PART I - FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201%20Condensed%20Consolidated%20Financial%20Statements) Unaudited statements show a significant performance decline in Q2 2020, with a 61% drop in net sales and a net loss of $5.6 million [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $252.0 million due to lower receivables, while liabilities also declined Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 (unaudited) | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $119,111 | $144,353 | | Accounts receivable, net | $33,684 | $60,855 | | **Total Assets** | **$252,017** | **$277,421** | | **Total Current Liabilities** | $49,891 | $71,423 | | **Total Liabilities** | **$81,734** | **$105,280** | | **Total Stockholders' Equity** | **$170,283** | **$172,141** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a Q2 2020 net loss of $5.6 million, driven by a 61% decrease in net sales Q2 2020 vs Q2 2019 Performance (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | | :--- | :--- | :--- | | Net Sales | $43,203 | $110,954 | | Gross Profit | $6,604 | $42,073 | | Operating (Loss) Income | ($7,990) | $24,653 | | Net (Loss) Income | ($5,648) | $17,244 | | Diluted EPS | ($0.38) | $1.15 | Six Months 2020 vs 2019 Performance (in thousands, except per share data) | Metric | Six Months 2020 | Six Months 2019 | | :--- | :--- | :--- | | Net Sales | $116,766 | $211,089 | | Gross Profit | $31,070 | $78,478 | | Operating (Loss) Income | ($1,645) | $45,105 | | Net (Loss) Income | ($1,493) | $32,414 | | Diluted EPS | ($0.10) | $2.17 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased to $11.1 million for the six-month period, resulting in a net cash decrease Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $11,128 | $23,302 | | Net cash used in investing activities | ($7,462) | ($15,025) | | Net cash used in financing activities | ($6,200) | ($6,757) | | **Net (decrease) in cash** | **($3,105)** | **$1,506** | | **Cash and cash equivalents, end of period** | **$17,248** | **$14,881** | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment performance, and $2.0 million in restructuring charges - Adopted a new accounting standard for credit losses on January 1, 2020, which **did not have a material impact** on the financial statements upon adoption[33](index=33&type=chunk) - Increased the allowance for credit losses by **$3.3 million** during the first six months of 2020 due to the COVID-19 pandemic's impact on the oil and gas industry[35](index=35&type=chunk)[37](index=37&type=chunk) - In Q2 2020, DynaEnergetics recorded **asset impairment charges of $1.2 million** on manufacturing assets and continued efforts to sell its Tyumen, Siberia facility[104](index=104&type=chunk) Restructuring & Impairment Charges (Q2 2020, in thousands) | Segment | Severance | Asset Impairment | Other Costs | Total | | :--- | :--- | :--- | :--- | :--- | | NobelClad | $191 | $0 | $4 | $195 | | DynaEnergetics | $121 | $1,181 | $549 | $1,851 | | **Total** | **$312** | **$1,181** | **$553** | **$2,046** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the 61% sales decline due to COVID-19's impact on oil and gas demand and responsive cost-cutting measures [Overview and Outlook](index=28&type=section&id=Overview%20and%20Outlook) The company outlines the severe impact on its DynaEnergetics segment and its strategic cost-cutting and liquidity actions - **Consolidated sales decreased 61%** versus Q2 2019, primarily due to a plunge in global crude oil prices and energy demand from the COVID-19 pandemic, which negatively affected DynaEnergetics[120](index=120&type=chunk) - Implemented cost-containment actions including a **32% workforce reduction**, a **25% cut in SG&A expenses**, a **50% reduction in the capital expenditures budget**, and suspension of the quarterly dividend[122](index=122&type=chunk) - Amended its credit facility to **waive the debt service coverage ratio** for the quarters ending Sep 30, 2020, Dec 31, 2020, and Mar 31, 2021 to preserve liquidity[122](index=122&type=chunk) - NobelClad's backlog **increased to $42.9 million** at June 30, 2020, from $31.7 million at December 31, 2019[117](index=117&type=chunk) [Consolidated Results of Operations](index=31&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated Q2 sales fell 61% to $43.2 million, leading to an operating loss of $8.0 million Consolidated Results - Q2 2020 vs Q2 2019 (in thousands) | Metric | Q2 2020 | Q2 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $43,203 | $110,954 | (61)% | | Gross Profit | $6,604 | $42,073 | (84)% | | Operating (Loss) Income | ($7,990) | $24,653 | (132)% | | Net (Loss) Income | ($5,648) | $17,244 | (133)% | | Adjusted EBITDA | ($1,786) | $29,026 | (106)% | Consolidated Results - H1 2020 vs H1 2019 (in thousands) | Metric | H1 2020 | H1 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $116,766 | $211,089 | (45)% | | Gross Profit | $31,070 | $78,478 | (60)% | | Operating (Loss) Income | ($1,645) | $45,105 | (104)% | | Net (Loss) Income | ($1,493) | $32,414 | (105)% | | Adjusted EBITDA | $9,499 | $52,923 | (82)% | [Business Segment Financial Information](index=36&type=section&id=Business%20Segment%20Financial%20Information) DynaEnergetics' sales plummeted 73%, while NobelClad's sales saw a smaller 12% decline DynaEnergetics Results - Q2 2020 vs Q2 2019 (in thousands) | Metric | Q2 2020 | Q2 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $23,643 | $88,628 | (73)% | | Gross Profit | $1,967 | $36,341 | (95)% | | Operating (Loss) Income | ($6,895) | $26,813 | (126)% | | Adjusted EBITDA | ($3,272) | $28,532 | (111)% | NobelClad Results - Q2 2020 vs Q2 2019 (in thousands) | Metric | Q2 2020 | Q2 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $19,560 | $22,326 | (12)% | | Gross Profit | $4,802 | $5,884 | (18)% | | Operating Income | $1,985 | $1,923 | 3% | | Adjusted EBITDA | $3,061 | $3,082 | (1)% | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained liquidity through cash reserves, an undrawn credit facility, and a suspended dividend - **Net cash provided by operating activities was $11.1 million** for the first six months of 2020, down from $23.3 million in the prior-year period[200](index=200&type=chunk) - On June 25, 2020, amended its credit facility to **waive the debt service coverage ratio** for Q3'20, Q4'20, and Q1'21, and added a minimum liquidity covenant of $10 million for those quarters[190](index=190&type=chunk)[191](index=191&type=chunk) - As of June 30, 2020, the company had **$50 million available** under its revolving credit facility and was in compliance with all financial covenants[193](index=193&type=chunk)[196](index=196&type=chunk) - The Board of Directors **suspended the quarterly dividend indefinitely** on April 23, 2020, due to economic uncertainty from the COVID-19 pandemic[204](index=204&type=chunk) [Item 3. Quantitative and Qualitative Disclosure about Market Risk](index=42&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) No material changes were reported in market risk exposures for currency and interest rates - There were **no material changes in market risk** for changes in foreign currency exchange rates and interest rates from the information provided in the company's Annual Report on Form 10-K for the year ended December 31, 2019[206](index=206&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes - The CEO and CFO evaluated the company's disclosure controls and procedures and **concluded they are effective** as of June 30, 2020[207](index=207&type=chunk) - **No changes occurred** during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting[209](index=209&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=44&type=section&id=Item%201%20Legal%20Proceedings) The company is not aware of any legal proceedings expected to have a material adverse effect - The company is not aware of any legal proceedings or claims that it believes will have a **material adverse effect** on its business, financial condition, or operating results[103](index=103&type=chunk)[211](index=211&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A%20Risk%20Factors) The COVID-19 pandemic is highlighted as a significant risk factor affecting demand, operations, and financial condition - A significant new risk factor is the **adverse effect of pandemics, such as COVID-19**, on the business, results of operations, financial condition, cash flows, and stock price[212](index=212&type=chunk) - The impacts of COVID-19 have **reduced demand for oil and gas**, which has significantly impacted demand for the company's products, pricing, and ability to collect receivables[214](index=214&type=chunk) - The extent of future impact from COVID-19 is **highly uncertain and unpredictable**, but may materially adversely affect the business and could be heightened by any resulting economic recession or depression[214](index=214&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company retained 1,988 shares of common stock to satisfy employee tax withholding obligations - In Q2 2020, the company **retained shares of common stock to satisfy withholding tax obligations** related to the vesting of restricted stock under its equity incentive plans[215](index=215&type=chunk) Share Purchases in Q2 2020 | Period | Total number of shares purchased | Average price paid per share | | :--- | :--- | :--- | | May 1 to May 31, 2020 | 1,988 | $25.21 | | **Total** | **1,988** | **$25.21** | [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204%20Mine%20Safety%20Disclosures) No mine safety violations, orders, or fatalities were reported for the quarter ended June 30, 2020 - During the quarter ended June 30, 2020, the company had **no specified health and safety violations**, orders, citations, or mining-related fatalities requiring disclosure under Section 1503(a) of the Dodd-Frank Act[221](index=221&type=chunk)

Financial Data and Key Metrics Changes - Consolidated sales for Q1 2020 were $73.6 million, down 15% sequentially and down 27% year-over-year [8] - Adjusted net income for Q1 2020 was $5.3 million or $0.35 per diluted share, compared to $15.2 million or $1.02 per diluted share in Q1 2019 [12] - Consolidated adjusted operating income was $7.5 million, down from $20.5 million in Q1 2019 [11][12] - Adjusted EBITDA was $11.3 million, down from $23.9 million in Q1 2019 [12] Business Line Data and Key Metrics Changes - DynaEnergetics reported Q1 sales of $53.2 million, down 18% sequentially and 33% year-over-year [8] - NobelClad reported Q1 sales of $20.3 million, down 7% sequentially and flat year-over-year [9] - DynaEnergetics' gross margin for Q1 was 37%, down from 39% in Q1 2019 [10] - NobelClad's gross margin for Q1 was 25%, down from 26% in Q1 2019 [10] Market Data and Key Metrics Changes - The oil price dropped 65% during Q1 2020, with U.S. crude futures turning negative for the first time in history [6] - Anticipated well completions in Q2 2020 could be down by more than 60% year-over-year [19] - NobelClad booked $29 million in orders during Q1, marking the second strongest bookings quarter in five years [18] Company Strategy and Development Direction - The company is focused on maintaining liquidity and reducing costs while continuing investments in R&D, product development, and operational excellence [15] - The strategy remains unchanged despite the downturn, with a focus on innovation and value creation [25][56] - The company aims to emerge stronger from the downturn by maintaining a strong balance sheet and focusing on integrated perforating systems [56][70] Management's Comments on Operating Environment and Future Outlook - The management noted that the current downturn is expected to be more severe than previous downturns, with a rapid decline in activity [25][19] - The company is not providing financial guidance for Q2 or the full year due to the volatile environment [19] - Management expressed confidence in the company's long-term success despite current challenges [20] Other Important Information - The company has suspended its quarterly dividend and cut its 2020 capital budget by 50% to approximately $13 million [14][15] - SG&A expenses were reduced by 25% compared to the 2019 quarterly run rate [14] Q&A Session Summary Question: What are the priorities for technology and product development during this downturn? - Management confirmed that investments in technology and product development will continue as these are long-term programs [25] Question: How does the company plan to handle pricing pressure in the current environment? - Management acknowledged increased price competition but emphasized the importance of value over price, focusing on innovative and high-performance systems [32] Question: What is the outlook for free cash flow given the current operating environment? - Management indicated that free cash flow for Q2 is expected to be challenging, potentially slightly negative, but positive cash flow is anticipated in the latter half of the year [40][42] Question: How is the backlog for NobelClad being managed in the current market? - Management stated that the backlog for NobelClad is strong, with good margins, and expects revenues to pick up in the second half of the year [59] Question: How is the company addressing new market opportunities? - Management highlighted growth in new applications and markets, including metals and mining, which are contributing to revenue [63][64]

Financial Performance - Net sales for Q1 2020 were $73,564,000, a decrease of 26.7% compared to $100,135,000 in Q1 2019[16] - Gross profit for Q1 2020 was $24,470,000, down 32.8% from $36,405,000 in Q1 2019[16] - Operating income decreased to $6,347,000 in Q1 2020, a decline of 68.9% from $20,452,000 in Q1 2019[16] - Net income for Q1 2020 was $4,155,000, representing a 72.6% decrease from $15,170,000 in Q1 2019[16] - Basic net income per share for Q1 2020 was $0.28, down from $1.02 in Q1 2019[16] - Adjusted EBITDA decreased to $11,287, a decline of 53% compared to $23,897 in the same quarter of the previous year[121] - Consolidated income before income taxes decreased by 68.9% to $6,224, compared to $20,058 in the same period last year[86] - Gross profit margin fell to 33.3% in Q1 2020 from 36.4% in Q1 2019, primarily due to lower volume and unfavorable project mix[122] Assets and Liabilities - Total current assets as of March 31, 2020, were $138,441,000, a decrease from $144,353,000 as of December 31, 2019[12] - Total assets decreased to $268,940,000 as of March 31, 2020, compared to $277,421,000 as of December 31, 2019[12] - Total liabilities as of March 31, 2020, were $95,251,000, down from $105,280,000 as of December 31, 2019[12] - Total stockholders' equity increased to $173,689,000 as of March 31, 2020, from $172,141,000 as of December 31, 2019[12] - Long-term debt decreased to $10,406 as of March 31, 2020, from $11,147 as of December 31, 2019[157] Cash Flow - Net cash provided by operating activities was $4,920,000, down from $6,997,000 in the prior year, reflecting a decline of 29.7%[24] - Cash and cash equivalents at the end of the period were $16,451,000, down from $20,353,000 at the beginning of the period, representing a decrease of 19.0%[24] - Cash flows used in investing activities amounted to $5,121,000, a decrease from $6,601,000 in the same period of 2019[24] - Net cash used in financing activities was $(3,681,000) compared to $818,000 provided in the same period of the previous year[24] Inventory and Expenses - As of March 31, 2020, total inventories increased to $61,445 from $53,728 as of December 31, 2019, representing a growth of approximately 14.5%[57] - Selling and distribution expenses increased by $1,741 in Q1 2020, primarily due to higher provisions for expected credit losses[136] - Total depreciation for the three months ended March 31, 2020, was $2,352,000, an increase of 30.8% from $1,798,000 in the same period of 2019[24] - Stock-based compensation expenses were $1,118,000 for the three months ended March 31, 2020, slightly down from $1,171,000 in the prior year[24] Dividends and Shareholder Returns - Dividends declared per common share increased to $0.125 in Q1 2020, compared to $0.02 in Q1 2019[16] - The company declared a quarterly cash dividend of $0.125 per share, totaling $1,883, which was payable to shareholders of record as of March 31, 2020[162] - The company suspended its quarterly dividend on April 23, 2020, to preserve capital amid the uncertain economic environment[113] - The company suspended its quarterly dividend indefinitely on April 23, 2020, due to the uncertain economic outlook caused by the COVID-19 pandemic[163] Workforce and Restructuring - DMC reduced its workforce by 264 positions in response to a decline in activity levels due to the COVID-19 pandemic[96] - Total restructuring and impairment charges incurred during the first quarter of 2020 amounted to $880[98] - Restructuring expenses amounted to $1,116 in Q1 2020, reflecting a workforce reduction of 264 positions, or 32% of the total workforce[113] Segment Performance - DynaEnergetics segment net sales decreased by 33.4% to $53,220, compared to $79,836 in the same period last year[84] - NobelClad segment net sales slightly increased by 0.2% to $20,344, compared to $20,299 in the same period last year[84] - Net sales for DynaEnergetics in Q1 2020 were $53,220, a decline of 33% from $79,836 in Q1 2019[132] - DynaEnergetics sales decreased by 33% year-over-year to $53,220, while NobelClad sales decreased by 7% to $20,344[112] Credit Losses and Provisions - The allowance for doubtful accounts increased to $2,320,000 as of March 31, 2020, compared to $967,000 at the end of 2019, indicating a significant rise in expected credit losses[34] - The company recorded provisions of $2,299,000 for expected credit losses during the three months ended March 31, 2020, due to the impact of the COVID-19 pandemic[32] Economic Impact and Future Outlook - The company anticipates a more than 60% year-over-year decline in well completions during Q2 2020 due to COVID-19 impacts[113] - A 25% reduction in selling, general and administrative expenses is planned for Q2 2020 compared to the 2019 quarterly run rate of $16.3 million[113] - The company recorded a tax overpayment refund of $2,700 under the CARES Act during the first quarter of 2020[80]

Financial Performance - Net sales for the year 2019 reached $397,550,000, a 21.8% increase from $326,429,000 in 2018[347]. - Gross profit for 2019 was $144,923,000, up from $110,695,000 in 2018, reflecting a gross margin improvement[347]. - Operating income increased to $58,425,000 in 2019, compared to $37,424,000 in 2018, marking a 55.9% growth[347]. - Net income for 2019 was $34,041,000, a 11.5% increase from $30,473,000 in 2018[349]. - Basic net income per share rose to $2.29 in 2019, compared to $2.05 in 2018, indicating a 11.7% increase[347]. - Total comprehensive income for 2019 was $43,252,000, significantly higher than $26,278,000 in 2018[349]. - Total costs and expenses for 2019 were $86,498,000, an increase from $73,271,000 in 2018, primarily due to restructuring expenses[347]. - The company reported a restructuring expense of $19,503,000 in 2019, compared to $1,114,000 in 2018, indicating significant operational changes[347]. - Net cash provided by operating activities increased significantly to $64,594 million in 2019 from $27,638 million in 2018, representing a growth of 133.4%[353]. Assets and Liabilities - Total assets increased to $277,421,000 in 2019 from $240,418,000 in 2018, representing a growth of approximately 15.4%[343]. - Total current liabilities increased to $71,423,000 in 2019 from $64,565,000 in 2018, reflecting an increase of approximately 13.7%[343]. - The company’s long-term debt decreased to $11,147,000 in 2019 from $38,230,000 in 2018, a reduction of approximately 70.8%[343]. - The company’s total liabilities decreased slightly to $105,280,000 in 2019 from $106,132,000 in 2018[343]. - The company had total outstanding borrowings of $14,875 million as of December 31, 2019, down from $42,128 million in 2018[417]. - The company recognized deferred debt issuance costs of $603 million and $773 million as of December 31, 2019, and 2018, respectively[424]. Revenue Recognition and Taxation - The company adopted a new revenue recognition standard on January 1, 2018, with no cumulative financial statement effect noted[386]. - Current income tax expense for 2019 was $18,372 million, significantly higher than $7,787 million in 2018, reflecting a substantial increase in taxable income[444]. - The provision for income taxes in 2019 was $22,661 million, compared to $4,134 million in 2018, indicating a notable rise in tax obligations[449]. - The Tax Cuts and Jobs Act reduced the U.S. federal corporate tax rate from 35% to 21%, impacting the company's tax provision calculations[449]. Operational Risks - The company is dependent on a relatively small number of large projects and customers for a significant portion of its net sales, which could adversely affect cash flow if contracts are not completed on time[140]. - The company is susceptible to the cyclicality of the steel industry, which is affected by supply and demand factors and general economic conditions[141]. - The company relies on suppliers for components and raw materials, and disruptions in supply could adversely affect operations[135]. - The company is exposed to litigation risks that may result in substantial legal fees and could adversely affect its financial position[173]. - Cybersecurity incidents pose risks to the company's information technology systems, which could disrupt operations and lead to financial losses[180]. Compliance and Regulation - The company is subject to extensive government regulation, and failure to comply could result in significant liabilities and restrictions on business operations[148]. - The company faces risks related to compliance with the Foreign Corrupt Practices Act and other anti-bribery laws, which could adversely affect its financial condition[162]. - The company is subject to extensive environmental, health, and safety regulations in the U.S. and other countries, which could lead to significant liabilities if not complied with[161]. Market and Economic Factors - The U.S. government imposed tariffs of 25% on steel and 10% on aluminum in 2018, impacting the cost of imported steel used in the company's products[143]. - The company is exposed to foreign currency risk primarily related to the euro, due to the percentage of U.S. dollar revenue derived from countries where the euro is the functional currency[134]. - The company’s operations are subject to political and economic instability in the countries where it operates, which could adversely affect financial condition[159]. Research and Development - Total research and development costs reached $8,450 million in 2019, up from $7,210 million in 2018, reflecting a growth of approximately 17.2%[397]. - Research and development costs for DynaEnergetics increased to $7,057 million in 2019 from $5,932 million in 2018, while NobelClad's R&D costs rose to $1,393 million from $1,278 million[397]. Stock and Compensation - The company declared a dividend payable of $1,866,000 in 2019, compared to $295,000 in 2018, showing a substantial increase in dividend distribution[343]. - The company granted 75,531 RSAs in 2019 with an average grant date fair value of $48.74[432]. - Total stock-based compensation expense for 2019 was $159 million, up from $121 million in 2018, a 31.4% increase[435].

DMC Global, Inc. (NASDAQ:BOOM) Q4 2019 Earnings Conference Call February 20, 2020 5:00 PM ET Company Participants Geoff High – Vice President-Investor Relations Kevin Longe – President and Chief Executive Officer Mike Kuta – Chief Financial Officer Conference Call Participants Stephen Gengaro – Stifel George O’Leary – Tudor Pickering Holt & Company Gerry Sweeney – ROTH Capital Edward Marshall – Sidoti & Company Jim Brilliant – Century Management Tommy Moll – Stephens Operator Good day, ladies and gentlemen, ...

Financial Data and Key Metrics Changes - Consolidated sales for Q3 2019 were $100.1 million, up 14% year-over-year but down 10% sequentially [5] - Adjusted gross margin was 37%, compared to 34% in Q3 2018 and 38% in Q2 2019 [7][8] - Adjusted net income was $13.4 million or $0.90 per diluted share, up from $10 million or $0.68 per diluted share in Q3 2018 [9] - Adjusted EBITDA was $23.2 million, up from $17.2 million in Q3 2018 but down from $29 million in Q2 2019 [10] Business Line Data and Key Metrics Changes - Sales at DynaEnergetics were $77.4 million, up 17% year-over-year but down 13% sequentially [5] - NobelClad sales were $22.7 million, up 5% year-over-year and up 2% sequentially, with an order backlog of $33.2 million [6] - Adjusted operating income for DynaEnergetics was $21.4 million, while NobelClad reported $2.2 million [9] Market Data and Key Metrics Changes - DynaEnergetics is focusing on onboarding new service companies and improving safety and efficiency in well completion [11][12] - NobelClad is seeing increased interest in composite metal applications across various end markets, including alternative energy and aerospace [16] Company Strategy and Development Direction - The company is maintaining its 2019 sales guidance and has increased its full-year adjusted EPS forecast to a range of $3.65 to $3.80 [19] - DynaEnergetics is introducing new models to enhance customer adoption rates and improve performance in hydraulic fracturing [13][14] - NobelClad is bidding on large projects expected to be awarded soon, which could lead to significant sales growth in 2020 [17] Management's Comments on Operating Environment and Future Outlook - Management noted that the energy industry is facing challenges, but both business lines delivered sales growth and margin improvements [4] - The company expects continued financial strength, with a 43% improvement in net debt and a 30% return on invested capital [18] - Management is optimistic about 2020, expecting it to be better than 2019, despite a weaker second half of the year [37] Other Important Information - The company raised its annual dividend to $0.50 per share from $0.08 per share [18] - The company anticipates Q4 consolidated sales in the range of $92 million to $97 million, with expected gross margins of 34% to 35% [22][23] Q&A Session Summary Question: Onboarding new customers in a softer market - Management acknowledged pricing pressure but emphasized the importance of maintaining margins and not chasing volume at the expense of profitability [26][27] Question: EPS guidance implications - EPS guidance of $3.65 to $3.80 is based on year-to-date adjusted EPS of $3.07 [30] Question: Relationship with Halliburton - Management refrained from discussing specifics but acknowledged Halliburton's importance in the industry [31] Question: DynaEnergetics revenue decline - Management noted that the decline in revenue was anticipated and that they expect a smaller drop in Q4 compared to Q3 [36] Question: Capital expenditures for 2020 - Management expects CapEx to be in the $15 million to $20 million range for 2020, significantly lower than previous years [43] Question: NobelClad's growth opportunities - Management highlighted ongoing bids for sizable projects that could significantly impact revenue in the coming year [82] Question: Market share updates - Management reported an increase in market share from the high teens to the low 20s, indicating stable to growing trends [57] Question: Future acquisitions - Management is open to acquisitions but emphasized a cautious approach to leverage and a focus on organic growth opportunities [61][64]

Financial Performance - Net sales for Q3 2019 reached $100,094,000, a 14% increase from $87,883,000 in Q3 2018[18] - Gross profit for Q3 2019 was $36,224,000, up from $29,728,000 in Q3 2018, representing a 22% increase[18] - Operating income for the nine months ended September 30, 2019, was $57,926,000, compared to $24,361,000 for the same period in 2018, reflecting a 137% increase[18] - Net income for Q3 2019 was $6,915,000, a 41% increase from $4,910,000 in Q3 2018[18] - Net income for the nine months ended September 30, 2019, was $39,329,000, compared to $15,202,000 for the same period in 2018, representing a 159% increase[25] - Adjusted EBITDA for Q3 2019 was $23,208 million, a 35% increase from $17,176 million in Q3 2018[140] - Adjusted EBITDA for the nine months ended September 30, 2019, increased to $76,234, up 75% from $43,530 in 2018[175] Assets and Liabilities - Total assets increased to $275,815,000 as of September 30, 2019, compared to $240,418,000 as of December 31, 2018[14] - Total liabilities increased slightly to $108,739,000 as of September 30, 2019, from $106,132,000 at the end of 2018[14] - Total stockholders' equity as of September 30, 2019, was $167,076,000, up from $134,286,000 at the end of 2018, indicating a growth of approximately 24%[21] - Cash and cash equivalents at the end of the period were $12,183,000, compared to $11,098,000 at the end of the previous year, showing an increase of approximately 9.8%[25] - As of September 30, 2019, total outstanding borrowings amounted to $28.785 million, down from $42.128 million as of December 31, 2018, showing a reduction of about 32%[69] - The total debt as of September 30, 2019, was $28.135 million, a decrease of approximately 32% from $41.355 million at the end of 2018[69] Dividends - The company declared dividends of $0.125 per common share in Q3 2019, compared to $0.02 in Q3 2018[18] - The company declared dividends totaling $896,000 for the nine months ended September 30, 2019, slightly higher than $891,000 in the same period of 2018[25] - The company declared an annual cash dividend of $0.50 per share, increased from $0.08 per share, with a quarterly cash dividend of $0.125 per share paid on October 15, 2019[202] Segment Performance - DynaEnergetics segment net sales for the nine months ended September 30, 2019, reached $245.820 million, up from $174.270 million in 2018, indicating a growth of about 41%[85] - NobelClad segment net sales for the nine months ended September 30, 2019, were $65.363 million, compared to $61.841 million in 2018, reflecting an increase of approximately 6%[85] - DynaEnergetics reported operating income of $14,911 million for 2019, up from $9,860 million in 2018, representing a 51.9% increase[87] - NobelClad's operating income for 2019 was $2,219 million, compared to $2,099 million in 2018, reflecting a 5.7% growth[87] - Total segment operating income increased to $17,130 million in 2019 from $11,959 million in 2018, a rise of 43.1%[87] Expenses - The company reported depreciation expenses of $6,178,000 for the nine months ended September 30, 2019, compared to $4,799,000 in the same period of 2018, reflecting a 29% increase[25] - Stock-based compensation for the nine months ended September 30, 2019, was $3,908,000, up from $2,662,000 in the previous year, marking a 47% increase[25] - General and administrative expenses decreased by 8% to $13,360 in the nine months ended September 30, 2019, compared to $14,526 in 2018[167] - Selling and distribution expenses increased by 25% to $13,142 in the nine months ended September 30, 2019, compared to $10,493 in 2018[167] - Restructuring expenses and asset impairments totaled $5,880 in Q3 2019, primarily related to the shutdown of DynaEnergetics' operations in Tyumen, Siberia[124] - Restructuring expenses, net and asset impairments for the nine months ended September 30, 2019, were $5,880, with no such expenses recorded in 2018[175] Cash Flow - Operating cash flow for the nine months ended September 30, 2019, was $35,096,000, significantly higher than $6,545,000 in the prior year[25] - Net cash provided by operating activities was $35,096 million for the nine months ended September 30, 2019, compared to $6,545 million in the same period last year[199] - Net cash flows used in investing activities for the nine months ended September 30, 2019, were $21,119 million, primarily for acquisitions of property and equipment[200] Other Financial Metrics - The income tax provision for Q3 2019 was $5,689 million on pretax income of $12,604 million, reflecting an effective tax rate impacted by non-deductible restructuring expenses[139][154] - The actual debt service coverage ratio for the trailing twelve months ended September 30, 2019, was 9.3 to 1.0, significantly above the minimum required ratio of 1.35 to 1.0[196] - The company accrued $8,000 million in penalties related to anti-dumping duties during the second quarter of 2019[104] Market and Product Developments - DynaEnergetics announced that sales of its DynaStage® systems exceeded one million units, reflecting a transition to Factory-Assembled, Performance-Assured systems[117] - DynaEnergetics introduced new products, including DS Trinity 4.0 and DS NLine, enhancing its product offerings in the perforating systems market[118] - The company experienced increased sales volume due to higher perforating intensity in U.S. well completions and growth in customer demand for advanced perforating systems[160]

DMC Global, Inc. (NASDAQ:BOOM) Q2 2019 Earnings Conference Call July 25, 2019 5:00 PM ET Company Participants Geoff High – Vice President-Investor Relations Kevin Longe – President and Chief Executive Officer Mike Kuta – Chief Financial Officer Conference Call Participants Tommy Moll – Stephens Incorporated Stephen Gengaro – Stifel Gerry Sweeney – ROTH Capital Partners Edward Marshall – Sidoti & Company Jim McIlree – Chardan Capital Jim Brilliant – Century Management Operator Greetings and welcome to the DM ...

Financial Performance - Net sales for Q2 2019 reached $110.954 million, a 37.1% increase from $80.915 million in Q2 2018[17] - Gross profit for the first half of 2019 was $78.478 million, up 58.5% from $49.528 million in the same period of 2018[17] - Net income for Q2 2019 was $17.244 million, compared to $6.372 million in Q2 2018, representing a 170.5% increase[19] - The comprehensive income for the first half of 2019 was $33.533 million, compared to $7.541 million in the same period of 2018[19] - Net income for the six months ended June 30, 2019, was $32,414,000, compared to $10,292,000 for the same period in 2018, representing a significant increase of 215%[26] - DynaEnergetics reported net sales of $88,628 million for the three months ended June 30, 2019, compared to $58,899 million for the same period in 2018, representing a growth of 50.5%[80] - NobelClad's net sales for the three months ended June 30, 2019, were $22,326 million, slightly up from $22,016 million in the same period of 2018[80] - The company's total net sales for the six months ended June 30, 2019, reached $211,089 million, compared to $148,228 million for the same period in 2018, indicating a year-over-year increase of 42.4%[80] Earnings and Profitability - The company reported a basic net income per share of $1.17 for Q2 2019, compared to $0.43 for Q2 2018, marking a significant increase[17] - Adjusted EBITDA for Q2 2019 was $29,026, a 108% increase from $13,922 in Q2 2018[118] - Operating income surged to $24,653 in Q2 2019, a 141% increase compared to $10,229 in Q2 2018[118] - Net income for the six months ended June 30, 2019 was $32,414, or $2.17 per diluted share, compared to $10,292, or $0.69 per diluted share, for the same period in 2018, representing a 215% increase[146] - Adjusted EBITDA for the six months ended June 30, 2019 was $52,923, an increase of 107% compared to $25,564 for the same period in 2018[132] - Gross profit for the six months ended June 30, 2019 was $78,478, up 58% from $49,528 in 2018, with a gross profit percentage of 37.2% compared to 33.4%[132] Assets and Liabilities - Total assets increased to $285.184 million as of June 30, 2019, up from $240.418 million at the end of 2018, reflecting a growth of 18.6%[14] - Current liabilities rose to $70.332 million, an increase of 8.7% from $64.565 million at the end of 2018[14] - Total stockholders' equity increased to $163.501 million as of June 30, 2019, up from $134.286 million at the end of 2018, a growth of 21.8%[14] - The long-term debt balance decreased to $32,744 at June 30, 2019 from $38,230 at December 31, 2018[187] Cash Flow - Cash flows provided by operating activities for the six months ended June 30, 2019, were $23,302,000, compared to a cash outflow of $1,579,000 in 2018[26] - Net cash provided by operating activities for the six months ended June 30, 2019 was $23,302, a significant increase from a cash outflow of $1,579 in the same period last year[188] - Net cash flows used in investing activities for the six months ended June 30, 2019 totaled $15,025, primarily for acquisitions of property, plant, and equipment[189] - Net cash flows used in financing activities for the six months ended June 30, 2019 totaled $6,757, a decrease from $15,748 provided in the same period last year[190] Dividends and Shareholder Returns - The company declared dividends of $0.02 per common share for both Q2 2019 and Q2 2018, maintaining consistency[17] - The company declared dividends totaling $598,000 for the six months ended June 30, 2019, compared to $593,000 in the same period of 2018[26] - A quarterly cash dividend of $0.02 per share was declared on May 7, 2019, totaling $299 payable to shareholders[191] Operational Metrics - Total inventories as of June 30, 2019, amounted to $59,980,000, an increase from $51,074,000 as of December 31, 2018, representing a 17% increase[57] - The company recorded unallocated corporate expenses of $(2,588) million for the three months ended June 30, 2019, compared to $(2,618) million for the same period in 2018[82] - General and administrative expenses were $9,460 in Q2 2019, a slight decrease from $9,743 in Q2 2018[118] - Selling and distribution expenses increased by 25% to $8,736 million in 2019, compared to $6,971 million in 2018[156] Debt and Financing - The company has a $75,000 million credit facility, which includes a $50,000 million revolving loan and a $25,000 million Capex Facility for financing expansion projects[178] - The maximum permitted leverage ratio for the June 30, 2019 reporting period was 3.00 to 1.0, while the actual leverage ratio was 0.4 to 1.0[183] - The actual debt service coverage ratio for the trailing twelve months ended June 30, 2019 was 12.5 to 1.0, exceeding the minimum required ratio of 1.35 to 1.0[185] - The company maintained compliance with all financial covenants and other provisions of its debt agreements as of June 30, 2019[186] Market and Revenue Insights - DynaEnergetics' revenue from the United States was $75,323 million for the three months ended June 30, 2019, compared to $44,164 million in the same period of 2018, reflecting a 70.7% increase[83] - NobelClad's revenue from the United States for the three months ended June 30, 2019, was $12,304 million, compared to $6,775 million in the same period of 2018, showing an 81.5% increase[85]

DMC Global Inc. (NASDAQ:BOOM) Q1 2019 Results Earnings Conference Call April 25, 2019 5:00 PM ET Company Participants Geoff High - VP of Investor Relations Kevin Longe - President and CEO Mike Kuta - CFO Conference Call Participants Tommy Moll - Stephens Stephen Gengaro - Stifel Gerry Sweeney - Roth Capital Partners Edward Marshall - Sidoti & Company Jim McIlree - Chardan Capital Ian Macpherson - Simmons Will Hamilton - Manatuck Hill Partners Operator Greetings, and welcome to DMC Global First Quarter 2019 ...