U.S. Silica Holdings, Inc. Announces First Quarter 2017 Results
''I'm very pleased with the strong performances we saw from both of our operating segments during the quarter,'' said
First Quarter 2017 Highlights
- Revenue totaled
$244.8 million compared with$122.5 million for the same period last year, an increase of 100% on a year-over-year basis and an increase of 34% sequentially from the fourth quarter of 2016. - Overall tons sold totaled 3.4 million, up 49% compared with 2.3 million tons sold in the first quarter of 2016 and an increase of 18% sequentially from the fourth quarter of 2016.
- Contribution margin for the quarter was
$59.1 million , up 233% compared with$17.7 million in the same period of the prior year and up 57% sequentially from the fourth quarter of 2016. - Adjusted EBITDA was
$42.7 million compared with Adjusted EBITDA of$5.3 million for the same period last year, an increase of 713% on a year-over-year basis and an increase of 107% sequentially from the fourth quarter of 2016.
Oil and Gas
- Revenue for the quarter totaled
$193.0 million compared with$73.9 million in the same period in 2016, an increase of 161% on a year-over-year basis and an increase of 41% sequentially from the fourth quarter of 2016. - Tons sold totaled 2.5 million, an increase of 79% compared with the 1.4 million tons sold in the first quarter of 2016 and an increase of 22% sequentially compared with the tons sold in the fourth quarter of 2016.
- 67% of tons were sold in basin compared with 75% sold in basin in the fourth quarter of 2016.
- Segment contribution margin was
$38.8 million versus$0.9 million in the first quarter of 2016, an increase of 4,464% on a year-over-year basis and an increase of 110% sequentially compared with the fourth quarter of 2016.
Industrial and Specialty Products
- Revenue for the quarter totaled
$51.8 million compared with$48.6 million for the same period in 2016, an increase of 7% on a year-over-year basis and an increase of 14% on a sequential basis from the fourth quarter of 2016. - Tons sold totaled 0.9 million, relatively flat on a year-over-year basis and an increase of 9% on a sequential basis compared with the fourth quarter of 2016.
- Segment contribution margin was
$20.2 million compared with$16.9 million in the first quarter of 2016, an increase of 20% on a year-over-year basis and up 6% sequentially compared with the fourth quarter of 2016.
Capital Update
As of
Outlook and Guidance
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. |
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SELECTED FINANCIAL DATA FROM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(unaudited; in thousands, except per share amounts) |
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Three Months Ended |
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March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
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Total sales |
$ 244,797 |
$ 182,373 |
$ 122,510 |
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Total cost of sales (excluding depreciation, depletion and amortization) |
187,475 |
148,411 |
106,751 |
||
Operating expenses: |
|||||
Selling, general and administrative |
22,341 |
19,167 |
15,503 |
||
Depreciation, depletion and amortization |
21,599 |
21,194 |
14,556 |
||
Total operating expenses |
43,940 |
40,361 |
30,059 |
||
Operating income (loss) |
13,382 |
(6,399) |
(14,300) |
||
Other income (expense): |
|||||
Interest expense |
(7,646) |
(7,998) |
(6,643) |
||
Other income (expense), net, including interest income |
(4,928) |
867 |
1,790 |
||
Total other expense |
(12,574) |
(7,131) |
(4,853) |
||
Income (loss) before income taxes |
808 |
(13,530) |
(19,153) |
||
Income tax benefit |
1,714 |
6,588 |
8,150 |
||
Net income (loss) |
$ 2,522 |
$ (6,942) |
$ (11,003) |
||
Earnings (loss) per share: |
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Basic |
$0.03 |
($0.09) |
($0.20) |
||
Diluted |
$0.03 |
($0.09) |
($0.20) |
||
Weighted average shares outstanding: |
|||||
Basic |
80,983 |
75,539 |
54,470 |
||
Diluted |
82,244 |
75,539 |
54,470 |
||
Dividends declared per share |
$0.06 |
$0.06 |
$0.06 |
U.S. SILICA HOLDINGS, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(dollars in thousands) |
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March 31, 2017 |
December 31, 2016 |
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(unaudited) |
(audited) |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
$ 660,903 |
$ 711,225 |
||
Accounts receivable, net |
139,970 |
89,006 |
||
Inventories, net |
69,458 |
78,709 |
||
Prepaid expenses and other current assets |
12,401 |
12,323 |
||
Income tax deposits |
1,397 |
1,682 |
||
Total current assets |
884,129 |
892,945 |
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Property, plant and mine development, net |
806,288 |
783,313 |
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Goodwill |
242,301 |
240,975 |
||
Trade names |
32,318 |
32,318 |
||
Intellectual property, net |
57,524 |
57,270 |
||
Customer relationships, net |
49,882 |
50,890 |
||
Other assets |
14,798 |
15,509 |
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Total assets |
$ 2,087,240 |
$ 2,073,220 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current Liabilities: |
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Accounts payable |
$ 71,951 |
$ 70,778 |
||
Dividends payable |
5,223 |
5,221 |
||
Accrued liabilities |
13,202 |
13,034 |
||
Accrued interest |
69 |
169 |
||
Current portion of long-term debt |
5,034 |
4,821 |
||
Current portion of capital leases |
2,190 |
2,237 |
||
Current portion of deferred revenue |
18,926 |
13,700 |
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Total current liabilities |
116,595 |
109,960 |
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Long-term debt |
507,484 |
508,417 |
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Deferred revenue |
66,360 |
58,090 |
||
Obligations under capital lease |
425 |
717 |
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Liability for pension and other post-retirement benefits |
56,363 |
56,746 |
||
Deferred income taxes, net |
49,643 |
50,075 |
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Other long-term obligations |
16,474 |
15,925 |
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Total liabilities |
813,344 |
799,930 |
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Stockholders' Equity: |
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Preferred stock |
— |
— |
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Common stock |
812 |
811 |
||
Additional paid-in capital |
1,131,253 |
1,129,051 |
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Retained earnings |
160,600 |
163,173 |
||
Treasury stock, at cost |
(3,422) |
(3,869) |
||
Accumulated other comprehensive loss |
(15,347) |
(15,876) |
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Total stockholders' equity |
1,273,896 |
1,273,290 |
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Total liabilities and stockholders' equity |
$ 2,087,240 |
$ 2,073,220 |
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 (loss) the most directly comparable GAAP financial measure, to segment contribution margin.
For the Three Months Ended |
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March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
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(in thousands) |
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Sales: |
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Oil & Gas Proppants |
$ 192,959 |
$ 136,977 |
$ 73,865 |
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Industrial & Specialty Products |
51,838 |
45,396 |
48,645 |
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Total sales |
244,797 |
182,373 |
122,510 |
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Segment contribution margin: |
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Oil & Gas Proppants |
38,841 |
18,486 |
851 |
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Industrial & Specialty Products |
20,216 |
19,021 |
16,893 |
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Total segment contribution margin |
59,057 |
37,507 |
17,744 |
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Operating activities excluded from segment cost of sales |
(1,735) |
(3,545) |
(1,985) |
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Selling, general and administrative |
(22,341) |
(19,167) |
(15,503) |
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Depreciation, depletion and amortization |
(21,599) |
(21,194) |
(14,556) |
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Interest expense |
(7,646) |
(7,998) |
(6,643) |
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Other income (loss), net, including interest income |
(4,928) |
867 |
1,790 |
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Income tax benefit |
1,714 |
6,588 |
8,150 |
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Net income (loss) |
$ 2,522 |
$ (6,942) |
$ (11,003) |
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:
For the Three Months Ended |
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March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
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(in thousands) |
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Net income (loss) |
$ 2,522 |
$ (6,942) |
$ (11,003) |
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Total interest expense, net of interest income |
6,311 |
7,048 |
6,370 |
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Provision for taxes |
(1,714) |
(6,588) |
(8,150) |
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Total depreciation, depletion and amortization expenses |
21,599 |
21,194 |
14,556 |
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EBITDA |
28,718 |
14,712 |
1,773 |
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Non-cash incentive compensation(1) |
5,510 |
3,032 |
1,906 |
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Post-employment expenses (excluding service costs)(2) |
489 |
260 |
765 |
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Business development related expenses(3) |
1,486 |
2,571 |
107 |
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Other adjustments allowable under our existing credit agreements(4) |
6,509 |
96 |
701 |
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Adjusted EBITDA |
$ 42,712 |
$ 20,671 |
$ 5,252 |
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(1) |
Reflects equity-based compensation expense. |
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(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 L - Pension and Post-retirement Benefits to our Financial Statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q. |
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(3) |
Reflects expenses related to business development activities in connection with our growth and expansion initiatives. |
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(4) |
Reflects miscellaneous adjustments permitted under our existing credit agreement. The 2017 amount includes a contract restructuring cost of $6.3 million. |
Investor Contact:
Vice President of Investor Relations and Corporate Communications
(301) 682-0304
lawsonm@USSilica.com
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