HOUSTON, Oct. 27, 2011 /PRNewswire/ -- CARBO Ceramics Inc.
(NYSE: CRR) today reported net income of $36.9 million, or $1.59 per diluted share, on revenues of
$167.1 million for the quarter ended
September 30, 2011.
President and CEO Gary Kolstad
commented, "We are pleased that CARBO set a number of financial and
operational records during the quarter. The exceptional third
quarter results continued to highlight the importance that our
clients place on high conductivity proppant, especially in the
North American liquids-rich resource plays such as the Bakken,
Colony Granite Wash, Eagle Ford, and Permian."
"The demand by E&P operators for our high quality, high
conductivity ceramic proppant continues to grow, as evidenced by
the company's record ceramic proppant sales volume for the quarter.
The benefit E&P operators see, as measured by increased
production and higher estimated ultimate recovery (EURs), continues
to enhance their economic returns. We continue to work with
our clients to optimize their fracs and maximize their profit
through Economic Conductivity® analysis."
"Regarding our commitment to capacity growth, we were excited to
commence production ahead of schedule at the company's newest 250
million lb. production line at our Toomsboro, Georgia plant," Mr. Kolstad said.
Third Quarter Results
Revenues for the third quarter of 2011 increased 41 percent, or
$48.6 million, when compared to the
third quarter of 2010. North American (defined as
Canada and the U.S.) proppant
sales volume increased 31 percent while international proppant
sales volume increased 29 percent, compared to the same period last
year.
Operating profit for the third quarter of 2011 increased 80
percent, or $24.9 million, compared
to the third quarter of 2010. This increase is due to higher
sales volume, an increase in the average proppant selling price, a
change in product mix and a higher contribution from other business
units, partially offset by an increase in selling, general and
administrative expenses.
Net income for the third quarter of 2011 increased 83 percent,
or $16.7 million, compared to the
third quarter of 2010.
|
|
Proppant Sales
Volumes
(in millions
lbs)
|
Three Months
Ended
September
30, 2011
|
Three Months
Ended
September
30, 2010
|
|
|
|
|
|
Ceramic Proppant
Volumes
|
398
|
306
|
|
Other Proppant
Volumes*
|
34
|
26
|
|
Total
|
432
|
332
|
|
|
|
|
|
|
|
|
|
|
* Includes CARBOBOND® RCS (resin-coated sand)
and API / ISO certified ceramic proppant manufactured on an
outsourced basis.
Technology and Business Highlights
- Toomsboro Line 4 commenced operations in September. The
addition of this line increases CARBO's total ceramic
proppant capacity to 1.75 billion pounds per year. With the
start-up of Line 4, CARBO continues to try to meet the
additional demand for its high quality, high conductivity
lightweight ceramic proppants, in the liquids-rich plays.
- New Iberia Line 2 remains on schedule for completion near the
end of the fourth quarter. Once completed, this line will
increase CARBO's resin-coated sand capacity to 0.35 billion
pounds per year of CARBOBOND® RCS
(Resin-Coated Sand).
- CARBO's resin-coated suite of products,
CARBOBOND® LITE® and
CARBOBOND® RCS, continue to see increased
demand from various North American unconventional reservoirs.
- Falcon Technologies™ continues to gain
traction among the various resource plays across North America, including the Marcellus where
Surface Mounted Containment systems have now been successfully
deployed in Pennsylvania,
West Virginia and New York. Falcon continues to
develop solutions that are engineered to protect the environment
and our clients' assets.
- Fracpro® Software continues to see
wide acceptance of its Frac Van display software,
FracproXCHANGE. This product brings all the plotting
and graphing capability of Fracpro to the jobsite, allowing
superior visualization of the real-time data.
- The company repurchased 55,000 shares of its common stock at an
average price of $120.89 per share
during the third quarter pursuant to its previously announced stock
repurchase program. Since September
2008, 1.8 million shares have been repurchased at an average
price of $39.93 per share.
Outlook
CEO Gary Kolstad commented on the
outlook for the Company stating, "We exited the third quarter with
positive momentum. As a result, we expect proppant sales volumes to
remain healthy, tempered by typical fourth quarter seasonality.
Although broader economic issues remain fluid and commodity prices
continue to fluctuate, we remain optimistic with respect to
proppant demand in 2012. Noteworthy is the continued
migration of North American upstream investment towards
liquids-rich resource plays, where multi-phase flow reservoir
conditions benefit the most from CARBO's high conductivity ceramic
proppant."
"We were pleased to commence operations on Line 4 at
Toomsboro ahead of schedule and we
expect this line to produce at capacity during the fourth quarter.
The addition of this line increases our total ceramic
proppant capacity to 1.75 billion pounds per year."
"Regarding our future ceramic plant site in Millen, Georgia, we have completed the due
diligence process and are moving forward with the purchase of the
real estate needed to construct the plant. Our environmental permit
application has been submitted to the Georgia Environmental
Protection Department. We have targeted this site for an
initial manufacturing capacity of up to 500 million pounds annually
and, subject to obtaining permits and approvals in a timely manner,
the plant could commence production before the end of 2013."
Mr. Kolstad continued, "With respect to our resin-coating
capacity expansion, New Iberia Line 2 remains on schedule for
completion near the end of the fourth quarter. Once
completed, this line will increase CARBO's annual RCS capacity to
350 million pounds. CARBO's 600 million pound RCS facility in
Marshfield, Wisconsin is on
schedule for completion before the end of 2012. Additionally,
we continue to acquire high quality raw materials for this
business, and have already secured multiple years of northern white
sand reserves."
"Going forward, with our strong balance sheet and cash
generation capability, we will continue to focus on organic growth,
dividends, share repurchases and acquisitions," Mr. 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 in the U.S. should dial
1-877-883-0383 at least 10 minutes before the start time and
reference conference number 3333584. 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
September
30
|
Nine Months
Ended
September
30
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
(In
thousands except per share data)
|
(In
thousands except per share data)
|
|
Revenues
|
$ 167,083
|
$
118,517
|
$
467,582
|
$
353,498
|
|
Cost of sales
|
94,390
|
74,018
|
270,715
|
225,193
|
|
Gross profit
|
72,693
|
44,499
|
196,867
|
128,305
|
|
Selling, general
& administrative expenses
|
16,622
|
13,047
|
46,754
|
38,732
|
|
Start-up
costs
|
127
|
102
|
127
|
621
|
|
(Gain) loss
on disposal or impairment of assets
|
(112)
|
193
|
1,537
|
204
|
|
Operating profit
|
56,056
|
31,157
|
148,449
|
88,748
|
|
Interest income, net
|
60
|
57
|
160
|
131
|
|
Foreign currency exchange gain
(loss), net
|
86
|
(63)
|
(228)
|
(50)
|
|
Other income (expense),
net
|
11
|
(92)
|
(119)
|
(308)
|
|
Income before income
taxes
|
56,213
|
31,059
|
148,262
|
88,521
|
|
Income taxes
|
19,302
|
10,884
|
51,243
|
30,620
|
|
Net income
|
$
36,911
|
$
20,175
|
$
97,019
|
$
57,901
|
|
|
|
Earnings per share:
|
|
|
|
|
|
Basic
|
$
1.59
|
$
0.87
|
$
4.19
|
$
2.51
|
|
Diluted
|
$
1.59
|
$
0.87
|
$
4.19
|
$
2.50
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
Basic
|
23,027
|
22,967
|
23,023
|
22,968
|
|
Diluted
|
23,028
|
22,974
|
23,024
|
22,977
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
9,174
|
$
6,978
|
$
25,661
|
$
20,308
|
|
|
|
|
|
|
|
|
Selected Balance Sheet
Information
|
|
|
September 30,
2011
|
|
December 31,
2010
|
|
|
(In
thousands)
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
39,677
|
|
$
46,656
|
|
Other current
assets
|
257,445
|
|
190,999
|
|
Property, plant and
equipment, net
|
375,741
|
|
338,483
|
|
Intangible and
other assets, net
|
9,290
|
|
10,380
|
|
Total assets
|
694,317
|
|
599,571
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
Accrued income
taxes
|
$
-
|
|
$
113
|
|
Other current
liabilities
|
66,317
|
|
51,134
|
|
Deferred income
taxes
|
31,972
|
|
26,345
|
|
Shareholders'
equity
|
596,028
|
|
521,979
|
|
Total liabilities and
shareholders' equity
|
$
694,317
|
|
$
599,571
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE CARBO Ceramics Inc.