We appreciate your attendance in the U.S. Silica third quarter 2023 results conference call. Our Chief Executive Officer, Bryan Shinn, and our Interim Executive Vice President, Chief Financial Officer, Chief Accounting Officer, Kevin Hough, are in charge of the call today. I want to remind everyone, before we get started, of our regular warnings about the forward-looking nature of some of the comments that will be made today. Predictions, forecasts, and other comments regarding future events that are considered to be forward-looking are predicated on present expectations and assumptions that are vulnerable to various risks and uncertainties. We urge you to read the company’s press release and its SEC filings for a thorough explanation of these risks and uncertainties.
We don’t promise to keep any forward-looking statements updated. To go along with today’s conversation, we have also uploaded an additional third-quarter results presentation to the Investors area of our website. We may discuss non-GAAP metrics such adjusted EBITDA, segment contribution margin, net debt, and net leverage ratio on today’s call. For a complete reconciliation and explanations of adjusted EBITDA, segment contribution margin, net debt, and the net leverage ratio, please refer to today’s news release, our public filings, or the accompanying results presentation. Now let me pass the call over to Bryan Shinn, our CEO.
We strengthened our financial base and advanced our growth plan throughout the third quarter. With the help of our lean cost structure, we were able to create excellent margins that drove both our adjusted EBITDA and cash flow from operations. We also improved our balance sheet and net leverage ratio by repurchasing and eliminating an additional $25 million in debt. Simultaneously, our expansion investments kept us in a position where we could take advantage of market possibilities by offering unique and cutting-edge goods to our clients and markets.
Our industrial growth plan comprises three key elements that we successfully executed during the quarter as part of our overall corporate strategy. These elements include growing our existing high margin differentiated ISP products, expanding our addressable markets with new high value advanced materials like EverWhite Pigment, and increasing the profitability of our base business at a GDP plus rate.
A little later in the session, I will take you over the most current developments in these areas. We just announced several changes and additions to our executive team in corporate news. We named Jay Moreau our Chief Operating Officer and Executive Vice President in August. Mike Winkler is replaced as COO by Jay. Despite being retired, Mike will continue to serve as a consultant for the business. We are thrilled to have Jay join our senior leadership team. He offers a wealth of expertise in industrial markets, a stellar operating record, and a strategic mindset. We anticipate reaping the rewards of his leadership and hard work in the future. Furthermore, Kevin Hough has been named our Interim Executive Vice President, Chief Accounting Officer, and Chief Financial Officer.
Kevin joined the firm in 2011 and has been its Vice President and Corporate Controller since 2016. The hunt is on for a permanent Chief Financial Officer, since Kevin intends to retire in 2024. I’m thrilled to welcome Kevin to his new position and am certain that his background, skill set, and in-depth understanding of the business make him the best choice to act as our temporary CFO. Kevin will now take over the call and go into further depth about our financial performance. Kevin, huh?
Now, starting with our oil and gas division, let me go over some of the patterns we saw throughout the quarter. As anticipated, the U.S. land energy complex saw a sequential decline in drilling and completions activity in Q3. Our most recent earnings conference guidance indicated that while our quarterly financial performance were down sequentially, they were still excellent when compared to historical norms. Pricing was somewhat lower than in Q2 but remained appealing. Despite this, our margin held steady, with Q3 contribution margin dollars per tonne being larger than in any other quarter of 2022. I’d want to express my gratitude and congrats to our supply chain, operations, and sales teams that specialise in oil and gas for their tremendous work in achieving these outcomes. Last but not least, the new Guardian frac-fluid filtering system we’re working on is working great.
Year-over-year volumes are expected to decline by high single digits in the fourth quarter as a result of a mix of customer year-end inventory management, regular seasonal demand drop, and facility maintenance. However, because of better pricing, a more advantageous product mix, and continuous improvements in supply chain and operational efficiencies, we anticipate that contribution margin dollars in the industrial sector will rise by 5% to 10% in Q4 compared to the previous year. And lastly, we’ve been inundated with inquiries concerning our industrial goods from both present and prospective investors. These inquiries cover a wide range of topics, such as the end markets we service, the competitive environment, and our involvement in sustainable product value chains.
We will have additional information about this virtual event in early December, so please check back. In summary, we made targeted capital expenditures and significant expense reductions in the third quarter to position the business for growth and to improve our balance sheet through incremental debt extinguishment. Through solid contracts in the oil and gas industry at competitive pricing, improved ISP solutions, and further cost optimisation and efficiency initiatives throughout the organisation, we’re dedicated to guaranteeing future cash flow visibility. With an improved balance sheet and robust projected operational cash flow, these actions can help the organisation build value by opening up transformative growth paths. And now, if you could kindly open the lines to inquiries, operator?