CARBO Ceramics Inc. reported financial results for the second quarter of 2018.
• Revenue for the second quarter of 2018 of $58.0 million, an increase of 33 percent year-on-year and 17 percent sequentially, resulting from solid revenue growth in its oilfield, industrial and environmental sectors.
• Revenue growth contributed to a strong Adjusted EBITDA incremental margin of 55 percent year-on-year; an improvement from an Adjusted EBITDA incremental margin of 42 percent year-on-year in the first quarter of 2018.
• Expect strong sequential and year-on-year growth in revenue and Adjusted EBITDA for the third and fourth quarters of 2018, resulting in positive EBITDA for entire second half of 2018.
• Management reiterates 2018 full year revenue guidance of approximately $250 million.
CEO Gary Kolstad commented, “Our results continue to improve as we execute on our transformation strategy to diversify our revenue streams and return the company to profitability. Revenue for the second quarter of 2018 increased 33 percent year-on-year driven by solid performance in all three business sectors. Our growing top line revenue, and improved sales mix, contributed to a strong Adjusted EBITDA incremental margin of 55 percent year-on-year. Frac sand revenue increased 126 percent year-on-year.
Frac sand provides cash flow generation and the opportunity to stay in front of our clients to promote our technology products,” Kolstad said. “We expect frac sand sales to see some pressure in the second half of 2018, specifically as it applies to third party sales volumes, as more regional sand mines come online. Despite the potential impact of these new entrants on third-party sales, we anticipate 2018 frac sand sales to approximate our stated annual capacity of 1.4 million tons.”