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| 8-K - FORM 8-K - CARBO CERAMICS INC | d79282e8vk.htm |
Exhibit 99.1
CONTACT: ERNESTO BAUTISTA III, CFO
(281)921-6400
(281)921-6400
Release #11- 03
CARBO CERAMICS INC. ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2010 EARNINGS
Conference Call Scheduled for Today, 10:00 a.m. Central Time
| • | Quarterly revenues of $119.6 million were up 33 percent compared to the prior year | ||
| • | Quarterly global proppant sales volume of 332 million pounds up 20 percent versus the prior year | ||
| • | Net income of $20.8 million, or $0.90 per diluted share, for the quarter | ||
| • | Full-year 2010 earnings per share of $3.40 versus $2.27 in 2009 |
HOUSTON (January 27, 2011) — CARBO Ceramics Inc. (NYSE: CRR) today reported net income of $20.8
million, or $0.90 per diluted share, on revenues of $119.6 million for the quarter ended December
31, 2010.
President and CEO Gary Kolstad commented, “We finished 2010 on a high note with another quarter of
solid financial and operational performance. Exiting the third quarter, we witnessed continued
momentum in proppant sales. The uptick in horizontal fracturing in oil bearing reservoirs, coupled
with our traditionally strong footprint in gas driven plays, caused sales volume resilience in a
quarter that historically shows seasonal weakness. Our plants continued to operate at high
utilization levels, aiding our ability to meet the challenging demands of our clients. We
successfully commenced operations of our third 250 million pound production line at our Toomsboro,
Georgia facility. We are excited about completing this third line and also look forward to
completing the previously announced fourth line by year end. We continue to build upon the Falcon
TechnologiesTM footprint in the resource plays and are pleased with the overall growth
that Falcon is exhibiting.”
“During the fourth quarter, we introduced and sold our first Resin Coated Sand (RCS) proppant,
CARBOBOND® RCS. We continue to listen to our clients’ needs and the addition of
CARBOBOND® RCS to our product offering is our latest response to those needs. We
believe this is a natural extension of our core business and fits well in the Economic
Conductivity® equation. We look forward to providing these additional products to meet
our clients’ proppant demands,” Mr. Kolstad stated.
Fourth Quarter Results
Revenues for the fourth quarter of 2010 increased 33 percent, or $29.5 million, when compared to
the fourth quarter of 2009. The Company’s worldwide proppant sales volume totaled 332 million
pounds for the fourth quarter of 2010 and represents a year-over-year increase of 20 percent.
North American (excludes Mexico) and international proppant sales volume increased 17 percent and
37 percent, respectively, compared to the same period last year.
Operating profit for the fourth quarter of 2010 increased 61 percent, or $11.6 million, compared to
the fourth 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 selling, general, administrative
and other operating expenses.
Net income for the fourth quarter of 2010 increased 65 percent, or $8.2 million, compared to the
fourth quarter of 2009.
Full Year Results
For the year ended December 31, 2010, revenues increased 38 percent compared to 2009. The increase
is mainly attributed to the increase in proppant sales volume, an increase in the average proppant
selling price compared to 2009, and an increase in the sales volume of Falcon Technologies acquired
in October 2009.
CARBO’s worldwide proppant sales volume totaled 1.35 billion pounds for the full year 2010, an
increase of 29 percent compared to 2009. Sales volume in North America increased 29 percent
primarily due to increases in both U.S. and Canada sales volume. International sales volume
increased 31 percent primarily due to increases in Russia, China, Latin America and
Europe/Africa/Middle East, partially offset by a decrease in Mexico.
Full year net income for 2010 increased 49 percent, or $25.9 million, compared to 2009.
Technology and Business Highlights
| • | CARBO’s proppant continues to be deployed in an increasing amount across the oily, liquid-rich plays in North America as operators realize the benefits of increased production and higher EURs through the utilization of our highly conductive proppant. | |
| • | Toomsboro Line 3 commenced production as scheduled in the fourth quarter. This proppant was deployed into several North American resource plays. | |
| • | CARBOBOND® LITE®, a resin-coated ceramic proppant, witnessed sequential volume growth during the fourth quarter and continues to receive positive performance feedback. | |
| • | CARBOBOND® RCS, a resin-coated sand proppant, was introduced during the fourth quarter and has garnered immediate interest from many of our clients. | |
| • | Several of our clients were able to demonstrate their commitment to environmental stewardship around the world by employing CARBONRTTM, a non-radioactive, environmentally responsible, traceable ceramic proppant. | |
| • | In December, version 10.5 of Fracpro® was released focusing on horizontal wellbores encompassing multiple fracture treatment completions. New features in this version allow for better visualization of horizontal multi-stage wells. | |
| • | StrataGen® Engineering expanded its Data and Neural AnalysisSM offering to include prospect analysis. Currently being utilized by several operators in the Bakken and evaluated for other resource plays in North America, Data and Neural AnalysisSM facilitates better completion/frac decision-making. |
Outlook
CEO Gary Kolstad commented on the outlook for the Company stating, “Industry activity levels remain
high, even with the economic challenges of low natural gas prices. We continue to see a shift in
activity to oily, liquid-rich plays which gives us confidence that the operating environment for
our proppant business will remain favorable as we move through 2011.”
“We continue to see capacity expansions playing a key role in CARBO’s long-term growth. Our
entrance into the RCS market will allow us to serve a broader spectrum of our clients’ proppant
requests. We have started site preparation for a second resin coating line at our New Iberia
facility in Louisiana. Once completed, our current resin coating capacity will increase from 100
million pounds to 400 million pounds annually. Ultimately, we see CARBO playing a significant role
in the RCS proppant market as we execute our growth plans over the next several years. In addition
to the Line 2 expansion at our New Iberia facility, we purchased a facility in Marshfield,
Wisconsin during the fourth quarter and are evaluating the site’s prospective RCS role. On the
ceramic proppant capacity expansion, Toomsboro Line 4 is still on schedule to start production
before the end of 2011. The outlook for our Falcon Technologies business remains positive and we
will continue our efforts to grow the business to further reduce the environmental risks that our
clients face today.”
“2010 marked the best year in CARBO’s history. Going forward, we’ll continue to focus on what we
do best, increasing well production by incorporating Economic Conductivity® in our
clients’ oil and gas wells. The industry’s acknowledgement of the importance of increased
conductivity in the lower permeability resource plays has never been greater, as shown by the
operators’ improved production when using high quality ceramic proppant.”
“It is this focused attention to both the production enhancement and environmental risk reduction
aspects of our clients’ businesses that we believe will add shareholder value over the long-term.”
Kolstad concluded.
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 1-877-317-6789 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 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 | Twelve Months Ended | |||||||||||||||
| December 31 | December 31 | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| (In thousands except per share data) | (In thousands except per share data) | |||||||||||||||
Revenues |
$ | 119,584 | $ | 90,125 | $ | 473,082 | $ | 341,872 | ||||||||
Cost of sales |
73,218 | 61,069 | 298,411 | 221,369 | ||||||||||||
Gross profit |
46,366 | 29,056 | 174,671 | 120,503 | ||||||||||||
Selling, general & administrative expenses |
13,903 | 9,815 | 52,635 | 40,897 | ||||||||||||
Start-up costs |
356 | — | 977 | — | ||||||||||||
Loss on disposal or impairment of assets |
1,245 | 28 | 1,449 | 156 | ||||||||||||
Operating profit |
30,862 | 19,213 | 119,610 | 79,450 | ||||||||||||
Interest income, net |
47 | 53 | 178 | 451 | ||||||||||||
Foreign currency exchange (loss) gain, net |
(46 | ) | 24 | (96 | ) | (192 | ) | |||||||||
Other (expense) income, net |
(35 | ) | (43 | ) | (343 | ) | 85 | |||||||||
Income before income taxes |
30,828 | 19,247 | 119,349 | 79,794 | ||||||||||||
Income taxes |
10,013 | 6,654 | 40,633 | 26,984 | ||||||||||||
Net income |
$ | 20,815 | $ | 12,593 | $ | 78,716 | $ | 52,810 | ||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | 0.90 | $ | 0.55 | $ | 3.41 | $ | 2.27 | ||||||||
Diluted |
$ | 0.90 | $ | 0.55 | $ | 3.40 | $ | 2.27 | ||||||||
Average shares outstanding: |
||||||||||||||||
Basic |
22,972 | 22,930 | 22,969 | 23,097 | ||||||||||||
Diluted |
22,979 | 22,940 | 22,977 | 23,112 | ||||||||||||
Depreciation and amortization |
$ | 7,420 | $ | 6,611 | $ | 27,728 | $ | 24,905 | ||||||||
Selected Balance Sheet Information
| December 31, 2010 | December 31, 2009 | |||||||
| (In thousands) | ||||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 46,656 | $ | 69,557 | ||||
Other current assets |
190,999 | 149,313 | ||||||
Property, plant and equipment, net |
338,483 | 270,722 | ||||||
Intangible and other assets, net |
10,380 | 10,104 | ||||||
Total assets |
599,571 | 513,412 | ||||||
Liabilities and Shareholders’ Equity |
||||||||
Accrued income taxes |
$ | 113 | $ | 3,609 | ||||
Other current liabilities |
51,134 | 28,849 | ||||||
Deferred income taxes |
26,345 | 23,638 | ||||||
Shareholders’ equity |
521,979 | 457,316 | ||||||
Total liabilities and shareholders’ equity |
$ | 599,571 | $ | 513,412 | ||||