HOUSTON, July 28, 2011 /PRNewswire/ -- CARBO Ceramics Inc.
(NYSE: CRR) today reported net income of $29.9 million, or $1.29 per diluted share, on revenues of
$149.7 million for the quarter ended
June 30, 2011.
President and CEO Gary Kolstad
commented, "We are pleased with the financial and operational
results for the second quarter. Demand for our proppant
remains robust across the major resource plays in North America, including the Haynesville,
Eagle Ford, Colony Wash, Permian and the Bakken. The
Company's solid quarterly performance demonstrates that our
marketing strategy, based on highlighting the benefits of Economic
Conductivity®, resonates with our clients and continues to have a
positive impact on increased well production and enhanced recovery.
We remain committed to increasing proppant capacity to
satisfy client demands for our high quality, high conductivity
proppant. Additionally, we are pleased with Falcon
Technologies™ second quarter performance. Operators continue
to respond well to Falcon's innovative, value-added products and
services which reduce environmental risk."
"We continue to execute on our growth strategy and believe the
recent Board of Directors' approval to increase the dividend by 20%
is a testament to the Board's confidence in our long-term cash flow
outlook," Mr. Kolstad said.
Second Quarter Results
Revenues for the second quarter of 2011 increased 34 percent, or
$38.1 million, when compared to the
second quarter of 2010. North American (excluding
Mexico) proppant sales volume
increased 26 percent while international proppant sales volume
increased 10 percent, compared to the same period last year.
Operating profit for the second quarter of 2011 increased 61
percent, or $17.5 million, compared
to the second quarter of 2010. This increase is due to higher
sales volume, an increase in the average proppant selling price and
a higher contribution from other business units, partially offset
by an increase in freight, selling, general and administrative
expenses.
Net income for the second quarter of 2011 increased 60 percent,
or $11.2 million, compared to the
second quarter of 2010.
|
|
Proppant Sales
Volumes
(in millions
lbs)
|
Three Months
Ended
June 30,
2011
|
Three Months
Ended
June 30,
2010
|
|
|
|
|
|
Ceramic Volumes
|
364
|
297
|
|
Other Proppant
Volumes*
|
23
|
17
|
|
Total
|
387
|
314
|
|
|
|
|
|
* Includes
CARBOBOND® RCS
(resin-coated sand) and API / ISO certified ceramic proppant
manufactured on an outsourced basis.
|
|
|
|
|
Technology and Business Highlights
- CARBO's ceramic
proppant capacity expansion at Toomsboro Line 4 is tracking ahead
of schedule, and completion is now expected near the beginning of
the fourth quarter.
- CARBO's resin-coated
sand ("RCS") proppant capacity expansion at New Iberia Line 2
remains on schedule for completion before year-end.
CARBO's resin-coated
suite of products, CARBOBOND® LITE® and
CARBOBOND® RCS,
continues to exhibit solid growth and has captured an even larger
amount of clients.
- Once completed, the two lines (Toomsboro Line 4 and New Iberia
Line 2) will increase CARBO's total annual proppant
manufacturing capacity to 2.1 billion pounds (1.75 billion –
Ceramic; 0.35 billion – RCS).
- Falcon Technologies™ continues to see broad acceptance
of its Surface Mounted Containment systems in Pennsylvania (Marcellus). This solution
fits an environmental need of clients and adapts easily into well
manufacturing work streams.
- StrataGen® Engineering has recently completed work on
two Data and Neural Analysis(SM) (DANA) projects for use in the
Bakken and Eagle Ford Shale plays. These data driven models allow
operators to establish production benchmarks over a range of
reservoir quality in these plays and help drive completion
optimization through multi-variant scenario analysis.
Outlook
CEO Gary Kolstad commented on the
outlook for the Company stating, "We see industry activity
remaining at healthy levels for the remainder of the year.
For the third quarter, we expect proppant sales volumes to
closely match our current productive capacity."
"With respect to our ceramic proppant capacity, we are pleased
to announce that construction on Line 4 at Toomsboro is tracking
ahead of schedule. We now expect completion near the
beginning of the fourth quarter. Once completed, Line 4 will
add 250 million pounds of ceramic capacity per year – increasing
our total ceramic proppant capacity to 1.75 billion pounds per
year."
"We have identified and secured purchase contracts for land that
could be used for a future ceramic capacity expansion.
Pending completion of survey and other customary due
diligence, we plan to move forward with the purchase of the
property. While any future expansion of the ceramic proppant
business would require various approvals, including environmental
permits, our preliminary analysis shows that this new location
could potentially support a plant with an initial capacity of up to
500 million pounds annually. Although we are still early in
the process, we believe production at the new plant could commence
before the end of 2013, if needed permits and approvals are
obtained in a timely manner."
Mr. Kolstad continued, "Regarding our resin-coating capacity,
Line 2 in New Iberia remains on schedule for completion before the
end of this year. Once completed, this facility will be able
to produce up to 350 million pounds of RCS on an annual basis.
As previously announced, our new RCS plant in Marshfield, Wisconsin is scheduled for
completion by the end of 2012, with a designed initial capacity of
600 million pounds annually. To supply these plants with
substrate, we have secured multiple years of northern white sand
reserves. These reserves will provide high-quality sand to
our New Iberia and Marshfield
resin-coating operations. Similar to our raw material
strategy for our ceramic proppant business, we expect to grow our
sand reserves over time. The purchase of these sand reserves
will assist us in producing CARBOBOND® RCS, a premium, high
conductivity resin-coated sand."
"Falcon Technologies™ is currently in-line with our forecasted
revenue growth projections for 2011. We remain excited about
Falcon's potential growth over the next several years and the
reduction of the environmental risks that Falcon's products and
services achieve for our clients," Mr. Kolstad concluded.
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 in the U.S. should dial
1-877-883-0383 at least 10 minutes before the start time and
reference conference number 7710332. Canada-based callers should dial
1-877-885-0477, and international callers outside of
North America should dial
1-412-902-6506. The conference call also can be accessed by
visiting the company's website, www.carboceramics.com.
CARBO is the world's largest
supplier of ceramic proppant for fracturing oil and gas wells;
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.
- tables follow -
|
Three Months
Ended
June
30
|
Six Months
Ended
June
30
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
(In
thousands except per share data)
|
(In
thousands except per share data)
|
|
Revenues
|
$ 149,669
|
$
111,532
|
$
300,499
|
$
234,981
|
|
Cost of sales
|
87,551
|
70,291
|
176,325
|
151,175
|
|
Gross profit
|
62,118
|
41,241
|
124,174
|
83,806
|
|
Selling, general
& administrative expenses
|
15,845
|
12,050
|
30,132
|
25,685
|
|
Start-up
costs
|
-
|
384
|
-
|
519
|
|
(Gain) loss on
disposal or impairment of assets
|
(30)
|
8
|
1,649
|
11
|
|
Operating profit
|
46,303
|
28,799
|
92,393
|
57,591
|
|
Interest income, net
|
56
|
41
|
100
|
74
|
|
Foreign currency exchange (loss)
gain, net
|
(126)
|
(23)
|
(314)
|
13
|
|
Other expense, net
|
(53)
|
(93)
|
(130)
|
(216)
|
|
Income before income
taxes
|
46,180
|
28,724
|
92,049
|
57,462
|
|
Income taxes
|
16,236
|
9,990
|
31,941
|
19,736
|
|
Net income
|
$
29,944
|
$
18,734
|
$
60,108
|
$
37,726
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
Basic
|
$
1.29
|
$
0.81
|
$
2.60
|
$
1.63
|
|
Diluted
|
$
1.29
|
$
0.81
|
$
2.60
|
$
1.63
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
Basic
|
23,027
|
22,971
|
23,021
|
22,969
|
|
Diluted
|
23,028
|
22,979
|
23,022
|
22,978
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
8,307
|
$
6,596
|
$
16,487
|
$
13,330
|
|
|
|
|
|
|
|
|
Selected Balance Sheet
Information
|
|
|
June 30, 2011
|
|
December 31,
2010
|
|
|
(In
thousands)
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
53,250
|
|
$
46,656
|
|
Other current
assets
|
225,705
|
|
190,999
|
|
Property, plant and
equipment, net
|
362,279
|
|
338,483
|
|
Intangible and
other assets, net
|
9,180
|
|
10,380
|
|
Total assets
|
662,578
|
|
599,571
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
Accrued income
taxes
|
$
-
|
|
$
113
|
|
Other current
liabilities
|
51,927
|
|
51,134
|
|
Deferred income
taxes
|
30,543
|
|
26,345
|
|
Shareholders'
equity
|
580,108
|
|
521,979
|
|
Total liabilities and
shareholders' equity
|
$
662,578
|
|
$
599,571
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE CARBO Ceramics Inc.