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| Dynamic Materials Reports Second Quarter Financial Results |
Selected Highlights
- Income from operations increases 228% on 53% improvement in Q2 revenue
- Backlog at Explosive Metalworking division remains near all-time high
- AMK Welding achieves 102% increase in revenue following initiation of
ground-based turbine project
- Term-debt and line-of-credit borrowings reduced by $5.9 million
- Company receives $6.0 million order following close of quarter
BOULDER, Colo., Aug. 4 /PRNewswire-FirstCall/ -- Dynamic Materials Corporation (DMC) (Nasdaq: BOOM), the world's leading provider of explosion-welded clad metal plates and associated services, today reported financial results for its second quarter ended June 30, 2005. Sales in the quarter increased 53% to $18.4 million versus $12.0 million in the second quarter last year. Sequentially, sales increased 5% versus sales of $17.5 million in this year's first quarter. Gross profit margin improved to 28% from 24% in the same period last year and 27% in this year's first quarter. Income from operations increased 228% to $3.4 million versus $1.1 million in the comparable year-ago quarter. Second quarter operating income increased 27% versus the $2.7 million reported in the first quarter. Second quarter net income was $2.1 million, or $0.35 per diluted share, versus a net loss of $0.5 million, or $0.09 per diluted share, in the second quarter last year. Sequentially, second quarter net income increased 28% versus first quarter net income of $1.6 million, or $0.28 per diluted share, in this year's first quarter. Diluted shares outstanding increased to 6,026,669 from 5,392,276 in last year's second quarter and 5,930,550 in the first quarter. Bottom-line results in last year's second quarter were impacted by a loss from discontinued operations of $1.1 million, or $0.20 per diluted share, which was associated with the company's former Spin Forge division. Explosive Metalworking Group Sales at DMC's Explosive Metalworking Group advanced 51% to $17.2 million from $11.4 million in last year's second quarter, and were up 2% versus sales of $17.0 million in the first quarter. Operating income increased 201% to $3.1 million from $1.0 million in the comparable period last year, and was up 10% from the $2.8 million reported in the first quarter. The Group ended the quarter with an order backlog of $33.2 million, down slightly from the all- time high backlog of $34.1 million achieved at the end of this year's first quarter. AMK Welding Second quarter sales from the company's AMK Welding division increased 102% to $1.1 million from $0.6 million in last year's comparable quarter. Sales were up 108% versus the $0.5 million reported in this year's first quarter. The division reported second quarter operating income of $343,000 versus $19,000 in the second quarter last year and a loss of $115,000 in the first quarter. The improvements reflect the impact of recently commenced production work on a previously discussed ground-based turbine project. Management Commentary Yvon Cariou, president and CEO, said, "Worldwide demand for clad metal remains strong, and our second quarter results are indicative of DMC's ability to capitalize on emerging global opportunities. Shortly after the close of the second period, we received a $6.0 million order that increased our backlog to a new all-time high. The order, which relates to a project for international petrochemical producer Kuwait Olefins Company, calls for the delivery of more than 2 million pounds of clad plate, which will be manufactured at our facilities in France and the United States. This order is illustrative of how our international production capacity gives us a distinct competitive advantage and allows us to better serve our customers' needs." Rick Santa, chief financial officer, said the order is expected to ship during this year's fourth quarter and the first quarter of fiscal 2006. "In addition to our strong operational performance, we have made significant progress at strengthening our balance sheet," Santa said. "The combination of operating cash flow, proceeds from stock option exercises and the conversion of a $1.2 million convertible subordinated note during the first half of 2005 allowed us to reduce line-of-credit borrowings and term-debt by approximately $5.9 million to roughly $3.4 million at June 30." "Current activity within many of the industries we target indicates there should be sustained demand for our products going forward," Cariou said. "We remain encouraged by our opportunities for continued growth." Six-Month Results Through six months, DMC reported a sales increase of 62% to $35.9 million compared with sales of $22.1 million at the six-month mark last year. Gross profit margin improved to 27% from 23% in the respective periods. Income from operations increased 236% to $6.2 million compared with $1.8 million in the same period a year ago. Net income advanced to $3.8 million, or $0.63 per diluted share, versus a net loss of $0.3 million, or $0.05 per diluted share, during the same period a year ago. Diluted shares outstanding increased to 5,979,348 from 5,380,286 in last year's six-month period. Last year's net loss through six months was impacted by a loss from discontinued operations of $1.3 million, or $0.24 per diluted share, associated with the former Spin Forge division. The Explosive Metalworking Group reported six-month sales of $34.2 million, a 62% increase versus sales of $21.1 million at the six-month mark a year ago. Operating income increased 218% to $5.9 million compared with $1.9 million during the same period a year prior. The improvement in operating income reflects both increased sales and more effective expense absorption within the division. Six-month sales at the AMK Welding division improved 58% to $1.7 million compared with $1.1 million during the comparable period last year. Operating income for the period improved to $227,000 compared with an operating loss of $34,000 during the same period a year ago. 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 petrochemicals, refining, hydrometallurgy, aluminum smelting and shipbuilding. The company operates two business segments: the Explosive Metalworking Group, which uses proprietary explosive processes to fuse dissimilar 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. With more than 30 years of international experience, DMC has captured a commanding share of the worldwide market for explosion-welded clad metals. For more information, visit the company's website at 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: 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, 2004.
DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Dollars in Thousands, Except Per Share Data)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
NET SALES $18,376 $11,985 $35,886 $22,145
COST OF PRODUCTS SOLD 13,161 9,148 26,020 17,043
Gross profit 5,215 2,837 9,866 5,102
COSTS AND EXPENSES:
General and administrative
expenses 898 846 1,707 1,573
Selling expenses 870 941 1,995 1,697
Total costs and expenses 1,768 1,787 3,702 3,270
INCOME FROM OPERATIONS OF
CONTINUING OPERATIONS 3,447 1,050 6,164 1,832
OTHER INCOME (EXPENSE):
Other income 13 2 16 7
Interest expense (82) (111) (168) (234)
Interest income 16 7 20 12
INCOME BEFORE INCOME TAXES
AND DISCONTINUED
OPERATIONS 3,394 948 6,032 1,617
INCOME TAX PROVISION 1,279 385 2,269 645
INCOME FROM CONTINUING
OPERATIONS
BEFORE DISCONTINUED
OPERATIONS 2,115 563 3,763 972
DISCONTINUED OPERATIONS:
Loss from operations of
discontinued operations,
net of tax -- (451) -- (650)
Loss on sale of discontinued
operations, net of tax -- (619) -- (619)
Loss from discontinued
operations -- (1,070) -- (1,269)
NET INCOME (LOSS) $2,115 $(507) $3,763 $(297)
INCOME (LOSS) PER SHARE -
BASIC:
Continuing operations $0.38 $0.11 $0.69 $0.19
Discontinued operations -- (0.21) -- (0.25)
Net income (loss) $0.38 $(0.10) $0.69 $(0.06)
INCOME (LOSS) PER SHARE -
DILUTED:
Continuing operations $0.35 $0.11 $0.63 $0.19
Discontinued operations -- (0.20) -- (0.24)
Net income (loss) $0.35 $(0.09) $0.63 $(0.05)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING -
Basic 5,535,466 5,106,912 5,441,818 5,098,231
Diluted 6,026,669 5,392,276 5,979,348 5,380,286
DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
June 30, December 31,
2005 2004
ASSETS (unaudited)
Cash and cash equivalents $1,824 $2,404
Accounts receivable, net 13,485 13,936
Inventories 10,789 8,000
Other current assets 2,620 1,906
Total current assets 28,718 26,246
Property, plant and equipment, net 12,000 11,844
Other long-term assets 5,602 5,663
Total assets $46,320 $43,753
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $7,517 $6,041
Dividend payable 1,155 --
Other current liabilities 3,762 4,519
Bank lines of credit 7 3,216
Current portion of long-term debt 1,101 3,186
Total current liabilities 13,542 16,962
Long-term debt 2,329 2,906
Other long-term liabilities 3,786 3,815
Stockholders' equity 26,663 20,070
Total liabilities and stockholders'
equity $46,320 $43,753
DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Dollars in Thousands)
(unaudited)
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations $3,763 $972
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities -
Depreciation and amortization 717 683
Amortization of capitalized debt
issuance costs 26 41
Provision for deferred income taxes (10) 627
Tax benefit related to stock options 2,294 --
Change in working capital, net (3,631) 794
Net cash flows provided by
operating activities 3,159 3,117
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment received on other receivable 874 53
Acquisition of property, plant and
equipment (1,376) (630)
Change in other non-current assets 148 (16)
Net cash flows provided by (used in)
investing activities (354) (593)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings / (repayments) on lines of
credit, net (2,949) 90
Payments on long-term debt (1,530) (1,478)
Net proceeds from issuance of common stock 1,181 63
Other cash flows from financing activities 32 (182)
Net cash flows used in financing
activities (3,266) (1,507)
EFFECTS OF EXCHANGE RATES ON CASH (119) (7)
CASH FLOWS USED IN DISCONTINUED OPERATIONS -- (842)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (580) 168
CASH AND CASH EQUIVALENTS, beginning
of the period 2,404 522
CASH AND CASH EQUIVALENTS, end of the period $1,824 $690
SOURCE Dynamic Materials Corporation
-0- 08/04/2005
/CONTACT: Geoff High of Pfeiffer High Investor Relations, Inc.,
+1-303-393-7044, for Dynamic Materials Corporation /
/Web site: http://www.dynamicmaterials.com /
(BOOM)
CO: Dynamic Materials Corporation
ST: Colorado
IN: MNG OTC
SU: ERN
BF-AI
-- LATH026 --
5285 08/04/2005 08:00 EDT http://www.prnewswire.com
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