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U.S. SILICA HOLDINGS, INC. (SLCA)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 revenue was $317.515M and diluted EPS $0.24; sales declined 22% YoY as Oil & Gas Proppants (OGP) volumes and pricing weakened, partly offset by ISP growth .
  • Adjusted EBITDA was $85.341M; results landed within the preliminary ranges disclosed on July 15 ($317.0–$318.0M sales; $18.8–$19.8M net income; $84.8–$85.8M Adj. EBITDA), indicating operational execution despite OGP headwinds .
  • No formal Q2 guidance or earnings call (consistent with Q1 stance due to the pending Apollo transaction); 2024 capex guidance maintained at ~$60M .
  • Primary stock catalyst: the sale to Apollo closed July 31, 2024 (~$1.28B consideration) with shares delisted; fundamentals were overshadowed by deal completion and go‑private transition .

What Went Well and What Went Wrong

What Went Well

  • ISP resilience: ISP sales rose 5% YoY to $151.256M and segment contribution margin increased to $57.613M, supported by value‑added mix and cost initiatives .
  • Cost and cash discipline: Interest expense fell 15% YoY; net debt declined to $529.463M; cash and equivalents rose to $278.180M; operating cash flow YTD was $104.846M .
  • Execution vs prelim: Final Q2 results were squarely within prelim ranges (sales, net income, Adj. EBITDA), signaling control over close/process despite merger distractions .

What Went Wrong

  • OGP pressure: OGP sales fell 37% YoY; tons sold -15%; ASP -25% YoY as crew activity softened and Northern White demand decreased; SandBox loads were lower .
  • Margin compression: Overall average selling price per ton fell 14% YoY; OGP contribution margin dropped to $55.683M (from $99.069M), weighing on consolidated operating income .
  • SG&A uptick: SG&A rose 31% YoY to $37.620M, driven by merger costs and compensation increases, diluting operating leverage in a down‑revenue quarter .

Financial Results

MetricQ2 2023Q4 2023Q1 2024Q2 2024
Revenue ($USD Millions)$406.784 $336.037 $325.942 $317.515
Net Income Attributable ($USD Millions)$46.259 $29.109 $13.688 $19.277
Diluted EPS ($USD)$0.59 $0.37 $0.17 $0.24
Operating Income ($USD Millions)$84.771 $45.115 $40.096 $44.681
Adjusted EBITDA ($USD Millions)$123.637 $88.591 $77.132 $85.341

Segment breakdown

MetricQ2 2023Q4 2023Q1 2024Q2 2024
OGP Sales ($USD Millions)$262.285 $200.552 $183.172 $166.259
ISP Sales ($USD Millions)$144.499 $135.485 $142.770 $151.256
OGP Segment Contribution Margin ($USD Millions)$99.069 $70.142 $59.515 $55.683
ISP Segment Contribution Margin ($USD Millions)$51.595 $46.794 $45.949 $57.613

KPIs

KPIQ2 2023Q2 2024
OGP Tons Sold (MM tons)3.419 2.899
ISP Tons Sold (MM tons)1.040 1.170
OGP Avg. Selling Price per Ton ($)$76.71 $57.35
ISP Avg. Selling Price per Ton ($)$138.94 $129.28

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital ExpenditureFY 2024≈$60M (Feb 2024 outlook) ≈$60M (Q2 10-Q) Maintained
DividendsFY 2024Dividends suspended since 2020 No plans to resume issuing dividends Maintained
Earnings Call/Quant GuidanceQ2 2024No call due to pending Apollo deal (Q1 precedent) No call; no quantitative guidance disclosed Maintained (no guidance)

Earnings Call Themes & Trends

Note: U.S. Silica did not host a Q2 2024 earnings call due to the pending/closing Apollo transaction. Themes are drawn from recent press releases and MD&A.

TopicPrevious Mentions (Q4 2023)Previous Mentions (Q1 2024)Current Period (Q2 2024)Trend
OGP pricing and volumesSeasonality and lower proppant volumes; disciplined pricing Volumes +5% seq; pricing slightly lower; 80% capacity under long-term contracts Sales -9% seq; tons -5% seq; ASP -5% seq Down sequentially in Q2; pricing pressure persists
ISP value‑added mixMargin per ton +27% YoY; price increases and advanced materials Revenue +5% seq; volumes +10% seq; favorable pricing ISP sales +5% YoY; tons +13% YoY; ASP -7% YoY Resilient volumes; pricing mixed
Transportation/logistics costsOGP SandBox loads fewer; logistics efficiency focus Leading last‑mile logistics capability highlighted Transportation costs down YoY; mix/rail/barge rates variable Costs improved YoY; rates mixed
Energy/natural gasNoted energy price impacts Lower nat gas prices impacted OGP pricing Natural gas swap hedges; fair value liability $1.1M Hedging continues; nat gas lower YoY
Technology initiativesGuardian frac fluid filtration gaining momentum Guardian system momentum; adding units Not explicitly updated in Q2 filingsContinued, but not expanded in Q2 MD&A

Management Commentary

  • “We generated robust cash flow from operations to start the year, positioning us well for the remainder of 2024… volumes were up 5% sequentially [in O&G], although our margins were impacted by slightly lower pricing… we continue to have 80% of our capacity under long-term contracts… Guardian frac fluid filtration system continues to gain momentum… In our ISP segment, revenue and volumes increased 5% and 10% sequentially… we entered into several new customer agreements with favorable pricing and… ongoing structural cost reductions.” — CEO Bryan Shinn (Q1 2024 release) .
  • Repricing lowered term loan interest margins by 75 bps; voluntary $25M principal repayment completed in Q1 .

Q&A Highlights

  • Not applicable. The company did not host an earnings call for Q2 2024 due to the Apollo transaction; similarly, management indicated no call in Q1 2024 .

Estimates Context

  • Wall Street consensus (S&P Global) for Q2 2024 EPS and revenue was unavailable via our data connector; therefore, estimate comparisons cannot be provided at this time. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

  • ISP stability and mix upgrades are a bright spot: ISP sales +5% YoY and contribution margin +11.7% YoY to $57.613M, underpinning consolidated profitability in a soft OGP market .
  • OGP headwinds intensified: OGP sales -37% YoY; tons -15%; ASP -25% YoY; expect continued caution if crew activity or Northern White demand remains weak .
  • Solid cash and deleveraging posture ahead of deal close: cash $278.180M, net debt down to $529.463M, interest expense lower YoY, and strong YTD operating cash flow of $104.846M .
  • 2024 capex guidance held at ~$60M; focus remains on maintenance, cost improvement and selected growth projects .
  • Transaction eclipses near‑term trading setup: ~$1.28B consideration paid at close; shares delisted post‑merger — fundamental momentum (ISP) vs OGP softness becomes a private‑market narrative rather than a public catalyst .
  • If OGP pricing/volumes stabilize, upside to EBITDA is plausible; if weakness persists, expect margin pressure to linger — watch mix, contract coverage, and energy inputs (hedges) .
  • No dividend plans; balance sheet flexibility preserved; revolver fully available based on leverage metrics as of Q2 .