• DMC Global Reports Second Quarter Financial Results

    来源: Nasdaq GlobeNewswire / 04 8月 2022 16:05:04   America/New_York

    • Second quarter sales were $165.8 million, up 20% sequentially and up 153% versus Q2 2021
    • Excluding the acquisition of Arcadia, sales were $89.4 million, up 26% sequentially and up 37% versus Q2 2021
    • Second quarter consolidated gross margin improved to 31% from 27% in Q1 2022 and 26% in Q2 2021
    • Second quarter net income attributable to DMC was $5.6 million
    • Second quarter net income per diluted share, inclusive of adjustment for redeemable noncontrolling interest, was $0.20
    • Second quarter adjusted net income attributable to DMC*, inclusive of $7.6 million in non-cash amortization expense for Arcadia purchased intangible assets, was $5.6 million, or $0.29 per diluted share
    • Second quarter adjusted EBITDA attributable to DMC* was $22.4 million, up 113% sequentially and up 198% versus Q2 2021

    BROOMFIELD, Colo., Aug. 04, 2022 (GLOBE NEWSWIRE) -- DMC Global Inc. (Nasdaq: BOOM) today reported financial results for its second quarter ended June 30, 2022.

    Second quarter sales were $165.8 million, up 20% sequentially, and up 153% versus sales in last year’s second quarter. This year’s first and second quarter results include contributions from Arcadia, a leading supplier of architectural building products. DMC acquired a 60% controlling interest in Arcadia on December 23, 2021.

    Excluding $76.5 million in sales from Arcadia, second quarter sales were $89.4 million, up 26% sequentially and up 37% versus the second quarter of 2021. The increases reflect stronger North American and international demand for well perforating products from DynaEnergetics, DMC’s energy products business.

    Second quarter gross margin was 31% versus 27% in the first quarter and 26% in the second quarter a year ago. The improvements reflect higher selling prices at Arcadia, and higher sales volume on fixed manufacturing overhead expenses coupled with higher average selling prices at DynaEnergetics.

    Selling, general and administrative expense (SG&A) was $29.4 million. Excluding $11.4 million in expenses from Arcadia, SG&A was $18.0 million versus $17.9 million in the first quarter and $14.0 million in the year-ago second quarter. The increase versus last year’s second quarter principally reflects higher variable incentive compensation, the expiration of the Employee Retention Credit under the CARES Act, and implementation costs associated with a new enterprise resource planning system at NobelClad, DMC’s composite metals business.

    Second quarter operating income was $9.9 million and included $12.8 million in non-cash amortization expense primarily associated with purchased intangible assets at Arcadia. This compares with an operating loss of $3.9 million in the first quarter and operating income of $2.7 million in last year’s second quarter.

    Second quarter net income attributable to DMC was $5.6 million. Due to the acquisition of the 60% controlling interest in Arcadia, the calculation for net earnings per diluted share must account for the change in redemption value of the 40% redeemable noncontrolling interest in Arcadia. Redemption value is estimated at the end of each quarter based on the formula used to calculate a Put and Call Option in the Arcadia Operating Agreement. During the second quarter, the adjustment was $1.5 million dollars. When deducted from the $5.6 million in net income attributable to DMC stockholders, the resulting net income is $4.0 million, or $0.20 per diluted share, based on 19.4 million diluted shares outstanding. Net income in the prior-year second quarter was $1.7 million, or $0.10 per diluted share on 17.6 million diluted shares outstanding.

    Second quarter adjusted net income attributable to DMC*, which includes $7.6 million in non-cash amortization expense of the purchased intangible assets of Arcadia, was $5.6 million, or $0.29 per diluted share.

    Second quarter adjusted EBITDA attributable to DMC* was $22.4 million, up 113% from $10.5 million in the first quarter of 2022 and up 198% from $7.5 million in the 2021 second quarter.

    Cash flow provided by operations was $7.1 million versus cash flow used in operations of $8.2 million in the prior-year second quarter. Cash and cash equivalents were $11.8 million versus $30.8 million at December 31, 2021.

    DMC’s debt-to-adjusted EBITDA leverage ratio at June 30, 2022, was 2.48. The Company’s debt-to-adjusted EBITDA leverage ratio covenant for the end of the quarter was 3.25.

    Arcadia
    Arcadia reported second quarter sales of $76.5 million, up 12% sequentially and up 25% from pro forma sales in last year’s second quarter. The increase versus both periods reflects higher average selling prices, which were implemented to address inflation on raw materials.

    Second quarter gross margin was 34% versus 30% in the first quarter and 35% in last year’s second quarter. The gross margin increase versus the first quarter reflects increases in selling prices. Adjusted EBITDA attributable to DMC was $9.8 million versus $6.9 million in the first quarter of 2022 and pro forma adjusted EBITDA of $8.2 million in the comparable year-ago quarter.

    DynaEnergetics
    DynaEnergetics reported second quarter sales of $67.5 million, up 38% sequentially and up 60% versus last year’s second quarter. Sales in North America increased 31% sequentially, while international sales increased 95% sequentially. When excluding a large order from a customer in South Asia, international sales increased 31% sequentially. Gross margin was 30% versus 26% in the first quarter and 25% in the 2021 second quarter. Adjusted EBITDA increased to $13.3 million from $5.3 million in the first quarter and $5.3 million in the 2021 second quarter.

    NobelClad
    NobelClad, DMC’s composite metals business, reported second quarter sales of $21.9 million, flat versus the first quarter and down 6% versus the 2021 second quarter. Gross margin was 28%, versus 19% in the first quarter and 28% in the prior-year second quarter. Adjusted EBITDA was $3.4 million versus $1.7 million in the first quarter and $4.3 million in the 2021 second quarter.

    NobelClad’s trailing 12-month book-to-bill ratio at the end of the second quarter was 1.05. Order backlog increased to $46.8 million from $44.4 million at the end of the first quarter.

    Six-month results
    Consolidated sales for the six-month period were $304.5 million, up 151% versus the six-month period a year ago. Excluding $144.4 million in contributions from Arcadia, year-to-date sales were $160.1 million, up 32% from the same period last year.

    Gross margin was 29% versus 25% in the 2021 six-month period. Operating income was $6.0 million versus operating income of $2.0 million in last year’s six-month period.

    Six-month net income attributable to DMC was $2.3 million. The adjustment related to the change in redemption value of the 40% redeemable noncontrolling interest in Arcadia was $7.3 million dollars. When deducted from the $2.3 million in net income attributable to DMC stockholders, the resulting net loss is $5.0 million, or $0.26 per diluted share, based on 19.3 million diluted shares outstanding. Net income in the prior-year six-month period was $2.2 million, or $0.13 per diluted share on 16.5 million diluted shares outstanding.

    Six month adjusted net income attributable to DMC*, which includes $15.3 million in non-cash amortization expense of the purchased intangible assets of Arcadia, was $2.5 million, or $0.13 per diluted share.

    Six-month adjusted EBITDA attributable to DMC* was $32.9 million, up 184% versus last year’s six-month period. Cash flow provided by operations during the six-month period was $2.5 million versus cash flow used in operations of $6.0 million in the prior-year six-month period.

    Arcadia
    Arcadia reported six-month sales of $144.4 million, up 22% from pro forma sales in last year’s six-month period. Gross margin was 32% versus pro forma gross margin of 36% in the 2021 six-month period, and adjusted EBITDA attributable to DMC was $16.6 million, up 4% from the same period a year ago.

    DynaEnergetics
    Six-month sales at DynaEnergetics were $116.4 million, up 45% versus last year’s six-month period. Gross margin improved to 28% from 24% a year ago, and adjusted EBITDA increased 111% to $18.6 million versus last year’s six-month period.

    NobelClad
    NobelClad reported six-month sales of $43.7 million, up 8% from the same period last year. Gross margin was 23% versus 27% last year, while adjusted EBITDA was $5.1 million versus $7.0 million in the 2021 six-month period.

    Management Commentary
    “Healthy end markets, improved pricing and excellent execution by our employees led to financial results that exceeded our second quarter guidance,” said Kevin Longe, president and CEO.

    “At DynaEnergetics, the 38% sequential sales increase reflects strong customer demand in both North America and our international markets, as well as the impact of recent price increases. Shipments of fully integrated DS perforating systems in North America were a quarterly record, and we expect robust demand for these systems will persist during the second half of the year given the strong energy price environment and growing global demand for U.S. oil and gas. DynaEnergetics is planning a series of product introductions during the coming months, which we expect will strengthen our technological lead in the perforating industry.

    “Arcadia’s second quarter results were above our forecast, principally due to price increases. Arcadia is reporting resilient demand from the commercial construction and high-end residential markets, and despite tight raw material supplies, Arcadia’s commercial teams were effective at maintaining relatively short customer lead times and reliable product availability, which have long been cornerstones of Arcadia’s commercial success. Our integration efforts are proceeding well, and we are making important progress on the design and planning of new finishing capacity.

    “While NobelClad’s industrial end markets have been slower to recover from the Covid-19 pandemic and related supply chain disruptions, the business is capitalizing on the strong metal price environment, and its order backlog continues to improve. NobelClad has seen a surge in demand for its cryogenic transition joints, which are multi-layer composite-metal components used in processing equipment by the liquified natural gas (LNG) industry. NobelClad also is reporting increasing interest in its new DetaPipe offering.

    “Our second quarter performance illustrates the growing strength of DMC and its family of innovative, differentiated businesses,” Longe added. “It also reflects the outstanding efforts of our talented employees. I am more encouraged than ever by DMC’s prospects for long-term, profitable growth and strong returns for our stakeholders.”

    Guidance
    Michael Kuta, CFO, said third quarter 2022 consolidated sales are expected in a range of $155 million to $163 million versus the $165.8 million reported in the second quarter. At the business level, Arcadia is expected to report sales of $70 million to $73 million versus the $76.5 million reported in the second quarter. Sales at DynaEnergetics are expected in a range of $65 million to $69 million versus the $67.5 million reported in the second quarter, which included the previously mentioned large international order. NobelClad’s sales are expected in a range of $20 million to $21 million versus the $21.9 million reported in the second quarter. The expected decline at NobelClad principally reflects soft demand from the downstream energy industry, which is expected to recover in the coming quarters as refineries accelerate investments in repair and maintenance work.

    Consolidated gross margin is expected in a range of 29% to 31% versus the 31% reported in the second quarter. The expected decline reflects a less favorable project mix at NobelClad, and a dip in margins at Arcadia resulting from a first quarter spike in aluminum prices that drove up the average cost of Arcadia’s inventory. The majority of this inventory is expected to be shipped during the third quarter.

    Third quarter selling, general and administrative (SG&A) expense, which will include approximately $600,000 in implementation expense associated with a new enterprise resource planning system at NobelClad, is expected in a range of $30 million to $31 million versus the $29.4 million reported in the second quarter.

    Third quarter amortization expense is expected to be $6.7 million versus the $12.8 million reported in the second quarter. The remaining value assigned to Arcadia’s acquired backlog was largely amortized during the second quarter, and amortization expense is expected to decline to $3.6 million in the fourth quarter. 

    Third quarter depreciation expense is expected to be $3.5 million, and interest expense is expected in a range of $1.9 million to $2.0 million.

    Adjusted EBITDA attributable to DMC, after deducting the 40% noncontrolling interest, is expected in a range of $16 million to $19 million versus $22.4 million in the second quarter.

    Third quarter capital expenditures are expected to be $5.0 million to $6.0 million. 

    Conference call information
    Management will hold a conference call to discuss these results today at 5:00 p.m. Eastern (3:00 p.m. Mountain). Investors may listen to a live webcast of the call at https://www.webcaster4.com/Webcast/Page/2204/46132 , or by dialing 888-506-0062 (973-528-0011 for international callers) and entering the code 762205. Webcast participants should access the website at least 15 minutes early to register and download any necessary audio software. A replay of the webcast will be available for 90 days and a telephonic replay will be available through August 11, 2022, by calling 877-481-4010 (919-882-2331 for international callers) and entering the Conference ID #46132.

    *Use of Non-GAAP Financial Measures
    Adjusted EBITDA, adjusted net income (loss), and adjusted diluted earnings per share 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 plus or minus net interest plus 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 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 and, when appropriate, other items that management does not utilize in assessing DMC’s operating performance. None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income 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 and, when appropriate, other items that management does not utilize in assessing DMC’s operating performance, on DMC’s net income 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 to EBITDA and adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles 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). 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 operates a portfolio of differentiated businesses that lead niche segments of the energy, industrial infrastructure and building products industries.  The Company’s strategy is to identify well-run businesses with strong management teams, and support them with long-term capital and strategic, financial, legal, technology and operating resources. DMC helps portfolio companies grow their core businesses, launch new initiatives, upgrade technologies and systems to support their long-term growth strategies, and make acquisitions that improve their competitive positions and expand their markets.  The Company’s current portfolio consists of Arcadia Inc., 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 the Company’s website at https://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 third quarter 2022 guidance on sales, gross margin, SG&A, depreciation expense, interest expense, adjusted EBITDA and capital expenditures; third quarter and full-year amortization expense; our expectations there will be strong demand for DynaEnergetics’ DS perforating systems during the second half of 2022; our expectations regarding the energy price environment and global demand for U.S. oil and gas, our plans for future product introductions at DynaEnergetics during the coming months and the impact on DynaEnergetics’ technological lead in the perforating industry and our expectations for improvement to NobelClad’s backlog. Such statements and information are based on numerous assumptions regarding present and future business strategies, the markets in which we operate, anticipated costs and 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; potential 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; 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; impacts of COVID-19 and any related preventive or protective actions taken by governmental authorities and resulting economic impacts, including inflation, recessions or depressions; 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, 2021. 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
     Jun 30, 2022 Mar 31, 2022 Jun 30, 2021 Sequential Year-on-year
    NET SALES$165,831  $138,716  $65,438  20% 153%
    COST OF PRODUCTS SOLD 113,732   101,810   48,467  12% 135%
    Gross profit 52,099   36,906   16,971  41% 207%
    Gross profit percentage 31%  27%  26%    
    COSTS AND EXPENSES:         
    General and administrative expenses 18,816   17,718   8,471  6% 122%
    Selling and distribution expenses 10,545   10,090   5,544  5% 90%
    Amortization of purchased intangible assets 12,793   12,976   288  -1% 4,342%
    Restructuring expenses and asset impairments 13   32   —  -59% —%
    Total costs and expenses 42,167   40,816   14,303  3% 195%
    OPERATING INCOME (LOSS) 9,932   (3,910)  2,668  354% 272%
    OTHER INCOME (EXPENSE):         
    Other income (expense), net 54   (209)  108  126% -50%
    Interest expense, net (1,263)  (1,024)  (81) -23% -1,459%
    INCOME (LOSS) BEFORE INCOME TAXES 8,723   (5,143)  2,695  270% 224%
    INCOME TAX PROVISION (BENEFIT) 2,264   (863)  971  362% 133%
    NET INCOME (LOSS) 6,459   (4,280)  1,724  251% 275%
    Less: Net income (loss) attributable to redeemable noncontrolling interest 907   (992)  —  191% —%
    NET INCOME (LOSS) ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS$5,552  $(3,288) $1,724  269% 222%
    NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS        
    Basic$0.20  $(0.47) $0.10  143% 100%
    Diluted$0.20  $(0.47) $0.10  143% 100%
    WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:         
    Basic 19,374,714   19,301,126   17,554,809  —% 10%
    Diluted 19,374,736   19,301,126   17,568,444  —% 10%

    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
     Jun 30, 2022 Mar 31, 2022 Jun 30, 2021
    Net income (loss) attributable to DMC Global Inc. stockholders$5,552  $(3,288) $1,724
    Adjustment of redeemable noncontrolling interest (1,535)  (5,717)  —
    Net income (loss) attributable to DMC Global Inc. common stockholders after adjustment of redeemable noncontrolling interest$4,017  $(9,005) $1,724


     Six months ended Change
     Jun 30, 2022 Jun 30, 2021 Year-on-year
    NET SALES$304,547  $121,096  151%
    COST OF PRODUCTS SOLD 215,542   91,212  136%
    Gross profit 89,005   29,884  198%
    Gross profit percentage 29%  25%  
    COSTS AND EXPENSES:     
    General and administrative expenses 36,534   16,400  123%
    Selling and distribution expenses 20,635   10,787  91%
    Amortization of purchased intangible assets 25,769   612  4,111%
    Restructuring expenses and asset impairments 45   127  -65%
    Total costs and expenses 82,983   27,926  197%
    OPERATING INCOME 6,022   1,958  208%
    OTHER INCOME (EXPENSE):     
    Other (expense) income, net (155)  502  -131%
    Interest expense, net (2,287)  (216) -959%
    INCOME BEFORE INCOME TAXES 3,580   2,244  60%
    INCOME TAX PROVISION 1,401   88  1,492%
    NET INCOME 2,179   2,156  1%
    Less: Net loss attributable to redeemable noncontrolling interest (85)  —  —%
    NET INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS$2,264  $2,156  5%
    NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS     
    Basic$(0.26) $0.13  -300%
    Diluted$(0.26) $0.13  -300%
    WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:     
    Basic 19,338,049   16,495,685  17%
    Diluted 19,338,049   16,507,500  17%

    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, 2022 Jun 30, 2021
    Net income attributable to DMC Global Inc. stockholders$2,264  $2,156
    Adjustment of redeemable noncontrolling interest (7,252)  —
    Net (loss) income attributable to DMC Global Inc. common stockholders after adjustment of redeemable noncontrolling interest$(4,988) $2,156
           


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

    Arcadia

     Three months ended Change
     Jun 30, 2022 Mar 31, 2022 Sequential
    Net sales$76,462  $67,968  12%
    Gross profit 26,227   20,245  30%
    Gross profit percentage 34%  30%  
    COSTS AND EXPENSES:     
    General and administrative expenses 7,412   6,143  21%
    Selling and distribution expenses 3,960   3,737  6%
    Amortization of purchased intangible assets 12,633   12,808  -1%
    Operating income (loss) 2,222   (2,443) 191%
    Adjusted EBITDA 16,292   11,420  43%
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest (6,517)  (4,568) 43%
    Adjusted EBITDA attributable to DMC Global Inc.$9,775  $6,852  43%


       Six months ended  
       Jun 30, 2022  
    Net sales $144,430  
    Gross profit  46,472  
    Gross profit percentage  32% 
    COSTS AND EXPENSES: 
    General and administrative expenses  13,555  
    Selling and distribution expenses  7,697  
    Amortization of purchased intangible assets  25,441  
    Operating loss  (221) 
    Adjusted EBITDA $27,712  
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest $(11,085) 
    Adjusted EBITDA attributable to DMC Global Inc. $16,627  
          

    DynaEnergetics

     Three months ended Change
     Jun 30, 2022 Mar 31, 2022 Jun 30, 2021 Sequential Year-on-year
    Net sales$67,517  $48,887  $42,268  38% 60%
    Gross profit 19,960   12,608   10,676  58% 87%
    Gross profit percentage 30%  26%  25%    
    COSTS AND EXPENSES:         
    General and administrative expenses 4,411   5,322   4,012  -17% 10%
    Selling and distribution expenses 4,158   3,903   3,300  7% 26%
    Amortization of purchased intangible assets 82   85   163  -4% -50%
    Operating income 11,309   3,298   3,201  243% 253%
    Adjusted EBITDA$13,276  $5,282  $5,284  151% 151%


     Six months ended Change
     Jun 30, 2022 Jun 30, 2021 Year-on-year
    Net sales$116,404  $80,440  45%
    Gross profit 32,568   19,111  70%
    Gross profit percentage 28%  24%  
    COSTS AND EXPENSES:     
    General and administrative expenses 9,733   7,587  28%
    Selling and distribution expenses 8,061   6,442  25%
    Amortization of purchased intangible assets 167   362  -54%
    Operating income 14,607   4,720  209%
    Adjusted EBITDA$18,558  $8,803  111%
               

    NobelClad

     Three months ended Change
     Jun 30, 2022 Mar 31, 2022 Jun 30, 2021 Sequential Year-on-year
    Net sales$21,852  $21,861  $23,170  —% -6%
    Gross profit 6,026   4,181   6,460  44% -7%
    Gross profit percentage 28%  19%  28%    
    COSTS AND EXPENSES:         
    General and administrative expenses 1,132   1,037   889  9% 27%
    Selling and distribution expenses 2,323   2,324   2,075  —% 12%
    Amortization of purchased intangible assets 78   83   125  -6% -38%
    Restructuring expenses and asset impairments 13   32   —  -59% —%
    Operating income 2,480   705   3,371  252% -26%
    Adjusted EBITDA$3,404  $1,652  $4,316  106% -21%


     Six months ended Change
     Jun 30, 2022 Jun 30, 2021 Year-on-year
    Net sales$43,713  $40,656  8%
    Gross profit 10,207   11,077  -8%
    Gross profit percentage 23%  27%  
    COSTS AND EXPENSES:     
    General and administrative expenses 2,169   1,702  27%
    Selling and distribution expenses 4,647   4,022  16%
    Amortization of purchased intangible assets 161   250  -36%
    Restructuring expenses and asset impairments 45   127  -65%
    Operating income 3,185   4,976  -36%
    Adjusted EBITDA$5,056  $6,987  -28%


    DMC GLOBAL INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Amounts in Thousands)

           Change
     Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sequential From year-end
     (unaudited) (unaudited)      
    ASSETS         
              
    Cash and cash equivalents$11,819 $15,376 $30,810 -23% -62%
    Accounts receivable, net 92,998  79,782  71,932 17% 29%
    Inventories 152,023  143,304  124,214 6% 22%
    Other current assets 11,888  17,354  12,240 -31% -3%
              
    Total current assets 268,728  255,816  239,196 5% 12%
              
    Property, plant and equipment, net 124,829  120,479  122,078 4% 2%
    Goodwill 135,464  140,234  141,266 -3% -4%
    Purchased intangible assets, net 229,365  242,568  255,576 -5% -10%
    Other long-term assets 105,169  104,827  106,296 —% -1%
              
    Total assets$863,555 $863,924 $864,412 —% —%
              
    LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY      
              
    Accounts payable$45,179 $48,114 $40,276 -6% 12%
    Contract liabilities 33,202  26,952  21,052 23% 58%
    Accrued income taxes 289  834  9 -65% 3,111%
    Current portion of long-term debt 15,000  15,000  15,000 —% —%
    Other current liabilities 27,740  30,288  29,477 -8% -6%
              
    Total current liabilities 121,410  121,188  105,814 —% 15%
              
    Long-term debt 125,017  128,710  132,425 -3% -6%
    Deferred tax liabilities 2,019  937  2,202 115% -8%
    Other long-term liabilities 62,858  64,398  66,250 -2% -5%
    Redeemable noncontrolling interest 197,196  197,196  197,196 —% —%
    Stockholders’ equity 355,055  351,495  360,525 1% -2%
              
    Total liabilities, redeemable noncontrolling interest, and stockholders’ equity$863,555 $863,924 $864,412 —% —%


    DMC GLOBAL INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Amounts in Thousands)
    (unaudited)

     Three months ended
     Jun 30, 2022 Mar 31, 2022 Jun 30, 2021
    CASH FLOWS FROM OPERATING ACTIVITIES:     
    Net income (loss)$6,459  $(4,280) $1,724 
    Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:     
    Depreciation 3,678   3,359   2,832 
    Amortization of purchased intangible assets 12,793   12,976   288 
    Amortization of deferred debt issuance costs 135   132   56 
    Amortization of acquisition-related inventory valuation step-up 172   258   — 
    Stock-based compensation 2,291   2,358   1,727 
    Deferred income taxes 2,550   (2,714)  (282)
    Restructuring expenses and asset impairments 13   32   — 
    Other 36   9   5 
    Change in working capital, net (21,007)  (16,714)  (14,547)
    Net cash provided by (used in) operating activities 7,120   (4,584)  (8,197)
    CASH FLOWS FROM INVESTING ACTIVITIES:     
    Proceeds from escrow related to acquisition of a business 640   —   — 
    Investment in marketable securities —   —   (123,984)
    Acquisition of property, plant and equipment (4,783)  (1,536)  (1,887)
    Proceeds on sale of property, plant and equipment —   —   723 
    Net cash used in investing activities (4,143)  (1,536)  (125,148)
    CASH FLOWS FROM FINANCING ACTIVITIES:     
    Repayments on term loan (3,750)  (3,750)  — 
    Payment of debt issuance costs (79)  (97)  — 
    Net proceeds from issuance of common stock through equity offering —   —   123,461 
    Net proceeds from issuance of common stock to employees and directors —   —   253 
    Distribution to redeemable noncontrolling interest holder (2,600)  (4,400)  — 
    Treasury stock purchases (6)  (1,088)  (16)
    Net cash (used in) provided by financing activities (6,435)  (9,335)  123,698 
    EFFECTS OF EXCHANGE RATES ON CASH (99)  21   173 
          
    NET DECREASE IN CASH AND CASH EQUIVALENTS (3,557)  (15,434)  (9,474)
    CASH AND CASH EQUIVALENTS, beginning of the period 15,376   30,810   45,837 
    CASH AND CASH EQUIVALENTS, end of the period$11,819  $15,376  $36,363 


     Six months ended
     Jun 30, 2022 Jun 30, 2021
    CASH FLOWS FROM OPERATING ACTIVITIES:   
    Net income$2,179  $2,156 
    Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:   
    Depreciation 7,037   5,530 
    Amortization of purchased intangible assets 25,769   612 
    Amortization of deferred debt issuance costs 267   112 
    Amortization of acquisition-related inventory valuation step-up 430   — 
    Stock-based compensation 4,649   3,335 
    Deferred income taxes (164)  (2,616)
    Restructuring expenses and asset impairments 45   127 
    Other 45   (283)
    Change in working capital, net (37,721)  (14,994)
    Net cash provided by (used in) operating activities 2,536   (6,021)
    CASH FLOWS FROM INVESTING ACTIVITIES:   
    Proceeds from escrow related to acquisition of a business 640   — 
    Investment in marketable securities —   (123,984)
    Proceeds from maturities of marketable securities —   4,799 
    Acquisition of property, plant and equipment (6,319)  (3,252)
    Proceeds on sale of property, plant and equipment —   1,004 
    Net cash used in investing activities (5,679)  (121,433)
    CASH FLOWS FROM FINANCING ACTIVITIES:   
    Repayments on credit facilities (7,500)  (11,750)
    Payments of deferred debt issuance costs (176)  — 
    Net proceeds from issuance of common stock through equity offering —   123,461 
    Net proceeds from issuance of common stock through at-the-market offering program —   25,262 
    Net proceeds from issuance of common stock —   253 
    Distribution to redeemable noncontrolling interest holder (7,000)  — 
    Treasury stock purchases (1,094)  (2,451)
    Net cash (used in) provided by financing activities (15,770)  134,775 
    EFFECTS OF EXCHANGE RATES ON CASH (78)  855 
        
    NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (18,991)  8,176 
    CASH AND CASH EQUIVALENTS, beginning of the period 30,810   28,187 
    CASH AND CASH EQUIVALENTS, end of the period$11,819  $36,363 
        

     


    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, 2022 Mar 31, 2022 Jun 30, 2021 Sequential Year-on-year
    Net income (loss) 6,459   (4,280)  1,724  251% 275%
    Interest expense, net 1,263   1,024   81  23% 1,459%
    Income tax provision (benefit) 2,264   (863)  971  -362% 133%
    Depreciation 3,678   3,359   2,832  9% 30%
    Amortization of purchased intangible assets 12,793   12,976   288  -1% 4,342%
              
    EBITDA 26,457   12,216   5,896  117% 349%
    Amortization of acquisition-related inventory valuation step-up 172   258   —  -33% —%
    Restructuring expenses and asset impairments 13   32   —  -59% —%
    Stock-based compensation 2,291   2,358   1,727  -3% 33%
    Other (income) expense, net (54)  209   (108) -126% 50%
    Adjusted EBITDA$28,879  $15,073  $7,515  92% 284%
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest (6,517)  (4,568)  —  -43% —%
    Adjusted EBITDA attributable to DMC Global Inc.$22,362  $10,505  $7,515  113% 198%


     Six months ended Change
     Jun 30, 2022 Jun 30, 2021 Year-on-year
    Net income$2,179  $2,156  1%
    Interest expense, net 2,287   216  959%
    Income tax provision 1,401   88  1,492%
    Depreciation 7,037   5,530  27%
    Amortization of purchased intangible assets 25,769   612  4,111%
          
    EBITDA 38,673   8,602  350%
    Amortization of acquisition-related inventory valuation step-up 430   —  n/a
    Restructuring expenses and asset impairments 45   127  -65%
    Stock-based compensation 4,649   3,335  39%
    Other expense (income), net 155   (502) 131%
    Adjusted EBITDA$43,952  $11,562  280%
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest (11,085)  —  n/a
    Adjusted EBITDA attributable to DMC Global Inc.$32,867  $11,562  184%

    Adjusted Net Income and Adjusted Diluted Earnings per Share

     Three months ended June 30, 2022
     Amount Per Share(1)
    Net income attributable to DMC Global Inc.$5,552 $0.29
    Amortization of acquisition-related inventory valuation step-up, net of tax 79  —
    NobelClad restructuring expenses and asset impairments, net of tax 9  —
    As adjusted$5,640 $0.29

    (1) Calculated using diluted weighted average shares outstanding of 19,374,736

     Three months ended March 31, 2022
     Amount Per Share(1)
    Net loss attributable to DMC Global Inc.$(3,288) $(0.17)
    Amortization of acquisition-related inventory valuation step-up, net of tax 133   0.01 
    NobelClad restructuring expenses and asset impairments, net of tax 22   — 
    As adjusted$(3,133) $(0.16)

    (1) Calculated using diluted weighted average shares outstanding of 19,301,126

     Three months ended June 30, 2021
     Amount Per Share(1)
    Net income attributable to DMC Global Inc.$1,724 $0.10
    As adjusted$1,724 $0.10

    1) Calculated using diluted weighted average shares outstanding of 17,568,444

     Six months ended June 30, 2022
     Amount Per Share(1)
    Net income attributable to DMC Global Inc.$2,264 $0.12
    Amortization of acquisition-related inventory valuation step-up, net of tax 199  0.01
    NobelClad restructuring expenses and asset impairments, net of tax 30  —
    As adjusted$2,493 $0.13

    1) Calculated using diluted weighted average shares outstanding of 19,338,049

     Six months ended June 30, 2021
     Amount Per Share(1)
    Net income attributable to DMC Global Inc.$2,156 $0.13
    NobelClad restructuring expenses and asset impairments, net of tax 127  0.01
    As adjusted$2,283 $0.14

    1) Calculated using diluted weighted average shares outstanding of 16,507,500

    Segment Adjusted EBITDA

    ArcadiaThree months ended Change
     Jun 30, 2022 Mar 31, 2022 Sequential
    Operating income (loss), as reported$2,222  $(2,443) 191%
    Adjustments:     
    Amortization of acquisition-related inventory valuation step-up 172   258  -33%
    Depreciation 870   541  61%
    Amortization of purchased intangible assets 12,633   12,808  -1%
    Stock-based compensation 395   256  54%
    Adjusted EBITDA 16,292   11,420  43%
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest (6,517) $(4,568) 43%
    Adjusted EBITDA attributable to DMC Global Inc.$9,775  $6,852  43%


       Six months ended  
       Jun 30, 2022  
    Operating loss, as reported $(221) 
    Adjustments: 
    Amortization of acquisition-related inventory valuation step-up  430  
    Depreciation  1,411  
    Amortization of purchased intangible assets  25,441  
    Stock-based compensation  651  
    Adjusted EBITDA  27,712  
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest  (11,085) 
    Adjusted EBITDA attributable to DMC Global Inc. $16,627  


    DynaEnergetics

     Three months ended Change
     Jun 30, 2022 Mar 31, 2022 Jun 30, 2021 Sequential Year-on-year
    Operating income, as reported$11,309 $3,298 $3,201 243% 253%
    Adjustments:         
    Depreciation 1,885  1,899  1,920 -1% -2%
    Amortization of purchased intangible assets 82  85  163 -4% -50%
    Adjusted EBITDA$13,276 $5,282 $5,284 151% 151%


     Six months ended Change
     Jun 30, 2022 Jun 30, 2021 Year-on-year
    Operating income, as reported$14,607 $4,720 209%
    Adjustments:     
    Depreciation 3,784  3,721 2%
    Amortization of purchased intangible assets 167  362 -54%
    Adjusted EBITDA$18,558 $8,803 111%
             

    NobelClad

     Three months ended Change
     Jun 30, 2022 Mar 31, 2022 Jun 30, 2021 Sequential Year-on-year
    Operating income, as reported$2,480 $705 $3,371 252% -26%
    Adjustments:         
    Restructuring expenses and asset impairments 13  32  — -59% —%
    Depreciation 833  832  820 —% 2%
    Amortization of purchased intangible assets 78  83  125 -6% -38%
    Adjusted EBITDA$3,404 $1,652 $4,316 106% -21%


     Six months ended Change
     Jun 30, 2022 Jun 30, 2021 Year-on-year
    Operating income, as reported$3,185 $4,976 -36%
    Adjustments:     
    Restructuring expenses and asset impairments 45  127 -65%
    Depreciation 1,665  1,634 2%
    Amortization of purchased intangible assets 161  250 -36%
    Adjusted EBITDA$5,056 $6,987 -28%


    DMC GLOBAL INC.
    PRO FORMA RESULTS
    (Amounts in Thousands, Except Per Share Data)
    (unaudited)

    Pro Forma Summary Income Statement*

     Three months ended June 30, 2021
     DMC Arcadia Redeemable
    Noncontrolling
    Interest(1)    		 Pro Forma
    Arcadia    		 Pro Forma
    Combined
    Net sales$65,438  $61,138    $61,138  $126,576 
    Gross profit 16,971   21,482     21,482   38,453 
    Gross profit percentage 26%  35%    35%  30%
              
    Selling, general, and administrative expenses 14,015   8,262     8,262   22,277 
    Amortization of purchased intangible assets 288   —     —   288 
    Operating income 2,668   13,220     13,220   15,888 
              
    Depreciation and amortization 3,120   451     451   3,571 
    Stock-based compensation expense 1,727   —     —   1,727 
    Adjusted EBITDA 7,515   13,671  (5,468)  8,203   15,718 
    Adjusted EBITDA % 11%  22%    13%  12%

    (1) Represents the Adjusted EBITDA attributable to the 40% redeemable noncontrolling interest.

     Six months ended June 30, 2021
     DMC Arcadia Redeemable
    Noncontrolling
    Interest(1)    		 Pro Forma
    Arcadia    		 Pro Forma
    Combined
    Net sales$121,096  $118,379    $118,379  $239,475 
    Gross profit 29,884   42,412     42,412   72,296 
    Gross profit percentage 25%  36%    36%  30%
              
    Selling, general, and administrative expenses 27,187   16,715     16,715   43,902 
    Amortization of purchased intangible assets 612   —     —   612 
    Restructuring expenses and asset impairments 127   —     —   127 
    Operating income 1,958   25,697     25,697   27,655 
              
    Depreciation and amortization 6,142   857     857   6,999 
    Restructuring expenses and asset impairments 127   —     —   127 
    Stock-based compensation expense 3,335   —     —   3,335 
    Adjusted EBITDA 11,562   26,554  (10,622)  15,932   27,494 
    Adjusted EBITDA % 10%  22%    13%  11%

    (1) Represents the Adjusted EBITDA attributable to the 40% redeemable noncontrolling interest.

    Pro Forma EBITDA and Adjusted EBITDA*

     Three months ended June 30, 2021
     DMC Arcadia Pro Forma
    Combined
    Net income$1,724  $13,220  $14,944 
    Interest expense, net 81   —   81 
    Income tax provision 971   —   971 
    Depreciation 2,832   451   3,283 
    Amortization of purchased intangible assets 288   —   288 
    EBITDA 5,896   13,671   19,567 
    Stock-based compensation expense 1,727   —   1,727 
    Other income, net (108)  —   (108)
    Adjusted EBITDA 7,515   13,671   21,186 
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest —   (5,468)  (5,468)
    Adjusted EBITDA attributable to DMC Global Inc. 7,515   8,203   15,718 


     Six months ended June 30, 2021
     DMC Arcadia Pro Forma
    Combined
    Net income$2,156  $25,697  $27,853 
    Interest expense, net 216   —   216 
    Income tax benefit 88   —   88 
    Depreciation 5,530   857   6,387 
    Amortization 612   —   612 
    EBITDA 8,602   26,554   35,156 
    Restructuring 127   —   127 
    Stock-based compensation expense 3,335   —   3,335 
    Other income, net (502)  —   (502)
    Adjusted EBITDA 11,562   26,554   38,116 
    Less: adjusted EBITDA attributable to redeemable noncontrolling interest —   (10,622)  (10,622)
    Adjusted EBITDA attributable to DMC Global Inc. 11,562   15,932   27,494 

    *This unaudited pro forma combined financial information was not prepared under Article 11 of SEC Regulation S-X (“Article 11”) or Financial Accounting Standards Board Accounting Standards Codification 805 (“ASC 805”).


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