Today, U.S. Silica Holdings, Inc. (NYSE:SLCA), a leader in the mining and processing of non-metallic minerals, disclosed preliminary financial results for the second quarter ended June 30, 2024, while navigating through a pending merger agreement. The Katy, Texas-based company, which is in the process of being acquired by Star Holding LLC, reported that sales for the quarter are estimated to be between $317.0 million and $318.0 million.
The preliminary figures suggest that net income attributable to U.S. Silica is projected to be in the range of $18.8 million to $19.8 million. Additionally, the company anticipates recognizing around $21.0 million in additional acquisition-related expenses contingent upon the closing of the merger, which have not been accrued to date.
Adjusted EBITDA, a non-GAAP measure used to assess operating performance, is expected to be between $84.8 million and $85.8 million for the quarter. The company provided a reconciliation to net income, the most comparable GAAP financial measure, which includes interest expenses, taxes, and depreciation, among other adjustments.
These preliminary results are subject to the completion of financial and accounting review procedures and may be adjusted as a result. The company's independent registered public accounting firm, Grant Thornton LLP, has not audited or reviewed these preliminary estimates.
The proposed merger, initially announced on April 26, 2024, will result in U.S. Silica becoming a wholly-owned subsidiary of Star Holding LLC. A special meeting of U.S. Silica's stockholders is scheduled for tomorrow to vote on the merger agreement.
The company has stated that the information provided in this report is based on a press release statement.
In other recent news, U.S. Silica Holdings, Inc. announced an increase in prices for most of its non-contracted products across several industrial applications, with adjustments up to 20%.
This decision is aimed at mitigating ongoing significant cost increases and supporting continued reinvestment in its business operations. The affected products include silica, aplite, diatomaceous earth, clay, perlite, and cellulose, which find use in sectors like glass, filtration, foundry, paints, coatings, and building products.
In a parallel development, Citi has updated its financial model for U.S. Silica Holdings, resulting in a raised price target of $15.50. Meanwhile, Stifel, a full-service brokerage and investment banking firm, downgraded U.S. Silica's stock from Buy to Hold.
These are among the key recent developments concerning U.S. Silica Holdings, Inc.
InvestingPro Insights
In light of U.S. Silica Holdings, Inc.'s (NYSE:SLCA) recent preliminary financial results and the pending merger, current and potential investors may find the following InvestingPro Insights valuable. The company currently boasts a market capitalization of approximately $1.21 billion, reflecting a significant presence in its industry. With a Price/Earnings (P/E) Ratio of 10.31 and an adjusted P/E for the last twelve months as of Q1 2024 at 11.45, U.S. Silica appears to be trading at a reasonable valuation relative to its earnings.
An InvestingPro Tip worth noting is that U.S. Silica's liquid assets exceed its short-term obligations, indicating a solid liquidity position that could be reassuring to investors considering the financial implications of the merger. Additionally, the company has been trading near its 52-week high, with a price that is 96.44% of this peak, and has experienced a substantial price uptick over the last six months, with a 44.08% total return over this period.
The strength of U.S. Silica's recent performance is also underscored by a robust return over the last three months, amounting to 18.38%. Analysts predict the company will be profitable this year, which is supported by the fact that it has been profitable over the last twelve months. It is important to note, however, that U.S. Silica does not pay a dividend to shareholders, which may influence investment decisions depending on individual strategies and preferences for income-generating assets.
For those seeking more in-depth analysis and additional InvestingPro Tips, visit https://www.investing.com/pro/SLCA. There are 5 more tips available that could provide further guidance on U.S. Silica's financial health and future prospects. To access these insights, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, offering a comprehensive view of investment opportunities.
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