Press Release

Calgon Carbon Announces Second Quarter Results

PITTSBURGH, PA  –  08/02/2011

Calgon Carbon Corporation (NYSE: CCC) announced results for the second quarter ended June 30, 2011.

The company reported net income of $11.3 million for the second quarter of 2011, as compared to net income of $2.9 million for the second quarter of 2010. On a fully diluted basis, net income per common share for the second quarter of 2011 was $0.20, as compared to $0.05 for the second quarter of 2010.

Income from operations for the second quarter of 2011 was $17.4 million, versus $4.3 million for the comparable period of 2010.

Both income from operations and net income for the second quarter of 2010 included an $11.5 million ($7.2 million after-tax) charge for a litigation contingency.

Net sales for the second quarter of 2011 were $135.3 million, an $11.7 million, or a 9.5%, increase over the comparable period in 2010. Currency translation had a $6.6 million positive impact on sales for the second quarter due to the weak dollar.

For the second quarter of 2011, sales for the Activated Carbon and Service segment increased 10.1%, as compared to the second quarter of 2010. The increase was due principally to higher demand for certain activated carbon and service products in the environmental water, environmental air, and food markets.

Equipment sales for the second quarter of 2011 increased 5.0% over the second quarter of 2010 due to higher revenue from ballast water treatment systems. For the second quarter of 2011, Consumer sales were comparable to the second quarter of 2010.

Net sales less the cost of products sold as a percentage of net sales for the second quarter of 2011 was 32.8% versus 34.8% for the second quarter of 2010. One percentage point of the decline was attributable to a $1.3 million charge related to the PreZerve® product line, which was previously disclosed as being discontinued. An increase in sales of lower margin outsourced carbon products also contributed to the decline.

Selling, administrative and research expenses for the second quarter of 2011 were comparable to the second quarter of 2010. As a percentage of sales, however, SG&A improved to 16.6% for the second quarter of 2011 versus 17.8% for the second quarter of 2010.

Environmental and litigation contingencies for the second quarter of 2011 included a $1.3 million reduction in the estimate to complete a remediation project at the company’s production facility in Columbus, Ohio. In the second quarter of 2010, the company recorded an $11.5 million litigation contingency charge.

Calgon Carbon’s board of directors did not declare a quarterly dividend.

Net sales for the six months ended June 30, 2011, were $259.7 million, a $33.2 million, or a 14.6%, increase over the comparable period in 2010. Of this increase, $17.9 million is attributable to an additional three months of Calgon Carbon Japan net revenue, since its results were fully consolidated as of April 1, 2010.

Results for the six months ended June 30, 2010, included a gain on acquisitions of $2.7 million.

Currency translation had a $7.5 million positive impact on sales for the first half of 2011 due to the weak dollar.

Net income for the six months ended June 30, 2011, was $19.8 million versus $12.4 million for the comparable period of 2010. Fully diluted net income per common share for the first half of 2011 was $0.35. Fully diluted net income per common share for the first half of 2010 was $0.22.

Commenting on the quarter, John Stanik, Calgon Carbon’s chairman, president and chief executive officer, said, “Calgon Carbon’s performance for the quarter was solid, as sales strengthened and mix improved as the quarter progressed. Margins also improved sequentially, excluding the effect of the PreZerve inventory charge.”

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

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.

Calgon Carbon Corporation Condensed Consolidated Statement of Income
(Dollars in thousands except per share data) (Unaudited)

 

  Quarter Ended June 30,   Six Months Ended June 30
  2011   2010   2011   2010
Net Sales $135,298   $123,574   $259,678   $226,501
Cost of Products Sold 90,864   80,512   173,853   146,303
Depreciation and Amortization 5,655   5,261   11,195   10,338
Selling, Administrative & Research 22,499   22,044   44,831   41,695
Environmental and Litigation Contingencies (1,135)   11,500   (956)   11,500
  117,883   119,317   228,923   209,836
Income from Operations 17,415   4,257   30,755   16,665
Interest – Net 58   2   103   110
Gain on Acquisitions       2,666
Other Expense – Net (46)   (172)   (236)   (475)
Income From Operations Before Income Tax and Equity in Income from Equity Investments 17,427   4,087   30,622   18,966
Income Tax Provision 6,136   1,171   10,854   6,686
Income from Operations Before Equity in Income from Equity Investments 11,291   2,916   19,768   12,280
Equity in Income from Equity Investments       112
Net Income $11,291   $2,916   $19,768   $12,392
Net Income per Common Share              
Basic $.20   $.05   $.35   $.22
Diluted $.20   $.05   $.35   $.22
Weighted Average Shares Outstanding (Thousands)              
Basic 56,188   55,830   56,156   55,770
Diluted 57,054   56,748   56,974   56,737

 

Calgon Carbon Corporation Segment Data

 

Segment Sales 2Q11   2Q10   YTD 2011   YTD 2010
Activated Carbon and Service 121,522   110,381   234,406   200,833
Equipment 11,681   11,129   20,798   21,289
Consumer 2,095   2,064   4,474   4,379
Total Sales (thousands) $135,298   $123,574   $259,678   $226,501
Segment Operating Income (loss)* 2Q11   2Q10   YTD 2011   YTD 2010
Activated Carbon and Service 24,890   9,275   43,957   26,962
Equipment (484)   243   (866)   (72)
Consumer (1,336)     (1,141)   113
Income from Operations (thousands) $23,070   $9,518   $41,950   $27,003

*Before depreciation and amortization. The 2011 quarter and year to date periods include a $1.3 million charge related to the PreZerve product line in the Consumer Segment as well as a $1.3 million reduction in an environmental liability in the Activated Carbon and Service segment. The 2010 quarter and year to date periods for the Activated Carbon and Service segment include a charge of $11.5 million related to a litigation contingency.

Calgon Carbon Corporation Condensed Consolidated Balance Sheet
(Dollars in thousands) (Unaudited)

 

    June 30, 2011   December 31, 2011
Assets        
Current assets:        
Cash and cash equivalents   $13,927   $33,992
Restricted cash   1,275   1,173
Receivables   92,490   94,354
Inventories   113,201   101,693
Other current assets   40,673   40,836
Total current assets   261,566   272,048
Property, plant and equipment, net   217,623   186,834
Other assets   41,738   42,681
Total assets   $520,927   $501,563
Liabilities and Shareholders’ Equity        
Current liabilities:        
Short-term debt   $18,019   $21,442
Current portion of long-term debt   3,010   3,203
Other current liabilities   72,773   80,529
Total current liabilities   93,802   105,174
Long-term debt   4,098   3,721
Other liabilities   52,631   49,430
Total liabilities   150,531   158,325
Redeemable non-controlling interest     274
Total shareholders’ equity   370,396   342,964
Total liabilities and shareholders’ equity   $520,927   $501,563