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 on par using excess cash on hand.
The company's operational performance continues to generate a significant cash flow, giving it the opportunity to pay off additional debt and strengthen its balance sheet.
Over the last five quarters, the company has extinguished $309 million in debt, meaningfully improving the leverage profile and lowering debt service expenses in today's high interest rate environment, SLCA noted.
In addition, U.S. Silica remains committed to its strategy of concurrently investing in additional capacity, enhanced capabilities and innovative new products in its industrial sector in order to capitalize on future development prospects and increase shareholder value.
Shares of SLCA have gained 9% over the past year compared with a 13.8% rise of its industry.
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U.S. Silica, on its second-quarter call, noted that its two business segments are well-placed in their respective markets for the third quarter. It has a strong portfolio of Industrial and Specialty Products that serves 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.
In the Oil & Gas segment, the company expects a multi-year growth cycle. The strength in crude oil prices supports an active well-completion environment over the next few years.
The company is focused on delivering a free cash flow and deleveraging its balance sheet. It plans to generate a significant operating cash flow this year. SLCA forecasts capital expenditure of $50-$60 million for 2023.
Zacks Rank & Key Picks
U.S. Silica currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space include Quaker Chemical Corporation KWR, Carpenter Technology Corporation CRS and The Andersons Inc. ANDE.
Quaker Chemical has a projected earnings growth rate of 27.1% for the current year. It currently carries a Zacks Rank #2 (Buy). Quaker Chemical has a trailing four-quarter earnings surprise of roughly 20%, on average. KWR shares are up around 13% in a year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Carpenter Technology currently carries a Zacks Rank #2. The stock has rallied roughly 94.2% in the past year. CRS beat the Zacks Consensus Estimate in three of the last four quarters while meeting in one. It delivered a trailing four-quarter earnings surprise of 9.8%, on average.
Andersons currently carries a Zacks Rank #2. ANDE has surged roughly 53.1% in the past year. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average.
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