DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009
(Dollars in Thousands, Except Share Data)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
NET SALES $ 41,298 $ 34,690 $ 109,913 $ 122,268
COST OF PRODUCTS SOLD 30,445 25,936 82,819 89,032
---------- ---------- ---------- ----------
Gross profit 10,853 8,754 27,094 33,236
---------- ---------- ---------- ----------
COSTS AND EXPENSES:
General and administrative
expenses 3,487 2,749 9,990 9,318
Selling expenses 3,047 2,212 7,918 6,376
Amortization of purchased
intangible assets 1,376 1,293 3,913 3,709
---------- ---------- ---------- ----------
Total costs and expenses 7,910 6,254 21,821 19,403
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS 2,943 2,500 5,273 13,833
OTHER INCOME (EXPENSE):
Gain on step acquisition
of joint ventures - - 2,117 -
Other income (expense), net (416) (633) (402) (560)
Interest expense (667) (752) (2,473) (2,521)
Interest income 6 41 71 145
Equity in earnings of
joint ventures - 91 255 170
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 1,866 1,247 4,841 11,067
INCOME TAX PROVISION 540 151 891 3,540
---------- ---------- ---------- ----------
NET INCOME $ 1,326 $ 1,096 $ 3,950 $ 7,527
========== ========== ========== ==========
INCOME PER SHARE:
Basic $ 0.10 $ 0.09 $ 0.30 $ 0.59
========== ========== ========== ==========
Diluted $ 0.10 $ 0.08 $ 0.30 $ 0.58
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:
Basic 12,939,274 12,632,406 12,807,826 12,597,023
========== ========== ========== ==========
Diluted 12,951,397 12,645,500 12,820,508 12,621,970
========== ========== ========== ==========
DIVIDENDS DECLARED PER
COMMON SHARE $ 0.04 $ 0.04 $ 0.12 $ 0.08
========== ========== ========== ==========
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
September 30, December 31,
2010 2009
ASSETS (unaudited)
------------- -------------
Cash and cash equivalents $ 11,097 $ 22,411
Accounts receivable, net 27,390 25,807
Inventories 36,797 32,501
Other current assets 4,350 7,255
------------- -------------
Total current assets 79,634 87,974
Property, plant and equipment, net 40,470 42,052
Goodwill, net 40,414 43,164
Purchased intangible assets, net 50,962 49,079
Other long-term assets 1,986 2,907
------------- -------------
Total assets $ 213,466 $ 225,176
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 11,386 $ 9,183
Customer advances 5,128 6,528
Dividend payable 528 515
Accrued income taxes 847 1,485
Other current liabilities 7,122 9,162
Lines of credit 6,735 1,777
Current portion of long-term debt 7,567 13,485
------------- -------------
Total current liabilities 39,313 42,135
Long-term debt 23,541 34,120
Deferred tax liabilities 13,469 15,217
Other long-term liabilities 1,354 1,593
Stockholders' equity 135,789 132,111
------------- -------------
Total liabilities and stockholders' equity $ 213,466 $ 225,176
============= =============
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009
(Dollars in Thousands)
(unaudited)
2010 2009
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,950 $ 7,527
Adjustments to reconcile net income to net cash
provided by operating activities -
Depreciation (including capital lease amortization) 3,908 3,701
Amortization of purchased intangible assets 3,913 3,709
Amortization of capitalized debt issuance costs 489 215
Stock-based compensation 2,537 2,657
Deferred income tax benefit (953) (1,875)
Equity in earnings of joint ventures (255) (170)
Gain on step acquisition of joint ventures (2,117) -
Change in working capital, net (1,218) 7,650
-------- --------
Net cash provided by operating activities 10,254 23,414
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Austin Explosives (3,620) -
Step acquisition of joint ventures, net of cash
acquired (2,065) -
Acquisition of property, plant and equipment (2,309) (3,238)
Change in other non-current assets (59) 42
-------- --------
Net cash used in investing activities (8,053) (3,196)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on syndicated credit agreement (15,374) (3,912)
Borrowings on lines of credit, net 4,682 -
Payments on long-term debt (593) (653)
Payments on capital lease obligations (215) (132)
Payment of dividends (1,561) (513)
Payment of deferred debt issuance costs - (58)
Net proceeds from issuance of common stock 70 373
Tax impact of stock-based compensation (639) 90
-------- --------
Net cash used in financing activities (13,630) (4,805)
-------- --------
EFFECTS OF EXCHANGE RATES ON CASH 115 258
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11,314) 15,671
CASH AND CASH EQUIVALENTS, beginning of the period 22,411 14,360
-------- --------
CASH AND CASH EQUIVALENTS, end of the period $ 11,097 $ 30,031
======== ========
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,
-------------------- --------------------
2010 2009 2010 2009
--------- --------- --------- ---------
(unaudited) (unaudited)
Explosive Metalworking Group $ 24,925 $ 27,327 $ 72,921 $ 102,403
Oilfield Products 13,208 5,123 28,868 13,171
AMK Welding 3,165 2,240 8,124 6,694
--------- --------- --------- ---------
Net sales $ 41,298 $ 34,690 $ 109,913 $ 122,268
========= ========= ========= =========
Explosive Metalworking Group $ 1,225 $ 3,370 $ 4,408 $ 17,381
Oilfield Products 1,691 (414) 1,490 (2,013)
AMK Welding 861 441 1,912 1,122
Unallocated expenses (834) (897) (2,537) (2,657)
--------- --------- --------- ---------
Income from operations $ 2,943 $ 2,500 $ 5,273 $ 13,833
========= ========= ========= =========
For the three months ended September 30, 2010
-------------------------------------------------
Explosive
Metalworking Oilfield AMK Unallocated
Group Products Welding Expenses Total
------------ -------- ------- --------- -------
(unaudited)
Income from operations $ 1,225 $ 1,691 $ 861 $ (834) $ 2,943
Adjustments:
Stock-based compensation - - - 834 834
Depreciation 1,051 333 120 - 1,504
Amortization of
purchased intangibles 557 819 - - 1,376
------------ -------- ------- --------- -------
Adjusted EBITDA $ 2,833 $ 2,843 $ 981 $ - $ 6,657
============ ======== ======= ========= =======
For the three months ended September 30, 2009
-------------------------------------------------
Explosive
Metalworking Oilfield AMK Unallocated
Group Products Welding Expenses Total
------------ -------- ------- --------- -------
(unaudited)
Income (loss) from
operations $ 3,370 $ (414) $ 441 $ (897) $ 2,500
Adjustments:
Stock-based compensation - - - 897 897
Depreciation 910 236 114 - 1,260
Amortization of
purchased intangibles 617 676 - - 1,293
------------ -------- ------- --------- -------
Adjusted EBITDA $ 4,897 $ 498 $ 555 $ - $ 5,950
============ ======== ======= ========= =======
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, 2010
-------------------------------------------------
Explosive
Metalworking Oilfield AMK Unallocated
Group Products Welding Expenses Total
------------ -------- ------- --------- -------
(unaudited)
Income from operations $ 4,408 $ 1,490 $ 1,912 $ (2,537) $ 5,273
Adjustments:
Stock-based compensation - - - 2,537 2,537
Depreciation 2,634 924 350 - 3,908
Amortization of
purchased intangibles 1,706 2,207 - - 3,913
------------ -------- ------- --------- -------
Adjusted EBITDA $ 8,748 $ 4,621 $ 2,262 $ - $15,631
============ ======== ======= ========= =======
For the nine months ended September 30, 2009
-------------------------------------------------
Explosive
Metalworking Oilfield AMK Unallocated
Group Products Welding Expenses Total
------------ -------- ------- --------- -------
(unaudited)
Income (loss) from
operations $ 17,381 $ (2,013) $ 1,122 $ (2,657) $13,833
Adjustments:
Stock-based compensation - - - 2,657 2,657
Depreciation 2,683 676 342 - 3,701
Amortization of
purchased intangibles 1,769 1,940 - - 3,709
------------ -------- ------- --------- -------
Adjusted EBITDA $ 21,833 $ 603 $ 1,464 $ - $23,900
============ ======== ======= ========= =======
Three months Nine months
ended ended
September 30, September 30,
---------------- ----------------
2010 2009 2010 2009
------- ------- ------- -------
(unaudited) (unaudited)
Net income $ 1,326 $ 1,096 $ 3,950 $ 7,527
Interest expense 667 752 2,473 2,521
Interest income (6) (41) (71) (145)
Provision for income taxes 540 151 891 3,540
Depreciation 1,504 1,260 3,908 3,701
Amortization of purchased intangible
assets 1,376 1,293 3,913 3,709
------- ------- ------- -------
EBITDA 5,407 4,511 15,064 20,853
Stock-based compensation 834 897 2,537 2,657
Other income (expense), net 416 633 (1,715) 560
Equity in earnings of joint ventures - (91) (255) (170)
------- ------- ------- -------
Adjusted EBITDA $ 6,657 $ 5,950 $15,631 $23,900
======= ======= ======= =======
Contact Information: CONTACT: Pfeiffer High Investor Relations, Inc. Geoff High 303-393-7044