U.S. Silica Holdings Inc. reported net income of $26.0 million, or $0.34 per diluted share, for the second quarter ended June 30, compared with a net loss of $20.8 million, or $0.28 per diluted share, for the first quarter of 2021.
The second quarter results were positively impacted by $46.9 million net, or $0.46 per diluted share, due to a customer settlement of $48.9 million, or $0.49 per diluted share, recorded in the Oil & Gas segment, and partially offset by delayed winter weather impacts and facility closure costs.
The company also reported:
• Revenue of $193.3 million for the second quarter of 2021 increased 59% when compared with $121.7 million in the first quarter of 2021 and increased 167% when compared with the second quarter of 2020. However, excluding the $48.9 million customer settlement, revenue increased 19% sequentially.
• Tons sold of 3.024 million for the second quarter of 2021 increased 17% compared with 2.577 million tons sold in the first quarter of 2021, and increased 172% when compared with the second quarter of 2020.
• Segment contribution margin of $82.7 million, or $27.35 per ton, increased 285% when compared with $21.5 million in the first quarter of 2021 and increased 216% when compared with the second quarter of 2020. However, excluding the $48.9 million customer settlement, segment contribution margin increased 57% sequentially.
Bryan Shinn, chief executive officer, commented, “Our strong financial and operational performance during the second quarter exceeded both revenue and Adjusted EBITDA expectations. Additionally, we recorded sequential volume growth in both of our operating segments, supported by the broader market recovery and constructive commodity prices.
“In the Industrial & Specialty Products segment, second quarter revenue grew at a rate that exceeded GDP growth and we recently announced our third price increase this year for our industrial and specialty products beginning September 1st. Our Oil & Gas segment benefited from strong commodity prices and completions activity, as we out-executed our competition and gained market share in the second quarter, which drove sequential increases in proppant volumes and SandBox delivered loads.
“I’m also happy to report that in late June, we came to an agreement with a customer to settle a dispute regarding fees related to minimum purchase commitments from 2014-2020. As a result of this resolution, the company received approximately $128 million of consideration, including $90 million in cash. Half of the cash settlement amount was received in the second quarter and the balance was received in July. We have used a portion of this settlement to pay off our outstanding revolver balance of $25 million.
“Our commitment to deleveraging the balance sheet remains a key corporate initiative. As the macro environment continues to improve, we are focused on prioritizing free cash flow, growing the Industrial & Specialty Products segment, and maximizing efficiencies in the Oil & Gas segment.”