SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) |
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) |
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File No. 0-28178
CARBO CERAMICS INC.
(Exact name of registrant as specified in its charter)
DELAWARE | 72-1100013 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification Number) |
6565 MacArthur Boulevard
Suite 1050
Irving, Texas 75039
(Address of principal executive offices)
(972) 401-0090
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X No
As of March 31, 2003, 15,490,836 shares of the registrant's Common Stock, par value $.01 per share, were outstanding.
CARBO CERAMICS INC.
Index to Quarterly Report on Form 10-Q
PART I. FINANCIAL INFORMATION | PAGE |
Item 1. Financial Statements | |
Consolidated Balance Sheets - | 3 |
March 31, 2003 (Unaudited) and December 31, 2002 | |
Consolidated Statements of Income (Unaudited) - | 4 |
Three months ended March 31, 2003 and 2002 | |
Consolidated Statements of Cash Flows (Unaudited) - | 5 |
Three months ended March 31, 2003 and 2002 | |
Notes to Consolidated Financial Statements (Unaudited) | 6-8 |
Item 2. Management's Discussion and Analysis of Financial | 9-10 |
Condition and Results of Operations | |
Item 3. Quantitative and Qualitative Disclosures about Market Risk | 10 |
Item 4. Controls and Procedures | 10 |
PART II. OTHER INFORMATION | |
Item 1. Legal proceedings | 11 |
Item 2. Changes in securities | 11 |
Item 3. Defaults upon senior securities | 11 |
Item 4. Submission of matters to a vote of security-holders | 11 |
Item 5. Other information | 11 |
Item 6. Exhibits and reports on Form 8-K | 11 |
Signatures | 12 |
Certifications | 13-14 |
Exhibit Index | 15 |
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARBO CERAMICS INC.
CONSOLIDATED BALANCE SHEETS
March 31, | December 31, | |
2003 | 2002 | |
(Unaudited) | ||
($ in thousands) | ||
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 18,323 | $ 24,447 |
Trade accounts receivable | 27,317 | 22,967 |
Inventories: | ||
Finished goods | 11,063 | 10,535 |
Raw materials and supplies | 5,579 | 5,295 |
Total inventories | 16,642 | 15,830 |
Prepaid expenses and other current assets | 836 | 600 |
Deferred income taxes | 1,051 | 1,023 |
Total current assets | 64,169 | 64,867 |
Property, plant and equipment: | ||
Land and land improvements | 1,866 | 1,866 |
Land-use and mineral rights | 5,052 | 5,050 |
Buildings | 12,371 | 12,058 |
Machinery and equipment | 106,812 | 105,052 |
Construction in progress | 27,174 | 25,425 |
Total | 153,275 | 149,451 |
Less accumulated depreciation | 39,879 | 37,654 |
Net property, plant and equipment | 113,396 | 111,797 |
Goodwill | 19,426 | 19,449 |
Intangible assets, net | 3,645 | 3,497 |
Total assets | $ 200,636 | $ 199,610 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current liabilities: | ||
Accounts payable | $ 4,531 | $ 8,074 |
Accrued payroll and benefits | 2,155 | 2,981 |
Accrued freight | 923 | 754 |
Accrued utilities | 2,131 | 1,061 |
Accrued income taxes | 1,958 | 1,563 |
Retainage related to construction in progress | 1,503 | 1,494 |
Provision for legal judgment | - | 993 |
Other accrued expenses | 1,197 | 1,020 |
Total current liabilities | 14,398 | 17,940 |
Deferred income taxes | 13,089 | 13,085 |
Shareholders' equity: | ||
Preferred stock, par value $0.01 per share, 5,000 shares authorized, | ||
none outstanding | - | - |
Common stock, par value $0.01 per share, 40,000,000 shares authorized; | ||
15,490,836 and 15,482,436 shares issued and outstanding at March 31, | ||
2003 and December 31, 2002, respectively | 155 | 155 |
Additional paid-in capital | 73,091 | 72,925 |
Unearned stock compensation | (467) | (557) |
Retained earnings | 100,394 | 96,078 |
Accumulated other comprehensive income (loss) | (24) | (16) |
Total shareholders' equity | 173,149 | 168,585 |
Total liabilities and shareholders' equity | $ 200,636 | $ 199,610 |
The accompanying notes are an integral part of these statements.
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CARBO CERAMICS INC.
CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except per share data)
(Unaudited)
Three months ended | ||
March 31, | ||
2003 | 2002 | |
Revenues | $ 38,538 | $ 29,311 |
Cost of sales | 23,459 | 17,633 |
Gross profit | 15,079 | 11,678 |
Selling, general and administrative expenses | 5,882 | 3,847 |
Start-up costs | 80 | 43 |
Operating profit | 9,117 | 7,788 |
Other income (expense): | ||
Interest, net | 37 | 156 |
Other, net | (45) | 12 |
(8) | 168 | |
Income before income taxes | 9,109 | 7,956 |
Income taxes | 3,399 | 2,927 |
Net income | $ 5,710 | $ 5,029 |
Earnings per share: | ||
$ 0.37 | $ 0.34 | |
Diluted | $ 0.37 | $ 0.33 |
Other information: | ||
Dividends declared per common share | $ 0.09 | $ 0.09 |
The accompanying notes are an integral part of these statements.
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CARBO CERAMICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
(Unaudited)
Three months ended | ||
March 31, | ||
2003 | 2002 | |
Operating activities | ||
Net income | $ 5,710 | $ 5,029 |
Adjustments to reconcile net income to net cash | ||
provided by operating activities: | ||
Depreciation | 2,225 | 1,736 |
Amortization | 120 | - |
Deferred income taxes | (24) | 903 |
Non-cash stock option expense | 90 | - |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (4,350) | (725) |
Inventories | (812) | (203) |
Prepaid expenses and other current assets | (236) | 74 |
Accounts payable | 812 | (928) |
Accrued payroll and benefits | (826) | (727) |
Accrued freight | 169 | (230) |
Accrued utilities | 1,070 | (286) |
Accrued income taxes | 418 | 1,398 |
Provision for legal judgment | (993) | - |
Other accrued expenses | 186 | 72 |
Net cash provided by operating activities | 3,559 | 6,113 |
Investing activities | ||
Capital expenditures, net | (8,447) | (3,850) |
Net cash used in investing activities | (8,447) | (3,850) |
Financing activities | ||
Proceeds from exercise of stock options | 166 | 1,924 |
Dividends paid | (1,394) | (1,345) |
Net cash provided by (used in) financing activities | (1,228) | 579 |
Net increase (decrease) in cash and cash equivalents | (6,116) | 2,842 |
Effect of exchange rate changes on cash | (8) | (2) |
Cash and cash equivalents at beginning of period | 24,447 | 31,547 |
Cash and cash equivalents at end of period | $ 18,323 | $ 34,387 |
Supplemental cash flow information | ||
Interest paid | $ 11 | $ - |
Income taxes paid | $ 3,005 | $ 626 |
The accompanying notes are an integral part of these statements.
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CARBO CERAMICS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of CARBO Ceramics Inc. have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. The results of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2002 in cluded in the Company's Form 10-K Annual Report for the year ended December 31, 2002.
The consolidated financial statements include the accounts of CARBO Ceramics Inc. and its wholly owned subsidiaries: CARBO Ceramics (UK) Limited, CARBO Ceramics (Mauritius) Inc. and Pinnacle Technologies Inc. All significant intercompany transactions have been eliminated.
2. Dividends Paid
On January 15, 2003, the Board of Directors declared a cash dividend of $0.09 per common share payable to shareholders of record on January 31, 2003. The dividend was paid on February 14, 2003.
3. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2003 and 2002 ($ in thousands, except per share data):
2003 | 2002 | |
Numerator for basic and diluted earnings per share: | ||
Net income | $ 5,710 | $ 5,029 |
Denominator: | ||
Denominator for basic earnings per share-- | ||
weighted-average shares | 15,486,524 | 14,984,883 |
Effect of dilutive securities: | ||
Employee stock options | 90,053 | 112,706 |
Contingent stock acquisition | 43,640 | - |
Dilutive potential common shares | 133,693 | 112,706 |
Denominator for diluted earnings per share-- | ||
adjusted weighted-average shares | 15,620,217 | 15,097,589 |
Basic earnings per share | $ 0.37 | $ 0.34 |
Diluted earnings per share | $ 0.37 | $ 0.33 |
During the three months ended March 31, 2003, employees exercised stock options to acquire 8,400 common shares at a weighted-average exercise price of $19.70 per share. The Company recognized a related income tax benefit of $45,000, of which $23,000 was recorded as a reduction of goodwill for exercises of vested stock options assumed in the May 31, 2002 acquisition of Pinnacle Technologies.
During the three months ended March 31, 2002, employees exercised stock options to acquire 112,650 common shares at a weighted-average exercise price of $17.08 per share. The Company recognized a related income tax benefit of $895,000, of which $232,000 was credited directly to shareholders' equity and $663,000 offset a previously recognized deferred income tax benefit.
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4. Comprehensive Income
Comprehensive income was as follows ($ in thousands):
Three months ended | ||
March 31, | ||
2003 | 2002 | |
Net income | $ 5,710 | $ 5,029 |
Foreign currency translation adjustment | (8) | (2) |
Comprehensive income | $ 5,702 | $ 5,027 |
5. Stock-Based Compensation
The Company accounts for its employee stock option plans under the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. In general, no stock-based employee compensation cost is reflected in net income, as most options granted under the plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share as if the Company had applied the fair value recognition provisions of FASB Statement No. 123, "Accounting for Stock-Based Compensation," to stock-based employee compensation ($ in thousands, except per share data):
Three months ended | ||
March 31, | ||
2003 | 2002 | |
Net income, as reported | $ 5,710 | $ 5,029 |
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects | 57 | - |
Deduct: Total stock-based compensation expense determined under fair value based method for all awards, net of related tax effects | (300) | (141) |
Pro forma net income | $ 5,467 | $ 4,888 |
Earnings per share: | ||
Basic - as reported | $ 0.37 | $ 0.34 |
Basic - pro forma | $ 0.35 | $ 0.33 |
Diluted - as reported | $ 0.37 | $ 0.33 |
Diluted - pro forma | $ 0.35 | $ 0.32 |
6. Acquisition of Business
On May 31, 2002, the Company purchased 100 percent of the outstanding shares of Pinnacle Technologies, Inc. (Pinnacle). Results of operations for Pinnacle are included in the consolidated financial statements since that date. Pinnacle provides fracture diagnostic and mapping services, sells fracture simulation software and provides fracture design services to oil and gas companies worldwide. The acquisition was made for the purpose of expanding the Company's ability to provide production-enhancing solutions to exploration and production companies worldwide and providing a catalyst for accelerating the growth of ceramic proppant sales in the future. The acquisition was accounted for using the purchase method of accounting provided for under FASB Statement No. 141, "Business Combinations."
The aggregate cost of the acquisition was approximately $26.7 million, including $12.4 million cash; 324,226 shares of common stock valued at $11.2 million; 158,300 stock options valued at $2.5 million granted in exchange for outstanding Pinnacle options; and $0.6 million direct costs of the acquisition. Goodwill was recorded as a result of the aggregate cost exceeding the fair value of the assets acquired of $9.0 million and liabilities assumed of $4.1 million. Goodwill is fully deductible for tax purposes. Under the terms of the acquisition agreement, the Company withheld $2.3 million of the aggregate purchase price in the form of $0.8 million cash and 43,640 common shares valued at $1.5 million. The final installment is expected to be paid on May 31, 2003, the first anniversary of closing, and recognized as additional goodwill at that time. Accordingly, allocation of the purchase price is subject to revision until that time.
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Following are pro forma amounts assuming the acquisition was made on January 1, 2002 ($ in thousands, except per share data):
Three Months Ended March 31, | ||
2003 | 2002 | |
Pro forma revenue | $ 38,538 | $ 31,570 |
Pro forma net income | $ 5,710 | $ 4,893 |
Pro forma earnings per share: | ||
Basic | $ 0.37 | $ 0.32 |
Diluted | $ 0.37 | $ 0.32 |
7. Legal Proceedings
The Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, management does not expect that the ultimate cost to resolve these matters will have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Critical Accounting Policies
The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S., which require the Company to make estimates and assumptions (see Note 1 to the consolidated financial statements included in the annual report on Form 10-K for the year ended December 31, 2002). The Company believes that some of its accounting policies involve a higher degree of judgment and complexity. Critical accounting policies for the Company include revenue recognition, estimating the recoverability of accounts receivable, inventory valuation, accounting for income taxes, accounting for long-lived assets, accounting for legal contingencies and accounting for business acquisitions. Critical accounting policies are discussed more fully in the annual report on Form 10-K for the year ended December 31, 2002 and there have been no changes in the Company's evaluation of its critical accounting policies.
Results of Operations
Three Months Ended March 31, 2003
Revenues. Revenues for the first quarter of 2003 were $38.5 million, a 31 percent increase over the first quarter of 2002. The improvement in revenue was largely due to a 23 percent increase in sales volume. Worldwide sales volume totaled 131 million pounds for the quarter. Driven by increased natural gas drilling activity, domestic sales volume climbed 17 percent versus last year's first quarter. International sales volume increased 38 percent, including a 20 percent increase in Canada and a 92 percent increase in shipments outside North America. First quarter 2003 average selling price of $0.273 per pound was one percent lower than the same period a year ago. Revenues for the first quarter of 2003 included $2.8 million from Pinnacle Technologies, which the company acquired in May 2002.
Gross Profit. Gross profit for the first quarter of 2003 was $15.1 million, or 39 percent of sales, compared to $11.7 million, or 40 percent of sales, for the first quarter of 2002. The decline in gross profit margin was due to higher manufacturing costs that resulted from the impact of higher natural gas prices and reduced production rates. For the first quarter of 2003, the company paid an average of $6.93/Mcf for natural gas compared to $4.40/Mcf during the first quarter of 2002. Production rates were reduced during the first quarter of 2003 because of shutdowns at the McIntyre, Georgia and New Iberia, Louisiana manufacturing facilities to bring new equipment online.
Selling, General and Administrative Expenses and Start-Up Costs. Selling, general and administrative expenses and start-up costs totaled $6.0 million for the first quarter of 2003 and $3.9 million for the corresponding period of 2002. The increase in expenses was due to variable expenses associated with higher sales volumes; increases in the company's marketing, business development and research activities; and expenses of Pinnacle Technologies. Selling, general and administrative expenses increased from 13 percent of revenues in the first quarter of 2002 to 15 percent of revenues in the first quarter of 2003 due to the fact that Pinnacle Technologies operates with a higher percentage of expenses, principally those related to product development.
Liquidity and Capital Resources
Cash and cash equivalents totaled $18.3 million as of March 31, 2003, a decrease of $6.1 million from December 31, 2002. The Company generated cash from operations of $3.6 million and realized $0.2 million proceeds from employee exercises of stock options. Uses of cash included capital spending of $8.5 million and cash dividends of $1.4 million. Major capital spending included $6.7 million on debottlenecking and capacity expansion projects at the McIntyre, Georgia manufacturing facility and $1.0 million on the addition of a third kiln at the New Iberia, Louisiana manufacturing facility.
The Company's current intention, subject to its financial condition, the amount of funds generated from operations and the level of capital expenditures, is to continue to pay quarterly dividends to shareholders of its Common Stock at the rate of $0.09 per share.
The Company maintains an unsecured line of credit of $10.0 million. As of March 31, 2003, there was no outstanding debt under the credit agreement. The Company anticipates that cash on hand, cash provided by operating activities and funds available under its line of credit will be sufficient to meet planned operating expenses, tax obligations and capital expenditures through 2003. The Company also believes that it could acquire additional debt financing, if needed. Based on these assumptions, we believe that the Company's fixed costs could be met even with a moderate decrease in demand for the Company's products.
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Forward-Looking Information
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This Form 10-Q, the Company's Form 10-K and Annual Report to Shareholders, any other Form 10-Q or any Form 8-K of the Company or any other written or oral statements made by or on behalf of the Company may include forward-looking statements which reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from such statements. This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, the Company's prospects, developments and business strategies for its operations, all of which are subject to certain risks, uncertainties and assumptions. These risks and uncertainties include, but are not limited to, changes in the dema nd for oil and natural gas, the development of alternative stimulation techniques and the development of alternative proppants for use in hydraulic fracturing. The words "believe", "expect", "anticipate", "project" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, each of which speaks only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's major market risk exposure is to foreign currency fluctuations that could impact its investment in China. When necessary, the Company may enter into forward foreign exchange contracts to hedge the impact of foreign currency fluctuations. There were no such foreign exchange contracts outstanding at March 31, 2003. The Company has a $10.0 million line of credit with its primary commercial bank. Under the terms of the revolving credit agreement, the Company may elect to pay interest at either a fluctuating base rate established by the bank from time to time or at a rate based on the rate established in the London inter-bank market. The Company does not believe that it has any material exposure to market risk associated with interest rates.
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Within the 90 days prior to the filing of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.
(b) Changes in Internal Controls
There were no changes in the Company's internal controls or in other factors that could have significantly affected those controls subsequent to the date of the Company's most recent evaluation.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
The following exhibits are filed as part of the Quarterly Report on Form 10-Q:
Exhibits
99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
b. Reports on Form 8-K
On February 11, 2003, the Company filed a report on Form 8-K concerning its press release announcing fourth quarter and full year 2002 results.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
CARBO CERAMICS INC.
/s/ C. MARK PEARSON
C. Mark Pearson
President and Chief Executive Officer
/s/ PAUL G. VITEK
Paul G. Vitek
Sr. Vice President, Finance and
Chief Financial Officer
Date: May 5, 2003
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Quarterly Certification
As required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934
I, C. Mark Pearson, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Carbo Ceramics Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: May 5, 2003
/s/ C. MARK PEARSON
C. Mark Pearson
President & CEO
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Quarterly Certification
As required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934
I, Paul G. Vitek, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Carbo Ceramics Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: May 5, 2003
/s/ PAUL G. VITEK
Paul G. Vitek
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
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