U.S. Silica Holdings, Inc. Announces Fourth Quarter and Full Year 2020 Results

- Fourth quarter revenue of $227.3 million and full year revenue of $845.9 million

- GAAP EPS earnings for the quarter of $0.06 per basic and diluted share and adjusted EPS loss ($0.26) per basic and diluted share

- Industrial and Specialty Products segment volumes increased 10% versus fourth quarter 2019

- Oil & Gas proppant volumes increased 48% and SandBox loads increased 71% sequentially in the fourth quarter

KATY, Texas, Feb. 26, 2021 /PRNewswire/ -- U.S. Silica Holdings, Inc. (NYSE: SLCA) today announced net income of $4.6 million, or $0.06 per basic and diluted share, for the fourth quarter ended December 31, 2020, compared with a net loss of $292.9 million, or $3.99 per basic and diluted share, for the fourth quarter of 2019. The fourth quarter results were negatively impacted by $4.1 million of charges related to asset impairments, facility closure costs, a plant capacity expansion, and other expenses.  These charges were offset by an $8.3 million valuation change on a note payable.  Additionally, the Company recorded $27.2 million of shortfall penalties in our Oil and Gas segment, resulting in adjusted EPS of ($0.26) per basic and diluted share.

"I am proud of how our company successfully navigated 2020 and of our industry leading performance during the year in spite of the challenging macro-economic environment."  

"We delivered another strong financial quarter and substantially beat expectations through structural cost reductions, disciplined execution in oil and gas and a rebound in the industrial and specialty products segment."

"2021 is off to a good start with surging proppant demand and a continuing recovery in general industrial markets.  We are well positioned for success this year and beyond with numerous growth opportunities in our new product pipeline across a diverse set of markets and end uses," said Bryan Shinn, U.S. Silica chief executive officer.  

Full Year 2020 Highlights

Total Company

• Revenue of $845.9 million decreased 43% compared with $1.47 billion for 2019.
• Net loss of $114.1 million, or $1.55 per basic and per diluted share, for 2020, compared with a net loss of $329.1 million, or $4.49 per basic and per diluted share, for 2019.
• Overall tons sold of 11.130 million for 2020 decreased 41% compared with 18.788 million tons sold in 2019.
• Contribution margin of $301.2 million for 2020 decreased 29% compared with $426.8 million for 2019.
• Adjusted EBITDA of $203.9 million for 2020 decreased 29% compared with Adjusted EBITDA of $286.3 million for 2019.

Fourth Quarter 2020 Highlights

Total Company

• Revenue of $227.3 million for the fourth quarter of 2020 increased 29% compared with $176.5 million in the third quarter of 2020 and decreased 33% when compared with the fourth quarter of 2019.
• Overall tons sold of 2.827 million for the fourth quarter of 2020 increased 26% compared with 2.239 million tons sold in the third quarter of 2020 and decreased 33% when compared with the fourth quarter of 2019.
• Contribution margin of $89.9 million for the fourth quarter of 2020 increased 22% compared with $73.8 million in the third quarter of 2020 and decreased 16% when compared with the fourth quarter of 2019.
• Adjusted EBITDA of $63.6 million for the fourth quarter of 2020 increased 24% compared with $51.3 million in the third quarter of 2020 and decreased 14% when compared with the fourth quarter of 2019.

Industrial and Specialty Products

• Revenue of $106.9 million for the fourth quarter of 2020 decreased 3% compared with $110.1 million in the third quarter of 2020 and increased 2% when compared with the fourth quarter of 2019.
• Tons sold totaled 0.926 million for the fourth quarter of 2020 decreased 3% compared with 0.957 million tons sold in the third quarter of 2020 and increased 10% when compared with the fourth quarter of 2019.
• Segment contribution margin of $38.4 million, or $41.47 per ton, for the fourth quarter of 2020 decreased 9% compared with $42.4 million in the third quarter of 2020 and decreased 2% when compared with the fourth quarter of 2019.

Oil & Gas

• Revenue of $120.3 million for the fourth quarter of 2020 increased 81% compared with $66.3 million in the third quarter of 2020 and decreased 49% when compared with the fourth quarter of 2019.
• Tons sold of 1.901 million for the fourth quarter of 2020 increased 48% compared with 1.282 million tons sold in the third quarter of 2020 and decreased 43% when compared with the fourth quarter of 2019.
• Segment contribution margin of $51.5 million, or $27.10 per ton, for the fourth quarter of 2020 increased 64% compared with $31.5 million in the third quarter of 2020 and decreased 24% when compared with the fourth quarter of 2019.

Capital Update

As of December 31, 2020, the Company had $150.9 million in cash and cash equivalents and total debt was $1.240 billion. Capital expenditures in 2020 totaled $34.5 million and were mainly related to growth projects in our ISP segment, as well as spending on equipment to expand our SandBox operations and other maintenance and cost improvement capital projects. During the fourth quarter of 2020, the Company generated $23.9 million in cash flow from operations.

Outlook and Guidance

Looking ahead to 2021 and beyond, the Company is well positioned for sustainable, long-term growth by servicing critical industries such as food and beverage production, housing, automotive, glass manufacturing, biopharma, and energy.  The Company has a pipeline of innovative, new products to service high growth, sustainable end uses including solar energy, wind power, cleaner air, green diesel, food safety and energy efficient buildings.

The Company continued to focus on its three strategic priorities in 2020, namely, 1) prioritizing free cash flow, 2) repositioning its Oil & Gas segment, and 3) growing its Industrial & Specialty Products segment.

The Company is focused on free cash flow and de-levering the balance sheet and intends on being cash flow positive in 2021, keeping an estimated $30-40 million of capital expenditures within operating cash flow.

Despite the continued macro-economic uncertainty, the Industrial & Specialty Products segment has proven its resiliency and is off to a good start in 2021 and growth is expected to outpace U.S. GDP.

The Company has repositioned the Oil & Gas segment by right sizing proppant capacity and reducing costs to match current and expected demand from well completions. The Company expects a robust recovery in energy sector proppant and last mile delivery demand especially in the first half of 2021 and expects the first quarter to be up 15-20% in volume sequentially, despite temporary headwinds from the unprecedented cold weather in February.

Conference Call

U.S. Silica will host a conference call for investors today, February 26, 2021 at 7:30 a.m. Central Time to discuss these results. Hosting the call will be Bryan Shinn, chief executive officer and Don Merril, executive vice president and chief financial officer. Investors are invited to listen to a live webcast of the conference call by visiting the "Investors" 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 (877) 869-3847 or for international callers, (201) 689-8261. A replay will be available shortly after the call and can be accessed by dialing (877) 660-6853 or for international callers, (201) 612-7415. The conference ID for the replay is 13716628. The replay will be available through March 31, 2021.