EX-99.1 2 d74859exv99w1.htm EX-99.1 exv99w1
(CARBO LOGO)   Exhibit 99.1
CONTACT: ERNESTO BAUTISTA III, CFO
(281)921-6400
Release #10-10
CARBO CERAMICS INC. ANNOUNCES SECOND QUARTER 2010 EARNINGS
Conference Call Scheduled for Today, 10:00 a.m. Central Time

      

•   Quarterly revenues of $111.5 million were up 61 percent compared to the prior year
 
•   Quarterly global proppant sales volume of 314 million pounds up 45 percent versus the prior year
 
•   Net income of $18.7 million, or $0.81 per diluted share, for the quarter
 
•   Quarterly dividend was raised for the 10th consecutive year
      


HOUSTON (July 29, 2010) — 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 iPropTM family of detectable proppants with the introduction of CARBONRTTM, an innovative, environmentally responsible, non-radioactive traceable proppant. In addition, the production of CARBOBONDTM 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 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.

 

 

CARBO Ceramics 2010 Second Quarter Earnings Release
July 29, 2010
Page 2
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.
•   CARBOBONDTM, 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.
•   CARBONRTTM, a non-radioactive, environmentally responsible, traceable proppant was successfully introduced during the second quarter. CARBONRTTM 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.

 

 

CARBO Ceramics 2010 Second Quarter Earnings Release
July 29, 2010
Page 3
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 -

 

 

CARBO Ceramics 2010 Second Quarter Earnings Release
July 29, 2010
Page 4
                                 
    Three Months Ended     Six Months Ended  
    June 30     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