DMC (BOOM) - 2020 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2020 were $73,564,000, a decrease of 26.7$100,135,000 in Q1 2019[16] - Gross profit for Q1 2020 was $24,470,000, down 32.8$36,405,000 in Q1 2019[16] - Operating income decreased to $6,347,000 in Q1 2020, a decline of 68.9$20,452,000 in Q1 2019[16] - Net income for Q1 2020 was $4,155,000, representing a 72.6$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$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$53,220, compared to $79,836 in the same period last year[84] - NobelClad segment net sales slightly increased by 0.2$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$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]