DMC Global’s Oilfield Products Business Completes Capacity Expansion in Germany and North America; Will Discontinue Operati...
August 30 2019 - 7:00AM
DMC Global Inc. (Nasdaq: BOOM) today announced its DynaEnergetics
oilfield products business has completed a series of capacity
expansion initiatives at its plants in North America and
Germany. The new capacity has significantly improved
DynaEnergetics’ operating efficiencies and enabled the business to
more effectively serve its global customer base.
Capitalizing on its more efficient manufacturing
footprint, DynaEnergetics is discontinuing production at its plant
in Tyumen, Siberia. DMC expects to record $15 million to $20
million in non-cash charges associated with the closure during the
second half of 2019. Approximately half of the charges relate to
foreign currency translation losses incurred since the Tyumen plant
commenced operations in 2011. Management expects an additional $2.0
million to $2.5 million in cash wind-down and severance expense, as
the closure will reduce DynaEnergetics’ workforce by 47
people.
DMC’s management said it is maintaining its
prior 2019 financial guidance, including for sales and adjusted
earnings per diluted share. Moreover, the consolidation of
manufacturing capacity is expected to further strengthen DMC’s
operating performance and returns on invested
capital.
“The DynaEnergetics team has been very effective
at improving operational efficiencies and establishing capacity and
resources where they most efficiently meet customer needs,” said
Kevin Longe, president and CEO of DMC. “Our decision to
discontinue operations in Siberia reflects our ongoing focus on
strengthening our operating performance, minimizing risk,
maximizing returns on invested capital and enhancing value for our
stockholders.”
Longe added, “We are extremely grateful for the
years of loyalty and dedication from the Tyumen team, and are
working with employees to assist in this transition.”
About DMCBased in Broomfield,
Colorado, DMC operates in two sectors: oilfield products and
services, and industrial infrastructure. The oilfield products and
services sector is served by DynaEnergetics, an international
developer, manufacturer and marketer of advanced explosive
components and systems used to perforate oil and gas wells.
The industrial infrastructure sector is served by DMC’s
NobelClad business, the world’s largest manufacturer of
explosion-welded clad metal plates, which are used to fabricate
capital equipment utilized within various process industries and
other industrial sectors. For more information, visit the
Company’s website at: http://www.dmcglobal.com.
Safe Harbor LanguageExcept for
the historical information contained herein, this news release
includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, including the
belief that DynaEnergetics has significantly improved its operating
efficiencies and can more effectively serve its global customer
base, the expectation of $15 million to $20 million in
non-cash charges during the second half of 2019 associated with the
Tyumen plant closure, the expectation of an additional $2.0 million
to $2.5 million in cash wind-down and severance expense, the belief
that DMC will achieve its prior 2019 financial guidance, and the
expectation of a further strengthening in DMC’s operating
performance and returns on invested capital. Such statements and
information are based on numerous assumptions regarding present and
future business strategies, the markets in which we operate,
anticipated costs and ability to achieve goals. Forward-looking
information and statements are subject to known and unknown risks,
uncertainties and other important factors that may cause actual
results and performance to be materially different from those
expressed or implied by such forward-looking information and
statements, including but not limited to: our ability to obtain new
contracts at attractive prices; the execution of purchase
commitments by our customers, and our ability to successfully
deliver on those purchase commitments; the size and timing of
customer orders and shipments; changes to customer orders; product
pricing and margins, fluctuations in customer demand; our ability
to successfully execute and capitalize upon growth opportunities;
the success of DynaEnergetics’ product and technology development
initiatives; fluctuations in foreign currencies; fluctuations in
tariffs and quotas; 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 our SEC reports, including the
annual report on Form 10-K for the year ended December 31,
2018. We do not undertake any obligation to release public
revisions to any forward-looking statement, including, without
limitation, to reflect events or circumstances after the date of
this news release, or to reflect the occurrence of unanticipated
events, except as may be required under applicable securities
laws.
CONTACT:
Geoff HighVice President of Investor Relations303-604-3924
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