CRR CARBO Ceramics Inc

Conference Call Scheduled for Today, 10:00 a.m. Central Time IRVING, Texas, April 30 /PRNewswire-FirstCall/ -- CARBO Ceramics Inc. (NYSE:CRR) today reported net income of $16.4 million, or $0.70 per diluted share, on revenues of $90.6 million for the quarter ended March 31, 2009. The Company previously reported that it had sold its fracture and reservoir diagnostics business to Halliburton Energy Services, Inc. Because of the transaction, which closed on October 10, 2008, the 2008 operating results of this business have been accounted for as discontinued operations. Continuing operations include the Company's ceramic proppant, software, consulting services and geotechnical monitoring businesses. President and CEO Gary Kolstad commented, "Given the challenging market conditions we faced during the quarter, we are pleased with our operating results. Notwithstanding significant sequential reductions in both the North American average rig count and natural gas commodity price, CARBO was able to leverage off the operating success that was achieved during the second half of 2008, including the continued demand for our newest product, CARBOHYDROPROP(TM)." First Quarter Results Revenues for the first quarter of 2009 were flat, at $90.6 million, when compared to the first quarter of last year and down 14 percent compared to the fourth quarter of 2008. Worldwide proppant sales volume totaled 253 million pounds for the first quarter of 2009, representing a year-over-year decrease of 11 percent and a sequential decrease of 14 percent. Proppant sales volume in the U.S. and Canada decreased eight percent compared to the first quarter of 2008 and 16 percent sequentially, despite the significant drop in commodity prices and reduction in the average number of drilling rigs experienced both year-over-year and sequentially. During the first quarter of 2009, overseas proppant sales volume decreased 46 percent compared to the same period last year and decreased 30 percent sequentially. Operating profit for the first quarter of 2009 increased $6.2 million compared to the first quarter of 2008 due primarily to product mix, a decrease in freight costs and the cumulative effect of pricing increases introduced during the second half of 2008. Selling, general and administrative expenses increased in both absolute terms and as a percentage of revenue for the first quarter of 2009 compared to the same period last year due to increased expenses associated with marketing and sales activities, certain relocation initiatives, the Company's new enterprise resource planning system and the Company's allowance for doubtful accounts. Income from continuing operations for the first quarter of 2009 increased $3.6 million compared to the first quarter of 2008. As previously disclosed, on August 28, 2008, the Company's Board of Directors authorized the repurchase of up to two million shares of the Company's common stock. During the first quarter of 2009, the Company repurchased 444,700 shares at an aggregate cost of $14.3 million. As of March 31, 2009, the Company had repurchased and retired approximately 1.5 million shares. Technology and Business Highlights Highlights for the first quarter of 2009 included: -- CARBO's penetration in the tight gas and shale resource plays continued to grow. Year-over-year, growth was experienced in the Rockies region, and in the North Louisiana and East Texas region, including the Haynesville shale reservoir. In spite of overall low commodity pricing, the E&P community continues to recognize the economic benefits that highly conductive ceramic proppant bring to both conventional and unconventional plays. -- CARBO's geotechnical monitoring company, Applied Geomechanics, Inc., assisted the Colorado Department of Transportation in an important rockfall netting and support structure design project. The controlled experiment utilized a series of fiber optic strain gauge sensors to evaluate the effectiveness of various combinations of rockfall mitigation devices. -- CARBO has rebranded its fracture consulting group. StrataGen, with global coverage and expertise in fracture optimization and effective reservoir drainage, is assisting E&P organizations in maximizing the flow capacities of their reservoirs. Outlook CEO Gary Kolstad commented on the outlook for the Company, stating, "Although we achieved solid results this quarter, we were not immune to the rapid and large decrease in global upstream activity, as we experienced a decrease in global sales volume of 11 percent year-over-year and 14 percent sequentially. The rate and magnitude of the deterioration in North American drilling activity that occurred over the last several months, fueled by low natural gas and oil prices and the continued weakness in the U.S. credit markets, has presented our customers with formidable financial challenges. As such, we have started to negotiate reduced pricing arrangements in an effort to mitigate some of our anticipated sales volume erosion. While we recognize that the significantly reduced natural gas drilling activity should bring the natural gas fundamentals back into balance, we do not see any significant recovery before 2010. However, we believe the strength of our balance sheet will provide us the means to weather this downturn. In fact we remain committed to our capacity expansion efforts at our Toomsboro, Georgia facility and our technology development activities and continue to investigate strategic acquisition opportunities. Nonetheless we continue to implement prudent cost control initiatives in certain areas of the business, including discretionary and capital spending." As previously announced, a conference call to discuss the Company's first quarter results has been scheduled for today at 10:00 a.m. central time (11:00 a.m. eastern). To participate in the call, please dial 800-860-2442 and refer to the "CARBO Ceramics Conference Call." International callers should dial 412-858-4600. The call can also be accessed live or on a delayed basis via the Company's Web site, http://www.carboceramics.com/. CARBO Ceramics Inc., based in Irving, Texas, is the world's largest supplier of ceramic proppant, the provider of the world's most popular fracture simulation software, and a leading provider of fracture design, engineering and consulting services. The Company also provides a broad range of technologies for geotechnical monitoring. The statements in this news release that are not historical statements, including statements regarding our future financial and operating performance, are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based on management's current expectations and estimates, which involve risks and uncertainties that could cause actual results to differ materially from those expressed in forward-looking statements. Among these factors are changes in overall economic conditions, changes in demand and prices charged for our products, changes in the demand for, or price of, oil and natural gas, risks of increased competition, technological, manufacturing and product development risks, loss of key customers, changes in government regulations, foreign and domestic political and legislative risks, the risks of war and international and domestic terrorism, risks associated with foreign operations and foreign currency exchange rates and controls; weather-related risks and other risks and uncertainties described in our publicly available filings with the Securities and Exchange Commission. We assume no obligation to update forward-looking statements, except as required by law. - tables follow - Three Months Ended March 31 -------- 2009 2008 ---- ---- (In thousands except per share data) Revenues $90,642 $90,375 Cost of sales 54,658 63,331 ------- ------- Gross profit 35,984 27,044 Selling, general & administrative expenses 11,432 8,582 Start-up costs - 231 Loss (gain) on disposal or impairment of assets 67 (68) ------- ------- Operating profit 24,485 18,299 Interest income, net 204 34 Foreign currency exchange (loss) gain, net (41) 1,493 Other income, net 175 17 ------- ------- Income before income taxes 24,823 19,843 Income taxes 8,395 6,988 ------- ------- Income from continuing operations 16,428 12,855 Discontinued operations (1): Operating results, net of income taxes - 1,376 ------- ------- Net income $16,428 $14,231 ======= ======= (1) Discontinued operations include the Company's fracture mapping and reservoir monitoring assets, which were sold to Halliburton Energy Services, Inc. on October 10, 2008. Basic earnings per share: Continuing operations $0.70 $0.52 Discontinued operations - 0.06 ------- ------- Basic earnings per share $0.70 $0.58 ======= ======= Diluted earnings per share: Continuing operations $0.70 $0.52 Discontinued operations - 0.06 ------- ------- Diluted earnings per share $0.70 $0.58 ======= ======= Average shares outstanding: Basic 23,460 24,451 ======= ======= Diluted 23,514 24,537 ======= ======= Depreciation and amortization: Continuing operations $6,191 $6,065 Discontinued operations - 1,454 ------- ------- $6,191 $7,519 ======= ======= Selected Balance Sheet Information Mar. 31, 2009 Dec. 31, 2008 ------------- ------------- (In thousands) Assets ------ Cash and cash equivalents $94,642 $154,817 Other current assets 142,212 140,895 Property, plant and equipment, net 242,297 244,902 Intangible and other assets, net 3,492 3,806 Total assets 487,502 549,279 Liabilities and Shareholders' Equity ------------------------------------ Accrued income taxes $4,102 $47,929 Other current liabilities 25,582 35,919 Deferred income taxes 25,183 22,897 Shareholders' equity 432,635 442,534 --------- --------- Total liabilities and shareholders' equity $487,502 $549,279 ========= ========= DATASOURCE: CARBO Ceramics Inc. CONTACT: Ernesto Bautista III, CFO of CARBO Ceramics Inc., +1-972-401-0090 Web Site: http://www.carboceramics.com/

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