Calgon Carbon Announces Fourth Quarter and 2012 Results

Calgon Carbon Corporation announced results for the fourth quarter and year ended December 31 2012.

Income from operations for the fourth quarter of 2012 was $14.7m versus $8.2m for the comparable period in 2011. Net income for the fourth quarter of 2012 was $9.1m, or $0.16 per common share on a fully diluted basis, versus $4.9m, or $0.09 per common share on a fully diluted basis, for the fourth quarter of 2011.

Commenting on the results, Randy Dearth, Calgon Carbon’s president and chief executive officer, said, "The Company’s performance for the quarter was solid despite a challenging business environment.

"In addition to growth from our traditional business in 2013, we will also realize positive impacts from our cost improvement program that we implemented in 2012. We will continue to focus on increasing profitability through process improvement, enhanced operating efficiencies, and worldwide cost reductions."

"As for the long term, we continue to believe that emerging environmental markets, including mercury removal from coal-fired power plants, ballast water treatment, and control of disinfection byproducts in drinking water, will provide opportunities for significant growth throughout this decade."

Net sales for the fourth quarter of 2012 were $141.8m, an increase of 2.6% over sales of $138.2m for the fourth quarter of 2011. Currency translation had a $1.0m negative impact on sales for the fourth quarter of 2012 due to the stronger U.S. dollar.

For the fourth quarter of 2012, sales for the company’s Activated Carbon and Service segment were $127.2m versus $122m for the fourth quarter of 2011, a 4.2% increase. Higher demand for granular activated carbon (GAC) products for drinking water treatment and for GAC used in respirators was primarily responsible for the increase.

Equipment sales declined 15% in the fourth quarter of 2012 versus the comparable quarter of 2011 due to lower revenue recognition on ballast water treatment, ion exchange, and carbon adsorption systems. This was partially offset by higher revenue recognition on ultraviolet systems for drinking water treatment.

For the fourth quarter of 2012, Consumer segment sales increased $0.5m, or 22.7%, as compared to the fourth quarter of 2011. This was due to increased demand for activated carbon cloth, the company’s sole consumer product.

Net sales less the cost of products sold as a percentage of net sales for the fourth quarter of 2012 was 31.2%, up slightly from 30.9% for the fourth quarter of 2011.

Selling, administrative and research expenses for the fourth quarter of 2012 were $20.5m versus $27m for the comparable period of 2011, a decrease of 24.1%. Lower research and development activities related to new products and lower legal and outside services expenses contributed to the favorable comparison. For the fourth quarter of 2011, selling, administrative and research expenses included $2.2m in severance expenses related to management changes.

Results for the fourth quarter of 2012 included restructuring charges of $2.3 million which were comprised of severance and pension-related expense. These charges were components of phase one of a cost improvement program that was completed in the fourth quarter of 2012.

For the year ended December 31, 2012, the company reported income from operations of $39.9m versus $57.2m for the year ended December 31, 2011. Net income for the year ended December 31 2012, was $23.3m versus $39.2m for the year ended December 31 2011. Results for the year ended December 2012 included a $10.2m restructuring charge related to a cost reduction program. Earnings per common share on a fully diluted basis were $0.41 for the year ended December 31 2012, as compared to $0.69 per common share for the year ended December 31 2011.

Net sales for the year ended December 31 were $562.3m, an increase of 3.8% over the comparable period in 2011. For the year ended December 31, 2012, foreign currency translation had a $7.5m negative impact on sales due to the stronger US dollar.

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