ROHSTOFF INTERNATIONAL

14:43 | 30.04.2013
U.S. Silica Holdings, Inc. Announces First Quarter 2013 Results and Declares Quarterly Cash Dividend

U.S. Silica Holdings, Inc. (NYSE: SLCA) announced today net income of
$17.3 million or $0.33 per basic and $0.32 per diluted share for the
first quarter ended March 31, 2013 compared with net income of $19.1
million or $0.37 per basic and diluted share for the same period in
2012. Earnings per share in the quarter were negatively impacted by $1.9
million on a pre-tax basis or $0.03 per share due to certain
non-recurring charges related to our secondary offering in March and M&A
and business development activities. Excluding this additional expense,
net income for the first quarter ended March 31, 2013 was $18.7 million
or $0.35 per basic share.

Bryan A. Shinn, president and chief executive officer of the company
commented, “The first quarter of 2013 was very strong for our company as
we posted record revenue, driven by our strong performance in oil and
gas. We believe that drilling and efficiency improvements in hydraulic
fracturing will drive increased demand in oil and gas and we expect to
grow market share in a growing market.” Shinn added that, “We are also
seeing success in our ISP business. We anticipate this segment will
continue to be a positive contributor to this year’s earnings growth,
due to the continuing rebounds in housing, chemical and automotive end
markets and our focus on developing and marketing higher value
offerings.”
First Quarter 2013 HighlightsTotal Company
Revenue totaled $122.3 million compared with $102.6 million for the
same period in 2012, an improvement of 19.2%. The increase was driven
primarily by strength in the Oil and Gas Proppants segment.

Overall sales volumes increased to 1.9 million tons, an increase of
8.2% over the first quarter of 2012.

Contribution margin for the quarter of $49.4 million compared with
$47.4 million for the same period last year.

Adjusted EBITDA was $38.8 million or 31.7% of revenue compared with
$37.0 million or 36.1% of revenue for the same period last year.
Oil and Gas
Revenue for the quarter totaled $73.6 million compared with $53.8
million in the same period in 2012.

Segment contribution margin was $36.2 million versus $35.1 million in
the first quarter of 2012.

Tons sold totaled 920,569 versus 678,982 sold in the first quarter of
2012.
Industrial and Specialty Products
Revenue for the quarter totaled $48.7 million compared with $48.8
million for the same period in 2012.

Segment contribution margin was $13.2 million versus $12.4 million in
the first quarter of 2012.

Tons sold totaled 964,956 compared with 1,063,900 sold in the first
quarter of 2012.
Capital Update
As of March 31, 2013, the Company had $42.9 million in cash and cash
equivalents and $29.0 million available under its credit facilities.
Total outstanding debt at March 31, 2013 totaled $265.4 million. Capital
expenditures in the first quarter totaled $22.7 million and were
associated primarily with our raw sand plant in Sparta, Wisconsin, the
acquisition of an existing silica sand processing facility near our
Ottawa operations, and the construction of three new transloads in
Texas, West Virginia and Ohio.
Quarterly Cash Dividend
The Company’s Board of Directors has declared a regular quarterly cash
dividend of $0.125 per share to common shareholders of record at the
close of business on June 19, 2013, payable on July 3, 2013. Future
declarations of dividends are subject to approval of the Board.
Commenting on the Board’s decision, President and CEO Bryan Shinn said
“the initiation of this dividend reflects the confidence that we have in
our future business prospects and ability to generate cash beyond the
needs for growth investment.”
Outlook and Guidance
The company expects revenues of approximately $132 million to $140
million and adjusted EBITDA of between $39 million and $42 million in
the second quarter of 2013. For the full year, 2013, the Company is
reaffirming its guidance for adjusted EBITDA in the range of $165
million to $175 million and capital expenditures of between $50 and $60
million.
Conference Call
U.S. Silica will host a conference call for investors today, April 30,
2013 at 10:00 a.m. Eastern Time to discuss these results. Hosting the
call will be Bryan A. Shinn, President and Chief Executive Officer and
Don Merril, Vice President and Chief Financial Officer. Investors are
invited to listen to a live webcast of the conference call by visiting
the “Investor Resources” section of the Company’s website at www.ussilica.com.
The webcast will be archived for one year. The call can also 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 412223. The
replay of the call will be available through May 31, 2013.
About U.S. Silica
U.S. Silica Holdings, Inc., a Delaware corporation, is the second
largest domestic producer of commercial silica, a specialized mineral
that is a critical input into the oil and gas proppants end market. The
company also processes ground and unground silica sand for a variety of
industrial and specialty products end markets such as glass, fiberglass,
foundry molds, municipal filtration and recreational uses. During its
100-plus year history, U.S. Silica Holdings, Inc. has developed core
competencies in mining, processing, logistics and materials science that
enable it to produce and cost-effectively deliver over 250 products to
customers across these end markets. U.S. Silica Holdings, Inc. is
headquartered in Frederick, MD.
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’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 Securities and Exchange Commission. We
undertake no obligation to publicly update or revise any forward-looking
statement as a result of new information, future events or otherwise,
except as otherwise required by law.

 
U.S. SILICA HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 

 
Three Months Ended March 31,

2013
 
2012

(in thousands, except per share amounts)
Sales

$

122,311

$

102,591

Cost of goods sold (excluding depreciation, depletion and
amortization)

74,412

56,921

Operating expenses

Selling, general and administrative

12,404

9,904

Depreciation, depletion and amortization

 

8,278

 

5,978

 

20,682

 

15,882

Operating income

27,217

29,788

Other (expense) income

Interest expense

(3,576)

(3,797)

Other income, net, including interest income

 

122

 

154

 

(3,454)

 

(3,643)

Income before income taxes

23,763

26,145

Income tax expense

 

(6,486)

 

(7,032)

Net income

$

17,277

$

19,113

 

Earnings per share:

Basic

$

0.33

$

0.37

Diluted

$

0.32

$

0.37

 

 

 

U.S. SILICA HOLDINGS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS

 

March 31,
December 31,

2013
2012

(in thousands)ASSETSCurrent Assets:

Cash and cash equivalents

$

42,919

$

61,022

Accounts receivable, net

65,249

59,564

Inventories, net

42,776

39,835

Prepaid expenses and other current assets

7,686

6,738

Deferred income tax, net

 

10,122

 

10,108

Total current assets

 

168,752

 

177,267

Property, plant and mine development, net

429,611

414,218

Debt issuance costs, net

1,980

2,111

Goodwill

68,403

68,403

Trade names

10,436

10,436

Customer relationships, net

6,428

6,531

Other assets

 

8,451

 

7,844

Total assets

$

694,061

$

686,810

 
LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent Liabilities:

Book overdraft

$

4,376

$

5,390

Accounts payable

30,307

37,333

Accrued liabilities

10,080

9,481

Accrued interest

154

2

Current portion of capital lease

489

Current portion of long-term debt

2,434

2,433

Short-term debt

10,551

Income tax payable

6,149

20,596

Current portion of deferred revenue

 

2,938

 

4,855

Total current liabilities

 

67,478

 

80,090

Long-term debt

252,383

252,992

Liability for pension and other post-retirement benefits

52,768

52,747

Deferred income tax, net

60,154

59,111

Other long-term obligations

 

10,323

 

10,176

Total liabilities

443,106

455,116

 

Commitments and contingencies

 
Stockholders’ Equity:

Common stock

529

529

Preferred stock

Additional paid-in capital

164,535

163,579

Retained earnings

100,008

82,731

Treasury stock, at cost

(364)

(970)

Accumulated other comprehensive loss

 

(13,753)

 

(14,175)

Total stockholders’ equity

 

250,955

 

231,694

Total liabilities and stockholders’ equity

$

694,061

$

686,810

 
Non-GAAP Financial MeasuresAdjusted 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.

 

Three Months Ended March 31,

2013
 
2012

(in thousands)
Net income

$

17,277

$

19,113

Total interest expense, net of interest income

3,552

3,763

Provision for taxes

6,486

7,032

Total depreciation, depletion and amortization expenses

 

8,278

 

5,978

EBITDA

35,593

35,886

Non-recurring expense (income)(1)

(439)

Transaction expenses(2)

156

Non-cash incentive compensation(3)

678

654

Post-employment expenses (excluding service costs)(4)

586

605

Other adjustments allowable under our existing credit agreements(5)

 

1,930

 

125

Adjusted EBITDA

$

38,787

$

36,987

 

(1) Includes the gain on sale of assets for the three months ended
March 31, 2013, and 2012, respectively.

(2) Includes fees and expenses related to the January 27, 2012
amendment of our Term Loan and Revolver.

(3) Includes vesting of incentive equity compensation issued to our
employees.

(4) 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 Q to our
Consolidated Financial Statements in Part I, Item 1 of this
Quarterly Report on Form 10-Q.

(5) Reflects miscellaneous adjustments permitted under our existing
credit agreements, including such items as expenses related to a
secondary offering by Golden Gate Capital and reviewing growth
initiatives and potential acquisitions.

 


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