Alberta-Based LRI Strengthens North American Presence of DMC's Oilfield Products Segment
BOULDER, CO--(Marketwire - October 2, 2009) - Dynamic Materials Corporation (DMC) (NASDAQ: BOOM), the world's leading provider of explosion-welded clad metal plates
and a growing participant in the worldwide oilfield products industry,
today announced it has acquired 100 percent of the stock of Alberta,
Canada-based LRI Oil Tools Inc. (LRI). The cash and stock transaction is
valued at approximately US$650,000, and includes 9,584 shares of DMC
restricted common stock. DMC intends to make an additional capital
contribution of approximately US$2.2 million into the LRI business to
reduce indebtedness and enhance working capital.
LRI, parent company of LRI Perforating Systems Inc., produces and
distributes perforating equipment for use by the oil and gas exploration
and production industry. The business has had a long-term strategic
relationship with DMC's Oilfield Products segment, and has served for
several years as its sole Canadian distributor. LRI employs a staff of
approximately 25, and DMC expects to retain its current management team.
Yvon Cariou, DMC's president and CEO, said, "This acquisition strengthens
our presence in a strategically important region that is poised for
long-range growth. In addition to expanding our product portfolio, LRI
improves our distribution platform and immediately enhances our access to a
broad spectrum of North American energy companies. Over the long-term, we
expect this acquisition could also provide us with a springboard into other
geographic end markets."
From 2006 through 2008, LRI recorded average annual sales of approximately
CAD$10.6 million and average gross margins of approximately 33%, which are
comparable to the historic gross margins of DMC's Oilfield Product segment.
Although the global economic downturn is expected to negatively impact
LRI's sales and gross margins in 2009, DMC management is optimistic about
its long-term prospects for growth.
"A June 2009 report from the Canadian Energy Research Institute forecasts
that the Canadian energy exploration and extraction market will grow by 50
percent during the next three years and by 70 percent over the next seven
years," said Rolf Rospek, CEO of DMC's Oilfield Products segment. "Given
LRI's product portfolio, strategic network of distribution centers and
solid customer relationships, we believe this acquisition represents an
ideal fit with our business."
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
oil and gas, petrochemicals, alternative energy, hydrometallurgy, aluminum
production, shipbuilding, power generation, industrial refrigeration and
similar industries. The Company operates three business segments:
Explosive Metalworking, which uses proprietary explosive processes to fuse
different metals and alloys; Oilfield Products, which manufactures, markets
and sells specialized explosive components and systems used to perforate
oil and gas wells; 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
websites at http://www.dynamicmaterials.com and
http://www.dynaenergetics.de.
Safe Harbor Language
Except for the historical information contained herein, this news release
contains forward-looking statements, including growth of the Canadian
energy exploration and extraction market, LRI's prospects for growth,
expectations about 2009 and future sales and margins of LRI, as well as
plans and amounts to reduce indebtedness, which involve risks and
uncertainties. These risks and uncertainties include, but are not limited
to, demand for LRI's products (which in part is dependant on oil and gas
prices and future oil and gas exploration activity) and the Company's
ability to successfully integrate LRI with its Oilfield Products segment,
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,
2008.
Contact Information: CONTACT:
Pfeiffer High Investor Relations, Inc.
Geoff High
303-393-7044