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Calgon Carbon Announces Fourth Quarter and 2013 Results

Companies mentioned in this article: Calgon Carbon Corporation

PITTSBURGH -- (BUSINESS WIRE) -- Calgon Carbon Corporation (NYSE: CCC) announced results for the fourth quarter and year ended December 31, 2013.

Income from operations for the fourth quarter of 2013 was $15.8 million versus $14.7 million for the comparable period in 2012, reflecting the Company’s comprehensive profit improvement program. Net income for the fourth quarter of 2013 was $11.0 million or $0.20 per common share on a fully diluted basis, versus $9.1 million, or $0.16 per common share on a fully diluted basis, for the fourth quarter of 2012.

Net sales for the fourth quarter of 2013 were $133.1 million, as compared to sales of $141.8 million, a 6.1% decrease primarily driven by lower sales of activated carbon in Asia, including Japan, and lower demand for mercury removal carbon in the U.S. This is discussed below in the Activated Carbon and Service segment. Currency translation had a $1.6 million negative impact on sales for the fourth quarter due to the stronger U.S. dollar.

For the fourth quarter of 2013, sales for the Company’s Activated Carbon and Service segment were $116.3 million versus $127.2 million for the fourth quarter of 2012, an 8.6% decrease. Lower demand for granular activated carbon (GAC) for drinking water in Asia; earlier than expected deliveries of GAC in Japan; and lower pricing for powdered activated carbon for mercury removal were partially offset by increased demand for activated carbon products and services in the environmental water treatment market.

Equipment sales increased by 12.4% in the fourth quarter of 2013 versus the comparable quarter of 2012, principally due to higher revenue from carbon adsorption equipment.

For the fourth quarter of 2013, Consumer segment sales decreased $0.7 million, or 25.1%, as compared to the fourth quarter of 2012.

Net sales less the cost of products sold as a percentage of net sales for the fourth quarter of 2013 was 34.3%, versus 31.2% for the fourth quarter of 2012. The increase was attributable to improved virgin carbon manufacturing plant maintenance costs and performance, as well as a favorable product mix in the fourth quarter of 2013. Higher pricing on certain activated carbon products and services also contributed to the increase.

Selling, administrative and research expenses for the fourth quarter of 2013 were $22.2 million versus $20.5 million for the comparable period of 2012. The 8.4% increase was primarily the result of higher employee-related expenses.

Results for the fourth quarter of 2012 included restructuring charges of $2.3 million.

In the fourth quarter of 2013 the Company initiated an open market stock repurchase program that concluded on February 12, 2014. Under this program the Company purchased 928,700 shares of Calgon Carbon stock at an average price of $20.39.

Net sales for the year ended December 31, 2013, were $547.9 million, a 2.5% decrease over the comparable period in 2012, principally due to lower revenue recognition on ballast water treatment systems and lower sales of activated carbon for mercury removal. In addition, foreign currency translation had an $11.6 million negative impact on sales due to the stronger U.S. dollar.

For the year ended December 31, 2013, the Company reported income from operations of $68.9 million versus $39.9 million for the year ended December 31, 2012. Net income for the year ended December 31, 2013, was $45.7 million versus $23.3 million for the year ended December 31, 2012. Results for the year ended December 2012 included a $10.2 million restructuring charge. Earnings per common share on a fully diluted basis were $0.84 for the year ended December 31, 2013, as compared to $0.41 per common share for the year ended December 31, 2012.

Commenting on the results, Randy Dearth, Calgon Carbon’s President and Chief Executive Officer, said, “I am pleased with our accomplishments in the fourth quarter as they represent continuing progress in our efforts to grow shareholder value. We achieved significant improvement in profitability despite a challenging sales environment in certain markets and the negative impact of a strong U.S. dollar. We also utilized our balance sheet to increase value by conducting an open market share repurchase program. In addition, our Board approved $85 million for 2014 capital spending that should increase carbon production capacity and reduce costs.

“Going forward we intend to build on this success. We will continue our cost improvement initiatives as we prepare to capitalize on opportunities for top-line growth from environmental regulations for mercury removal from coal-fired power plants and for ballast water treatment.”

Pure Water. Clean Air. Better World.
Calgon Carbon Corporation (NYSE:CCC) is a global leader in innovative solutions, high quality products and reliable services designed to protect human health and the environment from harmful contaminants in water, and air. As a leading manufacturer of activated carbon, with broad capabilities in ultraviolet light disinfection, the Company provides purification solutions for drinking water, wastewater, pollution abatement, and a variety of industrial and commercial manufacturing processes.

Calgon Carbon is the world’s largest producer of granular activated carbon and supplies more than 100 types of activated carbon products - in granular, powdered, pelletized and cloth form – for more than 700 distinct applications. Headquartered in Pittsburgh, Pennsylvania, Calgon Carbon Corporation employs approximately 1,100 people at more than 15 manufacturing, reactivation, and equipment facilities in the U.S., Asia, and in Europe, where Calgon Carbon is known as Chemviron Carbon. The company also has more than 27 sales and service centers throughout the world.

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.

 
 
Calgon Carbon Corporation
Condensed Consolidated Statements of Comprehensive Income
(Dollars in thousands except per share data)
(Unaudited)
 
        Quarter Ended     Twelve Months Ended
December 31, December 31,
2013   2012 2013   2012
 
Net Sales $ 133,092   $ 141,777   $ 547,939   $ 562,255  
 
Cost of Products Sold (Excluding Depreciation) 87,489 97,556 366,962 392,382
 
Depreciation and Amortization 7,539 6,609 28,938 26,320
 
Selling, Administrative & Research 22,240 20,517 82,995 93,370
 
Restructuring - 2,253 (129 ) 10,211
 
Environmental and Litigation   18     130     284     111  
 
  117,286     127,065     479,050     522,394  
 
Income from Operations 15,806 14,712 68,889 39,861
 
Interest Expense - Net (37 ) (54 ) (326 ) (45 )
 
Other Income (Expense) - Net   200     (674 )   (1,364 )   (2,480 )
 
Income Before Income Tax Provision 15,969 13,984 67,199 37,336
 
Income Tax Provision   4,925     4,881     21,486     14,064  
 
Net Income $ 11,044   $ 9,103   $ 45,713   $ 23,272  
 
Other Comprehensive Income (Loss), Net of Tax
Foreign Currency Translation 661 (257 ) (305 ) 1,197
Derivatives 256 290 424 854
Employee Benefit Plans   13,510     (3,990 )   15,268     (5,061 )
 
Comprehensive Income $ 25,471   $ 5,146   $ 61,100   $ 20,262  
 
Net Income per Common Share
Basic $ .20 $ .16 $ .85 $ .41
Diluted $ .20 $ .16 $ .84 $ .41
 

Weighted Average Shares Outstanding (Thousands)

Basic 54,265 55,390 53,898 56,304
 
Diluted 55,160 55,837 54,671 56,836
 
                   
 
Calgon Carbon Corporation
 
 

Segment Data (unaudited):

(in thousands)
 

Segment Sales

4Q13 4Q12 YTD 2013 YTD 2012
 
Activated Carbon and Service $ 116,345 $ 127,194 $ 482,278 $ 485,755
Equipment 13,306 11,833 54,935 66,050
Consumer   3,441     2,750     10,726     10,450
 
Net Sales $ 133,092 $ 141,777 $ 547,939 $ 562,255
 
Segment

Operating Income (loss)*

4Q13 4Q12 YTD 2013 YTD 2012
 
Activated Carbon and Service $ 22,855 $ 24,177 $ 96,411 $ 71,906
Equipment (274 ) (1,203 ) (1,133 ) 2,054
Consumer   764     600     2,420     2,432
 

Income from Operations *

$ 23,345 $ 23,574 $ 97,698 $ 76,392
 
 

* Before depreciation and amortization and restructuring.

 
           
 
Calgon Carbon Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
 
December 31, December 31,
2013 2012
 
Assets
 
Current assets:
 
Cash and cash equivalents $ 32,942 $ 18,161
 
Receivables 96,996 101,918
 
Inventories 109,517 107,166
 
Other current assets   41,995   45,961
 
Total current assets 281,450 273,206
 
Property, plant and equipment, net 266,849 262,993
 
Other assets   41,779   41,570
 
Total assets $ 590,078 $ 577,769
 
 
Liabilities and Shareholders' Equity
 
Current liabilities:
 
Short-term debt $ 2,172 $ 19,565
 
Other current liabilities   80,024   96,085
 
Total current liabilities 82,196 115,650
 
Long-term debt 32,114 44,408
 
Other liabilities   59,263   66,414
 
Total liabilities 173,573 226,472
 
Total shareholders' equity   416,505   351,297
 
Total liabilities and shareholders' equity $ 590,078 $ 577,769
 


Copyright © Business Wire 2014
Contact:

Calgon Carbon Corporation
Gail A. Gerono, 412-787-6795
Vice President – Investor Relations and Communications
ggerono@calgoncarbon-us.com