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| 8-K - FORM 8-K - CARBO CERAMICS INC | d70933e8vk.htm |
Exhibit 99.1
CONTACT: ERNESTO BAUTISTA III, CFO
(281) 921-6400
(281) 921-6400
Release #10-03
CARBO ANNOUNCES FOURTH QUARTER AND ANNUAL 2009 RESULTS
Conference Call Scheduled for Today, 10:00 a.m. Central Time
| • | Quarterly revenues of $90.1 million were down 15 percent compared to the prior year | |
| • | Quarterly global proppant sales volume of 278 million pounds down 5 percent versus the prior year, despite a 29 percent drop in the worldwide drilling rig count | |
| • | Net income of $12.6 million, or $0.55 per diluted share, for the quarter | |
| • | 2009 annual revenues of $341.9 million and income from continuing operations of $52.8 million were down 12 percent and 13 percent, respectively, compared to 2008 |
HOUSTON
(February 4, 2010) — CARBO Ceramics Inc. (NYSE: CRR) today reported income from continuing
operations of $12.6 million, or $0.55 per diluted share, on revenues of $90.1 million for the
quarter ended December 31, 2009. Continuing operations include the Company’s ceramic proppant,
software, consulting services, spill prevention and containment, and geotechnical monitoring
businesses.
President and CEO Gary Kolstad commented, “We are pleased with the overall quarterly results, and
especially with the economic success our customers are realizing by increasingly using our high
conductivity ceramic proppants in the oil and gas shale plays. While the fourth quarter worldwide
rig count was down 29 percent year-over-year, our overall global proppant volumes were only down 5
percent. Currently all of our plants are producing at capacity. The growth of the resource plays
and the increasing desire to maximize conductivity continue to have a positive effect on the demand
for our product offerings.”
“As we indicated in our remarks last quarter, we expected our fourth quarter proppant deliveries to
be modestly lower due to the holidays as compared to our strong third quarter results. However,
our proppant sales orders accelerated exiting the fourth quarter, while pricing improved slightly,
and this gives us confidence going into 2010. Separately, during the fourth quarter we incurred
costs associated with the substantially completed integration of our recently acquired business,
Falcon Technologies. We are excited about the growth prospects for this business and are seeing
increased customer acceptance of this technology in the resource plays.”
Fourth Quarter Results
Revenues for the fourth quarter of 2009 decreased 15 percent compared to the fourth quarter of
2008. The Company’s worldwide proppant sales volume totaled 278 million pounds for the fourth
quarter of 2009, representing a year-over-year decrease of 5 percent. Proppant sales volume for
the fourth quarter declined in the North American and International markets year-over-year,
following a 40 percent and 7 percent decline in rig count, respectively.
Operating profit for the fourth quarter of 2009 decreased $11.6 million compared to the fourth
quarter of 2008. Revenue decreases, resulting from decreases in volume and average selling price
experienced during the fourth quarter of 2009, were partially offset by decreases in cost of sales,
which was positively affected by lower raw material and natural gas costs. Selling, general,
administrative and other operating expenses for the fourth quarter of 2009 decreased $1.2 million
on a year-over-year basis.
Income from continuing operations for the fourth quarter of 2009 decreased $7.9 million compared to
the fourth quarter of 2008.
CARBO Ceramics 2009 Fourth Quarter Earnings Release
February 4, 2010
Page 2
February 4, 2010
Page 2
Full Year Results
For the year ended December 31, 2009, revenues decreased 12 percent compared to 2008 due primarily
to a decrease in proppant revenue. The decrease in revenue in the Company’s proppant business was
primarily the result of a decrease in proppant sales volume of 10 percent and a lower average
selling price compared to the record year of 2008.
CARBO’s worldwide proppant sales volume totaled 1.043 billion pounds for the full year 2009, a
decrease of 10 percent compared to 2008. Sales volume in North America (excludes Mexico) decreased
primarily due to Canada, as the U.S. sales volume was down less than two percent. International
(includes Mexico) sales volume decreased primarily due to decreases in Russia and
Europe/Africa/Middle East (collectively, EAME). However the decrease in international sales volume
was partially offset by growth in Latin America.
Full year income from continuing operations for 2009 decreased 13 percent compared to 2008.
As previously disclosed, on August 28, 2008 the Company’s Board of Directors authorized the
repurchase of up to two million shares of the Company’s common stock. As of December 31, 2009, the
Company had repurchased and retired approximately 1.7 million shares at an average cost of $37.13
per share, or an aggregate cost of $64.7 million.
Technology and Business Highlights
| • | CARBO recently began production of resin-coated proppant from its newly constructed resin coating plant in New Iberia, Louisiana. This state of the art facility will produce the CARBOBOND™ proppant family. We believe this initiative will better position the Company to fulfill client needs. | |
| • | CARBOHYDROPROP® continued to capture a bigger share of the market by increased penetration of numerous resource plays in North America. During the fourth quarter, several operators that had used CARBOHYDROPROP® announced strong well performance in the Eagle Ford. Significant inroads were also made in the Granite Wash, Montney and Marcellus along with continued strong sales into the Haynesville. | |
| • | Falcon Technologies and Services, Inc. (“Falcon Technologies”) continues to see growing acceptance of the Falcon Liner™ products including tank liners, secondary containments, and tank bases. Additionally, Falcon Technologies is expanding its geographical presence in the resource plays including a recent entry into the Haynesville. | |
| • | Applied Geomechanics, Inc. is working on a project at Denver International Airport that involves the evaluation of more than 500 pavement sensors and the installation of an updated high-speed data acquisition system for the FAA’s Technical Research Center. Actual measured pavement responses from new-generation aircraft help validate pavement testing at the FAA research facility. |
Outlook
CEO Gary Kolstad commented on the outlook for the Company stating, “We continue to see increasing
demand for our products and services and an expanding customer base that has recognized the
benefits of Economic Conductivity™. Our commitment to investing in proppant manufacturing capacity
remains unchanged, and expect completion of the third line at our Toomsboro, Georgia plant near the
end of 2010. We remain dedicated to new product development across all our businesses. We are
opening up new Falcon Technologies locations in certain resource plays due to customer demand and
acceptance for our containment and spill prevention products and services. The oil and gas
industry experienced a positive trend in drilling activity during the fourth quarter of 2009, which
makes us more optimistic about our business in 2010 than we were last year; however, we, like
others, remain prudently cautious about
CARBO Ceramics 2009 Fourth Quarter Earnings Release
February 4, 2010
Page 3
February 4, 2010
Page 3
the economy and natural gas fundamentals. The increased
trend of horizontal drilling and the economic success our customers are achieving by using our high
conductivity ceramic proppant bring confidence to our 2010 outlook.”
As previously announced, a conference call to discuss the Company’s fourth 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 1-800-860-2442 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 1-412-858-4600. 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, the provider of the world’s most popular
fracture simulation software, and provides leading fracture design and consulting services. The
Company also provides a broad range of technologies for spill prevention, containment and
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 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 2009 Fourth Quarter Earnings Release
February 4, 2010
Page 4
February 4, 2010
Page 4
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31 | December 31 | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| (In thousands except per share data) | (In thousands except per share data) | |||||||||||||||
Revenues |
$ | 90,125 | $ | 105,581 | $ | 341,872 | $ | 387,828 | ||||||||
Cost of sales |
61,069 | 63,749 | 221,369 | 260,394 | ||||||||||||
Gross profit |
29,056 | 41,832 | 120,503 | 127,434 | ||||||||||||
Selling, general & administrative expenses |
9,815 | 10,142 | 40,897 | 37,644 | ||||||||||||
Start-up costs |
— | 877 | — | 1,108 | ||||||||||||
Loss on disposal or impairment of assets |
28 | 40 | 156 | 1,599 | ||||||||||||
Operating profit |
19,213 | 30,773 | 79,450 | 87,083 | ||||||||||||
Interest income, net |
53 | 414 | 451 | 491 | ||||||||||||
Foreign currency exchange gain (loss), net |
24 | (659 | ) | (192 | ) | 257 | ||||||||||
Other income (expense), net |
(43 | ) | 256 | 85 | 518 | |||||||||||
Income before income taxes |
19,247 | 30,784 | 79,794 | 88,349 | ||||||||||||
Income taxes |
6,654 | 10,295 | 26,984 | 27,944 | ||||||||||||
Income from continuing operations |
12,593 | 20,489 | 52,810 | 60,405 | ||||||||||||
Discontinued operations (1): |
||||||||||||||||
Operating results, net of income taxes |
— | (481 | ) | — | 5,784 | |||||||||||
Gain on disposal, net of income taxes |
— | 44,127 | — | 44,127 | ||||||||||||
Net income |
$ | 12,593 | $ | 64,135 | $ | 52,810 | $ | 110,316 | ||||||||
| (1) | Discontinued operations include the Company’s fracture mapping and reservoir monitoring assets, which were sold on October 10, 2008. |
Basic earnings per share: |
||||||||||||||||
Continuing operations |
$ | 0.55 | $ | 0.85 | $ | 2.27 | $ | 2.47 | ||||||||
Discontinued operations |
— | 1.81 | — | 2.05 | ||||||||||||
Basic earnings per share |
$ | 0.55 | $ | 2.66 | $ | 2.27 | $ | 4.52 | ||||||||
Diluted earnings per share: |
||||||||||||||||
Continuing operations |
$ | 0.55 | $ | 0.85 | $ | 2.27 | $ | 2.46 | ||||||||
Discontinued operations |
— | 1.81 | — | 2.05 | ||||||||||||
Diluted earnings per share |
$ | 0.55 | $ | 2.66 | $ | 2.27 | $ | 4.51 | ||||||||
Average shares outstanding: |
||||||||||||||||
Basic |
22,930 | 24,095 | 23,097 | 24,373 | ||||||||||||
Diluted |
22,940 | 24,119 | 23,112 | 24,418 | ||||||||||||
Depreciation and amortization: |
||||||||||||||||
Continuing operations |
$ | 6,611 | $ | 6,165 | $ | 24,905 | $ | 24,638 | ||||||||
Discontinued operations |
— | — | — | 3,994 | ||||||||||||
| $ | 6,611 | $ | 6,165 | $ | 24,905 | $ | 28,632 | |||||||||
CARBO Ceramics 2009 Fourth Quarter Earnings Release
February 4, 2010
Page 5
February 4, 2010
Page 5
Selected Balance Sheet Information
| December 31, 2009 | December 31, 2008 | |||||||
| (In thousands) | ||||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 69,557 | $ | 154,817 | ||||
Other current assets |
149,313 | 138,493 | ||||||
Property, plant and equipment, net |
270,722 | 244,902 | ||||||
Intangible and other assets, net |
10,104 | 3,806 | ||||||
Total assets |
513,412 | 546,877 | ||||||
Liabilities and Shareholders’ Equity |
||||||||
Accrued income taxes |
$ | 3,609 | $ | 47,929 | ||||
Other current liabilities |
28,849 | 35,919 | ||||||
Deferred income taxes |
23,639 | 20,495 | ||||||
Shareholders’ equity |
457,315 | 442,534 | ||||||
Total liabilities and shareholders’ equity |
$ | 513,412 | $ | 546,877 | ||||