Second quarter sales were
Operating income was
Adjusted EBITDA was
Explosive Metalworking
DMC's Explosive Metalworking segment reported sales of
Oilfield Products
Sales at DMC's Oilfield Products segment increased 20% to
AMK Welding
DMC's AMK Welding segment reported second quarter sales of
Six-Month Results
Sales for the six-month period were
The Explosive Metalworking segment reported six-month sales of
Six-month sales at DMC's Oilfield Products segment increased 22% to
AMK Welding recorded sales at the mid-year mark of
Management Commentary
"Our second quarter was marked by solid production and shipment execution at our Explosive Metalworking segment, and continued strong demand from the worldwide oil and gas industry for our suite of oilfield products," said
"Our Explosive Metalworking sales team continued to quote on a broad array of order opportunities, most notably in the upstream oil and gas, chemical and petrochemical markets. After a 28% sequential increase in our order backlog during the first quarter, booking volume did moderate during the second period, as it appears macro-economic uncertainties have slowed the advancement of various projects in certain end markets. Several of these projects are tied to major capital expenditure initiatives in the
Cariou said that the Oilfield Products segment continues to capitalize on very active exploration and production programs in most of its global markets. "While we could see a near-term pullback in North American demand during the second half of the year as the energy industry shifts its drilling focus to oil from natural gas, our prospects for long-term growth remain encouraging. Development work on our new shaped-charge facilities in
Cariou said DMC's AMK Welding segment is also making progress on its growth initiatives, and management is optimistic these efforts will result in a return to sales growth by the end of the fiscal year.
"While current global economic conditions have not come without challenges, each of our business segments is addressing a range of compelling new business opportunities, and we are making significant progress on our wide ranging expansion initiatives. We are as bullish as ever about DMC's long-range prospects for growth."
Guidance
Consolidated sales during the third fiscal quarter should improve sequentially from the second quarter, but are expected to be down 6% to 10% from sales of
Conference call information
Management will hold a conference call to discuss these results today at
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 and the company's ability to generate cash flow from operations. As a result, internal management reports used during monthly operating reviews feature the adjusted EBITDA. 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
Based in
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 our guidance for third quarter and full-year 2012 sales, margins and tax rates, as well as expectations about customer demand, business conditions and growth opportunities, all of which involve risks and uncertainties. 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 size and timing of customer orders and shipments; fluctuations in customer demand; our ability to successfully source and execute upon greenfield growth as well as acquisition 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
DYNAMIC MATERIALS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011
(Dollars in Thousands, Except Share and Per Share Data)
(unaudited)
Three months ended Six months ended
June 30, June 30,
------------------------ ------------------------
2012 2011 2012 2011
----------- ----------- ----------- -----------
NET SALES $ 48,687 $ 54,165 $ 98,899 $ 99,740
COST OF PRODUCTS SOLD 34,748 38,692 70,583 73,964
----------- ----------- ----------- -----------
Gross profit 13,939 15,473 28,316 25,776
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
General and
administrative
expenses 4,641 4,194 9,146 7,869
Selling and
distribution expenses 4,128 3,911 8,319 7,638
Amortization of
purchased intangible
assets 1,520 1,471 3,064 2,876
----------- ----------- ----------- -----------
Total costs and
expenses 10,289 9,576 20,529 18,383
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 3,650 5,897 7,787 7,393
OTHER INCOME (EXPENSE):
Other income
(expense), net 409 (136) 209 (339)
Interest expense (196) (486) (407) (896)
Interest income 3 - 8 3
----------- ----------- ----------- -----------
INCOME BEFORE INCOME
TAXES 3,866 5,275 7,597 6,161
INCOME TAX PROVISION 1,167 1,418 2,509 1,565
----------- ----------- ----------- -----------
NET INCOME 2,699 3,857 5,088 4,596
Less: Net income
(loss) attributable
to noncontrolling
interest 46 (11) 9 (23)
----------- ----------- ----------- -----------
NET INCOME ATTRIBUTABLE
TO DYNAMIC MATERIALS
CORPORATION $ 2,653 $ 3,868 $ 5,079 $ 4,619
=========== =========== =========== ===========
INCOME PER SHARE:
Basic $ 0.20 $ 0.29 $ 0.38 $ 0.35
=========== =========== =========== ===========
Diluted $ 0.20 $ 0.29 $ 0.38 $ 0.35
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING:
Basic 13,205,620 13,060,456 13,203,310 13,059,782
=========== =========== =========== ===========
Diluted 13,209,732 13,070,536 13,207,562 13,069,834
=========== =========== =========== ===========
DIVIDENDS DECLARED PER
COMMON SHARE $ 0.04 $ 0.04 $ 0.08 $ 0.08
=========== =========== =========== ===========
The accompanying notes are an integral part of these Condensed Consolidated
Financial Statements.
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
June 30, December 31,
2012 2011
ASSETS (unaudited)
------------- -------------
Cash and cash equivalents $ 5,215 $ 5,276
Accounts receivable, net 35,273 36,368
Inventories 48,850 43,218
Other current assets 5,999 6,327
------------- -------------
Total current assets 95,337 91,189
Property, plant and equipment, net 45,910 41,402
Goodwill, net 36,056 37,507
Purchased intangible assets, net 43,369 42,054
Other long-term assets 1,365 1,274
------------- -------------
Total assets $ 222,037 $ 213,426
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 14,590 $ 14,753
Customer advances 2,036 1,918
Dividend payable 540 535
Accrued income taxes 604 780
Other current liabilities 8,733 10,158
Lines of credit 579 13
Current portion of long-term debt 62 1,153
------------- -------------
Total current liabilities 27,144 29,310
Lines of credit 35,515 26,462
Long-term debt 86 118
Deferred tax liabilities 9,285 10,185
Other long-term liabilities 1,188 1,308
Stockholders' equity 148,819 146,043
------------- -------------
Total liabilities and stockholders' equity $ 222,037 $ 213,426
============= =============
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011
(Dollars in Thousands)
(unaudited)
2012 2011
------------ ------------
(unaudited)
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,088 $ 4,596
Adjustments to reconcile net income to net
cash provided by operating activities -
Depreciation (including capital lease
amortization) 2,729 2,628
Amortization of purchased intangible assets 3,064 2,876
Amortization of deferred debt issuance costs 66 157
Stock-based compensation 1,935 1,663
Deferred income tax benefit (459) (1,367)
Loss on disposal of property, plant and
equipment (2) 101
Change in working capital, net (4,346) (9,899)
------------ ------------
Net cash provided by operating activities 8,075 755
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (5,595) (2,286)
Acquisition of TRX Industries (10,294) -
Change in other non-current assets 126 36
------------ ------------
Net cash used in investing activities (15,763) (2,250)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on lines of credit, net 9,924 5,818
Payments on long-term debt (1,138) (421)
Payments on capital lease obligations (40) (156)
Payment of dividends (1,074) (1,062)
Contribution from non-controlling stockholder - 42
Net proceeds from issuance of common stock 98 99
Tax impact of stock-based compensation (11) (109)
------------ ------------
Net cash provided by financing activities 7,759 4,211
------------ ------------
EFFECTS OF EXCHANGE RATES ON CASH (132) 325
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (61) 3,041
CASH AND CASH EQUIVALENTS, beginning of the
period 5,276 4,572
------------ ------------
CASH AND CASH EQUIVALENTS, end of the period $ 5,215 $ 7,613
============ ============
DYNAMIC MATERIALS CORPORATION & SUBSIDIARIES
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO MOST
DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(Dollars in thousands)
(unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Explosive
Metalworking $ 27,374 $ 35,751 $ 54,908 $ 61,826
Oilfield Products 18,924 15,717 39,898 32,773
AMK Welding 2,389 2,697 4,093 5,141
--------- --------- --------- ---------
Net sales $ 48,687 $ 54,165 $ 98,899 $ 99,740
========= ========= ========= =========
Explosive
Metalworking $ 3,589 $ 5,605 $ 7,688 $ 7,159
Oilfield Products 1,701 1,159 3,747 2,083
AMK Welding 165 702 77 1,170
Unallocated expenses (1,805) (1,569) (3,725) (3,019)
--------- --------- --------- ---------
Income (loss) from
operations $ 3,650 $ 5,897 $ 7,787 $ 7,393
========= ========= ========= =========
For the three months ended June 30, 2012
-------------------------------------------------------
Explosive Oilfield AMK Unallocated
Metalworking Products Welding Expenses Total
------------ -------- ---------- ----------- --------
(unaudited)
Income from
operations $ 3,589 $ 1,701 $ 165 $ (1,805) $ 3,650
Adjustments:
Net income
attributable to
non-controlling
interest - (46) - - (46)
Stock-based
compensation - - - 966 966
Depreciation 865 372 125 1,362
Amortization of
purchased
intangibles 513 1,007 - - 1,520
------------ -------- ---------- ----------- --------
Adjusted EBITDA $ 4,967 $ 3,034 $ 290 $ (839) $ 7,452
============ ======== ========== =========== ========
For the three months ended June 30, 2011
-------------------------------------------------------
Explosive Oilfield AMK Unallocated
Metalworking Products Welding Expenses Total
------------ -------- ---------- ----------- --------
(unaudited)
Income from
operations $ 5,605 $ 1,159 $ 702 $ (1,569) $ 5,897
Adjustments:
Net loss
attributable to
non-controlling
interest - 11 - - 11
Stock-based
compensation - - - 871 871
Depreciation 921 232 119 - 1,272
Amortization of
purchased
intangibles 574 897 - - 1,471
------------ -------- ---------- ----------- --------
Adjusted EBITDA $ 7,100 $ 2,299 $ 821 $ (698) $ 9,522
============ ======== ========== =========== ========
For the six months ended June 30, 2012
-------------------------------------------------------
Explosive Oilfield AMK Unallocated
Metalworking Products Welding Expenses Total
------------ -------- ---------- ----------- --------
(unaudited)
Income from
operations $ 7,688 $ 3,747 $ 77 $ (3,725) $ 7,787
Adjustments:
Net income
attributable to
non-controlling
interest - (9) - - (9)
Stock-based
compensation - - - 1,935 1,935
Depreciation 1,744 736 249 - 2,729
Amortization of
purchased
intangibles 1,036 2,028 - - 3,064
------------ -------- ---------- ----------- --------
Adjusted EBITDA $ 10,468 $ 6,502 $ 326 $ (1,790) $ 15,506
============ ======== ========== =========== ========
For the six months ended June 30, 2011
-------------------------------------------------------
Explosive Oilfield AMK Unallocated
Metalworking Products Welding Expenses Total
------------ -------- ---------- ----------- --------
(unaudited)
Income from
operations $ 7,159 $ 2,083 $ 1,170 $ (3,019) $ 7,393
Adjustments:
Net loss
attributable to
non-controlling
interest - 23 - - 23
Stock-based
compensation - - - 1,663 1,663
Depreciation 1,834 553 241 - 2,628
Amortization of
purchased
intangibles 1,120 1,756 - - 2,876
------------ -------- ---------- ----------- --------
Adjusted EBITDA $ 10,113 $ 4,415 $ 1,411 $ (1,356) $ 14,583
============ ======== ========== =========== ========
Three months ended Six months ended
June 30, June 30,
--------------------- --------------------
2012 2011 2012 2011
--------- ---------- --------- ---------
Net income
attributable to DMC $ 2,653 $ 3,868 $ 5,079 $ 4,619
Interest expense 196 486 407 896
Interest income (3) - (8) (3)
Provision for
income taxes 1,167 1,418 2,509 1,565
Depreciation 1,362 1,272 2,729 2,628
Amortization of
purchased
intangible assets 1,520 1,471 3,064 2,876
--------- ---------- --------- ---------
EBITDA 6,895 8,515 13,780 12,581
Stock-based
compensation 966 871 1,935 1,663
Other (income)
expense, net (409) 136 (209) 339
--------- ---------- --------- ---------
Adjusted EBITDA $ 7,452 $ 9,522 $ 15,506 $ 14,583
========= ========== ========= =========
CONTACT:Pfeiffer High Investor Relations, Inc.Geoff High 303-393-7044
Source:
