Dynamic Materials feeling financial pinch from low oil prices

BOULDER — Continued sagging oil prices are causing major financial pain for Dynamic Materials Corp., a Boulder-based firm that, among other things, supplies oilfield products and services to the energy industry.

DMC (Nasdaq: BOOM) officials announced on Friday that they expect third-quarter sales for the period ending Sept. 30 to come in between $38 million and $40 million, down 23 to 27 percent from the third quarter of 2014. The company had previously forecast a decline in sales of 8 to 12 percent, which would have put third-quarter sales this year between $45.7 and $48 million.

U.S. crude oil prices rose 1.8 percent Friday to close at $45.54 per barrel, down more than 50 percent from mid 2014.

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The company said the decline is due to decreased order volume in recent weeks at DynaEnergetics, DMC’s oilfield products business. The timing of the award and shipment of certain orders at DMC’s NobelClad division, which manufactures explosion-welded clad metal plates for several industrial sectors, also contributed.

DMC’s stock price, which has been pummeled over the past 15 months, declined further comment on the news Friday. Shares were trading at $8.78 in late afternoon trading, down more than nine percent from Thursday’s close and down more than 50 percent since November. DMC’s shares have lost nearly 63 percent of their value since July 3, 2014 when they closed at a price of $23.44.

“Sustained low oil and gas prices have led to a significant slowdown in drilling and well completion activity, particularly in our U.S. markets,” DMC president and chief executive Kevin Longe said. “We expect conditions in our industry will remain very challenging at least through the balance of the year.”

The company is slated to report its official third-quarter earnings on Oct. 27, at which time Longe said the company would also update guidance for the full 2015 fiscal year.

The news came on the same day DMC announced that it has inked a deal with oil and gas service company Weatherford International plc to become the first user of DynaEnergetics’ latest well-perforating system. Financial terms were not disclosed for the deal, which follows a six-month field testing partnership between the two companies.