BOOM DMC Global Inc

Selected Highlights BOULDER, Colo., Feb. 28 /PRNewswire-FirstCall/ -- Dynamic Materials Corporation (DMC) (NASDAQ:BOOM), a leading provider of explosion-welded clad metal plates and associated services, today reported financial results for its fourth quarter and full fiscal year ended December 31, 2005. Fourth quarter sales increased 16% to $23.2 million versus $20.0 million in the fourth quarter last year, and increased 14% from sales of $20.2 million in this year's third quarter. Income from operations increased 67% to $5.2 million versus $3.1 million in last year's fourth quarter. Operating income was up 18% versus the $4.4 million reported in the third quarter. Net income improved 50% to $3.5 million, or $0.28 per diluted share, versus net income of $2.3 million, or $0.20 per diluted share, in the fourth quarter last year. Sequentially, fourth quarter net income increased 10% versus net income of $3.2 million, or $0.26 per diluted share, in this year's third quarter. The earnings-per-share and shares outstanding figures from prior quarters have been adjusted to reflect the company's fourth quarter 2005 two-for-one stock split. Actual shares outstanding at December 31, 2005 was 11,758,920. Explosive Metalworking Fourth quarter sales in the company's Explosive Metalworking segment increased 17% to $22.2 million from $18.9 million in last year's fourth quarter, and were up 16% versus sales of $19.2 million in the third quarter. Operating income increased 77% to $5.1 million from $2.9 million in the comparable period last year, and was up 23% from the $4.1 million reported in the third quarter. The segment ended the quarter with an all-time high order backlog of $42.0 million, up 23% from $34.1 million reported at the end of the third quarter. AMK Welding The company's AMK Welding segment recorded sales of $1.0 million, flat versus sales of $1.0 million in last year's comparable quarter and down slightly from $1.1 million in the prior quarter. Fourth quarter operating income at AMK was $123,000 versus $235,000 in the fourth quarter last year and $258,000 in this year's third quarter. During the fourth quarter, AMK announced it had entered into a five-year supply agreement with a manufacturer of ground-based power turbines. Sales associated with the contract have been impacted by late-stage design modifications. 2005 Full-Year Results For the full fiscal year, sales increased 46% to $79.3 million compared with sales of $54.2 million in 2004. Full-year net income advanced 266% to $10.4 million, or $0.86 per diluted share, versus net income of $2.8 million, or $0.27 per diluted share, during the prior year. Last year's net income was impacted by a loss from discontinued operations of $1.6 million, or $0.14 per diluted share, associated with the company's former Spin Forge division. Full-year sales in the Explosive Metalworking segment were $75.6 million, up 47% versus $51.4 million in 2004. Operating income increased 129% to $15.2 million compared with $6.6 million during the prior year. AMK Welding's full-year sales increased 33% to $3.7 million compared with $2.8 million during 2004. Operating income improved 118% to $608,000 compared with $279,000 in the prior year. Cash, cash equivalents and marketable securities at December 31, 2005, increased to $7.7 million from $2.4 million at the end of 2004. Stockholders' equity increased 74% during the same period to $34.9 million from $20.1 million. Outstanding bank lines of credit and term debt were reduced to $2.8 million from $9.3 million at the end of the prior year. Management Commentary Yvon Cariou, president and CEO, said, "The fourth quarter represented a strong finish to what was a very solid year for Dynamic Materials. Robust order volume during the month of December pushed our year-end order backlog for explosion-welded plates to $42.0 million. This backlog exceeds our previous all-time high by a wide margin and is a clear indication of the demand we are seeing from within our global target markets." Rick Santa, chief financial officer, said the fourth quarter was positively impacted by shipments associated with a $5.3 million order for a nickel hydrometallurgy project in New Caledonia and initial deliveries on the $6.0 million Kuwait Olefins contract announced in August of last year. "Shipments for the New Caledonia project are largely complete, and we expect most of the $1.1 million remaining on the Kuwait order to ship in the first quarter. Deliveries on the recent $7.5 million North American refinery order commenced during January and will continue through the first half of 2006." Capital Expansion The company intends to make significant investments in additional production capacity at both of its divisions in anticipation of continued growth. Cariou said, "Our original 2006 capital expenditures budget of $4.5 million represents a more than 50% increase from what we spent in 2005 and has been augmented by recent board approval to spend up to an additional $8 million on the expansion of our explosion welding facility in Mount Braddock, Pennsylvania. We invested approximately $7.1 million in the original construction of this plant in 1999, so this clearly represents a major expansion initiative. We hope to complete this expansion project during the first half of 2007." Santa said the capital expenditures will be funded with cash flow from operations. "Our strong cash flow performance is allowing us to invest in new capacity while we simultaneously reinforce our balance sheet and increase our annual dividend by 50%." Annual Dividend DMC's board of directors has declared a cash dividend of $0.15 per share. This represents a 50% increase from the dividend paid last year. The dividend will be paid on March 22, 2006 to stockholders of record as of March 10, 2006. About Dynamic Materials Corporation Based in Boulder, Colorado, Dynamic Materials Corporation is a leading international metalworking company. Its products include explosion-welded clad metal plates and other metal fabrications for use in a variety of industries, including petrochemicals, refining, hydrometallurgy, aluminum smelting and shipbuilding. The company operates two business segments: Explosive Metalworking, which uses proprietary explosive processes to fuse dissimilar 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 http://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: the ability to obtain new contracts at attractive prices; the size and timing of customer orders; fluctuations in customer demand; 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 the company's facilities; the availability and cost of funds; and general economic conditions, both domestically and abroad; 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, 2004. DYNAMIC MATERIALS CORPORATION & SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands, Except Per Share Data) (unaudited) Three months ended Twelve months ended December 31, December 31, 2005 2004 2005 2004 NET SALES $23,167 $19,950 $79,291 $54,165 COST OF PRODUCTS SOLD 15,865 14,696 55,856 40,559 Gross profit 7,302 5,254 23,435 13,606 COSTS AND EXPENSES: General and administrative expenses 1,325 1,233 4,051 3,335 Selling expenses 772 912 3,616 3,383 Total costs and expenses 2,097 2,145 7,667 6,718 INCOME FROM OPERATIONS OF CONTINUING OPERATIONS 5,205 3,109 15,768 6,888 OTHER INCOME (EXPENSE): Other income (expense), net (15) 6 (7) 7 Interest expense, net 55 (198) (156) (531) INCOME BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS 5,245 2,917 15,605 6,364 INCOME TAX PROVISION 1,788 619 5,233 1,961 INCOME FROM CONTINUING OPERATIONS BEFORE DISCONTINUED OPERATIONS 3,457 2,298 10,372 4,403 DISCONTINUED OPERATIONS: Loss from operations of discontinued operations, net of tax -- -- -- (783) Loss on sale of discontinued operations, net of tax -- -- -- (787) Loss from discontinued operations -- -- -- (1,570) NET INCOME $3,457 $2,298 $10,372 $2,833 INCOME PER SHARE - BASIC: Continuing operations $0.29 $0.22 $0.92 $0.43 Discontinued operations -- -- -- (0.15) Net Income $0.29 $0.22 $0.92 $0.28 INCOME PER SHARE - DILUTED: Continuing operations $0.28 $0.20 $0.86 $0.41 Discontinued operations -- -- -- (0.14) Net Income $0.28 $0.20 $0.86 $0.27 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - Basic 11,731,186 10,415,530 11,290,053 10,269,080 Diluted 12,186,659 11,378,990 12,086,884 10,968,090 DIVIDENDS DECLARED PER COMMON SHARE $-- $-- $0.10 $-- DYNAMIC MATERIALS CORPORATION & SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2005 AND 2004 (Dollars in Thousands) (unaudited) ASSETS 2005 2004 Cash and cash equivalents $5,763 $2,404 Marketable securities 1,950 -- Accounts receivable, net 15,576 13,936 Inventories 11,869 8,000 Other current assets 1,394 1,906 Total current assets 36,552 26,246 Property, plant and equipment, net 12,572 11,844 Deferred tax asset 2,049 -- Other long-term assets 5,367 5,663 Total assets $56,540 $43,753 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $7,278 $6,041 Other current liabilities 6,987 4,519 Bank lines of credit -- 3,216 Current portion of long-term debt 573 3,186 Total current liabilities 14,838 16,962 Long-term debt 2,221 2,906 Other long-term liabilities 4,526 3,815 Stockholders' equity 34,955 20,070 Total liabilities and stockholders' equity $56,540 $43,753 DYNAMIC MATERIALS CORPORATION & SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 (Dollars in Thousands) (unaudited) 2005 2004 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $10,372 $2,833 Adjustments to reconcile net income to net cash provided by operating activities - Loss from discontinued operations -- 1,570 Depreciation and amortization 1,527 1,387 Amortization of capitalized debt issuance costs 41 79 Provision for deferred income taxes (1,431) 1,181 Tax benefit related to stock options 3,728 311 Change in working capital, net (2,599) (2,817) Net cash flows provided by continuing operations 11,638 4,544 Net cash flows used in discontinued operations -- (1,434) Net cash flows provided by operating activities 11,638 3,110 CASH FLOWS FROM INVESTING ACTIVITIES: Payment received on other receivable 1,016 580 Release of restricted cash from bond proceeds -- 190 Acquisition of property, plant and equipment (2,848) (1,138) Change in other non-current assets 288 (6) Investment in marketable securities (1,950) -- Investing activities of discontinued operations -- (45) Net cash flows used in investing activities (3,494) (419) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings / (repayments) on lines of credit, net (3,291) 1,291 Payments on long-term debt (1,818) (2,813) Payment of dividends (1,155) -- Net proceeds from issuance of common stock 1,555 889 Other cash flows from financing activities 47 (264) Net cash flows used in financing activities (4,662) (897) EFFECTS OF EXCHANGE RATES ON CASH (123) 88 NET INCREASE IN CASH AND CASH EQUIVALENTS 3,359 1,882 CASH AND CASH EQUIVALENTS, beginning of the period 2,404 522 CASH AND CASH EQUIVALENTS, end of the period $5,763 $2,404 DATASOURCE: Dynamic Materials Corporation CONTACT: Geoff High of Pfeiffer High Investor Relations, Inc., +1-303-393-7044, for Dynamic Materials Corporation Web site: http://www.dynamicmaterials.com/

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