Selected Highlights BOULDER, Colo., Aug. 3 /PRNewswire-FirstCall/
-- Dynamic Materials Corporation (DMC) (NASDAQ:BOOM), a leading
provider of explosion-welded clad metal plates, today reported
record financial results for its second quarter ended June 30,
2006. Sales in the second quarter advanced 51% to $27.8 million
from $18.4 million in the second quarter last year, and were up 10%
from $25.2 million reported in this year's first quarter. Second
quarter gross margin was 36% versus 28% in the comparable year-ago
quarter, and 37% in the first quarter. Income from operations
increased 127% to $7.8 million from $3.4 million in the second
quarter last year, and was up 22% from $6.4 million reported in the
most recent quarter. Net income increased 137% to $5.0 million, or
$0.41 per diluted share, from $2.1 million, or $0.18 per diluted
share, in last year's second quarter. First quarter 2006 income
from continuing operations was $4.1 million, or $0.34 per diluted
share. Including a gain from discontinued operations of $1.4
million, net of tax, which was attributable to the sale of a real
estate purchase option associated with the company's former Spin
Forge division, net income in this year's first quarter was $5.5
million, or $0.45 per diluted share. Explosive Metalworking DMC's
Explosive Metalworking segment reported sales of $26.6 million, up
55% from $17.2 million reported in the second quarter a year ago,
and an increase of 10% versus $24.2 million reported in this year's
first quarter. Operating income increased 149% to $7.7 million from
$3.1 million in the comparable year-ago quarter, and was up 16%
from first quarter operating income of $6.7 million. At the end of
the second quarter, the segment's order backlog was a record $52.4
million, surpassing by 24% the previous all-time high of $42.3
million reported at the end of the first quarter. AMK Welding Sales
at the company's AMK Welding segment were $1.1 million in both this
and last year's second quarter and $1.0 million in this year's
first quarter. Operating income was $122,000 versus $343,000 in the
comparable year-ago quarter and $108,000 in this year's first
quarter. The quarter-over-quarter decline resulted primarily from
increased manufacturing overhead and higher administrative expenses
associated with AMK's preparation for an anticipated increase in
production levels. Management Commentary "Our second quarter
performance, which included high-water marks for backlog and
revenue, reflects continued strong order volume for our explosion
welded plates, as well as our capacity to effectively address this
demand," said Yvon Cariou, president and chief executive officer.
"The industrial markets we serve continue to invest in capital
projects. In fact, our roster of anticipated domestic and
international order opportunities is as robust as ever. While the
size and timing of these prospective orders could lead to
quarter-to-quarter fluctuations in our financial performance, we
believe that our ability to capture a meaningful portion of these
opportunities should allow us to maintain our long-range growth
trends." "We have previously announced that we are making major
investments in new capacity, particularly at our Mount Braddock,
Pennsylvania facility," Cariou added. "To better meet anticipated
market demand, we have added $1.6 million of specialized equipment
to the Mount Braddock expansion project, increasing the project
budget to $9.6 million and our 2006 consolidated capital
expenditure budget to $14.1 million." Rick Santa, chief financial
officer, said, "Second quarter sales were better than anticipated
due in part to early fulfillment of certain orders originally
scheduled for delivery in the third quarter. Our current
expectations are that our top- and bottom-line performance during
the second half of 2006 will be comparable to our results during
the first half of the year. Although sales and gross margin during
the third quarter may be below results reported in the first and
second quarters, our fourth quarter performance should be strong
thanks in part to our expected deliveries on the $11 million
refinery order we received during the second quarter." "We
continued to strengthen our balance sheet during the second
quarter," Santa added. "We ended the period with cash and cash
equivalents of $14.0 million, an increase of 143% since the end of
fiscal 2005 and an increase of 7% since the end of the first
quarter. Working capital at June 30 stood at $30.6 million and our
current ratio was approximately 3:1." Six-Month Results At the
six-month mark, sales were up 47% to $52.9 million compared with
sales of $35.9 million at the mid-year mark last year, while gross
margin improved to 36% from 27% in the same period last year.
Income from operations increased 131% to $14.3 million compared
with $6.2 million in the comparable year-ago period. Net income for
the six months advanced 179% to $10.5 million, or $0.86 per diluted
share, versus net income of $3.8 million, or $0.32 per diluted
share, during the same period a year ago. The Explosive
Metalworking segment reported six-month sales of $50.8 million, a
49% increase versus sales of $34.2 million at the six-month mark a
year ago. Operating income increased 142% to $14.4 million compared
with $5.9 million during the same period last year. The improvement
in operating income reflects both increased sales and more
effective absorption of fixed manufacturing overhead costs and
operating expenses. Six-month sales at AMK Welding were $2.1
million compared with $1.7 million during the comparable period
last year. Operating income for the period was $230,000 compared
with operating income of $227,000 during the same period a year
ago. Conference call information Management will hold a conference
call to discuss second 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 866-543-6405 (617-213-8897 for
international callers) and entering the passcode 95208936.
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 August 5, 2006, by calling 888-286-8010
(617-801-6888 for international callers) and entering the passcode
61982125. 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 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 AND SIX MONTHS ENDED JUNE 30, 2006 AND
2005 (Dollars in Thousands, Except Share Data) (unaudited) Three
months ended Six months ended June 30, June 30, 2006 2005 2006 2005
NET SALES $27,754 $18,376 $52,928 $35,886 COST OF PRODUCTS SOLD
17,833 13,161 33,727 26,020 Gross profit 9,921 5,215 19,201 9,866
COSTS AND EXPENSES: General and administrative expenses 1,153 898
2,681 1,707 Selling expenses 946 870 2,270 1,995 Total costs and
expenses 2,099 1,768 4,951 3,702 INCOME FROM OPERATIONS OF
CONTINUING OPERATIONS 7,822 3,447 14,250 6,164 OTHER INCOME
(EXPENSE): Other income (expense), net (11) 13 (16) 16 Interest
expense (37) (82) (67) (168) Interest income 169 16 292 20 INCOME
BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS 7,943 3,394 14,459
6,032 INCOME TAX PROVISION 2,938 1,279 5,317 2,269 INCOME FROM
CONTINUING OPERATIONS BEFORE DISCONTINUED OPERATIONS 5,005 2,115
9,142 3,763 DISCONTINUED OPERATIONS: Income from discontinued
operations, net of tax -- -- 1,357 -- Income from discontinued
operations -- -- 1,357 -- NET INCOME $5,005 $2,115 $10,499 $3,763
INCOME PER SHARE - BASIC: Continuing operations $0.42 $0.19 $0.78
$0.35 Discontinued operations -- -- 0.11 -- Net income $0.42 $0.19
$0.89 $0.35 INCOME PER SHARE - DILUTED: Continuing operations $0.41
$0.18 $0.75 $0.32 Discontinued operations -- -- 0.11 -- Net income
$0.41 $0.18 $0.86 $0.32 WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING - Basic 11,805,610 11,070,932 11,786,957 10,883,636
Diluted 12,229,189 12,053,338 12,223,268 11,958,696 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 June 30,
December 31, 2006 2005 (unaudited) Cash and cash equivalents
$14,010 $5,763 Marketable securities -- 1,950 Accounts receivable,
net 16,328 15,576 Inventories 13,947 11,869 Other current assets
2,739 1,394 Total current assets 47,024 36,552 Property, plant and
equipment, net 14,694 12,572 Deferred tax asset 249 819 Other
long-term assets 1,635 5,368 Total assets $63,602 $55,311
LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $8,977 $7,278
Other current liabilities 6,860 6,987 Current portion of long-term
debt 559 573 Total current liabilities 16,396 14,838 Long-term debt
1,799 2,221 Other long-term liabilities 544 3,297 Stockholders'
equity 44,863 34,955 Total liabilities and stockholders' equity
$63,602 $55,311 DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
ENDED JUNE 30, 2006 AND 2005 (Dollars in Thousands) (unaudited)
2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $10,499
$3,763 Adjustments to reconcile net income to net cash provided by
operating activities - Income from discontinued operations, net of
tax (1,357) -- Depreciation and amortization 645 717 Amortization
of capitalized debt issuance costs 14 26 Stock-based compensation
353 - Provision for deferred income taxes 656 (10) Tax benefit
related to stock options -- 2,294 Change in working capital, net
(2,473) (3,631) Net cash flows provided by operating activities
8,337 3,159 CASH FLOWS FROM INVESTING ACTIVITIES: Sale of
marketable securities 1,950 -- Acquisition of property, plant and
equipment (2,561) (1,376) Loan to related party (1,206) --
Repayment on loan to related party 1,206 -- Change in other
non-current assets 147 148 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 1,736 (354) CASH FLOWS FROM
FINANCING ACTIVITIES: Repayments on lines of credit, net (47)
(2,949) Payments on long-term debt (90) (1,157) Payment on term
loan with French bank (356) (373) Payment of dividends (1,766) --
Net proceeds from issuance of common stock 207 1,181 Tax benefit
related to stock options 94 -- Other cash flows from financing
activities 15 32 Net cash flows used in financing activities
(1,943) (3,266) EFFECTS OF EXCHANGE RATES ON CASH 117 (119) NET
INCREASE IN CASH AND CASH EQUIVALENTS 8,247 (580) CASH AND CASH
EQUIVALENTS, beginning of the period 5,763 2,404 CASH AND CASH
EQUIVALENTS, end of the period $14,010 $1,824 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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