DMC (BOOM)2020-04-24 03:34Financial Data and Key Metrics Changes - Consolidated sales for Q1 2020 were 5.3 million or 15.2 million or 7.5 million, down from 11.3 million, down from 53.2 million, down 18% sequentially and 33% year-over-year [8] - NobelClad reported Q1 sales of 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]