Calgon Carbon Corporation (NYSE: CCC) has reported results for the second quarter of 2012, which ended on 30 June.
Q2 2012 results versus Q2 2011 results:
- Net Sales up 9.7%
- Equipment sales up 70.3%
- Fully diluted EPS $0.19 versus $0.20
- Gross margin (before depreciation and amortization) 31.0% versus 32.8% due to higher maintenance and coal costs
- Selling, administrative and research expense 15.6% of sales versus 16.6% of sales
The company reported net sales of $148.4m for the second quarter of 2012, a $13.1m, or 9.7% increase over the second quarter of 2011. Currency exchange had a $3.1m negative effect on sales for the second quarter of 2012 due to the stronger dollar.
Net income for the second quarter of 2012 was $10.9m versus $11.3m for the comparable period of 2011. Net income for the second quarter of 2011 included a $1.3m reduction in the estimate to complete a remediation project at one of the company’s production facilities. On a fully diluted basis, net income per common share for the second quarter of 2012 was $0.19 as compared to $0.20 for the second quarter of 2011.
For the second quarter of 2012, sales for the Activated Carbon and Service segment increased 4.0%, as compared to the second quarter of 2011. The increase was primarily due to higher demand for certain activated carbon and service products in the potable water market and higher pricing on activated carbon products for the metals recovery market.
Equipment sales for the second quarter of 2012 increased 70.3% versus the comparable period in 2011, primarily due to higher revenue recognition from ballast water treatment systems. For the second quarter of 2012, Consumer sales were comparable to the second quarter of 2011.
For the second quarter of 2012, net sales less the cost of products sold as a percentage of net sales was 31.0% versus 32.8% for the second quarter of 2011. The decline resulted primarily from higher coal and plant maintenance costs. Results for the second quarter of 2011 included a $1.3m charge related to a discontinued product line in the company’s consumer segment.
Selling, administrative and research expenses for the second quarter of 2012 were $23.1m as compared to $22.5m for the second quarter of 2011. The increase was principally due to expenses related to the testing of new activated carbon products. Selling, administrative and research expenses as a percentage of sales improved to 15.6% for the second quarter of 2012 versus 16.6% for the second quarter of 2011.
Calgon Carbon’s board of directors did not declare a quarterly dividend.
Net sales for the six months ended June 30 2012, were $285.0m, a $25.3m, or a 9.8%, increase over the comparable period in 2011. Currency translation had a $3.3m negative impact on sales for the first half of 2012 due to the stronger dollar.
Net income for the six months ended June 30, 2012, was $18.6m versus $19.8m for the comparable period of 2011. Fully diluted net income per common share for the first half of 2012 was $0.33. Fully diluted net income per common share for the first half of 2011 was $0.35.
Randy Dearth, Calgon Carbon’s president and chief executive officer, commented on the results.
"Calgon Carbon is a company with strong fundamentals and unprecedented opportunities as a provider of environmental solutions," he said.
"Several factors, including the global economic slowdown, rising raw material and maintenance costs, and delays in implementation of environmental regulations, have created a challenging business environment for the company. In response, Calgon Carbon’s management has initiated a program which, I believe, will result in annual cost savings in excess of $10m."
"As I assume leadership of the company, my first priority will be to fully implement this cost reduction program as quickly as possible. I am also committed to identifying additional initiatives that will further strengthen the company’s competitive position. I believe that these efforts should result in significant and sustained earnings growth."