DMC (US:BOOM)2025-05-01 22:02Financial Data and Key Metrics Changes - Consolidated first quarter sales were $159.3 million, up 5% sequentially, while adjusted EBITDA attributable to DMC was $14.4 million, 30.9% higher than the fourth quarter [5][9] - Adjusted EBITDA margin was 11.4%, up sequentially from 7.8% in the fourth quarter and flat with the prior year [9][10] - First quarter adjusted net income attributable to DMC was $2.2 million, with adjusted EPS of $0.11 [11] Business Line Data and Key Metrics Changes - Arcadia's sales were $65.6 million, a 9% sequential increase and a 6% year-over-year improvement [5] - DynaEnergetics reported first quarter sales of $65.6 million, up 3% sequentially but down 16% year-over-year [5][6] - NobelClad's first quarter sales were flat sequentially but up 5% year-over-year, with an order backlog of $41 million, down from $49 million at the end of the fourth quarter [7][8] Market Data and Key Metrics Changes - The U.S. onshore energy market saw a 20% decline in the number of active frac crews compared to the previous year [6] - Ongoing uncertainty around U.S. tariff policies has led to customers delaying orders in NobelClad's market [8] Company Strategy and Development Direction - The company is focused on driving absolute EBITDA growth, generating strong free cash flow, and restoring balance sheet health through deleveraging [15] - Management emphasized operational improvement initiatives despite external challenges such as tariffs and macroeconomic conditions [4][5] Management Comments on Operating Environment and Future Outlook - Management noted that the first quarter was a solid start to 2025 despite external challenges [4] - Future guidance reflects concerns over macroeconomic volatility and visibility issues due to current tariff policies and energy prices [13][14] Other Important Information - The company ended the first quarter with cash and cash equivalents of approximately $15 million and total debt of approximately $72 million [11] - The guidance for second quarter consolidated sales is expected to be in the range of $149 million to $157 million [13] Q&A Session Summary Question: Impact of tariffs and costs on guidance - Management indicated that tariffs have some impact, but demand destruction is a larger factor affecting guidance [18][20] Question: Automation and cost containment opportunities - Management stated that cost containment efforts are ongoing, particularly in DynaEnergetics and Arcadia, but quantifying total impact is challenging [25][27] Question: California commercial projects' contribution to EBITDA - Management confirmed that the commercial side of the business will remain profitable in Q2, with a significant project impacting EBITDA [35] Question: Pricing pressures from suppliers - Management is evaluating the supply chain but finds it difficult to predict pricing impacts for the next quarter and second half of the year [36] Question: Tariff surcharge effectiveness - Management reported partial success in passing along tariff surcharges to customers, with ongoing discussions about cost sharing [39] Question: Dyna business performance outlook - Management expects the Dyna business to be flat to modestly down if oil prices remain low and rig counts decrease [42] Question: Update on Steel Connect situation - Management stated that there is no new information regarding Steel Connect, the largest shareholder [43]