UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
FORM 8-K
_________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 26, 2024
__________________________________________
(Exact name of registrant as specified in its charter)
__________________________________________
(State or other jurisdiction of incorporation)
| (Commission File Number) | (IRS Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: (281 ) 258-2170
___________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. | ||||
On April 26, 2024, U.S. Silica Holdings, Inc. issued a press release providing information regarding earnings for the quarter ended March 31, 2024. A copy of the press release is attached hereto as Exhibit 99.1.
In accordance with General Instructions B.2. of Form 8-K, the information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. | ||||
(d) Exhibits. The following exhibit is furnished herewith:
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: April 26, 2024
| U.S. SILICA HOLDINGS, INC. | ||||||||||||||||||||
| /s/ KEVIN J. HOUGH | ||||||||||||||||||||
| Kevin J. Hough | ||||||||||||||||||||
| Executive Vice President & Chief Financial Officer | ||||||||||||||||||||
Exhibit 99.1
News Release
U.S. Silica Holdings, Inc. Reports First Quarter 2024 Results
•GAAP and adjusted EPS for the quarter of $0.17 and $0.20 per diluted share, respectively
•Industrial and Specialty Products segment contribution margin increased 7% year over year
•Total tonnage sold company wide increased 6% sequentially
•Cash flow from operations of $40.9 million for the quarter
•Completed term loan repricing and extinguished additional $25 million of debt
•Received credit rating upgrades from Moody's and S&P Global
•Company enters into definitive agreement to be acquired by Apollo Funds for $1.85 billion
Katy, Texas, April 26, 2024 – U.S. Silica Holdings, Inc. (NYSE: SLCA) (the “Company”), a diversified industrial minerals company and the leading last-mile logistics provider to the oil and gas industry, today announced its first quarter results for the period ended March 31, 2024. As separately announced, U.S. Silica has entered into a definitive agreement to be acquired by funds managed by affiliates of Apollo Global Management, Inc. (NYSE: APO) (the “Apollo Funds”) in an all-cash transaction that values the Company at an enterprise value of approximately $1.85 billion. In light of the pending transaction with Apollo Funds, U.S. Silica is not hosting an earnings conference call.
“During the first quarter, we continued to execute our strategy,” said Bryan Shinn, the Company’s Chief Executive Officer. “We generated robust cash flow from operations to start the year, positioning us well for the remainder of 2024.
“With the successful repricing of our term loan, we reduced our total interest rate by 85 basis points. We also repurchased and extinguished an additional $25 million of debt.
"In our Oil & Gas segment, volumes were up 5% sequentially, although our margins were impacted by slightly lower pricing, driven in part by lower natural gas prices. We continue to have 80% of our capacity under long-term contracts, with additional amendments and extensions signed in the first quarter. Additionally, our new, patent-pending Guardian frac fluid filtration system continues to gain momentum in the market.
"In our Industrial and Specialty Products segment, revenue and volumes increased 5% and 10% sequentially, respectively, with margins increasing 7% year over year. In the first quarter, we entered into several new customer agreements with favorable pricing and we continue to benefit from ongoing structural cost reductions.
“We are pleased to reach the separately announced agreement with Apollo, which will provide our stockholders with compelling, certain, cash value for their shares. The transaction also provides us with a partner who is committed to helping us achieve our long-term objectives while maintaining our core values and customer-centric approach.”
First Quarter 2024 Financial Highlights
Net income for the first quarter was $13.7 million, or $0.17 per diluted share. The first quarter results included $3.2 million pre-tax, or $0.03 per diluted share after-tax, of charges primarily related to the loss on extinguishment of debt. Excluding these charges, adjusted EPS (a non-GAAP measure) was $0.20 per diluted share.
These results compared with net income of $29.1 million, or $0.37 per diluted share, for the fourth quarter of 2023. The fourth quarter included $9.1 million pre-tax, or $0.09 per diluted share after-tax, of gains primarily related to asset sales, partially offset by facility closure costs, business optimization, and the loss on extinguishment of debt.
In the first quarter of 2024, the Company completed a $25 million voluntary term loan principal repayment, extinguishing the debt at par using excess cash on hand.
Total Company
In millions | Q1 2024 | Q4 2023 | Sequential Change | Q1 2023 | Year-over-year Change | ||||||||||||
Revenue | $ | 325.9 | $ | 336.0 | (3)% | $ | 442.2 | (26)% | |||||||||
Net Income | $ | 13.7 | $ | 29.1 | (53)% | $ | 44.6 | (69)% | |||||||||
Tons Sold | 4.092 | 3.865 | 6% | 4.934 | (17)% | ||||||||||||
Contribution Margin* | $ | 105.5 | $ | 116.9 | (10)% | $ | 152.8 | (31)% | |||||||||
Adjusted EBITDA* | $ | 77.1 | $ | 88.6 | (13)% | $ | 124.6 | (38)% | |||||||||
Oil & Gas Segment
•First quarter 2024 results were driven by slightly lower pricing, partially influenced by persistently low natural gas prices.
In millions | Q1 2024 | Q4 2023 | Sequential Change | Q1 2023 | Year-over-year Change | ||||||||||||
Revenue | $ | 183.2 | $ | 200.6 | (9)% | $ | 300.0 | (39)% | |||||||||
Tons Sold | 3.042 | 2.907 | 5% | 3.921 | (22)% | ||||||||||||
Contribution Margin* | $ | 59.5 | $ | 70.1 | (15)% | $ | 109.9 | (46)% | |||||||||
Industrial & Specialty Products (ISP) Segment
•First quarter 2024 results were impacted by increased activity levels, improvements in operational efficiencies, price increases, and lower costs.
In millions | Q1 2024 | Q4 2023 | Sequential Change | Q1 2023 | Year-over-year Change | ||||||||||||
Revenue | $ | 142.8 | $ | 135.5 | 5% | $ | 142.2 | —% | |||||||||
Tons Sold | 1.050 | 0.958 | 10% | 1.013 | 4% | ||||||||||||
Contribution Margin* | $ | 45.9 | $ | 46.8 | (2)% | $ | 42.9 | 7% | |||||||||
*Contribution Margin and Adjusted EBITDA are non-GAAP financial measures; see the discussion of non-GAAP information below and the reconciliation of GAAP to non-GAAP results included as an exhibit to this press release.
Capital Update
As of March 31, 2024, the Company had $234.5 million in cash and cash equivalents and total debt of $809.5 million. The Company's $150.0 million Revolver had zero drawn with $15.3 million allocated for letters of credit and availability of $134.7 million. During the first quarter of 2024, the Company generated $40.9 million in cash flow from operations while capital expenditures totaled $12.4 million.
Reclassification of Northern White Sand Offerings
The Company has postponed the proposed realignment of its Northern White Sand offerings from its Oil & Gas segment to its Industrial and Specialty Products segment to a later date as it prioritized the repricing of its term loan during the quarter.
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 124-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 800 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 26 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 first quarter 2024 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 estimated and projected costs and cost reduction programs, reserves and finished products estimates, growth opportunities, strategy, future financial results, forecasts, projections, plans and capital expenditures, technological innovations, and the expected outcome or impact of pending or threatened litigation. 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; heightened levels of inflation and rising interest rates; supply chain and logistics constraints for our company and our customers, 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 including the ongoing conflicts between Russia and Ukraine and between Israel and Hamas; pricing pressure; cost inflation; 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 | |||||||||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||
| Total sales | $ | 325,942 | $ | 336,037 | $ | 442,240 | |||||||||||
| Total cost of sales (excluding depreciation, depletion and amortization) | 223,724 | 226,764 | 293,133 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Selling, general and administrative | 30,754 | 31,653 | 29,163 | ||||||||||||||
| Depreciation, depletion and amortization | 31,368 | 32,505 | 35,386 | ||||||||||||||
| Total operating expenses | 62,122 | 64,158 | 64,549 | ||||||||||||||
| Operating income | 40,096 | 45,115 | 84,558 | ||||||||||||||
| Other (expense) income: | |||||||||||||||||
| Interest expense | (24,263) | (25,622) | (24,061) | ||||||||||||||
| Other income (expense), net, including interest income | 2,523 | 17,778 | (2,352) | ||||||||||||||
| Total other expense | (21,740) | (7,844) | (26,413) | ||||||||||||||
| Income before income taxes | 18,356 | 37,271 | 58,145 | ||||||||||||||
| Income tax expense | (4,775) | (8,306) | (13,573) | ||||||||||||||
| Net income | $ | 13,581 | $ | 28,965 | $ | 44,572 | |||||||||||
| Less: Net loss attributable to non-controlling interest | (107) | (144) | (76) | ||||||||||||||
| Net income attributable to U.S. Silica Holdings, Inc. | $ | 13,688 | $ | 29,109 | $ | 44,648 | |||||||||||
| Earnings per share attributable to U.S. Silica Holdings, Inc.: | |||||||||||||||||
| Basic | $ | 0.18 | $ | 0.38 | $ | 0.58 | |||||||||||
| Diluted | $ | 0.17 | $ | 0.37 | $ | 0.57 | |||||||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 77,671 | 77,181 | 76,517 | ||||||||||||||
| Diluted | 79,032 | 78,799 | 78,292 | ||||||||||||||
U.S. SILICA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
| Unaudited | Audited | ||||||||||
| March 31, 2024 | December 31, 2023 | ||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | 234,481 | $ | 245,716 | |||||||
| Accounts receivable, net | 189,506 | 185,917 | |||||||||
| Inventories, net | 139,535 | 149,429 | |||||||||
| Prepaid expenses and other current assets | 15,124 | 19,682 | |||||||||
| Total current assets | 578,646 | 600,744 | |||||||||
| Property, plant and mine development, net | 1,107,352 | 1,125,220 | |||||||||
| Lease right-of-use assets | 41,678 | 41,095 | |||||||||
| Goodwill | 185,649 | 185,649 | |||||||||
| Intangible assets, net | 129,033 | 131,384 | |||||||||
| Other assets | 12,701 | 12,501 | |||||||||
| Total assets | $ | 2,055,059 | $ | 2,096,593 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 122,588 | $ | 147,479 | |||||||
| Current portion of operating lease liabilities | 17,753 | 18,569 | |||||||||
| Current portion of long-term debt | 12,708 | 16,367 | |||||||||
| Current portion of deferred revenue | 1,226 | 3,124 | |||||||||
| Income tax payable | 5,697 | 311 | |||||||||
| Total current liabilities | 159,972 | 185,850 | |||||||||
| Long-term debt, net | 796,755 | 823,670 | |||||||||
| Deferred revenue | 12,456 | 12,388 | |||||||||
| Liability for pension and other post-retirement benefits | 24,679 | 28,715 | |||||||||
| Deferred income taxes, net | 100,452 | 100,458 | |||||||||
| Operating lease liabilities | 53,912 | 55,089 | |||||||||
| Other long-term liabilities | 36,508 | 34,896 | |||||||||
| Total liabilities | 1,184,734 | 1,241,066 | |||||||||
| Stockholders’ Equity: | |||||||||||
| Preferred stock | — | — | |||||||||
| Common stock | 891 | 877 | |||||||||
| Additional paid-in capital | 1,253,497 | 1,249,460 | |||||||||
| Retained deficit | (190,471) | (204,159) | |||||||||
| Treasury stock, at cost | (202,363) | (196,745) | |||||||||
| Accumulated other comprehensive income (loss) | 2,623 | (125) | |||||||||
| Total U.S. Silica Holdings, Inc. stockholders’ equity | 864,177 | 849,308 | |||||||||
| Non-controlling interest | 6,148 | 6,219 | |||||||||
| Total stockholders' equity | 870,325 | 855,527 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,055,059 | $ | 2,096,593 | |||||||
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 selling, general, and administrative costs, corporate costs, plant capacity expansion expenses, and facility closure costs.
The following table sets forth a reconciliation of net income, the most directly comparable GAAP financial measure, to segment contribution margin.
| (All amounts in thousands) | Three Months Ended | ||||||||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||
| Sales: | |||||||||||||||||
| Oil & Gas Proppants | $ | 183,172 | $ | 200,552 | $ | 300,013 | |||||||||||
| Industrial & Specialty Products | 142,770 | 135,485 | 142,227 | ||||||||||||||
| Total sales | 325,942 | 336,037 | 442,240 | ||||||||||||||
| Segment contribution margin: | |||||||||||||||||
| Oil & Gas Proppants | 59,515 | 70,142 | 109,897 | ||||||||||||||
| Industrial & Specialty Products | 45,949 | 46,794 | 42,929 | ||||||||||||||
| Total segment contribution margin | 105,464 | 116,936 | 152,826 | ||||||||||||||
| Operating activities excluded from segment cost of sales | (3,246) | (7,663) | (3,719) | ||||||||||||||
| Selling, general and administrative | (30,754) | (31,653) | (29,163) | ||||||||||||||
| Depreciation, depletion and amortization | (31,368) | (32,505) | (35,386) | ||||||||||||||
| Interest expense | (24,263) | (25,622) | (24,061) | ||||||||||||||
| Other income (expense), net, including interest income | 2,523 | 17,778 | (2,352) | ||||||||||||||
| Income tax expense | (4,775) | (8,306) | (13,573) | ||||||||||||||
| Net income | $ | 13,581 | $ | 28,965 | $ | 44,572 | |||||||||||
| Less: Net loss attributable to non-controlling interest | (107) | (144) | (76) | ||||||||||||||
| Net income attributable to U.S. Silica Holdings, Inc. | $ | 13,688 | $ | 29,109 | $ | 44,648 | |||||||||||
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 (loss) 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 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:
| (All amounts in thousands) | Three Months Ended | ||||||||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||
| Net income attributable to U.S. Silica Holdings, Inc. | $ | 13,688 | $ | 29,109 | $ | 44,648 | |||||||||||
| Total interest expense, net of interest income | 20,673 | 22,845 | 21,568 | ||||||||||||||
| Provision for taxes | 4,775 | 8,306 | 13,573 | ||||||||||||||
| Total depreciation, depletion and amortization expenses | 31,368 | 32,505 | 35,386 | ||||||||||||||
| EBITDA | 70,504 | 92,765 | 115,175 | ||||||||||||||
Non-cash incentive compensation (1) | 4,051 | 3,910 | 3,335 | ||||||||||||||
Post-employment expenses (excluding service costs) (2) | (664) | 982 | (839) | ||||||||||||||
Merger and acquisition related expenses (3) | 361 | 665 | 224 | ||||||||||||||
Plant capacity expansion expenses (4) | 47 | 6 | 66 | ||||||||||||||
Business optimization projects (5) | (77) | 846 | 956 | ||||||||||||||
Facility closure costs (6) | 345 | 3,462 | 81 | ||||||||||||||
Other adjustments allowable under the Credit Agreement (7) | 2,565 | (14,045) | 5,637 | ||||||||||||||
| Adjusted EBITDA | $ | 77,132 | $ | 88,591 | $ | 124,635 | |||||||||||
(1) | Reflects equity-based and other equity-related 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 $2 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 if we continue to pursue future plant capacity expansion. | |||||||
(5) | Reflects costs incurred related to business optimization projects 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. | |||||||
(6) | Reflects costs incurred related to idled sand facilities and closed corporate offices, including severance costs and remaining contracted costs such as office lease costs, maintenance, and utilities. 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. | |||||||
(7) | Reflects miscellaneous adjustments permitted under the Credit Agreement, such as recruiting fees and relocation costs. The three months ended March 31, 2024 also included costs related to severance restructuring of $0.1 million, $0.3 million of sales of assets, and $2.0 million related to the loss on extinguishment of debt. The three months ended December 31, 2023 also included costs related to severance restructuring of $0.1 million, recruiting costs of $0.5 million, and $1.0 million related to the loss on extinguishment of debt, offset by net proceeds of the sale of assets of $12.4 million. The three months ended March 31, 2023 also included costs related to severance restructuring of $0.8 million, an adjustment to non-controlling interest of $0.2 million and $5.3 million related to the loss on extinguishment of debt, offset by an insurance recovery of $0.8 million. | |||||||
Adjusted EPS
Adjusted EPS is diluted earnings or loss per share adjusted to exclude costs associated with merger & acquisition related activities and strategic business reviews, costs associated with business optimization, the effect of a non-recurring depreciation adjustment, and gain or loss on debt extinguishment.
Management believes Adjusted EPS is useful in providing period-to-period comparisons of the results of the Company's operations to assist investors in reviewing the Company's operating performance over time. Management believes it is useful to exclude certain items when comparing current performance to prior periods because these items can vary significantly depending on specific underlying transactions or events. Also, management believes certain excluded items may not relate specifically to current operating trends or be indicative of future results.
The following table sets forth a reconciliation from GAAP EPS to adjusted EPS:
| Three Months Ended | |||||||||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||
| Reported Diluted EPS | $ | 0.17 | $ | 0.37 | $ | 0.57 | |||||||||||
| Business Optimization | — | 0.01 | 0.01 | ||||||||||||||
| Facility Closure Costs | — | 0.03 | — | ||||||||||||||
| Asset (Gain)/Loss | — | (0.15) | — | ||||||||||||||
| (Gain)/Loss on extinguishment of debt | 0.02 | 0.01 | 0.05 | ||||||||||||||
| Other | 0.01 | 0.01 | 0.01 | ||||||||||||||
| Total Adjustments | 0.03 | (0.09) | 0.07 | ||||||||||||||
| Adjusted Diluted EPS | $ | 0.20 | $ | 0.28 | $ | 0.64 | |||||||||||
| Diluted Shares | 79,032 | 78,799 | 78,292 | ||||||||||||||
Net Debt
Net Debt is calculated by adding together the current portion of long-term debt and long-term debt, net and subtracting cash and cash equivalents from the total. Net debt shows how a company’s indebtedness has changed over a period as a result of cash flows. Net debt allows investors to see how business financing has changed and assess whether an entity that has had a significant increase in cash has, for example, achieved this only by taking on a corresponding increase in debt. Net debt 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.
Net Leverage Ratio
Net Leverage Ratio is calculated by dividing net debt by Trailing Twelve Month (TTM) Adjusted EBITDA. Management believes that net leverage ratio provides useful information to investors because it is an important indicator of the Company’s indebtedness in relation to its operating performance. Net Leverage Ratio should be considered in addition to results prepared in accordance with GAAP and should not be considered substitutes for or superior to GAAP results. In addition, our Net Leverage Ratio may not be comparable to similarly titled measures utilized by other companies.
The following table sets forth a reconciliation for net debt and net leverage ratio:
| Three Months Ended | |||||||||||||||||
| (All amounts in thousands) | March 31, 2023 | June 30, 2023 | September 30, 2023 | December 31, 2023 | March 31, 2024 | ||||||||||||
| Cash and cash equivalents | $ | (139,494) | $ | (186,961) | $ | (222,435) | $ | (245,716) | $ | (234,481) | |||||||
| Current portion of long-term debt | 13,590 | 10,152 | 19,763 | 16,367 | 12,708 | ||||||||||||
| Long-term debt | 897,013 | 871,913 | 847,849 | 823,670 | 796,754 | ||||||||||||
| Net debt | $ | 771,109 | $ | 695,104 | $ | 645,177 | $ | 594,321 | $ | 574,981 | |||||||
| TTM Adjusted EBITDA | $ | 425,291 | $ | 455,142 | $ | 454,565 | $ | 439,000 | $ | 391,497 | |||||||
| Net Leverage Ratio | 1.8x | 1.5x | 1.4x | 1.4x | 1.5x | ||||||||||||
Forward-looking Non-GAAP Measures
A reconciliation of net leverage ratio and segment contribution margin as used in our guidance, which are forward-looking non-GAAP financial measures, to the most directly comparable GAAP financial measure, is not provided because the Company is unable to provide such reconciliations without unreasonable effort. The inability to provide each reconciliation is due to the unpredictability of the amounts and timing of events affecting the items we exclude from the non-GAAP measure.
U.S. Silica Holdings, Inc.
Investor Contact
Marcelo Barbosa
Vice President, Finance
(281) 258-2173
barbosa@ussilica.com