DMC Global's Oilfield Products Business Completes Capacity Expansion in Germany and North America; Will Discontinue Operations in Siberia
BROOMFIELD, Colo., Aug. 30, 2019 -- 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.”
Based 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 Language
Except 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.
Vice President of Investor Relations