DMC Global Inc. (Nasdaq: BOOM) today reported financial results for its fourth quarter and fiscal year ended December 31, 2020.

Fourth quarter sales were $57.1 million, up 3% sequentially versus the 2020 third quarter, and down 34% versus the 2019 fourth quarter. The decline versus last year’s fourth quarter reflects the pandemic-related drop in travel and economic activity, which reduced demand for oil and gas, negatively affecting sales at DynaEnergetics, DMC’s energy products business. Fourth quarter gross margin was 21% versus 25% in the third quarter and 35% in the prior-year fourth quarter. The sequential decline principally reflects an anticipated less-favorable order mix at NobelClad, DMC’s composite metals business.

Fourth quarter operating loss was $818,000 versus operating income of $499,000 in the 2019 fourth quarter. Net loss was $927,000, or $0.06 per diluted share, versus a net loss of $5.3 million, or $0.36 per diluted share, in the prior-year fourth quarter. The 2019 fourth quarter was impacted by $13.2 million in restructuring charges ($12.1 million of which were non-cash) principally related to the closure of DynaEnergetics’ manufacturing plant in Tyumen, Siberia.

Adjusted operating loss* was $736,000, and excludes $82,000 in restructuring charges. Adjusted operating income in last year’s fourth quarter was $13.8 million. Adjusted net loss*, which excludes the restructuring charges, was $825,000, or $0.05 per diluted share. Adjusted net income* in the 2019 fourth quarter was $9.5 million, or $0.65 per diluted share.

Fourth quarter adjusted EBITDA was $3.6 million versus $6.0 million in the 2020 third quarter and $17.6 million in the 2019 fourth quarter. Cash flow from operations was $9.0 million versus $29.5 million in the prior-year fourth quarter.

Net cash* (cash, cash equivalents and marketable securities less total debt) was $42.6 million versus $12.6 million at the end of the 2020 third quarter and $6.1 million at December 31, 2019. Total debt was $11.3 million, and the Company’s debt-to-adjusted EBITDA leverage ratio was 0.6.

DynaEnergetics DynaEnergetics reported fourth quarter sales of $35.3 million, up 3% sequentially and down 45% versus the prior-year fourth quarter. Sales in North America increased 24% sequentially, while international sales declined 55% from the third quarter. Gross margin was 24% versus 24% in the 2020 third quarter and 38% in the 2019 fourth quarter. Adjusted EBITDA was $4.1 million versus $18.5 million in the 2019 fourth quarter.

NobelCladNobelClad reported fourth quarter sales of $21.8 million, up 3% sequentially and flat versus the 2019 fourth quarter. Gross margin was 18%, down from 26% in the 2020 third quarter and 27% in the prior-year fourth quarter. Adjusted EBITDA was $1.9 million versus $2.4 million in the prior-year fourth quarter.

NobelClad’s trailing 12-month book-to-bill ratio at the end of the fourth quarter was 1.05. Order backlog was $39.9 million versus $42.6 million at the end of the third quarter and $31.7 million at the end of the 2019 fourth quarter.

Full-year resultsConsolidated sales in 2020 were $229.2 million, down 42% from $397.6 million in 2019. Gross margin was 25% versus 36% in the prior year.

Operating loss was $996,000 versus operating income of $58.4 million in 2019. Excluding $3.4 million in restructuring charges, 2020 full-year adjusted operating income was $2.4 million versus adjusted operating income of $78.7 million in 2019.

Full-year 2020 net loss was $1.4 million, or $0.10 per diluted share, while full-year adjusted net income was $1.0 million, or $0.07 per diluted share. Net income in 2019 was $34.0 million, or $2.28 per diluted share, while 2019 adjusted net income was $55.6 million, or $3.75 per diluted share.

Full-year adjusted EBITDA was $19.1 million versus $93.8 million in 2019.

Cash flow from operations was $30.4 million, which excludes $13.9 million in capital expenditures. In 2019, cash flow from operations was $64.6 million, and excluded $27.2 million in capital expenditures.

DynaEnergeticsFull-year sales at DynaEnergetics were $146.4 million, down 53% from $310.4 million in 2019. Gross margin was 26%, down from 40% in the prior year. Adjusted EBITDA was $16.3 million versus $94.5 million in 2019.

NobelCladNobelClad reported full-year sales of $82.8 million, down 5% from $87.1 million in 2019. Gross margin was 23% versus 26% in the prior year. Adjusted EBITDA was $10.7 million versus $11.1 million in 2019.

Management CommentaryKevin Longe, president and CEO, said, “The recovery in unconventional well-completion activity accelerated during the fourth quarter, and fueled a 21% sequential increase in system sales at DynaEnergetics. Improved demand in DynaEnergetics’ primary North American market offset soft international sales, which we expect to increase during this year’s second half.

“DynaEnergetics is receiving positive feedback on several of its recently released products, including the DS LoneStar™, a compact perforating system incorporating next-generation shaped charges that deliver large, deep-penetrating and highly uniform entry holes. Data from three recent field trials showed the DS LoneStar charges achieved 98% perforating efficiency, meaning nearly every perforating tunnel delivered fluid and proppant into the targeted formations. Competitors’ best-performing perforating guns typically achieve perforating efficiency in the 80% to 85% range.

“The technologically advanced customers that tested DS LoneStar said the system delivered consistent hydraulic fracturing treatment across its entire asset, and reduced the required pressure-pumping horsepower by more than 20%. The DS LoneStar system also completed the trial with no misruns or misfires, illustrating the safety and performance benefits of the IS2™ intrinsically safe initiating system, which serves as the technological core of all DS products.”

Longe added, “Despite last year’s downturn, we continued to invest in technology and products that enhance the safety, efficiency and performance of our customers’ operations. DynaEnergetics was awarded 24 patents and filed 131 patent applications during 2020. We intend to aggressively protect and defend our intellectual property, as it is central to our efforts to create value for our customers and enhance the longer-term viability of our industry.”

Longe continued, “NobelClad’s late-cycle end markets generally lag changes in the broader economy, which likely will result in a relatively slow start to 2021. We believe several large international orders delayed by the pandemic will ultimately be awarded; and given the numerous new applications NobelClad has developed for its composite metal plates, the medium- to long-range outlook for the business remains positive. NobelClad’s order backlog at the beginning of the year was roughly 25% higher than at the beginning of 2020, and the associated contribution margins were a healthy 44%.

“Our primary energy markets have improved in recent months, and we entered 2021 with the strongest balance sheet in DMC’s history. Our at-the-market equity program is providing added financial flexibility as we explore opportunities to accelerate our growth and deliver strong, sustainable returns for our stakeholders.”

“I am extremely proud of our employees and their accomplishments during the most challenging year in Company history,” Longe added. “Thanks to the determination and innovative spirit of our global workforce, DMC has never been stronger or more resilient.”  

GuidanceMichael Kuta, CFO, said first quarter 2021 sales are expected to be in a range of $55 million to $62 million versus the $57.1 million reported in the 2020 fourth quarter. At the business level, DynaEnergetics is expected to report sales in a range of $37 million to $42 million versus the $35.3 million reported in last year’s fourth quarter.  The wide forecasted range reflects uncertainty regarding the timing of order deliveries following this week’s severe winter weather in Texas, DynaEnergetics’ largest geographic market. NobelClad’s sales are expected in a range of $18 million to $20 million versus the $21.8 million reported in the 2020 fourth quarter. Consolidated gross margin is expected to be in a range of 22% to 24% versus 21% in last year’s fourth quarter.

First quarter selling, general and administrative (SG&A) expense is expected in a range of $12.5 million to $13 million versus the $12.5 million reported in the 2020 fourth quarter, while amortization expense is expected to be approximately $325,000. Interest expense is expected to be approximately $150,000.

Adjusted EBITDA is expected in a range of $3.5 million to $5 million versus $3.6 million in the fourth quarter of 2020.

“Given the uncertainty regarding timing of the Covid-19 vaccination rollout and its impact on economic activity and energy demand, we are not yet providing full-year sales and earnings guidance. We do expect 2021 capital expenditures will be in a range of $12 million to $15 million. In addition, full-year amortization expense is expected to be approximately $1.1 million versus the $1.4 million reported in 2020; and interest expense is expected to be approximately $425,000, down from the $731,000 reported in 2020.”

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 a live webcast of the call at: https://www.webcaster4.com/Webcast/Page/2204/39911, or by dialing 888-506-0062 (973-528-0011 for international callers) and entering the code 482102. 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 February 25, 2021, by calling 877-481-4010 (919-882-2331 for international callers) and entering the Conference ID #39911.

*Use of Non-GAAP Financial MeasuresAdjusted EBITDA, adjusted operating income, adjusted net income, adjusted diluted earnings 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 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 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 total cash, cash equivalents and marketable securities 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 or 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, adjusted net income, 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 LanguageExcept 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 first quarter 2021 guidance on sales, gross margin, SG&A, and adjusted EBITDA; first quarter and full-year guidance on amortization expense and interest expense; expected capital expenditures in 2021; our expectations of a significant increase in DynaEnergetics international sales during the 2021 second half; our expectations of a relatively slow start to 2021 at NobelClad, our belief that several large international orders delayed by the pandemic will ultimately be awarded to NobelClad and NobelClad’s positive long-range outlook. 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 navigate slowdowns in market activity or execute and capitalize upon growth opportunities; the success of DynaEnergetics’ product and technology development initiatives; our ability to successfully protect our technology and intellectual property and the costs associated with these efforts; potential consolidation among DynaEnergetics’ customers; 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; government actions or other changes in laws and regulations; the availability and cost of funds; our ability to access our borrowing capacity under our credit facility; impacts of COVID-19 and any related preventive or protective actions taken by governmental authorities and resulting economic impacts, including recessions or depressions; general economic conditions, both domestic and foreign, impacting our business and the business of our customers and 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
  Dec 31, 2020   Sep 30, 2020   Dec 31, 2019   Sequential   Year-on-year
NET SALES $ 57,113     $ 55,281     $ 86,367     3 %   -34 %
COST OF PRODUCTS SOLD 44,927     41,688     56,146     8 %   -20 %
Gross profit 12,186     13,593     30,221     -10 %   -60 %
Gross profit percentage   21 %     25 %     35 %            
COSTS AND EXPENSES:                                  
General and administrative expenses 7,406     6,911     9,220     7 %   -20 %
Selling and distribution expenses 5,143     4,705     6,944     9 %   -26 %
Amortization of purchased intangible assets 373     369     355     1 %   5 %
Restructuring expenses, net and asset impairments 82     143     13,203     -43 %   -99 %
Total costs and expenses 13,004     12,128     29,722     7 %   -56 %
OPERATING (LOSS) INCOME (818 )   1,465     499     -156 %   -264 %
OTHER EXPENSE:                                  
Other expense, net (115 )   (148 )   (661 )   -22 %   -83 %
Interest expense, net (167 )   (170 )   (385 )   -2 %   -57 %
(LOSS) INCOME BEFORE INCOME TAXES (1,100 )   1,147     (547 )   -196 %   -101 %
INCOME TAX (BENEFIT) PROVISION (173 )   139     4,741     -224 %   -104 %
NET (LOSS) INCOME (927 )   1,008     (5,288 )   -192 %   82 %
NET (LOSS) INCOME PER SHARE                  
Basic $ (0.06 )   $ 0.07     $ (0.36 )   -186 %   83 %
Diluted $ (0.06 )   $ 0.07     $ (0.36 )   -186 %   83 %
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:                                  
Basic 14,917,109     14,820,881     14,640,110     1 %   2 %
Diluted 14,917,109     14,820,881     14,640,110     1 %   2 %
DIVIDENDS DECLARED PER COMMON SHARE $     $     $ 0.125          
 
  Twelve months ended   Change
  Dec 31, 2020   Dec 31, 2019   Year-on-year
NET SALES $ 229,161     $ 397,550     -42 %
COST OF PRODUCTS SOLD 172,308     252,627     -32 %
Gross profit 56,853     144,923     -61 %
Gross profit percentage   25 %     36 %      
COSTS AND EXPENSES:                    
General and administrative expenses 29,150     37,976     -23 %
Selling and distribution expenses 23,863     27,475     -13 %
Amortization of purchased intangible assets 1,449     1,544     -6 %
Restructuring expenses, net and asset impairments 3,387     19,503     -83 %
Total costs and expenses 57,849     86,498     -33 %
OPERATING (LOSS) INCOME (996 )   58,425     -102 %
OTHER EXPENSE:          
Other expense, net (233 )   (169 )   38 %
Interest expense, net (731 )   (1,554 )   -53 %
(LOSS) INCOME BEFORE INCOME TAXES (1,960 )   56,702     -103 %
INCOME TAX (BENEFIT) PROVISION (548 )   22,661     -102 %
NET (LOSS) INCOME (1,412 )   34,041     -104 %
NET (LOSS) INCOME PER SHARE                    
Basic $ (0.10 )   $ 2.29     -104 %
Diluted $ (0.10 )   $ 2.28     -104 %
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:                    
Basic   14,790,296       14,579,608     1 %
Diluted   14,790,296       14,655,350     1 %
DIVIDENDS DECLARED PER COMMON SHARE $ 0.125     $ 0.29      
DMC GLOBAL INC.SEGMENT STATEMENTS OF OPERATIONS(Amounts in Thousands)(unaudited)
 
DynaEnergetics
                                   
  Three months ended   Change
  Dec 31, 2020   Sep 30, 2020   Dec 31, 2019   Sequential   Year-on-year
Net sales $ 35,330     $ 34,201     $ 64,604     3 %   -45 %
Gross profit 8,433     8,194     24,586     3 %   -66 %
Gross profit percentage 24 %   24 %   38 %        
COSTS AND EXPENSES:                                  
General and administrative expenses 2,952     3,176     3,516     -7 %   -16 %
Selling and distribution expenses 2,945     2,445     4,119     20 %   -29 %
Amortization of purchased intangible assets 271     269     260     1 %   4 %
Restructuring expenses, net and asset impairments     133     12,744     -100 %   -100 %
Operating income 2,265     2,171     3,947     4 %   -43 %
Adjusted EBITDA $ 4,118     $ 4,170     $ 18,472     -1 %   -78 %
  Twelve months ended   Change
  Dec 31, 2020   Dec 31, 2019   Year-on-year
Net sales $ 146,395     $ 310,424     -53 %
Gross profit 38,072     122,703     -69 %
Gross profit percentage 26 %   40 %    
COSTS AND EXPENSES:                    
General and administrative expenses 13,116     16,876     -22 %
Selling and distribution expenses 14,825     17,260     -14 %
Amortization of purchased intangible assets 1,059     1,162     -9 %
Restructuring expenses, net and asset impairments 2,922     18,624     -84 %
Operating income 6,150     68,781     -91 %
Adjusted EBITDA $ 16,335     $ 94,541     -83 %
NobelClad
 
  Three months ended   Change
  Dec 31, 2020   Sep 30, 2020   Dec 31, 2019   Sequential   Year-on-year
Net sales $ 21,783     $ 21,080     $ 21,763     3 %   %
Gross profit 3,902     5,577     5,786     -30 %   -33 %
Gross profit percentage 18 %   26 %   27 %        
COSTS AND EXPENSES:                  
General and administrative expenses 739     878     1,324     -16 %   -44 %
Selling and distribution expenses 2,036     2,106     2,687     -3 %   -24 %
Amortization of purchased intangible assets 102     100     95     2 %   7 %
Restructuring expenses, net and asset impairments 82     10     459     720 %   -82 %
Operating income 943     2,483     1,221     -62 %   -23 %
Adjusted EBITDA $ 1,935     $ 3,372     $ 2,390     -43 %   -19 %
 
  Twelve months ended   Change
  Dec 31, 2020   Dec 31, 2019   Year-on-year
Net sales $ 82,766     $ 87,126     -5 %
Gross profit 19,433     22,840     -15 %
Gross profit percentage 23 %   26 %    
COSTS AND EXPENSES:          
General and administrative expenses 3,388     4,703     -28 %
Selling and distribution expenses 8,423     9,683     -13 %
Amortization of purchased intangible assets 390     382     2 %
Restructuring expenses, net and asset impairments 346     879     -61 %
Operating income 6,886     7,193     -4 %
Adjusted EBITDA $ 10,736     $ 11,118     -3 %
DMC GLOBAL INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in Thousands)(unaudited)
              Change
  Dec 31, 2020   Sep 30, 2020   Dec 31, 2019   Sequential   From year-end
                   
ASSETS                  
                   
Cash and cash equivalents $ 28,187     $ 24,604     $ 20,353     15 %   38 %
Marketable securities 25,736             n/a     n/a  
Accounts receivable, net 31,366     34,424     60,855     -9 %   -48 %
Inventories 52,573     56,958     53,728     -8 %   -2 %
Other current assets 5,448     9,831     9,417     -45 %   -42 %
                   
Total current assets 143,310     125,817     144,353     14 %   -1 %
                   
Property, plant and equipment, net 109,411     107,402     108,234     2 %   1 %
Purchased intangible assets, net 3,665     4,383     5,880     -16 %   -38 %
Other long-term assets 23,259     21,681     18,954     7 %   23 %
                   
Total assets $ 279,645     $ 259,283     $ 277,421     8 %   1 %
                   
LIABILITIES AND STOCKHOLDERS' EQUITY                
                   
Accounts payable $ 17,574     $ 22,123     $ 34,758     -21 %   -49 %
Contract liabilities 4,928     5,195     2,736     -5 %   80 %
Dividend payable         1,866     n/a     -100 %
Accrued income taxes 7,279     7,080     9,651     3 %   -25 %
Current portion of long-term debt 3,125     3,125     3,125     %   %
Other current liabilities 14,202     16,555     19,287     -14 %   -26 %
                   
Total current liabilities 47,108     54,078     71,423     -13 %   -34 %
                   
Long-term debt 8,139     8,867     11,147     -8 %   -27 %
Deferred tax liabilities 2,254     3,181     3,786     -29 %   -40 %
Other long-term liabilities 25,230     23,206     18,924     9 %   33 %
Stockholders' equity 196,914     169,951     172,141     16 %   14 %
                   
Total liabilities and stockholders' equity $ 279,645     $ 259,283     $ 277,421     8 %   1 %
DMC GLOBAL INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in Thousands)(unaudited)
 
  Three months ended
  Dec 31, 2020   Sep 30, 2020   Dec 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net (loss) income $ (927 )   $ 1,008     $ (5,288 )
Adjustments to reconcile net (loss) income to net cash provided by operating activities:                      
Depreciation 2,465     2,451     2,138  
Amortization of purchased intangible assets 373     369     355  
Amortization of deferred debt issuance costs 53     55     48  
Stock-based compensation 1,521     1,595     1,296  
Deferred income taxes (1,474 )   521     2,629  
Loss on disposal of property, plant and equipment 134     114     187  
Restructuring expenses, net and asset impairments 82     143     13,203  
Change in working capital, net 6,781     3,970     14,930  
Net cash provided by operating activities 9,008     10,226     29,498  
CASH FLOWS FROM INVESTING ACTIVITIES:                      
Investment in marketable securities (25,740 )        
Acquisition of property, plant and equipment (4,171 )   (2,206 )   (4,833 )
Proceeds on sale of property, plant and equipment 16     6     5  
Net cash used in investing activities (29,895 )   (2,200 )   (4,828 )
CASH FLOWS FROM FINANCING ACTIVITIES:                      
Payments on revolving loans         (6,130 )
Payments on capital expenditure facility (781 )   (782 )   (7,781 )
Payment of dividends         (1,866 )
Payment of deferred debt issuance costs (2 )   (4 )    
Net proceeds from issuance of common stock through at-the-market offering program 25,740          
Net proceeds from issuance of common stock 165     3     199  
Treasury stock purchases (767 )   (55 )   (24 )
Net cash provided by (used in) financing activities 24,355     (838 )   (15,602 )
EFFECTS OF EXCHANGE RATES ON CASH 115     168     (898 )
                       
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,583     7,356     8,170  
CASH AND CASH EQUIVALENTS, beginning of the period 24,604     17,248     12,183  
CASH AND CASH EQUIVALENTS, end of the period $ 28,187     $ 24,604     $ 20,353  
   
  Twelve months ended
  Dec 31, 2020   Dec 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net (loss) income $ (1,412 )   $ 34,041  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:              
Depreciation 9,632     8,316  
Amortization of purchased intangible assets 1,449     1,544  
Amortization of deferred debt issuance costs 207     178  
Stock-based compensation 5,675     5,204  
Deferred income taxes (2,313 )   4,289  
Loss on disposal of property, plant and equipment 247     530  
Restructuring expenses, net and asset impairments 3,387     19,503  
Change in working capital, net 13,490     (9,011 )
Net cash provided by operating activities 30,362     64,594  
CASH FLOWS FROM INVESTING ACTIVITIES:      
Investment in marketable securities (25,740 )    
Acquisition of property, plant and equipment (13,853 )   (27,210 )
Proceeds on sale of property, plant and equipment 36     1,263  
Net cash used in investing activities (39,557 )   (25,947 )
CASH FLOWS FROM FINANCING ACTIVITIES:              
Payments on revolving loans     (17,129 )
Payments on capital expenditure facility (3,125 )   (10,125 )
Payment of dividends (3,749 )   (2,762 )
Payment of deferred debt issuance costs (90 )    
Net proceeds from issuance of common stock through at-the-market offering program 25,740      
Net proceeds from issuance of common stock 431     557  
Treasury stock purchases (1,890 )   (1,103 )
Net cash provided by (used in) financing activities 17,317     (30,562 )
EFFECTS OF EXCHANGE RATES ON CASH (288 )   (1,107 )
               
NET INCREASE IN CASH AND CASH EQUIVALENTS 7,834     6,978  
CASH AND CASH EQUIVALENTS, beginning of the period 20,353     13,375  
CASH AND CASH EQUIVALENTS, end of the period $ 28,187     $ 20,353  
DMC GLOBAL INC.RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO MOSTDIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS(Amounts in Thousands, Except Per Share Data)(unaudited)
DMC Global Inc.
 
EBITDA and Adjusted EBITDA
 
  Three months ended   Change
  Dec 31, 2020   Sep 30, 2020   Dec 31, 2019   Sequential   Year-on-year
Net (loss) income $ (927 )   $ 1,008     $ (5,288 )   -192 %   470 %
Interest expense, net 167     170     385     -2 %   -131 %
Income tax (benefit) provision (173 )   139     4,741     -224 %   -2,840 %
Depreciation 2,465     2,451     2,138     1 %   15 %
Amortization of purchased intangible assets 373     369     355     1 %   5 %
                                   
EBITDA 1,905     4,137     2,331     -54 %   -22 %
Restructuring expenses, net and asset impairments 82     143     13,203     -43 %   -16,001 %
Restructuring related accounts receivable write off         131     n/a     n/a  
Stock-based compensation 1,521     1,595     1,296     -5 %   17 %
Other expense, net 115     148     661     -22 %   -475 %
                                   
Adjusted EBITDA $ 3,623     $ 6,023     $ 17,622     -40 %   -386 %
  Twelve months ended   Change
  Dec 31, 2020   Dec 31, 2019   Year-on-year
Net (loss) income $ (1,412 )   $ 34,041     -104 %
Interest expense, net 731     1,554     -53 %
Income tax (benefit) provision (548 )   22,661     -102 %
Depreciation 9,632     8,316     16 %
Amortization of purchased intangible assets 1,449     1,544     -6 %
                     
EBITDA 9,852     68,116     -86 %
Restructuring expenses, net and asset impairments 3,387     19,503     -83 %
Restructuring related inventory write down     630     -100 %
Restructuring related accounts receivable write off     131     -100 %
Stock-based compensation 5,675     5,204     9 %
Other expense, net 233     169     38 %
                     
Adjusted EBITDA $ 19,147     $ 93,753     -80 %
 
Adjusted Operating (Loss) Income
  Three months ended   Change
  Dec 31, 2020   Sep 30, 2020   Dec 31, 2019   Sequential   Year-on-year
Operating (loss) income, as reported $ (818 )     $ 1,465     $ 499     -156 %   194 %
Restructuring programs:                  
DynaEnergetics       133     12,745     -100 %   -99 %
NobelClad 82       10     458     720 %   -98 %
Restructuring related accounts receivable write off           131     n/a     -100 %
                                     
Adjusted operating (loss) income $ (736 )     $ 1,608     $ 13,833     -146 %   -88 %
  Twelve months ended   Change
  Dec 31, 2020   Dec 31, 2019   Year-on-year
Operating (loss) income, as reported $ (996 )   $ 58,425     -102 %
Restructuring programs:                    
DynaEnergetics 2,922     18,631     -84 %
NobelClad 346     872     -60 %
Corporate 119         n/a  
Restructuring related inventory write down     630     -100 %
Restructuring related accounts receivable write off     131     -100 %
                     
Adjusted operating income $ 2,391     $ 78,689     -97 %
Adjusted Net (Loss) Income and Diluted (Loss) Income per Share
 
  Three months ended December 31, 2020
  Pretax   Tax   Net   Diluted weighted average shares outstanding   Diluted EPS
Net loss, as reported $ (1,100 )   $ (173 )   $ (927 )   14,917,109     $ (0.06 )
Restructuring programs:                                    
NobelClad 82     (20 )   102     14,917,109     0.01  
                                     
Adjusted net loss $ (1,018 )   $ (193 )   $ (825 )   14,917,109     $ (0.05 )
 
  Three months ended September 30, 2020
  Pretax   Tax   Net   Diluted weighted average shares outstanding   Diluted EPS
Net income, as reported $ 1,147     $ 139       $ 1,008     14,820,881     $ 0.07  
Restructuring programs:                                      
DynaEnergetics 133     (39 )     172     14,820,881     0.01  
NobelClad 10     3       7     14,820,881      
                                       
Adjusted net income $ 1,290     $ 103       $ 1,187     14,820,881     $ 0.08  
  Three months ended December 31, 2019
  Pre-Tax   Tax   Net   Diluted weighted average shares outstanding   Diluted EPS
Net loss, as reported $ (547 )   $ 4,741     $ (5,288 )   14,640,110     $ (0.36 )
Restructuring programs:                                    
DynaEnergetics 12,745     160     12,585     14,640,110     0.86  
NobelClad 458     4     454     14,640,110     0.03  
Restructuring related accounts receivable write off 131         131     14,640,110     0.01  
Impact of tax valuation allowances     (1,647 )   1,647     14,640,110     0.11  
                                     
Adjusted net income $ 12,787     $ 3,258     $ 9,529     14,640,110     $ 0.65  
  Twelve months ended December 31, 2020
  Pre-Tax   Tax   Net   Diluted weighted average shares outstanding   Diluted EPS
Net loss, as reported $ (1,960 )   $ (548 )   $ (1,412 )   14,790,296     $ (0.10 )
Restructuring programs:                                    
DynaEnergetics 2,922     863     2,059     14,790,296     0.14  
NobelClad 346     56     290     14,790,296     0.02  
Corporate 119     25     94     14,790,296     0.01  
                                     
Adjusted net income $ 1,427     $ 396     $ 1,031     14,790,296     $ 0.07  
 
  Twelve months ended December 31, 2019
  Pre-Tax   Tax   Net   Diluted weighted average shares outstanding   Diluted EPS
Net income, as reported $ 56,702     $ 22,661     $ 34,041     14,655,350     $ 2.28  
Restructuring programs:                  
DynaEnergetics 18,625     239     18,386     14,655,350     1.25  
NobelClad 873     33     840     14,655,350     0.06  
Restructuring related inventory write down 630     109     521     14,655,350     0.04  
Restructuring related accounts receivable write off 131         131     14,655,350     0.01  
Impact of tax valuation allowances     (1,647 )   1,647     14,655,350     0.11  
                   
Adjusted net income $ 76,961     $ 21,395     $ 55,566     14,655,350     $ 3.75  
 
Return on Invested Capital    
     
    Three months ended
    Dec 31, 2019   Mar 31, 2020   Jun 30, 2020   Sep 30, 2020   Dec 31, 2020
Operating income (loss)       $ 499     $ 6,347     $ (7,990 )   $ 1,465     $ (818 )
Income tax provision (benefit) (1)       5,227     2,107     (2,509 )   177     (54 )
Net operating (loss) profit after taxes (NOPAT)       (4,728 )   4,240     (5,481 )   1,288     (764 )
Trailing Twelve Months NOPAT                   (4,681 )   (717 )
                     
  Balances as of
  Sep 30, 2019 Dec 31, 2019   Mar 31, 2020   Jun 30, 2020   Sep 30, 2020   Dec 31, 2020
Allowance for doubtful accounts $ 405   $ 967     $ 2,320     $ 2,882     $ 2,709     $ 2,605  
Deferred tax assets (3,431 ) (3,836 )   (3,902 )   (4,157 )   (4,070 )   (4,582 )
Deferred tax liabilities 1,469   3,786     3,692     2,747     3,181     2,254  
Accrued income taxes 10,427   9,651     8,666     5,727     7,080     7,279  
Current portion of lease liabilities 1,944   1,716     1,618     1,846     1,804     1,741  
Long-term portion of lease liabilities 9,487   9,777     9,454     10,430     10,155     10,066  
Current portion of long-term debt 3,125   3,125     3,125     3,125     3,125     3,125  
Long-term debt 25,010   11,147     10,406     9,595     8,867     8,139  
Total stockholders' equity 167,076   172,141     173,689     170,283     169,951     196,914  
Total invested capital 215,512   208,474     209,068     202,478     202,802     227,541  
Average invested capital   195,276     206,300     210,010     209,157     218,008  
                                             
Trailing Twelve Months Return on Invested Capital (ROIC) 18 %   12 %   1 %   (2% )   %
(1) Tax calculation for NOPAT:    
  Three months ended   Twelve months ended   Three months ended   Twelve months ended
  Dec 31, 2019   Dec 31, 2019   Mar 31, 2020   Jun 30, 2020   Sep 30, 2020   Dec 31, 2020   Dec 31, 2020
(Loss) income before income taxes $ (547 )   $ 56,702     $ 6,224     $ (8,231 )   $ 1,147     $ (1,100 )   (1,960 )
Income tax provision (benefit) 4,741     22,661     2,069     (2,583 )   139     (173 )   (548 )
Effective tax rate (866.7 )%   40.0 %   33.2 %   31.4 %   12.1 %   15.7 %   28.0 %
DynaEnergetics      
       
Adjusted EBITDA      
       
  Three months ended   Change
  Dec 31, 2020   Sep 30, 2020   Dec 31, 2019   Sequential   Year-on-year
Operating income, as reported $ 2,265     $ 2,171     $ 3,947     4 %   -43 %
Adjustments:                  
Restructuring expenses, net and asset impairments     133     12,744     -100 %   -100 %
Restructuring related accounts receivable write off         131     n/a     -100 %
                   
Adjusted operating income 2,265     2,304     16,822     -2 %   -87 %
Depreciation 1,582     1,597     1,390     -1 %   14 %
Amortization of purchased intangible assets 271     269     260     1 %   4 %
                   
Adjusted EBITDA $ 4,118     $ 4,170     $ 18,472     -1 %   -78 %
  Twelve months ended   Change
  Dec 31, 2020   Dec 31, 2019   Year-on-year
Operating income, as reported $ 6,150     $ 68,781     -91 %
Adjustments:          
Restructuring expenses, net and asset impairments 2,922     18,624     -84 %
Restructuring related inventory write down     630     -100 %
Restructuring related accounts receivable write off     131     -100 %
           
Adjusted operating income 9,072     88,166     -90 %
Depreciation 6,204     5,213     19 %
Amortization of purchased intangible assets 1,059     1,162     -9 %
           
Adjusted EBITDA $ 16,335     $ 94,541     -83 %
NobelClad
 
Adjusted EBITDA
       
  Three months ended   Change
  Dec 31, 2020   Sep 30, 2020   Dec 31, 2019   Sequential   Year-on-year
Operating income, as reported $ 943     $ 2,483     $ 1,221     -62 %   -23 %
Adjustments:                  
Restructuring expenses, net and asset impairments 82     10     459     720 %   -82 %
                   
Adjusted operating income 1,025     2,493     1,680     -59 %   -39 %
Depreciation 808     779     615     4 %   31 %
Amortization of purchased intangible assets 102     100     95     2 %   7 %
                   
Adjusted EBITDA $ 1,935     $ 3,372     $ 2,390     -43 %   -19 %
  Twelve months ended   Change
  Dec 31, 2020   Dec 31, 2019   Year-on-year
Operating income, as reported $ 6,886     $ 7,193     -4 %
Adjustments:          
Restructuring expenses, net and asset impairments 346     879     -61 %
           
Adjusted operating income 7,232     8,072     -10 %
Depreciation 3,114     2,664     17 %
Amortization of purchased intangible assets 390     382     2 %
           
Adjusted EBITDA $ 10,736     $ 11,118     -3 %
                     

 

CONTACT:Geoff High, Vice President of Investor Relations303-604-3924