Dynamic Materials Reports Third Quarter 2003 Financial Results
BOULDER, Colo., Nov. 13 /PRNewswire-FirstCall/ -- Dynamic Materials
Corporation, , "DMC", today reported third quarter income from
continuing operations of $226,239, or $.04 per diluted share,
versus income from continuing operations of $547,959, or $.11 per
diluted share, for the third quarter of 2002. DMC's third quarter
2003 sales were $11,129,210, an 8% increase from third quarter 2002
sales of $10,267,254. For the nine months ended September 30, 2003,
DMC reported income from continuing operations of $1,077,948, or
$.21 per diluted share, versus income from continuing operations of
$2,031,524, or $.40 per diluted share, for the first nine months of
2002. DMC reported sales of $31,034,281 and $30,987,927 for the
respective nine-month periods of 2003 and 2002. For the three
months ended September 30, 2003, DMC reported a net loss of
$679,393, or $.13 per diluted share, as compared to net income of
$383,974, or $.08 per diluted share, for the third quarter of 2002.
For the nine months ended September 30, 2003 and 2002, DMC reported
net losses of $130,281, or $.03 per diluted share, and $851,995, or
$.17 per diluted share, respectively. The net loss for the three
and nine month periods of 2003 reflects a loss from discontinued
operations of $905,632, or $.17 per diluted share, and $1,208,229,
or $.24 per diluted share, respectively, including operating losses
of $195,323 and $497,920 for the respective periods and an asset
impairment loss of $710,309 associated with the discontinued
operations of its Precision Machined Products division ("PMP"),
which was sold on October 7, 2003. The net loss for the first nine
months of 2002 included a transitional goodwill impairment charge
of $2,318,108, or $.46 per diluted share, associated with the
cumulative effect of a change in accounting principle as well as a
loss from discontinued operations of $565,411, or $.11 per diluted
share, relating to the reclassification of PMP's 2002 operating
loss to discontinued operations. Explosive Metalworking Group
Performance DMC's Explosive Metalworking Group reported third
quarter 2003 sales of $9,068,486, an 11% increase from sales of
$8,144,835 for the third quarter of 2002. For the three months
ended September 30, 2003 and 2002, the Group reported income from
operations of $820,852 and $1,183,179, respectively. Group sales
for the nine months ended September 30, 2003 were $24,820,283, a
decrease of 2% from sales of $25,245,221 for the first nine months
of 2002. The Group reported income from operations of $2,397,995
and $4,124,018 for the nine months ended September 30, 2003 and
2002, respectively. On a year-to- date basis, Explosive
Metalworking Group sales have been impacted by a weak first quarter
that resulted from a low December 31, 2002 backlog and operating
income has been impacted by a combination of unfavorable changes in
product mix, principally at the Group's European locations, and
lower sales volume in the U.S. Aerospace Group Performance The
Aerospace Group contributed $2,060,724 to sales in the third
quarter of 2003 as compared to reported sales of $2,122,419 in the
third quarter of 2002. For the nine months ended September 30,
2003, the Aerospace Group reported sales of $6,213,998, an increase
of 8% from the $5,742,706 in sales the Group posted for the
comparable period of 2002. The Aerospace Group reported an
operating loss of $26,537 for the nine months ended September 30,
2003 compared to an operating loss of $222,564 for the first nine
months of 2002. For the three months ended September 30, 2003 and
2002, the Group reported operating losses of $122,782 and $60,785,
respectively. The Group's decreased year-to-date 2003 operating
loss is attributable to a decreased operating loss at the Spin
Forge division. AMK Welding reported operating income for both the
third quarter and year-to-date periods but at levels well below the
record operating income that was reported for the comparable 2002
reporting periods. In commenting upon the Company's third quarter
2003 results, Yvon Cariou, DMC's President and CEO, stated, "As
expected, Explosive Metalworking Group sales and operating income
for the third quarter were comparable to those reported in the
second quarter of 2003. While we expect to see a decline in fourth
quarter sales and operating income from the amounts reported for
each of the last two quarters, we are increasingly optimistic about
the 2004 outlook for our Explosive Metalworking Group based on the
recent flow of new orders and the high volume of customer
inquiries." Cariou continued, "Results for our Aerospace Group no
longer include the operating results of PMP which was sold on
October 7, 2003 and whose operating losses for 2003 and 2002 have
been reported as discontinued operations. However, we are concerned
that the Aerospace Group, even without PMP, has reported losses in
2002 and 2003 that are expected to continue in the fourth quarter.
These concerns are being addressed by management and appropriate
actions will be taken during the remainder of 2003 and early part
of 2004." 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, 2002. Based in Boulder, Colorado,
Dynamic Materials Corporation is a leading metalworking company,
and its products include explosion bonded clad metal plates and
other metal fabrications for the petrochemical, chemical
processing, satellite/launch vehicle, commercial aircraft, defense
and a variety of other industries. For more information on Dynamic
Materials Corporation visit the Company's web site at
http://www.dynamicmaterials.com/ DYNAMIC MATERIALS CORPORATION
& SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 (unaudited)
Three months ended Nine months ended September 30, September 30,
2003 2002 2003 2002 NET SALES $11,129,210 $10,267,254 $31,034,281
$30,987,927 COST OF PRODUCTS SOLD 8,885,435 7,686,775 23,809,147
22,657,293 Gross profit 2,243,775 2,580,479 7,225,134 8,330,634
COSTS AND EXPENSES: General and administrative expenses 861,511
826,215 2,667,921 2,581,411 Selling expenses 684,194 631,870
2,185,755 1,847,769 Total costs and expenses 1,545,705 1,458,085
4,853,676 4,429,180 INCOME FROM OPERATIONS 698,070 1,122,394
2,371,458 3,901,454 OTHER INCOME (EXPENSE): Other income (expense),
net (16,268) 765 (16,230) (38,803) Interest expense (121,880)
(169,078) (396,893) (526,969) Interest income 1,260 636 2,888 1,155
INCOME BEFORE INCOME TAXES 561,182 954,717 1,961,223 3,336,837
INCOME TAX PROVISION 334,943 406,758 883,275 1,305,313 INCOME FROM
CONTINUING OPERATIONS BEFORE CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE 226,239 547,959 1,077,948 2,031,524
DISCONTINUED OPERATIONS: Loss from operations of discontinued
operations, net of tax benefit (195,323) (163,985) (497,920)
(565,411) Loss on impairment of assets associated with discontinued
operations, net of tax benefit (710,309) -- (710,309) -- Loss from
discontinued operations (905,632) (163,985) (1,208,229) (565,411)
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX
BENEFIT OF $1,482,000 -- -- -- (2,318,108) NET INCOME (LOSS)
$(679,393) $383,974 $(130,281) $(851,995) NET INCOME (LOSS) PER
SHARE - BASIC AND DILUTED: Continuing operations $0.04 $0.11 $0.21
$0.40 Discontinued operations (0.17) (0.03) (0.24) (0.11)
Cumulative effect of a change in accounting principle -- -- --
(0.46) Net Income (Loss) $(0.13) $0.08 $(0.03) $(0.17) WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING - Basic 5,072,943 5,048,888
5,065,283 5,038,596 Diluted 5,139,144 5,073,508 5,093,010 5,092,379
DATASOURCE: Dynamic Materials Corporation CONTACT: Richard A.
Santa, Vice President and Chief Financial Officer of Dynamic
Materials Corporation, +1-303-604-3938 Web site:
http://www.dynamicmaterials.com/
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