Calgon Carbon Announces Fourth Quarter 2017 Results

Completes 2017 with solid fourth quarter sales and operating income;
enters 2018 with positive momentum across legacy and New Business
activities

Q4 2017 Financial Highlights

• Net sales increased 17.5% to $161.5 million, compared to $137.5
  million in Q4 2016
  • Legacy business net sales improved 8.1% to $135.5 million
  • New Business net sales more than doubled to $26.0 million,
    reflecting both higher volumes and the inclusion of a full quarter
    of results in the current year fourth quarter
• Reports income from operations of $15.6 million, compared to a loss
  from operations of ($5.4) million in Q4 2016; fully diluted EPS of
  $0.19, versus a net loss per share of ($0.12) in Q4 2016
  • Q4 2017 results include a $4.1 million (pre-tax) gain on sale of
    an idled UK plant and $1.3 million (pre-tax) of expenses related
    to the Company’s pending merger with Kuraray
  • Q4 2016 results include $13.7 million (pre-tax) of acquisition1
    and project-related costs

PITTSBURGH–(BUSINESS WIRE)–Calgon Carbon Corporation (NYSE: CCC) (Calgon Carbon or the Company)
announced results for the 2017 fourth quarter that ended on December 31,
2017.

Net sales for the fourth quarter of 2017 were $161.5 million, an
increase of $24.0 million, or 17.5%, compared to net sales of $137.5
million for the fourth quarter of 2016. Net sales of the New Business
(the wood-based activated carbon, reactivation, and mineral-based
filtration media business acquired in November 2016) increased $13.9
million to $26.0 million, compared to reported post-acquisition net
sales of $12.1 million for the months of November and December of 2016.
Calgon Carbon’s legacy business net sales increased $10.1 million, or
8.1%, from $125.4 million in last year’s fourth quarter. The increases
in New Business and legacy business net sales include $1.3 million and
$2.3 million, respectively, of net favorable foreign currency
translation primarily due to a weaker U.S. dollar.

Income from operations for the fourth quarter of 2017 was $15.6 million,
compared to a loss from operations of ($5.4) million for the fourth
quarter of 2016. Net income for the fourth quarter of 2017 was $9.4
million, or $0.19 per fully diluted share. This compares to a net loss
of ($5.9) million, or ($0.12) per fully diluted share, for the same
period last year. Fourth quarter 2017 results include a $4.1 million
(pre-tax) gain on sale of an idled UK plant and $1.3 million (pre-tax)
of expenses related to the Company’s pending merger with Kuraray Co.,
Ltd. (Kuraray). Fourth quarter 2016 results include $13.7 million
(pre-tax) of acquisition1 and project-related costs.

Note: Beginning January 1, 2017, the Company realigned its
internal management reporting structure to incorporate the New Business
into the Company’s previously existing legacy business and reorganized
its reportable segments into: Activated Carbon, Alternative
Materials, and Advanced Water Purification. The Company is
reporting its 2017 fourth quarter and twelve months results using these
reportable segments, and has restated reportable segment information for
the comparable prior year periods to conform to the new structure.

For the fourth quarter of 2017, Activated Carbon segment net sales were
$143.9 million, an increase of $18.2 million, or 14.5%, from $125.7
million of net sales reported for the same period a year ago. Net sales
related to the New Business were $14.0 million in the fourth quarter of
2017, an increase of $7.6 million compared to the two months of New
Business net sales reported in the fourth quarter of 2016. Net sales
related to Calgon Carbon’s Activated Carbon segment legacy business were
$129.9 million, an increase of $10.6 million, or 8.9%. The net favorable
impact from currency translation contributed $0.7 million and $2.2
million to the increase in New Business and legacy business net sales,
respectively. The remaining increase in legacy business net sales was
primarily driven by higher potable water end market demand in North
America and Europe, as well as increased food and beverage,
environmental air and specialty end market demand in Asia.

Alternative Materials segment net sales in the fourth quarter of 2017
were $13.7 million, a $6.1 million increase compared to $7.6 million for
the same period a year ago. The increase is primarily due to the current
year fourth quarter including a complete quarter of New Business net
sales of diatomaceous earth and perlite filtration media products,
versus only two months in last year’s fourth quarter. The net favorable
impact from currency translation contributed $0.7 million to the net
sales increase, primarily related to sales of the New Business.

Net sales in the Advanced Water Purification segment decreased slightly
to $3.9 million in the fourth quarter of 2017 compared to $4.1 million
in the same period last year.

Net sales less the cost of products sold (excluding depreciation and
amortization), as a percentage of net sales for the fourth quarter of
2017 was 30.8%, comparable to the 31.0% reported for last year’s fourth
quarter.

Depreciation and amortization expense was $11.4 million in the fourth
quarter of 2017 compared to $10.8 million in last year’s fourth quarter.
Current year fourth quarter depreciation and amortization expense
includes a complete quarter of expenses from the acquired fixed assets
and intangible assets of the New Business.

Selling, general and administrative (SG&A) expenses and research and
development (R&D) expenses for the fourth quarter of 2017 totaled $26.9
million, or 16.7% of net sales, versus $37.3 million, or 27.1% of net
sales, in last year’s fourth quarter. Current year SG&A and R&D expenses
include costs of $1.3 million, or 0.8% of net sales, related to the
pending merger with Kuraray. Fourth quarter 2016 SG&A and R&D expenses
include $12.2 million, or 8.9% of net sales, related to acquisition1
and project-related costs.

Other operating income represents a $4.1 million pre-tax gain from the
sale of an idled UK plant.

Interest expense – net for the fourth quarter of 2017 was $2.2 million
compared to $1.2 million in last year’s fourth quarter. The increase was
primarily due to a complete quarter of higher debt levels resulting
primarily from the Company’s purchase of the New Business, as well as
higher interest rates in the current year.

The effective income tax rate for the fourth quarter of 2017 was 25.9%
compared to 33.5% in last year’s fourth quarter. The lower effective tax
rate was primarily due to an increase in earnings in tax jurisdictions
with tax rates lower than the 2017 U.S. statutory rate and non-taxable
income. This was partially offset by $0.6 million of income tax expense
related to the 2017 estimated impact of U.S. tax reform2.

Full Year 2017 Summary

Net sales for 2017 were $619.8 million compared to net sales of $514.2
million last year. The New Business contributed $104.0 million and $12.1
million to 2017 and 2016 net sales, respectively. Calgon Carbon’s legacy
business net sales increased 2.7% to $515.8 million from $502.1 million
in 2016.

The Company reported 2017 income from operations of $42.2 million versus
$24.5 million in 2016. Net income for 2017 was $21.1 million versus
$13.8 million last year. Earnings per common share on a fully diluted
basis for 2017 were $0.42, as compared to $0.27 for 2016. Results for
2017 were negatively impacted by $2.4 million (pre-tax) of acquisition1
and project-related costs and $4.6 million (pre-tax) of expenses related
to the pending merger with Kuraray, which were partially offset by a
$4.1 million (pre-tax) gain on the sale of an idled UK plant. Results
for 2016 were negatively impacted by acquisition1 and
project-related costs of $17.2 million (pre-tax).

CEO Commentary

“A second consecutive quarter of solid operational and financial
performance capped off a successful and eventful year for Calgon Carbon,
providing us with positive momentum as we move into 2018,” said Randy
Dearth, Calgon Carbon’s Chairman, President, and CEO.

“Despite being confronted with slow and challenging market conditions –
particularly early in the year – our talented employees around the world
were able to drive positive results and produce numerous achievements
that will benefit Calgon Carbon going forward. These included:

• Completing the integration of the New Business and exceeding our $100
  million sales target for the year. On top of that, we completed a
  de-bottlenecking project at the wood-based activated carbon
  manufacturing facility in France, and look forward to higher and more
  efficient sales volumes in 2018;
• Winning – and beginning to execute – a $13.2 million water treatment
  contract for the removal of the 1,2,3-TCP contaminant in California.
  This award exemplifies our ability to leverage the strength of our
  brand and high-quality solutions while establishing Calgon Carbon as a
  leader to meet the recent demand surge in the United States for the
  removal of emerging harmful contaminants from drinking water sources.
  As a result, our business unit focused on the North American municipal
  water end market achieved its highest level of annual sales since it
  was established in 2013; and,
• Executing a number of actions to improve our profitability and sharpen
  our focus going forward, including shedding previously idled assets in
  the UK and implementing business realignment strategies at several
  facilities globally.

“In addition, and most notably, we reached an agreement to merge with
Kuraray of Japan, and we continue to target completing the merger in the
first quarter of 2018. While accelerating value creation for our
stockholders, the combination with Kuraray provides Calgon Carbon the
opportunity to leverage the resources of a larger, stronger global
company, which we expect will enhance our ability to meet the
requirements of current and potential customers into the future,”
concluded Mr. Dearth.

Pending Calgon Carbon / Kuraray Merger

On September 21, 2017, the Company entered into a definitive merger
agreement under which the Japanese chemical manufacturer Kuraray agreed
to acquire the Company, by way of a reverse triangular merger, following
the consummation of which the Company would become a wholly owned
subsidiary of Kuraray. At the time of the merger, each issued and
outstanding share of the Company’s common stock will be automatically
converted into the right to receive $21.50 in cash.

On October 16, 2017 the U.S. Federal Trade Commission granted early
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and on October 25, 2017, clearance was received
from the German Federal Cartel Office. On December 28, 2017, the
Company’s stockholders voted to approve the merger. Closing the
transaction remains subject to other customary closing conditions, as
well as approval by the Committee on Foreign Investment in the United
States (CFIUS). On January 19, 2018, at the conclusion of the initial
review period, CFIUS notified Calgon Carbon and Kuraray (the parties)
that it initiated an additional 45 calendar day investigation period,
which will conclude no later than March 5, 2018. The parties continue to
target the first quarter of 2018 for the closing of the merger.

In light of the pending merger, the Company will not be conducting an
investor conference call in conjunction with today’s release of its
fourth quarter financial results, and will not be providing financial
guidance for future periods.

1 “Acquisition” refers to the Company’s acquisition of the
New Business.

2 The provisional estimate of the impact of U.S. tax reform
recorded in the fourth quarter of 2017 is based on the Company's initial
analysis of the Tax Cuts and Jobs Act and may be adjusted in future
periods due to, among other things, additional analysis performed by the
Company and additional guidance that may be issued by the U.S.
Department of the Treasury.

Pure Water. Clean Air. Better World.

Calgon Carbon Corporation (NYSE:CCC) is a global leader in innovative
solutions, high quality products and reliable services designed to
protect human health and the environment from harmful contaminants in
water and air. As a leading manufacturer of activated carbon, with broad
capabilities in ultraviolet light disinfection, the Company provides
purification solutions for drinking water, wastewater, pollution
abatement, and a variety of industrial and commercial manufacturing
processes.

Calgon Carbon is the world’s largest producer of granular activated
carbon and supplies more than 100 types of activated carbon products –
in granular, powdered, pelletized and cloth form – for more than 700
distinct applications.

With the 2016 acquisition of complementary wood-based activated carbon
and filtration media capabilities located in Europe, Calgon Carbon is an
even more global and diverse industry leader in activated carbon,
reactivation, and filtration media in the form of diatomaceous earth and
perlites.

Headquartered in Pittsburgh, Pennsylvania, the Company employs
approximately 1,300 people and operates 20 manufacturing, reactivation,
innovation and equipment fabrication facilities in the U.S., Asia, and
in Europe, where Calgon Carbon is known as Chemviron.

For more information about Calgon Carbon’s leading activated carbon,
filtration media, and ultraviolet light technology solutions, visit www.calgoncarbon.com.

“Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995

This communication contains “forward-looking” statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995, known
as the PSLRA. These statements, as they relate to Calgon Carbon, its
management or the proposed merger between Calgon Carbon and Kuraray,
involve risks and uncertainties that may cause results to differ
materially from those set forth in these statements. These statements
are based on current plans, estimates and projections, and therefore,
you are cautioned not to place undue reliance on them. No
forward-looking statement can be guaranteed, and actual results may
differ materially from those projected. Calgon Carbon does not undertake
any obligation to publicly update any forward-looking statement, whether
as a result of new information, future events or otherwise, except to
the extent required by law. Forward-looking statements are not
historical facts, but rather are based on current expectations,
estimates, assumptions and projections about the business and future
financial results, and other legal, regulatory and economic
developments. Statements that use words such as “anticipates,”
“believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,”
“will,” “should,” “could,” “estimates,” “predicts,” “potential,”
“continue,” “guidance,” and similar expressions identify these
forward-looking statements that are intended to be covered by the safe
harbor provisions of the PSLRA. Actual results could differ materially
from the results contemplated by these forward-looking statements due to
a number of factors, including: the failure to obtain governmental
approvals of the merger on the proposed terms and schedule, and any
conditions imposed on Calgon Carbon, Kuraray or the combined company in
connection with consummation of the merger; the failure to satisfy
various other conditions to the closing of the merger contemplated by
the merger agreement; restrictions imposed by outstanding indebtedness;
worldwide and regional economic, business, and political conditions;
changes in customer demand and requirements; business cycles and other
industry conditions; the timing of new services or facilities; the
ability to compete with others in the industries in which Calgon Carbon
operates; the effects of compliance with laws; fluctuations in the value
of currencies and of interest rates in major areas where operations are
located; matters relating to operating facilities; the effect and costs
of claims (known or unknown) relating to litigation and environmental
remediation; the ability to develop and further enhance technology and
proprietary know-how; the ability to attract and retain key personnel;
disruption from the merger making it more difficult to maintain
relationships with customers, employees or suppliers; changes in the
economic climate in the markets in which Calgon Carbon owns and operates
its businesses; the overall level of economic activity; the availability
of consumer credit and mortgage financing, unemployment rates and other
factors; Calgon Carbon’s ability to successfully integrate the New
Business and achieve the expected results of the acquisition, including
any expected synergies and the expected future accretion to earnings;
changes in, or delays in the implementation of, regulations that cause a
market for Calgon Carbon’s products; Calgon Carbon’s ability to
successfully type approve or qualify its products to meet customer and
end market requirements; changes in competitor prices for products
similar to Calgon Carbon’s; higher energy and raw material costs; costs
of imports and related tariffs; unfavorable weather conditions and
changes in market prices of natural gas relative to prices of coal;
changes in corporate income and cross-border tax policies and laws of
the United States and other countries, and the Company’s estimates of
the impacts of such policies and laws; labor relations; the availability
of capital and environmental requirements as they relate to Calgon
Carbon’s operations and to those of Calgon Carbon’s customers; borrowing
restrictions; the validity of and licensing restrictions on the use of
patents, trademarks and other intellectual property; pension costs; the
results of litigation involving Calgon Carbon, including any litigation
in connection with the proposed merger; information security breaches
and other disruptions that could compromise Calgon Carbon’s information
and expose Calgon Carbon to business interruption, increased costs,
liability and reputational damage; and additional risks associated with
the conduct of Calgon Carbon’s business, such as failure to achieve
expected results and the risks described from time to time in Calgon
Carbon’s reports filed with the SEC, including its most recently filed
annual report on Form 10-K.

Note: Beginning January 1, 2017, in conjunction with the acquisition of
the New Business, the Company realigned its internal management
reporting structure to incorporate the New Business into its previously
existing business, and reorganized its reportable segments. Prior year
amounts have been reclassified to conform to the current year
presentation.

Activated Carbon segment operating income for the twelve months ended
December 31, 2017 includes acquisition and project-related expenses of
$1,346. Alternative Materials segment operating income for the twelve
months ended December 31, 2017 includes acquisition and project-related
expenses of $1,082.

Activated Carbon segment operating income for the quarter and twelve
months ended December 31, 2016 includes acquisition and project-related
expenses of $9,572 and $13,064, respectively. Alternative Materials
segment operating income for both the quarter and twelve months ended
December 31, 2016 includes acquisition and project-related expenses of
$4,142.

Merger related expenses of $1,333 and $4,641 for the quarter and year
ended December 31, 2017, respectively, for investment banking, legal,
accounting, and other professional fees related to the Company's pending
merger with Kuraray are excluded from segment operating income.

Contacts

Calgon Carbon Corporation
Dan Crookshank, 412-787-6795
www.calgoncarbon.com