HOUSTON, July 29 /PRNewswire-FirstCall/ -- CARBO Ceramics
Inc. (NYSE: CRR) today reported net income of $18.7 million, or $0.81 per diluted share, on revenues of
$111.5 million for the quarter ended
June 30, 2010.
President and CEO Gary Kolstad
commented, "We are pleased with the results for the second quarter.
The economic success that our clients have experienced when
using our highly conductive proppant in both oil and natural gas
plays has helped maintain demand at a high level. Although we
were able to marginally draw down from our finished goods inventory
during the second quarter, we remain capacity constrained, and as
mentioned on last quarter's conference call, we expect proppant
sales volumes to track closely with our production capacity over
the next several months. Construction is progressing well on
the third 250 million pound production line at our Toomsboro, Georgia facility, and we still
expect this line to commence production in November of this year.
We continue to see solid revenue growth in the Falcon
Technologies business, and were pleased to have announced an 11
percent increase in our quarterly dividend, illustrating the Board
of Directors' confidence in the current and future financial
strength of the Company."
Mr. Kolstad continued, "During the second quarter, our
commitment to technology development continued as we expanded our
iProp™ family of detectable proppants with the introduction of
CARBONRT™, an innovative, environmentally
responsible, non-radioactive traceable proppant. In addition,
the production of CARBOBOND™ at our New Iberia
resin-coating facility continued the enhancement of our highly
conductive proppant suite."
Second Quarter Results
Revenues for the second quarter of 2010 increased 61 percent, or
$42.2 million, when compared to the
second quarter of 2009. The Company's worldwide proppant
sales volume totaled 314 million pounds for the second quarter of
2010 and represents a year-over-year increase of 45 percent.
North American proppant sales volume increased 42 percent
year-over-year, while international proppant sales volume increased
61 percent compared to the same period last year.
Operating profit for the second quarter of 2010 increased 101
percent, or $14.5 million, compared
to the second quarter of 2009. This increase is due to higher
sales volume and an increase in the average proppant selling price,
partially offset by an increase in freight costs. Selling,
general, administrative and other operating expenses for the second
quarter of 2010 increased $3.6
million on a year-over-year basis, largely due to the
inclusion of the Falcon Technologies business that was acquired in
October 2009 and higher research and
development spending.
Net income for the second quarter of 2010 increased 100 percent,
or $9.3 million, compared to the
second quarter of 2009.
Technology and Business Highlights
- Several operators continued to report excellent production
results in both the Bakken and Eagle Ford plays in wells utilizing
CARBO's ceramic proppants. Demand for high quality ceramic
proppant in these two plays continues to grow as operators realize
the benefits of Economic Conductivity®, particularly in the
presence of multiphase flow.
- CARBOBOND™, a resin-coated ceramic proppant, is
being successfully deployed in wells and client interest remains
high. We continue to ramp up production of this product at
our New Iberia resin coating facility.
- CARBONRT™, a non-radioactive, environmentally
responsible, traceable proppant, was successfully introduced during
the second quarter. CARBONRT™ is well
positioned to benefit from the increased focus on global
environmental stewardship in the oil and gas industry.
- In April, StrataGen Engineering held a symposium on shale
completion strategies. Topics covered by the panel of E&P
experts assembled for the workshop included: shale
characterization, reservoir modeling of stimulated shale
reservoirs, shale pressure diagnostics – evaluation of the
reservoir pre-frac and stimulation effectiveness post-frac in
horizontal wells and E&P experiences in stimulation shale
reservoirs.
Outlook
CEO Gary Kolstad commented on the
outlook for the Company stating, "Our near-term outlook on natural
gas, like many in the industry, remains cautious given the backdrop
of weak natural gas fundamentals. However, we are somewhat
encouraged by the price of oil which may keep activity at healthy
levels for the second half of 2010. Demand for our products and
services is strong, and we continue to anticipate that our ceramic
proppant sales volumes will closely match our production capacity
for the remainder of the year. As stated previously, we were able
to draw down our finished goods inventory in the second quarter,
but we do not anticipate being able to replicate this strategy
during the second half of 2010."
Mr. Kolstad continued, "As I previously noted, production on
Line 3 at our Toomsboro location
is anticipated to begin in November of this year and we are excited
to add additional capacity with Line 4, which is expected to be
complete in 2011. When combined, these two lines will
increase our annual productive capacity by 40 percent or 500
million pounds. We remain committed to our long-term view of
continued growth in CARBO's production capacity to better serve our
clients. An additional component for growth will come from
our ability to remain a leader in the development of
technologically advanced proppant systems. As such, the
opening of our new CARBO Technology Center in Houston during the third quarter of this year
is a key step in that process, and will allow us to have better
collaboration with our E&P end-users in the development of
products that enhance Economic Conductivity® and promote
environmental stewardship."
As previously announced, a conference call to discuss the
Company's second 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 1-877-317-6789 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 1-412-317-6789. 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 for
fracturing oil and gas wells; 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.
|
|
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(In thousands except per share
data)
|
(In thousands except per share
data)
|
|
Revenues
|
$ 111,532
|
$
69,322
|
$
234,981
|
$
159,964
|
|
Cost of sales
|
70,291
|
46,130
|
151,175
|
100,788
|
|
Gross profit
|
41,241
|
23,192
|
83,806
|
59,176
|
|
Selling, general &
administrative expenses
|
12,058
|
8,855
|
25,696
|
20,354
|
|
Start-up costs
|
384
|
-
|
519
|
-
|
|
Operating profit
|
28,799
|
14,337
|
57,591
|
38,822
|
|
Interest income, net
|
41
|
116
|
74
|
320
|
|
Foreign currency exchange (loss)
gain, net
|
(23)
|
(205)
|
13
|
(246)
|
|
Other (expense) income,
net
|
(93)
|
3
|
(216)
|
178
|
|
Income before income
taxes
|
28,724
|
14,251
|
57,462
|
39,074
|
|
Income taxes
|
9,990
|
4,864
|
19,736
|
13,259
|
|
Net income
|
$
18,734
|
$
9,387
|
$
37,726
|
$
25,815
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
Basic
|
$
0.81
|
$
0.41
|
$
1.63
|
$
1.11
|
|
Diluted
|
$
0.81
|
$
0.41
|
$
1.63
|
$
1.11
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
Basic
|
22,971
|
23,086
|
22,969
|
23,272
|
|
Diluted
|
22,979
|
23,137
|
22,978
|
23,324
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
6,596
|
$
6,133
|
$
13,330
|
$
12,324
|
|
|
|
|
|
|
|
|
Selected Balance Sheet
Information
|
|
|
|
|
June 30, 2010
|
|
December 31, 2009
|
|
|
(In thousands)
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
72,646
|
|
$
69,557
|
|
Other current
assets
|
160,358
|
|
149,313
|
|
Property, plant and
equipment, net
|
292,273
|
|
270,722
|
|
Intangible and other
assets, net
|
10,588
|
|
10,104
|
|
Total assets
|
549,388
|
|
513,412
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
Accrued income
taxes
|
$
75
|
|
$
3,609
|
|
Other current
liabilities
|
39,308
|
|
28,849
|
|
Deferred income
taxes
|
24,355
|
|
23,638
|
|
Shareholders'
equity
|
485,650
|
|
457,316
|
|
Total liabilities and
shareholders' equity
|
$
549,388
|
|
$
513,412
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE CARBO Ceramics Inc.