DMC Global Inc. (Nasdaq: BOOM) today reported financial results for
its first quarter ended March 31, 2024.
“DMC’s first quarter sales declined 9% versus
the same quarter last year, reflecting challenging market
conditions at two of our three industrial manufacturing
businesses,” said Michael Kuta, president and CEO. “Arcadia
Products, our architectural building products business, was
impacted by a late-quarter slowdown in short-cycle commercial
activity, lower sales at its high-end residential division, and an
approximately 10% decline in aluminum pricing versus last year’s
first quarter. DynaEnergetics, our energy products business,
reported steady demand and record unit sales of its
industry-leading DynaStage perforating system, but was impacted by
ongoing pricing pressure in its primary North American onshore
market. NobelClad, our composite metals business, delivered strong
first quarter results, with sales and adjusted EBITDA above our
forecasts.”
Arcadia Products reported first quarter sales of
$61.9 million, down 23% from last year’s first quarter. Adjusted
EBITDA margin was 9.5%, down from 13.0% in the first quarter last
year. The drop off in short-cycle commercial sales at certain
Arcadia service centers reflects soft construction activity in
portions of Arcadia’s western and southwestern U.S. service
territory, while Arcadia's ultra-high-end residential division
experienced a sharp decline in its order backlog in March.
DynaEnergetics reported sales of $78.1 million,
up 4% sequentially and down 5% versus last year’s first quarter.
Adjusted EBITDA margin improved 120 basis points sequentially to
13.5%, however adjusted EBITDA of $10.5 million was slightly below
management’s forecasted range and included $500 thousand in bad
debt expense. Margin enhancement initiatives, which include the
automation of various manufacturing and assembly operations,
increasing premium product sales, and streamlined product designs,
are expected to strengthen Dyna’s profitability during the second
half of 2024.
NobelClad reported sales of $26.8 million, up
22% versus last year’s first quarter. Adjusted EBITDA margin was
21.9%, up from 15.3% in the comparable year-ago quarter. Following
the close of the first quarter, NobelClad was awarded a $19 million
order from a customer in the petrochemical industry. The order –
the largest in NobelClad’s history – calls for the production of
clad plates that will be used to fabricate heat exchangers,
reactors and related equipment for a petrochemical facility in
Asia. The majority of the order is expected to be shipped in
2025.
NobelClad continues to benefit from strong
demand from several of its primary industrial end markets, as well
as improved production capacity of its Cylindra™ cryogenic
transition joints.
Eric Walter, CFO, said, “We generated first
quarter free cash flow of $10.5 million, more than doubling our
performance in the comparable year-ago quarter, and much stronger
than historic first-quarter results. We ended the quarter with
total debt of $90 million and reduced our debt-to-adjusted EBITDA
leverage ratio to 1.00x from 1.25x at the end of the fourth
quarter.”
Kuta said, “Arcadia’s first-quarter performance
was disappointing, and in part reflects widespread softness in the
commercial construction industry. The ABI, a national index that
tracks architectural firm billings, declined for the 14th
consecutive month in March. Arcadia is seeing an improvement in its
long-cycle project backlog, as well as a rebound in quoting
activity for both large projects and short-cycle orders. These
factors support our belief that Arcadia will deliver sequential
quarterly improvements in sales and earnings in the coming
quarters. In addition, recent operational improvements at Arcadia’s
high-end residential division have significantly shortened lead
times – a critical achievement as the division works to increase
its order backlog. Arcadia’s differentiated service model, strong
brand and recent operational enhancements have positioned it for
improved financial results and long-term success.”
Kuta added, “Our reviews of strategic
alternatives for NobelClad and DynaEnergetics are continuing. In
the coming months, we expect to provide more detail on these
processes, which represent a key step in our journey toward
unlocking shareholder value.”
Summary First Quarter
Results
|
Three months ended |
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
Net sales |
$ |
166,869 |
|
|
$ |
174,036 |
|
|
$ |
184,341 |
|
|
(4 |
)% |
|
(9 |
)% |
Gross profit percentage |
|
25.4 |
% |
|
|
26.1 |
% |
|
|
28.3 |
% |
|
|
|
|
SG&A* |
$ |
28,203 |
|
|
$ |
27,179 |
|
|
$ |
39,324 |
|
|
4 |
% |
|
(28 |
)% |
Net income |
$ |
2,319 |
|
|
$ |
3,569 |
|
|
$ |
2,139 |
|
|
(35 |
)% |
|
8 |
% |
Net income attributable to DMC |
$ |
2,563 |
|
|
$ |
2,764 |
|
|
$ |
909 |
|
|
(7 |
)% |
|
182 |
% |
Diluted net income (loss) per share attributable to DMC |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
|
— |
% |
|
200 |
% |
Adjusted net income attributable to DMC |
$ |
4,167 |
|
|
$ |
5,179 |
|
|
$ |
6,144 |
|
|
(20 |
)% |
|
(32 |
)% |
Adjusted diluted net income per share |
$ |
0.21 |
|
|
$ |
0.26 |
|
|
$ |
0.32 |
|
|
(19 |
)% |
|
(34 |
)% |
Adjusted EBITDA attributable to DMC |
$ |
16,683 |
|
|
$ |
19,589 |
|
|
$ |
20,091 |
|
|
(15 |
)% |
|
(17 |
)% |
Adjusted EBITDA before NCI allocation |
$ |
19,045 |
|
|
$ |
23,278 |
|
|
$ |
24,279 |
|
|
(18 |
)% |
|
(22 |
)% |
Adjusted EBITDA before NCI allocation margin |
|
11.4 |
% |
|
|
13.4 |
% |
|
|
13.2 |
% |
|
|
|
|
*SG&A in the three months ended March 31, 2023 included
$2,965 of CEO transition expenses and $3,040 of stock-based
compensation expense related to the accelerated vesting of the
former CEO’s outstanding equity awards.
Arcadia
|
Three months ended |
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
Net sales |
$ |
61,925 |
|
|
$ |
67,958 |
|
|
$ |
80,338 |
|
|
(9 |
)% |
|
(23 |
)% |
Adjusted EBITDA attributable to DMC |
$ |
3,544 |
|
|
$ |
5,533 |
|
|
$ |
6,282 |
|
|
(36 |
)% |
|
(44 |
)% |
Adjusted EBITDA before NCI allocation |
$ |
5,906 |
|
|
$ |
9,222 |
|
|
$ |
10,470 |
|
|
(36 |
)% |
|
(44 |
)% |
Adjusted EBITDA before NCI allocation margin |
|
9.5 |
% |
|
|
13.6 |
% |
|
|
13.0 |
% |
|
|
|
|
|
|
- Sales decline reflects slowdown in short-cycle activity, lower
residential sales and lower product pricing
DynaEnergetics
|
Three months ended |
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
Net sales |
$ |
78,122 |
|
|
$ |
75,306 |
|
|
$ |
81,968 |
|
|
4 |
% |
|
(5 |
)% |
Adjusted EBITDA |
$ |
10,539 |
|
|
$ |
9,286 |
|
|
$ |
14,955 |
|
|
13 |
% |
|
(30 |
)% |
Adjusted EBITDA margin |
|
13.5 |
% |
|
|
12.3 |
% |
|
|
18.2 |
% |
|
|
|
|
|
- Quarter-over-quarter adjusted EBITDA increase reflects record
sales volume of DynaStage perforating systems
NobelClad
|
Three months ended |
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
Net sales |
$ |
26,822 |
|
|
$ |
30,772 |
|
|
$ |
22,035 |
|
|
(13 |
)% |
|
22 |
% |
Adjusted EBITDA |
$ |
5,880 |
|
|
$ |
7,608 |
|
|
$ |
3,361 |
|
|
(23 |
)% |
|
75 |
% |
Adjusted EBITDA margin |
|
21.9 |
% |
|
|
24.7 |
% |
|
|
15.3 |
% |
|
|
|
|
|
- Order backlog at March 31, 2024 was
$52 million versus $60 million at the end of the prior-year
quarter. Backlog does not include the record petrochemical order
received after close of the first quarter.
- Rolling 12-month bookings were
$103.6 million versus $107.4 million at the end of the prior-year
quarter; and the book-to-bill ratio was 0.94.
Second Quarter 2024
Guidance
Measure |
Expected Range |
Sales |
|
DMC Consolidated |
$161M - $171M |
Arcadia |
$64M - $68M |
DynaEnergetics |
$73M - $77M |
NobelClad |
$24M - $26M |
Adjusted EBITDA |
|
Arcadia before NCI allocation |
$7M - $9M |
Arcadia after NCI allocation |
$4M - $5M |
DynaEnergetics |
$9M - $10M |
NobelClad |
$3.5M - $4.5M |
Corporate Unallocated |
~ ($3M) |
Attributable to DMC |
$14M - $17M |
Full-Year 2024 Guidance on Select Items |
|
Depreciation and amortization |
$35M - $36M |
Interest expense |
$8M - $9M |
Annualized effective tax rate |
27% - 29% |
Capital expenditures |
$18M - $22M |
Conference call informationThe conference call
will begin today at 5 p.m. Eastern (3 p.m. Mountain) and will be
accessible by dialing 877-407-5783 (or +1 201-689-8782 for
international callers).
Investors are invited to listen to the webcast live via the
Internet at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=Er1jouXt
Webcast participants should access the website at least 15
minutes early to register and download any necessary audio
software. The webcast also will be available on the Investor page
of DMC’s website, located at: ir.dmcglobal.com. A replay of the
webcast will be available for six months.
*Use of Non-GAAP Financial
MeasuresIn addition to disclosing financial results that
are determined in accordance with generally accepted accounting
principles in the United States (GAAP), the Company also discloses
certain non-GAAP financial measures that we use in operational and
financial decision making. Non-GAAP financial measures include the
following:
- EBITDA: defined as net income (loss) plus net
interest, taxes, depreciation and amortization.
- Adjusted EBITDA:
excludes from EBITDA stock-based compensation, restructuring
expenses and asset impairment charges (if applicable) and, when
appropriate, nonrecurring items that management does not utilize in
assessing DMC’s operating performance (as further described in the
tables below).
- Adjusted EBITDA
attributable to DMC Global Inc.: excludes the Adjusted
EBITDA attributable to the 40% redeemable noncontrolling interest
in Arcadia Products.
- Adjusted EBITDA for DMC
business segments: defined as operating income (loss) plus
depreciation, amortization, allocated stock-based compensation (if
applicable), restructuring expenses and asset impairment charges
(if applicable) and, when appropriate, nonrecurring items that
management does not utilize in assessing operating
performance.
- Adjusted net income
(loss): defined as net income (loss) attributable to DMC
Global Inc. stockholders prior to the adjustment of redeemable
noncontrolling interest plus restructuring expenses and asset
impairment charges (if applicable) and, when appropriate,
nonrecurring items that management does not utilize in assessing
DMC’s operating performance.
- Adjusted diluted earnings
per share: defined as diluted earnings per share
attributable to DMC Global Inc. stockholders (exclusive of
adjustment of redeemable noncontrolling interest) plus
restructuring expenses and asset impairment charges (if applicable)
and, when appropriate, nonrecurring items that management does not
utilize in assessing DMC’s operating performance.
- Net debt: defined as total debt less total
cash, cash equivalents and marketable securities.
- Free-cash flow:
defined as cash flows provided by (used in) operating activities
less net acquisitions of property, plant and equipment.
Management believes providing these additional
financial measures is useful to investors in understanding the
Company’s operating performance, including the effects of
restructuring, impairment, and other nonrecurring charges, as well
as its liquidity. Management typically monitors the business
utilizing the above non-GAAP measures, in addition to GAAP results,
to understand and compare operating results across accounting
periods, and certain management incentive awards are based, in
part, on these measures. The presence of non-GAAP financial
measures in this report is not intended to suggest that such
measures be considered in isolation or as a substitute for, or as
superior to, DMC’s GAAP information, and investors are cautioned
that the non-GAAP financial measures are limited in their
usefulness.
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.
About DMC Global Inc.DMC Global
is an owner and operator of innovative, asset-light manufacturing
businesses that provide unique, highly engineered products and
differentiated solutions. DMC’s businesses have established
leadership positions in their respective markets and consist of:
Arcadia, a leading supplier of architectural building products;
DynaEnergetics, which serves the global energy industry; and
NobelClad, which addresses the global industrial infrastructure and
transportation sectors. Based in Broomfield, Colorado, DMC trades
on Nasdaq under the symbol “BOOM.” For more information, visit:
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 2024 guidance on sales, adjusted EBITDA, depreciation and
amortization expense, interest expense, tax rate, capital
expenditures; our expectation that margin enhancement initiatives
at DynaEnergetics will strengthen its profitability during the
second half of 2024; our expectation that the majority of
NobelClad's record petrochemical order will be shipped in 2025; our
belief that Arcadia will deliver sequential quarterly improvements
in sales and earnings in the coming quarters and that Arcadia is
positioned for improved financial results and long-term success;
and our expectation that we can provide details on our
strategic-alternatives process in the coming months. Such
statements and information are based on numerous assumptions
regarding present and future business strategies, the markets in
which we operate, anticipated costs and the 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; the timely completion of contracts;
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,
technology, and margin enhancement initiatives; our ability to
successfully protect our technology and intellectual property and
the costs associated with these efforts; consolidation among
DynaEnergetics’ customers; fluctuations in foreign currencies;
fluctuations in tariffs and quotas; the cost and availability of
energy; the cyclicality of our business; competitive factors; 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; our ability to attract and retain key personnel;
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;
geopolitical and economic instability, including recessions,
depressions, wars or other military actions; inflation; supply
chain delays and disruptions; transportation disruptions; 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, 2023. 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.
CONTACT:Geoff High, Vice
President of Investor Relations303-604-3924
DMC GLOBAL INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Amounts in Thousands, Except Share and Per Share
Data)(unaudited) |
|
|
Three months ended |
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
NET SALES |
$ |
166,869 |
|
|
$ |
174,036 |
|
|
$ |
184,341 |
|
|
(4 |
)% |
|
(9 |
)% |
COST OF PRODUCTS SOLD |
|
124,517 |
|
|
|
128,682 |
|
|
|
132,130 |
|
|
(3 |
)% |
|
(6 |
)% |
Gross profit |
|
42,352 |
|
|
|
45,354 |
|
|
|
52,211 |
|
|
(7 |
)% |
|
(19 |
)% |
Gross profit percentage |
|
25.4 |
% |
|
|
26.1 |
% |
|
|
28.3 |
% |
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
15,980 |
|
|
|
15,056 |
|
|
|
26,500 |
|
|
6 |
% |
|
(40 |
)% |
Selling and distribution expenses |
|
12,223 |
|
|
|
12,123 |
|
|
|
12,824 |
|
|
1 |
% |
|
(5 |
)% |
Amortization of purchased intangible assets |
|
5,292 |
|
|
|
5,666 |
|
|
|
5,667 |
|
|
(7 |
)% |
|
(7 |
)% |
Strategic review expenses |
|
2,169 |
|
|
|
— |
|
|
|
— |
|
|
100 |
% |
|
100 |
% |
Restructuring expenses, net and asset impairments |
|
— |
|
|
|
3,251 |
|
|
|
— |
|
|
(100 |
)% |
|
— |
% |
Total costs and expenses |
|
35,664 |
|
|
|
36,096 |
|
|
|
44,991 |
|
|
(1 |
)% |
|
(21 |
)% |
OPERATING INCOME |
|
6,688 |
|
|
|
9,258 |
|
|
|
7,220 |
|
|
(28 |
)% |
|
(7 |
)% |
OTHER EXPENSE: |
|
|
|
|
|
|
|
|
|
Other expense, net |
|
(409 |
) |
|
|
(1,445 |
) |
|
|
(200 |
) |
|
(72 |
)% |
|
105 |
% |
Interest expense, net |
|
(2,317 |
) |
|
|
(2,311 |
) |
|
|
(2,381 |
) |
|
— |
% |
|
(3 |
)% |
INCOME BEFORE INCOME TAXES |
|
3,962 |
|
|
|
5,502 |
|
|
|
4,639 |
|
|
(28 |
)% |
|
(15 |
)% |
INCOME TAX PROVISION |
|
1,643 |
|
|
|
1,933 |
|
|
|
2,500 |
|
|
(15 |
)% |
|
(34 |
)% |
NET
INCOME |
|
2,319 |
|
|
|
3,569 |
|
|
|
2,139 |
|
|
(35 |
)% |
|
8 |
% |
Less: Net (loss) income attributable to redeemable noncontrolling
interest |
|
(244 |
) |
|
|
805 |
|
|
|
1,230 |
|
|
(130 |
)% |
|
(120 |
)% |
NET
INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS |
$ |
2,563 |
|
|
$ |
2,764 |
|
|
$ |
909 |
|
|
(7 |
)% |
|
182 |
% |
NET
INCOME (LOSS) PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC.
STOCKHOLDERS |
|
|
|
|
|
|
|
|
Basic |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
|
— |
% |
|
200 |
% |
Diluted |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
|
— |
% |
|
200 |
% |
WEIGHTED AVERAGE SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
Basic |
|
19,610,644 |
|
|
|
19,561,494 |
|
|
|
19,462,636 |
|
|
— |
% |
|
1 |
% |
Diluted |
|
19,622,455 |
|
|
|
19,580,750 |
|
|
|
19,462,636 |
|
|
— |
% |
|
1 |
% |
Reconciliation to net income (loss) attributable to DMC Global
Inc. stockholders after adjustment of redeemable noncontrolling
interest for purposes of calculating earnings per share
|
Three months ended |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
Net income attributable to DMC Global Inc. stockholders |
$ |
2,563 |
|
|
$ |
2,764 |
|
|
$ |
909 |
|
Adjustment of redeemable noncontrolling interest |
|
(2,307 |
) |
|
|
(2,581 |
) |
|
|
(1,138 |
) |
Net
income (loss) attributable to DMC Global Inc. stockholders after
adjustment of redeemable noncontrolling interest |
$ |
256 |
|
|
$ |
183 |
|
|
$ |
(229 |
) |
DMC GLOBAL INC.SEGMENT STATEMENTS OF OPERATIONS(Amounts in
Thousands)(unaudited) |
|
Arcadia |
|
|
Three months ended |
|
Change |
|
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
|
Net
sales |
$ |
61,925 |
|
|
$ |
67,958 |
|
|
$ |
80,338 |
|
|
(9 |
)% |
|
(23 |
)% |
Gross profit |
|
16,813 |
|
|
|
18,910 |
|
|
|
22,094 |
|
|
(11 |
)% |
|
(24 |
)% |
Gross profit percentage |
|
27.2 |
% |
|
|
27.8 |
% |
|
|
27.5 |
% |
|
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
7,656 |
|
|
|
7,012 |
|
|
|
7,857 |
|
|
9 |
% |
|
(3 |
)% |
Selling and distribution expenses |
|
4,468 |
|
|
|
4,028 |
|
|
|
5,452 |
|
|
11 |
% |
|
(18 |
)% |
Amortization of purchased intangible assets |
|
5,277 |
|
|
|
5,652 |
|
|
|
5,652 |
|
|
(7 |
)% |
|
(7 |
)% |
Operating (loss) income |
|
(588 |
) |
|
|
2,218 |
|
|
|
3,133 |
|
|
(127 |
)% |
|
(119 |
)% |
Adjusted EBITDA |
|
5,906 |
|
|
|
9,222 |
|
|
|
10,470 |
|
|
(36 |
)% |
|
(44 |
)% |
Less: adjusted EBITDA attributable to redeemable noncontrolling
interest |
|
(2,362 |
) |
|
|
(3,689 |
) |
|
|
(4,188 |
) |
|
(36 |
)% |
|
(44 |
)% |
Adjusted EBITDA attributable to DMC Global Inc. |
$ |
3,544 |
|
|
$ |
5,533 |
|
|
$ |
6,282 |
|
|
(36 |
)% |
|
(44 |
)% |
DynaEnergetics
|
Three months ended |
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
Net sales |
$ |
78,122 |
|
|
$ |
75,306 |
|
|
$ |
81,968 |
|
|
4 |
% |
|
(5 |
)% |
Gross profit |
|
16,971 |
|
|
|
16,127 |
|
|
|
24,437 |
|
|
5 |
% |
|
(31 |
)% |
Gross profit percentage |
|
21.7 |
% |
|
|
21.4 |
% |
|
|
29.8 |
% |
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
2,891 |
|
|
|
2,937 |
|
|
|
6,197 |
|
|
(2 |
)% |
|
(53 |
)% |
Selling and distribution expenses |
|
5,223 |
|
|
|
5,584 |
|
|
|
5,057 |
|
|
(6 |
)% |
|
3 |
% |
Amortization of purchased intangible assets |
|
15 |
|
|
|
14 |
|
|
|
15 |
|
|
7 |
% |
|
— |
% |
Restructuring expenses and asset impairments |
|
— |
|
|
|
3,011 |
|
|
|
— |
|
|
(100 |
)% |
|
— |
% |
Operating income |
|
8,842 |
|
|
|
4,581 |
|
|
|
13,168 |
|
|
93 |
% |
|
(33 |
)% |
Adjusted EBITDA |
$ |
10,539 |
|
|
$ |
9,286 |
|
|
$ |
14,955 |
|
|
13 |
% |
|
(30 |
)% |
NobelClad
|
Three months ended |
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
Net
sales |
$ |
26,822 |
|
|
$ |
30,772 |
|
|
$ |
22,035 |
|
|
(13 |
)% |
|
22 |
% |
Gross profit |
|
8,644 |
|
|
|
10,416 |
|
|
|
5,783 |
|
|
(17 |
)% |
|
49 |
% |
Gross profit percentage |
|
32.2 |
% |
|
|
33.8 |
% |
|
|
26.2 |
% |
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
1,074 |
|
|
|
1,114 |
|
|
|
923 |
|
|
(4 |
)% |
|
16 |
% |
Selling and distribution expenses |
|
2,470 |
|
|
|
2,435 |
|
|
|
2,239 |
|
|
1 |
% |
|
10 |
% |
Operating income |
|
5,100 |
|
|
|
6,867 |
|
|
|
2,621 |
|
|
(26 |
)% |
|
95 |
% |
Adjusted EBITDA |
$ |
5,880 |
|
|
$ |
7,608 |
|
|
$ |
3,361 |
|
|
(23 |
)% |
|
75 |
% |
DMC GLOBAL INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in
Thousands) |
|
|
|
|
|
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Year-end |
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
20,444 |
|
$ |
31,040 |
|
(34 |
)% |
Marketable securities |
|
— |
|
|
12,619 |
|
(100 |
)% |
Accounts receivable, net |
|
104,697 |
|
|
106,205 |
|
(1 |
)% |
Inventories |
|
172,113 |
|
|
166,712 |
|
3 |
% |
Prepaid expenses and other |
|
10,187 |
|
|
10,236 |
|
— |
% |
|
|
|
|
|
|
Total current assets |
|
307,441 |
|
|
326,812 |
|
(6 |
)% |
|
|
|
|
|
|
Property, plant and equipment, net |
|
129,028 |
|
|
129,267 |
|
— |
% |
Goodwill |
|
141,725 |
|
|
141,725 |
|
— |
% |
Purchased intangible assets, net |
|
189,966 |
|
|
195,260 |
|
(3 |
)% |
Other long-term assets |
|
91,860 |
|
|
91,431 |
|
— |
% |
|
|
|
|
|
|
Total assets |
$ |
860,020 |
|
$ |
884,495 |
|
(3 |
)% |
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
Accounts payable |
$ |
50,892 |
|
$ |
40,202 |
|
27 |
% |
Contract liabilities |
|
19,177 |
|
|
21,621 |
|
(11 |
)% |
Accrued income taxes |
|
14,451 |
|
|
12,810 |
|
13 |
% |
Current portion of long-term debt |
|
2,500 |
|
|
15,000 |
|
(83 |
)% |
Other current liabilities |
|
34,188 |
|
|
36,828 |
|
(7 |
)% |
|
|
|
|
|
|
Total current liabilities |
|
121,208 |
|
|
126,461 |
|
(4 |
)% |
|
|
|
|
|
|
Long-term debt |
|
85,509 |
|
|
100,851 |
|
(15 |
)% |
Deferred tax liabilities |
|
2,390 |
|
|
1,956 |
|
22 |
% |
Other long-term liabilities |
|
53,919 |
|
|
57,172 |
|
(6 |
)% |
Redeemable noncontrolling interest |
|
187,080 |
|
|
187,760 |
|
— |
% |
Stockholders’ equity |
|
409,914 |
|
|
410,295 |
|
— |
% |
|
|
|
|
|
|
Total liabilities, redeemable noncontrolling interest, and
stockholders’ equity |
$ |
860,020 |
|
$ |
884,495 |
|
(3 |
)% |
DMC GLOBAL INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Amounts in Thousands)(unaudited) |
|
|
Three months ended |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net income |
$ |
2,319 |
|
|
$ |
3,569 |
|
|
$ |
2,139 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
Depreciation |
|
3,419 |
|
|
|
3,546 |
|
|
|
3,400 |
|
Amortization of purchased intangible assets |
|
5,292 |
|
|
|
5,666 |
|
|
|
5,667 |
|
Amortization of deferred debt issuance costs |
|
190 |
|
|
|
141 |
|
|
|
138 |
|
Stock-based compensation |
|
1,549 |
|
|
|
1,712 |
|
|
|
5,027 |
|
Deferred income taxes |
|
(546 |
) |
|
|
(1,248 |
) |
|
|
178 |
|
Unrealized gain on marketable securities |
|
— |
|
|
|
(148 |
) |
|
|
— |
|
Asset impairments |
|
— |
|
|
|
1,956 |
|
|
|
— |
|
Other |
|
(985 |
) |
|
|
1,859 |
|
|
|
(405 |
) |
Change in working capital, net |
|
2,202 |
|
|
|
6,126 |
|
|
|
(9,079 |
) |
Net cash provided by operating activities |
|
13,440 |
|
|
|
23,179 |
|
|
|
7,065 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Investment in marketable securities |
|
— |
|
|
|
(4,955 |
) |
|
|
— |
|
Proceeds from maturities of marketable securities |
|
3,000 |
|
|
|
— |
|
|
|
— |
|
Proceeds from sales of marketable securities |
|
9,619 |
|
|
|
— |
|
|
|
— |
|
Acquisition of property, plant and equipment |
|
(2,968 |
) |
|
|
(8,519 |
) |
|
|
(2,226 |
) |
Proceeds on sale of property, plant and equipment |
|
— |
|
|
|
344 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
9,651 |
|
|
|
(13,130 |
) |
|
|
(2,226 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Repayments on term loan |
|
(117,500 |
) |
|
|
(3,750 |
) |
|
|
(6,250 |
) |
Borrowings on term loan |
|
50,000 |
|
|
|
— |
|
|
|
— |
|
Borrowings on revolving loans |
|
70,450 |
|
|
|
— |
|
|
|
— |
|
Repayments on revolving loans |
|
(30,450 |
) |
|
|
— |
|
|
|
— |
|
Payment of debt issuance costs |
|
(2,735 |
) |
|
|
— |
|
|
|
— |
|
Distributions to redeemable noncontrolling interest holder |
|
(3,125 |
) |
|
|
(3,170 |
) |
|
|
(2,600 |
) |
Treasury stock purchases |
|
(936 |
) |
|
|
(153 |
) |
|
|
(2,157 |
) |
Net proceeds from issuance of common stock to employees and
directors |
|
— |
|
|
|
102 |
|
|
|
— |
|
Net cash used in financing activities |
|
(34,296 |
) |
|
|
(6,971 |
) |
|
|
(11,007 |
) |
EFFECTS OF EXCHANGE RATES ON CASH |
|
609 |
|
|
|
(98 |
) |
|
|
671 |
|
|
|
|
|
|
|
NET
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
(10,596 |
) |
|
|
2,980 |
|
|
|
(5,497 |
) |
CASH AND CASH EQUIVALENTS, beginning of the period |
|
31,040 |
|
|
|
28,060 |
|
|
|
25,144 |
|
CASH AND CASH EQUIVALENTS, end of the period |
$ |
20,444 |
|
|
$ |
31,040 |
|
|
$ |
19,647 |
|
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, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
Net
income |
|
2,319 |
|
|
|
3,569 |
|
|
|
2,139 |
|
|
(35 |
)% |
|
8 |
% |
Interest expense, net |
|
2,317 |
|
|
|
2,311 |
|
|
|
2,381 |
|
|
— |
% |
|
(3 |
)% |
Income tax provision |
|
1,643 |
|
|
|
1,933 |
|
|
|
2,500 |
|
|
(15 |
)% |
|
(34 |
)% |
Depreciation |
|
3,419 |
|
|
|
3,546 |
|
|
|
3,400 |
|
|
(4 |
)% |
|
1 |
% |
Amortization of purchased intangible assets |
|
5,292 |
|
|
|
5,666 |
|
|
|
5,667 |
|
|
(7 |
)% |
|
(7 |
)% |
EBITDA |
|
14,990 |
|
|
|
17,025 |
|
|
|
16,087 |
|
|
(12 |
)% |
|
(7 |
)% |
Stock-based compensation |
|
1,477 |
|
|
|
1,557 |
|
|
|
5,027 |
|
|
(5 |
)% |
|
(71 |
)% |
Strategic review expenses |
|
2,169 |
|
|
|
— |
|
|
|
— |
|
|
100 |
% |
|
100 |
% |
Restructuring expenses, net and asset impairments |
|
— |
|
|
|
3,251 |
|
|
|
— |
|
|
(100 |
)% |
|
— |
% |
CEO
transition expenses |
|
— |
|
|
|
— |
|
|
|
2,965 |
|
|
— |
% |
|
(100 |
)% |
Other expense, net |
|
409 |
|
|
|
1,445 |
|
|
|
200 |
|
|
(72 |
)% |
|
105 |
% |
Adjusted EBITDA |
$ |
19,045 |
|
|
$ |
23,278 |
|
|
$ |
24,279 |
|
|
(18 |
)% |
|
(22 |
)% |
Less: adjusted EBITDA attributable to redeemable noncontrolling
interest |
|
(2,362 |
) |
|
|
(3,689 |
) |
|
|
(4,188 |
) |
|
(36 |
)% |
|
(44 |
)% |
Adjusted EBITDA attributable to DMC Global Inc. |
$ |
16,683 |
|
|
$ |
19,589 |
|
|
$ |
20,091 |
|
|
(15 |
)% |
|
(17 |
)% |
DMC GLOBAL INC.RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS
TO MOSTDIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS(Amounts in
Thousands)(unaudited) |
|
Adjusted Net Income* and Adjusted Diluted Earnings per Share*Net
income attributable to DMC Global Inc. stockholders prior to the
adjustment of redeemable noncontrolling interest |
|
|
Three months ended March 31, 2024 |
|
Amount |
|
Per Share (1) |
Net income attributable to DMC Global Inc. stockholders* |
$ |
2,563 |
|
$ |
0.13 |
Strategic review expenses, net of tax |
|
1,604 |
|
|
0.08 |
As
adjusted |
$ |
4,167 |
|
$ |
0.21 |
(1) Calculated using diluted weighted average shares outstanding
of 19,622,455
|
Three months ended December 31, 2023 |
|
Amount |
|
Per Share (1) |
Net income attributable to DMC Global Inc. stockholders* |
$ |
2,764 |
|
$ |
0.14 |
Restructuring expenses, net and asset impairments, net of tax |
|
2,415 |
|
|
0.12 |
As
adjusted |
$ |
5,179 |
|
$ |
0.26 |
(1) Calculated using diluted weighted average shares outstanding
of 19,580,750
|
Three months ended March 31, 2023 |
|
Amount |
|
Per Share (1) |
Net income attributable to DMC Global Inc. stockholders* |
$ |
909 |
|
$ |
0.05 |
CEO
transition expenses and accelerated stock-based compensation, net
of tax |
|
5,235 |
|
|
0.27 |
As
adjusted |
$ |
6,144 |
|
$ |
0.32 |
(1) Calculated using diluted weighted average shares outstanding
of 19,462,636
DMC GLOBAL INC.RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS
TO MOSTDIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS(Amounts in
Thousands)(unaudited) |
|
Segment Adjusted EBITDAArcadia |
|
|
Three months ended |
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
Operating (loss) income, as reported |
$ |
(588 |
) |
|
$ |
2,218 |
|
|
$ |
3,133 |
|
|
(127 |
)% |
|
(119 |
)% |
Adjustments: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
875 |
|
|
|
1,020 |
|
|
|
817 |
|
|
(14 |
)% |
|
7 |
% |
Amortization of purchased intangible assets |
|
5,277 |
|
|
|
5,652 |
|
|
|
5,652 |
|
|
(7 |
)% |
|
(7 |
)% |
Stock-based compensation |
|
342 |
|
|
|
332 |
|
|
|
579 |
|
|
3 |
% |
|
(41 |
)% |
CEO transition expenses |
|
— |
|
|
|
— |
|
|
|
289 |
|
|
— |
% |
|
(100 |
)% |
Adjusted EBITDA |
|
5,906 |
|
|
|
9,222 |
|
|
|
10,470 |
|
|
(36 |
)% |
|
(44 |
)% |
Less: adjusted EBITDA attributable to redeemable noncontrolling
interest |
|
(2,362 |
) |
|
$ |
(3,689 |
) |
|
$ |
(4,188 |
) |
|
(36 |
)% |
|
(44 |
)% |
Adjusted EBITDA attributable to DMC Global Inc. |
$ |
3,544 |
|
|
$ |
5,533 |
|
|
$ |
6,282 |
|
|
(36 |
)% |
|
(44 |
)% |
DynaEnergetics
|
Three months ended |
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
Operating income, as reported |
$ |
8,842 |
|
$ |
4,581 |
|
$ |
13,168 |
|
93 |
% |
|
(33 |
)% |
Adjustments: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
1,682 |
|
|
1,680 |
|
|
1,772 |
|
— |
% |
|
(5 |
)% |
Amortization of purchased intangible assets |
|
15 |
|
|
14 |
|
|
15 |
|
7 |
% |
|
— |
% |
Restructuring expenses, net and asset impairments |
|
— |
|
|
3,011 |
|
|
— |
|
(100 |
)% |
|
— |
% |
Adjusted EBITDA |
$ |
10,539 |
|
$ |
9,286 |
|
$ |
14,955 |
|
13 |
% |
|
(30 |
)% |
NobelClad
|
Three months ended |
|
Change |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Mar 31, 2023 |
|
Sequential |
|
Year-on-year |
Operating income, as reported |
$ |
5,100 |
|
$ |
6,867 |
|
$ |
2,621 |
|
(26 |
)% |
|
95 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
780 |
|
|
741 |
|
|
740 |
|
5 |
% |
|
5 |
% |
Adjusted EBITDA |
$ |
5,880 |
|
$ |
7,608 |
|
$ |
3,361 |
|
(23 |
)% |
|
75 |
% |
DMC Global (NASDAQ:BOOM)
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