SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 1, 1998
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Dynamic Materials Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-8328 84-0608431
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(State or other jurisdiction (Commission (IRS Employee
of incorporation) File Number) Identification No.)
551 Aspen Ridge Drive, Lafayette, CO 80026
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 665-5700
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(Former name or former address, if changed since last report)
EXHIBIT INDEX APPEARS ON PAGE 4
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 1, 1998, the Registrant acquired certain assets of Precision
Machined Products, Inc. ("PMP"). The assets acquired were used by PMP in the
manufacturing, selling and marketing of extremely high precision, complex
machined parts used in the aerospace, satellite, medical equipment and high
technology industries (the "Business"). The Registrant anticipates using the
assets acquired for similar purposes. The assets acquired consisted principally
of inventory, accounts receivable, machinery, equipment (including computer
equipment), and certain trade names used in the Business, as well as a lease of
the facilities at which the Business is conducted.
The purchase price of $7,015,680 was paid by the delivery of $6,800,000 in
cash and the delivery of 40,000 shares of the Registrant's Common Stock valued
at $5.392 per share or the average closing price of the Registrant's Common
Stock over the 15 day period immediately preceding the closing. The purchase
price is subject to post-closing adjustment based upon subsequent accounting
adjustments for inventory, accounts receivable and assumed liabilities. The
amount of the post-closing adjustment (to be determined within 60 days of
closing) is not anticipated to be material. In addition, the Registrant paid
$2,000 at the closing for an exclusive option to purchase the real property at
which the operations of the Business are conducted at a purchase price equal to
the fair market value at the date of the option is exercised (subject to certain
adjustments), which option may be exercised under certain conditions until
December 1, 2000, during which time the real property may not be sold,
transferred or conveyed without Registrant's consent. The Registrant also paid
$800 at the closing for a right of first offer to purchase the real property at
which the operations of the Business are conducted at a purchase price equal to
the fair market value at the date of the option is exercised (subject to certain
adjustments), which option may be exercised under certain conditions from
December 2, 2000 to December 1, 2008.
There are no material relationships between the directors, officers, or
affiliates of the parties to this transaction.
The source of funds used for the acquisition included $6,800,000 of
borrowing from KeyBank of Colorado under a revolving line of credit made in the
ordinary course of business.
In a related matter, the Registrant announced that it has discontinued its
negotiations with another potential acquisition target with which the Registrant
had signed a letter of intent and the two parties have agreed to terminate their
discussions indefinitely.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of business acquired.
It is not practicable to provide required financial statements at the date
of the Form 8-K. The Registrant shall provide an audited balance sheet as of
December 31, 1997 and an audited statement of income and cash flow for the year
ended December 31, 1997. The indicated financial statements will be filed not
later than 60 days after this report on Form 8-K must be filed.
(b) Pro forma financial information.
In addition, pro forma financial statements complying with Article 11 of
Regulation S-X will be filed not later than 60 days after this report on Form
8-K must be filed.
(c) Exhibits.
2.1 Asset Purchase Agreement, dated as of November 18, 1998, between the
Registrant, Precision Machined Products, Richard B. Bellows and
Michelle L. Bellows.
10.1 Option and Right of First Offer Agreement, dated as of December 1,
1998, between the Registrant and JEA Property, LLC.
10.2 Operating Lease, dated as of December 1, 1998, between the
Registrant and JEA Property, LLC.
99.1 Press release dated December 3, 1998.
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 hereunto duly authorized.
DYNAMIC MATERIALS CORPORATION
(Registrant)
Date December 4, 1998 By: /S/ RICHARD A. SANTA
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Name: Richard A. Santa
Title: Vice President, Finance, Chief
Financial Officer and Secretary
EXHIBIT INDEX
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EXHIBIT
NO. DESCRIPTION
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2.1 Asset Purchase Agreement, dated as of November 18, 1998, between the
Registrant, Precision Machined Products, Inc., Richard B. Bellows
and Michelle L. Bellows.
10.1 Option and Right of First Offer Agreement, dated as of December 1,
1998, between the Registrant and JEA Property, LLC.
10.2 Operating Lease, dated as of December 1, 1998, between the
Registrant and JEA Property, LLC.
99.1 Press release dated December 3, 1998.