KATY, Texas, Feb. 25, 2022 /PRNewswire/ -- U.S. Silica
Holdings, Inc. (NYSE: SLCA) today announced a net loss of
$19.0 million, or $0.25 per basic and diluted share, for the fourth
quarter ended December 31, 2021. The fourth quarter
results were negatively impacted by $3.5
million pre-tax, or $0.03 per
diluted share after-tax, of charges primarily related to merger and
acquisition related expense and other adjustments, resulting in an
adjusted loss of $0.22 per basic and
diluted share.
These results compared with net income of $4.6 million, or $0.06 per basic and diluted share, for the fourth
quarter of 2020, which were positively impacted by $31.3 million pre-tax, or $0.32 per diluted share after-tax, primarily
related to the recognition of $27.2
million of shortfall fees in our Oil and Gas segment.
Bryan Shinn, Chief Executive
Officer, stated, "Our fourth quarter and full year 2021 results
reflected positive market momentum as we continued to navigate a
global economic recovery. We reported a strong financial quarter
with sequential increases in total volumes, revenues, and Adjusted
EBITDA. Our outperformance in the quarter was due primarily to
robust customer demand in both segments, along with efficiency
improvements and price increases that outpaced
inflation.
"In our Industrial and Specialty Products segment, customer
demand remained stronger than anticipated across most end markets
during the fourth quarter and we experienced record sales for our
high-purity filtration products. Additionally, our numerous price
increases and surcharges in 2021 are helping to offset inflation
and maintain margins and we are continuing to increase prices in
2022 as necessary.
"In our Oil and Gas segment, proppant and logistics demand
improved sequentially, driven by stronger customer activity,
particularly in West Texas. During
the quarter, we also executed a number of contracts at improved
prices as customers have been intent on securing proppant and
delivery services for what is expected to be a very strong first
half of 2022. Given these developments, we are essentially sold out
of sand proppant.
"Overall, 2022 is setting up to be an outstanding year across
the company. We are well positioned for robust growth in our ISP
segment with demand driven by new opportunities in several
fast-growing end-uses, increased new product adoption, expected GDP
expansion for our base business, and margins that are supported by
further price increases. In our Oil and Gas segment, strong
customer demand and constructive commodity prices should support
higher prices and improved margins for sand proppant and SandBox as
well. We are increasing our contract coverage and forecast strong
proppant demand through the first half of the year. Finally, we
expect to generate free cash flow this year and to continue
de-levering our balance sheet."
Full Year 2021 Highlights
Total Company
- Revenue of $1.1 billion increased
30% compared with $845.9 million for
2020.
- Net loss of $33.8 million, or
$0.45 per basic and diluted share for
2021, compared with a net loss of $114.1
million, or $1.55 per basic
and per diluted share for 2020.
- Overall tons sold of 15.837 million for 2021 increased 42%
compared with 11.130 million tons sold in 2020.
- Contribution margin of $328.6
million for 2021 increased 9% compared with $301.2 million for 2020.
- Adjusted EBITDA of $223.5 million
for 2021 increased 10% compared with Adjusted EBITDA of
$203.9 million for 2020.
Fourth Quarter 2021 Highlights
Total Company
- Revenue of $284.9 million for the
fourth quarter of 2021 increased 7% compared with $267.3 million in the third quarter of 2021 and
increased 25% when compared with the fourth quarter of 2020.
- Overall tons sold of 4.181 million for the fourth quarter of
2021 increased 5% compared with 3.989 million tons sold in the
third quarter of 2021 and increased 48% when compared with the
fourth quarter of 2020.
- Contribution margin of $71.6
million for the fourth quarter of 2021 increased 7% compared
with $66.7 million in the third
quarter of 2021 and decreased 20% when compared with the fourth
quarter of 2020.
- Adjusted EBITDA of $42.1 million
for the fourth quarter of 2021 increased 6% compared with
$39.8 million in the third quarter of
2021 and decreased 34% when compared with the fourth quarter of
2020.
Industrial and Specialty Products
- Revenue of $126.3 million for the
fourth quarter of 2021 increased 1% compared with $125.5 million in the third quarter of 2021 and
increased 18% when compared with the fourth quarter of 2020.
- Tons sold totaled 1.085 million for the fourth quarter of 2021
increased 1% compared with 1.077 million tons sold in the third
quarter of 2021 and increased 17% when compared with the fourth
quarter of 2020.
- Segment contribution margin of $41.5
million, or $38.25 per ton,
for the fourth quarter of 2021 increased 1% compared with
$41.0 million in the third quarter of
2021 and increased 8% when compared with the fourth quarter of
2020.
Oil & Gas
- Revenue of $158.6 million for the
fourth quarter of 2021 increased 12% compared with $141.8 million in the third quarter of 2021 and
increased 32% when compared with the fourth quarter of 2020.
- Tons sold of 3.096 million for the fourth quarter of 2021
increased 6% compared with 2.912 million tons sold in the third
quarter of 2021 and increased 63% when compared with the fourth
quarter of 2020.
- Segment contribution margin of $30.1
million, or $9.72 per ton, for
the fourth quarter of 2021 increased 17% compared with $25.7 million in the third quarter of 2021 and
decreased 42% when compared with the fourth quarter of 2020.
Capital Update
As of December 31, 2021, the Company had $239.4 million in cash and cash equivalents, an
increase of 59% when compared with December 31, 2020, and
total debt was $1.211 billion.
Capital expenditures in 2021 totaled $30.3
million and were primarily related to growth projects, and
other facility improvements and maintenance projects. During the
fourth quarter of 2021, the Company generated $12.6 million in cash flow from operations.
Outlook and Guidance
Looking forward to the first quarter and into 2022, the
Company's two business segments remain well positioned for
sustainable, long-term growth in their respective markets. The
Company has a strong portfolio of Industrial and Specialty Products
that serve numerous essential, high-growth and attractive end
markets, supported by a robust pipeline of new products under
development, as well as pricing increases and surcharges.
The oil and gas industry is progressing through what is
anticipated to be a multi-year growth cycle. Strength in commodity
prices, particularly WTI crude oil prices, along with forecasted
increases in customer spending, are supportive of an active well
completions environment in 2022.
The Company is focused on free cash flow and de-levering the
balance sheet and intends on being cash flow positive in 2022,
keeping an estimated $40-60 million
of capital expenditures within operating cash flow.
Conference Call
U.S. Silica will host a conference call for investors
today, February 25, 2022 at 7:30 a.m. Central
Time to discuss these results. Hosting the call will
be Bryan Shinn, 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 "Investors- Events &
Presentations" 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 13726843. The
replay will be available through March 25,
2022.
About U.S. Silica
U.S. Silica Holdings, Inc. is a global performance materials
company and is a member of the Russell 2000. The Company is a
leading producer of commercial silica used in the oil and gas
industry and in a wide range of industrial applications. Over
its 122-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 600 diversified
products to customers across our end markets. U.S. Silica's
wholly-owned subsidiaries include EP Minerals and SandBox
Logistics™. EP Minerals is an industry leader in the
production of products derived from diatomaceous earth, perlite,
engineered clays, and non-activated clays. SandBox Logistics™ 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 24 mines and
production facilities and is headquartered in Katy, Texas.
Forward-looking Statements
This full-year and fourth-quarter 2021 earnings release, as well
as other statements we make, contain "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,
technological innovations, ability to reduce costs or idle plants,
the impacts of COVID-19 on the Company's operations, 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; the
effect of the COVID-19 pandemic on markets the Company serves;
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; the entry of competitors
into our marketplace; 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; changes in oil and gas
inventories; 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 hereof,
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
|
|
December 31,
2021
|
|
September 30,
2021
|
|
December 31,
2020
|
Total
sales
|
$
284,864
|
|
$
267,298
|
|
$
227,277
|
Total cost of sales
(excluding depreciation, depletion and amortization)
|
217,591
|
|
207,448
|
|
141,418
|
Operating
expenses:
|
|
|
|
|
|
Selling, general and
administrative
|
34,939
|
|
30,956
|
|
27,777
|
Depreciation,
depletion and amortization
|
38,637
|
|
39,981
|
|
39,964
|
Goodwill and other
asset impairments
|
153
|
|
11
|
|
2,644
|
Total operating
expenses
|
73,729
|
|
70,948
|
|
70,385
|
Operating (loss)
income
|
(6,456)
|
|
(11,098)
|
|
15,474
|
Other (expense)
income:
|
|
|
|
|
|
Interest
expense
|
(17,732)
|
|
(17,796)
|
|
(16,155)
|
Other income, net,
including interest income
|
1,147
|
|
2,580
|
|
8,758
|
Total other
expense
|
(16,585)
|
|
(15,216)
|
|
(7,397)
|
(Loss) income
before income taxes
|
(23,041)
|
|
(26,314)
|
|
8,077
|
Income tax benefit
(expense)
|
3,927
|
|
6,140
|
|
(3,760)
|
Net (loss)
income
|
$
(19,114)
|
|
$
(20,174)
|
|
$
4,317
|
Less: Net loss
attributable to non-controlling interest
|
(98)
|
|
(179)
|
|
(250)
|
Net (loss) income
attributable to U.S. Silica Holdings, Inc.
|
$
(19,016)
|
|
$
(19,995)
|
|
$
4,567
|
|
|
|
|
|
|
(Loss) earnings per
share attributable to U.S. Silica Holdings, Inc.:
|
|
|
|
|
|
Basic
|
$
(0.25)
|
|
$
(0.27)
|
|
$
0.06
|
Diluted
|
$
(0.25)
|
|
$
(0.27)
|
|
$
0.06
|
Weighted average
shares outstanding:
|
|
|
|
|
|
Basic
|
74,598
|
|
74,523
|
|
73,728
|
Diluted
|
74,598
|
|
74,523
|
|
74,328
|
|
Year
Ended
|
|
December 31,
2021
|
|
December 31,
2020
|
Total
sales
|
$
1,103,879
|
|
$
845,885
|
Total cost of sales
(excluding depreciation, depletion and amortization)
|
794,983
|
|
575,070
|
Operating
expenses:
|
|
|
|
Selling, general and
administrative
|
119,628
|
|
124,171
|
Depreciation,
depletion and amortization
|
161,131
|
|
155,568
|
Goodwill and other
asset impairments
|
202
|
|
110,688
|
Total operating
expenses
|
280,961
|
|
390,427
|
Operating income
(loss)
|
27,935
|
|
(119,612)
|
Other (expense)
income:
|
|
|
|
Interest
expense
|
(71,157)
|
|
(79,885)
|
Other income, net,
including interest income
|
6,146
|
|
24,350
|
Total other
expense
|
(65,011)
|
|
(55,535)
|
Loss before income
taxes
|
(37,076)
|
|
(175,147)
|
Income tax
benefit
|
2,755
|
|
60,025
|
Net loss
|
$
(34,321)
|
|
$
(115,122)
|
Less: Net loss
attributable to non-controlling interest
|
(560)
|
|
(1,028)
|
Net loss attributable
to U.S. Silica Holdings, Inc.
|
$
(33,761)
|
|
$
(114,094)
|
|
|
|
|
Loss per share
attributable to U.S. Silica Holdings, Inc.:
|
|
|
|
Basic
|
$
(0.45)
|
|
$
(1.55)
|
Diluted
|
$
(0.45)
|
|
$
(1.55)
|
Weighted average
shares outstanding:
|
|
|
|
Basic
|
74,350
|
|
73,634
|
Diluted
|
74,350
|
|
73,634
|
Dividends declared
per share
|
$
—
|
|
$
0.02
|
U.S. SILICA
HOLDINGS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited;
dollars in thousands)
|
|
|
December 31,
2021
|
|
December 31,
2020
|
|
|
|
|
ASSETS
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
239,425
|
|
$
150,920
|
Accounts receivable,
net
|
202,759
|
|
206,934
|
Inventories,
net
|
115,713
|
|
104,684
|
Prepaid expenses and
other current assets
|
18,018
|
|
23,147
|
Income tax
deposits
|
—
|
|
628
|
Total current
assets
|
575,915
|
|
486,313
|
Property, plant and
mine development, net
|
1,258,646
|
|
1,368,092
|
Lease right-of-use
assets
|
42,241
|
|
37,469
|
Goodwill
|
185,649
|
|
185,649
|
Intangible assets,
net
|
150,054
|
|
159,582
|
Other
assets
|
7,095
|
|
9,842
|
Total
assets
|
$
2,219,600
|
|
$
2,246,947
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
167,670
|
|
$
121,920
|
Current portion of
operating lease liabilities
|
14,469
|
|
17,388
|
Current portion of
long-term debt
|
18,285
|
|
42,042
|
Current portion of
deferred revenue
|
4,247
|
|
13,545
|
Income tax
payable
|
1,200
|
|
—
|
Total current
liabilities
|
205,871
|
|
194,895
|
Long-term debt,
net
|
1,193,135
|
|
1,197,660
|
Deferred
revenue
|
16,494
|
|
20,147
|
Liability for pension
and other post-retirement benefits
|
32,935
|
|
48,169
|
Deferred income
taxes, net
|
44,774
|
|
49,386
|
Operating lease
liabilities
|
75,130
|
|
76,361
|
Other long-term
obligations
|
37,178
|
|
33,538
|
Total
liabilities
|
1,605,517
|
|
1,620,156
|
Stockholders'
Equity:
|
|
|
|
Preferred
stock
|
—
|
|
—
|
Common
stock
|
845
|
|
827
|
Additional paid-in
capital
|
1,218,575
|
|
1,200,023
|
Retained
deficit
|
(429,260)
|
|
(395,496)
|
Treasury stock, at
cost
|
(186,294)
|
|
(181,615)
|
Accumulated other
comprehensive income (loss)
|
349
|
|
(8,479)
|
Total U.S. Silica
Holdings, Inc. stockholders' equity
|
604,215
|
|
615,260
|
Non-controlling
interest
|
9,868
|
|
11,531
|
Total stockholders'
equity
|
614,083
|
|
626,791
|
Total liabilities and
stockholders' equity
|
$
2,219,600
|
|
$
2,246,947
|
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,
the most directly comparable GAAP financial measure, to segment
contribution margin.
|
Three Months
Ended
|
|
December 31,
2021
|
|
September 30,
2021
|
|
December 31,
2020
|
Sales:
|
|
|
|
|
|
Oil & Gas
Proppants
|
$
158,606
|
|
$
141,848
|
|
$
120,344
|
Industrial &
Specialty Products
|
126,258
|
|
125,450
|
|
106,933
|
Total sales
|
284,864
|
|
267,298
|
|
227,277
|
Segment contribution
margin:
|
|
|
|
|
|
Oil & Gas
Proppants
|
30,114
|
|
25,723
|
|
51,501
|
Industrial &
Specialty Products
|
41,518
|
|
41,003
|
|
38,350
|
Total segment
contribution margin
|
71,632
|
|
66,726
|
|
89,851
|
Operating activities
excluded from segment cost of sales
|
(4,359)
|
|
(6,876)
|
|
(3,992)
|
Selling, general and
administrative
|
(34,939)
|
|
(30,956)
|
|
(27,777)
|
Depreciation,
depletion and amortization
|
(38,637)
|
|
(39,981)
|
|
(39,964)
|
Goodwill and other
asset impairments
|
(153)
|
|
(11)
|
|
(2,644)
|
Interest
expense
|
(17,732)
|
|
(17,796)
|
|
(16,155)
|
Other income, net,
including interest income
|
1,147
|
|
2,580
|
|
8,758
|
Income tax benefit
(expense)
|
3,927
|
|
6,140
|
|
(3,760)
|
Net (loss)
income
|
$
(19,114)
|
|
$
(20,174)
|
|
$
4,317
|
Less: Net loss
attributable to non-controlling interest
|
(98)
|
|
(179)
|
|
(250)
|
Net (loss) income
attributable to U.S. Silica Holdings, Inc.
|
$
(19,016)
|
|
$
(19,995)
|
|
$
4,567
|
|
Year
Ended
|
|
December 31,
2021
|
|
December 31,
2020
|
Sales:
|
|
|
|
Oil & Gas
Proppants
|
$
615,448
|
|
$
414,897
|
Industrial &
Specialty Products
|
488,431
|
|
430,988
|
Total sales
|
1,103,879
|
|
845,885
|
Segment contribution
margin:
|
|
|
|
Oil & Gas
Proppants
|
160,052
|
|
142,041
|
Industrial &
Specialty Products
|
168,499
|
|
159,176
|
Total segment
contribution margin
|
328,551
|
|
301,217
|
Operating activities
excluded from segment cost of sales
|
(19,655)
|
|
(30,402)
|
Selling, general and
administrative
|
(119,628)
|
|
(124,171)
|
Depreciation,
depletion and amortization
|
(161,131)
|
|
(155,568)
|
Goodwill and other
asset impairments
|
(202)
|
|
(110,688)
|
Interest
expense
|
(71,157)
|
|
(79,885)
|
Other income, net,
including interest income
|
6,146
|
|
24,350
|
Income tax
benefit
|
2,755
|
|
60,025
|
Net loss
|
$
(34,321)
|
|
$
(115,122)
|
Less: Net loss
attributable to non-controlling interest
|
(560)
|
|
(1,028)
|
Net loss attributable
to U.S. Silica Holdings, Inc.
|
$
(33,761)
|
|
$
(114,094)
|
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:
(All amounts in
thousands)
|
Three Months
Ended
|
|
December 31,
2021
|
|
September 30,
2021
|
|
December 31,
2020
|
Net (loss) income
attributable to U.S. Silica Holdings, Inc.
|
$
(19,016)
|
|
$
(19,995)
|
|
$
4,567
|
Total interest
expense, net of interest income
|
17,690
|
|
17,778
|
|
15,858
|
Provision for
taxes
|
(3,927)
|
|
(6,140)
|
|
3,760
|
Total depreciation,
depletion and amortization expenses
|
38,637
|
|
39,981
|
|
39,964
|
EBITDA
|
33,384
|
|
31,624
|
|
64,149
|
Non-cash incentive
compensation (1)
|
5,714
|
|
5,450
|
|
3,068
|
Post-employment
expenses (excluding service costs) (2)
|
(506)
|
|
(2,140)
|
|
428
|
Merger and
acquisition related expenses (3)
|
2,154
|
|
504
|
|
143
|
Plant capacity
expansion expenses (4)
|
86
|
|
782
|
|
825
|
Goodwill and other
asset impairments (5)
|
153
|
|
11
|
|
2,644
|
Business optimization
projects (6)
|
28
|
|
33
|
|
28
|
Facility closure
costs (7)
|
137
|
|
218
|
|
1,377
|
Gain on valuation
change of royalty note payable (8)
|
—
|
|
—
|
|
(8,263)
|
Other adjustments
allowable under the Credit Agreement (9)
|
962
|
|
3,279
|
|
(817)
|
Adjusted
EBITDA
|
$
42,112
|
|
$
39,761
|
|
$
63,582
|
(All amounts in
thousands)
|
Year
Ended
|
|
December 31,
2021
|
|
December 31,
2020
|
Net loss attributable
to U.S. Silica Holdings, Inc.
|
$
(33,761)
|
|
$
(114,094)
|
Total interest
expense, net of interest income
|
69,173
|
|
79,148
|
Provision for
taxes
|
(2,755)
|
|
(60,025)
|
Total depreciation,
depletion and amortization expenses
|
161,131
|
|
155,568
|
EBITDA
|
193,788
|
|
60,597
|
Non-cash incentive
compensation (1)
|
19,692
|
|
15,827
|
Post-employment
expenses (excluding service costs) (2)
|
(1,920)
|
|
1,729
|
Merger and
acquisition related expenses (3)
|
2,961
|
|
1,423
|
Plant capacity
expansion expenses (4)
|
928
|
|
6,149
|
Goodwill and other
asset impairments (5)
|
202
|
|
110,688
|
Business optimization
projects (6)
|
105
|
|
67
|
Facility closure
costs (7)
|
1,347
|
|
7,093
|
Gain on valuation
change of royalty note payable (8)
|
—
|
|
(8,263)
|
Other adjustments
allowable under the Credit Agreement (9)
|
6,372
|
|
8,612
|
Adjusted
EBITDA
|
$
223,475
|
|
$
203,922
|
|
|
|
(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.
|
|
|
(5)
|
During 2020, there
was an unprecedented drop in global demand combined with the
breakdown of the Organization of the Petroleum Exporting Countries
and other oil producing nations ("OPEC+") agreement to restrict oil
production that led to one of the largest annual crude oil
inventory builds in history. This led to a sharp reduction in
global crude oil prices. Containment measures and other
economic, travel, and business disruptions caused by COVID-19 also
affected refinery activity and future demand for crude oil, and
consequently, the services and products of our Oil & Gas
Proppants segment. As a result, impairment charges of $11.8
million of long-lived assets, $6.8 million of inventory, $3.4
million of operating lease right-of-use assets, and $86.1 million
of goodwill were recorded in our Oil & Gas Proppants
segment. Additionally, $2.5 million of impairment charges
were recorded for other intangible assets in our Industrial &
Specialty Products segment due to the discontinuance of a minor
product line.
|
|
|
(6)
|
Reflects costs
incurred related to business optimization projects mainly 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.
|
|
|
(7)
|
Reflects costs
incurred mainly related to idled sand facilities and closed
corporate offices, including severance costs and remaining
contracted costs such as office lease costs, and common area
maintenance fees. 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.
|
|
|
(8)
|
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.
|
|
|
(9)
|
Reflects
miscellaneous adjustments permitted under the Credit Agreement. For
2021, included $3.4 million of transload shortfall and exit fees,
$2.1 million related to expenses incurred with severe winter storms
during the first quarter, $0.7 million of costs related to a power
interruption at a plant location, partially offset by $0.1 million
for a measurement period adjustment related to the Arrows Up
bargain purchase. For 2020, includes $1.6 million in transload
shortfalls and exit fees, $4.6 million in inventory adjustments,
$6.0 million in severance costs, and $11.8 million in legal expense
due to the unsuccessful defense of a small number of our patents,
offset by $15.2 million related to the gain attributable to the
bargain purchase of Arrows Up. While these gains and costs are not
operational in nature and are not expected to continue for any
singular event on an ongoing basis, similar types of gains and
expenses have occurred in prior periods and may recur in the
future.
|
Investor Contacts
Patricia Gil
Vice President, Investor Relations
(281) 505-6011
gil@ussilica.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/us-silica-holdings-inc-announces-fourth-quarter-and-full-year-2021-results-301490388.html
SOURCE U.S. Silica Holdings, Inc.