• DMC Global Reports Third Quarter Financial Results

    Источник: Nasdaq GlobeNewswire / 02 ноя 2023 15:05:01   America/Chicago

    • Third quarter sales were $172.1 million, down 1% vs. Q3 2022
    • Net income was $11.5 million, while net income attributable to DMC was $8.9 million
    • Adjusted net income attributable to DMC* was $9.9 million, up 47% versus Q3 2022
    • Adjusted diluted EPS attributable to DMC* was $0.50, up 43% versus Q3 2022
    • Adjusted EBITDA attributable to DMC* was $24.6 million, up 13% vs. Q3 2022
    • Total adjusted EBITDA, inclusive of non-controlling interest (NCI), was $30.0 million, or 17.4% of sales, up 220 basis points versus Q3 2022
    • Third quarter free cash flow* was $21.9 million

    BROOMFIELD, Colo., Nov. 02, 2023 (GLOBE NEWSWIRE) -- DMC Global Inc. (Nasdaq: BOOM) today reported financial results for its third quarter ended September 30, 2023.

    “Our third quarter sales of $172.1 million were comparable to the third quarter of 2022, but below our forecasts,” said Michael Kuta, president & CEO. “While our adjusted EBITDA was within our forecasted range and we delivered solid free cash flow, our sales shortfall was disappointing, and was principally due to lower-than-expected top-line results at our Arcadia and DynaEnergetics businesses.”

    “Arcadia, our architectural building products business, saw steady demand at its primary regional service centers and its ultra-high-end residential business. However, third quarter sales of $71.5 million were down 11% year-over-year due to lower product pricing, soft demand for commercial interior products, and brief operational challenges related to the go-live of a new ERP system. Adjusted EBITDA margin was 18.8%, up from 15.0% in the 2022 third quarter, as the decline in product pricing was not as pronounced as the year-over-year drop in raw material costs.

    “DynaEnergetics, our energy products business, reported sales of $73.0 million, up 4% versus last year’s third quarter and down 14% sequentially. Demand in Dyna’s core North American market was impacted by a 10% sequential decline in U.S. well completions, as well as customer project delays late in the quarter. The sales decline in North America was partially offset by the continued strong performance of Dyna’s international business, which is on pace to deliver record full-year sales. Dyna’s third quarter adjusted EBITDA margin was 17.2%, down from 19.8% in last year’s third quarter and 23.0% in this year’s second quarter. The decline was related to lower absorption and customer mix.

    “NobelClad, our composite metals business, reported third quarter sales of $27.7 million, up 18% versus last year’s third quarter and the strongest quarterly performance in nearly 10 years. Adjusted EBITDA margin was 23.1%, up from 14.6% in last year’s third quarter. NobelClad is benefitting from robust activity across several industrial end markets, including liquified natural gas, downstream energy and petrochemicals. Order backlog at the end of the third quarter was $61 million versus $64 million at the end of the second quarter. Rolling 12-month bookings increased sequentially to $110.9 million from $108.4 million; and the book-to-bill ratio at the end of the quarter was 1.1.”   

    Kuta added, “Arcadia and DynaEnergetics both are taking steps to strengthen sales, profit margins and cash flow. Arcadia has nearly completed the first phase of an expansion in paint capacity, which will increase the sales potential of its commercial and ultra-high-end residential businesses. We also expect Arcadia’s new ERP system will deliver incremental operational benefits in the coming quarters. DynaEnergetics is implementing a series of automation, lean manufacturing and cost-reduction initiatives designed to enhance profitability and improve quality. DynaEnergetics has incurred approximately $1 million in fourth-quarter restructuring expenses, which we anticipate will result in roughly $3 million in annualized savings.”

    Eric Walter, CFO, said, “We recorded approximately $22 million in third-quarter free cash flow, reflecting our focus on maximizing profitability and reducing inventory. We further strengthened our balance sheet in the third quarter, improving our debt-to-adjusted EBITDA leverage ratio to 1.26x, and our net-debt leverage ratio to 0.89x. This was the seventh consecutive quarter in which we de-levered DMC’s balance sheet.”

    Walter said roughly half of this year’s $20 million capex budget has been allocated to the fourth quarter. “Our fourth quarter expenditures should be in a range of $8 million to $10 million and will include additional investments in painting capacity at Arcadia and manufacturing automation at DynaEnergetics.”

    Kuta concluded, “Despite macro-economic uncertainties, I am encouraged by the resiliency of Arcadia’s and NobelClad’s diverse end markets, and by the expected acceleration in well-completion activity in DynaEnergetics’ core North American market beginning early next year. Our long-term strategy is to deliver adjusted EBITDA margins of 20% or better at the business level, and we are positioning our businesses to achieve this objective with greater consistency. I want to thank DMC’s employees for their consistent dedication and hard work.”

    Summary Third Quarter Results

     Three months ended Change
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Net sales$172,147  $188,664  $174,465  (9)% (1)%
    Gross profit percentage 30.6%  32.8%  29.4%    
    SG&A 28,713   29,226   30,544  (2)% (6) %
    Net income 11,525   17,526   8,213  (34)% 40%
    Net income attributable to DMC$8,883  $13,703  $6,717  (35)% 32%
    Diluted net income per share attributable to DMC$0.38  $0.70  $0.46  (46)% (17)%
    Adjusted net income attributable to DMC$9,861  $14,131  $6,722  (30)% 47%
    Adjusted diluted net income per share$0.50  $0.72  $0.35  (31)% 43%
    Adjusted EBITDA attributable to DMC$24,607  $31,776  $21,751  (23)% 13%
    Adjusted EBITDA before NCI allocation$29,981  $38,370  $26,577  (22)% 13%


    Arcadia

     Three months ended Change
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Net sales$71,455  $79,158  $80,697  (10)% (11)%
    Gross profit percentage 33.3%  34.7%  29.6%    
    Adjusted EBITDA attributable to DMC$8,060  $9,892  $7,239  (19)% 11%
    Adjusted EBITDA before NCI allocation 13,434   16,486   12,065  (19)% 11%
    • Sales decline reflects reduced product pricing and brief ERP go-live challenges

    DynaEnergetics

     Three months ended Change
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Net sales$72,998  $84,754  $70,372  (14)% 4%
    Gross profit percentage 26.8%  31.3%  30.2%    
    Adjusted EBITDA$12,568  $19,461  $13,935  (35)% (10)%
    • Sequential sales decline reflects lower North American well-completion activity and project delays at end of quarter

    NobelClad

     Three months ended Change
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Net sales$27,694  $24,752  $23,396  12% 18%
    Gross profit percentage 33.6%  32.4%  27.0%    
    Adjusted EBITDA$6,384  $5,407  $3,412  18% 87%
    • Sales growth reflects healthy pressure vessel construction and strong demand for Cylindra™ cryogenic transition joints
    • Gross margin improvement driven by favorable petrochemical project mix

    Fourth Quarter 2023 Guidance

    MeasureExpected Range
    Sales 
    DMC Consolidated$170M - $180M
    Arcadia$70M - $74M
    DynaEnergetics$72M - $76M
    NobelClad$28M - $30M
    Consolidated Gross Margin28% - 30%
    Consolidated SG&A*$28M - $29M
    Depreciation & Amortization~$9.2M
    Interest Expense~$2.4M
    Annualized effective tax rate27% - 29%
    Adjusted EBITDA attributable to DMC$20M - $24M
    Adjusted EBITDA before NCI allocation$25M - $29M
    Capital Expenditures$8M - $10M

    *Excludes one-time expenses

    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=VxX1JGSY

    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
    Adjusted EBITDA, adjusted net income (loss), adjusted diluted earnings per share and free cash flow are non-GAAP (generally accepted accounting principles) financial measures used by management to measure operating performance and liquidity. Non-GAAP results are presented only as a supplement to the financial statements based on U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information is provided to enhance the reader’s understanding of DMC’s financial performance, but no non-GAAP measure should be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of the most directly comparable GAAP measures to non-GAAP measures are provided within the schedules attached to this release.

    EBITDA is defined as net income (loss) plus or minus net interest, taxes, depreciation and amortization. Adjusted EBITDA excludes from EBITDA stock-based compensation, restructuring and impairment charges and, when appropriate, other items that management does not utilize in assessing DMC’s operating performance (as further described in the attached financial schedules). Adjusted net income (loss) is defined as net income (loss) attributable to DMC stockholders plus restructuring and impairment charges (if applicable) and, when appropriate, other items that management does not utilize in assessing DMC’s operating performance. Adjusted diluted earnings per share is defined as diluted earnings per share plus restructuring and impairment charges (if applicable) and, when appropriate, other items that management does not utilize in assessing DMC’s operating performance. Free cash flow is defined as cash flows provided by (used in) operating activities minus acquisitions of property, plant and equipment. Management believes that free cash flow is a key measure to assess liquidity of the business. None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income (loss) as an indicator of operating performance or any other GAAP measure.

    Management uses adjusted EBITDA in its operational and financial decision-making, believing that it is useful to eliminate certain items in order to focus on what it deems to be a more reliable indicator of ongoing operating performance. As a result, internal management reports used during monthly operating reviews feature adjusted EBITDA measures. Management believes that investors may find this non-GAAP financial measure useful for similar reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures. In addition, management incentive awards are based, in part, on the amount of adjusted EBITDA achieved during relevant periods. EBITDA and adjusted EBITDA are also used by research analysts, investment bankers and lenders to assess operating performance. For example, a measure similar to adjusted EBITDA is required by the lenders under DMC’s credit facility.

    Adjusted net income (loss) and adjusted diluted earnings per share are presented because management believes these measures are useful to understand the effects of restructuring and impairment charges (if applicable) and, when appropriate, other items that management does not utilize in assessing DMC’s operating performance, on DMC’s net income (loss) and diluted earnings per share, respectively.

    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.

    All of the items included in the reconciliation from net income (loss) to EBITDA and adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangible assets and stock-based compensation) or (ii) items that management does not consider to be useful in assessing DMC’s operating performance (e.g., income taxes, restructuring and impairment charges, CEO transition expenses). In the case of the non-cash items, management believes that investors can better assess the company’s operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect DMC’s ability to generate free cash flow or invest in its business. For example, by adjusting for depreciation and amortization in computing EBITDA, users can compare operating performance without regard to different accounting determinations such as useful life. In the case of the other items, management believes that investors can better assess operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating 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. DMC’s businesses are led by experienced, strategically focused management teams, which are supported with business resources and capital allocation expertise to advance their operating strategies and generate the greatest returns. Headquartered 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 guidance on sales, gross margin, SG&A, depreciation and amortization expense, interest expense, tax rate, adjusted EBITDA, and capital expenditures, as well as our expectation of record full-year sales at DynaEnergetics’ international business; stronger sales, margin and cashflow at Arcadia and DynaEnergetics; operational benefits in the coming quarters from Arcadia’s new ERP system; initiatives expected to deliver improvements in profitability and quality at DynaEnergetics; approximately $3 million in expected annualized savings at DynaEnergetics from cost reduction initiatives; the resiliency of Arcadia’s and NobelClad’s end markets; the expected acceleration in well-completion activity in DynaEnergetics’ core North American market early next year; and our objective to achieve consistent quarterly adjusted EBITDA margins of 20% or greater at our businesses. 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; 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 and technology development 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 timely completion of contracts; 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, 2022. 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, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    NET SALES$172,147  $188,664  $174,465  (9)% (1)%
    COST OF PRODUCTS SOLD 119,550   126,774   123,127  (6)% (3)%
    Gross profit 52,597   61,890   51,338  (15)% 2%
    Gross profit percentage 30.6%  32.8%  29.4%      
    COSTS AND EXPENSES:           
    General and administrative expenses 16,259   17,526   19,796  (7)% (18)%
    Selling and distribution expenses 12,454   11,700   10,748  6% 16%
    Amortization of purchased intangible assets 5,667   5,667   7,385  —% (23)%
    Restructuring expenses and asset impairments 515   —   8  —% 6,338%
    Total costs and expenses 34,895   34,893   37,937  —% (8)%
    OPERATING INCOME 17,702   26,997   13,401  (34)% 32%
    OTHER INCOME (EXPENSE):          
    Other income (expense), net 302   (439)  120  169% 152%
    Interest expense, net (2,392)  (2,432)  (1,771) (2)% 35%
    INCOME BEFORE INCOME TAXES 15,612   24,126   11,750  (35)% 33%
    INCOME TAX PROVISION 4,087   6,600   3,537  (38)% 16%
    NET INCOME 11,525   17,526   8,213  (34)% 40%
    Less: Net income attributable to redeemable noncontrolling interest 2,642   3,823   1,496  (31)% 77%
    NET INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS$8,883  $13,703  $6,717  (35)% 32%
    NET INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS            
    Basic$0.38  $0.70  $0.46  (46)% (17)%
    Diluted$0.38  $0.70  $0.46  (46)% (17)%
    WEIGHTED AVERAGE SHARES OUTSTANDING:          
    Basic 19,543,251   19,497,871   19,381,489  —% 1%
    Diluted 19,596,575   19,504,963   19,381,794  —% 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
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022
    Net income attributable to DMC Global Inc. stockholders$8,883  $13,703 $6,717
    Adjustment of redeemable noncontrolling interest (1,263)  112  2,256
    Net income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest$7,620  $13,815 $8,973


     Nine months ended Change
     Sep 30, 2023 Sep 30, 2022 Year-on-year
    NET SALES$545,152  $479,012  14%
    COST OF PRODUCTS SOLD 378,454   338,669  12%
    Gross profit 166,698   140,343  19%
    Gross profit percentage 30.6%  29.3%  
    COSTS AND EXPENSES:     
    General and administrative expenses 60,285   56,330  7%
    Selling and distribution expenses 36,978   31,383  18%
    Amortization of purchased intangible assets 17,001   33,154  (49)%
    Restructuring expenses and asset impairments 515   53  872%
    Total costs and expenses 114,779   120,920  (5)%
    OPERATING INCOME 51,919   19,423  167%
    OTHER EXPENSE:     
    Other expense, net (337)  (35) 863%
    Interest expense, net (7,205)  (4,058) 78%
    INCOME BEFORE INCOME TAXES 44,377   15,330  189%
    INCOME TAX PROVISION 13,187   4,938  167%
    NET INCOME 31,190   10,392  200%
    Less: Net income attributable to redeemable noncontrolling interest 7,695   1,411  445%
    NET INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS$23,495  $8,981  162%
    NET INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS     
    Basic$1.07  $0.20  435%
    Diluted$1.07  $0.20  435%
    WEIGHTED AVERAGE SHARES OUTSTANDING:     
    Basic 19,492,212   19,352,638  1%
    Diluted 19,540,978   19,357,333  1%
     

    Reconciliation to net 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, 2023 Sep 30, 2022
    Net income attributable to DMC Global Inc. stockholders$23,495  $8,981 
    Adjustment of redeemable noncontrolling interest (2,289)  (4,996)
    Net income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest$21,206  $3,985 


     
    DMC GLOBAL INC.
    SEGMENT STATEMENTS OF OPERATIONS
    (Amounts in Thousands)
    (unaudited)
     
     
    Arcadia
     Three months ended Change
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Net sales$71,455  $79,158  $80,697  (10)% (11)%
    Gross profit 23,789   27,459   23,892  (13)% —%
    Gross profit percentage 33.3%  34.7%  29.6%      
    COSTS AND EXPENSES:           
    General and administrative expenses 7,413   8,206   8,782  (10)% (16)%
    Selling and distribution expenses 4,248   4,021   4,135  6% 3%
    Amortization of purchased intangible assets 5,652   5,652   7,233  —% (22)%
    Operating income 6,476   9,580   3,742  (32)% 73%
    Adjusted EBITDA 13,434   16,486   12,065  (19)% 11%
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest (5,374)  (6,594)  (4,826) (19)% 11%
    Adjusted EBITDA attributable to DMC Global Inc.$8,060  $9,892  $7,239  (19)% 11%
     


     Nine months ended Change
     Sep 30, 2023 Sep 30, 2022 Year-on-year
    Net sales$230,951  $225,127  3%
    Gross profit 73,342   70,364  4%
    Gross profit percentage 31.8%  31.3%  
    COSTS AND EXPENSES:     
    General and administrative expenses 23,476   22,337  5%
    Selling and distribution expenses 13,721   11,832  16%
    Amortization of purchased intangible assets 16,956   32,674  (48)%
    Operating income 19,189   3,521  445%
    Adjusted EBITDA 40,390   39,777  2%
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest (16,156)  (15,911) 2%
    Adjusted EBITDA attributable to DMC Global Inc.$24,234  $23,866  2%
     


    DynaEnergetics
     Three months ended Change
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Net sales$72,998  $84,754  $70,372  (14)% 4%
    Gross profit 19,585   26,552   21,237  (26)% (8)%
    Gross profit percentage 26.8%  31.3%  30.2%      
    COSTS AND EXPENSES:           
    General and administrative expenses 3,095   3,577   4,924  (13)% (37)%
    Selling and distribution expenses 5,604   5,227   4,257  7% 32%
    Amortization of purchased intangible assets 15   15   78  —% (81)%
    Operating income 10,871   17,733   11,978  (39)% (9)%
    Adjusted EBITDA$12,568  $19,461  $13,935  (35)% (10)%


     Nine months ended Change
     Sep 30, 2023 Sep 30, 2022 Year-on-year
    Net sales$239,720  $186,776  28%
    Gross profit 70,574   53,805  31%
    Gross profit percentage 29.4%  28.8%   
    COSTS AND EXPENSES:      
    General and administrative expenses 12,869   14,657  (12)%
    Selling and distribution expenses 15,888   12,318  29%
    Amortization of purchased intangible assets 45   245  (82)%
    Operating income 41,772   26,585  57%
    Adjusted EBITDA$46,984  $32,493  45%
               


    NobelClad
     Three months ended Change
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Net sales$27,694  $24,752  $23,396  12% 18%
    Gross profit 9,309   8,021   6,325  16% 47%
    Gross profit percentage 33.6%  32.4%  27.0%     
    COSTS AND EXPENSES:          
    General and administrative expenses 1,106   949   1,475  17% (25)%
    Selling and distribution expenses 2,531   2,365   2,263  7% 12%
    Amortization of purchased intangible assets —   —   74  —% (100)%
    Restructuring expenses and asset impairments 440   —   8  —% 5,400%
    Operating income 5,232   4,707   2,505  11% 109%
    Adjusted EBITDA$6,384  $5,407  $3,412  18% 87%
                      


     Nine months ended Change
     Sep 30, 2023 Sep 30, 2022 Year-on-year
    Net sales$74,481  $67,109  11%
    Gross profit 23,113   16,532  40%
    Gross profit percentage 31.0%  24.6%   
    COSTS AND EXPENSES:      
    General and administrative expenses 2,978   3,644  (18)%
    Selling and distribution expenses 7,135   6,910  3%
    Amortization of purchased intangible assets —   235  (100)%
    Restructuring expenses and asset impairments 440   53  730%
    Operating income 12,560   5,690  121%
    Adjusted EBITDA$15,152  $8,468  79%


     
    DMC GLOBAL INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Amounts in Thousands)
     
           Change
     Sep 30, 2023 Jun 30, 2023 Dec 31, 2022 Sequential Year-end
     (unaudited) (unaudited)       
    ASSETS          
                
    Cash and cash equivalents$28,060 $18,724 $25,144 50% 12%
    Marketable securities 7,516  2,414  — 211% 100%
    Accounts receivable, net 105,519  112,177  94,415 (6)% 12%
    Inventories 185,777  190,947  156,590 (3)% 19%
    Prepaid expenses and other 9,945  16,434  10,723 (39)% (7)%
                
    Total current assets 336,817  340,696  286,872 (1)% 17%
                
    Property, plant and equipment, net 126,095  128,627  129,445 (2)% (3)%
    Goodwill 141,725  141,725  141,725 —% —%
    Purchased intangible assets, net 200,925  206,593  217,925 (3)% (8)%
    Other long-term assets 90,716  92,706  103,011 (2)% (12)%
                
    Total assets$896,278 $910,347 $878,978 (2)% 2%
               
    LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY   
                
    Accounts payable$45,589 $57,559 $46,816 (21)% (3)%
    Contract liabilities 28,557  32,863  32,080 (13)% (11)%
    Accrued income taxes 11,527  9,455  4,256 22% 171%
    Current portion of long-term debt 15,000  15,000  15,000 —% —%
    Other current liabilities 36,954  40,259  29,898 (8)% 24%
                
    Total current liabilities 137,627  155,136  128,050 (11)% 7%
                
    Long-term debt 104,460  108,069  117,798 (3)% (11)%
    Deferred tax liabilities 3,336  2,214  1,908 51% 75%
    Other long-term liabilities 58,167  59,100  63,053 (2)% (8)%
    Redeemable noncontrolling interest 187,522  187,522  187,522 —% —%
    Stockholders’ equity 405,166  398,306  380,647 2% 6%
                
    Total liabilities, redeemable noncontrolling interest, and stockholders’ equity$896,278 $910,347 $878,978 (2)% 2%


     
    DMC GLOBAL INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Amounts in Thousands)
    (unaudited)
     
     Three months ended Nine months ended
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sep 30, 2023 Sep 30, 2022
    CASH FLOWS FROM OPERATING ACTIVITIES:           
    Net income$11,525  $17,526  $8,213  $31,190  $10,392 
    Adjustments to reconcile net income to net cash provided by operating activities:         
    Depreciation 3,460   3,434   3,541   10,294   10,578 
    Amortization of purchased intangible assets 5,667   5,667   7,385   17,001   33,154 
    Amortization of deferred debt issuance costs 141   133   145   412   412 
    Amortization of acquisition-related inventory valuation step-up —   —   —   —   430 
    Stock-based compensation 1,832   1,699   2,242   8,558   6,891 
    Deferred income taxes 1,558   482   (1,448)  2,218   (1,612)
    Restructuring expenses and asset impairments 515   —   8   515   53 
    Other (1,607)  (28)  (340)  (2,040)  (295)
    Change in working capital, net 1,113   (17,434)  2,053   (25,400)  (35,668)
    Net cash provided by operating activities 24,204   11,479   21,799   42,748   24,335 
    CASH FLOWS FROM INVESTING ACTIVITIES:           
    Investment in marketable securities (5,102)  (2,414)  —   (7,516)  — 
    Consideration adjustments related to acquisition of business —   —   (2,674)  —   (2,034)
    Acquisition of property, plant and equipment (2,333)  (2,896)  (4,958)  (7,455)  (11,277)
    Net cash used in investing activities (7,435)  (5,310)  (7,632)  (14,971)  (13,311)
    CASH FLOWS FROM FINANCING ACTIVITIES:           
    Repayments on term loan (3,750)  (3,750)  (3,750)  (13,750)  (11,250)
    Payment of debt issuance costs —   —   (3)  —   (179)
    Distribution to redeemable noncontrolling interest holder (4,034)  (3,711)  (3,293)  (10,345)  (10,293)
    Net proceeds from issuance of common stock to employees and directors —   212   —   212   — 
    Treasury stock activity (157)  (14)  2   (2,328)  (1,092)
    Net cash used in financing activities (7,941)  (7,263)  (7,044)  (26,211)  (22,814)
              
    EFFECTS OF EXCHANGE RATES ON CASH 508   171   (456)  1,350   (534)
              
    NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 9,336   (923)  6,667   2,916   (12,324)
    CASH AND CASH EQUIVALENTS, beginning of the period 18,724   19,647   11,819   25,144   30,810 
    CASH AND CASH EQUIVALENTS, end of the period$28,060  $18,724  $18,486  $28,060  $18,486 


     
    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, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Net income 11,525   17,526   8,213  (34)% 40%
    Interest expense, net 2,392   2,432   1,771  (2)% 35%
    Income tax provision 4,087   6,600   3,537  (38)% 16%
    Depreciation 3,460   3,434   3,541  1% (2)%
    Amortization of purchased intangible assets 5,667   5,667   7,385  —% (23)%
                
    EBITDA 27,131   35,659   24,447  (24)% 11%
    Stock-based compensation 1,832   1,699   2,242  8% (18)%
    CEO transition expenses (1) 805   573   —  40% 100%
    Other (income) expense, net (302)  439   (120) 169% 152%
    Restructuring expenses and asset impairments 515   —   8  100% 6,338%
    Adjusted EBITDA$29,981  $38,370  $26,577  (22)% 13%
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest (5,374)  (6,594)  (4,826) (19)% 11%
    Adjusted EBITDA attributable to DMC Global Inc.$24,607  $31,776  $21,751  (23)% 13%


     
     Nine months ended Change
     Sep 30, 2023 Sep 30, 2022 Year-on-year
    Net income$31,190  $10,392  200%
    Interest expense, net 7,205   4,058  78%
    Income tax provision 13,187   4,938  167%
    Depreciation 10,294   10,578  (3)%
    Amortization of purchased intangible assets 17,001   33,154  (49)%
           
    EBITDA 78,877   63,120  25%
    Stock-based compensation 8,558   6,891  24%
    CEO transition expenses (1) 4,343   —  100%
    Restructuring expenses and asset impairments 515   53  872%
    Amortization of acquisition-related inventory valuation step-up —   430  (100)%
    Other expense, net 337   35  863%
    Adjusted EBITDA$92,630  $70,529  31%
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest (16,156)  (15,911) 2%
    Adjusted EBITDA attributable to DMC Global Inc.$76,474  $54,618  40%
     

    (1) The Company and its former CEO entered into a separation agreement in the first quarter of 2023. In conjunction with this event as well as a reprioritization of near-term initiatives, we incurred certain expenses during the nine months ended September 30, 2023, primarily including: (a) severance-related charges for the former CEO and other impacted employees of $1,948; (b) CEO transition and executive search firm costs of $1,893; and (c) contract termination costs of $350.

    Adjusted Net Income and Adjusted Diluted Earnings per Share
     
     Three months ended September 30, 2023
     Amount Per Share(1)
    Net income attributable to DMC Global Inc.(2)$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
    (2) Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest

     
     Three months ended June 30, 2023
     Amount Per Share(1)
    Net income attributable to DMC Global Inc.(2)$13,703 $0.70
    CEO transition expenses, net of tax 428  0.02
    As adjusted$14,131 $0.72

    (1) Calculated using diluted weighted average shares outstanding of 19,504,963
    (2) Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest

     
     Three months ended September 30, 2022
     Amount Per Share(1)
    Net income attributable to DMC Global Inc. (2)$6,717 $0.35
    NobelClad restructuring expenses, net of tax 5  —
    As adjusted$6,722 $0.35

    (1) Calculated using diluted weighted average shares outstanding of 19,381,794
    (2) Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest

     
     Nine months ended September 30, 2023
     Amount Per Share(1)
    Net income attributable to DMC Global Inc. (2)$23,495 $1.20
    CEO transition expenses and accelerated stock-based compensation, net of tax (3) 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
    (2) Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest
    (3) Includes CEO transition expenses of $4,343 and accelerated stock-based compensation of $3,040 related to the vesting of the former CEO’s outstanding equity awards, net of tax.

     
     Nine months ended September 30, 2022
     Amount Per Share(1)
    Net income attributable to DMC Global Inc. (2)$8,981 $0.47
    Amortization of acquisition-related inventory valuation step-up, net of tax 199  0.01
    NobelClad restructuring expenses, net of tax 36  —
    As adjusted$9,216 $0.48

    (1) Calculated using diluted weighted average shares outstanding of 19,357,333
    (2) Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest

    Segment Adjusted EBITDA
     
    Arcadia
     
     Three months ended Change
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Operating income, as reported$6,476  $9,580  $3,742  (32)% 73%
    Adjustments:           
    Depreciation 969   889   733  9% 32%
    Amortization of purchased intangible assets 5,652   5,652   7,233  —% (22)%
    Stock-based compensation 337   323   357  4% (6)%
    CEO transition expenses —   42   —  (100)% —%
    Adjusted EBITDA 13,434   16,486   12,065  (19)% 11%
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest (5,374) $(6,594) $(4,826) (19)% 11%
    Adjusted EBITDA attributable to DMC Global Inc.$8,060  $9,892  $7,239  (19)% 11%


     
     Nine months ended Change
     Sep 30, 2023 Sep 30, 2022 Year-on-year
    Operating income, as reported$19,189  $3,521  445%
    Adjustments:      
    Depreciation 2,675   2,144  25%
    Amortization of purchased intangible assets 16,956   32,674  (48)%
    Stock-based compensation 1,239   1,008  23%
    CEO transition expenses 331   —  100%
    Amortization of acquisition-related inventory valuation step-up —   430  (100)%
    Adjusted EBITDA 40,390   39,777  2%
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest (16,156) $(15,911) 2%
    Adjusted EBITDA attributable to DMC Global Inc.$24,234  $23,866  2%


    DynaEnergetics
     Three months ended Change
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Operating income, as reported$10,871 $17,733 $11,978 (39)% (9)%
    Adjustments:           
    Depreciation 1,682  1,713  1,879 (2)% (10)%
    Amortization of purchased intangible assets 15  15  78 —% (81)%
    Adjusted EBITDA$12,568 $19,461 $13,935 (35)% (10)%


     
     Nine months ended Change
     Sep 30, 2023 Sep 30, 2022 Year-on-year
    Operating income, as reported$41,772 $26,585 57%
    Adjustments:      
    Depreciation 5,167  5,663 (9)%
    Amortization of purchased intangible assets 45  245 (82)%
    Adjusted EBITDA$46,984 $32,493 45%
     

    NobelClad

     Three months ended Change
     Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Sequential Year-on-year
    Operating income, as reported$5,232 $4,707 $2,505 11% 109%
    Adjustments:          
    Depreciation 712  700  825 2% (14)%
    Amortization of purchased intangible assets —  —  74 —% (100)%
    Restructuring expenses and asset impairments 440  —  8 100% 5,400%
    Adjusted EBITDA$6,384 $5,407 $3,412 18% 87%


     
     Nine months ended Change
     Sep 30, 2023 Sep 30, 2022 Year-on-year
    Operating income, as reported$12,560 $5,690 121%
    Adjustments:      
    Depreciation 2,152  2,490 (14)%
    Amortization of purchased intangible assets —  235 (100)%
    Restructuring expenses and asset impairments 440  53 730%
    Adjusted EBITDA$15,152 $8,468 79%

     

     
    CONTACT:
    Geoff High, Vice President of Investor Relations
    303-604-3924
     

    Primary Logo

Опубликовать