EX-99.1 2 d64655exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
CARBO CERAMICS INC.
UNAUDTED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
     The following unaudited pro forma consolidated financial statements present the historical financial statements of CARBO Ceramics Inc., (the “Company”) with adjustments relating to the sale of a portion of the assets of the Company’s wholly-owned subsidiary, Pinnacle Technologies, Inc. The sale, which includes substantially all of the fracture and reservoir diagnostic business, the Pinnacle name and related trademarks, was completed on October 10, 2008. The cash proceeds received from the sale totaled $143.7 million, including the $137.0 million purchase price plus $6.7 million for preliminary working capital adjustments.
     The historical financial information has been derived from the historical consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2008. These unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements and accompanying notes previously filed in these reports. The unaudited pro forma consolidated balance sheet as of June 30, 2008 was prepared as if the sale had been completed on June 30, 2008. The unaudited pro forma consolidated statements of income for the six month period ended June 30, 2008 and the years ended December 31, 2007, 2006 and 2005 were prepared as though the sale had been completed on January 1, 2005.
     The unaudited pro forma consolidated financial statements are not necessarily indicative of the results of operations or financial position of the Company that would have been reported had the sale been completed as of the dates presented, and are not necessarily representative of the future consolidated results of operations or financial position of the Company.
     The Company will account for this group of assets sold as a discontinued operation in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-lived Assets, in its future financial statements.

 

 

CARBO Ceramics Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of June 30, 2008
($ in thousands)
                                 
            Pro Forma              
      Historical         Adjustments     Notes       Pro Forma     
ASSETS
                                
Current assets:
                                
     Cash and cash equivalents
   $ 9,397     $ 142,841       (1 )   $ 152,238  
     Trade accounts and other receivables, net
     85,799       (20,911 )             64,888  
     Inventories:
                                
         Finished goods
     37,312       —               37,312  
         Raw materials and supplies
     26,378       —               26,378  
 
                          
Total inventories
     63,690       —               63,690  
     Prepaid expenses and other current assets
     4,085       (420 )             3,665  
     Prepaid income taxes
     493       (493 )             —  
     Deferred income taxes
     7,280       (1,626 )     (4 )     5,654  
 
                          
Total current assets
     170,744       119,391               290,135  
Property, plant and equipment:
                                
     Land and land improvements
     10,924       (827 )             10,097  
     Land-use and mineral rights
     6,255       —               6,255  
     Buildings
     48,171       (4,365 )             43,806  
     Machinery and equipment
     319,270       (31,876 )             287,394  
     Construction in progress
     13,811       (2,669 )             11,142  
 
                          
Total
     398,431       (39,737 )             358,694  
     Less accumulated depreciation
     124,105       (14,079 )             110,026  
 
                          
Net property, plant and equipment
     274,326       (25,658 )             248,668  
Goodwill
     23,199       (18,340 )     (3 )     4,859  
Intangible and other assets, net
     10,876       (7,571 )             3,305  
 
                          
 
                                
Total assets
   $ 479,145     $ 67,822             $ 546,967  
 
                          
 
                                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                
Current liabilities:
                                
     Accounts payable
   $ 7,762     $ (2,185 )           $ 5,577  
     Accrued payroll and benefits
     7,111       (579 )             6,532  
     Accrued freight
     4,984       —               4,984  
     Accrued utilities
     4,283       —               4,283  
     Accrued income taxes
     —       29,428       (2 )     29,428  
     Retainage related to construction in progress
     85       —               85  
     Other accrued expenses
     5,712       (740 )             4,972  
 
                          
Total current liabilities
     29,937       25,924               55,861  
Deferred income taxes
     35,407       (4,797 )     (4 )     30,610  
Shareholders’ equity:
                                
     Preferred stock, none outstanding
     —       —               —  
     Common stock
     246       —               246  
     Additional paid-in capital
     110,405       588       (5 )     110,993  
     Retained earnings
     297,703       46,488               344,191  
     Accumulated other comprehensive income
     5,447       (381 )             5,066  
 
                          
Total shareholders’ equity
     413,801       46,695               460,496  
 
                          
 
                                
Total liabilities and shareholders’ equity
   $ 479,145     $ 67,822             $ 546,967  
 
                          
 
Pro Forma Adjustments include the net book values of the assets sold and liabilities assumed, and the following adjustments:
(1)   Cash includes $143,741 of cash received, net of estimated transaction expenses totaling $900.
 
(2)   Estimated income taxes payable associated with the tax gain on sale.
 
(3)   Adjustment to record the estimated value of $18,340 of goodwill associated with the sold assets.
 
(4)   Settlement of deferred income taxes associated with the sold assets.
 
(5)   Stock compensation costs associated with the accelerated vesting of certain restricted stock awards in connection with the discontinued operations.

 

 

CARBO Ceramics Inc.
Unaudited Pro Forma Consolidated Statement of Income
For the Six Months Ended June 30, 2008
($ in thousands, except per share amounts)
                         
            Pro Forma        
      Historical         Adjustments       Pro Forma     
Revenues
   $ 204,926     $ 25,266     $ 179,660  
Cost of sales
     140,551       14,355       126,196  
 
                  
 
                        
Gross profit
     64,375       10,911       53,464  
Selling, general and administrative expenses
     23,177       5,858       17,319  
Start-up costs
     231       —       231  
Loss on disposal of assets
     110       —       110  
 
                  
 
                        
Operating profit
     40,857       5,053       35,804  
Other income (expense):
                        
Interest income, net
     56       —       56  
Foreign currency exchange gain (loss), net
     1,427       —       1,427  
Other, net
     227       40       187  
 
                  
 
     1,710       40       1,670  
 
                  
 
                        
Income before income taxes
     42,567       5,093       37,474  
Income taxes
     14,806       1,935       12,871  
 
                  
 
                        
Net income
   $ 27,761     $ 3,158     $ 24,603  
 
                  
 
                        
Earnings per share:
                        
Basic
   $ 1.14             $ 1.01  
 
                    
Diluted
   $ 1.13             $ 1.00  
 
                    
 
                        
Average shares outstanding:
                        
Basic
     24,458,834               24,458,834  
 
                    
Diluted
     24,556,910               24,556,910  
 
                    
Pro Forma Adjustments include results of the discontinued operations.

 

 

CARBO Ceramics Inc.
Unaudited Pro Forma Consolidated Statement of Income
For the Year Ended December 31, 2007
($ in thousands, except per share amounts)
                         
            Pro Forma        
      Historical         Adjustments       Pro Forma     
Revenues
   $ 340,351     $ 40,355     $ 299,996  
Cost of sales
     221,202       23,132       198,070  
 
                  
 
                        
Gross profit
     119,149       17,223       101,926  
Selling, general and administrative expenses
     39,615       10,631       28,984  
Start-up costs
     1,215       —       1,215  
Loss on disposal of assets
     268       —       268  
 
                  
 
                        
Operating profit
     78,051       6,592       71,459  
Other income (expense):
                        
Interest income, net
     419       —       419  
Foreign currency exchange gain (loss), net
     2,882       —       2,882  
Other, net
     48       229       (181 )
 
                  
 
     3,349       229       3,120  
 
                  
 
                        
Income before income taxes
     81,400       6,821       74,579  
Income taxes
     27,530       2,592       24,938  
 
                  
 
                        
Net income
   $ 53,870     $ 4,229     $ 49,641  
 
                  
 
                        
Earnings per share:
                        
Basic
   $ 2.21             $ 2.04  
 
                    
Diluted
   $ 2.20             $ 2.03  
 
                    
 
                        
Average shares outstanding:
                        
Basic
     24,367,479               24,367,479  
 
                    
Diluted
     24,483,902               24,483,902  
 
                    
Pro Forma Adjustments include results of the discontinued operations.

 

 

CARBO Ceramics Inc.
Unaudited Pro Forma Consolidated Statement of Income
For the Year Ended December 31, 2006
($ in thousands, except per share amounts)
                         
            Pro Forma        
      Historical         Adjustments       Pro Forma     
Revenues
   $ 312,126     $ 28,297     $ 283,829  
Cost of sales
     196,133       16,236       179,897  
 
                  
 
                        
Gross profit
     115,993       12,061       103,932  
Selling, general and administrative expenses
     34,732       8,744       25,988  
Start-up costs
     474       —       474  
Loss on disposal of assets
     —       —       —  
 
                  
 
                        
Operating profit
     80,787       3,317       77,470  
Other income (expense):
                        
Interest income, net
     1,590       —       1,590  
Foreign currency exchange gain (loss), net
     1,387       —       1,387  
Other, net
     50       (78 )     128  
 
                  
 
     3,027       (78 )     3,105  
 
                  
 
                        
Income before income taxes
     83,814       3,239       80,575  
Income taxes
     29,561       1,231       28,330  
 
                  
 
                        
Net income
   $ 54,253     $ 2,008     $ 52,245  
 
                  
 
                        
Earnings per share:
                        
Basic
   $ 2.23             $ 2.15  
 
                    
Diluted
   $ 2.22             $ 2.14  
 
                    
 
                        
Average shares outstanding:
                        
Basic
     24,280,778               24,280,778  
 
                    
Diluted
     24,400,531               24,400,531  
 
                    
Pro Forma Adjustments include results of the discontinued operations.

 

 

CARBO Ceramics Inc.
Unaudited Pro Forma Consolidated Statement of Income
For the Year Ended December 31, 2005
($ in thousands, except per share amounts)
                         
            Pro Forma        
      Historical         Adjustments       Pro Forma     
Revenues
   $ 252,673     $ 21,724     $ 230,949  
Cost of sales
     153,941       13,529       140,412  
 
                  
 
                        
Gross profit
     98,732       8,195       90,537  
Selling, general and administrative expenses
     27,245       6,326       20,919  
Start-up costs
     1,092       —       1,092  
Loss on disposal of assets
     95       —       95  
 
                  
 
                        
Operating profit
     70,300       1,869       68,431  
Other income (expense):
                        
Interest income, net
     1,756       —       1,756  
Foreign currency exchange gain (loss), net
     (147 )     —       (147 )
Other, net
     174       208       (34 )
 
                  
 
     1,783       208       1,575  
 
                  
 
Income before income taxes
     72,083       2,077       70,006  
Income taxes
     25,463       789       24,674  
 
                  
 
                        
Net income
   $ 46,620     $ 1,288     $ 45,332  
 
                  
 
                        
Earnings per share:
                        
Basic
   $ 1.94             $ 1.89  
 
                    
Diluted
   $ 1.93             $ 1.87  
 
                    
 
                        
Average shares outstanding:
                        
Basic
     24,004,563               24,004,563  
 
                    
Diluted
     24,177,364               24,177,364  
 
                    
Pro Forma Adjustments include results of the discontinued operations.