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FOR IMMEDIATE RELEASE CONTACT:
April 26, 2007 Pfeiffer High Investor Relations, Inc.
Geoff High
303-393-7044
DYNAMIC MATERIALS REPORTS FIRST QUARTER FINANCIAL RESULTS
Selected Highlights
o Q1 net income totals $4.9 million, or $0.40 per diluted share
o Q1 sales increase 31% to $33.1 million versus comparable 2006 quarter
o Backlog for Explosive Metalworking remains near all-time high at $67.9 million
BOULDER, Colo. - April 26, 2007 - Dynamic Materials Corporation (DMC) (Nasdaq:
BOOM), a leading provider of explosion-welded clad metal plates, today reported
financial results for its first quarter ended March 31, 2007.
Sales increased 31% to $33.1 million from sales of $25.2 million in the first
quarter last year. Gross margin was 33% versus 37% in the same quarter a year
ago. The decline in gross margin is attributable to normal quarterly
fluctuations in product mix. First quarter income from operations increased 17%
to $7.5 million versus $6.4 million in the comparable year-ago quarter.
Income from continuing operations increased 18% to $4.9 million, or $0.40 per
diluted share, from $4.1 million, or $0.34 per diluted share in the first
quarter last year. Net income was $4.9 million, or $0.40 per diluted share,
versus net income of $5.5 million, or $0.45 per diluted share, in the first
quarter a year ago. Last year's first quarter net income included a gain from
discontinued operations of $1.4 million, or $0.11 per diluted share, net of tax,
attributable to the sale of a real estate purchase option.
Explosive Metalworking
First quarter sales at the company's Explosive Metalworking segment increased
30% to $31.5 million from $24.2 million in the first quarter last year.
Operating income increased 13% to $7.5 million from $6.7 million in last year's
first quarter. Order backlog at the end of the first quarter was $67.9 million,
down slightly from the all-time high $68.8 million reported at the end of last
year's fourth quarter.
AMK Welding
Sales at DMC's AMK Welding segment increased 60% to $1.6 million versus sales of
$1.0 million in the first quarter last year. Operating income increased 144% to
$264,000 versus $108,000 reported in the comparable year-ago quarter.
Management Commentary
Yvon Cariou, president and chief executive officer, said, "Our first quarter
financial results were stronger than expected thanks to the convergence of
several positive developments. Late in the quarter, we received
earlier-than-anticipated deliveries of select source metals at our Mt. Braddock,
Pennsylvania facility, and our team responded with a tremendous effort and many
long hours to move these metals through production. In addition, we were able to
utilize some of the
new equipment we have been bringing on-line at Mt. Braddock as part of our
capacity expansion program.
"We expect that the new capacity at our U.S. facilities will be largely
operational by the end of the current quarter, and we are pleased by the
progress being made on the modernization of our production sites in France and
Sweden," Cariou added. "Although we expect to see ongoing tightness in the metal
supply chain, we remain encouraged by the continued strong demand we are
experiencing from across all of our global target markets."
Rick Santa, chief financial officer, said, "We previously indicated that the
last three quarters of fiscal 2007 could be stronger than the first quarter,
which we believed would be impacted by metal supply issues. Given our
better-than-expected Q1 performance, we now believe that our second quarter
results will likely be comparable to those of the first. For the full fiscal
year, we are reiterating our forecast of year-over-year top-line growth in the
20 percent range."
Conference call information
Management will hold a conference call to discuss first 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 866-510-0710 (617-597-5378 for international callers) and
entering the passcode 81853317. 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 May 3, 2007, by calling 888-286-8010 (617-801-6888 for
international callers) and entering the passcode 42763833.
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.
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.
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DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
(Dollars in Thousands, Except Share Data)
(unaudited)
Three months ended
March 31,
----------------- -----------------
2007 2006
----------------- -----------------
NET SALES $ 33,094 $ 25,175
COST OF PRODUCTS SOLD 22,243 15,894
----------------- -----------------
Gross profit 10,851 9,281
----------------- -----------------
COSTS AND EXPENSES:
General and administrative expenses 1,662 1,527
Selling expenses 1,647 1,324
----------------- -----------------
Total costs and expenses 3,309 2,851
----------------- -----------------
INCOME FROM OPERATIONS OF CONTINUING OPERATIONS 7,542 6,430
OTHER INCOME (EXPENSE):
Interest income, net 188 94
Other income (expense), net (7) (6)
----------------- -----------------
INCOME BEFORE INCOME TAXES AND
DISCONTINUED OPERATIONS 7,723 6,518
INCOME TAX PROVISION 2,841 2,379
----------------- -----------------
INCOME FROM CONTINUING OPERATIONS 4,882 4,139
INCOME FROM DISCONTINUED OPERATIONS, net of tax - 1,357
----------------- -----------------
NET INCOME $ 4,882 $ 5,496
================= =================
INCOME PER SHARE - BASIC:
Continuing operations $ 0.41 $ 0.35
Discontinued operations - 0.12
----------------- -----------------
Net income $ 0.41 $ 0.47
================= =================
INCOME PER SHARE - DILUTED:
Continuing operations $ 0.40 $ 0.34
Discontinued operations - 0.11
----------------- -----------------
Net income $ 0.40 $ 0.45
================= =================
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING -
Basic 12,009,577 11,768,098
================= =================
Diluted 12,222,601 12,217,547
================= =================
ANNUAL DIVIDENDS DECLARED PER COMMON SHARE $ - $ 0.15
================= =================
DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
ASSETS March 31, December 31,
2007 2006
(unaudited)
----------------- ------------------
Cash and cash equivalents $ 19,779 $ 17,886
Restricted cash - 3,059
Accounts receivable, net 20,999 21,549
Inventories 21,723 19,226
Other current assets 2,114 2,127
----------------- ------------------
Total current assets 64,615 63,847
Property, plant and equipment, net 23,145 20,260
Other long-term assets 862 866
----------------- ------------------
Total assets $ 88,622 $ 84,973
================= ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 11,552 $ 13,572
Accrued income taxes 3,909 1,892
Customer advances 2,369 2,394
Other current liabilities 5,335 7,057
Current portion of long-term debt 386 382
----------------- ------------------
Total current liabilities 23,551 25,297
Long-term debt 386 382
Other long-term liabilities 1,660 1,714
Stockholders' equity 63,025 57,580
----------------- ------------------
Total liabilities and stockholders' equity $ 88,622 $ 84,973
================= ==================
DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
(Dollars in Thousands)
(unaudited)
2007 2006
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,882 $ 5,496
Adjustments to reconcile net income to net cash
provided by operating activities -
Income from discontinued operations, net of tax - (1,357)
Depreciation 395 317
Amortization of capitalized debt issuance costs - 7
Stock-based compensation 224 336
Provision for deferred income taxes (46) 320
Change in working capital, net (622) 1,374
-------------- --------------
Net cash flows provided by operating activities 4,833 6,493
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (3,257) (469)
Sale of marketable securities - 1,950
Loan to related party - (1,206)
Change in other non-current assets - 79
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 (3,257) 2,554
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on lines of credit, net - (45)
Payments on long-term debt - (45)
Payment of dividends - (1,766)
Net proceeds from issuance of common stock 278 74
Tax benefit related to stock options - 54
Other cash flows from financing activities 5 7
-------------- --------------
Net cash flows used in financing activities 283 (1,721)
-------------- --------------
EFFECTS OF EXCHANGE RATES ON CASH 34 25
-------------- --------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,893 7,351
CASH AND CASH EQUIVALENTS, beginning of the period 17,886 5,763
-------------- --------------
CASH AND CASH EQUIVALENTS, end of the period $ 19,779 $ 13,114
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