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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Fiscal Year Ended December 31, 2016
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-3718801
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(State or other jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Title of each class:
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Name of each exchange on which registered:
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Common Stock, par value $0.01 per share
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New York Stock Exchange
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Large accelerated filer
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þ
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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fluctuations in demand for commercial silica;
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the cyclical nature of our customers’ businesses;
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operating risks that are beyond our control, such as changes in the price and availability of transportation, natural gas or electricity; unusual or unexpected geological formations or pressures; cave-ins, pit wall failures or rock falls; or unanticipated ground, grade or water conditions;
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our dependence on three of our plants for a significant portion of our sales;
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the level of activity in the natural gas and oil industries;
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decreased demand for frac sand or the development of either effective alternative proppants or new processes to replace hydraulic fracturing;
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federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing and the potential for related regulatory action or litigation affecting our customers’ operations;
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our rights and ability to mine our properties and our renewal or receipt of the required permits and approvals from governmental authorities and other third parties;
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our ability to implement our capacity expansion plans within our current timetable and budget and our ability to secure demand for our increased production capacity, and the actual operating costs once we have completed the capacity expansion;
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our ability to succeed in competitive markets;
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loss of, or reduction in, business from our largest customers;
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increasing costs or a lack of dependability or availability of transportation services and transload network access or infrastructure;
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extensive regulation of trucking services;
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our ability to recruit and retain truckload drivers;
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increases in the prices of, or interruptions in the supply of, natural gas and electricity, or any other energy sources;
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increases in the price of diesel fuel;
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diminished access to water;
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our ability to successfully complete acquisitions or integrate acquired businesses;
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our ability to make capital expenditures to maintain, develop and increase our asset base and our ability to obtain needed capital or financing on satisfactory terms;
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our substantial indebtedness and pension obligations;
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restrictions imposed by our indebtedness on our current and future operations;
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contractual obligations that require us to deliver minimum amounts of frac sand or purchase minimum amounts of services;
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the accuracy of our estimates of mineral reserves and resource deposits;
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a shortage of skilled labor and rising costs in the mining industry;
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our ability to attract and retain key personnel;
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our ability to maintain satisfactory labor relations;
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our reliance on patents, trade secrets and contractual restrictions to protect our proprietary rights;
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our significant unfunded pension obligations and post-retirement health care liabilities;
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our ability to maintain effective quality control systems at our mining, processing and production facilities;
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seasonal and severe weather conditions;
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fluctuations in our sales and results of operations due to seasonality and other factors;
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interruptions or failures in our information technology systems;
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the impact of a terrorist attack or armed conflict;
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extensive and evolving environmental, mining, health and safety, licensing, reclamation and other regulation (and changes in their enforcement or interpretation);
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silica-related health issues and corresponding litigation;
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our ability to acquire, maintain or renew financial assurances related to the reclamation and restoration of mining property; and
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other factors included and disclosed in Part I, Item 1A, “Risk Factors” and elsewhere in this Annual Report on Form 10-K.
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ITEM 1.
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BUSINESS
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•
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Large-scale producer with a diverse and high-quality reserve base
.
Our
18
geographically dispersed production facilities control
467 million
tons of reserves, including API size frac sand and large quantities of silica with distinct characteristics, giving us the ability to sell over
240
products to customers in both our Oil & Gas Proppants segment and Industrial & Specialty Products segment. Our large-scale production, logistics capabilities and long reserve life make us a preferred commercial silica supplier to our customers. Our consistent, reliable supply of large quantities of silica gives our customers the security to customize their production processes around our commercial silica. Furthermore, our large scale provides us earnings diversification and a larger addressable market.
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•
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Geographically advantaged footprint with intrinsic transportation advantages.
The strategic location of our facilities and our logistics capabilities enable us to enjoy high customer retention and a larger addressable market. In 2016, we acquired NBI, the ultimate parent company of NBR Sand, LLC, a regional sand producer located near Tyler, Texas. This facility allows customers to ship regional sand directly to the wellheads in the Texas and Louisiana basins by truck, which provides us with a delivered cost advantage. In our Oil & Gas Proppants segment, our network of frac sand production facilities with access to Class I rail either onsite or by truck and the strategic locations of our transloads serve to create an addressable market that includes every major U.S. shale basin. We
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•
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Low-cost operating structure.
We focus on building and operating facilities with low delivered cost that will allow us to be successful through the cycle. We believe the combination of the following factors contributes to our low-cost structure and our high margins:
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our ownership of the vast majority of our reserves, resulting in mineral royalty expense that was less than
0.3%
of our sales in
2016
;
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•
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the close proximity of our mines to their respective processing plants, which allows for a cost-efficient and highly automated production process;
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our processing expertise, which enables us to create over
240
products with unique characteristics while minimizing waste;
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our integrated logistics management expertise and geographically advantaged facility network, which enables us to reliably ship products by the most cost-effective method available, whether by truck, rail or barge, to meet the needs of our customers, whether at in-basin transload locations or directly at wellhead locations via our Sandbox operations;
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our large customer base across numerous end markets, which allows us to maximize our mining recovery rate and asset utilization; and
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our large overall and plant-level operating scale.
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Strong reputation with our customers and the communities in which we operate.
We believe that we have built a strong reputation during our
116
year operating history. Our customers know us for our dependability and our high-quality, innovative products, as we have a long track record of timely delivery of our products according to customer specifications. We also have an extensive network of technical resources, including materials science and petroleum engineering expertise, which enables us to collaborate with our customers to develop new products and improve the performance of their existing applications. We are also well known in the communities in which we operate as a preferred employer and a responsible corporate citizen, which generally serves us well in hiring new employees and securing difficult to obtain permits for expansions and new facilities.
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Experienced management team
.
The members of our senior management team bring significant experience to the dynamic environment in which we operate. Their expertise covers a range of disciplines, including industry-specific operating and technical knowledge as well as experience managing high-growth businesses. We believe we have assembled a flexible, creative and responsive team that can quickly adapt to the rapidly evolving unconventional oil and natural gas drilling landscape.
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Expand our Oil & Gas Proppants
production capacity and product portfolio.
We continue to consider and execute several initiatives to increase our frac sand production capacity and augment our proppant product portfolio.
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While we continue to work on maximizing existing production facility efficiencies, due to the recent improvements in the oil and gas market, we are also evaluating production capacity expansion opportunities at existing facilities as well as Greenfield opportunities.
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In order to increase our resin coated product portfolio, during 2015, we announced the introduction of InnoProp
®
Python RCS, a new high-performance resin coated proppant designed to increase the production of oil and gas wells in an economical and efficient manner. In early 2016, we introduced another new resin
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Increase our presence and product offering in industrial and specialty products end markets.
Our research and business development teams work in tandem with our customers to develop new products, which we expect will either increase our presence and market share in certain industrial and specialty products end markets or allow us to enter new markets. We manage a robust pipeline of new products in various stages of development. Some of these products have already come to market, resulting in a positive impact on our financial results. We continue to work toward offering more value-driven industrial and specialty products that will enhance the profitability of the business.
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Optimize product mix and further develop value-added capabilities to maximize margins.
We continue to actively manage our product mix at each of our plants to ensure we maximize our profit margins. This requires us to use our proprietary expertise in balancing key variables, such as mine geology, processing capacities, transportation availability, customer requirements and pricing. We expect to continue investing in ways to increase the value we provide to our customers by expanding our product offerings, improving our supply chain management, upgrading our information technology, and creating a world class customer service model.
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Expand our supply chain network and leverage our logistics capabilities to meet our customers’ needs in each strategic oil and gas basin.
We continue to expand our logistics network to ensure product is available to meet the in-basin needs of our customers. This approach allows us to provide strong customer service and puts us in a position to take advantage of opportunistic spot market sales. Our plant sites are strategically located to provide access to key Class I railroads, which enables us to cost effectively send product to each of the strategic basins in North America. We can ship product by truck, barge and rail with an ability to connect to short-line railroads as necessary to meet our customers’ evolving in-basin product needs. We believe that our supply chain network and logistics capabilities are a competitive advantage that enables us to provide superior service for our customers. We expect to continue to make strategic investments and develop partnerships with transload operators and transportation providers that will enhance our portfolio of supply chain services that we can provide to customers. As of
December 31, 2016
, we have storage capacity at
50
transloads located near all of the major shale basins in the United States. Our recent acquisition of Sandbox extends our delivery capability directly to our customers' wellhead locations, which increases efficiency and provides a lower cost logistics solution for our customers. Sandbox has operations in Midland/Odessa, Texas; Morgantown, West Virginia; western North Dakota; northeast of Denver, Colorado; Oklahoma City, OK; and Cambridge, Ohio, where its major customers are located.
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Evaluate both Greenfield and Brownfield expansion opportunities and other acquisitions.
We expect to continue leveraging our reputation, processing capabilities and infrastructure to increase production, as well as explore other opportunities to expand our reserve base. We may accomplish this by developing Greenfield projects, where we can capitalize on our technical knowledge of geology, mining and processing and our strong reputation within local communities. We are continuing to actively pursue acquisitions to grow by taking advantage of our asset footprint, our management’s experience with high-growth businesses, and our strong customer relationships. Our primary objective is to acquire assets with differing levels of frac sand qualities that are complementary to our Oil & Gas Proppants segment, with a focus on mining, processing and logistics to further enhance our market presence. We prioritize acquisitions that provide opportunities to realize synergies (and, in some cases, the acquisition may be immediately accretive assuming synergies), including entering new geographic and frac sand product markets, acquiring attractive customer contracts and improving operations. For instance, on August 16, 2016, we completed our acquisition of NBI, the ultimate parent company of, NBR Sand, LLC, a regional sand producer located near Tyler, Texas. Additionally, on August 22, 2016, we completed the acquisition of Sandbox, a provider of logistics solutions and technology for the transportation of proppant used in hydraulic fracturing in the oil and gas industry. We are in active discussions to acquire additional assets fitting this strategy, which, if completed, would be “significant” under Regulation S-X and could require additional sources of financing. There can be no assurance that we will reach a definitive agreement and complete any of these potential transactions. See the risk factors disclosed in Item 1A of Part I, including the risk factor entitled, “If we cannot successfully complete acquisitions or integrate acquired businesses, our growth may be limited and our financial condition may be adversely affected.”
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Maintain financial strength and flexibility
.
We intend to maintain financial strength and flexibility to enable us to better manage through industry downturns and pursue acquisitions and new growth opportunities as they arise. In March 2016, we completed a public offering of 10,000,000 shares of our common stock for total cash net proceeds of
$186.2 million
. In November 2016, we executed another offering of 10,350,000 shares of common stock raising net cash proceeds of
$467.0 million
. As of
December 31, 2016
, we had
$711.2 million
of cash on hand and
$46.0 million
of availability under our revolving credit facility (the "Revolver").
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the difficulty of finding silica reserves suitable for use as frac sand, which, according to the API, must meet stringent technical specifications, including, among others, sphericity, grain size, crush resistance, acid solubility, purity and turbidity;
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the difficulty of securing contiguous reserves of silica large enough to justify the capital investment required to develop a mine, processing plant, product storage and rail track;
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a lack of industry-specific geological, exploration, development and mining knowledge and experience needed to enable the identification, acquisition and development of high-quality reserves;
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the difficulty of identifying reserves with the above characteristics that either are located in close proximity to oil and natural gas reservoirs or have the rail access needed for low-cost transportation to major shale basins;
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the difficulty of securing mining, production, water, air, refuse and other federal, state and local operating permits from the proper authorities, a process that can require up to three years; and
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the difficulty of assembling a large, diverse portfolio of customers to optimize operations.
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Sales—
Our sales team is organized by both region and end market. We have an experienced group of dedicated sales team members for the oil and gas proppants and the industrial and specialty end markets. Our oil and gas proppants team is led out of our Houston office and is regionally positioned in the oil and gas markets across the U.S. This staff consists of experienced experts in the use of frac proppants in the oil and gas industry. Our industrial and specialty products sales team is strategically located near our major customers. As we make decisions to enter or expand our presence in certain end markets or regions, we will continue to add dedicated team members to support that growth.
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Marketing—
Our marketing team coordinates all of our new and existing customer outreach efforts as well as identify emerging market trends and new product opportunities. This includes producing exhibits for trade shows and exhibitions, manufacturing product overview materials, participating in regional industry meetings and other trade associations and managing our advertising efforts in trade journals.
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Transportation and Logistics—
Our transportation and logistics team manages domestic and international shipments by directing inbound and outbound rail, barge and truck traffic, supervising equipment maintenance, coordinating with rail carriers to ensure equipment availability, ensuring compliance with shipping regulations and strategically planning for future growth. With our Sandbox acquisition we can deliver frac sand directly to wellheads.
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Technical—
Our technical team is anchored by our Industrial & Specialty Products laboratory in Berkeley Springs, West Virginia and our oil and gas laboratory in Houston, Texas. At these facilities, we perform a variety of analyses including:
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analytical chemistry by X-Ray Fluorescence (“XRF”) and Inductively Coupled Plasma (“ICP”) spectroscopy;
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particle characterization by sieve, SediGraph, Brunauer, Emmett and Teller (“BET”) surface area and microscopy;
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ore evaluation by mineral processing, flotation and magnetic separation;
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API frac sand evaluation, including crush resistance; and
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American Foundry Society (“AFS”) green sand evaluation by various foundry sand tests.
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Customer Service—
Our customer service team is dedicated to creating an exceptional customer experience and making it easy to do business with our company. The organization aims to accomplish this by consistently exceeding our customers’ expectations, continually improving our performance, offering efficient and timely responses to customer needs, being available to our customers 24/7 and providing customers with personal points of contact on whom they can rely.
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ITEM 1A.
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RISK FACTORS
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demand for oil, natural gas and petroleum products;
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fluctuations in energy, fuel, oil and natural gas prices and the availability of such fuels;
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the use of alternative proppants, such as ceramic proppants, in the hydraulic fracturing process;
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global and regional economic, political and military events and conditions;
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changes in residential and commercial construction demands, driven in part by fluctuating interest rates and demographic shifts;
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demand for automobiles and other vehicles;
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the substitution of plastic or other materials for glass;
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the use of recycled glass in glass production;
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competition from offshore producers of glass products;
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changes in demand for our products due to technological innovations, including the development and use of new processes for oil and gas production that do not require proppants;
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changes in laws and regulations (or the interpretation thereof) related to the mining and hydraulic fracturing industries, silica dust exposure or the environment;
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prices, availability and other factors relating to our products; and
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increases in costs of labor and labor strikes.
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changes in the price and availability of transportation and transload network access;
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changes in the price and availability of natural gas or electricity;
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unusual or unexpected geological formations or pressures;
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pit wall failures or rock falls;
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unanticipated ground, grade or water conditions;
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inclement or hazardous weather conditions, including flooding, and the physical impacts of climate change;
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environmental hazards;
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industrial accidents;
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physical plant security breaches;
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changes in laws and regulations (or the interpretation thereof) related to the mining and hydraulic fracturing industries, silica dust exposure or the environment;
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nonperformance of contractual obligations;
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inability to acquire or maintain necessary permits or mining or water rights;
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restrictions on blasting operations;
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inability to obtain necessary production equipment or replacement parts;
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reduction in the amount of water available for silica production;
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technical difficulties or key equipment failures;
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labor disputes;
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cybersecurity breaches;
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late delivery of supplies;
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fires, explosions or other accidents; and
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facility shutdowns in response to environmental regulatory actions.
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the validity of our assumptions about mineral reserves, future production, sales, capital expenditures, operating expenses and costs, including synergies;
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an inability to successfully integrate the businesses we acquire;
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the use of a significant portion of our available cash or borrowing capacity to finance acquisitions and the subsequent decrease in our liquidity;
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a significant increase in our interest expense or financial leverage if we incur additional debt to finance acquisitions;
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the assumption of unknown liabilities, losses or costs for which we are not indemnified or for which our indemnity is inadequate;
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the diversion of management’s attention from other business concerns;
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an inability to hire, train or retain qualified personnel both to manage and to operate our growing business and assets;
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the incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges;
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unforeseen difficulties encountered in operating in new geographic areas;
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customer or key employee losses at the acquired businesses; and
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the accuracy of data obtained from production reports and engineering studies, geophysical and geological analyses and other information used when deciding to acquire a property, the results of which are often inconclusive and subject to various interpretations.
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increase our vulnerability to adverse changes in general economic, industry and competitive conditions;
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require us to dedicate a substantial portion of our cash flow from operations to make payments on our indebtedness and pension obligations, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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restrict us from exploiting business opportunities;
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make it more difficult to satisfy our financial obligations, including payments on our indebtedness;
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place us at a disadvantage compared to our competitors that have less debt and pension obligations; and
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limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy or other general corporate purposes.
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our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms, or at all;
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covenants contained in our existing and future credit and debt arrangements will require us to meet financial tests that may affect our flexibility in planning for, and reacting to, changes in our business, including possible acquisition opportunities;
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we will need a substantial portion of our cash flow to make principal and interest payments on our indebtedness and to improve the funded status of our defined benefit pension plan, reducing the funds that would otherwise be available for operations and future business opportunities; and
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our debt level will make us more vulnerable than our less leveraged competitors to competitive pressures or a downturn in our business or the economy generally.
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geological and mining conditions and/or effects from prior mining that may not be fully identified by available data or that may differ from experience;
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assumptions concerning future prices of commercial silica products, operating costs, mining technology improvements, development costs and reclamation costs; and
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assumptions concerning future effects of regulation, including the issuance of required permits and taxes by governmental agencies.
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issuance of administrative, civil and criminal penalties;
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denial, modification or revocation of permits or other authorizations;
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imposition of injunctive obligations or other limitations on our operations, including cessation of operations; and
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requirements to perform site investigatory, remedial or other corrective actions.
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the lack of availability, higher expense or unreasonable terms of such financial assurances;
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the ability of current and future financial assurance counterparties to increase required collateral; and
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the exercise by financial assurance counterparties of any rights to refuse to renew the financial assurance instruments.
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quarterly variations in our operating results compared to market expectations;
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announcements of acquisitions of or investments in other businesses and properties or dispositions;
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changes in preferences of our customers;
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announcements of new services or products or significant price reductions by us or our competitors;
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size of the public float;
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stock price performance of our competitors;
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fluctuations in stock market prices and volumes;
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default on our indebtedness or foreclosure on our properties;
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actions by competitors;
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changes in our management team or key personnel;
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changes in ratings and financial estimates by securities analysts;
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negative earnings or other announcements by us or other industrial companies;
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downgrades in our credit ratings or the credit ratings of our competitors;
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issuances of capital stock; and
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global economic, legal and regulatory factors unrelated to our performance.
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authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;
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prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
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provide that the Board is expressly authorized to make, alter or repeal our bylaws; and
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establish advance notice requirements for nominations for elections to our Board or for proposing matters that can be acted upon by stockholders at stockholder meetings.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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•
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Proven (measured) reserves.
Reserves for which (1) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (2) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
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•
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Probable (indicated) reserves.
Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.
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Mine/Plant Location
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Acreage Owned/Leased
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Proven
Reserves
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Probable
Reserves
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Combined
Proven
and
Probable
Reserves
|
|
2016
Tons
Mined
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Primary
End
Markets
Served
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(in acres)
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(tonnage data in thousands)
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Ottawa
|
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2,100 owned
|
|
132,238
|
|
|
—
|
|
|
132,238
|
|
|
(3,657
|
)
|
|
Oil and gas proppants, glass, chemicals, foundry
|
Voca
|
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1,061 owned
|
|
32,247
|
|
|
41,900
|
|
|
74,147
|
|
|
(2,199
|
)
|
|
Oil and gas proppants
|
Tyler
|
|
1,356 owned
|
|
20,745
|
|
|
20,100
|
|
|
40,845
|
|
|
(555
|
)
|
|
Oil and gas proppants
|
Mill Creek
|
|
2,174 owned
16 mineral lease
|
|
—
|
|
|
13,617
|
|
|
13,617
|
|
|
(1,504
|
)
|
|
Oil and gas proppants, glass, foundry, building products
|
Sparta
|
|
660 owned
|
|
26,491
|
|
|
2,740
|
|
|
29,231
|
|
|
(1,367
|
)
|
|
Oil and gas proppants
|
Utica
|
|
148 owned
|
|
9,291
|
|
|
—
|
|
|
9,291
|
|
|
(1,555
|
)
|
|
Oil and gas proppants
|
Mapleton
|
|
1,761 owned
194 mineral lease
98 access lease
|
|
3,410
|
|
|
2,100
|
|
|
5,510
|
|
|
(545
|
)
|
|
Glass, building products
|
Pacific
|
|
524 owned
|
|
16,848
|
|
|
7,994
|
|
|
24,842
|
|
|
(529
|
)
|
|
Oil and gas proppants, glass, foundry, fillers and extenders
|
Kosse
|
|
1,053 owned
25 mineral lease
|
|
10,830
|
|
|
—
|
|
|
10,830
|
|
|
(68
|
)
|
|
Oil and gas proppants, glass, recreational products
|
Berkeley
|
|
4,435 owned
|
|
2,261
|
|
|
6,000
|
|
|
8,261
|
|
|
(370
|
)
|
|
Glass, building products, fillers and extenders
|
Columbia
|
|
648 lease
204 owned
|
|
5,181
|
|
|
—
|
|
|
5,181
|
|
|
(400
|
)
|
|
Glass, building products, fillers and extenders
|
Dubberly
|
|
356 owned
|
|
4,803
|
|
|
—
|
|
|
4,803
|
|
|
(236
|
)
|
|
Glass, foundry, building products
|
Montpelier
(1)
|
|
824 owned
|
|
—
|
|
|
13,189
|
|
|
13,189
|
|
|
(292
|
)
|
|
Glass, building products
|
Hurtsboro
|
|
117 owned
1,108 mineral lease
|
|
627
|
|
|
—
|
|
|
627
|
|
|
(109
|
)
|
|
Foundry, building products
|
Jackson
|
|
132 owned
|
|
—
|
|
|
145
|
|
|
145
|
|
|
(146
|
)
|
|
Fiberglass, building products
|
Mauricetown
|
|
1279 owned
|
|
12,084
|
|
|
—
|
|
|
12,084
|
|
|
(234
|
)
|
|
Filtration, foundry, building products
|
Rockwood
(2)
|
|
872 owned
|
|
8,363
|
|
|
—
|
|
|
8,363
|
|
|
—
|
|
|
Glass, building products
|
Fairchild
|
|
632 owned
|
|
38,975
|
|
|
—
|
|
|
38,975
|
|
|
—
|
|
|
—
|
Batesville
|
|
477 owned
|
|
—
|
|
|
34,732
|
|
|
34,732
|
|
|
—
|
|
|
—
|
Total
|
|
|
|
324,394
|
|
|
142,517
|
|
|
466,911
|
|
|
(13,766
|
)
|
|
|
(1)
|
Montpelier’s reserves are comprised entirely of the mineral aplite.
|
(2)
|
Rockwood's products were produced from or sourced from a third party. It did not mine any of its reserves in
2016
.
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Sales Price
|
||||||
|
High
|
|
Low
|
||||
Fiscal 2016
|
|
|
|
||||
First Quarter
|
$
|
22.72
|
|
|
$
|
14.96
|
|
Second Quarter
|
$
|
35.60
|
|
|
$
|
22.14
|
|
Third Quarter
|
$
|
46.56
|
|
|
$
|
32.73
|
|
Fourth Quarter
|
$
|
58.24
|
|
|
$
|
42.47
|
|
Fiscal 2015
|
|
|
|
||||
First Quarter
|
$
|
35.61
|
|
|
$
|
23.71
|
|
Second Quarter
|
$
|
39.07
|
|
|
$
|
28.43
|
|
Third Quarter
|
$
|
27.75
|
|
|
$
|
13.59
|
|
Fourth Quarter
|
$
|
21.99
|
|
|
$
|
13.78
|
|
Declaration date
|
Dividends per common share
|
||
February 12, 2015
|
$
|
0.125
|
|
May 8, 2015
|
$
|
0.125
|
|
July 24, 2015
|
$
|
0.125
|
|
November 9, 2015
|
$
|
0.0625
|
|
February 22, 2016
|
$
|
0.0625
|
|
May 5, 2016
|
$
|
0.0625
|
|
July 21, 2016
|
$
|
0.0625
|
|
November 3, 2016
|
$
|
0.0625
|
|
Period
|
Total Number of
Shares
Purchased
|
|
Average Price
Paid Per
Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced
Program
(1)
|
|
Maximum Dollar Value of
Shares that May Yet
Be Purchased Under
the Program
(1)
|
||||||
October 2016
|
—
|
|
(2)
|
$
|
—
|
|
|
—
|
|
|
|
||
November 2016
|
13,484
|
|
(2)
|
$
|
44.95
|
|
|
—
|
|
|
|
||
December 2016
|
—
|
|
(2)
|
$
|
—
|
|
|
—
|
|
|
|
||
Total
|
13,484
|
|
|
$
|
44.95
|
|
|
—
|
|
|
$
|
33,173,725
|
|
(1)
|
A program covering the repurchase of up to $25 million of our common stock was initially announced in June 2012 and was increased to $50 million in December 2014. This program expires on December 11, 2017.
|
(2)
|
Represents
shares withheld by U.S. Silica to pay taxes due upon the vesting of employee restricted stock and restricted stock units.
|
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights (A)
|
|
Weighted-average
exercise price of
outstanding
options, warrants
and rights
(B)
|
|
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column A)
(C)
|
||||
Equity compensation plans approved by security holders
|
952,693
|
|
|
$
|
27.99
|
|
|
4,437,767
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
952,693
|
|
|
27.99
|
|
|
4,437,767
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
(6)
|
|
2015
|
|
2014
(3)
|
|
2013
|
|
2012
(2)
|
||||||||||
|
(amounts in thousands, excluding per share and per ton figures)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
559,625
|
|
|
$
|
642,989
|
|
|
$
|
876,741
|
|
|
$
|
545,985
|
|
|
$
|
441,921
|
|
Operating income (loss)
|
(53,531
|
)
|
|
26,672
|
|
|
176,167
|
|
|
111,241
|
|
|
118,988
|
|
|||||
Income (loss) before income taxes
|
(77,745
|
)
|
|
117
|
|
|
158,723
|
|
|
96,017
|
|
|
109,805
|
|
|||||
Net income (loss)
|
(41,056
|
)
|
|
11,868
|
|
|
121,540
|
|
|
75,256
|
|
|
79,154
|
|
|||||
Earnings (loss) per share - basic
|
$
|
(0.63
|
)
|
|
$
|
0.22
|
|
|
$
|
2.26
|
|
|
$
|
1.42
|
|
|
$
|
1.50
|
|
Earnings (loss) per share - diluted
|
$
|
(0.63
|
)
|
|
$
|
0.22
|
|
|
$
|
2.24
|
|
|
$
|
1.41
|
|
|
$
|
1.50
|
|
Cash dividends declared per common share
|
$
|
0.25
|
|
|
$
|
0.44
|
|
|
$
|
0.50
|
|
|
$
|
0.38
|
|
|
$
|
0.50
|
|
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
381
|
|
|
$
|
61,492
|
|
|
$
|
171,411
|
|
|
$
|
46,451
|
|
|
$
|
100,950
|
|
Investing activities
|
(201,657
|
)
|
|
49
|
|
|
(190,906
|
)
|
|
(135,113
|
)
|
|
(104,461
|
)
|
|||||
Financing activities
|
$
|
635,424
|
|
|
$
|
(47,530
|
)
|
|
$
|
208,964
|
|
|
$
|
105,896
|
|
|
$
|
5,334
|
|
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
$
|
46,450
|
|
|
$
|
53,646
|
|
|
$
|
92,609
|
|
|
$
|
60,470
|
|
|
$
|
105,719
|
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total tons sold
|
9,875
|
|
|
10,025
|
|
|
10,927
|
|
|
8,161
|
|
|
7,170
|
|
|||||
Average selling price (per ton)
|
$
|
56.67
|
|
|
$
|
64.14
|
|
|
$
|
80.24
|
|
|
$
|
66.90
|
|
|
$
|
61.63
|
|
Segment cost of goods sold (per ton)
(1)
|
47.51
|
|
|
48.27
|
|
|
51.20
|
|
|
42.04
|
|
|
34.62
|
|
|||||
Oil & Gas Proppants:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
362,550
|
|
|
430,435
|
|
|
662,770
|
|
|
347,439
|
|
|
243,765
|
|
|||||
Segment contribution margin
|
11,445
|
|
|
88,928
|
|
|
256,137
|
|
|
145,916
|
|
|
140,070
|
|
|||||
Industrial & Specialty Products:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
197,075
|
|
|
212,554
|
|
|
213,971
|
|
|
198,546
|
|
|
198,156
|
|
|||||
Segment contribution margin
|
$
|
78,988
|
|
|
$
|
70,137
|
|
|
$
|
61,102
|
|
|
$
|
56,983
|
|
|
$
|
53,601
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and short-term investments
(4)
|
$
|
711,225
|
|
|
$
|
298,926
|
|
|
$
|
338,209
|
|
|
$
|
148,577
|
|
|
$
|
55,632
|
|
Total assets
(4)(5)
|
2,073,220
|
|
|
1,108,619
|
|
|
1,226,727
|
|
|
853,547
|
|
|
679,309
|
|
|||||
Total long-term debt, including current portion
(5)
|
494,175
|
|
|
491,705
|
|
|
495,086
|
|
|
366,196
|
|
|
253,314
|
|
|||||
Total liabilities
(4)(5)
|
799,930
|
|
|
724,452
|
|
|
822,911
|
|
|
544,253
|
|
|
447,615
|
|
|||||
Total stockholders’ equity
|
$
|
1,273,290
|
|
|
$
|
384,167
|
|
|
$
|
403,816
|
|
|
$
|
309,294
|
|
|
$
|
231,694
|
|
(1)
|
Segment cost of goods sold (per ton) equals segment cost of goods sold, divided by total tons sold.
|
(2)
|
2012 financial data above includes the impact of our initial public offering ("IPO"), including proceeds received and additional charges incurred.
|
(3)
|
We acquired Cadre on July 31, 2014, and included Cadre's financial position and results of operations in our 2014 financial information above. As a result, our 2014 financial information may not be comparable to prior years. See
Note D - Business Combinations
to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K for more information related to this acquisition.
|
(4)
|
In 2015, we changed the presentation of book overdraft from being classified as a liability to a reduction to our cash and cash equivalents. 2014, 2013 and 2012 cash and cash equivalents amounts presented are recasted to reflect this change. See
Note B - Summary of Significant Accounting Policies
to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K for more information.
|
(5)
|
2014, 2013, and 2012 amounts include the reclassification of deferred debt issuance costs related to the adoption of ASU 2015-03. See
Note B - Summary of Significant Accounting Policies
to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K for more information.
|
(6)
|
We acquired NBI and Sandbox on August 16, 2016 and August 22, 2016, respectively, and included NBI's and Sandbox's financial position and results of operations in our 2016 financial information above. As a result, our 2016 financial information may not be comparable to prior years. See
Note D - Business Combinations
to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K for more information related to this acquisition.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Dollars in thousands except per ton data
|
Quarter ended
|
|
Percentage change for quarter ended
|
|||||||||||||||||||||
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31, 2016 vs. September 30, 2016
|
|
September 30, 2016 vs. June 30, 2016
|
|
June 30,
2016 vs. March 31, 2016
|
||||||||||||
Oil & Gas Proppants
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
|
|
||||||||||||||
Sales
|
$
|
136,977
|
|
|
$
|
86,782
|
|
|
$
|
64,926
|
|
|
$
|
73,865
|
|
|
58
|
%
|
|
34
|
%
|
|
(12
|
)%
|
Tons Sold
|
2,081
|
|
|
1,617
|
|
|
1,333
|
|
|
1,411
|
|
|
29
|
%
|
|
21
|
%
|
|
(6
|
)%
|
||||
Average Selling Price per Ton
|
$
|
65.82
|
|
|
$
|
53.67
|
|
|
$
|
48.71
|
|
|
$
|
52.35
|
|
|
23
|
%
|
|
10
|
%
|
|
(7
|
)%
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(amount in thousands)
|
||||||||||
Net income (loss)
|
$
|
(41,056
|
)
|
|
$
|
11,868
|
|
|
$
|
121,540
|
|
Total interest expense, net of interest income
|
25,779
|
|
|
26,578
|
|
|
17,868
|
|
|||
Provision for taxes
|
(36,689
|
)
|
|
(11,751
|
)
|
|
37,183
|
|
|||
Total depreciation, depletion and amortization expenses
|
68,134
|
|
|
58,474
|
|
|
45,019
|
|
|||
EBITDA
|
16,168
|
|
|
85,169
|
|
|
221,610
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|||
Non-cash incentive compensation
(1)
|
12,107
|
|
|
3,857
|
|
|
7,487
|
|
|||
Post-employment expenses (excluding service costs)
(2)
|
1,040
|
|
|
3,335
|
|
|
1,730
|
|
|||
Business development related expenses
(3)
|
8,206
|
|
|
10,701
|
|
|
11,450
|
|
|||
Other adjustments allowable under our existing credit agreements
(4)
|
2,033
|
|
|
6,446
|
|
|
3,936
|
|
|||
Adjusted EBITDA
|
$
|
39,554
|
|
|
$
|
109,508
|
|
|
$
|
246,213
|
|
|
|
|
(1)
|
Reflects equity-based compensation expense.
|
|
(2)
|
Includes net pension cost and net post-retirement cost relating to pension and other post-retirement benefit obligations during the applicable period, but in each case excluding the service cost relating to benefits earned during such period. See Note P - Pension and Post-retirement Benefits to our Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
|
|
(3)
|
Reflects expenses related to business development activities in connection with our growth and expansion initiatives, including acquisition-related costs for our NBI Acquisition and Sandbox Acquisition completed in August 2016.
|
|
(4)
|
Reflects miscellaneous adjustments permitted under our existing credit agreement, including such items as restructuring costs for actions that will provide future cost savings. Restructuring costs were $3.5 million and $4.8 million, respectively, for the years ended December 31, 2016 and 2015. The year ended December 31, 2016 amount includes a gain on insurance settlement of $1.5 million.
|
|
For the Years Ended December 31,
|
|
Percent Change
|
||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
’16 vs. ‘15
|
|
’15 vs. ‘14
|
||||||||
|
(amounts in thousands, except per ton data)
|
|
|
|
|
||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
||||||||
Oil & Gas Proppants
|
$
|
362,550
|
|
|
$
|
430,435
|
|
|
$
|
662,770
|
|
|
(16
|
)%
|
|
(35
|
)%
|
Industrial & Specialty Products
|
197,075
|
|
|
212,554
|
|
|
213,971
|
|
|
(7
|
)%
|
|
(1
|
)%
|
|||
Total Sales
|
$
|
559,625
|
|
|
$
|
642,989
|
|
|
$
|
876,741
|
|
|
(13
|
)%
|
|
(27
|
)%
|
Tons:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Oil & Gas Proppants
|
6,442
|
|
|
6,082
|
|
|
6,736
|
|
|
6
|
%
|
|
(10
|
)%
|
|||
Industrial & Specialty Products
|
3,433
|
|
|
3,943
|
|
|
4,192
|
|
|
(13
|
)%
|
|
(6
|
)%
|
|||
Total Tons
|
$
|
9,875
|
|
|
10,025
|
|
|
10,928
|
|
|
(1
|
)%
|
|
(8
|
)%
|
||
Average Selling Price per Ton:
|
|
|
|
|
|
|
|
|
|
||||||||
Oil & Gas Proppants
|
$
|
56.28
|
|
|
$
|
70.77
|
|
|
$
|
98.39
|
|
|
(20
|
)%
|
|
(28
|
)%
|
Industrial & Specialty Products
|
$
|
57.41
|
|
|
$
|
53.91
|
|
|
$
|
51.04
|
|
|
6
|
%
|
|
6
|
%
|
Overall Average Selling Price per Ton
|
$
|
56.67
|
|
|
$
|
64.14
|
|
|
$
|
80.24
|
|
|
(12
|
)%
|
|
(20
|
)%
|
•
|
Compensation related expense increased by
$11.2 million
for the year ended
December 31, 2016
compared to
2015
, primarily due to increased equity-based compensation and incremental compensation expense related to NBI and Sandbox employees.
|
•
|
Bad debt expense decreased by
$0.9 million
for the year ended
December 31, 2016
compared to the year ended
December 31, 2015
, mainly due to a
13%
decrease in sales and a recovery of a previously reserved receivable.
|
•
|
Business development related expense decreased by
$2.5 million
to
$8.2 million
for the year ended
December 31, 2016
compared to
$10.7 million
for the year ended
December 31, 2015
, primarily due to a $6.5 million settlement of an unfavorable arbitration ruling during the year ended
December 31, 2015
partially offset by our NBI and Sandbox acquisition-related costs during the year ended
December 31, 2016
.
|
•
|
Compensation-related expense decreased by $13.0 million for the year ended
December 31, 2015
compared to 2014, primarily due to reduced incentive compensation and lower employee headcount.
|
•
|
Bad debt expense decreased by $10.5 million for the year ended
December 31, 2015
compared to the year ended December 31, 2014, mainly due to a 27% decrease in sales and a recovery of a previously reserved receivable.
|
•
|
Business development-related expense decreased by $0.8 million to $10.7 million for the year ended
December 31, 2015
, compared to $11.5 million for the year ended December 31, 2014, primarily due to expense related to the Cadre acquisition in 2014.
|
|
As of December 31,
|
|
Percent Change
|
||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
’16 vs. ‘15
|
|
’15 vs. ‘14
|
||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
$
|
381
|
|
|
$
|
61,492
|
|
|
$
|
171,411
|
|
|
(99
|
)%
|
|
(64
|
)%
|
Investing activities
|
(201,657
|
)
|
|
49
|
|
|
(190,906
|
)
|
|
(411,645
|
)%
|
|
(100
|
)%
|
|||
Financing activities
|
635,424
|
|
|
(47,530
|
)
|
|
208,964
|
|
|
(1,437
|
)%
|
|
(123
|
)%
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
|
(amounts in thousands)
|
||||||||||||||||||
Principal payments on long-term debt
(1)
|
$
|
494,175
|
|
|
$
|
5,100
|
|
|
$
|
10,200
|
|
|
$
|
478,875
|
|
|
$
|
—
|
|
Estimated interest payments on long-term debt
|
71,559
|
|
|
20,349
|
|
|
40,067
|
|
|
11,143
|
|
|
—
|
|
|||||
Minimum payments on customer note payable
|
2,500
|
|
|
500
|
|
|
1,000
|
|
|
1,000
|
|
|
—
|
|
|||||
Minimum payments on note payable secured by royalty interest
|
28,000
|
|
|
1,750
|
|
|
3,500
|
|
|
3,500
|
|
|
19,250
|
|
|||||
Retirement plans
|
58,290
|
|
|
3,664
|
|
|
8,641
|
|
|
9,291
|
|
|
36,694
|
|
|||||
Capital lease obligations
|
3,037
|
|
|
2,315
|
|
|
722
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
381,420
|
|
|
55,525
|
|
|
119,392
|
|
|
91,598
|
|
|
114,905
|
|
|||||
Minimum purchase obligations
(2)
|
83,086
|
|
|
20,739
|
|
|
36,922
|
|
|
12,625
|
|
|
12,800
|
|
|||||
Other long-term liabilities
(3)
|
1,401
|
|
|
208
|
|
|
400
|
|
|
271
|
|
|
522
|
|
|||||
Total Contractual Cash Obligations
(4)
|
$
|
1,123,468
|
|
|
$
|
110,150
|
|
|
$
|
220,844
|
|
|
$
|
608,303
|
|
|
$
|
184,171
|
|
(1)
|
Excludes the unamortized debt issuance costs and original issue discount.
|
(2)
|
Includes estimated future minimum purchase obligation related to transload service agreements and transportation service agreements. As of
December 31, 2016
, we accrued
$2.1
million in shortfall fees under these service agreements.
|
(3)
|
Includes estimated future minimum royalty payments provided for under our mineral leases.
|
(4)
|
The above table excludes discounted asset retirement obligations in the amount of
$11.2 million
at
December 31, 2016
, the majority of which have a settlement date beyond 2025, as well as indemnification for surety bonds issued on our behalf discussed in
Note R - Obligations Under Guarantees
to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
|
|
December 31, 2016
|
|
|
|
December 31, 2015
|
||||||||||||||||||||
|
Maturity
Date
|
|
Contract/Notional
Amount
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Maturity
Date
|
|
Contract/Notional
Amount
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||||||
Interest rate cap agreement
(1)
|
2019
|
|
$
|
249
|
million
|
|
$
|
72
|
|
|
$
|
72
|
|
|
2016
|
|
$
|
252
|
million
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Agreements limit the LIBOR floating interest rate base to 4%.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
ASSETS
|
|||||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
711,225
|
|
|
$
|
277,077
|
|
Short-term investments
|
—
|
|
|
21,849
|
|
||
Accounts receivable, net
|
89,006
|
|
|
58,706
|
|
||
Inventories, net
|
78,709
|
|
|
65,004
|
|
||
Prepaid expenses and other current assets
|
12,323
|
|
|
9,921
|
|
||
Income tax deposits
|
1,682
|
|
|
6,583
|
|
||
Total current assets
|
892,945
|
|
|
439,140
|
|
||
Property, plant and mine development, net
|
783,313
|
|
|
561,196
|
|
||
Goodwill
|
240,975
|
|
|
68,647
|
|
||
Trade names
|
32,318
|
|
|
14,474
|
|
||
Intellectual property
|
57,270
|
|
|
—
|
|
||
Customer relationships, net
|
50,890
|
|
|
6,453
|
|
||
Other assets
|
15,509
|
|
|
18,709
|
|
||
Total assets
|
$
|
2,073,220
|
|
|
$
|
1,108,619
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
70,778
|
|
|
$
|
49,631
|
|
Dividends payable
|
5,221
|
|
|
3,453
|
|
||
Accrued liabilities
|
13,034
|
|
|
11,708
|
|
||
Accrued interest
|
169
|
|
|
58
|
|
||
Current portion of long-term debt
|
4,821
|
|
|
3,330
|
|
||
Current portion of capital leases
|
2,237
|
|
|
—
|
|
||
Current portion of deferred revenue
|
13,700
|
|
|
15,738
|
|
||
Total current liabilities
|
109,960
|
|
|
83,918
|
|
||
Long-term debt
|
508,417
|
|
|
488,375
|
|
||
Liability for pension and other post-retirement benefits
|
56,746
|
|
|
55,893
|
|
||
Deferred revenue
|
58,090
|
|
|
59,676
|
|
||
Deferred income taxes, net
|
50,075
|
|
|
19,513
|
|
||
Obligations under capital lease
|
717
|
|
|
—
|
|
||
Other long-term obligations
|
15,925
|
|
|
17,077
|
|
||
Total liabilities
|
799,930
|
|
|
724,452
|
|
||
Stockholders’ Equity:
|
|
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
||
Common stock
|
811
|
|
|
539
|
|
||
Additional paid-in capital
|
1,129,051
|
|
|
194,670
|
|
||
Retained earnings
|
163,173
|
|
|
220,974
|
|
||
Treasury stock, at cost
|
(3,869
|
)
|
|
(15,845
|
)
|
||
Accumulated other comprehensive loss
|
(15,876
|
)
|
|
(16,171
|
)
|
||
Total stockholders’ equity
|
1,273,290
|
|
|
384,167
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,073,220
|
|
|
$
|
1,108,619
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per share amounts)
|
||||||||||
Sales
|
$
|
559,625
|
|
|
$
|
642,989
|
|
|
$
|
876,741
|
|
Cost of goods sold (excluding depreciation, depletion and amortization)
|
477,295
|
|
|
495,066
|
|
|
566,584
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Selling, general and administrative
|
67,727
|
|
|
62,777
|
|
|
88,971
|
|
|||
Depreciation, depletion and amortization
|
68,134
|
|
|
58,474
|
|
|
45,019
|
|
|||
|
135,861
|
|
|
121,251
|
|
|
133,990
|
|
|||
Operating income (loss)
|
(53,531
|
)
|
|
26,672
|
|
|
176,167
|
|
|||
Other income (expense)
|
|
|
|
|
|
||||||
Interest expense
|
(27,972
|
)
|
|
(27,283
|
)
|
|
(18,202
|
)
|
|||
Other income, net, including interest income
|
3,758
|
|
|
728
|
|
|
758
|
|
|||
|
(24,214
|
)
|
|
(26,555
|
)
|
|
(17,444
|
)
|
|||
Income (loss) before income taxes
|
(77,745
|
)
|
|
117
|
|
|
158,723
|
|
|||
Income tax benefit (expense)
|
36,689
|
|
|
11,751
|
|
|
(37,183
|
)
|
|||
Net income (loss)
|
$
|
(41,056
|
)
|
|
$
|
11,868
|
|
|
$
|
121,540
|
|
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.63
|
)
|
|
$
|
0.22
|
|
|
$
|
2.26
|
|
Diluted
|
$
|
(0.63
|
)
|
|
$
|
0.22
|
|
|
$
|
2.24
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
65,037
|
|
|
53,344
|
|
|
53,719
|
|
|||
Diluted
|
65,037
|
|
|
53,601
|
|
|
54,296
|
|
|||
Dividends declared per share
|
$
|
0.25
|
|
|
$
|
0.44
|
|
|
$
|
0.50
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net income
|
$
|
(41,056
|
)
|
|
$
|
11,868
|
|
|
$
|
121,540
|
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Unrealized gain (loss) on derivatives (net of tax of $29, $34 and ($32) for 2016, 2015, and 2014, respectively)
|
49
|
|
|
53
|
|
|
(55
|
)
|
|||
Unrealized gain (loss) on investments (net of tax of ($4), $29 and ($8) for 2016, 2015, and 2014, respectively)
|
(6
|
)
|
|
47
|
|
|
(14
|
)
|
|||
Pension and other post-retirement benefits liability adjustment (net of tax of $152, $2,469 and ($9,678) for 2016, 2015, and 2014, respectively)
|
252
|
|
|
3,547
|
|
|
(15,732
|
)
|
|||
Comprehensive income
|
$
|
(40,761
|
)
|
|
$
|
15,515
|
|
|
$
|
105,739
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
||||||||||||
|
|
|
|
|
Additional
|
|
|
|
Other
|
|
Total
|
||||||||||||
|
Common
|
|
Treasury
|
|
Paid-In
|
|
Retained
|
|
Comprehensive
|
|
Stockholders'
|
||||||||||||
|
Stock
|
|
Stock
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Equity
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Balance at January 1, 2014
|
$
|
534
|
|
|
$
|
—
|
|
|
$
|
174,799
|
|
|
$
|
137,978
|
|
|
$
|
(4,017
|
)
|
|
$
|
309,294
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
121,540
|
|
|
—
|
|
|
121,540
|
|
||||||
Unrealized loss on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
(55
|
)
|
||||||
Unrealized loss on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
||||||
Pension and post-retirement liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,732
|
)
|
|
(15,732
|
)
|
||||||
Cash dividend declared ($0.500 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,967
|
)
|
|
—
|
|
|
(26,967
|
)
|
||||||
Common stock-based compensation plans activity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
7,487
|
|
|
—
|
|
|
—
|
|
|
7,487
|
|
||||||
Excess tax benefit from equity compensation
|
—
|
|
|
—
|
|
|
3,813
|
|
|
—
|
|
|
—
|
|
|
3,813
|
|
||||||
Proceeds from options exercised
|
4
|
|
|
572
|
|
|
4,987
|
|
|
—
|
|
|
—
|
|
|
5,563
|
|
||||||
Shares withheld for employee taxes related to
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
vested restricted stock and stock units
|
1
|
|
|
(615
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(614
|
)
|
||||||
Repurchase of common stock
|
—
|
|
|
(499
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(499
|
)
|
||||||
Balance at December 31, 2014
|
539
|
|
|
(542
|
)
|
|
191,086
|
|
|
232,551
|
|
|
(19,818
|
)
|
|
403,816
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
11,868
|
|
|
—
|
|
|
11,868
|
|
||||||
Unrealized gain on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
53
|
|
||||||
Unrealized gain on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
||||||
Pension and post-retirement liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,547
|
|
|
3,547
|
|
||||||
Cash dividend declared ($0.438 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,445
|
)
|
|
—
|
|
|
(23,445
|
)
|
||||||
Common stock-based compensation plans activity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
3,857
|
|
|
—
|
|
|
—
|
|
|
3,857
|
|
||||||
Proceeds from options exercised
|
—
|
|
|
744
|
|
|
(271
|
)
|
|
—
|
|
|
—
|
|
|
473
|
|
||||||
Shares withheld for employee taxes related to
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
vested restricted stock and stock units
|
—
|
|
|
(792
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(794
|
)
|
||||||
Repurchase of common stock
|
—
|
|
|
(15,255
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,255
|
)
|
||||||
Balance at December 31, 2015
|
539
|
|
|
(15,845
|
)
|
|
194,670
|
|
|
220,974
|
|
|
(16,171
|
)
|
|
384,167
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,056
|
)
|
|
—
|
|
|
(41,056
|
)
|
||||||
Issuance of common stock (stock offerings net of issuance costs of $25,732)
|
272
|
|
|
—
|
|
|
931,016
|
|
|
—
|
|
|
—
|
|
|
931,288
|
|
||||||
Unrealized gain on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
||||||
Unrealized loss on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||||
Pension and post-retirement liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
252
|
|
|
252
|
|
||||||
Cash dividend declared ($0.25 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,893
|
)
|
|
—
|
|
|
(16,893
|
)
|
||||||
Common stock-based compensation plans activity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
12,107
|
|
|
—
|
|
|
—
|
|
|
12,107
|
|
||||||
Excess tax benefit from equity-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
148
|
|
|
—
|
|
|
148
|
|
||||||
Proceeds from options exercised
|
—
|
|
|
8,465
|
|
|
(3,640
|
)
|
|
—
|
|
|
—
|
|
|
4,825
|
|
||||||
Issuance of restricted stock
|
—
|
|
|
1,437
|
|
|
(1,437
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares withheld for employee taxes related to
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
vested restricted stock and stock units
|
—
|
|
|
2,074
|
|
|
(3,665
|
)
|
|
—
|
|
|
—
|
|
|
(1,591
|
)
|
||||||
Balance at December 31, 2016
|
$
|
811
|
|
|
$
|
(3,869
|
)
|
|
$
|
1,129,051
|
|
|
$
|
163,173
|
|
|
$
|
(15,876
|
)
|
|
$
|
1,273,290
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(41,056
|
)
|
|
$
|
11,868
|
|
|
$
|
121,540
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization
|
68,134
|
|
|
58,474
|
|
|
45,019
|
|
|||
Debt issuance amortization
|
1,392
|
|
|
1,401
|
|
|
912
|
|
|||
Original issue discount amortization
|
378
|
|
|
382
|
|
|
272
|
|
|||
Deferred income taxes
|
(36,903
|
)
|
|
(10,473
|
)
|
|
(2,442
|
)
|
|||
Loss on disposal of property, plant and equipment
|
563
|
|
|
383
|
|
|
222
|
|
|||
Deferred revenue
|
(9,026
|
)
|
|
(16,079
|
)
|
|
(8,508
|
)
|
|||
Equity-based compensation
|
12,107
|
|
|
3,857
|
|
|
7,487
|
|
|||
Excess tax benefit from equity-based compensation
|
—
|
|
|
—
|
|
|
(3,813
|
)
|
|||
Bad debt provision
|
(1,232
|
)
|
|
(290
|
)
|
|
10,200
|
|
|||
Other
|
3,643
|
|
|
(5,257
|
)
|
|
367
|
|
|||
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(12,996
|
)
|
|
62,465
|
|
|
(48,976
|
)
|
|||
Inventories
|
(10,211
|
)
|
|
1,708
|
|
|
34
|
|
|||
Prepaid expenses and other current assets
|
(509
|
)
|
|
(708
|
)
|
|
(2,158
|
)
|
|||
Income taxes
|
11,558
|
|
|
(5,837
|
)
|
|
2,063
|
|
|||
Accounts payable and accrued liabilities
|
13,121
|
|
|
(42,353
|
)
|
|
51,357
|
|
|||
Accrued interest
|
111
|
|
|
(2
|
)
|
|
15
|
|
|||
Liability for pension and other post-retirement benefits
|
1,307
|
|
|
1,953
|
|
|
(2,180
|
)
|
|||
Net cash provided by (used in) operating activities
|
381
|
|
|
61,492
|
|
|
171,411
|
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(46,450
|
)
|
|
(53,646
|
)
|
|
(92,609
|
)
|
|||
Capitalized intellectual property costs
|
(959
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sales and maturities of short-term investments
|
21,872
|
|
|
53,568
|
|
|
—
|
|
|||
Acquisition of business, net of cash acquired
|
(176,617
|
)
|
|
—
|
|
|
(98,317
|
)
|
|||
Proceeds from sale of property, plant and equipment
|
497
|
|
|
127
|
|
|
20
|
|
|||
Net cash provided by (used in) investing activities
|
(201,657
|
)
|
|
49
|
|
|
(190,906
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Issuance of common stock
|
678,791
|
|
|
—
|
|
|
—
|
|
|||
Common stock issuance costs
|
(25,732
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
(15,125
|
)
|
|
(26,797
|
)
|
|
(26,871
|
)
|
|||
Repurchase of common stock
|
—
|
|
|
(15,255
|
)
|
|
(499
|
)
|
|||
Proceeds from options exercised
|
4,825
|
|
|
473
|
|
|
5,563
|
|
|||
Excess tax benefit from equity-based compensation
|
—
|
|
|
—
|
|
|
3,813
|
|
|||
Tax payments related to shares withheld for vested restricted stock and stock units
|
(1,591
|
)
|
|
(794
|
)
|
|
(614
|
)
|
|||
Advances from customers
|
—
|
|
|
—
|
|
|
100,000
|
|
|||
Issuance of long-term debt
|
—
|
|
|
—
|
|
|
134,325
|
|
|||
Repayment of long-term debt
|
(5,202
|
)
|
|
(5,093
|
)
|
|
(3,750
|
)
|
|||
Principal payments on capital lease obligations
|
(542
|
)
|
|
—
|
|
|
(132
|
)
|
|||
Financing fees
|
—
|
|
|
(64
|
)
|
|
(2,871
|
)
|
|||
Net cash provided by (used in) financing activities
|
635,424
|
|
|
(47,530
|
)
|
|
208,964
|
|
|||
Net increase in cash and cash equivalents
|
434,148
|
|
|
14,011
|
|
|
189,469
|
|
|||
Cash and cash equivalents, beginning of period
|
277,077
|
|
|
263,066
|
|
|
73,597
|
|
|||
Cash and cash equivalents, end of period
|
$
|
711,225
|
|
|
$
|
277,077
|
|
|
$
|
263,066
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Cash paid (received) during the period for
:
|
|
|
|
|
|
||||||
Interest
|
$
|
21,994
|
|
|
$
|
21,729
|
|
|
$
|
15,920
|
|
Taxes
|
$
|
(11,322
|
)
|
|
$
|
4,568
|
|
|
$
|
37,637
|
|
Non-cash items:
|
|
|
|
|
|
||||||
Common stock issued in connection with acquisitions
|
$
|
278,229
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Capital lease obligations incurred to acquire assets
|
$
|
165
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2016
|
|
2015
|
||||
Beginning balance
|
$
|
12,254
|
|
|
$
|
11,283
|
|
Accretion
|
979
|
|
|
812
|
|
||
Additions and revisions of prior estimates
|
(2,074
|
)
|
|
159
|
|
||
Ending balance
|
$
|
11,159
|
|
|
$
|
12,254
|
|
|
Weighted-average
|
|||||
|
Year ended December 31,
|
|||||
|
|
2015
|
|
2014
|
||
Risk-free interest rate
|
|
1.68
|
%
|
|
1.81
|
%
|
Expected volatility
|
|
48
|
%
|
|
45
|
%
|
Expected term
|
|
6.25 years
|
|
|
6.25 years
|
|
Expected dividend yield
|
|
1
|
%
|
|
1
|
%
|
Expected forfeiture rate
|
|
0
|
%
|
|
0
|
%
|
|
For the Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Weighted-average outstanding stock options excluded
|
573
|
|
|
528
|
|
|
33
|
|
Weighted-average outstanding restricted stock awards excluded
|
166
|
|
|
66
|
|
|
20
|
|
Dividends per Common Share
|
|
Declaration Date
|
|
Record Date
|
|
Payable Date
|
||
$
|
0.0625
|
|
|
February 22, 2016
|
|
March 15, 2016
|
|
April 5, 2016
|
$
|
0.0625
|
|
|
May 5, 2016
|
|
June 15, 2016
|
|
July 6, 2016
|
$
|
0.0625
|
|
|
July 21, 2016
|
|
September 15, 2016
|
|
October 4, 2016
|
$
|
0.0625
|
|
|
November 3, 2016
|
|
December 15, 2016
|
|
January 5, 2017
|
|
For the Year Ended December 31, 2016
|
||||||||||||||
|
Unrealized
gain (loss) on
cash flow
hedges
|
|
Unrealized
gain (loss) on
short-term
investments
|
|
Pension and
other post-
retirement
benefits liability
|
|
Total
|
||||||||
Beginning Balance
|
$
|
(81
|
)
|
|
$
|
6
|
|
|
$
|
(16,096
|
)
|
|
$
|
(16,171
|
)
|
Other comprehensive income before reclassifications
|
(32
|
)
|
|
(6
|
)
|
|
(760
|
)
|
|
(798
|
)
|
||||
Amounts reclassed from accumulated other comprehensive income
|
81
|
|
|
—
|
|
|
1,012
|
|
|
1,093
|
|
||||
Ending Balance
|
$
|
(32
|
)
|
|
$
|
—
|
|
|
$
|
(15,844
|
)
|
|
$
|
(15,876
|
)
|
|
|
|
||||
Cash consideration paid
|
|
$
|
116,165
|
|
||
Number of Holdings common shares delivered
|
2,630,513
|
|
|
|||
Multiplied by closing market price per share of U.S. Silica common stock on August 16, 2016
|
$
|
40.51
|
|
|
||
Total value of Holdings common shares delivered
|
|
$
|
106,562
|
|
||
Less, cash acquired
|
|
$
|
(9,002
|
)
|
||
Total purchase price
|
|
$
|
213,725
|
|
Allocation of Purchase price:
|
|
||
Accounts receivable
|
$
|
2,680
|
|
Inventories
|
3,494
|
|
|
Other current assets
|
428
|
|
|
Income tax deposits
|
6,657
|
|
|
Property, plant and mine development
|
210,913
|
|
|
Identifiable intangible assets
|
1,600
|
|
|
Goodwill
|
86,228
|
|
|
Total assets acquired
|
312,000
|
|
|
Accounts payable, accrued expenses and other current liabilities
|
1,938
|
|
|
Deferred revenue
|
500
|
|
|
Notes payable
|
24,361
|
|
|
Capital lease liabilities
|
3,331
|
|
|
Asset retirement obligations
|
710
|
|
|
Deferred tax liabilities
|
67,435
|
|
|
Total liabilities assumed
|
98,275
|
|
|
Net assets acquired
|
$
|
213,725
|
|
|
Approximate Fair Value
|
Estimated Useful Life
|
||
|
(in thousands)
|
(in years)
|
||
Customer relationships
|
$
|
1,600
|
|
15
|
|
|
|
||||
Cash consideration paid
|
|
$
|
70,760
|
|
||
Number of Holdings common shares delivered
|
4,195,180
|
|
|
|||
Multiplied by closing market price per share of U.S. Silica common stock on August 22, 2016
|
$
|
40.92
|
|
|
||
Total value of Holdings common shares delivered
|
|
$
|
171,667
|
|
||
Less, cash acquired
|
|
$
|
(1,306
|
)
|
||
Total purchase price
|
|
$
|
241,121
|
|
Allocation of Purchase price:
|
(in thousands)
|
||
Accounts receivable
|
$
|
13,392
|
|
Prepaid expenses and other
|
1,465
|
|
|
Property, plant and mine development
|
32,336
|
|
|
Identifiable intangible assets
|
120,144
|
|
|
Goodwill
|
86,100
|
|
|
Total assets acquired
|
253,437
|
|
|
Accounts payable
|
4,122
|
|
|
Deferred revenue
|
4,902
|
|
|
Accrued expenses and other current liabilities
|
3,292
|
|
|
Total liabilities assumed
|
12,316
|
|
|
Net assets acquired
|
$
|
241,121
|
|
|
Approximate Fair Value
|
Estimated Useful Life
|
||
|
(in thousands)
|
(in years)
|
||
Indefinite lived intangible assets - Trade names
|
$
|
17,844
|
|
Indefinite
|
Definite lived intangible assets - Technology and intellectual property
|
57,700
|
|
15
|
|
Definite lived intangible asset - Customer relationships
|
44,600
|
|
13
|
|
Total fair value of identifiable intangible assets
|
$
|
120,144
|
|
|
|
For the year ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Sales
|
$
|
615,552
|
|
|
$
|
753,287
|
|
Net income (loss)
|
$
|
(45,161
|
)
|
|
$
|
43,163
|
|
Basic earnings per share
|
$
|
(0.69
|
)
|
|
$
|
0.81
|
|
Diluted earnings per share
|
$
|
(0.69
|
)
|
|
$
|
0.81
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Trade receivables
|
$
|
93,982
|
|
|
$
|
64,821
|
|
Less: Allowance for doubtful accounts
|
(7,042
|
)
|
|
(7,686
|
)
|
||
Net trade receivables
|
86,940
|
|
|
57,135
|
|
||
Other receivables
|
2,066
|
|
|
1,571
|
|
||
Total accounts receivable
|
$
|
89,006
|
|
|
$
|
58,706
|
|
|
Allowance for Doubtful Accounts
|
||||||
|
2016
|
|
2015
|
||||
Balance at January 1,
|
$
|
7,686
|
|
|
$
|
10,429
|
|
Bad debt provision
|
(1,232
|
)
|
|
(290
|
)
|
||
Write-offs and recoveries
|
588
|
|
|
(2,453
|
)
|
||
Balance at December 31,
|
$
|
7,042
|
|
|
$
|
7,686
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Supplies
|
$
|
18,824
|
|
|
$
|
18,029
|
|
Raw materials and work in process
|
25,161
|
|
|
18,113
|
|
||
Finished goods
|
34,724
|
|
|
28,862
|
|
||
Total inventories
|
$
|
78,709
|
|
|
$
|
65,004
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Mining property and mine development
|
$
|
414,434
|
|
|
$
|
222,439
|
|
Asset retirement cost
|
8,062
|
|
|
9,889
|
|
||
Land
|
35,052
|
|
|
30,322
|
|
||
Land improvements
|
42,738
|
|
|
37,791
|
|
||
Buildings
|
52,178
|
|
|
51,280
|
|
||
Machinery and equipment
|
450,881
|
|
|
360,817
|
|
||
Furniture and fixtures
|
2,566
|
|
|
1,917
|
|
||
Construction-in-progress
|
43,790
|
|
|
56,130
|
|
||
|
1,049,701
|
|
|
770,585
|
|
||
Accumulated depletion, depreciation and amortization
|
(266,388
|
)
|
|
(209,389
|
)
|
||
Total property, plant and mine development, net
|
$
|
783,313
|
|
|
$
|
561,196
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Accrued salaries and wages
|
$
|
3,794
|
|
|
$
|
1,309
|
|
Accrued vacation liability
|
2,471
|
|
|
2,593
|
|
||
Current portion of liability for pension and post-retirement benefits
|
1,553
|
|
|
1,505
|
|
||
Accrued healthcare liability
|
1,307
|
|
|
1,830
|
|
||
Accrued property taxes and sales taxes
|
1,815
|
|
|
1,940
|
|
||
Other accrued liabilities
|
2,094
|
|
|
2,531
|
|
||
Total accrued liabilities
|
$
|
13,034
|
|
|
$
|
11,708
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Senior secured credit facility:
|
|
|
|
|
|||
Revolver expiring July 23, 2018 (5.25% at December 31, 2016 and 5% at December 31, 2015)
|
$
|
—
|
|
|
$
|
—
|
|
Term loan facility—final maturity July 23, 2020 (4% - 4.5% at December 31, 2016 and December 31, 2015)
|
494,175
|
|
|
499,275
|
|
||
Less: Unamortized original issue discount
|
(1,318
|
)
|
|
(1,696
|
)
|
||
Less: Unamortized debt issuance cost
|
(4,482
|
)
|
|
(5,874
|
)
|
||
Note payable secured by royalty interest (includes $3,053 unamortized fair value premium)
|
23,076
|
|
|
—
|
|
||
Customer note payable
|
1,787
|
|
|
—
|
|
||
Total debt
|
513,238
|
|
|
491,705
|
|
||
Less: current portion
|
(4,821
|
)
|
|
(3,330
|
)
|
||
Total long-term portion of debt
|
$
|
508,417
|
|
|
$
|
488,375
|
|
2017
|
$
|
5,100
|
|
2018
|
5,100
|
|
|
2019
|
5,100
|
|
|
2020
|
478,875
|
|
|
|
$
|
494,175
|
|
2017
|
$
|
1,750
|
|
2018
|
1,750
|
|
|
2019
|
1,750
|
|
|
2020
|
1,750
|
|
|
2021
|
1,750
|
|
2017
|
$
|
2,315
|
|
2018
|
722
|
|
|
Total minimum lease payments
|
3,037
|
|
|
Less: amount representing interest
|
(83
|
)
|
|
Present value of minimum lease payments
|
2,954
|
|
|
Less: current portion of capital lease obligations
|
(2,237
|
)
|
|
Non-current portion of capital lease obligations
|
$
|
717
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
Short-term investments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
21,848
|
|
|
$
|
21,849
|
|
Interest rate derivatives
|
—
|
|
|
72
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net asset
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
72
|
|
|
$
|
1
|
|
|
$
|
21,848
|
|
|
$
|
21,849
|
|
|
Aggregate
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
10,535
|
|
|
—
|
|
|
(3
|
)
|
|
10,532
|
|
||||
Commercial paper
|
5,689
|
|
|
19
|
|
|
—
|
|
|
5,708
|
|
||||
Corporate notes and bonds
|
2,006
|
|
|
—
|
|
|
—
|
|
|
2,006
|
|
||||
Government agencies
|
3,598
|
|
|
4
|
|
|
—
|
|
|
3,602
|
|
||||
U.S. Treasuries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Variable rate demand obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total available-for-sale investments
|
$
|
21,829
|
|
|
$
|
23
|
|
|
$
|
(3
|
)
|
|
$
|
21,849
|
|
|
|
|
December 31, 2016
|
|
|
|
December 31, 2015
|
||||||||||||||||||||
|
Maturity
Date
|
|
Contract/Notional
Amount
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Maturity
Date
|
|
Contract/Notional
Amount
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||||||
Interest rate cap agreement
(1)
|
2019
|
|
$
|
249
|
million
|
|
$
|
72
|
|
|
$
|
72
|
|
|
2016
|
|
$
|
252
|
million
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Deferred losses from derivatives in OCI, beginning of period
|
$
|
(81
|
)
|
|
$
|
(134
|
)
|
|
$
|
(79
|
)
|
Loss recognized in OCI from derivative instruments
|
(32
|
)
|
|
—
|
|
|
(65
|
)
|
|||
Loss reclassified from Accumulated OCI
|
81
|
|
|
53
|
|
|
10
|
|
|||
Deferred losses from derivatives in OCI, end of period
|
$
|
(32
|
)
|
|
$
|
(81
|
)
|
|
$
|
(134
|
)
|
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
|
|
Aggregate Intrinsic Value (in thousands)
|
|
Weighted
Average
Remaining Contractual Term in Years
|
||||
Outstanding at December 31, 2015
|
1,307,067
|
|
|
24.61
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
||
Exercised
|
(326,884
|
)
|
|
14.76
|
|
|
|
|
|
||
Forfeited
|
(27,490
|
)
|
|
24.81
|
|
|
|
|
|
||
Outstanding at December 31, 2016
|
952,693
|
|
|
27.99
|
|
|
$
|
27,332
|
|
|
7.00 years
|
Exercisable at December 31, 2016
|
597,799
|
|
|
23.71
|
|
|
$
|
19,712
|
|
|
6.33 years
|
|
Number of Shares
|
|
Grant Date Weighted
Average Fair Value
|
|||
Unvested, December 31, 2015
|
398,987
|
|
|
$
|
26.65
|
|
Granted
|
364,710
|
|
|
22.97
|
|
|
Vested
|
(180,419
|
)
|
|
26.28
|
|
|
Forfeited
|
(25,562
|
)
|
|
27.26
|
|
|
Unvested, December 31, 2016
|
557,716
|
|
|
$
|
24.33
|
|
|
Number of Shares
|
|
Grant Date Weighted
Average Fair Value
|
|||
Unvested, December 31, 2015
|
277,066
|
|
|
$
|
29.05
|
|
Granted
|
850,143
|
|
|
39.36
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(163,596
|
)
|
|
33.30
|
|
|
Unvested, December 31, 2016
|
963,613
|
|
|
$
|
32.63
|
|
Amounts in thousands
Year ending December 31,
|
Operating Lease Minimum Rental Payments
|
|
Minimum Purchase Commitments
|
||||
2017
|
$
|
55,525
|
|
|
$
|
20,739
|
|
2018
|
63,221
|
|
|
19,332
|
|
||
2019
|
56,171
|
|
|
17,590
|
|
||
2020
|
48,774
|
|
|
9,175
|
|
||
2021
|
42,824
|
|
|
3,450
|
|
||
Thereafter
|
114,905
|
|
|
12,800
|
|
||
Total future lease and purchase commitments
|
$
|
381,420
|
|
|
$
|
83,086
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Service cost—benefits earned during the period
|
$
|
1,078
|
|
|
$
|
1,295
|
|
|
$
|
1,080
|
|
Interest cost
|
4,067
|
|
|
4,813
|
|
|
4,811
|
|
|||
Expected return on plan assets
|
(5,495
|
)
|
|
(5,498
|
)
|
|
(5,146
|
)
|
|||
Net amortization and deferral
|
1,592
|
|
|
2,665
|
|
|
1,037
|
|
|||
Net pension benefit costs
|
$
|
1,242
|
|
|
$
|
3,275
|
|
|
$
|
1,782
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Service cost—benefits earned during the period
|
$
|
132
|
|
|
$
|
176
|
|
|
$
|
151
|
|
Interest cost
|
876
|
|
|
1,074
|
|
|
1,030
|
|
|||
Expected return on plan assets
|
(1
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|||
Net amortization and deferral
|
—
|
|
|
281
|
|
|
—
|
|
|||
Special termination benefit
|
21
|
|
|
48
|
|
|
—
|
|
|||
Net post-retirement costs
|
$
|
1,028
|
|
|
$
|
1,578
|
|
|
$
|
1,177
|
|
|
Pension Benefits
|
|
Post-retirement Benefits
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Benefit obligation at January 1,
|
$
|
115,420
|
|
|
$
|
122,336
|
|
|
$
|
25,091
|
|
|
$
|
28,289
|
|
Service cost
|
1,078
|
|
|
1,295
|
|
|
132
|
|
|
176
|
|
||||
Interest cost
|
4,067
|
|
|
4,813
|
|
|
876
|
|
|
1,074
|
|
||||
Actuarial (gain) loss
|
1,640
|
|
|
(7,492
|
)
|
|
(802
|
)
|
|
(3,631
|
)
|
||||
Benefits paid
|
(6,517
|
)
|
|
(6,106
|
)
|
|
(1,332
|
)
|
|
(1,288
|
)
|
||||
Amendments
|
457
|
|
|
574
|
|
|
—
|
|
|
—
|
|
||||
Special termination benefits
|
—
|
|
|
—
|
|
|
21
|
|
|
48
|
|
||||
Other
|
—
|
|
|
—
|
|
|
407
|
|
|
423
|
|
||||
Benefit obligation at December 31,
|
$
|
116,145
|
|
|
$
|
115,420
|
|
|
$
|
24,393
|
|
|
$
|
25,091
|
|
Fair value of plan assets at January 1,
|
$
|
84,716
|
|
|
$
|
90,897
|
|
|
$
|
17
|
|
|
$
|
19
|
|
Actual return on plan assets
|
5,651
|
|
|
(2,100
|
)
|
|
(3
|
)
|
|
(2
|
)
|
||||
Employer contributions
|
—
|
|
|
2,025
|
|
|
925
|
|
|
864
|
|
||||
Benefits paid
|
(6,517
|
)
|
|
(6,106
|
)
|
|
(1,332
|
)
|
|
(1,288
|
)
|
||||
Other
|
—
|
|
|
—
|
|
|
407
|
|
|
424
|
|
||||
Fair value of plan assets at December 31,
|
$
|
83,850
|
|
|
$
|
84,716
|
|
|
$
|
14
|
|
|
$
|
17
|
|
Plan assets less than benefit obligations at December 31 recognized as liability for pension and other post-retirement benefits
|
$
|
(32,295
|
)
|
|
$
|
(30,704
|
)
|
|
$
|
(24,379
|
)
|
|
$
|
(25,074
|
)
|
|
Benefits
|
||||||||||
|
|
|
Post-retirement
|
||||||||
|
Pension
|
|
Before
Medicare
Subsidy
|
|
After
Medicare
Subsidy
|
||||||
2017
|
$
|
6,824
|
|
|
$
|
1,570
|
|
|
$
|
1,429
|
|
2018
|
7,050
|
|
|
1,544
|
|
|
1,402
|
|
|||
2019
|
7,201
|
|
|
1,521
|
|
|
1,379
|
|
|||
2020
|
7,343
|
|
|
1,598
|
|
|
1,452
|
|
|||
2021
|
7,419
|
|
|
1,676
|
|
|
1,528
|
|
|||
2022-2026
|
38,158
|
|
|
8,627
|
|
|
7,839
|
|
|
Benefits
|
||||||||||
|
Pension
|
|
Post-retirement
|
|
Total
|
||||||
Net actuarial loss
|
$
|
1,372
|
|
|
$
|
—
|
|
|
$
|
1,372
|
|
Prior service cost
|
411
|
|
|
—
|
|
|
411
|
|
|||
|
$
|
1,783
|
|
|
$
|
—
|
|
|
$
|
1,783
|
|
|
Pension Benefits
|
|
Post-retirement Benefits
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Discount rate
|
4.2
|
%
|
|
4.5
|
%
|
|
4.2
|
%
|
|
4.5
|
%
|
Long-term rate of compensation increase
|
3.5
|
%
|
|
3.5
|
%
|
|
N/A
|
|
|
N/A
|
|
Long-term rate of return on plan assets
|
7.0
|
%
|
|
7.0
|
%
|
|
7.0
|
%
|
|
7.0
|
%
|
Health care cost trend rate:
|
|
|
|
|
|
|
|
||||
Pre-65 initial rate/ultimate rate
|
N/A
|
|
|
N/A
|
|
|
7.3%/5.0%
|
|
|
7.8%/5.0%
|
|
Pre-65 ultimate year
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|
—
|
|
Post-65 initial rate/ultimate rate
|
N/A
|
|
|
N/A
|
|
|
8.5%/5.0%
|
|
|
9.0%/5.0%
|
|
Post-65 ultimate year
|
N/A
|
|
|
N/A
|
|
|
2024/2025
|
|
|
2024/2025
|
|
|
Pension Benefits and Post-retirement Benefits
|
||
|
2016
|
|
2015
|
Healthy lives
|
RP-2014 mortality table, adjusted back to 2006 base rates, with generational mortality improvements using Scale MP-2016
|
|
RP-2014 mortality table, adjusted back to 2006 base rates, with generational mortality improvements using Scale MP-2015
|
Disabled lives
|
RP-2014 disabled retiree mortality table, adjusted back to 2006 base rates, with generational mortality improvements using Scale MP-2016
|
|
RP-2014 disabled retiree mortality table, adjusted back to 2006 base rates, with generational mortality improvements using Scale MP-2015
|
|
One-Percentage-Point
|
||||||
|
Increase
|
|
Decrease
|
||||
Effect on total of service and interest cost
|
$
|
144
|
|
|
$
|
(120
|
)
|
Effect on post-retirement benefit obligation
|
2,827
|
|
|
(2,406
|
)
|
|
Pension Benefits
|
|
Post-retirement Benefits
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Equity securities
|
59.4
|
%
|
|
58.1
|
%
|
|
64.0
|
%
|
|
52.5
|
%
|
Debt securities
|
38.3
|
%
|
|
40.0
|
%
|
|
39.1
|
%
|
|
35.3
|
%
|
Cash
|
2.3
|
%
|
|
1.9
|
%
|
|
(3.1
|
)%
|
|
12.2
|
%
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
1,893
|
|
|
$
|
—
|
|
|
$
|
1,893
|
|
Mutual funds:
|
|
|
|
|
|
|
|
||||||||
Diversified emerging markets
|
7,700
|
|
|
—
|
|
|
—
|
|
|
7,700
|
|
||||
Foreign large blend
|
12,621
|
|
|
—
|
|
|
—
|
|
|
12,621
|
|
||||
Large-cap blend
|
16,687
|
|
|
—
|
|
|
—
|
|
|
16,687
|
|
||||
Mid-cap blend
|
8,674
|
|
|
—
|
|
|
—
|
|
|
8,674
|
|
||||
Real estate
|
4,070
|
|
|
—
|
|
|
—
|
|
|
4,070
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
Corporate notes and bonds
|
21,357
|
|
|
—
|
|
|
—
|
|
|
21,357
|
|
||||
Government agencies
|
301
|
|
|
—
|
|
|
—
|
|
|
301
|
|
||||
U.S. Treasuries
|
7,495
|
|
|
—
|
|
|
—
|
|
|
7,495
|
|
||||
Mortgage-backed securities
|
—
|
|
|
2,022
|
|
|
—
|
|
|
2,022
|
|
||||
Asset-backed securities
|
—
|
|
|
983
|
|
|
—
|
|
|
983
|
|
||||
Insurance policies
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
||||
Net asset
|
$
|
78,905
|
|
|
$
|
4,898
|
|
|
$
|
47
|
|
|
$
|
83,850
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
1,635
|
|
|
$
|
—
|
|
|
$
|
1,635
|
|
Mutual funds:
|
|
|
|
|
|
|
|
||||||||
Diversified emerging markets
|
6,890
|
|
|
—
|
|
|
—
|
|
|
6,890
|
|
||||
Foreign large blend
|
13,111
|
|
|
—
|
|
|
—
|
|
|
13,111
|
|
||||
Large-cap blend
|
16,855
|
|
|
—
|
|
|
—
|
|
|
16,855
|
|
||||
Mid-cap blend
|
7,769
|
|
|
—
|
|
|
—
|
|
|
7,769
|
|
||||
Real estate
|
4,369
|
|
|
—
|
|
|
—
|
|
|
4,369
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate notes and bonds
|
22,559
|
|
|
—
|
|
|
—
|
|
|
22,559
|
|
||||
Government agencies
|
607
|
|
|
—
|
|
|
—
|
|
|
607
|
|
||||
U.S. Treasuries
|
5,384
|
|
|
—
|
|
|
—
|
|
|
5,384
|
|
||||
Mortgage-backed securities
|
—
|
|
|
3,111
|
|
|
—
|
|
|
3,111
|
|
||||
Asset-backed securities
|
—
|
|
|
2,375
|
|
|
—
|
|
|
2,375
|
|
||||
Insurance policies
|
—
|
|
|
—
|
|
|
51
|
|
|
51
|
|
||||
Net asset
|
$
|
77,544
|
|
|
$
|
7,121
|
|
|
$
|
51
|
|
|
$
|
84,716
|
|
Pension
Fund
|
EIN/ Pension
Plan No.
|
|
Pension Protection Act
Zone Status
(1)
|
|
FIP/RP Status
Pending/
Implemented
|
|
Company
Contributions
(in thousands)
|
|
Surcharge
Imposed
|
|
Expiration
Date of
CBA
|
||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2014
|
|
||||||||||||||
LIUNA
|
52-6074345/001
|
|
Red
|
|
Red
|
|
Yes
|
|
$
|
167
|
|
|
$
|
182
|
|
|
$
|
149
|
|
|
Yes
|
|
5/31/2017
|
IUOE
|
36-6052390/001
|
|
Green
|
|
Green
|
|
No
|
|
28
|
|
|
29
|
|
|
28
|
|
|
No
|
|
7/29/2018
|
|||
CSSS
(2)
|
36-6044243/001
|
|
Red
|
|
Red
|
|
Yes
|
|
51
|
|
|
51
|
|
|
51
|
|
|
NA
|
|
NA
|
(1)
|
The Pension Protection Act of 2006 defines the zone status as follows: green—healthy, yellow—endangered, orange—seriously endangered and red—critical.
|
(2)
|
In 2011, we withdrew from the Central States, Southeast and Southwest Areas Pension Plan. The withdrawal liability of
$1.0 million
will be paid in monthly installments of
$4,000
until 2031.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
60
|
|
|
$
|
(170
|
)
|
|
$
|
(34,790
|
)
|
State
|
(274
|
)
|
|
1,448
|
|
|
(4,835
|
)
|
|||
|
$
|
(214
|
)
|
|
$
|
1,278
|
|
|
$
|
(39,625
|
)
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
32,944
|
|
|
7,439
|
|
|
(308
|
)
|
|||
State
|
3,959
|
|
|
3,034
|
|
|
2,750
|
|
|||
|
$
|
36,903
|
|
|
$
|
10,473
|
|
|
$
|
2,442
|
|
Income tax benefit (expense)
|
$
|
36,689
|
|
|
$
|
11,751
|
|
|
$
|
(37,183
|
)
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
Gross deferred tax assets:
|
|
|
|
||||
Net operating loss carry forward and state tax credits
|
$
|
65,022
|
|
|
$
|
39,280
|
|
Pension and post-retirement benefit costs
|
22,920
|
|
|
22,577
|
|
||
Alternative minimum tax credit carry forward
|
19,431
|
|
|
19,049
|
|
||
Property, plant and equipment
|
6,112
|
|
|
6,657
|
|
||
Accrued expenses
|
6,752
|
|
|
3,765
|
|
||
Inventories
|
4,362
|
|
|
6,425
|
|
||
Third-party products liability
|
511
|
|
|
568
|
|
||
Stock-based compensation expense
|
5,576
|
|
|
3,365
|
|
||
Note payable
|
4,009
|
|
|
—
|
|
||
Other
|
5,458
|
|
|
5,373
|
|
||
Total deferred tax assets
|
$
|
140,153
|
|
|
$
|
107,059
|
|
Gross deferred tax liabilities:
|
|
|
|
||||
Land and mineral property basis difference
|
$
|
(126,315
|
)
|
|
$
|
(63,488
|
)
|
Fixed assets and depreciation
|
(61,531
|
)
|
|
(54,913
|
)
|
||
Intangibles
|
(2,260
|
)
|
|
(8,049
|
)
|
||
Other
|
(122
|
)
|
|
(122
|
)
|
||
Total deferred tax liabilities
|
$
|
(190,228
|
)
|
|
$
|
(126,572
|
)
|
Net deferred tax liabilities
|
$
|
(50,075
|
)
|
|
$
|
(19,513
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Income tax benefit (expense) computed at U.S. federal statutory rate
|
$
|
27,211
|
|
|
$
|
(41
|
)
|
|
$
|
(55,553
|
)
|
Decrease (increase) resulting from:
|
|
|
|
|
|
||||||
Statutory depletion
|
4,734
|
|
|
8,918
|
|
|
15,548
|
|
|||
Prior year tax return reconciliation
|
435
|
|
|
393
|
|
|
1,018
|
|
|||
State income taxes, net of federal benefit
|
2,369
|
|
|
1,370
|
|
|
(3,416
|
)
|
|||
Domestic production deduction
|
—
|
|
|
—
|
|
|
3,911
|
|
|||
Equity compensation
|
2,003
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(63
|
)
|
|
1,111
|
|
|
1,309
|
|
|||
Income tax benefit (expense)
|
$
|
36,689
|
|
|
$
|
11,751
|
|
|
$
|
(37,183
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Sales:
|
|
|
|
|
|
||||||
Oil & Gas Proppants
|
$
|
362,550
|
|
|
$
|
430,435
|
|
|
$
|
662,770
|
|
Industrial & Specialty Products
|
197,075
|
|
|
212,554
|
|
|
213,971
|
|
|||
Total sales
|
$
|
559,625
|
|
|
$
|
642,989
|
|
|
$
|
876,741
|
|
Segment contribution margin:
|
|
|
|
|
|
||||||
Oil & Gas Proppants
|
$
|
11,445
|
|
|
$
|
88,928
|
|
|
$
|
256,137
|
|
Industrial & Specialty Products
|
78,988
|
|
|
70,137
|
|
|
61,102
|
|
|||
Total segment contribution margin
|
$
|
90,433
|
|
|
$
|
159,065
|
|
|
$
|
317,239
|
|
Operating activities excluded from segment cost of goods sold
|
(8,103
|
)
|
|
(11,142
|
)
|
|
(7,082
|
)
|
|||
Selling, general and administrative
|
(67,727
|
)
|
|
(62,777
|
)
|
|
(88,971
|
)
|
|||
Depreciation, depletion and amortization
|
(68,134
|
)
|
|
(58,474
|
)
|
|
(45,019
|
)
|
|||
Interest expense
|
(27,972
|
)
|
|
(27,283
|
)
|
|
(18,202
|
)
|
|||
Other income, net, including interest income
|
3,758
|
|
|
728
|
|
|
758
|
|
|||
Income tax benefit (expense)
|
$
|
36,689
|
|
|
11,751
|
|
|
(37,183
|
)
|
||
Net income (loss)
|
$
|
(41,056
|
)
|
|
$
|
11,868
|
|
|
$
|
121,540
|
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
2016:
|
(Unaudited)
|
||||||||||||||
Sales
|
$
|
122,510
|
|
|
$
|
116,994
|
|
|
$
|
137,748
|
|
|
$
|
182,373
|
|
Cost of goods sold (excluding depreciation, depletion and amortization)
|
106,751
|
|
|
102,707
|
|
|
119,426
|
|
|
148,411
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
15,503
|
|
|
14,585
|
|
|
18,472
|
|
|
19,167
|
|
||||
Depreciation, depletion and amortization
|
14,556
|
|
|
15,209
|
|
|
17,175
|
|
|
21,194
|
|
||||
|
$
|
30,059
|
|
|
$
|
29,794
|
|
|
$
|
35,647
|
|
|
$
|
40,361
|
|
Operating loss
|
(14,300
|
)
|
|
(15,507
|
)
|
|
(17,325
|
)
|
|
(6,399
|
)
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(6,643
|
)
|
|
(6,647
|
)
|
|
(6,684
|
)
|
|
(7,998
|
)
|
||||
Other income, net, including interest income
|
1,790
|
|
|
608
|
|
|
493
|
|
|
867
|
|
||||
|
$
|
(4,853
|
)
|
|
$
|
(6,039
|
)
|
|
$
|
(6,191
|
)
|
|
$
|
(7,131
|
)
|
Loss before income taxes
|
(19,153
|
)
|
|
(21,546
|
)
|
|
(23,516
|
)
|
|
(13,530
|
)
|
||||
Income tax benefit
|
8,150
|
|
|
9,774
|
|
|
12,177
|
|
|
6,588
|
|
||||
Net loss
|
$
|
(11,003
|
)
|
|
$
|
(11,772
|
)
|
|
$
|
(11,339
|
)
|
|
$
|
(6,942
|
)
|
Loss per share, basic
|
$
|
(0.20
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.09
|
)
|
Loss per share, diluted
|
$
|
(0.20
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.09
|
)
|
Weighted average shares outstanding, basic
|
54,470
|
|
|
63,417
|
|
|
66,676
|
|
|
75,539
|
|
||||
Weighted average shares outstanding, diluted
|
54,470
|
|
|
63,417
|
|
|
66,676
|
|
|
75,539
|
|
||||
Dividends declared per share
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
||||||||
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
2015:
|
(Unaudited)
|
||||||||||||||
Sales
|
$
|
203,958
|
|
|
$
|
147,511
|
|
|
$
|
155,408
|
|
|
$
|
136,112
|
|
Cost of goods sold (excluding depreciation, depletion and amortization)
|
138,653
|
|
|
117,200
|
|
|
122,599
|
|
|
116,614
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
26,961
|
|
|
6,575
|
|
|
13,559
|
|
|
15,682
|
|
||||
Depreciation, depletion and amortization
|
13,243
|
|
|
13,695
|
|
|
15,158
|
|
|
16,378
|
|
||||
|
$
|
40,204
|
|
|
$
|
20,270
|
|
|
$
|
28,717
|
|
|
$
|
32,060
|
|
Operating income (loss)
|
25,101
|
|
|
10,041
|
|
|
4,092
|
|
|
(12,562
|
)
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(6,836
|
)
|
|
(6,928
|
)
|
|
(6,684
|
)
|
|
(6,835
|
)
|
||||
Other income (loss), net, including interest income
|
11
|
|
|
498
|
|
|
309
|
|
|
(90
|
)
|
||||
|
$
|
(6,825
|
)
|
|
$
|
(6,430
|
)
|
|
$
|
(6,375
|
)
|
|
$
|
(6,925
|
)
|
Income before income taxes
|
18,276
|
|
|
3,611
|
|
|
(2,283
|
)
|
|
(19,487
|
)
|
||||
Income tax benefit (expense)
|
(3,453
|
)
|
|
6,342
|
|
|
4,695
|
|
|
4,167
|
|
||||
Net income (loss)
|
$
|
14,823
|
|
|
$
|
9,953
|
|
|
$
|
2,412
|
|
|
$
|
(15,320
|
)
|
Earnings (loss) per share, basic
|
$
|
0.28
|
|
|
$
|
0.19
|
|
|
$
|
0.05
|
|
|
$
|
(0.29
|
)
|
Earnings (loss) per share, diluted
|
$
|
0.28
|
|
|
$
|
0.18
|
|
|
$
|
0.04
|
|
|
$
|
(0.29
|
)
|
Weighted average shares outstanding, basic
|
53,416
|
|
|
53,303
|
|
|
53,321
|
|
|
53,323
|
|
||||
Weighted average shares outstanding, diluted
|
53,869
|
|
|
53,857
|
|
|
53,742
|
|
|
53,323
|
|
||||
Dividends declared per share
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.06
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
ASSETS
|
|||||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
534,378
|
|
|
$
|
58,579
|
|
Short-term investments
|
—
|
|
|
21,849
|
|
||
Total current assets
|
534,378
|
|
|
80,428
|
|
||
Investment in subsidiaries
|
854,860
|
|
|
417,462
|
|
||
Total assets
|
$
|
1,389,238
|
|
|
$
|
497,890
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current Liabilities:
|
|
|
|
||||
Accrued expenses and other current liabilities
|
$
|
461
|
|
|
$
|
107
|
|
Dividends payable
|
5,222
|
|
|
3,453
|
|
||
Due to affiliates
|
110,265
|
|
|
110,159
|
|
||
Total current liabilities
|
115,948
|
|
|
113,719
|
|
||
Deferred income taxes, net
|
—
|
|
|
4
|
|
||
Total liabilities
|
115,948
|
|
|
113,723
|
|
||
Stockholders’ Equity:
|
|
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
||
Common stock
|
811
|
|
|
539
|
|
||
Additional paid-in capital
|
1,129,051
|
|
|
194,670
|
|
||
Retained earnings
|
163,173
|
|
|
220,974
|
|
||
Treasury stock, at cost
|
(3,869
|
)
|
|
(15,845
|
)
|
||
Accumulated other comprehensive loss
|
(15,876
|
)
|
|
(16,171
|
)
|
||
Total stockholders’ equity
|
1,273,290
|
|
|
384,167
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,389,238
|
|
|
$
|
497,890
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per share amounts)
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost of revenue
|
—
|
|
|
—
|
|
|
—
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Selling, general and administrative
|
184
|
|
|
185
|
|
|
184
|
|
|||
Other
|
10
|
|
|
19
|
|
|
—
|
|
|||
|
194
|
|
|
204
|
|
|
184
|
|
|||
Operating loss
|
(194
|
)
|
|
(204
|
)
|
|
(184
|
)
|
|||
Other income (expense)
|
|
|
|
|
|
||||||
Interest income
|
1,046
|
|
|
262
|
|
|
278
|
|
|||
Early extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other income, net, including interest income
|
—
|
|
|
1
|
|
|
—
|
|
|||
|
1,046
|
|
|
263
|
|
|
278
|
|
|||
Income before income taxes and equity in net earnings of subsidiaries
|
852
|
|
|
59
|
|
|
94
|
|
|||
Income tax benefit (expense)
|
(344
|
)
|
|
(24
|
)
|
|
(38
|
)
|
|||
Income before equity in net earnings of subsidiaries
|
508
|
|
|
35
|
|
|
56
|
|
|||
Equity in earnings of subsidiaries, net of tax
|
(41,564
|
)
|
|
11,833
|
|
|
121,484
|
|
|||
Net income (loss)
|
(41,056
|
)
|
|
11,868
|
|
|
121,540
|
|
|||
Other comprehensive income (loss), net of deferred income taxes:
|
|
|
|
|
|
||||||
Unrealized gain (loss) on investments (net of tax of ($4), $29, and ($8) for 2016, 2015, and 2014, respectively)
|
(6
|
)
|
|
47
|
|
|
(14
|
)
|
|||
Unrealized loss on derivatives, (net of tax of $29, $34 and ($32) for 2016, 2015 and 2014, respectively)
|
49
|
|
|
53
|
|
|
(55
|
)
|
|||
Pension and post-retirement liability (net of tax of $152, $2,469, and ($9,678) for 2016, 2015 and 2014, respectively)
|
252
|
|
|
3,547
|
|
|
(15,732
|
)
|
|||
Other comprehensive income (loss), net of deferred income taxes
|
295
|
|
|
3,647
|
|
|
(15,801
|
)
|
|||
Comprehensive income (loss) attributable to U.S. Silica Holdings, Inc.
|
$
|
(40,761
|
)
|
|
$
|
15,515
|
|
|
$
|
105,739
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|||||||||||||
|
|
|
|
|
Additional
|
|
Retained
|
|
Other
|
|
Total
|
|||||||||||||
|
Par
|
|
Treasury
|
|
Paid-In
|
|
Earnings-
|
|
Comprehensive
|
|
Stockholders'
|
|||||||||||||
|
Value
|
|
Stock
|
|
Capital
|
|
Present
|
|
Income (Loss)
|
|
Equity
|
|||||||||||||
Balance at January 1, 2014
|
$
|
534
|
|
|
$
|
—
|
|
|
$
|
174,799
|
|
|
$
|
137,978
|
|
|
$
|
(4,017
|
)
|
|
$
|
309,294
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
121,540
|
|
|
—
|
|
|
121,540
|
|
|||||||
Unrealized loss on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
(55
|
)
|
|||||||
Unrealized loss on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
||||||
Pension and post-retirement liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,732
|
)
|
|
(15,732
|
)
|
|||||||
Cash dividend declared ($0.500 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,967
|
)
|
|
—
|
|
|
(26,967
|
)
|
|||||||
Common stock-based compensation plans activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
7,487
|
|
|
—
|
|
|
—
|
|
|
7,487
|
|
|||||||
Excess tax benefit from equity compensation
|
—
|
|
|
—
|
|
|
3,813
|
|
|
—
|
|
|
—
|
|
|
3,813
|
|
|||||||
Proceeds from options exercised
|
4
|
|
|
572
|
|
|
4,987
|
|
|
—
|
|
|
—
|
|
|
5,563
|
|
|||||||
Shares withheld for employee taxes related to
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
vested restricted stock and stock units
|
1
|
|
|
(615
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(614
|
)
|
|||||||
Repurchase of common stock
|
—
|
|
|
(499
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(499
|
)
|
|||||||
Balance at December 31, 2014
|
539
|
|
|
(542
|
)
|
|
191,086
|
|
|
232,551
|
|
|
(19,818
|
)
|
|
403,816
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
11,868
|
|
|
—
|
|
|
11,868
|
|
|||||||
Unrealized gain on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
53
|
|
|||||||
Unrealized gain on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
|||||||
Pension and post-retirement liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,547
|
|
|
3,547
|
|
|||||||
Cash dividend declared ($0.438 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,445
|
)
|
|
—
|
|
|
(23,445
|
)
|
|||||||
Common stock-based compensation plans activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
3,857
|
|
|
—
|
|
|
—
|
|
|
3,857
|
|
|||||||
Proceeds from options exercised
|
—
|
|
|
744
|
|
|
(271
|
)
|
|
—
|
|
|
—
|
|
|
473
|
|
|||||||
Shares withheld for employee taxes related to
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
vested restricted stock and stock units
|
—
|
|
|
(792
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(794
|
)
|
|||||||
Repurchase of common stock
|
—
|
|
|
(15,255
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,255
|
)
|
|||||||
Balance at December 31, 2015
|
539
|
|
|
(15,845
|
)
|
|
194,670
|
|
|
220,974
|
|
|
(16,171
|
)
|
|
384,167
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,056
|
)
|
|
—
|
|
|
(41,056
|
)
|
|||||||
Issuance of common stock (stock offerings net of issuance costs of $25,732)
|
272
|
|
|
—
|
|
|
931,016
|
|
|
—
|
|
|
—
|
|
|
931,288
|
|
|||||||
Unrealized gain on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
|||||||
Unrealized loss on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
|||||||
Pension and post-retirement liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
252
|
|
|
252
|
|
|||||||
Cash dividend declared ($0.25 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,893
|
)
|
|
—
|
|
|
(16,893
|
)
|
|||||||
Common stock-based compensation plans activity:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
12,107
|
|
|
—
|
|
|
—
|
|
|
12,107
|
|
|||||||
Excess tax benefit from equity-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
148
|
|
|
—
|
|
|
148
|
|
|||||||
Proceeds from options exercised
|
—
|
|
|
8,465
|
|
|
(3,640
|
)
|
|
—
|
|
|
—
|
|
|
4,825
|
|
|||||||
Issuance of restricted stock
|
—
|
|
|
1,437
|
|
|
(1,437
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for employee taxes related to
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
vested restricted stock and stock units
|
—
|
|
|
2,074
|
|
|
(3,665
|
)
|
|
—
|
|
|
—
|
|
|
(1,591
|
)
|
|||||||
Balance at December 31, 2016
|
$
|
811
|
|
|
$
|
(3,869
|
)
|
|
$
|
1,129,051
|
|
|
$
|
163,173
|
|
|
$
|
(15,876
|
)
|
|
$
|
1,273,290
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(41,056
|
)
|
|
$
|
11,868
|
|
|
$
|
121,540
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Undistributed (Income) loss from equity method investment, net
|
41,564
|
|
|
(11,833
|
)
|
|
(121,484
|
)
|
|||
Other
|
(30
|
)
|
|
(195
|
)
|
|
(213
|
)
|
|||
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities
|
353
|
|
|
29
|
|
|
36
|
|
|||
Net cash provided by (used in) operating activities
|
831
|
|
|
(131
|
)
|
|
(121
|
)
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Proceeds from sales and maturities of short-term investments
|
21,872
|
|
|
53,568
|
|
|
—
|
|
|||
Investment in subsidiary
|
(188,177
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) investing activities
|
(166,305
|
)
|
|
53,568
|
|
|
—
|
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Dividends paid
|
(15,125
|
)
|
|
(26,797
|
)
|
|
(26,871
|
)
|
|||
Repurchase of common stock
|
—
|
|
|
(15,255
|
)
|
|
(499
|
)
|
|||
Proceeds from options exercised
|
4,603
|
|
|
473
|
|
|
5,563
|
|
|||
Tax payments related to shares withheld for vested restricted stock and stock units
|
(1,590
|
)
|
|
(794
|
)
|
|
(614
|
)
|
|||
Issuance of common stock (secondary offering)
|
678,791
|
|
|
—
|
|
|
—
|
|
|||
Issuance of treasury stock
|
221
|
|
|
—
|
|
|
—
|
|
|||
Costs of common stock issuance
|
(25,733
|
)
|
|
—
|
|
|
—
|
|
|||
Net financing activities with subsidiaries
|
106
|
|
|
223
|
|
|
211
|
|
|||
Net cash provided by (used in) financing activities
|
641,273
|
|
|
(42,150
|
)
|
|
(22,210
|
)
|
|||
Net increase in cash and cash equivalents
|
475,799
|
|
|
11,287
|
|
|
(22,331
|
)
|
|||
Cash and cash equivalents, beginning of period
|
58,579
|
|
|
47,292
|
|
|
69,623
|
|
|||
Cash and cash equivalents, end of period
|
$
|
534,378
|
|
|
$
|
58,579
|
|
|
$
|
47,292
|
|
Non-cash financing activities:
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Cash paid (received) during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
(1,046
|
)
|
|
$
|
(263
|
)
|
|
$
|
(278
|
)
|
Non-cash transactions
|
|
|
|
|
|
||||||
Common stock issued for business acquisitions
|
$
|
278,229
|
|
|
$
|
—
|
|
|
$
|
—
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
a)
|
Consolidated Financial Statements
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
Consolidated Statements of Operations for the Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014
|
|
Notes to the Consolidated Financial Statements
|
b)
|
Financial Statement Schedules
|
c)
|
Exhibits required to be filed by Item 601 of Regulation S-K
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
U.S. Silica Holdings, Inc.
|
|
|
|
|
|
/s/ B
RYAN
A. S
HINN
|
|
|
Name: Bryan A. Shinn
|
|
|
Title: Chief Executive Officer
|
|
Name
|
|
Capacity
|
|
Date
|
|
|
|
||
/
S
/ B
RYAN
A. S
HINN
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
February 23, 2017
|
Bryan A. Shinn
|
|
|
|
|
|
|
|
||
/
S
/ D
ONALD
A. M
ERRIL
|
|
Executive Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
February 23, 2017
|
Donald A. Merril
|
|
|
|
|
|
|
|
||
/
S
/ C
HARLES
S
HAVER
|
|
Chairman of the Board
|
|
February 23, 2017
|
Charles Shaver
|
|
|
|
|
|
|
|
||
/
S
/ P
ETER
B
ERNARD
|
|
Director
|
|
February 23, 2017
|
Peter Bernard
|
|
|
|
|
|
|
|
||
/
S
/ W
ILLIAM
J. K
ACAL
|
|
Director
|
|
February 23, 2017
|
William J. Kacal
|
|
|
|
|
|
|
|
||
/
S
/ J. M
ICHAEL
S
TICE
|
|
Director
|
|
February 23, 2017
|
J. Michael Stice
|
|
|
|
|
|
|
Incorporated by Reference
|
|||||||
Exhibit
Number
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
2.1#
|
Agreement and Plan of Merger, dated as of July 15, 2016, by and among U.S. Silica Holdings, Inc., New Birmingham Merger Corp., NBI Merger Subsidiary II, Inc., New Birmingham, Inc. and each of David Durrett and Erik Dall, as representatives of the sellers and optionholders.
|
|
10-Q
|
|
001-35416
|
|
2.1
|
|
November 4, 2016
|
|
2.2#
|
Membership Unit Purchase Agreement, dated as of August 1, 2016, by and among U.S. Silica Company, U.S. Silica Holdings, Inc., Sandbox Enterprises, LLC, the members of Sandbox Enterprises, LLC and Sandy Creek Capital, LLC, as representative of the sellers.
|
|
10-Q
|
|
001-35416
|
|
2.2
|
|
November 4, 2016
|
|
3.1
|
Second Amended and Restated Certificate of Incorporation of U.S. Silica Holdings, Inc., effective January 31, 2012.
|
|
8-K
|
|
001-35416
|
|
3.1
|
|
February 6, 2012
|
|
3.2
|
Second Amended and Restated Bylaws of U.S. Silica Holdings, Inc., effective January 31, 2012.
|
|
8-K
|
|
001-35416
|
|
3.2
|
|
February 6, 2012
|
|
3.3
|
Certificate of Change of Registered Agent and/or Registered Office.
|
|
8-K
|
|
001-35416
|
|
3.1
|
|
May 11, 2015
|
|
4.1
|
Specimen Common Stock Certificate.
|
|
S-1/A
|
|
333-175636
|
|
4.1
|
|
December 7, 2011
|
|
4.2
|
Registration Rights Agreement, dated as of August 16, 2016, by and among U.S. Silica Holdings, Inc. and each person identified on the signature pages thereto.
|
|
S-3ASR
|
|
333-213870
|
|
4.1
|
|
September 29, 2016
|
|
4.3
|
Registration Rights Agreement, dated as of August 22, 2016, by and among U.S. Silica Holdings, Inc. and each person identified on the signature pages thereto.
|
|
S-3ASR
|
|
333-213870
|
|
4.2
|
|
September 29, 2016
|
|
10.1
|
Amendment No. 3 to Second Amended and Restated Credit Agreement, dated as of July 23, 2013, by and among USS Holdings, Inc. as Parent, U.S. Silica Company as Company, the Subsidiary Guarantors listed therein as Subsidiary Guarantors, the Lenders listed therein as Lenders and BNP Paribas as Administrative Agent.
|
|
8-K
|
|
001-35416
|
|
10.10
|
|
July 29, 2013
|
|
10.2+
|
Employment Agreement, dated as of March 22, 2012, by and between U.S. Silica Company and Bryan A. Shinn.
|
|
8-K
|
|
001-35416
|
|
10.11
|
|
March 22, 2012
|
|
10.3+
|
Amended and Restated 2011 Incentive Compensation Plan.
|
|
8-K
|
|
001-35416
|
|
10.1
|
|
May 11, 2015
|
|
10.4+
|
Form of Incentive Stock Option Agreement.
|
|
S-1/A
|
|
333-175636
|
|
10.15
|
|
August 29, 2011
|
|
10.5+
|
Form of Restricted Stock Agreement.
|
|
S-1/A
|
|
333-175636
|
|
10.16
|
|
August 29, 2011
|
|
10.6+
|
Form of Nonqualified Stock Option Agreement.
|
|
S-1/A
|
|
333-175636
|
|
10.17
|
|
August 29, 2011
|
|
10.7+
|
Form of Stock Appreciation Rights Agreement.
|
|
S-1/A
|
|
333-175636
|
|
10.18
|
|
August 29, 2011
|
|
10.8+
|
Form of Restricted Stock Unit Agreement.
|
|
S-1/A
|
|
333-175636
|
|
10.19
|
|
August 29, 2011
|
|
10.9+
|
Form of Performance Share Unit Agreement.
|
|
10-K
|
|
001-35416
|
|
10.12
|
|
February 26, 2014
|
|
10.10
|
Form of Indemnification Agreement.
|
|
S-1/A
|
|
333-175636
|
|
10.20
|
|
December 29, 2011
|
|
10.11+
|
Letter Agreement, dated as of December 27, 2011, by and between William J. Kacal and U.S. Silica Holdings, Inc.
|
|
S-1/A
|
|
333-175636
|
|
10.24
|
|
|
December 29, 2011
|
10.12+
|
Letter Agreement, dated April 27, 2012, by and between Peter Bernard and U.S. Silica Holdings, Inc.
|
|
8-K
|
|
001-35416
|
|
10.10
|
|
May 1, 2012
|
|
10.13+
|
Letter Agreement, dated October 8, 2013, by and between J. Michael Stice and U.S. Silica Holdings, Inc.
|
|
8-K
|
|
001-35416
|
|
10.10
|
|
October 11, 2013
|
|
10.14+
|
Omnibus Amendment dated February 18, 2016 to Award Agreements.
|
|
8-K
|
|
001-35416
|
|
10.3
|
|
February 23, 2016
|
#
|
Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. We will furnish the omitted schedules to the Securities and Exchange Commission upon request by the Commission.
|
+
|
Management contract or compensatory plan/arrangement
|
*
|
Filed herewith
|
1.
|
Restricted Stock Unit Award Agreement by and between you and the Company, dated
[DATE]
, granting
[NUMBER]
restricted stock units.
|
2.
|
Performance Share Unit Award Agreement by and between you and the Company, dated
[DATE]
, granting
[NUMBER]
performance share units.
|
3.
|
Nonqualified Stock Option Agreement by and between you and the Company, dated,
[DATE]
, granting
[NUMBER]
stock options.
|
4.
|
[LIST ADDITIONAL AWARDS AS APPLICABLE]
|
Name
|
Jurisdiction of Formation
|
Hourglass Acquisition I, LLC
|
Delaware
|
Preferred Rocks USS Inc.
|
Delaware
|
Hourglass Holdings, LLC
|
Delaware
|
USS Holdings, Inc.
|
Delaware
|
U.S. Silica Company
|
Delaware
|
Pennsylvania Glass Sand Corporation
|
Delaware
|
The Fulton Land and Timber Company
|
Pennsylvania
|
Ottawa Silica Company
|
Delaware
|
Ottawa Silica Company, Ltd.
|
Quebec
|
Coated Sand Solutions, LLC
|
Delaware
|
Cadre Services Inc.
|
Delaware
|
Cadre Material Products, LLC
|
Texas
|
Fairchild Silica, LLC
|
Delaware
|
Utica Silica, LLC
|
Delaware
|
Tyler Silica Company
|
Delaware
|
New Birmingham Resources, LLC
|
Texas
|
NBR Sand, LLC
|
Texas
|
NBR Maritime I, LLC
|
Texas
|
NBR Maritime II, LLC
|
Texas
|
Sandbox Enterprises, LLC
|
Texas
|
Oren Technologies, LLC
|
Texas
|
Sandbox Leasing, LLC
|
Texas
|
Sandbox Logistics, LLC
|
Texas
|
Sandbox Transportation, LLC
|
Texas
|
1.
|
I have reviewed this Annual Report on Form 10-K of U.S. Silica Holdings, Inc. (the “Company”) for the year ended December 31, 2016;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ B
RYAN
A. S
HINN
|
|
Name: Bryan A. Shinn
|
|
Title: Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of U.S. Silica Holdings, Inc. (the “Company”) for the year ended December 31, 2016;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ D
ONALD
A. M
ERRIL
|
|
Name: Donald A. Merril
|
|
Title: Chief Financial Officer
|
|
i.
|
The Annual Report on Form 10-K of the Company for the period ended December 31, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
ii.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ B
RYAN
A. S
HINN
|
|
Name: Bryan A. Shinn
|
|
Title: Chief Executive Officer
|
|
i.
|
The Annual Report on Form 10-K of the Company for the period ended December 31, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
ii.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ D
ONALD
A. M
ERRIL
|
|
Name: Donald A. Merril
|
|
Title: Chief Financial Officer
|
•
|
Section 104 S&S Citations:
Citations received from MSHA under section 104 of the Mine Act for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard.
|
•
|
Section 104(b) Orders:
Orders issued by MSHA under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period of time prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated.
|
•
|
Section 104(d) Citations and Orders:
Citations and orders issued by MSHA under section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards.
|
•
|
Section 110(b)(2) Violations:
Flagrant violations issued by MSHA under section 110(b)(2) of the Mine Act.
|
•
|
Section 107(a) Orders:
Orders issued by MSHA under section 107(a) of the Mine Act for situations in which MSHA determined an “imminent danger” (as defined by MSHA) existed.
|
Mine
(a)
|
Section 104
S&S
Citations(#)
|
|
Section
104(b)
Orders
(#)
|
|
Section
104(d)
Citations
and Orders
(#)
|
|
Section
110(b)(2)
Violations
(#)
|
|
Section
107(a)
Orders
(#)
|
|
Proposed
Assessments
(b)
($, amounts in dollars)
|
|
Mining
Related
Fatalities
(#)
|
||||||||
Ottawa, IL
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
15,671
|
|
|
(c)
|
|
Mill Creek, OK
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
556
|
|
|
—
|
|
|
Pacific, MO
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
428
|
|
|
—
|
|
|
Berkeley Springs, WV
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,152
|
|
|
—
|
|
|
Mapleton Depot, PA
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
455
|
|
|
—
|
|
|
Kosse, TX
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,646
|
|
|
—
|
|
|
Mauricetown, NJ
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
414
|
|
|
—
|
|
|
Columbia, SC
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,541
|
|
|
—
|
|
|
Montpelier, VA
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Rockwood, MI
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,284
|
|
|
—
|
|
|
Jackson, TN
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
Dubberly, LA
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
Hurtsboro, AL
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
235
|
|
|
—
|
|
|
Sparta, WI
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
Voca, TX
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,639
|
|
|
—
|
|
|
Peru, IL
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
Utica, IL
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,345
|
|
|
—
|
|
|
Tyler, TX
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
314
|
|
|
—
|
|
|
(a)
|
The definition of mine under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools and minerals preparation facilities. Unless otherwise indicated, any of these other items associated with a single mine have been aggregated in the totals for that mine. MSHA assigns an identification number to each mine and may or may not assign separate identification numbers to related facilities such as preparation facilities. We are providing the information in the table by mine rather than MSHA identification number because that is how we manage and operate our mining business and we believe this presentation will be more useful to investors than providing information based on MSHA identification numbers.
|
(b)
|
Represents the total dollar value of proposed assessments from MSHA under the Mine Act relating to any type of citation or order issued during the year ended
December 31, 2016
.
|
PROPTESTER, INC.
|
||||
|
|
|
|
|
By:
|
|
/s/ Ian Renkes
|
|
|
|
|
Name:
|
|
Ian Renkes
|
|
|
Title:
|
|
VP of Operations
|