Press Release

Calgon Carbon Announces Second Quarter Results

PITTSBURGH, PA  –  07/25/2005

Calgon Carbon Corporation (NYSE: CCC) announced results for the second quarter ended June 30, 2005.

Sales for the second quarter of 2005 were $96.3 million versus second quarter 2004 sales of $97.1 million, a 0.8% decrease. Currency translation had a $1.6-million positive impact on sales for the quarter due to the stronger Euro.

The company reported net income of $2.6 million for the quarter, including a restructuring charge of $0.1 million related to the closure of two small manufacturing facilities as part of the company’s previously announced re-engineering plan. Other costs associated with the company’s re-engineering plan totaled $0.3 million. For the second quarter of 2004, the company reported net income of $4.2 million. Fully diluted net income per common share was $0.07 for the second quarter of 2005 as compared to $0.11 for the comparable period in 2004.

For the second quarter of 2005, sales of the Activated Carbon and Service segment decreased by 5.5% versus the second quarter of 2004. Sales in the second quarter of 2005 were adversely affected by postponement of awarded contracts for activated carbon for drinking water treatment in Europe and the U.S., delays in sales of specialty carbons, including sales of respirator carbons, and a decline in demand for resin service sales for the removal of perchlorate from drinking water.

Equipment sales for the second quarter of 2005 declined by 6.1% due to the completion in 2004 of two ISEP® projects in Asia which contributed $3.5 million in revenue in the second quarter of 2004.

Consumer sales were 30.3% higher in the second quarter of 2005. The increase was primarily attributable to stronger demand for charcoal in Europe.

Consolidated gross profit before depreciation and amortization as a percentage of net sales was 26.6% for the second quarter of 2005 versus 28.6% for the second quarter of 2004. The decline was primarily the result of higher costs for transportation, energy and raw materials in the second quarter of 2005.

Operating expenses in the second quarter of 2005 and the second quarter of 2004 were comparable—$15.6 million and $15.7 million, respectively. However, legal expense was $0.9 million in the second quarter of 2005, versus $0.4 million in the second quarter of 2004.

Calgon Carbon also indicated that as of June 30, 2005, the company is in technical violation of one of the financial covenants in its U.S. credit facility. The company is working with its lenders and expects to modify the agreement and to be in full compliance when it files its Form 10-Q.

Sales for the six months ended June 30, 2005 were $179.7 million, as compared to $168.4 million for the comparable period in 2004, an increase of 6.7%. Foreign currency translation had a positive impact of $3.0 million on sales for the first six months of 2005. The company reported a net loss of $0.2 million for the six months ended June 30, 2005, versus net income of $3.7 million for the six months ended June 30, 2004. For the first half of 2005, earnings per share on a diluted basis were breakeven as compared to $0.09 for the first half of 2004.

Re-engineering costs for the six months ended June 30, 2005 totaled $4.0 million, which included a $2.2-million impairment charge for the cancellation of the construction of a reactivation facility on the U.S. Gulf Coast.

Commenting on the results, John Stanik, Calgon Carbon’s president and chief executive officer, said, “Clearly, the results for the quarter were below expectations. Inflationary cost increases in transportation, raw materials, and energy were major contributing factors, totaling approximately $2.6 million. The timing of the benefits from our re-engineering plan, which totaled $1.5 million in the second quarter, lagged the timing of these inflationary cost increases.

Looking forward, we are hopeful that participation in attractive traditional and emerging market opportunities and the completion of our re-engineering plan will result in significant improvement in Calgon Carbon’s performance.”

Calgon Carbon Corporation, headquartered in Pittsburgh, Pennsylvania, is a global leader in services and solutions for making air and water cleaner and safer. The company employs approximately 1,100 people at 16 operating facilities and 27 sales and service centers worldwide.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This document contains certain statements that are forward-looking relative to the company’s future strategy and performance. 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.

Calgon Carbon Corporation
Condensed Consolidated Statement of Income
(Dollars in thousands except per share date)
(Unaudited)

Calgon Carbon Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)

* $86.5 million of debt is currently classified as long-term debt under the expectation that a modification of the agreement will be obtained by the Form 10-Q filing. If such modification should not be obtained, the long-term debt will be reclassified to short-term debt.

Calgon Carbon Corporation
Segment Data

* Before depreciation, amortization, and restructuring charges