Rock Products

JUN 2013

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WISA Disputes Economic Report Frac sand mining's impact on job creation in Wisconsin's sandy areas will be minimal, and communities must ac‐ count for its potential economic drawbacks, according to a new report. Economic impact studies "almost always quan‐ tify only what are labeled benefits: additional jobs, payrolls and tax revenues to governments," said the report, re‐ leased by Power Consulting Inc., a Montana‐based consult‐ ing firm that specializes in natural resources analysis. The report was commissioned by the Wisconsin Farmers Union, a family farming advocacy group; Wisconsin Towns Association, a nonpartisan association representing town and village governments; and the Institute for Agriculture and Trade Policy, a Minnesota‐based sustainable food, farm and trade research and advocacy organization. Rich Budinger, president of the Wisconsin Industrial Sand Association (WISA), issued the following statement in re‐ sponse to the report: "Sand mining companies and municipalities absolutely can and should work together. Strong community interac‐ tion is an important part of the WISA Code of Conduct, and WISA members have very positive relationships with their host municipalities. That said, the report released today is the product of a paid consultant who is routinely critical of mining and whose clients frequently have an anti‐mining bias. Its conclusions must be considered with that in mind. "The Wisconsin Counties Association established an inde‐ pendent task force that recently conducted an in‐depth review of the state's sand industry. That group – made up of public officials who have first‐hand experience with in‐ dustrial sand mining in several West Central Wisconsin counties – concluded that when performed responsibly, sand mining brings numerous economic benefits to the Badger State. Those positives include job creation, con‐ struction and manufacturing impacts and ancillary serv‐ ices that benefit not only local communities, but also the entire state. "Industrial sand mining has been part of Wisconsin – and a solid job‐creator and contributor to the state economy – for more than a century. We owe our long and successful history here to a deep respect for the land, our neighbors and our communities. As leaders in the state's sand mining industry, WISA and its members have shown that with a proper balance between sound operations, adherence to responsible regulations and good community relation‐ ships, we can operate safely and protect the environment while generating significant economic impact." U.S. Silica Holdings Inc. Sees Record First-Quarter Revenue U.S. Silica Holdings Inc. announced record revenue of $122.3 million and net income of $17.3 million for the first quarter ended March 31, 2013, compared with net income of $19.1 million for the same period in 2012. Earnings per share in the quarter were negatively im‐ pacted by $1.9 million on a pre‐tax basis or $0.03 per share due to certain non‐recurring charges related to the com‐ pany's secondary offering in March, and M&A and business development activities. Excluding this additional expense, net income for the first quarter ended March 31, 2013, was $18.7 million or $0.35 per basic share. Bryan A. Shinn, president and chief executive officer of the company, commented, "The first quarter of 2013 was very strong for our company as we posted record revenue, driven by our strong performance in oil and gas. We be‐ lieve that drilling and efficiency improvements in hydraulic fracturing will drive increased demand in oil and gas and we expect to grow market share in a growing market." Shinn added that, "We are also seeing success in our ISP 12 ROCKproducts • JUNE 2013 business. We anticipate this segment will continue to be a positive contributor to this year's earnings growth, due to the continuing rebounds in housing, chemical and automo‐ tive end markets and our focus on developing and market‐ ing higher value offerings." The company reported: Revenue totaled $122.3 million compared with $102.6 million for the same period in 2012, an improvement of 19.2 percent. The increase was driven primarily by strength in the Oil and Gas Proppants segment. ■ Overall sales volumes increased to 1.9 million tons, an increase of 8.2 percent over the first quarter of 2012. ■ Contribution margin for the quarter of $49.4 million compared with $47.4 million for the same period last year. ■ Adjusted EBITDA was $38.8 million or 31.7 percent of revenue compared with $37.0 million or 36.1 percent of revenue for the same period last year. ■ www.rockproducts.com

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