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8-K - CALGON CARBON CORPORATION 8-K - CALGON CARBON Corpa51157520.htm

Exhibit 99.1

Calgon Carbon Announces Second Quarter Results

  • Board Declares Dividend of $0.05 per share
  • Q2 2015 Financial Highlights:
    • Net sales total $135.5 million, including a $6.6 million negative impact from foreign exchange
    • Mercury control market revenues increase 141% to $15.4 million, compared to $6.4 million in last year’s second quarter
    • Gross margin (before depreciation and amortization) increased to 37.5% from 34.4% in last year’s second quarter
    • Fully diluted EPS was $0.24

PITTSBURGH--(BUSINESS WIRE)--August 6, 2015--Calgon Carbon Corporation (NYSE: CCC) announced results for the second quarter ended June 30, 2015.

Income from operations for the second quarter of 2015 was $19.8 million versus $21.3 million for the second quarter of 2014. Net income was $12.6 million for the second quarter of 2015 versus $15.2 million for the comparable period in 2014. On a fully diluted share basis, earnings per common share for the second quarter of 2015 were $0.24 versus $0.28 for the second quarter of 2014.

Net sales for the second quarter of 2015 were $135.5 million, as compared to $145.1 million for the comparable period in 2014. Currency translation had a $6.6 million negative impact on sales for the second quarter of 2015 due to the weaker euro, British pound sterling, and yen.

For the second quarter of 2015, sales for the Activated Carbon and Service segment were $123.6 million, a decline of $6.4 million from the same period a year ago. Excluding a $6.3 million negative impact from currency translation, Activated Carbon and Service segment sales were essentially flat. Sales of FLUEPAC® products to the environmental air market, principally in North America for mercury removal, were substantially higher. This increase was offset by lower demand for virgin and reactivated carbon primarily in the potable water markets in North America and Asia. Sales in the environmental water and food markets were also lower.


Equipment segment sales in the second quarter of 2015 were $9.6 million compared to $11.8 million for the same period a year ago. Higher sales of traditional ultraviolet light systems were more than offset by lower demand for carbon adsorption equipment and ballast water treatment systems.

Sales in the Consumer segment were $2.2 million in the second quarter of 2015 compared to $3.3 million in the second quarter of 2014. The $1.1 million decline was due to fulfillment of a single large order during the prior year second quarter.

Net sales less the cost of products sold (excluding depreciation and amortization), as a percentage of net sales for the second quarter of 2015 was 37.5%, versus 34.4% for the second quarter of 2014. The improvement was attributable to several factors, including a more favorable mix of higher margin activated carbon product sales, lower coal costs, and the impact of the Company’s focus on cost and operational efficiency improvements. In addition, the second quarter of 2015 included a $1.2 million, or an approximate one percentage point benefit related to an import duty refund in conjunction with the Trade Preferences Extension Act of 2015 that was signed into law on June 29, 2015.

Selling, administrative and research expenses for the second quarter of 2015 were $22.6 million versus $21.2 million for the comparable period of 2014. The increase was primarily due to the Company’s SAP re-implementation project to improve the functionality of its enterprise resource planning system which went live in July 2015. Expenses related to certain outside consulting services were also higher.

The income tax rate for the second quarter of 2015 was 34.2% versus 27.3% for the second quarter of 2014. The tax provision for the second quarter of 2014 was favorably impacted by a $1.4 million income tax benefit resulting from the conclusion of an Internal Revenue Service examination related to the Company’s 2008 amended tax return.

The Company continued its open market stock repurchase program and purchased 310,881 shares of Calgon Carbon stock during the second quarter. Including the repurchase of an additional 212,210 shares of common stock in July, the Company has repurchased a total of 603,591 shares in the current year, and has approximately $95 million of remaining authorization for common stock repurchases.

On August 4, 2015, Calgon Carbon’s Board of Directors declared a quarterly cash dividend of $0.05 per share, payable on September 15, 2015, to shareholders of record on September 4, 2015.

Commenting on the quarter, Randy Dearth, Calgon Carbon’s Chairman, President and Chief Executive Officer, said, “Our second quarter results demonstrate the positive impact of several Calgon Carbon strategic initiatives. Our ongoing focus on product innovation was a clear catalyst for the continued success of our FLUEPAC mercury control product revenues, as they exceeded our expectations for the quarter. Demonstrating the sustainability of our cost reduction initiatives, our gross margin before depreciation and amortization continued to improve, despite total quarterly revenues that fell shy of our expectations.”


“The second quarter was not without its challenges, as a combination of factors in several of our markets contributed to lower than expected sales. The anticipated level of our oil and gas market activities and projects were negatively impacted by the effects of continued low oil prices and labor disruptions. Quarterly demand from the sweetener, municipal water and environmental water markets were affected by customer order and utilization patterns, including the adverse impact of the unusually wet spring and summer weather conditions in the eastern United States. In addition, revenues in Japan were negatively impacted by increased competitive dynamics in that region.”

“While this quarter’s results exemplify the susceptibility of our products and services to variability in revenue timing on a quarterly basis; our market positioning, market share, and general level of demand for our products and services remains robust across most of our served markets. Accordingly, we expect second half 2015 revenues and profitability to improve sequentially from our first-six-months results as well as year-over-year, including an upward revision to our expected full year revenues of FLUEPAC mercury control market revenues from the forecast we provided in late June.”

Pure Water. Clean Air. Better World.

Calgon Carbon Corporation (NYSE:CCC) is a global leader in innovative solutions, high quality products and reliable services designed to protect human health and the environment from harmful contaminants in water, and air. As a leading manufacturer of activated carbon, with broad capabilities in ultraviolet light disinfection, the Company provides purification solutions for drinking water, wastewater, pollution abatement, and a variety of industrial and commercial manufacturing processes.

Calgon Carbon is the world’s largest producer of granular activated carbon and supplies more than 100 types of activated carbon products - in granular, powdered, pelletized and cloth form – for more than 700 distinct applications. Headquartered in Pittsburgh, Pennsylvania, Calgon Carbon Corporation employs approximately 1,100 people at more than 15 manufacturing, reactivation, and equipment fabrication facilities in the U.S., Asia, and in Europe, where Calgon Carbon is known as Chemviron Carbon. The company also has more than 27 sales and service centers throughout the world.

For more information about Calgon Carbon’s leading activated carbon and ultraviolet technology solutions for municipalities and industries, visit www.calgoncarbon.com.

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, availability of capital and environmental requirements as they relate both to our operations and to our customers, 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.


Calgon Carbon Corporation
Condensed Consolidated Statements of Comprehensive Income
(Dollars in thousands except per share data)
(Unaudited)
  Quarter Ended   Six Months Ended
June 30, June 30,
2015   2014 2015   2014
 
Net Sales $ 135,452   $ 145,132   $ 271,155   $ 276,764  
 
Cost of Products Sold (Excluding Depreciation and Amortization) 84,614 95,253 171,832 182,716
 
Depreciation and Amortization 8,463 7,525 17,164 14,554
 
Selling, Administrative & Research 22,580 21,151 45,074 42,793
 
Restructuring   -     (122 )   -     (225 )
 
  115,657     123,807     234,070     239,838  
 
Income from Operations 19,795 21,325 37,085 36,926
 
Interest Expense - Net (81 ) (24 ) (201 ) (123 )
 
Other Expense - Net   (603 )   (382 )   (1,151 )   (928 )
 
Income Before Income Tax Provision 19,111 20,919 35,733 35,875
 
Income Tax Provision   6,531     5,716     12,092     10,863  
 
Net Income 12,580 15,203 23,641 25,012
 
Other Comprehensive Income (Loss), Net of Tax
Foreign Currency Translation 3,324 971 (6,972 ) 1,095
Defined Benefit Pension Plans 147 120 957 322
Derivatives   (362 )   (213 )   (118 )   (419 )
 
Comprehensive Income $ 15,689   $ 16,081   $ 17,508   $ 26,010  
 
Net Income per Common Share
Basic $ .24 $ .29 $ .45 $ .47
Diluted $ .24 $ .28 $ .44 $ .46
 
Dividends per Common Share $ .05 $ - $ .10 $ -
 

Weighted Average Shares Outstanding (Thousands)

Basic 52,314 52,942 52,382 53,273
 
Diluted 53,179 53,845 53,254 54,181
 

Calgon Carbon Corporation        
 
 

Segment Data (unaudited):

(in thousands)
 

Segment Sales

2Q15 2Q14 YTD 2015 YTD 2014
 
Activated Carbon and Service 123,567 129,947 246,314 247,671
Equipment 9,636 11,837 20,344 22,304
Consumer   2,249   3,348     4,497     6,789  
 
Net Sales $ 135,452 $ 145,132 $ 271,155 $ 276,764
 
Segment

Operating Income (loss)*

2Q15 2Q14 YTD 2015 YTD 2014
 
Activated Carbon and Service 27,259 28,600 53,149 51,269
Equipment 395 (629 ) (52 ) (1,616 )
Consumer   604   757     1,152     1,602  
 
Income from Operations * $ 28,258 $ 28,728 $ 54,249 $ 51,255
 
 
*Before depreciation and amortization and restructuring.
 

Calgon Carbon Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
   
June 30, December 31,
2015 2014
 
Assets
 
Current assets:
 
Cash and cash equivalents $ 50,090 $ 53,133
 
Receivables 97,670 95,232
 
Inventories 106,929 98,446
 
Other current assets   39,322   46,151
 
Total current assets 294,011 292,962
 
Property, plant and equipment, net 306,173 290,586
 
Other assets   36,607   38,113
 
Total assets $ 636,791 $ 621,661
 
Liabilities and Shareholders' Equity
 
Current liabilities:
 
Short-term debt $ 407 $ 833
 
Current portion of long-term debt 2,250 -
 
Other current liabilities   69,158   74,586
 
Total current liabilities 71,815 75,419
 
Long-term debt 87,317 70,448
 
Other liabilities   65,468   70,321
 
Total liabilities 224,600 216,188
 
Total shareholders' equity   412,191   405,473
 
Total liabilities and shareholders' equity $ 636,791 $ 621,661

CONTACT:
Calgon Carbon Corporation
Dan Crookshank, 412-787-6795
Director – Investor Relations
dcrookshank@calgoncarbon.com