Dynamic Materials Reports First Quarter Financial Results
BOULDER, CO--(Marketwired - Apr 29, 2014) - Dynamic Materials
Corporation (DMC) (NASDAQ: BOOM) today reported financial results
for its first quarter ended March 31, 2014.
Sales increased 4% to $48.0 million versus $46.3 million in the
first quarter last year, while gross margin improved to 30% from
28% in the same period a year ago. The increase in gross margin
resulted from favorable changes in product and customer mix at the
Company's Oilfield Products business, which reported gross margin
of 41%, up from 34% in the first quarter last year.
Operating income was $2.8 million versus an operating loss of
$1.1 million in the first quarter of 2013. Operating results in
last year's first quarter included $3.0 million of non-recurring
expenses associated with management retirements. Net income
improved to $1.6 million, or $0.12 per diluted share, versus net
income of $215,000, or $0.02 per diluted share, in the year-ago
first quarter. Net income in the 2013 first quarter reflected a tax
benefit of $1.2 million.
First quarter adjusted EBITDA increased 107% to $6.9 million
from $3.3 million in the first quarter last year. Adjusted EBITDA
is a non-GAAP (generally accepted accounting principles) financial
measure used by management to measure operating performance. See
additional information about adjusted EBITDA at the end of this
news release, as well as a reconciliation of adjusted EBITDA to
GAAP measures.
NobelClad NobelClad reported sales of $24.6 million, a
decline of 6% from $26.2 million in the first quarter last year.
Operating income was $1.4 million versus $2.4 million in the
comparable year-ago quarter. Adjusted EBITDA was $3.1 million
versus $3.9 million in the same quarter a year ago. NobelClad ended
the quarter with an order backlog of $35.9 million versus $36.9
million at the end of the fourth quarter.
Oilfield Products First quarter sales at the Company's
Oilfield Products segment, which now includes DynaEnergetics and
AMK Technical Services, increased 17% to $23.5 million from $20.1
million in the same quarter a year ago. Operating income increased
150% to $3.6 million from $1.4 million in last year's first
quarter. Adjusted EBITDA advanced 85% to $5.4 million from $2.9
million in the comparable prior-year quarter.
Management Commentary Kevin Longe, president and CEO, said the
first quarter reflected positive market conditions for DMC's
Oilfield Products business. "Demand for DynaEnergetics' DynaSelect
detonator system drove improved first quarter sales and gross
margin performance for DMC. The oil and gas industry places great
emphasis on reliability, safety and efficiency in its well
completion technologies, and the demand for our new DynaSelect
system illustrates we are facilitating more effective well
completions.
"We continue to strengthen the DynaEnergetics organization to
better serve customers and support demand for our growing product
offering. Our research and development team remains very active,
and we expect to introduce multiple new perforating-related
products in the coming quarters."
Longe added, "NobelClad continues to report strong quoting
activity, particularly from the oil and gas and chemical sectors.
However, bookings activity remains relatively modest. Sluggish
demand is a current challenge among many of our clad-related
fabrication customers, although they also are reporting strong
quoting activity from many of the industrial end markets we serve.
While the timing of improved order flow remains difficult to
predict, we are cautiously optimistic that recent quoting volume
will result in increased bookings. We also are very confident that
NobelClad is well positioned to address this anticipated
improvement in demand."
Guidance Rick Santa, senior vice president, said management has
maintained its prior 2014 financial guidance of revenue that is
expected to be flat to up 4% versus the $209.6 million reported in
2013, and gross margin in the range of 29% to 31% versus the 28%
reported in 2013. The Company's blended effective tax rate for
fiscal 2014 is expected to range from 29% to 30% based on projected
pre-tax income.
For the second quarter, management anticipates sales will be
down 5% to 7% from the $57.9 million reported in last year's second
quarter, but up 12% to 14% sequentially from the $48.0 million
reported in this year's first quarter. Second quarter gross margin
is expected to be in a range of 29% to 30% versus the 30% reported
in last year's second quarter.
Conference call information Management will hold a conference
call to discuss these 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 www.dynamicmaterials.com, or by dialing 877-407-8031
(201-689-8031 for international callers). No passcode is necessary.
Webcast 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 90 days and a
telephonic replay will be available through May 6, 2014, by calling
877-660-6853 (201-612-7415 for international callers) and entering
the Conference ID # 13580677.
Use of Non-GAAP Financial Measures Non-GAAP results are
presented only as a supplement to the financial statements based on
U.S. generally accepted accounting principles (GAAP). The non-GAAP
financial information is provided to enhance the reader's
understanding of DMC's financial performance, but no non-GAAP
measure should be considered in isolation or as a substitute for
financial measures calculated in accordance with GAAP.
Reconciliations of the most directly comparable GAAP measures to
non-GAAP measures are provided within the schedules attached to
this release.
EBITDA is defined as net income plus or minus net interest plus
taxes, depreciation and amortization. Adjusted EBITDA excludes from
EBITDA stock-based compensation and, when appropriate, other items
that management does not utilize in assessing DMC's operating
performance (as further described in the attached financial
schedules). None of these non-GAAP financial measures are
recognized terms under GAAP and do not purport to be an alternative
to net income as an indicator of operating performance or any other
GAAP measure.
Management uses these non-GAAP measures in its operational and
financial decision-making, believing that it is useful to eliminate
certain items in order to focus on what it deems to be a more
reliable indicator of ongoing operating performance. As a result,
internal management reports used during monthly operating reviews
feature the adjusted EBITDA. In addition, during 2014 DMC
management incentive awards will be based, in part, on the amount
of EBITDA achieved during the year. Management also believes that
investors may find non-GAAP financial measures useful for the same
reasons, although investors are cautioned that non-GAAP financial
measures are not a substitute for GAAP disclosures. EBITDA and
adjusted EBITDA are also used by research analysts, investment
bankers and lenders to assess operating performance. For example, a
measure similar to EBITDA is required by the lenders under DMC's
credit facility.
Because not all companies use identical calculations, DMC's
presentation of non-GAAP financial measures may not be comparable
to other similarly titled measures of other companies. However,
these measures can still be useful in evaluating the company's
performance against its peer companies because management believes
the measures provide users with valuable insight into key
components of GAAP financial disclosures. For example, a company
with greater GAAP net income may not be as appealing to investors
if its net income is more heavily comprised of gains on asset
sales. Likewise, eliminating the effects of interest income and
expense moderates the impact of a company's capital structure on
its performance.
All of the items included in the reconciliation from net income
to EBITDA and adjusted EBITDA are either (i) non-cash items (e.g.,
depreciation, amortization of purchased intangibles and stock-based
compensation) or (ii) items that management does not consider to be
useful in assessing DMC's operating performance (e.g., income taxes
and gain on sale of assets). In the case of the non-cash items,
management believes that investors can better assess the company's
operating performance if the measures are presented without such
items because, unlike cash expenses, these adjustments do not
affect DMC's ability to generate free cash flow or invest in its
business. For example, by adjusting for depreciation and
amortization in computing EBITDA, users can compare operating
performance without regard to different accounting determinations
such as useful life. In the case of the other items, management
believes that investors can better assess operating performance if
the measures are presented without these items because their
financial impact does not reflect ongoing operating
performance.
About DMC Based in Boulder, Colorado, DMC serves a global
network of customers in the energy, infrastructure and industrials
markets through two core businesses: NobelClad and Oilfield
Products. The NobelClad segment is the world's largest manufacturer
of explosion-welded clad metal plates, which are used to fabricate
capital equipment utilized within various process industries and
other industrial sectors. The Oilfield Products segment is
comprised of DynaEnergetics, an international manufacturer and
marketer of advanced explosive components and systems used to
perforate oil and gas wells, and AMK Technical Services, which
utilizes various specialized technologies to weld components for
use in oilfield equipment, power-generation turbines, and
commercial and military jet engines. For more information, visit
the Company's website at: http://www.dynamicmaterials.com
Safe Harbor Language Except for the historical information
contained herein, this news release contains forward-looking
statements, including second quarter and full-year 2014 guidance on
revenue, gross margins and effective tax rates, expectations about
improving conditions in NobelClad's industrial end markets, new
product launches and the Company's other growth initiatives. These
risks and uncertainties include, but are not limited to, the
following: our ability to realize sales from our backlog; our
ability to obtain new contracts at attractive prices; the execution
of purchase commitments by our customers, and our ability to
successfully deliver on those purchase commitments; the size and
timing of customer orders and shipments; fluctuations in customer
demand; our ability to successfully execute upon growth
opportunities; fluctuations in foreign currencies, changes to
customer orders; the cyclicality of our business; competitive
factors; the timely completion of contracts; the timing and size of
expenditures; the timing and price of metal and other raw material;
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 annual report on Form 10-K for the year ended
December 31, 2013.
|
|
|
|
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND
2013 |
|
(Amounts in Thousands, Except Share and Per Share
Data) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
March 31, |
|
|
|
2014 |
|
2013 |
|
NET SALES |
|
$ |
48,039 |
|
$ |
46,270 |
|
|
|
|
|
|
|
|
|
COST OF PRODUCTS SOLD |
|
|
33,710 |
|
|
33,551 |
|
|
|
Gross
profit |
|
|
14,329 |
|
|
12,719 |
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
5,702 |
|
|
8,138 |
|
|
Selling and distribution expenses |
|
|
4,248 |
|
|
4,051 |
|
|
Amortization of purchased intangible assets |
|
|
1,616 |
|
|
1,585 |
|
|
|
Total
costs and expenses |
|
|
11,566 |
|
|
13,774 |
|
INCOME (LOSS) FROM OPERATIONS |
|
|
2,763 |
|
|
(1,055 |
) |
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
(435) |
|
|
296 |
|
|
Interest expense, net |
|
|
(104) |
|
|
(169 |
) |
INCOME (LOSS) BEFORE INCOME TAXES AND NON-CONTROLLING
INTEREST |
|
|
2,224 |
|
|
(928 |
) |
|
|
|
|
|
|
|
|
INCOME TAX PROVISION |
|
|
586 |
|
|
(1,171 |
) |
NET INCOME |
|
|
1,638 |
|
|
243 |
|
|
|
|
|
|
|
|
|
|
Less: Net income attributable to non-controlling
interest |
|
|
- |
|
|
28 |
|
NET INCOME ATTRIBUTABLE TO DYNAMIC MATERIALS
CORPORATION |
|
$ |
1,638 |
|
$ |
215 |
|
INCOME PER SHARE: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.12 |
|
$ |
0.02 |
|
|
|
Diluted |
|
$ |
0.12 |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
13,644,239 |
|
|
13,509,792 |
|
|
|
Diluted |
|
|
13,649,953 |
|
|
13,513,797 |
|
|
|
|
|
|
|
|
|
DIVIDENDS DECLARED PER COMMON SHARE |
|
$ |
0.04 |
|
$ |
0.04 |
|
|
|
|
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Amounts in Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2014 |
|
2013 |
ASSETS |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
9,130 |
|
$ |
10,617 |
Accounts receivable, net |
|
|
36,804 |
|
|
38,715 |
Inventory, net |
|
|
43,497 |
|
|
41,550 |
Other current assets |
|
|
8,803 |
|
|
7,882 |
|
|
|
|
|
|
|
|
Total
current assets |
|
|
98,234 |
|
|
98,764 |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
63,968 |
|
|
65,015 |
Goodwill, net |
|
|
37,689 |
|
|
37,970 |
Purchased intangible assets, net |
|
|
34,597 |
|
|
36,458 |
Other long-term assets |
|
|
2,387 |
|
|
2,405 |
|
|
|
|
|
|
|
Total assets |
|
$ |
236,875 |
|
$ |
240,612 |
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
13,558 |
|
$ |
14,668 |
Customer advances |
|
|
3,002 |
|
|
1,025 |
Dividend payable |
|
|
557 |
|
|
550 |
Accrued income taxes |
|
|
2,036 |
|
|
2,811 |
Other current liabilities |
|
|
8,097 |
|
|
9,231 |
Current portion of long-term debt |
|
|
516 |
|
|
2,907 |
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
27,766 |
|
|
31,192 |
|
|
|
|
|
|
|
Lines of credit |
|
|
26,900 |
|
|
26,400 |
Deferred tax liabilities |
|
|
7,968 |
|
|
8,347 |
Other long-term liabilities |
|
|
1,937 |
|
|
1,881 |
Stockholders' equity |
|
|
172,304 |
|
|
172,792 |
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
236,875 |
|
$ |
240,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND
2013 |
|
(Amounts in Thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,638 |
|
|
$ |
243 |
|
|
Adjustments to reconcile net income to net cash
provided by operating activities - |
|
|
|
|
|
|
|
|
|
|
Depreciation (including capital lease
amortization) |
|
|
1,995 |
|
|
|
1,417 |
|
|
|
Amortization of purchased intangible assets |
|
|
1,616 |
|
|
|
1,585 |
|
|
|
Amortization of deferred debt issuance costs |
|
|
25 |
|
|
|
25 |
|
|
|
Stock-based compensation |
|
|
555 |
|
|
|
1,422 |
|
|
|
Deferred income tax provision (benefit) |
|
|
445 |
|
|
|
(19 |
) |
|
|
Gain on disposal of property, plant and equipment |
|
|
- |
|
|
|
21 |
|
|
|
Change in working capital, net |
|
|
(3,176 |
) |
|
|
1,596 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by operating activities |
|
|
3,098 |
|
|
|
6,290 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment |
|
|
(2,057 |
) |
|
|
(4,453 |
) |
|
Change in other non-current assets |
|
|
32 |
|
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash used in investing activities |
|
|
(2,025 |
) |
|
|
(4,408 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Borrowings (repayments) on bank lines of credit,
net |
|
|
(1,863 |
) |
|
|
(202 |
) |
|
Payments on long-term debt |
|
|
(15 |
) |
|
|
(16 |
) |
|
Payments on capital lease obligations |
|
|
(15 |
) |
|
|
(13 |
) |
|
Payment of dividends |
|
|
(550 |
) |
|
|
(540 |
) |
|
Net proceeds from issuance of common stock |
|
|
22 |
|
|
|
- |
|
|
Tax impact of stock-based compensation |
|
|
87 |
|
|
|
(890 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash used in financing activities |
|
|
(2,334 |
) |
|
|
(1,661 |
) |
|
|
|
|
|
|
|
|
|
EFFECTS OF EXCHANGE RATES ON CASH |
|
|
(226 |
) |
|
|
(247 |
) |
NET DECREASE IN CASH AND CASH EQUIVALENTS |
|
|
(1,487 |
) |
|
|
(26 |
) |
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, beginning of the period |
|
|
10,617 |
|
|
|
8,200 |
|
CASH AND CASH EQUIVALENTS, end of the period |
|
$ |
9,130 |
|
|
$ |
8,174 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES |
|
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO
MOST |
|
DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS |
|
(Amounts in thousands) |
|
(unaudited) |
|
|
|
|
|
Three months ended |
|
|
|
March 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
NobelClad |
|
$ |
24,564 |
|
|
$ |
26,180 |
|
DynaEnergetics |
|
|
23,475 |
|
|
|
20,090 |
|
Net
sales |
|
$ |
48,039 |
|
|
$ |
46,270 |
|
|
|
|
|
|
|
|
|
|
NobelClad |
|
$ |
1,377 |
|
|
$ |
2,444 |
|
DynaEnergetics |
|
|
3,570 |
|
|
|
1,429 |
|
Unallocated expenses |
|
|
(2,184 |
) |
|
|
(4,928 |
) |
Income (loss) from operations |
|
$ |
2,763 |
|
|
$ |
(1,055 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2014 |
|
|
|
|
|
Oilfield |
|
|
Unallocated |
|
|
|
|
|
|
NobelClad |
|
Products |
|
|
Expenses |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
$ |
1,377 |
|
$ |
3,570 |
|
|
$ |
(2,184 |
) |
|
$ |
2,763 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
- |
|
|
- |
|
|
|
555 |
|
|
|
555 |
|
|
Depreciation |
|
|
1,185 |
|
|
810 |
|
|
|
- |
|
|
|
1,995 |
|
|
Amortization of purchased intangibles |
|
|
547 |
|
|
1,069 |
|
|
|
- |
|
|
|
1,616 |
|
Adjusted EBITDA |
|
$ |
3,109 |
|
$ |
5,449 |
|
|
$ |
(1,629 |
) |
|
$ |
6,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2013 |
|
|
|
|
|
Oilfield |
|
|
Unallocated |
|
|
|
|
|
|
NobelClad |
|
Products |
|
|
Expenses |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
$ |
2,444 |
|
$ |
1,429 |
|
|
$ |
(4,928 |
) |
|
$ |
(1,055 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controllinginterest |
|
|
- |
|
|
(28 |
) |
|
|
- |
|
|
|
(28 |
) |
|
|
Stock-based compensation |
|
|
- |
|
|
- |
|
|
|
1,422 |
|
|
|
1,422 |
|
|
Depreciation |
|
|
929 |
|
|
488 |
|
|
|
- |
|
|
|
1,417 |
|
|
Amortization of purchased intangibles |
|
|
527 |
|
|
1,058 |
|
|
|
- |
|
|
|
1,585 |
|
Adjusted EBITDA |
|
$ |
3,900 |
|
$ |
2,947 |
|
|
$ |
(3,506 |
) |
|
$ |
3,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES |
|
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO
MOST |
|
DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS |
|
(Amounts in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
March 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to DMC |
|
$ |
1,638 |
|
|
$ |
215 |
|
|
Interest expense |
|
|
109 |
|
|
|
172 |
|
|
Interest income |
|
|
(5 |
) |
|
|
(3 |
) |
|
Provision for income taxes |
|
|
586 |
|
|
|
(1,171 |
) |
|
Depreciation |
|
|
1,995 |
|
|
|
1,417 |
|
|
Amortization of purchased intangible assets |
|
|
1,616 |
|
|
|
1,585 |
|
EBITDA |
|
|
5,939 |
|
|
|
2,215 |
|
|
Stock-based compensation |
|
|
555 |
|
|
|
1,422 |
|
|
Other
(income) expense, net |
|
|
435 |
|
|
|
(296 |
) |
Adjusted EBITDA |
|
$ |
6,929 |
|
|
$ |
3,341 |
|
|
|
|
|
|
|
|
|
|
CONTACT: Pfeiffer High Investor Relations, Inc. Geoff High
303-393-7044
DMC Global (NASDAQ:BOOM)
Historical Stock Chart
From Jun 2024 to Jul 2024
DMC Global (NASDAQ:BOOM)
Historical Stock Chart
From Jul 2023 to Jul 2024