In the news release, U.S. Silica Holdings, Inc. Announces Third
Quarter 2014 Results, issued 29-Oct-2014 by U.S. Silica Holdings, Inc. over PR
Newswire, we are advised by the company that in the third
subheadline; in the second bullet under "Total Company"; in the
second bullet under "Oil and Gas"; and in the second bullet under
"Industrial and Specialty Products," there are six instances that
should read "million tons" rather than "thousand tons" as
originally issued inadvertently. The complete, corrected release
follows:
U.S. Silica Holdings, Inc. Announces Third Quarter 2014 Results -
Revenue of
$241.3 million up 67%
year-over-year - EPS of
$0.77 per
basic share; excluding business development and related expenses;
EPS of
$0.79 per basic share - Total
volumes sold in oil and gas reached a record 1.895 million tons, an
80% improvement over same period last year - Cadre acquisition
accretive to EPS in the quarter by
$0.02 per share -Company updating full-year 2014
adjusted EBITDA to high end of its guidance range
FREDERICK, Md., Oct. 29, 2014 /PRNewswire/ -- U.S. Silica
Holdings, Inc. (NYSE: SLCA) today announced net income of
$41.3 million or $0.77 per basic share and $0.76 per diluted share for the third quarter
ended Sept. 30, 2014 compared with
net income of $21.3 million or
$0.40 per basic and diluted share for
the third quarter of 2013. Excluding business development and
related expenses during the quarter, EPS was $0.79 per basic share.
Bryan Shinn, president and chief
executive officer commented, "I'm extremely pleased with our
performance during the quarter. Contribution margin for our Oil and
Gas segment almost doubled year-over-year, volumes were up
significantly and we continue to see very strong demand for our
high quality products. In addition, our Cadre acquisition is
performing above our initial expectations and our Industrial and
Specialty Products business is making steady progress in expanding
margins and growing their bottom line."
Third Quarter 2014 Highlights
Total Company
- Revenue totaled $241.3 million
compared with $144.4 million for the
same period last year and up 17% sequentially over the second
quarter of 2014.
- Overall sales volumes increased to 2.993 million tons, a 42%
improvement over the third quarter of 2013 and up 15% sequentially
over the second quarter of 2014.
- Contribution margin for the quarter was $93.9 million compared with $54.7 million in the same period of the prior
year and up 26% sequentially over the second quarter of 2014.
- Adjusted EBITDA was $77.5 million
versus $45.0 million for the same
period last year and representing a 30% increase sequentially over
the second quarter of 2014.
Oil and Gas
- Revenue for the quarter totaled $186.8
million compared with $94.2
million in the same period in 2013.
- Overall tons sold totaled 1.895 million tons compared with
1.052 million tons sold in the third quarter of 2013.
- 61% of tons sold were made in basin via transloads compared
with 56% in the third quarter of 2013.
- Segment contribution margin was $77.0
million versus $40.1 million
in the third quarter of 2013.
Industrial and Specialty Products
- Revenue for the quarter totaled $54.4
million compared with $50.2
million for the same period in 2013.
- Overall tons sold totaled 1.098 million tons compared with
1.059 million tons sold in the same period last year.
- Segment contribution margin was $16.8
million compared with $14.5
million in the third quarter of 2013.
Capital Update
As of September 30, 2014, the
Company had $196.9 million in cash
and cash equivalents and short term investments and $47.0 million available under its credit
facilities. Total long-term debt at September 30, 2014 totaled $365.3 million. Capital expenditures in the third
quarter, excluding the Cadre acquisition, totaled $33.6 million and were associated largely with
the Company's investment in a new frac sand mine and plant located
near Utica, Illinois, a new
transload facility under construction in Odessa, Texas, the expansion of its
Pacific, Missouri facility, the
development of a new Greenfield
site in Fairchild, Wisconsin
and other maintenance capital projects.
Outlook and Guidance
The Company is now expecting full-year 2014 Adjusted EBITDA to
be at the high end of its guidance range of $230 million to $240
million. The Company still anticipates full-year 2014
capital expenditures to be in the range of $95 million to $105 million and its effective tax
rate to be approximately 27 percent.
Conference Call
U.S. Silica will host a conference call for investors tomorrow,
October 30, 2014 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, 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
passcode for the replay is 13592747. The replay of the call will be
available through November 28,
2014.
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
114-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 250 products to
customers across our end markets. The company currently operates
nine industrial sand production plants and seven oil and gas sand
production plants. The company is headquartered in Frederick, Maryland and also has offices
located in Chicago, Illinois,
Houston, Texas and Shanghai, China. The company operates on
a platform of ethics, safety and sustainability. U.S. Silica was
named America's Best Small Company for 2014 by Forbes Magazine. The
Company is a founding member of Wisconsin Industrial Sand
Association (WISA) and has been recognized by the Wisconsin
Department of Natural Resources (WDNR) as a partner in the WDNR
Green Tier program. In becoming a Green Tier participant, U.S.
Silica demonstrates its commitment to achieving superior
environmental and economic performance.
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;
(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.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
( dollars in
thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
2014
|
|
2013
|
|
|
Sales
|
$241,256
|
|
$144,372
|
Cost of goods sold
(excluding depreciation, depletion and amortization)
|
149,697
|
|
90,983
|
Operating
expenses
|
|
|
|
Selling, general and
administrative
|
18,600
|
|
12,800
|
Depreciation,
depletion and amortization
|
12,425
|
|
9,152
|
|
31,025
|
|
21,952
|
Operating
income
|
60,534
|
|
31,437
|
Other (expense)
income
|
|
|
|
Interest
expense
|
(4,950)
|
|
(4,144)
|
Early extinguishment
of debt
|
-
|
|
(480)
|
Other income, net,
including interest income
|
120
|
|
260
|
|
(4,830)
|
|
(4,364)
|
Income before income
taxes
|
55,704
|
|
27,073
|
Income tax
expense
|
(14,427)
|
|
(5,739)
|
Net income
|
$ 41,277
|
|
$ 21,334
|
|
|
|
|
Earnings per
share:
|
|
|
|
Basic
|
$ 0.77
|
|
$ 0.40
|
Diluted
|
$ 0.76
|
|
$ 0.40
|
U.S. SILICA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(dollars in
thousands)
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2014
|
|
2013
|
|
(unaudited)
|
|
(audited)
|
ASSETS
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
121,708
|
|
$
78,256
|
Short-term
investments
|
75,155
|
|
74,980
|
Accounts receivable,
net
|
129,755
|
|
75,207
|
Inventories,
net
|
64,642
|
|
64,212
|
Prepaid expenses and
other current assets
|
8,710
|
|
11,104
|
Deferred income tax,
net
|
20,771
|
|
17,737
|
Income tax
deposits
|
2,753
|
|
-
|
Total current
assets
|
423,494
|
|
321,496
|
Property, plant and
mine development, net
|
536,721
|
|
442,116
|
Debt issuance costs,
net
|
4,596
|
|
5,255
|
Goodwill
|
68,910
|
|
68,403
|
Trade
names
|
14,991
|
|
10,436
|
Customer
relationships, net
|
7,331
|
|
6,120
|
Other
assets
|
11,046
|
|
9,635
|
Total
assets
|
$ 1,067,089
|
|
$ 863,461
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
Book
overdraft
|
$
5,545
|
|
$
4,659
|
Accounts
payable
|
67,550
|
|
37,376
|
Dividends
payable
|
6,791
|
|
6,709
|
Accrued
liabilities
|
16,998
|
|
10,823
|
Accrued
interest
|
41
|
|
41
|
Current portion of
long-term debt
|
3,490
|
|
3,488
|
Deferred
revenue
|
26,850
|
|
-
|
Income tax
payable
|
-
|
|
1,037
|
Total current
liabilities
|
127,265
|
|
64,133
|
Long-term
debt
|
365,345
|
|
367,963
|
Deferred
revenue
|
69,481
|
|
-
|
Liability for pension
and other post-retirement benefits
|
32,727
|
|
36,802
|
Deferred income
taxes, net
|
65,711
|
|
71,318
|
Other long-term
obligations
|
15,417
|
|
13,951
|
Total
liabilities
|
675,946
|
|
554,167
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Common
stock
|
538
|
|
534
|
Preferred
stock
|
-
|
|
-
|
Additional paid-in
capital
|
188,174
|
|
174,799
|
Retained
earnings
|
206,066
|
|
137,978
|
Treasury stock, at
cost
|
(38)
|
|
-
|
Accumulated other
comprehensive loss
|
(3,597)
|
|
(4,017)
|
Total stockholders'
equity
|
391,143
|
|
309,294
|
Total liabilities and
stockholders' equity
|
$ 1,067,089
|
|
$ 863,461
|
|
|
|
|
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 income before
income taxes, the most directly comparable GAAP financial measure,
to segment contribution margin.
|
|
|
|
|
For the Three
Months Ended September 30,
|
|
2014
|
|
2013
|
|
(in
thousands)
|
Sales:
|
|
|
|
Oil & Gas
Proppants
|
$ 186,812
|
|
$ 94,174
|
Industrial &
Specialty Products
|
54,444
|
|
50,198
|
Total
sales
|
241,256
|
|
144,372
|
Segment contribution
margin:
|
|
|
|
Oil & Gas
Proppants
|
77,030
|
|
40,129
|
Industrial &
Specialty Products
|
16,844
|
|
14,546
|
Total segment
contribution margin
|
93,874
|
|
54,675
|
Operating activities
excluded from segment cost of goods sold
|
(2,315)
|
|
(1,286)
|
Selling, general and
administrative
|
(18,600)
|
|
(12,800)
|
Depreciation,
depletion and amortization
|
(12,425)
|
|
(9,152)
|
Interest
expense
|
(4,950)
|
|
(4,144)
|
Early extinguishment
of debt
|
-
|
|
(480)
|
Other income, net,
including interest income
|
120
|
|
260
|
Income before income
taxes
|
$ 55,704
|
|
$ 27,073
|
|
|
|
|
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,
it 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
September 30,
|
|
2014
|
|
2013
|
|
(in
thousands)
|
Net income
|
$ 41,277
|
|
$ 21,334
|
Total interest
expense, net of interest income
|
4,859
|
|
4,127
|
Provision for
taxes
|
14,427
|
|
5,739
|
Total depreciation,
depletion and amortization expenses
|
12,425
|
|
9,152
|
EBITDA
|
72,988
|
|
40,352
|
Loss on early
extinuguishment of debt (1)
|
-
|
|
480
|
Non-cash incentive
compensation(2)
|
1,424
|
|
854
|
Post-employment
expenses (excluding service costs)(3)
|
380
|
|
382
|
Other adjustments
allowable under our existing credit
agreement(4)
|
2,695
|
|
2,956
|
Adjusted
EBITDA
|
$ 77,487
|
|
$ 45,024
|
|
|
|
|
|
|
|
|
(1)
Includes write-offs of debt issuance costs, legal fees and a
prepayment penalty related to the early
extinguishment of debt.
|
(2)Includes vesting of incentive equity
compensation issued to our employees.
|
(3)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 O- Pension and Post-retirement Benefits to our
Financial Statements in Part I, Item 1 of this Quarterly
Report on Form 10-Q.
|
(4) Reflects miscellaneous
adjustments permitted under our existing credit agreement,
including such items as expenses related to offerings of our common
stock by our former controlling shareholder, business development
activities related to our growth and expansion initiatives,
one-time litigation fees, expenses related to debt refinancing and
employment agency fees.
|
Media Inquiries: Alison
Holder
Manager of Corporate Communications
301-682-0326
holder@ussilica.com
Investor Relations Inquiries: Mike
Lawson
Director of Investor Relations and Corporate Communications
301-682-0304
lawsonm@ussilica.com
SOURCE U.S. Silica Holdings, Inc.