DMC Global Inc. (Nasdaq: BOOM) today reported financial results for
its fourth quarter and fiscal year ended December 31, 2021.
Fourth quarter sales were $71.8 million, up 7%
sequentially versus the 2021 third quarter, and up 26% versus the
2020 fourth quarter. The sequential improvement reflects a 15%
sales increase at DynaEnergetics, DMC’s energy products business.
DynaEnergetics’ growth was partially offset by a sequential sales
decline at NobelClad, DMC’s composite metals business, which was
negatively impacted by supply chain disruptions at its U.S. and
European manufacturing facilities.
Fourth quarter gross margin was 18% versus 25%
in the third quarter and 21% in the prior-year fourth quarter. The
sequential decline reflects a $1.1 million inventory reserve
adjustment at DynaEnergetics, a less favorable project mix at
NobelClad, and approximately $1.0 million of post-acquisition
expenses in cost of goods at Arcadia, DMC’s architectural building
products business. DMC acquired a 60% controlling interest in
Arcadia on December 23, 2021, however sales contributions from
Arcadia did not begin until this year’s first quarter.
Selling, general and administrative expense
(SG&A) was $16.3 million, up from $15.3 million in the third
quarter and $12.5 million in the year-ago third quarter. SG&A
in the fourth quarter included $2.7 million in litigation expense
related to several patent infringement cases in which
DynaEnergetics is the plaintiff. Litigation expense was
approximately $750,000 above management’s forecast.
Fourth quarter operating loss was $5.5 million
versus an operating loss of $818,000 in the 2020 fourth quarter.
Adjusted operating loss* was $1.9 million and excludes $1.6 million
in acquisition expenses and $2.0 million in operating expenses at
Arcadia between December 23, 2021, and December 31, 2021. Adjusted
operating loss in last year’s fourth quarter was $736,000.
Fourth quarter net loss attributable to DMC was
$2.8 million. Following the acquisition of the 60% controlling
interest in Arcadia, the calculation for net earnings per diluted
share must account for the change in redemption value of the 40%
redeemable noncontrolling interest in Arcadia. Redemption value is
estimated at the end of each quarter based on the formula used to
calculate a Put and Call Option in the Operating Agreement. At
December 31, 2021, the adjustment was $4.4 million dollars. When
added to the $2.8 million net loss attributable to DMC
stockholders, the resulting net loss is $7.2 million or $0.38 per
diluted share, based on 18.8 million diluted shares outstanding.
Net loss in the prior-year fourth quarter was $927,000, or $0.06
per diluted share on 14.9 million diluted shares outstanding.
Adjusted net income attributable to DMC* was
$840,000, or $0.05 per diluted share. Adjusted net loss* in the
2020 fourth quarter was $825,000, or $0.05 per diluted share.
Fourth quarter adjusted EBITDA attributable to
DMC was $2.8 million versus $5.8 million in the 2021 third quarter
and $3.6 million in the 2020 fourth quarter.
Cash flow used in operations was $10.9 million
versus cash from operations of $9.0 million in the prior-year
fourth quarter. Cash and marketable securities was $30.8 million
versus $182.0 million at the end of the 2021 third quarter and
$53.9 million at December 31, 2020.
DMC’s debt-to-adjusted EBITDA leverage ratio at
December 31, 2021, was 3.0. The Company’s debt-to-adjusted EBITDA
leverage ratio covenant for the end of the quarter was 3.50. DMC’s
net-debt-to adjusted EBITDA at the end of the fourth quarter was
2.3. Net debt is defined as total debt less total cash, cash
equivalents, and marketable securities.
DynaEnergetics DynaEnergetics reported fourth
quarter sales of $50.7 million, up 15% sequentially and 43% versus
the prior-year fourth quarter. Sales in North America increased 7%
sequentially, while international sales increased 75% from the
third quarter. Gross margin was 20% versus 22% in the 2021 third
quarter and 24% in the 2020 fourth quarter. Adjusted EBITDA was
$4.0 million versus $4.1 million in the 2020 fourth quarter.
NobelCladNobelClad reported fourth quarter sales
of $21.2 million, down 8% sequentially and down 3% versus the 2020
fourth quarter. Gross margin was 20%, down from 30% in the 2021
third quarter and up from 18% in the prior-year fourth quarter.
Adjusted EBITDA was $2.1 million versus $1.9 million in the
prior-year fourth quarter.
NobelClad’s trailing 12-month book-to-bill ratio
at the end of the fourth quarter was 1.03. Order backlog was $41.2
million versus $42.9 million at the end of the third quarter and
$39.9 million at the end of the 2020 fourth quarter.
Full-year resultsConsolidated
sales in 2021 were $260.1 million, up 14% from $229.2 million in
2020. Gross margin was 23% versus 25% in the prior year.
Operating loss was $2.4 million versus an
operating loss of $996,000 in 2020. Full-year adjusted operating
income was $1.3 million versus adjusted operating income of $2.4
million in 2020.
Full-year 2021 net loss attributable to DMC was
$202,000. Inclusive of the $4.4 million redemption value adjustment
to the redeemable noncontrolling interest in Arcadia, net loss was
$4.6 million, or $0.26 per diluted share. Full-year adjusted net
income attributable to DMC was $3.5 million, or $0.20 per diluted
share. Net loss in 2020 was $1.4 million, or $0.10 per diluted
share, while 2020 adjusted net income was $1.0 million, or $0.07
per diluted share.
Full-year adjusted EBITDA attributable to DMC
was $20.2 million versus $19.1 million in 2020. Cash flow used in
operations was $12.8 million, which excludes $8.7 million in
capital expenditures. In 2020, cash flow from operations was $30.4
million, and excluded $13.9 million in capital expenditures.
DynaEnergeticsFull-year sales at DynaEnergetics
were $175.4 million, up 20% from $146.4 million in 2020. Gross
margin was 22%, down from 26% in the prior year. Adjusted EBITDA
was $16.4 million versus $16.3 million in 2020.
NobelCladNobelClad reported full-year sales of
$84.8 million, up 2% from $82.8 million in 2020. Gross margin was
26% versus 23% in the prior year. Adjusted EBITDA was $13.7 million
versus $10.7 million in 2020.
Full-year Pro Forma
ResultsDMC’s full-year pro forma sales, inclusive of
Arcadia, were $500.5 million, while pro forma gross margin was 28%.
Pro forma adjusted EBITDA attributable to DMC after accounting for
the 40% held by Arcadia’s noncontrolling interest holder, was $50.1
million. DMC intends to acquire the remaining 40% interest in
Arcadia through a three-year put and call option, the features of
which are described in an Arcadia Acquisition Presentation, located
here.
Management Commentary“The
fourth quarter concluded a pivotal year for DMC,” said Kevin Longe,
president and CEO. “DynaEnergetics and Nobelclad both navigated a
second year of very challenging market conditions, and DMC
completed an acquisition that roughly doubled our consolidated
sales, significantly expanded our addressable markets and
strengthened DMC’s position as a diversified holding company of
innovative, asset-light businesses.”
Longe said the acquisition of Arcadia, which
serves both commercial and high-end residential markets, increased
DMC’s total addressable market from $2 billion to approximately $7
billion. Arcadia’s commercial business provides exterior and
interior architectural building products to a diverse customer base
operating across the western and southwestern United States. Its
high-end residential business, Arcadia Custom, supplies premium
steel, aluminum and wood windows and doors to a national customer
base that includes dealers, architects and homebuilders.
“For the past three years, Arcadia has operated
at nearly full capacity to address strong demand from each of its
end markets,” Longe said. “DMC is working with Arcadia to implement
several initiatives that will expand its manufacturing capacity and
enhance its operating efficiencies. These include installation of
additional anodizing and painting capacity, and implementation of a
new enterprise resource planning (ERP) system. I am encouraged by
how quickly our teams have come together to launch these
initiatives and capitalize on the strong position Arcadia has built
in its growing markets.
“At DynaEnergetics, sales growth during the
fourth quarter reflected increased international demand and a 7%
sequential increase in North American sales, which outpaced a 4%
increase in U.S. well completions. A global price increase took
effect on November 22, 2021, however it was more than offset by
inflation and the expiration of the CARES Act. We’ve instituted an
additional price increase, the full effect of which will be seen
during the second quarter. We also believe DynaEnergetics’ sales
will improve during the second quarter, as we expect international
project activity will accelerate and well completions in North
America will increase.
“At NobelClad, the global pandemic slowed
progress on several large international infrastructure projects on
which the business is bidding. NobelClad also has faced delayed
metal deliveries, which led to the shortfall in fourth quarter
sales. We are confident NobelClad is well positioned in its
markets, and will deliver improved bookings and sales results once
end-market activity improves.”
Longe added, “As we enter 2022, I am very
confident about DMC’s prospects for success. Demand for Arcadia’s
products is strong, and its markets are healthy and growing. Our
energy markets are gaining strength and we believe margins at
DynaEnergetics will improve significantly during the balance of the
year. We also expect the performance of NobelClad will improve as
the disruptions in its supply chain subside. I want to thank our
employees around the world for their continued dedication to DMC,
and would like to again welcome the team from Arcadia to the DMC
family.”
GuidanceMichael Kuta, CFO, said
first quarter 2022 consolidated sales are expected to be in a range
of $125 million to $135 million. At the business level, Arcadia is
expected to report sales of $57 million to $61 million, while
DynaEnergetics is expected to report sales in a range of $48
million to $52 million, and NobelClad’s sales are expected in a
range of $20 million to $21 million.
Consolidated gross margin is expected to be in a
range of 25% to 27%. First quarter selling, general and
administrative (SG&A) expense is expected in a range of $25.5
million to $26.5 million.
First quarter amortization expense is expected
to be approximately $13.5 million, and relates principally to the
acquired trade names, customer relationships and backlog of
Arcadia. Amortization expense is expected to decline significantly
once the value assigned to Arcadia’s backlog has been amortized,
which is expected in the third quarter. For the balance of 2022,
amortization expense is expected to be approximately $13.5 million
in the second quarter, $7.0 million in the third quarter and $4.0
million in the fourth quarter. After amortizing the backlog value,
2023 quarterly amortization expense is expected to be approximately
$4.0 million.
First quarter 2022 depreciation expense is
expected to be $4.0 million, and interest expense is expected
to be approximately $1.0 million.
First quarter adjusted EBITDA attributable to
DMC, after deducting the 40% noncontrolling interest, is expected
to be $8.0 million to $10.0 million.
Capital expenditures are expected to be $2.0
million to $4.0 million.
Conference call
informationManagement will hold a conference call to
discuss these results today at 5:00 p.m. Eastern (3:00 p.m.
Mountain). Investors may listen to a live webcast of the call at:
https://www.webcaster4.com/Webcast/Page/2204/44661, or by dialing
888-506-0062 (973-528-0011 for international callers) and entering
the code 317421. Webcast participants should access the website at
least 15 minutes early to register and download any necessary audio
software. A replay of the webcast will be available for 90 days and
a telephonic replay will be available through March 10, 2022, by
calling 877-481-4010 (919-882-2331 for international callers) and
entering the Conference ID #44661.
*Use of Non-GAAP Financial
MeasuresAdjusted EBITDA, pro forma adjusted EBITDA,
adjusted operating income, adjusted net income, adjusted diluted
earnings per share, net debt, and return on invested capital (ROIC)
are non-GAAP (generally accepted accounting principles) financial
measures used by management to measure operating performance and
liquidity. Non-GAAP results are presented only as a supplement to
the financial statements based on U.S. generally accepted
accounting principles (GAAP). The non-GAAP financial information is
provided to enhance the reader’s understanding of DMC’s financial
performance, but no non-GAAP measure should be considered in
isolation or as a substitute for financial measures calculated in
accordance with GAAP. Reconciliations of the most directly
comparable GAAP measures to non-GAAP measures are provided within
the schedules attached to this release.
EBITDA is defined as net income plus or minus
net interest plus taxes, depreciation and amortization. Adjusted
EBITDA excludes from EBITDA stock-based compensation, restructuring
and impairment charges and, when appropriate, other items that
management does not utilize in assessing DMC’s operating
performance (as further described in the attached financial
schedules). Pro forma adjusted EBITDA reflects combined results for
DMC and Arcadia and the impact of the adjusted EBITDA attributable
to the redeemable noncontrolling interest holder Adjusted operating
income is defined as operating income plus restructuring and
impairment charges and, when appropriate, other items that
management does not utilize in assessing DMC’s operating
performance. Adjusted net income is defined as net income plus
restructuring and impairment charges and, when appropriate, other
items that management does not utilize in assessing DMC’s operating
performance. Adjusted diluted earnings per share is defined as
diluted earnings per share plus restructuring and impairment
charges and, when appropriate, other items that management does not
utilize in assessing DMC’s operating performance. Net debt is
defined as total debt less total cash, cash equivalents and
marketable securities. ROIC is based on Bloomberg Finance's most
recent calculation methodology and is computed as trailing 12-month
net operating profit after tax divided by average invested capital,
where average of invested capital is calculated based on the
average of invested capital for the current period and invested
capital for the same period a year ago. None of these non-GAAP
financial measures are recognized terms under GAAP and do not
purport to be an alternative to net income as an indicator of
operating performance or any other GAAP measure.
Management uses adjusted EBITDA in its
operational and financial decision-making, believing that it is
useful to eliminate certain items in order to focus on what it
deems to be a more reliable indicator of ongoing operating
performance. As a result, internal management reports used during
monthly operating reviews feature adjusted EBITDA measures.
Management believes that investors may find this non-GAAP financial
measure useful for similar reasons, although investors are
cautioned that non-GAAP financial measures are not a substitute for
GAAP disclosures. In addition, management incentive awards are
based, in part, on the amount of adjusted EBITDA achieved during
relevant periods. EBITDA and adjusted EBITDA are also used by
research analysts, investment bankers and lenders to assess
operating performance. For example, a measure similar to adjusted
EBITDA is required by the lenders under DMC’s credit facility.
Net cash or net debt is used by management to
supplement GAAP financial information and evaluate DMC’s
performance, and management believes this information may be
similarly useful to investors. Adjusted operating income, adjusted
net income, and adjusted diluted earnings per share are presented
because management believes these measures are useful to understand
the effects of restructuring and impairment charges on DMC’s
operating income, net income and diluted earnings per share,
respectively. ROIC is used by management as one measure of the
effectiveness of DMC’s use of capital in its operations, and
management believes it may be of similar usefulness to
investors.
Because not all companies use identical
calculations, DMC’s presentation of non-GAAP financial measures may
not be comparable to other similarly titled measures of other
companies. However, these measures can still be useful in
evaluating the company’s performance against its peer companies
because management believes the measures provide users with
valuable insight into key components of GAAP financial disclosures.
For example, a company with greater GAAP net income may not be as
appealing to investors if its net income is more heavily comprised
of gains on asset sales. Likewise, eliminating the effects of
interest income and expense moderates the impact of a company’s
capital structure on its performance.
All of the items included in the reconciliation
from net income to EBITDA and adjusted EBITDA are either (i)
non-cash items (e.g., depreciation, amortization of purchased
intangibles and stock-based compensation) or (ii) items that
management does not consider to be useful in assessing DMC’s
operating performance (e.g., income taxes, restructuring and
impairment charges). In the case of the non-cash items, management
believes that investors can better assess the company’s operating
performance if the measures are presented without such items
because, unlike cash expenses, these adjustments do not affect
DMC’s ability to generate free cash flow or invest in its business.
For example, by adjusting for depreciation and amortization in
computing EBITDA, users can compare operating performance without
regard to different accounting determinations such as useful life.
In the case of the other items, management believes that investors
can better assess operating performance if the measures are
presented without these items because their financial impact does
not reflect ongoing operating performance.
About DMC Global Inc.DMC Global
operates a portfolio of innovative, asset-light businesses that
provide differentiated products and services to their respective
industries. The Company’s strategy is to identify well-run
businesses with strong management teams, and support them with
long-term capital and strategic, financial, legal, technology and
operating resources. DMC helps portfolio companies grow their core
businesses, launch new initiatives, upgrade technologies and
systems to support their long-term growth strategies, and make
acquisitions that improve their competitive positions and expand
their markets. The Company’s current portfolio consists of
Arcadia Inc., a leading supplier of architectural building
products, DynaEnergetics, which serves the global energy industry,
and NobelClad, which addresses the global industrial infrastructure
and transportation sector. Based in Broomfield, Colorado, DMC
trades on Nasdaq under the symbol “BOOM.” For more information,
visit the Company’s website at: http://www.dmcglobal.com.
Safe Harbor LanguageExcept for
the historical information contained herein, this news release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, including the
statements in “Guidance”, market conditions, the company’s
strategy, growth opportunities and strategies, and the Company’s
prospects the statements in “Guidance”, market conditions, the
company’s strategy, growth opportunities and strategies, and the
Company’s prospects. Such statements and information are based on
numerous assumptions regarding present and future business
strategies, the markets in which we operate, anticipated costs and
ability to achieve goals. Forward-looking information and
statements are subject to known and unknown risks, uncertainties
and other important factors that may cause actual results and
performance to be materially different from those expressed or
implied by such forward-looking information and statements,
including but not limited to: our ability to realize sales from our
backlog; our ability to obtain new contracts at attractive prices;
the execution of purchase commitments by our customers, and our
ability to successfully deliver on those purchase commitments; the
size and timing of customer orders and shipments; changes to
customer orders; product pricing and margins; fluctuations in
customer demand; our ability to successfully navigate slowdowns in
market activity or execute and capitalize upon growth
opportunities; the success of DynaEnergetics’ product and
technology development initiatives; our ability to successfully
protect our technology and intellectual property and the costs
associated with these efforts; potential consolidation among
DynaEnergetics’ customers; fluctuations in foreign currencies;
fluctuations in tariffs and quotas; the cyclicality of our
business; competitive factors; the timely completion of contracts;
the timing and size of expenditures; the timing and price of metal
and other raw material; the adequacy of local labor supplies at our
facilities; current or future limits on manufacturing capacity at
our various operations; government actions or other changes in laws
and regulations; the availability and cost of funds; our ability to
access our borrowing capacity under our credit facility; impacts of
COVID-19 and any related preventive or protective actions taken by
governmental authorities and resulting economic impacts, including
recessions or depressions; general economic conditions, both
domestic and foreign, impacting our business and the business of
our customers and the end-market users we serve; our ability to
achieve the intended benefits of the acquisition of Arcadia, and
our ability to achieve the intended benefits of the acquisition of
Arcadia, and the other risks detailed from time to time in our SEC
reports, including the annual report on Form 10-K for the year
ended December 31, 2020. We do not undertake any obligation to
release public revisions to any forward-looking statement,
including, without limitation, to reflect events or circumstances
after the date of this news release, or to reflect the occurrence
of unanticipated events, except as may be required under applicable
securities laws.
CONTACT: |
Geoff High, Vice President of Investor Relations |
303-604-3924 |
DMC GLOBAL INC.CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS(Amounts in Thousands, Except Share and Per Share
Data)(unaudited)
|
Three months ended |
|
Change |
|
Dec 31, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2020 |
|
Sequential |
|
Year-on-year |
NET SALES |
$ |
71,844 |
|
|
$ |
67,175 |
|
|
$ |
57,113 |
|
|
7 |
% |
|
26 |
% |
COST OF PRODUCTS SOLD |
|
58,910 |
|
|
|
50,513 |
|
|
|
44,927 |
|
|
17 |
% |
|
31 |
% |
Gross profit |
|
12,934 |
|
|
|
16,662 |
|
|
|
12,186 |
|
|
-22 |
% |
|
6 |
% |
Gross profit percentage |
|
18 |
% |
|
|
25 |
% |
|
|
21 |
% |
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
10,155 |
|
|
|
9,721 |
|
|
|
7,406 |
|
|
4 |
% |
|
37 |
% |
Selling and distribution expenses |
|
6,127 |
|
|
|
5,593 |
|
|
|
5,143 |
|
|
10 |
% |
|
19 |
% |
Amortization of purchased intangible assets |
|
568 |
|
|
|
211 |
|
|
|
373 |
|
|
169 |
% |
|
52 |
% |
Acquisition expenses |
|
1,581 |
|
|
|
— |
|
|
|
— |
|
|
N/M |
|
N/M |
|
Restructuring expenses and asset impairments |
|
— |
|
|
|
— |
|
|
|
82 |
|
|
N/M |
|
-100 |
% |
Total costs and expenses |
|
18,431 |
|
|
|
15,525 |
|
|
|
13,004 |
|
|
19 |
% |
|
42 |
% |
OPERATING (LOSS) INCOME |
|
(5,497 |
) |
|
|
1,137 |
|
|
|
(818 |
) |
|
-583 |
% |
|
-572 |
% |
OTHER EXPENSE: |
|
|
|
|
|
|
|
|
|
Other expense, net |
|
(152 |
) |
|
|
(198 |
) |
|
|
(115 |
) |
|
23 |
% |
|
-32 |
% |
Interest expense, net |
|
(74 |
) |
|
|
(14 |
) |
|
|
(167 |
) |
|
-429 |
% |
|
56 |
% |
(LOSS) INCOME BEFORE INCOME
TAXES |
|
(5,723 |
) |
|
|
925 |
|
|
|
(1,100 |
) |
|
-719 |
% |
|
-420 |
% |
INCOME TAX (BENEFIT)
PROVISION |
|
(2,154 |
) |
|
|
522 |
|
|
|
(173 |
) |
|
-513 |
% |
|
-1,145 |
% |
NET (LOSS) INCOME |
|
(3,569 |
) |
|
|
403 |
|
|
|
(927 |
) |
|
-986 |
% |
|
-285 |
% |
Less: Net loss attributable to noncontrolling interest |
|
(808 |
) |
|
|
— |
|
|
|
— |
|
|
N/M |
|
|
N/M |
|
NET (LOSS) INCOME ATTRIBUTABLE
TO DMC GLOBAL INC. STOCKHOLDERS |
$ |
(2,761 |
) |
|
$ |
403 |
|
|
$ |
(927 |
) |
|
-785 |
% |
|
-198 |
% |
|
|
|
|
|
|
|
|
|
|
NET (LOSS) INCOME
PER SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS |
Basic |
$ |
(0.38 |
) |
|
$ |
0.02 |
|
|
$ |
(0.06 |
) |
|
-2,000 |
% |
|
-533 |
% |
Diluted |
$ |
(0.38 |
) |
|
$ |
0.02 |
|
|
$ |
(0.06 |
) |
|
-2,000 |
% |
|
-533 |
% |
WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING: |
Basic |
|
18,754,250 |
|
|
|
18,728,278 |
|
|
|
14,917,109 |
|
|
— |
% |
|
26 |
% |
Diluted |
|
18,754,250 |
|
|
|
18,739,085 |
|
|
|
14,917,109 |
|
|
— |
% |
|
26 |
% |
DIVIDENDS DECLARED PER COMMON
SHARE |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
Reconciliation to net (loss) income attributable to DMC Global
Inc. stockholders after adjustment of redeemable noncontrolling
interest for purposes of calculating earnings per share
|
Three months ended |
|
Dec 31, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2020 |
Net (loss) income attributable to DMC Global Inc. stockholders |
$ |
(2,761 |
) |
|
$ |
403 |
|
$ |
(927 |
) |
Adjustment of redeemable
noncontrolling interest |
|
4,424 |
|
|
|
— |
|
|
— |
|
Net (loss) income attributable
to DMC Global Inc. common stockholders after adjustment of
redeemable noncontrolling interest |
$ |
(7,185 |
) |
|
$ |
403 |
|
$ |
(927 |
) |
|
Twelve months ended |
|
Change |
|
Dec 31, 2021 |
|
Dec 31, 2020 |
|
Year-on-year |
NET SALES |
$ |
260,115 |
|
|
$ |
229,161 |
|
|
14 |
% |
COST OF PRODUCTS SOLD |
|
200,635 |
|
|
|
172,308 |
|
|
16 |
% |
Gross profit |
|
59,480 |
|
|
|
56,853 |
|
|
5 |
% |
Gross profit percentage |
|
23 |
% |
|
|
25 |
% |
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
General and administrative expenses |
|
36,276 |
|
|
|
29,150 |
|
|
24 |
% |
Selling and distribution expenses |
|
22,507 |
|
|
|
23,863 |
|
|
-6 |
% |
Amortization of purchased intangible assets |
|
1,391 |
|
|
|
1,449 |
|
|
-4 |
% |
Acquisition expenses |
|
1,581 |
|
|
|
— |
|
|
N/M |
|
Restructuring expenses and asset impairments |
|
127 |
|
|
|
3,387 |
|
|
-96 |
% |
Total costs and expenses |
|
61,882 |
|
|
|
57,849 |
|
|
7 |
% |
OPERATING LOSS |
|
(2,402 |
) |
|
|
(996 |
) |
|
-141 |
% |
OTHER INCOME (EXPENSE): |
|
|
|
|
|
Other income (expense), net |
|
152 |
|
|
|
(233 |
) |
|
165 |
% |
Interest expense, net |
|
(304 |
) |
|
|
(731 |
) |
|
58 |
% |
LOSS BEFORE INCOME TAXES |
|
(2,554 |
) |
|
|
(1,960 |
) |
|
-30 |
% |
INCOME TAX BENEFIT |
|
(1,544 |
) |
|
|
(548 |
) |
|
-182 |
% |
NET LOSS |
|
(1,010 |
) |
|
|
(1,412 |
) |
|
28 |
% |
Less: Net loss attributable to noncontrolling interest |
|
(808 |
) |
|
|
— |
|
|
N/M |
|
NET LOSS ATTRIBUTABLE TO DMC
GLOBAL INC. STOCKHOLDERS |
|
(202 |
) |
|
|
(1,412 |
) |
|
86 |
% |
|
|
|
|
|
|
NET LOSS PER
SHARE ATTRIBUTABLE TO DMC GLOBAL INC. STOCKHOLDERS |
Basic |
$ |
(0.26 |
) |
|
$ |
(0.10 |
) |
|
-160 |
% |
Diluted |
$ |
(0.26 |
) |
|
$ |
(0.10 |
) |
|
-160 |
% |
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING: |
|
|
|
|
|
Basic |
|
17,610,711 |
|
|
|
14,790,296 |
|
|
19 |
% |
Diluted |
|
17,610,711 |
|
|
|
14,790,296 |
|
|
19 |
% |
DIVIDENDS DECLARED PER COMMON
SHARE |
$ |
— |
|
|
$ |
0.125 |
|
|
|
Reconciliation to net loss attributable to DMC Global Inc.
stockholders after adjustment of redeemable noncontrolling interest
for purposes of calculating earnings per share
|
Twelve months ended |
|
Dec 31, 2021 |
|
Dec 31, 2020 |
Net loss attributable to DMC Global Inc. stockholders |
|
(202 |
) |
|
|
(1,412 |
) |
Adjustment of redeemable
noncontrolling interest |
|
4,424 |
|
|
|
— |
|
Net loss attributable to DMC
Global Inc. common stockholders after adjustment of redeemable
noncontrolling interest |
$ |
(4,626 |
) |
|
$ |
(1,412 |
) |
DMC GLOBAL INC.SEGMENT STATEMENTS OF
OPERATIONS(Amounts in Thousands)(unaudited)
DynaEnergetics
|
Three months ended |
|
Change |
|
Dec 31, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2020 |
|
Sequential |
|
Year-on-year |
Net sales |
$ |
50,679 |
|
|
$ |
44,237 |
|
|
$ |
35,330 |
|
|
15 |
% |
|
43 |
% |
Gross profit |
|
9,922 |
|
|
|
9,924 |
|
|
|
8,433 |
|
|
— |
% |
|
18 |
% |
Gross profit percentage |
|
20 |
% |
|
|
22 |
% |
|
|
24 |
% |
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
4,559 |
|
|
|
4,990 |
|
|
|
2,952 |
|
|
-9 |
% |
|
54 |
% |
Selling and distribution expenses |
|
3,348 |
|
|
|
3,260 |
|
|
|
2,945 |
|
|
3 |
% |
|
14 |
% |
Amortization of purchased intangible assets |
|
87 |
|
|
|
89 |
|
|
|
271 |
|
|
-2 |
% |
|
-68 |
% |
Restructuring expenses and asset impairments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
n/a |
|
|
n/a |
|
Operating income |
|
1,928 |
|
|
|
1,585 |
|
|
|
2,265 |
|
|
22 |
% |
|
-15 |
% |
Adjusted EBITDA |
$ |
3,950 |
|
|
$ |
3,597 |
|
|
$ |
4,118 |
|
|
10 |
% |
|
-4 |
% |
|
Twelve months ended |
|
Change |
|
Dec 31, 2021 |
|
Dec 31, 2020 |
|
Year-on-year |
Net sales |
$ |
175,356 |
|
|
$ |
146,395 |
|
|
20 |
% |
Gross profit |
|
38,955 |
|
|
|
38,072 |
|
|
2 |
% |
Gross profit percentage |
|
22 |
% |
|
|
26 |
% |
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
General and administrative expenses |
|
17,132 |
|
|
|
13,116 |
|
|
31 |
% |
Selling and distribution expenses |
|
13,050 |
|
|
|
14,825 |
|
|
-12 |
% |
Amortization of purchased intangible assets |
|
538 |
|
|
|
1,059 |
|
|
-49 |
% |
Restructuring expenses and asset impairments |
|
— |
|
|
|
2,922 |
|
|
-100 |
% |
Operating income |
|
8,235 |
|
|
|
6,150 |
|
|
34 |
% |
Adjusted EBITDA |
$ |
16,361 |
|
|
$ |
16,335 |
|
|
— |
% |
NobelClad
|
Three months ended |
|
Change |
|
Dec 31, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2020 |
|
Sequential |
|
Year-on-year |
Net sales |
$ |
21,165 |
|
|
$ |
22,938 |
|
|
$ |
21,783 |
|
|
-8 |
% |
|
-3 |
% |
Gross profit |
|
4,212 |
|
|
|
6,883 |
|
|
|
3,902 |
|
|
-39 |
% |
|
8 |
% |
Gross profit percentage |
|
20 |
% |
|
|
30 |
% |
|
|
18 |
% |
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
581 |
|
|
|
933 |
|
|
|
739 |
|
|
-38 |
% |
|
-21 |
% |
Selling and distribution expenses |
|
2,326 |
|
|
|
2,208 |
|
|
|
2,036 |
|
|
5 |
% |
|
14 |
% |
Amortization of purchased intangible assets |
|
118 |
|
|
|
122 |
|
|
|
102 |
|
|
-3 |
% |
|
16 |
% |
Restructuring expenses and asset impairments |
|
— |
|
|
|
— |
|
|
|
82 |
|
|
N/M |
|
|
-100 |
% |
Operating income |
|
1,187 |
|
|
|
3,620 |
|
|
|
943 |
|
|
-67 |
% |
|
26 |
% |
Adjusted EBITDA |
$ |
2,141 |
|
|
$ |
4,587 |
|
|
$ |
1,935 |
|
|
-53 |
% |
|
11 |
% |
|
Twelve months ended |
|
Change |
|
Dec 31, 2021 |
|
Dec 31, 2020 |
|
Year-on-year |
Net sales |
$ |
84,759 |
|
|
$ |
82,766 |
|
|
2 |
% |
Gross profit |
|
22,173 |
|
|
|
19,433 |
|
|
14 |
% |
Gross profit percentage |
|
26 |
% |
|
|
23 |
% |
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
General and administrative expenses |
|
3,217 |
|
|
|
3,388 |
|
|
-5 |
% |
Selling and distribution expenses |
|
8,556 |
|
|
|
8,423 |
|
|
2 |
% |
Amortization of purchased intangible assets |
|
490 |
|
|
|
390 |
|
|
26 |
% |
Restructuring expenses and asset impairments |
|
127 |
|
|
|
346 |
|
|
-63 |
% |
Operating income |
|
9,783 |
|
|
|
6,886 |
|
|
42 |
% |
Adjusted EBITDA |
$ |
13,717 |
|
|
$ |
10,736 |
|
|
28 |
% |
DMC GLOBAL INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Amounts in Thousands)(unaudited)
|
|
|
|
|
|
|
Change |
|
Dec 31, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2020 |
|
Sequential |
|
From year-end |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
30,810 |
|
$ |
37,020 |
|
$ |
28,187 |
|
-17 |
% |
|
9 |
% |
Marketable securities |
|
— |
|
|
144,932 |
|
|
25,736 |
|
-100 |
% |
|
-100 |
% |
Accounts receivable, net |
|
71,932 |
|
|
39,347 |
|
|
31,366 |
|
83 |
% |
|
129 |
% |
Inventories |
|
124,214 |
|
|
62,172 |
|
|
52,573 |
|
100 |
% |
|
136 |
% |
Other current assets |
|
12,240 |
|
|
9,974 |
|
|
5,448 |
|
23 |
% |
|
125 |
% |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
239,196 |
|
|
293,445 |
|
|
143,310 |
|
-18 |
% |
|
67 |
% |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net |
|
122,078 |
|
|
105,137 |
|
|
109,411 |
|
16 |
% |
|
12 |
% |
Goodwill |
|
141,266 |
|
|
— |
|
|
— |
|
N/M |
|
|
N/M |
|
Purchased intangible assets,
net |
|
255,576 |
|
|
1,829 |
|
|
3,665 |
|
13,874 |
% |
|
6,873 |
% |
Other long-term assets |
|
106,296 |
|
|
35,964 |
|
|
23,259 |
|
196 |
% |
|
357 |
% |
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
864,412 |
|
$ |
436,375 |
|
$ |
279,645 |
|
98 |
% |
|
209 |
% |
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
40,276 |
|
$ |
24,436 |
|
$ |
17,574 |
|
65 |
% |
|
129 |
% |
Contract liabilities |
|
21,052 |
|
|
9,759 |
|
|
4,928 |
|
116 |
% |
|
327 |
% |
Accrued income taxes |
|
9 |
|
|
8,101 |
|
|
7,279 |
|
-100 |
% |
|
-100 |
% |
Current portion of long-term
debt |
|
15,000 |
|
|
— |
|
|
3,125 |
|
N/M |
|
|
380 |
% |
Other current liabilities |
|
29,477 |
|
|
17,692 |
|
|
14,202 |
|
67 |
% |
|
108 |
% |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
105,814 |
|
|
59,988 |
|
|
47,108 |
|
76 |
% |
|
125 |
% |
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
132,425 |
|
|
— |
|
|
8,139 |
|
N/M |
|
|
1,527 |
% |
Deferred tax liabilities |
|
2,202 |
|
|
1,373 |
|
|
2,254 |
|
60 |
% |
|
-2 |
% |
Other long-term
liabilities |
|
66,250 |
|
|
30,114 |
|
|
25,230 |
|
120 |
% |
|
163 |
% |
Redeemable noncontrolling
interest |
|
197,196 |
|
|
— |
|
|
— |
|
N/M |
|
|
N/M |
|
Stockholders' equity |
|
360,525 |
|
|
344,900 |
|
|
196,914 |
|
5 |
% |
|
83 |
% |
|
|
|
|
|
|
|
|
|
|
Total liabilities, redeemable
noncontrolling interest, and stockholders' equity |
$ |
864,412 |
|
$ |
436,375 |
|
$ |
279,645 |
|
98 |
% |
|
209 |
% |
DMC GLOBAL INC.CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS(Amounts in Thousands)(unaudited)
|
Three months ended |
|
Dec 31, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2020 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
Net (loss) income |
$ |
(3,569 |
) |
|
$ |
403 |
|
|
$ |
(927 |
) |
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities: |
|
|
|
|
|
Depreciation |
|
2,903 |
|
|
|
2,870 |
|
|
|
2,465 |
|
Amortization of purchased intangible assets |
|
568 |
|
|
|
211 |
|
|
|
373 |
|
Amortization of deferred debt issuance costs |
|
80 |
|
|
|
56 |
|
|
|
53 |
|
Stock-based compensation |
|
1,670 |
|
|
|
1,569 |
|
|
|
1,521 |
|
Deferred income taxes |
|
200 |
|
|
|
570 |
|
|
|
(1,474 |
) |
Loss (gain) on disposal of property, plant and equipment |
|
94 |
|
|
|
(15 |
) |
|
|
134 |
|
Restructuring expenses and asset impairments |
|
— |
|
|
|
— |
|
|
|
82 |
|
Change in working capital, net |
|
(12,852 |
) |
|
|
(1,549 |
) |
|
|
6,781 |
|
Net cash (used in) provided by operating activities |
|
(10,906 |
) |
|
|
4,115 |
|
|
|
9,008 |
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
Acquisition of business, net of cash acquired |
|
(261,000 |
) |
|
|
— |
|
|
|
— |
|
Investment in marketable securities |
|
— |
|
|
|
— |
|
|
|
(25,740 |
) |
Proceeds from sales of marketable securities |
|
144,921 |
|
|
|
— |
|
|
|
— |
|
Acquisition of property, plant and equipment |
|
(2,311 |
) |
|
|
(3,096 |
) |
|
|
(4,171 |
) |
Proceeds on sale of property, plant and equipment |
|
— |
|
|
|
15 |
|
|
|
16 |
|
Promissory note to redeemable noncontrolling interest holder |
|
(24,902 |
) |
|
|
— |
|
|
|
— |
|
Net cash used in investing activities |
|
(143,292 |
) |
|
|
(3,081 |
) |
|
|
(29,895 |
) |
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
Payments on capital expenditure facility |
|
— |
|
|
|
— |
|
|
|
(781 |
) |
Borrowings on term loan |
|
150,000 |
|
|
|
— |
|
|
|
— |
|
Payment of deferred debt issuance costs |
|
(2,337 |
) |
|
|
— |
|
|
|
(2 |
) |
Net proceeds from issuance of common stock through at-the-market
offering program |
|
— |
|
|
|
— |
|
|
|
25,740 |
|
Net proceeds from issuance of common stock to employees and
directors |
|
181 |
|
|
|
— |
|
|
|
165 |
|
Treasury stock purchases |
|
(9 |
) |
|
|
(25 |
) |
|
|
(767 |
) |
Net cash provided by (used in) financing activities |
|
147,835 |
|
|
|
(25 |
) |
|
|
24,355 |
|
EFFECTS OF EXCHANGE RATES ON
CASH |
|
153 |
|
|
|
(352 |
) |
|
|
115 |
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS |
|
(6,210 |
) |
|
|
657 |
|
|
|
3,583 |
|
CASH AND CASH EQUIVALENTS,
beginning of the period |
|
37,020 |
|
|
|
36,363 |
|
|
|
24,604 |
|
CASH AND CASH EQUIVALENTS, end
of the period |
$ |
30,810 |
|
|
$ |
37,020 |
|
|
$ |
28,187 |
|
|
Twelve months ended |
|
Dec 31, 2021 |
|
Dec 31, 2020 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
Net loss |
$ |
(1,010 |
) |
|
$ |
(1,412 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities: |
|
|
|
Depreciation |
|
11,303 |
|
|
|
9,632 |
|
Amortization of purchased intangible assets |
|
1,391 |
|
|
|
1,449 |
|
Amortization of deferred debt issuance costs |
|
248 |
|
|
|
207 |
|
Stock-based compensation |
|
6,574 |
|
|
|
5,675 |
|
Deferred income taxes |
|
(1,846 |
) |
|
|
(2,313 |
) |
(Gain) loss on disposal of property, plant and equipment |
|
(204 |
) |
|
|
247 |
|
Restructuring expenses and asset impairments |
|
127 |
|
|
|
3,387 |
|
Change in working capital, net |
|
(29,395 |
) |
|
|
13,490 |
|
Net cash (used in) provided by operating activities |
|
(12,812 |
) |
|
|
30,362 |
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
Acquisition of business, net of cash acquired |
|
(261,000 |
) |
|
|
— |
|
Investment in marketable securities |
|
(123,984 |
) |
|
|
(25,740 |
) |
Proceeds from maturities of marketable securities |
|
4,799 |
|
|
|
— |
|
Proceeds from sales of marketable securities |
|
144,921 |
|
|
|
— |
|
Acquisition of property, plant and equipment |
|
(8,659 |
) |
|
|
(13,853 |
) |
Proceeds on sale of property, plant and equipment |
|
1,019 |
|
|
|
36 |
|
Promissory note to redeemable noncontrolling interest holder |
|
(24,902 |
) |
|
|
— |
|
Net cash used in investing activities |
|
(267,806 |
) |
|
|
(39,557 |
) |
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
Payments on capital expenditure facility |
|
(11,750 |
) |
|
|
(3,125 |
) |
Borrowings on term loan |
|
150,000 |
|
|
|
— |
|
Payment of dividends |
|
— |
|
|
|
(3,749 |
) |
Payment of deferred debt issuance costs |
|
(2,337 |
) |
|
|
(90 |
) |
Net proceeds from issuance of common stock through equity
offering |
|
123,461 |
|
|
|
— |
|
Net proceeds from issuance of common stock through at-the-market
offering program |
|
25,262 |
|
|
|
25,740 |
|
Net proceeds from issuance of common stock to employees and
directors |
|
434 |
|
|
|
431 |
|
Treasury stock purchases |
|
(2,485 |
) |
|
|
(1,890 |
) |
Net cash provided by financing activities |
|
282,585 |
|
|
|
17,317 |
|
EFFECTS OF EXCHANGE RATES ON
CASH |
|
656 |
|
|
|
(288 |
) |
|
|
|
|
NET INCREASE IN CASH AND CASH
EQUIVALENTS |
|
2,623 |
|
|
|
7,834 |
|
CASH AND CASH EQUIVALENTS,
beginning of the period |
|
28,187 |
|
|
|
20,353 |
|
CASH AND CASH EQUIVALENTS, end
of the period |
$ |
30,810 |
|
|
$ |
28,187 |
|
DMC GLOBAL INC.RECONCILIATIONS OF NON-GAAP
FINANCIAL MEASUREMENTS TO MOSTDIRECTLY COMPARABLE GAAP FINANCIAL
MEASUREMENTS(Amounts in Thousands, Except Per Share
Data)(unaudited)
DMC Global Inc.
EBITDA and Adjusted EBITDA
|
Three months ended |
|
Change |
|
Dec 31, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2020 |
|
Sequential |
|
Year-on-year |
Net (loss) income |
$ |
(3,569 |
) |
|
$ |
403 |
|
$ |
(927 |
) |
|
-986 |
% |
|
-285 |
% |
Interest expense, net |
|
74 |
|
|
|
14 |
|
|
167 |
|
|
429 |
% |
|
-56 |
% |
Income tax (benefit)
provision |
|
(2,154 |
) |
|
|
522 |
|
|
(173 |
) |
|
-513 |
% |
|
-1,145 |
% |
Depreciation |
|
2,903 |
|
|
|
2,870 |
|
|
2,465 |
|
|
1 |
% |
|
18 |
% |
Amortization of purchased
intangible assets |
|
568 |
|
|
|
211 |
|
|
373 |
|
|
169 |
% |
|
52 |
% |
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
(2,178 |
) |
|
|
4,020 |
|
|
1,905 |
|
|
-154 |
% |
|
-214 |
% |
Restructuring expenses and
asset impairments |
|
— |
|
|
|
— |
|
|
82 |
|
|
N/M |
|
|
-100 |
% |
Acquisition expenses |
|
1,581 |
|
|
|
— |
|
|
— |
|
|
N/M |
|
|
N/M |
|
Arcadia stub period expenses
excluding depreciation & amortization |
|
1,605 |
|
|
|
— |
|
|
— |
|
|
N/M |
|
|
N/M |
|
Stock-based compensation |
|
1,670 |
|
|
|
1,569 |
|
|
1,521 |
|
|
6 |
% |
|
10 |
% |
Other expense, net |
|
152 |
|
|
|
198 |
|
|
115 |
|
|
-23 |
% |
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA attributable
to DMC Global Inc. |
$ |
2,830 |
|
|
$ |
5,787 |
|
$ |
3,623 |
|
|
-51 |
% |
|
-22 |
% |
|
Twelve months ended |
|
Change |
|
Dec 31, 2021 |
|
Dec 31, 2020 |
|
Year-on-year |
Net loss |
$ |
(1,010 |
) |
|
$ |
(1,412 |
) |
|
28 |
% |
Interest expense, net |
|
304 |
|
|
|
731 |
|
|
-58 |
% |
Income tax benefit |
|
(1,544 |
) |
|
|
(548 |
) |
|
-182 |
% |
Depreciation |
|
11,303 |
|
|
|
9,632 |
|
|
17 |
% |
Amortization of purchased
intangible assets |
|
1,391 |
|
|
|
1,449 |
|
|
-4 |
% |
|
|
|
|
|
|
EBITDA |
|
10,444 |
|
|
|
9,852 |
|
|
6 |
% |
Restructuring expenses and
asset impairments |
|
127 |
|
|
|
3,387 |
|
|
-96 |
% |
Acquisition expenses |
|
1,581 |
|
|
|
— |
|
|
N/M |
|
Arcadia stub period expenses
excluding depreciation & amortization |
|
1,605 |
|
|
|
— |
|
|
N/M |
|
Stock-based compensation |
|
6,574 |
|
|
|
5,675 |
|
|
16 |
% |
Other (income) expense,
net |
|
(152 |
) |
|
|
233 |
|
|
-165 |
% |
|
|
|
|
|
|
Adjusted EBITDA attributable
to DMC Global Inc. |
$ |
20,179 |
|
|
$ |
19,147 |
|
|
5 |
% |
Adjusted Operating (Loss) Income
|
Three months ended |
|
Change |
|
Dec 31, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2020 |
|
Sequential |
|
Year-on-year |
Operating (loss) income, as reported |
$ |
(5,497 |
) |
|
$ |
1,137 |
|
$ |
(818 |
) |
|
-583 |
% |
|
-572 |
% |
Restructuring programs: |
|
|
|
|
|
|
|
|
|
NobelClad |
|
— |
|
|
|
— |
|
|
82 |
|
|
N/M |
|
|
-100 |
% |
Acquisition expenses |
|
1,581 |
|
|
|
— |
|
|
— |
|
|
N/M |
|
|
N/M |
|
Arcadia stub period
expenses |
|
2,020 |
|
|
|
— |
|
|
— |
|
|
N/M |
|
|
N/M |
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating (loss)
income |
$ |
(1,896 |
) |
|
$ |
1,137 |
|
$ |
(736 |
) |
|
-267 |
% |
|
-158 |
% |
|
Twelve months ended |
|
Change |
|
Dec 31, 2021 |
|
Dec 31, 2020 |
|
Year-on-year |
Operating loss, as reported |
$ |
(2,402 |
) |
|
$ |
(996 |
) |
|
-141 |
% |
Restructuring programs: |
|
|
|
|
|
DynaEnergetics |
|
— |
|
|
|
2,922 |
|
|
-100 |
% |
NobelClad |
|
127 |
|
|
|
346 |
|
|
-63 |
% |
Corporate |
|
— |
|
|
|
119 |
|
|
-100 |
% |
Acquisition expenses |
|
1,581 |
|
|
|
— |
|
|
n/a |
|
Arcadia stub period
expenses |
|
2,020 |
|
|
|
— |
|
|
n/a |
|
|
|
|
|
|
|
Adjusted operating income |
$ |
1,326 |
|
|
$ |
2,391 |
|
|
-45 |
% |
Adjusted Net Income (Loss) and Diluted Income (Loss) per
Share
|
Three months ended December 31, 2021 |
|
Amount |
|
Diluted weighted average shares outstanding |
|
Per Share |
Net loss attributable to DMC Global Inc. common stockholders |
$ |
(2,761 |
) |
|
18,754,250 |
|
$ |
(0.15 |
) |
Acquisition expenses |
|
1,581 |
|
|
18,754,250 |
|
|
0.09 |
|
Arcadia stub period
expenses |
|
2,020 |
|
|
18,754,250 |
|
|
0.11 |
|
|
|
|
|
|
|
Adjusted net income
attributable to DMC Global Inc. stockholders |
$ |
840 |
|
|
18,754,250 |
|
$ |
0.05 |
|
|
Three months ended December 31, 2020 |
|
Amount |
|
Diluted weighted average shares outstanding |
|
Per Share |
Net loss attributable to DMC Global Inc. common stockholders |
$ |
(927 |
) |
|
14,917,109 |
|
$ |
(0.06 |
) |
Restructuring programs: |
|
|
|
|
|
NobelClad |
|
102 |
|
|
14,917,109 |
|
|
0.01 |
|
|
|
|
|
|
|
Adjusted net loss attributable
to DMC Global Inc. stockholders |
$ |
(825 |
) |
|
14,917,109 |
|
$ |
(0.05 |
) |
|
Twelve months ended December 31, 2021 |
|
Amount |
|
Diluted weighted average shares outstanding |
|
Per Share |
Net loss attributable to DMC Global Inc. common stockholders |
$ |
(202 |
) |
|
17,610,711 |
|
$ |
(0.01 |
) |
Restructuring programs: |
|
|
|
|
|
NobelClad |
|
127 |
|
|
17,610,711 |
|
|
0.01 |
|
Acquisition expenses |
|
1,581 |
|
|
17,610,711 |
|
|
0.09 |
|
Arcadia stub period
expenses |
|
2,020 |
|
|
17,610,711 |
|
|
0.11 |
|
|
|
|
|
|
|
Adjusted net income
attributable to DMC Global Inc. stockholders |
$ |
3,526 |
|
|
17,610,711 |
|
$ |
0.20 |
|
|
Twelve months ended December 31, 2020 |
|
Amount |
|
Diluted weighted average shares outstanding |
|
Per Share |
Net loss attributable to DMC Global Inc. common stockholders |
$ |
(1,412 |
) |
|
14,790,296 |
|
$ |
(0.10 |
) |
Restructuring programs: |
|
|
|
|
|
DynaEnergetics |
|
2,059 |
|
|
14,790,296 |
|
|
0.14 |
|
NobelClad |
|
290 |
|
|
14,790,296 |
|
|
0.02 |
|
Corporate |
|
94 |
|
|
14,790,296 |
|
|
0.01 |
|
|
|
|
|
|
|
Adjusted net income
attributable to DMC Global Inc. stockholders |
$ |
1,031 |
|
|
14,790,296 |
|
$ |
0.07 |
|
Return on Invested Capital
|
|
|
Three months ended |
|
|
|
Dec 31, 2020 |
|
Mar 31, 2021 |
|
Jun 30, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2021 |
Operating income
(loss) |
|
$ |
(818 |
) |
|
$ |
(710 |
) |
|
$ |
2,668 |
|
|
$ |
1,137 |
|
|
$ |
(5,497 |
) |
Income tax
provision (benefit) (1) |
|
|
(54 |
) |
|
|
(1,390 |
) |
|
|
960 |
|
|
|
641 |
|
|
|
(1,664 |
) |
Net operating
(loss) profit after taxes (NOPAT) |
|
|
(764 |
) |
|
|
680 |
|
|
|
1,708 |
|
|
|
496 |
|
|
|
(3,833 |
) |
Trailing Twelve
Months NOPAT |
|
|
|
|
(4,277 |
) |
|
|
2,912 |
|
|
|
2,120 |
|
|
|
(949 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances as of |
|
Sep 30, 2020 |
|
Dec 31, 2020 |
|
Mar 31, 2021 |
|
Jun 30, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2021 |
Current portion of lease liabilities |
1,804 |
|
|
1,741 |
|
|
|
1,505 |
|
|
|
1,477 |
|
|
|
1,648 |
|
|
|
6,126 |
|
Long-term portion of lease
liabilities |
10,155 |
|
|
10,066 |
|
|
|
10,137 |
|
|
|
9,944 |
|
|
|
10,432 |
|
|
|
47,000 |
|
Current portion of long-term
debt |
3,125 |
|
|
3,125 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,000 |
|
Long-term debt |
8,867 |
|
|
8,139 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
132,425 |
|
Total stockholders'
equity |
169,951 |
|
|
196,914 |
|
|
|
218,430 |
|
|
|
346,037 |
|
|
|
344,900 |
|
|
|
360,525 |
|
Total invested capital |
193,902 |
|
|
219,985 |
|
|
|
230,072 |
|
|
|
357,458 |
|
|
|
356,980 |
|
|
|
561,076 |
|
Average invested capital |
|
|
|
208,946 |
|
|
|
214,182 |
|
|
|
276,369 |
|
|
|
275,441 |
|
|
|
390,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing Twelve
Months Return on Invested Capital (ROIC) |
|
|
— |
% |
|
|
(2 |
%) |
|
|
1 |
% |
|
|
1 |
% |
|
|
— |
% |
(1) Tax calculation
for NOPAT: |
|
|
|
Three months ended |
|
Twelve months ended |
|
Three months ended |
|
Twelve months ended |
|
Dec 31, 2020 |
|
Dec 31, 2020 |
|
Mar 31, 2021 |
|
Jun 30, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2021 |
|
Dec 31, 2021 |
(Loss) income before income taxes |
$ |
(1,100 |
) |
|
$ |
(1,960 |
) |
|
$ |
(451 |
) |
|
$ |
2,695 |
|
|
$ |
925 |
|
|
$ |
(5,723 |
) |
|
(2,554 |
) |
Income tax provision
(benefit) |
|
(173 |
) |
|
|
(548 |
) |
|
|
(883 |
) |
|
|
971 |
|
|
|
522 |
|
|
|
(2,154 |
) |
|
(1,544 |
) |
Effective tax rate |
|
15.7 |
% |
|
|
28.0 |
% |
|
|
195.8 |
% |
|
|
36.0 |
% |
|
|
56.4 |
% |
|
|
37.6 |
% |
|
60.5 |
% |
DynaEnergetics
Adjusted operating income and EBITDA
|
Three months ended |
|
Change |
|
Dec 31, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2020 |
|
Sequential |
|
Year-on-year |
Operating income, as reported |
$ |
1,928 |
|
$ |
1,585 |
|
$ |
2,265 |
|
22 |
% |
|
-15 |
% |
|
|
|
|
|
|
|
|
|
|
Adjusted operating income |
|
1,928 |
|
|
1,585 |
|
|
2,265 |
|
22 |
% |
|
-15 |
% |
Depreciation |
|
1,935 |
|
|
1,923 |
|
|
1,582 |
|
1 |
% |
|
22 |
% |
Amortization of purchased intangible assets |
|
87 |
|
|
89 |
|
|
271 |
|
-2 |
% |
|
-68 |
% |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
3,950 |
|
$ |
3,597 |
|
$ |
4,118 |
|
10 |
% |
|
-4 |
% |
|
Twelve months ended |
|
Change |
|
Dec 31, 2021 |
|
Dec 31, 2020 |
|
Year-on-year |
Operating income, as reported |
$ |
8,235 |
|
$ |
6,150 |
|
34 |
% |
Adjustments: |
|
|
|
|
|
Restructuring expenses and asset impairments |
|
— |
|
|
2,922 |
|
-100 |
% |
|
|
|
|
|
|
Adjusted operating income |
|
8,235 |
|
|
9,072 |
|
-9 |
% |
Depreciation |
|
7,588 |
|
|
6,204 |
|
22 |
% |
Amortization of purchased intangible assets |
|
538 |
|
|
1,059 |
|
-49 |
% |
|
|
|
|
|
|
Adjusted EBITDA |
$ |
16,361 |
|
$ |
16,335 |
|
— |
% |
NobelClad
Adjusted operating income and EBITDA
|
Three months ended |
|
Change |
|
Dec 31, 2021 |
|
Sep 30, 2021 |
|
Dec 31, 2020 |
|
Sequential |
|
Year-on-year |
Operating income, as reported |
$ |
1,187 |
|
$ |
3,620 |
|
$ |
943 |
|
-67 |
% |
|
26 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
Restructuring expenses and asset impairments |
|
— |
|
|
— |
|
|
82 |
|
n/a |
|
|
-100 |
% |
|
|
|
|
|
|
|
|
|
|
Adjusted operating income |
|
1,187 |
|
|
3,620 |
|
|
1,025 |
|
-67 |
% |
|
16 |
% |
Depreciation |
|
836 |
|
|
845 |
|
|
808 |
|
-1 |
% |
|
3 |
% |
Amortization of purchased intangible assets |
|
118 |
|
|
122 |
|
|
102 |
|
-3 |
% |
|
16 |
% |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
2,141 |
|
$ |
4,587 |
|
$ |
1,935 |
|
-53 |
% |
|
11 |
% |
|
Twelve months ended |
|
Change |
|
Dec 31, 2021 |
|
Dec 31, 2020 |
|
Year-on-year |
Operating income, as reported |
$ |
9,783 |
|
$ |
6,886 |
|
42 |
% |
Adjustments: |
|
|
|
|
|
Restructuring expenses and asset impairments |
|
127 |
|
|
346 |
|
-63 |
% |
|
|
|
|
|
|
Adjusted operating income |
|
9,910 |
|
|
7,232 |
|
37 |
% |
Depreciation |
|
3,317 |
|
|
3,114 |
|
7 |
% |
Amortization of purchased intangible assets |
|
490 |
|
|
390 |
|
26 |
% |
|
|
|
|
|
|
Adjusted EBITDA |
$ |
13,717 |
|
$ |
10,736 |
|
28 |
% |
DMC GLOBAL INC.PRO FORMA RESULTS(Amounts in
Thousands, Except Per Share Data)(unaudited)
Pro Forma Summary Income Statement*
|
Three months ended December 31, 2021 |
|
DMC |
|
Arcadia |
|
Redeemable Noncontrolling Interest(1) |
|
Pro Forma Arcadia |
|
Pro Forma Combined |
Net Sales |
$ |
71,844 |
|
|
$ |
56,653 |
|
|
|
|
$ |
56,653 |
|
|
$ |
128,497 |
|
Gross profit |
|
12,934 |
|
|
|
16,082 |
|
|
|
|
|
16,082 |
|
|
|
29,016 |
|
Gross profit % |
|
18.0 |
% |
|
|
28.4 |
% |
|
|
|
|
28.4 |
% |
|
|
22.6 |
% |
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expenses |
|
16,282 |
|
|
|
8,621 |
|
|
|
|
|
8,621 |
|
|
|
24,903 |
|
Amortization |
|
568 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
568 |
|
Operating (loss) income |
|
(3,916 |
) |
|
|
7,461 |
|
|
|
|
|
7,461 |
|
|
|
3,545 |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization |
|
3,471 |
|
|
|
588 |
|
|
|
|
|
588 |
|
|
|
4,059 |
|
Stock-based compensation
expense |
|
1,670 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
1,670 |
|
Post acquisition stub period
expenses |
|
1,605 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
1,605 |
|
Adjusted EBITDA |
|
2,830 |
|
|
|
8,049 |
|
|
(3,220 |
) |
|
|
4,829 |
|
|
|
7,659 |
|
Adjusted EBITDA % |
|
3.9 |
% |
|
|
14.2 |
% |
|
|
|
|
8.5 |
% |
|
|
6.0 |
% |
(1) Represents the Adjusted EBITDA attributable to the 40%
redeemable noncontrolling interest.
|
Twelve months ended December 31, 2021 |
|
DMC |
|
Arcadia |
|
Redeemable Noncontrolling Interest(1) |
|
Pro Forma Arcadia |
|
Pro Forma Combined |
Net sales |
$ |
260,115 |
|
|
$ |
240,345 |
|
|
|
|
$ |
240,345 |
|
|
$ |
500,460 |
|
Gross profit |
|
59,480 |
|
|
|
82,129 |
|
|
|
|
|
82,129 |
|
|
|
141,609 |
|
Gross profit % |
|
22.9 |
% |
|
|
34.2 |
% |
|
|
|
|
34.2 |
% |
|
|
28.3 |
% |
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expenses |
|
58,783 |
|
|
|
34,117 |
|
|
|
|
|
34,117 |
|
|
|
92,900 |
|
Amortization |
|
1,391 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
1,391 |
|
Operating (loss) income |
|
(694 |
) |
|
|
48,012 |
|
|
|
|
|
48,012 |
|
|
|
47,318 |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization |
|
12,694 |
|
|
|
1,907 |
|
|
|
|
|
1,907 |
|
|
|
14,601 |
|
Stock-based compensation
expense |
|
6,574 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
6,574 |
|
Post acquisition stub period
expenses |
|
1,605 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
1,605 |
|
Adjusted EBITDA |
|
20,179 |
|
|
|
49,919 |
|
|
(19,968 |
) |
|
|
29,951 |
|
|
|
50,130 |
|
Adjusted EBITDA % |
|
7.8 |
% |
|
|
20.8 |
% |
|
|
|
|
12.5 |
% |
|
|
10.0 |
% |
(1) Represents the Adjusted EBITDA attributable to the 40%
redeemable noncontrolling interest.
Pro Form EBITDA and Adjusted EBITDA*
|
Three months ended December 31, 2021 |
|
DMC |
|
Arcadia |
|
Pro Forma Combined |
Net (loss) income |
$ |
(3,569 |
) |
|
$ |
7,461 |
|
$ |
3,892 |
|
Interest expense, net |
|
74 |
|
|
|
— |
|
|
74 |
|
Income tax benefit |
|
(2,154 |
) |
|
|
— |
|
|
(2,154 |
) |
Depreciation |
|
2,903 |
|
|
|
588 |
|
|
3,491 |
|
Amortization |
|
568 |
|
|
|
— |
|
|
568 |
|
EBITDA |
|
(2,178 |
) |
|
|
8,049 |
|
|
5,871 |
|
Acquisition expenses |
|
1,581 |
|
|
|
— |
|
|
1,581 |
|
Arcadia stub period expenses
excluding depreciation & amortization |
|
1,605 |
|
|
|
— |
|
|
1,605 |
|
Stock-based compensation
expense |
|
1,670 |
|
|
|
— |
|
|
1,670 |
|
Other expense, net |
|
152 |
|
|
|
— |
|
|
152 |
|
Adjusted EBITDA |
|
2,830 |
|
|
|
8,049 |
|
|
10,879 |
|
Adjusted EBITDA attributable
to redeemable noncontrolling interest |
|
— |
|
|
|
3,220 |
|
|
3,220 |
|
Adjusted EBITDA attributable
to DMC Global Inc. |
$ |
2,830 |
|
|
$ |
4,829 |
|
$ |
7,659 |
|
|
Twelve months ended December 31, 2021 |
|
DMC |
|
Arcadia |
|
Pro Forma Combined |
Net (loss) income |
$ |
(1,010 |
) |
|
$ |
48,012 |
|
$ |
47,002 |
|
Interest expense, net |
|
304 |
|
|
|
— |
|
|
304 |
|
Income tax benefit |
|
(1,544 |
) |
|
|
— |
|
|
(1,544 |
) |
Depreciation |
|
11,303 |
|
|
|
1,907 |
|
|
13,210 |
|
Amortization |
|
1,391 |
|
|
|
— |
|
|
1,391 |
|
EBITDA |
|
10,444 |
|
|
|
49,919 |
|
|
60,363 |
|
Restructuring |
|
127 |
|
|
|
— |
|
|
127 |
|
Acquisition expenses |
|
1,581 |
|
|
|
— |
|
|
1,581 |
|
Arcadia stub period expenses
excluding depreciation & amortization |
|
1,605 |
|
|
|
— |
|
|
1,605 |
|
Stock-based compensation
expense |
|
6,574 |
|
|
|
— |
|
|
6,574 |
|
Other expense, net |
|
(152 |
) |
|
|
— |
|
|
(152 |
) |
Adjusted EBITDA |
|
20,179 |
|
|
|
49,919 |
|
|
70,098 |
|
Adjusted EBITDA attributable
to redeemable noncontrolling interest |
|
— |
|
|
|
19,968 |
|
|
19,968 |
|
Adjusted EBITDA attributable
to DMC Global Inc. |
$ |
20,179 |
|
|
$ |
29,951 |
|
$ |
50,130 |
|
|
|
|
|
|
|
|
|
|
|
|
*This unaudited pro forma combined financial information was not
prepared under Article 11 of SEC Regulation S-X (“Article 11”) or
Financial Accounting Standards Board Accounting Standards
Codification 805 (“ASC 805”). Pro forma financial information as
required under Article 11 will be filed in a Form 8-K/A that will
be filed 75 days after the closing of the acquisition of Arcadia
and the unaudited pro forma financial information as required under
ASC 805 will be included within our 2021 Form 10-K.
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