US Silica Holdings Inc (NYSE:SLCA) Q1 2018 Earnings Conference Call - Preliminary Transcript
Apr 24, 2018 • 09:00 am ET
Greetings and welcome to the U.S. Silica first quarter 2018 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer
session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Mr. Michael Wilson, Vice President of Investor Relations and Corporate Communications for U.S.
Silica. Michael, please go ahead.
Thanks. Good morning everyone and thank you for joining us for U.S. Silica's first quarter 2018 earnings conference call. With me on the call today are Bryan Shinn, President and Chief Executive Officer, and Don Merril, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind all participants that our comments today will include forward-looking statements which are subject to certain risks and uncertainties. For a complete discussion of these risks and uncertainties, we encourage you to read the company's press release and our documents on file with the SEC.
Additionally, we may refer to the non-GAAP measures of adjusted EBITDA and segment contribution margin during this call. Please refer to today's press release or our public filings for a full reconciliation of adjusted EBITDA to net income and the definition of segment contribution margin. Finally, during today's question and answer session, we would ask that you limit your questions to one plus a follow-up to ensure all who wish to ask a question may do so.
With that, I would now like to turn the call over to our CEO, Mr. Bryan Shinn. Bryan?
Thanks Mike, and good morning everyone. I'll begin today's call by discussing our strong first quarter results, then I'll give an overview of our top strategic initiatives that we expect to create significant additional value for the enterprise, including our acquisition of EP Minerals. Finally, I'll comment on what looks like the very positive outlook for our key markets. Don Merril will then provide additional color on our financial performance for the quarter before we open up the call for your questions.
Total company revenue for the first quarter of $369.3 million increased 2% sequentially and adjusted EBITDA for the first quarter of $95.4 million was also up 2% sequentially. First quarter contribution margin for oil and gas of $99.4 million was up 4% sequentially, driven by higher sand volumes and a very strong performance from Sandbox. We sold a record 3.3 million tons in oil and gas during the quarter despite some extreme winter weather conditions and a sluggish start by some of our oil and gas customers. I'm also pleased to report that due to the breadth and depth of our mine and trans-load network, we were not adversely impacted by the widespread rail disruptions that many in our industry experienced in the first quarter.
Our Sandbox unit performed particularly well during the quarter with contribution margin up 23% sequentially, driven by higher volumes, lower costs, and targeted price increases. Momentum was very strong during the