DMC Global Inc.

11/04/2024 | Press release | Distributed by Public on 11/04/2024 15:09

DMC Global Reports Third Quarter Financial Results

DMC Global Reports Third Quarter Financial Results

November 04, 2024 4:05 pm EST Download as PDF
  • Third quarter sales were $152.4 million, down 11% sequentially and year-over-year
  • Net loss, inclusive of a $141.7 million non-cash goodwill impairment charge at Arcadia Products, was $159.4 million, while net loss attributable to DMC, inclusive of the goodwill impairment charge, was $101.3 million
  • Adjusted net loss attributable to DMC* was $9.6 million, or $(0.49) per diluted share
  • Adjusted EBITDA* attributable to DMC was $5.7 million, down 71% sequentially and down 77% vs. Q3 2023
  • Total adjusted EBITDA, inclusive of non-controlling interest (NCI), was $7.0 million, or 5% of sales

BROOMFIELD, Colo., Nov. 04, 2024 (GLOBE NEWSWIRE) -- DMC Global Inc. (Nasdaq: BOOM) today reported financial results for its third quarter ended September 30, 2024. As the Company recently announced, weakness in the U.S. construction and energy services industries negatively affected the performance of DMC's two largest businesses.

At Arcadia, DMC's architectural building products business, persistent high interest rates have impacted sales to the high-end luxury home market and have resulted in continued soft commercial construction activity. Under the direction of a new interim business president, Arcadia is executing a series of internal initiatives designed to strengthen sourcing and supply chain functions; improve sales, inventory and operations planning processes; and more effectively leverage Arcadia's enterprise resource planning system. The business is also reviewing certain product lines that have not consistently met profitability targets.

Arcadia's improvement initiatives are being led by interim president Chris Scocos, who joined the business in September 2024 with a 25-year track record of implementing lean manufacturing, process improvement and operational excellence programs for industrial manufacturing businesses across a broad range of industries, including building materials and industrial manufactured products.

Results at DynaEnergetics, DMC's energy products business, reflect a further market-driven decline in U.S. well completions, which were down 6% sequentially and 13% versus last year's third quarter. DynaEnergetics' results also were impacted by a lower-margin customer mix. New automated assembly systems at DynaEnergetics' U.S. manufacturing center in Blum, Texas, as well as a streamlined, next-generation model of its DynaStage perforating system, are expected to help strengthen DynaEnergetics' profit margins beginning next year.

NobelClad, DMC's composite metals business, delivered another solid quarter and achieved adjusted EBITDA margins of more than 23%. Management believes additional large order opportunities and continued strong demand for NobelClad's Cylindra™ cryogenic transition joints will offset a recent slowdown in repair and maintenance work in North America's downstream energy industry.

Guidance
Management has decided to limit quarterly financial guidance to consolidated sales and adjusted EBITDA during the current period of volatility and uncertainty in its energy and construction markets. For the fourth quarter, consolidated sales are expected to be in a range of $138 million to $148 million, while adjusted EBITDA attributable to DMC is expected in a range of $5 million to $8 million. The expected sequential decline in consolidated sales principally reflects challenging market conditions, including an anticipated extended frac holiday in DynaEnergetics' North American market. The continued impact of stubbornly high interest rates on luxury home sales and the related impact of lower fixed-cost absorption in certain factories, particularly those supporting certain high-end residential products, are expected to negatively impact Arcadia's fourth quarter performance.

Summary Third Quarter Results

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Net sales $ 152,429 $ 171,179 $ 172,147 (11 )% (11 )%
Gross profit percentage 19.8 % 27.1 % 30.6 %
SG&A* $ 28,205 $ 27,122 $ 28,713 4 % (2 )%
Net (loss) income $ (159,416 ) $ 6,293 $ 11,525 (2,633 )% (1,483 )%
Net (loss) income attributable to DMC $ (101,323 ) $ 4,012 $ 8,883 (2,625 )% (1,241 )%
Diluted net (loss) income per share attributable to DMC $ (8.27 ) $ 0.24 $ 0.38 (3,546 )% (2,276 )%
Adjusted net (loss) income attributable to DMC $ (9,615 ) $ 5,675 $ 9,861 (269 )% (198 )%
Adjusted diluted net (loss) income per share $ (0.49 ) $ 0.29 $ 0.50 (269 )% (198 )%
Adjusted EBITDA attributable to DMC $ 5,671 $ 19,420 $ 24,607 (71 )% (77 )%
Adjusted EBITDA before NCI allocation $ 7,015 $ 24,398 $ 29,981 (71 )% (77 )%
Adjusted EBITDA before NCI allocation margin 4.6 % 14.3 % 17.4 %

*SG&A in the three months ended September 30, 2023 included $805 of CEO transition expenses

Arcadia

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Net sales $ 57,818 $ 69,748 $ 71,455 (17 )% (19 )%
Adjusted EBITDA attributable to DMC $ 2,014 $ 7,467 $ 8,060 (73 )% (75 )%
Adjusted EBITDA before NCI allocation $ 3,358 $ 12,445 $ 13,434 (73 )% (75 )%
Adjusted EBITDA before NCI allocation margin 5.8 % 17.8 % 18.8 %

DynaEnergetics

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Net sales $ 69,679 $ 76,210 $ 72,998 (9 )% (5 )%
Adjusted EBITDA $ 414 $ 8,752 $ 12,568 (95 )% (97 )%
Adjusted EBITDA margin 0.6 % 11.5 % 17.2 %
  • Sales and margin declines reflect softer well-completion activity and continued pricing pressure in North America
  • Third quarter 2024 adjusted EBITDA includes approximately $5 million in inventory and bad debt charges

NobelClad

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Net sales $ 24,932 $ 25,221 $ 27,694 (1 )% (10 )%
Adjusted EBITDA $ 5,776 $ 5,722 $ 6,384 1 % (10 )%
Adjusted EBITDA margin 23.2 % 22.7 % 23.1 %
  • Backlog at the end of the third quarter was $59.0 million versus $60.8 million at the end of the 2023 third quarter
  • Rolling 12-month bookings were $103.9 million versus $108.4 million at the end of the prior-year third quarter; and the book-to-bill ratio was 0.96.

Conference call information
The 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=kSCFTQNY

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 Measures
In 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.

DMC is unable to reconcile its expected fourth quarter adjusted EBITDA attributable to DMC to the most directly comparable projected GAAP financial measure because certain information necessary to calculate such measure on a GAAP basis is unavailable or dependent on the timing of future events outside of DMC's control. Therefore, because of the uncertainty and variability of the nature of and the amount of any potential applicable future adjustments, which could be significant, DMC is unable to provide a reconciliation for expected adjusted EBITDA attributable to DMC without unreasonable efforts.

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 fourth quarter 2024 guidance on sales and adjusted EBITDA; our expectations that automation initiatives and product enhancements at DynaEnergetics will strengthen its EBITDA margins beginning next year; that improvement initiatives at Arcadia will strengthen operations; and that large order opportunities and demand for NobelClad's Cylindra™ product line will offset a recent slowdown in repair and maintenance work. 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; the potential effects of activist stockholder actions and actions that we may take to discourage takeover attempts, 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, and our quarterly reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024. 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
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
NET SALES $ 152,429 $ 171,179 $ 172,147 (11 )% (11 )%
COST OF PRODUCTS SOLD 122,324 124,766 119,550 (2 )% 2 %
Gross profit 30,105 46,413 52,597 (35 )% (43 )%
Gross profit percentage 19.8 % 27.1 % 30.6 %
COSTS AND EXPENSES:
General and administrative expenses 14,349 15,623 16,259 (8 )% (12 )%
Selling and distribution expenses 13,856 11,499 12,454 20 % 11 %
Amortization of purchased intangible assets 5,278 5,307 5,667 (1 )% (7 )%
Goodwill impairment charge 141,725 - - 100 % 100 %
Strategic review expenses 1,763 2,020 - (13 )% 100 %
Restructuring expenses and asset impairments 2,069 279 515 642 % 302 %
Total costs and expenses 179,040 34,728 34,895 416 % 413 %
OPERATING (LOSS) INCOME (148,935 ) 11,685 17,702 (1,375 )% (941 )%
OTHER EXPENSE:
Other (expense) income, net (520 ) (284 ) 302 83 % 272 %
Interest expense, net (2,113 ) (2,316 ) (2,392 ) (9 )% (12 )%
(LOSS) INCOME BEFORE INCOME TAXES (151,568 ) 9,085 15,612 (1,768 )% (1,071 )%
INCOME TAX PROVISION 7,848 2,792 4,087 181 % 92 %
NET (LOSS) INCOME (159,416 ) 6,293 11,525 (2,633 )% (1,483 )%
Less: Net (loss) income attributable to redeemable noncontrolling interest (58,093 ) 2,281 2,642 (2,647 )% (2,299 )%
NET (LOSS) INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS $ (101,323 ) $ 4,012 $ 8,883 (2,625 )% (1,241 )%
NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS
Basic $ (8.27 ) $ 0.24 $ 0.38 (3,546 )% (2,276 )%
Diluted $ (8.27 ) $ 0.24 $ 0.38 (3,546 )% (2,276 )%
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 19,706,587 19,659,908 19,543,251 - % 1 %
Diluted 19,706,587 19,671,169 19,596,575 - % 1 %

Reconciliation to net (loss) income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest for purposes of calculating earnings per share

Three months ended
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023
Net (loss) income attributable to DMC Global Inc. stockholders $ (101,323 ) $ 4,012 $ 8,883
Adjustment of redeemable noncontrolling interest (61,687 ) 793 (1,263 )
Net (loss) income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest $ (163,010 ) $ 4,805 $ 7,620
DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Share and Per Share Data)
(unaudited)
Nine months ended Change
Sep 30, 2024 Sep 30, 2023 Year-on-year
NET SALES $ 490,477 $ 545,152 (10 )%
COST OF PRODUCTS SOLD 371,607 378,454 (2 )%
Gross profit 118,870 166,698 (29 )%
Gross profit percentage 24.2 % 30.6 %
COSTS AND EXPENSES:
General and administrative expenses 45,952 60,285 (24 )%
Selling and distribution expenses 37,578 36,978 2 %
Amortization of purchased intangible assets 15,877 17,001 (7 )%
Goodwill impairment 141,725 - 100 %
Strategic review expenses 5,952 - 100 %
Restructuring expenses and asset impairments 2,348 515 356 %
Total costs and expenses 249,432 114,779 117 %
OPERATING (LOSS) INCOME (130,562 ) 51,919 (351 )%
OTHER EXPENSE:
Other expense, net (1,213 ) (337 ) 260 %
Interest expense, net (6,746 ) (7,205 ) (6 )%
(LOSS) INCOME BEFORE INCOME TAXES (138,521 ) 44,377 (412 )%
INCOME TAX PROVISION 12,283 13,187 (7 )%
NET (LOSS) INCOME (150,804 ) 31,190 (584 )%
Less: Net (loss) income attributable to redeemable noncontrolling interest (56,056 ) 7,695 (828 )%
NET (LOSS) INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS $ (94,748 ) $ 23,495 (503 )%
NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS
Basic $ (8.04 ) $ 1.07 (851 )%
Diluted $ (8.04 ) $ 1.07 (851 )%
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 19,648,253 19,492,212 1 %
Diluted 19,648,253 19,540,978 1 %

Reconciliation to net (loss) income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest for purposes of calculating earnings per share

Nine months ended
Sep 30, 2024 Sep 30, 2023
Net (loss) income attributable to DMC Global Inc. stockholders $ (94,748 ) $ 23,495
Adjustment of redeemable noncontrolling interest (63,201 ) (2,289 )
Net (loss) income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest $ (157,949 ) $ 21,206

DMC GLOBAL INC.
SEGMENT STATEMENTS OF OPERATIONS
(Amounts in Thousands)
(unaudited)

Arcadia

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Net sales $ 57,818 $ 69,748 $ 71,455 (17 )% (19 )%
Gross profit 13,562 23,157 23,789 (41 )% (43 )%
Gross profit percentage 23.5 % 33.2 % 33.3 %
COSTS AND EXPENSES:
General and administrative expenses 7,223 7,765 7,413 (7 )% (3 )%
Selling and distribution expenses 4,210 4,116 4,248 2 % (1 )%
Amortization of purchased intangible assets 5,278 5,278 5,652 - % (7 )%
Goodwill impairment 141,725 - - 100 % 100 %
Restructuring expenses and asset impairments 248 279 - (11 )% 100 %
Operating (loss) income (145,122 ) 5,719 6,476 (2,638 )% (2,341 )%
Adjusted EBITDA 3,358 12,445 13,434 (73 )% (75 )%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest (1,344 ) (4,978 ) (5,374 ) (73 )% (75 )%
Adjusted EBITDA attributable to DMC Global Inc. $ 2,014 $ 7,467 $ 8,060 (73 )% (75 )%
Nine months ended Change
Sep 30, 2024 Sep 30, 2023 Year-on-year
Net sales $ 189,491 $ 230,951 (18 )%
Gross profit 53,532 73,342 (27 )%
Gross profit percentage 28.3 % 31.8 %
COSTS AND EXPENSES:
General and administrative expenses 22,644 23,476 (4 )%
Selling and distribution expenses 12,794 13,721 (7 )%
Amortization of purchased intangible assets 15,833 16,956 (7 )%
Goodwill impairment 141,725 - 100 %
Restructuring expenses and asset impairments 527 - 100 %
Operating (loss) income (139,991 ) 19,189 (830 )%
Adjusted EBITDA 21,709 40,390 (46 )%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest (8,684 ) (16,156 ) (46 )%
Adjusted EBITDA attributable to DMC Global Inc. $ 13,025 $ 24,234 (46 )%

DMC GLOBAL INC.
SEGMENT STATEMENTS OF OPERATIONS
(Amounts in Thousands)
(unaudited)

DynaEnergetics

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Net sales $ 69,679 $ 76,210 $ 72,998 (9 )% (5 )%
Gross profit 8,347 15,133 19,585 (45 )% (57 )%
Gross profit percentage 12.0 % 19.9 % 26.8 %
COSTS AND EXPENSES:
General and administrative expenses 2,299 3,011 3,095 (24 )% (26 )%
Selling and distribution expenses 7,276 5,041 5,604 44 % 30 %
Amortization of purchased intangible assets - 29 15 (100 )% (100 )%
Restructuring expenses and asset impairments 1,821 - - 100 % 100 %
Operating (loss) income (3,049 ) 7,052 10,871 (143 )% (128 )%
Adjusted EBITDA $ 414 $ 8,752 $ 12,568 (95 )% (97 )%
Nine months ended Change
Sep 30, 2024 Sep 30, 2023 Year-on-year
Net sales $ 224,011 $ 239,720 (7 )%
Gross profit 40,451 70,574 (43 )%
Gross profit percentage 18.1 % 29.4 %
COSTS AND EXPENSES:
General and administrative expenses 8,201 12,869 (36 )%
Selling and distribution expenses 17,540 15,888 10 %
Amortization of purchased intangible assets 44 45 (2 )%
Restructuring expenses and asset impairments 1,821 - 100 %
Operating income 12,845 41,772 (69 )%
Adjusted EBITDA $ 19,705 $ 46,984 (58 )%

NobelClad

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Net sales $ 24,932 $ 25,221 $ 27,694 (1 )% (10 )%
Gross profit 8,269 8,222 9,309 1 % (11 )%
Gross profit percentage 33.2 % 32.6 % 33.6 %
COSTS AND EXPENSES:
General and administrative expenses 1,110 1,023 1,106 9 % - %
Selling and distribution expenses 2,190 2,267 2,531 (3 )% (13 )%
Restructuring expenses and asset impairments - - 440 - % (100 )%
Operating income 4,969 4,932 5,232 1 % (5 )%
Adjusted EBITDA $ 5,776 $ 5,722 $ 6,384 1 % (10 )%
DMC GLOBAL INC.
SEGMENT STATEMENTS OF OPERATIONS
(Amounts in Thousands)
(unaudited)
Nine months ended Change
Sep 30, 2024 Sep 30, 2023 Year-on-year
Net sales $ 76,975 $ 74,481 3 %
Gross profit 25,135 23,113 9 %
Gross profit percentage 32.7 % 31.0 %
COSTS AND EXPENSES:
General and administrative expenses 3,207 2,978 8 %
Selling and distribution expenses 6,927 7,135 (3 )%
Restructuring expenses and asset impairments - 440 (100 )%
Operating income 15,001 12,560 19 %
Adjusted EBITDA $ 17,378 $ 15,152 15 %
DMC GLOBAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
Change
Sep 30, 2024 Jun 30, 2024 Dec 31, 2023 Sequential Year-end
(unaudited) (unaudited)
ASSETS
Cash and cash equivalents $ 14,511 $ 14,567 $ 31,040 - % (53 )%
Marketable securities - - 12,619 - % (100 )%
Accounts receivable, net 110,996 118,247 106,205 (6 )% 5 %
Inventories 165,636 174,791 166,712 (5 )% (1 )%
Prepaid expenses and other 16,734 13,270 10,236 26 % 63 %
Total current assets 307,877 320,875 326,812 (4 )% (6 )%
Property, plant and equipment, net 129,674 128,189 129,267 1 % - %
Goodwill - 141,725 141,725 (100 )% (100 )%
Purchased intangible assets, net 179,380 184,658 195,260 (3 )% (8 )%
Other long-term assets 85,079 94,038 91,431 (10 )% (7 )%
Total assets $ 702,010 $ 869,485 $ 884,495 (19 )% (21 )%
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY
Accounts payable $ 55,883 $ 62,594 $ 40,202 (11 )% 39 %
Contract liabilities 21,263 16,401 21,621 30 % (2 )%
Accrued income taxes 16,616 13,917 12,810 19 % 30 %
Current portion of long-term debt 2,500 2,500 15,000 - % (83 )%
Other current liabilities 33,787 31,266 36,828 8 % (8 )%
Total current liabilities 130,049 126,678 126,461 3 % 3 %
Long-term debt 71,715 81,612 100,851 (12 )% (29 )%
Deferred tax liabilities 1,702 1,935 1,956 (12 )% (13 )%
Other long-term liabilities 54,940 56,191 57,172 (2 )% (4 )%
Redeemable noncontrolling interest 187,080 187,080 187,760 - % - %
Stockholders' equity 256,524 415,989 410,295 (38 )% (37 )%
Total liabilities, redeemable noncontrolling interest, and stockholders' equity $ 702,010 $ 869,485 $ 884,495 (19 )% (21 )%
DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(unaudited)
Three months ended Nine months ended
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sep 30, 2024 Sep 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (159,416 ) $ 6,293 $ 11,525 $ (150,804 ) $ 31,190
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation 3,444 3,431 3,460 10,294 10,294
Amortization of purchased intangible assets 5,278 5,307 5,667 15,877 17,001
Amortization of deferred debt issuance costs 217 217 141 624 412
Stock-based compensation 1,772 1,782 1,832 5,103 8,558
Bad debt expense 3,943 560 317 4,979 141
Deferred income taxes 6,026 (746 ) 1,558 4,734 2,218
Asset impairments 1,044 - 515 1,044 515
Goodwill impairment 141,725 - - 141,725 -
Other 712 197 (1,607 ) (76 ) (2,040 )
Change in working capital, net 14,257 (14,698 ) 796 1,285 (25,541 )
Net cash provided by operating activities 19,002 2,343 24,204 34,785 42,748
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in marketable securities - - (5,102 ) - (7,516 )
Proceeds from maturities of marketable securities - - - 3,000 -
Proceeds from sales of marketable securities - - - 9,619 -
Acquisition of property, plant and equipment (6,085 ) (2,547 ) (2,333 ) (11,600 ) (7,455 )
Proceeds from property, plant and equipment reimbursements 406 - - 406 -
Proceeds on sale of property, plant and equipment - 100 - 100 -
Net cash (used in) provided by investing activities (5,679 ) (2,447 ) (7,435 ) 1,525 (14,971 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on term loan (625 ) (625 ) (3,750 ) (118,750 ) (13,750 )
Borrowings on term loan - - - 50,000 -
Borrowings on revolving loans 500 6,700 - 77,650 -
Repayments on revolving loans (9,875 ) (10,075 ) - (50,400 ) -
Payment of debt issuance costs - - - (2,735 ) -
Distributions to redeemable noncontrolling interest holder (3,649 ) (1,547 ) (4,034 ) (8,321 ) (10,345 )
Net proceeds from issuance of common stock to employees and directors - 132 - 132 212
Treasury stock purchases (48 ) (16 ) (157 ) (1,000 ) (2,328 )
Net cash used in financing activities (13,697 ) (5,431 ) (7,941 ) (53,424 ) (26,211 )
EFFECTS OF EXCHANGE RATES ON CASH 318 (342 ) 508 585 1,350
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (56 ) (5,877 ) 9,336 (16,529 ) 2,916
CASH AND CASH EQUIVALENTS, beginning of the period 14,567 20,444 18,724 31,040 25,144
CASH AND CASH EQUIVALENTS, end of the period $ 14,511 $ 14,567 $ 28,060 $ 14,511 $ 28,060

DMC GLOBAL INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO MOST
DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(Amounts in Thousands)
(unaudited)

DMC Global

EBITDA and Adjusted EBITDA

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Net (loss) income (159,416 ) 6,293 11,525 (2,633 )% (1,483 )%
Interest expense, net 2,113 2,316 2,392 (9 )% (12 )%
Income tax provision 7,848 2,792 4,087 181 % 92 %
Depreciation 3,444 3,431 3,460 - % - %
Amortization of purchased intangible assets 5,278 5,307 5,667 (1 )% (7 )%
EBITDA (140,733 ) 20,139 27,131 (799 )% (619 )%
Stock-based compensation 1,671 1,676 1,832 - % (9 )%
Goodwill impairment 141,725 - - 100 % 100 %
Strategic review expenses 1,763 2,020 - (13 )% 100 %
Restructuring expenses and asset impairments 2,069 279 515 642 % 302 %
CEO transition expenses - - 805 - % (100 )%
Other expense (income), net 520 284 (302 ) 83 % 272 %
Adjusted EBITDA $ 7,015 $ 24,398 $ 29,981 (71 )% (77 )%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest (1,344 ) (4,978 ) (5,374 ) (73 )% (75 )%
Adjusted EBITDA attributable to DMC Global Inc. $ 5,671 $ 19,420 $ 24,607 (71 )% (77 )%
Nine months ended Change
Sep 30, 2024 Sep 30, 2023 Year-on-year
Net (loss) income $ (150,804 ) $ 31,190 (584 )%
Interest expense, net 6,746 7,205 (6 )%
Income tax provision 12,283 13,187 (7 )%
Depreciation 10,294 10,294 - %
Amortization of purchased intangible assets 15,877 17,001 (7 )%
EBITDA (105,604 ) 78,877 (234 )%
Stock-based compensation 4,824 8,558 (44 )%
Goodwill impairment 141,725 - 100 %
Strategic review expenses 5,952 - 100 %
Restructuring expenses and asset impairments 2,348 515 356 %
CEO transition expenses - 4,343 (100 )%
Other expense, net 1,213 337 260 %
Adjusted EBITDA $ 50,458 $ 92,630 (46 )%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest (8,684 ) (16,156 ) (46 )%
Adjusted EBITDA attributable to DMC Global Inc. $ 41,774 $ 76,474 (45 )%

DMC GLOBAL INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO MOST
DIRECTLY 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 September 30, 2024
Amount Per Share (1)
Net loss attributable to DMC Global Inc. stockholders* $ (101,323 ) $ (5.14 )
Goodwill impairment, net of tax 85,035 4.31
Strategic review expenses, net of tax 1,322 0.07
Restructuring expenses and asset impairments, net of tax 1,451 0.07
Establishment of income tax valuation allowance 3,900 0.20
As adjusted $ (9,615 ) $ (0.49 )

(1) Calculated using diluted weighted average shares outstanding of 19,706,587

Three months ended June 30, 2024
Amount Per Share (1)
Net income attributable to DMC Global Inc. stockholders* $ 4,012 $ 0.20
Strategic review expenses, net of tax 1,538 0.08
Restructuring expenses and asset impairments, net of tax 125 0.01
As adjusted $ 5,675 $ 0.29

(1) Calculated using diluted weighted average shares outstanding of 19,671,169

Three months ended September 30, 2023
Amount Per Share (1)
Net income attributable to DMC Global Inc. stockholders* $ 8,883 $ 0.45
CEO transition expenses, net of tax 620 0.03
Restructuring expenses and asset impairments, net of tax 358 0.02
As adjusted $ 9,861 $ 0.50

(1) Calculated using diluted weighted average shares outstanding of 19,596,575

Nine months ended September 30, 2024
Amount Per Share (1)
Net loss attributable to DMC Global Inc. stockholders* $ (94,748 ) $ (4.82 )
Goodwill impairment, net of tax 85,035 4.33
Strategic review expenses, net of tax 4,464 0.22
Restructuring expenses and asset impairments, net of tax 1,576 0.08
Establishment of income tax valuation allowance 3,900 0.20
As adjusted $ 227 $ 0.01

(1) Calculated using diluted weighted average shares outstanding of 19,648,253

Nine months ended September 30, 2023
Amount
 Per Share (1)
Net income attributable to DMC Global Inc. stockholders* $ 23,495 $ 1.20
CEO transition expenses and accelerated stock-based compensation, net of tax 6,284 0.32
Restructuring expenses and asset impairments, net of tax 358 0.02
As adjusted $ 30,137 $ 1.54

(1) Calculated using diluted weighted average shares outstanding of 19,540,978

Segment Adjusted EBITDA

Arcadia

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Operating (loss) income, as reported $ (145,122 ) $ 5,719 $ 6,476 (2,638 )% (2,341 )%
Adjustments:
Depreciation 914 888 969 3 % (6 )%
Amortization of purchased intangible assets 5,278 5,278 5,652 - % (7 )%
Stock-based compensation 315 281 337 12 % (7 )%
Goodwill impairment 141,725 - - 100 % 100 %
Restructuring expenses and asset impairments 248 279 - (11 )% 100 %
Adjusted EBITDA 3,358 12,445 13,434 (73 )% (75 )%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest (1,344 ) $ (4,978 ) $ (5,374 ) (73 )% (75 )%
Adjusted EBITDA attributable to DMC Global Inc. $ 2,014 $ 7,467 $ 8,060 (73 )% (75 )%
Nine months ended Change
Sep 30, 2024 Sep 30, 2023 Year-on-year
Operating (loss) income, as reported $ (139,991 ) $ 19,189 (830 )%
Adjustments:
Depreciation 2,677 2,675 - %
Amortization of purchased intangible assets 15,833 16,956 (7 )%
Stock-based compensation 938 1,239 (24 )%
Goodwill impairment 141,725 - 100 %
Restructuring expenses and asset impairments 527 - 100 %
CEO transition expenses - 331 (100 )%
Adjusted EBITDA 21,709 40,390 (46 )%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest (8,684 ) $ (16,156 ) (46 )%
Adjusted EBITDA attributable to DMC Global Inc. $ 13,025 $ 24,234 (46 )%

DynaEnergetics

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Operating (loss) income, as reported $ (3,049 ) $ 7,052 $ 10,871 (143 )% (128 )%
Adjustments:
Depreciation 1,642 1,671 1,682 (2 )% (2 )%
Amortization of purchased intangible assets - 29 15 (100 )% (100 )%
Restructuring expenses and asset impairments 1,821 - - 100 % 100 %
Adjusted EBITDA $ 414 $ 8,752 $ 12,568 (95 )% (97 )%
Nine months ended Change
Sep 30, 2024 Sep 30, 2023 Year-on-year
Operating income, as reported $ 12,845 $ 41,772 (69 )%
Adjustments:
Depreciation 4,995 5,167 (3 )%
Amortization of purchased intangible assets 44 45 (2 )%
Restructuring expenses and asset impairments 1,821 - 100 %
Adjusted EBITDA $ 19,705 $ 46,984 (58 )%

NobelClad

Three months ended Change
Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Sequential Year-on-year
Operating income, as reported $ 4,969 $ 4,932 $ 5,232 1 % (5 )%
Adjustments:
Depreciation 807 790 712 2 % 13 %
Restructuring expenses and asset impairments - - 440 - % (100 )%
Adjusted EBITDA $ 5,776 $ 5,722 $ 6,384 1 % (10 )%
Nine months ended Change
Sep 30, 2024 Sep 30, 2023 Year-on-year
Operating income, as reported $ 15,001 $ 12,560 19 %
Adjustments:
Depreciation 2,377 2,152 10 %
Restructuring expenses and asset impairments - 440 (100 )%
Adjusted EBITDA $ 17,378 $ 15,152 15 %

Source: DMC Global Inc.

Released November 4, 2024