(Exact name of registrant as specified in its charter)

(Address of principal executive offices)

(Registrant's telephone number)

               As of July 31, 2001, 14,933,250 shares of the registrant's Common Stock, par value $.01 per share, were outstanding.

PART I.  FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

($ in thousands, except per share data)

(Unaudited)

The accompanying notes are an integral part of these statements.

($ in thousands)

(Unaudited)

The accompanying notes are an integral part of these statements.

(Unaudited)

        The accompanying unaudited consolidated financial statements of CARBO Ceramics Inc. have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. The results of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2000 included in the Company's Form 10-K Annual Report for the year ended December 31, 2000.

        The consolidated financial statements include the accounts of CARBO Ceramics Inc. and its wholly owned subsidiaries, CARBO Ceramics Sales Corporation, CARBO Ceramics (UK) Limited and CARBO Ceramics (Mauritius) Inc. All significant intercompany transactions have been eliminated.

        On April 10, 2001, the Board of Directors declared a cash dividend of $0.09 per common share payable to shareholders of record on April 30, 2001. The dividend was paid on May 15, 2001.

        The following table sets forth the computation of basic and diluted earnings per share ($ in thousands, except per share data):

        During the six months ended June 30, 2001, employees exercised stock options to acquire 233,750 common shares at a weighted-average exercise price of $17.35 per share. The Company recognized a related income tax benefit of $1.9 million, which was credited directly to shareholders' equity.

        Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

        During the first quarter of 2001, the Company received a $1.0 million capital expenditure refund on a claim related to the construction of its manufacturing facility in McIntyre, Georgia. $973,000 was recorded as a direct reduction of the cost of machinery and equipment capitalized prior to receipt of the refund.

        The Company has an employment agreement with its President, Dr. C. Mark Pearson, which became effective with his appointment as President on April 10, 2001. The agreement, which expires December 31, 2002, provides for an annual base salary and incentive bonus. If Dr. Pearson is terminated without cause prior to December 31, 2002, the Company will be obligated to pay two years base salary and a prorated incentive bonus, and all non-vested stock options granted to Dr. Pearson will vest immediately and become exercisable. The agreement also contains a two-year non-competition covenant that would become effective upon termination for any reason.

        The Company's employment agreement with its former President, Mr. Jesse P. Orsini, terminated upon his retirement on April 10, 2001. At that time, Mr. Orsini held fully vested options to purchase 200,000 shares of Common Stock, which were awarded on April 26, 1996 and would have expired on April 26, 2006 if he had remained employed by the Company. The original terms of the agreement required Mr. Orsini to exercise these options within 30 days after cessation of employment. Prior to Mr. Orsini's retirement, the Board of Directors agreed to allow the options to remain exercisable for a 3-year period following his retirement instead of the original 30-day period. Mr. Orsini was not granted additional options; however, the modification of the term of the original agreement triggered a provision under Accounting Principles Board Opinion No. 25 that required the Company to apply accounting rules as if new options were granted. The result was recognition of non-cash compensation cost of $3.5 million ($2.2 million, net of income taxes) charged to operations in the second quarter of 2001. The Company has no further obligations under the employment agreement.

        The Company is subject to legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, management does not expect that the ultimate cost to resolve these matters will have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

                                                                      RESULTS OF OPERATIONS

Operating results for the second quarter 2001 reflect continuing strong drilling activity in the North American natural gas industry as well as the increasing success of the company's technical marketing program. The recent decline in natural gas prices benefits the company in the form of lower manufacturing costs, and the company has seen no significant reduction in drilling activity as a result of the lower commodity prices. Management expects demand for the company's products to remain strong for the rest of the year and continues to believe that the biggest challenge for the future is adding capacity to meet growing demand.

Revenues. Revenues of $35.3 million for the quarter ended June 30, 2001 were 60 percent higher than the second quarter 2000, surpassing the previous quarterly record established in the first quarter of this year. Increases of 39 percent in sales volume and 16 percent in the average selling price of the company's products combined to account for the increase. The improvement in average selling price is attributable to a price increase that went into effect on January 1, 2001 and a change in product mix favoring the company's premium-priced, high-strength products. An increase in domestic sales volume of 57 percent represented the majority of the total increase over last year's second quarter, with the largest gains in the South Texas market. Export sales volume for the quarter exceeded the comparable period of 2000 by three percent, but was highlighted by a 177 percent increase in sales into Canada.

The number of rigs drilling for natural gas in the U.S. during the second quarter of 2001 was 56 percent higher than the same period a year earlier. Natural gas rigs accounted for over 80 percent of the total rig count in the second quarter of 2001 versus 76 percent in the second quarter of 2000.

Gross Profit. Gross profit for the quarter was $15.4 million, or 44 percent of sales, compared to $9.1 million, or 41 percent of sales, for the second quarter of 2000. The increase in gross profit was a result of higher sales prices, a shift in product mix toward more profitable products and improved efficiency in all of the company's manufacturing facilities. Company-wide finished goods production was up 20 percent over last year's second quarter. The increases were partially diluted by higher natural gas costs in manufacturing operations and excess freight costs to expedite transportation of finished goods to meet sales demand.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $7.1 million for the second quarter of 2001 and $3.1 million for the corresponding period of 2000. Included in the second quarter of 2001 is a $3.5 million non-recurring, non-cash stock-based compensation charge related to the modification of the expiration date of fully vested stock options in connection with the April 10, 2001 retirement of the Company's former President. Excluding this non-recurring charge, expenses as a percentage of sales decreased from 14 percent in the second quarter of 2000 to 10.3 percent for the same period in 2001. The increase in expenses, excluding the non-recurring charge, resulted from those that vary directly with sales volume and increased legal expenses.

Revenues. Year to date revenues of $69.5 million exceeded revenues for the same period in 2000 by 58 percent. The growth in revenues resulted from an increase in sales volume and an increase in the average selling price due to a price increase that was effective on January 1, 2001. Domestic sales volume increased by 48 percent and export volume grew by 16 percent over last year.

Gross Profit. Gross profit for the six months ended June 30, 2001 was $28.5 million, or 41 percent of revenues, compared to $15.8 million, or 36 percent of revenues, for the same period in 2000. Higher sales prices, a more favorable product mix and improved efficiency in manufacturing operations more than offset the negative effects of higher natural gas costs and excess freight costs on expedited finished goods shipments to remote stocking locations. Another contributor to the year-over-year increase in gross profit was the impact of high production costs incurred in the first quarter of 2000 during the start-up of the McIntyre, Georgia manufacturing facility.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $10.8 million for the six months ended June 30, 2001 compared to $5.9 million for the six months ended June 30, 2000. Included in the first half of 2001 is a $3.5 million non-recurring, non-cash stock-based compensation charge related to the modification of the expiration date of fully vested stock options in connection with the April 10, 2001 retirement of the Company's former President. The increase, exclusive of the non-recurring charge, was mostly due to increases in expenses that vary directly with sales activity and profitability: warehouse and shipping, marketing and management incentive expenses. Excluding the non-recurring charge, expenses as a percentage of revenues declined from 13.4 percent last year to 10.5 percent this year.

Cash and cash equivalents totaled $29.8 million as of June 30, 2001, an increase of $15.0 million from December 31, 2000. The increase was due to cash generated from operations of $14.4 million, proceeds from the issuance of stock (stock options exercised) of $4.0 million, and a $1.0 million capital expenditure refund on a claim related to the construction of the McIntyre, Georgia facility; offset by capital spending of $1.9 million and cash dividends of $2.5 million. There were no borrowings against the company's $10 million line of credit as of June 30, 2001.

The Company believes that existing cash balances and cash generated from operations will be sufficient to fund its operations, dividend and capital spending requirements through 2001.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This Form 10-Q, the Company's Form 10-K and Annual Report to Shareholders, any other Form 10-Q or any Form 8-K of the Company or any other written or oral statements made by or on behalf of the Company may include forward-looking statements which reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from such statements. This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, the Company's prospects, developments and business strategies for its operations, all of which are subject to certain risks, uncertainties and assumptions. These risks and uncertainties include, but are not limited to, changes in the demand for oil and natural gas, the development of alternative stimulation techniques and the development of alternative proppants for use in hydraulic fracturing. The words "believe", "expect", "anticipate", "project" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, each of which speaks only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PART II.  OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

ITEM 2.    CHANGES IN SECURITIES

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5.    OTHER INFORMATION

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

SIGNATURES

               Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

                                                                                                         CARBO CERAMICS INC.

                                                                                                         C. Mark Pearson

                                                                                                         President and Chief Executive Officer

                                                                                                         Paul G. Vitek

                                                                                                         Sr. Vice President, Finance and

                                                                                                         Chief Financial Officer

                                                                            Date: March 6, 2002