Add
CRR to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| CRR > SEC Filings for CRR > Form 10-Q on 6-May-2009 | All Recent SEC Filings |
6-May-2009
Quarterly Report
Other Income (Expense). Other income for the first quarter of 2009 declined
$1.2 million compared to the same period in 2008. This decline is mainly
attributed to a $1.5 million decrease in foreign currency exchange gains
recognized in the first quarter of 2008 that did not recur in 2009 as a result
of the reduction in intercompany liabilities that were subject to exchange rate
fluctuations.
Income Tax Expense. Income tax expense was $8.4 million, or 33.8% of pretax
income, for the first quarter of 2009 compared to $7.0 million, or 35.2% of
pretax income, for the same period last year. The $1.4 million increase is due
to higher pre-tax income partially offset by a lower effective tax rate
primarily associated with mining depletion deductions the Company began claiming
in the third quarter of 2008.
Income from Discontinued Operations, Net of Income Taxes. Income from
discontinued operations in 2008 was $1.4 million and includes gross profit of
$4.8 million offset by selling, general, and administrative expenses of
$2.6 million. Income taxes related to discontinued operations for the first
quarter of 2008 was $0.8 million. The sale of the discontinued operations was
completed on October 10, 2008.
Liquidity and Capital Resources
At March 31, 2009, the Company had cash and cash equivalents of $94.6 million
compared to cash and cash equivalents of $154.8 million at December 31, 2008.
During the first quarter of 2009, the Company used $33.3 million of cash from
operating activities of continuing operations mainly attributed to payments of
income taxes owed as a result of the sale of discontinued operations on
October 10, 2008, and third and fourth quarter 2008 estimated tax payments that
were deferred to 2009 as a result of hurricane Gustav tax relief. The Company
also used $8.2 million for capital spending, $4.0 million for the payment of
cash dividends, $14.5 million for the repurchase of the Company's Common Stock,
and $0.3 million from the effect of exchange rate changes on cash. Increases in
cash included $0.1 million from employee exercises of stock options.
The Company believes its operating results in the remainder of 2009 will be
influenced by the decline in the level of natural gas drilling in North America.
As a result of increased economic pressures from the decline in rig counts
fueled by low natural gas and oil prices and continued weakness in the U.S.
credit markets, the Company instituted in April 2009 certain price reductions
for its products in an effort to mitigate sales volume erosion. These price
reductions will likely lower gross profit margins and net income. However, the
Company expects its ability to demonstrate the value of ceramic proppant
relative to alternatives will allow it to continue to generate new sales
opportunities. The Company believes its introduction of CARBOHYDROPROPTM should
further the market penetration of ceramic proppant in slickwater fracturing
treatments. Given the levels of natural gas inventories in North America and the
limited levels of availability in the current credit market, the Company
believes the recent contraction in drilling activity is likely to persist
throughout 2009, but also expects that the steep decline curves in the resource
plays providing much of the incremental natural gas supply in North America will
help in bringing supply and demand more into balance as the rig activity
continues to decline. However, the Company is unable to determine how
detrimental of an effect the U.S. economic crisis will have on overall natural
gas demand.
Subject to the Company's financial condition, the amount of funds generated from
operations and the level of capital expenditures, the Company's current
intention is to continue to pay quarterly dividends to holders of its common
stock. On March 17, 2009, the Company's Board of Directors approved the payment
of a quarterly cash dividend of $0.17 per share to shareholders of the Company's
common stock on May 1, 2009. The Company estimates its total capital
expenditures for the remainder of 2009 will be between $45.0 million and
$50.0 million. Capital expenditures in 2009 are expected to include costs
associated with the previously announced construction of the Company's third
production line at its Toomsboro, Georgia facility. However, the project has
been delayed, as certain permits needed to proceed with construction have not
been received as expected. The Company currently anticipates that the project
will be completed in the second half of 2010.
The Company maintains an unsecured line of credit of $10.0 million. As of
March 31, 2009, there was no outstanding debt under the credit agreement. The
Company anticipates that cash on hand, cash provided by operating activities and
funds available under its line of credit will be sufficient to meet planned
operating expenses, tax obligations, capital expenditures and other cash needs
for the next 12 months. The Company also believes that it could acquire
additional debt financing, if needed. Based on these assumptions, the Company
believes that its fixed costs could be met even with a moderate decrease in
demand for the Company's products.
Off-Balance Sheet Arrangements
The Company had no off-balance sheet arrangements as of March 31, 2009.
Forward-Looking Information
The statements in this Form 10-Q 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 federal securities laws. 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 cost of raw materials and natural gas used in manufacturing our products,
• changes in demand and prices charged for our products,
• changes in the demand for, or price of, oil and natural gas,
• risks of increased competition,
• technological, manufacturing and product development risks,
• loss of key customers,
• changes in foreign and domestic government regulations,
• changes in foreign and domestic political and legislative risks,
• the risks of war and international and domestic terrorism,
• risks associated with foreign operations and foreign currency exchange rates and controls, and
• 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"). See in particular our Form 10-K for the fiscal year ended December 31, 2008 under the caption "Risk Factors" and similar disclosures in subsequently filed reports with the SEC. We assume no obligation to update forward-looking statements, except as required by law.
|
|