Selected Highlights
-- Q3 diluted EPS reported at $0.57 on 33% gross margin and lower tax
rate
-- Revenue of $52.4M up 24% versus 2007 third quarter
-- Year-to-date Adjusted EBITDA increases 41% to $41.1M versus 2007 nine-
month period
-- Management reports steady bookings and strong quoting activity
Dynamic Materials Corporation (DMC) (
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Dollars in Thousands, Except Share Data)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
NET SALES $ 52,380 $ 42,099 $ 173,957 $ 109,964
COST OF PRODUCTS SOLD 35,355 27,807 120,171 72,741
---------- ---------- ---------- ----------
Gross profit 17,025 14,292 53,786 37,223
---------- ---------- ---------- ----------
COSTS AND EXPENSES:
General and administrative
expenses 3,679 1,903 10,612 5,419
Selling expenses 2,611 1,811 8,085 4,913
Amortization expense of
purchased intangible
assets 1,363 - 6,188 -
---------- ---------- ---------- ----------
Total costs and
expenses 7,653 3,714 24,885 10,332
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS 9,372 10,578 28,901 26,891
OTHER INCOME (EXPENSE):
Other income (expense) (268) 23 (227) 3
Interest expense (1,469) (20) (4,203) (20)
Interest income 153 233 477 598
Equity in earnings
(losses) of joint
ventures (19) - 270 -
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 7,769 10,814 25,218 27,472
INCOME TAX PROVISION 546 3,697 6,535 9,813
---------- ---------- ---------- ----------
NET INCOME $ 7,223 $ 7,117 $ 18,683 $ 17,659
========== ========== ========== ==========
INCOME PER SHARE:
Basic $ 0.58 $ 0.59 $ 1.50 $ 1.47
========== ========== ========== ==========
Diluted $ 0.57 $ 0.58 $ 1.49 $ 1.44
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:
Basic 12,463,060 12,094,181 12,426,369 12,039,593
========== ========== ========== ==========
Diluted 12,567,912 12,301,772 12,572,226 12,245,212
========== ========== ========== ==========
ANNUAL DIVIDENDS DECLARED
PER COMMON SHARE $ - $ - $ 0.15 $ 0.15
========== ========== ========== ==========
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
September 30, December 31,
2008 2007
ASSETS (unaudited)
------------- -------------
Cash and cash equivalents $ 30,508 $ 9,045
Restricted cash - 371
Accounts receivable, net 31,031 39,833
Inventories 40,900 41,628
Other current assets 7,729 3,853
------------- -------------
Total current assets 110,168 94,730
Property, plant and equipment, net 38,709 35,446
Goodwill, net 44,797 45,862
Purchased intangible assets, net 54,876 61,914
Other long-term assets 2,878 2,947
------------- -------------
Total assets $ 251,428 $ 240,899
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 18,722 $ 22,590
Accrued income taxes 993 1,212
Other current liabilities 14,476 19,394
Lines of credit - current 4,785 7,587
Current portion of long-term debt 7,471 8,035
------------- -------------
Total current liabilities 46,447 58,818
Lines of credit 9,536 -
Long-term debt 60,440 61,530
Deferred tax liabilities 18,040 20,604
Other long-term liabilities 1,125 1,668
Stockholders' equity 115,840 98,279
------------- -------------
Total liabilities and stockholders' equity $ 251,428 $ 240,899
============= =============
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Dollars in Thousands)
(unaudited)
2008 2007
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 18,683 $ 17,659
Adjustments to reconcile net income to net cash
provided by operating activities -
Depreciation (including capital lease
amortization) 3,621 1,394
Amortization of purchased intangible assets 6,188 -
Amortization of capitalized debt issuance costs 210 -
Stock-based compensation 2,363 912
Provision for deferred income taxes (2,735) (239)
Equity in earnings of joint ventures (270) -
Change in working capital, net (3,255) (6,925)
-------- --------
Net cash provided by operating activities 24,805 12,801
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (7,325) (7,347)
Change in other non-current assets 50 (11)
-------- --------
Net cash used in investing activities (7,275) (7,358)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on lines of credit, net 7,247 -
Payments on long-term debt (1,251) (389)
Payments on capital lease obligations (308) -
Payment of dividends (1,894) (1,821)
Payment of deferred debt issuance costs (167) -
Net proceeds from issuance of common stock 333 563
Excess tax benefit related to stock options 9 5
-------- --------
Net cash provided by (used in) financing
activities 3,969 (1,642)
-------- --------
EFFECTS OF EXCHANGE RATES ON CASH (36) 357
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 21,463 4,158
CASH AND CASH EQUIVALENTS, beginning of the period 9,045 17,886
-------- --------
CASH AND CASH EQUIVALENTS, end of the period $ 30,508 $ 22,044
======== ========
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO MOST
DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(Dollars in thousands)
Three months ended Nine months ended
September 30, September 30,
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
(unaudited) (unaudited)
Explosive Metalworking Group $ 42,703 $ 40,326 $ 147,344 $ 105,257
Oilfield Products 6,756 - 19,128 -
AMK Welding 2,921 1,773 7,485 4,707
--------- --------- --------- ---------
Net sales $ 52,380 $ 42,099 $ 173,957 $ 109,964
========= ========= ========= =========
Explosive Metalworking Group $ 8,593 $ 10,646 $ 28,393 $ 27,197
Oilfield Products 725 - 775 -
AMK Welding 874 325 2,096 606
Unallocated Expenses (820) (393) (2,363) (912)
--------- --------- --------- ---------
Income from operations $ 9,372 $ 10,578 $ 28,901 $ 26,891
========= ========= ========= =========
For the three months ended September 30, 2008
------------------------------------------------
Explosive
Metalworking Oilfield AMK Unallocated
Group Products Welding Expenses Total
---------- -------- -------- -------- ---------
(unaudited)
Income from operations $ 8,593 $ 725 $ 874 $ (820) $ 9,372
Adjustments:
Stock-based compensation - - - 820 820
Depreciation 924 234 109 - 1,267
Amortization of purchased
intangibles 650 713 - - 1,363
---------- -------- -------- -------- ---------
Adjusted EBITDA $ 10,167 $ 1,672 $ 983 $ - $ 12,822
========== ======== ======== ======== =========
For the three months ended
September 30, 2007
-------------------------------------
Explosive
Metalworking AMK Unallocated
Group Welding Expenses Total
-------- -------- -------- ---------
(unaudited)
Income from operations $ 10,646 $ 325 $ (393) $ 10,578
Adjustments:
Stock-based compensation - - 393 393
Depreciation 402 82 - 484
-------- -------- -------- ---------
Adjusted EBITDA $ 11,048 $ 407 $ - $ 11,455
======== ======== ======== =========
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO MOST
DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(Dollars in thousands)
For the nine months ended September 30, 2008
---------------------------------------------------
Explosive
Metalworking Oilfield AMK Unallocated
Group Products Welding Expenses Total
----------- --------- --------- -------- ---------
(unaudited)
Income from operations $ 28,393 $ 775 $ 2,096 $ (2,363) $ 28,901
Adjustments:
Stock-based
compensation - - - 2,363 2,363
Depreciation 2,593 704 324 - 3,621
Amortization of
purchased intangibles 4,026 2,162 - - 6,188
----------- --------- --------- -------- ---------
Adjusted EBITDA $ 35,012 $ 3,641 $ 2,420 $ - $ 41,073
=========== ========= ========= ======== =========
For the nine months ended
September 30, 2007
---------------------------------------
Explosive
Metalworking AMK Unallocated
Group Welding Expenses Total
--------- --------- -------- ---------
(unaudited)
Income from operations $ 27,197 $ 606 $ (912) $ 26,891
Adjustments:
Stock-based
compensation - - 912 912
Depreciation 1,190 204 - 1,394
--------- --------- -------- ---------
Adjusted EBITDA $ 28,387 $ 810 $ - $ 29,197
========= ========= ======== =========
Three months ended Nine months ended
September 30, September 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
(unaudited) (unaudited)
Net income $ 7,223 $ 7,117 $ 18,683 $ 17,659
Interest expense 1,469 20 4,203 20
Interest income (153) (233) (477) (598)
Provision for income taxes 546 3,697 6,535 9,813
Depreciation 1,267 484 3,621 1,394
Amortization of purchased
intangible assets 1,363 - 6,188 -
-------- -------- -------- --------
EBITDA 11,715 11,085 38,753 28,288
Stock-based compensation 820 393 2,363 912
Other (income) expense 268 (23) 227 (3)
Equity in (earnings) losses of
joint ventures 19 - (270) -
-------- -------- -------- --------
Adjusted EBITDA $ 12,822 $ 11,455 $ 41,073 $ 29,197
======== ======== ======== ========
Contact Information: CONTACT: Pfeiffer High Investor Relations, Inc. Geoff High 303-393-7044