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Calgon Carbon Announces Third Quarter Results

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PITTSBURGH--(BUSINESS WIRE)--

Calgon Carbon Corporation (NYSE: CCC) reported results for the third quarter ended September 30, 2012.

For the third quarter of 2012, the company reported a net loss of $0.08 per fully diluted share, as compared to fully diluted earnings per share of $0.25 for the third quarter of 2011.

Net loss for the third quarter of 2012 was $4.5 million versus net income of $14.5 million for the comparable period of 2011.

A restructuring charge of $8.0 million for the third quarter of 2012, related to a previously announced cost reduction program, included $3.7 million of severance and a $3.6 million impairment charge for the permanent closure of the company's activated carbon manufacturing facility in Datong, China. Results for the third quarter of 2011 included $2.8 million of income due to the reversal of an uncertain tax position liability.

Net sales for the third quarter of 2012 were $135.5 million versus third quarter 2011 sales of $143.6 million, a decrease of 5.6%. Currency translation had a $3.2 million negative impact on sales for the third quarter of 2012 due to the stronger U.S. dollar.

For the third quarter of 2012, sales of Activated Carbon and Service decreased by 11.6%, as compared to the third quarter of 2011. The decline was primarily due to lower demand for activated carbon in the municipal drinking water, environmental air, and wastewater markets. These decreases were partially offset by higher demand for activated carbon in the food market.

Equipment sales increased by 57.5% versus the third quarter of 2011 due to higher revenue recognition on ballast water treatment systems and, to a lesser extent, on ion exchange systems. Third quarter Consumer sales increased 13.3% over the comparable period of 2011 due to higher demand for activated carbon cloth. Net sales less the cost of products sold as a percentage of net sales was 27.3% for the third quarter of 2012 versus 33.8% for the third quarter of 2011. The decline was attributable to maintenance issues, delays associated with a capital project, and hurricane damage at the company's Pearl River plant, which increased the cost of goods sold by $2.5 million. A $1.7 million write-off of obsolete inventory also contributed to the decline.

Selling, administrative and research expenses for the third quarter of 2012 were $25.8 million, as compared to $24.0 million for the third quarter of 2011. The increase included a $1.7 million pension charge and $1.7 million related to an agreement reached with the company's former chief executive officer in July 2012.

Calgon Carbon's board of directors did not declare a quarterly dividend.

Net sales for the nine months ended September 30, 2012 were $420.5 million, a 4.3% increase over the comparable period of 2011. For the nine months ended 2012, currency translation had a $6.5 million negative effect on sales due to the stronger dollar.

Net income for the nine months ended September 30, 2012, was $14.2 million versus $34.3 million for the comparable period of 2011.

Fully diluted net income per common share for the nine months ended September 30, 2012, was $0.25 as compared to $0.60 for the comparable period of 2011.

Commenting on the results, Randy Dearth, Calgon Carbon's president and chief executive officer, said, “The results for the quarter clearly confirm the need to reduce Calgon Carbon's cost structure and improve operating efficiencies. We are implementing additional initiatives to address those issues, and that will be our primary focus for the remainder of the year.”

Calgon Carbon Corporation, headquartered in Pittsburgh, Pennsylvania, is a global leader in services and solutions for making water and air safer and cleaner.

For more information about Calgon Carbon's leading activated carbon and ultraviolet technology solutions for municipalities and industries, visit www.calgoncarbon.com.

This news release contains historical information and forward-looking statements. Forward-looking statements typically contain words such as “expect,” “believe,” “estimate,” “anticipate,” or similar words indicating that future outcomes are uncertain. Statements looking forward in time, including statements regarding future growth and profitability, price increases, cost savings, broader product lines, enhanced competitive posture and acquisitions, are included in the company's most recent Annual Report pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. 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 suggested herein. Further, the company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the company's control. Some of the factors that could affect future performance of the company are higher energy and raw material costs, costs of imports and related tariffs, labor relations, availability of capital and environmental requirements as they relate both to our operations and to our customers, changes in foreign currency exchange rates, borrowing restrictions, validity of patents and other intellectual property, and pension costs. In the context of the forward-looking information provided in this news release, please refer to the discussions of risk factors and other information detailed in, as well as the other information contained in the company's most recent Annual Report.

 
Calgon Carbon Corporation
Condensed Consolidated Statement of Income
(Dollars in thousands except per share data)
(Unaudited)
  Quarter Ended   Nine Months Ended
September 30, September 30,
2012   2011 2012   2011
 
Net Sales $135,467 $143,594 $420,478 $403,272
 
Cost of Products Sold 98,544 95,030 294,826 268,883
 
Depreciation and Amortization 6,756 6,127 19,711 17,322
 
Selling, Administrative & Research 25,815 24,010 72,853 68,841
 
Restructuring Charges 7,958 - 7,958 -
 
Environmental and Litigation - 199 (19) (757)
 
139,073 125,366 395,329 354,289
 
Income (Loss) from Operations (3,606) 18,228 25,149 48,983
 
Interest Income (Expense) - Net (1) 204 9 307
 
Other Income (Expense) - Net (1,042) (255) (1,806) (491)
 
Income (Loss) Before Income Tax (Benefit) Provision (4,649) 18,177 23,352 48,799
 
Income Tax (Benefit) Provision (196) 3,662 9,183 14,516
 
Net Income (Loss) $ (4,453) $ 14,515 $ 14,169 $ 34,283
 
Net Income (Loss) per Common Share
Basic $ (.08) $ .26 $ .25 $ .61
 
Diluted $ (.08) $ .25 $ .25 $ .60
 
Weighted Average Shares
Outstanding (Thousands)
Basic 56,682 56,275 56,611 56,196
 
Diluted 57,197 56,983 57,171 56,977
 

 
Calgon Carbon Corporation
         
 

Segment Data:

 

Segment Sales

3Q12 3Q11 YTD 2012 YTD 2011
 
Activated Carbon and Service 114,971 130,016 358,561 364,422
Equipment 18,212 11,563 54,217 32,361
Consumer 2,284 2,015 7,700 6,489
 
Total Sales (thousands) $ 135,467 $ 143,594 $ 420,478 $ 403,272
 
Segment

Operating Income (loss)*

3Q12 3Q11 YTD 2012 YTD 2011
 
Activated Carbon and Service 1,942 25,682 39,771 69,639
Equipment 726 (677) 3,257 (1,543)
Consumer 482 (650) 1,832 (1,791)
 
Income from Operations (thousands) $ 3,150 $ 24,355 $ 44,860 $ 66,305
 

*Before depreciation and amortization. The 2012 quarter and year to date periods include an $8.0 million restructuring charge and a $1.7 million charge related to pension in the Activated Carbon and Service segment. The 2012 quarter and year to date periods also include a $1.7 million charge related to the Company's former CEO which has been primarily allocated to the Activated Carbon and Service segment. The 2011 quarter and year to date periods include a $0.6 million and $1.3 million charge related to a discontinued product line in the Consumer segment. The 2011 year to date period also includes a $1.3 million reduction in an environmental liability in the Activated Carbon and Service segment.

     
Calgon Carbon Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
 
September 30, December 31,
2012 2011
 
Assets
 
Current assets:
 
Cash and cash equivalents $ 18,660 $ 13,574
 
Restricted cash - 1,152
 
Receivables 96,934 102,540
 
Inventories 112,121 118,348
 
Other current assets   49,438   42,327
 
Total current assets 277,153 277,941
 
Property, plant and equipment, net 253,643 234,549
 
Other assets   40,749   40,500
 
Total assets $ 571,545 $ 552,990
 
Liabilities and Shareholders' Equity
 
Current liabilities:
 
Short-term debt $ 27,552 $ 22,894
 
Current portion of long-term debt 1,854 3,372
 
Other current liabilities   87,788   89,721
 
Total current liabilities 117,194 115,987
 
Long-term debt 283 1,103
 
Other liabilities   59,110   58,783
 
Total liabilities 176,587 175,873
 
Total shareholders' equity   394,958   377,117
 
Total liabilities and shareholders' equity $ 571,545 $ 552,990

Calgon Carbon Corporation
Gail A. Gerono, 412-787-6795

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