FREDERICK, Md., July 29, 2014 /PRNewswire/ -- U.S. Silica
Holdings, Inc. (NYSE: SLCA) today announced net income of
$28.7 million or $0.53 per basic and diluted share for the second
quarter ended June 30, 2014 compared
with net income of $20.2 million or
$0.38 per basic and diluted share for
the second quarter of 2013. Excluding M&A and business
development expenses of $1.7 million
or $0.02 per basic share during the
quarter, EPS was $0.55 per basic
share and diluted share.
Bryan Shinn, president and chief
executive officer commented, "I'm extremely pleased with the
performance of our oil and gas and industrial businesses. The
robust demand we continue to see in oil and gas drove higher
pricing and margins for both of our operating units during the
quarter. We're moving quickly to add more capacity through both
Greenfield developments and M&A to assure adequate supply for
our customers going forward."
Second Quarter 2014 Highlights
Total Company
- Revenue totaled $205.8 million
compared with $129.8 million for the
same period last year and up 14% sequentially over the first
quarter of 2014.
- Overall sales volumes increased to 2.6 million tons, a 27%
improvement over the second quarter of 2013 and up 13% sequentially
over the first quarter of 2014.
- Contribution margin for the quarter was $74.7 million compared with $50.8 million in the same period of the prior
year and up 36% sequentially over the first quarter of 2014.
- Adjusted EBITDA was $59.8 million
versus $ 41.0 million for the same
period last year and representing a 43% increase sequentially over
the first quarter of 2014.
Oil and Gas
- Revenue for the quarter totaled $149.3
million compared with $77.7
million in the same period in 2013.
- Overall tons sold totaled 1.5 million tons compared with 988
thousand tons sold in the second quarter of 2013.
- 68% of tons sold were made in basin via transloads compared
with 42% in the second quarter of 2013.
- Segment contribution margin was $57.1
million versus $35.5 million
in the second quarter of 2013.
Industrial and Specialty Products
- Revenue for the quarter totaled $56.5
million compared with $52.2
million for the same period in 2013.
- Overall tons sold totaled 1.095 million tons compared with
1.060 million tons sold in the same period last year.
- Segment contribution margin was $17.6
million compared with $15.4
million in the second quarter of 2013.
Capital Update
As of June 30, 2014, the Company
had $181.1 million in cash and cash
equivalents and short term investments and $46.7 million available under its credit
facilities. Total long-term debt at June 30,
2014 totaled $366.2 million.
Capital expenditures in the second quarter totaled $7.4 million and were associated largely with the
Company's investment in a new frac sand mine and plant located near
Utica, Illinois, a new transload
facility under construction in Odessa,
Texas and other maintenance capital projects.
Outlook and Guidance
The Company is increasing the guidance it provided in its press
release dated April 29, 2014. For the
full-year 2014, the Company now anticipates Adjusted EBITDA in the
range of $215 million to $225
million, which includes a small contribution from our Cadre
acquisition. The Company is also revising guidance for capital
expenditures and its full-year effective tax rate. The Company now
expects capital expenditures in the range of $95 million to $105 million and an effective tax
rate of approximately 27 percent.
Conference Call
U.S. Silica will host a conference call for investors tomorrow,
July 30, 2014 at 9:00 a.m. Eastern Time to discuss these results.
Hosting the call will be Bryan
Shinn, president and chief executive officer and
Don Merril, vice president and chief
financial officer. Investors are invited to listen to a live
webcast of the conference call by visiting the "Investor Resources"
section of the Company's website at www.ussilica.com. The webcast
will be archived for one year. The call can also be accessed live
over the telephone by dialing (855) 325-2605 or for international
callers, (970) 315-0758. The conference passcode is 71727515. A
replay will be available shortly after the call and can be accessed
by dialing (855) 859-2056. The passcode for the replay is 71727515.
The replay of the call will be available through August 29, 2014.
About U.S. Silica
U.S. Silica Holdings, Inc., a member of the Russell 2000 and
S&P Small Cap 600 indexes, is one of the largest domestic
producers of commercial silica, a specialized mineral that is a
critical input into the oil and gas proppants end market. The
company also processes ground and unground silica sand for a
variety of industrial and specialty products end markets such as
glass, fiberglass, foundry molds, municipal filtration and
recreational uses. During its 100-plus year history, U.S. Silica
Holdings, Inc. has developed core competencies in mining,
processing, logistics and materials science that enable it to
produce and cost-effectively deliver over 250 products to customers
across these end markets. U.S. Silica Holdings, Inc. is
headquartered in Frederick,
MD.
Forward-looking Statements
Certain statements in this press release are "forward-looking
statements" made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and speak only as
of this date. Forward-looking statements made include any statement
that does not directly relate to any historical or current fact and
may include, but are not limited to, statements regarding U.S.
Silica's growth opportunities, strategy, future financial results,
forecasts, projections, plans and capital expenditures, and the
commercial silica industry. Forward-looking statements are based on
our current expectations and assumptions, which may not prove to be
accurate. These statements are not guarantees and are subject to
risks, uncertainties and changes in circumstances that are
difficult to predict. Many factors could cause actual results to
differ materially and adversely from these forward-looking
statements. Among these factors are: (1) fluctuations in demand for
commercial silica; (2) the cyclical nature of our customers'
businesses; (3) operating risks that are beyond our control; (4)
federal, state and local legislative and regulatory initiatives
relating to hydraulic fracturing; (5) our ability to implement our
capacity expansion plans within our current timetable and budget;
(6) loss of, or reduction in, business from our largest customers;
(7) increasing costs or a lack of dependability or availability of
transportation services or infrastructure; (8) our substantial
indebtedness and pension obligations; (9) our ability to attract
and retain key personnel; (10) silica-related health issues and
corresponding litigation; (11) seasonal and severe weather
conditions; and (12) extensive and evolving environmental, mining,
health and safety, licensing, reclamation and other regulation (and
changes in their enforcement or interpretation). Additional
information concerning these and other factors can be found in U.S.
Silica's filings with the Securities and Exchange Commission. We
undertake no obligation to publicly update or revise any
forward-looking statement as a result of new information, future
events or otherwise, except as otherwise required by law.
U.S. SILICA
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
( dollars in
thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
2014
|
|
2013
|
|
|
Sales
|
$
205,801
|
|
$
129,828
|
Cost of goods sold
(excluding depreciation, depletion and amortization)
|
132,417
|
|
80,297
|
Operating
expenses
|
|
|
|
Selling, general and
administrative
|
19,267
|
|
10,099
|
Depreciation,
depletion and amortization
|
10,341
|
|
8,890
|
|
29,608
|
|
18,989
|
Operating
income
|
43,776
|
|
30,542
|
Other (expense)
income
|
|
|
|
Interest
expense
|
(4,013)
|
|
(3,535)
|
Other income, net,
including interest income
|
221
|
|
63
|
|
(3,792)
|
|
(3,472)
|
Income before income
taxes
|
39,984
|
|
27,070
|
Income tax
expense
|
(11,330)
|
|
(6,878)
|
Net income
|
$
28,654
|
|
$
20,192
|
|
|
|
|
Earnings per
share:
|
|
|
|
Basic
|
$
0.53
|
|
$
0.38
|
Diluted
|
$
0.53
|
|
$
0.38
|
|
U.S. SILICA
HOLDINGS, INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2014
|
|
2013
|
|
|
(unaudited)
|
|
(audited)
|
|
ASSETS
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
105,974
|
|
$
78,256
|
|
Short-term
investments
|
75,101
|
|
74,980
|
|
Accounts receivable,
net
|
108,452
|
|
75,207
|
|
Inventories,
net
|
58,650
|
|
64,212
|
|
Prepaid expenses and
other current assets
|
8,936
|
|
6,347
|
|
Deferred income tax,
net
|
18,582
|
|
17,737
|
|
Income tax
deposits
|
5,074
|
|
-
|
|
Total current
assets
|
380,769
|
|
316,739
|
|
Property, plant and
mine development, net
|
441,450
|
|
442,116
|
|
Debt issuance costs,
net
|
4,815
|
|
5,255
|
|
Goodwill
|
68,403
|
|
68,403
|
|
Trade
names
|
10,436
|
|
10,436
|
|
Customer
relationships, net
|
5,915
|
|
6,120
|
|
Other
assets
|
11,073
|
|
14,392
|
|
Total
assets
|
$
922,861
|
|
$
863,461
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
Current
Liabilities:
|
|
|
|
|
Book
overdraft
|
$
3,466
|
|
$
4,659
|
|
Accounts
payable
|
52,826
|
|
37,376
|
|
Dividends
payable
|
6,770
|
|
6,709
|
|
Accrued
liabilities
|
13,020
|
|
10,823
|
|
Accrued
interest
|
41
|
|
41
|
|
Current portion of
long-term debt
|
3,489
|
|
3,488
|
|
Income tax
payable
|
-
|
|
1,037
|
|
Total current
liabilities
|
79,612
|
|
64,133
|
|
Long-term
debt
|
366,218
|
|
367,963
|
|
Liability for pension
and other post-retirement benefits
|
34,431
|
|
36,802
|
|
Deferred income tax,
net
|
74,203
|
|
71,318
|
|
Other long-term
obligations
|
14,913
|
|
13,951
|
|
Total
liabilities
|
569,377
|
|
554,167
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Preferred
stock
|
-
|
|
-
|
|
Common
stock
|
538
|
|
534
|
|
Additional paid-in
capital
|
185,155
|
|
174,799
|
|
Retained
earnings
|
171,540
|
|
137,978
|
|
Treasury stock, at
cost
|
-
|
|
-
|
|
Accumulated other
comprehensive loss
|
(3,749)
|
|
(4,017)
|
|
Total stockholders'
equity
|
353,484
|
|
309,294
|
|
Total liabilities and
stockholders' equity
|
$
922,861
|
|
$
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 June 30,
|
|
2014
|
|
2013
|
|
(in
thousands)
|
Sales:
|
|
|
|
Oil & Gas
Proppants
|
$
149,331
|
|
$
77,672
|
Industrial &
Specialty Products
|
56,470
|
|
52,156
|
Total
sales
|
205,801
|
|
129,828
|
Segment contribution
margin:
|
|
|
|
Oil & Gas
Proppants
|
57,060
|
|
35,475
|
Industrial &
Specialty Products
|
17,615
|
|
15,358
|
Total segment
contribution margin
|
74,675
|
|
50,833
|
Operating activities
excluded from segment cost of goods sold
|
(1,291)
|
|
(1,302)
|
Selling, general and
administrative
|
(19,267)
|
|
(10,099)
|
Depreciation,
depletion and amortization
|
(10,341)
|
|
(8,890)
|
Interest
expense
|
(4,013)
|
|
(3,535)
|
Other income, net,
including interest income
|
221
|
|
63
|
Income (loss) before
income taxes
|
$
39,984
|
|
$
27,070
|
Adjusted EBITDA
Adjusted EBITDA is not a measure of our financial performance or
liquidity under GAAP and should not be considered as an alternative
to net income as a measure of operating performance, cash flows
from operating activities as a measure of liquidity or any other
performance measure derived in accordance with GAAP. Additionally,
it is not intended to be a measure of free cash flow for
management's discretionary use, as it does not consider certain
cash requirements such as interest payments, tax payments and debt
service requirements. Adjusted EBITDA contains certain other
limitations, including the failure to reflect our cash
expenditures, cash requirements for working capital needs and cash
costs to replace assets being depreciated and amortized, and
excludes certain non-recurring charges that may recur in the
future. Management compensates for these limitations by relying
primarily on our GAAP results and by using Adjusted EBITDA only
supplementally. Our measure of Adjusted EBITDA is not necessarily
comparable to other similarly titled captions of other companies
due to potential inconsistencies in the methods of calculation.
The following table sets forth a reconciliation of net income,
the most directly comparable GAAP financial measure, to Adjusted
EBITDA.
|
Three Months Ended
June 30,
|
|
2014
|
|
2013
|
|
(in
thousands)
|
Net income
|
$
28,654
|
|
$
20,192
|
Total interest
expense, net of interest income
|
3,811
|
|
3,522
|
Provision for
taxes
|
11,330
|
|
6,878
|
Total depreciation,
depletion and amortization expenses
|
10,341
|
|
8,890
|
EBITDA
|
54,136
|
|
39,482
|
Non-cash incentive
compensation(1)
|
2,053
|
|
704
|
Post-employment
expenses (excluding service costs)(2)
|
381
|
|
586
|
Other adjustments
allowable under our existing credit
agreement(3)
|
3,215
|
|
213
|
Adjusted
EBITDA
|
$
59,785
|
|
$
40,985
|
|
|
|
|
|
|
|
|
(1) Includes vesting
of incentive equity compensation issued to our
employees.
|
|
|
(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. See Note M- Pension and
Post-retirement Benefits to our Financial Statements in Part I,
Item 1 of this Quarterly Report on Form 10-Q.
|
(3) Reflects
miscellaneous adjustments permitted under our existing credit
agreement, including such items as expenses related to offerings of
our common stock by our former controlling shareholder, business
development activities related to our growth and expansion
initiatives, one-time litigation fees, expenses related to debt
refinancing and employment agency fees.
|
Investor Relations Inquiries: Mike Lawson
Director of Investor Relations and Corporate Communications
301-682-0304
lawsonm@ussilica.com
SOURCE U.S. Silica Holdings, Inc.