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DMC (BOOM) - 2024 Q4 - Annual Report
BOOMDMC (BOOM)2025-02-24 21:25
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Financial Performance - Consolidated net sales decreased by 11% to 642,851in2024from642,851 in 2024 from 719,188 in 2023, primarily due to lower sales volumes in Arcadia Products and decreased pricing in DynaEnergetics' DS perforating systems [259]. - Adjusted EBITDA attributable to DMC Global Inc. decreased by 46% to 52,156in2024from52,156 in 2024 from 96,063 in 2023 [262]. - Operating loss for 2024 was 131,258,asignificantdeclinefromoperatingincomeof131,258, a significant decline from operating income of 61,177 in 2023, mainly due to goodwill impairment at Arcadia Products [269]. - The company reported a net loss of 151.960millionin2024,comparedtoanetincomeof151.960 million in 2024, compared to a net income of 34.759 million in 2023 [348]. - Comprehensive loss attributable to DMC Global Inc. stockholders was 97.586millionin2024,comparedtoacomprehensiveincomeof97.586 million in 2024, compared to a comprehensive income of 28.591 million in 2023 [348]. - Basic net loss per share attributable to DMC Global Inc. stockholders was (8.20)in2024,downfrom(8.20) in 2024, down from 1.08 in 2023 [345]. Goodwill and Impairments - Goodwill impairment of 141,725in2024wasduetothefullimpairmentofArcadiaProducts′goodwill,reflectingrecentfinancialperformancenotmeetingexpectations[266].−Thecompanyrecordedagoodwillimpairmentchargeof141,725 in 2024 was due to the full impairment of Arcadia Products' goodwill, reflecting recent financial performance not meeting expectations [266]. - The company recorded a goodwill impairment charge of 141,725 for the year ended December 31, 2024 [319]. - The company performed a quantitative goodwill impairment test for the Arcadia Products reporting unit due to recent financial performance not meeting expectations [318]. - The company recorded asset impairments of 1,182in2024,primarilyduetotheabandonmentofaplannedmanufacturingexpansionatDynaEnergetics[371].ExpensesandCosts−Grossprofitmargindeclinedto23.41,182 in 2024, primarily due to the abandonment of a planned manufacturing expansion at DynaEnergetics [371]. Expenses and Costs - Gross profit margin declined to 23.4% in 2024 from 29.5% in 2023, attributed to margin declines at DynaEnergetics and Arcadia Products, along with lower absorption of fixed manufacturing overhead costs [263]. - General and administrative expenses decreased by 13,940 to 61,401in2024,influencedbylowervariablecompensationcostsandtheabsenceofCEOtransitionexpensesfromthepreviousyear[264].−Totalrestructuringexpensesrecordedwere61,401 in 2024, influenced by lower variable compensation costs and the absence of CEO transition expenses from the previous year [264]. - Total restructuring expenses recorded were 2,526 million in 2024, 3,766millionin2023,and3,766 million in 2023, and 182 million in 2022, showing a significant increase in restructuring costs in 2024 [401]. - The company’s operating lease expense for 2024 was 13,678,anincreaseof6.713,678, an increase of 6.7% from 12,822 in 2023 [418]. Cash Flow and Liquidity - Cash and marketable securities decreased by 29,370to29,370 to 14,289 at December 31, 2024, primarily due to debt repayments [259]. - Net cash provided by operating activities decreased to 46,596in2024from46,596 in 2024 from 65,927 in 2023, driven by lower net income [308]. - Net cash used in investing activities was 3,569in2024,primarilyforproperty,plant,andequipmentacquisitions[309].−Netcashusedinfinancingactivitiestotaled3,569 in 2024, primarily for property, plant, and equipment acquisitions [309]. - Net cash used in financing activities totaled 59,788 in 2024, including 45,000innetcreditfacilityrepayments[310].SalesandMarketPerformance−DynaEnergeticsreportednetsalesof45,000 in net credit facility repayments [310]. Sales and Market Performance - DynaEnergetics reported net sales of 287,686 in 2024, down 9% from 315,026in2023,primarilyduetodecreasedpricingofDSperforatingsystems[286].−ArcadiaProductsisfocusingonstabilizingitshigh−endresidentialproductsandmayeliminateunderperformingofferingstostrengthenitscorecommercialoperations[256].−DynaEnergeticsexpectsfirstquartersalestobeflattomodestlyupcomparedtotheseasonallysoftfourthquarterof2024,withanticipatedgrowthinNorthAmericaoffsetbylowerinternationalsales[257].AssetsandLiabilities−Totalcurrentassetsdecreasedto315,026 in 2023, primarily due to decreased pricing of DS perforating systems [286]. - Arcadia Products is focusing on stabilizing its high-end residential products and may eliminate underperforming offerings to strengthen its core commercial operations [256]. - DynaEnergetics expects first quarter sales to be flat to modestly up compared to the seasonally soft fourth quarter of 2024, with anticipated growth in North America offset by lower international sales [257]. Assets and Liabilities - Total current assets decreased to 289.022 million in 2024 from 326.812millionin2023,adeclineof11.5326.812 million in 2023, a decline of 11.5% [343]. - Total liabilities decreased to 233.286 million in 2024 from 286.440millionin2023,areductionof18.6286.440 million in 2023, a reduction of 18.6% [343]. - Total assets decreased to 671.337 million in 2024 from 884.495millionin2023,adeclineof24.0884.495 million in 2023, a decline of 24.0% [343]. - Total debt as of December 31, 2024, was 70,818, down from 115,851in2023,representingareductionof38.8115,851 in 2023, representing a reduction of 38.8% [421]. Tax and Valuation - Income tax provision for 2024 was 10,970 on a loss before taxes of 140,990,influencedbythefullimpairmentatArcadiaProducts′goodwill[272].−TheeffectivetaxratewasadverselyaffectedbyincomegeneratedinforeignjurisdictionsandtheestablishmentofavaluationallowanceagainstU.S.deferredtaxassets[272].−Aconsolidatedvaluationallowanceof140,990, influenced by the full impairment at Arcadia Products' goodwill [272]. - The effective tax rate was adversely affected by income generated in foreign jurisdictions and the establishment of a valuation allowance against U.S. deferred tax assets [272]. - A consolidated valuation allowance of 32,121 was recorded against net deferred tax assets in the U.S. as of December 31, 2024 [323]. Stock and Compensation - The company issued 615,689 shares in connection with stock compensation plans during 2024 [350]. - Total stock-based compensation expense for the year ended December 31, 2024, was 6,902,downfrom6,902, down from 10,270 in 2023, reflecting a decrease of approximately 32.5% [431]. - The total unrecognized stock-based compensation related to unvested awards as of December 31, 2024, was 6,705,withunvestedRSAsat6,705, with unvested RSAs at 4,565, RSUs at 813,andPSUsat813, and PSUs at 1,327 [438]. Future Outlook - The company expects performance obligations under short-term contracts to be satisfied within the next 12 months, indicating a positive outlook for revenue recognition [384]. - DynaEnergetics expects first quarter sales to be flat to modestly up compared to the seasonally soft fourth quarter of 2024, with anticipated growth in North America offset by lower international sales [257].