- Fourth quarter revenue of $412.9
million and full year revenue of $1.5
billion
- GAAP and adjusted EPS for the quarter of $0.40 and $0.43 per
diluted share, respectively
- Full year 2022 cash flow from operations of $262.7 million increased 55%
year-over-year
- Oil & Gas proppant volumes increased 2% and SandBox
loads increased 3% sequentially
- Oil & Gas segment contribution margin increased 11%
sequentially
KATY,
Texas, Feb. 24, 2023 /PRNewswire/ -- U.S. Silica
Holdings, Inc. (NYSE: SLCA) today announced net income of
$31.6 million, or $0.40 per diluted share, for the fourth quarter
ended December 31, 2022. The
fourth quarter results were impacted by $2.7
million pre-tax, or $0.03 per
diluted share after-tax, of charges primarily related to merger and
acquisition related expenses and optimization costs, partially
offset by the gain on extinguishment of debt, resulting in adjusted
EPS (a non-GAAP measure) of $0.43 per
diluted share.
These results compared with net income of $32.1 million, or $0.41 per diluted share, for the third quarter of
2022, which were negatively impacted by $2.1
million pre-tax, or $0.02 per
diluted share after-tax, primarily related to merger and
acquisition related expenses and optimization costs, partially
offset by the gain on extinguishment of debt.
Bryan Shinn, Chief Executive
Officer, stated, "Our fourth quarter delivered a strong close to an
exceptional year. During 2022, we successfully executed our
strategic plan and delivered impressive bottom-line results while
strengthening our balance sheet and positioning U.S. Silica for
future success. In 2022, we significantly raised pricing across
both segments to help offset inflation, we increased contract
coverage while expanding margins in our Oil and Gas segment, and
generated $262.7 million of cash flow
from operations. We opportunistically used this cash to retire
$150 million of long-term debt,
effectively reducing our net leverage ratio to 2.2x at year-end.
Financially and operationally, we reported impressive achievements
during the year, as revenues increased 38%, Adjusted EBITDA grew
58%, and overall tons sold increased 14% year-over-year.
"In our Oil and Gas segment, activity was strong through the
holidays, and we did not experience meaningful disruptions from
seasonality or weather. The supply and demand balance remained very
tight in sand proppant and last-mile logistics, and we continued to
be effectively sold-out due to strong well completion demand,
especially in West Texas. During
the quarter, our customers secured incremental sand supply for the
medium term and we signed attractive multi-year contracts that
extend into 2024 and 2025, in addition to successfully realizing
increased pricing on existing customer contracts.
"In our Industrial and Specialty Products segment, our fourth
quarter profitability declined sequentially as we'd expected, due
to normal year-end seasonality. Partially offsetting these seasonal
impacts, were lower natural gas input costs and the previously
announced November 1st
price increases on most of our non-contracted industrial
products.
"In summary, 2023 is setting up to be another strong year of
financial performance and free cash flow generation. Our Oil and
Gas segment is well positioned to continue to generate strong
earnings and cash flow while delivering further sequential growth.
In our Industrial segment, customer demand remains strong overall,
and we anticipate sequential improvements as customer activity
rebounds from the typical fourth quarter seasonality and we realize
a full quarter of price increases."
Full Year 2022 Highlights
Total Company
- Revenue of $1.5 billion increased
38% compared with $1.1 billion for
2021.
- Net income of $78.2 million, or
$1.01 per diluted share for 2022,
compared with a net loss of $33.8
million, or $(0.45) per
diluted share for 2021.
- Overall tons sold of 18.016 million for 2022 increased 14%
compared with 15.837 million tons sold in 2021.
- Contribution margin of $472.1
million for 2022 increased 44% compared with $328.6 million for 2021.
- Adjusted EBITDA of $353.6 million
for 2022 increased 58% compared with Adjusted EBITDA of
$223.5 million for 2021.
Fourth Quarter 2022 Highlights
Total Company
- Revenue of $412.9 million for the
fourth quarter of 2022 decreased 1% compared with $418.8 million in the third quarter of 2022 and
increased 45% when compared with the fourth quarter of 2021.
- Overall tons sold of 4.606 million for the fourth quarter of
2022 were essentially flat compared with 4.624 million tons sold in
the third quarter of 2022 and increased 10% when compared with the
fourth quarter of 2021.
- Contribution margin of $134.4
million for the fourth quarter of 2022 increased 2% compared
with $131.8 million in the third
quarter of 2022 and increased 88% when compared with the fourth
quarter of 2021.
- Adjusted EBITDA of $104.2 million
for the fourth quarter of 2022 increased 1% compared with
$102.7 million in the third quarter
of 2022 and increased 147% when compared with the fourth quarter of
2021.
Oil & Gas
- Revenue of $273.7 million for the
fourth quarter of 2022 increased 2% compared with $267.5 million in the third quarter of 2022 and
increased 73% when compared with the fourth quarter of 2021.
- Tons sold of 3.568 million for the fourth quarter of 2022
increased 2% compared with 3.498 million tons sold in the third
quarter of 2022 and increased 15% when compared with the fourth
quarter of 2021.
- Segment contribution margin of $94.4
million, or $26.47 per ton,
for the fourth quarter of 2022 increased 11% compared with
$85.3 million in the third quarter of
2022 and increased 214% when compared with the fourth quarter of
2021.
Industrial and Specialty Products
- Revenue of $139.2 million for the
fourth quarter of 2022 decreased 8% compared with $151.4 million in the third quarter of 2022 and
increased 10% when compared with the fourth quarter of 2021.
- Tons sold of 1.038 million for the fourth quarter of 2022
decreased 8% compared with 1.126 million tons sold in the third
quarter of 2022 and decreased 4% when compared with the fourth
quarter of 2021.
- Segment contribution margin of $40.0
million, or $38.54 per ton,
for the fourth quarter of 2022 decreased 14% compared with
$46.5 million in the third quarter of
2022 and decreased 4% when compared with the fourth quarter of
2021.
Capital Update
As of December 31, 2022, the Company had $280.8 million in cash and cash equivalents and
total debt was $1.057 billion. The
Company's $100.0 million Revolver had
zero drawn, with $21.5 million
allocated for letters of credit, and availability of $78.5 million. Capital expenditures in 2022
totaled $53.2 million and were
primarily related to growth projects, facility improvements, and
maintenance projects. During 2022, the Company generated
$262.7 million in cash flow from
operations.
Outlook and Guidance
Looking forward to the first quarter and into 2023, the
Company's two business segments remain well positioned 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. The Company also
expects growth in its underlying base business, coupled with
pricing increases and surcharges to continue to fight inflationary
impacts.
The oil and gas industry is progressing through a multi-year
growth cycle. Constructive customer sentiment and strength in WTI
crude oil prices are supportive of an active well completions
environment in 2023.
The Company remains focused on generating free cash flow and
de-levering the balance sheet and intends on being operating cash
flow positive in 2023, keeping an estimated $50-$60 million of
capital expenditures within operating cash flow.
Conference Call
U.S. Silica will host a conference call for investors
today, February 24, 2023 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 13736345. The
replay will be available through March 24,
2023.
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 123-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 has 27 operating mines and
processing facilities and two additional exploration stage
properties across the United
States and is headquartered in Katy, Texas.
Forward-looking Statements
This full-year and fourth-quarter 2022 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,
2022
|
|
September 30,
2022
|
|
December 31,
2021
|
Total sales
|
$
412,934
|
|
$
418,813
|
|
$
284,864
|
Total cost of sales
(excluding depreciation, depletion and amortization)
|
282,904
|
|
291,520
|
|
217,591
|
Operating
expenses:
|
|
|
|
|
|
Selling, general and
administrative
|
34,978
|
|
33,933
|
|
34,939
|
Depreciation,
depletion and amortization
|
33,202
|
|
34,500
|
|
38,637
|
Goodwill and other
asset impairments
|
—
|
|
—
|
|
153
|
Total operating
expenses
|
68,180
|
|
68,433
|
|
73,729
|
Operating income
(loss)
|
61,850
|
|
58,860
|
|
(6,456)
|
Other (expense)
income:
|
|
|
|
|
|
Interest
expense
|
(22,821)
|
|
(20,174)
|
|
(17,732)
|
Other income, net,
including interest income
|
3,437
|
|
3,576
|
|
1,147
|
Total other
expense
|
(19,384)
|
|
(16,598)
|
|
(16,585)
|
Income (loss) before
income taxes
|
42,466
|
|
42,262
|
|
(23,041)
|
Income tax (expense)
benefit
|
(10,950)
|
|
(10,259)
|
|
3,927
|
Net income
(loss)
|
$
31,516
|
|
$
32,003
|
|
$
(19,114)
|
Less: Net loss
attributable to non-controlling interest
|
(74)
|
|
(68)
|
|
(98)
|
Net income (loss)
attributable to U.S. Silica Holdings, Inc.
|
$
31,590
|
|
$
32,071
|
|
$
(19,016)
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to U.S. Silica Holdings, Inc.:
|
|
|
|
|
|
Basic
|
$
0.42
|
|
$
0.42
|
|
$
(0.25)
|
Diluted
|
$
0.40
|
|
$
0.41
|
|
$
(0.25)
|
Weighted average shares
outstanding:
|
|
|
|
|
|
Basic
|
75,711
|
|
75,587
|
|
74,598
|
Diluted
|
78,026
|
|
77,770
|
|
74,598
|
|
Year
Ended
|
|
December 31,
2022
|
|
December 31,
2021
|
Total sales
|
$
1,525,147
|
|
$
1,103,879
|
Total cost of sales
(excluding depreciation, depletion and amortization)
|
1,070,189
|
|
794,983
|
Operating
expenses:
|
|
|
|
Selling, general and
administrative
|
143,838
|
|
119,628
|
Depreciation,
depletion and amortization
|
140,166
|
|
161,131
|
Goodwill and other
asset impairments
|
—
|
|
202
|
Total operating
expenses
|
284,004
|
|
280,961
|
Operating
income
|
170,954
|
|
27,935
|
Other (expense)
income:
|
|
|
|
Interest
expense
|
(77,598)
|
|
(71,157)
|
Other income, net,
including interest income
|
10,643
|
|
6,146
|
Total other
expense
|
(66,955)
|
|
(65,011)
|
Income (loss) before
income taxes
|
103,999
|
|
(37,076)
|
Income tax (expense)
benefit
|
(26,159)
|
|
2,755
|
Net income
(loss)
|
$
77,840
|
|
$
(34,321)
|
Less: Net loss
attributable to non-controlling interest
|
(336)
|
|
(560)
|
Net income (loss)
attributable to U.S. Silica Holdings, Inc.
|
$
78,176
|
|
$
(33,761)
|
|
|
|
|
Earnings (loss) per
share attributable to U.S. Silica Holdings, Inc.:
|
|
|
|
Basic
|
$
1.04
|
|
$
(0.45)
|
Diluted
|
$
1.01
|
|
$
(0.45)
|
Weighted average shares
outstanding:
|
|
|
|
Basic
|
75,512
|
|
74,350
|
Diluted
|
77,670
|
|
74,350
|
Dividends declared per
share
|
$
—
|
|
$
—
|
U.S. SILICA
HOLDINGS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited; dollars
in thousands)
|
|
December 31,
2022
|
|
December 31,
2021
|
|
|
|
|
ASSETS
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
280,845
|
|
$
239,425
|
Accounts receivable,
net
|
208,631
|
|
202,759
|
Inventories,
net
|
147,626
|
|
115,713
|
Prepaid expenses and
other current assets
|
20,182
|
|
18,018
|
Total current
assets
|
657,284
|
|
575,915
|
Property, plant and
mine development, net
|
1,178,834
|
|
1,258,646
|
Lease right-of-use
assets
|
42,374
|
|
42,241
|
Goodwill
|
185,649
|
|
185,649
|
Intangible assets,
net
|
140,809
|
|
150,054
|
Other assets
|
9,630
|
|
7,095
|
Total
assets
|
$
2,214,580
|
|
$
2,219,600
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
216,239
|
|
$
167,670
|
Current portion of
operating lease liabilities
|
19,773
|
|
14,469
|
Current portion of
long-term debt
|
19,535
|
|
18,285
|
Current portion of
deferred revenue
|
16,275
|
|
4,247
|
Income tax
payable
|
128
|
|
1,200
|
Total current
liabilities
|
271,950
|
|
205,871
|
Long-term debt,
net
|
1,037,458
|
|
1,193,135
|
Deferred
revenue
|
14,477
|
|
16,494
|
Liability for pension
and other post-retirement benefits
|
30,911
|
|
32,935
|
Deferred income taxes,
net
|
64,636
|
|
44,774
|
Operating lease
liabilities
|
64,478
|
|
75,130
|
Other long-term
obligations
|
25,976
|
|
37,178
|
Total
liabilities
|
1,509,886
|
|
1,605,517
|
Stockholders'
Equity:
|
|
|
|
Preferred
stock
|
—
|
|
—
|
Common stock
|
854
|
|
845
|
Additional paid-in
capital
|
1,234,834
|
|
1,218,575
|
Retained
deficit
|
(351,084)
|
|
(429,260)
|
Treasury stock, at
cost
|
(186,196)
|
|
(186,294)
|
Accumulated other
comprehensive (loss) income
|
(1,723)
|
|
349
|
Total U.S. Silica
Holdings, Inc. stockholders' equity
|
696,685
|
|
604,215
|
Non-controlling
interest
|
8,009
|
|
9,868
|
Total stockholders'
equity
|
704,694
|
|
614,083
|
Total liabilities and
stockholders' equity
|
$
2,214,580
|
|
$
2,219,600
|
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,
2022
|
|
September 30,
2022
|
|
December 31,
2021
|
Sales:
|
|
|
|
|
|
Oil & Gas
Proppants
|
$
273,717
|
|
$
267,461
|
|
$
158,606
|
Industrial &
Specialty Products
|
139,217
|
|
151,352
|
|
126,258
|
Total sales
|
412,934
|
|
418,813
|
|
284,864
|
Segment contribution
margin:
|
|
|
|
|
|
Oil & Gas
Proppants
|
94,437
|
|
85,295
|
|
30,114
|
Industrial &
Specialty Products
|
40,004
|
|
46,526
|
|
41,518
|
Total segment
contribution margin
|
134,441
|
|
131,821
|
|
71,632
|
Operating activities
excluded from segment cost of sales
|
(4,411)
|
|
(4,528)
|
|
(4,359)
|
Selling, general and
administrative
|
(34,978)
|
|
(33,933)
|
|
(34,939)
|
Depreciation, depletion
and amortization
|
(33,202)
|
|
(34,500)
|
|
(38,637)
|
Goodwill and other
asset impairments
|
—
|
|
—
|
|
(153)
|
Interest
expense
|
(22,821)
|
|
(20,174)
|
|
(17,732)
|
Other income, net,
including interest income
|
3,437
|
|
3,576
|
|
1,147
|
Income tax (expense)
benefit
|
(10,950)
|
|
(10,259)
|
|
3,927
|
Net income
(loss)
|
$
31,516
|
|
$
32,003
|
|
$
(19,114)
|
Less: Net loss
attributable to non-controlling interest
|
(74)
|
|
(68)
|
|
(98)
|
Net income (loss)
attributable to U.S. Silica Holdings, Inc.
|
$
31,590
|
|
$
32,071
|
|
$
(19,016)
|
|
Year
Ended
|
|
December 31,
2022
|
|
December 31,
2021
|
Sales:
|
|
|
|
Oil & Gas
Proppants
|
$
961,667
|
|
$
615,448
|
Industrial &
Specialty Products
|
563,480
|
|
488,431
|
Total sales
|
1,525,147
|
|
1,103,879
|
Segment contribution
margin:
|
|
|
|
Oil & Gas
Proppants
|
301,837
|
|
160,052
|
Industrial &
Specialty Products
|
170,280
|
|
168,499
|
Total segment
contribution margin
|
472,117
|
|
328,551
|
Operating activities
excluded from segment cost of sales
|
(17,159)
|
|
(19,655)
|
Selling, general and
administrative
|
(143,838)
|
|
(119,628)
|
Depreciation, depletion
and amortization
|
(140,166)
|
|
(161,131)
|
Goodwill and other
asset impairments
|
—
|
|
(202)
|
Interest
expense
|
(77,598)
|
|
(71,157)
|
Other income, net,
including interest income
|
10,643
|
|
6,146
|
Income tax (expense)
benefit
|
(26,159)
|
|
2,755
|
Net income
(loss)
|
$
77,840
|
|
$
(34,321)
|
Less: Net loss
attributable to non-controlling interest
|
(336)
|
|
(560)
|
Net income (loss)
attributable to U.S. Silica Holdings, Inc.
|
$
78,176
|
|
$
(33,761)
|
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,
2022
|
|
September 30,
2022
|
|
December 31,
2021
|
Net income (loss)
attributable to U.S. Silica Holdings, Inc.
|
$
31,590
|
|
$
32,071
|
|
$
(19,016)
|
Total interest expense,
net of interest income
|
21,511
|
|
19,495
|
|
17,690
|
Provision for
taxes
|
10,950
|
|
10,259
|
|
(3,927)
|
Total depreciation,
depletion and amortization expenses
|
33,202
|
|
34,500
|
|
38,637
|
EBITDA
|
97,253
|
|
96,325
|
|
33,384
|
Non-cash incentive
compensation (1)
|
4,875
|
|
4,826
|
|
5,714
|
Post-employment
expenses (excluding service costs) (2)
|
(674)
|
|
(535)
|
|
(506)
|
Merger and acquisition
related expenses (3)
|
1,495
|
|
1,532
|
|
2,154
|
Plant capacity
expansion expenses (4)
|
86
|
|
32
|
|
86
|
Contract termination
expenses (5)
|
—
|
|
—
|
|
—
|
Goodwill and other
asset impairments (6)
|
—
|
|
—
|
|
153
|
Business optimization
projects (7)
|
648
|
|
550
|
|
28
|
Facility closure costs
(8)
|
137
|
|
270
|
|
1,377
|
Gain on valuation
change of royalty note payable (9)
|
—
|
|
—
|
|
(8,263)
|
Other adjustments
allowable under the Credit Agreement (10)
|
170
|
|
(286)
|
|
962
|
Adjusted
EBITDA
|
$
104,156
|
|
$
102,714
|
|
$
42,112
|
(All amounts in
thousands)
|
Year
Ended
|
|
December 31,
2022
|
|
December 31,
2021
|
Net income (loss)
attributable to U.S. Silica Holdings, Inc.
|
$
78,176
|
|
$
(33,761)
|
Total interest expense,
net of interest income
|
75,437
|
|
69,173
|
Provision for
taxes
|
26,159
|
|
(2,755)
|
Total depreciation,
depletion and amortization expenses
|
140,166
|
|
161,131
|
EBITDA
|
319,938
|
|
193,788
|
Non-cash incentive
compensation (1)
|
19,653
|
|
19,692
|
Post-employment
expenses (excluding service costs) (2)
|
(2,654)
|
|
(1,920)
|
Merger and acquisition
related expenses (3)
|
6,984
|
|
2,961
|
Plant capacity
expansion expenses (4)
|
213
|
|
928
|
Contract termination
expenses (5)
|
6,500
|
|
—
|
Goodwill and other
asset impairments (6)
|
—
|
|
202
|
Business optimization
projects (7)
|
1,209
|
|
105
|
Facility closure costs
(8)
|
1,503
|
|
1,347
|
Gain on valuation
change of royalty note payable (9)
|
—
|
|
—
|
Other adjustments
allowable under the Credit Agreement (10)
|
212
|
|
6,372
|
Adjusted
EBITDA
|
$
353,558
|
|
$
223,475
|
|
|
|
(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, professional fees, bank fees,
severance costs, and other employee related costs. 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)
|
Reflects contract
termination expenses related to strategically exiting a service
contract. 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)
|
No impairment charges
were recorded for the year ended December 31, 2022. Impairment
charges of $202 thousand were recorded for the year ended December
31, 2021.
|
|
|
(7)
|
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.
|
|
|
(8)
|
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.
|
|
|
(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 year ended
December 31, 2022 also included costs related to weather events and
supplier and logistical issues of $1.1 million, severance
restructuring costs of $1.8 million, an adjustment to
non-controlling interest of $0.6 million, partially offset by net
proceeds of the sale of assets of $1.7 million and $2.9 million
related to the gain on extinguishment of debt. The year ended
December 31, 2021 also 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.
|
Investor Contacts
Patricia Gil
Vice President, Investor Relations
(281) 505-6011
gil@ussilica.com
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SOURCE U.S. Silica Holdings, Inc.