BOULDER, CO--(Marketwire - October 25, 2007) -
Selected Highlights
-- Company reports third quarter EPS of $0.58 versus $0.30 in same
quarter last year
-- Net income up 93% to $7.1 million versus Q3 last year
-- Sales increase 69% to $42.1 million versus comparable year-ago period
-- Explosive Metalworking backlog remains strong at $77.1 million
Dynamic Materials Corporation (DMC) (
NASDAQ:
BOOM), a leading provider of
explosion-welded clad metal plates, today reported financial results for
its third quarter ended Sept. 30, 2007.
Sales for the third quarter increased 69% to $42.1 million from $24.9
million in the third quarter last year. Gross margin increased to 34% from
33% in the third quarter a year ago. Income from operations increased 72%
to $10.6 million from $6.1 million in the comparable year-ago quarter. Net
income increased 93% to $7.1 million, or $0.58 per diluted share, from $3.7
million, or $0.30 per diluted share, in the third quarter last year.
Explosive Metalworking
The Company's Explosive Metalworking segment reported third quarter sales
of $40.3 million, up 72% from $23.5 million in the third quarter last year.
Operating income increased 83% to $10.6 million from $5.8 million in the
2006 third quarter. Order backlog at the end of this year's third quarter
was $77.1 million versus $68.8 million at December 31, 2006, and an
all-time high $84.7 million at the end of the prior quarter.
AMK Welding
Third quarter sales at the Company's AMK Welding segment increased 32% to
$1.8 million versus $1.3 million in the third quarter last year. Operating
income was $325,000 versus $391,000 reported in the comparable year-ago
quarter.
Management Commentary
"Strong demand from an array of end markets fueled another quarter of
robust sales and earnings growth," said Yvon Cariou, president and chief
executive officer. "The widespread push for new industrial processing
capacity continues to drive significant investments in capital equipment,
and based on the broad spectrum of domestic and international projects we
are tracking, it appears this activity could continue for the foreseeable
future. We are optimistic that many of these projects will incorporate
DMC's explosion welded plates."
Cariou said the chemical processing, energy refining and aluminum smelting
industries have been sectors from which there has been particularly strong
order volume in recent months. "The new production capacity we have
brought on line at our Mt. Braddock facility and the upgrades we are making
at our European operations have enhanced our ability to effectively process
the considerable order volume we continue to experience. In spite of
continued tension in the supply chain for high-grade carbon steel, we are
very encouraged by the volume of work our production teams are moving
through our three explosion welding production centers."
Cariou added that activity at the Company's AMK Welding segment could
increase significantly in the coming quarters, as one of the business'
largest customers is expected to expand production of its ground-based
turbine systems, on which AMK provides specialized welding services. "We
believe our capacity expansion efforts at AMK have positioned us to
effectively manage this anticipated increase in workload."
Rick Santa, chief financial officer, said DMC ended the third quarter with
a strong balance sheet that included a cash position of $22.0 million, up
from $10.4 million at the end of this year's second quarter. At the end of
fiscal 2006, DMC had cash, cash equivalents and restricted cash of $20.9
million. DMC completed the third quarter with total current assets of
$78.9 million, total assets of $106.4 million and working capital of $50.3
million.
Santa said management expects sales and earnings results for the 2007
fourth quarter will likely approximate those of the third quarter.
Nine-Month Results
Through nine months, sales increased 41% to $110.0 million compared with
$77.8 million in the nine-month period of 2006. Gross margin was 34%
versus 35% in the same period a year ago. Income from operations increased
32% to $26.9 million compared with $20.4 million in the comparable 2006
period. Net income through nine months was $17.7 million, or $1.44 per
diluted share, versus net income of $14.2 million, or $1.16 per diluted
share, in the same period last year. Net income in the 2006 nine-month
period included a gain from discontinued operations of $1.4 million, or
$0.11 per share, net of tax, attributable to the sale of a real estate
purchase option.
The Explosive Metalworking segment reported nine-month sales of $105.3
million, an improvement of 42% versus sales of $74.3 million in the
comparable period of 2006. Operating income increased 35% to $27.2 million
compared with $20.2 million in the prior year's nine-month period.
Sales at AMK Welding for the nine-month period increased 37% to $4.7
million compared with sales of $3.4 million in the comparable year-ago
period. Operating income was $606,000 compared with $621,000 in the
prior-year period.
Conference call information
Management will hold a conference call to discuss third quarter results
today at 5:00 p.m. Eastern (3:00 p.m. Mountain). Investors are invited to
listen to the call live via the Internet at
www.dynamicmaterials.com, or by
dialing into the teleconference at 888-713-4215 (617-213-4867 for
international callers) and entering the passcode 10554262. Participants
should access the website at least 15 minutes early to register and
download any necessary audio software. A replay of the webcast will be
available for 30 days and a telephonic replay will be available through
Oct. 27, 2007, by calling 888-286-8010 (617-801-6888 for international
callers) and entering the passcode 53738869.
About Dynamic Materials Corporation
Based in Boulder, Colorado, Dynamic Materials Corporation is a leading
international metalworking company. Its products, which are typically used
in industrial capital projects, include explosion-welded clad metal plates
and other metal fabrications for use in a variety of industries, including
upstream oil and gas, oil refinery, petrochemicals, hydrometallurgy,
aluminum production, shipbuilding, power generation, industrial
refrigeration and similar industries. The Company operates two business
segments: Explosive Metalworking, which uses proprietary explosive
processes to fuse different metals and alloys, and AMK Welding, which
utilizes various technologies to weld components for use in
power-generation turbines, as well as commercial and military jet engines.
For more information, visit the Company's website at
www.dynamicmaterials.com.
Safe Harbor Language
Except for the historical information contained herein, this news release
contains forward-looking statements that involve risks and uncertainties
including, but not limited to, the following: our ability to obtain new
contracts at attractive prices; the size and timing of customer orders and
shipment; fluctuations in customer demand; changes to customer orders; the
cyclicality of our business; competitive factors; the timely completion of
contracts; the timing and size of expenditures; the timely receipt of
government approvals and permits; the adequacy of local labor supplies at
our facilities; current or future limits on manufacturing capacity at our
various operations; the availability and cost of funds; and general
economic conditions, both domestic and foreign, impacting our business and
the business of the end-market users we serve; as well as the other risks
detailed from time to time in the Company's SEC reports, including the
report on Form 10-K for the year ended December 31, 2006.
DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
(Dollars in Thousands, Except Share Data)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
----------------------- -----------------------
2007 2006 2007 2006
----------- ---------- ----------- ----------
NET SALES $ 42,099 $ 24,852 $ 109,964 $ 77,781
COST OF PRODUCTS SOLD 27,807 16,542 72,741 50,270
----------- ---------- ----------- ----------
Gross profit 14,292 8,310 37,223 27,511
----------- ---------- ----------- ----------
COSTS AND EXPENSES:
General and
Administrative expenses 1,903 1,267 5,419 3,948
Selling expenses 1,811 904 4,913 3,174
----------- ---------- ----------- ----------
Total costs and
expenses 3,714 2,171 10,332 7,122
----------- ---------- ----------- ----------
INCOME FROM OPERATIONS OF
CONTINUING OPERATIONS 10,578 6,139 26,891 20,389
OTHER INCOME (EXPENSE):
Interest income, net 213 121 578 347
Other income (expense) 23 (23) 3 (40)
----------- ---------- ----------- ----------
INCOME BEFORE
INCOME TAXES AND
DISCONTINUED
OPERATIONS 10,814 6,237 27,472 20,696
INCOME TAX PROVISION 3,697 2,547 9,813 7,865
----------- ---------- ----------- ----------
INCOME FROM CONTINUING
OPERATIONS 7,117 3,690 17,659 12,831
INCOME FROM DISCONTINUED
OPERATIONS, net of tax - - - 1,357
----------- ---------- ----------- ----------
NET INCOME $ 7,117 $ 3,690 $ 17,659 $ 14,188
=========== ========== =========== ==========
INCOME PER SHARE - BASIC:
Continuing operations $ 0.59 $ 0.31 $ 1.47 $ 1.09
Discontinued
operations - - - 0.11
----------- ---------- ----------- ----------
Net income $ 0.59 $ 0.31 $ 1.47 $ 1.20
=========== ========== =========== ==========
INCOME PER SHARE - DILUTED:
Continuing operations $ 0.58 $ 0.30 $ 1.44 $ 1.05
Discontinued
operations - - - 0.11
----------- ---------- ----------- ----------
Net income $ 0.58 $ 0.30 $ 1.44 $ 1.16
=========== ========== =========== ==========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING -
Basic 12,094,181 11,865,336 12,039,593 11,813,371
=========== ========== =========== ==========
Diluted 12,301,772 12,210,791 12,245,212 12,216,283
=========== ========== =========== ==========
ANNUAL DIVIDENDS DECLARED
PER COMMON SHARE $ - $ - $ 0.15 $ 0.15
=========== ========== =========== ==========
DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
ASSETS September 30, December 31,
2007 2006
(unaudited)
-------------- --------------
Cash and cash equivalents $ 22,044 $ 17,886
Restricted cash - 3,059
Accounts receivable, net 20,077 21,549
Inventories 33,793 19,226
Other current assets 2,987 2,127
-------------- --------------
Total current assets 78,901 63,847
Property, plant and equipment, net 26,584 20,260
Other long-term assets 870 866
-------------- --------------
Total assets $ 106,355 $ 84,973
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 17,400 $ 13,572
Accrued income taxes 1,455 1,892
Customer advances 2,619 2,394
Other current liabilities 6,760 7,057
Current portion of long-term debt 413 382
-------------- --------------
Total current liabilities 28,647 25,297
Long-term debt - 382
Other long-term liabilities 1,652 1,714
Stockholders' equity 76,056 57,580
-------------- --------------
Total liabilities and stockholders' equity $ 106,355 $ 84,973
============== ==============
DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
(Dollars in Thousands)
(unaudited)
2007 2006
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 17,659 $ 14,188
Adjustments to reconcile net income to net
Cash provided by operating activities -
Income from discontinued operations, net
of tax - (1,357)
Depreciation 1,394 1,020
Amortization of capitalized debt
issuance costs - 50
Stock-based compensation 912 436
Provision for deferred income taxes (239) 923
Change in working capital, net (6,940) 997
------------- -------------
Net cash provided by operating
activities 12,786 16,257
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and
equipment (7,347) (5,154)
Sale of marketable securities - 1,950
Loan to related party - (1,206)
Repayment on loan to related party - 1,206
Change in other non-current assets (11) 219
Payment received on other receivables
related to discontinued operations - 3
Cash flows provided by investing activities
of discontinued operations - 2,197
------------- -------------
Net cash flows used in investing
activities (7,358) (785)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on lines of credit, net - (47)
Payments on long-term debt (389) (2,081)
Payment of dividends (1,821) (1,766)
Net proceeds from issuance of common stock 563 523
Tax benefit related to stock options 5 948
Other cash flows from financing activities 15 22
------------- -------------
Net cash flows used in financing
activities (1,627) (2,401)
------------- -------------
EFFECTS OF EXCHANGE RATES ON CASH 357 327
------------- -------------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 4,158 13,398
CASH AND CASH EQUIVALENTS, beginning of the
period 17,886 5,763
------------- -------------
CASH AND CASH EQUIVALENTS, end of the period $ 22,044 $ 19,161
============= =============
Contact Information: CONTACT:
Pfeiffer High Investor Relations, Inc.
Geoff High
303-393-7044