SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 22, 1999
DYNAMIC MATERIALS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-8328 84-0608431
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(State or other jurisdiction (Commission (IRS Employee
of incorporation) File Number) Identification No.)
551 Aspen Ridge Drive, Lafayette, CO 80026
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 665-5700
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(Former name or former address, if changed since last report)
EXHIBIT INDEX APPEARS ON PAGE 4
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS
99.1 Press Release dated February 22, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
DYNAMIC MATERIALS COMPANY
Dated: February 23, 1999 By: /s/ Mark W. Jarman
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Mark W. Jarman
Vice President of Corporate Development
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release dated February 22, 1999.
[Dynamic Materials Corporation Letterhead]
DYNAMIC MATERIALS REPORTS 1998 FINANCIAL RESULTS
FOR IMMEDIATE RELEASE
MONDAY, FEBRUARY 22, 1999
CONTACT: RICHARD A. SANTA MARK W. JARMAN
CHIEF FINANCIAL OFFICER VP OF CORPORATE DEVELOPMENT
DYNAMIC MATERIALS CORPORATION DYNAMIC MATERIALS CORPORATION
303-604-3938 303-604-3923
LAFAYETTE, CO---Dynamic Materials Corporation, (Nasdaq: BOOM), 'DMC', today
reported net income for the full year 1998 of $1,385,756, a decrease of 31%
versus net income of $2,007,913 reported for 1997. Diluted earnings were $0.49,
after non-recurring and other charges in 1998 of $0.10, compared to $0.70
diluted per share earnings in 1997. DMC's 1998 sales were $38.2 million, up 19%
from $32.1 million in 1997. The Company's fourth quarter 1998 net loss was
$69,724, or a loss of $0.03 per diluted share which includes charges of $0.02
per share in start-up costs for the Company's new manufacturing facility in
Pennsylvania. In comparison, fourth quarter 1997 net income was $402,427, or
$0.14 diluted earnings per share. Fourth quarter 1998 sales were $7.7 million,
up 15% from 1997 fourth quarter sales of $6.7 million.
AEROSPACE GROUP GIVES STRONG PERFORMANCE
"Our success at growing DMC's revenues and improving the Company's margins
through the acquisition of aerospace supplier companies has been masked by the
downturn we are experiencing in the explosion metalworking group," stated
Joseph P. Allwein, president and CEO of Dynamic Materials Corporation. "DMC's
aerospace group contributed 22% of the Company's 1998 revenues and 31% of 1998
gross profit. This contribution came primarily from the AMK Welding and Spin
Forge operations acquired early in 1998. DMC's third acquisition of the year,
Precision Machined Products, closed in December of 1998 and will contribute
additional earnings and revenue growth to this key group in 1999," said Allwein.
EXPLOSION METALWORKING GROUP OUTLOOK - FORMED PRODUCT SALES REDUCED, GLOBAL
ECONOMIC UNCERTAINTY SLOWS PROJECT WORK INVOLVING CLAD PLATE
Sales for DMC's explosion metalworking group (which includes explosion bonding
of clad metal, explosion formed metal products and shock synthesis of synthetic
diamonds), was $29.7 million in 1998 versus $32.1 million in 1997. Gross profits
for the explosion metalworking group declined to $5.4 million in 1998 from $7.8
million in 1997. This was principally due to lower sales of explosion formed
products that have historically carried significantly higher margins than sales
of explosion bonded clad metals. Sales for explosion formed products in 1998
were $2.1 million compared to $3.8 million in 1997. A customer that accounts for
a major portion of the Company's sales of explosion formed products
significantly reduced its 1998 order levels. This customer no longer orders such
parts from DMC, and the Company expects sales of less than $300,000 from
explosion formed products in 1999.
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"Reduced orders in DMC's explosion bonded clad metal segment in the third
quarter of 1998 also contributed to the decrease in fourth quarter 1998
revenues," said Allwein. "1998 and 1997 fourth quarter revenues from the
explosion metalworking group were $5.0 million and $6.7 million respectively. We
can attribute much of the reduction in revenues to delays in worldwide capital
equipment projects and uncertain economic conditions in Asia which are affecting
the explosion bonded clad metal portion of our business," Allwein explained. "We
do not expect explosion bonded clad metal revenues to return in the near-term to
levels experienced during the first half of 1998."
PENNSYLVANIA FACILITY PROGRESS & START-UP EXPENSES
"Our new, state-of-the-art explosion bonded clad manufacturing plant is
progressing on schedule for third quarter 1999 completion, and we believe it
will be the lowest cost explosion bonded clad metal plate facility in the
world," said Allwein. Start-up expenses relating to the new Pennsylvania
manufacturing facility contributed to the loss for the fourth quarter, and such
expenses will continue for at least two more quarters.
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 timing and size of orders by major customers,
the timing, size and receipt of orders relating to new capital equipment
projects, customer inventory levels, retention of key customers, shifts in
product mix, the availability and timing of potential future acquisitions, the
occurrence of acquisition-related costs, construction-related delays and
associated costs, the timing and size of expenditures, the receipt of government
approvals and permits, the adequacy of local labor supplies at the Company's
operations, the availability and cost of funds, general economic conditions as
they affect the Company's key customers, as well as the other risks detailed
from time to time in the Company's SEC reports, including the report on Form
10-KSB for the year ended December 31, 1997, and on Form 10-Qs for the quarters
ending March 31, June 30, and September 30, 1998.
Based in Lafayette, Colorado, Dynamic Materials Corporation is a leader in the
metal working industry, and its products include explosion bonded clad metal
plates and other metal fabrications for the petrochemical, chemical processing,
satellite/launch vehicle, commercial aircraft, defense and a variety of other
industries.
For more information on Dynamic Materials Corporation
visit the Company's web site at http://www.dynamicmaterials.com
- FINANCIAL TABLES FOLLOW -
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<TABLE>
DYNAMIC MATERIALS CORPORATION
CONDENSED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(UNAUDITED)
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES
$7,668,179 $6,656,986 $38,212,051 $32,119,585
COST OF PRODUCTS SOLD 6,301,185 4,649,718 30,343,637 24,459,168
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Gross profit 1,366,994 2,007,268 7,868,414 7,660,417
COSTS AND OTHER EXPENSES:
General and administrative 861,375 684,267 3,262,993 2,338,355
Selling expense 463,150 412,606 1,850,973 1,963,707
New facility start-up costs 75,091 - 189,529 -
Research and development costs - 40,405 28,963 68,029
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1,399,616 1,137,278 5,332,458 4,370,091
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INCOME FROM OPERATIONS (32,622) 869,990 2,535,956 3,290,326
Other income/(expense) 3,297 (6,586) 8,921 17,177
Interest expense (84,894) (11,952) (283,706) (117,372)
Interest income 495 16,975 11,585 38,782
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Income before income tax
benefit (provision) (113,724) 868,427 2,272,756 3,228,913
INCOME TAX BENEFIT (PROVISION) 44,000 (466,000) (887,000) (1,221,000)
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NET INCOME (LOSS) $ (69,724) $ 402,427 $ 1,385,756 $ 2,007,913
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EARNINGS (LOSS) PER SHARE - BASIC $ (0.03) $ 0.15 $ 0.50 $ 0.75
EARNINGS (LOSS) PER SHARE - DILUTED $ (0.03) $ 0.14 $ 0.49 $ 0.70
WEIGHTED AVERAGE SHARES
OUTSTANDING:
BASIC 2,740,171 2,718,431 2,770,139 2,681,943
DILUTED 2,740,171 2,855,555 2,852,547 2,875,703
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