News Column

U.S. Silica Holdings Posts Fourth Quarter and Full Year 2013 Results

February 28, 2014

U.S. Silica Holdings, Inc. announced net income of $16.5 million or $0.31 per basic and diluted share for the fourth quarter ended Dec. 31, 2013 compared with net income of $21.8 million or $0.41 per basic and diluted share for the fourth quarter of 2012.

In a release on February 24, the Company noted that as stated previously results in the quarter were negatively impacted by severe winter storms in mid- and late December, reducing well completion activity, thus driving higher costs across our supply chain. The quarter was also negatively impacted by meaningful one-time costs, including a bad debt expense related to a customer bankruptcy.

Bryan Shinn, president and chief executive officer commented, "In 2013, we took several steps to position our Company for success going forward. We increased the speed with which we respond to customers by adding several new transloads near the major shale basins. We expanded the scale of our business by adding a state-of- the-art frac sand mine and plant in Sparta, Wisconsin and a resin- coated sand plant in Rochelle, Illinois. We strengthened our balance sheet and added top new talent to our team to support further growth of the Company. For 2014, we will be focused on improving the efficiency of our supply chain, bringing our new Utica operations online and carefully evaluating acquisition opportunities to expand our infrastructure and add additional mine production."

Full Year 2013 Highlights

Total Company

-Revenue totaled $546.0 million compared with $441.9 million for the full year of 2012, an improvement of 23.6 percent.

-Overall sales volumes increased to 8.2 million tons, an increase of 13.8 percent over 2012 totals.

-Selling, general and administrative expense for the year totaled $49.8 million or 9.1 percent of revenue compared with $41.3 million or 9.3 percent of revenue for the full year 2012.

-Contribution margin was $202.9 million compared with $193.7 million for the full year 2012.

-Adjusted EBITDA was $160.7 million or 29.4 percent of revenue compared with $150.6 million or 34.1 percent of revenue for the full year 2012.

-Net income was $75.3 million or $1.41 per diluted share compared with $79.2 million or $1.50 per diluted share for the full year 2012.

Fourth Quarter 2013 Highlights

Total Company

-Revenue totaled $149.5 million compared with $118.8 million for the same period last year, an increase of 25.8 percent.

-Overall sales volumes increased to 2.1 million tons, a 19.9 percent improvement over the fourth quarter of 2012.

-Contribution margin for the quarter was $48.0 million compared with $50.5 million in the same period of the prior year.

-Adjusted EBITDA was $35.9 million or 24.0 percent of revenue versus $39.0 million or 32.8 percent of revenue for the same period last year.

Oil and Gas

-Revenue for the quarter totaled $102.0 million compared with $70.9 million in the same period in 2012.

-61 percent of total sales were made in basin via transloads compared with 32 percent in the fourth quarter of 2012.

-Overall sales volumes totaled 1.1 million tons compared with 785.8 thousand tons sold in the fourth quarter of 2012.

-Segment contribution margin was $34.2 million versus $37.5 million in the fourth quarter of 2012.

Industrial and Specialty Products

-Revenue for the quarter totaled $47.5 million compared with $47.9 million for the same period in 2012.

-Overall sales volumes totaled 1.0 million tons compared with 973.4 thousand tons sold in the same period last year.

-Segment contribution margin was $13.8 million versus $13.0 million in the fourth quarter of 2012.

Capital Update

As of Dec. 31, 2013, the Company had $153.2 million in cash and cash equivalents and short term investments and $41.0 million available under its credit facilities. Total long-term debt at Dec. 31, 2013 was $368.0 million. Capital expenditures in the fourth quarter totaled $13.6 million and were associated largely with the Company's investment in a new frac sand mine and plant located near Utica, IL.

Outlook and Guidance

The Company is reiterating the guidance it provided in its press release dated Jan. 31. For the full year 2014, the Company anticipates adjusted EBITDA in range of $180 million to $200 million. In addition, the Company expects capital expenditures of between $75 million and $85 million and an effective tax rate of approximately 25 percent.

More information:

www.ussilica.com

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