CARBO Ceramics Inc. reported that revenue for the second quarter of 2017 was $43.6 million, an increase of 111 percent year-over-year and 26 percent sequentially. The company is reporting an operating loss of $23.7 million for the quarter compared to revenue of $20.7 million and an operating loss of $30.0 million in the same period of 2016.
Year-to-date 2017 revenue was up 46 percent compared to the same period in 2016, and the company anticipates full-year 2017 revenue to grow at least 60 percent year-over-year.
CEO Gary Kolstad commented, “Revenue continues to rebound and is now up 115 percent off the trough witnessed in the third quarter of 2016. We made progress during the second quarter in expanding our opportunities in technology products and services, and in our industrial products and services. Our efforts to reduce fixed structural costs resulted in increased fall-through on revenue growth. These are the key parts of our strategy to strengthen and build upon the foundation that we believe will make CARBO a stronger company in the future.
“Although the oil and gas industry remains challenging, we are pleased with our technology product sales during the quarter. We continue to find opportunities for our value-added, production enhancement technologies in a low commodity price environment that leaves many operators focusing primarily on upfront costs. In addition, we saw revenue growth in the Fracpro software, StrataGen consulting, and base ceramic businesses.
“Frac sand continues to see strong demand as operators push the limits on the volumes of sand being pumped into today’s wells. Given this demand, we are now at full utilization at our sand plant in Marshfield, Wis.
“Our strategy to grow the industrial products and services business is proceeding. We initiated several product tests with potential new clients, laid the groundwork to expand our sales channels and introduced two new products for testing during the second quarter of 2017.
“As we mentioned last quarter, we started plant trials at our facilities to produce products other than base ceramic proppant. Those mineral processing plant trials have proven successful and have led to increased revenue generation in the second quarter of 2017. We continue to develop additional opportunities within the industrial, agricultural and oil and gas industries to return our idle assets back to work.
“AssetGuard, our environmental business, improved on the back of increased oil and gas industry activity. In addition, we started to capitalize on efforts to generate revenue from industrial opportunities during the second quarter of 2017.
“We continue to right-size our fixed costs to better align with activity levels. During the second quarter of 2017, we made strategic decisions to reduce our distribution footprint through facility closures and subleasing of facilities, yet remain flexible enough to serve our client base. We are also finding additional opportunities to sublease idled rail cars and generate revenue from rail cars dedicated to the frac sand business.
“Subsequent to quarter end, we met remaining post-closing conditions under our $65 million credit facility and received the remaining $12.3 million. On a pro-forma basis, our cash balance at quarter end including this $12.3 million, stands at $62.9 million. In addition, subsequent to quarter end, we signed a share purchase agreement to sell our Russian proppant business for $22 million and, subject to local regulatory approval, expect the closing of this transaction to occur in the third quarter of 2017. This additional liquidity, coupled with our expectation for reduced cash burn in the second half of 2017, keeps our balance sheet strong,” Kolstad said.