Calgon Carbon Reports First Quarter Results
The company reported net income of $9.8 million for the first quarter of 2013
Calgon Carbon Corp. announced results for the first quarter ended March 31, 2013.
Net sales for the first quarter of 2013 were $135.0 million, essentially flat versus the comparable period in 2012. Currency translation had a $3.1 million negative impact on sales for the first quarter of 2013 due to the weaker yen.
The company reported net income of $9.8 million for the first quarter of 2013, as compared to net income of $7.7 million for the first quarter of 2012. On a fully diluted share basis, earnings per common share for the first quarter of 2013 were $0.18 versus $0.14 for the first quarter of 2012.
For the first quarter of 2013, sales for the Activated Carbon and Service segment increased 1.4% as compared to the first quarter of 2012. The increase was due to higher demand for activated carbon products and services in the municipal and industrial process markets. These increases were largely offset by lower demand for granular activated carbon in the food market, as well as lower demand and pricing for powdered activated carbon for mercury removal from electric generating units.
Equipment sales declined 13.7% in the first quarter of 2013 versus the comparable period of 2012 due primarily to lower sales of ballast water treatment and ion exchange systems. These decreases were partially offset by higher sales of traditional UV systems and carbon adsorption equipment.
The $1.0 million, or 31.3%, decline in consumer sales was attributed to lower demand for activated carbon cloth.
Net sales less the cost of products sold (excluding depreciation and amortization), as a percentage of net sales for the first quarter of 2013 was 31.6%, versus 31.3% for the first quarter of 2012. In the first quarter of 2013, the margin rate benefited from the $0.4 million settlement of an insurance claim related to Hurricane Isaac.
Selling, administrative and research (SG&A) expenses for the first quarter of 2013 were $20.9 million versus $23.9 million for the comparable period of 2012. The decrease was due to lower employee related expenses, due in part to the company’s cost reduction initiatives. SG&A as a percentage of sales improved to 15.5% as compared to 17.5% for the first quarter of 2012.
The income tax rate for the first quarter of 2013 was 30.4% versus 35% for the first quarter of 2012. The lower tax rate for the first quarter of 2013 was due to activity related to the company’s Datong, China, subsidiary which was sold in March of 2013.
Commenting on the quarter, Randy Dearth, Calgon Carbon’s president and CEO, said, “I am very pleased with the pace at which we are implementing our cost reduction initiatives and their positive impact in the first quarter, especially on operating expense.
“Although revenue was flat for the first quarter of 2013 versus last year’s first quarter, the company’s bottom line results showed significant improvement. Going forward we should see higher margins as we continue to implement the second phase of our cost reduction program which specifically targets margin improvement. In addition, price increases on our activated carbon products and services that we initiated earlier this year should begin to have a positive impact on both sales and margins.”