DMC (BOOM) - 2025 Q2 - Quarterly Results

Executive Summary & Business Outlook Second Quarter 2025 Consolidated Financial Highlights DMC Global Inc. reported Q2 2025 consolidated sales of $155.5 million, a 2% sequential and 9% year-over-year decrease, with adjusted EBITDA of $13.5 million exceeding management guidance | Metric | Amount (Millions USD) | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Consolidated Sales | 155.5 | -2% | -9% | | Adjusted EBITDA | 13.5 | -6% | -30% | | Net Income | 0.1 | -83% | -97% | | Adjusted Net Income | 2.5 | 14% | -56% | | Adjusted Diluted EPS | 0.12 | 9% | -59% | - Company's total debt decreased 17% year-to-date, and a credit agreement was revised in June to enhance financial flexibility for a potential acquisition of the remaining 40% of Arcadia by late 2026[7][8] Segment Performance Overview DMC Global's segments showed mixed Q2 results: Arcadia's sales and EBITDA declined due to high interest rates, DynaEnergetics' sales decreased but EBITDA grew from lower costs, and NobelClad's sales rose but EBITDA fell due to order mix Arcadia Arcadia's Q2 sales were $62 million, down 5% sequentially and 11% year-over-year, with adjusted EBITDA of $4 million, reflecting a weak high-end residential market | Metric | Amount (Millions USD) | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Sales | 62.0 | -5% | -11% | | Adjusted EBITDA | 4.0 | -28% | -46% | - Performance decline primarily attributed to a significantly weaker high-end residential market due to high interest rates and reduced construction activity, alongside decreased project billing after large mixed-use project completion[4] - Arcadia has adjusted its residential business cost structure to adapt to current market activity and refocused on its core commercial operations[4] DynaEnergetics DynaEnergetics' Q2 sales were $66.9 million, up 2% sequentially but down 12% year-over-year, with adjusted EBITDA of $9 million, benefiting from lower material costs | Metric | Amount (Millions USD) | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Sales | 66.9 | 2% | -12% | | Adjusted EBITDA | 9.0 | 22% | 3% | - Year-over-year sales decline primarily reflects lower pricing and softer demand in DynaEnergetics' core U.S. unconventional market, where active frac crews decreased 5% sequentially and 24% year-over-year[5] - Improved adjusted EBITDA primarily benefited from lower overall material costs compared to the prior year period[5] NobelClad NobelClad's Q2 sales were $26.6 million, down 5% sequentially but up 6% year-over-year, with adjusted EBITDA of $4.4 million, impacted by an unfavorable order mix | Metric | Amount (Millions USD) | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Sales | 26.6 | -5% | 6% | | Adjusted EBITDA | 4.4 | -19% | -23% | | Backlog (End of Period) | 37.0 | -9.8% (Sequential) | - | | Trailing 12-Month Bookings | 80.7 | - | - | | 12-Month Book-to-Bill Ratio | 0.75 | - | - | - Backlog decline reflects ongoing uncertainty in U.S. tariff policy, causing customers to delay purchasing decisions[6] - Adjusted EBITDA decline primarily due to an unfavorable order mix[6] Management Commentary & Strategic Initiatives CEO James O'Leary highlighted progress in operational and commercial strategies, improved financial health with a 17% debt reduction, and a revised credit agreement for future acquisitions - The company is focused on executing operational and commercial strategies, making significant progress in improving its financial position[7] - Total debt decreased 17% year-to-date, and a credit agreement was revised in June to enhance financial flexibility for a potential acquisition of the remaining 40% of Arcadia by late 2026[7][8] Third Quarter 2025 Guidance DMC Global forecasts Q3 sales between $142 million and $150 million, with adjusted EBITDA between $8 million and $12 million, reflecting broad market uncertainties | Metric | Range (Millions USD) | | :--- | :--- | | Third Quarter Sales | 142 - 150 | | Adjusted EBITDA (Attributable to DMC) | 8 - 12 | - The wider adjusted EBITDA guidance range reflects increased uncertainty in DMC's end markets[8] - Challenging conditions are expected to persist in the U.S. construction industry, Arcadia has adjusted its cost structure and continues to focus on commercial operations. DynaEnergetics anticipates a sequential decline in U.S. onshore oil and gas completion activity. NobelClad sales are projected to decrease sequentially, influenced by evolving tariff policies[8] Company Information About DMC Global Inc. DMC Global Inc. is an owner and operator of innovative, asset-light manufacturing businesses providing unique, highly engineered products and differentiated solutions - DMC Global Inc. is an owner and operator of innovative, asset-light manufacturing businesses, providing unique, highly engineered products and differentiated solutions[18] - The company's businesses include Arcadia (architectural products), DynaEnergetics (global energy industry), and NobelClad (global industrial infrastructure and transportation)[18] Safe Harbor Statement This press release contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations - The press release contains forward-looking statements based on assumptions about current and future business strategies, markets, anticipated costs, and the ability to achieve objectives[19] - Forward-looking information and statements are subject to known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially from expectations, including order fulfillment, new contract acquisition, customer purchasing commitments, product pricing and margins, fluctuations in customer demand, tariff and quota fluctuations, energy costs and availability, business cyclicality, competitive factors, and macroeconomic conditions[19][21] - The company undertakes no obligation to publicly revise any forward-looking statements, except as required by applicable securities laws[21] Conference Call Information DMC Global will host a conference call on August 5, 2025, at 5:00 PM ET (3:00 PM MT) to discuss Q2 financial results, with a webcast replay available for six months - The conference call will be held on August 5, 2025, at 5:00 PM ET (3:00 PM MT)[13] - Investors can participate by dialing 877-407-5783 (international +1 201-689-8782) or by accessing the webcast at https://event.choruscall.com/mediaframe/webcast.html?webcastid=YQzvAWQ8[13](index=13&type=chunk) - A webcast replay will be available for six months on the investor page of DMC's website[13] Consolidated Financial Results Condensed Consolidated Statements of Operations DMC Global's Q2 2025 consolidated net sales were $155.5 million, down 2% sequentially and 9% year-over-year, with net income significantly decreasing both sequentially and year-over-year Condensed Consolidated Statements of Operations Summary for Q2 2025 | Metric (Thousands USD) | June 30, 2025 | March 31, 2025 | June 30, 2024 | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | 155,487 | 159,290 | 171,179 | (2)% | (9)% | | Gross Profit | 36,731 | 41,199 | 46,413 | (11)% | (21)% | | Gross Margin | 23.6% | 25.9% | 27.1% | - | - | | Operating Income | 3,897 | 6,513 | 11,685 | (40)% | (67)% | | Net Income | 321 | 1,863 | 6,293 | (83)% | (95)% | | Net Income Attributable to DMC Global Inc. Shareholders | 116 | 677 | 4,012 | (83)% | (97)% | | Diluted EPS Attributable to DMC Global Inc. Shareholders | (0.24) | 0.04 | 0.24 | (700)% | (200)% | Condensed Consolidated Statements of Operations Summary for H1 2025 | Metric (Thousands USD) | June 30, 2025 | June 30, 2024 | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Net Sales | 314,777 | 338,048 | (7)% | | Gross Profit | 77,930 | 88,765 | (12)% | | Gross Margin | 24.8% | 26.3% | - | | Operating Income | 10,410 | 18,373 | (43)% | | Net Income | 2,184 | 8,612 | (75)% | | Net Income Attributable to DMC Global Inc. Shareholders | 793 | 6,575 | (88)% | | Diluted EPS Attributable to DMC Global Inc. Shareholders | (0.20) | 0.25 | (180)% | Condensed Consolidated Balance Sheets As of June 30, 2025, DMC Global's total assets were $645 million, a 4% decrease from year-end 2024, with total liabilities decreasing 9% sequentially and 11% year-over-year Condensed Consolidated Balance Sheets Summary as of Q2 2025 | Metric (Thousands USD) | June 30, 2025 | March 31, 2025 | December 31, 2024 | Sequential Change | Year-End Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 12,427 | 14,705 | 14,289 | (15)% | (13)% | | Total Current Assets | 280,174 | 296,909 | 289,022 | (6)% | (3)% | | Total Assets | 645,024 | 670,640 | 671,337 | (4)% | (4)% | | Total Current Liabilities | 101,559 | 111,763 | 114,102 | (9)% | (11)% | | Long-Term Debt | 55,112 | 69,921 | 68,318 | (21)% | (19)% | | Total Liabilities, Redeemable Non-Controlling Interests, and Stockholders' Equity | 645,024 | 670,640 | 671,337 | (4)% | (4)% | - Net accounts receivable decreased 4% sequentially but increased 7% from year-end 2024. Inventory decreased 3% sequentially and 5% from year-end 2024[35] - Contract liabilities decreased 35% sequentially and 48% from year-end 2024[35] Condensed Consolidated Statements of Cash Flows DMC Global's Q2 2025 net cash flow from operating activities was $15.2 million, a significant increase from prior periods, while financing activities saw a net outflow of $19.6 million Condensed Consolidated Statements of Cash Flows Summary for Q2 2025 | Metric (Thousands USD) | June 30, 2025 (Q2) | March 31, 2025 (Q1) | June 30, 2024 (Q2) | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 15,246 | 4,488 | 2,343 | 239.7% | 550.7% | | Net Cash Provided by/(Used in) Investing Activities | 2,614 | (3,332) | (2,447) | - | - | | Net Cash Used in Financing Activities | (19,611) | (135) | (5,431) | - | 2610.9% | | Cash and Cash Equivalents, End of Period | 12,427 | 14,705 | 14,567 | (15.5)% | (14.7)% | Condensed Consolidated Statements of Cash Flows Summary for H1 2025 | Metric (Thousands USD) | June 30, 2025 (H1) | June 30, 2024 (H1) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 19,734 | 15,783 | 25.0% | | Net Cash Used in Investing Activities | (718) | 7,204 | - | | Net Cash Used in Financing Activities | (19,746) | (39,727) | (50.3)% | | Cash and Cash Equivalents, End of Period | 12,427 | 14,567 | (14.7)% | - Net cash inflow from investing activities primarily benefited from $4.167 million in note settlements[37] - Cash outflow from financing activities primarily included $51.512 million in revolving loan repayments and $5.104 million in distributions to redeemable non-controlling interest holders[37] Segment Financial Results Arcadia Segment Operations Arcadia's Q2 2025 net sales were $61.98 million, down 5% sequentially and 11% year-over-year, with operating income significantly decreasing and gross margin falling to 26.2% Arcadia Segment Operations Summary for Q2 2025 | Metric (Thousands USD) | June 30, 2025 | March 31, 2025 | June 30, 2024 | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | 61,980 | 65,580 | 69,748 | (5)% | (11)% | | Gross Profit | 16,250 | 20,361 | 23,157 | (20)% | (30)% | | Gross Margin | 26.2% | 31.0% | 33.2% | - | - | | Operating Income | 516 | 2,996 | 5,719 | (83)% | (91)% | Arcadia Segment Operations Summary for H1 2025 | Metric (Thousands USD) | June 30, 2025 | June 30, 2024 | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Net Sales | 127,560 | 131,673 | (3)% | | Gross Profit | 36,611 | 39,970 | (8)% | | Gross Margin | 28.7% | 30.4% | - | | Operating Income | 3,512 | 5,131 | (32)% | DynaEnergetics Segment Operations DynaEnergetics' Q2 2025 net sales were $66.862 million, up 2% sequentially but down 12% year-over-year, with operating income increasing and gross margin rising to 20.9% DynaEnergetics Segment Operations Summary for Q2 2025 | Metric (Thousands USD) | June 30, 2025 | March 31, 2025 | June 30, 2024 | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | 66,862 | 65,551 | 76,210 | 2% | (12)% | | Gross Profit | 13,959 | 12,811 | 15,133 | 9% | (8)% | | Gross Margin | 20.9% | 19.5% | 19.9% | - | - | | Operating Income | 6,411 | 5,588 | 7,052 | 15% | (9)% | DynaEnergetics Segment Operations Summary for H1 2025 | Metric (Thousands USD) | June 30, 2025 | June 30, 2024 | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Net Sales | 132,413 | 154,332 | (14)% | | Gross Profit | 26,770 | 32,104 | (17)% | | Gross Margin | 20.2% | 20.8% | - | | Operating Income | 11,999 | 15,894 | (25)% | NobelClad Segment Operations NobelClad's Q2 2025 net sales were $26.645 million, down 5% sequentially but up 6% year-over-year, with operating income and gross margin both decreasing NobelClad Segment Operations Summary for Q2 2025 | Metric (Thousands USD) | June 30, 2025 | March 31, 2025 | June 30, 2024 | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | 26,645 | 28,159 | 25,221 | (5)% | 6% | | Gross Profit | 6,593 | 8,097 | 8,222 | (19)% | (20)% | | Gross Margin | 24.7% | 28.8% | 32.6% | - | - | | Operating Income | 3,407 | 4,622 | 4,932 | (26)% | (31)% | NobelClad Segment Operations Summary for H1 2025 | Metric (Thousands USD) | June 30, 2025 | June 30, 2024 | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Net Sales | 54,804 | 52,043 | 5% | | Gross Profit | 14,690 | 16,866 | (13)% | | Gross Margin | 26.8% | 32.4% | - | | Operating Income | 8,029 | 10,032 | (20)% | Non-GAAP Financial Measures Reconciliation Use of Non-GAAP Financial Measures DMC Global uses non-GAAP financial measures like EBITDA and adjusted EPS to aid operational and financial decisions, providing insights into performance excluding non-recurring items - Non-GAAP financial measures include EBITDA, Adjusted EBITDA, Adjusted EBITDA attributable to DMC Global Inc., Adjusted EBITDA for DMC's business segments, Adjusted Net Income (Loss), Adjusted Diluted EPS, Net Debt, and Free Cash Flow[14][20] - Management believes providing these additional financial measures helps investors understand DMC's operating performance, excluding the impact of restructuring, impairment, and other non-recurring charges, as well as the company's liquidity[15] - Non-GAAP financial measures are not a substitute for GAAP information, and investors should use them cautiously, as they may not be comparable to similar measures used by other companies[15][16] DMC Global EBITDA and Adjusted EBITDA Reconciliation DMC Global's Q2 2025 EBITDA was $12 million, down 18% sequentially and 40% year-over-year, with adjusted EBITDA attributable to DMC Global Inc. at $13.5 million DMC Global EBITDA and Adjusted EBITDA Reconciliation Summary (Thousands USD) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income | 321 | 1,863 | 6,293 | (83)% | (95)% | | EBITDA | 12,021 | 14,718 | 20,139 | (18)% | (40)% | | Adjusted EBITDA | 16,228 | 18,122 | 24,398 | (10)% | (33)% | | Adjusted EBITDA Attributable to DMC Global Inc. | 13,538 | 14,391 | 19,420 | (6)% | (30)% | - Adjustments include share-based compensation, strategic review and related costs, restructuring charges and asset impairments, executive transition costs, and other net expenses[38] Adjusted Net Income and Adjusted Diluted EPS Reconciliation DMC Global's Q2 2025 adjusted net income was $2.473 million, with adjusted diluted EPS of $0.12, while first-half adjusted net income reached $4.643 million Adjusted Net Income and Adjusted Diluted EPS Reconciliation Summary (Thousands USD) | Metric | June 30, 2025 (Q2) | EPS | March 31, 2025 (Q1) | EPS | June 30, 2024 (Q2) | EPS | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to DMC Global Inc. | 116 | — | 677 | 0.03 | 4,012 | 0.20 | | Adjusted Net Income | 2,473 | 0.12 | 2,170 | 0.11 | 5,675 | 0.29 | Adjusted Net Income and Adjusted Diluted EPS Reconciliation Summary (Thousands USD) | Metric | June 30, 2025 (H1) | EPS | June 30, 2024 (H1) | EPS | | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to DMC Global Inc. | 793 | 0.04 | 6,575 | 0.33 | | Adjusted Net Income | 4,643 | 0.23 | 9,842 | 0.50 | - Adjustments include strategic review and related costs (after tax), restructuring charges and asset impairments (after tax), and executive transition costs (after tax)[39] Segment Adjusted EBITDA Reconciliation DMC Global provides adjusted EBITDA reconciliations for its Arcadia, DynaEnergetics, and NobelClad segments, detailing adjustments from reported operating income Arcadia Adjusted EBITDA Arcadia's Q2 2025 adjusted EBITDA was $6.725 million, down 28% sequentially and 46% year-over-year, with adjusted EBITDA attributable to DMC Global Inc. at $4.035 million Arcadia Adjusted EBITDA Summary (Thousands USD) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Reported Operating Income | 516 | 2,996 | 5,719 | (83)% | (91)% | | Adjusted EBITDA | 6,725 | 9,327 | 12,445 | (28)% | (46)% | | Adjusted EBITDA Attributable to DMC Global Inc. | 4,035 | 5,596 | 7,467 | (28)% | (46)% | DynaEnergetics Adjusted EBITDA DynaEnergetics' Q2 2025 adjusted EBITDA was $8.979 million, up 22% sequentially and 3% year-over-year DynaEnergetics Adjusted EBITDA Summary (Thousands USD) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Reported Operating Income | 6,411 | 5,588 | 7,052 | 15% | (9)% | | Adjusted EBITDA | 8,979 | 7,379 | 8,752 | 22% | 3% | NobelClad Adjusted EBITDA NobelClad's Q2 2025 adjusted EBITDA was $4.399 million, down 19% sequentially and 23% year-over-year NobelClad Adjusted EBITDA Summary (Thousands USD) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Reported Operating Income | 3,407 | 4,622 | 4,932 | (26)% | (31)% | | Adjusted EBITDA | 4,399 | 5,416 | 5,722 | (19)% | (23)% |