Michael Kuta, Chief Financial Officer of Dynamic Materials Corp. (NASDAQ: BOOM), presented today at EnerCom’s The Oil & Gas Conference 20®.
Based in Boulder, Colorado, Dynamic Materials Corp. operates in two sectors: industrial infrastructure and oilfield products and services. 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. 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.
Dynamic Materials reported second quarter 2015 sales of $44.7 million for a gross margin of 28%. DynaEnergetics and NobelClad, the company’s two businesses, generated approximately 70% of their combined sales from the global oil and gas industry.
During the company’s breakout session, management was asked the following questions:
- I see you are building inventory for DynaEnergetics, what is your visibility for the market? Based on your distribution level, how long does it take to move from inventory to market?
- How can you resist the pricing pressure in this market? And what is your margin objective?
- Can you give me more details for the cost structure and cost savings, and how does it flow into profit and loss, for NobelClad and DynaEnergetics, respectively?
- When, if ever, do you believe the oil sector will come back?
- I know the NobelClad business has an extremely sophisticated process. Can you comment on that process and its competitive landscape?
- What’s your inventory mix of the DynaEnergetics business, such as shaped charges and perforating guns?
- Are you optimistic about the future of DynaEnergetics products, like DynaSelect Detonators?
- I know you have other big competitors. How do you develop relationships with customers like the big four (BHI, HAL, SLB and WFT)? And what do your distribution channels look like?
- Research and development is important for your company. How long does it take to develop new technology inside your company?