Calgon Carbon Corporation fka CCC

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Calgon Carbon Announces First Quarter Results
Date : 05/03/2011 @ 8:00AM
Source : Business Wire
Stock : Calgon Carbon Corporation (CCC)
Quote : 17.44 0.62 (3.69%) @ 4:29PM

Calgon Carbon Announces First Quarter Results
Calgon Carbon (NYSE:CCC)
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Today : Tuesday 3 May 2011
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Calgon Carbon Corporation (NYSE: CCC) announced results for the first quarter ended March 31, 2011.

The company reported net income of $8.5 million for the first quarter of 2011, as compared to net income of $9.5 million for the first quarter of 2010. Net income for the first quarter of 2010 was retrospectively adjusted to increase the gain on acquisitions to $2.7 million. As a result, earnings per diluted share for the first quarter of 2010 as previously reported increased by $0.01.

On a fully diluted share basis, earnings per common share for the first quarter of 2011 were $0.15 versus $0.17 for the first quarter of 2010.

Net sales for the first quarter of 2011 were $124.4 million, a 20.8% increase over net sales of $102.9 million for the first quarter of 2010. Calgon Carbon Japan’s (CCJ’s) sales, which were not reported on a consolidated basis for the first quarter of 2010, accounted for approximately 83% of the increase. Currency translation had a $0.9 million positive impact on sales for the first quarter of 2011 due to the weaker dollar.

For the first quarter of 2011, sales for the Activated Carbon and Service segment increased 24.8% as compared to the first quarter of 2010. The increase was primarily due to the above mentioned CCJ sales.

Sales from the company’s traditional business increased due to higher sales of activated carbon products and services in four of its six market segments: municipal, industrial process, respirator, and environmental water treatment. This increase was partially offset by lower demand in the food and environmental air treatment markets. The decline in environmental air treatment sales was the result of a change in mercury removal requirements in one Canadian province; the temporary shut down of certain customers’ coal-fired electric generating units for maintenance; and one customer’s decision to temporarily shift some production from coal-fired to hydroelectric generating facilities.

Equipment sales declined by 10.3% in the first quarter of 2011 versus the comparable period in 2010, principally due to lower revenue from carbon adsorption systems. This was partially offset by higher revenue from UV systems.

An increase of 2.8% in Consumer sales for the first quarter of 2011 versus the comparable period in 2010 was attributable to higher demand for activated carbon cloth products. The company previously announced its intention to exit the home wellness market where it provides PreZerve® products.

Net sales less the cost of products sold (excluding depreciation and amortization), as a percentage of net sales for the first quarter of 2011 was 33.3%, versus 36.1% for the first quarter of 2010. The decline was primarily due to sales from CCJ and revenue recognized on UV systems whose margins were lower than the overall company average. Lower sales of activated carbon products for mercury removal also contributed to the decline.

Selling, administrative and research (SG&A) expenses for the first quarter of 2011 were $22.5 million versus $19.7 million for the comparable period in 2010. The increase resulted from expenses incurred by CCJ that were not reported on a consolidated basis for the first quarter of 2010. SG&A as a percentage of sales improved to 18.1% versus 19.1% for the first quarter of 2010.

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

Commenting on the quarter, John Stanik, Calgon Carbon’s chairman, president and chief executive officer, said, “The first quarter is typically Calgon Carbon’s weakest and should not be indicative of performance for the year. Lower sales of Fluepac® carbons for the removal of mercury had an adverse impact on results for the first quarter.”

“Overall, however, demand for activated carbon increased year-over-year. CCJ’s margins were up sequentially, and we expect continued improvement throughout the year as we conclude the integration process. We continue to believe that in order to meet customer demand in 2011 we will be required to supplement activated carbon that we produce with lower-margin outsourced products. However, margins in our traditional Carbon and Service business should improve as we continue to make progress implementing our pricing and reactivation strategies.”