HOUSTON, Jan. 26, 2012 /PRNewswire/ -- CARBO Ceramics Inc.
(NYSE: CRR) today reported net income of $33.1 million, or $1.43 per diluted share, on revenues of
$158.1 million for the quarter ended
December 31, 2011.
President and CEO Gary Kolstad
commented, "2011 was a record year for CARBO. Proppant volumes
increased 19 percent year-over-year to 1.6 billion pounds. Revenues
and net income increased 32 and 65 percent, respectively,
year-over-year. We continued to focus on returning cash to our
shareholders by increasing the quarterly dividend 20 percent. This
marked the 11th consecutive year the Company has increased its
dividend.
"For the fourth quarter 2011, proppant volumes increased 16
percent, revenues increased 32 percent and net income increased 59
percent when compared to the fourth quarter 2010. Notwithstanding
this solid performance, the fourth quarter had its challenges
beyond typical seasonality.
"The severe decline in natural gas prices during the quarter led
E&Ps to reduce capital spending in natural gas basins and
increase capital spending in liquids-rich basins. The largest
impact associated with this shift in capital spending was a
reduction of approximately 70 percent in our Haynesville proppant
sales volumes from the third quarter of 2011, which was partially
offset by growth in the liquids-rich plays and international
markets.
"The growth of activity in liquids-rich plays contributed to
logistical issues in the industry. These logistical issues burdened
our distribution network. From our perspective, the industry's
response to the decline of activity in the Haynesville,
reallocation of proppant supply and demand and adjustment to
natural gas fundamentals will take some time to work out. During
the fourth quarter 2011, we accelerated several distribution
infrastructure investments to address the logistical challenges we
faced.
"The economic success our clients achieve by utilizing our high
conductivity proppant in their oil and natural gas wells continues
to give us confidence in the long-term demand for our proppant,"
Mr. Kolstad said.
Fourth Quarter Results
Revenues for the fourth quarter of 2011 increased 32 percent, or
$38.5 million, when compared to the
fourth quarter of 2010. North American (defined as Canada and the U.S.) proppant sales volume
increased 16 percent while international proppant sales volume
increased 21 percent, compared to the same period last year.
Operating profit for the fourth quarter of 2011 increased 59
percent, or $18.3 million, compared
to the fourth quarter of 2010. This increase is primarily due to
higher proppant sales volume, an increase in the average proppant
selling price and a higher contribution from the Company's other
business units, partially offset by an increase in freight and
logistics costs.
Net income for the fourth quarter of 2011 increased 59 percent,
or $12.3 million, compared to the
fourth quarter of 2010.
|
|
Proppant Sales
Volumes
(in millions lbs)
|
Three Months
Ended
December 31, 2011
|
Three Months
Ended
December 31, 2010
|
|
|
|
|
|
Ceramic Proppant
Volumes
|
339
|
317
|
|
Other Proppant
Volumes*
|
48
|
15
|
|
Total
|
387
|
332
|
|
|
|
|
|
* Includes
CARBOBOND® RCS
(resin-coated sand) and API / ISO certified ceramic proppant
manufactured on an outsourced basis.
|
|
|
|
|
Full Year Results
For the year ended December 31,
2011, revenues increased 32 percent, or $152.6 million, compared to 2010. The increase is
mainly attributed to the increase in proppant sales volume, an
increase in the average proppant selling price, and an increase in
the revenues of Falcon Technologies.
CARBO's worldwide proppant sales volume totaled 1.6 billion
pounds for the full year 2011, an increase of 19 percent compared
to 2010. Sales volume in North
America increased 21 percent primarily due to increases in
both U.S. and Canada sales volume.
International sales volume increased 12 percent primarily due to
increases in Russia, Latin America and Asia Pacific, including China.
Full year net income for 2011 increased 65 percent, or
$51.4 million, compared to 2010.
Technology and Business Highlights
- Several wells were completed utilizing CARBO's iPROP™ family of
proppants. CARBOTAG® and CARBONRT® (a non-radioactive
detectable proppant), have now been successfully deployed in
North America, Latin America, Europe, Africa, the Middle
East and Asia Pacific.
This technology mitigates the issues surrounding the use of
radioactive isotopes by the E&P industry.
- Production data from key producing basins continues to
substantiate the 20 percent plus gains in production and recovery
CARBO expects operators to achieve when using our high conductivity
ceramic proppant.
- Falcon Technologies® achieved revenue growth of 20% in
2011 when compared to 2010. Falcon continues to develop and deliver
solutions that are Engineered to Protect™ the environment
and our clients' assets and reputations.
- Fracpro®, the industry's most popular frac simulation
software, achieved record revenues in 2011 due to clients'
increased focus on fracturing in unconventional reservoirs and the
need for multiple-fracture simulator solutions.
- StrataGen® Engineering's Data and Neural
Analysis(SM) (DANA) studies are gaining E&P operator
interest by contributing to the optimization of completions and
frac methods in the Bakken and Eagle Ford.
Outlook
CEO Gary Kolstad commented on the
outlook for the Company stating, "We believe 2012 industry activity
levels will be influenced by many factors. The contraction of North
American natural gas fundamentals should be balanced by the
continued strength of the liquids-rich unconventional plays, which
should lead to volume growth for CARBO in these plays. We are
pleased that we continue to see more clients adopting our high
conductivity ceramic proppant in these liquids-rich plays.
"Our financial position remains strong and debt-free, and it
affords us the ability to fund our growth from internally generated
cash flows. We remain committed to growing our proppant
manufacturing capacity, for both ceramic and resin-coated sand.
"With respect to our ceramic production capacity and as we noted
last quarter, we have submitted our environmental permit
application for our new plant in Millen,
Georgia. Although timing is still uncertain surrounding the
receipt of an approved permit, we expect this plant could commence
production before the end of 2013.
"Regarding our resin-coated sand operations, we initiated the
start-up process on our second resin-coating line in New Iberia in
late January 2012. Our resin-coating
expansion efforts continue at our Marshfield, Wisconsin site. The first phase of
this project is completing our sand processing plant, which is
expected to be operational by the end of the second quarter 2012.
Once completed, we will be back-integrated into our own sand
reserves which will feed our New Iberia plant and ultimately our
resin-coating operations in Marshfield.
"Separately, our environmental risk reduction business, Falcon
Technologies, achieved revenue growth of 20 percent in 2011. We are
excited about the future of this business as we expect our
Engineered to Protect™ solutions and the environmental stewardship
exhibited by our clients to drive future growth.
"We believe 2012 will be another successful year for CARBO. We
will continue to market the benefits that increased conductivity
can achieve for our clients through Economic Conductivity®
analysis," Mr. Kolstad concluded.
As previously announced, a conference call to discuss the
Company's fourth quarter results is scheduled for today at
10:00 a.m. Central Time (11:00 a.m. Eastern). To participate in the
teleconference, investors in the U.S. should dial
1-877-883-0383 at least 10 minutes before the start time and
reference conference number 2305150. Canada-based callers should dial
1-877-885-0477, and international callers outside of
North America should dial
1-412-902-6506. The conference call also can be accessed by
visiting the Company's website, www.carboceramics.com.
CARBO is the world's largest supplier of ceramic proppant for
fracturing oil and gas wells; provider of the industry's most
popular fracture simulation software; and a provider of fracture
design and consulting services. The Company also provides a broad
range of technologies for spill prevention, containment and
countermeasures, along with geotechnical monitoring.
The statements in this news release that are not historical
statements, including statements regarding our future financial and
operating performance, are forward-looking statements within the
meaning of the federal securities laws, including the Private
Securities Litigation Reform Act of 1995. All forward-looking
statements are based on management's current expectations and
estimates, which involve risks and uncertainties that could cause
actual results to differ materially from those expressed in
forward-looking statements. Among these factors are changes
in overall economic conditions, changes in the cost of raw
materials and natural gas used in manufacturing our products,
changes in demand and prices charged for our products, changes in
the demand for, or price of, oil and natural gas, risks of
increased competition, technological, manufacturing, distribution
and product development risks, loss of key customers, changes in
government regulations, foreign and domestic political and
legislative risks, the risks of war and international and domestic
terrorism, risks associated with foreign operations and foreign
currency exchange rates and controls, weather-related risks and
other risks and uncertainties described in our publicly available
filings with the Securities and Exchange Commission. We
assume no obligation to update forward-looking statements, except
as required by law.
- tables follow -
|
Three Months
Ended
December 31
|
Twelve
Months Ended
December 31
|
|
|
____2011____
|
____2010____
|
____2011____
|
____2010____
|
|
|
(In thousands except per share
data)
|
(In thousands except per share
data)
|
|
Revenues
|
$ 158,123
|
$
119,584
|
$
625,705
|
$
473,082
|
|
Cost of sales
|
93,275
|
73,218
|
363,990
|
298,411
|
|
Gross profit
|
64,848
|
46,366
|
261,715
|
174,671
|
|
Selling, general &
administrative expenses
|
15,627
|
13,903
|
62,381
|
52,635
|
|
Start-up costs
|
57
|
356
|
184
|
977
|
|
Loss on disposal
or impairment of assets
|
11
|
1,245
|
1,548
|
1,449
|
|
Operating profit
|
49,153
|
30,862
|
197,602
|
119,610
|
|
Interest income, net
|
37
|
47
|
197
|
178
|
|
Foreign currency exchange gain
(loss), net
|
93
|
(46)
|
(135)
|
(96)
|
|
Other expense, net
|
(95)
|
(35)
|
(214)
|
(343)
|
|
Income before income
taxes
|
49,188
|
30,828
|
197,450
|
119,349
|
|
Income taxes
|
16,071
|
10,013
|
67,314
|
40,633
|
|
Net income
|
$
33,117
|
$
20,815
|
$
130,136
|
$
78,716
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
Basic
|
$
1.43
|
$
0.90
|
$
5.62
|
$
3.41
|
|
Diluted
|
$
1.43
|
$
0.90
|
$
5.62
|
$
3.40
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
Basic
|
22,976
|
22,972
|
23,011
|
22,969
|
|
Diluted
|
22,978
|
22,979
|
23,012
|
22,977
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
10,354
|
$
7,420
|
$
36,015
|
$
27,728
|
|
|
|
|
|
|
|
|
Selected Balance Sheet
Information
|
|
|
|
|
December 31, 2011
|
|
December 31, 2010
|
|
|
(In
thousands)
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
41,270
|
|
$
46,656
|
|
Other current
assets
|
261,295
|
|
190,999
|
|
Property, plant and
equipment, net
|
392,659
|
|
338,483
|
|
Intangible and other
assets, net
|
33,477
|
|
10,380
|
|
Total assets
|
740,865
|
|
599,571
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
Accrued income
taxes
|
$
-
|
|
$
113
|
|
Other current
liabilities
|
79,066
|
|
51,134
|
|
Deferred income
taxes
|
31,641
|
|
26,345
|
|
Shareholders'
equity
|
630,158
|
|
521,979
|
|
Total liabilities and
shareholders' equity
|
$
740,865
|
|
$
599,571
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE CARBO Ceramics Inc.