WELCOME Mike Lawson Director of Investor Relations & Corporate Communications
Todays Agenda SLCA Overview Bryan Shinn President & CEO and Strategy Vice President of Operations Mike Winkler Operations Vice President & General Oil & Gas Don Weinheimer Manager, Oil & Gas Supply Chain & Vice President…
Bryan Shinn President & CEO
U.S. Silica: A Unique Value Proposition A Balanced Mix of Stable Better Insulated From Market and Growing Markets Forces and Entrants Sustainable Competitive Grow Faster Than the Market Advantages Intense Focus on Creating…
2016 Adj. EBITDA(1) Goal of 250M-300M Segment Strategic Goal Key Actions & Triggers Role of M&A Build new mines Increase share Accelerate growth g Oil & Gas Add new transloads through scale acquisitions Earn a premium on…
Base market growth and share gains will drive the pace of plant additions New plant acquired or comes online Sources: 8% growth rate based on Freedonia October 2012 World Industrial Silica Sand report estimate of 2011-2016 NAm…
Translating gain 1 share point per year into specific actions Segment Strategic Goal Specific actions through 2016 Role of M&A Build new mines Sell out Sparta 1.7M tons Add and sell-out an additional greenfield mine 1.5M tons…
How Well Reach our Goal of Growing EBITDA byy 2016 byy Nearlyy 100% Adj. EBITDA 400 400M 250 - 300 300 -15 Rochelle 200 Sparta 151 100 0 2012 2013 2015 ISP New Products SG&A 2016P (1) See Appendix A for…
Balanced Mix: Established Markets with Strong Cash Flow... & Growth Markets with Strong Investment Opportunities Industrial & Specialty Products (ISP) Oil & Gas (O&G) Foundational business with strong, Newer business with exceptional…
Margins & Revenues Attractive in Wide Range of Oil Pricing Environments 160 160 Barrel) Yearly EBITDA ((MM) 140 140 120 120 WTI Oil Prices (/B SLCA Adjusted Y (1) 100 100 80 80 60 60 Adj. E 40 40 20 20 -…
Why We Can Win in the Growth Markets Unique Advantages Position SLCA to Grow Share Stable & Reliable Multi-plant network allows for supply diversity Low cost model difficult to replicate: plants located on mine sites and near…
Translating Growth Into Shareholder Value We are investing a portion of EBITDA in growth initiatives Capital improvements to expand on competitive advantages Acquisitions largely inside our core businesses Strategic plan…
Compelling Investment Opportunity pp y 2x Revenue over last 3 years P Proven R Results lt Adj EBITDA(1) over last 3 Adj. 3x l t 3 years Strong operating cash flows E Economically i ll iirreplaceable l bl iingredient…
Mike Winkler Vice President of Operations
Mike Winkler - VP of Operations Vice President of Operations U.S. Silica Vice President of Operations, Campbell Soup Company, 2007 to 2011 Director of Industrial Engineering and Plant Manager, Mars Inc., 1996 to 2007 BS in…
U.S. Silica Operations Overview U.S. Silica Overview Operations Footprint 15 facilities and over 100 years of history U.S. U S Silica Overview Flagship Ottawa site home of Ottawa White 307 million tons of high quality reserves…
Operational Excellence Continuous Improvement Six Sigma Group problem solving 5 Whys Using operational Lean excellence to operations: Total Productive Maintenance improve: 5S Planned maintenance Safety Daily Critical…
Experienced Miners Backed by Centralized Resources Name Position Tenure VP of Operations 2 Operations Director of Engineering 30 Di Director off O Operations i 16 Director of Purchasing 1 Director of Ops Excellence 1 Director…
Focus on Sustainability People Reduced our lost time incident rate by 55% D Donated t d 309K 309K+ to t local l l charities h iti andd communities Expanded the Community Outreach Programs and enhanced the programs program s…
Mining & Processing Industrial silica can be mined through relatively simple surface methods, but requires sophisticated processing before shipment to customers Mi i Methods Mining M th d P Processing i Steps St Open-Pit 1…
Don Weinheimer Vice President & General Manager, Oil & Gas
Don Weinheimer VP and GM, Oil & Gas Vice President and General Manager, Oil & Gas U.S. Silica Senior Vice President,, Strategy, gy, Markets and Technology, Key Energy Services, 2006 - 2012 Vice President of Technology…
Oil & Horizontal Drilling Source: Baker Hughes 25
Drivers of Proppant Demand Horizontal Wells Lateral Stages g per p Proppant pp P Proppant t Demand D d Rig Count per Rig Length Lateral per Stage Growth Drivers Proppant growth has outpaced rig count growth due to higher…
High Demand Markets High Demand Markets such as Eagle Ford, Permian Basin, and Williston Basin are anticipating double digit drilling efficiency increases year over year. Horizontal Vertical Directional 27
Going to the Customer Percent Transload Sales 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Q112 Q212 Q312 Q412 Q113 Network Footprint Railroad access on BNSF, Union Pacific, CN, CP and CSX B Barge access 22 inbasin…
Sparta and Rochelle Milestones Rochelle Plant Phase I Capacity: 200k tons Resin Coated Resin-Coated Pre-cured P d product d td developed l d and d Proppant (RCS) tested Client testing / evaluation underway Building inventory at…
Jason Tedrow Vice President of Supply Chain
Jason Tedrow VP of Supply Chain Vice President of Supply Chain - U.S. Silica Director of Distribution, Logistics Manager, Distribution Operations Manager, Lafarge Cement 2006 - 2011 Engineering and supply chain management,…
Supply pp y Chain Supply, Service and Solutions Planning Sales and Operations Planning, balancing supply and demand Transportation & Truck, barge and rail shipments, rail fleet management Logistics Customer Service Ownership…
Differentiated Footprint and Logistics Capability Transportation Assets Railroad access on BNSF BNSF, Union Pacific, CN, CP and CSX Barge access 22 in-basin transloads, many of which can be turned on or off to meet demand…
Transload Facility Options Silo Flat Storage Rail to Truck 34
U.S. Silicas Highly Efficient Logistic Solutions Plant Unit Train Transload Well Head What is a unit train What is a transload Consists of 70-100 cars (8k -11k tons) that are shipped Rail terminal located in the basin direct…
San Antonio Unit Train Transload Facility y 15,000 ton Unit Train Facility in Eagle Ford Basin (8-10M) Built in partnership with the BNSF Railroad 36
Transload Strategy Goal: Increase network throughout 2013 Become the logistics g and Supply pp y Chain arm of customers Have product available where and when needed Design parameters Not all transloads are created equal Multiple…
Appendix A
Adjusted EBITDA Q1 The following table sets forth a reconciliation of net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA. Three Months Ended March 31, 2013 2012 Net income 17,277 19,113 Total…
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