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|Calgon Carbon Announces Fourth Quarter 2003 Results|
Board Declares Dividend
PITTSBURGH, Feb. 6 /PRNewswire-FirstCall/ -- Calgon Carbon Corporation (NYSE: CCC) announced results for the fourth quarter ended December 31, 2003.
Sales for the fourth quarter were $69.6 million versus fourth quarter 2002 sales of $62.6 million, an increase of 11.1%. Net income for the fourth quarter of 2003 was $2.0 million, as compared to $0.3 million for the fourth quarter of 2002, a 505.1% increase. Fully diluted earnings per share for the fourth quarter of 2003 were $0.05, as compared to $0.01 for the fourth quarter of 2002. Foreign currency translation had a $3.7-million positive effect on sales for the quarter due to the stronger Euro, and net income reflected a tax benefit due to a lower effective tax rate for the year.
Sales of activated carbon in the fourth quarter of 2003 versus the comparable period in 2002 declined slightly. Increased demand from the drinking water market in Europe and for specialty carbons in the U.S. was offset by weakness in the industrial process market in the U.S. Service sales were $25.2 million, an increase of 12.3%, driven by strong demand for potable water service in Europe. Engineered Systems sales increased 31.7%, due to increased contract revenue on contracts secured in the second and third quarters for perchlorate removal and UV disinfection of drinking water. Consumer sales increased 37.2% due to increased demand for charcoal.
Consolidated gross profit before depreciation and amortization as a percentage of net sales was 28.8%, versus 31.9% for the fourth quarter of 2002. Carbon and Service margins were adversely affected by product mix, increases in employee benefit costs, and competition in Europe, partially offset by the positive impact of sales in Europe of U.S-sourced, lower-cost carbon due to the stronger Euro. Engineered Systems margins improved versus the fourth quarter of 2002 due to a product mix change and a lower cost structure within the service business. Consumer margins improved due to increased charcoal manufacturing efficiencies.
Operating expense for the fourth quarter of 2003 was $1.5 million lower than for the comparable period of 2002. This 10.6% improvement was due to a reduction in employee-related costs and professional service expense, partially offset by negative foreign exchange translation.
A tax benefit of $0.6 million was recorded in the fourth quarter of 2003 to bring the company's overall annual effective tax rate to 1.6%. The tax benefit primarily related to a research and development tax credit project completed in the fourth quarter of 2003.
Sales for the twelve months ended December 31, 2003, were $278.3 million versus $258.1 million for the twelve months ended December 31, 2002, an increase of 7.8%. For the year, foreign currency translation had a positive impact of $14.6 million on sales. The change to the equity method of accounting for Calgon Mitsubishi Chemical Corporation, as the result of the joint venture formed by Calgon Carbon and Mitsubishi Chemical in 2002, had a negative impact of $4.4 million on the year-over-year sales comparison.
For the twelve months ended December 31, 2003, the company reported income before cumulative effect of accounting change of $4.5 million, versus $4.2 million for the comparable period of 2002, an increase of 6.2%. Net income for the year 2003 was $4.5 million, versus a net loss of $26.7 million in 2002. Earnings per share before the cumulative effect of accounting change on a diluted basis were $0.11 for both 2002 and 2003.
Calgon Carbon's board of directors declared a dividend of $0.03 per share. Dividends will be payable to shareholders of record as of February 23, 2004, and will be payable on March 9, 2004.
Commenting on the results, John Stanik, president and chief executive officer of Calgon Carbon, said, "We are pleased with the sales growth for both the quarter and the year, especially increases in our Service and Engineered Systems segments. However, intense competition in our Carbon and Service businesses continued to compress margins. We were also encouraged by fourth quarter sales growth in the Consumer and Engineered Systems segments, and by margin improvement in those segments which was partially due to cost efficiencies."
Looking ahead, Mr. Stanik continued, "In the short term, economic recovery in the U.S. and Europe will continue to be a major factor in the demand for Calgon Carbon's products and services. A solid backlog for UV and perchlorate removal systems should have a positive impact on sales in our Engineered Systems segment. Consumer sales will be driven by increasing demand for activated carbon cloth and the introduction of new tarnish prevention products."
"In the longer-term, sustained growth will depend on the successful implementation of our three-year strategic plan. We are off to an excellent start with the pending acquisition of Waterlink Specialty Products. We are making progress on all of our strategic initiatives -- strengthening our core businesses, applying technical knowledge to solve new purification problems, and expanding our geographical presence -- and expect them to have a significant positive impact on future results."
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 1,000 people at 14 operating facilities and 11 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 data) (Unaudited) Quarter Ended Twelve Months Ended December 31, December 31, 2003 2002 2003 2002 Net Sales $69,624 $62,642 $278,322 $258,094 Cost of Products Sold 49,578 42,673 195,113 177,966 Depreciation and Amortization 5,255 5,012 19,789 19,039 Selling, Administrative & Research 12,876 14,409 55,826 51,828 Restructuring Charge 452 116 452 116 68,161 62,210 271,180 248,949 Income from Operations 1,463 432 7,142 9,145 Interest Income (Expense) - Net (283) (449) (1,555) (1,988) Equity Income (Loss) - Net 391 (186) 429 (186) Other Income (Expense) - Net (155) (401) (1,646) (1,548) Income Before Income Taxes, Minority Interest and Cumulative Effect of Accounting Change 1,416 (604) 4,370 5,423 Provision (Benefit) for Income Taxes (586) (855) 64 1,315 Income Before Minority Interest and Cumulative Effect of Accounting Change 2,002 251 4,306 4,108 Minority Interest 31 85 179 114 Income Before Cumulative Effect of Accounting Change 2,033 336 4,485 4,222 Cumulative Effect of Accounting Change - - - (30,926) Net Income (Loss) $2,033 $336 $4,485 $(26,704) Net Income per Common Share Before Cumulative Effect of Accounting Change Basic $.05 $.01 $.12 $.11 Diluted $.05 $.01 $.11 $.11 Quarter Ended Twelve Months Ended December 31, December 31, 2003 2002 2003 2002 Cumulative Effect of Accounting Change per Common Share Basic $- $- $- $(.79) Diluted $- $- $- $(.79) Adjusted Net Income (Loss) per Basic $.05 $.01 $.12 $(.69) Diluted $.05 $.01 $.11 $(.68) Weighted Average Shares Outstanding (Thousands) Basic 39,006 38,963 39,000 38,939 Diluted 39,258 38,963 39,157 39,131 Calgon Carbon Corporation Condensed Consolidated Balance Sheet (Dollars in thousands) (Unaudited) December 31, December 31, 2003 2002 ASSETS Current assets: Cash and cash equivalents $8,954 $4,093 Receivables 46,133 45,490 Inventories 51,811 48,665 Other current assets 24,210 18,169 Total current assets 131,108 116,417 Property, plant and equipment, net 128,956 134,852 Other assets 42,131 39,360 Total assets $302,195 $290,629 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt $604 $- Other current liabilities 45,489 38,950 Total current liabilities 46,093 38,950 Long-term debt 53,600 57,600 Other liabilities 40,350 40,705 Total liabilities 140,043 137,255 Minority interest 279 56 Total shareholders' equity 161,873 153,318 Total liabilities and shareholders' equity $302,195 $290,629 Calgon Carbon Corporation Segment Data Segment Sales 4Q03 4Q02 YTD 2003 YTD 2002 Activated Carbon 25,311 25,902 108,380 100,625 Service 25,182 22,421 96,198 93,494 Engineered Solutions 12,342 9,371 40,770 40,081 Consumer 6,789 4,948 32,974 23,894 Total Sales (thousands) $69,624 $62,642 $278,322 $258,094 Segment Operating Income (Loss)* 4Q03 4Q02 YTD 2003 YTD 2002 Activated Carbon 3,570 4,115 14,012 16,307 Service 3,284 4,016 12,089 18,512 Engineered Solutions 531 (1,699) 141 (5,245) Consumer (215) (872) 1,141 (1,274) Total Income from operations (thousands) $7,170 $5,560 $27,383 $28,300 *Before depreciation, amortization and restructuring
SOURCE Calgon Carbon Corporation