Press Release

Calgon Carbon Announces Second Quarter Results

PITTSBURGH, PA  –  07/26/2004

Calgon Carbon Corporation (NYSE:CCC) announced results for the second quarter ended June 30, 2004.

Sales for the second quarter were $97.1 million versus second quarter 2003 sales of $78.1 million, an increase of 24.4%. The company reported net income of $4.2 million as compared to net income of $3.0 million for the second quarter of 2003, a 42.0% increase. Earnings per share on a diluted basis for the second quarter of 2004 were $0.11 versus $0.08 for the second quarter of 2003. Sales of the former Specialty Products Division of Waterlink, Inc. (Waterlink), which Calgon Carbon acquired in February 2004, were $15.1 million for the second quarter of 2004. Foreign currency translation had a $2.6 million positive effect on sales for the quarter due to the stronger Euro.

For the second quarter of 2004, sales of the Activated Carbon and Service segment increased 19.0% versus the comparable period in 2003. Excluding the contribution from Waterlink, sales in this segment declined 4.0%. The quarter-over-quarter comparison was adversely affected by a one-time sale of activated carbon in 2003 for a new drinking water treatment facility in Asia for which there was no replacement in 2004. Lower demand for service in Europe and the U.S. also contributed to the decline.

Equipment sales increased 83.3% in the second quarter of 2004, as compared to the second quarter of 2003. Excluding Waterlink sales, this segment was up 60.8%, due to higher sales of solvent recovery, ion exchange, and ultraviolet light systems.

A 5.7% increase in consumer sales for the quarter was attributable to higher charcoal and liquid sales in Europe.

Consolidated gross profit before depreciation and amortization as a percentage of sales for the second quarter of 2004 was 28.6%, versus 31.2% for the second quarter of 2003. The decline was primarily attributable to product mix, competitive pricing, and higher raw material costs in the Carbon and Service Segment. Equipment margins also declined due to competitive bidding. However, margins on ultra violet light systems sold in North America and on ISEP® equipment for the Asian market showed significant improvement versus the second quarter of 2003. Product mix in Europe and reduced sales of PreZerve® products in the U.S. had an adverse impact on Consumer margins for the quarter.

Operating expense for the second quarter of 2004 was $1.0 million higher than for the comparable period of 2003, including $2.3 million associated with Waterlink. A $0.5 million decrease in employee-related costs and a $0.5 million favorable judgment in a patent litigation suit concerning the company’s proprietary ISEP® system partially offset the Waterlink expenses.

Sales for the six months ended June 30, 2004 were $168.4 million, versus $142.1 million for the six months ended June 30, 2003, an increase of 18.5%. For the six months ended June 30, 2004, the company reported net income of $3.7 million, versus $1.2 million for the comparable period in 2003, an increase of 200.0%. For the first half of 2004, earnings per share on a diluted basis were $0.09 as compared to $0.03 for the first half of 2003. Waterlink’s sales contribution for the six months ended June 30, 2004 was $22.2 million. Year to date, foreign currency translation had a positive impact of $5.7 million on sales.

Calgon Carbon’s board of directors declared a dividend of $0.03 per share. Dividends will be payable to shareholders of record as of August 13, 2004, and will be payable on September 1, 2004.

Commenting on the quarter, John Stanik, president and chief executive officer of Calgon Carbon, said, “I am pleased with the results as an indicator of the progress we are making in implementing our strategic initiatives. During the remainder of this transition year, we will continue to make the investments and the changes necessary to accelerate improvement in performance over the remaining two years of our strategic plan.”

Calgon Carbon Corporation, headquartered in Pittsburgh, Pennsylvania, is a global leader in services and solutions for making water and air safer and cleaner. The company employs approximately 1,200 people at 18 operating facilities and 22 sales and service centers worldwide.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This document contains certain statements that are forward-looking relative to the company’s future strategy and performance. 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.

Contact: Gail Gerono, vice president, investor relations, 412 787-6795.

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Segment Data                
                 
Segment Sales   2Q04   2Q03   YTD 2004   YTD 2003
                 
Carbon and Service   67,596   56,810   123,482   108,005
Equipment   16,629   9,071   24,670   14,940
Consumer   12,901   12,204   20,217   19,190
                 
Total Sales (thousands)   $97,126   $78,085   $168,369   $142,135
                 
Segment                
Operating Income (loss)*   2Q04   2Q03   YTD 2004   YTD 2003
                 
Carbon and Service   10,028   8,559   16,678   13,572
Equipment   726   (399)   (1,232)   (1,669)
Consumer   1,305   1,528   1,942   1,399
                 
Total Income from                
operations (thousands)   $12,059   $9,688   $17,388   $13,302

* Before depreciation and amortization

Condensed Consolidated Statement of Income
(Dollars in thousands except per share data)
(Unaudited)
               
               
  Quarter Ended   Six Months Ended
  June 30,   June 30,
  2004   2003   2004   2003
               
Net Sales $97,126   $78,085   $168,369   $142,135
               
Cost of Products Sold 69,377   53,738   119,389   98,969
               
Depreciation and Amortization 5,848   4,889   11,156   9,789
               
Selling, Administrative & Research 15,690   14,659   31,592   29,864
               
  90,915   73,286   162,137   138,622
               
Income from Operations 6,211   4,799   6,232   3,513
               
Interest Income (Expense) – Net (662)   (485)   (1,133)   (880)
               
Equity Income in Calgon Mitsubishi Chemical Corporation 397   233   917   58
               
Other Income (Expense) – Net (900)   (727)   (1,688)   (1,241)
               
Income Before Income Taxes and              
Minority Interest 5,046   3,820   4,328   1,450
               
Provision for Income Taxes 807   840   649   319
               
Income Before Minority Interest 4,239   2,980   3,679   1,131
               
Minority Interest 10   12   21   101
               
Net Income $4,249   $2,992   $3,700   $1,232
               
Net Income per Common Share              
Basic and Diluted $.11   $.08   $.09   $.03
               
Weighted Average Shares              
Outstanding (Thousands)              
Basic 39,035   38,996   39,030   38,990
               
Diluted 39,283   39,093   39,344   39,064

 

Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
    June 30,   December 31,
    2004   2003
         
ASSETS        
         
Current assets:        
         
Cash and cash equivalents   $ 8,906   $ 8,954
         
Receivables   66,496   46,133
         
Inventories   58,356   51,811
         
Other current assets   23,914   24,210
         
Total current assets   157,672   131,108
         
Property, plant and equipment, net   131,533   128,956
         
Other assets   70,223   42,131
         
Total assets   $359,428   $302,195
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
         
Current liabilities:        
         
Short-term debt   $604   $604
         
Other current liabilities   62,953   45,489
         
Total current liabilities   63,557   46,093
         
Long-term debt   86,000   53,600
         
Other liabilities   47,204   40,350
         
Total liabilities   196,761   140,043
         
Minority interest   341   279
         
Total shareholders’ equity   162,326   161,873
         
Total liabilities and shareholders’ equity   $359,428   $302,195