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U.S. Silica Holdings, Inc. Announces Second Quarter 2012 Results

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 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.

CONSOLIDATED STATEMENTS OF OPERATIONS

 
Three Months Ended June 30,
  2012     2011  
(in thousands, except per share amounts)
Sales $ 104,599 $ 74,080
Cost of goods sold (excluding depreciation, depletion and amortization) 58,920 42,629
Operating expenses
Selling, general and administrative 9,718 5,952
Advisory fees to parent - 313
Depreciation, depletion and amortization   5,974     5,252  
  15,692     11,517  
Operating income 29,987 19,934
Other (expense) income
Interest expense (3,428 ) (5,224 )
Early extinguishment of debt - (6,043 )
Other income, net, including interest income   179     163  
  (3,249 )   (11,104 )
Income before income taxes 26,738 8,830
Income tax (expense) benefit   (7,287 )   (2,474 )
Net income $ 19,451   $ 6,356  
 
Earnings per share:
Basic $ 0.37 $ 0.13
Diluted $ 0.36 $ 0.13
       

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

 

June 30, 2012

December 31, 2011

(in thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 102,625 $ 59,199
Accounts receivable, net 49,904 46,600
Inventories, net 40,131 29,307
Prepaid expenses and other current assets 7,165 8,561
Deferred income taxes, net 20,424 28,007
Income tax receivable   -     3,895  
Total current assets   220,249     175,569  
Property, plant and mine development, net 363,828 336,788
Debt issuance costs, net 2,348 1,291
Goodwill 68,403 68,403
Trade names 10,436 10,436
Customer relationships, net 6,737 6,942
Other assets   6,458     6,367  
Total assets $ 678,459   $ 605,796  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Book overdraft $ 4,028 $ 5,588
Accounts payable 37,588 36,579
Accrued liabilities 8,620 9,875
Accrued interest 86 1,659
Current portion of long-term debt 6,364 6,364
Income tax payable 7,223 -
Current portion of deferred revenue   8,081     10,393  
Total current liabilities   71,990     70,458  
Long-term debt 254,209 255,425
Note payable to parent - 15,000
Liability for pension and other post-retirement benefits 49,190 52,078
Deferred revenue 899 2,128
Deferred income taxes, net 69,489 75,915
Other long-term obligations   13,420     12,858  
Total liabilities 459,197 483,862
 
Commitments and contingencies
 
Stockholders’ Equity:
Common stock 529 500
Preferred stock -

-

Additional paid-in capital 162,085 103,757
Retained earnings (accumulated deficit) 68,602 30,038
Treasury stock, at cost (215 )

-

Accumulated other comprehensive loss   (11,739 )   (12,361 )
Total stockholders’ equity   219,262     121,934  
Total liabilities and stockholders’ equity $ 678,459   $ 605,796  
 

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.

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