HOUSTON, April 29 /PRNewswire-FirstCall/ -- CARBO Ceramics
Inc. (NYSE: CRR) today reported net income of $19.0 million, or $0.82 per diluted share, on revenues of
$123.4 million for the quarter ended
March 31, 2010.
President and CEO Gary Kolstad
commented, "We are pleased with the record results of the first
quarter and especially with the increasing economic success our
clients are realizing when they use our high conductivity ceramic
proppants. Ceramic proppants help wells produce more and
result in higher recovery rates than lower conductivity sand-based
proppants. This is becoming very apparent in the well successes our
clients are seeing in the Bakken, Eagle Ford, Granite Wash and
Haynesville plays. Our products are being utilized with
growing frequency in resource plays producing both oil and gas,
which illustrates our clients' awareness of the benefits of
Economic Conductivity®. We are also benefitting from the
shift in E&P capital expenditures into oil plays."
"As we pointed out during last quarter's earnings conference
call," Mr. Kolstad continued, "we expected proppant sales volume to
accelerate in the first quarter of 2010. We were able to meet
the increased demand by drawing from our finished goods inventory
to augment the output from our manufacturing facilities, which were
operating at capacity. The strategy we employed last year, to
maintain high levels of production during slow periods, benefitted
us this quarter. Separately, we continued with the expansion
of our Falcon Technologies business, including securing a contract
to apply our lining technology in the down-stream business. We
remain confident about the potential that this business has, not
only in its existing oilfield applications, but as demonstrated
recently with the value that its products and services can bring to
other industry segments."
First Quarter Results
Revenues for the first quarter of 2010 increased 36 percent, or
$32.8 million, when compared to the
first quarter of 2009. The Company's worldwide proppant sales
volume totaled 370 million pounds for the first quarter of 2010,
which is a new quarterly record for CARBO, and represents a
year-over-year increase of 46 percent. North American
proppant sales volume increased 47 percent year-over-year, while
international proppant sales volume increased 45 percent compared
to same period last year.
Operating profit for the first quarter of 2010 increased 18
percent, or $4.3 million, compared to
the first quarter of 2009. This increase is due to higher
sales volume experienced during the first quarter of 2010,
partially offset by a decrease in average selling price compared to
the first quarter of 2009. Selling, general, administrative
and other operating expenses for the first quarter of 2010
increased $2.3 million on a
year-over-year basis, largely due to the inclusion of the Falcon
Technologies business that was acquired in October 2009.
Net income for the first quarter of 2010 increased 16 percent,
or $2.6 million, compared to the
first quarter of 2009.
Technology and Business Highlights
- The E&P industry continues to report strong production
results when employing our ceramic proppants. We saw increased
usage in oil bearing reservoirs during this quarter and an
awareness of its benefits when employed in reservoirs exhibiting
multi phase flow characteristics.
- In our continuing commitment to grow our business through
innovative product development, we are pleased to announce that
construction of a new CARBO Technology Center has commenced in
Houston. The Technology
Center will focus on developing and commercializing new products
which address our clients' needs in the Oil and Gas industry.
Completion of the Technology Center is expected in the third
quarter of this year.
- In March 2010, Falcon
Technologies signed a contract with an Illinois based down-stream operator.
This contract award marks the first installation of the
Falcon Liner™ outside of the upstream oil & gas segment.
It demonstrates the diverse applicability of Falcon's
products and services.
- Applied Geomechanics, Inc. ("AGI") and the Colorado Department
of Transportation are developing new rock-fall monitoring
techniques and technology. AGI has designed and built custom
load cells to evaluate rock netting behavior.
- Ownership of intellectual property rights underlying our
FracproPT software, the industry's most widely used fracture design
modeling software, were acquired in March. The acquisition of
these rights provides our engineers and developers flexibility to
upgrade and advance the capabilities of this software technology,
while maintaining its proprietary nature.
Outlook
CEO Gary Kolstad commented on the
outlook for the Company stating, "The near-term story for natural
gas remains cautious, given the supply-demand situation. It
is difficult to say with certainty what market condition the second
half of 2010 will provide in natural gas, but given the price of
oil, some industry experts expect activity in oil drilling to
remain strong. For the next couple of quarters, we would
expect our ceramic proppant sales volume to closely match our
production capacity. As stated previously, we drew down our
finished goods inventory in the first quarter."
Mr. Kolstad continued, "We continue to be committed to growing
CARBO for the long-term. At our Toomsboro, Georgia facility, Line 3 is
expected to add 250 million pounds of ceramic production annually
and will be completed before the end of 2010. Toomsboro Line
4 is expected to add another 250 million pounds of annual
production by the end of 2011. This equates to nearly 40
percent growth in CARBO's global proppant manufacturing capacity
over the next 20 months to approximately 1.75 billion pounds
annually. Increasing our production capacity and investing in
new product development, including building a Houston Technology
Center, are central to the future growth of CARBO. With our
clients recognizing the benefits of Economic Conductivity®, we
remain focused on meeting their needs. In addition, the focus
on environmental stewardship by many E&P companies provides us
confidence that the demand for our Falcon Technologies products and
services should continue to grow and develop."
As previously announced, a conference call to discuss the
Company's first quarter results is scheduled for today at
10:00 a.m. central time (11:00 a.m. eastern). To participate in the
teleconference, investors should dial 1-800-860-2442 about 10
minutes before the start time and reference the CARBO conference
call. Canada-based callers should dial 1-866-605-3852 and
international callers should dial 1-412-858-4600. The conference
call can also be accessed by visiting the company's Web site,
www.carboceramics.com.
CARBO is the world's largest supplier of ceramic proppant, the
provider of the world's most popular fracture simulation software,
and a provider of fracture design and consulting services. The
Company also provides a broad range of technologies for spill
prevention, containment and countermeasures, along with
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 -
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Three Months
Ended
March
31
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2010
|
|
2009
|
|
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(In thousands
except per share data)
|
|
Revenues
|
$
123,449
|
|
$
90,642
|
|
Cost of sales
|
80,884
|
|
54,658
|
|
Gross profit
|
42,565
|
|
35,984
|
|
Selling, general &
administrative expenses
|
13,638
|
|
11,499
|
|
Start-up costs
|
135
|
|
-
|
|
Operating profit
|
28,792
|
|
24,485
|
|
Interest income, net
|
33
|
|
204
|
|
Foreign currency exchange gain (loss),
net
|
36
|
|
(41)
|
|
Other (expense) income, net
|
(123)
|
|
175
|
|
Income before income taxes
|
28,738
|
|
24,823
|
|
Income taxes
|
9,746
|
|
8,395
|
|
Net income
|
$
18,992
|
|
$
16,428
|
|
|
|
|
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Earnings per share:
|
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|
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Basic
|
$
0.82
|
|
$
0.70
|
|
Diluted
|
$
0.82
|
|
$
0.70
|
|
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Average shares outstanding:
|
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Basic
|
22,967
|
|
23,460
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Diluted
|
22,977
|
|
23,514
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Depreciation and
amortization
|
$
6,734
|
|
$
6,191
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Selected Balance Sheet Information
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March 31,
2010
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December 31,
2009
|
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(In
thousands)
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Assets
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|
|
Cash and cash
equivalents
|
$
79,975
|
|
$
69,557
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Other current assets
|
158,384
|
|
149,313
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Property, plant and equipment,
net
|
279,144
|
|
270,722
|
|
Intangible and other assets,
net
|
10,669
|
|
10,104
|
|
Total assets
|
541,695
|
|
513,412
|
|
|
|
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Liabilities and Shareholders'
Equity
|
|
|
|
|
Accrued income taxes
|
$
9,572
|
|
$
3,609
|
|
Other current
liabilities
|
38,030
|
|
28,849
|
|
Deferred income taxes
|
23,972
|
|
23,638
|
|
Shareholders' equity
|
470,121
|
|
457,316
|
|
Total liabilities and shareholders'
equity
|
$
541,695
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$
513,412
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SOURCE CARBO Ceramics Inc.