KATY, Texas, July 30, 2019
/PRNewswire/ -- U.S. Silica Holdings, Inc. (NYSE: SLCA), a
diversified industrial minerals company and the leading last mile
logistics provider to the oil and gas industry (the "Company"),
today announced net income of $6.2
million, or $0.08 per basic
and diluted share.
The second quarter results were negatively impacted by
$6.1 million or $0.06 per share related to merger and acquisition
expenses, $4.7 million or
$0.05 per share in facility closure
costs, $3.7 million or $0.04 per share in costs related to plant startup
and expansion expenses, and $5.5
million or $0.06 per share in
other adjustments, partly offset by $14.1
million or $0.15 per share in
a gain related to a royalty note payable valuation change,
resulting in adjusted EPS for the second quarter of $0.14 per basic and diluted share.
"Our Industrial and Specialty Products business delivered record
contribution margin in the second quarter and Sandbox had all-time
record delivered loads,'' said Bryan
Shinn, president and chief executive officer. "These
successes are a result of the significant growth and
diversification strategy we have executed over the last three
years. Going forward, we expect U.S. Silica to transition
from a net cash consumer to a net cash generator. While we
intend to continue investing in modest industrial growth projects
and Sandbox technology and growth, we are modeling substantially
lower overall capex, minimal investments in oil and gas sand and
stable dividend payments. We plan to deploy some of our
projected cash flow to reduce our gross debt to Adjusted EBITDA
leverage ratio to 3 times by the end of 2021, through a combination
of debt reduction and profitable growth,'' he added.
Second Quarter 2019 Highlights
Total Company
- Revenue of $394.9 million for the
second quarter of 2019 compared with $378.8
million in the first quarter of 2019, up 4% sequentially and
down 8% over the second quarter of 2018.
- Overall tons sold of 4.904 million for the second quarter of
2019 compared with 4.830 million tons sold in the first quarter of
2019, up 2% sequentially and 9% over the second quarter of
2018.
- Contribution margin of $121.6
million for the second quarter of 2019 compared with
$103.1 million in the first quarter
of 2019, up 18% sequentially and down 22% over the second quarter
of 2018.
- Net income of $6.2 million, or
$0.08 per basic and diluted share,
for the second quarter ended June 30,
2019, compared with net income of $17.6 million, or $0.23 per basic and $0.22 per diluted share, for the second quarter
of 2018.
- Adjusted EBITDA of $85.5 million
for the second quarter of 2019 compared with $68.8 million in the first quarter of 2019, up
24% sequentially and down 31% from the second quarter of 2018.
Industrial and Specialty Products
- Revenue of $121.8 million for the
second quarter of 2019 compared with $118.3
million in the first quarter of 2019, up 3% sequentially and
18% over the second quarter of 2018.
- Tons sold totaled 0.972 million for the second quarter of 2019
compared with 0.966 million tons sold in the first quarter of 2019,
up 1% sequentially and down 5% over the second quarter of
2018.
- Segment contribution margin of $50.1
million, or $51.61 per ton,
for the second quarter of 2019 compared with $44.6 million in the first quarter of 2019, up
13% sequentially and 21% over the second quarter of 2018.
The Company's Industrial and Specialty Products business
delivered a 21% year-over-year improvement in contribution margin
dollars in the second quarter to a record $50.1 million, even though total tons sold
declined 5% from 2Q18 to 2Q19. We believe this clearly illustrates
the effectiveness of our strategy of increasing our focus on higher
margin products. The Company also signed new, long-term
contracts in the quarter and began production at our new
Millen, Georgia facility, which
will enable us to accelerate sales of two of our higher margin
products to customers.
Oil & Gas
- Revenue of $273.1 million for the
second quarter of 2019 compared with $260.5
million in the first quarter of 2019, up 5% sequentially and
down 16% over the second quarter of 2018.
- Tons sold of 3.932 million for the second quarter of 2019
compared with 3.864 million tons sold in the first quarter of 2019,
up 2% sequentially and 13% over the second quarter of 2018.
- Segment contribution margin of $71.5
million, or $18.17 per ton,
for the second quarter of 2019 compared with $58.6 million in the first quarter of 2019, up
22% sequentially and down 38% from the second quarter of 2018.
In our Oil & Gas segment, we sold a record 3.9 million tons,
up 2% sequentially, as we continued to ramp our new West Texas capacity. Volumes in Oil & Gas
were negatively affected in the quarter due to flooding in the
Midwest, which took our Festus,
Missouri plant offline for nearly two months. Oil & Gas
contribution margin of $71.5 million
was better than expected, despite some pricing pressure in
West Texas, partly due to a strong
performance from SandBox, a rebound in Northern White sand pricing
and reduced operating costs, some of which may not repeat in the
third quarter. SandBox posted another record load count, with loads
up 14% quarter over quarter, and June exit load volumes hitting an
all-time high. We continue to grow share and estimate that we ended
the quarter with approximately 27% market share.
Capital Update
As of June 30, 2019, the Company had $189.4 million in cash and cash equivalents and
$95.2 million available under its
credit facilities. Total debt outstanding under our credit
facilities as of June 30, 2019 was $1.264 billion.
Capital expenditures in the second quarter totaled $34.1 million and were mainly for engineering,
procurement and construction of our growth projects, primarily at
the Lamesa, Texas mine, equipment
to expand Sandbox operations, several growth projects in our
Industrial and Specialty Products segment and other
maintenance and cost improvement capital projects. During the
second quarter, the company generated $71.6
million in cash flow from operations.
Outlook and Guidance
The Company expects its capital expenditures for 2019 to be
approximately $125 million. As
the Company continues to generate healthy cash flow from operations
and following a significant growth initiative that was successfully
executed over the last two years, the Company has decided to focus
on reducing the level of its outstanding indebtedness. While
investments will be made on an ongoing basis to increase the scale
of the Company's Industrial and Specialty Products business, the
Company anticipates that some of its free cash flow after capital
expenditures and the regular payment of dividends will be used to
strengthen the Company's balance sheet.
Despite a slowdown in U.S. economic growth, the Company hasn't
observed any material changes to customer demand. Indeed,
there is continued strong demand for ground silica products, and
the Company continues to expand its capacity in both ground silica
products and functional coatings. The Company has appointed
new management for EP Minerals and plans to drive organic growth
above historical rates through the introduction of new products and
entry into new market segments. In particular, the Company is
currently pursuing several potential growth platforms in areas like
high purity filtration for uses in the pharmaceutical industry and
the rubber and polymers industries.
SandBox, our industry-leading last-mile logistics solution,
continues to make efficiency gains that drive more savings with
customers, which we also believe will offset margin pressure. These
include bigger boxes, minimal nonproductive time, and technological
improvements to boost operational efficiency and labor cost
effectiveness. The Company is actively exploring new applications
for SandBox technology in other new oilfield segments and new
industries.
For Oil & Gas proppants, volumes are expected to increase by
approximately 10% sequentially in the third quarter of 2019,
although some softening is to be expected in the fourth quarter of
2019 as exploration and production company budgets are stretched
and activity levels decline. There has been further pricing
weakness in the Permian basin, although some of that pressure may
be offset by the rebound in Northern White sand pricing. At the
same time, the Company's costs per ton continued to decrease,
particularly in West Texas. U.S.
Silica is at the very low end of the cost curve and will continue
to differentiate its frac sand business as the Company becomes more
deeply embedded in the value chain of its largest customers, by
supplying value-added logistics services that complement the
Company's frac sand supply business.
Conference Call
U.S. Silica will host a conference call for investors
today, July 30, 2019 at 7:30 a.m. Central
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 or for international
callers, (201) 612-7415. The conference ID for the replay is
13689413. The replay will be available through August 30, 2019.
About U.S. Silica
U.S. Silica Holdings, Inc. is a global performance
materials company and last-mile logistics provider and is a member
of the Russell 2000 Index. The Company is a leading producer of
commercial silica used in a wide range of industrial applications
and in the oil and gas industry. Over its 119-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 1,500 diversified
products to customers across its multiple end markets. U.S.
Silica's wholly-owned subsidiaries include EP Minerals and
SandBox Logistics, LLC. EP Minerals is an industry leader in the
production of products derived from diatomaceous earth, perlite,
engineered clays, and non-activated clays. SandBox Logistics,
LLC is a state-of-the-art leader in proppant storage, handling
and well-site delivery, dedicated to making proppant logistics
cleaner, safer and more efficient. The Company currently operates
27 mines and production facilities. The Company is headquartered
in Katy, Texas and has offices in Frederick,
Maryland, Reno,
Nevada and Chicago, Illinois.
Forward-looking Statements
The presentation referred to above contains "forward-looking
statements" within the meaning of the federal securities laws -
that is, statements about the future, not about past events.
Forward-looking statements give our current expectations and
projections relating to our financial condition, results of
operations, plans, objectives, future performance and business.
These statements may include words such as "anticipate,"
"estimate," "expect," "project," "plan," "intend," "believe,"
"may," "will," "should," "could," "can have," "likely" and other
words and terms of similar meaning. 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 global economic conditions; fluctuations in
demand for commercial silica, diatomaceous earth, perlite, clay and
cellulose; fluctuations in demand for frac sand or the development
of either effective alternative proppants or new processes to
replace hydraulic fracturing; changes in production spending by
companies in the oil and gas industry and changes in the level of
oil and natural gas exploration and development; general economic,
political and business conditions in key regions of the world;
pricing pressure; weather and seasonal factors; the cyclical nature
of our customers' business; our inability to meet our financial and
performance targets and other forecasts or expectations; our
substantial indebtedness and pension obligations, including
restrictions on our operations imposed by our indebtedness;
operational modifications, delays or cancellations; prices for
electricity, natural gas and diesel fuel; our ability to maintain
our transportation network; changes in government regulations and
regulatory requirements, including those related to mining,
explosives, chemicals, and oil and gas production; silica-related
health issues and corresponding litigation; and other risks and
uncertainties detailed in this press release and our most recent
Forms 10-K, 10-Q, and 8-K filed with or furnished to the U.S.
Securities and Exchange Commission.
If one or more of these or other risks or uncertainties materialize
(or the consequences of such a development changes), or should
underlying assumptions prove incorrect, actual outcomes may vary
materially from those reflected in our forward-looking statements.
The forward-looking statements speak only as of the date of the
presentation referred to above, and we disclaim any intention or
obligation to update publicly or revise such statements, whether as
a result of new information, future events or otherwise.
U.S. SILICA
HOLDINGS, INC.
|
SELECTED FINANCIAL
DATA FROM CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(Unaudited;
dollars in thousands, except per share amounts)
|
|
|
Three Months
Ended
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
Total
sales
|
$
|
394,854
|
|
|
$
|
378,750
|
|
|
$
|
427,433
|
|
Total cost of sales
(excluding depreciation, depletion and
amortization)
|
294,160
|
|
|
297,538
|
|
|
292,845
|
|
Operating
expenses:
|
|
|
|
|
|
Selling, general and
administrative
|
38,659
|
|
|
34,656
|
|
|
42,232
|
|
Depreciation,
depletion and amortization
|
44,899
|
|
|
44,600
|
|
|
36,563
|
|
Asset
impairment
|
—
|
|
|
—
|
|
|
16,184
|
|
Total operating
expenses
|
83,558
|
|
|
79,256
|
|
|
94,979
|
|
Operating
income
|
17,136
|
|
|
1,956
|
|
|
39,609
|
|
Other (expense)
income:
|
|
|
|
|
|
Interest
expense
|
(23,765)
|
|
|
(23,978)
|
|
|
(20,214)
|
|
Other income, net,
including interest income
|
15,074
|
|
|
722
|
|
|
1,081
|
|
Total other
expense
|
(8,691)
|
|
|
(23,256)
|
|
|
(19,133)
|
|
Income (loss) before
income taxes
|
8,445
|
|
|
(21,300)
|
|
|
20,476
|
|
Income tax (expense)
benefit
|
(2,384)
|
|
|
1,972
|
|
|
(2,832)
|
|
Net income
(loss)
|
$
|
6,061
|
|
|
$
|
(19,328)
|
|
|
$
|
17,644
|
|
Less: Net loss
attributable to non-controlling interest
|
(89)
|
|
|
(4)
|
|
|
—
|
|
Net income (loss)
attributable to U.S. Silica
Holdings, Inc.
|
$
|
6,150
|
|
|
$
|
(19,324)
|
|
|
$
|
17,644
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to U.S. Silica Holdings, Inc.:
|
|
|
|
|
|
Basic
|
$
|
0.08
|
|
|
$
|
(0.26)
|
|
|
$
|
0.23
|
|
Diluted
|
$
|
0.08
|
|
|
$
|
(0.26)
|
|
|
$
|
0.22
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
Basic
|
73,301
|
|
|
73,040
|
|
|
77,784
|
|
Diluted
|
73,505
|
|
|
73,040
|
|
|
78,480
|
|
Dividends declared
per share
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
U.S. SILICA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited;
dollars in thousands)
|
|
|
June 30,
2019
|
|
December 31,
2018
|
|
|
|
|
ASSETS
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
189,388
|
|
|
$
|
202,498
|
|
Accounts receivable,
net
|
237,393
|
|
|
215,486
|
|
Inventories,
net
|
148,397
|
|
|
162,087
|
|
Prepaid expenses and
other current assets
|
12,876
|
|
|
17,966
|
|
Income tax
deposits
|
2,010
|
|
|
2,200
|
|
Total current
assets
|
590,064
|
|
|
600,237
|
|
Property, plant and
mine development, net
|
1,803,203
|
|
|
1,826,303
|
|
Operating lease
right-of-use assets
|
196,660
|
|
|
—
|
|
Goodwill
|
273,524
|
|
|
261,340
|
|
Intangible assets,
net
|
189,207
|
|
|
194,626
|
|
Other
assets
|
12,856
|
|
|
18,334
|
|
Total
assets
|
$
|
3,065,514
|
|
|
$
|
2,900,840
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
231,260
|
|
|
$
|
216,400
|
|
Current portion of
operating lease liabilities
|
59,479
|
|
|
—
|
|
Current portion of
long-term debt
|
13,093
|
|
|
13,327
|
|
Current portion of
deferred revenue
|
26,161
|
|
|
31,612
|
|
Total current
liabilities
|
329,993
|
|
|
261,339
|
|
Long-term debt,
net
|
1,229,820
|
|
|
1,246,428
|
|
Deferred
revenue
|
81,904
|
|
|
81,707
|
|
Liability for pension
and other post-retirement benefits
|
60,830
|
|
|
57,194
|
|
Deferred income
taxes, net
|
130,942
|
|
|
137,239
|
|
Operating lease
liabilities
|
139,379
|
|
|
—
|
|
Other long-term
liabilities
|
60,181
|
|
|
64,629
|
|
Total
liabilities
|
2,033,049
|
|
|
1,848,536
|
|
Stockholders'
Equity:
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
Common
stock
|
821
|
|
|
818
|
|
Additional paid-in
capital
|
1,176,057
|
|
|
1,169,383
|
|
Retained
earnings
|
45,224
|
|
|
67,854
|
|
Treasury stock, at
cost
|
(180,775)
|
|
|
(178,215)
|
|
Accumulated other
comprehensive loss
|
(21,382)
|
|
|
(15,020)
|
|
Total U.S. Silica
Holdings, Inc. stockholders' equity
|
1,019,945
|
|
|
1,044,820
|
|
Non-controlling
interest
|
12,520
|
|
|
7,484
|
|
Total stockholders'
equity
|
1,032,465
|
|
|
1,052,304
|
|
Total liabilities and
stockholders' equity
|
$
|
3,065,514
|
|
|
$
|
2,900,840
|
|
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.
|
Three Months
Ended
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
Sales:
|
|
|
|
|
|
Oil & Gas
Proppants
|
$
|
273,064
|
|
|
$
|
260,477
|
|
|
$
|
324,063
|
|
Industrial &
Specialty Products
|
121,790
|
|
|
118,273
|
|
|
103,370
|
|
Total
sales
|
394,854
|
|
|
378,750
|
|
|
427,433
|
|
Segment contribution
margin:
|
|
|
|
|
|
Oil & Gas
Proppants
|
71,456
|
|
|
58,588
|
|
|
114,607
|
|
Industrial &
Specialty Products
|
50,145
|
|
|
44,561
|
|
|
41,301
|
|
Total segment
contribution margin
|
121,601
|
|
|
103,149
|
|
|
155,908
|
|
Operating activities
excluded from segment cost of sales
|
(20,907)
|
|
|
(21,937)
|
|
|
(21,320)
|
|
Selling, general and
administrative
|
(38,659)
|
|
|
(34,656)
|
|
|
(42,232)
|
|
Depreciation,
depletion and amortization
|
(44,899)
|
|
|
(44,600)
|
|
|
(36,563)
|
|
Asset
impairment
|
—
|
|
|
—
|
|
|
(16,184)
|
|
Interest
expense
|
(23,765)
|
|
|
(23,978)
|
|
|
(20,214)
|
|
Other income, net,
including interest income
|
15,074
|
|
|
722
|
|
|
1,081
|
|
Income tax (expense)
benefit
|
(2,384)
|
|
|
1,972
|
|
|
(2,832)
|
|
Net income
(loss)
|
$
|
6,061
|
|
|
$
|
(19,328)
|
|
|
$
|
17,644
|
|
Less: Net loss
attributable to non-controlling interest
|
(89)
|
|
|
(4)
|
|
|
—
|
|
Net income (loss)
attributable to U.S. Silica Holdings, Inc.
|
$
|
6,150
|
|
|
$
|
(19,324)
|
|
|
$
|
17,644
|
|
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 (loss) 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 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:
(All amounts in
thousands)
|
Three Months
Ended
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
Net income (loss)
attributable to U.S. Silica Holdings, Inc.
|
$
|
6,150
|
|
|
$
|
(19,324)
|
|
|
$
|
17,644
|
|
Total interest
expense, net of interest income
|
23,053
|
|
|
22,920
|
|
|
16,490
|
|
Provision for
taxes
|
2,384
|
|
|
(1,972)
|
|
|
2,832
|
|
Total depreciation,
depletion and amortization expenses
|
44,899
|
|
|
44,600
|
|
|
36,563
|
|
EBITDA
|
76,486
|
|
|
46,224
|
|
|
73,529
|
|
Non-cash incentive
compensation (1)
|
2,799
|
|
|
4,045
|
|
|
6,931
|
|
Post-employment
expenses (excluding service costs) (2)
|
323
|
|
|
552
|
|
|
554
|
|
Merger and
acquisition related expenses (3)
|
6,091
|
|
|
4,783
|
|
|
17,624
|
|
Plant capacity
expansion expenses (4)
|
3,740
|
|
|
8,571
|
|
|
10,721
|
|
Contract termination
expenses (5)
|
—
|
|
|
1,000
|
|
|
—
|
|
Asset impairments
(6)
|
—
|
|
|
—
|
|
|
16,184
|
|
Business optimization
projects (7)
|
—
|
|
|
6
|
|
|
—
|
|
Facility closure
costs (8)
|
4,654
|
|
|
2,426
|
|
|
—
|
|
Gain on valuation
change of royalty note payable(9)
|
(14,100)
|
|
|
—
|
|
|
—
|
|
Other adjustments
allowable under the Credit Agreement (10)
|
5,527
|
|
|
1,212
|
|
|
(1,932)
|
|
Adjusted
EBITDA
|
$
|
85,520
|
|
|
$
|
68,819
|
|
|
$
|
123,611
|
|
|
|
|
(1)
|
Reflects
equity-based, non-cash 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. Non-service net periodic benefit costs
are not considered reflective of our operating performance because
these costs do not exclusively originate from employee services
during the applicable period and may experience periodic
fluctuations as a result of changes in non-operating factors,
including changes in discount rates, changes in expected returns on
benefit plan assets, and other demographic actuarial
assumptions.
|
|
|
(3)
|
Merger and
acquisition related expenses include legal fees, consulting fees,
bank fees, severance costs, certain purchase accounting items such
as the amortization of inventory fair value step-up, information
technology integration costs and similar charges. While these costs
are not operational in nature and are not expected to continue for
any singular transaction on an ongoing basis, similar types of
costs, expenses and charges have occurred in prior periods and may
recur in the future as we continue to integrate prior acquisitions
and pursue any future acquisitions.
|
|
|
(4)
|
Plant capacity
expansion expenses include expenses that are not inventoriable or
capitalizable as related to plant expansion projects greater than
$5 million in capital expenditures or plant start up projects.
While these expenses are not operational in nature and are not
expected to continue for any singular project on an ongoing basis,
similar types of expenses have occurred in prior periods and may
recur in the future if we continue to pursue future plant capacity
expansion.
|
|
|
(5)
|
Reflects contract
termination expenses related to strategically exiting a service
contract and losses related to sub-leases. While these expenses are
not operational in nature and are not expected to continue for any
singular event on an ongoing basis, similar types of expenses have
occurred in prior periods and may recur in the future as we
continue to strategically evaluate our contracts.
|
|
|
(6)
|
The second quarter of
2018 reflects a $16.2 million asset impairment related to the
closure of our resin coating facility and associated product
portfolio.
|
|
|
(7)
|
Reflects costs
incurred related to business optimization projects within our
corporate center, which aim to measure and improve the efficiency,
productivity and performance of our organization. While these costs
are not operational in nature and are not expected to continue for
any singular project on an ongoing basis, similar types of expenses
may recur in the future.
|
|
|
(8)
|
Reflects costs
incurred related to idled sand facilities and closed corporate
offices, including severance costs and remaining contracted costs
such as office lease costs, maintenance, and utilities. While these
costs are not operational in nature and are not expected to
continue for any singular event on an ongoing basis, similar types
of expenses may recur in the future.
|
|
|
(9)
|
Gain on valuation
change of royalty note payable due to a change in estimate of
future tonnages and sales related to the sand shipped from our
Tyler, Texas facility. This gain is not operational in nature and
is not expected to continue for any singular event on an ongoing
basis.
|
|
|
(10)
|
Reflects
miscellaneous adjustments permitted under the Credit Agreement. The
second quarter of 2019 includes $4.2 million of loss contingencies
reserve. The first quarter of 2019 includes $2.2 million of loss
contingencies reserve offset by insurance proceeds of $2.2 million.
The second quarter of 2018 includes a $2.7 million credit as a
result of the final settlement of contract termination costs
related to the divestiture of assets in the first quarter of
2018.
|
Investor Contacts
Michael Lawson
Vice President of Investor Relations and Corporate
Communications
301-682-0304
lawsonm@ussilica.com
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SOURCE U.S. Silica Holdings, Inc.