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Baker hughes to sell separation interest
ISSUE 37 APRIL 2000 ISSN 1365-6937
IdN +Nb S(PAttATIOil ItjDtiSTRIEi
CALGON INITIATES CHANGE IN A MOVE TO DEFINE ITS FUTURE Responding to recent share price increases and to clarify the company’s future direction, Calgon Carbon Carp’s president and chief executive ofhcer, Jim Cederna, and Bill Cann, the company’s chief financial officer, have announced changes at Calgon Carbon that are expected to result in a US!$4S million improvement in Economic Profit (EP) over the next three years. To achieve this would require earnings per share of US$O.80 to US$l.O5. Cederna and Cann also commented that sales growth and price increases are expected to account for approximately half of the improvement. Cost and capital reductions will account for the other half of the improvement. The company intends to meet its EP target in two ways: sales and pricing and cost and capital reductions. The first includes the introduction of price increases, the creation of two ‘Centers of Excellence’ that will accelerate growth in its Engineered Solutions and Service businesses and the development of CONTENTS
a compensation programme that ties all incentives to EP Within the area of cost and capital reductions Calgon Carbon expects to reduce its workforce by 10% - approximately 100 people, convert its current business format to a global organization, reduce activated carbon production capacity by 20% and reduce inventory by 20%.
The company’s share price is currently trading at around US$7, this is at the upper end of its’ 52-week range which has a current high of US$8 ‘/x,recorded at the beginning of this year. Calgon Carbon is also enthusiastic regarding the prospects of existing company technology currently ahead of demand. These include recent installations of Filtrasorb 600 for removal of MTBE from contaminated drinking water. The approval by the California Department of Health for use of ISEP technology for perchlorate removal from groundwater; and support by
GENERAL
NEWS 113 16 MARKET
the EPA and Indian Health Services for ISEP technology for removal of nitrate from contaminated drinking water. Cedema also says that Calgon Carbon has adopted its proven industrial purification technologies to consumer products. The company intends to form alliances with firms that will market the products directly to the consumer. n
BAKER HUGHES TO SELL SEPARATION INTEREST Following on from the announcement last month that Baker Hughes intends to sell its Baker Process division - which includes its separation technologies interests - the company has retained Credit Suisse First Boston to manage the sale process. Baker Process’ revenues for the 12 months ended 3 1 December 1999 were US$389.8 million. According to Joe Foster, interim chairman, president and chief executive officer of Baker Hughes, “The sale of Baker Process, which is an excellent business, will permit Baker Hughes to reduce its debt and focus more intensely on what it does best, provide high quality products and services to the oil and gas industry.” Foster also says that the company’s goal for fiscal PROSPECTS 2-4 COMPANY
2000 is to double the company’s 1999 operational earnings. During the first quarter of 2000, Baker Hughes expects to almost breakeven. This news came after the company announced a fourth quarter net loss of US$O.28 per diluted share, compared with a profit of US$O.O2 a share a year earlier. For 1999, the company earned US$O.lO per share, compared with a net loss of US$O.92 in fiscal 1998. All current and prior period results were restated for the effect of the Inteq accounting issues and to treat Baker Process as a discontinued operation. Baker Hughes has also commented on its review of the accounting issues previously identified at its Inteq division (see Filrrarion IndusIVYAnal~, February 2000).
A spokesperson for Baker Hughes Inc told Filtration Industry Analyst that as yet a buyer for its Process division has not been found but it will explore every opportunity for the sale and the industry can expect to be informed of developments in the coming weeks. Baker Process is a leader in process and separation technologies serving the mining, pulp and paper and industrial and municipal water and wastewater industries. n PROFILE 5-6
IdN +Nb S(PAttATIOil ItjDtiSTRIEi
CALGON INITIATES CHANGE IN A MOVE TO DEFINE ITS FUTURE Responding to recent share price increases and to clarify the company’s future direction, Calgon Carbon Carp’s president and chief executive ofhcer, Jim Cederna, and Bill Cann, the company’s chief financial officer, have announced changes at Calgon Carbon that are expected to result in a US!$4S million improvement in Economic Profit (EP) over the next three years. To achieve this would require earnings per share of US$O.80 to US$l.O5. Cederna and Cann also commented that sales growth and price increases are expected to account for approximately half of the improvement. Cost and capital reductions will account for the other half of the improvement. The company intends to meet its EP target in two ways: sales and pricing and cost and capital reductions. The first includes the introduction of price increases, the creation of two ‘Centers of Excellence’ that will accelerate growth in its Engineered Solutions and Service businesses and the development of CONTENTS
a compensation programme that ties all incentives to EP Within the area of cost and capital reductions Calgon Carbon expects to reduce its workforce by 10% - approximately 100 people, convert its current business format to a global organization, reduce activated carbon production capacity by 20% and reduce inventory by 20%.
The company’s share price is currently trading at around US$7, this is at the upper end of its’ 52-week range which has a current high of US$8 ‘/x,recorded at the beginning of this year. Calgon Carbon is also enthusiastic regarding the prospects of existing company technology currently ahead of demand. These include recent installations of Filtrasorb 600 for removal of MTBE from contaminated drinking water. The approval by the California Department of Health for use of ISEP technology for perchlorate removal from groundwater; and support by
GENERAL
NEWS 113 16 MARKET
the EPA and Indian Health Services for ISEP technology for removal of nitrate from contaminated drinking water. Cedema also says that Calgon Carbon has adopted its proven industrial purification technologies to consumer products. The company intends to form alliances with firms that will market the products directly to the consumer. n
BAKER HUGHES TO SELL SEPARATION INTEREST Following on from the announcement last month that Baker Hughes intends to sell its Baker Process division - which includes its separation technologies interests - the company has retained Credit Suisse First Boston to manage the sale process. Baker Process’ revenues for the 12 months ended 3 1 December 1999 were US$389.8 million. According to Joe Foster, interim chairman, president and chief executive officer of Baker Hughes, “The sale of Baker Process, which is an excellent business, will permit Baker Hughes to reduce its debt and focus more intensely on what it does best, provide high quality products and services to the oil and gas industry.” Foster also says that the company’s goal for fiscal PROSPECTS 2-4 COMPANY
2000 is to double the company’s 1999 operational earnings. During the first quarter of 2000, Baker Hughes expects to almost breakeven. This news came after the company announced a fourth quarter net loss of US$O.28 per diluted share, compared with a profit of US$O.O2 a share a year earlier. For 1999, the company earned US$O.lO per share, compared with a net loss of US$O.92 in fiscal 1998. All current and prior period results were restated for the effect of the Inteq accounting issues and to treat Baker Process as a discontinued operation. Baker Hughes has also commented on its review of the accounting issues previously identified at its Inteq division (see Filrrarion IndusIVYAnal~, February 2000).
A spokesperson for Baker Hughes Inc told Filtration Industry Analyst that as yet a buyer for its Process division has not been found but it will explore every opportunity for the sale and the industry can expect to be informed of developments in the coming weeks. Baker Process is a leader in process and separation technologies serving the mining, pulp and paper and industrial and municipal water and wastewater industries. n PROFILE 5-6