BOULDER, Colo., Aug. 3 /PRNewswire-FirstCall/ -- Dynamic Materials Corporation (DMC) (NASDAQ:BOOM), a leading provider of explosion-welded clad metal plates, today reported record financial results for its second quarter ended June 30, 2006.

Sales in the second quarter advanced 51% to $27.8 million from $18.4 million in the second quarter last year, and were up 10% from $25.2 million reported in this year's first quarter. Second quarter gross margin was 36% versus 28% in the comparable year-ago quarter, and 37% in the first quarter. Income from operations increased 127% to $7.8 million from $3.4 million in the second quarter last year, and was up 22% from $6.4 million reported in the most recent quarter.

Net income increased 137% to $5.0 million, or $0.41 per diluted share, from $2.1 million, or $0.18 per diluted share, in last year's second quarter. First quarter 2006 income from continuing operations was $4.1 million, or $0.34 per diluted share. Including a gain from discontinued operations of $1.4 million, net of tax, which was attributable to the sale of a real estate purchase option associated with the company's former Spin Forge division, net income in this year's first quarter was $5.5 million, or $0.45 per diluted share.

Explosive Metalworking

DMC's Explosive Metalworking segment reported sales of $26.6 million, up 55% from $17.2 million reported in the second quarter a year ago, and an increase of 10% versus $24.2 million reported in this year's first quarter. Operating income increased 149% to $7.7 million from $3.1 million in the comparable year-ago quarter, and was up 16% from first quarter operating income of $6.7 million. At the end of the second quarter, the segment's order backlog was a record $52.4 million, surpassing by 24% the previous all-time high of $42.3 million reported at the end of the first quarter.

AMK Welding

Sales at the company's AMK Welding segment were $1.1 million in both this and last year's second quarter and $1.0 million in this year's first quarter. Operating income was $122,000 versus $343,000 in the comparable year-ago quarter and $108,000 in this year's first quarter. The quarter-over-quarter decline resulted primarily from increased manufacturing overhead and higher administrative expenses associated with AMK's preparation for an anticipated increase in production levels.

Management Commentary

"Our second quarter performance, which included high-water marks for backlog and revenue, reflects continued strong order volume for our explosion welded plates, as well as our capacity to effectively address this demand," said Yvon Cariou, president and chief executive officer. "The industrial markets we serve continue to invest in capital projects. In fact, our roster of anticipated domestic and international order opportunities is as robust as ever. While the size and timing of these prospective orders could lead to quarter-to-quarter fluctuations in our financial performance, we believe that our ability to capture a meaningful portion of these opportunities should allow us to maintain our long-range growth trends."

"We have previously announced that we are making major investments in new capacity, particularly at our Mount Braddock, Pennsylvania facility," Cariou added. "To better meet anticipated market demand, we have added $1.6 million of specialized equipment to the Mount Braddock expansion project, increasing the project budget to $9.6 million and our 2006 consolidated capital expenditure budget to $14.1 million."

Rick Santa, chief financial officer, said, "Second quarter sales were better than anticipated due in part to early fulfillment of certain orders originally scheduled for delivery in the third quarter. Our current expectations are that our top- and bottom-line performance during the second half of 2006 will be comparable to our results during the first half of the year. Although sales and gross margin during the third quarter may be below results reported in the first and second quarters, our fourth quarter performance should be strong thanks in part to our expected deliveries on the $11 million refinery order we received during the second quarter."

"We continued to strengthen our balance sheet during the second quarter," Santa added. "We ended the period with cash and cash equivalents of $14.0 million, an increase of 143% since the end of fiscal 2005 and an increase of 7% since the end of the first quarter. Working capital at June 30 stood at $30.6 million and our current ratio was approximately 3:1."

Six-Month Results

At the six-month mark, sales were up 47% to $52.9 million compared with sales of $35.9 million at the mid-year mark last year, while gross margin improved to 36% from 27% in the same period last year. Income from operations increased 131% to $14.3 million compared with $6.2 million in the comparable year-ago period. Net income for the six months advanced 179% to $10.5 million, or $0.86 per diluted share, versus net income of $3.8 million, or $0.32 per diluted share, during the same period a year ago.

The Explosive Metalworking segment reported six-month sales of $50.8 million, a 49% increase versus sales of $34.2 million at the six-month mark a year ago. Operating income increased 142% to $14.4 million compared with $5.9 million during the same period last year. The improvement in operating income reflects both increased sales and more effective absorption of fixed manufacturing overhead costs and operating expenses.

Six-month sales at AMK Welding were $2.1 million compared with $1.7 million during the comparable period last year. Operating income for the period was $230,000 compared with operating income of $227,000 during the same period a year ago.

Conference call information

Management will hold a conference call to discuss second quarter results today at 5:00 p.m. Eastern (3:00 p.m. Mountain). Investors are invited to listen to the call live via the Internet atwww.dynamicmaterials.com, or by dialing into the teleconference at 866-543-6405 (617-213-8897 for international callers) and entering the passcode 95208936. Participants should access the website at least 15 minutes early to register and download any necessary audio software. A replay of the webcast will be available for 30 days and an audio replay will be available through August 5, 2006, by calling 888-286-8010 (617-801-6888 for international callers) and entering the passcode 61982125.

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 upstream oil and gas, oil refinery, petrochemicals, hydrometallurgy, aluminum production, shipbuilding, power generation, industrial refrigeration and similar industries. The company operates two business segments: Explosive Metalworking, which uses proprietary explosive processes to fuse different metals and alloys, 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 website atwww.dynamicmaterials.com.

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 following: our ability to obtain new contracts at attractive prices; the size and timing of customer orders and shipment; fluctuations in customer demand; changes to customer orders; competitive factors; the timely completion of contracts; the timing and size of expenditures; the timely receipt of government approvals and permits; 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 SEC reports, including the report on Form 10-K for the year ended December 31, 2005.

                  DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
          FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005
                  (Dollars in Thousands, Except Share Data)
                                 (unaudited)

                                  Three months ended       Six months ended
                                       June 30,                June 30,
                                   2006        2005        2006        2005
    NET SALES                    $27,754     $18,376     $52,928     $35,886
    COST OF PRODUCTS SOLD         17,833      13,161      33,727      26,020
        Gross profit               9,921       5,215      19,201       9,866
    COSTS AND EXPENSES:
      General and
       administrative
       expenses                    1,153         898       2,681       1,707
      Selling expenses               946         870       2,270       1,995
        Total costs and
         expenses                  2,099       1,768       4,951       3,702
    INCOME FROM OPERATIONS
     OF CONTINUING OPERATIONS      7,822       3,447      14,250       6,164
    OTHER INCOME (EXPENSE):
      Other income (expense),
       net                           (11)         13         (16)         16
      Interest expense               (37)        (82)        (67)       (168)
      Interest income                169          16         292          20
    INCOME BEFORE INCOME
     TAXES AND DISCONTINUED
     OPERATIONS                    7,943       3,394      14,459       6,032
    INCOME TAX PROVISION           2,938       1,279       5,317       2,269
    INCOME FROM CONTINUING
     OPERATIONS BEFORE
    DISCONTINUED OPERATIONS        5,005       2,115       9,142       3,763
    DISCONTINUED OPERATIONS:
      Income from discontinued
       operations, net of tax         --          --       1,357          --
        Income from
         discontinued operations      --          --       1,357          --
    NET INCOME                    $5,005      $2,115     $10,499      $3,763
    INCOME PER SHARE -
     BASIC:
      Continuing operations        $0.42       $0.19       $0.78       $0.35
      Discontinued operations         --          --        0.11          --
      Net income                   $0.42       $0.19       $0.89       $0.35
    INCOME PER SHARE - DILUTED:
      Continuing operations        $0.41       $0.18       $0.75       $0.32
      Discontinued operations         --          --        0.11          --

    Net income                     $0.41       $0.18       $0.86       $0.32
    WEIGHTED AVERAGE NUMBER OF
     SHARES OUTSTANDING -
      Basic                   11,805,610  11,070,932  11,786,957  10,883,636
      Diluted                 12,229,189  12,053,338  12,223,268  11,958,696
    ANNUAL DIVIDENDS DECLARED
     PER COMMON SHARE                $--       $0.10       $0.15       $0.10
                  DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Dollars in Thousands)
                                 (unaudited)

    ASSETS                                          June 30,     December 31,
                                                      2006           2005
                                                   (unaudited)
    Cash and cash equivalents                       $14,010        $5,763
    Marketable securities                                --         1,950
    Accounts receivable, net                         16,328        15,576
    Inventories                                      13,947        11,869
    Other current assets                              2,739         1,394
      Total current assets                           47,024        36,552
    Property, plant and equipment, net               14,694        12,572
    Deferred tax asset                                  249           819
    Other long-term assets                            1,635         5,368
    Total assets                                    $63,602       $55,311

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Accounts payable                                 $8,977        $7,278
    Other current liabilities                         6,860         6,987
    Current portion of long-term debt                   559           573
      Total current liabilities                      16,396        14,838
    Long-term debt                                    1,799         2,221
    Other long-term liabilities                         544         3,297
    Stockholders' equity                             44,863        34,955
    Total liabilities and stockholders' equity      $63,602       $55,311
                  DYNAMIC MATERIALS CORPORATION & SUBSIDIARY
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005
                            (Dollars in Thousands)
                                 (unaudited)

                                                       2006          2005
    CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                      $10,499         $3,763
     Adjustments to reconcile net income to net
      cash provided by operating activities -
       Income from discontinued operations, net
        of tax                                        (1,357)            --
       Depreciation and amortization                     645            717
       Amortization of capitalized debt issuance
        costs                                             14             26
       Stock-based compensation                          353              -
       Provision for deferred income taxes               656           (10)
       Tax benefit related to stock options               --          2,294
       Change in working capital, net                 (2,473)        (3,631)
         Net cash flows provided by operating
          activities                                   8,337          3,159
    CASH FLOWS FROM INVESTING ACTIVITIES:
     Sale of marketable securities                     1,950             --
     Acquisition of property, plant and equipment     (2,561)        (1,376)
     Loan to related party                            (1,206)            --
     Repayment on loan to related party                1,206             --
     Change in other non-current assets                  147            148
     Payment received on other receivables related
      to discontinued operations                           3            874
     Cash flows provided by investing activities of
      discontinued operations                          2,197             --
       Net cash flows provided by investing
        activities                                     1,736           (354)
    CASH FLOWS FROM FINANCING ACTIVITIES:
     Repayments on lines of credit, net                  (47)        (2,949)
     Payments on long-term debt                          (90)        (1,157)
     Payment on term loan with French bank              (356)          (373)
     Payment of dividends                             (1,766)            --
     Net proceeds from issuance of common stock          207          1,181
     Tax benefit related to stock options                 94             --
     Other cash flows from financing activities           15             32
       Net cash flows used in financing activities    (1,943)        (3,266)
    EFFECTS OF EXCHANGE RATES ON CASH                    117           (119)
    NET INCREASE IN CASH AND CASH EQUIVALENTS          8,247           (580)
    CASH AND CASH EQUIVALENTS, beginning of the
     period                                            5,763          2,404
    CASH AND CASH EQUIVALENTS, end of the period     $14,010         $1,824

Source: Dynamic Materials Corporation