Calgon Carbon Announces Second Quarter Results
PITTSBURGH, PA – 07/31/2008
Calgon Carbon Corporation (NYSE:CCC) announced results for the second quarter ended June 30, 2008.
The company reported net income of $13.3 million for the second quarter of 2008, as compared to net income of $4.5 million for the second quarter of 2007. Net income for the second quarter of 2008 consisted of income from continuing operations of $9.8 million and income from discontinued operations of $3.5 million which represents the final adjustment to the sale price of the company’s charcoal business that was sold in the first quarter of 2006. On a fully diluted basis, net income per common share for the second quarter of 2008 was $0.25, consisting of $0.19 from continuing operations and $0.06 from discontinued operations. This compares with fully diluted net income per common share of $0.09 for the second quarter of 2007, all of which was from continuing operations.
Income from operations for the second quarter of 2008 was $16.1 million versus income from operations of $8.6 million for the comparable period in 2007.
Net sales for the second quarter of 2008, were $108.5 million versus second quarter 2007 sales of $88.4 million, an increase of 22.7%. Currency translation had a $3.5-million positive impact on sales for the second quarter of 2008 due to the strong Euro.
For the second quarter of 2008, sales of the Activated Carbon and Service segment increased by 27.5% versus the second quarter of 2007. The increase was primarily due to higher demand and pricing in the food, potable water, and environmental air treatment markets, and higher pricing in the environmental water treatment and industrial process markets. Equipment sales were comparable to the second quarter of 2007. A 19.6% decrease in consumer sales for the second quarter of 2008 was attributable to lower demand for the company’s PreZerve® products.
Net sales less the cost of products sold as a percentage of net sales for the second quarter of 2008 was 34.5% versus 32.7% for the second quarter of 2007. The increase was due primarily to higher pricing on certain activated carbon and service products.
Selling, administrative and research expenses for the second quarter of 2008 increased 7.8% versus the second quarter of 2007, principally due to higher employee-related costs which were partially offset by a decrease in bad debt expense. Selling, administrative and research expenses as a percentage of sales were 15.8% as compared to 18.0% for the second quarter of 2007.
Calgon Carbon’s board of directors did not declare a quarterly dividend.
Net income for the six months ended June 30, 2008 was $24.1 million versus $6.5 million for the comparable period of 2007. Net income for the first half of 2008 included a non-recurring after-tax gain of $5.7 million from the settlement of a lawsuit and a non-recurring after-tax gain of $3.5 million related to the sale of the company’s charcoal business. Fully diluted net income per common share for the first half of 2008 was $0.47, which consisted of $0.40 from continuing operations and $0.07 from discontinued operations. Fully diluted net income per common share for the first half of 2007 was $0.14, all of which was from continuing operations.
Income from operations for the six months ended June 30, 2008 was $33.7 million as compared to income from operations of $13.5 million for the first half of 2007.
Commenting on the results, John Stanik, Calgon Carbon’s chairman, president and chief executive officer said, “We are pleased with the results. Sales for the second quarter were the highest quarterly sales in our company’s 23-year history. Gross margin showed significant improvement – both year-over-year and sequentially. In addition, we made solid progress toward our strategic goal of reducing SG&A as a percentage of sales. These metrics reflect our continued success in obtaining higher value for our activated carbon products and services.”
Calgon Carbon Corporation, headquartered in Pittsburgh, Pennsylvania, is a global leader in services and solutions for making water and air safer and cleaner.
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This document contains certain statements that are forward-looking relative to the company’s future strategy and performance. They involve known and unknown risks and uncertainties that may cause the company’s actual results in future periods to be materially different from any future performance.
Condensed Consolidated Balance Sheet
(Dollars in thousands)
|Cash and cash equivalents||$ 38,549||$ 30,304|
|Other current assets||23,227||20,546|
|Total current assets||214,935||189,678|
|Property, plant and equipment, net||112,260||105,512|
|Total assets||$ 381,062||$ 348,140|
|LIABILITIES AND SHAREHOLDERS’ EQUITY|
|Short-term debt||$ 1,600||$ 1,504|
|Current portion of long-term debt||65,744||62,507|
|Other current liabilities||55,317||55,750|
|Total current liabilities||122,661||119,761|
|Total shareholders’ equity||206,733||172,249|
|Total liabilities and shareholders’ equity||$ 381,062||$ 348,140|
Condensed Consolidated Statement of Income
(Dollars in thousands except per share data)
|Quarter Ended||Six Months Ended|
|June 30,||June 30,|
|Net Sales||$ 108,476||$ 88,428||$ 198,807||$ 171,458|
|Cost of Products Sold||71,021||59,556||132,786||117,980|
|Depreciation and Amortization||4,199||4,331||8,125||8,592|
|Selling, Administrative & Research||17,154||15,916||33,445||31,350|
|Gain from AST Settlement||–||–||(9,250)||–|
|Income from Operations||16,102||8,625||33,701||13,536|
|Interest Expense – Net||(779)||(1,010)||(1,618)||(2,158)|
|Other Expense – Net||(480)||(408)||(570)||(811)|
|Income From Continuing Operations Before Income Tax and||14,843||7,207||31,513||10,567|
|Equity in Income (Loss) from Equity Investments|
|Income Tax Provision||4,887||3,147||11,121||5,527|
|Income from Continuing Operations Before Equity in|
|Income (Loss) from Equity Investments||9,956||4,060||20,392||5,040|
|Equity in Income (Loss) from Equity Investments||(139)||402||299||1,456|
|Income from Continuing Operations||9,817||4,462||20,691||6,496|
|Income from Discontinued Operations||3,447||–||3,447||–|
|Net Income||$ 13,264||$ 4,462||$ 24,138||$ 6,496|
|Net Income per Common Share|
|Income from Continuing Operations||$ .24||$ .11||$ .51||$ .16|
|Income from Discontinued Operations||$ .09||$ –||$ .09||$ –|
|Total||$ .33||$ .11||$ .60||$ .16|
|Income from Continuing Operations||$ .19||$ .09||$ .40||$ .14|
|Income from Discontinued Operations||$ .06||$ –||$ .07||$ –|
|Total||$ .25||$ .09||$ .47||$ .14|
Segment Data – Continuing Operations
|Segment Sales||2Q08||2Q07||YTD 2008||YTD 2007|
|Activated Carbon and Service||95,284||74,723||172,182||143,406|
|Total Sales (thousands)||$ 108,476||$ 88,428||$ 198,807||$ 171,458|
|Operating Income (loss)*||2Q08||2Q07||YTD 2008||YTD 2007|
|Activated Carbon and Service||19,766||13,015||37,142||21,488|
|Income from Operations (thousands)||$ 20,301||$ 12,956||$ 41,826||$ 22,128|