Selected Highlights BOULDER, Colo., Feb. 22 /PRNewswire-FirstCall/
-- Dynamic Materials Corporation (DMC) (NASDAQ:BOOM), a leading
provider of explosion-welded clad metal plates, today reported
record financial results for its fourth quarter and full fiscal
year ended December 31, 2006. DMC established single-quarter
records for sales and earnings, and achieved strong gross margin
results, thanks in large part to the Company's fourth quarter
delivery on an $11 million contract - DMC's largest-ever order.
Fourth quarter sales increased 54% to $35.7 million from $23.2
million in the fourth quarter last year. Sequentially, fourth
quarter sales were up 44% from the $24.9 million reported in the
2006 third quarter. Fourth quarter gross margin was 41% versus 32%
in the comparable year-ago quarter and 33% in the third quarter.
The improvement in 2006 fourth quarter margin resulted from
favorable terms received on the aforementioned $11 million order,
which involved complex materials engineering and a tight delivery
schedule. Income from operations increased 87% to $9.7 million from
$5.2 million in the fourth quarter last year, and was up 58% from
third quarter income from operations of $6.1 million. Net income
increased 90% to $6.6 million, or $0.54 per diluted share, from
$3.5 million, or $0.28 per diluted share, in the fourth quarter
last year. Net income in the 2006 fourth quarter included a gain
from discontinued operations of $141,000, or $0.01 per share, from
the sale of leased equipment. Sequentially, fourth quarter net
income increased 78% versus third quarter net income of $3.7
million, or $0.30 per diluted share. Explosive Metalworking The
Company's Explosive Metalworking segment reported fourth quarter
sales of $34.0 million, up 53% from $22.2 million reported in the
fourth quarter last year, and up 45% from the $23.5 million
reported in the 2006 third quarter. Fourth quarter operating income
increased 85% to $9.4 million from $5.1 million in the comparable
year-ago quarter, and was up 61% from the $5.8 million reported in
the third quarter. Order backlog at the end of the fourth quarter
was a record $68.8 million, up slightly from the $68.5 million
reported at the end of the 2006 third quarter. AMK Welding Fourth
quarter sales at the Company's AMK Welding segment increased 69% to
$1.7 million versus $1.0 million in the fourth quarter last year,
and were up 24% from $1.3 million reported in the third quarter.
Operating income was $538,000, up 337% from $123,000 reported in
the comparable year-ago quarter and an increase of 38% from the
$391,000 reported in the third quarter. Management Commentary Yvon
Cariou, president and chief executive officer, said, "Our full-year
and fourth quarter results have established new high water marks
for both revenue and profits. The fourth quarter was an
exceptionally strong period for both of our operating segments, and
included the best-ever single month of bookings for our explosion
welding business, as well as full delivery of our largest ever
order. These results, when coupled with our record-level order
backlog and our strong balance sheet, are a clear indication of the
current strength of our business. "Capital spending within the
global markets we serve remains robust, and there appear to be a
broad range of new business opportunities on the horizon," Cariou
added. "We therefore believe fiscal 2007 will be another year of
respectable growth at DMC. "Our program to double the production
capacity at our Mt. Braddock facility in Pennsylvania remains on
track, and we expect our new production equipment will be up and
running by the end of the second quarter," Cariou said. "We also
continue to upgrade our European cladding operations. We have
established a 2007 capital expenditure budget of approximately $7.1
million, the majority of which will be directed toward
modernization of our Nobelclad and Nitro Metall facilities. We also
expect to spend more than $5 million remaining from our 2006 budget
on completing our expansion at Mt. Braddock." Rick Santa, chief
financial officer, said, "With more than $68 million in our order
backlog and an extensive range of contract opportunities on our hot
list, we are looking to achieve revenue growth in the 20% range
during fiscal 2007. The availability of source metals has
fluctuated in recent quarters. Although there were adequate
supplies to achieve record shipments during the fourth quarter,
tightness in the supply chain is likely to lead to first quarter
financial results that will approximate the average results we
reported during the first three quarters of fiscal 2006. In light
of our full- year growth expectations, we believe the average
quarterly results during the balance of the fiscal year will be
stronger than those of the first quarter. In addition, we believe
that improvements in the supply situation could result in even
better full-year financial growth than we are currently
projecting." Full-Year Results For the full fiscal year, sales
increased 43% to $113.5 million compared with $79.3 million in
fiscal 2005. Gross margin improved to 37% from 30% in the prior
year. The improvement reflects the Company's strong sales
increases, more effective absorption of fixed manufacturing and
overhead expenses, and strong profit margin on the large contract
completed in the fourth quarter. Income from operations increased
91% to $30.1 million compared with $15.8 million in 2005. Net
income increased 100% to $20.8 million, or $1.70 per diluted share,
versus net income of $10.4 million, or $0.86 cents per diluted
share, in the prior year. Net income in 2006 included a gain from
discontinued operations of $1.5 million, or $0.12 per share, net of
tax, attributable to the first quarter sale of a real estate
purchase option and to the fourth quarter sale of leased equipment,
both related to the Company's former Spin Forge division. The
Explosive Metalworking segment reported full-year sales of $108.3
million, an improvement of 43% versus sales of $75.6 million in
2005. Operating income increased 95% to $29.6 million compared with
$15.2 million in the prior year. Full-year sales at AMK Welding
increased 38% to $5.1 million compared with 2005 sales of $3.7
million. Operating income increased 91% to $1.2 million compared
with $608,000 in the prior year. Conference call information
Management will hold a conference call to discuss fourth 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 800-237-9752 (617-847-8706 for international
callers) and entering the passcode 47718534. 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 a telephonic replay will be available
through March 1, 2007, by calling 888-286-8010 (617-801-6888 for
international callers) and entering the passcode 79495997. 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; 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
(Dollars in Thousands, Except Share Data) (unaudited) Three months
ended Twelve months ended December 31, December 31, 2006 2005 2006
2005 NET SALES $35,691 $23,167 $113,472 $79,291 COST OF PRODUCTS
SOLD 21,170 15,865 71,439 55,856 Gross profit 14,521 7,302 42,033
23,435 COSTS AND EXPENSES: General and administrative expenses
1,854 1,325 5,802 4,051 Selling expenses 2,953 772 6,128 3,616
Total costs and expenses 4,807 2,097 11,930 7,667 INCOME FROM
OPERATIONS OF CONTINUING OPERATIONS 9,714 5,205 30,103 15,768 OTHER
INCOME (EXPENSE): Other expense, net (75) (15) (115) (7) Interest
income (expense), net 272 55 620 (156) INCOME BEFORE INCOME TAXES
AND DISCONTINUED OPERATIONS 9,911 5,245 30,608 15,605 INCOME TAX
PROVISION 3,476 1,788 11,341 5,233 INCOME FROM CONTINUING
OPERATIONS 6,435 3,457 19,267 10,372 INCOME FROM DISCONTINUED
OPERATIONS, net of tax: 141 -- 1,497 -- NET INCOME $6,576 $3,457
$20,764 $10,372 INCOME PER SHARE - BASIC: Continuing operations
$0.54 $0.29 $1.63 $0.92 Discontinued operations 0.01 -- 0.12 -- Net
income $0.55 $0.29 $1.75 $0.92 INCOME PER SHARE - DILUTED:
Continuing operations $0.53 $0.28 $1.58 $0.86 Discontinued
operations 0.01 -- 0.12 -- Net income $0.54 $0.28 $1.70 $0.86
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - Basic 11,924,467
11,731,186 11,841,373 11,290,053 Diluted 12,206,704 12,186,659
12,213,075 12,086,884 ANNUAL DIVIDENDS DECLARED PER COMMON SHARE
$-- $-- $0.15 $0.10 DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2006 AND
2005 (Dollars in Thousands) (unaudited) ASSETS 2006 2005 Cash and
cash equivalents $17,886 $5,763 Restricted cash 3,059 -- Marketable
securities -- 1,950 Accounts receivable, net 21,549 15,576
Inventories 19,226 11,869 Other current assets 2,127 1,394 Total
current assets 63,847 36,552 Property, plant and equipment, net
20,260 12,572 Other long-term assets 866 6,187 Total assets $84,973
$55,311 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable
$13,572 $7,278 Customer advances 2,394 1,885 Other current
liabilities 8,949 5,102 Current portion of long-term debt 382 573
Total current liabilities 25,297 14,838 Long-term debt 382 2,221
Other long-term liabilities 1,714 3,297 Stockholders' equity 57,580
34,955 Total liabilities and stockholders' equity $84,973 $55,311
DYNAMIC MATERIALS CORPORATION & SUBSIDIARY CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER
31, 2006 AND 2005 (Dollars in Thousands) (unaudited) 2006 2005 CASH
FLOWS FROM OPERATING ACTIVITIES: Net income $20,764 $10,372
Adjustments to reconcile net income to net cash provided by
operating activities - Income from discontinued operations, net of
tax (1,497) -- Depreciation 1,369 1,527 Amortization of capitalized
debt issuance costs 50 41 Stock-based compensation 660 -- Provision
for deferred income taxes 2,115 (1,431) Tax benefit related to
stock options -- 3,728 Change in working capital, net (6,904)
(2,599) Net cash flows provided by operating activities 16,557
11,638 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of
property, plant and equipment (8,650) (2,848) Investment in
marketable securities -- (1,950) Sale of marketable securities
1,950 -- Loan to related party (1,206) -- Repayment on loan to
related party 1,206 -- Change in other non-current assets 290 288
Payment received on other receivables related to discontinued
operations 576 1,016 Cash flows provided by investing activities of
discontinued operations 3,089 -- Net cash flows used in investing
activities (2,745) (3,494) CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on lines of credit, net (48) (3,291) Payments on
long-term debt (2,084) (1,818) Payment of dividends (1,766) (1,155)
Net proceeds from issuance of common stock 585 1,555 Tax benefit
related to stock options 1,154 -- Other cash flows from financing
activities (19) 47 Net cash flows used in financing activities
(2,178) (4,662) EFFECTS OF EXCHANGE RATES ON CASH 489 (123) NET
INCREASE IN CASH AND CASH EQUIVALENTS 12,123 3,359 CASH AND CASH
EQUIVALENTS, beginning of the period 5,763 2,404 CASH AND CASH
EQUIVALENTS, end of the period $17,886 $5,763 DATASOURCE: Dynamic
Materials Corporation CONTACT: Geoff High of Pfeiffer High Investor
Relations, Inc., +1-303-393-7044, for Dynamic Materials Corporation
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