CARBO Sees 7% Revenue Growth in 2018 Third Quarter
CARBO Ceramics’ revenue reached $53.8 million for the quarter, an increase of 7% over the 2017 third quarter, reportedly resulting from solid growth in the company’s industrial and environmental business sectors.
CARBO® Ceramics Inc. recently reported its financial results for the third quarter of 2018. Revenue reached $53.8 million for the quarter, an increase of 7% over the 2017 third quarter, reportedly resulting from solid growth in the company’s industrial and environmental business sectors. According to the company, the largest contributors to this increase were oilfield technology products, environmental products and industrial products.
CARBO’s operating loss for the third quarter of 2018 improved to $14.8 million, compared to $177.1 million in the same period of 2017, primarily due to prior year charges that did not reoccur, a reduction in certain fixed structural costs, and increased revenues. Approximately 67% of the operating loss for the third quarter of 2018 consisted of non-cash expenses.
“We were pleased with the growth rates of both our industrial and environmental business sectors as a result of our long-term growth strategy to diversify our revenue streams,” said Gary Kolstad, CEO. “I am confident we have the right strategy, technology and assets to execute our transformation plan. Although our oilfield sector revenue was down year-on-year, we are very pleased to see our oilfield technology revenue grow in what remains a tough environment. In addition, we were able to improve our cash position from the second quarter of 2018.
“A decline in oil and gas completion activity, along with increases in sand supplies from new regional sand mines, impacted our oilfield business during the third quarter. Adjusting to this market decline, we incurred approximately $400 thousand of severance during the third quarter of 2018.
“Oilfield sector revenue declined 3% year-on-year, and comprised approximately 75% of consolidated revenue. Oilfield technology ceramic revenue increased 20% year-on-year. The year-on-year increase was driven by strong sales of KRYPTOSPHERE® HD. Our technology product portfolio continues to demonstrate its high value through increased usage in oil and gas wells.
“STRATAGEN® consulting revenue increased 31% year-on-year. Trust in our expert field consultants to manage fracture completions, continues to drive new client growth.
“Base ceramic revenue increased 26% year-on-year (adjusted for the sale of our Russian ceramic business). Base ceramic is difficult to forecast due to uncertainty regarding timing of jobs, including clients’ propensity to change completion designs.
“Frac sand related revenues decreased 18% year-on-year. The pressure on our frac sand business increased as the quarter progressed due to the decline in oil and gas activity and more regional sand supply coming online. This negatively impacted both sales volumes and average selling prices.
“Industrial sector revenue grew 41% year-on-year, and comprised approximately 8% of consolidated revenue. We continue to build upon the foundry and grinding markets we have served for decades as well as expanding into other industrial markets. Successful results from previous conversions have provided a tailwind for the marketing of our foundry products. We were recently awarded four full sand-to-ceramic foundry conversions utilizing our ACCUCAST® ceramic media. Our expanding grinding market product offerings provides us the ability to address a broader range of fine and ultra-fine grinding applications.”
Additional details are available at www.carboceramics.com.