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“We are pleased with our third quarter results,” said Gary Kolstad, president and CEO. “Looking forward, we remain cautious about the demand in North America, where depressed and volatile industry conditions still exist. In the near term, pricing remains competitive. Despite this climate, we continue to experience growing acceptance of our products by E&P companies that understand the benefits associated with Economic Conductivity™ resulting from the use of our high-quality ceramic proppants, such as CARBOHYDROPROP®.”
Revenues for the third quarter of 2009 decreased 11% compared to the third quarter of 2008 and increased 32% sequentially. Worldwide proppant sales volume totaled 296 million pounds for the third quarter of 2009, representing a year-over-year decrease of 3% and a sequential increase of 37%. Proppant sales volume for the third quarter grew in the U.S. both year-over-year and sequentially.
Operating profit for the third quarter of 2009 increased $0.9 million compared to the third quarter of 2008. Revenue decreases resulting from decreases in volume and average selling price experienced during the third quarter of 2009 were offset by decreases in cost of sales, which was positively affected by a favorable product mix, lower freight costs and lower natural gas prices. Selling, general, administrative and other operating expenses for the third quarter of 2009 decreased $0.8 million on a year-over-year basis.
“While we experienced a positive trend this quarter in the North American rig count, which achieved 13% sequential growth, opinions vary as to whether this is the start of a recovery or simply a short-term correction,” said Kolstad. “From our perspective, we believe that a sustainable recovery in the oil and gas industry is inevitable; however, the exact timing of the recovery is difficult to pinpoint.
“We remain committed to expanding our client base and product and service offerings. The acquisition of the Falcon assets in early October is an example of our commitment to invest our cash reserves in high-growth, cash-generating businesses. Newly incorporated as Falcon Technologies and Services, Inc., its existing management team will build on its leading technology position and already successful strategy by taking advantage of CARBO’s well-established geographic footprint, a common client base and our ability to fund product innovation. We expect that the transaction will be accretive to our financial results in 2010.”
Visit www.carboceramics.com for additional details.