U.S. Silica Holdings, Inc. (NYSE: SLCA) today announced net income of
$20.2 million or $0.38 per basic and diluted share for the second
quarter ended June 30, 2013 compared with net income of $19.5 million or
$0.37 per basic share and $0.36 per diluted share for the same period in
2012.
“We are extremely pleased with our second quarter performance, again
delivering Adjusted EBITDA at the high end of our guidance range,” said
Bryan Shinn, president and chief executive officer. “For the
Company as a whole, the bottom line is that our business is very strong,
and we expect robust second half performance, driven by record oil and
gas demand and continued margin expansion in our industrials business.”
Second Quarter 2013 Highlights
Total Company
-
Revenue totaled $129.8 million compared with $104.6 million for the
same period in 2012, an improvement of 24.1%. The increase was driven
primarily by additional volumes in the oil and gas segment, including
initial contributions from the Company’s new frac sand facility in
Sparta, WI.
-
Overall volumes increased to 2.0 million tons, an increase of 14.9%
over the second quarter of 2012.
-
Adjusted EBITDA was $41.0 million or 32% of revenue compared with
$37.1 million or 35% of revenue for the same period last year.
Oil and Gas
-
Revenue for the quarter totaled $77.7 million compared with $54.5
million in the same period in 2012.
-
Segment contribution margin was $35.5 million versus $33.3 million in
the second quarter of 2012.
-
Tons sold totaled 988,120 versus 684,992 sold in the second quarter of
2012.
Industrial and Specialty Products
-
Revenue for the quarter totaled $52.1 million compared with $50.1
million for the same period in 2012.
-
Segment contribution margin was $15.3 million versus $14.0 million in
the second quarter of 2012. The increase in contribution margin was
driven largely by a richer mix of value-added products sold during the
quarter.
-
Tons sold totaled 1,060,448 compared with 1,098,425 sold in the second
quarter of 2012.
Capital Update
As of June 30, 2013, the Company had $47.1 million in cash and cash
equivalents and $33.1 million available under its credit facilities.
Total outstanding debt at June 30, 2013 totaled $261.1 million. Capital
expenditures in the second quarter totaled $8.5 million and were
associated primarily with bringing the second phase of the Sparta, WI,
operation online and completing a new, 15,000 ton transload facility in
San Antonio, Texas. Subsequent to the end of the quarter, the Company
completed the refinancing of its existing senior credit facility with a
new, $425 million senior secured credit facility consisting of a new
$375 million term loan and a new $50 million revolver.
Quarterly Cash Dividend
The Company’s Board of Directors has declared a regular quarterly cash
dividend of $0.125 per share to common shareholders of record at the
close of business on September 19, 2013, payable on October 3, 2013.
Future declarations of dividends are subject to approval of the Board.
Capital Investment
The Company has made an initial investment in a new Greenfield site near
Utica, Illinois with an annual capacity of approximately 1.5 million
tons of raw frac sand. The Company is working with a third-party to
develop the mine and construct a wet processing plant along with drying
and screening operations. Site work is currently underway and the new
mine and plant are expected to come online in the first quarter of 2014.
Outlook and Guidance
For the full year, 2013, the Company is reaffirming its guidance for
Adjusted EBITDA in the range of $165 million to $175 million and is
raising its guidance for capital expenditures to a range of $60 to $70
million. The Company anticipates its effective tax rate will be in the
range of 27 to 28 percent.
Conference Call
U.S. Silica will host a conference call for investors tomorrow, August
1, 2013 at 10:00 a.m. Eastern Time to discuss these results. Hosting the
call will be Bryan Shinn, President and Chief Executive Officer and Don
Merril, Vice President and Chief Financial Officer. Investors are
invited to listen to a live webcast of the conference call by visiting
the “Investor Resources” section of the Company’s website at www.ussilica.com.
The webcast will be archived for one year. The call can also be accessed
live over the telephone by dialing (877) 705-6003 or for international
callers, (201) 493-6725. A replay will be available shortly after the
call and can be accessed by dialing (877) 870-5176, or for international
callers, (858) 384-5517. The Passcode for the replay is 417446. The
replay of the call will be available through August 29, 2013.
About U.S. Silica
U.S. Silica Holdings, Inc., a member of the Russell 2000, is the second
largest domestic producer 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
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
(in thousands, except per share amounts)
|
Sales
|
|
|
|
$
|
129,828
|
|
|
|
|
$
|
104,599
|
|
Cost of goods sold (excluding depreciation, depletion and
amortization)
|
|
|
|
|
80,297
|
|
|
|
|
|
58,920
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
10,099
|
|
|
|
|
|
9,718
|
|
Depreciation, depletion and amortization
|
|
|
|
|
8,890
|
|
|
|
|
|
5,974
|
|
|
|
|
|
|
18,989
|
|
|
|
|
|
15,692
|
|
Operating income
|
|
|
|
|
30,542
|
|
|
|
|
|
29,987
|
|
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
(3,535
|
)
|
|
|
|
|
(3,428
|
)
|
Other income, net, including interest income
|
|
|
|
|
63
|
|
|
|
|
|
179
|
|
|
|
|
|
|
(3,472
|
)
|
|
|
|
|
(3,249
|
)
|
Income before income taxes
|
|
|
|
|
27,070
|
|
|
|
|
|
26,738
|
|
Income tax expense
|
|
|
|
|
(6,878
|
)
|
|
|
|
|
(7,287
|
)
|
Net income
|
|
|
|
$
|
20,192
|
|
|
|
|
$
|
19,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.38
|
|
|
|
|
$
|
0.37
|
|
Diluted
|
|
|
|
$
|
0.38
|
|
|
|
|
$
|
0.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. SILICA HOLDINGS, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
June 30,
|
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
(in thousands)
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
47,068
|
|
|
|
|
$
|
61,022
|
|
Accounts receivable, net
|
|
|
|
|
61,784
|
|
|
|
|
|
59,564
|
|
Inventories, net
|
|
|
|
|
52,190
|
|
|
|
|
|
39,835
|
|
Prepaid expenses and other current assets
|
|
|
|
|
7,668
|
|
|
|
|
|
6,738
|
|
Deferred income tax, net
|
|
|
|
|
10,141
|
|
|
|
|
|
10,108
|
|
Income tax deposits, net
|
|
|
|
|
1,881
|
|
|
|
|
|
-
|
|
Total current assets
|
|
|
|
|
180,732
|
|
|
|
|
|
177,267
|
|
Property, plant and mine development, net
|
|
|
|
|
429,364
|
|
|
|
|
|
414,218
|
|
Debt issuance costs, net
|
|
|
|
|
1,849
|
|
|
|
|
|
2,111
|
|
Goodwill
|
|
|
|
|
68,403
|
|
|
|
|
|
68,403
|
|
Trade names
|
|
|
|
|
10,436
|
|
|
|
|
|
10,436
|
|
Customer relationships, net
|
|
|
|
|
6,325
|
|
|
|
|
|
6,531
|
|
Other assets
|
|
|
|
|
8,369
|
|
|
|
|
|
7,844
|
|
Total assets
|
|
|
|
$
|
705,478
|
|
|
|
|
$
|
686,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Book overdraft
|
|
|
|
$
|
5,013
|
|
|
|
|
$
|
5,390
|
|
Accounts payable
|
|
|
|
|
30,711
|
|
|
|
|
|
37,333
|
|
Dividends payable
|
|
|
|
|
6,634
|
|
|
|
|
|
-
|
|
Accrued liabilities
|
|
|
|
|
9,178
|
|
|
|
|
|
9,481
|
|
Accrued interest
|
|
|
|
|
148
|
|
|
|
|
|
2
|
|
Current portion of capital lease
|
|
|
|
|
364
|
|
|
|
|
|
-
|
|
Current portion of long-term debt
|
|
|
|
|
2,434
|
|
|
|
|
|
2,433
|
|
Short-term debt
|
|
|
|
|
6,866
|
|
|
|
|
|
-
|
|
Income tax payable
|
|
|
|
|
-
|
|
|
|
|
|
20,596
|
|
Current portion of deferred revenue
|
|
|
|
|
570
|
|
|
|
|
|
4,855
|
|
Total current liabilities
|
|
|
|
|
61,918
|
|
|
|
|
|
80,090
|
|
Long-term debt
|
|
|
|
|
251,774
|
|
|
|
|
|
252,992
|
|
Liability for pension and other post-retirement benefits
|
|
|
|
|
52,019
|
|
|
|
|
|
52,747
|
|
Deferred income tax, net
|
|
|
|
|
62,200
|
|
|
|
|
|
59,111
|
|
Other long-term obligations
|
|
|
|
|
10,531
|
|
|
|
|
|
10,176
|
|
Total liabilities
|
|
|
|
|
438,442
|
|
|
|
|
|
455,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
530
|
|
|
|
|
|
529
|
|
Preferred stock
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
Additional paid-in capital
|
|
|
|
|
166,195
|
|
|
|
|
|
163,579
|
|
Retained earnings
|
|
|
|
|
113,566
|
|
|
|
|
|
82,731
|
|
Treasury stock, at cost
|
|
|
|
|
-
|
|
|
|
|
|
(970
|
)
|
Accumulated other comprehensive loss
|
|
|
|
|
(13,255
|
)
|
|
|
|
|
(14,175
|
)
|
Total stockholders’ equity
|
|
|
|
|
267,036
|
|
|
|
|
|
231,694
|
|
Total liabilities and stockholders’ equity
|
|
|
|
$
|
705,478
|
|
|
|
|
$
|
686,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
Adjusted EBITDA
Adjusted EBITDA is not a measure of our financial performance or
liquidity under GAAP and should not be considered as an alternative to
net income as a measure of operating performance, cash flows from
operating activities as a measure of liquidity or any other performance
measure derived in accordance with GAAP. Additionally, Adjusted EBITDA
is not intended to be a measure of free cash flow for management’s
discretionary use, as it does not consider certain cash requirements
such as interest payments, tax payments and debt service requirements.
Adjusted EBITDA contains certain other limitations, including the
failure to reflect our cash expenditures, cash requirements for working
capital needs and cash costs to replace assets being depreciated and
amortized, and excludes certain non-recurring charges that may recur in
the future. Management compensates for these limitations by relying
primarily on our GAAP results and by using Adjusted EBITDA only
supplementally. Our measure of Adjusted EBITDA is not necessarily
comparable to other similarly titled captions of other companies due to
potential inconsistencies in the methods of calculation.
The following table sets forth a reconciliation of net income, the most
directly comparable GAAP financial measure, to Adjusted EBITDA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
(in thousands)
|
Net income
|
|
|
|
$
|
20,192
|
|
|
|
$
|
19,451
|
Total interest expense, net of interest income
|
|
|
|
|
3,522
|
|
|
|
|
3,383
|
Provision for taxes
|
|
|
|
|
6,878
|
|
|
|
|
7,287
|
Total depreciation, depletion and amortization expenses
|
|
|
|
|
8,890
|
|
|
|
|
5,974
|
EBITDA
|
|
|
|
|
39,482
|
|
|
|
|
36,095
|
Non-cash incentive compensation(1) |
|
|
|
|
704
|
|
|
|
|
493
|
Post-employment expenses (excluding service costs)(2) |
|
|
|
|
586
|
|
|
|
|
404
|
Other adjustments allowable under our existing credit agreements(3) |
|
|
|
|
213
|
|
|
|
|
120
|
Adjusted EBITDA
|
|
|
|
$
|
40,985
|
|
|
|
$
|
37,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 Q to our
Consolidated Financial Statements in Part I, Item 1 of this
Quarterly Report on Form 10-Q.
|
|
|
|
(3)
|
|
Reflects miscellaneous adjustments permitted under our existing
credit agreements, including such items as expenses related to a
secondary offering by Golden Gate Capital and reviewing growth
initiatives and potential acquisitions.
|
|
|
|
Copyright Business Wire 2013