Exhibit 99.1
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 | | P.O. Box 717 | | Pittsburgh, PA 15230-0717 (412) 787-6700 |
— NEWS RELEASE —
CALGON CARBON ANNOUNCES FIRST QUARTER RESULTS
Board Declares Dividend
PITTSBURGH, PA — April 20, 2004 – Calgon Carbon Corporation (NYSE: CCC) announced results for the first quarter ended March 31, 2004. On February 18, 2004, the company completed the acquisition of the Specialty Products Division of Waterlink, Inc. (WSP). For the first quarter of 2004, the results of the acquired entity are included from the date of acquisition.
Sales for the first quarter of 2004 were $71.2 million versus first quarter 2003 sales of $64.1 million, an 11.2% increase. WSP contributed $7.1 million of sales in the quarter. Currency translation had a $3.1 million positive impact on sales for the quarter due to the stronger Euro. Calgon Carbon reported a net loss of $0.5 million for the first quarter of 2004, as compared to a net loss of $1.8 million for the first quarter of 2003. Fully diluted net loss per common share was $0.01 for the first quarter of 2004, versus a fully diluted net loss per common share of $0.05 for the first quarter of 2003.
Management has been reviewing the company’s operating segments - Activated Carbon, Service, Engineered Solutions, and Consumer - and their continued relevance in business decision-making. Management decided to change the segments beginning in the first quarter of 2004 to report financial information in a manner consistent with that used by the chief decision makers of the company. The new operating segments are Carbon and Service, Equipment, and Consumer. The prior period 2003 has also been restated to conform to the new segments.
For the first quarter of 2004, sales of Activated Carbon and Service were $55.9 million, an increase of 9.2% versus the comparable period in 2003. Excluding WSP sales, Activated Carbon and Service sales for the first quarter of 2004 declined 2.8% versus the first quarter of 2003. In the first quarter of 2003, sales in this segment included a $2.3-million, one-time supply contract for a new water treatment plant in Europe. Sales also declined year-over-year due to pricing pressure on certain types of activated carbon and partly due to mix (higher sales of powdered carbon). However, service sales were strong in both Europe and the U.S., and demand for specialty carbons increased in the U.S.
Equipment sales increased 37.0% for the first quarter of 2004 versus the comparable period in 2003. Excluding WSP sales, Equipment sales increased 20.5% due to demand for systems that utilize ultraviolet light for disinfection of drinking water.
Consumer sales increased year-over-year by 4.7%. The increase was attributable to stronger demand for the company’s charcoal products.
Consolidated gross profit before depreciation and amortization as a percentage of net sales was 29.8%, versus 29.4% in the first quarter of 2003. Excluding WSP, gross profit as a percentage of net sales was 30.0%, as compared to 29.4% in the first quarter of 2003. Activated Carbon and Service margins were adversely affected by pricing pressure, higher product costs, and higher sales of lower-margin powdered carbon. This was partially offset by the positive impact of sales in Europe of U.S.-sourced, lower-cost carbon due to the stronger Euro. Equipment margins declined due to product mix. Consumer margins increased significantly, also due to product mix.
Operating expense in the first quarter of 2004 was $15.9 million versus $15.2 million in 2003. This $0.7 million increase included a $0.8 million charge related to a dispute over a contract for construction of a perchlorate destruction system, and $0.3 million associated with the integration of the WSP acquisition. Operating expenses in the first quarter of 2003 included severance costs of approximately $2.0 million related to a change in CEO.
Other expense for the first quarter of 2004 was $0.3 million versus $0.7 million in 2003. Equity income from the company’s Japanese joint venture increased $0.7 million versus the first quarter of 2003. Other expense for the first quarter of 2004 also included a negative foreign exchange translation loss of $0.3 million on an intercompany loan to Calgon Carbon’s European operating unit for the purchase of stock of WSP’s European subsidiary.
Calgon Carbon’s board of directors declared a dividend of $0.03 per share. Dividends will be issued to shareholders of record as of May 19, 2004, and will be payable on June 2, 2004.
Commenting on the results, John Stanik, Calgon Carbon’s president and chief executive officer, said, “We are very pleased with the revenue growth in the first quarter, driven, as we expected, by our recent acquisition, but reporting a loss in income is always disappointing. We are, however, encouraged that the loss was in part a result of charges which were necessary to advance our growth strategy.”
Mr. Stanik continued, “We have three major challenges in 2004. We must complete the integration of Waterlink Specialty Products; we must effectively execute our strategic initiatives; and, we must show improvement in our business. I am convinced that we made progress in each of these areas in the first quarter, and it will become apparent as the year progresses that the direction we have chosen will result in continued growth.”
Calgon Carbon Corporation, headquartered in Pittsburgh, Pennsylvania, is a global leader in services and solutions for making air and water cleaner and safer. The company employs approximately 1,250 people at 18 operating facilities and 22 sales and service centers worldwide.
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.
Contact: Gail Gerono, vice president, investor relations, 412 787-6795
Calgon Carbon Corporation
Condensed Consolidated Statement of Income
(Dollars in thousands except per share data)
(Unaudited)
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| | | Quarter Ended March 31,
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| | | 2004*
| | | 2003
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Net Sales | | $ | 71,243 | | | $ | 64,050 | |
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Cost of Products Sold | | | 50,012 | | | | 45,231 | |
Depreciation and Amortization | | | 5,308 | | | | 4,900 | |
Selling, Administrative & Research | | | 15,902 | | | | 15,205 | |
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| | | | 71,222 | | | | 65,336 | |
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Income (Loss) from Operations | | | 21 | | | | (1,286 | ) |
Interest Income (Expense) - Net | | | (471 | ) | | | (395 | ) |
Other Income (Expense) - Net | | | (268 | ) | | | (689 | ) |
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Loss Before Income Taxes and Minority Interest | | | (718 | ) | | | (2,370 | ) |
Income Tax Benefit | | | (158 | ) | | | (521 | ) |
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Loss Before Minority Interest | | | (560 | ) | | | (1,849 | ) |
Minority Interest | | | 11 | | | | 89 | |
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Net Loss | | $ | (549 | ) | | $ | (1,760 | ) |
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Net Loss per Common Share | | | | | | | | |
Basic and Diluted | | $ | (.01 | ) | | $ | (.05 | ) |
Weighted Average Shares Outstanding (Thousands) | | | | | | | | |
Basic | | | 39,024 | | | | 38,984 | |
Diluted | | | 39,405 | | | | 39,035 | |
| * | Includes results of the Specialty Products Division of Waterlink, Inc. (Barnebey Sutcliffe and Sutcliffe Speakman) |
Calgon Carbon Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
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| | | March 31, 2004
| | December 31, 2003
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ASSETS | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | | $ | 7,501 | | $ | 8,954 |
Receivables | | | 53,789 | | | 46,133 |
Inventories | | | 63,713 | | | 51,811 |
Other current assets | | | 22,301 | | | 24,210 |
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Total current assets | | | 147,304 | | | 131,108 |
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Property, plant and equipment, net | | | 134,081 | | | 128,956 |
Other assets | | | 71,106 | | | 42,131 |
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Total assets | | $ | 352,491 | | $ | 302,195 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
Current liabilities: | | | | | | |
Short-term debt | | $ | 604 | | $ | 604 |
Other current liabilities | | | 51,073 | | | 45,489 |
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Total current liabilities | | | 51,677 | | | 46,093 |
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Long-term debt | | | 88,123 | | | 53,600 |
Other liabilities | | | 52,475 | | | 40,350 |
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Total liabilities | | | 192,275 | | | 140,043 |
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Minority interest | | | 285 | | | 279 |
Total shareholders’ equity | | | 159,931 | | | 161,873 |
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Total liabilities and shareholders’ equity | | $ | 352,491 | | $ | 302,195 |
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Calgon Carbon Corporation
Segment Data
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Segment Sales
| | 1Q04
| | | 1Q03
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Carbon and Service | | | 55,886 | | | | 51,195 | |
Equipment | | | 8,041 | | | | 5,869 | |
Consumer | | | 7,316 | | | | 6,986 | |
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Total Sales (thousands) | | $ | 71,243 | | | $ | 64,050 | |
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Segment Operating Income (loss)*
| | 1Q04
| | | 1Q03
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Carbon and Service | | | 6,650 | | | | 5,013 | |
Equipment | | | (1,958 | ) | | | (1,270 | ) |
Consumer | | | 637 | | | | (129 | ) |
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Total Income (loss) from operations (thousands) | | $ | 5,329 | | | $ | 3,614 | |
| * | Before depreciation and amortization |
