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Press Release

Calgon Carbon Announces Second Quarter Results

PITTSBURGH, PA  –  07/31/2008

Calgon Carbon Corporation (NYSE:CCC) announced results for the second quarter ended June 30, 2008.

The company reported net income of $13.3 million for the second quarter of 2008, as compared to net income of $4.5 million for the second quarter of 2007. Net income for the second quarter of 2008 consisted of income from continuing operations of $9.8 million and income from discontinued operations of $3.5 million which represents the final adjustment to the sale price of the company’s charcoal business that was sold in the first quarter of 2006. On a fully diluted basis, net income per common share for the second quarter of 2008 was $0.25, consisting of $0.19 from continuing operations and $0.06 from discontinued operations. This compares with fully diluted net income per common share of $0.09 for the second quarter of 2007, all of which was from continuing operations.

Income from operations for the second quarter of 2008 was $16.1 million versus income from operations of $8.6 million for the comparable period in 2007.

Net sales for the second quarter of 2008, were $108.5 million versus second quarter 2007 sales of $88.4 million, an increase of 22.7%. Currency translation had a $3.5-million positive impact on sales for the second quarter of 2008 due to the strong Euro.

For the second quarter of 2008, sales of the Activated Carbon and Service segment increased by 27.5% versus the second quarter of 2007. The increase was primarily due to higher demand and pricing in the food, potable water, and environmental air treatment markets, and higher pricing in the environmental water treatment and industrial process markets. Equipment sales were comparable to the second quarter of 2007. A 19.6% decrease in consumer sales for the second quarter of 2008 was attributable to lower demand for the company’s PreZerve® products.

Net sales less the cost of products sold as a percentage of net sales for the second quarter of 2008 was 34.5% versus 32.7% for the second quarter of 2007. The increase was due primarily to higher pricing on certain activated carbon and service products.

Selling, administrative and research expenses for the second quarter of 2008 increased 7.8% versus the second quarter of 2007, principally due to higher employee-related costs which were partially offset by a decrease in bad debt expense. Selling, administrative and research expenses as a percentage of sales were 15.8% as compared to 18.0% for the second quarter of 2007.

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

Net income for the six months ended June 30, 2008 was $24.1 million versus $6.5 million for the comparable period of 2007. Net income for the first half of 2008 included a non-recurring after-tax gain of $5.7 million from the settlement of a lawsuit and a non-recurring after-tax gain of $3.5 million related to the sale of the company’s charcoal business. Fully diluted net income per common share for the first half of 2008 was $0.47, which consisted of $0.40 from continuing operations and $0.07 from discontinued operations. Fully diluted net income per common share for the first half of 2007 was $0.14, all of which was from continuing operations.

Income from operations for the six months ended June 30, 2008 was $33.7 million as compared to income from operations of $13.5 million for the first half of 2007.

Commenting on the results, John Stanik, Calgon Carbon’s chairman, president and chief executive officer said, “We are pleased with the results. Sales for the second quarter were the highest quarterly sales in our company’s 23-year history. Gross margin showed significant improvement – both year-over-year and sequentially. In addition, we made solid progress toward our strategic goal of reducing SG&A as a percentage of sales. These metrics reflect our continued success in obtaining higher value for our activated carbon products and services.”

Calgon Carbon Corporation, headquartered in Pittsburgh, Pennsylvania, is a global leader in services and solutions for making water and air safer and cleaner.

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 Balance Sheet
(Dollars in thousands)
(Unaudited)

 

ASSETS        
Current assets:        
Cash and cash equivalents   $ 38,549   $ 30,304
Receivables   66,430   57,548
Inventories   86,729   81,280
Other current assets   23,227   20,546
Total current assets   214,935   189,678
Property, plant and equipment, net   112,260   105,512
Other assets   53,867   52,950
Total assets   $ 381,062   $ 348,140
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Current liabilities:        
Short-term debt   $ 1,600   $ 1,504
Current portion of long-term debt   65,744   62,507
Other current liabilities   55,317   55,750
Total current liabilities   122,661   119,761
Long-term debt   10,000   12,925
Other liabilities   41,668   43,205
Total liabilities   174,329   175,891
Total shareholders’ equity   206,733   172,249
Total liabilities and shareholders’ equity   $ 381,062   $ 348,140

 

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

 

  Quarter Ended   Six Months Ended
  June 30,   June 30,
  2008   2007   2008   2007
Net Sales $ 108,476   $ 88,428   $ 198,807   $ 171,458
Cost of Products Sold 71,021   59,556   132,786   117,980
Depreciation and Amortization 4,199   4,331   8,125   8,592
Selling, Administrative & Research 17,154   15,916   33,445   31,350
               
Gain from AST Settlement –   –   (9,250)   –
  92,374   79,803   165,106   157,922
Income from Operations 16,102   8,625   33,701   13,536
Interest Expense – Net (779)   (1,010)   (1,618)   (2,158)
Other Expense – Net (480)   (408)   (570)   (811)
Income From Continuing Operations Before Income Tax and 14,843   7,207   31,513   10,567
Equity in Income (Loss) from Equity Investments              
Income Tax Provision 4,887   3,147   11,121   5,527
Income from Continuing Operations Before Equity in              
Income (Loss) from Equity Investments 9,956   4,060   20,392   5,040
Equity in Income (Loss) from Equity Investments (139)   402   299   1,456
Income from Continuing Operations 9,817   4,462   20,691   6,496
Income from Discontinued Operations 3,447   –   3,447   –
Net Income $ 13,264   $ 4,462   $ 24,138   $ 6,496
Net Income per Common Share              
Basic:              
Income from Continuing Operations $ .24   $ .11   $ .51   $ .16
Income from Discontinued Operations $ .09   $ –   $ .09   $ –
Total $ .33   $ .11   $ .60   $ .16
Diluted:              
Income from Continuing Operations $ .19   $ .09   $ .40   $ .14
Income from Discontinued Operations $ .06   $ –   $ .07   $ –
Total $ .25   $ .09   $ .47   $ .14

 

Calgon Carbon Corporation
Segment Data – Continuing Operations

 

Segment Data:              
Segment Sales 2Q08   2Q07   YTD 2008   YTD 2007
Activated Carbon and Service 95,284   74,723   172,182   143,406
z 10,742   10,658   20,439   21,624
Consumer 2,450   3,047   6,186   6,428
Total Sales (thousands) $ 108,476   $ 88,428   $ 198,807   $ 171,458
Segment              
Operating Income (loss)* 2Q08   2Q07   YTD 2008   YTD 2007
Activated Carbon and Service 19,766   13,015   37,142   21,488
z 519   (607)   3,962   (736)
Consumer 16   548   722   1,376
Income from Operations (thousands) $ 20,301   $ 12,956   $ 41,826   $ 22,128