Q4 2023 US Silica Holdings Inc Earnings Call
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Good morning, and welcome to the U S political fourth quarter 2023 earnings conference call. At this time, all participants are in a listen only mode.
Operator: Good morning and welcome to the U.S. Silica Fourth Quarter 2023 Earnings Conference. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to Patricia Gill, Vice President of Investor Relations and Sustainability. Thank you, and good morning everyone.
You didn't answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero.
As a reminder, this conference is being recorded it is now my pleasure to introduce you to Patricia <unk>, Vice President Investor Relations and sustainability.
Patricia: Thank you and good morning, everyone I'd like to thank you for joining us today for U S silica fourth quarter 2023 earnings conference call.
Patricia Gill: I'd like to thank you for joining us today for U.S. Silica's fourth quarter 2023 earnings conference call. Leading the call today are Bryan Shinn, our Chief Executive Officer, and Kevin Howe, our Interim 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.
Patricia: Leading the call today are Bryan Shinn, our Chief Executive Officer, and Kevin How are interim executive Vice President and Chief Financial Officer.
Patricia: 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.
Patricia: 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.
Patricia: 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.
Patricia: We do not undertake any duty to update any forward looking statements. Additionally, we have provided a supplemental fourth quarter earnings presentation on our website in the investors section to accompany today's discussion.
Patricia Gill: Additionally, we have provided a supplemental fourth-quarter earnings presentation on our website in the investor section to accompany today's discussion. During today's call, we may refer to non-GAAP measures such as adjusted EBITDA, segment contribution margin, net debt, and net leverage ratio. Please refer to today's press release, our public filings, or the accompanying earnings presentation for a full reconciliation and discussion of adjusted EBITDA, segment contribution margin, net debt, and the net leverage ratio. I would now like to turn the call over to our CEO, Bryan Shinn. Thanks, Patricia, and good morning, everyone.
Patricia: On today's call, we may refer to non-GAAP measures such as adjusted EBITDA segment contribution margin net debt and net leverage ratio. Please refer to today's press release, our public filings or the accompanying earnings presentation for a full reconciliation and discussion of adjusted EBITDA segment.
Jewish margin net debt and the net leverage ratio I would now like to turn the call over to our CEO Bryan Shinn.
Bryan A. Shinn: Thanks, Patricia and good morning, everyone.
Bryan A. Shinn: During the fourth quarter, we continued to strengthen our financial foundation and advance our growth strategy while closing out an exceptionally strong and historic year for the company. In 2023, we delivered on profit guidance with 24 percent year-over-year adjusted EBITDA growth while increasing company contribution margin 16 percent and net income 88 percent. We also generated $264 million of cash flow from operations.
Bryan A. Shinn: During the fourth quarter, we continued to strengthen our financial foundation and advance our growth strategy, while closing out an exceptionally strong and historic year for the company.
Bryan A. Shinn: During 2023 we delivered on profit guidance with 24% year over year, adjusted EBITDA growth, while increasing company contribution margin, 16% and net income 88%. We also generated $264 million of cash flow from operations.
Bryan A. Shinn: These impressive annual results were driven by a combination of strong customer demand and disciplined pricing in oil and gas and increased pricing and improved product mix in industrials, all supported by our optimized and lean cost structure. Furthermore, we repurchased and extinguished a total of $184 million of debt, improving our balance sheet and delivering a low net leverage ratio of approximately 1.4 times TTM EBITDA at year end. It's also worth noting that both business segments delivered record annual profitability during the year with annual sequential contribution margin dollar growth of 10% for ISP and 20% for oil and gas. During 2023, we also delivered many non-financial achievements, including our fourth year in a row of record employee safety performance, selling enough bleaching clay to purify 1.7 billion gallons of edible oil, and selling enough diatomaceous earth filter aid to filter 13,000 And finally, we completed 160 community events in 2023, including education for local students, sponsoring multiple recreational sports leagues and local FFA and 4-H organizations, along with participating in numerous volunteer events across the country.
Bryan A. Shinn: Annual results were driven by a combination of strong customer demand and disciplined pricing in oil and gas and increased pricing and improved product mix and industrials all supported by our optimized and lean cost structure.
Bryan A. Shinn: Furthermore, we repurchased and extinguished a total of $184 million of debt, improving our balance sheet and delivering a low net leverage ratio of approximately 1.4 times TTM EBITDA at year end.
Bryan A. Shinn: It's also also worth noting that both business segments delivered record annual profitability during the year with annual sequential contribution margin dollar growth of 10% for ISP and 20% for oil and gas.
Bryan A. Shinn: During 2023, we also delivered many non financial achievements, including our fourth year in a row of record employee safety performance.
Bryan A. Shinn: Selling enough of bleaching clay to purify 1.7 billion gallons of edible oil and selling enough die to merchant diatomaceous Earth filter aid to filter 13000 Olympic sized swimming pools worth of beer.
Bryan A. Shinn: Well, our purified product was used in blood plasma protein processing to produce roughly 9 million vials of albumin medicine, serving millions of patients in the year.
Bryan A. Shinn: And finally, we completed 160 community events in 2023, including education for local students sponsoring multiple recreational sports leagues and local FFA and four H organizations, along with participating in numerous volunteer events across the country and all 2023 was a fantastic year and we certainly.
Bryan A. Shinn: In all, 2023 was a fantastic year, and we certainly had a lot to be proud of. In corporate news, we appointed Gene Pagent as Vice President, Chief Accounting Officer, and Controller of the company in late December. I'm very excited to welcome Gene to our leadership team and believe that his extensive accounting and financial expertise will be a key asset for the company as we continue to advance our growth strategy. I'd also like to provide an update on our CFO search. We've had the opportunity to meet with a number of talented, high-quality candidates with a broad range of backgrounds.
Bryan A. Shinn: Had a lot to be proud of.
Bryan A. Shinn: And corporate news, we appointed Jean pageant, his vice President Chief Accounting Officer, and controller of the company in late December I'm very excited to welcome Jim to our leadership team and believe that his extensive accounting and financial expertise will be a key asset for the company as we continue to advance our growth strategy.
Bryan A. Shinn: I'd also like to provide an update on our CFO search I've had the opportunity to meet with a number of talented high quality candidates with a broad range of backgrounds I'm very pleased with the search process, so far and expect to have our new CFO in place in the next few months.
Bryan A. Shinn: I'm very pleased with the search process so far and expect to have our new CFO in place in the next few months. I'll now turn the call over to Kevin, who will discuss our financial results in more detail.
Bryan A. Shinn: I'll now turn the call over to Kevin who will discuss our financial results in more detail Kevin.
Kevin: Thanks, Bryan. And good morning, everyone. As Bryan mentioned, we reported historic levels of cash flow from operations and adjusted EBITDA for the full year 2023, driven by disciplined pricing in oil and gas and a higher value product mix in industrials. This was further supported by improved cost structures, despite softer market activity for both segments. Looking at fourth quarter results when compared to the prior quarter, overall tons sold decreased 6% sequentially to 3.9 million, and total revenue decreased 8% to $336 million.
Thanks, Brian and good morning, everyone as Brian mentioned, we reported its historic levels of cash flow from operations and adjusted EBITDA for the full year of 2023, driven by disciplined pricing and oil and gas and a higher value product mix and industrials. This was further supported by improved cost structures, despite softer market activity for both.
Bryan A. Shinn: <unk>.
Bryan A. Shinn: Looking at fourth quarter results when compared to the prior quarter overall tons sold decreased 6% sequentially to $3 9 million total revenue decreased 8% to $336 million adjusted EBITDA decreased 13% to $88 $6 million in total company contribution margin decrease.
Kevin: Adjusted EBITDA decreased 13% to $88.6 million, and the total company contribution margin decreased 10% to $116.9 million. Selling general and administrative expenses for the quarter increased 8% sequentially to $31.7 million, driven primarily by the purchase of group annuity contracts covering company pension participants and beneficiaries and insurance costs in the quarter. Depreciation, depletion, and amortization expense decreased 9% sequentially to $32.5 million in the following year due to a non-referring adjustment made in the prior. Our effective tax rate for the quarter ended December 31st, 2023 was 23.
Bryan A. Shinn: 10% to $116 $9 million.
Bryan A. Shinn: Selling general and administrative expenses for the quarter increased 8% sequentially $31 $7 million driven primarily by the purchase of a group annuity contracts covering company pension participants and beneficiaries and insurance costs in the quarter.
Bryan A. Shinn: Depreciation depletion and amortization expense decreased 9% sequentially to $32 $5 million in the fourth quarter due to a nonrecurring adjustment made in the prior quarter.
Bryan A. Shinn: Our effective tax rate for the quarter ended December 31, 2023 was 23, 3%, including discrete items.
Kevin: As Bryan mentioned, in the fourth quarter, we used excess cash on the balance sheet to extinguish an additional $25 million of outstanding debt at par. Since the second quarter of 2022, we have extinguished a total of $334 million of debt, incrementally reducing our debt service cost in today's high-interest rate environment and providing an estimated $33.8 million of annual interest expenditures. At the end of the fourth quarter, our net debt to trailing 12-month adjusted EBITDA ratio remained at 1.4 times, below our year-end target of 1.5. I will now walk you through our operating segments. The oil and gas segment reported revenue of $200.6 million, a sequential decrease of 13%. Volumes for the oil and gas segment performed below our prior guidance, decreasing by 7% to 2.9 million tons, while sandbox delivered loads decreased 5% compared to 7%. Segment contribution margin decreased 15% compared with the third quarter to $70.1 million, which on a per-fund basis was $24.13. These results were driven by a sequential decline in U.S. completions activity and lower prices.
Bryan A. Shinn: As Brian mentioned in the fourth quarter, we used excess cash on the balance sheet to extinguish an additional $25 million of outstanding debt at par.
Bryan A. Shinn: Since the second quarter of 2022, we have extinguished a total of $334 million of debt incrementally, reducing our debt service cost in todays higher interest rate environment, and providing an estimated $33 $8 million with annual interest expense savings.
Bryan A. Shinn: At the end of the fourth quarter, our net debt to trailing 12 months adjusted EBITDA ratio remained at 1.4 times below our year end target of one five times.
Speaker Change: I will now walk you through our operating segment results.
Speaker Change: The oil and gas segment reported revenue of $206 million for the fourth quarter, a sequential decrease of 13%.
Speaker Change: Williams for the oil and gas segment performed below our prior guidance decreasing by 7% to 9 million tonnes, while sandbox delivered loans decreased 5% compared to the third quarter.
Speaker Change: Segment contribution margin decreased 15% compared with the third quarter to $70 $1 million, which on a per ton basis was $24 13.
Speaker Change: These results were driven by sequential decline in U S completions activity and lower pricing.
Kevin: Our industrial and specialty segment, or ISP, reported revenues of $135.5 million, which was flat compared to the prior; volumes for the ISP segment decreased 4%, totaling $958,000. Segment Contribution Margin increased 1% on a sequential basis, to 46.8%, which on a per ton basis was $48. The sequential increase in the results for the ISP segment was due to improved pricing and lower costs. On a year-over-year basis, contribution margin dollars increased 17%.
Speaker Change: Our industrial and specialty segment or ISP reported revenues of $135 $5 million, which was flat compared to the prior quarter volumes.
Speaker Change: Volumes for the ISP segment decreased 4% sequentially and totaled 958000 tons.
Speaker Change: Segment contribution margin increased 1% highest sequential basis and totaled $46 $8 million, which on a per ton basis was $48.85 to sequential.
Speaker Change: The increase in the results for the ISP segment was due to improved pricing and lower costs on.
Speaker Change: On a year over year basis contribution margin dollars increased 17%.
Kevin: Contribution Margin Percentage Expanded 11% Due to pricing increases, the high grading of product mix, and cost improvement initiatives. Turning to the cash flow, We delivered strong cash flow from operations of $54.2 million in the fourth quarter, driven by strong earnings and efficient network and capital. During Q4, we invested $17.5 million in capital, primarily for facility maintenance, cost improvement, and ISP growth projects. As of December 31, 2023, the company's cash and cash equivalents totaled $245.7 million, a 10 percent increase, which includes the impact of the $25 million loan exchange. At quarter end, our $150 million revolver had $0 drawn on it, with $134.7 million available under the credit facility after allocating for letters of credit.
Speaker Change: <unk> margin percentage expanded 11% due to pricing increases the high grading of product mix and cost improvement initiatives.
Speaker Change: Turning to the cash flow statement.
Speaker Change: We delivered strong cash flow from operations of $54 $2 million in the fourth quarter, driven by strong earnings and efficient network and capital.
Speaker Change: During Q4, we invested $17 $5 million of capital primarily for facility maintenance cost improvement in ISP growth projects.
Speaker Change: As of December 31st 2023.
Speaker Change: <unk> cash cash equivalents totaled $245 $7 million, a sequential increase of 10%, which includes the impact of the $25 million loan extinguishment.
Speaker Change: At quarter end, our $150 million revolver had $0 drawn with $134 $7 million available under the credit facility after allocating for letters of credit.
Kevin: Turning to guidance, the high level of profitable customer contracts in our oil and gas, coupled with our consistent and varied customer base in the ISP sector, gives us reasonable confidence in our visibility for 2020. We expect strong operating cash flow generation. We plan to direct our free cash flow to fund our growth capital needs while we continue to reduce our net debt. The current net leverage ratio expectation is that it will remain below 1.5 times through the year.
Speaker Change: Turning to guidance.
Speaker Change: The high level of profit customer contracts in our oil and gas segment, coupled with our consistent and varied customer base in the ISP segment gives us reasonable confidence in our visibility for 2024, we expect strong operating cash flow generation this year and plan to direct our free cash flow to fund our growth capital needs, while we continued to reduce.
Speaker Change: Our net debt level.
Speaker Change: Our current net leverage ratio expectation is that it will remain below one five times through the year.
Kevin: The Bulletproof Executive 2013, We will continue to be disciplined in our investment allocations and will focus on maintaining operating levels at our facilities while pursuing profitable full year 2024. We are forecasting our capital spending to be approximately $60 million, with the possibility for that to increase during the year as we opportunistically look to accelerate our high-return potential capital investment. Finally, we are forecasting full year 2024 SG&A expense to be up approximately 5%, driven primarily by investments in our, Forecast for full year 2024, depreciation, depletion, and amortization, down approximately five. Assets that have become or are becoming fully depreciated Our estimated effective tax rate for the full year 2024 is approximately $20,000. And with that, I'll turn the call back over to Bryan. Thanks, Kevin.
Speaker Change: Regarding capital spending.
Speaker Change: We will continue to be disciplined in our investment allocations and will focus on maintaining operating levels at our facilities, while pursuing profitable growth for.
Speaker Change: For full year 2024, we are forecasting our capital spending to be approximately $60 million with a possibility for that to increase during the year as he opportunistically look to accelerate our high return potential capital investment projects.
Speaker Change: Finally, we are forecasting full year 2024, SG&A expense to be up approximately 5% year over year, driven primarily by investments in our workforce and our forecast for full year 2020 for depreciation depletion and amortization expense is down approximately 5%.
Speaker Change: Given higher capex spending levels in prior years for assets that have become more are becoming fully depreciated.
Speaker Change: Our estimated effective tax rate for full year 2024, it's approximately 27%.
Speaker Change: And with that I'll turn the call back over to Brian.
Brian: Thanks, Kevin next let's review some of the trends that we saw during the quarter, starting with our oil and gas segment.
Bryan A. Shinn: Next, let's review some of the trends that we saw during the quarter, starting with our oil and gas segment. Demand for our prop and sandbox logistics offerings was off by mid-single digits sequentially in Q4 as the U.S. land energy complex experienced sequentially lower drilling and completions activity driven by weather and typical seasonality. Due to our disciplined pricing approach, our overall profit price per ton was down less than $2 quarter over quarter. These efforts, coupled with our quick and flexible variable cost reduction initiatives, allowed us to deliver a strong contribution margin of 35% for Q4. Additionally, due to our trusted market reputation, reliability, and capability to deliver profit at scale, we signed four customer contract amendments and extensions in the quarter. Finally, our new patent-pending Guardian FRAC fluid filtration system continues to perform well and gain momentum in the market, with a total of 16 units installed to date.
Brian: Demand for our proppant and sandbox logistics offerings were off mid single digits sequentially in Q4, as the U S land energy complex experienced sequentially lower drilling and completions activity driven by weather and typical seasonality due.
Brian: Due to our disciplined pricing approach, our overall proppant price per ton was down less than $2 quarter over quarter. These.
Brian: These efforts coupled with our quick and flexible variable cost reduction initiatives allowed us to deliver strong contribution margin of 35% for Q4.
Brian: Additionally, due to our trusted market reputation reliability and capability to deliver proppant at scale, we signed four customer contract amendments and extensions in the quarter.
Brian: Finally, our new patent pending guarding Guardian frac fluid filtration system continues to perform well and gained momentum in the market.
Brian: A total of 16 units installed to date customers continue to enjoy increased pump uptime and efficiency and decreased repair and maintenance costs, given the strong customer acceptance and market adoption, we expect to double the systems in our fleet in 2024.
Bryan A. Shinn: Customers continue to enjoy increased pump uptime and efficiency and decreased repair and maintenance costs. Given the strong customer acceptance and market adoption, we expect to double the systems in our fleet in 2024. In our ISP segment, as we guided on last quarter's call, volumes declined on a year-over-year basis.
Brian: And our ISP segment as we guided on last quarter's call volumes declined on a year over year basis. This was due to a combination of normal seasonal demand reduction customer facility maintenance and customer year end inventory management, particularly for fiberglass industrial oil and recreation products.
Bryan A. Shinn: This was due to a combination of normal seasonal demand reduction, customer facility maintenance, and customer year-end inventory management, particularly for fiberglass, industrial oil, and recreation products. Despite these lower activity levels, we benefited from ongoing structural cost reductions, price increases, and greater sales from advanced materials, which afforded us improved sequential and year-over-year profitability and a 27% increase in contribution margin on a per-ton basis. I will now provide updates on key developments in our industrial portfolio and then finish with a summary of our outlook for the first quarter of 2024. During the fourth quarter, we made significant progress on all three key strategic growth elements of our ISP business. Our first element is increasing the profitability of our base business at a GDP plus rate. With that goal in mind, we continue to capture savings from reduced logistics costs, improved plant reliability, automation, cost efficiency projects, and lower natural gas prices. We're also committed to raising and maintaining product pricing to help offset increased costs. Our most recent price increase of up to 20% for numerous non-contracted ISP products went into effect for shipments beginning January 1st.
Brian: Despite these lower activity levels, we benefited from ongoing structural cost reductions price increases and greater sales from advanced materials, which afforded us the improved sequential and year over year profitability and a 27% increase in contribution margin on a per ton basis.
Brian: I will now provide updates on key developments in our industrial portfolio and then finish with a summary of our outlook for the first quarter of 2024.
Brian: During the fourth quarter, we made significant progress on all three key strategic growth elements of our ISP business.
Brian: The first element is increasing the profitability of our base business at a GDP plus right.
Brian: With that goal in mind, we continue to capture savings from reduced logistics cost improve plant reliability automation cost efficiency projects and lower natural gas prices.
Brian: We're also committed to raising and maintaining product pricing to help offset increased costs.
Brian: Most recent price increase of up to 20% for numerous non contracted ISP products went into effect for shipments beginning January 1st.
Bryan A. Shinn: The second element of our ISP strategy is to substantially grow our current high-value differentiated products, such as ground silica, diatomaceous earth powders, and fine fillers, and high-purity filtration substrates. Q4 was a very productive quarter in this regard. During the quarter, we finalized and amended nine key customer contracts with improved pricing and volume commitment. Low iron silica demand for solar glass remains strong and is growing with the domestic industry.
Brian: The second element of our ISP strategy is to substantially grow our current high value differentiated products such as ground silica.
Brian: Diatomaceous Earth powders, and find fillers and high purity filtration substrates.
Brian: Q4 was a very productive quarter in this regard.
During the quarter, we finalized an amended nine key customer contracts with improved pricing and volume commitments.
Brian: Laura and silica demand for solar glass remains strong and is growing with the domestic industry.
Bryan A. Shinn: We estimate that U.S. solar panel manufacturers announced an additional $1.8 billion of capacity expansion projects during the quarter, bringing total domestic announced solar panel investment to $11.4 billion since the passage of the IRA. To support industry growth, we have developed the capability to produce low iron silica from a second U.S. silica mine and have recently signed a key customer supply contract for this product. Additionally, demand for our diatomaceous earth catalyst products continues at high levels, and our natural DE powders remain sold out across facilities.
Brian: We estimate that U S solar panel manufacturers announced an additional $1 $8 billion of capacity expansion projects during the quarter, bringing total domestic announced solar panel investment to $11 $4 billion since the passage of the Eir rate.
Brian: To support industry growth, we have developed the capability to produce low iron silica from our second U S. Silica mine and have recently signed a key customer supply contract for this product.
Brian: Additionally, demand for our diatomaceous Earth catalyst products continues at high levels and our natural <unk> powders remains sold out across facilities.
Bryan A. Shinn: Given the strength of customer demand for these products, we are pursuing capacity expansion that will come online in early to mid-2025. Our third strategic element is expanding our addressable markets and applications with sales of new high-value advanced materials such as Cristobalite, Everwhite Pigment, and White Armor solar reflective roofing materials. Sales of Everwhite Pigment, our TIO2 partial replacement product, continue to accelerate.
Brian: Given the strength of customer demand for these products. We are pursuing capacity expansion that will come online in early to mid 2025.
Brian: Our third strategic element is expanding our addressable markets and applications with sales of new high value advanced materials, such as cristobalite ever white pigment and white armor solar reflect your roofing materials.
Brian: Sales of ever White pigment, our T. I O two partial replacement product continue to accelerate we have line of sight to selling out our existing production capacity for this product and our expanded capacity, which is scheduled to come online early next year.
Bryan A. Shinn: We have line of sight to selling out our existing production capacity for this product and our expanded capacity, which is scheduled to come online early next year. Customer feedback remains positive as we move forward with multiple qualifications and production trials for several applications that would further expand our total addressable market. During the quarter, we also launched and qualified a new cool roof granule product with improved solar reflectance.
Brian: Customer feedback remains positive as we move forward with multiple qualifications and production trials for several applications that would further expand our total addressable markets.
Brian: During the quarter, we also launched and qualified a new cool roof granules product with improved solar reflectance.
Bryan A. Shinn: This increase in performance ensures that customers can continue to meet even the most stringent cool roofing codes across North America. Plus, we fully commissioned our new state-of-the-art innovation center in Rochelle, Illinois, and we're receiving numerous inquiries from customers and distributors about processing new materials at this location. Turning now to our business and market outlook, as Kevin noted, we anticipate that we'll generate robust operating cash flow again this year and maintain a net leverage ratio below 1.5 times. Our oil and gas segment is attractively positioned to maximize through-cycle earnings due to our cost reduction and variabilization efforts over the past few years, which have cut our annual fixed costs substantially. These actions have had the effect of raising our annual earnings floor in a softer market by up to $70 million without sacrificing upside in a peak market.
Brian: This increase in performance ensures that customers can continue to meet even the most stringent cool roofing codes across North America.
Brian: So we fully commissioned our new state of the Art Innovation Center in Rochelle, Illinois, and we're receiving numerous inquiries from customers and distributors about processing new materials at this location.
Turning now to our business and market outlook as Kevin noted, we anticipate that will generate robust operating cash flow again, this year and maintain a net leverage ratio below one five times.
Brian: Our oil and gas segment is attractively positioned to maximize through cycle earnings due to our cost reduction and variables Asian efforts over the past few years, which have cut our annual fixed costs substantially.
Brian: These actions so that'd be effect of raising our annual earnings floor in a softer market by up to $70 million without sacrificing upside in a peak market.
We've repositioned the segment and improved our contribution margin percent to the mid thirties and forecast that our contribution margin on a per ton basis will average in the low $20 per ton level for the year.
Brian: For the first quarter, we anticipate that volumes will be flat to slightly up sequentially with contribution margin dollars down 5% to 10% due to continued pricing pressures from a slightly oversupplied proppant market Q.
Bryan A. Shinn: We've repositioned the segment and improved our contribution margin percent to the mid-30s and forecast that our contribution margin on a per ton basis will average in the low $20 per ton level for the year. For the first quarter, we anticipate that volumes will be flat to slightly up sequentially with contribution margin dollars down 5 to 10 percent due to continued pricing pressures from a slightly oversupplied profit market. Q1 has started off well with stronger than anticipated January sales as we just recorded our second best month for West Texas sales volume. The harsh winter weather in the Permian Basin proved beneficial for U.S. Silica as competitor mini-mines were negatively impacted, and customers reached out to us for additional profit supply to maintain ongoing completion.
Brian: Q1 has started off well with stronger than anticipated January sales as we just recorded our second best month for West, Texas sales volumes the <unk>.
Brian: Winter weather in the Permian Basin proved beneficial for U S. Silica as competitor many mines were negatively impacted and customers reached out to us for additional proppant supply to maintain ongoing completions.
Brian: Overall this business segment remains well positioned to capitalize on the current multiyear energy up cycle with expectations for constructive commodity prices and healthy demand for proppant and last mile logistics.
Brian: We're maintaining pricing discipline and continued to have strong contractual commitments for our sand with approximately 80% of production capacity committed for 2024.
Bryan A. Shinn: Overall, this business segment remains well-positioned to capitalize on the current multi-year energy upcycle, with expectations for constructive commodity prices and healthy demand for profit and last mile logistics. We are maintaining pricing discipline and continue to have strong contractual commitments for our stand, with approximately 80% of production capacity committed for 2024. We continue to believe that the recent operator consolidation should lead to better acreage positions and increased lateral length, requiring greater service intensity and translating to more stand for well completion. To reiterate, demand for stand profit remains healthy and strong, and we plan to remain heavily contracted and disciplined on pricing while maximizing our profit margin. Moving to our industrial and specialty products segment, we are well positioned to achieve another year of profitability growth in 2024 due to the strength of the numerous current and emerging end markets that we serve. Furthermore, we expect to continue expanding profit margins through structural cost reductions, price increases, and investments in product development. These initiatives, coupled with customer investments in domestic manufacturing, should continue to offset any potential near-term market weakness. For the first quarter, year-over-year volumes are forecasted to be down low single digits due to product-demand mix.
Brian: We continue to believe that the recent operator consolidation should lead to better acreage position positions and increased lateral length, requiring greater service intensity and translating to more sand for well completions.
Brian: To reiterate demand for sand proppant remains healthy and strong and we plan to remain heavily contracted and discipline on pricing, while maximizing our profit margins.
Brian: Moving to our industrial and specialty products segment, we are well positioned to achieve another year of profitability growth in 2024 due to the strength of the numerous current and emerging end markets that we serve.
Brian: Furthermore, we expect to continue expanding profit margins through structural cost reductions price increases and investments in product development. These.
Brian: These initiatives coupled with customer investments in domestic manufacturing should continue to offset any potential near term market weakness.
Brian: For the first quarter year over year volumes are forecasted to be down low single digits due to product demand mix.
Brian: However, we expect contribution margin dollars in industrials to increase 5% to 10% on a year over year basis, due to improved pricing favorable product mix and ongoing operational and supply chain efficiency improvements.
Brian: Additionally, I'd like to update you on a change to our business alignment and segment reporting going forward.
Brian: After careful consideration we are moving the management and reporting of our oilfield northern white sand offerings from the oil and gas business segment to the industrial and specialty products segment, beginning with first quarter results in 2024.
Bryan A. Shinn: However, we expect contribution margin dollars in industrials to increase 5 to 10 percent on a year-over-year basis due to improved pricing, favorable product mix, and ongoing operational and supply chain efficiency improvements. Additionally, I'd like to update you on a change to our business alignment and segment reporting going forward. After careful consideration, we are moving the management and reporting of our oilfield northern white sand offerings from the oil and gas business segment to the industrial and specialty product segment, beginning with first quarter results in 2024. Given how the oilfield northern white sand business has evolved over the years, we believe that it's better positioned today as an offering with an ISP. This change will streamline our business operations, reduce costs, and allow us to maximize value as we will now have all white sand based offerings in one business.
Brian: Given how the oilfield northern white sand business has evolved over the years, we believe that it is better positioned today as an offering with an ISP.
Brian: This change will streamline our business operations reduce costs and allow us to maximize value as we will now have all white sand based offerings in one business unit.
Brian: We will discuss this further on our next earnings call and offer historical financial examples to bridge prior quarter results to the new reporting alignment.
Brian: So to summarize in the fourth quarter, we continued to strengthen our balance sheet through incremental debt extinguishment and further cost reductions, while making strong progress on growing the company in several areas, including signing numerous contracts at attractive prices in both of our business segments.
Brian: Helping and launching a second source of low iron silica to meet the growing needs of the domestic solar panel industry.
Brian: Beginning of capacity increase plan for our sold out Diatomaceous Earth powders line, which will come on coming online in early to mid 2025.
Bryan A. Shinn: We will discuss this further on our next earnings call, and I'll offer historical financial examples to bridge prior quarter results to the new reporting alignment. So to summarize, in the fourth quarter, we continued to strengthen our balance sheet through incremental debt extinguishment and further cost reductions while making strong progress on growing the company in several areas, including signing numerous contracts at attractive prices in both of our business segments. Developing and launching a second source of low iron silica to meet the growing needs of the domestic solar panel industry.
Brian: Continuing capacity expansion for our new ever White pigment product line, which will come online early next year.
Brian: Launching a new and improved cool roof granules product and finally, maximizing cost optimization and efficiency efforts across the company.
Brian: We expect that the actions that we're taking to increase capacity expand our contracts with blue chip customers and improve our operations and efficiency can help unlike unlock transformational growth for the company and enhance stakeholder value.
Speaker Change: And with that operator will you. Please open the lines for questions.
Bryan A. Shinn: Beginning a capacity increase plan for our sold-out diatomaceous earth powders line, which will be coming online in early to mid-2025. Continuing capacity expansion for our new Everwhite pigment product line, which will come online early next year, launching a new and improved cool roof granule product, and finally, maximizing cost optimization and efficiency efforts across the company. We expect that the actions that we are taking to increase capacity, expand our contracts with blue chip customers, and improve our operations and efficiency can help unlock transformational growth for the company and enhance stakeholder value. And with that, Operator, will you please open the lines for questions? Thank you. And at this time, we will be conducting a question. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate your line is busy. You may press star 2 if you would like to remove your question.
Speaker Change: Thank you and at this time, we'll be conducting a question and answer session. If.
Speaker Change: If you would like to ask a question. Please press star one.
Speaker Change: A confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before question Dave Starkey.
Speaker Change: Our first question comes from the line.
Speaker Change: Steven.
Steven: Zingaro with Stifel.
Steven Zingaro: Please proceed with your question.
Steven Zingaro: Thanks, and good morning, everybody.
Steven Zingaro: Morning, Steven Martin.
Steven Zingaro: So a couple of things jumped out for me just to start with you mentioned the ISP segment I know market dynamics are evolving you.
Steven Zingaro: Had suggested 8% to 10% contribution margin growth.
Steven Zingaro: As a trend during the analyst day that you held is that the bulk of 24.
Steven Martin: Yes, we expect to be in that window.
Steven Martin: On average that as our growth CAGR going forward Stephen.
Stephen: Great. Thank you and what.
Stephen: When we think about.
Stephen: The reallocation of capacity.
Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. Our first question comes from the line of Steve, and please proceed with your. Thanks and good morning, everybody. Good morning, Stephen. So a couple of things jump out for me, but just to start with, you mentioned the ISP segment. I know market dynamics are evolving. You had suggested 8 to 10 percent contribution margin growth as a trend during the analyst event you held. Is that applicable to 24?
Stephen: What does that mean for.
Stephen: Average contribution margin per ton in oil and gas overtime and.
Stephen: What is sort of.
Stephen: Current year nameplate or accessible oil and gas.
Stephen: Sand capacity right now.
Stephen: So when you're talking about the reallocation or you're talking about the sort of geographic change.
Stephen: Northern White sand or were you talking about something else.
Stephen: When you said your reclassify your your northern White into ISP does that mean, you're not selling it into oil and gas anymore it'll be used for industrial applications.
Stephen: Yes, we expect to be in that window and average that as our growth kegger going forward, Steven. Great, thank you. And when we think about the reallocation of capacity, what does that mean for the average contribution margin per tonne of oil and gas over time and what is the sort of current, either nameplate or accessible, oil and gas, flexing capacity right now? So when you talk about the reallocation, are you talking about the sort of geographic change on northern white sand or are you talking about something else? Yeah, when you said you were reclassifying your northern whites into ISP, does that mean you're not selling them for oil and gas anymore? They'll be used for industrial applications?
Stephen: No no, but basically what that means is that we're gonna have the industrial team manage all of the northern white sand. So I think maybe theres, a little bit of confusion around northern white sand. It internally when we think about northern white sand, we think about all of the sand that meets that sort of technical description and we saw some of that.
Stephen: Into the oilfield and some into industrial applications like glass manufacturing foundry et cetera, and so what we're doing is we're bringing all that together and.
Stephen: Having that managed by the industrial team within the company and the reality is that's kind of in line with how we run the company in some ways anyway.
Stephen: And.
Stephen: Basically by doing this it will allow one management team in the company to optimize the profitability and the sort of ongoing logistics and management efficiency of that supply chain. Today. We've got two two management teams kind of buying for that capacity and I think long term we can.
Bryan A. Shinn: No, no. But basically, what that means is that we're going to have the industrial team manage all of the northern white sand. So I think maybe there's a little bit of confusion around northern white sand. Internally, when we think about northern white sand, we think about all of the sand that meets that sort of technical description.
Stephen: <unk> profit for the company, if we have that under one team. So I still expect that we will sell a lot of sand into the oilfield, but the management of that and the allocation of that capacity will be done by the industrial team does that makes sense.
Speaker Change: Okay that makes it I was I was a little I misread that I thought you were basically exiting the northern white oil and gas business for sure sure. Okay. That's helpful.
Bryan A. Shinn: And we sell some of that into the oil field and some into industrial applications like glass manufacturing, foundry, etc. So, what we're doing is we're bringing all that together and having that managed by the industrial team within the company. And the reality is that it's kind of in line with how we run the company in some ways anyway. And basically, by doing this, it will allow one management team in the company to optimize the profitability and the sort of ongoing logistics and management efficiency of that supply chain.
Speaker Change: We're not.
Speaker Change: And then just a final one from me and ill get back in line.
Speaker Change: There was there was a big acquisition announced earlier this morning.
Speaker Change: So I think it consolidates the.
Speaker Change: Permian quite a bit I think.
Speaker Change: And by that kind of problem.
Speaker Change: Close to 30%, maybe high 20% of industry capacity.
Speaker Change: So there was a couple of things that jumped out at me was the consolidation of our menu.
Speaker Change: <unk> paid for that which seemed a little low but can you just talk about the.
Bryan A. Shinn: Today, we've got two management teams kind of vying for that capacity, and I think, long term, we can optimize profits for the company if we have that under one team. So I still expect that we'll sell a lot of sand to the oil field. But the management of that and the allocation of that capacity will be done by the industrial team, if that makes sense. Okay, that makes it I was I was a little misread that I thought you were basically edging the northern white oil and gas business, which you're not. Okay, that's how we're not. And then just the final one for me, and I'll get back in line.
Speaker Change: The impact potential impact of that consolidation.
Speaker Change: Yes.
How that potentially helps the supply demand and pricing dynamic in the Permian.
Speaker Change: Sure sure. So so first off congratulations to both companies, it's tough to always tough to pull an acquisition off.
Speaker Change: Hats off to them for doing it.
Speaker Change: As I step back and look at this I think it's a real positive for our industry, Steven but we all know that the frac sand value chain is pretty fragmented and when you look at it compared to a lot of the other parts of the oilfield industry.
Our industry is very sort of fragmented and deconsolidation and.
Bryan A. Shinn: There was a big acquisition announced earlier this morning, so I think it consolidates the Permian quite a bit with, I think, the combined entity kind of probably, close to 30%, maybe the high 20s of industry capacity. So there were a couple of things that jumped out at me, the consolidation and then kind of the valuation paid for that, which seemed a little low. But can you just talk about the impact, potential impact, of that consolidation and how that potentially helps the supply, demand, and pricing dynamic in the permit? Sure, sure. So first off, congratulations to both companies. It's always tough to pull an acquisition off, and hats off to them for doing it.
Speaker Change: And if this can start a chain of consolidations within the industry.
Speaker Change: That's definitely a positive and it should bring more discipline and stability overall to the frac sand value chain, which I think will be.
Speaker Change: Basically accretive to evaluations for the sector long term, we've all talked on our earnings calls.
Speaker Change: All kinds of meetings are right around the industry about needing to get some consolidation in this industry and so it's it's really great to see it.
Speaker Change: Happening.
Speaker Change: Okay, great. Thank you.
Speaker Change: Thanks Steven.
Speaker Change: Thank you. Our next question comes from the line of John Daniel with Daniel Energy. Please proceed with your question.
John Daniel: Hey, guys. Good morning, Thanks morning, Jonathan.
John Daniel: So I just want to follow on to Stephen's question.
John Daniel: And then all else being equal World would you rather pursue.
Bryan A. Shinn: You know, as I step back and look at this, I think it's a real positive for our industry, Stephen. We all know that the Fraxin value chain is pretty fragmented, and when you look at it compared to a lot of the other parts of the oil field industry, our industry is very sort of fragmented and deconsolidated. And if this can start a chain of consolidations within the industry, I think that's definitely a positive, and it should bring more discipline and stability overall to the Fraxin value chain, which I think will be basically accretive to valuations for the sector long term. We've all talked on our earnings calls and in all kinds of meetings around the industry about needing to get some consolidation in this industry, and so it's really great to see Okay, great.
John Daniel: Consolidation in the oil and gas or in the industrial.
Speaker Change: Well I think we've talked a lot about the strategy of both parts of the company.
Speaker Change: And we're fortunate enough to have had the optionality to to look across that.
Speaker Change: We're certainly investing our growth capital and growth energy.
Speaker Change: Disproportionately towards the industrial side of the company because we think we have so many are really cool opportunities over there.
Speaker Change: That said, we invest a lot of kind of mental energy and managing the oil and gas part of the company and we like that part as well generates cash and it plays are unimportant part in the company's overall strategy.
Speaker Change: I would say if you look at the dynamics of the two businesses certainly on.
Bryan A. Shinn: Thank you. Thanks, Stephen. Thank you. Our next question comes from the line of John Daniel with Daniel Energy. Please repeat with your question.
Speaker Change: On the industrial side, there's more of a moat around that business more technically specified.
John Daniel: Hey guys, good morning, thank you for having me. I just want to follow on to Stephen's question: in an all else being equal world, would you rather pursue consolidation in oil and gas or in the industrial world? Well, I think we've talked a lot about the strategy of both parts of the company, and we're fortunate enough to have the optionality to look across that. We're certainly investing our gross capital and growth energy disproportionately towards the industrial side of the company because we think we have so many really cool opportunities over there. That said, we invest a lot of mental energy in managing the oil and gas part of the company, and we like that part as well. It generates cash, and it plays an important part in the company's overall strategy. I would say if you look at the dynamics of the two businesses, certainly on the industrial side, there's more of a moat around that business. More technically, we rarely see new entrance into the sort of industrial silica and diatomaceous earth and different minerals that we have there.
Speaker Change: We rarely see new entrants into the sort of industrial silica and diatomaceous Earth and different minerals that we have there. So it's why that part of the company certainly commands a premium valuation and if you look at.
Speaker Change: The stock is valued today.
Speaker Change: Dollar we generate on the industrial side of EBITDA, we'd probably get four times the EV ultimately dropping through to the share price and if we generate at that same dollar on the oilfield side. So I think we get the appropriate the appropriate amount of effort to both of the businesses.
Speaker Change: We like the two.
Speaker Change: Two industries that we're in.
Speaker Change: Okay.
Speaker Change: One more if I may.
Speaker Change: When you think about growth through.
Speaker Change: Acquisition can you.
Speaker Change: Assuming you see more opportunities within oil and gas for consolidation.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Well I think there are definitely opportunities and as you can imagine over the years, we've had a number of different conversations with parties on both sides of a transaction.
Bryan A. Shinn: So it's why that part of the company certainly commands a premium valuation. And if you look at kind of how the stock is valued today, for every dollar we generate on the industrial side of EBITDA, we probably get four times the EV ultimately dropping through to the share price than if we generated that same dollar on the oil field side. So I think we give the appropriate amount of effort to both of the businesses, and we like the two industries that we're in. One more, if I may.
Speaker Change: I feel like the as you know well the issue in the oilfield is there's usually not much time, where where buyer and seller expectations actually overlap in terms of valuation.
Speaker Change: And depending on where the cycle is one side or the other feels like there they're not going to get a good deal. So.
Speaker Change: I think that's been the biggest issue quite frankly to getting something done here and.
Speaker Change: Frac sand in particular has been has been up and down over the years in terms of.
Speaker Change: The valuation so it makes it doubly doubly hard to do that hopefully.
John Daniel: When you think about, you know, growth through acquisition, can you... I'm assuming you see more opportunities within oil and gas for consolidation, or is that incorrect? Well, I think there are definitely opportunities.
This will show a path towards getting things done it certainly establishes some expectations around what what things might be worth so sometimes that's what it takes it's kind of like like diffuse. If you will to get more done and I'm really hopeful that we do see more consolidation in that part of our business.
Bryan A. Shinn: And as you can imagine, you know, over the years, we've had a number of different conversations with parties on both sides of a transaction. I feel like, as you know, well, the issue in the oil field is that there's usually not much time where buyer and seller expectations actually overlap in terms of valuation. And, you know, depending on where the cycle is, one side of the other feels like they're not going to get a good deal.
Speaker Change: Thank you for including me.
Speaker Change: Thank you John.
Speaker Change: Thank you and as a reminder, if anyone has any questions you May press star one on your telephone keypad.
Speaker Change: In order to join the question and answer queue.
Speaker Change: Our next question comes from the line of Stephen <unk> with Stifel. Please proceed with your question.
Stephen: Thanks, Brian just two quick follow ups.
Bryan A. Shinn: So I think that's been the biggest issue, quite frankly, to getting something done here. And, you know, Fraxin in particular has been up and down over the years in terms of valuation, so it makes it doubly hard to do that.
Stephen: You mentioned.
Stephen: I think 80% of <unk>.
Stephen: <unk> in the oil and gas business contracted for 2024.
Stephen: Does does work.
Stephen: I assume what underlies that is supported on a contribution margin target you, obviously provided but what.
Bryan A. Shinn: Hopefully, you know, this will show a path towards getting things done. It certainly establishes some expectations around what things might be worth. So sometimes that's what it takes to kind of light the fuse, if you will, to get more done. And I'm really hopeful that we do see more consolidation in that part of our business. Fair enough.
Stephen: Is the pricing situation right now fairly stable you think I mean, you did mentioned slight overcapacity right now, but how do we think about the supply demand dynamics for our Frac sand right now yeah.
Stephen: It's a great great question and as I said in my prepared remarks, there's a slight oversupply right now of capacity and we will see prices down a couple of dollars a tonne versus.
John Daniel: Thank you for including me. Thank you, John. Thank you. And as a reminder, if anyone has any questions, you may press star one on your telephone keypad in order to join the question and answer session. Our next question comes from the line of Stephen Gingaro with Stiefel. Please proceed with your question.
Stephen: Where we exited from from Q4. So if you look at 2024 to two <unk> to Q4 of last year and things will be down just a bit on pricing, but I do feel like things have stabilized and we see pretty consistent pricing out in the market today.
Stephen: As always the spot prices a few dollars less than the contract, but I think we've stabilized in the market in a in a very healthy spot, particularly relative to history and I think that's how you have to view. This 2023 with a really strong year two.
Operator: Thanks, Bryan. Just two quick follow-ups. You mentioned, I think, 80% of sand in the oil and gas business is contracted for 2024. Does what, I assume what underlies that is supportive of the contribution margin time that you obviously provided, but what? Is the pricing situation right now fairly stable, you think? I mean, you mentioned slight overcapacity right now, but how do we think about the supply-demand dynamics for FRAC right now? Yeah, it's a great question, and as I said in my prepared remark, there's a slight oversupply right now of capacity, and we'll see prices down a couple dollars a ton versus where we exited from Q4. So if you look at 2024 to Q4 of last year, things will be down just a bit on pricing, but I do feel like things have stabilized, and we see pretty consistent pricing out in the market today. As always, the spot price is a few dollars less than contract, but I think we've stabilized in the market in a very healthy spot, particularly relative to history, and I think that's how you have to view this. 2023 was a really strong year.
Stephen: <unk> 2020 for I think for most of us in and around the world.
Stephen: Anywhere in the in the service company changed probably going to be a little bit off versus.
Stephen: 'twenty three but again that was kind of a historic year for many many companies I think what I said.
We feel really really good about where we are in 'twenty, four and like the pricing and the contracts that we've signed and continuing to be able to have.
Stephen: Or minus 80% of our capacity under long term contract really gives us that that visibility and that confidence that we're going to have a very good year here in 'twenty four.
Stephen: Okay.
Stephen: Great.
And then and then just a second quick one is when you think about capital allocation and I know John asked a little bit about.
Stephen: About M&A et cetera, but what do you think about the balance between.
Speaker Change: Dividends buybacks and reducing debt.
Speaker Change: Where are you sort of ultra comfortable with the debt levels were.
Speaker Change: More of the cash would start to flow directly back to shareholders through buybacks and dividends.
Stephen: 2024, I think for most of us in and around, well, anywhere in the service company chain, probably going to be a little bit off versus 23, but again, that was kind of a historic year for many companies, I think. But I still feel really good about where we are in 2024, and I like the pricing and the contracts that we've signed, and continuing to be able to have plus or minus 80% of our capacity under long-term contracts really gives us that visibility and that confidence that we're going to have a very good year here in 2024. Great And then just the second quick one is when you think about capital allocation, and I know John asked a little bit about M&A, etc., but when you think about the balance between Dividends, Buybacks, and Reducing Debt, where are you sort of ultra-comfortable with the debt levels? More of the cash would start to flow directly back to shareholders through buybacks and dividends.
Speaker Change: So I think just backing up and looking at capital allocation. The first thing that we want to do is make sure that our industrial growth needs are fully funded so that's kind of priority one for US and then we look at the things that you mentioned, obviously, we've reduced a lot of that over the last couple of years about 300.
Speaker Change: $34 million I think since Q2 of 'twenty two.
Speaker Change: I'd say that given the still relatively high interest rates that that we and others have out there.
Speaker Change: We will always have to look hard at at debt repurchases thinking.
Speaker Change: <unk> thinking about leverage levels kind of specifically to your question.
Speaker Change: We finished last year about one four times net debt.
Speaker Change: <unk> EBITDA.
Speaker Change: Basis.
Speaker Change: That's a good place to start I think we might go a little bit lower there, we're sitting about well just under two times gross levered.
Speaker Change: So I think theres room to still take that down a bit more than that.
Bryan A. Shinn: So I think just backing up and looking at capital allocations, the first thing that we want to do is make sure that our industrial growth needs are fully funded. So that's kind of priority number one for us. And then we look at the things that you mentioned. Obviously, we've reduced a lot of debt over the last couple of years, about $334 million, I think, since Q2 of 22. I would say that given the still relatively high interest rates that we and others have out there, we'll always have to look hard at debt repurchases.
Speaker Change: And I tend to think about through the cycle.
Speaker Change: Where do we want to be in and so if we can stay let's say under three times.
Speaker Change: Net levered through through a cycle that feels like a pretty good place to be as well. So we have a lot of different metrics that we look at even just think about where we want to go and we'll be opportunistic in making those calls we chat with the board every quarter and think about exactly what what what decisions we want to make.
Bryan A. Shinn: Thinking about leverage levels, kind of specifically to your question, we finished last year about 1.4 times net debt, so on a TTM EBITDA basis. That's a good place to start. I think we might go a little bit lower there. We're sitting about, well, just under two times growth levered. And so I think there's room to still take that down a bit more. And I tend to think about it through the cycle: where do we want to be? And so if we can stay, let's say, under three times net leveraged through a cycle, that feels like a pretty good place to be as well.
With our cash so we will constantly monitor that and.
Speaker Change: Pick the right choices for our investors and all our stakeholders.
Speaker Change: Great. Thanks for the color.
Speaker Change: Thanks Steven.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Thank you we have reached the end of the question and answer session. I will now turn the call back over to CEO, Brian <unk> for closing remarks.
Brian: Okay. Thank you very much operator, so as we begin.
Brian: This new year here in 2024.
Brian: We're very confident in our business strategy, and we believe that our industry, leading current and new offerings that free cash flow visibility and our commitment to further grow earnings will deliver substantial value for our shareholders and other stakeholders as we've talked about already on the call today. So I do want to thank you all again.
Bryan A. Shinn: So we have a lot of different metrics that we look at, Stephen, to think about where we want to go. And we'll be opportunistic in making those calls. We chat with the board every quarter and think about exactly what decisions we want to make with our cash. So we'll constantly monitor that and make the right choices for our investors and all our stakeholders.
Speaker Change: For for joining us and we look forward to speaking with you all again next quarter and stay safe, everyone and be well.
Stephen: Great. Thanks for the color. Thanks, Stephen. Thank you. We have reached the end of the question and answer session. I will now turn the call back over to CEO Bryan Shinn for a closed. Thank you very much, Operator. So as we begin this new year here in 2024, we're very confident in our business strategy, and we believe that our industry-leading current and new offerings, the free cash flow visibility, and our commitment to further growing earnings will deliver substantial value for our shareholders and other stakeholders, as we've talked about already on the call today. So I do want to thank you all again for joining us, and we look forward to speaking with you all again next quarter. Stay safe, everyone, and be well.
Speaker Change: And this concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
Speaker Change: [music].
Mhm.
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Speaker Change: Okay.
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Speaker Change: No.
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Speaker Change: Okay.
Bryan A. Shinn: And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. The Ultimate Parody Site! Thanks for watching!
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
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