Calgon Carbon Announces Third Quarter Results
Third quarter ended Sept. 30, 2012
Calgon Carbon Corp. reported results for the third quarter, which ended Sept. 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 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 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 CEO in July 2012.
Calgon Carbon’s board of directors did not declare a quarterly dividend.
Net sales for the nine months ended Sept. 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 Sept. 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 CEO, 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.”