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8-K - FORM 8-K - CALGON CARBON Corpl41945e8vk.htm
Exhibit 99.1
     
(CALGON CARBON LOGO)   (NEWS RELEASE LOGO)
CALGON CARBON ANNOUNCES FOURTH QUARTER RESULTS
PITTSBURGH, PA — February 23, 2011 — Calgon Carbon Corporation (NYSE: CCC) announced results for the fourth quarter and year ended December 31, 2010.
The company reported net income of $12.5 million, or $0.22 per common share on a fully diluted basis, for the fourth quarter of 2010 which included $2.8 million of income from discrete tax items, including the release of a valuation allowance on foreign tax credits. Net income for the fourth quarter of 2009 was $13.2 million or $0.23 per common share on a fully diluted basis.
Net sales for the fourth quarter of 2010 were $131.5 million, an increase of 18.8% versus fourth quarter 2009 sales of $110.7 million. For the fourth quarter of 2010, the net effect on sales from acquisitions completed in 2010 was $18.8 million. Currency translation had a $1.8-million negative impact on sales for the fourth quarter of 2010, due to the stronger dollar.
For the fourth quarter of 2010, sales for the Activated Carbon and Service segment increased by 20.7% versus the fourth quarter of 2009, including 17.2% from the acquisitions mentioned above. The increase from the company’s traditional businesses was primarily due to higher demand for activated carbon products in the potable water and respirator markets. This was partially offset by a decline in demand for activated carbon products in the food market.
Equipment sales increased by 13.3% versus the fourth quarter of 2009, due to revenue recognition from ballast water treatment systems. Sales from the company’s traditional equipment businesses declined slightly. The 27.9% decline in Consumer sales was attributable to lower demand for activated carbon cloth and PreZerve® products.
Net sales less the cost of products sold as a percentage of net sales for the fourth quarter of 2010 was 33.0%, versus 42.2% for the fourth quarter of 2009. Results for the fourth quarter of 2009 included $2.4 million related to the receipt of, or estimated refunds of, tariff deposits. Results for the fourth quarter of 2009 also benefited from
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unusually low repair and maintenance expense. Sales from Calgon Carbon Japan and Hyde Marine, whose margins were lower than the corporate average, had an adverse impact on margins in the fourth quarter of 2010.
Selling, administrative and research expenses for the fourth quarter of 2010 were 7.3% higher than for the comparable period of 2009, due to on-going expenses related to acquisitions completed in the first quarter of 2010. For the fourth quarter of 2010 SG&A as a percentage of revenue was 16.4% as compared to 18.2% for the comparable period in 2009.
Net sales for the year ended December 31, 2010 were $482.3 million, versus $411.9 million for 2009, an increase of 17.1%. For the year, foreign currency translation had a $3.2 million negative impact on sales due to the stronger U.S. dollar.
Net income for the year ended December 31, 2010 was $34.9 million versus $39.2 million for the comparable period of 2009. The 2010 results included a $12.0 million pre-tax charge related to settlements of lawsuits and environmental related matters. The results for the year ended December 31, 2010 also included $3.8 million from discrete tax items including the release of a valuation allowance on foreign tax credits. The 2009 results included $4.8 million from the release of valuation allowance on foreign tax credits.
Fully diluted earnings per share for the year ended December 31, 2010 were $0.61. For 2009, earnings per share on a fully diluted basis were $0.69.
Calgon Carbon’s board of directors did not declare a quarterly dividend.
Commenting on the results, John Stanik, Calgon Carbon’s chairman, president and chief executive officer, said, “We continue to improve our top-line growth which included contributions from our most recent acquisitions and Calgon Carbon’s traditional businesses. While the decline in the fourth quarter margins was anticipated given our recent acquisitions, we expect to see margin improvement going forward as we continue to integrate Calgon Carbon Japan and implement global price increases that were previously announced.
Excluding the impact of non-recurring legal and environmental expenses, the company’s 2010 performance represents a significant improvement year-over-year and positions Calgon Carbon for continued growth in 2011 and beyond.”
For more information about Calgon Carbon’s leading activated carbon and ultraviolet technology solutions for municipalities and industries, visit www.calgoncarbon.com.
Calgon Carbon Corporation, headquartered in Pittsburgh, Pennsylvania, is a global leader in services and solutions for making water and air safer and cleaner.
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This news release contains historical information and forward-looking statements. Forward-looking statements typically contain words such as “expect,” “believe,” “estimate,” “anticipate,” or similar words indicating that future outcomes are uncertain. Statements looking forward in time, including statements regarding future growth and profitability, price increases, cost savings, broader product lines, enhanced competitive posture and acquisitions, are included in the company’s most recent Annual Report pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. They involve known and unknown risks and uncertainties that may cause the company’s actual results in future periods to be materially different from any future performance suggested herein. Further, the company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the company’s control. Some of the factors that could affect future performance of the company are higher energy and raw material costs, costs of imports and related tariffs, labor relations, capital and environmental requirements, changes in foreign currency exchange rates, borrowing restrictions, validity of patents and other intellectual property, and pension costs. In the context of the forward-looking information provided in this news release, please refer to the discussions of risk factors and other information detailed in, as well as the other information contained in the company’s most recent Annual Report.
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Calgon Carbon Corporation
Condensed Consolidated Statement of Income
(Dollars in thousands except per share data)
(Unaudited)
                                 
    Quarter Ended     Twelve Months Ended  
    December 31,     December 31,  
    2010     2009     2010     2009  
 
                               
Net Sales
  $ 131,469     $ 110,692     $ 482,341     $ 411,910  
 
                       
 
                               
Cost of Products Sold
    88,139       63,975       316,884       266,597  
 
                               
Depreciation and Amortization
    6,253       5,692       22,082       18,130  
 
                               
Selling, Administrative & Research
    21,574       20,110       85,071       72,789  
 
                               
Litigation and Other Contingencies
    500       711       12,000       961  
 
                       
 
                               
 
    116,466       90,488       436,037       358,477  
 
                       
 
                               
Income from Operations
    15,003       20,204       46,304       53,433  
 
                               
Interest — Net
    233       149       323       173  
 
                               
Gain on Acquisitions
                2,666        
 
                               
Loss on debt extinguishment
                      (899 )
 
                               
Other Expense — Net
    (210 )     (515 )     (1,395 )     (3,089 )
 
                       
 
                               
Income From Operations Before Income Tax and Equity in Income (Loss) from Equity Investments
    15,026       19,838       47,898       49,618  
 
                               
Income Tax Provision
    2,520       6,567       13,160       11,754  
 
                       
 
                               
Income from Operations Before Equity in Income (Loss) from Equity Investments
    12,506       13,271       34,738       37,864  
 
                               
Equity in Income (Loss) from Equity Investments
          (43 )     112       1,295  
 
                       
 
                               
Net Income
  $ 12,506     $ 13,228     $ 34,850     $ 39,159  
 
                       
 
                               
Net Income per Common Share
                               
Basic
  $ .22     $ .24     $ .62     $ .72  
 
                               
Diluted
  $ .22     $ .23     $ .61     $ .69  
 
                               
Weighted Average Shares Outstanding (Thousands)
                               
Basic
    56,020       55,622       55,867       54,757  
 
                               
Diluted
    56,816       56,654       56,742       56,529  
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Calgon Carbon Corporation
Segment Data:
                                 
Segment Sales   4Q10     4Q09     YTD 2010     YTD 2009  
 
                               
Activated Carbon and Service
    116,879       96,820       427,713       358,196  
Equipment
    12,615       11,132       46,010       43,916  
Consumer
    1,975       2,740       8,618       9,798  
 
                       
 
                               
Total Sales (thousands)
  $ 131,469     $ 110,692     $ 482,341     $ 411,910  
                                 
Segment                        
Operating Income (loss)*   4Q10     4Q09     YTD 2010     YTD 2009  
 
                               
Activated Carbon and Service
    23,446       24,988       69,584       68,717  
Equipment
    1,112       707       1,990       2,584  
Consumer
    (3,302 )     201       (3,188 )     262  
 
                       
 
                               
Income from Operations (thousands)
  $ 21,256     $ 25,896     $ 68,386     $ 71,563  
 
*   Before depreciation and amortization. The Activated Carbon and Service segment includes a reduction of $2.8 million and a charge of $8.7 million for the quarter and year-to-date periods ended 2010, respectively, related to legal and other contingencies. The Consumer segment includes a charge of $3.3 million for both the quarter and year-to-date periods 2010 related to a legal contingency.
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Calgon Carbon Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
                 
    December 31,     December 31,  
    2010     2009  
Assets
               
 
               
Current assets:
               
 
               
Cash and cash equivalents
  $ 33,992     $ 38,029  
 
               
Restricted cash
    1,173       5,556  
 
               
Receivables
    94,354       64,304  
 
               
Inventories
    101,693       84,587  
 
               
Other current assets
    40,836       29,369  
 
           
 
               
Total current assets
    272,048       221,845  
 
               
Property, plant and equipment, net
    186,834       155,100  
 
               
Other assets
    42,681       48,773  
 
           
 
               
Total assets
  $ 501,563     $ 425,718  
 
           
 
               
Liabilities and Shareholders’ Equity
               
 
               
Current liabilities:
               
 
               
Short-term debt
  $ 21,442     $  
 
               
Current portion of long-term debt
    3,203        
 
               
Other current liabilities
    80,529       62,021  
 
           
 
               
Total current liabilities
    105,174       62,021  
 
               
Long-term debt
    3,721        
 
               
Other liabilities
    49,430       56,611  
 
           
 
               
Total liabilities
    158,325       118,632  
 
               
Redeemable Non-Controlling Interest
    274        
 
               
Total shareholders’ equity
    342,964       307,086  
 
           
 
               
Total liabilities and shareholders’ equity
  $ 501,563     $ 425,718  
 
           
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