DMC Global Inc. (Nasdaq: BOOM) today reported financial results for
its first quarter ended March 31, 2019.
Consolidated sales were a record $100.1 million,
up 49% versus the first quarter of 2018 and up 11% sequentially
from the 2018 fourth quarter. The sales growth was driven by
continued strong customer demand for intrinsically safe integrated
switch-detonators and Factory-Assembled, Performance-Assured™ well
perforating systems from DynaEnergetics, DMC’s oilfield products
business. Sales at NobelClad, DMC’s composite metals
business, also exceeded forecasts.
First quarter gross margin was 36% versus 34% in
the 2018 first quarter and 35% in the 2018 fourth quarter.
The improvement primarily resulted from a higher proportion of
sales from DynaEnergetics, and an improved project mix at
NobelClad.
Operating income was $20.5 million versus $5.3
million in the 2018 first quarter. Net income was $15.2 million, or
$1.01 per diluted share, versus $3.9 million, or $0.26 per diluted
share, in last year’s first quarter.
Adjusted operating income* was $20.5 million,
and excludes $78,000 in restructuring expenses at NobelClad.
Adjusted net income was $15.2 million, or $1.02 per diluted
share.
First quarter adjusted EBITDA was $23.9 million
versus $11.6 million in the 2018 first quarter and $16.9 million in
last year’s fourth quarter.
Net debt* (total debt less cash and cash
equivalents) at March 31, 2019, was $28.5 million versus $28.0
million at December 31, 2018.
DynaEnergeticsFirst quarter sales at
DynaEnergetics were $79.8 million, up 63% from the 2018 first
quarter and 26% sequentially. Gross margin was 39%, down from 40%
in last year’s first quarter and flat versus the 2018 fourth
quarter. Operating income was $23.1 million versus $8.7 million in
the comparable year-ago quarter. Adjusted EBITDA was $24.5 million
versus $13.4 million in last year’s first quarter.
NobelCladNobelClad reported first-quarter sales
of $20.3 million, up 12% versus the 2018 first quarter and down 25%
sequentially. The sequential decline relates to the accelerated
production and delivery of a large chemical-industry order during
last year’s fourth quarter. Gross margin was 26%, up from 18%
in the 2018 first quarter and 25% in the fourth quarter. The
improvement reflects the completion of NobelClad’s European
consolidation effort, as well as the business’ successful efforts
to capture value for its unique products and technologies, which
led to a higher margin project mix. Operating income was $1.8
million versus an operating loss of $12,000 in the year-ago first
quarter. Excluding restructuring charges, adjusted operating
income was $1.9 million. Adjusted EBITDA was $2.7 million
versus $948,000 in last year’s first quarter.
NobelClad’s trailing 12-month book-to-bill ratio
at the end of the first quarter was 1.02. Order backlog was
$40.5 million versus $29.9 million at the end of the 2018 fourth
quarter.
Management
Commentary“DynaEnergetics continues to transform North
America’s unconventional well-completion industry with its
Factory-Assembled, Performance-Assured perforating systems,” said
Kevin Longe, president and CEO. “During the first quarter,
the business also benefitted from improved market conditions, which
included a 32% increase in crude prices and improved well
completion activity.
“The safety, efficiency and reliability of the
DynaStage system is made possible by DynaEnergetics’ intrinsically
safe, integrated switch-detonator, which remains a critical point
of differentiation versus other pre-wired systems entering the
market. The unmatched simplicity associated with
installing this wire-free initiating system has helped reduce gun
string assembly times by up to 80% versus conventional guns, and
has enabled customers to complete up to 40% more stages per
day. These benefits are leading to the continued expansion of
DynaEnergetics’ customer base in unconventional basins across the
United States.”
Longe said DynaEnergetics continues to add
manufacturing capacity in response to improving market conditions
and increasing demand. “A third automated detonator assembly
line recently commenced production at our facility in Troisdorf,
Germany, and we will begin installing an additional automated
shaped charge line at our Blum, Texas plant later in the second
quarter.”
Longe added, “NobelClad’s first quarter results
benefitted from healthy demand from the downstream energy and
aluminum smelting industries, as well as the award of multiple
mid-size projects. NobelClad’s order backlog at the end of
the quarter was at its highest level since the fourth quarter of
2015.
“The first quarter represented a strong start to
2019. I am very appreciative of the outstanding efforts of
our employees and the continued support of our customers. I
also am pleased we achieved a 25% return on invested capital*,
which reflects the impact of our technology, product and market
development programs, as well as our multi-year efforts to improve
the operating efficiencies of our businesses.”
GuidanceMichael Kuta, CFO, said
second quarter sales are expected in a range of $102 million to
$107 million versus the $80.9 million reported in the 2018 second
quarter. At the business level, DynaEnergetics is expected to
report sales in a range of $82 million to $85 million versus $58.9
million reported in last year’s second quarter. NobelClad’s sales
are expected to be approximately $20 million to $22 million versus
$22 million reported in the 2018 second quarter.
Consolidated gross margin is expected to be in
the 35% range versus 33% reported in the year-ago second
quarter. The potential decline versus the 36% reported in
this year’s first quarter reflects the possibility of higher
material costs in advance of DynaEnergetics’ transition to in-house
production of key components used in the DynaStage
system.
Second quarter selling, general and
administrative (SG&A) expense is expected to be approximately
$16.5 million versus SG&A of $15.5 million in last year’s
second quarter. Amortization expense is expected to be
approximately $400,000 versus $791,000 in the second quarter last
year, while interest expense is expected to be approximately
$500,000.
Adjusted EBITDA is expected in a range of $22
million to $24.5 million versus $13.9 million in last year’s second
quarter.
Kuta said that after a stronger-than-expected
start to fiscal 2019, management has revised its prior full-year
forecasts. Sales are now expected in a range of $405 million to
$425 million versus the $326.4 million reported in 2018. Sales at
DynaEnergetics are expected in a range of $325 million to $340
million versus the $237.4 million reported in 2018, while
NobelClad’s expected sales remain in a range of $80 million to $85
million versus the $89.0 million in 2018. Full-year gross margin is
expected in a range of 35% versus the 34% reported in 2018.
Kuta said full-year SG&A should be
approximately $63 million to $66 million versus the $61.2 million
reported in 2018. The increase relates to higher expected spending
on sales and marketing programs at both DynaEnergetics and
NobelClad. Anticipated amortization expense remains at
approximately $1.6 million versus the $2.9 million reported in
2018.
Anticipated interest expense in 2019 remains in
a range of $2.0 million to $2.25 million, and the expected
effective tax rate for 2019 is still approximately 30%.
Adjusted EBITDA is expected in a range of $90
million to $100 million, up from 2018 adjusted EBITDA of $59.6
million. Full-year adjusted net income per share is expected in a
range of $3.40 to $3.70 versus the $2.07 reported in fiscal
2018.
Anticipated capital expenditures in 2019 remain
in the range of $25 million to $30 million.
Conference call
informationManagement will hold a conference call to
discuss these results today at 5:00 p.m. Eastern (3:00 p.m.
Mountain). Investors are invited to listen to the call live via the
Internet at:
https://www.investornetwork.com/event/presentation/46191, or by
dialing 877-407-0778 (201-689-8565 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 through May
2, 2019, by calling 877-481-4010 (919-882-2331 for international
callers) and entering the Conference ID #46191.
*Use of Non-GAAP Financial
MeasuresAdjusted EBITDA, adjusted operating income (loss),
adjusted net income (loss), adjusted diluted earnings (loss) per
share, net debt 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 (loss) is defined as
operating income (loss) plus restructuring and impairment charges
and, when appropriate, other items that management does not utilize
in assessing DMC’s operating performance. Adjusted net income
(loss) is defined as net income (loss) plus restructuring and
impairment charges and, when appropriate, other items that
management does not utilize in assessing DMC’s operating
performance. Adjusted diluted earnings (loss) per share is defined
as diluted earnings (loss) per share plus restructuring and
impairment charges and, when appropriate, other items that
management does not utilize in assessing DMC’s operating
performance. Net debt is defined as total debt less cash and cash
equivalents. 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 debt 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 (loss), adjusted net income
(loss) and adjusted diluted earnings (loss) 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 (loss), net income (loss) and diluted earnings
(loss) 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 DMCBased in Boulder,
Colorado, DMC 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. 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 second quarter and full-year 2019 guidance on
sales and gross margin, SG&A, amortization expenses, earnings
per share, adjusted EBITDA, interest expense, and our effective tax
rate; timing of the installation of a new automated shaped charge
line at DynaEnergetics' Blum, Texas facility; and the anticipation
at DynaEnergetics of increased customer demand, continued
customer-base expansion and improving market conditions. 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;
our ability to complete our capacity expansion initiatives on
schedule and on budget; the availability and cost of funds; 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, 2018. We do not undertake any obligation to
release publicly 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, 2019 |
|
Dec 31, 2018 |
|
Mar 31, 2018 |
|
Sequential |
|
Year-on-year |
NET SALES |
$ |
100,135 |
|
|
$ |
90,318 |
|
|
$ |
67,313 |
|
|
11 |
% |
|
49 |
% |
COST OF PRODUCTS
SOLD |
63,730 |
|
|
58,879 |
|
|
44,560 |
|
|
8 |
% |
|
43 |
% |
Gross
profit |
36,405 |
|
|
31,439 |
|
|
22,753 |
|
|
16 |
% |
|
60 |
% |
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
|
General
and administrative expenses |
9,168 |
|
|
10,902 |
|
|
8,177 |
|
|
-16 |
% |
|
12 |
% |
Selling
and distribution expenses |
6,309 |
|
|
6,334 |
|
|
5,212 |
|
|
— |
% |
|
21 |
% |
Amortization of purchased intangible assets |
398 |
|
|
579 |
|
|
805 |
|
|
-31 |
% |
|
-51 |
% |
Restructuring expenses |
78 |
|
|
561 |
|
|
144 |
|
|
-86 |
% |
|
-46 |
% |
Anti-dumping duty penalties |
— |
|
|
— |
|
|
3,103 |
|
|
— |
% |
|
-100 |
% |
Total
costs and expenses |
15,953 |
|
|
18,376 |
|
|
17,441 |
|
|
-13 |
% |
|
-9 |
% |
OPERATING INCOME |
20,452 |
|
|
13,063 |
|
|
5,312 |
|
|
57 |
% |
|
285 |
% |
OTHER EXPENSE: |
|
|
|
|
|
|
|
|
|
Other
expense, net |
(21 |
) |
|
(163 |
) |
|
(377 |
) |
|
87 |
% |
|
94 |
% |
Interest
expense, net |
(373 |
) |
|
(519 |
) |
|
(465 |
) |
|
28 |
% |
|
20 |
% |
INCOME BEFORE INCOME
TAXES |
20,058 |
|
|
12,381 |
|
|
4,470 |
|
|
62 |
% |
|
349 |
% |
INCOME TAX
PROVISION |
4,888 |
|
|
2,890 |
|
|
550 |
|
|
69 |
% |
|
789 |
% |
NET INCOME |
15,170 |
|
|
9,491 |
|
|
3,920 |
|
|
60 |
% |
|
287 |
% |
NET INCOME PER
SHARE |
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.02 |
|
|
$ |
1.02 |
|
|
$ |
0.26 |
|
|
— |
% |
|
292 |
% |
Diluted |
$ |
1.01 |
|
|
$ |
1.02 |
|
|
$ |
0.26 |
|
|
-1 |
% |
|
288 |
% |
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
Basic |
14,606,052 |
|
|
14,576,522 |
|
|
14,449,915 |
|
|
— |
% |
|
1 |
% |
Diluted |
14,671,689 |
|
|
14,676,240 |
|
|
14,449,915 |
|
|
— |
% |
|
2 |
% |
DIVIDENDS DECLARED PER
COMMON SHARE |
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DMC GLOBAL INC.SEGMENT STATEMENTS OF
OPERATIONS(Amounts in Thousands)(unaudited) |
|
DynaEnergetics |
|
|
Three months ended |
|
Change |
|
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Mar 31, 2018 |
|
Sequential |
|
Year-on-year |
Net sales |
|
$ |
79,836 |
|
|
$ |
63,178 |
|
|
$ |
49,121 |
|
|
26 |
% |
|
63 |
% |
Gross profit |
|
31,232 |
|
|
24,744 |
|
|
19,627 |
|
|
26 |
% |
|
59 |
% |
Gross profit
percentage |
|
39.1 |
% |
|
39.2 |
% |
|
40.0 |
% |
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
General
and administrative expenses |
|
3,722 |
|
|
6,577 |
|
|
3,844 |
|
|
-43 |
% |
|
-3 |
% |
Selling
and distribution expenses |
|
4,099 |
|
|
4,016 |
|
|
3,260 |
|
|
2 |
% |
|
26 |
% |
Amortization of purchased intangible assets |
|
301 |
|
|
482 |
|
|
700 |
|
|
-38 |
% |
|
-57 |
% |
Anti-dumping duty penalties |
|
— |
|
|
— |
|
|
3,103 |
|
|
— |
% |
|
-100 |
% |
Operating income |
|
23,110 |
|
|
13,669 |
|
|
8,720 |
|
|
69 |
% |
|
165 |
% |
Adjusted EBITDA |
|
$ |
24,509 |
|
|
$ |
15,247 |
|
|
$ |
13,382 |
|
|
61 |
% |
|
83 |
% |
NobelClad
|
|
Three months ended |
|
Change |
|
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Mar 31, 2018 |
|
Sequential |
|
Year-on-year |
Net sales |
|
$ |
20,299 |
|
|
$ |
27,140 |
|
|
$ |
18,192 |
|
|
-25 |
% |
|
12 |
% |
Gross profit |
|
5,360 |
|
|
6,799 |
|
|
3,192 |
|
|
-21 |
% |
|
68 |
% |
Gross profit
percentage |
|
26.4 |
% |
|
25.1 |
% |
|
17.5 |
% |
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
General
and administrative expenses |
|
1,244 |
|
|
1,217 |
|
|
1,080 |
|
|
2 |
% |
|
15 |
% |
Selling
and distribution expenses |
|
2,111 |
|
|
2,216 |
|
|
1,875 |
|
|
-5 |
% |
|
13 |
% |
Amortization of purchased intangible assets |
|
97 |
|
|
97 |
|
|
105 |
|
|
— |
% |
|
-8 |
% |
Restructuring expenses |
|
78 |
|
|
561 |
|
|
144 |
|
|
-86 |
% |
|
-46 |
% |
Operating income
(loss) |
|
1,830 |
|
|
2,708 |
|
|
(12 |
) |
|
-32 |
% |
|
15,350 |
% |
Adjusted EBITDA |
|
$ |
2,705 |
|
|
$ |
4,047 |
|
|
$ |
948 |
|
|
-33 |
% |
|
185 |
% |
|
DMC GLOBAL INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Amounts in Thousands) |
|
|
|
|
|
Change |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
From year-end |
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
14,874 |
|
|
$ |
13,375 |
|
|
11 |
% |
Accounts
receivable, net |
73,252 |
|
|
59,709 |
|
|
23 |
% |
Inventory, net |
50,851 |
|
|
51,074 |
|
|
— |
% |
Other
current assets |
7,015 |
|
|
8,058 |
|
|
-13 |
% |
|
|
|
|
|
|
Total
current assets |
145,992 |
|
|
132,216 |
|
|
10 |
% |
|
|
|
|
|
|
Property, plant and
equipment, net |
99,911 |
|
|
95,140 |
|
|
5 |
% |
Purchased intangible
assets, net |
7,882 |
|
|
8,589 |
|
|
-8 |
% |
Other long-term
assets |
12,321 |
|
|
4,473 |
|
|
175 |
% |
|
|
|
|
|
|
Total assets |
$ |
266,106 |
|
|
$ |
240,418 |
|
|
11 |
% |
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
29,747 |
|
|
$ |
24,243 |
|
|
23 |
% |
Accrued anti-dumping
penalties |
8,000 |
|
|
8,000 |
|
|
— |
% |
Contract
liabilities |
2,490 |
|
|
1,140 |
|
|
118 |
% |
Dividend payable |
299 |
|
|
295 |
|
|
1 |
% |
Accrued income
taxes |
5,367 |
|
|
9,545 |
|
|
-44 |
% |
Current portion of
long-term debt |
3,125 |
|
|
3,125 |
|
|
— |
% |
Other current
liabilities |
17,895 |
|
|
18,217 |
|
|
-2 |
% |
|
|
|
|
|
|
Total
current liabilities |
66,923 |
|
|
64,565 |
|
|
4 |
% |
|
|
|
|
|
|
Long-term debt |
40,239 |
|
|
38,230 |
|
|
5 |
% |
Deferred tax
liabilities |
880 |
|
|
379 |
|
|
132 |
% |
Other long-term
liabilities |
9,153 |
|
|
2,958 |
|
|
209 |
% |
Stockholders’
equity |
148,911 |
|
|
134,286 |
|
|
11 |
% |
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
$ |
266,106 |
|
|
$ |
240,418 |
|
|
11 |
% |
|
DMC GLOBAL INC.CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(Amounts in Thousands)(unaudited) |
|
|
Three months ended |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Mar 31, 2018 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
Net
income |
$ |
15,170 |
|
|
$ |
15,271 |
|
|
$ |
3,920 |
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: |
|
|
|
|
|
Depreciation |
1,798 |
|
|
1,777 |
|
|
1,570 |
|
Amortization of purchased intangible assets |
398 |
|
|
579 |
|
|
805 |
|
Amortization of deferred debt issuance costs |
47 |
|
|
46 |
|
|
190 |
|
Stock-based compensation |
1,171 |
|
|
918 |
|
|
708 |
|
Deferred
income taxes |
343 |
|
|
(3,929 |
) |
|
(308 |
) |
Loss on
disposal of property, plant and equipment |
— |
|
|
48 |
|
|
— |
|
Restructuring expenses |
78 |
|
|
561 |
|
|
144 |
|
Transition tax liability |
— |
|
|
— |
|
|
(268 |
) |
Change in
working capital, net |
(12,008 |
) |
|
5,822 |
|
|
(9,739 |
) |
Net cash
provided by (used in) operating activities |
6,997 |
|
|
21,093 |
|
|
(2,978 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
Acquisition of property, plant and equipment |
(6,601 |
) |
|
(18,521 |
) |
|
(5,302 |
) |
Proceeds
on sale of property, plant and equipment |
204 |
|
|
— |
|
|
— |
|
Net cash
used in investing activities |
(6,397 |
) |
|
(18,521 |
) |
|
(5,302 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
Borrowings (repayments) on revolving loans, net |
2,750 |
|
|
(6,150 |
) |
|
7,898 |
|
(Repayments) borrowings on capital expenditure facility |
(781 |
) |
|
6,010 |
|
|
3,278 |
|
Payment
of dividends |
(298 |
) |
|
(298 |
) |
|
(295 |
) |
Payment
of deferred debt issuance costs |
— |
|
|
(4 |
) |
|
— |
|
Net
proceeds from issuance of common stock |
— |
|
|
210 |
|
|
— |
|
Treasury
stock purchases |
(853 |
) |
|
— |
|
|
(343 |
) |
Net cash
provided by (used in) financing activities |
818 |
|
|
(232 |
) |
|
10,538 |
|
EFFECTS OF EXCHANGE
RATES ON CASH |
81 |
|
|
(63 |
) |
|
(473 |
) |
|
|
|
|
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS |
1,499 |
|
|
2,277 |
|
|
1,785 |
|
CASH AND CASH
EQUIVALENTS, beginning of the period |
13,375 |
|
|
11,098 |
|
|
8,983 |
|
CASH AND CASH
EQUIVALENTS, end of the period |
$ |
14,874 |
|
|
$ |
13,375 |
|
|
$ |
10,768 |
|
|
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, 2019 |
|
Dec 31, 2018 |
|
Mar 31, 2018 |
|
Sequential |
|
Year-on-year |
Net income |
$ |
15,170 |
|
|
$ |
9,491 |
|
|
$ |
3,920 |
|
|
60 |
% |
|
287 |
% |
Interest expense,
net |
373 |
|
|
519 |
|
|
465 |
|
|
-28 |
% |
|
-20 |
% |
Income tax
provision |
4,888 |
|
|
2,890 |
|
|
550 |
|
|
69 |
% |
|
789 |
% |
Depreciation |
1,798 |
|
|
1,777 |
|
|
1,570 |
|
|
1 |
% |
|
15 |
% |
Amortization of
purchased intangible assets |
398 |
|
|
579 |
|
|
805 |
|
|
-31 |
% |
|
-51 |
% |
|
|
|
|
|
|
|
|
|
|
EBITDA |
22,627 |
|
|
15,256 |
|
|
7,310 |
|
|
48 |
% |
|
210 |
% |
Restructuring |
78 |
|
|
561 |
|
|
144 |
|
|
-86 |
% |
|
-46 |
% |
Accrued anti-dumping
penalties |
— |
|
|
— |
|
|
3,103 |
|
|
— |
% |
|
-100 |
% |
Stock-based
compensation |
1,171 |
|
|
918 |
|
|
708 |
|
|
28 |
% |
|
65 |
% |
Other expense, net |
21 |
|
|
163 |
|
|
377 |
|
|
-87 |
% |
|
-94 |
% |
Adjusted EBITDA |
$ |
23,897 |
|
|
$ |
16,898 |
|
|
$ |
11,642 |
|
|
41 |
% |
|
105 |
% |
Adjusted operating income
|
Three months ended |
|
Change |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Mar 31, 2018 |
|
Sequential |
|
Year-on-year |
Operating income, as
reported |
$ |
20,452 |
|
|
$ |
13,063 |
|
|
$ |
5,312 |
|
|
57 |
% |
|
285 |
% |
Restructuring
programs: |
|
|
|
|
|
|
|
|
|
NobelClad |
78 |
|
|
561 |
|
|
144 |
|
|
-86 |
% |
|
-46 |
% |
Accrued anti-dumping
penalties |
— |
|
|
— |
|
|
3,103 |
|
|
— |
% |
|
-100 |
% |
Adjusted operating
income |
$ |
20,530 |
|
|
$ |
13,624 |
|
|
$ |
8,559 |
|
|
51 |
% |
|
140 |
% |
Adjusted Net Income and Adjusted Diluted Earnings per Share
|
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) |
|
|
Three months ended December 31, 2018 |
|
Pretax |
|
Tax |
|
Net |
|
Diluted EPS |
Net income, as
reported |
$ |
12,381 |
|
|
$ |
(2,890 |
) |
|
$ |
15,271 |
|
|
$ |
1.02 |
|
Restructuring
programs: |
|
|
|
|
|
|
|
NobelClad |
561 |
|
|
— |
|
|
561 |
|
|
0.04 |
|
Impact of tax valuation
allowances |
— |
|
|
8,860 |
|
|
(8,860 |
) |
|
(0.60 |
) |
Adjusted net
income |
$ |
12,942 |
|
|
$ |
5,970 |
|
|
$ |
6,972 |
|
|
$ |
0.46 |
|
|
Three months ended March 31, 2018 |
|
Pretax |
|
Tax |
|
Net |
|
Diluted EPS |
Net income, as
reported |
$ |
4,470 |
|
|
$ |
550 |
|
|
$ |
3,920 |
|
|
$ |
0.26 |
|
Restructuring
programs: |
|
|
|
|
|
|
|
NobelClad |
144 |
|
|
— |
|
|
144 |
|
|
0.01 |
|
Accrued anti-dumping
duties |
3,103 |
|
|
— |
|
|
3,103 |
|
|
0.22 |
|
Adjusted net
income |
$ |
7,717 |
|
|
$ |
550 |
|
|
$ |
7,167 |
|
|
$ |
0.49 |
|
|
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 |
|
|
|
Jun 30, 2018 |
|
Sep 30, 2018 |
|
Dec 31, 2018 |
|
Mar 31, 2019 |
Operating
income |
|
$ |
10,229 |
|
|
$ |
8,820 |
|
|
$ |
13,063 |
|
|
$ |
20,452 |
|
Income tax
provision (benefit) (1) |
|
3,555 |
|
|
3,396 |
|
|
(2,809 |
) |
|
4,990 |
|
Net
operating profit after taxes (NOPAT) |
|
6,674 |
|
|
5,424 |
|
|
15,872 |
|
|
15,462 |
|
Trailing
Twelve Months NOPAT |
|
|
|
|
|
|
|
43,432 |
|
|
|
|
|
|
|
|
|
|
|
|
Balances as of |
|
Mar 31, 2018 |
|
Jun 30, 2018 |
|
Sep 30, 2018 |
|
Dec 31, 2018 |
|
Mar 31, 2019 |
Allowance for doubtful
accounts |
1,269 |
|
|
572 |
|
|
490 |
|
|
513 |
|
|
574 |
|
Deferred tax
assets |
— |
|
|
— |
|
|
— |
|
|
(4,001 |
) |
|
(3,843 |
) |
Deferred tax
liabilities |
265 |
|
|
606 |
|
|
849 |
|
|
379 |
|
|
880 |
|
Accrued income
taxes |
4,603 |
|
|
6,557 |
|
|
9,299 |
|
|
9,545 |
|
|
5,367 |
|
Current portion of
long-term debt |
— |
|
|
— |
|
|
— |
|
|
3,125 |
|
|
3,125 |
|
Long-term debt |
29,350 |
|
|
34,611 |
|
|
41,454 |
|
|
38,230 |
|
|
40,239 |
|
Total stockholders'
equity |
111,357 |
|
|
114,229 |
|
|
119,390 |
|
|
134,286 |
|
|
148,911 |
|
Total invested
capital |
146,844 |
|
|
156,575 |
|
|
171,482 |
|
|
182,077 |
|
|
195,253 |
|
|
|
|
|
|
|
|
|
|
|
Trailing Twelve Months
Return on Invested Capital (ROIC) |
|
|
|
|
|
|
|
|
25 |
% |
|
|
(1) Tax
calculation for NOPAT: |
|
Three months ended |
|
Twelve months ended |
|
Three months ended |
|
Mar 31, 2018 |
|
Jun 30, 2018 |
|
Sep 30, 2018 |
|
Dec 31, 2018 |
|
Dec 31, 2018 |
|
Mar 31, 2019 |
Income Before Income
Taxes |
4,470 |
|
|
9,766 |
|
|
7,990 |
|
|
12,381 |
|
|
34,607 |
|
|
20,058 |
|
Income Tax
Provision |
550 |
|
|
3,394 |
|
|
3,080 |
|
|
(2,890 |
) |
|
4,134 |
|
|
4,888 |
|
Effective Tax Rate |
12.3 |
% |
|
34.8 |
% |
|
38.5 |
% |
|
(23.3 |
)% |
|
11.9 |
% |
|
24.4 |
% |
|
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, 2019 |
|
Dec 31, 2018 |
|
Mar 31, 2018 |
|
Sequential |
|
Year-on-year |
Operating income |
$ |
23,110 |
|
|
$ |
13,669 |
|
|
$ |
8,720 |
|
|
69 |
% |
|
165 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
Accrued
anti-dumping penalties |
— |
|
|
— |
|
|
3,103 |
|
|
— |
% |
|
-100 |
% |
Depreciation |
1,098 |
|
|
1,096 |
|
|
859 |
|
|
— |
% |
|
28 |
% |
Amortization of purchased intangibles |
301 |
|
|
482 |
|
|
700 |
|
|
-38 |
% |
|
-57 |
% |
Adjusted EBITDA |
$ |
24,509 |
|
|
$ |
15,247 |
|
|
$ |
13,382 |
|
|
61 |
% |
|
83 |
% |
NobelClad
|
Three months ended |
|
Change |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Mar 31, 2018 |
|
Sequential |
|
Year-on-year |
Operating income
(loss) |
$ |
1,830 |
|
|
$ |
2,708 |
|
|
$ |
(12 |
) |
|
-32 |
% |
|
15,350 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
Restructuring |
78 |
|
|
561 |
|
|
144 |
|
|
-86 |
% |
|
-46 |
% |
Depreciation |
700 |
|
|
681 |
|
|
711 |
|
|
3 |
% |
|
-2 |
% |
Amortization of purchased intangibles |
97 |
|
|
97 |
|
|
105 |
|
|
— |
% |
|
-8 |
% |
Adjusted EBITDA |
$ |
2,705 |
|
|
$ |
4,047 |
|
|
$ |
948 |
|
|
-33 |
% |
|
185 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT:Geoff High, Vice President of Investor
Relations303-604-3924
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