HOUSTON, Oct. 28 /PRNewswire-FirstCall/ -- CARBO Ceramics
Inc. (NYSE: CRR) today reported net income of $20.2 million, or $0.87 per diluted share, on revenues of
$118.5 million for the quarter ended
September 30, 2010.
President and CEO Gary Kolstad
commented, "We are pleased with the record results for the third
quarter. Our business continues to benefit from robust
oilfield activity levels across the major shale plays in
North America. Demand for
our products remains strong as clients continue to benefit from the
high conductivity achieved by our ceramic proppant both in oil and
gas reservoirs. CARBO's plants operated at high utilization
levels during the quarter, which assisted in achieving a quarterly
sales volume of 332 million pounds. The start-up of the third
250 million pound production line at our Toomsboro, Georgia facility remains on
schedule for November of this year. We are eager to bring on
this additional capacity as it will alleviate some of the capacity
constraints that exist today. We continued the geographical
expansion of our Falcon Technologies™ business which commenced
operations in the Marcellus shale during the third quarter."
"During the third quarter we were encouraged by the client
acceptance of CARBOBOND™.
Looking forward, we remain committed to developing new and
innovative products that meet the challenges and demands of our
clients and enhance Economic Conductivity®," Mr. Kolstad stated.
Third Quarter Results
Revenues for the third quarter of 2010 increased 29 percent, or
$26.7 million, when compared to the
third quarter of 2009. The Company's worldwide proppant sales
volume totaled 332 million pounds for the third quarter of 2010 and
represents a year-over-year increase of 12 percent. North
American proppant sales volume increased 16 percent year-over-year,
while international proppant sales volume decreased 6 percent
compared to the same period last year.
Operating profit for the third quarter of 2010 increased 45
percent, or $9.7 million, compared to
the third 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 third
quarter of 2010 increased $2.5
million on a year-over-year basis, largely due to the
inclusion of the Falcon Technologies™ business acquired in
October 2009 and higher research and
development spending.
Net income for the third quarter of 2010 increased 40 percent,
or $5.8 million, compared to the
third quarter of 2009.
Technology and Business Highlights
- CARBO's penetration into the North American oil resource
plays continued this quarter with increasing customer demand in
reservoirs such as the Eagle Ford, Bakken, Granite Wash and Bone
Springs.
- CARBOBOND™, a resin-coated ceramic proppant, has
seen encouraging client acceptance. During the third quarter,
numerous wells utilized CARBOBOND™ and received
positive performance feedback.
- CARBONRT™, a non-radioactive, environmentally
responsible, traceable ceramic proppant was recently introduced and
successfully deployed in various reservoirs around the globe.
- CARBO recently presented several papers at the SPE
Annual Technical Conference and Exhibition, highlighting the
benefits of ceramic proppant in both the Bakken and Haynesville
Shales. Presentations were also made which highlighted
refracturing technology and hydraulic fracturing performance for
various well types using numeric reservoir simulation.
- Falcon Technologies™ has developed a spray-on, seamless,
surface mounted secondary containment system. In many locations the
subsurface conditions and/or local regulations restrict the
construction of below-surface secondary containment systems.
This Professional Engineer (PE) certified system is designed
to meet our customers' environmental stewardship needs while
providing them a measure of insurance regarding the uncertainties
associated with a leak or catastrophic event.
- StrataGen® Engineering's Data and Neural
Analysis(SM) business offering is providing completion designs
using neural network data mining for the Bakken. These designs,
currently used by two operators, successfully improved their well
production and performance forecasts.
Outlook
CEO Gary Kolstad commented on the
outlook for the Company stating, "Although natural gas fundamentals
remain weak, the shift in oilfield activity by our clients to oily,
liquids-rich plays is encouraging, and we anticipate that demand
for our ceramic proppant will remain high. As we enter the fourth
quarter, a typically slower quarter in recent years, we expect
seasonality to curb sales volumes, especially surrounding the
holidays."
"We are optimistic about our long-term growth opportunities. We
expect global productive capacity to increase by 40%, with the
addition of Line 3 and 4 at our Toomsboro facility, or 500 million pounds over
the next 12 months. The outlook for the Falcon Technologies™
business is encouraging as we see a sustained focus on
environmental stewardship by our clients. We continue to identify
and evaluate other key geographic regions to further expand
Falcon's footprint. The new Houston Technology Center was completed
during the third quarter which will centralize our R&D efforts
and support CARBO's future growth by reducing the time from concept
to commercialization of new products."
"Our third quarter results once again highlight the successful
execution of our business strategy, one which we believe will
continue to position CARBO as the leader in the ceramic proppant
industry," Kolstad concluded.
As previously announced, a conference call to discuss the
Company's third 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 industry'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 the cost of raw
materials and natural gas used in manufacturing our products,
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.
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follow -
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Three Months
Ended
September
30
|
Nine Months
Ended
September
30
|
|
|
____2010____
|
____2009____
|
____2010____
|
____2009____
|
|
|
(In
thousands except per share data)
|
(In
thousands except per share data)
|
|
Revenues
|
$ 118,517
|
$
91,783
|
$
353,498
|
$
251,747
|
|
Cost of sales
|
74,018
|
59,512
|
225,193
|
160,300
|
|
Gross profit
|
44,499
|
32,271
|
128,305
|
91,447
|
|
Selling, general &
administrative expenses
|
13,240
|
10,856
|
38,936
|
31,210
|
|
Start-up costs
|
102
|
-
|
621
|
-
|
|
Operating profit
|
31,157
|
21,415
|
88,748
|
60,237
|
|
Interest income, net
|
57
|
78
|
131
|
398
|
|
Foreign currency exchange (loss)
gain, net
|
(63)
|
30
|
(50)
|
(216)
|
|
Other (expense) income,
net
|
(92)
|
(50)
|
(308)
|
128
|
|
Income before income
taxes
|
31,059
|
21,473
|
88,521
|
60,547
|
|
Income taxes
|
10,884
|
7,071
|
30,620
|
20,330
|
|
Net income
|
$
20,175
|
$
14,402
|
$
57,901
|
$
40,217
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
Basic
|
$
0.87
|
$
0.62
|
$
2.51
|
$
1.73
|
|
Diluted
|
$
0.87
|
$
0.62
|
$
2.50
|
$
1.73
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
Basic
|
22,967
|
22,919
|
22,968
|
23,153
|
|
Diluted
|
22,974
|
22,933
|
22,977
|
23,170
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
6,978
|
$
5,970
|
$
20,308
|
$
18,294
|
|
|
|
|
|
|
|
|
Selected Balance Sheet
Information
|
|
|
September 30,
2010
|
|
December 31,
2009
|
|
|
(In
thousands)
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
52,800
|
|
$
69,557
|
|
Other current
assets
|
188,039
|
|
149,313
|
|
Property, plant and
equipment, net
|
318,800
|
|
270,722
|
|
Intangible and other
assets, net
|
10,351
|
|
10,104
|
|
Total assets
|
583,513
|
|
513,412
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
Accrued income
taxes
|
$
-
|
|
$
3,609
|
|
Other current
liabilities
|
57,320
|
|
28,849
|
|
Deferred income
taxes
|
26,719
|
|
23,638
|
|
Shareholders'
equity
|
499,474
|
|
457,316
|
|
Total liabilities and
shareholders' equity
|
$
583,513
|
|
$
513,412
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE CARBO Ceramics Inc.
Copyright . 28 PR Newswire