8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) October 30, 2008

CARBO Ceramics Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

001-15903	72-1100013
(Commission File Number)	(IRS Employer Identification No.)

6565 MacArthur Boulevard, Suite 1050
Irving, Texas	75039
(Address of Principal Executive Offices)	(Zip Code)

(972) 401-0090

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.1

Item 2.02. Results of Operations and Financial Condition.

     The following information, including the Exhibit to this Form 8-K, is being furnished pursuant to Item 2.02 — Results of Operations and Financial Condition of Form 8-K. This information is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any Securities Act of 1933 registration statements.

     On October 30, 2008, CARBO Ceramics Inc. (“CARBO”) issued a press release, a copy of which is attached hereto as Exhibit 99.1, announcing third quarter 2008 earnings.

Item 7.01. Regulation FD Disclosure.

     The following information, including the Exhibit to this Form 8-K, is being furnished pursuant to Item 7.01 — Regulation FD Disclosure of Form 8-K. This information is not deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any Securities Act of 1933 registration statements.

     On October 30, 2008, CARBO issued a press release, a copy of which is attached hereto as Exhibit 99.1, announcing technology and business highlights.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

     Pursuant to General Instruction B.2 of Form 8-K, the following exhibit is furnished with this Form 8-K.

99.1 Press Release, dated October 30, 2008.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CARBO CERAMICS INC.
Date: October 30, 2008	By:	/s/ Paul G. Vitek
		Paul G. Vitek
		Sr. Vice President, Finance and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated October 30, 2008.

4

EX-99.1

Exhibit 99.1

CONTACT: PAUL VITEK, CFO
(972) 401-0090

Release #08-10

CARBO CERAMICS INC. ANNOUNCES THIRD QUARTER 2008 EARNINGS

Conference Call Scheduled for Today, 10:00 a.m. Central Time

• Record quarterly proppant sales volume of 306 million pounds, increased 35 percent versus the prior year

• Record quarterly revenue from proppant sales

• Net income was $18.4 million, or $0.75 per diluted share, for the quarter

Irving, Texas (October 30, 2008) — CARBO Ceramics Inc. (NYSE: CRR) today reported third quarter net income of $18.4 million, or $0.75 per diluted share, for the quarter ended September 30, 2008. The Company previously reported that it had agreed to sell its fracture and reservoir diagnostics business to Halliburton Energy Services Inc. As a result of that transaction, which closed on October 10, 2008, the results of this business have been accounted for as discontinued operations. Continuing operations include the Company’s ceramic proppant, software, consulting services and geotechnical monitoring businesses. Net income from continuing operations for the third quarter of 2008 was $15.3 million, or $0.62 per diluted share, on revenues of $102.6 million.

President and CEO Gary Kolstad commented, “Our proppant business growth can be attributed to an increased awareness and acceptance by the E&P industry of the economic benefits of employing our ceramic proppant in an increasing number of reservoirs. CARBO’s products continued to penetrate the resource plays in North America, while our newest product, CARBOHYDROPROP^TM, experienced overwhelming demand. The proppant business generated record revenue as the result of sales volume that increased 35 percent compared to last year’s third quarter and a 6 percent improvement in pricing over the second quarter of 2008. North American sales volume increased by 47 percent compared to last year’s third quarter despite an increase of only 6 percent in the U.S. natural gas rig count and a 24 percent increase in the rig count in Canada.

“Looking forward, the lack of credit availability and the slowing global economy raise some concerns about the level of drilling activity in 2009. However, we are entering this period with a very strong market where demand for our proppant in North America presently exceeds our domestic production capacity. We believe that any downturn in drilling will be relatively short in duration primarily due to the steep decline curves in reservoirs currently producing the bulk of U.S. natural gas. We remain committed to adding manufacturing capacity and developing new technologies to support the long term needs of our customers. In addition, our strong financial position allows us the flexibility to explore opportunities to grow our business through acquisition.”

Third Quarter Results

Revenues for the third quarter increased 38 percent compared to last year’s third quarter due primarily to a 35 percent increase in proppant sales volume. Worldwide proppant sales totaled a record 306 million pounds for the quarter. Sales volume in North America increased 47 percent compared to the third quarter of 2007 due to the increasing acceptance of the Company’s ceramic proppant in reservoirs that had previously used sand-based proppants. Overseas sales volume decreased 6 percent compared to the same period last year. Sequentially, the average selling price for the Company’s ceramic proppants increased approximately 6 percent. Pricing on CARBOHYDROPROP^TM has improved considerably since its introduction in the first quarter of this year.

Operating profit from continuing operations for the third quarter of 2008 increased $3.1 million, or 18 percent, compared to the third quarter of 2007 due primarily to the significant increase in proppant sales volume and revenues. Operating margins declined compared to the previous year due to an increase in

CARBO Ceramics 2008 Third Quarter Earnings Release
October 30, 2008
Page 2

depreciation, and higher costs for natural gas and increased raw material costs for the Company’s high-strength products. Selling, general and administrative expenses declined as a percentage of revenue for the third quarter of 2008 compared to the same period last year but increased in total due to higher spending for sales and marketing activities associated with higher proppant sales, engineering expenses related to improved global plant design and information technology expenses associated with the Company’s new enterprise resource planning system.

The following items impacted operating profit and/or net income from continuing operations during the third quarter of 2008 and resulted in changes in financial performance compared to the third quarter of 2007.

• The Company recorded a loss of $1.4 million for the write-off of prepaid purchases of ceramic proppant from a third party Chinese-based proppant manufacturer that was recently forced to liquidate its assets due to the inflationary pressure in China in recent years. The write-off, net of tax effects, resulted in a reduction in earnings per share of approximately $0.04 on a diluted basis for the quarter.

• The recent strength of the U.S. dollar resulted in a non-cash loss of $0.5 million on foreign currency exchange fluctuations associated with a loan outstanding to the Company’s Russian subsidiary. This loss, net of tax effects, resulted in a reduction in earnings per share of approximately $0.01 per share on a diluted basis for the quarter. In comparison, in the third quarter of 2007, the Company recorded a gain on foreign currency fluctuations of $1.6 million or an increase in earnings per share of approximately $0.04 on a diluted basis.

• The Company reduced income tax expense in the quarter by approximately $2.1 million. The reduction was comprised of adjustments to recognize depletion deductions from mining of the Company’s kaolin reserves which supply its lightweight ceramic proppant operations and to adjust its accrued tax liability to reflect the actual tax liability incurred upon filing prior year federal and state tax returns. The favorable tax adjustments resulted in an increase in earnings per share of approximately $0.08 on a diluted basis for the quarter. The Company had a favorable adjustment in the third quarter of 2007 to adjust its accrued tax liability to reflect the actual tax liability incurred upon filing prior year federal and state tax returns totaling $0.5 million or $0.02 per share on a diluted basis.

Net income from continuing operations for the third quarter of 2008 increased $2.5 million compared to the third quarter of 2007.

Technology and Business Highlights

Highlights for the third quarter included:

• The Company’s products continued to penetrate the North American resource plays with CARBO’s high-quality ceramic proppant employed in the Bakken, Haynesville, Woodford, Deep Barnett and Marcellus shale formations.

• The Company successfully introduced its new Economic Conductivity campaign at the Society of Petroleum Engineer’s Annual Technical Conference and Exhibition. The E&P industry has traditionally used simplified models to predict a well’s production capacity. Economic Conductivity analysis draws upon significant advances in technology which, when combined with the results of detailed case studies, enable a more precise determination of which proppant will generate the optimal financial return.

As previously announced, a conference call to discuss the Company’s third quarter and year-to-date results has been scheduled for today at 10:00 a.m. central time (11:00 a.m. eastern). To participate in the call, please dial 877-261-8992 and refer to the “CARBO Ceramics Conference Call” or conference ID #22936341. International callers should dial 847-619-6548. The call can also be accessed live or on a delayed basis via the Company’s Web site, www.carboceramics.com.

CARBO Ceramics Inc., based in Irving, Texas, is the world’s largest supplier of ceramic proppant, the provider of the world’s most popular fracture simulation software, and a leading provider of fracture

CARBO Ceramics 2008 Third Quarter Earnings Release
October 30, 2008
Page 3

design, engineering and consulting services. The Company also provides a broad range of technologies for 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 demand 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 SEC. We assume no obligation to update forward-looking statements, except as required by law.

- tables follow -

CARBO Ceramics 2008 Third Quarter Earnings Release
October 30, 2008
Page 4

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2008			2007			2008		2007
	(In thousands except per share data)						(In thousands except per share data)
Revenues	$	102,587		$	74,313		$	282,247	$	219,004
Cost of sales		70,449			49,189			196,645		142,557
Gross profit		32,138			25,124			85,602		76,447
Selling, general & administrative expenses		10,183			7,555			27,502		21,544
Start-up costs		—			204			231		1,171
Loss on disposal or write-off of assets		1,449			—			1,559		—
Operating profit		20,506			17,365			56,310		53,732
Interest income, net		21			72			77		424
Foreign currency exchange gain (loss), net		(511	)		1,581			916		2,377
Other income (expense), net		75			(36	)		262		(95	)
Income before income taxes		20,091			18,982			57,565		56,438
Income taxes		4,779			6,128			17,649		18,743
Net income from continuing operations		15,312			12,854			39,916		37,695
Discontinued operations (1):
Operating results, net of income taxes		3,108			1,209			6,265		2,548
Net income	$	18,420		$	14,063		$	46,181	$	40,243

(1) Discontinued operations include the Company’s fracture mapping and reservoir monitoring assets which were sold to Halliburton Energy Services Inc. on October 10, 2008 for $143.7 million.

Basic earnings per share:
Continuing operations	$	0.62	$	0.53	$	1.63	$	1.55
Discontinued operations		0.13		0.05		0.26		0.10
Basic earnings per share	$	0.75	$	0.58	$	1.89	$	1.65
Diluted earnings per share:
Continuing operations	$	0.62	$	0.52	$	1.62	$	1.54
Discontinued operations		0.13		0.05		0.26		0.10
Diluted earnings per share	$	0.75	$	0.57	$	1.88	$	1.64
Average shares outstanding:
Basic		24,482		24,377		24,466		24,357
Diluted		24,567		24,504		24,560		24,474
Depreciation and amortization:
Continuing operations	$	6,219	$	5,061	$	18,473	$	14,006
Discontinued operations		1,039		1,234		3,994		3,556
	$	7,258	$	6,295	$	22,467	$	17,562

CARBO Ceramics 2008 Third Quarter Earnings Release
October 30, 2008
Page 5

Selected Balance Sheet Information

	Sept. 30, 2008		Dec. 31, 2007
	(In thousands)
Assets
Assets of continuing operations:
Cash and cash equivalents	$	31,931	$	12,296
Other current assets		140,351		114,037
Property, plant and equipment, net		247,101		253,261
Intangible and other assets, net		2,360		2,465
Assets of discontinued operations		70,983		66,191
Total assets		497,585		453,123
Liabilities and Shareholders’ Equity
Liabilities of continuing operations:
Current liabilities		33,194		29,240
Deferred income taxes		36,618		30,420
Liabilities of discontinued operations		2,217		4,024
Shareholders’ equity		425,556		389,439
Total liabilities and shareholders’ equity		497,585		453,123