U.S. Silica Holdings, Inc. recently announced a net loss of $11.3 million (or $0.17 per basic and diluted share) for the 2016 third quarter, which ended September 30, 2016. The third quarter results were negatively impacted by $4.7 million of business development-related expenses, including acquisition-related costs for Sandbox and NBR Sands. Excluding these expenses, net of $1.8 million tax effect, earnings per share (EPS) was -$0.13 per basic share for the quarter. 

“Our team showed tremendous discipline and determination during the quarter to successfully integrate two major acquisitions while continuing to move our base businesses forward,” said Bryan Shinn, president and CEO. “With the additions of Sandbox and NBR Sands, we can further maximize value for our Oil and Gas customers by having the widest raw sand product offering of anyone in our industry and the only commercially viable last-mile containerized delivery solution. On the industrial side, we continue to benefit from the inherent value of ISP [Industrial and Specialty Products] to generate consistent cash flows to cover fixed costs in a downturn while providing a platform for growth going forward.”

Revenue totaled $137.7 million compared with $155.4 million in the same period last year, a decrease of 11% on a year-over-year basis and an increase of 18% sequentially compared with the second quarter of 2016. Overall tons sold totaled 2.5 million, down 5% compared with the 2.6 million tons sold in the third quarter of 2015 and an increase of 11% sequentially. Contribution margin for the quarter was $19.7 million, down 46% compared with $36.5 million in the same period of the prior year but up 27% sequentially from the second quarter of 2016. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $8.3 million compared with adjusted EBITDA of $24 million for the same period last year, a decrease of 66% on a year-over-year basis and an increase of 54% sequentially. 

Revenue for the quarter in the Oil and Gas segment totaled $86.8 million compared with $102 million in the same period in 2015, a decrease of 15% on a year-over-year basis and an increase of 34% sequentially from the second quarter of 2016. Tons sold totaled 1.6 million, essentially flat compared with the third quarter of 2015 and up 21% sequentially compared with the tons sold in the second quarter of 2016. 65% of tons were sold in basin compared with 61% sold in basin in the third quarter of 2015, and 55% sold in basin in the second quarter of 2016. Segment contribution margin was a loss of $1.9 million vs. a profit of $16.5 million in the third quarter of 2015, an increase of 68% sequentially compared with the second quarter of 2016. 

Revenue for the quarter in the Industrial and Specialty Products segment totaled $51 million compared with $53.4 million for the same period in 2015, a decrease of 5% on a year-over-year basis and a decrease of 2% on a sequential basis from the second quarter of 2016. Tons sold totaled 0.876 million, a decrease of 13% on a year-over-year basis and a decrease of 3% on a sequential basis compared with the second quarter of 2016. Segment contribution margin was $21.6 million compared with $20 million in the third quarter of 2015, an increase of 8% on a year-over-year basis and flat sequentially compared with the second quarter of 2016. 

As of September 30, 2016, the company had $264.1 million in cash and cash equivalents and $46 million available under its credit facilities. Total debt at September 30, 2016 was $506.6 million. Capital expenditures in the third quarter totaled $9.4 million and were associated largely with the company’s investments in various maintenance, expansion, and cost improvement projects. 

Due to the current lack of visibility in its Oil and Gas business, the company will continue to refrain from providing guidance for adjusted EBITDA until such time as it can gain more clarity around its customers’ business activity levels and the associated demand for products. Based on current market conditions, the company anticipates that its capital expenditures for 2016 will be in the range of $42-47 million. 

For more information, visit www.ussilica.com.