U.S. Silica Holdings, Inc. Announces Third Quarter 2014 Results
In the news release,
U.S. Silica Holdings, Inc. Announces Third Quarter 2014 Results
- Revenue of $241.3 million up 67% year-over-year
- EPS of $0.77 per basic share; excluding business development and related expenses; EPS of $0.79 per basic share
- Total volumes sold in oil and gas reached a record 1.895 million tons, an 80% improvement over same period last year
- Cadre acquisition accretive to EPS in the quarter by $0.02 per share
-Company updating full-year 2014 adjusted EBITDA to high end of its guidance range
Third Quarter 2014 Highlights
- Revenue totaled
$241.3 million compared with$144.4 million for the same period last year and up 17% sequentially over the second quarter of 2014. - Overall sales volumes increased to 2.993 million tons, a 42% improvement over the third quarter of 2013 and up 15% sequentially over the second quarter of 2014.
- Contribution margin for the quarter was
$93.9 million compared with$54.7 million in the same period of the prior year and up 26% sequentially over the second quarter of 2014. - Adjusted EBITDA was
$77.5 million versus$45.0 million for the same period last year and representing a 30% increase sequentially over the second quarter of 2014.
Oil and Gas
- Revenue for the quarter totaled
$186.8 million compared with$94.2 million in the same period in 2013. - Overall tons sold totaled 1.895 million tons compared with 1.052 million tons sold in the third quarter of 2013.
- 61% of tons sold were made in basin via transloads compared with 56% in the third quarter of 2013.
- Segment contribution margin was
$77.0 million versus$40.1 million in the third quarter of 2013.
Industrial and Specialty Products
- Revenue for the quarter totaled
$54.4 million compared with$50.2 million for the same period in 2013. - Overall tons sold totaled 1.098 million tons compared with 1.059 million tons sold in the same period last year.
- Segment contribution margin was
$16.8 million compared with$14.5 million in the third quarter of 2013.
Capital Update
As of
Outlook and Guidance
The Company is now expecting full-year 2014 Adjusted EBITDA to be at the high end of its guidance 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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( dollars in thousands, except per share amounts) |
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Three Months Ended September 30, |
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2014 |
2013 |
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Sales |
$241,256 |
$144,372 |
|
Cost of goods sold (excluding depreciation, depletion and amortization) |
149,697 |
90,983 |
|
Operating expenses |
|||
Selling, general and administrative |
18,600 |
12,800 |
|
Depreciation, depletion and amortization |
12,425 |
9,152 |
|
31,025 |
21,952 |
||
Operating income |
60,534 |
31,437 |
|
Other (expense) income |
|||
Interest expense |
(4,950) |
(4,144) |
|
Early extinguishment of debt |
- |
(480) |
|
Other income, net, including interest income |
120 |
260 |
|
(4,830) |
(4,364) |
||
Income before income taxes |
55,704 |
27,073 |
|
Income tax expense |
(14,427) |
(5,739) |
|
Net income |
$ 41,277 |
$ 21,334 |
|
Earnings per share: |
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Basic |
$ 0.77 |
$ 0.40 |
|
Diluted |
$ 0.76 |
$ 0.40 |
U.S. SILICA HOLDINGS, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(dollars in thousands) |
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September 30, |
December 31, |
||
2014 |
2013 |
||
(unaudited) |
(audited) |
||
ASSETS |
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Current Assets: |
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Cash and cash equivalents |
$ 121,708 |
$ 78,256 |
|
Short-term investments |
75,155 |
74,980 |
|
Accounts receivable, net |
129,755 |
75,207 |
|
Inventories, net |
64,642 |
64,212 |
|
Prepaid expenses and other current assets |
8,710 |
11,104 |
|
Deferred income tax, net |
20,771 |
17,737 |
|
Income tax deposits |
2,753 |
- |
|
Total current assets |
423,494 |
321,496 |
|
Property, plant and mine development, net |
536,721 |
442,116 |
|
Debt issuance costs, net |
4,596 |
5,255 |
|
Goodwill |
68,910 |
68,403 |
|
Trade names |
14,991 |
10,436 |
|
Customer relationships, net |
7,331 |
6,120 |
|
Other assets |
11,046 |
9,635 |
|
Total assets |
$ 1,067,089 |
$ 863,461 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current Liabilities: |
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Book overdraft |
$ 5,545 |
$ 4,659 |
|
Accounts payable |
67,550 |
37,376 |
|
Dividends payable |
6,791 |
6,709 |
|
Accrued liabilities |
16,998 |
10,823 |
|
Accrued interest |
41 |
41 |
|
Current portion of long-term debt |
3,490 |
3,488 |
|
Deferred revenue |
26,850 |
- |
|
Income tax payable |
- |
1,037 |
|
Total current liabilities |
127,265 |
64,133 |
|
Long-term debt |
365,345 |
367,963 |
|
Deferred revenue |
69,481 |
- |
|
Liability for pension and other post-retirement benefits |
32,727 |
36,802 |
|
Deferred income taxes, net |
65,711 |
71,318 |
|
Other long-term obligations |
15,417 |
13,951 |
|
Total liabilities |
675,946 |
554,167 |
|
Stockholders' Equity: |
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Common stock |
538 |
534 |
|
Preferred stock |
- |
- |
|
Additional paid-in capital |
188,174 |
174,799 |
|
Retained earnings |
206,066 |
137,978 |
|
Treasury stock, at cost |
(38) |
- |
|
Accumulated other comprehensive loss |
(3,597) |
(4,017) |
|
Total stockholders' equity |
391,143 |
309,294 |
|
Total liabilities and stockholders' equity |
$ 1,067,089 |
$ 863,461 |
|
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 income before income taxes, the most directly comparable GAAP financial measure, to segment contribution margin.
For the Three Months Ended September 30, |
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2014 |
2013 |
||
(in thousands) |
|||
Sales: |
|||
Oil & Gas Proppants |
$ 186,812 |
$ 94,174 |
|
Industrial & Specialty Products |
54,444 |
50,198 |
|
Total sales |
241,256 |
144,372 |
|
Segment contribution margin: |
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Oil & Gas Proppants |
77,030 |
40,129 |
|
Industrial & Specialty Products |
16,844 |
14,546 |
|
Total segment contribution margin |
93,874 |
54,675 |
|
Operating activities excluded from segment cost of goods sold |
(2,315) |
(1,286) |
|
Selling, general and administrative |
(18,600) |
(12,800) |
|
Depreciation, depletion and amortization |
(12,425) |
(9,152) |
|
Interest expense |
(4,950) |
(4,144) |
|
Early extinguishment of debt |
- |
(480) |
|
Other income, net, including interest income |
120 |
260 |
|
Income before income taxes |
$ 55,704 |
$ 27,073 |
|
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, it 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 September 30, |
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2014 |
2013 |
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(in thousands) |
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Net income |
$ 41,277 |
$ 21,334 |
|
Total interest expense, net of interest income |
4,859 |
4,127 |
|
Provision for taxes |
14,427 |
5,739 |
|
Total depreciation, depletion and amortization expenses |
12,425 |
9,152 |
|
EBITDA |
72,988 |
40,352 |
|
Loss on early extinuguishment of debt (1) |
- |
480 |
|
Non-cash incentive compensation(2) |
1,424 |
854 |
|
Post-employment expenses (excluding service costs)(3) |
380 |
382 |
|
Other adjustments allowable under our existing credit agreement(4) |
2,695 |
2,956 |
|
Adjusted EBITDA |
$ 77,487 |
$ 45,024 |
|
(1) Includes write-offs of debt issuance costs, legal fees and a prepayment penalty related to the early |
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(2)Includes vesting of incentive equity compensation issued to our employees. |
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(3)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 O- Pension and Post-retirement Benefits to our Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. |
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(4) Reflects miscellaneous adjustments permitted under our existing credit agreement, including such items as expenses related to offerings of our common stock by our former controlling shareholder, business development activities related to our growth and expansion initiatives, one-time litigation fees, expenses related to debt refinancing and employment agency fees. |
Media Inquiries:
Manager of Corporate Communications
301-682-0326
holder@ussilica.com
Investor Relations Inquiries:
Director of Investor Relations and Corporate Communications
301-682-0304
lawsonm@ussilica.com
SOURCE