U.S. Silica Holdings, Inc. (NYSE:SLCA) Q4 2022 Earnings Conference Call February 24, 2023 8:30 AM ET

Company Participants

Patricia Gil - Vice President of Investor Relations

Bryan Shinn - Chief Executive Officer

Don Merril - Executive Vice President and Chief Financial Officer

Conference Call Participants

Stephen Gengaro - Stifel

Samantha Hoh - Evercore ISI

Operator

Good morning and welcome to the U.S. Silica Fourth Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Patricia Gil, Vice President of Investor Relations. Please proceed.

Patricia Gil

Thank you and good morning, everyone. I’d like to thank you for joining us today for U.S. Silica’s fourth quarter 2022 earnings conference call. Leading the call today are our Chief Executive Officer, Bryan Shinn; and Don Merril, our Executive Vice President and Chief Financial Officer.

Before we begin, I would like to remind you of our standard cautionary remarks regarding the forward-looking nature of some of the statements that will be made today. Such forward-looking statements which are predictions, projections or other statements about future events are based on current expectations and assumptions, which are subject to certain risks and uncertainties. For a complete discussion of these risks and uncertainties, we encourage you to read the company’s press release and our documents on file with the SEC. We do not undertake any duty to update any forward-looking statements.

Additionally, we may refer to the non-GAAP measures such as adjusted EBITDA, segment contribution margin, net debt and our net leverage ratio during this call. Please refer to today’s press release or our public filings for a full reconciliation of adjusted EBITDA to net income and discussions of segment contribution margin, net debt and the net leverage ratio.

And with that, I will hand the call over to Bryan Shinn.

Bryan Shinn

Thanks, Patricia, and good morning, everyone. We delivered another excellent quarter to close out an exceptionally strong year for the company, which was defined by numerous achievements and accomplishments. During 2022, our talented team successfully executed our strategic plan and delivered impressive bottom-line results, while strengthening our balance sheet and positioning U.S. Silica for future success.

We capitalized on robust customer demand for both operating segments and our combination of market and customer focus plus best-in-class offerings helped us maintain our industry leadership position. In 2022, we significantly raised pricing across both segments to help offset inflation. We increased contract coverage, while expanding margins in our oil and gas segment and generated significant free cash flow. We opportunistically use this cash to retire $150 million of long-term debt, effectively reducing our net leverage ratio to 2.2 times at year end.