SLCA (33.20) on amazing earnings after the bell
Reported sales in the quarter of 345 million, up 150% from last year. Reported net income of $41.3 million or .51 EPS, compared to a loss of (11.3 million), or (.17) EPS. Also announced a cash dividend , along with a share buyback of $100 million today. Conference call tomorrow morning at 8amCST. This stock was trading at 61.50$ at the high for the last year, just recently bouncing off the low of 24.26.
FREDERICK, Md., Nov. 6, 2017 /PRNewswire/ -- U.S. Silica Holdings, Inc. (NYSE: SLCA) today announced net income of $41.3 million or $0.51 per basic share, or $0.50 per diluted share, for the third quarter ended Sept. 30, 2017 compared with a net loss of $11.3 million or $(0.17) per basic and diluted share for the third quarter of 2016. The third quarter results were negatively impacted by $2.4 million in business development related expenses. Excluding this expense, net of the $0.9 million tax effect, EPS was $0.53 per basic share for the quarter.
"Robust market demand in our Oil and Gas business, coupled with record profitability from our Industrial and Specialty Products segment drove an exceptionally strong performance in the third quarter that led to a record Adjusted EBITDA for the total Company," said Bryan Shinn, president and chief executive officer.
"In Oil and Gas, volumes were up 15% sequentially to a record 3.1 million tons, with capacity utilization running at nearly 100%. Pricing was up over 5% sequentially and our contribution margin per ton in Oil and Gas was $30.54. Our Sandbox unit had a very strong performance as well, exiting the quarter fully utilized with 52 crews online. Additionally, we signed five new long-term supply agreements during the quarter for both Northern White and local and regional sand, many of which included capacity reservation fees.
"Our ISP segment had record contribution margin during the quarter of $24 million, driven by a combination of strategic price increases and a better mix of higher margin products sold during the quarter,'' Shinn concluded.
Third Quarter 2017 Highlights
Total Company
Revenue totaled $345 million compared with $137.7 million for the same period last year, an increase of 151% on a year-over-year basis and an increase of 19% sequentially over the second quarter of 2017.
Overall tons sold totaled 4.075 million, up 63% compared to 2.493 million tons sold in the third quarter of 2016 and an increase of 12% sequentially over the second quarter of 2017.
Contribution margin for the quarter was $120.1 million, up 510% compared with $19.7 million in the same period of the prior year and up 27% sequentially from the second quarter of 2017.
Adjusted EBITDA was $96.7 million compared with Adjusted EBITDA of $8.3 million in the third quarter of 2016 and $75.1 million in the second quarter of 2017.
Oil and Gas
Revenue totaled $286.4 million compared with $86.8 million for the same period of 2016, up 230% on a year-over-year basis and an increase of 22% sequentially from the second quarter of 2017.
Tons sold totaled 3.147 million, an increase of 95% over the 1.617 million tons sold in the third quarter of 2016, and an increase of 15% sequentially over the 2.745 million tons sold in the second quarter of 2017.
66% of tons sold were in basin compared with the 62% sold in basin in the second quarter of 2017.
Segment contribution margin was $96.1 million versus a loss of $1.9 million in the third quarter of 2016, and an increase of 35% over the $71.2 million in the second quarter of 2017.
Industrial and Specialty Products
Revenue in the third quarter of 2017 totaled $58.7 million, an increase of 15% over the third quarter of 2016, and up 6% over the second quarter of 2017.
Tons sold totaled 0.928 million, up 6% over the 0.876 million tons sold in the same period of 2016, and an increase of 4% compared with the second quarter of 2017.
Segment contribution margin was $24 million compared to $21.6 million in the third quarter of 2016, an increase of 11% on a year-over-year basis and up 3% sequentially over the second quarter of 2017.
Capital Update and Share Repurchase Plan
As of Sept. 30, 2017, the Company had $463.7 million in cash and cash equivalents and $45.2 million available under its credit facilities. Total debt at Sept. 30, 2017 was $511.3 million. Capital expenditures in the third quarter totaled $130.7 million, and were associated largely with our previously announced growth projects and other maintenance and cost improvement capital projects.
Subsequent to the end of the quarter, the Board of Directors approved a new Share Repurchase Plan to repurchase up to $100 million of the Company's common stock. Commenting on the action, Shinn noted that, "U.S. Silica is the only Company in the sand space that has had the financial strength and flexibility to continually pay a quarterly dividend, fund growth projects, complete accretive acquisitions and make share repurchases, all while maintaining an industry-leading balance sheet."
Outlook and Guidance
The Company anticipates that its capital expenditures for the full year 2017 will be at the high end of the second quarter guidance or approximately $375 million.
For the fourth quarter, we expect that sand volumes will be up in oil and gas but perhaps restrained by some frac crews extending their holiday time off, plant down time due to planned maintenance and brief outages for capacity expansion work at a few mines. We do expect to see continued pricing upside in oil and gas during the fourth quarter. Contract interest is at an all-time high and we will continue to prioritize customers with capacity reservation fee contracts and long-term partners in this tight market. For Sandbox, we expect strong growth and plan to increase from the 52 crews online at the end of the third quarter to 70 active crews by year end.
For 2018, the Company expects another strong year, driven by record demand for frac sand, increased opportunities for Sandbox and increased market penetration for some of ISP's new, higher margin products. We are forecasting total industry demand for frac sand to be in the range of 90 million to 100 million tons, assuming a rig count that is essentially flat with today's levels and proppant per well up 15-20% year-over-year. Additionally, the Company expects to invest significantly in Sandbox and is targeting to have over 100 crews online exiting 2018. Finally, ISP, which has grown contribution margin at a 10% CAGR for the last five years, is expected to continue this trend in 2018 with increased market penetration of new, higher margin products like our cool roof granules and by the introduction of additional attractive new products.
