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Howard Weil 43rd Annual Energy Conference – US Silica

US Silica · Mar 23, 2015 · 26 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Howard Weil 43rd Annual Energy Conference – US Silica – slide 1
    U.S. Silica Howard Weil 43rd Annual Energy Conference March 23, 2015
  2. Howard Weil 43rd Annual Energy Conference – US Silica – slide 2
    THE US SILICA STORY Industry Leader. Capitalizing on Market Dynamics. Adj. EBITDA Competitive Business Market growth advantages model share 2009-2014 38% Strong Resilient Growing CAGR 3
  3. Howard Weil 43rd Annual Energy Conference – US Silica – slide 3
    THE US SILICA STORY Industry Leader. Capitalizing on Market Dynamics. GOALS: 1 Strong performance record 2015-2016 2 Capitalizing on market dynamics Resilient performance 2020 3 Differentiated business model Grow Adj. EBITDA 4X…
  4. Howard Weil 43rd Annual Energy Conference – US Silica – slide 4
    AT A GLANCE U.S. Silica Strength in Numbers Frac sand provider in world Top 3 Operating facilities 17 Tons of reserves 363M Annual production in 2014 (tons) 10.9M Net debt to Adjusted…
  5. Howard Weil 43rd Annual Energy Conference – US Silica – slide 5
    Building on Two Strong, Complementary Business Segments Oil & Gas Proppants Industrial & Specialty (ISP) Revenue 663M Revenue 214M Contribution margin (1) 256M Contribution margin (1) 61M Contribution margin % 39% Contribution…
  6. Howard Weil 43rd Annual Energy Conference – US Silica – slide 6
    Delivered Impressive Results Revenue Adjusted EBITDA1 Volume (tons) 877M 246M 10.9M 3X 3X 1.8X 6.0M 245M 72M 2010 2014 2010 2014 2010 2014 Note 1: See Appendix for reconciliations to GAAP 7
  7. Howard Weil 43rd Annual Energy Conference – US Silica – slide 7
    THE US SILICA STORY Industry Leader. Capitalizing on Market Dynamics. GOALS: 1 Strong performance record 2015-2016 2 Capitalizing on market dynamics Resilient performance 2020 3 Differentiated business model Grow Adj. EBITDA 4X…
  8. Howard Weil 43rd Annual Energy Conference – US Silica – slide 8
    Responding Aggressively to Declining Demand Market Demand Down 15-20% in 2015 Average rig More sand count per well down 30-40% 2014 2015E 9
  9. Howard Weil 43rd Annual Energy Conference – US Silica – slide 9
    Responding Aggressively to Declining Demand Key U.S. Silica Actions Maintaining 60-70% of volume under long-term contract Flexibility in exchange for value Reducing costs SG&A and supply chain Flexing capex/projects capex…
  10. Howard Weil 43rd Annual Energy Conference – US Silica – slide 10
    Market Dynamics Play to Our Strengths Market Dynamics Our Strengths Expect customers to consolidate suppliers Low cost supplier Pressure on less efficient Best-in-class distribution operations network Delayed supply expansions…
  11. Howard Weil 43rd Annual Energy Conference – US Silica – slide 11
    THE US SILICA STORY Industry Leader. Capitalizing on Market Dynamics. GOALS: 1 Strong performance record 2015-2016 2 Capitalizing on market dynamics Resilient performance 2020 3 Differentiated business model Grow Adj. EBITDA 4X…
  12. Howard Weil 43rd Annual Energy Conference – US Silica – slide 12
    A Differentiated Business Model 1 Unmatched scale and resources 2 Best-in-class distribution Strong, sustainable competitive advantages 3 Attractive customer mix 4 Strong financial position 13
  13. Howard Weil 43rd Annual Energy Conference – US Silica – slide 13
    1. Unmatched Scale and Resources C A N A D A 17 operating facilities 363M tons of high quality reserves 35 transload terminals Operating facilities Oil & Gas ISP Planned Transload terminals 14
  14. Howard Weil 43rd Annual Energy Conference – US Silica – slide 14
    2. Best-in-Class, Highly Flexible Distribution Moving Large Volumes Leverages our Highly Flexible of Proppant Supply Chain Example: Railcars and trucks needed to complete one well 430 Ability to redirect trains mid-trip…
  15. Howard Weil 43rd Annual Energy Conference – US Silica – slide 15
    3. Attractive Mix of Customers and Markets Currently 70% of sales under contract provide leverage in current market conditions Oil & Gas efficiency gains in production and supply chain planning Proppants continue to sign long-term…
  16. Howard Weil 43rd Annual Energy Conference – US Silica – slide 16
    4. Strong Financial Position 200 All capex internally funded in 2014 150 Cash Flow from Ops. Unlevered balance sheet Net debt to Adj. EBITDA 0.6 100 46.8M available under revolver 50 Capex Total liquidity of 400M as of Dec.…
  17. Howard Weil 43rd Annual Energy Conference – US Silica – slide 17
    THE US SILICA STORY Industry Leader. Capitalizing on Market Dynamics. GOALS: 1 Strong performance record 2015-2016 2 Capitalizing on market dynamics Resilient performance 2020 3 Differentiated business model Grow Adj. EBITDA 4X…
  18. Howard Weil 43rd Annual Energy Conference – US Silica – slide 18
    Key Initiatives to Outperform the Industry 4 Consolidator accretive 3 Enhance acquisitions Industrial & Specialty performance 2 Leverage logistics to gain share in market 1 Effectively manage downturn 19
  19. Howard Weil 43rd Annual Energy Conference – US Silica – slide 19
    INITIATIVE 1 Effectively Manage the Downturn Maintaining, extending contracts Laser focus on cost reductions Focus Optimize plant costs Flexible capital spending 20
  20. Howard Weil 43rd Annual Energy Conference – US Silica – slide 20
    INITIATIVE 2 Leverage Distribution Network Facilities in the right places, with the right products, at the best price Gain market share Shift to high-velocity transloads Improving the customer experience Winning customers…
  21. Howard Weil 43rd Annual Energy Conference – US Silica – slide 21
    INITIATIVE 3 Enhance Industrial & Specialty Performance Investing in Innovation Solid, stable cash flow business Introducing higher-margin, value 37 added specialty products Optimizing product mix Growing base 4% per year…
  22. Howard Weil 43rd Annual Energy Conference – US Silica – slide 22
    INITIATIVE 4 Grow in a Fragmented Industry Poised for Consolidation Unmatched scale and resources Best-in-class distribution 40 Top 10: Attractive customer smaller suppliers 65% mix Strong financial position Source:…
  23. Howard Weil 43rd Annual Energy Conference – US Silica – slide 23
    Longer Term Our Goal Remains the Same Adj. EBITDA 900M-1B ISP new products and growth Potential greenfields / 246M Pacific Fairchild acquisitions Full run-rate expansion Rochelle, Utica and Cadre 2014 2020 24
  24. Howard Weil 43rd Annual Energy Conference – US Silica – slide 24
    2015 Outlook Expect 2015 to be one of our best years Sell significant volumes and continue to take share ISP markets still strong and driving growth Continuing to make substantial investments Numerous opportunities for business…
  25. Howard Weil 43rd Annual Energy Conference – US Silica – slide 25
    IN SUMMARY Industry Leader. Capitalizing on Market Dynamics. GOALS: 1 Strong performance record 2015-2016 2 Capitalizing on market dynamics Resilient performance 2020 3 Differentiated business model Grow Adj. EBITDA 4X to…
  26. Howard Weil 43rd Annual Energy Conference – US Silica – slide 26
    Reconciliation (Adjusted EBITDA to Net Income) The following table sets forth a reconciliation of net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA. Year Ended December 31, 2014 2010 Net income…

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