U.S. Silica Holdings, Inc. (NYSE: SLCA) today announced net
income of $19.1 million, or $0.37 per basic and diluted share for
the quarter ended March 31, 2012, compared with net income of $3.5
million, or $0.07 per share for the same period in 2011.
Summary Financial and Operating Data
(unaudited; $ in millions, except statistics and per share)
Three Months Ended March 31,
2012 2011 Key
Operating Statistics:
Tons Sold:
(000s)
Oil & Gas 679.0 433.8 Industrial & Specialty Products
1,063.9 1,034.7 Total 1,742.9 1,468.5
Income: Revenue $ 102.6 $ 64.4 Contribution
Margin $ 47.4 $ 21.4 % Margin 46.2 % 33.2 % Adjusted EBITDA
(a) $ 37.0 $ 16.7 % Margin 36.1 % 26.0 % Net Income $ 19.1 $
3.5 EPS, Basic and Diluted $ 0.37 $ 0.07
(a)
A reconciliation of Adjusted EBITDA, a
non-GAAP financial measure, to net income, the most comparable GAAP
measure, and other important information appears on page 6.
President and Chief Executive Officer Bryan Shinn commented, “We
are very pleased with our first quarter performance, delivering
record revenues and earnings for the Company. Customers continue to
highly value our premium Ottawa white sand, our
multi-plant-multi-basin logistics capabilities, and supply chain
responsiveness. We believe we are well positioned for continued
success and reaffirm our guidance for the full year 2012.”
The Company reported first quarter 2012 revenues of $102.6
million, an increase of $38.2 million, or 59% from $64.4 million in
2011 driven by continued growth in demand for our Ottawa White frac
sand. Overall sales volume increased 19% during the first quarter
of 2012 to 1.7 million tons, as compared to 1.5 million tons in the
first quarter of 2011.
First quarter 2012 sales volume within our Oil & Gas
Proppants segment increased by 57%, to 679 thousand tons, compared
to 434 thousand tons in 2011, while sales volumes for our
Industrial and Specialty Products segment grew year over year by 29
thousand tons, or 3%, to 1,064 thousand tons, compared to 1,035
thousand tons in the prior year.
SG&A expense was $9.9 million in the first quarter of 2012,
as compared to $5.3 million for 2011. The increase was driven by
increased staffing to support our Oil & Gas Proppants segment
and to support the transformation and administrative requirements
of a public company.
Adjusted EBITDA increased 121%, or $20.3 million, to $37.0
million for the three months ended March 31, 2012, as compared to
$16.7 million for the three months ended March 31, 2011, driven by
accelerated volume increases in our Oil & Gas Proppants
segment, as well as increased pricing in both segments. Adjusted
EBITDA margin percentage increased for the three months ended March
31, 2012 to 36%, compared to 26% during the three months ended
March 31, 2011.
Capital Update
As of March 31, 2012, we had $84.6 million of cash on hand and
$24.0 million available under our credit facilities. Our total
outstanding debt at March 31, 2012 was $261.2 million.
Outlook and Guidance
The Company reaffirms full year 2012 guidance with revenues of
approximately $395 million to $420 million and Adjusted EBITDA of
approximately $142 million to $150 million. The Company has raised
the range for full year 2012 capital spend to between $100 million
to $115 million. Spending is expected to be primarily directed
towards the construction of a resin-coated sand plant in Rochelle,
IL and a new Greenfield raw sand plant in Sparta, WI, with $15
million allocated for maintenance.
Conference Call
U.S. Silica will host a conference call for investors today, May
8, 2012 at 10:00 a.m. Eastern Time to discuss these results.
Hosting the call will be Bryan A. Shinn, President and Chief
Executive Officer, and William A. White, Chief Financial
Officer.
The call can be accessed live over the telephone by dialing
(877) 705-6003, or for international callers, (201) 493-6725. A
replay will be available shortly after the call and can be accessed
by dialing (877) 870-5176, or for international callers, (858)
384-5517. The passcode for the replay is 392803. The replay will be
available until May 22, 2012.
Interested parties may also listen to a simultaneous webcast of
the conference call by logging onto U.S. Silica’s website at
www.ussilica.com in the Investors Resources section. A replay of
the webcast will also be available for approximately 2 weeks
following the call.
About U.S. Silica Holdings, Inc.
U.S. Silica Holdings, Inc., a Delaware corporation, is
the second largest domestic producer of commercial silica, a
specialized mineral that is a critical input into the oil and gas
proppants end market and a variety of attractive industrial and
specialty products end markets. During its 112-year history, U.S.
Silica Holdings, Inc. has developed core competencies in mining,
processing, logistics and materials science that enable it to
produce and cost-effectively deliver over 200 products to customers
across these end markets. U.S. Silica Holdings, Inc. is
headquartered in Frederick, Maryland.
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 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;
(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; (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 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.
COMBINED STATEMENTS OF
OPERATIONS
(unaudited; in thousands, except per
share amounts)
Three Months Ended March 31, 2012
2011 Sales $ 102,591 $ 64,432 Cost of goods
sold (excluding depreciation, depletion and amortization) 56,921
43,275 Operating expenses Selling, general and administrative 9,904
5,323 Advisory fees to parent - 313 Depreciation, depletion and
amortization 5,978 5,089 15,882
10,725 Operating income 29,788 10,432 Other
(expense) income Interest expense (3,797 ) (5,449 ) Other income,
net, including interest income 154 174
(3,643 ) (5,275 ) Income before income taxes 26,145
5,157 Income tax expense (7,032 ) (1,647 ) Net income
$ 19,113 $ 3,510 Earnings per share: Basic $
0.37 $ 0.07 Diluted $ 0.37 $ 0.07
U.S. SILICA HOLDINGS, INC.
COMBINED BALANCE SHEETS
(in thousands, except share and per
share amounts)
March 31,
2012
December 31,2011
(unaudited) ASSETS Current Assets: Cash and
cash equivalents $ 84,641 $ 59,199 Accounts receivable, net 56,766
46,600 Inventories, net 31,936 29,307 Prepaid expenses and other
current assets 5,804 8,561 Deferred income taxes, net 24,283 28,007
Income tax receivable - 3,895 Total
current assets 203,430 175,569
Property, plant and mine development, net 345,277 336,788 Debt
issuance costs, net 2,483 1,291 Goodwill 68,403 68,403 Trade names
10,436 10,436 Customer relationships, net 6,839 6,942 Other assets
6,182 6,367 Total assets $ 643,050
$ 605,796
LIABILITIES AND STOCKHOLDERS’
EQUITY Current Liabilities: Book overdraft $ 4,170 $
5,588 Accounts payable 19,705 36,579 Accrued liabilities 8,771
9,875 Accrued interest 99 1,659 Current portion of long-term debt
6,364 6,364 Income tax payable 2,550 - Current portion of deferred
revenue 10,393 10,393 Total current
liabilities 52,052 70,458 Long-term
debt 254,817 255,425 Note payable to parent - 15,000 Liability for
pension and other post-retirement benefits 50,328 52,078 Deferred
revenue 701 2,128 Deferred income taxes, net 72,601 75,915 Other
long-term obligations 13,139 12,858
Total liabilities 443,638 483,862 Commitments and
contingencies
Stockholders’ Equity: Common stock -
$0.01 par value, 100,000,000 authorized shares; 52,941,176 and
50,000,000 shares issued and outstanding at March 31, 2012 and
December 31, 2011, respectively 529 500 Additional paid-in capital
162,100 103,757 Retained earnings 49,151 30,038 Accumulated other
comprehensive loss (12,368 ) (12,361 ) Total
stockholders’ equity 199,412 121,934
Total liabilities and stockholders’ equity $ 643,050 $
605,796
Non-GAAP Financial Measures
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,
the most directly comparable GAAP financial measure, to Adjusted
EBITDA.
Three Months Ended
March 31,
2012 2011 (unaudited) Net income $
19,113 $ 3,510 Total interest expense, net of interest income 3,763
5,441 Provision for taxes (benefit) 7,032 1,647 Total depreciation,
depletion and amortization expenses 5,978
5,089 EBITDA 35,886 15,687
Non-recurring expenses (income) (1)
(439 ) - Transaction expenses (2) 156 - Permitted management fees
and expenses (3) - 313 Non-cash incentive compensation (4) 654 96
Post-employment expenses (excluding service costs) (5) 605 628
Other adjustments allowable under our existing credit agreements
(6) 125 5 Adjusted EBITDA $ 36,987 $
16,729
-------------------------
(1)
Includes the gain on the sale of
assets.
(2)
Includes fees and expenses related to the
January 27, 2012 amendment of our Term Loan Facility and ABL
Facility.
(3)
Includes fees and expense paid to Golden
Gate Capital for ongoing consulting and management services
provided pursuant to an Advisory Agreement entered into in
connection with the Golden Gate Capital Acquisition; this Advisory
Agreement was terminated in connection with our IPO.
(4)
Includes vesting of incentive equity
compensation issued to our employees.
(5)
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.
(6)
Reflects miscellaneous adjustments
permitted under our existing credit agreements, including such
items as expenses related to reviewing growth initiatives and
potential acquisitions.
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