Fairmount Santrol Down for Quarter, Up for Year

Fairmount Santrol announced results for the fourth quarter and full year ended Dec. 31, 2017. Total company volumes sold were 3.4 million tons for the quarter, down 3 percent from the third quarter of 2017 and an increase of 38 percent from 2.4 million tons in the fourth quarter of 2016.

Fourth-quarter 2017 revenues were $273.9 million, down 2 percent from $280.1 million in the third quarter of 2017 and nearly double from $140.5 million in the fourth quarter of 2016.

For fourth-quarter 2017, the company had net income of $19.9 million, or $0.09 per diluted share, compared with net income of $34.9 million, or $0.15 per diluted share, in the third quarter of 2017. Net loss for fourth-quarter 2016 was $19.9 million, or $(0.09) per diluted share.

Total volumes sold in 2017 were 12.8 million tons, compared with 8.9 million tons in 2016. Full-year 2017 revenues were $959.8 million, compared with $535.0 million in 2016. The increase in revenues was mainly driven by greater demand for proppants in 2017, higher pricing throughout the year and greater sales of higher-priced value-added products in both the Proppant Solutions and Industrial and Recreation segments.

Net income for full-year 2017 was $53.8 million, or $0.23 per diluted share, compared to a net loss of $140.2 million, or $(0.78) per diluted share, in 2016.
Full-year Adjusted EBITDA for 2017 totaled $206.3 million and included $2.4 million in costs related to plant start-ups and $4.6 million of freight charges to move railcars into the company’s active fleet.

“Proppant demand remained robust during the fourth quarter. As anticipated, however, our volumes were impacted by continued capacity constraints, seasonal weather conditions and holiday shutdowns,” said Jenniffer Deckard, president and chief executive officer. “Our Industrial & Recreational segment continued its positive 2017 momentum, particularly in selling more value-added products, which contributed to its year-over-year profitability growth. While our overall fourth-quarter earnings were impacted by seasonal items, I am extremely pleased with the Company’s ability to execute on multiple initiatives and to deliver strong profitability growth during 2017.”

For the fourth quarter of 2017, Proppant Solutions volumes were 2.8 million tons, a decrease of 2 percent from the third quarter of 2017 and more than 50 percent greater than the prior-year period. Raw frac sand volumes were 2.6 million tons and coated proppant volumes were 213,000 tons, which represent a 2 percent and 1 percent sequential decline, respectively, but represent a 47 percent and 110 percent increase, respectively, compared with the prior-year period.

Industrial and Recreational volumes were 582,000 tons in fourth-quarter 2017, down slightly from the prior year’s fourth quarter. The decrease in volumes over the prior-year period was driven by a shift in sales efforts toward value-added products and away from certain higher-volume, low-margin sales.

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