Incorporated in the results for the first quarter of 2008 was a non-recurring after-tax gain of $5.7 million, or $0.11 per common share on a fully diluted share basis, from the settlement of a lawsuit.
Because of the stronger US dollar, currency translation had a $5.3-million, or 5.5%, negative impact on sales for the first quarter of 2009.
For the first quarter of 2009, sales for the Activated Carbon and Service segment increased slightly as compared to the first quarter of 2008. The 1.1% increase was primarily due to higher pricing for certain carbon products and services in the food and municipal drinking water markets, which was partially offset by lower demand in other market segments. Equipment sales increased by 12.4% in the first quarter of 2009 versus the comparable period in 2008, principally due to higher revenue for ultraviolet light and ion exchange systems. This increase was partially offset by lower revenue for carbon adsorption and odor control systems. A decline of 47.2% in Consumer sales for the first quarter of 2009 was primarily attributable to lower demand for carbon cloth products.
Net sales less the cost of products sold (excluding depreciation and amortization), as a percentage of net sales for the first quarter of 2009 was 32.5% versus 31.6% for the first quarter of 2008. Higher pricing on certain carbon and service products accounted for the increase by more than offsetting increases in activated carbon product costs.
Selling, administrative and research (SG&A) expenses for the first quarter of 2009 increased by 2.5% versus the comparable period in 2008. The increase was principally due to higher pension expense.
Interest income was $0.1 million for the first quarter of 2009. This compares with interest expense of $1.7 million for the first quarter of 2008. The change is due to the lower amount of debt outstanding during the first quarter of 2009 as a result of the company redeeming $69.0 million of its 5% Senior Convertible Notes in the second half of 2008.
Calgon Carbon’s board of directors did not declare a quarterly dividend.
Commenting on the quarter, John Stanik, Calgon Carbon’s chairman, president and chief executive officer, stated, The weak global economy had a significant negative impact on volume sold during the first quarter. Lower demand in many of our end markets resulted in a considerable decline in activated carbon and service sales volume. Considering this, I am relatively pleased with the company’s performance in the first quarter. Despite the decline in volume, earnings per share showed improvement over last year, excluding the non-recurring gain in the first quarter of 2008. This improvement was achieved primarily through pricing on certain activated carbon and service products, lower interest expense, and tight expense control.
