Zacks_Analysts' Blog : Calgon Carbon Settles Disputes - Analyst Blog

Calgon Carbon Corporation (CCC), a leader in the activated carbon sector, settled its 10 year dispute with For Your Ease Only Inc. (FYEO) for $4.3 million.

In exchange, FYEO will withdraw its lawsuit seeking a declaration from the U.S. District Court for the Northern District of Illinois that FYEO did not infringe Calgon Carbon’s patent covering anti-tarnish jewelry boxes. Further, it also claimed that Calgon Carbon purposely intervened with the relationship between FYEO and its retailer.

Similarly, FYEO will also dismiss its appeal pending in the Seventh Circuit Court of Appeals in a related case and will release any other claims.

Previously, Calgon Carbon had a similar dispute with FYEO, which was settled for $1.0 million. Earlier, in December 2010, the company also settled a dispute with ADA-ES Inc. (ADES) for $7.2 million, for which Calgon Carbon had previously accrued $12.0 million.

Calgon Carbon and FYEO have been competitors in the sale of jewelry boxes through a common retailer. Calgon Carbon is exiting that business effective immediately and will no longer produce its PreZerve® product line, which accounted for less than $2.0 million of the company’s total sales in 2009. The company will, however, continue to produce and market its activated carbon cloth for other applications.

Calgon Carbon also faces stiff competition from a privately held company ITT Water & Wastewater Herford GmbH and MeadWestvaco Corporation (MWV).

Calgon Carbon is a leader in the activated carbon sector, an area benefiting from higher prices and significant growth opportunities. However, the company is facing weak demand in all its business segments.

Currently, Calgon has a Zacks #3 Rank (Hold) for the short term and a Neutral recommendation for the long term.