U.S. Silica Holdings Inc. announced net income of $6.3 million or $0.08 per basic and diluted share for the third quarter ended Sept. 30, 2018, compared with net income of $41.3 million or $0.51 per basic and $0.50 per diluted share for the third quarter of 2017.
The third quarter results were negatively impacted by $8.3 million or $0.08 per share in M&A related expenses, including $7.0 million of purchase accounting related to the acquisition of EP Minerals, $25.0 million or $0.25 per share in costs related to plant startup and expansion expenses, $1.9 million or $0.02 per share in business optimization projects and $1.5 million or $0.01 per share in other adjustments, resulting in adjusted EPS for the third quarter of $0.44 per basic and diluted share.
“I am proud that our team overcame headwinds in our Oil & Gas sand business to deliver one of the best quarters in company history. We again demonstrated the strength of our customer relationships, offerings and diversified business model,” said Bryan Shinn, president and chief executive officer.
“Our Industrial and Specialty Products segment had another record-breaking quarter, setting highs for revenue, contribution margin and contribution margin per ton. These impressive results were driven by a full quarter of earnings from our recent acquisition, EP Minerals, several recent price increases and favorable product mix. I’m very excited about our prospects in ISP. We have a robust new business pipeline with more than 100 projects in the queue. These products should add substantial value to our business in the next few years,” Shin said.
“In Oil and Gas sand, we grew volumes 10 percent sequentially and continued to ramp up our new Permian basin mining facilities. This achievement was impressive given the slowdown in well completions driven by Permian well offtake capacity issues and E&P 2018 budget exhaustion. While we did experience pricing pressure during the quarter on Northern White sand and spot sales, our contracts held up well,” Shin continued.
“Our SandBox unit averaged 82 crews during the quarter, and though we saw lower load volumes from the slowdown in completions activity, this decline was partially offset by higher profitability per load. Sandbox has a strong pipeline of new work with recent contract awards from several operators for multiple crews planned to start in the next two quarters. We also have developed and launched several new innovative solutions to better serve our customers and grow the business,” Shin noted.
“I am positive on the outlook for our Oil and Gas businesses in 2019. While we will likely see more white space on our customer’s calendars for the rest of this year, we believe these near-term challenges are transitory. Budgets will reset in 2019, takeaway capacity will be expanded and the record inventory of DUCs will begin to be completed. All of which should provide positive catalysts for sand and logistics demand. Further, we expect to see more higher cost Northern White sand capacity idled in the next few quarters, which will help balance supply and demand and support stable pricing,” concluded Shinn.