Calgon Carbon Announces Third Quarter Results
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PITTSBURGH--(BUSINESS WIRE)-- Calgon Carbon Corporation (NYSE: CCC) announced results for the third quarter ended September 30, 2009.
The company reported net income of $13.9 million for the third quarter of 2009, versus $2.2 million for the comparable period of 2008. On a fully diluted basis, net income per common share for the third quarter of 2009 was $0.25 as compared to fully diluted net income per common share of $0.04 for the comparable quarter of 2008.
Income from operations for the third quarter of 2009 was $14.1 million, as compared to income from operations of $12.3 million for the third quarter of 2008.
Net sales for the third quarter of 2009 were $107.5 million versus third quarter 2008 sales of $99.1 million, an increase of 8.5%. Currency translation had a $2.3-million negative impact on sales for the third quarter of 2009 due to the stronger U.S. dollar.
For the third quarter of 2009, sales of Activated Carbon and Service increased by 10.6% versus the third quarter of 2008. The increase was due to favorable pricing and higher demand in areas of strategic focus, including products in the environmental air treatment market, as well as supply of activated carbon for a new potable water treatment facility in Asia. Equipment sales declined 9.5% versus the third quarter of 2008. The decrease was attributable to lower demand for traditional carbon adsorption and odor control equipment, and was partially offset by higher revenue from systems that employ ultraviolet light technology. A 23.7% increase in Consumer sales for the third quarter of 2009 was due to higher demand for activated carbon cloth.
Net sales less the cost of products sold as a percentage of net sales was 33.9% for both the third quarter of 2009 and the third quarter of 2008.
Selling, administrative and research expenses for the third quarter of 2009 and for the third quarter of 2008 were comparable. As a result of the quarter-over-quarter sales growth, selling, administrative and research expenses as a percentage of sales were 16.4% for the third quarter of 2009, versus 17.5% for the third quarter of 2008.
For the third quarter of 2009, the company reported a tax benefit of $0.8 million, versus a tax provision of $1.6 million for the comparable period in 2008. During the third quarter of 2009, the company determined that a sufficient amount of foreign source income had been generated to release $5.0 million of its valuation allowance on foreign tax credits. Absent this and other 2009 discrete events, the company estimates that its 2009 consolidated annual tax rate will be 38.4%.
Calgon Carbon's board of directors did not declare a quarterly dividend.
Net income for the nine months ended September 30, 2009 was $25.9 million versus $25.3 million for the comparable period of 2008. The 2009 results include the above mentioned $5.0 million valuation allowance release. The 2008 results include a non-recurring after-tax gain of $5.7 million from the settlement of a lawsuit, and a non-recurring after-tax gain of $3.2 million related to the sale of the company's charcoal business. Fully diluted net income per common share for the nine months ended September 30, 2009 was $0.46. Fully diluted net income per common share for the nine months ended September 30, 2008 was $0.48 which consisted of $0.42 from continuing operations and $0.06 from discontinued operations.
In May 2008, Accounting Standards Codification (ASC) 470-20 "Debt with Conversion and Other Options" was issued. ASC 470-20 affected the accounting treatment for convertible debt instruments that allow for either mandatory or optional cash settlements. ASC 470-20 affected the accounting associated with the company's senior convertible notes. Guidance within this ASC required the company to recognize additional non-cash interest expense based on the market rate for similar debt instruments without the conversion feature, as well as losses on induced conversions. ASC 470-20 was effective for fiscal periods beginning in 2009 and required retrospective application. The company adopted this accounting guidance in the first quarter of 2009 and, accordingly, the prior periods' financial statements included herein have been adjusted. Adoption of this guidance reduced previously reported earnings per diluted share for the third quarter and full year fiscal 2008 by $0.08 and $0.10, respectively.
Commenting on the results, John Stanik, Calgon Carbon's chairman, president and chief executive officer, said, "We are pleased with the third quarter performance. Sales of activated carbon for potable water treatment in Asia and for the removal of mercury from coal-fired power plants offset the decline in demand in our traditional markets that have been affected by the global economic slowdown. We are very encouraged by the demand for our activated carbon products in these emerging markets which we have identified as major growth opportunities for Calgon Carbon."
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 Nine Months Ended
September 30, September 30,
2009 2008* 2009 2008*
Net Sales $ 107,495 $ 99,069 $ 301,218 $ 297,876
Cost of Products Sold 71,089 65,461 202,622 198,247
Depreciation and 4,690 4,036 12,438 12,161
Amortization
Selling, Administrative & 17,596 17,311 52,929 50,756
Research
Gain from AST Settlement - - - (9,250 )
93,375 86,808 267,989 251,914
Income from Operations 14,120 12,261 33,229 45,962
Interest Expense - Net 27 (1,258 ) 24 (4,559 )
Loss on Debt Extinguishment (899 ) (6,313 ) (899 ) (6,313 )
Other Expense - Net (646 ) (701 ) (2,574 ) (1,269 )
Income From Continuing
Operations Before Income Tax 12,602 3,989 29,780 33,821
and Equity in Income from
Equity Investments
Income Tax (Benefit) (787 ) 1,593 5,187 12,067
Provision
Income from Continuing
Operations Before Equity 13,389 2,396 24,593 21,754
in Income from Equity
Investments
Equity in Income from Equity 470 38 1,338 337
Investments
Income from Continuing 13,859 2,434 25,931 22,091
Operations
Income (Loss) from - (211 ) - 3,236
Discontinued Operations
Net Income $ 13,859 $ 2,223 $ 25,931 $ 25,327
Net Income per Common Share
Basic:
Income from Continuing $ .25 $ .05 $ .48 $ .53
Operations
Income (Loss) from $ - $ - $ - $ .08
Discontinued Operations
Total $ .25 $ .05 $ .48 $ .61
Diluted:
Income from Continuing $ .25 $ .04 $ .46 $ .42
Operations
Income (Loss) from $ - $ - $ - $ .06
Discontinued Operations
Total $ .25 $ .04 $ .46 $ .48
Weighted Average Shares
Outstanding (Thousands)
Basic 54,940 44,625 54,466 41,818
Diluted 56,448 53,798 56,274 52,536
* Results have been retrospectively adjusted to incorporate the adoption of
guidance within Accounting Standards
Codification (ASC) 470-20 "Debt with Conversion and Other Options," formerly APB
14-1, "Accounting for Convertible
Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial
Cash Settlement)."
Calgon Carbon Corporation Segment Data: Segment Sales 3Q09 3Q08 YTD 2009 YTD 2008 Activated Carbon and Service 94,230 85,219 261,376 257,401 Equipment 10,558 11,662 32,784 32,101 Consumer 2,707 2,188 7,058 8,374 Total Sales (thousands) $ 107,495 $ 99,069 $ 301,218 $ 297,876 Segment Operating Income (loss)* 3Q09 3Q08 YTD 2009 YTD 2008 Activated Carbon and Service 18,647 15,941 43,729 53,083 Equipment (60 ) 588 1,877 4,550 Consumer 223 (232 ) 61 490 Income from Operations $ 18,810 $ 16,297 $ 45,667 $ 58,123 (thousands) *Before depreciation and amortization. The YTD 2008 period includes the $9.3 million gain on AST settlement ($5.3 million Activated Carbon and Service and $4.0 million Equipment).
Calgon Carbon Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
September 30, December 31,
2009 2008*
Assets
Current assets:
Cash and cash equivalents $ 15,529 $ 16,750
Restricted cash 5,266 -
Receivables 62,296 64,515
Inventories 88,186 93,725
Other current assets 26,571 25,598
Total current assets 197,848 200,588
Property, plant and equipment, net 151,073 122,960
Other assets 57,684 63,714
Total assets $ 406,605 $ 387,262
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt $ - $ 1,605
Current portion of long-term debt - 7,903
Other current liabilities 55,446 56,036
Total current liabilities 55,446 65,544
Other liabilities 60,072 68,441
Total liabilities 115,518 133,985
Total shareholders' equity 291,087 253,277
Total liabilities and shareholders' equity $ 406,605 $ 387,262
* Results have been retrospectively adjusted to incorporate the adoption
of guidance within Accounting Standards
Codification (ASC) 470-20 "Debt with Conversion and Other Options,"
formerly APB 14-1, "Accounting for Convertible
Debt Instruments That May Be Settled in Cash upon Conversion (Including
Partial Cash Settlement)."
Source: Calgon Carbon Corporation
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