Selected Highlights * Operating income up 137% to $6.4 million on
44% increase in sales versus first quarter last year * Income from
continuing operations up 151% to $4.1 million versus first quarter
last year * $42.3 million backlog at Explosive Metalworking segment
again a record * Cash position improves to $13.1 million BOULDER,
Colo., April 27 /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 first quarter ended March 31,
2006. First quarter sales increased 44% to $25.2 million from $17.5
million in the first quarter last year, and were up 9% from $23.2
million reported in last year's fourth quarter. Gross margin
improved to 37% from 27% in the same quarter a year ago, and from
32% in the 2005 fourth quarter. The gross margin improvement was
attributable to the benefit of spreading fixed manufacturing
overhead expenses over higher sales volume, as well as positive
changes in product mix and order size at the company's Explosive
Metalworking segment. During the first quarter, the segment
performed work on two significant contracts, one involving a major
North American refinery expansion and the other relating to an
international petrochemical project. Income from operations during
the first quarter advanced 137% to $6.4 million from $2.7 million
in the comparable year-ago quarter, and increased 24% from $5.2
million reported in last year's fourth quarter. Net income
increased 233% to $5.5 million, or $0.45 per diluted share, from
$1.6 million, or $0.14 per diluted share, in last year's first
quarter. First quarter net income was up 59% from $3.5 million, or
$0.28 per diluted share, reported in last year's fourth quarter.
First quarter net income included a gain from discontinued
operations of $1.4 million, net of tax, which is attributable to
the sale of a real estate purchase option associated with the
company's former Spin Forge division. Excluding such gain, income
from continuing operations was $4.1 million, or $0.34 per diluted
share. Explosive Metalworking The company's Explosive Metalworking
segment reported sales of $24.2 million, up 42% from $17.0 million
reported in the first quarter a year ago, and an increase of 9%
versus $22.2 million reported in last year's fourth quarter.
Operating income increased 135% to $6.7 million from $2.8 million
in the comparable year-ago quarter, and was up 31% from fourth
quarter 2005 operating income of $5.1 million. The segment's order
backlog increased slightly to $42.3 million at the end of the
quarter, eclipsing the previous all-time high of $42.0 million
established as of December 31, 2005. AMK Welding The company's AMK
Welding segment recorded sales of $1.0 million, up 84% from
$543,000 reported in the first quarter last year, and flat versus
$1.0 million recorded in last year's fourth quarter. AMK achieved
operating income of $108,000 as compared with a loss from
operations of $115,000 in the comparable year-ago quarter. AMK's
operating income in last year's fourth quarter was $123,000.
Management Commentary "We are very encouraged by our first quarter
performance, which represents a strong start to fiscal 2006," said
Yvon Cariou, president and chief executive officer. "In addition to
achieving significant revenue and earnings growth, we maintained a
record-level order backlog at our Explosive Metalworking segment.
These results are indicative of the continued strong demand we are
experiencing in our worldwide target markets. They also reflect the
talent and experience of DMC's sales, production and support teams,
which we believe represent some of our greatest corporate assets."
Rick Santa, chief financial officer, said, "First quarter financial
results were positively impacted by deliveries on two large
contracts. Our gross margin performance, in particular, benefited
from shipments under these orders and an otherwise favorable
product mix. Our sales, net earnings and gross margins are likely
to continue to fluctuate from quarter-to-quarter and, in light of
the record results posted in the first quarter of 2006, we expect
that our sales, net earnings and gross margins for the second
quarter may be somewhat lower than they were in the first quarter."
Santa added, "Cash, cash equivalents and marketable securities have
increased by more than $5.4 million since December 31, 2005, and
stood at $13.1 million at the end of the first quarter. Our strong
working capital position has allowed us to commence our previously
discussed capital improvements and facilities expansion as
scheduled." 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 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 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: 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; 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 CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Dollars in Thousands, Except Share Data) (unaudited) 2006 2005 NET
SALES $25,175 $17,510 COST OF PRODUCTS SOLD 15,894 12,860 Gross
profit 9,281 4,650 COSTS AND EXPENSES: General and administrative
expenses 1,527 809 Selling expenses 1,324 1,126 Total costs and
expenses 2,851 1,935 INCOME FROM OPERATIONS OF CONTINUING
OPERATIONS 6,430 2,715 OTHER INCOME (EXPENSE): Other income
(expense), net (6) 5 Interest expense (29) (86) Interest income 123
4 INCOME BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS 6,518
2,638 INCOME TAX PROVISION 2,379 990 INCOME FROM CONTINUING
OPERATIONS BEFORE DISCONTINUED OPERATIONS 4,139 1,648 DISCONTINUED
OPERATIONS: Income from discontinued operations, net of tax 1,357
-- Income from discontinued operations 1,357 -- NET INCOME $5,496
$1,648 INCOME PER SHARE - BASIC: Continuing operations $0.35 $0.15
Discontinued operations 0.12 -- Net income $0.47 $0.15 INCOME PER
SHARE - DILUTED: Continuing operations $0.34 $0.14 Discontinued
operations 0.11 -- Net income $0.45 $0.14 WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING - Basic 11,768,098 10,694,260 Diluted
12,217,547 11,861,100 ANNUAL DIVIDENDS DECLARED PER COMMON SHARE
$0.15 $-- DYNAMIC MATERIALS CORPORATION & SUBSIDIARY CONDENSED
CONSOLIDATED BALANCE SHEETS (Dollars in Thousands (unaudited)
ASSETS March 31, December 31, 2006 2005 (unaudited) Cash and cash
equivalents $13,114 $5,763 Marketable securities -- 1,950 Loan to
related party 1,211 -- Accounts receivable, net 15,002 15,576
Inventories 12,644 11,869 Other current assets 3,095 1,394 Total
current assets 45,066 36,552 Property, plant and equipment, net
12,790 12,572 Deferred tax asset 1,824 819 Other long-term assets
1,715 5,368 Total assets $61,395 $55,311 LIABILITIES AND
STOCKHOLDERS' EQUITY Accounts payable $7,486 $7,278 Other current
liabilities 10,139 6,987 Current portion of long-term debt 540 573
Total current liabilities 18,165 14,838 Long-term debt 2,185 2,221
Other long-term liabilities 1,756 3,297 Stockholders' equity 39,289
34,955 Total liabilities and stockholders' equity $61,395 $55,311
DYNAMIC MATERIALS CORPORATION & SUBSIDIARY CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED
MARCH 31, 2006 AND 2005 (Dollars in Thousands) (unaudited) 2006
2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $5,496 $1,648
Adjustments to reconcile net income to net cash provided by
operating activities - Income from discontinued operations, net of
tax (1,357) -- Depreciation and amortization 317 366 Amortization
of capitalized debt issuance costs 7 13 Stock-based compensation
336 -- Provision for deferred income taxes 320 (14) Tax benefit
related to stock options -- 214 Change in working capital, net
1,374 27 Net cash flows provided by operating activities 6,493
2,254 CASH FLOWS FROM INVESTING ACTIVITIES: Sale of marketable
securities 1,950 -- Acquisition of property, plant and equipment
(469) (577) Loan to related party (1,206) -- Change in other
non-current assets 79 78 Payment received on other receivables
related to discontinued operations 3 874 Cash flows provided by
investing activities of discontinued operations 2,197 -- Net cash
flows provided by investing activities 2,554 375 CASH FLOWS FROM
FINANCING ACTIVITIES: Repayments on lines of credit, net (45)
(3,170) Payments on long-term debt (45) (907) Payment of dividends
(1,766) -- Net proceeds from issuance of common stock 74 620 Tax
benefit related to stock options 54 -- Other cash flows from
financing activities 7 4 Net cash flows used in financing
activities (1,721) (3,453) EFFECTS OF EXCHANGE RATES ON CASH 25
(57) NET INCREASE IN CASH AND CASH EQUIVALENTS 7,351 (881) CASH AND
CASH EQUIVALENTS, beginning of the period 5,763 2,404 CASH AND CASH
EQUIVALENTS, end of the period $13,114 $1,523 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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