DMC Global Provides Business and Strategic Review Update; Announces Governance Changes
DMC Global (NASDAQ: BOOM) has revised its Q3 2024 financial guidance, expecting sales of approximately $152 million, down from the previous $158-$168 million forecast. Adjusted EBITDA is now projected at $5 million, significantly lower than the earlier $15-$18 million guidance. The company will record a $142 million non-cash goodwill impairment charge related to its Arcadia acquisition.
DMC's Board has ended the active marketing of DynaEnergetics and NobelClad, prioritizing internal improvements. Governance changes include James O'Leary becoming executive chairman and Ouma Sananikone appointed as lead independent director. David Aldous has stepped down as independent chairman and board member, while Peter Rose will not seek re-election.
The company cites weak commercial construction activity, supply-chain disruptions, and declining North American well-completion activity as factors impacting performance. DMC expects to report detailed Q3 results on November 4, 2024.
DMC Global (NASDAQ: BOOM) ha rivisto le previsioni finanziarie per il terzo trimestre del 2024, prevedendo vendite di circa 152 milioni di dollari, in calo rispetto alla precedente previsione di 158-168 milioni di dollari. L'EBITDA rettificato è ora previsto a 5 milioni di dollari, significativamente inferiore alla precedente stima di 15-18 milioni di dollari. L'azienda registrerà un onere per impairment di goodwill non monetario pari a 142 milioni di dollari relativo all'acquisizione di Arcadia.
Il Consiglio di Amministrazione di DMC ha cessato il marketing attivo di DynaEnergetics e NobelClad, dando priorità a miglioramenti interni. Tra i cambiamenti di governance, James O'Leary diventa presidente esecutivo e Ouma Sananikone è stata nominata direttore indipendente principale. David Aldous si è dimesso da presidente indipendente e membro del consiglio, mentre Peter Rose non si ricandiderà.
L'azienda cita Debole attività nel settore delle costruzioni commerciali, interruzioni nella catena di approvvigionamento e un calo nell'attività di completamento dei pozzi in Nord America come fattori che influenzano le performance. DMC prevede di riportare risultati dettagliati per il terzo trimestre il 4 novembre 2024.
DMC Global (NASDAQ: BOOM) ha revisado su guía financiera para el tercer trimestre de 2024, esperando ventas de aproximadamente 152 millones de dólares, por debajo de la previsión anterior de 158 a 168 millones de dólares. Se proyecta que el EBITDA ajustado sea ahora de 5 millones de dólares, significativamente inferior a la guía previa de 15 a 18 millones de dólares. La empresa registrará un cargo por deterioro de goodwill no monetario de 142 millones de dólares relacionado con su adquisición de Arcadia.
La Junta de DMC ha terminado con el marketing activo de DynaEnergetics y NobelClad, priorizando mejoras internas. Los cambios en la gobernanza incluyen a James O'Leary como presidente ejecutivo y a Ouma Sananikone como directora independiente principal. David Aldous ha renunciado como presidente independiente y miembro de la junta, mientras que Peter Rose no buscará la reelección.
La empresa cita la débil actividad de construcción comercial, las interrupciones en la cadena de suministro y la disminución de la actividad de finalización de pozos en América del Norte como factores que impactan el rendimiento. DMC espera informar resultados detallados del tercer trimestre el 4 de noviembre de 2024.
DMC 글로벌 (NASDAQ: BOOM)은 2024년 3분기 재무 가이드를 수정하여 약 1억 5200만 달러의 매출을 예상하고 있으며, 이는 이전의 1억 5800만 ~ 1억 6800만 달러 예측보다 감소한 수치입니다. 조정된 EBITDA는 이제 500만 달러로 예상되며, 이는 초기의 1500만 ~ 1800만 달러 가이드보다 상당히 낮습니다. 회사는 Arcadia 인수와 관련하여 1억 4200만 달러의 비현금 영업권 손상비용을 기록할 예정입니다.
DMC의 이사회는 DynaEnergetics 및 NobelClad의 적극적인 마케팅을 종료하고 내부 개선을 우선시하기로 결정했습니다. 거버넌스 변화에는 James O'Leary가 집행 의장으로 취임하고 Ouma Sananikone이 수석 독립 이사로 임명됩니다. David Aldous는 독립 의장 및 이사직에서 사임하였으며, Peter Rose는 재선 출마를 하지 않기로 했습니다.
회사는 낮은 상업 건설 활동, 공급망 중단 및 북미 지역의 웰 완공 활동 감소를 성과에 영향을 미치는 요소로 언급했습니다. DMC는 2024년 11월 4일에 3분기 실적을 상세히 보고할 것으로 예상합니다.
DMC Global (NASDAQ: BOOM) a révisé ses prévisions financières pour le troisième trimestre 2024, s'attendant à des ventes d'environ 152 millions de dollars, en baisse par rapport à la prévision précédente de 158 à 168 millions de dollars. L'EBITDA ajusté est désormais prévu à 5 millions de dollars, bien en dessous des précédentes prévisions de 15 à 18 millions de dollars. L'entreprise enregistrera une charge de dépréciation de goodwill non monétaire de 142 millions de dollars liée à son acquisition d'Arcadia.
Le conseil d'administration de DMC a mis fin au marketing actif de DynaEnergetics et NobelClad, en privilégiant les améliorations internes. Les changements de gouvernance incluent James O'Leary devenant président exécutif et Ouma Sananikone nommée administratrice indépendante principale. David Aldous a démissionné de son poste de président indépendant et de membre du conseil, tandis que Peter Rose ne cherchera pas à être réélu.
L'entreprise cite une faible activité de construction commerciale, des perturbations de la chaîne d'approvisionnement et une baisse de l'activité de complétion de puits en Amérique du Nord comme des facteurs affectant la performance. DMC prévoit de rapporter des résultats détaillés pour le troisième trimestre le 4 novembre 2024.
DMC Global (NASDAQ: BOOM) hat seine Finanzprognose für das 3. Quartal 2024 überarbeitet und erwartet einen Umsatz von etwa 152 Millionen USD, was einem Rückgang gegenüber den vorherigen Prognosen von 158 bis 168 Millionen USD entspricht. Das bereinigte EBITDA wird nun auf 5 Millionen USD geschätzt, was erheblich unter der früheren Schätzung von 15 bis 18 Millionen USD liegt. Das Unternehmen wird einen nicht liquiditätswirksamen Goodwill-Abschreibungsaufwand von 142 Millionen USD im Zusammenhang mit der Akquisition von Arcadia verbuchen.
Der Vorstand von DMC hat das aktive Marketing von DynaEnergetics und NobelClad eingestellt und priorisiert interne Verbesserungen. Änderungen in der Governance umfassen James O'Leary als neuen Vorstandsvorsitzenden und Ouma Sananikone als leitende unabhängige Direktorin. David Aldous ist als unabhängiger Vorstand und Vorstandsmitglied zurückgetreten, während Peter Rose nicht zur Wiederwahl antreten wird.
Das Unternehmen führt schwache Aktivitäten im gewerblichen Bau, Störungen in der Lieferkette und eine rückläufige Aktivität im Bereich des Abschlusses von Bohrungen in Nordamerika als Faktoren an, die die Leistung beeinflussen. DMC plant, am 4. November 2024 detaillierte Ergebnisse für das 3. Quartal zu berichten.
- NobelClad, the composite metals business, is expected to deliver strong Q3 results within or above the forecasted range
- Implementation of manufacturing automation and product design initiatives at DynaEnergetics expected to strengthen adjusted EBITDA margins beginning in 2025
- Appointment of experienced executives James O'Leary as executive chairman and Ouma Sananikone as lead independent director
- Q3 sales revised down to $152 million from $158-$168 million guidance
- Adjusted EBITDA forecast lowered to $5 million from $15-$18 million
- $142 million non-cash goodwill impairment charge related to Arcadia acquisition
- Weak performance in Arcadia due to slow commercial and high-end residential construction activity
- DynaEnergetics affected by declining North American well-completion activity and higher mix of lower margin customers
- $5 million in inventory and bad debt charges at DynaEnergetics
- Termination of active marketing for DynaEnergetics and NobelClad businesses
Insights
DMC Global's Q3 update reveals significant challenges across its business segments. The company expects
The
The strategic review's outcome, halting the sale of DynaEnergetics and NobelClad, suggests a lack of attractive offers and a shift towards internal improvements. While this may provide stability, it also indicates near-term catalysts for value creation.
Governance changes, including a new executive chairman and lead independent director, could bring fresh perspectives but also reflect the urgency of the situation. Investors should closely monitor Q3 results and management's turnaround strategies, as the company faces significant headwinds across multiple fronts.
Arcadia's underperformance highlights broader challenges in the commercial and high-end residential construction sectors. The weak activity in these areas suggests a potential slowdown that could extend beyond DMC Global. Supply chain disruptions affecting product availability are a common industry issue, but Arcadia's struggles indicate it may be more severely impacted than competitors.
The appointment of James O'Leary as executive chairman is noteworthy. His extensive experience in construction and industrial manufacturing, particularly his roles at Builders FirstSource and BMC Stock Holdings, could prove valuable in navigating Arcadia's challenges. His insights into market trends and potential operational improvements might help stabilize this segment.
However, the construction industry's cyclical nature and current macroeconomic headwinds pose significant hurdles. Arcadia's performance will likely remain under pressure in the near term, with any turnaround heavily dependent on broader market conditions and the effectiveness of internal improvement initiatives.
DynaEnergetics' disappointing performance reflects the volatility in the energy sector, particularly in North American well-completion activity. The shift towards lower-margin customers in U.S. markets suggests intensifying competition and pricing pressures, which could persist in the near term.
The
The decision to halt the sale process for DynaEnergetics and NobelClad amidst energy market weakness suggests a lack of attractive offers. While this preserves these assets for potential future value, it also means DMC remains exposed to the cyclical and volatile energy sector.
The company's focus on manufacturing automation and product design initiatives for DynaEnergetics, aimed at improving EBITDA margins by 2025, is a positive long-term strategy. However, investors should be cautious about near-term performance given the current market challenges and the time required for these initiatives to yield results.
BROOMFIELD, Colo., Oct. 21, 2024 (GLOBE NEWSWIRE) -- DMC Global (NASDAQ: BOOM) (“DMC” or the “Company”) today provided an update on its business conditions and revised its third quarter financial guidance. The Company also commented on its strategic review process and announced governance changes. DMC said third quarter sales are expected to be approximately
Adjusted EBITDA* is now expected to be approximately
The Company said its third quarter financial results will include an approximate
DMC president and CEO Michael Kuta, who is also leading Arcadia on an interim basis, said, “Arcadia’s third quarter performance was affected by weak commercial and high-end residential construction activity, lower fixed overhead absorption, and supply-chain disruptions that impacted product availability. Results at DynaEnergetics were below expectations due to declining North American well-completion activity, a higher mix of lower margin customers in DynaEnergetics’ U.S. markets, and the aforementioned inventory and bad debt charges. NobelClad, our composite metals business, is expected to deliver another strong quarter with sales and adjusted EBITDA results within or above our forecasted range.
“Arcadia is a solid business with exceptional employees and a respected brand, and we are focused on improving its performance and delivering the value its customers have come to expect. At DynaEnergetics, we expect the manufacturing automation and product design initiatives we are implementing will strengthen adjusted EBITDA margins beginning in 2025.”
Strategic Review Process
DMC’s Board of Directors (the “Board”) also announced it is no longer actively marketing DynaEnergetics and NobelClad. Since announcing strategic review processes for both businesses in January 2024, the Company has reviewed and considered sales, mergers and other strategic combinations. However, given the challenges of the last several months for DMC, including macroeconomic factors such as weakness and volatility in the energy market, the Board believes that prioritizing stability, simplification and internal improvement will better serve DMC’s stockholders than selling these market-leading businesses at the present time.
Governance Changes
DMC also announced that director James O’Leary has agreed to serve as executive chairman, director Ouma Sananikone has been appointed lead independent director, and David Aldous has stepped down as DMC’s independent chairman and as a member of the Board. In addition, Peter Rose has decided not to stand for re-election at the Company’s next annual meeting of stockholders. The Board wishes to recognize and thank Mr. Aldous and Mr. Rose for their years of service to DMC.
Mr. O’Leary joined the Board in November 2023 with nearly four decades of executive leadership, finance, capital markets and board-level experience. He has extensive expertise in the construction and industrial manufacturing industries and is on the board of publicly traded Builders FirstSource, Inc., the largest U.S. supplier of building products, prefabricated components and value-added services to the professional market segment for new residential construction and repair and remodeling.
Mr. O’Leary was chairman of publicly traded BMC Stock Holdings, Inc. prior to its merger with Builders FirstSource in 2021. He was also chairman and CEO of Kaydon Corporation, Inc., a leading, publicly traded manufacturer of highly engineered industrial products, which was sold to an industry peer in a successful strategic transaction. He more recently served as chairman and CEO of WireCo, a leading supplier of steel and synthetic rope and electromechanical cable for global energy markets. His experience also includes extensive work as a director and senior advisor at several leading private equity firms.
Ms. Sananikone joined the Board in 2023 with more than 30 years of experience in finance, capital markets, mergers and acquisitions and investment management. She previously served as managing director of corporate strategy and development at BT Financial Group, a
Ms. Sananikone currently serves on the boards of IA Financial Group, an insurance group with operations in Canada and the USA; Innergex Renewable Energy, a producer of renewable energy with operations in Canada, the USA, Chile and France; and Gecina, a Paris-based real estate company.
DMC expects to report third quarter financial results after the market closes on Monday, November 4, 2024, when it will discuss detailed operations performance and profitability improvement initiatives underway. Details for participating in the call will be issued in the coming days.
*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.
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 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
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
This news release contains certain 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, but not limited to, third quarter 2024 guidance on sales and Adjusted EBITDA. All of these statements are based on management’s expectations as well as estimates and assumptions prepared by management that, although they believe to be reasonable, are inherently uncertain. These statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and other factors outside of the Company’s control that may cause its business, industry, strategy, financing activities or actual results to differ materially. More information on potential factors that could affect the Company and its financial results is available in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections within the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and in other documents that the Company has filed with, or furnished to, the U.S. Securities and Exchange Commission. The Company does 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:
Investors:
Geoff High
Vice President of Investor Relations
303-604-3924
Media:
Riyaz Lalani or Dan Gagnier
Gagnier Communications
416-305-1459
DMCGLOBAL@GAGNIERFC.COM
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