US Silica Holdings Inc (SLCA) Reports Q3 2023 Earnings: Net Income Drops 16% YoY
US Silica Holdings Inc (NYSE:SLCA) reported a net income of $26.9 million for Q3 2023, a decrease of 16% YoY.
The company generated cash flow from operations of $76.7 million for the quarter.
SLCA's balance sheet was strengthened with an additional $25 million of debt extinguished.
The company reaffirmed its full-year 2023 financial guidance.
On November 3, 2023, US Silica Holdings Inc (NYSE:SLCA) announced its third-quarter results for the period ended September 30, 2023. The company reported a net income of $26.9 million, or $0.34 per diluted share, a decrease of 16% compared to the same period in the previous year. Despite a sequential decrease in drilling and completions activity, the company's financial results remained strong due to attractive pricing and cost reduction efforts.
Financial Highlights
SLCA's total revenue for Q3 2023 was $367 million, a decrease of 12% YoY. The company sold 4.121 tons, an 11% decrease YoY. The contribution margin was $129.2 million, a 2% decrease YoY, and the adjusted EBITDA was $102.1 million, a 1% decrease YoY.
The Oil & Gas segment reported a revenue of $231.4 million, a decrease of 13% YoY, and the Industrial & Specialty Products (ISP) segment reported a revenue of $135.5 million, a decrease of 10% YoY.
As of September 30, 2023, the company had $222.4 million in cash and cash equivalents and total debt of $867.6 million. During the third quarter of 2023, the company generated $76.7 million in cash flow from operations while capital expenditures totaled $13.6 million.
Company's Outlook
Looking forward to the fourth quarter, the company's two business segments remain well positioned in their respective markets. The company expects growth in its underlying base business, coupled with pricing increases and market share expansion. The company remains focused on generating cash flow from operations and de-levering the balance sheet. It expects to produce significant operating cash flow in 2023, and projects investing at the high-end of capital expenditures guidance ranging between $60-$65 million for the year.
CEO's Commentary
During the third quarter, we continued to advance our two-pronged growth strategy of expanding our Industrial & Specialty Products segment while strengthening our financial foundation," said Bryan Shinn, the Companys Chief Executive Officer. "We generated healthy cash flow from operations and Adjusted EBITDA, driven by strong customer demand compared to historical averages and supported by our lean cost structure. We also repurchased and extinguished an additional $25 million of debt, improving our balance sheet and leverage profile."
Explore the complete 8-K earnings release (here) from US Silica Holdings Inc for further details.
This article first appeared on GuruFocus.
