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Operator
Greetings, and welcome to the Dynamic Materials Corporation 2011 third quarter conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce our host, Geoff High of Pfeiffer High Investor Relations. Thank you, Mr. High, you may begin.
Geoff High - IR
Thank you, Robin. Good afternoon, and welcome to Dynamic Materials' third quarter conference call. Presenting on behalf of the Company will be President and CEO, Yvon Cariou, and Senior Vice President and Chief Financial Officer, Rick Santa.
I'd like to remind everyone that the matters discussed during this call may include forward-looking statements that are based on Management's estimates, projections and assumptions as of today's date, and are subject to risks and uncertainties that are disclosed in Dynamic Materials' filings with the Securities and Exchange Commission.
The Company's business is subject to certain risks that could cause actual results to differ materially from those anticipated in its forward-looking statements. Dynamic Materials assumes no obligation to update forward-looking statements that become untrue because of subsequent events.
A webcast replay of today's call will be available at dynamicmaterials.com after the call. In addition, a telephone replay will be made available beginning approximately two hours after the conclusion of this call. Details for listening to today's replay or webcast are available in today's news release.
And with that, I will now turn the call over to Yvon.
Yvon Cariou - President, CEO
Thanks, Geoff. Hello, everyone. Strong capital spending within the worldwide energy, chemical and petrochemical industries helped fuel a 33% increase in consolidated third quarter sales versus the same period last year. This was slightly better than our prior topline forecast. After a prolonged period of limited infrastructure investment by the chemical and petrochemical industry, our Explosive Metalworking business is benefiting from a resurgence in capital spending from this sector.
We also are seeing expanding use of our clad plates in upstream oil and gas for testing equipment. As many of you know, we have had a meaningful presence in the upstream sector for a couple of years, and it is a market that is increasingly reliant on our comprehensive package of specialized products and customer support.
These two end markets have remained active after the close of our third quarter. In fact, in recent weeks, we received two notable orders from these respective sectors for projects in the Middle East. On the subject of the Middle East, our Explosion Welding business has been capitalizing on the aggressive infrastructure spending taking place in that part of the world, including the addition of significant new fabricating capacity.
Our Oilfield Products segment, which has accounted for approximately one-third of our year-to-date sales delivered topline growth of 42% in the third quarter versus the same period last year. This segment continues to benefit from very active global drilling activity. According to Baker Hughes, the worldwide rig count is at a multi-year high and global drilling activity continues to expand.
In order to further capitalize on this environment, we have been evaluating opportunities to add production capacity in select regions around the world. We hope to provide you with more information about these efforts in coming quarters. We saw a 15% dip in third quarter sales at our AMK Welding segment versus the same quarter last year. This decline was largely due to a 33% decrease in revenue related to large ground-based turbine project and was partially offset by increased revenue from aircraft engine work.
Over the long term, we expect AMK's revenue stream will come increasingly from the aircraft sector, smaller ground power projects and values new market opportunities that we are currently pursuing.
Looking forward, new business prospects are percolating within all three of our business segments. We are making and we'll continue to make strategic investments in personnel and equipment that we believe will best position us to capitalize on these opportunities.
Now, I'll turn the call over to Rick for some additional color on our third quarter financial performance. Rick?
Rick Santa - SVP, CFO, Secretary
Thank you, Yvon. Good afternoon, everyone. As Yvon mentioned, third quarter sales came in slightly ahead of our forecast and increased 33% to $54.9 million versus $41.3 million in last year's third quarter. Gross margin was 27% versus 26% in the same quarter a year ago.
Operating income increased 93% to $5.7 million from $2.9 million in last year's third quarter. Net income was up 222% to $4.3 million or $0.32 per share from $1.3 million or $0.10 per share in the year ago third quarter. Adjusted EBITDA improved 43% to $9.6 million from $6.7 million in the same quarter last year. Please see our earnings release regarding our use of adjusted EBITDA, which is a non-GAAP measure.
Turning to expenses, G&A increased by 25% to $4.4 million from $3.5 million in last year's third quarter. The increase was largely due to higher salaries, increased accrued incentive compensation, and consulting fees on major IT initiative. As a percentage of sales, G&A was relatively flat at approximately 8% in both this year's and last year's third quarters.
Selling and distribution costs increased 10% to $3.4 million from $3 million in the third quarter last year. The increase was due to higher selling and distribution -- as a percentage of sales, selling and distribution cost declined to 6% from 7% in last year's third quarter.
Looking at the balance sheet, the most significant changes from December 31 were a 26% increase in accounts receivable and a 31% increase in inventories. These increases generally reflect the higher level of business activity at both our Explosive Metalworking and Oilfield Products segments versus the fourth quarter last year.
Our total current assets have increased to $92.2 million from $72.7 million at December 31 while current liabilities increased to $45.2 million from $38.4 million over the same period. Working capital at the end of the quarter was $47 million and our current ratio was 2 to 1. Our long-term debt remained flat at just under $24 million.
Turning to guidance. We are again increasing our 2011 sales growth forecast. We now expect sales would be up by 31% to 33% versus last year. Our prior forecast was for a sales growth of 28% to 30%. We anticipate our full-year consolidated gross margin will be in a range of 26% to 27%. We expect sales for the fourth quarter to be down by approximately 10% versus the third quarter and this is principally due to the sequential dip in our Explosion Metalworking backlog.
Fourth quarter gross margin is expected to be approximately 27%. Our blended effective tax rate for fiscal 2011 is now projected in a range of 25% to 26%. And as we previously stated, we expect that rate to rise to a normalized level of between 28% and 30% beginning next year.
As always, we will address guidance for the next fiscal year in our year-end earnings release and conference call, but generally speaking, the improving climate in our Explosion Metalworking end markets and the strength of the global oil and gas industry have us optimistic about our prospects for continued growth in the coming year.
With that, we're now ready to take any questions. Robin?
Operator
Thank you. (Operator Instructions) Avinash Kant, D.A. Davidson & Company.
Avinash Kant - Analyst
Good afternoon, Yvon and Rick.
Yvon Cariou - President, CEO
Hi, Avinash.
Rick Santa - SVP, CFO, Secretary
Good afternoon, Avinash.
Avinash Kant - Analyst
I think, Yvon, you were talking early on on the call and you talked about two notable orders in the quarter. I believe you're talking about Q4 and these were explosion clad orders, mostly related to oil and natural gas. Could you give us a little bit more color on that?
Yvon Cariou - President, CEO
Yes. It was a transition from the comment that we made about petrochemical and oil and gas upstream. The remaining reasonably active and just after the end of the quarter, we got (inaudible) huge orders but over a multi-million dollar. One, having to do with upstream oil and gas, the other one having to do with chemical. And otherwise not to indicate that things are drastically changing, but just to give a little color on the Middle East markets and our involvement there. And also, to the fact that, we remain a known quarter-to-quarter Company, things happen in and out of our quarters and that's why we see swing on our clad backlog, particularly.
Avinash Kant - Analyst
Right. So, explosion clad backlog that did come down this quarter, given these orders now and given the fact that your revenue guidance is going to be -- is down 10%, I'm expecting that you think that backlog at the end of Q4 is going to be meaningfully higher than what it is right now or not?
Yvon Cariou - President, CEO
I am not making that forecast, certainly. You know we don't do that. We know, we still have to transform order component of our hot list into firm bookings to be able to indicate something like that. So, we're not saying that. We just wanted to give color to the -- to some activities in an interesting regime of the world for us.
Avinash Kant - Analyst
But the two orders you talked about, they were not hot list items, they are real bookings, right?
Yvon Cariou - President, CEO
Yes. But they were hot list before, becoming an order. Right?
Avinash Kant - Analyst
Right, right. But, they have already been placed an order this quarter?
Yvon Cariou - President, CEO
Yes. They are booked. Yes, they are booked.
Avinash Kant - Analyst
Okay. So, does that not give you some visibility into the bookings in the quarter thus far?
Yvon Cariou - President, CEO
Well, no, they are not of a magnitude that would allow us to indicate that.
Avinash Kant - Analyst
Okay. Okay, perfect. That's all. Thanks.
Operator
(Operator Instructions) Mark Parr, KeyBanc Capital Markets.
Mark Parr - Analyst
Hey. Thanks very much. Hey, Yvon.
Yvon Cariou - President, CEO
Hello, Mark, how are you doing?
Mark Parr - Analyst
All right. Hi, Rick.
Rick Santa - SVP, CFO, Secretary
Hi, Mark. How are you?
Mark Parr - Analyst
Geoff, there?
Geoff High - IR
Hi, Mark.
Mark Parr - Analyst
Hey, I was curious, if you, Yvon, could you comment on just the other backlog is -- the backlog has been moving up and down. We're in the early phase of a recovery, I mean, I certainly I understand that. And based on the strong revenues you had in the third quarter, I mean you would expect, again in the early phases of recovery that the backlog might pull back somewhat just for a period of time.
On the other hand, we have seen a tremendous increase in the global economic uncertainty. And I'm wondering, if you could comment at all, are your salesmen telling you that things are being delayed or there is some concerns, is financing availability becoming an issue anywhere that you can see? Anything new on the horizon that you could share with us?
Yvon Cariou - President, CEO
Yes. Thanks for the question, Mark. I think, our thesis is that we were late going into that major recession in '08.
Mark Parr - Analyst
Yes.
Yvon Cariou - President, CEO
And we also were late coming out. And so we believe that we may still be in that late cycle condition related to flat CapEx, where we are not suffering or suffering yet from that what seems to be a macroeconomic slowdown. And I cannot report that our sales team are giving us lots of [angst] on uncertainty, they seem to be pretty upbeat and bullish on our diversified end markets, talking about clad. And so, to answer your question, no, not yet. We fully understand, it's very uncertain out there, we are not seeing it quite yet. And by the same token, we are not simply bullish either, we are reasonably bullish. We see good activity, good hot list and we're going of course after everything.
Mark Parr - Analyst
So is the quoting activity pretty much unchanged then from your, say, today versus two or three months ago?
Yvon Cariou - President, CEO
Yes, sir.
Mark Parr - Analyst
Okay. All right. Well, good luck on the fourth quarter and thank you for that color on the economic condition.
Yvon Cariou - President, CEO
You're welcome.
Operator
Phil Gibbs, KeyBanc Capital Markets.
Phil Gibbs - Analyst
Hey, gentlemen, I just had a follow-up on the gross margins. Rick, do you have some color you could give us on the gross margins by segment?
Rick Santa - SVP, CFO, Secretary
I certainly can give you that information, Phil. First, I'll give you the Explosive Metalworking margins for the quarter. In the 2011 quarter was 22.6% and the 2010 third quarter was 18.7%. For the Oilfield Products, Q3 of 2011 was 34.5% and for Oilfield Products last year, the third quarter was 39.2%. AMK Welding, Q3 2011, 31.5% and Q3 2010 34.9%. For the year-to-date, the cladding, our Explosive Metalworking was 22.1% in 2011 versus 20% in 2010. Oilfield Products, year-to-date 2011, 33.4% versus 35% in 2010, and AMK Welding 2011 year-to-date 31.9% versus 32.7% in 2010.
Phil Gibbs - Analyst
Great. And just lastly, as far as the revenue in the third quarter, Yvon, what surprised you there, I think, you were looking for revenues to be down? So what took you by surprise, was it a late quarter surge that you made or -- is it was -- just I was looking for a little bit more there? Thanks, guys.
Yvon Cariou - President, CEO
No, I think it was well distributed throughout the quarter. There was not -- our US operations, they are very good at always bidding [votes] and so we're not surprised anymore. So I cannot say there was a big surprise. There was no hiccup with supply chain which is always something we need to be cautious about. So not -- I cannot really say that we had a surprise.
Rick Santa - SVP, CFO, Secretary
Yes, we came across the board, everyone with the exception of AMK doing a little bit better than we had forecast than to do in Q4 or Q3, excuse me.
Phil Gibbs - Analyst
Is the Oilfield business in the third quarter, is that a seasonally strong quarter for you?
Rick Santa - SVP, CFO, Secretary
Yes, certainly, it's kind of hard, we haven't been in the business for that many years and things were slow in 2008 and 2009 and then, yes, through the first half of 2010. And then starting in Q3 of 2010, the Oilfield Products business started to take off and that's continued.
Yvon Cariou - President, CEO
Yes, and we have the leverage of the acquisitions we made, I think, which benefit from that more now.
Rick Santa - SVP, CFO, Secretary
But the seasonality in the business tends to be more...
Yvon Cariou - President, CEO
Q2.
Rick Santa - SVP, CFO, Secretary
Q2, if you can get into the Alberta oilfields.
Phil Gibbs - Analyst
Okay. Thanks a lot, guys. Good luck.
Yvon Cariou - President, CEO
Thanks.
Operator
(Operator Instructions) It appears there are no more questions at this time. I would like to turn the floor back over to management for closing comments.
Yvon Cariou - President, CEO
Thank you. Well, guys, we've made steady progress during the first nine months of the year and we are well ahead of the original growth forecast we gave you at the outset of 2011. Given the strength of our Company and the improving health of many of our end markets, we remain upbeat about DMC and its future. So, looking forward to talking to you next quarter. Thank you.
Operator
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.