Press Release

Calgon Carbon Announces Third Quarter Results

PITTSBURGH, PA  –  11/03/2011

Calgon Carbon Corporation (NYSE: CCC) reported results for the third quarter ended September 30, 2011.

For the third quarter of 2011, the company reported income from operations of $18.2 million, as compared to $14.6 million for the third quarter of 2010.

Net income for the third quarter of 2011 was $14.5 million versus $10.0 million for the comparable period of 2010. On a fully diluted basis, net income per common share for the third quarter of 2011 was $0.25 as compared to $0.18 for the comparable quarter of 2010. Results for the third quarter of 2011 included $2.8 million of income due to the reversal of an uncertain tax position liability. Results for the third quarter of 2010 included $0.8 million of income, primarily from the reversal of a valuation allowance on foreign tax credits.

Net sales for the third quarter of 2011 were $143.6 million versus third quarter 2010 sales of $124.4 million, an increase of 15.5%. Currency translation had a $5.1 million positive impact on sales for the third quarter of 2011 due to the weaker U.S. dollar.

For the third quarter of 2011, sales of Activated Carbon and Service increased by 18.2%, as compared to the third quarter of 2010. Sales increased versus the comparable quarter of 2010 in five of the company’s six market segments with the largest increases in potable water (including supply of a large quantity of activated carbon for a new treatment facility), wastewater, and environmental air treatment. These increases were due primarily to higher demand for activated carbon products and services and were partially offset by lower demand for activated carbon products in the food market.

Equipment sales declined 4.5% versus the third quarter of 2010, due to lower revenue from traditional carbon adsorption equipment. The substantial increase in revenue for UV systems in the third quarter of 2011 did not offset this decline. An 11.0% decline in Consumer sales for the third quarter of 2011 was due to lower sales of PreZerve® products. The company had previously disclosed that it was discontinuing that product line.

Net sales less the cost of products sold as a percentage of net sales was 33.8% for the third quarter of 2011 versus 33.7% for the third quarter of 2010.

Selling, administrative and research expenses for the third quarter of 2011 were $24.0 million as compared to $21.8 million for the third quarter of 2010. Selling, administrative and research expenses as a percentage of revenue were 16.7% for the third quarter of 2011 versus 17.5% for the comparable quarter in 2010.

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

Net sales for the nine months ended September 30, 2011 were $403.3 million, a $52.4 million, or a 14.9%, increase over the comparable period of 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 on April 1, 2010.

Net income for the nine months ended September 30, 2011, was $34.3 million versus $22.3 million for the comparable period of 2010. Results for the nine months ended September 30, 2011, included the previously noted tax adjustment as well as a $1.3 million reduction in the estimate to complete a remediation project at one of the company’s plants. Results for the nine months ended September 30, 2010, included a $2.7 million gain on acquisitions and an $11.5 million litigation contingency charge.

Fully diluted net income per common share for the nine months ended September 30, 2011, was $0.60 as compared to $0.39 for the comparable period of 2010.

Commenting on the results, John Stanik, Calgon Carbon’s chairman, president and chief executive officer, said, “Our company’s performance for the third quarter was solid, despite the challenges of rising raw material costs and aggressive competition for sales of activated carbon in certain market segments. Activity in the ballast water treatment market, both sales and level of inquiries, continued to be strong, and we are very pleased with our position in this burgeoning market.”

“The completion of our 2011 reactivation expansion initiatives should have a positive impact on results in the short term. The continued pursuit of other growth opportunities, in conjunction with our recurring base business, should drive improvement in Calgon Carbon’s performance over time.”

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, 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 Statement of Income
(Dollars in thousands except per share data) (Unaudited)

 

  Quarter Ended September 30,   Nine Months Ended September 30,
  2011   2010   2011   2010
Net Sales $143,594   $124,371   $403,272   $350,872
Cost of Products Sold 95,030   82,442   268,883   228,745
Depreciation and Amortization 6,127   5,491   17,322   15,829
Selling, Administrative & Research 24,010   21,802   68,841   63,497
Environmental and Litigation Contingencies 199     (757)   11,500
  125,366   109,735   354,289   319,571
Income from Operations 18,228   14,636   48,983   31,301
Interest – Net 204   (20)   307   90
Gain on Acquisitions       2,666
Other Expense – Net (255)   (710)   (491)   (1,185)
Income From Operations Before Income Tax and Equity in Income from Equity Investments 18,177   13,906   48,799   32,872
Income Tax Provision 3,662   3,954   14,516   10,640
Income from Operations Before Equity in Income from Equity Investments 14,515   9,952   34,283   22,232
Equity in Income from Equity Investments       112
Net Income $14,515   $9,952   $34,283   $22,344
Net Income per Common Share              
Basic $.26   $.18   $.61   $.40
Diluted $.25   $.18   $.60   $.39
Weighted Average Shares Outstanding (Thousands)              
Basic 56,275   55,904   56,196   55,815
Diluted 56,983   56,686   56,977   56,720

 

Calgon Carbon Corporation Segment Data

 

Segment Sales 3Q11   3Q10   YTD 2011   YTD 2010
Activated Carbon and Service 130,016   110,000   364,422   310,834
Equipment 11,563   12,106   32,361   33,395
Consumer 2,015   2,265   6,489   6,643
Total Sales (thousands) $143,594   $124,371   $403,272   $350,872
Segment              
Operating Income (loss)* 3Q11   3Q10   YTD 2011   YTD 2010
Activated Carbon and Service 25,682   19,177   69,639   46,139
Equipment (677)   949   (1,543)   877
Consumer (650)   1   (1,791)   114
Income from Operations (thousands) $24,355   $20,127   $66,305   $47,130

*Before depreciation and amortization. The 2011 quarter and year to date periods include a $0.6 million and $1.9 million charge related to the PreZerve product line in the Consumer Segment. The year to date period also includes a $1.3 million reduction in an environmental liability in the Activated Carbon and Service segment. The 2010 year to date period for the Activated Carbon and Service segment includes a charge of $11.5 million related to a litigation contingency.

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

 

    September 30,   December 31,
    2011   2010
Assets        
Current assets:        
Cash and cash equivalents   $11,958   $33,992
Restricted cash   1,180   1,173
Receivables   99,839   94,354
Inventories   112,751   101,693
Other current assets   39,567   40,836
Total current assets   265,295   272,048
Property, plant and equipment, net   223,540   186,834
Other assets   41,618   42,681
Total assets   $530,453   $501,563
Liabilities and Shareholders’ Equity        
Current liabilities:        
Short-term debt   $24,916   $21,442
Current portion of long-term debt   3,142   3,203
Other current liabilities   72,349   80,529
Total current liabilities   100,407   105,174
Long-term debt   1,899   3,721
Other liabilities   45,122   49,430
Total liabilities   147,428   158,325
Redeemable non-controlling interest     274
Total shareholders’ equity   383,025   342,964
Total liabilities and shareholders’ equity   $530,453   $501,563