FREDERICK, Md., Feb. 24, 2015 /PRNewswire/ --
- Revenue for the quarter and the full year
up 67% and 61%, respectively
- Full year overall tons sold increased 34%
to 10.9 million tons
- Oil and Gas tons sold for the year up over
65% versus the same period last year
- Net income for the full year of
$121.5 million or $2.26 per basic share
U.S. Silica Holdings, Inc. (NYSE: SLCA) today announced net
income of $33.2 million or
$0.62 per basic share and
$0.61 per diluted share for the
fourth quarter ended Dec. 31, 2014
compared with net income of $16.5
million or $0.31 per basic and
diluted share for the fourth quarter of 2013. Excluding business
development expense during the quarter of approximately
$6.5 million or $0.10 per basic share, EPS was $0.72 per basic share. The quarter was also
negatively impacted by a meaningful increase in bad debt expense of
$6.9 million mostly related
to the Company's assessment of a certain customer's
current ability to pay its obligation to the Company.
"2014 was our best year by almost every measure, as evidenced by
our record financial results and the substantial progress we made
toward driving more speed, scale and strength across our
organization," said Bryan Shinn,
president and chief executive officer. "We expect 2015 to be a
challenging year in light of lower oil prices but we have built our
business and our balance sheet to capitalize on this type of market
environment. Ultimately, I believe U.S. Silica will emerge as an
even stronger company once oil and gas markets recover."
Full Year 2014 Highlights
Total Company
- Revenue totaled $876.7 million
compared with $546.0 million for the
full year of 2013, an improvement of 61%.
- Overall tons sold increased to 10.9 million tons, an increase
of 34% over 2013 totals.
- Selling, general and administrative expense for the year
totaled $89.0 million or 10% of
revenue compared with $49.8 million
or 9% of revenue for the full year 2013.
- Contribution margin was $317.2
million compared with $202.9
million for the full year 2013.
- Adjusted EBITDA was $246.2
million compared with $160.7
million for the full year 2013.
- Net income was $121.5 million or
$2.26 per basic share and
$2.23 per diluted share compared with
$75.3 million or $1.42 per basic share and $1.41 per diluted share for the full year
2013.
Fourth Quarter 2014
Highlights
Total Company
- Revenue totaled $249.6 million
compared with $149.5 million for the
same period last year, an increase of 67%.
- Overall tons sold increased to 3.0 million tons, a 43%
improvement over the fourth quarter of 2013.
- Selling, general and administrative expense for the quarter
were greater than expected and totaled $35.7
million compared with $14.5
million for the fourth quarter of 2013. The increase in
SG&A was due primarily to an $8.7
million increase in compensation expense mostly related to
our annual bonus incentive plan, the $6.9
million increase in bad debt expense and a $6.4 million increase in business development
expense.
- Contribution margin for the quarter was $93.9 million compared with $48.0 million in the same period of the prior
year.
- Adjusted EBITDA was $67.0 million
or 27% of revenue versus $35.9
million or 24% of revenue for the same period last
year.
Oil and Gas
- Revenue for the quarter totaled $196.0
million compared with $102.0
million in the same period in 2013.
- Overall tons sold totaled 2.0 million tons compared with 1.1
million tons sold in the fourth quarter of 2013.
- 66% of total tons sold were made in basin compared with 61% in
the fourth quarter of 2013.
- Segment contribution margin was $80.4
million versus $34.2 million
in the fourth quarter of 2013.
Industrial and Specialty Products
- Revenue for the quarter totaled $53.5
million compared with $47.5
million for the same period in 2013.
- Overall tons sold totaled 1.0 million tons, a 2% increase
compared with the same period last year.
- Segment contribution margin was $13.5
million versus $13.8 million
in the fourth quarter of 2013 due to higher manufacturing costs in
the quarter.
Capital Update
As of Dec. 31, 2014, the Company
had $342.4 million in cash, cash
equivalents and short term investments and $46.8 million available under its credit
facilities. Total debt at Dec. 31,
2014 was $502.3 million
compared with $371.5 million at
December 31, 2013. Capital
expenditures in the fourth quarter totaled $41.0 million and were associated largely with
the Company's investments in various maintenance and growth
initiatives.
Outlook and Guidance
Due to the current lack of visibility in our oil and gas
business, the Company has decided to suspend guidance of Adjusted
EBITDA until such time as we can gain more clarity around our
customers' business activity levels and the associated demand for
our products. Based on current market conditions, the Company
anticipates that its capital expenditures for 2015 will be in a
range of $100 million to $120
million.
Conference Call
U.S. Silica will host a conference call for investors tomorrow,
Feb. 25, 2015 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 or for
international callers, (201) 612-7415. The conference ID for the
replay is 13599731. The replay of the call will be available
through March 25, 2015.
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
115-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,
Houston, Texas and Shanghai, China. The Company operates on
a platform of ethics, safety and sustainability. U.S. Silica 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
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; (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.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(dollars in
thousands, except per share amounts)
|
|
|
|
|
|
For the Three
Months Ended December 31,
|
|
2014
|
|
2013
|
|
|
|
|
Sales
|
$
249,589
|
|
$
149,474
|
Cost of goods sold
(excluding depreciation, depletion and amortization)
|
157,700
|
|
102,875
|
Operating
expenses
|
|
|
|
Selling, general and
administrative
|
35,659
|
|
14,456
|
Depreciation,
depletion and amortization
|
12,664
|
|
10,098
|
|
48,323
|
|
24,554
|
Operating
income
|
43,566
|
|
22,045
|
Other (expense)
income
|
|
|
|
Interest
expense
|
(5,431)
|
|
(4,086)
|
Other income, net,
including interest income
|
379
|
|
152
|
|
(5,052)
|
|
(3,934)
|
Income before income
taxes
|
38,514
|
|
18,111
|
Income tax
expense
|
(5,276)
|
|
(1,658)
|
Net income
|
$
33,238
|
|
$
16,453
|
|
|
|
|
Earnings per
share:
|
|
|
|
Basic
|
$
0.62
|
|
$
0.31
|
Diluted
|
$
0.61
|
|
$
0.31
|
|
|
|
|
U.S. SILICA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(dollars in
thousands)
|
|
|
|
|
|
December
31,
|
|
2014
|
|
2013
|
|
|
|
|
ASSETS
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
267,281
|
|
$
78,256
|
Short-term
investments
|
75,143
|
|
74,980
|
Accounts receivable,
net
|
120,881
|
|
75,207
|
Inventories,
net
|
66,712
|
|
64,212
|
Prepaid expenses and
other current assets
|
9,267
|
|
7,140
|
Deferred income tax,
net
|
22,295
|
|
17,737
|
Income tax
deposits
|
746
|
|
-
|
Total current
assets
|
562,325
|
|
317,532
|
Property, plant and
mine development, net
|
565,755
|
|
442,116
|
Debt issuance costs,
net
|
7,211
|
|
5,255
|
Goodwill
|
68,647
|
|
68,403
|
Trade
names
|
14,914
|
|
10,436
|
Customer
relationships, net
|
6,984
|
|
6,120
|
Other
assets
|
12,317
|
|
13,599
|
Total
assets
|
$
1,238,153
|
|
$
863,461
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
Book
overdraft
|
$
4,215
|
|
$
4,659
|
Accounts
payable
|
85,781
|
|
37,376
|
Dividends
payable
|
6,805
|
|
6,709
|
Accrued
liabilities
|
17,911
|
|
10,823
|
Accrued
interest
|
60
|
|
41
|
Current portion of
long-term debt
|
4,718
|
|
3,488
|
Income tax
payable
|
-
|
|
1,037
|
Current portion of
deferred revenue
|
26,771
|
|
-
|
Total current
liabilities
|
146,261
|
|
64,133
|
Long-term
debt
|
497,579
|
|
367,963
|
Liability for pension
and other post-retirement benefits
|
59,932
|
|
36,802
|
Deferred
revenue
|
64,722
|
|
-
|
Deferred income tax,
net
|
49,749
|
|
71,318
|
Other long-term
obligations
|
16,094
|
|
13,951
|
Total
liabilities
|
834,337
|
|
554,167
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Common
stock
|
539
|
|
534
|
Preferred
stock
|
-
|
|
-
|
Additional paid-in
capital
|
191,086
|
|
174,799
|
Retained
earnings
|
232,551
|
|
137,978
|
Treasury stock, at
cost
|
(542)
|
|
-
|
Accumulated other
comprehensive loss
|
(19,818)
|
|
(4,017)
|
Total stockholders'
equity
|
403,816
|
|
309,294
|
Total liabilities and
stockholders' equity
|
$
1,238,153
|
|
$
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 December 31,
|
|
2014
|
|
2013
|
|
(in
thousands)
|
Sales:
|
|
|
|
Oil and gas
proppants
|
$
196,043
|
|
$
102,011
|
Industrial and
specialty products
|
53,546
|
|
47,463
|
Total
sales
|
249,589
|
|
149,474
|
Segment contribution
margin:
|
|
|
|
Oil and gas
proppants
|
80,419
|
|
34,150
|
Industrial and
specialty products
|
13,456
|
|
13,833
|
Total segment
contribution margin
|
93,875
|
|
47,983
|
Operating activities
excluded from segment cost of goods sold
|
(1,985)
|
|
(1,384)
|
Selling, general and
administrative
|
(35,660)
|
|
(14,456)
|
Depreciation,
depletion and amortization
|
(12,664)
|
|
(10,098)
|
Interest
expense
|
(5,431)
|
|
(4,086)
|
Early extinguishment
of debt
|
-
|
|
-
|
Other income, net,
including interest income
|
379
|
|
152
|
Income (loss) before
income taxes
|
$
38,514
|
|
$
18,111
|
|
|
|
|
|
For the Year Ended
December 31,
|
|
2014
|
|
2013
|
|
(in
thousands)
|
Sales:
|
|
|
|
Oil and gas
proppants
|
$
662,770
|
|
$
347,439
|
Industrial and
specialty products
|
213,971
|
|
198,546
|
Total
sales
|
876,741
|
|
545,985
|
Segment contribution
margin:
|
|
|
|
Oil and gas
proppants
|
256,137
|
|
145,916
|
Industrial and
specialty products
|
61,102
|
|
56,983
|
Total segment
contribution margin
|
317,239
|
|
202,899
|
Operating activities
excluded from segment cost of goods sold
|
(7,082)
|
|
(5,481)
|
Selling, general and
administrative
|
(88,971)
|
|
(49,759)
|
Depreciation,
depletion and amortization
|
(45,019)
|
|
(36,418)
|
Interest
expense
|
(18,202)
|
|
(15,341)
|
Early extinguishment
of debt
|
-
|
|
(480)
|
Other income, net,
including interest income
|
758
|
|
597
|
Income (loss) before
income taxes
|
$
158,723
|
|
$
96,017
|
|
|
|
|
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.
|
For the Three
Months Ended December 31,
|
|
2014
|
|
2013
|
|
(in
thousands)
|
Net income
|
$
33,238
|
|
$
16,453
|
Total interest
expense, net of interest income
|
5,325
|
|
4,040
|
Provision for
taxes
|
5,276
|
|
1,658
|
Total
depreciation, depletion and amortization expenses
|
12,664
|
|
10,098
|
EBITDA
|
56,503
|
|
32,249
|
Non-cash
deductions, losses and charges (1)
|
207
|
|
464
|
Loss on early
extinguishment of debt (2)
|
-
|
|
-
|
Non-cash
incentive compensation (3)
|
2,681
|
|
803
|
Post-employment expenses (excluding service costs) (4)
|
586
|
|
517
|
Business
development related expenses(5)
|
6,473
|
|
106
|
Other
adjustments allowable under our existing credit agreements
(6)
|
563
|
|
1,756
|
Adjusted
EBITDA
|
$
67,013
|
|
$
35,895
|
|
|
|
|
(1) Includes non-cash
deductions, losses and charges arising from adjustments to
estimates of a future litigation liability and the decision by our
hourly workforce at our Rockwood facility to withdraw from a
pension plan administered by a third party.
(2) Includes write-offs of
debt issuance costs, legal fees and a prepayment penalty related to
the early extinguishment of debt.
(3)
Includes vesting of incentive equity compensation issued to our
employees.
(4)
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.
(5)
Expenses related to business development activities related to our
growth and expansion initiatives.
(6)
Reflects miscellaneous adjustments permitted under our existing
credit agreement, including such items as purchase accounting
adjustments, one-time litigation fees, expenses related to debt
refinancing, offerings of our common stock by our former
controlling shareholder, employment agency fees.
|
|
For the Year Ended
December 31,
|
|
2014
|
|
2013
|
|
(in
thousands)
|
Net income
|
$
121,540
|
|
$
75,256
|
Total interest
expense, net of interest income
|
17,868
|
|
15,241
|
Provision for
taxes
|
37,183
|
|
20,761
|
Total
depreciation, depletion and amortization expenses
|
45,019
|
|
36,418
|
EBITDA
|
221,610
|
|
147,676
|
Non-cash
deductions, losses and charges (1)
|
198
|
|
464
|
Loss on early
extinguishment of debt (2)
|
-
|
|
480
|
Non-cash
incentive compensation (3)
|
7,487
|
|
3,039
|
Post-employment expenses (excluding service costs) (4)
|
1,730
|
|
2,071
|
Business
development related expenses(5)
|
11,450
|
|
1,430
|
Other
adjustments allowable under our existing credit agreements
(6)
|
3,738
|
|
5,531
|
Adjusted
EBITDA
|
$
246,213
|
|
$
160,691
|
|
|
|
|
(1) Includes non-cash
deductions, losses and charges arising from adjustments to
estimates of a future litigation liability and the decision by our
hourly workforce at our Rockwood facility to withdraw from a
pension plan administered by a third party.
(2) Includes write-offs of
debt issuance costs, legal fees and a prepayment penalty related to
the early extinguishment of debt.
(3)
Includes vesting of incentive equity compensation issued to our
employees.
(4)
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.
(5)
Expenses related to business development activities related to our
growth and expansion initiatives.
(6)
Reflects miscellaneous adjustments permitted under our existing
credit agreement, including such items as purchase accounting
adjustments, one-time litigation fees, expenses related to debt
refinancing, offerings of our common stock by our former
controlling shareholder, employment agency fees.
|
Investor Contact:
Mike Lawson
Director 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-fourth-quarter-and-full-year-2014-results-300040668.html
SOURCE U.S. Silica