Investor Presentation March 2007

Transcription

1 Investor Presentation March

2 Cautionary Statement Regarding Forward-looking Information This presentation contains, and the Company may from time to time make, written or oral "forward-looking statements" within the safe harbor provisions of the Private Securities Litigations Reform Act of These statements include information with respect to the Company's financial condition and its results of operations and business. Words such as "anticipates," '.expects," "intends, "plans," "believes," "seeks," "estimates," "may," "will," "continue," "project" and similar expressions, as well as statements in the future tense, identify forward-looking statements. These forward-looking statements are not guarantees of the Company's future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include: The Company's 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 the Company s 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 the Company's business or the business of the end-market users it serves. The effects of these factors are difficult to predict. New factors emerge from time to time and the Company cannot assess the potential impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statement speaks only as of its date and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of such statement or to reflect the occurrence of unanticipated events. You are encouraged to read the SEC reports of DMC, particularly its Form 10-K for the Fiscal Year Ended December 31, 2006 for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management. 1

3 Company Overview Yvon Cariou President and Chief Executive Officer 2

4 Market Profile As of 3/5/07 Stock: Recent price: 52-week range: Average daily trading volume: Market capitalization: Shares outstanding: Approximate float: Institutional ownership: Fiscal year end: NASDAQ GS: BOOM $30.00 $25.05 $ ,000 $358 million 11.9 million shares 11.5 million shares 79% December 31 3

5 Company Overview World s leading producer of explosion-welded clad-metal plates #1 supplier with 35-40% of global market share Explosion welding = approximately 95% of DMC revenue Plates used in capital equipment requiring resistance to corrosion, high pressure & high temperatures Provider of specialized welding services Serves power turbine and aircraft engine manufacturing industries Long-term contract with GE Energy Approximately 5% of DMC revenue 4

6 Company Overview Headquarters in Boulder, Colorado Operations in: Mt. Braddock, Pennsylvania Likenas, Sweden Clad Metal USA Rivesaltes, France Nitro Metall South Windsor, Connecticut Nobelclad Europe AMK Welding 5

7 Executive Management Yvon Pierre Cariou - President and CEO Richard A. Santa - Vice President, CFO and Secretary John G. Banker - Vice President, Marketing and Sales, Clad Metal Division 6

8 The DETACLAD Process ALLOY CLADDER 1. 1 PLAIN MATERIAL INSPECTION DETONATION FRONT 2. 2 GRIND MATING SURFACES EXPLOSIVE POWDER SPACE BETWEEN PLATES 3. 3 ASSEMBLY: BACKER, CLADDER, EXPLOSIVE 4. EXPLOSION METALLURGICAL WELD LINE COLLISION POINT 5. 5 FLATTENING & CUTTING 6. 6 TESTING & INSPECTION 7

9 Explosion Welding a key step in pre-fabrication process Metal Suppliers Explosion Welding Fabricators Sourced Metals Carbon Steel Nickel Alloys Titanium Zirconium End Users 8

10 DMC is the market leader for explosion clad with unrivaled manufacturing and technological expertise Pre-clad operations Explosion cladding Post-clad operations will change picture Plate being moved to assembly work station Clad plates after shooting Detonations Automatic wet grinding of a plate before assembly Multi-roll leveler flattens plates 9

11 Explosion clad most versatile solution for corrosion resistance Solid metal Rollbond Weld overlay Explosion-welded BASE METAL BASE METAL BASE METAL Appropriate for incompatible metals N/A X X Appropriate for compatible metals N/A Corrosion- Resistant Metal Thickness < 0.75 < 0.25 < Base Metal N/A Steel <2 Steel >5 Steel up to 40 10

12 Growth of clad metals manufacturing market Capital Investments by End Markets Driving DMC s Growth Clad manufacturing market ($mm) Explosion clad Other Technologies 40% $700 $500 $210 $160 $340 $

13 End markets served by DMC Upstream oil and gas Oil refining Petrochemicals / chemicals Hydrometallurgy Aluminum production Shipbuilding Power generation Industrial refrigeration 12

14 DMC s end user customers include leading players in respective fields Fabricators End Users Chemicals Refinery Mining Engineering 13

15 Geographic breakdown of fabrication customers United States 41% United States 50% Canada 10% Canada 10% South Korea 10% Russia 10% Spain 7% France 4% Malaysia 6% India 3% China 4% Italy 3% Netherlands 3% South Korea 3% Belgium 3% Belgium 2% France 3% Spain 2% Italy 3% Germany 2% Other countries 10% Other countries 11% 14

16 DMC Investing $10.2mm to Double U.S. Cladding Capacity Capacity expansion will position DMC to capture expected growth of capital expenditures in end markets Doubles revenue opportunity from U.S. plant Construction expected to be complete by mid-year 2007 Most significant capital expansion in DMC s history Expansion being funded from DMC s earnings and cash on hand 2007 CapEx budget of $7.1 million will focus on modernization of European cladding facilities 15

17 Sales and Backlog Progression: Q Q $80.00 (in millions) $70.00 Sales Backlog $68.50 $68.80 $60.00 $52.40 $50.00 $42.00 $42.30 $40.00 $30.00 $20.00 $17.30 $21.10 $25.60 $27.50 $34.10 $33.20 $34.10 $20.00 $18.40 $20.20 $17.50 $27.80 $23.20 $25.20 $24.90 $35.70 $11.00 $12.00 $12.10 $10.00 $0.00 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q

18 DMC s worldwide manufacturing facilities - a key competitive advantage Corporate office Sales offices and agents Clad factories DMC s sales offices ~18 sales representatives including 12 traveling sales reps DMC s agents ~51 sales representatives 17

19 AMK Welding - a leading provider of precision welding services Serves ground-based turbine and commercial and military aircraft engine markets 5-year contract (signed in Q4 2005) to be exclusive provider of welding services for up to 6 gas turbine engines per year Combined cycle gas turbine power plants forecast to increase market share due to higher thermal efficiency; Customer is the market leader with 26% share AMK has supported the development of the new turbine and is well positioned to benefit from its growth Company doubling size of AMK facilities to facilitate growth 18

20 Financial Overview Rick Santa Vice President and Chief Financial Officer 19

21 Financial Performance Review ($mm) Sales $35.8 $54.2 $79.3 $113.5 % growth 51% 46% 43% Gross profit $9.0 $13.6 $23.4 $42.0 % margin 25% 25% 30% 37% Operating profit $3.3 $6.9 $15.8 $30.1 % margin 9% 13% 20% 27% Net income $1.3 $4.4 $10.4 $20.8 % growth 243% 136% 100% EPS ($) $0.13 $0.41 $0.86 $1.70 % growth 223% 112% 98% Dividend per share ($) $0.10 $

22 Net Sales Income from Operations $ $ $80.00 $60.00 $40.00 $20.00 In millions $38.9 $35.8 $54.2 $79.3 $113.5 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 In millions $7.2 $3.3 $6.9 $15.8 $30.1 $ $

23 Net Income Diluted EPS $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 ($5.00) In millions $0.2 ($0.7) $2.8 $10.4 $ $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 ($0.20) $0.02 ($0.06) $0.27 $0.86 $

24 Stockholders Equity $60.00 In millions $57.6 $50.00 $40.00 $35.0 $30.00 $20.00 $10.00 $15.6 $15.6 $20.1 $

25 Balance Sheet Highlights (in thousands except per share amounts) Assets Cash, cash equivalents & restricted cash $ 2,404 $ 5,763 $ 20,945 Accounts receivables, net of allowance $ 13,936 $ 15,576 $ 21,549 Total current assets $ 26,245 $ 36,552 $ 63,847 Total assets $ 43,753 $ 55,311 $ 84,973 Liabilities Total current liabilities $ 16,962 $ 14,838 $ 25,297 Long-term debt $ 2,906 $ 2,221 $ 382 Total liabilities $ 23,683 $ 20,356 $ 27,393 Total stockholders equity $ 20,070 $ 34,955 $ 57,580 Total liabilities and stockholders equity $ 43,753 $ 55,311 $ 84,973 24

26 Investment Highlights Dominant position in worldwide explosion clad industry Record top- and bottom-line financial performance Record $68.8 million backlog for Explosive Metalworking business Robust capital expenditures and demand expected in key end markets Expanding production capacity Strong balance sheet 25

27 Thank you. 26