U.S. Silica Holdings, Inc. Announces Record Fourth Quarter and Full Year 2011 Results
FREDERICK, Md.--(BUSINESS WIRE)--Mar. 20, 2012--
Net income for the fourth quarter of 2011 was
Summary Financial and Operating Data
($ in millions except statistics and per share) | |||||||||||||||||||||
Three Months Ended
December 31, |
Year Ended
December 31, |
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2011 | 2010 | 2011 | 2010 | ||||||||||||||||||
Key Operating Statistics: | |||||||||||||||||||||
Tons Sold: (000s) |
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Oil & Gas | 590.4 | 430.0 | 2,018.1 | 1,522.2 | |||||||||||||||||
Industrial & Specialty Products | 1,010.6 | 1,017.4 | 4,270.4 | 4,442.4 | |||||||||||||||||
Total | 1,601.0 | 1,447.4 | 6,288.5 | 5,964.6 | |||||||||||||||||
ASP: (per ton) |
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Oil & Gas | $ | 63.94 | $ | 42.72 | $ | 53.06 | $ | 45.69 | |||||||||||||
Industrial & Specialty Products | $ | 45.40 | $ | 40.13 | $ | 44.15 | $ | 39.48 | |||||||||||||
Total | $ | 52.24 | $ | 40.90 | $ | 47.00 | $ | 41.07 | |||||||||||||
Income: | |||||||||||||||||||||
Revenue | $ | 83.6 | $ | 59.5 | $ | 295.6 | $ | 245.0 | |||||||||||||
Contribution Margin | $ | 33.6 | $ | 20.5 | $ | 114.4 | $ | 87.0 | |||||||||||||
% Margin | 40.2 | % | 34.4 | % | 38.7 | % | 35.5 | % | |||||||||||||
Adjusted EBITDA (a) | $ | 27.2 | $ | 16.0 | $ | 93.6 | $ | 72.2 | |||||||||||||
% Margin | 32.5 | % | 27.0 | % | 31.7 | % | 29.5 | % | |||||||||||||
Net Income | $ | 10.0 | $ | 3.8 | $ | 30.3 | $ | 11.4 | |||||||||||||
EPS, Basic and Diluted | $ | 0.19 | $ | 0.07 | $ | 0.61 | $ | 0.23 |
(a) | A reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to net income, the most comparable GAAP measure, and other important information appears on page 7. |
President and Chief Executive Officer
2011 Full Year Financial Highlights
The Company reported full year 2011 revenues of
Sales in the Oil & Gas segment accounted for approximately 75% of the growth in 2011. Sales volume within our Oil & Gas business increased by 32.6% in 2011, to over 2.0 million tons, compared to 1.5 million tons in 2010. This growth was driven by continued increased demand for our proppants as domestic drilling and production activity continued to accelerate throughout the year. Contribution margin for the Oil and Gas business was
2011 proved to be a strong year for our Industrial & Specialty Products business as we continued to add high-value customers to our portfolio to offset any softness in demand. Contribution margins for the Industrial and Specialty Products segment for the full year 2011 was
SG&A expense was
Adjusted EBITDA increased 29.6%, or
Net income for full year 2011 was
Fourth Quarter 2011 Financial Highlights
The Company reported fourth quarter 2011 revenues of
Fourth quarter 2011 sales volume within our Oil & Gas business increased by 37.3%, to over 590 thousand tons, compared to 430 thousand tons in 2010; sales volumes for our Industrial and Specialty Products were mostly flat year over year.
SG&A expense was
Adjusted EBITDA increased 69.7%, or
Net income for the fourth quarter 2011 was
Capital Update
As of
Outlook
We currently estimate Revenue, Adjusted EBITDA and Capital Expenditures for 2012 to be within the following ranges:
First Quarter
2012 |
Full Year
2012 |
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Revenue | $92 - $97 million | $395 - $420 million | |||||||||||
Adjusted EBITDA (a) | $34 - $36 million | $140 - $150 million | |||||||||||
Capital Expenditures |
$70 - $95 million |
(a) | The Company is not able to provide a reconciliation of projected Adjusted EBITDA to projected Net Income due to the unknown effect, timing and potential significance of certain income statement items. The methodology to reconcile Adjusted EBITDA ton Net Income is disclosed in our 2011 Annual Report on Form 10-K, as filed with the SEC, and included on page 7, herein. |
These projections are based on many estimates and are inherently subject to change based on industry conditions, future decisions made by management and the Board of Directors, and significant economic, competitive and other uncertainties and contingencies.
Conference Call
The call can 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 389786. The replay will be available until
Interested parties may also listen to a simultaneous webcast of the conference call by logging onto U.S. Silica's website at http://www.ussilica.com in the Investors Resources section. A replay of the conference call will also be available for approximately 30 days following the 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 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
U.S. SILICA HOLDINGS, INC. COMBINED STATEMENTS OF OPERATIONS |
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Year Ended December 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
(in thousands, except per share amounts) | ||||||||||||
Sales | $ | 295,596 | $ | 244,953 | $ | 191,623 | ||||||
Cost of goods sold (excluding depreciation, depletion and amortization) | 181,196 | 157,994 | 136,200 | |||||||||
Operating expenses | ||||||||||||
Selling, general and administrative | 23,348 | 20,413 | 10,672 | |||||||||
Advisory fees to parent | 9,250 | 1,250 | 1,250 | |||||||||
Depreciation, depletion and amortization | 20,999 | 19,305 | 17,887 | |||||||||
53,597 | 40,968 | 29,809 | ||||||||||
Operating income | 60,803 | 45,991 | 25,614 | |||||||||
Other (expense) income | ||||||||||||
Interest expense | (18,407 | ) | (23,034 | ) | (28,228 | ) | ||||||
Early extinguishment of debt | (6,043 | ) | (10,195 | ) | - | |||||||
Other income, net, including interest income | 1,062 | 959 | 4,894 | |||||||||
(23,388 | ) | (32,270 | ) | (23,334 | ) | |||||||
Income before income taxes | 37,415 | 13,721 | 2,280 | |||||||||
Income tax (expense) benefit | (7,162 | ) | (2,329 | ) | 3,259 | |||||||
Net income | $ | 30,253 | $ | 11,392 | $ | 5,539 | ||||||
Earnings per share: | ||||||||||||
Basic | $ | 0.61 | $ | 0.23 | $ | 0.11 | ||||||
Diluted | $ | 0.61 | $ | 0.23 | $ | 0.11 | ||||||
U.S. SILICA HOLDINGS, INC. COMBINED BALANCE SHEETS |
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December 31, | ||||||||||
2011 | 2010 | |||||||||
(in thousands) | ||||||||||
ASSETS | ||||||||||
Current Assets: | ||||||||||
Cash and cash equivalents | $ | 59,199 | $ | 64,500 | ||||||
Accounts receivable, net | 46,600 | 30,044 | ||||||||
Inventories, net | 29,307 | 22,418 | ||||||||
Prepaid expenses and other current assets | 8,561 | 3,191 | ||||||||
Deferred income taxes, net | 28,007 | 4,557 | ||||||||
Income tax receivable | 3,895 | 2,150 | ||||||||
Total current assets | 175,569 | 126,860 | ||||||||
Property, plant and mine development, net | 336,788 | 287,595 | ||||||||
Debt issuance costs, net | 1,291 | 1,322 | ||||||||
Goodwill | 68,403 | 68,403 | ||||||||
Trade names | 10,436 | 10,436 | ||||||||
Customer relationships, net | 6,942 | 7,353 | ||||||||
Other assets | 6,367 | 6,565 | ||||||||
Total assets | $ | 605,796 | $ | 508,534 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Current Liabilities: | ||||||||||
Book overdraft | $ | 5,588 | $ | 3,727 | ||||||
Accounts payable | 36,579 | 12,027 | ||||||||
Accrued liabilities | 9,875 | 8,949 | ||||||||
Accrued interest | 1,659 | 101 | ||||||||
Current portion of long-term debt | 6,364 | 1,510 | ||||||||
Current portion of deferred revenue | 10,393 | 6,512 | ||||||||
Total current liabilities | 70,458 | 32,826 | ||||||||
Long-term debt | 255,425 | 236,932 | ||||||||
Note payable to parent | 15,000 | 15,000 | ||||||||
Liability for pension and other post-retirement benefits | 52,078 | 49,460 | ||||||||
Deferred revenue | 2,128 | 13,077 | ||||||||
Deferred income taxes, net | 75,915 | 53,124 | ||||||||
Other long-term obligations | 12,858 | 10,551 | ||||||||
Total liabilities | 483,862 | 410,970 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' Equity: | ||||||||||
Common stock - $0.01 par value, 100,000,000 authorized shares, 50,000,000 shares issued and outstanding | 500 | 500 | ||||||||
Additional paid-in capital | 103,757 | 102,519 | ||||||||
Retained earnings (accumulated deficit) | 30,038 | (215 | ) | |||||||
Accumulated other comprehensive loss | (12,361 | ) | (5,240 | ) | ||||||
Total stockholders' equity | 121,934 | 97,564 | ||||||||
Total liabilities and stockholders' equity | $ | 605,796 | $ | 508,534 |
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 |
Year Ended
December 31, |
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2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income | $ | 10,045 | $ | 3,772 | $ | 30,253 | $ | 11,392 | |||||||
Total interest expense, net of interest income | 3,374 | 5,221 | 18,347 | 22,989 | |||||||||||
Provision for taxes (benefit) | 371 | (151 | ) | 7,162 | 2,329 | ||||||||||
Total depreciation, depletion and amortization expenses | 5,363 | 5,040 | 20,999 | 19,305 | |||||||||||
EBITDA | 19,153 | 13,882 | 76,761 | 56,015 | |||||||||||
Non-cash deductions, losses and charges (1) | (526 | ) | 762 | (526 | ) | 1,364 | |||||||||
Non-recurring expenses (income) (2) | (733 | ) | - | (2,028 | ) | - | |||||||||
Transaction expenses (3) | - | - | 6,043 | 10,669 | |||||||||||
Permitted management fees and expenses (4) | 8,312 | 312 | 9,250 | 1,250 | |||||||||||
Non-cash incentive compensation (5) | 555 | 96 | 1,237 | 383 | |||||||||||
Post-employment expenses (excluding service costs) (6) | 422 | 550 | 1,689 | 2,113 | |||||||||||
Other adjustments allowable under our existing credit agreements (7) | 269 | 39 | 1,131 | 358 | |||||||||||
Adjusted EBITDA |
$ | 27,452 | $ | 15,641 | $ | 93,557 | $ | 72,152 |
__________
(1) | Includes non-cash deductions, losses and charges arising from adjustments to estimates of a future litigation liability and the decision by our hourly workforce at our Rockwood facility to withdraw from a pension plan administered by a third party. | |
(2) | Includes non-recurring expenses related to a former insurer's liquidation. | |
(3) | Includes natural gas hedging losses, purchase accounting adjustments, management bonuses and other expenses related to the Golden Gate Capital acquisition, as well as unamortized transaction fees and expenses arising from the refinancing of our Term Loan Facility. | |
(4) | Includes fees and expense paid to Golden Gate Capital for ongoing consulting and management services provided pursuant to an Advisory Agreement entered into in connection with our acquisition by Golden Gate Capital. At December 31, 2011, we recorded an accrual for $8.0 million related to the termination fee paid to Golden Gate Capital in connection with our initial public offering on January 31, 2012. | |
(5) | Includes vesting of incentive equity compensation issued to our employees. | |
(6) | 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. | |
(7) | Reflects miscellaneous adjustments permitted under our existing credit agreements, including such items as expenses related to reviewing potential acquisitions and costs associated with relocating the corporate headquarters. |
Source:
U.S. Silica Holdings, Inc.
855-SILICA-7 (855-745-4227)
Email: IR@ussilica.com