Selected Highlights BOULDER, Colo., Nov. 1 /PRNewswire-FirstCall/
-- Dynamic Materials Corporation (DMC) (NASDAQ:BOOM), a leading
provider of explosion-welded clad metal plates, today reported
financial results for its third quarter and nine-month period ended
September 30, 2006. Sales in the third quarter increased 23% to
$24.9 million from $20.2 million in the third quarter last year.
Third quarter sales were below those in this year's second quarter,
which were an all-time quarterly high $27.8 million, and had
benefited from early product deliveries by the Company's Explosive
Metalworking segment on certain orders that were originally
scheduled for shipment in the third quarter. Third quarter gross
margin was 33% versus 31% in the comparable year-ago quarter and
36% in this year's second quarter. Income from operations increased
40% to $6.1 million from $4.4 million in the third quarter last
year. Second quarter income from operations was $7.8 million. Net
income increased 17% to $3.7 million, or $0.30 per diluted share,
from $3.2 million, or $0.26 per diluted share in the third quarter
last year. Second quarter net income was $5.0 million, or $0.41 per
diluted share. Explosive Metalworking Third quarter sales at the
Company's Explosive Metalworking segment increased 23% to $23.5
million from $19.2 million in the third quarter last year. Second
quarter sales were a record $26.6 million, due in part to the early
customer deliveries discussed above. Operating income increased 41%
to $5.8 million from $4.1 million in the comparable year-ago
quarter. Operating income in the second quarter was $7.7 million.
Order backlog at the end of the third quarter was a record $68.5
million, up 31% from the $52.4 million recorded at the end of the
second quarter. AMK Welding Third quarter sales at the Company's
AMK Welding segment increased 28% to $1.3 million versus $1.1
million in the third quarter last year and $1.1 million in this
year's second quarter. Operating income was $391,000, up 52% from
$258,000 reported in the comparable year-ago quarter and an
increase of 220% from the $122,000 reported in this year's second
quarter. Management Commentary "The DMC team delivered the third
strongest quarterly performance in Company history," said Yvon
Cariou, president and chief executive officer. "Our financial
results met our internal forecasts and we achieved
better-than-expected quarterly bookings. In fact, Q3 bookings
established a new single-quarter record. "Our all-time high order
backlog, a deep roster of new contract opportunities and ongoing
capital investments within our global target markets are all
encouraging signs that our prospects for continued growth remain
strong," Cariou added. "We believe our fourth quarter will be
strong given our anticipated high-level of product deliveries
scheduled for the period." Cariou said the $9.6 million expansion
underway at the Company's Mt. Braddock, Pennsylvania production
facility is on schedule and proceeding smoothly. "We are confident
our new production capacity will be online by the end of next
year's second quarter - in time to help facilitate deliveries from
our mounting order backlog. The expansion of our AMK Welding
operations, which are beginning to benefit from increased work on a
major long-term supply agreement, is also on track." Rick Santa,
chief financial officer, said, "Given the expected strength of our
fourth fiscal quarter, we continue to believe our results during
the second half of 2006 will be comparable to those reported during
the first half of the year." "Our balance sheet also showed
increased strength at the end of the third quarter, and included
cash and cash equivalents of $19.2 million," Santa added. "Working
capital has grown by 49% since the beginning of the year, and stood
at $32.4 million on September 30. We are obviously very encouraged
by the growing financial strength of DMC." Nine-Month Results
Through nine months, sales increased 39% to $77.8 million compared
with sales of $56.1 million at the nine-month mark last year. Gross
margin improved to 35% from 29% in the same period last year,
thanks largely to the strong year-to-date sales increases and a
more favorable absorption of fixed manufacturing and overhead
expenses within the Explosive Metalworking segment, which generates
approximately 95% of DMC's total revenue. Income from operations
increased 93% to $20.4 million compared with $10.6 million through
nine months last year. Net income advanced 105% to $14.2 million,
or $1.16 per diluted share, versus net income of $6.9 million, or
$0.58 per diluted share, during the same period a year ago. This
year's nine-month net income figure included a first quarter gain
from discontinued operations of $1.4 million, or $0.11 per share,
net of tax, which was attributable to the sale of a real estate
purchase option associated with the Company's former Spin Forge
division. DMC's Explosive Metalworking segment reported
year-to-date sales of $74.3 million, up 39% versus sales of $53.4
million at the nine-month mark last year. Operating income
increased 100% to $20.2 million compared with $10.1 million during
the same period last year. Nine-month sales at AMK Welding
increased 27% to $3.4 million compared with $2.7 million during the
comparable period last year. AMK's operating income increased 28%
$621,000 compared with $485,000 through nine months last year.
Conference call information Management will hold a conference call
to discuss third quarter results today at 5:00 p.m. Eastern (3:00
p.m. Mountain). Investors are invited to listen to the call live
via the Internet at http://www.dynamicmaterials.com/, or by dialing
into the teleconference at 800-299-8538 (617-786-2902 for
international callers) and entering the passcode 19653209.
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 an audio replay will be
available through November 3, 2006, by calling 888-286-8010
(617-801-6888 for international callers) and entering the passcode
31704541. 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 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, 2005. DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2006 AND 2005 (Dollars in Thousands, Except
Share Data) (unaudited) Three months ended Nine months ended
September 30, September 30, 2006 2005 2006 2005 NET SALES $24,852
$20,238 $77,781 $56,124 COST OF PRODUCTS SOLD 16,542 13,970 50,270
39,990 Gross profit 8,310 6,268 27,511 16,134 COSTS AND EXPENSES:
General and administrative expenses 1,267 1,020 3,948 2,726 Selling
expenses 904 849 3,174 2,845 Total costs and expenses 2,171 1,869
7,122 5,571 INCOME FROM OPERATIONS OF CONTINUING OPERATIONS 6,139
4,399 20,389 10,563 OTHER INCOME (EXPENSE): Other income (expense),
net (23) (8) (40) 9 Interest expense (42) (65) (108) (233) Interest
income 163 2 455 22 INCOME BEFORE INCOME TAXES AND DISCONTINUED
OPERATIONS 6,237 4,328 20,696 10,361 INCOME TAX PROVISION 2,547
1,176 7,865 3,445 INCOME FROM CONTINUING OPERATIONS 3,690 3,152
12,831 6,916 DISCONTINUED OPERATIONS: Income from discontinued
operations, net of tax -- -- 1,357 -- Income from discontinued
operations -- -- 1,357 -- NET INCOME $3,690 $3,152 $14,188 $6,916
INCOME PER SHARE - BASIC: Continuing operations $0.31 $0.27 $1.09
$0.62 Discontinued operations -- -- 0.11 -- Net income $0.31 $0.27
$1.20 $0.62 INCOME PER SHARE - DILUTED: Continuing operations $0.30
$0.26 $1.05 $0.58 Discontinued operations -- -- 0.11 -- Net income
$0.30 $0.26 $1.16 $0.58 WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING - Basic 11,865,336 11,648,502 11,813,371 11,141,394
Diluted 12,210,791 12,135,142 12,216,283 12,028,562 ANNUAL
DIVIDENDS DECLARED PER COMMON SHARE $-- $0.10 $0.15 $0.10 DYNAMIC
MATERIALS CORPORATION & SUBSIDIARY CONDENSED CONSOLIDATED
BALANCE SHEETS (Dollars in Thousands) (unaudited) ASSETS September
30, December 31, 2006 2005 (unaudited) Cash and cash equivalents
$19,161 $5,763 Marketable securities -- 1,950 Accounts receivable,
net 19,884 15,576 Inventories 14,025 11,869 Other current assets
2,131 1,394 Total current assets 55,201 36,552 Property, plant and
equipment, net 16,932 12,572 Other long-term assets 1,562 6,187
Total assets $73,695 $55,311 LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $8,182 $7,278 Customer advances 8,026 1,885 Other
current liabilities 6,243 5,102 Current portion of long-term debt
368 573 Total current liabilities 22,819 14,838 Long-term debt 368
2,221 Other long-term liabilities 565 3,297 Stockholders' equity
49,943 34,955 Total liabilities and stockholders' equity $73,695
$55,311 DYNAMIC MATERIALS CORPORATION & SUBSIDIARY CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2006 AND 2005 (Dollars in Thousands) (unaudited) 2006
2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $14,188 $
6,916 Adjustments to reconcile net income to net cash provided by
operating activities - Income from discontinued operations, net of
tax (1,357) -- Depreciation 1,020 1,132 Amortization of capitalized
debt issuance costs 50 33 Stock-based compensation 436 -- Provision
for deferred income taxes 923 (171) Tax benefit related to stock
options - 2,477 Change in working capital, net 997 (5,843) Net cash
flows provided by operating activities 16,257 4,544 CASH FLOWS FROM
INVESTING ACTIVITIES: Sale of marketable securities 1,950 --
Acquisition of property, plant and equipment (5,154) (1,966) Loan
to related party (1,206) -- Repayment on loan to related party
1,206 -- Change in other non-current assets 219 218 Payment
received on other receivables related to discontinued operations 3
1,016 Cash flows provided by investing activities of discontinued
operations 2,197 -- Net cash flows used in investing activities
(785) (732) CASH FLOWS FROM FINANCING ACTIVITIES: Repayments on
lines of credit, net (47) (3,302) Payments on long-term debt
(2,081) (1,778) Payment of dividends (1,766) (1,155) Net proceeds
from issuance of common stock 523 1,481 Tax benefit related to
stock options 948 -- Other cash flows from financing activities 22
23 Net cash flows used in financing activities (2,401) (4,731)
EFFECTS OF EXCHANGE RATES ON CASH 327 (117) NET INCREASE IN CASH
AND CASH EQUIVALENTS 13,398 (1,036) CASH AND CASH EQUIVALENTS,
beginning of the period 5,763 2,404 CASH AND CASH EQUIVALENTS, end
of the period $19,161 $ 1,368 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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