CARBO Continues Focus on Diversification Following Decreased Revenue in 2019 First Quarter
The company’s operating loss for the first quarter of 2019 improved to $18.2 million, compared to $20.2 million in the same period of 2018.
CARBO Ceramics Inc. recently reported financial results for the first quarter of 2019. Revenues for the first quarter were $47.5 million, representing a 4% decrease, compared to revenue of $49.4 million in the same period of 2018. The largest contributors to this decrease were declines in sales of base ceramic and sand products, as well as ceramic technology products and services. These decreases were partially offset by a 44% increase in industrial products and services revenue, a 7% increase in environmental technologies and services revenue, and an additional $1.5 million in sublease and rental income.
The company’s operating loss for the first quarter of 2019 improved to $18.2 million, compared to $20.2 million in the same period of 2018, primarily due to a reduction in under-absorption costs. Approximately 48% of the operating loss for the first quarter of 2019 consisted of non-cash expenses.
“While first quarter consolidated revenues declined year-on-year, we were pleased to see our industrial sector and environmental sector revenue increase,” said Gary Kolstad, CEO. “The continued volatility in our oilfield sector reinforces our belief that we are on the right path to return the company to profitability by diversifying our revenue streams and reducing our reliance on the oil and gas industry. To support this diversification effort, we continue to develop and commercialize products for all three of our market sectors. Maintaining a solid cash balance during the execution of our transformation strategy is of high importance.
“We continue to execute our transformation strategy to diversify our revenue streams to the more profitable oilfield ceramic technology products, and industrial and environmental markets. Developing and commercializing new products for all three of our market sectors supports this diversification effort. Despite E&P operators starting the year cautiously with respect to discretionary spending, we still expect our 2019 revenues will be similar to 2018 levels as growth in our ceramic technology, industrial, and environmental sectors will likely offset declines in our base ceramic and sand revenues. Through year-on-year growth in these more profitable areas, we expect to see strong year-on-year EBITDA incremental margins for 2019.”
Additional details are available at www.carboceramics.com.