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DMC Global Reports Fourth Quarter Financial Results

DMC Global Inc.

February 22, 2024 18 min read

BOOM

Fourth quarter sales were $174.0 million, flat versus Q4 2022
Net income attributable to DMC was $2.8 million, while total net income was $3.6 million
Adjusted net income attributable to DMC* was $5.2 million, or $0.26 per diluted share
Adjusted EBITDA attributable to DMC* was $19.6 million, while total adjusted EBITDA, inclusive of non-controlling interest (NCI), was $23.3 million
Free-cash flow* was $15.0 million
Full-year results include record sales, adjusted EBITDA attributable to DMC, and free-cash flow performance

BROOMFIELD, Colo., Feb. 22, 2024 (GLOBE NEWSWIRE) -- DMC Global Inc. (Nasdaq: BOOM) today reported financial results for its fourth quarter ended December 31, 2023.

Michael Kuta, president and CEO, said, “The fourth quarter marked the end of a milestone year for DMC. In addition to reporting record sales, adjusted EBITDA and free cash flow, we refined the operating strategies of our three businesses and initiated a review of alternative structures for DMC’s portfolio as part of a broader strategy for enhancing stakeholder value.

“At the business level, the fourth quarter was notable for the varied conditions across our industrial end markets. At Arcadia, our architectural building products business, lower pricing impacted several of our markets in the western and southwestern United States. Arcadia’s fourth quarter sales were $68.0 million, down 9% from the 2022 fourth quarter. Adjusted EBITDA margin improved to 13.6% from 9.6% in the comparable 2022 fourth quarter, as the decline in product pricing was not as pronounced as the drop in raw material costs.

“DynaEnergetics, our oilfield products business, reported continued strong demand in its international and North American markets. However, industry consolidation in the United States impacted pricing. Dyna’s fourth quarter sales were $75.3 million, down 3% versus the 2022 fourth quarter, but up 3% sequentially. Adjusted EBITDA margin was 12.3% versus 18.6% in the prior-year fourth quarter and 17.2% in the 2023 third quarter. We expect the new automation and operational-excellence initiatives coming on-line in 2024 will improve profitability at Dyna.

“NobelClad, our composite metals business, continued to capitalize on healthy market conditions and delivered a very strong fourth quarter. Sales of $30.8 million were up 33% year-over-year. The increase, combined with a favorable product mix, led to adjusted EBITDA margins of 24.7%, up from 14.8% in the 2022 fourth quarter.

“While challenging conditions in Arcadia’s markets will lead to a soft first quarter, we anticipate the business will experience improved demand during the balance of the year. Moreover, the recent addition of new painting capacity has improved Arcadia’s ability to capitalize on expected increases in activity.

“At Dyna, strong demand for the new Gravity 2.0 self-orienting perforating system should be additive to the expected margin benefits of improved manufacturing efficiencies. We believe 2024 will be another strong year at NobelClad, as there are a broad range of large project opportunities for both traditional and new clad-plate applications.

“As we enter 2024, our primary objective is to unlock value for DMC’s shareholders,” Kuta said. “Two key steps in this process are the simplification of our portfolio and maximizing the long-term growth opportunities at Arcadia. We are working with our financial advisors to explore strategic alternatives for NobelClad and DynaEnergetics, two valuable and innovative businesses that will continue to lead their respective industries. We also intend to capitalize on Arcadia’s differentiated business model and large addressable market, and are pursuing a range of compelling growth initiatives.”

Eric Walter, CFO, said “Our new $300 million senior secured credit facility has strengthened DMC’s balance sheet and enhanced our financial flexibility as we execute our strategy. We believe we can fund our growth programs while maintaining our leverage and debt-service costs at prudent levels.”

Kuta added, “We have the strategy, the leadership team and the capital structure to be successful. We also have an extraordinary team of dedicated employees who have enabled the success of our businesses. I sincerely thank them for their continued dedication.”

Summary Fourth Quarter Results

	Three months ended									Change
(Amounts in 000’s, except Per Share Data)	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Sequential		Year-on-year
Net sales	$	174,036		$	172,147		$	175,074		1	%	(1	)%
Gross profit percentage		26.1	%		30.6	%		25.8	%
SG&A	$	27,179		$	28,713		$	30,636		(5	)%	(11	)%
Net income	$	3,569		$	11,525		$	3,441		(69	)%	4	%
Net income attributable to DMC	$	2,764		$	8,883		$	3,266		(69	)%	(15	)%
Diluted net income per share attributable to DMC	$	0.01		$	0.38		$	0.52		(97	)%	(98	)%
Adjusted net income attributable to DMC	$	5,179		$	9,861		$	4,259		(47	)%	22	%
Adjusted diluted net income per share	$	0.26		$	0.50		$	0.22		(48	)%	18	%
Adjusted EBITDA attributable to DMC	$	19,589		$	24,607		$	19,581		(20	)%	—	%
Adjusted EBITDA before NCI allocation	$	23,278		$	29,981		$	22,438		(22	)%	4	%

Arcadia

	Three months ended									Change
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Sequential		Year-on-year
Net sales	$	67,958		$	71,455		$	74,400		(5	)%	(9	)%
Gross profit percentage		27.8	%		33.3	%		24.2	%
Adjusted EBITDA attributable to DMC	$	5,533		$	8,060		$	4,286		(31	)%	29	%
Adjusted EBITDA before NCI allocation		9,222			13,434			7,143		(31	)%	29	%

Acadia’s year-over-year improvement in adjusted EBITDA margin reflects a less pronounced drop in product pricing as compared to aluminum costs.

DynaEnergetics

	Three months ended									Change
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Sequential		Year-on-year
Net sales	$	75,306		$	72,998		$	77,551		3	%	(3	)%
Gross profit percentage		21.4	%		26.8	%		28.1	%
Adjusted EBITDA	$	9,286		$	12,568		$	14,439		(26	)%	(36	)%

Fourth quarter 2023 adjusted EBITDA was negatively impacted by $1.0 million in bad debt expense.

NobelClad

	Three months ended									Change
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Sequential		Year-on-year
Net sales	$	30,772		$	27,694		$	23,123		11	%	33	%
Gross profit percentage		33.8	%		33.6	%		23.9	%
Adjusted EBITDA	$	7,608		$	6,384		$	3,433		19	%	122	%

NobelClad ended 2023 with an order backlog of $59 million versus $61 million at the end of the third quarter.
Rolling 12-month bookings were $109.8 million versus $110.9 million at the end of the third quarter; and the book-to-bill ratio was 1.04.

Summary 2023 Results

	Twelve months ended						Change
	Dec 31, 2023			Dec 31, 2022				Year-on-year
Net sales	$	719,188		$	654,086			10	%
Gross profit percentage		29.5	%		28.4	%
SG&A	$	124,442		$	118,349			5	%
Net income	$	34,759		$	13,833			151	%
Net income attributable to DMC	$	26,259		$	12,247			114	%
Diluted net income per share attributable to DMC	$	1.08		$	0.72			50	%
Adjusted net income attributable to DMC	$	35,316		$	13,475			162	%
Adjusted diluted net income per share	$	1.81		$	0.70			159	%
Adjusted EBITDA attributable to DMC	$	96,063		$	74,199			29	%
Adjusted EBITDA before NCI allocation	$	115,908		$	92,967			25	%

First Quarter 2024 Guidance

Measure	Expected Range
Sales
DMC Consolidated	$168M - $178M
Arcadia	$67M - $71M
DynaEnergetics	$77M - $81M
NobelClad	$24M - $26M
Adjusted EBITDA
Arcadia before NCI allocation	$7M - $10M
Arcadia after NCI allocation	$4M - $6M
DynaEnergetics	$11M - $13M
NobelClad	$3M - $4M
Corporate Unallocated	~ ($3M)
Attributable to DMC	$15M - $20M
Full-Year 2024 Guidance on Select Items
Depreciation and amortization	$35M - $36M
Interest expense	$8M - $9M
Annualized effective tax rate	27% - 29%
Capital expenditures	$22M - $26M

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=hzNWxwom

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

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

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

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

Safe Harbor Language
Except for the historical information contained herein, this news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including guidance on sales, adjusted EBITDA, depreciation and amortization expense, interest expense, tax rate, capital expenditures; our expectations for a soft first quarter at Arcadia followed by improved demand during the balance of the year; our intentions with respect to growth at Arcadia; the impact of new painting and anodizing capacity expansions at Arcadia; improved profitability at DynaEnergetics resulting from new automation and operational excellence initiatives, as well as the success of new premium product offerings; our expectations of a strong year in NobelClad; and our ability to fund our growth programs while maintaining our leverage and debt-service costs at prudent levels. 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
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Sequential		Year-on-year
NET SALES	$	174,036		$	172,147		$	175,074		1	%	(1	)%
COST OF PRODUCTS SOLD		128,682			119,550			129,970		8	%	(1	)%
Gross profit		45,354			52,597			45,104		(14	)%	1	%
Gross profit percentage		26.1	%		30.6	%		25.8	%
COSTS AND EXPENSES:
General and administrative expenses		15,056			16,259			19,789		(7	)%	(24	)%
Selling and distribution expenses		12,123			12,454			10,847		(3	)%	12	%
Amortization of purchased intangible assets		5,666			5,667			3,772		—	%	50	%
Restructuring expenses, net and asset impairments		3,251			515			129		531	%	2,420	%
Total costs and expenses		36,096			34,895			34,537		3	%	5	%
OPERATING INCOME		9,258			17,702			10,567		(48	)%	(12	)%
OTHER (EXPENSE) INCOME:
Other (expense) income, net		(1,445	)		302			(559	)	578	%	158	%
Interest expense, net		(2,311	)		(2,392	)		(2,129	)	(3	)%	9	%
INCOME BEFORE INCOME TAXES		5,502			15,612			7,879		(65	)%	(30	)%
INCOME TAX PROVISION		1,933			4,087			4,438		(53	)%	(56	)%
NET INCOME		3,569			11,525			3,441		(69	)%	4	%
Less: Net income attributable to redeemable noncontrolling interest		805			2,642			175		(70	)%	360	%
NET INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS	$	2,764		$	8,883		$	3,266		(69	)%	(15	)%
NET INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS
Basic	$	0.01		$	0.38		$	0.52		(97	)%	(98	)%
Diluted	$	0.01		$	0.38		$	0.52		(97	)%	(98	)%
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		19,561,494			19,543,251			19,384,678		—	%	1	%
Diluted		19,580,750			19,596,575			19,393,245		—	%	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
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022
Net income attributable to DMC Global Inc. stockholders	$	2,764		$	8,883		$	3,266
Adjustment of redeemable noncontrolling interest		(2,581	)		(1,263	)		6,933
Net income attributable to DMC Global Inc. common stockholders after adjustment of redeemable noncontrolling interest	$	183		$	7,620		$	10,199

	Twelve months ended						Change
	Dec 31, 2023			Dec 31, 2022			Year-on-year
NET SALES	$	719,188		$	654,086		10	%
COST OF PRODUCTS SOLD		507,136			468,639		8	%
Gross profit		212,052			185,447		14	%
Gross profit percentage		29.5	%		28.4	%
COSTS AND EXPENSES:
General and administrative expenses		75,341			76,119		(1	)%
Selling and distribution expenses		49,101			42,230		16	%
Amortization of purchased intangible assets		22,667			36,926		(39	)%
Restructuring expenses, net and asset impairments		3,766			182		1,969	%
Total costs and expenses		150,875			155,457		(3	)%
OPERATING INCOME		61,177			29,990		104	%
OTHER (EXPENSE) INCOME:
Other expense, net		(1,782	)		(594	)	200	%
Interest expense, net		(9,516	)		(6,187	)	54	%
INCOME BEFORE INCOME TAXES		49,879			23,209		115	%
INCOME TAX PROVISION		15,120			9,376		61	%
NET INCOME		34,759			13,833		151	%
Less: Net income attributable to redeemable noncontrolling interest		8,500			1,586		436	%
NET INCOME ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS	$	26,259		$	12,247		114	%
NET INCOME PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS
Basic	$	1.08		$	0.72		50	%
Diluted	$	1.08		$	0.72		50	%
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		19,504,542			19,360,677		1	%
Diluted		19,518,382			19,369,165		1	%

Reconciliation to net income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest for purposes of calculating earnings per share

	Twelve months ended
	Dec 31, 2023			Dec 31, 2022
Net income attributable to DMC Global Inc. stockholders	$	26,259		$	12,247
Adjustment of redeemable noncontrolling interest		(4,870	)		1,937
Net income attributable to DMC Global Inc. common stockholders after adjustment of redeemable noncontrolling interest	$	21,389		$	14,184

DMC GLOBAL INC. SEGMENT STATEMENTS OF OPERATIONS (Amounts in Thousands) (unaudited)
Arcadia
	Three months ended									Change
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Sequential		Year-on-year
Net sales	$	67,958		$	71,455		$	74,400		(5	)%	(9	)%
Gross profit		18,910			23,789			17,970		(21	)%	5	%
Gross profit percentage		27.8	%		33.3	%		24.2	%
COSTS AND EXPENSES:
General and administrative expenses		7,012			7,413			9,535		(5	)%	(26	)%
Selling and distribution expenses		4,028			4,248			4,352		(5	)%	(7	)%
Amortization of purchased intangible assets		5,652			5,652			3,642		—	%	55	%
Operating income		2,218			6,476			441		(66	)%	403	%
Adjusted EBITDA		9,222			13,434			7,143		(31	)%	29	%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(3,689	)		(5,374	)		(2,857	)	(31	)%	29	%
Adjusted EBITDA attributable to DMC Global Inc.	$	5,533		$	8,060		$	4,286		(31	)%	29	%

	Twelve months ended						Change
	Dec 31, 2023			Dec 31, 2022			Year-on-year
Net sales	$	298,909		$	299,527		—	%
Gross profit		92,252			88,334		4	%
Gross profit percentage		30.9	%		29.5	%
COSTS AND EXPENSES:
General and administrative expenses		30,488			31,872		(4	)%
Selling and distribution expenses		17,749			16,184		10	%
Amortization of purchased intangible assets		22,608			36,316		(38	)%
Operating income		21,407			3,962		440	%
Adjusted EBITDA	$	49,612		$	46,920		6	%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest	$	(19,845	)	$	(18,768	)	6	%
Adjusted EBITDA attributable to DMC Global Inc.	$	29,767		$	28,152		6	%

DynaEnergetics
	Three months ended									Change
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Sequential		Year-on-year
Net sales	$	75,306		$	72,998		$	77,551		3	%	(3	)%
Gross profit		16,127			19,585			21,764		(18	)%	(26	)%
Gross profit percentage		21.4	%		26.8	%		28.1	%
COSTS AND EXPENSES:
General and administrative expenses		2,937			3,095			4,970		(5	)%	(41	)%
Selling and distribution expenses		5,584			5,604			4,270		—	%	31	%
Amortization of purchased intangible assets		14			15			54		(7	)%	(74	)%
Restructuring expenses, net and asset impairments		3,011			—			—		100	%	100	%
Operating income		4,581			10,871			12,470		(58	)%	(63	)%
Adjusted EBITDA	$	9,286		$	12,568		$	14,439		(26	)%	(36	)%

	Twelve months ended						Change
	Dec 31, 2023			Dec 31, 2022			Year-on-year
Net sales	$	315,026		$	264,327		19	%
Gross profit		86,701			75,569		15	%
Gross profit percentage		27.5	%		28.6	%
COSTS AND EXPENSES:
General and administrative expenses		15,806			19,627		(19	)%
Selling and distribution expenses		21,472			16,588		29	%
Amortization of purchased intangible assets		59			299		(80	)%
Restructuring expenses, net and asset impairments		3,011			—		100	%
Operating income		46,353			39,055		19	%
Adjusted EBITDA	$	56,270		$	46,932		20	%

NobelClad
	Three months ended									Change
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Sequential		Year-on-year
Net sales	$	30,772		$	27,694		$	23,123		11	%	33	%
Gross profit		10,416			9,309			5,518		12	%	89	%
Gross profit percentage		33.8	%		33.6	%		23.9	%
COSTS AND EXPENSES:
General and administrative expenses		1,114			1,106			943		1	%	18	%
Selling and distribution expenses		2,435			2,531			2,071		(4	)%	18	%
Amortization of purchased intangible assets		—			—			76		—	%	(100	)%
Restructuring expenses, net and asset impairments		—			440			129		(100	)%	(100	)%
Operating income		6,867			5,232			2,299		31	%	199	%
Adjusted EBITDA	$	7,608		$	6,384		$	3,433		19	%	122	%

	Twelve months ended						Change
	Dec 31, 2023			Dec 31, 2022			Year-on-year
Net sales	$	105,253		$	90,232		17	%
Gross profit		33,529			22,050		52	%
Gross profit percentage		31.9	%		24.4	%
COSTS AND EXPENSES:
General and administrative expenses		4,092			4,587		(11	)%
Selling and distribution expenses		9,570			8,981		7	%
Amortization of purchased intangible assets		—			311		(100	)%
Restructuring expenses, net and asset impairments		440			182		142	%
Operating income		19,427			7,989		143	%
Adjusted EBITDA	$	22,760		$	11,901		91	%

DMC GLOBAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in Thousands)
							Change
	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022		Sequential		From year-end
	(unaudited)		(unaudited)
ASSETS

Cash and cash equivalents	$	31,040	$	28,060	$	25,144	11	%	23	%
Marketable securities		12,619		7,516		—	68	%	100	%
Accounts receivable, net		106,205		105,519		94,415	1	%	12	%
Inventories		166,712		185,777		156,590	(10	)%	6	%
Prepaid expenses and other		10,236		9,945		10,723	3	%	(5	)%

Total current assets		326,812		336,817		286,872	(3	)%	14	%

Property, plant and equipment, net		129,267		126,095		129,445	3	%	—	%
Goodwill		141,725		141,725		141,725	—	%	—	%
Purchased intangible assets, net		195,260		200,925		217,925	(3	)%	(10	)%
Other long-term assets		91,431		90,716		103,011	1	%	(11	)%

Total assets	$	884,495	$	896,278	$	878,978	(1	)%	1	%

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY

Accounts payable	$	40,202	$	45,589	$	46,816	(12	)%	(14	)%
Contract liabilities		21,621		28,557		32,080	(24	)%	(33	)%
Accrued income taxes		12,810		11,527		4,256	11	%	201	%
Current portion of long-term debt		15,000		15,000		15,000	—	%	—	%
Other current liabilities		36,828		36,954		29,898	—	%	23	%

Total current liabilities		126,461		137,627		128,050	(8	)%	(1	)%

Long-term debt		100,851		104,460		117,798	(3	)%	(14	)%
Deferred tax liabilities		1,956		3,336		1,908	(41	)%	3	%
Other long-term liabilities		57,172		58,167		63,053	(2	)%	(9	)%
Redeemable noncontrolling interest		187,760		187,522		187,522	—	%	—	%
Stockholders’ equity		410,295		405,166		380,647	1	%	8	%

Total liabilities, redeemable noncontrolling interest, and stockholders’ equity	$	884,495	$	896,278	$	878,978	(1	)%	1	%

DMC GLOBAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands) (unaudited)
	Three months ended									Twelve months ended
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Dec 31, 2023			Dec 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,569		$	11,525		$	3,441		$	34,759		$	13,833
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		3,546			3,460			3,703			13,840			14,281
Amortization of purchased intangible assets		5,666			5,667			3,772			22,667			36,926
Amortization of deferred debt issuance costs		141			141			141			553			553
Amortization of acquisition-related inventory valuation step-up		—			—			—			—			430
Stock-based compensation		1,712			1,832			3,167			10,270			10,058
Deferred income taxes		(1,248	)		1,558			1,013			970			(599	)
Unrealized gain on marketable securities		(148	)		—			—			(148	)		—
Asset impairments		1,956			515			—			2,471			—
Other		1,859			(1,607	)		1,768			(181	)		1,526
Change in working capital, net		6,126			1,113			3,596			(19,274	)		(32,072	)
Net cash provided by operating activities		23,179			24,204			20,601			65,927			44,936
CASH FLOWS FROM INVESTING ACTIVITIES:
Consideration adjustments related to acquisition of business		—			—			(370	)		—			(2,404	)
Investment in marketable securities		(4,955	)		(5,102	)		—			(12,471	)		—
Acquisition of property, plant and equipment		(8,519	)		(2,333	)		(7,307	)		(15,974	)		(18,584	)
Proceeds on sale of property, plant and equipment		344			—			62			344			62
Net cash used in investing activities		(13,130	)		(7,435	)		(7,615	)		(28,101	)		(20,926	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on term loan		(3,750	)		(3,750	)		(3,750	)		(17,500	)		(15,000	)
Payments of debt issuance costs		—			—			(1	)		—			(180	)
Distributions to redeemable noncontrolling interest holder		(3,170	)		(4,034	)		(2,007	)		(13,515	)		(12,300	)
Net proceeds from issuance of common stock to employees and directors		102			—			201			314			201
Treasury stock activity		(153	)		(157	)		(139	)		(2,481	)		(1,231	)
Net cash used in financing activities		(6,971	)		(7,941	)		(5,696	)		(33,182	)		(28,510	)
EFFECTS OF EXCHANGE RATES ON CASH		(98	)		508			(632	)		1,252			(1,166	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		2,980			9,336			6,658			5,896			(5,666	)
CASH AND CASH EQUIVALENTS, beginning of the period		28,060			18,724			18,486			25,144			30,810
CASH AND CASH EQUIVALENTS, end of the period	$	31,040		$	28,060		$	25,144		$	31,040		$	25,144

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
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Sequential		Year-on-year
Net income		3,569			11,525			3,441		(69	)%	4	%
Interest expense, net		2,311			2,392			2,129		(3	)%	9	%
Income tax provision		1,933			4,087			4,438		(53	)%	(56	)%
Depreciation		3,546			3,460			3,703		2	%	(4	)%
Amortization of purchased intangible assets		5,666			5,667			3,772		—	%	50	%
EBITDA		17,025			27,131			17,483		(37	)%	(3	)%
Stock-based compensation		1,557			1,832			3,167		(15	)%	(51	)%
Restructuring expenses, net and asset impairments		3,251			515			129		531	%	2,420	%
CEO transition expenses		—			805			—		(100	)%	—	%
Nonrecurring retirement expenses		—			—			1,100		—	%	(100	)%
Other expense (income), net		1,445			(302	)		559		578	%	158	%
Adjusted EBITDA	$	23,278		$	29,981		$	22,438		(22	)%	4	%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(3,689	)		(5,374	)		(2,857	)	(31	)%	29	%
Adjusted EBITDA attributable to DMC Global Inc. stockholders	$	19,589		$	24,607		$	19,581		(20	)%	—	%

	Twelve months ended						Change
	Dec 31, 2023			Dec 31, 2022			Year-on-year
Net income	$	34,759		$	13,833		151	%
Interest expense, net		9,516			6,187		54	%
Income tax provision		15,120			9,376		61	%
Depreciation		13,840			14,281		(3	)%
Amortization of purchased intangible assets		22,667			36,926		(39	)%
EBITDA		95,902			80,603		19	%
Stock-based compensation		10,115			10,058		1	%
CEO transition expenses		4,343			—		100	%
Restructuring expenses, net and asset impairments		3,766			182		1,969	%
Amortization of acquisition-related inventory valuation step-up		—			430		(100	)%
Nonrecurring retirement expenses		—			1,100		(100	)%
Other expense, net		1,782			594		200	%
Adjusted EBITDA	$	115,908		$	92,967		25	%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(19,845	)		(18,768	)	6	%
Adjusted EBITDA attributable to DMC Global Inc. stockholders	$	96,063		$	74,199		29	%

Adjusted Net Income* and Adjusted Diluted Earnings per Share
*Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest
	Three months ended December 31, 2023
	Amount		Per Share⁽¹⁾
Net income attributable to DMC Global Inc. stockholders*	$	2,764	$	0.14
Restructuring expenses, net and asset impairments, net of tax		2,415		0.12
As adjusted	$	5,179	$	0.26
⁽¹⁾ Calculated using diluted weighted average shares outstanding of 19,580,750

	Three months ended 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, net 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

	Three months ended December 31, 2022
	Amount		Per Share⁽¹⁾
Net income attributable to DMC Global Inc. stockholders*	$	3,266	$	0.17
Nonrecurring retirement expenses, net of tax		905		0.05
Restructuring expenses, net and asset impairments, net of tax		88		—
As adjusted	$	4,259	$	0.22
⁽¹⁾Calculated using diluted weighted average shares outstanding of 19,393,245

	Twelve months ended December 31, 2023
	Amount		Per Share⁽¹⁾
Net income attributable to DMC Global Inc. stockholders*	$	26,259	$	1.35
CEO transition expenses and accelerated stock-based compensation, net of tax⁽²⁾		6,284		0.32
Restructuring expenses, net and asset impairments, net of tax		2,773		0.14
As adjusted	$	35,316	$	1.81
⁽¹⁾Calculated using diluted weighted average shares outstanding of 19,518,382
⁽²⁾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.

	Twelve months ended December 31, 2022
	Amount		Per Share⁽¹⁾
Net income attributable to DMC Global Inc. stockholders*	$	12,247	$	0.63
Nonrecurring retirement expenses, net of tax⁽²⁾		905		0.05
Amortization of acquisition-related inventory valuation step-up, net of tax		199		0.01
Restructuring expenses, net and asset impairments, net of tax		124		0.01
As adjusted	$	13,475	$	0.70
⁽¹⁾Calculated using diluted weighted average shares outstanding of 19,369,165
⁽²⁾Includes nonrecurring expenses of $1,100 in accrued cash compensation and $859 in accelerated stock-based compensation, net of tax, related to the retirement of Arcadia’s former president.

Segment Adjusted EBITDA
Arcadia
	Three months ended									Change
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Sequential		Year-on-year
Operating income, as reported	$	2,218		$	6,476		$	441		(66	)%	403	%
Adjustments:
Depreciation		1,020			969			762		5	%	34	%
Amortization of purchased intangible assets		5,652			5,652			3,642		—	%	55	%
Stock-based compensation		332			337			1,198		(1	)%	(72	)%
Nonrecurring retirement expenses		—			—			1,100		—	%	(100	)%
Adjusted EBITDA		9,222			13,434			7,143		(31	)%	29	%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(3,689	)		(5,374	)		(2,857	)	(31	)%	29	%
Adjusted EBITDA attributable to DMC Global Inc.	$	5,533		$	8,060		$	4,286		(31	)%	29	%

	Twelve months ended						Change
	Dec 31, 2023			Dec 31, 2022			Year-on-year
Operating income, as reported	$	21,407		$	3,962		440	%
Adjustments:
Depreciation		3,695			2,906		27	%
Amortization of purchased intangible assets		22,608			36,316		(38	)%
Stock-based compensation		1,571			2,206		(29	)%
CEO transition expenses		331			—		100	%
Nonrecurring retirement expenses		—			1,100		(100	)%
Amortization of acquisition-related inventory valuation step-up		—			430		(100	)%
Adjusted EBITDA		49,612			46,920		6	%
Less: adjusted EBITDA attributable to redeemable noncontrolling interest		(19,845	)		(18,768	)	6	%
Adjusted EBITDA attributable to DMC Global Inc.	$	29,767		$	28,152		6	%

DynaEnergetics
	Three months ended						Change
	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022		Sequential		Year-on-year
Operating income, as reported	$	4,581	$	10,871	$	12,470	(58	)%	(63	)%
Adjustments:
Depreciation		1,680		1,682		1,915	—	%	(12	)%
Amortization of purchased intangible assets		14		15		54	(7	)%	(74	)%
Restructuring expenses, net and asset impairments		3,011		—		—	100	%	100	%
Adjusted EBITDA	$	9,286	$	12,568	$	14,439	(26	)%	(36	)%

	Twelve months ended				Change
	Dec 31, 2023		Dec 31, 2022		Year-on-year
Operating income, as reported	$	46,353	$	39,055	19	%
Adjustments:
Depreciation		6,847		7,578	(10	)%
Amortization of purchased intangible assets		59		299	(80	)%
Restructuring expenses, net and asset impairments		3,011		—	100	%
Adjusted EBITDA	$	56,270	$	46,932	20	%

NobelClad
	Three months ended						Change
	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022		Sequential		Year-on-year
Operating income, as reported	$	6,867	$	5,232	$	2,299	31	%	199	%
Adjustments:
Depreciation		741		712		929	4	%	(20	)%
Amortization of purchased intangible assets		—		—		76	—	%	(100	)%
Restructuring expenses, net and asset impairments		—		440		129	(100	)%	(100	)%
Adjusted EBITDA	$	7,608	$	6,384	$	3,433	19	%	122	%

	Twelve months ended				Change
	Dec 31, 2023		Dec 31, 2022		Year-on-year
Operating income, as reported	$	19,427	$	7,989	143	%
Adjustments:
Depreciation		2,893		3,419	(15	)%
Amortization of purchased intangible assets		—		311	(100	)%
Restructuring expenses, net and asset impairments		440		182	142	%
Adjusted EBITDA	$	22,760	$	11,901	91	%