USSilica.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/us-silica-holdings-inc-announces-first-quarter-2017-results-300444408.html
SOURCE U.S. Silica Holdings, Inc.