U.S. Silica (SLCA) Completes $25 Million Loan Repurchase
U.S. Silica Holdings, Inc. SLCA has completed a voluntary term loan principal repayment of $25 million. The debt was paid off using cash on hand.
The repayment of an additional $25 million in debt bolstered its balance sheet and improved its leverage profile. U.S. Silica has paid off a total of $334 million in debt over the last six quarters, lowering its debt payment costs in today's high interest rate environment.
The company is committed to executing its strategy of using cash flow from operations to invest in additional capacity, added capabilities and innovative new products in its industrial division to capitalize on future growth prospects and generate shareholder value.
Shares of U.S. Silica have lost 2.4% over the past year against a 15.6% rise of its industry.
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U.S. Silica, on its third-quarter call, noted that its two business segments are well-placed in their respective markets for the fourth quarter. It has a strong portfolio of Industrial and Specialty Products that serve several essential, high-growth and attractive end markets, backed by a strong pipeline of products under development. It also expects growth in its underlying base business along with pricing hikes.
The oil and gas industry is experiencing a multi-year growth phase, and favorable, consistent commodity prices are expected to sustain an active, well-completed environment in the coming years. The company secured solid contractual commitments for its sand production capacity for the rest of the current year and into the next.
The company’s primary focus remains on generating operational cash flow and reducing its debt burden. For 2023, it anticipates a substantial inflow of operating cash and plans to invest at the upper range of the capital expenditure guidance, ranging between $60 million and $65 million for the year.
U.S. Silica Holdings, Inc. Price and Consensus
U.S. Silica Holdings, Inc. price-consensus-chart | U.S. Silica Holdings, Inc. Quote
Zacks Rank & Key Picks
U.S. Silica currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Centrus Energy Corp. LEU, Axalta Coating Systems Ltd. AXTA and Hawkins, Inc. HWKN.
Centrus Energy currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for LEU’s current-year earnings has been revised upward by 30.5% in the past 60 days. It beat the Zacks Consensus Estimate in three of the last four quarters while reporting in-line results on one occasion, with the average earnings surprise being 47.7%. The company’s shares have surged 62.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axalta has a projected earnings growth rate of 5.4% for the current year. It currently carries a Zacks Rank #2 (Buy). AXTA delivered a trailing four-quarter earnings surprise of roughly 6.7%, on average. The stock is up around 33.4% in a year.
Hawkins has a projected earnings growth rate of 21% for the current year. It currently carries a Zacks Rank #2. Hawkins delivered a trailing four-quarter earnings surprise of roughly 27.5%, on average. HWKN shares are up around 82.5% in a year.
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