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[May 2006]
CARBO Ceramics Announces Record Earnings and Expansion of Toomsboro Facility
CARBO Ceramics Inc (Irving, TX, USA), the world's leading manufacturer of ceramic proppants for use in
the hydraulic fracturing of natural gas and oil wells and the leading supplier of fracture and reservoir diagnostic services, has announced net income of US$13 million on revenues of US$74.3 million for the quarter ended 31 March 2006. Both revenues and net income were the highest for any quarter in the company's history.
Revenues for the quarter increased 21% while net income increased 12% compared to the first quarter of 2005. The company also announced that its new manufacturing facility in Toomsboro, GA, USA started production as scheduled in the first quarter and the company's Board of Directors has approved the
construction of a second production line at this facility.The increase in revenues compared to last year's first quarter was attributable to record proppant sales volume, an increase in the average selling price of the company's ceramic proppants and a 21% increase
in revenues from Pinnacle Technologies Inc, the company's fracture and reservoir diagnostics business. Revenues for Q1 2006 included US$7.3 million from Pinnacle Technologies compared to US$6 million for the same period a year earlier.Worldwide proppant sales were 209 million pounds for the quarter, an increase of 4% compared to the previous year's first quarter. The increased sales volume was the result of record sales volume in the USA and Canada, where sales increased 16% compared to the first quarter of 2005. After having sales volume constrained by manufacturing capacity throughout 2005, initial production from the company's new manufacturing facility allowed it to respond to continued strong demand in the North American market. Sales outside of North America declined 32% compared to last year's first quarter, due to a decline in sales to Russia.
While the company's sales in Russia have been impacted by an increase in the availability of product produced by Russian manufacturers, the company anticipates improving its sales in Russia during 2006 as a result of new marketing initiatives in that country. Excluding Russia, sales outside of North America increased 38% versus the first quarter of 2005 due to improved activity in China, the Middle East and West Africa.
The first production line of the company's new manufacturing facility in Toomsboro (previously referred to as McIntyre II) started up as scheduled in January 2006 and was completed slightly below the planned
expenditure of US$62 million. When fully operational, this production line is expected to have annual manufacturing capacity of 250 million pounds. Production from this facility during the first quarter met the company's objective of 50 percent of capacity and is expected to improve to 75 percent of capacity during the second quarter.
In light of the start-up of this facility as expected, and the continued strong demand for the company's ceramic proppants, the company's Board of Directors has approved the construction of a second production line at this facility. Construction of the second production line is expected to cost approximately US$54 million and the company anticipates its completion in the third quarter of 2007. The second production line is expected to have an installed cost less than the first due to the investment in infrastructure made during the initial construction project. The new production line is expected to have annual capacity of 250 million pounds, bringing the Toomsboro facility's total capacity to 500 million pounds per year.www.carboceramics.com
ENDS