Dynamic Materials (BOOM) Will Only Feel Pinch on Tax Line in Restatement; Roth Affirms at 'Buy'

Roth Capital is out with commentary on Dynamic Materials (Nasdaq: BOOM) after the company announced it would restates certain financials.

Analyst Gerry Sweeney noted that the impact to Dynamic Materials will be felt on the tax line only. Essentially DMC was recognizing and paying local and federal German tax on income generated from its German subsidiary. However, for US GAAP purposes the company was deferring the tax liability which created incorrect tax accounting, the analyst commented.

Sweeney continued, For 2012 net income will decline by $400 - $700K; for 2013 net income will decline by $1.25 - $1.75 million. For Q1-Q3 2014 any tax adjustments will be recognized in the fourth quarter. In the 2014 10-K the company will note a material weakness.

Roth Capital affirms Dynamics Materials at Buy with a price target of $25.

For an analyst ratings summary and ratings history on Dynamic Materials click here. For more ratings news on Dynamic Materials click here.

Dynamic Materials closed at $15.53 yesterday.

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