DMC GLOBAL REPORTS SECOND QUARTER FINANCIAL RESULTS
•Second quarter sales were $171.2 million, up 3% sequentially and down 9% vs. Q2 2023
•Net income was $6.3 million, while net income attributable to DMC was $4.0 million
•Adjusted net income attributable to DMC* was $5.7 million, or $0.29 per diluted share
•Adjusted EBITDA* attributable to DMC was $19.4 million, up 16% sequentially and down 39% vs. Q2 2023
•Total adjusted EBITDA, inclusive of non-controlling interest (NCI), was $24.4 million, or 14.3% of sales
BROOMFIELD, Colo. - August 1, 2024 - DMC Global Inc. (Nasdaq: BOOM) today reported financial results for its second quarter ended June 30, 2024.
“All three of our businesses delivered on key financial and operational objectives during the second quarter,” said Michael Kuta, president and CEO. “These accomplishments led to consolidated sales and adjusted EBITDA that were above the high end of our guidance.”
“We made significant progress at Arcadia, our architectural building products business,” Kuta added. “While construction spending across its key markets remains weak, Arcadia’s sales of $69.7 million were better than anticipated, reflecting solid execution by the entire Arcadia organization.
“Arcadia’s sales results, combined with ongoing efforts to improve operational efficiencies and streamline its cost structure, helped fuel a significant rebound in margins. Second quarter gross margin of 33.2% was up 600-basis-points versus the first quarter and approached the 34.7% reported in last year’s second quarter, when Arcadia delivered its strongest gross margin since its December 2021 acquisition by DMC. Adjusted EBITDA margin was 17.8% as compared with 9.5% in the first quarter, and 20.8% in the year-ago second quarter.”
Second quarter sales at DynaEnergetics, DMC’s energy products business, were $76.2 million, down 2% sequentially and down 10% versus last year’s second quarter. The declines reflect softer demand in Dyna’s core U.S. onshore market, where well completions fell 4% sequentially following a 7% sequential drop in the first quarter, according to the U.S. Energy Information Administration. Adjusted EBITDA margins were 11.5% versus 13.5% in the first quarter and 23.0% in the year-ago second quarter.
“We expect well completions will remain soft during the second half of 2024, and Dyna has adjusted its cost structure to align with anticipated activity levels,” Kuta said. “These adjustments, coupled with automation initiatives and product enhancements, are expected to drive improved EBITDA margins during the back half of the year.
“NobelClad, our composite metals business, reported sales of $25.2 million, up 2% versus last year’s second quarter, and down 6% sequentially. A favorable project mix led to an adjusted EBITDA margin of 22.7%, up from 21.9% in the first quarter and 21.8% in the year-ago second quarter. NobelClad’s order backlog increased to $64 million from $52 million at the end of the first quarter, reflecting the impact of a record order from the petrochemical industry. NobelClad is pursuing additional large order opportunities and is reporting continued strong demand for its Cylindra™ cryogenic transition joints.
1
“I am encouraged by the accomplishments at each of our businesses during the second quarter,” Kuta continued. “Arcadia’s execution is driving improved lead times and customer service, which is helping mitigate the impact of a weak market. Dyna remains the technology leader in the well perforating sector, and its operational excellence initiatives are expected to improve its profitability in the coming quarters. Meanwhile, NobelClad continues to extend its position as a leader in the global composite-metal manufacturing industry.”
Kuta added, “Our focus remains on evaluating options to drive improved value for DMC’s stockholders, and we look forward to providing an update on our efforts when appropriate.”
Summary Second Quarter Results
Three months ended
Change
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Sequential
Year-on-year
Net sales
$
171,179
$
166,869
$
188,664
3
%
(9)
%
Gross profit percentage
27.1
%
25.4
%
32.8
%
SG&A*
$
27,122
$
28,203
$
29,226
(4)
%
(7)
%
Net income
$
6,293
$
2,319
$
17,526
171
%
(64)
%
Net income attributable to DMC
$
4,012
$
2,563
$
13,703
57
%
(71)
%
Diluted net income per share attributable to DMC
$
0.24
$
0.01
$
0.70
2,300
%
(66)
%
Adjusted net income attributable to DMC
$
5,675
$
4,167
$
14,131
36
%
(60)
%
Adjusted diluted net income per share
$
0.29
$
0.21
$
0.72
38
%
(60)
%
Adjusted EBITDA attributable to DMC
$
19,420
$
16,683
$
31,776
16
%
(39)
%
Adjusted EBITDA before NCI allocation
$
24,398
$
19,045
$
38,370
28
%
(36)
%
Adjusted EBITDA before NCI allocation margin
14.3
%
11.4
%
20.3
%
*SG&A in the three months ended June 30, 2023 included $573 of CEO transition expenses
Arcadia
Three months ended
Change
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Sequential
Year-on-year
Net sales
$
69,748
$
61,925
$
79,158
13
%
(12)
%
Adjusted EBITDA attributable to DMC
$
7,467
$
3,544
$
9,892
111
%
(25)
%
Adjusted EBITDA before NCI allocation
$
12,445
$
5,906
$
16,486
111
%
(25)
%
Adjusted EBITDA before NCI allocation margin
17.8
%
9.5
%
20.8
%
•Sequential adjusted EBITDA recovery driven by higher sales on fixed overhead and streamlining of cost structure
DynaEnergetics
Three months ended
Change
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Sequential
Year-on-year
Net sales
$
76,210
$
78,122
$
84,754
(2)
%
(10)
%
Adjusted EBITDA
$
8,752
$
10,539
$
19,461
(17)
%
(55)
%
Adjusted EBITDA margin
11.5
%
13.5
%
23.0
%
•Sales and margin declines reflect softer well-completion activity and continued pricing pressure in North America
2
NobelClad
Three months ended
Change
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Sequential
Year-on-year
Net sales
$
25,221
$
26,822
$
24,752
(6)
%
2
%
Adjusted EBITDA
$
5,722
$
5,880
$
5,407
(3)
%
6
%
Adjusted EBITDA margin
22.7
%
21.9
%
21.8
%
•Rolling 12-month bookings were $110.1 million versus $108.4 million at the end of the prior-year second quarter; and the book-to-bill ratio was 1.0.
Third Quarter 2024 Guidance
Measure
Expected Range
Sales
DMC Consolidated
$158M - $168M
Arcadia
$64M - $68M
DynaEnergetics
$70M - $74M
NobelClad
$24M - $26M
Adjusted EBITDA
Arcadia before NCI allocation
$10M - $12M
Arcadia after NCI allocation
$6M - $7M
DynaEnergetics
$9M - $10M
NobelClad
$3M - $4M
Corporate Unallocated
~ ($3M)
Attributable to DMC
$15M - $18M
Full-Year 2024 Guidance on Select Items
Depreciation and amortization
$35M - $36M
Interest expense
$8M - $9M
Annualized effective tax rate
30% - 32%
Capital expenditures
$16M - $20M
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=07VusKiV
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.
3
•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.
###
4
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 third quarter 2024 guidance on sales, adjusted EBITDA, depreciation and amortization expense, interest expense, tax rate, and capital expenditures; our expectation regarding well completions in the second half of 2024 and that initiatives and product enhancements at DynaEnergetics will strengthen its EBITDA margins during the second half of 2024; and our expectation that we will provide details on our options for driving improved shareholder value at a future date. 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 and June 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.
5
DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Share and Per Share Data)
(unaudited)
Three months ended
Change
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Sequential
Year-on-year
NET SALES
$
171,179
$
166,869
$
188,664
3
%
(9)
%
COST OF PRODUCTS SOLD
124,766
124,517
126,774
—
%
(2)
%
Gross profit
46,413
42,352
61,890
10
%
(25)
%
Gross profit percentage
27.1
%
25.4
%
32.8
%
COSTS AND EXPENSES:
General and administrative expenses
15,623
15,980
17,526
(2)
%
(11)
%
Selling and distribution expenses
11,499
12,223
11,700
(6)
%
(2)
%
Amortization of purchased intangible assets
5,307
5,292
5,667
—
%
(6)
%
Strategic review expenses
2,020
2,169
—
(7)
%
100%
Restructuring expenses
279
—
—
100
%
100%
Total costs and expenses
34,728
35,664
34,893
(3)
%
—
%
OPERATING INCOME
11,685
6,688
26,997
75
%
(57)
%
OTHER EXPENSE:
Other expense, net
(284)
(409)
(439)
(31)
%
(35)
%
Interest expense, net
(2,316)
(2,317)
(2,432)
—
%
(5)
%
INCOME BEFORE INCOME TAXES
9,085
3,962
24,126
129
%
(62)
%
INCOME TAX PROVISION
2,792
1,643
6,600
70
%
(58)
%
NET INCOME
6,293
2,319
17,526
171
%
(64)
%
Less: Net income (loss) attributable to redeemable noncontrolling interest
2,281
(244)
3,823
1,035
%
(40)
%
NET INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS
$
4,012
$
2,563
$
13,703
57
%
(71)
%
NET INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS
Basic
$
0.24
$
0.01
$
0.70
2,300
%
(66)
%
Diluted
$
0.24
$
0.01
$
0.70
2,300
%
(66)
%
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
19,659,908
19,610,644
19,497,871
—
%
1
%
Diluted
19,671,169
19,622,455
19,504,963
—
%
1
%
Reconciliation to net income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest for purposes of calculating earnings per share
Three months ended
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Net income attributable to DMC Global Inc. stockholders
$
4,012
$
2,563
$
13,703
Adjustment of redeemable noncontrolling interest
793
(2,307)
112
Net income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest
$
4,805
$
256
$
13,815
6
DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Share and Per Share Data)
(unaudited)
Six months ended
Change
Jun 30, 2024
Jun 30, 2023
Year-on-year
NET SALES
$
338,048
$
373,005
(9)
%
COST OF PRODUCTS SOLD
249,283
258,904
(4)
%
Gross profit
88,765
114,101
(22)
%
Gross profit percentage
26.3
%
30.6
%
COSTS AND EXPENSES:
General and administrative expenses
31,603
44,026
(28)
%
Selling and distribution expenses
23,722
24,524
(3)
%
Amortization of purchased intangible assets
10,599
11,334
(6)
%
Strategic review expenses
4,189
—
100
%
Restructuring expenses
279
—
100
%
Total costs and expenses
70,392
79,884
(12)
%
OPERATING INCOME
18,373
34,217
(46)
%
OTHER EXPENSE:
Other expense, net
(693)
(639)
8
%
Interest expense, net
(4,633)
(4,813)
(4)
%
INCOME BEFORE INCOME TAXES
13,047
28,765
(55)
%
INCOME TAX PROVISION
4,435
9,100
(51)
%
NET INCOME
8,612
19,665
(56)
%
Less: Net income attributable to redeemable noncontrolling interest
2,037
5,053
(60)
%
NET INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS
$
6,575
$
14,612
(55)
%
NET INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS
Basic
$
0.25
$
0.69
(64)
%
Diluted
$
0.25
$
0.69
(64)
%
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
19,635,716
19,477,576
1
%
Diluted
19,647,005
19,485,863
1
%
Reconciliation to net income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest for purposes of calculating earnings per share
Six months ended
Jun 30, 2024
Jun 30, 2023
Net income attributable to DMC Global Inc. stockholders
$
6,575
$
14,612
Adjustment of redeemable noncontrolling interest
(1,514)
(1,026)
Net income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest
$
5,061
$
13,586
7
DMC GLOBAL INC.
SEGMENT STATEMENTS OF OPERATIONS
(Amounts in Thousands)
(unaudited)
Arcadia
Three months ended
Change
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Sequential
Year-on-year
Net sales
$
69,748
$
61,925
$
79,158
13
%
(12)
%
Gross profit
23,157
16,813
27,459
38
%
(16)
%
Gross profit percentage
33.2
%
27.2
%
34.7
%
COSTS AND EXPENSES:
General and administrative expenses
7,765
7,656
8,206
1
%
(5)
%
Selling and distribution expenses
4,116
4,468
4,021
(8)
%
2
%
Amortization of purchased intangible assets
5,278
5,277
5,652
—
%
(7)
%
Restructuring expenses
279
—
—
100
%
100
%
Operating income (loss)
5,719
(588)
9,580
1,073
%
(40)
%
Adjusted EBITDA
12,445
5,906
16,486
111
%
(25)
%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest
(4,978)
(2,362)
(6,594)
111
%
(25)
%
Adjusted EBITDA attributable to DMC Global Inc.
$
7,467
$
3,544
$
9,892
111
%
(25)
%
Six months ended
Change
Jun 30, 2024
Jun 30, 2023
Year-on-year
Net sales
$
131,673
$
159,496
(17)
%
Gross profit
39,970
49,553
(19)
%
Gross profit percentage
30.4
%
31.1
%
COSTS AND EXPENSES:
General and administrative expenses
15,421
16,063
(4)
%
Selling and distribution expenses
8,584
9,473
(9)
%
Amortization of purchased intangible assets
10,555
11,304
(7)
%
Restructuring expenses
279
—
100
%
Operating income
5,131
12,713
(60)
%
Adjusted EBITDA
18,351
26,956
(32)
%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest
(7,340)
(10,782)
(32)
%
Adjusted EBITDA attributable to DMC Global Inc.
$
11,011
$
16,174
(32)
%
8
DMC GLOBAL INC.
SEGMENT STATEMENTS OF OPERATIONS
(Amounts in Thousands)
(unaudited)
DynaEnergetics
Three months ended
Change
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Sequential
Year-on-year
Net sales
$
76,210
$
78,122
$
84,754
(2)
%
(10)
%
Gross profit
15,133
16,971
26,552
(11)
%
(43)
%
Gross profit percentage
19.9
%
21.7
%
31.3
%
COSTS AND EXPENSES:
General and administrative expenses
3,011
2,891
3,577
4
%
(16)
%
Selling and distribution expenses
5,041
5,223
5,227
(3)
%
(4)
%
Amortization of purchased intangible assets
29
15
15
93
%
93
%
Operating income
7,052
8,842
17,733
(20)
%
(60)
%
Adjusted EBITDA
$
8,752
$
10,539
$
19,461
(17)
%
(55)
%
Six months ended
Change
Jun 30, 2024
Jun 30, 2023
Year-on-year
Net sales
$
154,332
$
166,722
(7)
%
Gross profit
32,104
50,989
(37)
%
Gross profit percentage
20.8
%
30.6
%
COSTS AND EXPENSES:
General and administrative expenses
5,903
9,774
(40)
%
Selling and distribution expenses
10,263
10,284
—
%
Amortization of purchased intangible assets
44
30
47
%
Operating income
15,894
30,901
(49)
%
Adjusted EBITDA
$
19,291
$
34,416
(44)
%
NobelClad
Three months ended
Change
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Sequential
Year-on-year
Net sales
$
25,221
$
26,822
$
24,752
(6)
%
2
%
Gross profit
8,222
8,644
8,021
(5)
%
3
%
Gross profit percentage
32.6
%
32.2
%
32.4
%
COSTS AND EXPENSES:
General and administrative expenses
1,023
1,074
949
(5)
%
8
%
Selling and distribution expenses
2,267
2,470
2,365
(8)
%
(4)
%
Operating income
4,932
5,100
4,707
(3)
%
5
%
Adjusted EBITDA
$
5,722
$
5,880
$
5,407
(3)
%
6
%
9
DMC GLOBAL INC.
SEGMENT STATEMENTS OF OPERATIONS
(Amounts in Thousands)
(unaudited)
Six months ended
Change
Jun 30, 2024
Jun 30, 2023
Year-on-year
Net sales
$
52,043
$
46,787
11
%
Gross profit
16,866
13,804
22
%
Gross profit percentage
32.4
%
29.5
%
COSTS AND EXPENSES:
General and administrative expenses
2,096
1,872
12
%
Selling and distribution expenses
4,738
4,604
3
%
Operating income
10,032
7,328
37
%
Adjusted EBITDA
$
11,602
$
8,768
32
%
10
DMC GLOBAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
Change
Jun 30, 2024
Dec 31, 2023
Year-end
(unaudited)
ASSETS
Cash and cash equivalents
$
14,567
$
31,040
(53)
%
Marketable securities
—
12,619
(100)
%
Accounts receivable, net
118,247
106,205
11
%
Inventories
174,791
166,712
5
%
Prepaid expenses and other
13,270
10,236
30
%
Total current assets
320,875
326,812
(2)
%
Property, plant and equipment, net
128,189
129,267
(1)
%
Goodwill
141,725
141,725
—
%
Purchased intangible assets, net
184,658
195,260
(5)
%
Other long-term assets
94,038
91,431
3
%
Total assets
$
869,485
$
884,495
(2)
%
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY
Accounts payable
$
62,594
$
40,202
56
%
Contract liabilities
16,401
21,621
(24)
%
Accrued income taxes
13,917
12,810
9
%
Current portion of long-term debt
2,500
15,000
(83)
%
Other current liabilities
31,266
36,828
(15)
%
Total current liabilities
126,678
126,461
—
%
Long-term debt
81,612
100,851
(19)
%
Deferred tax liabilities
1,935
1,956
(1)
%
Other long-term liabilities
56,191
57,172
(2)
%
Redeemable noncontrolling interest
187,080
187,760
—
%
Stockholders’ equity
415,989
410,295
1
%
Total liabilities, redeemable noncontrolling interest, and stockholders’ equity
$
869,485
$
884,495
(2)
%
11
DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(unaudited)
Three months ended
Six months ended
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
6,293
$
2,319
$
17,526
$
8,612
$
19,665
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
3,431
3,419
3,434
6,850
6,834
Amortization of purchased intangible assets
5,307
5,292
5,667
10,599
11,334
Amortization of deferred debt issuance costs
217
190
133
407
271
Stock-based compensation
1,782
1,549
1,699
3,331
6,726
Deferred income taxes
(746)
(546)
482
(1,292)
660
Other
197
(985)
(28)
(788)
(433)
Change in working capital, net
(14,138)
2,202
(17,434)
(11,936)
(26,513)
Net cash provided by operating activities
2,343
13,440
11,479
15,783
18,544
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in marketable securities
—
—
(2,414)
—
(2,414)
Proceeds from maturities of marketable securities
—
3,000
—
3,000
—
Proceeds from sales of marketable securities
—
9,619
—
9,619
—
Acquisition of property, plant and equipment
(2,547)
(2,968)
(2,896)
(5,515)
(5,122)
Proceeds on sale of property, plant and equipment
100
—
—
100
—
Net cash (used in) provided by investing activities
(2,447)
9,651
(5,310)
7,204
(7,536)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on term loan
(625)
(117,500)
(3,750)
(118,125)
(10,000)
Borrowings on term loan
—
50,000
—
50,000
—
Borrowings on revolving loans
6,700
70,450
—
77,150
—
Repayments on revolving loans
(10,075)
(30,450)
—
(40,525)
—
Payment of debt issuance costs
—
(2,735)
—
(2,735)
—
Distributions to redeemable noncontrolling interest holder
(1,547)
(3,125)
(3,711)
(4,672)
(6,311)
Net proceeds from issuance of common stock to employees and directors
132
—
212
132
212
Treasury stock purchases
(16)
(936)
(14)
(952)
(2,171)
Net cash used in financing activities
(5,431)
(34,296)
(7,263)
(39,727)
(18,270)
EFFECTS OF EXCHANGE RATES ON CASH
(342)
609
171
267
842
NET DECREASE IN CASH AND CASH EQUIVALENTS
(5,877)
(10,596)
(923)
(16,473)
(6,420)
CASH AND CASH EQUIVALENTS, beginning of the period
20,444
31,040
19,647
31,040
25,144
CASH AND CASH EQUIVALENTS, end of the period
$
14,567
$
20,444
$
18,724
$
14,567
$
18,724
12
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
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Sequential
Year-on-year
Net income
6,293
2,319
17,526
171
%
(64)
%
Interest expense, net
2,316
2,317
2,432
—
%
(5)
%
Income tax provision
2,792
1,643
6,600
70
%
(58)
%
Depreciation
3,431
3,419
3,434
—
%
—
%
Amortization of purchased intangible assets
5,307
5,292
5,667
—
%
(6)
%
EBITDA
20,139
14,990
35,659
34
%
(44)
%
Stock-based compensation
1,676
1,477
1,699
13
%
(1)
%
Strategic review expenses
2,020
2,169
—
(7)
%
100%
Restructuring expenses
279
—
—
100
%
100%
CEO transition expenses
—
—
573
—%
(100)
%
Other expense, net
284
409
439
(31)
%
(35)
%
Adjusted EBITDA
$
24,398
$
19,045
$
38,370
28
%
(36)
%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest
(4,978)
(2,362)
(6,594)
111
%
(25)
%
Adjusted EBITDA attributable to DMC Global Inc.
$
19,420
$
16,683
$
31,776
16
%
(39)
%
Six months ended
Change
Jun 30, 2024
Jun 30, 2023
Year-on-year
Net income
$
8,612
$
19,665
(56)
%
Interest expense, net
4,633
4,813
(4)
%
Income tax provision
4,435
9,100
(51)
%
Depreciation
6,850
6,834
—
%
Amortization of purchased intangible assets
10,599
11,334
(6)
%
EBITDA
35,129
51,746
(32)
%
Stock-based compensation
3,153
6,726
(53)
%
Strategic review expenses
4,189
—
100
%
Restructuring expenses
279
—
100
%
CEO transition expenses
—
3,538
(100)
%
Other expense, net
693
639
8
%
Adjusted EBITDA
$
43,443
$
62,649
(31)
%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest
(7,340)
(10,782)
(32)
%
Adjusted EBITDA attributable to DMC Global Inc.
$
36,103
$
51,867
(30)
%
13
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 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, 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 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 June 30, 2023
Amount
Per Share (1)
Net income attributable to DMC Global Inc. stockholders*
$
13,703
$
0.70
CEO transition expenses and accelerated stock-based compensation, net of tax
428
0.02
As adjusted
$
14,131
$
0.72
(1) Calculated using diluted weighted average shares outstanding of 19,504,963
Six months ended June 30, 2024
Amount
Per Share (1)
Net income attributable to DMC Global Inc. stockholders*
$
6,575
$
0.33
Strategic review expenses, net of tax
3,142
0.16
Restructuring expenses, net of tax
125
0.01
As adjusted
$
9,842
$
0.50
(1) Calculated using diluted weighted average shares outstanding of 19,647,005
Six months ended June 30, 2023
Amount
Per Share (1)
Net income attributable to DMC Global Inc. stockholders*
$
14,612
$
0.75
CEO transition expenses and accelerated stock-based compensation, net of tax
5,663
0.29
As adjusted
$
20,275
$
1.04
(1) Calculated using diluted weighted average shares outstanding of 19,485,863
14
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
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Sequential
Year-on-year
Operating income (loss), as reported
$
5,719
$
(588)
$
9,580
1,073
%
(40)
%
Adjustments:
Depreciation
888
875
889
1
%
—
%
Amortization of purchased intangible assets
5,278
5,277
5,652
—
%
(7)
%
Stock-based compensation
281
342
323
(18)
%
(13)
%
Restructuring expenses
279
—
—
100
%
100
%
CEO transition expenses
—
—
42
—%
(100)
%
Adjusted EBITDA
12,445
5,906
16,486
111
%
(25)
%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest
(4,978)
$
(2,362)
$
(6,594)
111
%
(25)
%
Adjusted EBITDA attributable to DMC Global Inc.
$
7,467
$
3,544
$
9,892
111
%
(25)
%
Six months ended
Change
Jun 30, 2024
Jun 30, 2023
Year-on-year
Operating income, as reported
$
5,131
$
12,713
(60)
%
Adjustments:
Depreciation
1,763
1,706
3
%
Amortization of purchased intangible assets
10,555
11,304
(7)
%
Stock-based compensation
623
902
(31)
%
Restructuring expenses
279
—
100
%
CEO transition expenses
—
331
(100)
%
Adjusted EBITDA
18,351
26,956
(32)
%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest
(7,340)
$
(10,782)
(32)
%
Adjusted EBITDA attributable to DMC Global Inc.
$
11,011
$
16,174
(32)
%
15
DMC GLOBAL INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO MOST
