DMC Global Reports Third Quarter Financial Results

DMC Global Inc.

Mon, Nov 4, 2024, 2:05 PM 18 min read

Third quarter sales were $152.4 million, down 11% sequentially and year-over-year
Net loss, inclusive of a $141.7 million non-cash goodwill impairment charge at Arcadia Products, was $159.4 million, while net loss attributable to DMC, inclusive of the goodwill impairment charge, was $101.3 million
Adjusted net loss attributable to DMC* was $9.6 million, or $(0.49) per diluted share
Adjusted EBITDA* attributable to DMC was $5.7 million, down 71% sequentially and down 77% vs. Q3 2023
Total adjusted EBITDA, inclusive of non-controlling interest (NCI), was $7.0 million, or 5% of sales

BROOMFIELD, Colo., Nov. 04, 2024 (GLOBE NEWSWIRE) -- DMC Global Inc. (Nasdaq: BOOM) today reported financial results for its third quarter ended September 30, 2024. As the Company recently announced, weakness in the U.S. construction and energy services industries negatively affected the performance of DMC’s two largest businesses.

At Arcadia, DMC’s architectural building products business, persistent high interest rates have impacted sales to the high-end luxury home market and have resulted in continued soft commercial construction activity. Under the direction of a new interim business president, Arcadia is executing a series of internal initiatives designed to strengthen sourcing and supply chain functions; improve sales, inventory and operations planning processes; and more effectively leverage Arcadia’s enterprise resource planning system. The business is also reviewing certain product lines that have not consistently met profitability targets.

Arcadia’s improvement initiatives are being led by interim president Chris Scocos, who joined the business in September 2024 with a 25-year track record of implementing lean manufacturing, process improvement and operational excellence programs for industrial manufacturing businesses across a broad range of industries, including building materials and industrial manufactured products.

Results at DynaEnergetics, DMC’s energy products business, reflect a further market-driven decline in U.S. well completions, which were down 6% sequentially and 13% versus last year’s third quarter. DynaEnergetics’ results also were impacted by a lower-margin customer mix. New automated assembly systems at DynaEnergetics’ U.S. manufacturing center in Blum, Texas, as well as a streamlined, next-generation model of its DynaStage perforating system, are expected to help strengthen DynaEnergetics’ profit margins beginning next year.

NobelClad, DMC’s composite metals business, delivered another solid quarter and achieved adjusted EBITDA margins of more than 23%. Management believes additional large order opportunities and continued strong demand for NobelClad’s Cylindra™ cryogenic transition joints will offset a recent slowdown in repair and maintenance work in North America’s downstream energy industry.

Guidance
Management has decided to limit quarterly financial guidance to consolidated sales and adjusted EBITDA during the current period of volatility and uncertainty in its energy and construction markets. For the fourth quarter, consolidated sales are expected to be in a range of $138 million to $148 million, while adjusted EBITDA attributable to DMC is expected in a range of $5 million to $8 million. The expected sequential decline in consolidated sales principally reflects challenging market conditions, including an anticipated extended frac holiday in DynaEnergetics’ North American market. The continued impact of stubbornly high interest rates on luxury home sales and the related impact of lower fixed-cost absorption in certain factories, particularly those supporting certain high-end residential products, are expected to negatively impact Arcadia’s fourth quarter performance.

Summary Third Quarter Results

	Three months ended									Change
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sequential			Year-on-year
Net sales	$	152,429		$	171,179		$	172,147			(11	)%		(11	)%
Gross profit percentage		19.8	%		27.1	%		30.6	%
SG&A*	$	28,205		$	27,122		$	28,713			4	%		(2	)%
Net (loss) income	$	(159,416	)	$	6,293		$	11,525			(2,633	)%		(1,483	)%
Net (loss) income attributable to DMC	$	(101,323	)	$	4,012		$	8,883			(2,625	)%		(1,241	)%
Diluted net (loss) income per share attributable to DMC	$	(8.27	)	$	0.24		$	0.38			(3,546	)%		(2,276	)%
Adjusted net (loss) income attributable to DMC	$	(9,615	)	$	5,675		$	9,861			(269	)%		(198	)%
Adjusted diluted net (loss) income per share	$	(0.49	)	$	0.29		$	0.50			(269	)%		(198	)%
Adjusted EBITDA attributable to DMC	$	5,671		$	19,420		$	24,607			(71	)%		(77	)%
Adjusted EBITDA before NCI allocation	$	7,015		$	24,398		$	29,981			(71	)%		(77	)%
Adjusted EBITDA before NCI allocation margin		4.6	%		14.3	%		17.4	%

*SG&A in the three months ended September 30, 2023 included $805 of CEO transition expenses

Arcadia

	Three months ended									Change
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sequential			Year-on-year
Net sales	$	57,818		$	69,748		$	71,455			(17	)%		(19	)%
Adjusted EBITDA attributable to DMC	$	2,014		$	7,467		$	8,060			(73	)%		(75	)%
Adjusted EBITDA before NCI allocation	$	3,358		$	12,445		$	13,434			(73	)%		(75	)%
Adjusted EBITDA before NCI allocation margin		5.8	%		17.8	%		18.8	%

DynaEnergetics

	Three months ended									Change
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sequential			Year-on-year
Net sales	$	69,679		$	76,210		$	72,998			(9	)%		(5	)%
Adjusted EBITDA	$	414		$	8,752		$	12,568			(95	)%		(97	)%
Adjusted EBITDA margin		0.6	%		11.5	%		17.2	%

Sales and margin declines reflect softer well-completion activity and continued pricing pressure in North America
Third quarter 2024 adjusted EBITDA includes approximately $5 million in inventory and bad debt charges

NobelClad

	Three months ended									Change
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sequential			Year-on-year
Net sales	$	24,932		$	25,221		$	27,694			(1	)%		(10	)%
Adjusted EBITDA	$	5,776		$	5,722		$	6,384			1	%		(10	)%
Adjusted EBITDA margin		23.2	%		22.7	%		23.1	%

Backlog at the end of the third quarter was $59.0 million versus $60.8 million at the end of the 2023 third quarter
Rolling 12-month bookings were $103.9 million versus $108.4 million at the end of the prior-year third quarter; and the book-to-bill ratio was 0.96.

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=kSCFTQNY

Webcast participants should access the website at least 15 minutes early to register and download any necessary audio software. The webcast also will be available on the Investor page of DMC’s website, located at: ir.dmcglobal.com. A replay of the webcast will be available for six months.

*Use of Non-GAAP Financial Measures
In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States (GAAP), the Company also discloses certain non-GAAP financial measures that we use in operational and financial decision making. Non-GAAP financial measures include the following:

EBITDA: defined as net income (loss) plus net interest, taxes, depreciation and amortization.
Adjusted EBITDA: excludes from EBITDA stock-based compensation, restructuring expenses and asset impairment charges (if applicable) and, when appropriate, nonrecurring items that management does not utilize in assessing DMC’s operating performance (as further described in the tables below).
Adjusted EBITDA attributable to DMC Global Inc.: excludes the Adjusted EBITDA attributable to the 40% redeemable noncontrolling interest in Arcadia Products.
Adjusted EBITDA for DMC business segments: defined as operating income (loss) plus depreciation, amortization, allocated stock-based compensation (if applicable), restructuring expenses and asset impairment charges (if applicable) and, when appropriate, nonrecurring items that management does not utilize in assessing operating performance.
Adjusted net income (loss): defined as net income (loss) attributable to DMC Global Inc. stockholders prior to the adjustment of redeemable noncontrolling interest plus restructuring expenses and asset impairment charges (if applicable) and, when appropriate, nonrecurring items that management does not utilize in assessing DMC’s operating performance.
Adjusted diluted earnings per share: defined as diluted earnings per share attributable to DMC Global Inc. stockholders (exclusive of adjustment of redeemable noncontrolling interest) plus restructuring expenses and asset impairment charges (if applicable) and, when appropriate, nonrecurring items that management does not utilize in assessing DMC’s operating performance.
Net debt: defined as total debt less total cash, cash equivalents and marketable securities.
Free-cash flow: defined as cash flows provided by (used in) operating activities less net acquisitions of property, plant and equipment.

Management believes providing these additional financial measures is useful to investors in understanding the Company’s operating performance, including the effects of restructuring, impairment, and other nonrecurring charges, as well as its liquidity. Management typically monitors the business utilizing the above non-GAAP measures, in addition to GAAP results, to understand and compare operating results across accounting periods, and certain management incentive awards are based, in part, on these measures. The presence of non-GAAP financial measures in this report is not intended to suggest that such measures be considered in isolation or as a substitute for, or as superior to, DMC’s GAAP information, and investors are cautioned that the non-GAAP financial measures are limited in their usefulness.

Because not all companies use identical calculations, DMC’s presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. However, these measures can still be useful in evaluating the company’s performance against its peer companies because management believes the measures provide users with valuable insight into key components of GAAP financial disclosures. For example, a company with greater GAAP net income may not be as appealing to investors if its net income is more heavily comprised of gains on asset sales. Likewise, eliminating the effects of interest income and expense moderates the impact of a company’s capital structure on its performance.

DMC is unable to reconcile its expected fourth quarter adjusted EBITDA attributable to DMC to the most directly comparable projected GAAP financial measure because certain information necessary to calculate such measure on a GAAP basis is unavailable or dependent on the timing of future events outside of DMC’s control. Therefore, because of the uncertainty and variability of the nature of and the amount of any potential applicable future adjustments, which could be significant, DMC is unable to provide a reconciliation for expected adjusted EBITDA attributable to DMC without unreasonable efforts.

About DMC Global Inc.
DMC Global is an owner and operator of innovative, asset-light manufacturing businesses that provide unique, highly engineered products and differentiated solutions. DMC’s businesses have established leadership positions in their respective markets and consist of: Arcadia, a leading supplier of architectural building products; DynaEnergetics, which serves the global energy industry; and NobelClad, which addresses the global industrial infrastructure and transportation sectors. Based in Broomfield, Colorado, DMC trades on Nasdaq under the symbol “BOOM.” For more information, visit: http://www.dmcglobal.com.

Safe Harbor Language
Except for the historical information contained herein, this news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including fourth quarter 2024 guidance on sales and adjusted EBITDA; our expectations that automation initiatives and product enhancements at DynaEnergetics will strengthen its EBITDA margins beginning next year; that improvement initiatives at Arcadia will strengthen operations; and that large order opportunities and demand for NobelClad’s Cylindra™ product line will offset a recent slowdown in repair and maintenance work. 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, June 30, 2024 and September 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.


DMC GLOBAL INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in Thousands, Except Share and Per Share Data) (unaudited)

	Three months ended									Change
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sequential			Year-on-year
NET SALES	$	152,429		$	171,179		$	172,147			(11	)%		(11	)%
COST OF PRODUCTS SOLD		122,324			124,766			119,550			(2	)%		2	%
Gross profit		30,105			46,413			52,597			(35	)%		(43	)%
Gross profit percentage		19.8	%		27.1	%		30.6	%
COSTS AND EXPENSES:
General and administrative expenses		14,349			15,623			16,259			(8	)%		(12	)%
Selling and distribution expenses		13,856			11,499			12,454			20	%		11	%
Amortization of purchased intangible assets		5,278			5,307			5,667			(1	)%		(7	)%
Goodwill impairment charge		141,725			—			—			100	%		100	%
Strategic review expenses		1,763			2,020			—			(13	)%		100	%
Restructuring expenses and asset impairments		2,069			279			515			642	%		302	%
Total costs and expenses		179,040			34,728			34,895			416	%		413	%
OPERATING (LOSS) INCOME		(148,935	)		11,685			17,702			(1,375	)%		(941	)%
OTHER EXPENSE:
Other (expense) income, net		(520	)		(284	)		302			83	%		272	%
Interest expense, net		(2,113	)		(2,316	)		(2,392	)		(9	)%		(12	)%
(LOSS) INCOME BEFORE INCOME TAXES		(151,568	)		9,085			15,612			(1,768	)%		(1,071	)%
INCOME TAX PROVISION		7,848			2,792			4,087			181	%		92	%
NET (LOSS) INCOME		(159,416	)		6,293			11,525			(2,633	)%		(1,483	)%
Less: Net (loss) income attributable to redeemable noncontrolling interest		(58,093	)		2,281			2,642			(2,647	)%		(2,299	)%
NET (LOSS) INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS	$	(101,323	)	$	4,012		$	8,883			(2,625	)%		(1,241	)%
NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS
Basic	$	(8.27	)	$	0.24		$	0.38			(3,546	)%		(2,276	)%
Diluted	$	(8.27	)	$	0.24		$	0.38			(3,546	)%		(2,276	)%
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		19,706,587			19,659,908			19,543,251			—	%		1	%
Diluted		19,706,587			19,671,169			19,596,575			—	%		1	%

Reconciliation to net (loss) 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, 2024			Jun 30, 2024		Sep 30, 2023
Net (loss) income attributable to DMC Global Inc. stockholders	$	(101,323	)	$	4,012	$	8,883
Adjustment of redeemable noncontrolling interest		(61,687	)		793		(1,263	)
Net (loss) income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest	$	(163,010	)	$	4,805	$	7,620

DMC GLOBAL INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in Thousands, Except Share and Per Share Data) (unaudited)

	Nine months ended						Change
	Sep 30, 2024			Sep 30, 2023			Year-on-year
NET SALES	$	490,477		$	545,152			(10	)%
COST OF PRODUCTS SOLD		371,607			378,454			(2	)%
Gross profit		118,870			166,698			(29	)%
Gross profit percentage		24.2	%		30.6	%
COSTS AND EXPENSES:
General and administrative expenses		45,952			60,285			(24	)%
Selling and distribution expenses		37,578			36,978			2	%
Amortization of purchased intangible assets		15,877			17,001			(7	)%
Goodwill impairment		141,725			—			100	%
Strategic review expenses		5,952			—			100	%
Restructuring expenses and asset impairments		2,348			515			356	%
Total costs and expenses		249,432			114,779			117	%
OPERATING (LOSS) INCOME		(130,562	)		51,919			(351	)%
OTHER EXPENSE:
Other expense, net		(1,213	)		(337	)		260	%
Interest expense, net		(6,746	)		(7,205	)		(6	)%
(LOSS) INCOME BEFORE INCOME TAXES		(138,521	)		44,377			(412	)%
INCOME TAX PROVISION		12,283			13,187			(7	)%
NET (LOSS) INCOME		(150,804	)		31,190			(584	)%
Less: Net (loss) income attributable to redeemable noncontrolling interest		(56,056	)		7,695			(828	)%
NET (LOSS) INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS	$	(94,748	)	$	23,495			(503	)%
NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS
Basic	$	(8.04	)	$	1.07			(851	)%
Diluted	$	(8.04	)	$	1.07			(851	)%
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		19,648,253			19,492,212			1	%
Diluted		19,648,253			19,540,978			1	%

Reconciliation to net (loss) 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, 2024			Sep 30, 2023
Net (loss) income attributable to DMC Global Inc. stockholders	$	(94,748	)	$	23,495
Adjustment of redeemable noncontrolling interest		(63,201	)		(2,289	)
Net (loss) income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest	$	(157,949	)	$	21,206

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

Arcadia

	Three months ended									Change
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sequential			Year-on-year
Net sales	$	57,818		$	69,748		$	71,455			(17	)%		(19	)%
Gross profit		13,562			23,157			23,789			(41	)%		(43	)%
Gross profit percentage		23.5	%		33.2	%		33.3	%
COSTS AND EXPENSES:
General and administrative expenses		7,223			7,765			7,413			(7	)%		(3	)%
Selling and distribution expenses		4,210			4,116			4,248			2	%		(1	)%
Amortization of purchased intangible assets		5,278			5,278			5,652			—	%		(7	)%
Goodwill impairment		141,725			—			—			100	%		100	%
Restructuring expenses and asset impairments		248			279			—			(11	)%		100	%
Operating (loss) income		(145,122	)		5,719			6,476			(2,638	)%		(2,341	)%
Adjusted EBITDA		3,358			12,445			13,434			(73	)%		(75	)%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(1,344	)		(4,978	)		(5,374	)		(73	)%		(75	)%
Adjusted EBITDA attributable to DMC Global Inc.	$	2,014		$	7,467		$	8,060			(73	)%		(75	)%

	Nine months ended						Change
	Sep 30, 2024			Sep 30, 2023			Year-on-year
Net sales	$	189,491		$	230,951			(18	)%
Gross profit		53,532			73,342			(27	)%
Gross profit percentage		28.3	%		31.8	%
COSTS AND EXPENSES:
General and administrative expenses		22,644			23,476			(4	)%
Selling and distribution expenses		12,794			13,721			(7	)%
Amortization of purchased intangible assets		15,833			16,956			(7	)%
Goodwill impairment		141,725			—			100	%
Restructuring expenses and asset impairments		527			—			100	%
Operating (loss) income		(139,991	)		19,189			(830	)%
Adjusted EBITDA		21,709			40,390			(46	)%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(8,684	)		(16,156	)		(46	)%
Adjusted EBITDA attributable to DMC Global Inc.	$	13,025		$	24,234			(46	)%

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

DynaEnergetics

	Three months ended									Change
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sequential			Year-on-year
Net sales	$	69,679		$	76,210		$	72,998			(9	)%		(5	)%
Gross profit		8,347			15,133			19,585			(45	)%		(57	)%
Gross profit percentage		12.0	%		19.9	%		26.8	%
COSTS AND EXPENSES:
General and administrative expenses		2,299			3,011			3,095			(24	)%		(26	)%
Selling and distribution expenses		7,276			5,041			5,604			44	%		30	%
Amortization of purchased intangible assets		—			29			15			(100	)%		(100	)%
Restructuring expenses and asset impairments		1,821			—			—			100	%		100	%
Operating (loss) income		(3,049	)		7,052			10,871			(143	)%		(128	)%
Adjusted EBITDA	$	414		$	8,752		$	12,568			(95	)%		(97	)%

	Nine months ended						Change
	Sep 30, 2024			Sep 30, 2023			Year-on-year
Net sales	$	224,011		$	239,720			(7	)%
Gross profit		40,451			70,574			(43	)%
Gross profit percentage		18.1	%		29.4	%
COSTS AND EXPENSES:
General and administrative expenses		8,201			12,869			(36	)%
Selling and distribution expenses		17,540			15,888			10	%
Amortization of purchased intangible assets		44			45			(2	)%
Restructuring expenses and asset impairments		1,821			—			100	%
Operating income		12,845			41,772			(69	)%
Adjusted EBITDA	$	19,705		$	46,984			(58	)%

NobelClad

	Three months ended									Change
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sequential			Year-on-year
Net sales	$	24,932		$	25,221		$	27,694			(1	)%		(10	)%
Gross profit		8,269			8,222			9,309			1	%		(11	)%
Gross profit percentage		33.2	%		32.6	%		33.6	%
COSTS AND EXPENSES:
General and administrative expenses		1,110			1,023			1,106			9	%		—	%
Selling and distribution expenses		2,190			2,267			2,531			(3	)%		(13	)%
Restructuring expenses and asset impairments		—			—			440			—	%		(100	)%
Operating income		4,969			4,932			5,232			1	%		(5	)%
Adjusted EBITDA	$	5,776		$	5,722		$	6,384			1	%		(10	)%

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

	Nine months ended						Change
	Sep 30, 2024			Sep 30, 2023			Year-on-year
Net sales	$	76,975		$	74,481			3	%
Gross profit		25,135			23,113			9	%
Gross profit percentage		32.7	%		31.0	%
COSTS AND EXPENSES:
General and administrative expenses		3,207			2,978			8	%
Selling and distribution expenses		6,927			7,135			(3	)%
Restructuring expenses and asset impairments		—			440			(100	)%
Operating income		15,001			12,560			19	%
Adjusted EBITDA	$	17,378		$	15,152			15	%

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

							Change
	Sep 30, 2024		Jun 30, 2024		Dec 31, 2023		Sequential			Year-end
	(unaudited)		(unaudited)
ASSETS

Cash and cash equivalents	$	14,511	$	14,567	$	31,040		—	%		(53	)%
Marketable securities		—		—		12,619		—	%		(100	)%
Accounts receivable, net		110,996		118,247		106,205		(6	)%		5	%
Inventories		165,636		174,791		166,712		(5	)%		(1	)%
Prepaid expenses and other		16,734		13,270		10,236		26	%		63	%

Total current assets		307,877		320,875		326,812		(4	)%		(6	)%

Property, plant and equipment, net		129,674		128,189		129,267		1	%		—	%
Goodwill		—		141,725		141,725		(100	)%		(100	)%
Purchased intangible assets, net		179,380		184,658		195,260		(3	)%		(8	)%
Other long-term assets		85,079		94,038		91,431		(10	)%		(7	)%

Total assets	$	702,010	$	869,485	$	884,495		(19	)%		(21	)%

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY

Accounts payable	$	55,883	$	62,594	$	40,202		(11	)%		39	%
Contract liabilities		21,263		16,401		21,621		30	%		(2	)%
Accrued income taxes		16,616		13,917		12,810		19	%		30	%
Current portion of long-term debt		2,500		2,500		15,000		—	%		(83	)%
Other current liabilities		33,787		31,266		36,828		8	%		(8	)%

Total current liabilities		130,049		126,678		126,461		3	%		3	%

Long-term debt		71,715		81,612		100,851		(12	)%		(29	)%
Deferred tax liabilities		1,702		1,935		1,956		(12	)%		(13	)%
Other long-term liabilities		54,940		56,191		57,172		(2	)%		(4	)%
Redeemable noncontrolling interest		187,080		187,080		187,760		—	%		—	%
Stockholders’ equity		256,524		415,989		410,295		(38	)%		(37	)%

Total liabilities, redeemable noncontrolling interest, and stockholders’ equity	$	702,010	$	869,485	$	884,495		(19	)%		(21	)%

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

	Three months ended									Nine months ended
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(159,416	)	$	6,293		$	11,525		$	(150,804	)	$	31,190
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation		3,444			3,431			3,460			10,294			10,294
Amortization of purchased intangible assets		5,278			5,307			5,667			15,877			17,001
Amortization of deferred debt issuance costs		217			217			141			624			412
Stock-based compensation		1,772			1,782			1,832			5,103			8,558
Bad debt expense		3,943			560			317			4,979			141
Deferred income taxes		6,026			(746	)		1,558			4,734			2,218
Asset impairments		1,044			—			515			1,044			515
Goodwill impairment		141,725			—			—			141,725			—
Other		712			197			(1,607	)		(76	)		(2,040	)
Change in working capital, net		14,257			(14,698	)		796			1,285			(25,541	)
Net cash provided by operating activities		19,002			2,343			24,204			34,785			42,748
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in marketable securities		—			—			(5,102	)		—			(7,516	)
Proceeds from maturities of marketable securities		—			—			—			3,000			—
Proceeds from sales of marketable securities		—			—			—			9,619			—
Acquisition of property, plant and equipment		(6,085	)		(2,547	)		(2,333	)		(11,600	)		(7,455	)
Proceeds from property, plant and equipment reimbursements		406			—			—			406			—
Proceeds on sale of property, plant and equipment		—			100			—			100			—
Net cash (used in) provided by investing activities		(5,679	)		(2,447	)		(7,435	)		1,525			(14,971	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on term loan		(625	)		(625	)		(3,750	)		(118,750	)		(13,750	)
Borrowings on term loan		—			—			—			50,000			—
Borrowings on revolving loans		500			6,700			—			77,650			—
Repayments on revolving loans		(9,875	)		(10,075	)		—			(50,400	)		—
Payment of debt issuance costs		—			—			—			(2,735	)		—
Distributions to redeemable noncontrolling interest holder		(3,649	)		(1,547	)		(4,034	)		(8,321	)		(10,345	)
Net proceeds from issuance of common stock to employees and directors		—			132			—			132			212
Treasury stock purchases		(48	)		(16	)		(157	)		(1,000	)		(2,328	)
Net cash used in financing activities		(13,697	)		(5,431	)		(7,941	)		(53,424	)		(26,211	)
EFFECTS OF EXCHANGE RATES ON CASH		318			(342	)		508			585			1,350
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(56	)		(5,877	)		9,336			(16,529	)		2,916
CASH AND CASH EQUIVALENTS, beginning of the period		14,567			20,444			18,724			31,040			25,144
CASH AND CASH EQUIVALENTS, end of the period	$	14,511		$	14,567		$	28,060		$	14,511		$	28,060

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, 2024			Jun 30, 2024			Sep 30, 2023			Sequential			Year-on-year
Net (loss) income		(159,416	)		6,293			11,525			(2,633	)%		(1,483	)%
Interest expense, net		2,113			2,316			2,392			(9	)%		(12	)%
Income tax provision		7,848			2,792			4,087			181	%		92	%
Depreciation		3,444			3,431			3,460			—	%		—	%
Amortization of purchased intangible assets		5,278			5,307			5,667			(1	)%		(7	)%
EBITDA		(140,733	)		20,139			27,131			(799	)%		(619	)%
Stock-based compensation		1,671			1,676			1,832			—	%		(9	)%
Goodwill impairment		141,725			—			—			100	%		100	%
Strategic review expenses		1,763			2,020			—			(13	)%		100	%
Restructuring expenses and asset impairments		2,069			279			515			642	%		302	%
CEO transition expenses		—			—			805			—	%		(100	)%
Other expense (income), net		520			284			(302	)		83	%		272	%
Adjusted EBITDA	$	7,015		$	24,398		$	29,981			(71	)%		(77	)%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(1,344	)		(4,978	)		(5,374	)		(73	)%		(75	)%
Adjusted EBITDA attributable to DMC Global Inc.	$	5,671		$	19,420		$	24,607			(71	)%		(77	)%

	Nine months ended						Change
	Sep 30, 2024			Sep 30, 2023			Year-on-year
Net (loss) income	$	(150,804	)	$	31,190			(584	)%
Interest expense, net		6,746			7,205			(6	)%
Income tax provision		12,283			13,187			(7	)%
Depreciation		10,294			10,294			—	%
Amortization of purchased intangible assets		15,877			17,001			(7	)%
EBITDA		(105,604	)		78,877			(234	)%
Stock-based compensation		4,824			8,558			(44	)%
Goodwill impairment		141,725			—			100	%
Strategic review expenses		5,952			—			100	%
Restructuring expenses and asset impairments		2,348			515			356	%
CEO transition expenses		—			4,343			(100	)%
Other expense, net		1,213			337			260	%
Adjusted EBITDA	$	50,458		$	92,630			(46	)%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(8,684	)		(16,156	)		(46	)%
Adjusted EBITDA attributable to DMC Global Inc.	$	41,774		$	76,474			(45	)%

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 September 30, 2024
	Amount			Per Share ⁽¹⁾
Net loss attributable to DMC Global Inc. stockholders*	$	(101,323	)	$	(5.14	)
Goodwill impairment, net of tax		85,035			4.31
Strategic review expenses, net of tax		1,322			0.07
Restructuring expenses and asset impairments, net of tax		1,451			0.07
Establishment of income tax valuation allowance		3,900			0.20
As adjusted	$	(9,615	)	$	(0.49	)

⁽¹⁾ Calculated using diluted weighted average shares outstanding of 19,706,587

	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 and asset impairments, 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 September 30, 2023
	Amount		Per Share ⁽¹⁾
Net income attributable to DMC Global Inc. stockholders*	$	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

	Nine months ended September 30, 2024
	Amount			Per Share ⁽¹⁾
Net loss attributable to DMC Global Inc. stockholders*	$	(94,748	)	$	(4.82	)
Goodwill impairment, net of tax		85,035			4.33
Strategic review expenses, net of tax		4,464			0.22
Restructuring expenses and asset impairments, net of tax		1,576			0.08
Establishment of income tax valuation allowance		3,900			0.20
As adjusted	$	227		$	0.01

⁽¹⁾ Calculated using diluted weighted average shares outstanding of 19,648,253

	Nine months ended September 30, 2023
	Amount		Per Share ⁽¹⁾
Net income attributable to DMC Global Inc. stockholders*	$	23,495	$	1.20
CEO transition expenses and accelerated stock-based compensation, net of tax		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

Segment Adjusted EBITDA

Arcadia

	Three months ended									Change
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sequential			Year-on-year
Operating (loss) income, as reported	$	(145,122	)	$	5,719		$	6,476			(2,638	)%		(2,341	)%
Adjustments:
Depreciation		914			888			969			3	%		(6	)%
Amortization of purchased intangible assets		5,278			5,278			5,652			—	%		(7	)%
Stock-based compensation		315			281			337			12	%		(7	)%
Goodwill impairment		141,725			—			—			100	%		100	%
Restructuring expenses and asset impairments		248			279			—			(11	)%		100	%
Adjusted EBITDA		3,358			12,445			13,434			(73	)%		(75	)%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(1,344	)	$	(4,978	)	$	(5,374	)		(73	)%		(75	)%
Adjusted EBITDA attributable to DMC Global Inc.	$	2,014		$	7,467		$	8,060			(73	)%		(75	)%

	Nine months ended						Change
	Sep 30, 2024			Sep 30, 2023			Year-on-year
Operating (loss) income, as reported	$	(139,991	)	$	19,189			(830	)%
Adjustments:
Depreciation		2,677			2,675			—	%
Amortization of purchased intangible assets		15,833			16,956			(7	)%
Stock-based compensation		938			1,239			(24	)%
Goodwill impairment		141,725			—			100	%
Restructuring expenses and asset impairments		527			—			100	%
CEO transition expenses		—			331			(100	)%
Adjusted EBITDA		21,709			40,390			(46	)%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(8,684	)	$	(16,156	)		(46	)%
Adjusted EBITDA attributable to DMC Global Inc.	$	13,025		$	24,234			(46	)%

DynaEnergetics

	Three months ended							Change
	Sep 30, 2024			Jun 30, 2024		Sep 30, 2023		Sequential			Year-on-year
Operating (loss) income, as reported	$	(3,049	)	$	7,052	$	10,871		(143	)%		(128	)%
Adjustments:
Depreciation		1,642			1,671		1,682		(2	)%		(2	)%
Amortization of purchased intangible assets		—			29		15		(100	)%		(100	)%
Restructuring expenses and asset impairments		1,821			—		—		100	%		100	%
Adjusted EBITDA	$	414		$	8,752	$	12,568		(95	)%		(97	)%

	Nine months ended				Change
	Sep 30, 2024		Sep 30, 2023		Year-on-year
Operating income, as reported	$	12,845	$	41,772		(69	)%
Adjustments:
Depreciation		4,995		5,167		(3	)%
Amortization of purchased intangible assets		44		45		(2	)%
Restructuring expenses and asset impairments		1,821		—		100	%
Adjusted EBITDA	$	19,705	$	46,984		(58	)%

NobelClad

	Three months ended						Change
	Sep 30, 2024		Jun 30, 2024		Sep 30, 2023		Sequential			Year-on-year
Operating income, as reported	$	4,969	$	4,932	$	5,232		1	%		(5	)%
Adjustments:
Depreciation		807		790		712		2	%		13	%
Restructuring expenses and asset impairments		—		—		440		—	%		(100	)%
Adjusted EBITDA	$	5,776	$	5,722	$	6,384		1	%		(10	)%

	Nine months ended				Change
	Sep 30, 2024		Sep 30, 2023		Year-on-year
Operating income, as reported	$	15,001	$	12,560		19	%
Adjustments:
Depreciation		2,377		2,152		10	%
Restructuring expenses and asset impairments		—		440		(100	)%
Adjusted EBITDA	$	17,378	$	15,152		15	%

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