PR Newswire
HOUSTON, Oct. 26, 2017
HOUSTON, Oct. 26, 2017 /PRNewswire/ -- CARBO Ceramics Inc. (NYSE: CRR) today reported financial results for the third quarter of 2017.
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The Company reported revenues of $50.2 million for the quarter ended September 30, 2017 compared to revenue of $20.2 million in the same period of 2016. Third quarter operating loss of $51.4 million compares to an operating loss of $30.5 million last year. The operating loss includes a $26.7 million loss on the sale of our Russian proppant business and $10.9 million of costs primarily associated with slowing and idling production, of which 73% is non-cash.
CEO Gary Kolstad commented, "We are pleased with the progress made on our transformation strategy to grow and diversify our revenue streams coming out of the oil and gas industry downturn. The 148% year-on-year increase in quarterly revenue was driven by double to triple digit revenue increases in each of our businesses.
"Revenues grew sequentially by 15% primarily driven by sales of our ceramic technology products and sand, partially offset by a decline in our environmental service business which was impacted by the hurricanes and associated weather during the quarter.
"Ceramic technology revenue was stronger sequentially due to increased KRYTPOSPHERE®, SCALEGUARD® and NRT® sales, and sand sales volumes set a quarterly record of 617 million pounds.
"Industrial ceramic product sales continue to leverage our 'Are You Ready?' marketing campaign, which asks businesses if they are ready to meet the new OSHA silica Permissable Exposure Limits (PEL) requirements going into effect in 2018. Not only does our ceramic media produce higher quality castings and reduce operating costs, but it also ensures the workplace environment is safer for our clients' employees by eliminating risks associated with silica dust. In addition, we successfully launched a new CARBOGRIND™ product used in grinding mills for the mining industry, which when client-tested performed significantly better than established industry products.
"Mineral processing revenues are trending in the right direction, and we are pleased with the quarterly growth throughout the year. During the quarter, we produced several products for non-oilfield clients. In addition, discussions continued with a number of companies to define what other products our plants can produce for industries outside of the oilfield. Although this revenue is a nominal contributor today, growing our mineral processing opportunities is important to getting our idled plant capacity back to work and producing cash.
"We continued to see improvement in our net cash used in operating activities which declined from $15.8 million in the second quarter of 2017 to $5.2 million in the third quarter of 2017. This is a result of the high revenue growth, as well as a continued focus across the organization to reduce structural costs, such as distribution, where in 2017 we have removed approximately $9 million of costs on an annualized basis. In addition, during the quarter we took steps to reduce certain slow-moving base ceramic inventories through price incentives, which released cash from working capital.
"During the quarter, we closed on the sale of our Russia proppant business. The sale strengthens our liquidity position, de-risks our company portfolio and allows us to continue to execute on our transformation strategy to return the company to profitability," Mr. Kolstad said.
Third Quarter 2017 Results
Revenues for the third quarter of 2017 increased 148%, or $30.0 million, compared to the same period of 2016. The increase was primarily attributable to increases in frac sand sales, ceramic technology product sales, and environmental product sales.
Operating loss for the third quarter of 2017 increased to $51.4 million as compared to $30.5 million in the same period of 2016, primarily due to a $26.7 million loss on the sale of our Russian proppant business. The recorded loss was primarily due to a $33.3 million foreign currency cumulative translation loss that was reclassified from the balance sheet to the income statement. The increase to operating loss was offset by increased sales combined with a reduction in certain fixed structural costs, and a decrease in slowing and idling expenses.
During the quarter, we identified indicators of impairment related to our Millen, Georgia manufacturing facility. We expect this impairment will range between $85 million to $125 million. This non-cash impairment will be finalized and included as a component of operating loss within the Loss on disposal or impairment of assets line item on our Consolidated Statements of Operations in the third quarter 10-Q.
Technology and Business Highlights
Outlook
CEO Gary Kolstad commented on the outlook for CARBO stating, "We are expecting a sequential increase in both revenue and operating cash flow for the fourth quarter of 2017. Opportunities within our oilfield business for the fourth quarter of 2017 are tracking positively. Both our ceramic technology and base ceramic volumes are expected to increase sequentially based on our visibility today. Further, we continue to believe that the negative returns throughout the base ceramic industry should lead to increased industry pricing moving forward.
"Through existing business relationships, we are pursuing multiple projects resulting in increases to our annual sand capacity utilizing 'asset-lite' business models. One of these projects should start first production toward the end of the fourth quarter of 2017. To meet our client demand, we expect to ramp up to an annual sand capacity of 600,000 tons by the end of the first quarter of 2018. Providing a complete suite of proppant products remains an important factor that differentiates us from our competitors.
"STRATAGEN, our oilfield consulting business, has seen significant growth this year. We expect continued growth in this business, given the value that our experienced technical people provide E&P operators in the design, execution, and optimization of their well completions.
"Our industrial products should have a solid fourth quarter. The stricter OSHA silica PEL requirements should provide a tailwind for ceramic media sales as the regulations take effect in June of 2018. In addition, the new CARBOGRIND products we have introduced are seeing client adoption.
"Our strategy to increase plant utilization through mineral processing opportunities is progressing well. Recent plant trials have proved successful this year, and we expect this to play an important role by increasing revenue through the long-term utilization at our manufacturing plants.
"ASSETGUARD, our environmental business, should bounce back after the weather issues experienced during the third quarter of 2017. We also expect to continue to grow our industrial revenue as we branch outside the oilfield.
"We continue to target positive EBITDA in 2018 and are excited about the direction we are headed, the positive trends we are seeing, and the opportunity set we have before us. Execution of our transformation strategy should allow us to grow revenues, return the company to profitability, and generate cash," Mr. Kolstad concluded.
Conference Call
As previously announced, a conference call to discuss CARBO's third quarter 2017 results is scheduled for today at 10:30 a.m. Central Time (11:30 a.m. Eastern). Due to historical high call volume, CARBO is offering participants the opportunity to register in advance for the conference by accessing the following website:
http://dpregister.com/10112466
Registered participants will immediately receive an email with a calendar reminder and a dial-in number and PIN that will allow them immediate access to the call.
Participants who do not wish to pre-register for the call may dial in using (877) 232-2832 (for U.S. callers), (855) 669-9657 (for Canadian callers) or (412) 542-4138 (for international callers) and ask for the "CARBO Ceramics" call. The conference call also can be accessed through CARBO's website, www.carboceramics.com.
A telephonic replay of the earnings conference call will be available through November 2nd, 2017 at 9:00 a.m. Eastern Time. To access the replay, please dial (877)-344-7529 (for U.S. callers), (855) 669-9658 (for Canadian callers) or (412) 317-0088 (for international callers). Please reference conference number 10112466. Interested parties may also access the archived webcast of the earnings teleconference through CARBO's website approximately two hours after the end of the call.
About CARBO
CARBO (NYSE: CRR) is a global technology company that provides products and services to the oil and gas and industrial markets to enhance value for its clients.
CARBO Oilfield Technologies - is a global leader that provides engineered solutions in its Design, Build, and Optimize the Frac® technology businesses, delivering important value to E&P operators by increasing well production and EUR. Oilfield Technologies is the world's largest producer of high quality ceramic proppant, provides one of the industry's most widely used fracture simulation software, has proprietary technology that provides fracture diagnostics and production assurance, and offers consulting services for fracture design and completion optimization. The Company also provides a range of technology solutions for spill prevention and containment.
Its products and services are sold to operators of oil and natural gas wells and to oilfield service companies for use in the hydraulic fracturing of natural gas and oil wells.
CARBO Industrial Technologies - is a leading provider of high-performance industrial ceramic media products that are engineered to increase process efficiency, improve end-product quality and reduce operating costs.
Its products and services are primarily sold to industrial companies that work in manufacturing and mineral processing.
For more information, please visit www.carboceramics.com.
Forward-Looking Statements
The statements in this news release that are not historical statements, including statements regarding our future financial and operating performance and liquidity and capital resources, are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of terminology such as "may", "will", "estimate", "intend", "continue", "believe", "expect", "anticipate", "should", "could", "potential", "opportunity", or other similar terminology. All forward-looking statements are based on management's current expectations and estimates, which involve risks and uncertainties that could cause actual results to differ materially from those expressed in forward-looking statements. Among these factors are changes in overall economic conditions, changes in the demand for, or price of, oil and natural gas, changes in the cost of raw materials and natural gas used in manufacturing our products, risks related to our ability to access needed cash and capital, our ability to meet our current and future debt service obligations, including our ability to maintain compliance with our debt covenants, our ability to manage distribution costs effectively, changes in demand and prices charged for our products, risks of increased competition, technological, manufacturing and product development risks, our dependence on and loss of key customers and end users, changes in foreign and domestic government regulations, including environmental restrictions on operations and regulation of hydraulic fracturing, changes in foreign and domestic political and legislative risks, risks of war and international and domestic terrorism, risks associated with foreign operations and foreign currency exchange rates and controls, weather-related risks and other risks and uncertainties. Additional factors that could affect our future results or events are described from time to time in our reports filed with the Securities and Exchange Commission (the "SEC"). Please see the discussion set forth under the caption "Risk Factors" in our most recent annual report on Form 10-K, and similar disclosures in subsequently filed reports with the SEC. We assume no obligation to update forward-looking statements, except as required by law.
Note on Non-GAAP Financial Measures
This press release includes unaudited non-GAAP financial measures, including EBITDA and Adjusted EBITDA. We present non-GAAP measures when our management believes that the additional information provides useful information about our operating performance. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. See the table entitled "Reconciliation of Reported Net Loss to EBITDA and Adjusted EBITDA" below and the accompanying text for an explanation of the non-GAAP financial measures and a reconciliation of the non-GAAP financial measures to the comparable GAAP measures.
-tables follow –
| | Three Months Ended | | | Nine Months Ended | | ||||||||||
| | September 30, | | | September 30, | | ||||||||||
| | 2017 | | | 2016 | | | 2017 | | | 2016 | | ||||
| | (In thousands except per share) | | | (In thousands except per share) | | ||||||||||
Revenues | | $ | 50,173 | | | $ | 20,241 | | | $ | 128,415 | | | $ | 73,993 | |
Cost of sales (see Cost of Sales Detail table below) | | | 64,696 | | | | 41,106 | | | | 175,829 | | | | 138,512 | |
Gross loss | | | (14,523) | | | | (20,865) | | | | (47,414) | | | | (64,519) | |
SG&A expenses | | | 10,135 | | | | 9,640 | | | | 31,196 | | | | 31,148 | |
(Gain) loss on disposal or impairment of assets ** | | | (21) | | | | (15) | | | | (21) | | | | 910 | |
Loss on sale of Russian proppant business | | | 26,728 | | | | — | | | | 26,728 | | | | — | |
Operating loss ** | | | (51,365) | | | | (30,490) | | | | (105,317) | | | | (96,577) | |
Other expense, net | | | (1,657) | | | | (1,390) | | | | (5,182) | | | | (3,726) | |
Loss before income taxes ** | | | (53,022) | | | | (31,880) Werbung Mehr Nachrichten zur Carbo Ceramics Aktie kostenlos abonnieren
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