FREDERICK, Md., July 29, 2014 /PRNewswire/ -- U.S. Silica Holdings, Inc. (NYSE: SLCA) today announced net income of $28.7 million or $0.53 per basic and diluted share for the second quarter ended June 30, 2014 compared with net income of $20.2 million or $0.38 per basic and diluted share for the second quarter of 2013. Excluding M&A and business development expenses of $1.7 million or $0.02 per basic share during the quarter, EPS was $0.55 per basic share and diluted share.

Bryan Shinn, president and chief executive officer commented, "I'm extremely pleased with the performance of our oil and gas and industrial businesses. The robust demand we continue to see in oil and gas drove higher pricing and margins for both of our operating units during the quarter. We're moving quickly to add more capacity through both Greenfield developments and M&A to assure adequate supply for our customers going forward."

Second Quarter 2014 Highlights

Total Company


    --  Revenue totaled $205.8 million compared with $129.8 million for the same
        period last year and up 14% sequentially over the first quarter of 2014.
    --  Overall sales volumes increased to 2.6 million tons, a 27% improvement
        over the second quarter of 2013 and up 13% sequentially over the first
        quarter of 2014.
    --  Contribution margin for the quarter was $74.7 million compared with
        $50.8 million in the same period of the prior year and up 36%
        sequentially over the first quarter of 2014.
    --  Adjusted EBITDA was $59.8 million versus $ 41.0 million for the same
        period last year and representing a 43% increase sequentially over the
        first quarter of 2014.

Oil and Gas


    --  Revenue for the quarter totaled $149.3 million compared with $77.7
        million in the same period in 2013.
    --  Overall tons sold totaled 1.5 million tons compared with 988 thousand
        tons sold in the second quarter of 2013.
    --  68% of tons sold were made in basin via transloads compared with 42% in
        the second quarter of 2013.
    --  Segment contribution margin was $57.1 million versus $35.5 million in
        the second quarter of 2013.

Industrial and Specialty Products


    --  Revenue for the quarter totaled $56.5 million compared with $52.2
        million for the same period in 2013.
    --  Overall tons sold totaled 1.095 million tons compared with 1.060 million
        tons sold in the same period last year.
    --  Segment contribution margin was $17.6 million compared with $15.4
        million in the second quarter of 2013.

Capital Update

As of June 30, 2014, the Company had $181.1 million in cash and cash equivalents and short term investments and $46.7 million available under its credit facilities. Total long-term debt at June 30, 2014 totaled $366.2 million. Capital expenditures in the second quarter totaled $7.4 million and were associated largely with the Company's investment in a new frac sand mine and plant located near Utica, Illinois, a new transload facility under construction in Odessa, Texas and other maintenance capital projects.

Outlook and Guidance

The Company is increasing the guidance it provided in its press release dated April 29, 2014. For the full-year 2014, the Company now anticipates Adjusted EBITDA in the range of $215 million to $225 million, which includes a small contribution from our Cadre acquisition. The Company is also revising guidance for capital expenditures and its full-year effective tax rate. The Company now expects capital expenditures in the range of $95 million to $105 million and an effective tax rate of approximately 27 percent.

Conference Call

U.S. Silica will host a conference call for investors tomorrow, July 30, 2014 at 9:00 a.m. Eastern Time to discuss these results. Hosting the call will be Bryan 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 (855) 325-2605 or for international callers, (970) 315-0758. The conference passcode is 71727515. A replay will be available shortly after the call and can be accessed by dialing (855) 859-2056. The passcode for the replay is 71727515. The replay of the call will be available through August 29, 2014.

About U.S. Silica

U.S. Silica Holdings, Inc., a member of the Russell 2000 and S&P Small Cap 600 indexes, is one of the largest domestic producers 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

                                                                     ( dollars in thousands, except per share amounts)


                                                                                                                       Three Months Ended June 30,
                                                                                                                       ---------------------------

                                                                                                                                  2014                 2013
                                                                                                                                  ----                 ----


    Sales                                                                                                                     $205,801             $129,828

    Cost of goods sold (excluding depreciation, depletion and amortization)                                                    132,417               80,297

    Operating expenses

    Selling, general and administrative                                                                                         19,267               10,099

    Depreciation, depletion and amortization                                                                                    10,341                8,890
                                                                                                                                ------                -----

                                                                                                                                29,608               18,989
                                                                                                                                ------               ------

    Operating income                                                                                                            43,776               30,542

    Other (expense) income

    Interest expense                                                                                                           (4,013)             (3,535)

    Other income, net, including interest income                                                                                   221                   63
                                                                                                                                   ---                  ---

                                                                                                                               (3,792)             (3,472)
                                                                                                                                ------               ------

    Income before income taxes                                                                                                  39,984               27,070

    Income tax expense                                                                                                        (11,330)             (6,878)
                                                                                                                               -------               ------

    Net income                                                                                                                 $28,654              $20,192
                                                                                                                               =======              =======


    Earnings per share:

    Basic                                                                                                                        $0.53                $0.38

    Diluted                                                                                                                      $0.53                $0.38



                                                  U.S. SILICA HOLDINGS, INC.

                                            CONDENSED CONSOLIDATED BALANCE SHEETS

                                                    (dollars in thousands)


                                                                                   June 30,            December 31,

                                                                                                  2014                  2013
                                                                                                  ----                  ----

                                                                                  (unaudited)            (audited)

                                                            ASSETS

     Current Assets:

     Cash and cash equivalents                                                                $105,974               $78,256

     Short-term investments                                                                     75,101                74,980

     Accounts receivable, net                                                                  108,452                75,207

     Inventories, net                                                                           58,650                64,212

     Prepaid expenses and other current assets                                                   8,936                 6,347

     Deferred income tax, net                                                                   18,582                17,737

     Income tax deposits                                                                         5,074                     -

     Total current assets                                                                      380,769               316,739
                                                                                               -------               -------

     Property, plant and mine development, net                                                 441,450               442,116

     Debt issuance costs, net                                                                    4,815                 5,255

     Goodwill                                                                                   68,403                68,403

     Trade names                                                                                10,436                10,436

     Customer relationships, net                                                                 5,915                 6,120

     Other assets                                                                               11,073                14,392
                                                                                                ------                ------

     Total assets                                                                             $922,861              $863,461
                                                                                              ========              ========


                                             LIABILITIES AND STOCKHOLDERS' EQUITY

     Current Liabilities:

     Book overdraft                                                                             $3,466                $4,659

     Accounts payable                                                                           52,826                37,376

     Dividends payable                                                                           6,770                 6,709

     Accrued liabilities                                                                        13,020                10,823

     Accrued interest                                                                               41                    41

     Current portion of long-term debt                                                           3,489                 3,488

     Income tax payable                                                                              -                1,037
                                                                                                   ---                -----

     Total current liabilities                                                                  79,612                64,133
                                                                                                ------                ------

     Long-term debt                                                                            366,218               367,963

     Liability for pension and other post-retirement benefits                                   34,431                36,802

     Deferred income tax, net                                                                   74,203                71,318

     Other long-term obligations                                                                14,913                13,951
                                                                                                ------                ------

     Total liabilities                                                                         569,377               554,167
                                                                                               -------               -------


     Commitments and contingencies


     Stockholders' Equity:

     Preferred stock                                                                                 -                    -

     Common stock                                                                                  538                   534

     Additional paid-in capital                                                                185,155               174,799

     Retained earnings                                                                         171,540               137,978

     Treasury stock, at cost                                                                         -                    -

     Accumulated other comprehensive loss                                                      (3,749)              (4,017)
                                                                                                ------                ------

     Total stockholders' equity                                                                353,484               309,294
                                                                                               -------               -------

     Total liabilities and stockholders' equity                                               $922,861              $863,461
                                                                                              ========              ========

Non-GAAP Financial Measures

Segment Contribution Margin

Segment contribution margin is a key metric that management uses to evaluate our operating performance and to determine resource allocation between segments. Segment contribution margin excludes certain corporate costs not associated with the operations of the segment. These unallocated costs include costs related to corporate functional areas such as sales, production and engineering, corporate purchasing, accounting, treasury, information technology, legal and human resources.

The following table sets forth a reconciliation of income before income taxes, the most directly comparable GAAP financial measure, to segment contribution margin.


                                           For the Three Months
                                               Ended June 30,
                                          ---------------------

                                               2014                  2013
                                               ----                  ----

                                              (in thousands)

    Sales:

    Oil & Gas Proppants                    $149,331               $77,672

    Industrial & Specialty Products          56,470                52,156
                                             ------                ------

    Total sales                             205,801               129,828

    Segment contribution margin:

    Oil & Gas Proppants                      57,060                35,475

    Industrial & Specialty Products          17,615                15,358
                                             ------                ------

    Total segment contribution margin        74,675                50,833

    Operating activities excluded from
     segment cost of goods sold             (1,291)              (1,302)

    Selling, general and administrative    (19,267)             (10,099)

    Depreciation, depletion and
     amortization                          (10,341)              (8,890)

    Interest expense                        (4,013)              (3,535)

    Other income, net, including interest
     income                                     221                    63
                                                ---                   ---

    Income (loss) before income taxes       $39,984               $27,070
                                            =======               =======

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, it 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.

The following table sets forth a reconciliation of net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA.


                                            Three Months Ended
                                                 June 30,
                                           -------------------

                                               2014                  2013
                                               ----                  ----

                                              (in thousands)

    Net income                              $28,654               $20,192

    Total interest
     expense, net of
     interest income                          3,811                 3,522

    Provision for taxes                      11,330                 6,878

    Total depreciation,
     depletion and
     amortization
     expenses                                10,341                 8,890
                                             ------                 -----

       EBITDA                                54,136                39,482

    Non-cash incentive
     compensation(1)                          2,053                   704

    Post-employment
     expenses (excluding
     service costs)(2)                          381                   586

    Other adjustments
     allowable under our
     existing credit
     agreement(3)                             3,215                   213
                                              -----                   ---

       Adjusted EBITDA                      $59,785               $40,985
                                            =======               =======



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

    (2 ) 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 M- Pension
     and Post-retirement Benefits to our Financial Statements in Part I,
     Item 1 of this Quarterly Report on Form 10-Q.

    (3) Reflects miscellaneous adjustments permitted under our existing
     credit agreement, including such items as expenses related to
     offerings of our common stock by our former controlling shareholder,
     business development activities related to our growth and expansion
     initiatives, one-time litigation fees, expenses related to debt
     refinancing and employment agency fees.

Investor Relations Inquiries: Mike Lawson
Director of Investor Relations and Corporate Communications
301-682-0304
lawsonm@ussilica.com

SOURCE U.S. Silica Holdings, Inc.