U.S. Silica Holdings Inc. announced a net loss of $10.7 million or $(0.20) per basic share for the first quarter ended March 31, 2016, compared with net income of $14.8 million or $0.28 per basic share for the first quarter of 2015. The first quarter results were negatively impacted by $2.2 million in restructuring costs for actions designed to help bring the business more in line with current market conditions and business development expenses, partially offset by a $1.5 million gain related to an insurance settlement.
"During the first quarter of 2016, we saw continued pressure on both volumes and pricing in our Oil and Gas segment, as business conditions weakened further and the market environment became even more competitive," said Bryan Shinn, president and chief executive officer. He added that the company's Industrial and Specialty Products segment, however, saw improvement in its business, recording sequential and year-over-year increases in contribution margin, driven largely by a combination of strategic price increases implemented earlier this year and by selling a larger mix of higher-margin products during the quarter.
Going forward, Shinn added that the company anticipates continued downward pressure on volumes and pricing in its Oil and Gas business in the second quarter, with further declines expected in drilling and completion activity. At the same time, he said, "We are keenly focused on three key areas: cash, customers and costs. We're tightly managing our cash. We are working to be a faster, more efficient company to do business with and we are lowering our cost structure during this downturn to be even more competitive and profitable in the upcycle," he concluded.
U.S. Silica Holdings also announced that it has completed the purchase of a fully permitted, 327-acre parcel of land adjacent to its existing silica sand mine and plant in Ottawa, Ill. The company plans to use the land for future mining operations and said it will add approximately 30 million tons of proven reserves. U.S. Silica purchased the property from a privately-held mining company.
The reserves are high-quality Ottawa White sand and will produce coarse and medium to fine product grades. U.S. Silica's Ottawa facility serves multiple end markets such as glass, building products, foundry, filler and extenders, chemicals and oil and gas proppants.