DMC Global Reports First Quarter Financial Results
DMC Global Inc. reported first-quarter financial results, with sales of $166.9 million, down 9% from the previous year. Adjusted net income was $4.2 million, EPS was $0.21, both showing a decline from Q1 2023. Arcadia Products and DynaEnergetics faced challenges from market conditions, while NobelClad saw sales and EBITDA growth. DMC ended the quarter with improved free cash flow and reduced debt leverage ratio.
NobelClad reported strong sales growth of 22% and an improved EBITDA margin of 21.9%, fueled by a record $19 million order from the petrochemical industry.
DMC's free cash flow for the quarter doubled compared to the prior year, reaching $10.5 million, and the debt-to-adjusted EBITDA leverage ratio improved to 1.00x.
Margin enhancement initiatives at DynaEnergetics are expected to boost profitability in the second half of 2024, with a 13% increase in adjusted EBITDA quarter-over-quarter.
Arcadia Products experienced a sales decline of 23% in the first quarter, with an adjusted EBITDA margin drop to 9.5% from 13.0% in the prior year.
DMC's adjusted net income and diluted EPS showed a decrease of 32% and 34% respectively compared to Q1 2023, reflecting challenging market conditions.
The drop in short-cycle commercial sales and ongoing pricing pressure affected DynaEnergetics' sales, resulting in a 5% decrease compared to the same quarter last year.
Insights
DMC Global's report indicates a 9% decline in sales compared to the previous year, coupled with a net income increase of 8%. However, when looking at the adjusted net income and adjusted EBITDA, the picture is less optimistic, showing a decrease of 32% and 17%, respectively. The decline in sales could be a reflection of the company's exposure to volatile markets, such as the price-sensitive aluminum sector and the ongoing pricing pressure in the North American energy market.
NobelClad's performance, as highlighted by the record order post-quarter, suggests a strategic success in capitalizing on industrial demand, which could be beneficial for the long-term outlook. However, investors should be mindful of the long lead time with the majority of the order expected to be shipped in 2025, indicating that the revenue impact will not be immediate.
Regarding cash flow, the improvement to $10.5 million is notable and reflects management's effective cost management and possibly improved working capital efficiency. The significant reduction of the debt-to-adjusted EBITDA leverage ratio to 1.00x from 1.25x reflects positively on the company's balance sheet health. Despite the mixed financial results, DMC's ability to generate free cash flow in a challenging environment suggests a potential resilience in their operating model.
The commercial construction industry, as per the Architectural Billings Index (ABI), has seen a consistent decline. This trend directly impacts DMC's architectural building products business, Arcadia, which reported a 23% reduction in sales. While the company anticipates a sequential improvement in sales and earnings, external market conditions seem to be a significant influencing factor and investors should keep a close watch on industry indicators for signs of recovery.
Operationally, the initiatives to enhance profitability at DynaEnergetics through automation and a focus on premium product sales could improve margins in the latter half of the year. However, this is contingent upon market conditions stabilizing and the success of these initiatives.
Strategically, DMC's review of alternatives for NobelClad and DynaEnergetics could indicate a potential restructuring or divestiture in the future, aimed at unlocking shareholder value. The outcome of these strategic reviews could significantly influence the company's future direction and stock performance.
- First quarter sales were
$166.9 million , down9% vs. Q1 2023 - Net income was
$2.3 million , while net income attributable to DMC was$2.6 million - Adjusted net income attributable to DMC* was
$4.2 million versus$6.1 million in Q1 2023 - Adjusted diluted EPS attributable to DMC* was
$0.21 versus$0.32 in Q1 2023 - Adjusted EBITDA* attributable to DMC was
$16.7 million , down17% vs. Q1 2023 - Total adjusted EBITDA, inclusive of non-controlling interest (NCI), was
$19.0 million , or11.4% of sales - First quarter free cash flow* was
$10.5 million versus$4.8 million in Q1 2023 - NobelClad, DMC's composite metals business, receives record
$19 million order following close of first quarter
BROOMFIELD, Colo., May 02, 2024 (GLOBE NEWSWIRE) -- DMC Global Inc. (Nasdaq: BOOM) today reported financial results for its first quarter ended March 31, 2024.
“DMC’s first quarter sales declined
Arcadia Products reported first quarter sales of
DynaEnergetics reported sales of
NobelClad reported sales of
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
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
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 | |
| Arcadia | |
| DynaEnergetics | |
| NobelClad | |
| Adjusted EBITDA | |
| Arcadia before NCI allocation | |
| Arcadia after NCI allocation | |
| DynaEnergetics | |
| NobelClad | |
| Corporate Unallocated | ~ ( |
| Attributable to DMC | |
| Full-Year 2024 Guidance on Select Items | |
| Depreciation and amortization | |
| Interest expense | |
| Annualized effective tax rate | |
| Capital expenditures |
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=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 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.
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 Relations
303-604-3924
| 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 MOST DIRECTLY 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 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 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 MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS (Amounts in Thousands) (unaudited) | |||||||||||||||||
| Segment Adjusted EBITDA Arcadia | |||||||||||||||||
| 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 | % | ||||
FAQ
What were DMC Global Inc.'s first-quarter sales results?
What was NobelClad's sales growth in the first quarter?
How did Arcadia Products perform in the first quarter of 2024?
What was DMC Global Inc.'s free cash flow for the first quarter?
What was the debt leverage ratio of DMC Global Inc. at the end of the first quarter?
