CARBO Sees Revenue Growth in 2017 First Quarter
Reported revenues for the first quarter of 2017 increased 5%, or $1.6 million, compared to the same period in 2016.
CARBO Ceramics Inc. recently reported revenues of $34.7 million and a general accepted accounting principles (GAAP) pre-tax loss of $32.2 million for the quarter ended March 31, compared to a GAAP pre-tax loss of $36.8 million in the same period of 2016. The GAAP pre-tax loss reportedly included $12.1 million of costs primarily associated with slowing and idling production, two-thirds of which is non-cash.
“We are pleased with the 19% sequential increase in revenue experienced in the first quarter of 2017,” said Gary Kolstand CEO. “This revenue increase is a result of our previously outlined strategy of developing higher growth opportunities which we believe will result in strong double-digit revenue growth for CARBO in 2017. The exceptional strengths we have in technology, experienced people, and manufacturing assets support the execution of this strategy.
“The increase in technology product sales in this challenging environment highlights the value of our technology platform. Technology product revenues increased sequentially, led by sales of KRYPTOSPHERE and our Production Assurance products, which include SCALEGUARD. Industrial products and environmental revenue also grew sequentially.
“Industrial product revenue growth was driven by new client gains. Environmental revenue growth was driven primarily by increased rig activity and new client gains.
“Our frac sand revenues grew sequentially as a result of ramping plant production and utilizing third-party suppliers. Frac sand sales provide multiple benefits, including producing positive cash, generating revenue from idle rail cars under lease, and increasing client contact which increases sales opportunities for other products.
“We successfully completed plant trials producing products other than base ceramic proppant, executing on our strategy of utilizing our idled plant assets. The success of these trials should lead to revenue generation. We continue to develop opportunities with other companies in the industrial, agricultural, and oil and gas industries.
“We expect to see a reduction in our cash burn in the second quarter, and anticipate continued improvement throughout the year, targeting cash neutral operations on a 2017 exit rate basis. The first quarter had approximately $9.0 million in cash outlays that we do not expect to repeat in 2017, including but not limited to rail car activation costs, refinancing costs, a debt amortization payment, and certain property taxes,” said Kolstad.
Reported revenues for the first quarter of 2017 increased 5%, or $1.6 million, compared to the same period in 2016. The increase was primarily attributable to an increase in technology product sales, an increase in frac sand sales, and an increase in environmental product sales. These increases were said to be partially offset by decreases in base ceramic proppant sales.
For more information, visit www.carboceramics.com.