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[November 2009]
CARBO Ceramics Announces Third Quarter Earnings
CARBO Ceramics Inc (Houston, TX, USA) has reported net income of US$14.4 million, or US$0.62 per diluted share, on revenues of US$91.8 million for the quarter ended 30 September 2009. The company previously reported that it had sold its fracture and reservoir diagnostics business. Because of the transaction, which closed on 10 October 2008, the 2008 operating results of this business have been accounted for as discontinued operations. Continuing operations include the company's ceramic proppant, software, consulting services and geotechnical monitoring businesses.
President and CEO Gary Kolstad commented: "We are pleased with our third quarter results. Looking forward, we remain cautious about the demand in North America where depressed and volatile industry conditions still exist. In the near term, pricing remains competitive. Despite this climate, we continue to experience growing acceptance of our products by E&P companies that understand the benefits associated with Economic Conductivity™ resulting from the use of our high quality ceramic proppants such as CARBOHYDROPROP®".
Revenues for the third quarter of 2009 decreased 11% compared to the third quarter of 2008 and increased 32% sequentially. Worldwide proppant sales volume totalled 296 million pounds for the third quarter of 2009, representing a year-over-year decrease of 3% and a sequential increase of 37%. Proppant sales volume for the third quarter grew in the USA both year-over-year and sequentially.
Operating profit for the third quarter of 2009 increased US$0.9 million compared to the third quarter of 2008. Revenue decreases, resulting from decreases in volume and average selling price experienced during the third quarter of 2009, were offset by decreases in cost of sales, which was positively affected by a favourable product mix, lower freight costs and lower natural gas prices. Selling, general, administrative and other operating expenses for the third quarter of 2009 decreased US$0.8 million on a year-over-year basis.
Income from continuing operations for the third quarter of 2009 decreased US$0.9 million compared to the third quarter of 2008, mainly due to tax-related benefits realised during the third quarter of 2008.
On 2 October 2009, a wholly-owned subsidiary of CARBO purchased substantially all of the assets of BBL Falcon Industries Ltd, a supplier of spill prevention and containment systems for the oil and gas industry. The acquisition expands CARBO's product and service offerings to its existing client base of E&P and oilfield service companies. Falcon uses proprietary technology to provide value-added solutions that are designed to enable its clients to extend the life of their storage assets, reduce the potential for hydrocarbon spills and provide secure containment of stored materials.
Three technical papers, co-authored by CARBO engineers, were presented at the 2009 SPE Annual Technical Conference and Exhibition in New Orleans. The papers covered fracture efficiency and economic gains when employing ceramics in the Bakken and Haynesville shale reservoirs.
Using a full suite of surface and subsurface instrumentation, Applied Geomechanics is monitoring the second largest active landslide in Colorado. The system comprises 3DTracker GPS, Little Dipper borehole tiltmeters and vibrating wire piezometers. Data is monitored continuously using web monitoring software.
CEO Gary Kolstad commented on the outlook for the company stating: "While we experienced a positive trend this quarter in the North American rig count, which achieved 13 percent sequential growth, opinions vary as to whether this is the start of a recovery or simply a short-term correction. From our perspective, we believe that a sustainable recovery in the oil and gas industry is inevitable; however, the exact timing of the recovery is difficult to pinpoint.
"We remain committed to expanding our client base and product and service offerings. The acquisition of the Falcon assets in early October is an example of our commitment to invest our cash reserves in high-growth, cash-generating businesses. Newly incorporated as Falcon Technologies and Services, Inc., its existing management team will build on its leading technology position and already successful strategy by taking advantage of CARBO's well-established geographic footprint, a common client base and our ability to fund product innovation. We expect that the transaction will be accretive to our financial results in 2010."
www.carboceramics.com
ENDS