Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 28, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | DYNAMIC MATERIALS CORP | |
Entity Central Index Key | 34,067 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 14,192,682 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 10,889 | $ 9,400 |
Accounts receivable, net of allowance for doubtful accounts of $624 and $542, respectively | 35,518 | 35,501 |
Inventory, net | 43,227 | 40,101 |
Prepaid expenses and other | 7,111 | 6,123 |
Current deferred tax assets | 4,974 | 3,971 |
Total current assets | 101,719 | 95,096 |
PROPERTY, PLANT AND EQUIPMENT | 107,925 | 109,733 |
Less - accumulated depreciation | (46,636) | (45,898) |
Property, plant and equipment, net | 61,289 | 63,835 |
GOODWILL, net | 29,574 | 32,762 |
PURCHASED INTANGIBLE ASSETS, net | 22,990 | 26,734 |
DEFERRED TAX ASSETS | 2,670 | 587 |
OTHER ASSETS, net | 1,253 | 315 |
TOTAL ASSETS | 219,495 | 219,329 |
CURRENT LIABILITIES: | ||
Accounts payable | 16,615 | 14,076 |
Accrued expenses | 5,307 | 5,638 |
Dividend payable | 567 | 559 |
Accrued income taxes | 4,004 | 3,770 |
Accrued employee compensation and benefits | 3,269 | 4,582 |
Customer advances | 1,094 | 3,510 |
Current deferred tax liabilities | 317 | 373 |
Total current liabilities | 31,173 | 32,508 |
LINES OF CREDIT | 33,711 | 22,782 |
DEFERRED TAX LIABILITIES | 8,749 | 7,003 |
OTHER LONG-TERM LIABILITIES | 1,990 | 2,121 |
Total liabilities | $ 75,623 | $ 64,414 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, $0.05 par value; 4,000,000 shares authorized; no issued and outstanding shares | $ 0 | $ 0 |
Common stock, $0.05 par value; 25,000,000 shares authorized; 14,196,015 and 13,997,076 shares issued and outstanding, respectively | 710 | 700 |
Additional paid-in capital | 69,087 | 67,088 |
Retained earnings | 108,894 | 113,723 |
Other cumulative comprehensive loss | (34,819) | (26,596) |
Total stockholders’ equity | 143,872 | 154,915 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 219,495 | $ 219,329 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 624 | $ 542 |
Preferred stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Preferred stock, shares authorized | 4,000,000 | 4,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 14,196,015 | 13,997,076 |
Common stock, shares outstanding | 14,196,015 | 13,997,076 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
NET SALES | $ 44,741 | $ 51,911 | $ 85,560 | $ 98,680 |
COST OF PRODUCTS SOLD | 32,156 | 36,013 | 62,272 | 68,067 |
Gross profit | 12,585 | 15,898 | 23,288 | 30,613 |
COSTS AND EXPENSES: | ||||
General and administrative expenses | 5,561 | 5,771 | 11,599 | 11,564 |
Selling and distribution expenses | 4,958 | 4,733 | 9,836 | 8,956 |
Amortization of purchased intangible assets | 1,013 | 1,617 | 2,030 | 3,232 |
Restructuring expenses | 1,116 | 0 | 3,112 | 0 |
Total costs and expenses | 12,648 | 12,121 | 26,577 | 23,752 |
INCOME (LOSS) FROM OPERATIONS | (63) | 3,777 | (3,289) | 6,861 |
OTHER INCOME (EXPENSE): | ||||
Other income (expense), net | 40 | 332 | 1,164 | (103) |
Interest expense | (263) | (174) | (445) | (283) |
Interest income | 1 | 1 | 4 | 5 |
INCOME (LOSS) BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS | (285) | 3,936 | (2,566) | 6,480 |
INCOME TAX PROVISION | 1,034 | 1,839 | 1,130 | 2,580 |
INCOME (LOSS) FROM CONTINUING OPERATIONS | (1,319) | 2,097 | (3,696) | 3,900 |
DISCONTINUED OPERATIONS: | ||||
Income (loss) from operations of discontinued operations, net of tax | 0 | 219 | 0 | (97) |
NET INCOME (LOSS) | $ (1,319) | $ 2,316 | $ (3,696) | $ 3,803 |
INCOME (LOSS) PER SHARE - BASIC: | ||||
Continuing operations (in dollars per share) | $ (0.10) | $ 0.15 | $ (0.27) | $ 0.28 |
Discontinued operations (in dollars per share) | 0 | 0.02 | 0 | (0.01) |
Net income (loss) (in dollars per share) | (0.10) | 0.17 | (0.27) | 0.27 |
INCOME (LOSS) PER SHARE - DILUTED: | ||||
Continuing operations (in dollars per share) | (0.10) | 0.15 | (0.27) | 0.28 |
Discontinued operations (in dollars per share) | 0 | 0.02 | 0 | (0.01) |
Net income (loss) (in dollars per share) | $ (0.10) | $ 0.17 | $ (0.27) | $ 0.27 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: | ||||
Basic (in shares) | 13,906,993 | 13,672,457 | 13,900,499 | 13,668,223 |
Diluted (in shares) | 13,906,993 | 13,677,911 | 13,900,499 | 13,673,807 |
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.08 | $ 0.08 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (1,319) | $ 2,316 | $ (3,696) | $ 3,803 |
Change in cumulative foreign currency translation adjustment | 2,494 | 744 | (8,223) | (1,710) |
Total comprehensive income (loss) | $ 1,175 | $ 3,060 | $ (11,919) | $ 2,093 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Other Cumulative Comprehensive Loss |
Balances (in shares) at Dec. 31, 2014 | 13,997,076 | 13,997,076 | |||
Balances at Dec. 31, 2014 | $ 154,915 | $ 700 | $ 67,088 | $ 113,723 | $ (26,596) |
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (3,696) | (3,696) | |||
Change in cumulative foreign currency translation adjustment | (8,223) | (8,223) | |||
Shares issued in connection with stock compensation plans (in shares) | 198,939 | ||||
Shares issued in connection with stock compensation plans | 185 | $ 10 | 175 | ||
Tax impact of stock-based compensation | (260) | (260) | |||
Stock-based compensation | 2,084 | 2,084 | |||
Dividends declared | $ (1,133) | (1,133) | |||
Balances (in shares) at Jun. 30, 2015 | 14,196,015 | 14,196,015 | |||
Balances at Jun. 30, 2015 | $ 143,872 | $ 710 | $ 69,087 | $ 108,894 | $ (34,819) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (3,696) | $ 3,803 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Loss from discontinued operations | 0 | 97 |
Depreciation (including capital lease amortization) | 3,153 | 3,379 |
Amortization of purchased intangible assets | 2,030 | 3,232 |
Amortization of deferred debt issuance costs | 128 | 51 |
Stock-based compensation | 1,571 | 1,741 |
Excess tax benefit from stock-based compensation | (72) | (51) |
Deferred income tax provision (benefit) | (742) | 848 |
Gain on disposal of property, plant and equipment | 65 | 5 |
Restructuring and impairment charges | 3,112 | 0 |
Change in: | ||
Accounts receivable, net | (1,272) | (858) |
Inventory, net | (4,755) | (5,000) |
Prepaid expenses and other | (1,261) | (2,873) |
Accounts payable | 2,454 | (4,778) |
Customer advances | (2,184) | 1,613 |
Accrued expenses and other liabilities | (3,248) | (535) |
Net cash flows provided by (used in) continuing operations | (4,717) | 674 |
Net cash flows provided by discontinued operations | 0 | 48 |
Net cash provided by (used in) operating activities | (4,717) | 722 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of property, plant and equipment | (2,471) | (4,123) |
Change in other non-current assets | (25) | (59) |
Net cash flows used in continuing operations | (2,496) | (4,182) |
Net cash flows used in discontinued operations | 0 | (85) |
Net cash used in investing activities | (2,496) | (4,267) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings on bank lines of credit, net | 11,245 | 2,555 |
Payment on loans with former owners of LRI | 0 | (31) |
Payment on capital lease obligations | (2) | (22) |
Payment of dividends | (1,125) | (1,108) |
Payment of deferred debt issuance costs | (1,042) | 0 |
Net proceeds from issuance of common stock to employees and directors | 185 | 234 |
Excess tax benefit from stock-based compensation | 72 | 51 |
Net cash provided by financing activities | 9,333 | 1,679 |
EFFECTS OF EXCHANGE RATES ON CASH | (631) | (89) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,489 | (1,955) |
CASH AND CASH EQUIVALENTS, beginning of the period | 9,400 | 10,598 |
CASH AND CASH EQUIVALENTS, end of the period | $ 10,889 | $ 8,643 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The information included in the condensed consolidated financial statements is unaudited but includes all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the financial statements that are included in our Annual Report filed on Form 10-K for the year ended December 31, 2014 . 2014 Sale of AMK Technical Services On October 1 2014, DMC completed the sale of its AMK Technical Services ("AMK") business. The operating results of AMK have been classified as discontinued operations in all period presented. See Note 9 "Discontinued Operations" for additional disclosures regarding the AMK sale. NobelClad Restructuring On October 27, 2014, management announced a plan to restructure its NobelClad European operations. Clad metal plate production is being shifted from facilities in both Rivesaltes, France and Wurgendorf, Germany to the new manufacturing facility in Liebenscheid, Germany. See Note 10 "Restructuring" for additional disclosures regarding these restructuring plans. DynaEnergetics Restructuring In the first quarter of 2015, we launched several initiatives to enhance DynaEnergetics’ operational efficiencies and align its production and distribution resources with the anticipated demands of the market. In January 2015, we closed two North American distribution centers. On February 24, 2015, we announced the closure of a perforating gun manufacturing facility and distribution center in Edmonton, Alberta. In the second quarter of 2015, North America perforating gun manufacturing was consolidated into DynaEnergetics' existing facility in Whitney, Texas. We also exited multiple other distribution centers in North America and Colombia. The Colombia market is now being served directly from our existing facilities in Texas. Two new centralized distribution centers are replacing the smaller and less efficient distribution centers that were closed. See Note 10 "Restructuring" for additional disclosures regarding these restructuring plans. Corporate Restructuring In the first quarter of 2015, we eliminated certain positions in our corporate office. Additionally, two of the nine members of our board of directors did not stand for re-election at our Annual meeting in May 2015, and we will continue with a seven -member board. See Note 10 "Restructuring" for additional disclosures regarding these restructuring plans. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed consolidated financial statements include the accounts of Dynamic Materials Corporation (“DMC”) and its controlled subsidiaries. Only subsidiaries in which controlling interests are maintained are consolidated. All significant intercompany accounts, profits, and transactions have been eliminated in consolidation. Income Taxes The effective tax rate for each of the periods reported differs from the U.S. statutory rate due primarily to favorable foreign permanent differences, variation in contribution to consolidated pre-tax income from each jurisdiction for the respective periods and differences between the U.S. and foreign tax rates (which range from 20% to 35% ) on earnings that have been permanently reinvested. We recognize deferred tax assets and liabilities for the expected future income tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. The deferred income tax impact of tax credits are recognized as an immediate adjustment to income tax expense. We recognize deferred tax assets for the expected future effects of all deductible temporary differences to the extent we believe these assets will more likely than not be realized. We record a valuation allowance when, based on current circumstances, it is more likely than not that all or a portion of the deferred tax assets will not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, recent financial operations and their associated valuation allowances, if any. We recognize the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position; the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that is more likely than not of being realized upon ultimate resolution. We recognize interest and penalties related to uncertain tax positions in operating expense. Earnings Per Share Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our restricted stock awards (“RSAs”), are considered participating securities for purposes of calculating earnings per share (“EPS”) and require the use of the two class method for calculating EPS. Under this method, a portion of net income is allocated to these participating securities and therefore is excluded from the calculation of EPS allocated to common stock, as shown in the table below. Computation and reconciliation of earnings per common share are as follows: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Numerator: Income (loss) from continuing operations $ (1,319 ) $ 2,097 $ (3,696 ) $ 3,900 Less income allocated to RSAs — (49 ) — (80 ) Income (loss) from continuing operations allocated to common stock for EPS calculation (1,319 ) 2,048 (3,696 ) 3,820 Income (loss) from discontinued operations — 219 — (97 ) Net income (loss) allocated to common stock for EPS calculation $ (1,319 ) $ 2,267 $ (3,696 ) $ 3,723 Denominator: Weighted average common shares outstanding - basic 13,906,993 13,672,457 13,900,499 13,668,223 Dilutive stock-based compensation plans — 5,454 — 5,584 Weighted average common shares outstanding - diluted 13,906,993 13,677,911 13,900,499 13,673,807 Income (loss) per share - Basic: Continuing operations $ (0.10 ) $ 0.15 $ (0.27 ) $ 0.28 Discontinued operations — 0.02 — (0.01 ) Net income (loss) allocated to common stock for EPS calculation $ (0.10 ) $ 0.17 $ (0.27 ) $ 0.27 Income (loss) per share - Diluted: Continuing operations $ (0.10 ) $ 0.15 $ (0.27 ) $ 0.28 Discontinued operations — 0.02 — (0.01 ) Net income (loss) allocated to common stock for EPS calculation $ (0.10 ) $ 0.17 $ (0.27 ) $ 0.27 Fair Value of Financial Instruments The carrying value of cash and cash equivalents, trade accounts receivable and payable, accrued expenses and lines of credit approximate their fair value. Recent Accounting Pronouncements In April 2015, the FASB issued an accounting standards update to revise the presentation of debt issuance costs. Under this pronouncement, entities will present debt issuance costs in their balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the deferred debt issuance costs will continue to be included in interest expense. The pronouncement, which is to be applied retrospectively to all prior periods, is effective for fiscal years beginning after December 15, 2015, with early adoption permitted for financial statements that have not been previously issued. In June 2014, the FASB issued an accounting standards update to clarify the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The pronouncement is effective for reporting periods beginning after December 15, 2015. We currently are evaluating the potential impact the adoption of this standard will have on our financial statements. In May 2014, the FASB issued an accounting standards update to clarify the principles of recognizing revenue and to develop a common revenue standard and disclosure requirements for U.S. GAAP and IFRS. The pronouncement is effective for reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We currently are evaluating the potential impact the adoption of this standard will have on our financial statements. In April 2014, the FASB issued an accounting standards update which changes the criteria for determining which disposal transactions can be presented as discontinued operations and modifies related disclosure requirements. The pronouncement is effective for reporting periods beginning after December 15, 2014, however, early adoption is permitted. Any future disposal transaction will be accounted for under this standard. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower-of-cost (first-in, first-out) or market value. Cost elements included in inventory are material, labor, subcontract costs, and manufacturing overhead. As necessary, we record provisions and maintain reserves for excess, slow moving and obsolete inventory. To determine reserve amounts, we regularly review inventory quantities on hand and values, and compare them to estimates of future product demand, market conditions, production requirements and technological developments. Inventories consist of the following at June 30, 2015 and December 31, 2014 and include reserves of $3,036 and $3,117 , respectively: June 30, December 31, Raw materials $ 15,188 $ 15,208 Work-in-process 12,047 11,528 Finished goods 15,463 12,782 Supplies 529 583 $ 43,227 $ 40,101 |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill Disclosure [Abstract] | |
GOODWILL | GOODWILL The changes to the carrying amount of goodwill during the period are summarized below: NobelClad DynaEnergetics Total Goodwill balance at December 31, 2014 $ 19,418 $ 13,344 $ 32,762 Adjustment due to recognition of tax benefit of tax amortization of certain goodwill (147 ) (258 ) (405 ) Adjustment due to exchange rate differences (1,620 ) (1,163 ) (2,783 ) Goodwill balance at June 30, 2015 $ 17,651 $ 11,923 $ 29,574 |
PURCHASED INTANGIBLE ASSETS
PURCHASED INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2015 | |
Purchased Intangible Assets Disclosure [Abstract] | |
PURCHASED INTANGIBLE ASSETS | PURCHASED INTANGIBLE ASSETS The following table presents details of our purchased intangible assets, other than goodwill, as of June 30, 2015 : Gross Accumulated Amortization Net Core technology $ 18,872 $ (7,195 ) $ 11,677 Customer relationships 37,794 (26,859 ) 10,935 Trademarks / Trade names 2,022 (1,644 ) 378 Total intangible assets $ 58,688 $ (35,698 ) $ 22,990 The following table presents details of our purchased intangible assets, other than goodwill, as of December 31, 2014 : Gross Accumulated Amortization Net Core technology $ 20,667 $ (7,360 ) $ 13,307 Customer relationships 40,195 (27,270 ) 12,925 Trademarks / Trade names 2,216 (1,714 ) 502 Total intangible assets $ 63,078 $ (36,344 ) $ 26,734 The change in the gross value of our purchased intangible assets from December 31, 2014 to June 30, 2015 was due to foreign currency translation. |
CUSTOMER ADVANCES
CUSTOMER ADVANCES | 6 Months Ended |
Jun. 30, 2015 | |
Customer Advances Disclosure [Abstract] | |
CUSTOMER ADVANCES | CUSTOMER ADVANCES On occasion, we require customers to make advance payments prior to the shipment of goods in order to help finance our inventory investment on large orders or to keep customers’ credit limits at acceptable levels. As of June 30, 2015 and December 31, 2014 , customer advances totaled $1,094 and $3,510 , respectively, and originated from several customers. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Lines of credit consisted of the following at June 30, 2015 and December 31, 2014 : June 30, December 31, Syndicated credit agreement: U.S. Dollar revolving loan $ 26,500 $ 19,500 Euro revolving loan 7,211 3,282 Long-term lines of credit $ 33,711 $ 22,782 Syndicated Credit Agreement On February 23, 2015, we entered into a five -year $150,000 syndicated credit agreement (“credit facility”) which amended and replaced in its entirety our prior syndicated credit facility entered into on December 11, 2011. The new credit facility allows for revolving loans of $90,000 in US dollars, $10,000 in alternate currencies and a $50,000 US dollar term loan facility. The term loan facility is available in a single advance and expires 364 days after the February 23, 2015 closing date. If drawn, the term loan is amortizable in quarterly installments as follows: 10% of principal is due in each of years one and two, 20% of principal is due in each of years three and four and 30% of principal is due in year five with the remaining balance due at maturity. The new facility has a $100,000 accordion feature to increase the commitments in any of the three previous loan classes subject to approval by applicable lenders. We entered into the credit facility with a syndicate of four banks, with JP Morgan Chase Bank, N.A. acting as administrative agent for the U.S. and Canadian dollar loans and JP Morgan Europe Ltd. acting as administrative agent for the Euro and other alternate currency loans. The syndicated credit facility is secured by the assets of DMC including accounts receivable, inventory, and fixed assets, as well as guarantees and share pledges by DMC and its subsidiaries. Borrowings under the $90,000 revolving loan and $50,000 term loan can be in the form of Alternate Base Rate loans (“ABR” borrowings are based on the greater of adjusted Prime rates, adjusted CD rates, or adjusted Federal Funds rates) or one, two, three, or six month London Interbank Offered Rate (“LIBOR”) loans. ABR loans bear interest at the defined ABR rate plus an applicable margin (varying from 0.25% to 1.25% ) and LIBOR loans bear interest at the applicable LIBOR rate plus an applicable margin (varying from 1.25% to 2.25% ). Borrowings under the $10,000 Alternate Currency revolving loans can be in Canadian Dollars, Euros, Pounds Sterling and any other currency that is freely transferable and convertible to U.S. Dollars. Alternative currency borrowings denominated in Canadian Dollars shall be comprised of Canadian Dealer Offered Rate (“CDOR”) Loans or Canadian Prime Loans, at our option, and bear interest at the CDOR rate plus applicable margin (varying from 1.25% to 2.25% ) or the applicable Canadian Prime Rate plus an applicable margin (varying from 0.25% to 1.25% ), respectively. Alternative currency borrowings denominated in Euros shall be comprised of Euro Interbank Offered Rate (“EURIBOR”) loans and bear interest at the EURIBOR rate plus an applicable margin (varying from 1.25% to 2.25% ). Alternative currency borrowings denominated in any other alternate currency shall be comprised of Eurocurrency loans and bear interest at the LIBOR rate plus an applicable margin (varying from 1.25% to 2.25% ). Loan Covenants and Restrictions Our existing loan agreements include various covenants and restrictions, certain of which relate to the payment of dividends or other distributions to stockholders; redemption of capital stock; incurrence of additional indebtedness; mortgaging, pledging or disposition of major assets; and maintenance of specified financial ratios. As of June 30, 2015 , we were in compliance with all financial covenants and other provisions of our debt agreements. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS Our business is organized into two segments: NobelClad and DynaEnergetics. NobelClad's revenues are generated principally from cladding two dissimilar metals together using an explosion-welding process to form plates or transition joints. The clad plates and transition joints are sold to customers that fabricate industrial equipment for various industries, including oil and gas, petrochemicals, alternative energy, hydrometallurgy, aluminum production, shipbuilding, power generation and industrial refrigeration. DynaEnergetics manufactures, markets and sells oilfield perforating equipment and explosives, including detonating cords, detonators, bi-directional boosters and shaped charges, and seismic related explosives and accessories. Due to the AMK sale in 2014, the operating results of AMK have been classified as discontinued operations in all periods presented. All prior periods segment disclosures have been conformed to the 2015 presentation. Refer to Note 9 "Discontinued Operations" for further details. The accounting policies of all of the segments are the same as those described in the summary of significant accounting policies included herein and in our Annual Report on Form 10-K for the year ended December 31, 2014 . Our reportable segments are separately managed strategic business units that offer different products and services. Each segment’s products are marketed to different customer types and require different manufacturing processes and technologies. Segment information is presented for the three and six months ended June 30, 2015 and 2014 as follows: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Net sales: NobelClad $ 21,449 $ 26,231 $ 45,393 $ 50,795 DynaEnergetics 23,292 25,680 40,167 47,885 Consolidated net sales $ 44,741 $ 51,911 $ 85,560 $ 98,680 Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Income before income taxes: NobelClad $ 986 $ 3,152 $ 2,807 $ 4,442 DynaEnergetics 1,247 3,139 453 7,279 Segment operating income 2,233 6,291 3,260 11,721 Unallocated corporate expenses (1,449 ) (1,490 ) (4,465 ) (3,119 ) Stock-based compensation (847 ) (1,024 ) (2,084 ) (1,741 ) Other income (expense) 40 332 1,164 (103 ) Interest expense (263 ) (174 ) (445 ) (283 ) Interest income 1 1 4 5 Income (loss) before income taxes and discontinued operations $ (285 ) $ 3,936 $ (2,566 ) $ 6,480 Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Depreciation and amortization: NobelClad $ 944 $ 1,682 $ 2,101 $ 3,414 DynaEnergetics 1,567 1,689 3,082 3,197 Segment depreciation and amortization $ 2,511 $ 3,371 $ 5,183 $ 6,611 During the three and six months ended June 30, 2015 and 2014, no one customer accounted for more than 10% of total net sales. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On October 1, 2014, DMC completed the sale of its AMK business. The net proceeds were $6,830 , after final purchase price adjustments. We received $4,330 in cash consideration at closing and a $2,500 90 -day secured promissory note, which was paid in full by December 31, 2014. The excess of the selling price over the carrying value of $1,476 was recorded in our Statement of Operations in the fourth quarter 2014. The operating results of AMK have been classified as discontinued operations in all periods presented. Operating results of the discontinued operations (formerly included with DynaEnergetics in the Oilfield Products segment) for the three months ended June 30, 2014 included net sales of $1,707 and income from discontinued operations of $219 , net of tax of $91 . Operating results of the discontinued operations for the six months ended June 30, 2014 included net sales of $2,977 and a loss from discontinued operations of $97 , net of tax of $15 . |
RESTRUCTURING
RESTRUCTURING | 6 Months Ended |
Jun. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING NobelClad Restructuring In October 2014, we signed an agreement to purchase a manufacturing facility in Liebenscheid, Germany and completed the purchase in November 2014. The facility significantly enhances NobelClad’s manufacturing capabilities and its ability to serve customers throughout Europe, the Middle East and Africa. The plant became operational in the second quarter of 2015. In October 2014, management announced a plan to restructure its NobelClad European operations. Clad metal plate production is being shifted from facilities in both Rivesaltes, France and Wurgendorf, Germany to the new manufacturing facility in Liebenscheid, Germany. NobelClad's Rivesaltes plant will continue to produce transition joints with a reduced workforce while the Wurgendorf site was closed and its workers were transferred to the new facility. We incurred pretax restructuring and impairment charges of $6,781 in the fourth quarter of 2014, $54 in the first quarter of 2015 and $504 in the second quarter of 2015 related to this program. Restructuring charges associated with this program were substantially complete as of June 30, 2015. DynaEnergetics Restructuring In the first quarter of 2015, we launched several initiatives to enhance DynaEnergetics’ operational efficiencies and align its production and distribution resources with the anticipated demands of the market. In January 2015, we closed two North American distribution centers. On February 24, 2015, we announced the closure of a perforating gun manufacturing facility and distribution center in Edmonton, Alberta. In the second quarter of 2015, North America perforating gun manufacturing was consolidated into DynaEnergetics' existing facility in Whitney, Texas. We also exited multiple other distribution centers in North America and Colombia. The Colombia market is now being served directly from our existing facilities in Texas. Two new centralized distribution centers are replacing the smaller and less efficient distribution centers that were closed. We incurred pretax restructuring and impairment charges of $382 in the first quarter of 2015 and $612 in the second quarter of 2015 related to these programs. Restructuring charges associated with these programs were substantially complete as of June 30, 2015. Corporate Restructuring In the first quarter of 2015, we eliminated certain positions in our corporate office. We incurred restructuring charges of approximately $1,560 in the first quarter of 2015 associated with severance and expense related to the acceleration of unvested stock awards. Additionally, two of the nine members of our board of directors did not stand for re-election at our Annual meeting in May 2015, and we will continue with a seven -member board. Total restructuring and impairment charges incurred to date for these programs are as follows and are reported in the “Restructuring expenses” line item in our consolidated statement of operations: Three months ended June 30, 2015 Severance Asset Impairment Contract Termination Costs Equipment Moving Costs Other Exit Costs Total NobelClad (42 ) — 29 517 — 504 DynaEnergetics 99 3 244 198 68 612 Corporate — — — — — — Total $ 57 $ 3 $ 273 $ 715 $ 68 $ 1,116 Six months ended June 30, 2015 Severance Asset Impairment Contract Termination Costs Equipment Moving Costs Other Exit Costs Total NobelClad (3 ) — 40 517 4 558 DynaEnergetics 245 205 244 230 70 994 Corporate 1,560 — — — — 1,560 Total $ 1,802 $ 205 $ 284 $ 747 $ 74 $ 3,112 The changes to the restructuring liability associated with these programs is summarized below: Balance at December 31, 2014 Expense Payments Currency Adjustments Balance at June 30, 2015 Severance 2,406 1,289 (3,353 ) (218 ) 124 Contract termination costs 44 284 (80 ) (5 ) 243 Equipment moving costs — 747 (500 ) 1 248 Other exit costs 36 74 (81 ) (3 ) 26 Total $ 2,486 $ 2,394 $ (4,014 ) $ (225 ) $ 641 |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES The Company records an accrual for contingent liabilities when a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued. When no amount within a range of loss appears to be a better estimate than any other amount, the lowest amount in the range is accrued. As of June 30, 2015 and through the date of this filing we had no known pending or threatened litigation that we expect would have a material impact on our financial statements. In June 2015, U.S. Customs and Border Protection (“U.S. Customs”) sent us a Notice of Action that proposed to classify certain of our imports as subject to anti-dumping duties pursuant to a 2010 anti-dumping duty (“AD”) order on Oil Country Tubular Goods (“OCTG”) from China. A companion countervailing duty (“CVD”) order on the same product is in effect as well. The Notice of Action covered one entry of certain raw material steel mechanical tubing made in China and imported into the U.S. from Canada by our DynaEnergetics segment during 2015 for use in manufacturing perforating guns. In July 2015, we sent a response to U.S. Customs outlining the reasons our mechanical tubing imports do not fall within the scope of the AD order on OCTG from China and should not be subject to anti-dumping duties. Since then U.S. Customs has proposed to take similar action with respect to other recent entries of this product and has requested an approximately $1,100 cash deposit or bond for AD/CVD duties. The estimated AD/CVD duties cash deposit or bond would be held by U.S. Customs until future administrative proceedings determine whether actual, final AD/CVD duties should be assessed. We continue to believe these imports are not subject to the proposed duties and are defending these actions. In the interim, we will make AD/CVD cash deposits or post a bond of approximately $1,100 to U.S. Customs in the third quarter of 2015, pending the outcome of this matter. As of June 30, 2015 and through the date of this filing, we have not recorded a liability related to this matter as a loss is neither probable nor estimable. |
SIGNIFICANT ACCOUNTING POLICI19
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Dynamic Materials Corporation (“DMC”) and its controlled subsidiaries. Only subsidiaries in which controlling interests are maintained are consolidated. All significant intercompany accounts, profits, and transactions have been eliminated in consolidation. |
Income Taxes | Income Taxes The effective tax rate for each of the periods reported differs from the U.S. statutory rate due primarily to favorable foreign permanent differences, variation in contribution to consolidated pre-tax income from each jurisdiction for the respective periods and differences between the U.S. and foreign tax rates (which range from 20% to 35% ) on earnings that have been permanently reinvested. We recognize deferred tax assets and liabilities for the expected future income tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. The deferred income tax impact of tax credits are recognized as an immediate adjustment to income tax expense. We recognize deferred tax assets for the expected future effects of all deductible temporary differences to the extent we believe these assets will more likely than not be realized. We record a valuation allowance when, based on current circumstances, it is more likely than not that all or a portion of the deferred tax assets will not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, recent financial operations and their associated valuation allowances, if any. We recognize the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position; the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that is more likely than not of being realized upon ultimate resolution. We recognize interest and penalties related to uncertain tax positions in operating expense. |
Earnings Per Share | Earnings Per Share Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our restricted stock awards (“RSAs”), are considered participating securities for purposes of calculating earnings per share (“EPS”) and require the use of the two class method for calculating EPS. Under this method, a portion of net income is allocated to these participating securities and therefore is excluded from the calculation of EPS allocated to common stock |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash and cash equivalents, trade accounts receivable and payable, accrued expenses and lines of credit approximate their fair value. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2015, the FASB issued an accounting standards update to revise the presentation of debt issuance costs. Under this pronouncement, entities will present debt issuance costs in their balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the deferred debt issuance costs will continue to be included in interest expense. The pronouncement, which is to be applied retrospectively to all prior periods, is effective for fiscal years beginning after December 15, 2015, with early adoption permitted for financial statements that have not been previously issued. In June 2014, the FASB issued an accounting standards update to clarify the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The pronouncement is effective for reporting periods beginning after December 15, 2015. We currently are evaluating the potential impact the adoption of this standard will have on our financial statements. In May 2014, the FASB issued an accounting standards update to clarify the principles of recognizing revenue and to develop a common revenue standard and disclosure requirements for U.S. GAAP and IFRS. The pronouncement is effective for reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We currently are evaluating the potential impact the adoption of this standard will have on our financial statements. In April 2014, the FASB issued an accounting standards update which changes the criteria for determining which disposal transactions can be presented as discontinued operations and modifies related disclosure requirements. The pronouncement is effective for reporting periods beginning after December 15, 2014, however, early adoption is permitted. Any future disposal transaction will be accounted for under this standard. |
Inventories | Inventories are stated at the lower-of-cost (first-in, first-out) or market value. Cost elements included in inventory are material, labor, subcontract costs, and manufacturing overhead. As necessary, we record provisions and maintain reserves for excess, slow moving and obsolete inventory. To determine reserve amounts, we regularly review inventory quantities on hand and values, and compare them to estimates of future product demand, market conditions, production requirements and technological developments. |
Customer Advances | On occasion, we require customers to make advance payments prior to the shipment of goods in order to help finance our inventory investment on large orders or to keep customers’ credit limits at acceptable levels. |
SIGNIFICANT ACCOUNTING POLICI20
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of computation and reconciliation of earnings per common share | Computation and reconciliation of earnings per common share are as follows: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Numerator: Income (loss) from continuing operations $ (1,319 ) $ 2,097 $ (3,696 ) $ 3,900 Less income allocated to RSAs — (49 ) — (80 ) Income (loss) from continuing operations allocated to common stock for EPS calculation (1,319 ) 2,048 (3,696 ) 3,820 Income (loss) from discontinued operations — 219 — (97 ) Net income (loss) allocated to common stock for EPS calculation $ (1,319 ) $ 2,267 $ (3,696 ) $ 3,723 Denominator: Weighted average common shares outstanding - basic 13,906,993 13,672,457 13,900,499 13,668,223 Dilutive stock-based compensation plans — 5,454 — 5,584 Weighted average common shares outstanding - diluted 13,906,993 13,677,911 13,900,499 13,673,807 Income (loss) per share - Basic: Continuing operations $ (0.10 ) $ 0.15 $ (0.27 ) $ 0.28 Discontinued operations — 0.02 — (0.01 ) Net income (loss) allocated to common stock for EPS calculation $ (0.10 ) $ 0.17 $ (0.27 ) $ 0.27 Income (loss) per share - Diluted: Continuing operations $ (0.10 ) $ 0.15 $ (0.27 ) $ 0.28 Discontinued operations — 0.02 — (0.01 ) Net income (loss) allocated to common stock for EPS calculation $ (0.10 ) $ 0.17 $ (0.27 ) $ 0.27 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of components of inventory | Inventories consist of the following at June 30, 2015 and December 31, 2014 and include reserves of $3,036 and $3,117 , respectively: June 30, December 31, Raw materials $ 15,188 $ 15,208 Work-in-process 12,047 11,528 Finished goods 15,463 12,782 Supplies 529 583 $ 43,227 $ 40,101 |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill Disclosure [Abstract] | |
Schedule of changes to the carrying amount of goodwill | The changes to the carrying amount of goodwill during the period are summarized below: NobelClad DynaEnergetics Total Goodwill balance at December 31, 2014 $ 19,418 $ 13,344 $ 32,762 Adjustment due to recognition of tax benefit of tax amortization of certain goodwill (147 ) (258 ) (405 ) Adjustment due to exchange rate differences (1,620 ) (1,163 ) (2,783 ) Goodwill balance at June 30, 2015 $ 17,651 $ 11,923 $ 29,574 |
PURCHASED INTANGIBLE ASSETS (Ta
PURCHASED INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Purchased Intangible Assets Disclosure [Abstract] | |
Schedule of details of purchased intangible assets, other than goodwill | The following table presents details of our purchased intangible assets, other than goodwill, as of June 30, 2015 : Gross Accumulated Amortization Net Core technology $ 18,872 $ (7,195 ) $ 11,677 Customer relationships 37,794 (26,859 ) 10,935 Trademarks / Trade names 2,022 (1,644 ) 378 Total intangible assets $ 58,688 $ (35,698 ) $ 22,990 The following table presents details of our purchased intangible assets, other than goodwill, as of December 31, 2014 : Gross Accumulated Amortization Net Core technology $ 20,667 $ (7,360 ) $ 13,307 Customer relationships 40,195 (27,270 ) 12,925 Trademarks / Trade names 2,216 (1,714 ) 502 Total intangible assets $ 63,078 $ (36,344 ) $ 26,734 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of lines of credit | Lines of credit consisted of the following at June 30, 2015 and December 31, 2014 : June 30, December 31, Syndicated credit agreement: U.S. Dollar revolving loan $ 26,500 $ 19,500 Euro revolving loan 7,211 3,282 Long-term lines of credit $ 33,711 $ 22,782 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of segment information | Segment information is presented for the three and six months ended June 30, 2015 and 2014 as follows: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Net sales: NobelClad $ 21,449 $ 26,231 $ 45,393 $ 50,795 DynaEnergetics 23,292 25,680 40,167 47,885 Consolidated net sales $ 44,741 $ 51,911 $ 85,560 $ 98,680 Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Income before income taxes: NobelClad $ 986 $ 3,152 $ 2,807 $ 4,442 DynaEnergetics 1,247 3,139 453 7,279 Segment operating income 2,233 6,291 3,260 11,721 Unallocated corporate expenses (1,449 ) (1,490 ) (4,465 ) (3,119 ) Stock-based compensation (847 ) (1,024 ) (2,084 ) (1,741 ) Other income (expense) 40 332 1,164 (103 ) Interest expense (263 ) (174 ) (445 ) (283 ) Interest income 1 1 4 5 Income (loss) before income taxes and discontinued operations $ (285 ) $ 3,936 $ (2,566 ) $ 6,480 Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Depreciation and amortization: NobelClad $ 944 $ 1,682 $ 2,101 $ 3,414 DynaEnergetics 1,567 1,689 3,082 3,197 Segment depreciation and amortization $ 2,511 $ 3,371 $ 5,183 $ 6,611 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring and impairment charges | Total restructuring and impairment charges incurred to date for these programs are as follows and are reported in the “Restructuring expenses” line item in our consolidated statement of operations: Three months ended June 30, 2015 Severance Asset Impairment Contract Termination Costs Equipment Moving Costs Other Exit Costs Total NobelClad (42 ) — 29 517 — 504 DynaEnergetics 99 3 244 198 68 612 Corporate — — — — — — Total $ 57 $ 3 $ 273 $ 715 $ 68 $ 1,116 Six months ended June 30, 2015 Severance Asset Impairment Contract Termination Costs Equipment Moving Costs Other Exit Costs Total NobelClad (3 ) — 40 517 4 558 DynaEnergetics 245 205 244 230 70 994 Corporate 1,560 — — — — 1,560 Total $ 1,802 $ 205 $ 284 $ 747 $ 74 $ 3,112 |
Schedule of changes to the restructuring liability | The changes to the restructuring liability associated with these programs is summarized below: Balance at December 31, 2014 Expense Payments Currency Adjustments Balance at June 30, 2015 Severance 2,406 1,289 (3,353 ) (218 ) 124 Contract termination costs 44 284 (80 ) (5 ) 243 Equipment moving costs — 747 (500 ) 1 248 Other exit costs 36 74 (81 ) (3 ) 26 Total $ 2,486 $ 2,394 $ (4,014 ) $ (225 ) $ 641 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | 1 Months Ended | ||
May. 31, 2015board_member | Jan. 31, 2015Facility | Jun. 30, 2015board_member | |
Restructuring Cost and Reserve [Line Items] | |||
Number of members of board of directors not standing for re-election | 2 | ||
Number of members of board of directors | 9 | 7 | |
DynaEnergetics | |||
Restructuring Cost and Reserve [Line Items] | |||
Number of distribution centers closed | Facility | 2 | ||
Number of new centralized distribution centers to replace closed distribution centers | Facility | 2 |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Taxes | ||||
Income tax rate, low end | 20.00% | |||
Income tax rate, high end | 35.00% | |||
Numerator: | ||||
Income (loss) from continuing operations | $ (1,319) | $ 2,097 | $ (3,696) | $ 3,900 |
Less income allocated to RSAs | 0 | (49) | 0 | (80) |
Income (loss) from continuing operations allocated to common stock for EPS calculation | (1,319) | 2,048 | (3,696) | 3,820 |
Income (loss) from discontinued operations | 0 | 219 | 0 | (97) |
Net income (loss) allocated to common stock for EPS calculation | $ (1,319) | $ 2,267 | $ (3,696) | $ 3,723 |
Denominator: | ||||
Weighted average common shares outstanding - basic (in shares) | 13,906,993 | 13,672,457 | 13,900,499 | 13,668,223 |
Dilutive stock-based compensation plans (in shares) | 0 | 5,454 | 0 | 5,584 |
Weighted average common shares outstanding - diluted (in shares) | 13,906,993 | 13,677,911 | 13,900,499 | 13,673,807 |
Income (loss) per share - Basic: | ||||
Continuing operations (in dollars per share) | $ (0.10) | $ 0.15 | $ (0.27) | $ 0.28 |
Discontinued operations (in dollars per share) | 0 | 0.02 | 0 | (0.01) |
Net income (loss) (in dollars per share) | (0.10) | 0.17 | (0.27) | 0.27 |
Income (loss) per share - Diluted: | ||||
Continuing operations (in dollars per share) | (0.10) | 0.15 | (0.27) | 0.28 |
Discontinued operations (in dollars per share) | 0 | 0.02 | 0 | (0.01) |
Net income (loss) (in dollars per share) | $ (0.10) | $ 0.17 | $ (0.27) | $ 0.27 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Inventory valuation reserves | $ 3,036 | $ 3,117 |
Inventories | ||
Raw materials | 15,188 | 15,208 |
Work-in-process | 12,047 | 11,528 |
Finished goods | 15,463 | 12,782 |
Supplies | 529 | 583 |
Total inventory | $ 43,227 | $ 40,101 |
GOODWILL (Details)
GOODWILL (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Changes to the carrying amount of goodwill | |
Goodwill balance at the beginning of the period | $ 32,762 |
Adjustment due to recognition of tax benefit of tax amortization of certain goodwill | (405) |
Adjustment due to exchange rate differences | (2,783) |
Goodwill balance at the end of the period | 29,574 |
Operating Segments | NobelClad | |
Changes to the carrying amount of goodwill | |
Goodwill balance at the beginning of the period | 19,418 |
Adjustment due to recognition of tax benefit of tax amortization of certain goodwill | (147) |
Adjustment due to exchange rate differences | (1,620) |
Goodwill balance at the end of the period | 17,651 |
Operating Segments | DynaEnergetics | |
Changes to the carrying amount of goodwill | |
Goodwill balance at the beginning of the period | 13,344 |
Adjustment due to recognition of tax benefit of tax amortization of certain goodwill | (258) |
Adjustment due to exchange rate differences | (1,163) |
Goodwill balance at the end of the period | $ 11,923 |
PURCHASED INTANGIBLE ASSETS (De
PURCHASED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Purchased intangible assets | ||
Gross | $ 58,688 | $ 63,078 |
Accumulated Amortization | (35,698) | (36,344) |
Net | 22,990 | 26,734 |
Core technology | ||
Purchased intangible assets | ||
Gross | 18,872 | 20,667 |
Accumulated Amortization | (7,195) | (7,360) |
Net | 11,677 | 13,307 |
Customer relationships | ||
Purchased intangible assets | ||
Gross | 37,794 | 40,195 |
Accumulated Amortization | (26,859) | (27,270) |
Net | 10,935 | 12,925 |
Trademarks / Trade names | ||
Purchased intangible assets | ||
Gross | 2,022 | 2,216 |
Accumulated Amortization | (1,644) | (1,714) |
Net | $ 378 | $ 502 |
CUSTOMER ADVANCES (Details)
CUSTOMER ADVANCES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Customer Advances Disclosure [Abstract] | ||
Customer advances | $ 1,094 | $ 3,510 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - Feb. 23, 2015 - Credit Facility - USD ($) | Total |
Syndicated Credit Facility 2015 [Member] | |
Debt Instrument [Line Items] | |
Term | 5 years |
Maximum borrowing capacity | $ 150,000,000 |
Percentage of principal due in each of years one and two | 10.00% |
Percentage of principal due in each of years three and four | 20.00% |
Percentage of principal due in year five | 30.00% |
Accordion feature | $ 100,000,000 |
Syndicated Credit Facility 2015 [Member] | Minimum | Alternate base rate (ABR) | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 0.25% |
Syndicated Credit Facility 2015 [Member] | Minimum | London Interbank Offered Rate (LIBOR) | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 1.25% |
Syndicated Credit Facility 2015 [Member] | Maximum | Alternate base rate (ABR) | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 1.25% |
Syndicated Credit Facility 2015 [Member] | Maximum | London Interbank Offered Rate (LIBOR) | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 2.25% |
U.S. Dollar revolving loan | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 90,000,000 |
Alternate currencies revolving loan | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 10,000,000 |
Alternate currencies revolving loan | Minimum | London Interbank Offered Rate (LIBOR) | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 1.25% |
Alternate currencies revolving loan | Minimum | Canadian Dealer Offered Rate (CDOR) | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 1.25% |
Alternate currencies revolving loan | Minimum | Canadian Prime Rate | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 0.25% |
Alternate currencies revolving loan | Minimum | Euro Interbank Offered Rate (EURIBOR) | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 1.25% |
Alternate currencies revolving loan | Maximum | London Interbank Offered Rate (LIBOR) | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 2.25% |
Alternate currencies revolving loan | Maximum | Canadian Dealer Offered Rate (CDOR) | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 2.25% |
Alternate currencies revolving loan | Maximum | Canadian Prime Rate | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 1.25% |
Alternate currencies revolving loan | Maximum | Euro Interbank Offered Rate (EURIBOR) | |
Debt Instrument [Line Items] | |
Basis spread on variable interest rate | 2.25% |
US dollar term loan facility | |
Debt Instrument [Line Items] | |
Term | 364 days |
Maximum borrowing capacity | $ 50,000,000 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Lines of credit | ||
Long-term lines of credit | $ 33,711 | $ 22,782 |
Euro revolving loan | ||
Lines of credit | ||
Long-term lines of credit | 7,211 | 3,282 |
Credit Facility | U.S. Dollar revolving loan | ||
Lines of credit | ||
Long-term lines of credit | $ 26,500 | $ 19,500 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($)Customer | Jun. 30, 2014USD ($)Customer | Jun. 30, 2015USD ($)SegmentCustomer | Jun. 30, 2014USD ($)Customer | |
Segment information | ||||
Number of segments | Segment | 2 | |||
Consolidated net sales | $ 44,741 | $ 51,911 | $ 85,560 | $ 98,680 |
Segment operating income | (63) | 3,777 | (3,289) | 6,861 |
Unallocated corporate expenses | (1,449) | (1,490) | (4,465) | (3,119) |
Stock-based compensation | (847) | (1,024) | (2,084) | (1,741) |
Other income (expense) | 40 | 332 | 1,164 | (103) |
Interest expense | (263) | (174) | (445) | (283) |
Interest income | 1 | 1 | 4 | 5 |
Income (loss) before income taxes and discontinued operations | $ (285) | $ 3,936 | $ (2,566) | $ 6,480 |
Customer concentration risk | Net sales | ||||
Segment information | ||||
Number of customers representing greater than 10% of total net sales | Customer | 0 | 0 | 0 | 0 |
Operating Segments | ||||
Segment information | ||||
Consolidated net sales | $ 44,741 | $ 51,911 | $ 85,560 | $ 98,680 |
Segment operating income | 2,233 | 6,291 | 3,260 | 11,721 |
Depreciation and amortization | 2,511 | 3,371 | 5,183 | 6,611 |
NobelClad | Operating Segments | ||||
Segment information | ||||
Consolidated net sales | 21,449 | 26,231 | 45,393 | 50,795 |
Segment operating income | 986 | 3,152 | 2,807 | 4,442 |
Depreciation and amortization | 944 | 1,682 | 2,101 | 3,414 |
DynaEnergetics | Operating Segments | ||||
Segment information | ||||
Consolidated net sales | 23,292 | 25,680 | 40,167 | 47,885 |
Segment operating income | 1,247 | 3,139 | 453 | 7,279 |
Depreciation and amortization | $ 1,567 | $ 1,689 | $ 3,082 | $ 3,197 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands | Oct. 01, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||||
Income (loss) from operations, net of tax | $ 0 | $ 219 | $ 0 | $ (97) | ||
AMK Technical Services | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sales price | $ 6,830 | |||||
Cash consideration | 4,330 | |||||
Note receivable | $ 2,500 | |||||
Note receivable, term | 90 days | |||||
Gain on sale of business | $ 1,476 | |||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||||
Net sales | 1,707 | 2,977 | ||||
Income (loss) from operations, net of tax | 219 | (97) | ||||
Tax provision | $ (91) | $ 15 |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
May. 31, 2015board_member | Jan. 31, 2015Facility | Jun. 30, 2015USD ($)board_member | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)board_member | Jun. 30, 2014USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring and impairment charges | $ 1,116 | $ 0 | $ 3,112 | $ 0 | ||||
Number of members of board of directors not standing for re-election | board_member | 2 | |||||||
Number of members of board of directors | board_member | 9 | 7 | 7 | |||||
NobelClad | Facility closing | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring and impairment charges | $ 504 | $ 54 | $ 6,781 | |||||
DynaEnergetics | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Number of distribution centers closed | Facility | 2 | |||||||
Number of new centralized distribution centers to replace closed distribution centers | Facility | 2 | |||||||
DynaEnergetics | Facility closing | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring and impairment charges | $ 612 | 382 | ||||||
Corporate | Severance | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring and impairment charges | $ 1,560 |
RESTRUCTURING - Schedule of Res
RESTRUCTURING - Schedule of Restructuring Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total | $ 1,116 | $ 0 | $ 3,112 | $ 0 |
Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 1,116 | 3,112 | ||
Severance | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 57 | 1,802 | ||
Asset Impairment | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 3 | 205 | ||
Contract Termination Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 273 | 284 | ||
Equipment Moving Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 715 | 747 | ||
Other Exit Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 68 | 74 | ||
Operating Segments | NobelClad | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 504 | 558 | ||
Operating Segments | NobelClad | Severance | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | (42) | (3) | ||
Operating Segments | NobelClad | Asset Impairment | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 0 | 0 | ||
Operating Segments | NobelClad | Contract Termination Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 29 | 40 | ||
Operating Segments | NobelClad | Equipment Moving Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 517 | 517 | ||
Operating Segments | NobelClad | Other Exit Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 0 | 4 | ||
Operating Segments | DynaEnergetics | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 612 | 994 | ||
Operating Segments | DynaEnergetics | Severance | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 99 | 245 | ||
Operating Segments | DynaEnergetics | Asset Impairment | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 3 | 205 | ||
Operating Segments | DynaEnergetics | Contract Termination Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 244 | 244 | ||
Operating Segments | DynaEnergetics | Equipment Moving Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 198 | 230 | ||
Operating Segments | DynaEnergetics | Other Exit Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 68 | 70 | ||
Corporate, Non-Segment | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 0 | 1,560 | ||
Corporate, Non-Segment | Severance | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 0 | 1,560 | ||
Corporate, Non-Segment | Asset Impairment | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 0 | 0 | ||
Corporate, Non-Segment | Contract Termination Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 0 | 0 | ||
Corporate, Non-Segment | Equipment Moving Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 0 | 0 | ||
Corporate, Non-Segment | Other Exit Costs | Restructuring expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | $ 0 | $ 0 |
RESTRUCTURING - Rollforward of
RESTRUCTURING - Rollforward of Restructuring Reserve (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance | $ 2,486 |
Expense | 2,394 |
Payments | (4,014) |
Currency Adjustments | (225) |
Balance | 641 |
Severance | |
Restructuring Reserve [Roll Forward] | |
Balance | 2,406 |
Expense | 1,289 |
Payments | (3,353) |
Currency Adjustments | (218) |
Balance | 124 |
Contract termination costs | |
Restructuring Reserve [Roll Forward] | |
Balance | 44 |
Expense | 284 |
Payments | (80) |
Currency Adjustments | (5) |
Balance | 243 |
Equipment moving costs | |
Restructuring Reserve [Roll Forward] | |
Balance | 0 |
Expense | 747 |
Payments | (500) |
Currency Adjustments | 1 |
Balance | 248 |
Other exit costs | |
Restructuring Reserve [Roll Forward] | |
Balance | 36 |
Expense | 74 |
Payments | (81) |
Currency Adjustments | (3) |
Balance | $ 26 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) - US Customs Notice of Action - Unfavorable Regulatory Action - Threatened Litigation - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Jul. 28, 2015 | |
Scenario, Forecast | ||
Loss Contingencies [Line Items] | ||
AD/CVD cash deposits to be remitted or bond posted | $ 1,100 | |
Subsequent Event | ||
Loss Contingencies [Line Items] | ||
Requested payment of AD/CVD cash deposits | $ 1,100 |