U.S. Silica Holdings, Inc. Announces Fourth Quarter and Full Year 2016 Results
''Despite the many challenges, we made substantial progress in 2016 to make our Company leaner, stronger, more flexible and ultimately easier for customers to do business with, all of which we believe will enable us to further extend our industry-leading positions in both our Oil and Gas and Industrial and Specialty Products segments,'' said
Full Year 2016 Highlights
- Revenue totaled
$559.6 million compared with$643.0 million for the full year of 2015, a decrease of 13%. - Net loss of
$41.1 million or$(0.63) per basic and diluted share compared with net income of$11.9 million or$0.22 per basic and diluted share for the full year 2015. - Overall tons sold were 9.9 million tons, virtually flat compared with 10.0 million tons for the full year 2015.
- Selling, general and administrative expense for the year totaled
$67.7 million compared with$62.8 million for the full year 2015, an increase of 8%. - Contribution margin was
$90.4 million or 16% of revenue compared with$159.1 million or 25% of revenue for the full year 2015. - Adjusted EBITDA was
$39.6 million or 7% of revenue compared with$109.5 million or 17% of revenue for the full year 2015.
Fourth Quarter 2016 Highlights
- Revenue totaled
$182.4 million compared with$136.1 million for the same period last year, an increase of 34% on a year-over-year basis and an increase of 32% sequentially compared with the third quarter of 2016. - Overall tons sold were 2.9 million, up 16% compared with the 2.5 million tons sold in the fourth quarter of 2015 and an increase of 15% sequentially from the third quarter of 2016.
- Contribution margin for the quarter was
$37.5 million , up 69% compared with$22.1 million in the same period of the prior year and an increase of 90% sequentially from the third quarter of 2016. - Adjusted EBITDA was
$20.7 million , up 92% compared with$10.8 million for the same period last year and an increase of 150% sequentially compared with the third quarter of 2016.
Oil and Gas
- Revenue for the quarter totaled
$137.0 million , an increase of 54% compared with$88.8 million for the same period in 2015 and an increase of 58% sequentially compared with the third quarter of 2016. - Tons sold totaled 2.1 million, up 34% compared with 1.6 million tons sold in the fourth quarter of 2015 and an increase of 29% sequentially from the third quarter of 2016.
- 75% of tons were sold in basin compared with 54% in the fourth quarter of 2015 and 65% sold in basin in the third quarter of 2016.
- Segment contribution margin was
$18.5 million , a 166% improvement compared with$7.0 million in the same period of the prior year and a$20.4 million increase sequentially from the third quarter of 2016.
Industrial and Specialty Products
- Revenue for the quarter totaled
$45.4 million compared with$47.3 million for the same period in 2015, a decrease of 4% and a decrease of 11% on a sequential basis from the third quarter of 2016. - Tons sold totaled 0.8 million tons, a decrease of 14% on a year-over-year basis and a decrease of 10% on a sequential basis compared with the third quarter of 2016.
- Segment contribution margin was
$19.0 million compared with$15.2 million in the fourth quarter of 2015, an increase of 25% on a year-over-year basis and a decrease of 12% sequentially compared with the third quarter of 2016.
Capital Update
As of
Outlook and Guidance
Due to the current lack of visibility in its Oil and Gas business, the Company will continue to refrain from providing guidance for Adjusted EBITDA until such time as we can gain more clarity around our customers' business activity levels and the associated demand for our products. Based on current market conditions, the Company anticipates that its capital expenditures for 2017 will be in the range of
Conference Call
About
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 HOLDINGS, INC. |
|||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||
Three Months Ended |
|||||
December 31, 2016 |
September 30, 2016 |
December 31, 2015 |
|||
(in thousands, except per share amounts) |
|||||
Sales |
$ 182,373 |
$ 137,748 |
$ 136,112 |
||
Cost of goods sold (excluding depreciation, depletion and amortization) |
148,411 |
119,426 |
116,614 |
||
Operating expenses |
|||||
Selling, general and administrative |
19,167 |
18,472 |
15,682 |
||
Depreciation, depletion and amortization |
21,194 |
17,175 |
16,378 |
||
40,361 |
35,647 |
32,060 |
|||
Operating loss |
(6,399) |
(17,325) |
(12,562) |
||
Other income (expense) |
|||||
Interest expense |
(7,998) |
(6,684) |
(6,835) |
||
Other income (expense), net, including interest income |
867 |
493 |
(90) |
||
(7,131) |
(6,191) |
(6,925) |
|||
Loss before income taxes |
(13,530) |
(23,516) |
(19,487) |
||
Income tax benefit |
6,588 |
12,177 |
4,167 |
||
Net loss |
$ (6,942) |
$ (11,339) |
$ (15,320) |
||
Loss per share: |
|||||
Basic |
$ (0.09) |
($0.17) |
$ (0.29) |
||
Diluted |
$ (0.09) |
($0.17) |
$ (0.29) |
||
Weighted average shares outstanding: |
|||||
Basic |
75,539 |
66,676 |
53,323 |
||
Diluted |
75,539 |
66,676 |
53,323 |
||
Dividends declared per share |
$ 0.06 |
$0.06 |
$ 0.06 |
||
Year Ended December 31, |
|||||
2016 |
2015 |
||||
(in thousands, except per share amounts) |
|||||
Sales |
$ 559,625 |
$ 642,989 |
|||
Cost of goods sold (excluding depreciation, depletion and amortization) |
477,295 |
495,066 |
|||
Operating expenses |
|||||
Selling, general and administrative |
67,727 |
62,777 |
|||
Depreciation, depletion and amortization |
68,134 |
58,474 |
|||
135,861 |
121,251 |
||||
Operating income (loss) |
(53,531) |
26,672 |
|||
Other income (expense) |
|||||
Interest expense |
(27,972) |
(27,283) |
|||
Other income, net, including interest income |
3,758 |
728 |
|||
(24,214) |
(26,555) |
||||
Income (loss) before income taxes |
(77,745) |
117 |
|||
Income tax benefit |
36,689 |
11,751 |
|||
Net income (loss) |
$ (41,056) |
$ 11,868 |
|||
Earnings (loss) per share: |
|||||
Basic |
$ (0.63) |
$ 0.22 |
|||
Diluted |
$ (0.63) |
$ 0.22 |
|||
Weighted average shares outstanding: |
|||||
Basic |
65,037 |
53,344 |
|||
Diluted |
65,037 |
53,601 |
|||
Dividends declared per share |
$ 0.25 |
$ 0.44 |
U.S. SILICA HOLDINGS, INC. |
|||
CONSOLIDATED BALANCE SHEETS |
|||
December 31, |
|||
2016 |
2015 |
||
(in thousands) |
|||
ASSETS |
|||
Current Assets: |
|||
Cash and cash equivalents |
$ 711,225 |
$ 277,077 |
|
Short-term investments |
- |
21,849 |
|
Accounts receivable, net |
89,006 |
58,706 |
|
Inventories, net |
78,709 |
65,004 |
|
Prepaid expenses and other current assets |
12,323 |
9,921 |
|
Income tax deposits |
1,682 |
6,583 |
|
Total current assets |
892,945 |
439,140 |
|
Property, plant and mine development, net |
783,313 |
561,196 |
|
Goodwill |
240,975 |
68,647 |
|
Trade names |
32,318 |
14,474 |
|
Intellectual property |
57,270 |
- |
|
Customer relationships, net |
50,890 |
6,453 |
|
Other assets |
15,509 |
18,709 |
|
Total assets |
$ 2,073,220 |
$ 1,108,619 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
Current Liabilities: |
|||
Accounts payable |
70,778 |
49,631 |
|
Dividends payable |
5,221 |
3,453 |
|
Accrued liabilities |
13,034 |
11,708 |
|
Accrued interest |
169 |
58 |
|
Current portion of long-term debt |
4,821 |
3,330 |
|
Current portion of capital leases |
2,237 |
- |
|
Current portion of deferred revenue |
13,700 |
15,738 |
|
Total current liabilities |
109,960 |
83,918 |
|
Long-term debt |
508,417 |
488,375 |
|
Liability for pension and other post-retirement benefits |
56,746 |
55,893 |
|
Deferred revenue |
58,090 |
59,676 |
|
Deferred income taxes, net |
50,075 |
19,513 |
|
Obligations under capital lease |
717 |
- |
|
Other long-term obligations |
15,925 |
17,077 |
|
Total liabilities |
799,930 |
724,452 |
|
Stockholders' Equity: |
|||
Preferred stock |
- |
- |
|
Common stock |
811 |
539 |
|
Additional paid-in capital |
1,129,051 |
194,670 |
|
Retained earnings |
163,173 |
220,974 |
|
Treasury stock, at cost |
(3,869) |
(15,845) |
|
Accumulated other comprehensive loss |
(15,876) |
(16,171) |
|
Total stockholders' equity |
1,273,290 |
384,167 |
|
Total liabilities and stockholders' equity |
$ 2,073,220 |
$ 1,108,619 |
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 tables set forth a reconciliation of net income (loss), the most directly comparable GAAP financial measure, to segment contribution margin.
For the Three Months Ended |
|||||
December 31, 2016 |
September 30, 2016 |
December 31, 2015 |
|||
(in thousands) |
|||||
Sales: |
|||||
Oil & Gas Proppants |
$ 136,977 |
$ 86,782 |
$ 88,842 |
||
Industrial & Specialty Products |
45,396 |
50,966 |
47,270 |
||
Total sales |
182,373 |
137,748 |
136,112 |
||
Segment contribution margin: |
|||||
Oil & Gas Proppants |
18,486 |
(1,897) |
6,956 |
||
Industrial & Specialty Products |
19,021 |
21,587 |
15,184 |
||
Total segment contribution margin |
37,507 |
19,690 |
22,140 |
||
Operating activities excluded from segment cost of goods sold |
(3,545) |
(1,368) |
(2,642) |
||
Selling, general and administrative |
(19,167) |
(18,472) |
(15,682) |
||
Depreciation, depletion and amortization |
(21,194) |
(17,175) |
(16,378) |
||
Interest expense |
(7,998) |
(6,684) |
(6,835) |
||
Other income (expense), net, including interest income |
867 |
493 |
(90) |
||
Income tax benefit |
6,588 |
12,177 |
4,167 |
||
Net loss |
$ (6,942) |
$ (11,339) |
$ (15,320) |
||
Year Ended December 31, |
|||||
2016 |
2015 |
||||
(in thousands) |
|||||
Sales: |
|||||
Oil & Gas Proppants |
$ 362,550 |
$ 430,435 |
|||
Industrial & Specialty Products |
197,075 |
212,554 |
|||
Total sales |
559,625 |
642,989 |
|||
Segment contribution margin: |
|||||
Oil & Gas Proppants |
11,445 |
88,928 |
|||
Industrial & Specialty Products |
78,988 |
70,137 |
|||
Total segment contribution margin |
90,433 |
159,065 |
|||
Operating activities excluded from segment cost of goods sold |
(8,103) |
(11,142) |
|||
Selling, general and administrative |
(67,727) |
(62,777) |
|||
Depreciation, depletion and amortization |
(68,134) |
(58,474) |
|||
Interest expense |
(27,972) |
(27,283) |
|||
Other income, net, including interest income |
3,758 |
728 |
|||
Income tax benefit |
36,689 |
11,751 |
|||
Net income (loss) |
$ (41,056) |
$ 11,868 |
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 tables set forth a reconciliation of net income (loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA.
Three Months Ended |
|||||
December 31, 2016 |
September 30, 2016 |
December 31, 2015 |
|||
(in thousands) |
|||||
Net loss |
$ (6,942) |
$ (11,339) |
$ (15,320) |
||
Total interest expense, net of interest income |
7,048 |
6,211 |
6,617 |
||
Provision for taxes |
(6,588) |
(12,177) |
(4,167) |
||
Total depreciation, depletion and amortization expenses |
21,194 |
17,175 |
16,378 |
||
EBITDA |
14,712 |
(130) |
3,508 |
||
Non-cash incentive compensation (1) |
3,032 |
3,720 |
2,033 |
||
Post-employment expenses (excluding service costs) (2) |
260 |
(184) |
834 |
||
Business development related expenses (3) |
2,571 |
4,667 |
2,358 |
||
Other adjustments allowable under our existing credit agreement (4) |
96 |
185 |
2,044 |
||
Adjusted EBITDA |
$ 20,671 |
$ 8,258 |
$ 10,777 |
||
(1) |
Reflects equity-based 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. See Note P - Pension and Post-retirement Benefits to our Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. |
|||
(3) |
Reflects expenses related to business development activities in connection with our growth and expansion initiatives, including acquisition-related costs for our NBI Acquisition and Sandbox Acquisition completed in August 2016. |
|||
(4) |
Reflects miscellaneous adjustments permitted under our existing credit agreement, including such items as restructuring costs for actions that will provide future cost savings. Restructuring costs were $0.2 million and $2.1 million, respectively, for the three months ended December 31, 2016 and 2015. |
|||
Year Ended December 31, |
|||
2016 |
2015 |
||
(in thousands) |
|||
Net income (loss) |
$ (41,056) |
$ 11,868 |
|
Total interest expense, net of interest income |
25,779 |
26,578 |
|
Provision for taxes |
(36,689) |
(11,751) |
|
Total depreciation, depletion and amortization expenses |
68,134 |
58,474 |
|
EBITDA |
16,168 |
85,169 |
|
Non-cash incentive compensation (1) |
12,107 |
3,857 |
|
Post-employment expenses (excluding service costs) (2) |
1,040 |
3,335 |
|
Business development related expenses (3) |
8,206 |
10,701 |
|
Other adjustments allowable under our existing credit agreements (4) |
2,033 |
6,446 |
|
Adjusted EBITDA |
$ 39,554 |
$ 109,508 |
|
(1) |
Reflects equity-based 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. See Note P - Pension and Post-retirement Benefits to our Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. |
|||
(3) |
Reflects expenses related to business development activities in connection with our growth and expansion initiatives, including acquisition-related costs for our NBI Acquisition and Sandbox Acquisition completed in August 2016. |
|||
(4) |
Reflects miscellaneous adjustments permitted under our existing credit agreement, including such items as restructuring costs for actions that will provide future cost savings. Restructuring costs were $3.5 million and $4.8 million, respectively, for the years ended December 31, 2016 and 2015. The year ended December 31, 2016 amount includes a gain on insurance settlement of $1.5 million. |
Investor Contact:
Vice President of Investor Relations and Corporate Communications
(301) 682-0304
lawsonm@USSilica.com
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/us-silica-holdings-inc-announces-fourth-quarter-and-full-year-2016-results-300411984.html
SOURCE