DMC Global Inc. (Nasdaq: BOOM) today reported financial results for
its first quarter ended March 31, 2020.
Consolidated sales were $73.6 million, down 15%
sequentially and down 27% versus the first quarter of 2019. The
decline relates to lower demand for well perforating systems from
DynaEnergetics, DMC’s oilfield products business. Well
completion activity declined throughout the first quarter, as an
oil supply-demand imbalance primarily associated with the COVID-19
pandemic drove a more than 65% decline in crude prices.
First quarter gross margin was 33% versus 35% in
the 2019 fourth quarter and 36% in the 2019 first quarter.
The decrease primarily was due to lower volume on fixed
manufacturing overhead expenses at DynaEnergetics, less favorable
project mix at NobelClad, and a lower proportion of sales at
DynaEnergetics versus NobelClad.
Operating income was $6.3 million, down 69% from
$20.5 million in the 2019 first quarter. The decline reflects lower
sales, as well as an additional $2.3 million allowance for doubtful
accounts. Adjusted operating income* was $7.5 million, and
excludes $1.1 million in restructuring expense. The expense
primarily relates to severance costs associated with a workforce
reduction at DynaEnergetics.
Net income was $4.2 million, or $0.28 per
diluted share, versus $15.2 million, or $1.01 per diluted share, in
last year’s first quarter. Adjusted net income was $5.3 million, or
$0.35 per diluted share.
First quarter adjusted EBITDA was $11.3 million,
down 36% sequentially versus the $17.6 million reported in the 2019
fourth quarter, and down 53% from $23.9 million in the 2019 first
quarter.
Net cash* (total cash and cash equivalents less
total debt) at March 31, 2020, was $2.9 million, down from net cash
of $6.1 million at December 31, 2019.
DynaEnergetics First quarter sales at
DynaEnergetics were $53.2 million, down 18% sequentially and down
33% from the 2019 first quarter. Gross margin was 37%, down from
38% in the fourth quarter of 2019 and 39% in last year’s first
quarter. Operating income was $8.6 million versus $23.1 million in
the comparable year-ago quarter. Excluding restructuring charges,
adjusted operating income was $9.5 million versus $23.1 million in
the 2019 first quarter. Adjusted EBITDA was $11.3 million versus
$24.5 million in last year’s first quarter.
NobelClad First quarter sales at NobelClad,
DMC's composite metals business, were $20.3 million, down 7%
sequentially and flat versus the 2019 first quarter. Gross margin
was 25%, down from 27% in the fourth quarter of 2019 and 26% in
last year’s first quarter. Operating income was $1.5 million versus
$1.8 million in the year-ago first quarter. Adjusted EBITDA was
$2.4 million, down from $2.7 million in last year’s first
quarter.
NobelClad’s trailing 12-month book-to-bill ratio
at the end of the first quarter was 1.01, and its rolling 12-month
bookings increased to $98 million from $90 million at December 31,
2019. Order backlog was $41.3 million versus $31.7 million at
the end of the fourth quarter.
Management Commentary President
and CEO Kevin Longe said, “Global crude oil demand began to
collapse late in the first quarter as efforts to contain the
COVID-19 pandemic sharply reduced economic activity around the
world. The demand decline has been exacerbated by rapidly
rising crude supplies and dwindling storage capacity. In light of
these challenges, we moved quickly to reduce our activity-based
cost structure, limit spending and protect our balance
sheet.”
Longe cited several recent cost-containment
actions, including:
- A 32% reduction in DMC’s workforce, which primarily involved
direct labor positions at DynaEnergetics
- The implementation of reduced work weeks at DynaEnergetics
- A 25% reduction in selling, general and administrative expense
(SG&A) beginning in the 2020 second quarter as compared with
quarterly SG&A in 2019
- A 50% reduction in DMC’s capital budget, which is now projected
at approximately $13 million and is limited to maintenance programs
and previously commenced projects
- The suspension of DMC’s quarterly dividend
Longe added, “We have entered a very challenging
period in our primary markets, but we have done so with a strong
financial position and a highly efficient operating structure. We
intend to preserve our financial position through this downturn,
while maintaining our focus on innovation and creating value for
our customers.
“At DynaEnergetics, we expect to see increased
adoption of our DynaStage™ (DS) Factory-assembled,
Performance-assured™ perforating systems, which are the safest and
most reliable in the market. Our DS systems reduce the number of
people required at the well site and enable much faster assembly
and deployment. Customers who adopt our systems can eliminate their
assembly facilities, and reduce their investments in inventory and
supply chain resources. These reductions significantly improve our
customers’ returns on invested capital.”
Longe added, “NobelClad reported a strong start
to 2020, as first-quarter bookings of $29 million were the second
highest in five years. This led to a 30% sequential increase
in NobelClad’s order backlog. One of NobelClad’s largest
orders during the first quarter was related to a newly developed
composite metals application for engineered wood manufacturing.
While it is unclear what impact COVID-19 will have on medium-term
customer activity, we remain optimistic about NobelClad’s long-term
growth prospects.
“The current economic downturn has led to a
severe disruption of our core energy markets. Operators and
service companies are revising their activity plans daily, and we
now anticipate second quarter well completions could be down by
more than 60% year over year. This volatility has made it
very difficult to forecast our near-term performance, and we
therefore are not issuing financial guidance for the second quarter
or full year. Despite these challenges, DMC is well
positioned for long-term success. We have taken aggressive
action to maintain our liquidity and reduce costs, which will
enable us to continue our investments in new technology, product
and market development. By concurrently focusing on innovation and
financial strength, we are confident DMC will emerge from the
downturn an even stronger company.”
Conference call
informationManagement will hold a conference call to
discuss these results today at 5:00 p.m. Eastern (3:00 p.m.
Mountain). The call is available live via the Internet at:
https://www.webcaster4.com/Webcast/Page/2204/34192, or by dialing
844-407-9500 (862-298-0850 for international callers). No passcode
is necessary. Webcast participants should access the website at
least 15 minutes early to register and download any necessary audio
software. A replay of the webcast will be available for 90 days and
a telephonic replay will be available until May 7, 2020, by calling
877-481-4010 (919-882-2331 for international callers) and entering
the Conference ID #34192.
*Use of Non-GAAP Financial
MeasuresAdjusted EBITDA, adjusted operating income,
adjusted net income, adjusted gross margin, adjusted diluted
earnings per share, net cash, and return on invested capital (ROIC)
are non-GAAP (generally accepted accounting principles) financial
measures used by management to measure operating performance and
liquidity. Non-GAAP results are presented only as a supplement to
the financial statements based on U.S. generally accepted
accounting principles (GAAP). The non-GAAP financial information is
provided to enhance the reader’s understanding of DMC’s financial
performance, but no non-GAAP measure should be considered in
isolation or as a substitute for financial measures calculated in
accordance with GAAP. Reconciliations of the most directly
comparable GAAP measures to non-GAAP measures are provided within
the schedules attached to this release.
EBITDA is defined as net income plus or minus
net interest plus taxes, depreciation and amortization. Adjusted
EBITDA excludes from EBITDA stock-based compensation, restructuring
and impairment charges and, when appropriate, other items that
management does not utilize in assessing DMC’s operating
performance (as further described in the attached financial
schedules). Adjusted operating income is defined as operating
income plus restructuring and impairment charges and, when
appropriate, other items that management does not utilize in
assessing DMC’s operating performance. Adjusted net income is
defined as net income plus restructuring and impairment charges
and, when appropriate, other items that management does not utilize
in assessing DMC’s operating performance. Adjusted gross margin is
defined as gross margin plus inventory write downs associated with
restructuring. Adjusted diluted earnings per share is defined as
diluted earnings per share plus restructuring and impairment
charges and, when appropriate, other items that management does not
utilize in assessing DMC’s operating performance. Net cash is
defined as cash and cash equivalents less total debt. ROIC is based
on Bloomberg Finance's most recent calculation methodology and is
computed as trailing 12-month net operating profit after tax
divided by average invested capital, where average of invested
capital is calculated based on the average of invested capital for
the current period and invested capital for the same period a year
ago. None of these non-GAAP financial measures are recognized terms
under GAAP and do not purport to be an alternative to net income as
an indicator of operating performance or any other GAAP
measure.
Management uses adjusted EBITDA in its
operational and financial decision-making, believing that it is
useful to eliminate certain items in order to focus on what it
deems to be a more reliable indicator of ongoing operating
performance. As a result, internal management reports used during
monthly operating reviews feature adjusted EBITDA measures.
Management believes that investors may find this non-GAAP financial
measure useful for similar reasons, although investors are
cautioned that non-GAAP financial measures are not a substitute for
GAAP disclosures. In addition, management incentive awards are
based, in part, on the amount of adjusted EBITDA achieved during
relevant periods. EBITDA and adjusted EBITDA are also used by
research analysts, investment bankers and lenders to assess
operating performance. For example, a measure similar to adjusted
EBITDA is required by the lenders under DMC’s credit facility.
Net cash is used by management to supplement
GAAP financial information and evaluate DMC’s performance, and
management believes this information may be similarly useful to
investors. Adjusted operating income, adjusted net income, adjusted
gross margin and adjusted diluted earnings per share are presented
because management believes these measures are useful to understand
the effects of restructuring and impairment charges on DMC’s
operating income, net income and diluted earnings per share,
respectively. ROIC is used by management as one measure of the
effectiveness of DMC’s use of capital in its operations, and
management believes it may be of similar usefulness to
investors.
Because not all companies use identical
calculations, DMC’s presentation of non-GAAP financial measures may
not be comparable to other similarly titled measures of other
companies. However, these measures can still be useful in
evaluating the company’s performance against its peer companies
because management believes the measures provide users with
valuable insight into key components of GAAP financial disclosures.
For example, a company with greater GAAP net income may not be as
appealing to investors if its net income is more heavily comprised
of gains on asset sales. Likewise, eliminating the effects of
interest income and expense moderates the impact of a company’s
capital structure on its performance.
All of the items included in the reconciliation
from net income to EBITDA and adjusted EBITDA are either (i)
non-cash items (e.g., depreciation, amortization of purchased
intangibles and stock-based compensation) or (ii) items that
management does not consider to be useful in assessing DMC’s
operating performance (e.g., income taxes, restructuring and
impairment charges). In the case of the non-cash items, management
believes that investors can better assess the company’s operating
performance if the measures are presented without such items
because, unlike cash expenses, these adjustments do not affect
DMC’s ability to generate free cash flow or invest in its business.
For example, by adjusting for depreciation and amortization in
computing EBITDA, users can compare operating performance without
regard to different accounting determinations such as useful life.
In the case of the other items, management believes that investors
can better assess operating performance if the measures are
presented without these items because their financial impact does
not reflect ongoing operating performance.
About DMCDMC Global is a
diversified holding company. Our innovative businesses
provide differentiated products and services to niche industrial
and commercial markets around the world. DMC’s objective is to
identify well-run businesses and strong management teams and
support them with long-term capital and strategic, legal,
technology and operating resources. Our approach helps our
portfolio companies grow core businesses, launch new initiatives,
upgrade technologies and systems to support their long-term
strategy, and make acquisitions that improve their competitive
positions and expand their markets. DMC’s culture is to
foster local innovation versus centralized control, and stand
behind our businesses in ways that truly add value. Today, DMC’s
portfolio consists of DynaEnergetics and NobelClad, which
collectively address the energy, industrial processing and
transportation markets. Based in Broomfield, Colorado, DMC
trades on Nasdaq under the symbol “BOOM.” For more information,
visit the Company’s website at: http://www.dmcglobal.com
Safe Harbor Language Except for
the historical information contained herein, this news release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, including
projected 2020 capital expenditures and reductions in SG&A; our
belief in increased sales of DynaStage systems; NobelClad’s
backlog; our belief that well completions in the second quarter
will decline by more than 60% year over year; and our ability
to maintain our financial health during the downturn and emerge an
even stronger company. Such statements and information are based on
numerous assumptions regarding present and future business
strategies, the markets in which we operate, anticipated costs and
ability to achieve goals. Forward-looking information and
statements are subject to known and unknown risks, uncertainties
and other important factors that may cause actual results and
performance to be materially different from those expressed or
implied by such forward-looking information and statements,
including but not limited to: our ability to realize sales from our
backlog; our ability to obtain new contracts at attractive prices;
the execution of purchase commitments by our customers, and our
ability to successfully deliver on those purchase commitments; the
size and timing of customer orders and shipments; changes to
customer orders; product pricing and margins, fluctuations in
customer demand; our ability to successfully execute and capitalize
upon growth opportunities; the success of DynaEnergetics’ product
and technology development initiatives; fluctuations in foreign
currencies; fluctuations in tariffs and quotas; the cyclicality of
our business; competitive factors; the timely completion of
contracts; the timing and size of expenditures; the timing and
price of metal and other raw material; the adequacy of local labor
supplies at our facilities; current or future limits on
manufacturing capacity at our various operations; the availability
and cost of funds; our ability to access our borrowing capacity
under our credit facility; impacts of COVID-19 and any preventive
or protective actions taken by governmental authorities, including
resulting economic recessions or depressions; and general economic
conditions, both domestic and foreign, impacting our business and
the business of the end-market users we serve; as well as the other
risks detailed from time to time in our SEC reports, including the
annual report on Form 10-K for the year ended December 31,
2019. We do not undertake any obligation to release public
revisions to any forward-looking statement, including, without
limitation, to reflect events or circumstances after the date of
this news release, or to reflect the occurrence of unanticipated
events, except as may be required under applicable securities
laws.
DMC GLOBAL INC.CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS(Amounts in Thousands, Except Share and Per Share
Data)(unaudited)
|
Three months ended |
|
Change |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Mar 31, 2019 |
|
Sequential |
|
Year-on-year |
NET SALES |
$ |
73,564 |
|
|
|
$ |
86,367 |
|
|
|
$ |
100,135 |
|
|
|
-15 |
% |
|
-27 |
% |
COST OF PRODUCTS SOLD |
49,094 |
|
|
|
56,146 |
|
|
|
63,730 |
|
|
|
-13 |
% |
|
-23 |
% |
Gross profit |
24,470 |
|
|
|
30,221 |
|
|
|
36,405 |
|
|
|
-19 |
% |
|
-33 |
% |
Gross profit percentage |
33.3 |
|
% |
|
35.0 |
|
% |
|
36.4 |
|
% |
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
8,126 |
|
|
|
9,220 |
|
|
|
9,168 |
|
|
|
-12 |
% |
|
-11 |
% |
Selling and distribution expenses |
8,527 |
|
|
|
6,944 |
|
|
|
6,309 |
|
|
|
23 |
% |
|
35 |
% |
Amortization of purchased intangible assets |
354 |
|
|
|
355 |
|
|
|
398 |
|
|
|
— |
% |
|
-11 |
% |
Restructuring expenses, net |
1,116 |
|
|
|
13,203 |
|
|
|
78 |
|
|
|
-92 |
% |
|
1,331 |
% |
Total costs and expenses |
18,123 |
|
|
|
29,722 |
|
|
|
15,953 |
|
|
|
-39 |
% |
|
14 |
% |
OPERATING INCOME |
6,347 |
|
|
|
499 |
|
|
|
20,452 |
|
|
|
1,172 |
% |
|
-69 |
% |
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
|
Other income (expense), net |
115 |
|
|
|
(661 |
) |
|
|
(21 |
) |
|
|
117 |
% |
|
648 |
% |
Interest expense, net |
(238 |
) |
|
|
(385 |
) |
|
|
(373 |
) |
|
|
38 |
% |
|
36 |
% |
INCOME BEFORE INCOME
TAXES |
6,224 |
|
|
|
(547 |
) |
|
|
20,058 |
|
|
|
1,238 |
% |
|
-69 |
% |
INCOME TAX PROVISION |
2,069 |
|
|
|
4,741 |
|
|
|
4,888 |
|
|
|
-56 |
% |
|
-58 |
% |
NET INCOME (LOSS) |
4,155 |
|
|
|
(5,288 |
) |
|
|
15,170 |
|
|
|
179 |
% |
|
-73 |
% |
NET INCOME (LOSS) PER
SHARE |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.28 |
|
|
|
$ |
(0.36 |
) |
|
|
$ |
1.02 |
|
|
|
178 |
% |
|
-73 |
% |
Diluted |
$ |
0.28 |
|
|
|
$ |
(0.36 |
) |
|
|
$ |
1.01 |
|
|
|
178 |
% |
|
-72 |
% |
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
Basic |
14,697,164 |
|
|
|
14,640,110 |
|
|
|
14,606,052 |
|
|
|
— |
% |
|
1 |
% |
Diluted |
14,717,836 |
|
|
|
14,640,110 |
|
|
|
14,671,689 |
|
|
|
1 |
% |
|
— |
% |
DIVIDENDS DECLARED PER COMMON
SHARE |
$ |
0.125 |
|
|
|
$ |
0.125 |
|
|
|
$ |
0.020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DMC GLOBAL INC.SEGMENT STATEMENTS OF
OPERATIONS(Amounts in Thousands)(unaudited)
DynaEnergetics
|
Three months ended |
|
Change |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Mar 31, 2019 |
|
Sequential |
|
Year-on-year |
Net sales |
$ |
53,220 |
|
|
$ |
64,604 |
|
|
$ |
79,836 |
|
|
-18 |
% |
|
-33 |
% |
Gross profit |
19,476 |
|
|
24,586 |
|
|
31,232 |
|
|
-21 |
% |
|
-38 |
% |
Gross profit percentage |
36.6 |
% |
|
38.1 |
% |
|
39.1 |
% |
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
3,832 |
|
|
3,516 |
|
|
3,722 |
|
|
9 |
% |
|
3 |
% |
Selling and distribution expenses |
5,840 |
|
|
4,119 |
|
|
4,099 |
|
|
42 |
% |
|
42 |
% |
Amortization of purchased intangible assets |
260 |
|
|
260 |
|
|
301 |
|
|
— |
% |
|
-14 |
% |
Restructuring expenses |
938 |
|
|
12,744 |
|
|
— |
|
|
-93 |
% |
|
n/a |
|
Operating income |
8,606 |
|
|
3,947 |
|
|
23,110 |
|
|
118 |
% |
|
-63 |
% |
Adjusted EBITDA |
$ |
11,316 |
|
|
$ |
18,472 |
|
|
$ |
24,509 |
|
|
-39 |
% |
|
-54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NobelClad
|
Three months ended |
|
Change |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Mar 31, 2019 |
|
Sequential |
|
Year-on-year |
Net sales |
$ |
20,344 |
|
|
$ |
21,763 |
|
|
$ |
20,299 |
|
|
-7 |
% |
|
— |
% |
Gross profit |
5,154 |
|
|
5,786 |
|
|
5,360 |
|
|
-11 |
% |
|
-4 |
% |
Gross profit percentage |
25.3 |
% |
|
26.6 |
% |
|
26.4 |
% |
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
974 |
|
|
1,324 |
|
|
1,244 |
|
|
-26 |
% |
|
-22 |
% |
Selling and distribution expenses |
2,551 |
|
|
2,687 |
|
|
2,111 |
|
|
-5 |
% |
|
21 |
% |
Amortization of purchased intangible assets |
94 |
|
|
95 |
|
|
97 |
|
|
-1 |
% |
|
-3 |
% |
Restructuring expenses, net |
59 |
|
|
459 |
|
|
78 |
|
|
-87 |
% |
|
-24 |
% |
Operating income |
1,476 |
|
|
1,221 |
|
|
1,830 |
|
|
21 |
% |
|
-19 |
% |
Adjusted EBITDA |
$ |
2,369 |
|
|
$ |
2,390 |
|
|
$ |
2,705 |
|
|
-1 |
% |
|
-12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DMC GLOBAL INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Amounts in Thousands)
|
|
|
|
|
Change |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
From year-end |
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
16,451 |
|
|
$ |
20,353 |
|
|
-19 |
% |
Accounts receivable, net |
51,011 |
|
|
60,855 |
|
|
-16 |
% |
Inventory, net |
61,445 |
|
|
53,728 |
|
|
14 |
% |
Other current assets |
9,534 |
|
|
9,417 |
|
|
1 |
% |
|
|
|
|
|
|
Total current assets |
138,441 |
|
|
144,353 |
|
|
-4 |
% |
|
|
|
|
|
|
Property, plant and equipment,
net |
106,817 |
|
|
108,234 |
|
|
-1 |
% |
Purchased intangible assets,
net |
5,199 |
|
|
5,880 |
|
|
-12 |
% |
Other long-term assets |
18,483 |
|
|
18,954 |
|
|
-2 |
% |
|
|
|
|
|
|
Total assets |
$ |
268,940 |
|
|
$ |
277,421 |
|
|
-3 |
% |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
29,020 |
|
|
$ |
34,758 |
|
|
-17 |
% |
Contract liabilities |
4,367 |
|
|
2,736 |
|
|
60 |
% |
Dividend payable |
1,883 |
|
|
1,866 |
|
|
1 |
% |
Accrued income taxes |
8,666 |
|
|
9,651 |
|
|
-10 |
% |
Current portion of long-term
debt |
3,125 |
|
|
3,125 |
|
|
— |
% |
Other current liabilities |
16,032 |
|
|
19,287 |
|
|
-17 |
% |
|
|
|
|
|
|
Total current liabilities |
63,093 |
|
|
71,423 |
|
|
-12 |
% |
|
|
|
|
|
|
Long-term debt |
10,406 |
|
|
11,147 |
|
|
-7 |
% |
Deferred tax liabilities |
3,692 |
|
|
3,786 |
|
|
-2 |
% |
Other long-term
liabilities |
18,060 |
|
|
18,924 |
|
|
-5 |
% |
Stockholders’ equity |
173,689 |
|
|
172,141 |
|
|
1 |
% |
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
$ |
268,940 |
|
|
$ |
277,421 |
|
|
-3 |
% |
|
|
|
|
|
|
|
|
|
|
|
DMC GLOBAL INC.CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS(Amounts in Thousands)(unaudited)
|
Three months ended |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Mar 31, 2019 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
Net income (loss) |
$ |
4,155 |
|
|
$ |
(5,288 |
) |
|
$ |
15,170 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
Depreciation |
2,352 |
|
|
2,138 |
|
|
1,798 |
|
Amortization of purchased intangible assets |
354 |
|
|
355 |
|
|
398 |
|
Amortization of deferred debt issuance costs |
40 |
|
|
48 |
|
|
47 |
|
Stock-based compensation |
1,118 |
|
|
1,296 |
|
|
1,171 |
|
Deferred income taxes |
(160 |
) |
|
2,629 |
|
|
343 |
|
Loss on disposal of property, plant and equipment |
13 |
|
|
187 |
|
|
— |
|
Restructuring expenses, net |
1,116 |
|
|
13,203 |
|
|
78 |
|
Change in working capital, net |
(4,068 |
) |
|
14,930 |
|
|
(12,008 |
) |
Net cash provided by operating activities |
4,920 |
|
|
29,498 |
|
|
6,997 |
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
Acquisition of property, plant and equipment |
(5,121 |
) |
|
(4,833 |
) |
|
(6,601 |
) |
Proceeds on sale of property, plant and equipment |
— |
|
|
5 |
|
|
204 |
|
Net cash used in investing activities |
(5,121 |
) |
|
(4,828 |
) |
|
(6,397 |
) |
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
(Repayments) borrowings on revolving loans, net |
— |
|
|
(6,130 |
) |
|
2,750 |
|
Repayments on capital expenditure facility |
(781 |
) |
|
(7,781 |
) |
|
(781 |
) |
Payment of dividends |
(1,866 |
) |
|
(1,866 |
) |
|
(298 |
) |
Net proceeds from issuance of common stock |
— |
|
|
199 |
|
|
— |
|
Treasury stock purchases |
(1,034 |
) |
|
(24 |
) |
|
(853 |
) |
Net cash provided by (used in) financing activities |
(3,681 |
) |
|
(15,602 |
) |
|
818 |
|
EFFECTS OF EXCHANGE RATES ON
CASH |
(20 |
) |
|
(898 |
) |
|
81 |
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS |
(3,902 |
) |
|
8,170 |
|
|
1,499 |
|
CASH AND CASH EQUIVALENTS,
beginning of the period |
20,353 |
|
|
12,183 |
|
|
13,375 |
|
CASH AND CASH EQUIVALENTS, end
of the period |
$ |
16,451 |
|
|
$ |
20,353 |
|
|
$ |
14,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
DMC GLOBAL INC.RECONCILIATIONS OF NON-GAAP
FINANCIAL MEASUREMENTS TO MOSTDIRECTLY COMPARABLE GAAP FINANCIAL
MEASUREMENTS(Amounts in Thousands)(unaudited)
DMC Global
EBITDA and Adjusted EBITDA
|
Three months ended |
|
Change |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Mar 31, 2019 |
|
Sequential |
|
Year-on-year |
Net income (loss) |
$ |
4,155 |
|
|
$ |
(5,288 |
) |
|
$ |
15,170 |
|
179 |
% |
|
-73 |
% |
Interest expense, net |
238 |
|
|
385 |
|
|
373 |
|
-38 |
% |
|
-36 |
% |
Income tax provision |
2,069 |
|
|
4,741 |
|
|
4,888 |
|
-56 |
% |
|
-58 |
% |
Depreciation |
2,352 |
|
|
2,138 |
|
|
1,798 |
|
10 |
% |
|
31 |
% |
Amortization of purchased
intangible assets |
354 |
|
|
355 |
|
|
398 |
|
— |
% |
|
-11 |
% |
|
|
|
|
|
|
|
|
|
|
EBITDA |
9,168 |
|
|
2,331 |
|
|
22,627 |
|
293 |
% |
|
-59 |
% |
Restructuring expenses,
net |
1,116 |
|
|
13,203 |
|
|
78 |
|
-92 |
% |
|
1,331 |
% |
Restructuring related accounts
receivable write off |
— |
|
|
131 |
|
|
— |
|
-100 |
% |
|
n/a |
|
Stock-based compensation |
1,118 |
|
|
1,296 |
|
|
1,171 |
|
-14 |
% |
|
-5 |
% |
Other (income) expense,
net |
(115 |
) |
|
661 |
|
|
21 |
|
-117 |
% |
|
-648 |
% |
Adjusted EBITDA |
$ |
11,287 |
|
|
$ |
17,622 |
|
|
$ |
23,897 |
|
-36 |
% |
|
-53 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income
|
Three months ended |
|
Change |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Mar 31, 2019 |
|
Sequential |
|
Year-on-year |
Operating income, as reported |
$ |
6,347 |
|
|
$ |
499 |
|
|
$ |
20,452 |
|
|
1,172 |
% |
|
-69 |
% |
Restructuring programs: |
|
|
|
|
|
|
|
|
|
NobelClad |
59 |
|
|
458 |
|
|
78 |
|
|
-87 |
% |
|
-24 |
% |
DynaEnergetics |
938 |
|
|
12,745 |
|
|
— |
|
|
-93 |
% |
|
n/a |
|
Corporate |
119 |
|
|
— |
|
|
— |
|
|
n/a |
|
|
n/a |
|
Restructuring related accounts
receivable write off |
— |
|
|
131 |
|
|
— |
|
|
-100 |
% |
|
n/a |
|
Adjusted operating income |
$ |
7,463 |
|
|
$ |
13,833 |
|
|
$ |
20,530 |
|
|
-46 |
% |
|
-64 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income and Adjusted Diluted Earnings per Share
|
Three months ended March 31, 2020 |
|
Pretax |
|
Tax |
|
Net |
|
Diluted EPS |
Net income, as reported |
$ |
6,224 |
|
|
$ |
2,069 |
|
|
$ |
4,155 |
|
|
$ |
0.28 |
|
Restructuring programs: |
|
|
|
|
|
|
|
NobelClad |
59 |
|
|
— |
|
|
59 |
|
|
— |
|
DynaEnergetics |
938 |
|
|
— |
|
|
938 |
|
|
0.06 |
|
Corporate |
119 |
|
|
— |
|
|
119 |
|
|
0.01 |
|
Adjusted net income |
$ |
7,340 |
|
|
$ |
2,069 |
|
|
$ |
5,271 |
|
|
$ |
0.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DMC GLOBAL INC.RECONCILIATIONS OF NON-GAAP
FINANCIAL MEASUREMENTS TO MOSTDIRECTLY COMPARABLE GAAP FINANCIAL
MEASUREMENTS(Amounts in Thousands)(unaudited)
|
Three months ended December 31, 2019 |
|
Pretax |
|
Tax |
|
Net |
|
Diluted EPS |
Net loss, as reported |
$ |
(547 |
) |
|
$ |
4,741 |
|
|
$ |
(5,288 |
) |
|
$ |
(0.36 |
) |
Restructuring programs: |
|
|
|
|
|
|
|
NobelClad |
458 |
|
|
4 |
|
|
454 |
|
|
0.03 |
|
DynaEnergetics |
12,745 |
|
|
160 |
|
|
12,585 |
|
|
0.86 |
|
Restructuring related accounts
receivable write off |
131 |
|
|
— |
|
|
131 |
|
|
0.01 |
|
Impact of tax valuation
allowances |
— |
|
|
(1,647 |
) |
|
1,647 |
|
|
0.11 |
|
Adjusted net income |
$ |
12,787 |
|
|
$ |
3,258 |
|
|
$ |
9,529 |
|
|
$ |
0.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2019 |
|
Pretax |
|
Tax |
|
Net |
|
Diluted EPS |
Net income, as reported |
$ |
20,058 |
|
|
$ |
4,888 |
|
|
$ |
15,170 |
|
|
$ |
1.01 |
|
Restructuring programs: |
|
|
|
|
|
|
|
NobelClad |
78 |
|
|
— |
|
|
78 |
|
|
0.01 |
|
Adjusted net income |
$ |
20,136 |
|
|
$ |
4,888 |
|
|
$ |
15,248 |
|
|
$ |
1.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DMC GLOBAL INC.RECONCILIATIONS OF NON-GAAP
FINANCIAL MEASUREMENTS TO MOSTDIRECTLY COMPARABLE GAAP FINANCIAL
MEASUREMENTS(Amounts in Thousands)(unaudited)
Return on Invested Capital
|
|
|
Three months ended |
|
|
|
Mar 31, 2019 |
|
Dec 31, 2019 |
|
Sep 30, 2019 |
|
Dec 31, 2019 |
|
Mar 31, 2020 |
Operating income |
|
|
|
20,452 |
|
|
$ |
24,653 |
|
|
$ |
12,821 |
|
|
|
$ |
499 |
|
|
|
$ |
6,347 |
|
|
Income tax provision (benefit)
(1) |
|
|
|
4,990 |
|
|
7,371 |
|
|
5,782 |
|
|
|
5,227 |
|
|
|
2,107 |
|
|
Net operating profit after
taxes (NOPAT) |
|
|
|
15,462 |
|
|
17,282 |
|
|
7,039 |
|
|
|
(4,728 |
) |
|
|
4,240 |
|
|
Trailing Twelve Months
NOPAT |
|
|
|
|
|
|
|
|
|
35,055 |
|
|
|
23,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances as of |
|
Dec 31, 2018 |
|
Mar 31, 2019 |
|
Jun 30, 2019 |
|
Sep 30, 2019 |
|
Dec 31, 2019 |
|
Mar 31, 2020 |
Allowance for doubtful
accounts |
513 |
|
|
574 |
|
|
428 |
|
|
405 |
|
|
|
967 |
|
|
|
2,320 |
|
|
Deferred tax assets |
(4,001 |
) |
|
(3,843 |
) |
|
(3,656 |
) |
|
(3,431 |
) |
|
|
(3,836 |
) |
|
|
(3,902 |
) |
|
Deferred tax liabilities |
379 |
|
|
880 |
|
|
458 |
|
|
1,469 |
|
|
|
3,786 |
|
|
|
3,692 |
|
|
Accrued income taxes |
9,545 |
|
|
5,367 |
|
|
9,419 |
|
|
10,427 |
|
|
|
9,651 |
|
|
|
8,666 |
|
|
Current portion of lease
liabilities |
— |
|
|
2,122 |
|
|
2,016 |
|
|
1,944 |
|
|
|
1,716 |
|
|
|
1,618 |
|
|
Long-term portion of lease
liabilities |
— |
|
|
6,157 |
|
|
9,506 |
|
|
9,487 |
|
|
|
9,777 |
|
|
|
9,454 |
|
|
Current portion of long-term
debt |
3,125 |
|
|
3,125 |
|
|
3,125 |
|
|
3,125 |
|
|
|
3,125 |
|
|
|
3,125 |
|
|
Long-term debt |
38,230 |
|
|
40,239 |
|
|
32,744 |
|
|
25,010 |
|
|
|
11,147 |
|
|
|
10,406 |
|
|
Total stockholders'
equity |
134,286 |
|
|
148,911 |
|
|
163,501 |
|
|
167,076 |
|
|
|
172,141 |
|
|
|
173,689 |
|
|
Total invested capital |
182,077 |
|
|
203,532 |
|
|
217,541 |
|
|
215,512 |
|
|
|
208,474 |
|
|
|
209,068 |
|
|
Average invested capital |
|
|
|
|
|
|
193,497 |
|
|
|
195,276 |
|
|
|
206,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing Twelve
Months Return on Invested Capital (ROIC) |
|
|
|
29 |
|
% |
|
18 |
|
% |
|
12 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax calculation for NOPAT:
|
|
Three months ended |
|
Twelve months ended |
|
Three months ended |
|
Mar 31, 2019 |
|
Jun 30, 2019 |
|
Sep 30, 2019 |
|
Dec 31, 2019 |
|
Dec 31, 2019 |
|
Mar 31, 2020 |
Income before income taxes |
20,058 |
|
|
24,587 |
|
|
12,604 |
|
|
(547 |
) |
|
|
56,702 |
|
|
6,224 |
|
Income tax provision
(benefit) |
4,888 |
|
|
7,343 |
|
|
5,689 |
|
|
4,741 |
|
|
|
22,661 |
|
|
2,069 |
|
Effective tax rate |
24.4 |
% |
|
29.9 |
% |
|
45.1 |
% |
|
(866.7 |
) |
% |
|
40.0 |
% |
|
33.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DMC GLOBAL INC.RECONCILIATIONS OF NON-GAAP
FINANCIAL MEASUREMENTS TO MOSTDIRECTLY COMPARABLE GAAP FINANCIAL
MEASUREMENTS(Amounts in Thousands)(unaudited)
DynaEnergetics
|
Three months ended |
|
Change |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Mar 31, 2019 |
|
Sequential |
|
Year-on-year |
Operating income, as reported |
$ |
8,606 |
|
|
$ |
3,947 |
|
|
$ |
23,110 |
|
|
118 |
% |
|
-63 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
Restructuring |
938 |
|
|
12,744 |
|
|
— |
|
|
-93 |
% |
|
n/a |
|
Restructuring related accounts receivable write off |
— |
|
|
131 |
|
|
— |
|
|
-100 |
% |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income |
9,544 |
|
|
16,822 |
|
|
23,110 |
|
|
-43 |
% |
|
-59 |
% |
Depreciation |
1,512 |
|
|
1,390 |
|
|
1,098 |
|
|
9 |
% |
|
38 |
% |
Amortization of purchased intangibles |
260 |
|
|
260 |
|
|
301 |
|
|
— |
% |
|
-14 |
% |
Adjusted EBITDA |
$ |
11,316 |
|
|
$ |
18,472 |
|
|
$ |
24,509 |
|
|
-39 |
% |
|
-54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NobelClad
|
Three months ended |
|
Change |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Mar 31, 2019 |
|
Sequential |
|
Year-on-year |
Operating income, as reported |
$ |
1,476 |
|
|
$ |
1,221 |
|
|
$ |
1,830 |
|
|
21 |
% |
|
-19 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
Restructuring expenses, net |
59 |
|
|
459 |
|
|
78 |
|
|
-87 |
% |
|
-24 |
% |
|
|
|
|
|
|
|
|
|
|
Adjusted operating income |
1,535 |
|
|
1,680 |
|
|
1,908 |
|
|
|
|
|
Depreciation |
740 |
|
|
615 |
|
|
700 |
|
|
20 |
% |
|
6 |
% |
Amortization of purchased intangibles |
94 |
|
|
95 |
|
|
97 |
|
|
-1 |
% |
|
-3 |
% |
Adjusted EBITDA |
$ |
2,369 |
|
|
$ |
2,390 |
|
|
$ |
2,705 |
|
|
-1 |
% |
|
-12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT: |
Geoff High, Vice President of Investor Relations |
303-604-3924 |
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