CARBO Ceramics Inc. Announces Second Quarter Results; Conference Call Scheduled for Today, 9:00 a.m. Central Time
IRVING, Texas, July 19 /PRNewswire-FirstCall/ --
CARBO Ceramics Inc. (NYSE: CRR), a manufacturer of ceramic proppants for use in the hydraulic
fracturing of natural gas and oil wells, today announced net income of
$5.0 million or $0.33 per share (on a diluted basis), on revenues of
$29.7 million, for the quarter ended June 30, 2002. For the six months ended
June 30, 2002, the company reported net income of $10.0 million or $0.66 per
diluted share, on revenues of $59.0 million.
Revenues for the second quarter decreased 16 percent from the same period
a year earlier due to a decline in sales volume primarily attributable to a
reduction in North American natural gas drilling activity. Sales volume for
the quarter totaled 104 million pounds, a decline of 20 percent versus last
year's second quarter. The U.S. natural gas rig count for the second quarter
was 33 percent lower than the same period last year, while the Canadian rig
count was down 42 percent versus the prior year. Gross profit margins
declined versus the second quarter of 2001 due to lower production rates in
the company's manufacturing facilities. While selling, general and
administrative expenses decreased $2.9 million compared to the second quarter
of last year, second quarter 2001 results include a $3.5 million charge
recognized in connection with the modification of stock-based compensation.
Excluding this 2001 charge, selling, general and administrative expenses for
the 2002 second quarter increased $630,000 versus the same period last year.
The increase in expenses was due to additional marketing and development
activities associated with the expansion of the company's technical marketing
program, engineering activity related to potential manufacturing capacity
expansion and start-up and management activities at the company's plant under
construction in China.
Year to date revenues declined 15 percent versus the previous year, driven
primarily by a 29 percent decline in the U.S. natural gas rig count. Gross
profit margins for the six months ended June 30 declined from 41 percent in
2001 to 40 percent in the current year. The decline was the result of lower
natural gas costs in 2002 being offset by lower production rates at the
company's manufacturing facilities. Excluding the previously mentioned
$3.5 million charge in 2001, selling, general and administrative expenses for
the year to date increased $792,000 from last year due to enhanced marketing
and engineering activity as well as start-up and management activities in
China. Net income for the year to date 2002 declined 14 percent compared to
the same period in 2001. Excluding the charge for modification of stock-based
compensation, net income for the first six months of 2002 declined 28 percent
compared to the same period a year earlier.
Mark Pearson, President and Chief Executive Officer of CARBO Ceramics,
stated, "Despite operating in a difficult market environment, this was an
exciting quarter for CARBO Ceramics. On May 31, we completed our acquisition
of Pinnacle Technologies and we are very enthusiastic about the potential for
growth in this business. Overall, our results for the second quarter reflect
the continuing weakness in drilling activity experienced throughout most of
the quarter. Given the low level of activity, we are encouraged by the
relative strength of our business. We believe this reflects the success of
our expanding marketing efforts. We expect an improvement in drilling
activity during the second half of the year which should allow us to operate
our manufacturing facilities more efficiently and improve operating margins."
As previously announced, a conference call to discuss the company's second
quarter results has been scheduled for Friday, July 19, at 9:00 a.m. central
time. To participate in the call, please dial 719-457-2633 and refer to
confirmation code 285206. The call can also be accessed live or on a delayed
basis via the company's Web site, http://www.carboceramics.com or by accessing the
following URL: http://www.firstcallevents.com/service/ajwz362769751gf12.html.
Carbo Ceramics Inc. is based in Irving, Texas.
This news release contains forward-looking statements that involve risks
and uncertainties including price volatility, operation and other risks and
other factors described in the company's publicly available SEC reports, which
could cause actual results to differ materially from those indicated in the
forward-looking statements.
- tables follow -
Three Months Ended Six Months Ended
June 30 June 30
2002 2001 2002 2001
(In thousands except (In thousands except
per share data) per share data)
Revenues $29,651 $35,304 $58,962 $69,478
Operating expenses:
Cost of sales 17,681 19,864 35,314 40,992
Selling, general &
administrative 4,257 7,131 8,104 10,816
Start-up costs 68 --- 111 ---
Total operating
expenses 22,006 26,995 43,529 51,808
Operating income 7,645 8,309 15,433 17,670
Net interest income 136 269 292 487
Other income (expense) 76 (5) 88 22
Income before income taxes 7,857 8,573 15,813 18,179
Income taxes 2,881 3,136 5,808 6,562
Net income $4,976 $5,437 $10,005 $11,617
Earnings per share:
Basic $0.33 $0.36 $0.66 $0.78
Diluted $0.33 $0.36 $0.66 $0.77
Average shares outstanding:
Basic 15,162 14,917 15,074 14,859
Diluted 15,306 15,087 15,202 15,027
Selected Balance Sheet Information
June 30, 2002 Dec. 31, 2001
(in thousands)
Total current assets $66,997 $76,502
Net property, plant and
equipment 92,249 82,527
Other assets, net 22,963 ---
Total assets 182,209 159,029
Total current liabilities 11,034 11,127
Deferred income taxes 12,152 10,960
Shareholders' equity 159,023 136,942
Total liabilities and
shareholders' equity $182,209 $159,029
