Originally published on Best Stocks Revenue rose 27% sequentially, adjusted EBITDA increased 78% sequentially, contribution margin rose 73% sequentially in the Oil & Gas business, and contribution margin rose 21% sequentially in the Industrial & Specialty Products segment, all due to demand from new and current clients.For April, May, June 2022, U.S. Silica Holdings, Inc. (NYSE: SLCA) (“the Business”), the premier last-mile logistics service provider to the oil and gas sector, reported a net income of $22.9 million, or $0.29 per diluted share. Despite $2.4 million in pre-tax costs, or $0.03 per diluted share after-tax, principally due to merger and acquisition-related spending and site closure expenses, adjusted EPS (a non-GAAP measure) for the second quarter was $0.32.Losses of $8.4 million, or $0.11 per diluted share, were recorded in the 1st three months of 2022 due to charges of $9.4 million before taxes (or $0.09 per diluted share after taxes), the majority of which was attributable to the termination of a supplier contract and merger and acquisition expenses. Loss per share for the company dropped from $0.04 to $0.02 due to these factors.“We had a fantastic second quarter in terms of sales volume, revenue, profitability, and cash creation, as well as overall,” said CEO Bryan Shinn. “Our $88 million in operating cash flow was a direct outcome of our 77 percent sequential increase in adjusted EBITDA, which was in turn driven by our dedication to the growth of our underlying markets” he added. In addition, throughout the quarter, demand from customers remained robust, prompted the company to raise prices and implement surcharges across both companies to offset the impact of inflation.Productivity in the plants went up, logistics on a global scale became more streamlined, and worker safety made historic strides. Unfortunately, high demand for well completions, especially in West Texas, caused our Oil & Gas division to run out of sand and other last-mile logistical supplies. Nevertheless, US Silica Holdings managed to expand and sell more sand and SandBox at greater pricing and profit margins in the 2nd quarter due to enhanced operational efficiency at major mining locations.Price increases and surcharges across all major product lines to combat inflation, an improved product mix, and greater operational efficiencies from initiatives such as leveraging alternate shipping ports and packaging automation helped us overcome the temporary seasonal issues we encountered in the first quarter and move into positive territory in the second.US Silica Holdings’ strong profitability and free cash flow in the 1st half of this year allowed the company to use available cash to buy $100 million in debt at a discount to par earlier this month. points to note for the 2nd quarter of 2022. The company forecasted that a potentially high free cash flow generation will lead to additional debt reduction and sustained excellent progress in Q3 2022.The Petroleum and Natural Gas IndustriesRevenue in the 2nd quarter of 2022 ($244.2M) was up 39 percent over the 1st quarter of 2022 ($176.2M). There was a 26 percent rise in earnings during the 2nd quarter of last year.Sales increased by 15.0 percent year on year in Q1 2022 and 17.0 percent year on year in Q2 this year, when 3.060 million tons were sold.The $77.4 million segment contribution margin, or $21.93 per ton, is up 73% from the $44.8 million segment contribution margin in the 1st three months of this year, and up 129% from the 2nd quarter of 2021 after adjusting for the $48.9 million customer settlement.Product Types for the Industrial and Specialty Markets (ISP) A 12.1 percent increase from Q1 2022 sales of $128.6 million and a 16.1 percent increase from Q2 2021 sales of $102.1 million led to Q2 2022 sales of $144.3 million.Sales of tons in the 2nd quarter of 2022 rose by 5% year over year to 1.124 million from 1.074 million in Q2 2021 and by 4% year over year from 1.04 million in Q2 2020.In the 2nd quarter of 2022, segment contribution margin was $45.9 million, or $40.85 per ton, up 21 percent from the $37.8 million recorded in the 1st quarter of 2022 and unchanged from the 2nd quarter of 2021.Modifications to the Capital StructureThe corporation has $312.4 million in cash and $1.205 billion in debt on June 30, 2022. In addition, the company had a Revolver with a total of $100.0 million, with $21.6 million set aside for letters of credit and the remaining $78.0 million ready for use. The second quarter of 2022 saw the corporation create $88.1 million in operating cash flow and spend $10.5 million on capital expenditures.Perspectives and RecommendationsThe company’s two business sectors are well positioned for expansion in their respective markets in the third quarter and second half of 2022. The company can withstand inflationary pressures due to growth in its underlying base business as well as price hikes and surcharges. In addition, it employs a diverse portfolio of industrial and specialized products that serve a wide range of important, high-growth, and attractive end sectors.By 2022, the company anticipates a positive operating cash flow and capital expenditures in the range of $40 million to $60 million. Accordingly, debt reduction and free cash flow creation will continue to be our key priority.