DMC Global Inc.
For the period ended Mar 31, 2025. Filed May 1, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 1, 2025
BOOM$7.01-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0000034067-24-000156
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000034067-25-000098
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 146 previous paragraphs and 98 current paragraphs.
37 unchanged; 38 reworded; 23 added; 67 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 20 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
•DynaEnergetics’ sales of $65,551 in the first quarter of 2025 represented a 16% decrease compared to the first quarter of 2024. The decline was due to a decrease in volume of DynaStage® (DS) perforating systems attributable to lower well completions in North America, pricing decreases due to industry consolidation in the United States, and a 27% reduction in international sales due to project timing.
Current report
Our three manufacturing businesses continue to closely monitor evolving U.S. and reciprocal tariff policies, and our DynaEnergetics and NobelClad businesses also are evaluating the implications of recent volatility in energy prices. If our businesses cannot mitigate tariff impacts or if tariffs significantly reduce product demand, both net sales and profitability will suffer. For further details on potential tariff impacts, see Part II, Item 1A. Risk Factors.
Current report
At Arcadia Products, former president Jim Schladen recently returned to lead the organization. He is focused on strengthening Arcadia Products’ core commercial operations and stabilizing and developing an improvement plan for its high-end residential products. Lower project billings are anticipated in the second quarter given the recent completion of a substantial portion of a large mixed-use project in California. Additionally, Arcadia Products’ second quarter results are expected to be below the year-ago second quarter, which benefited from stronger demand for residential and commercial exterior products.
Current report
Our DynaEnergetics business has completed a value-engineering initiative designed to reduce the cost and improve the performance of its flagship DynaStage product offering. DynaEnergetics also has completed an initiative to automate the assembly of its perforating systems at its North American manufacturing center in Blum, Texas. Cost benefits from these initiatives are expected to be realized in 2025 and could help mitigate the potential impacts of tariffs and energy price volatility.
Current report
At NobelClad, uncertainty associated with tariffs has led to a slowdown in bookings activity. Order backlog at the end of the first quarter was $41,014 versus $48,885 at the end of last year’s fourth quarter. Quoting activity has remained healthy, and NobelClad believes order activity could improve once customers gain clarity on the implications of future tariffs.
Current report
Net sales were $159,290 for the three months ended March 31, 2025, or a decrease of 5% compared with the same period in 2024, due to lower sales at DynaEnergetics. The 16% decline at DynaEnergetics was due to a decrease in volume of DS perforating systems attributable to lower well completions in North America, pricing decreases due to industry consolidation in the United States, and lower international sales due to project timing. This decrease was partially offset by a 6% and 5% increase in net sales at Arcadia Products and NobelClad, respectively. The increase in net sales at Arcadia was primarily attributable to higher sales volumes for longer-cycle commercial projects while the increase in net sales at NobelClad was due to timing of shipments out of backlog.
Current report
Selling and distribution expenses decreased $597 for the three months ended March 31, 2025 compared with the same period in 2024. The lower expense was driven by cost reductions at DynaEnergetics, including compensation costs of $413 and marketing consulting costs of $182.
Current report
Strategic review and related expensesof $1,298 for the three months ended March 31, 2025 include $932 in professional service fees and $366 in employee retention compensation, including $36 of stock-based compensation.
Current report
For the three months ended March 31, 2024, strategic review and related expenses were $2,169 and primarily include $1,138 in professional service fees and $489 in employee retention compensation, including $72 of stock-based compensation.
Current report
(1) Calculated using diluted weighted average shares outstanding of 19,816,281
Current report
(1)Calculated using diluted weighted average shares outstanding of 19,622,455
Current report
(2)Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest for purposes of calculating earnings per share
Current report
Net sales increased $3,655 for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to higher sales volumes for longer-cycle commercial projects. This increase was partially offset by lower sales volumes in longer-cycle high-end residential markets.
Current report
Net sales decreased $12,571 for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to a decrease in volume of DS perforating systems attributable to lower well completions in North America, as well as a decrease in pricing due to industry consolidation in the United States. There was also a 27% reduction in international sales due to project timing.
Current report
Operating incomeof $5,588 for the three months ended March 31, 2025 decreased compared to operating income of $8,842 in the same period in 2024 due to the decline in gross profit.
Current report
Net sales increased $1,337 for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to timing of shipments out of backlog.
Current report
Gross profit percentage decreased to 28.8% for the three months ended March 31, 2025 due to a less favorable project mix.
Current report
General and administrative expenses were higher by $118 for the three months ended March 31, 2025 compared to the same period in 2024 due to increases in compensation costs from higher headcount.
Current report
Selling and distribution expenses were lower by $187 for the three months ended March 31, 2025 compared to the same period in 2024 due to decreases in incentive compensation costs of $67, business related travel of $62, and outside services costs of $57.
Current report
Operating income decreased $478 for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to the decline in gross profit.
Current report
Cash flows from operating activities
Current report
Cash flows from investing activities
Current report
Cash flows from financing activities
Removed paragraphs (67)
Previous report
•DynaEnergetics’ sales of $69,679 in the third quarter of 2024 decreased 5% compared with the third quarter of 2023 primarily due to a decrease in pricing of DS perforating systems as a result of industry consolidation in the United States.
Previous report
•Consolidated gross profit was 19.8% in the third quarter of 2024 versus 30.6% in the third quarter of 2023. The decline was primarily attributable to margin declines at DynaEnergetics and Arcadia Products, as well as lower absorption of fixed manufacturing overhead costs as a result of the decrease in consolidated sales.
Previous report
•Consolidated selling, general and administrative (SG&A) expenses were $28,205 in the third quarter of 2024 compared with $28,713 in the third quarter of 2023. The year-over-year decrease is primarily attributable to a reduction in variable compensation costs as well as outside services costs.
Previous report
•Cash and cash equivalents of $14,511 at September 30, 2024 decreased $29,148 from cash and cash equivalents and marketable securities of $43,659 at December 31, 2023. The decrease was primarily attributable to debt repayments made in conjunction with the Company’s amended credit agreement.
Previous report
Our Arcadia Products business reported third quarter results that were below our expectations, due primarily to weak activity in the high-end luxury home and commercial construction markets, as well as internal operational disruptions that negatively impacted Arcadia Products’ short-cycle commercial sales. Under the direction of a new lean manufacturing and supply chain expert who is serving as Arcadia Products’ interim president, we are focused on strengthening sourcing and supply chain functions; instituting stronger sales, inventory and operations planning processes; and more effectively leveraging the functionality and benefits of Arcadia Products’ enterprise resource planning system. Arcadia Products is also pursuing various organic growth initiatives, including expanding its full product suite (commercial exteriors, commercial interiors, and residential doors and windows) into all of its branch locations throughout the western and southwestern United States. Additionally, the Company is reviewing certain product lines that have not consistently met our profitability targets.
Previous report
At DynaEnergetics, total third quarter well completions in the U.S. declined 6% versus the 2024 second quarter, and were down 13% versus last year’s third quarter, according to the U.S. Energy Information Administration. We believe U.S. well completion activity will remain soft during the fourth quarter of 2024 based on year-to-date declines in the number of active drilling rigs, well fracking crews and an anticipated extended frac holiday in the North American market. DynaEnergetics is in the process of implementing lower-cost product designs and various operational excellence initiatives, including automated assembly processes, that collectively are expected to partially offset persistent pricing pressure in North America’s well completions sector beginning in 2025.
Previous report
NobelClad continues to experience strong demand for its Cylindra™ cryogenic transition joints for use in the processing of LNG, and recent enhancements to the Cylindra production process have reduced manufacturing lead times. In the second quarter, NobelClad was awarded its largest-ever clad-plate order, and currently is pursuing additional large order opportunities in the energy and petrochemical industries. NobelClad’s order backlog was $59,028 as of September 30, 2024, flat versus $59,357 as of December 31, 2023. NobelClad expects to ship most orders in its backlog within twelve months.
Previous report
On January 29, 2024, we announced our Board of Directors had initiated a review of strategic alternatives for DynaEnergetics and NobelClad. The process formalized our ongoing efforts to unlock shareholder value. The Board retained financial advisors to assist in evaluating current strategies, operations, and capital structure, and considered sales, mergers, and other strategic combinations. On October 21, 2024, we announced that the Board is no longer actively marketing DynaEnergetics and NobelClad. Given the challenges of the last several months for DMC, including macroeconomic factors such as weakness and volatility in the energy market and soft luxury home and commercial construction activity the Board believes prioritizing stability, simplification and internal improvement will better serve DMC’s stockholders than selling these market-leading businesses at the present time.
Previous report
Net sales were $152,429 for the three months ended September 30, 2024, or a decrease of 11% compared with the same period in 2023, due to lower sales at all three business segments. The decrease at Arcadia Products was primarily due tolower sales volumes in longer-cycle ultra-high-end residential and certain short-cycle commercial markets. DynaEnergetics’ lower sales were primarily due to a decrease in pricing of DS perforating systems as a result of industry consolidation in the United States. NobelClad’s sales decrease was primarily due to timing of shipments out of backlog.
Previous report
Gross profit percentage was 19.8% versus 30.6% in the same period in 2023. The decline compared to prior year was primarily attributable to margin declines at DynaEnergetics and Arcadia Products, as well as lower absorption of fixed manufacturing overhead costs as a result of the decrease in consolidated sales.
Previous report
Goodwill impairment of $141,725 for the three months ended September 30, 2024 relates to full impairment of Arcadia Products’ goodwill due in part to recent financial performance not in accordance with expectations and downward revisions to the near-term forecast.
Previous report
Strategic review expenses of $1,763 for the three months ended September 30, 2024 relate primarily to the review of strategic alternatives for DynaEnergetics and NobelClad. In connection with this process, strategic review expenses primarily included $1,045 in professional service fees and $709 in employee retention compensation, including $101 of stock-based compensation. On October 21, 2024, the Company announced that the Board is no longer actively marketing the DynaEnergetics and NobelClad segments.
Previous report
Restructuring expenses and asset impairmentsof $2,069 for the three months ended September 30, 2024 relate to the abandonment of a planned manufacturing expansion at DynaEnergetics and employee severance associated with headcount reductions at DynaEnergetics and Arcadia Products.
Previous report
Operating lossof $148,935 for the three months ended September 30, 2024 decreased compared to operating income of $17,702 in the same period in 2023. The current period operating loss was primarily attributable to the goodwill impairment charge as well as decreased financial performance at DynaEnergetics and Arcadia Products.
Previous report
Other expense, netof $520 for the three months ended September 30, 2024 primarily related to net unrealized foreign currency exchange losses. Currency gains and losses can arise when subsidiaries enter into inter-company and third-party transactions that are denominated in currencies other than their functional currency, including foreign currency forward contracts used to offset foreign exchange rate fluctuations on certain foreign currency denominated asset and liability positions.
Previous report
(1) Calculated using diluted weighted average shares outstanding of 19,706,587
Previous report
(2)Net loss attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest
Previous report
(1)Calculated using diluted weighted average shares outstanding of 19,596,575
Previous report
Net sales were $490,477 for the nine months ended September 30, 2024, a decrease of 10% compared with the same period in 2023, primarily due to lower Arcadia Products sales volumes in longer-cycle ultra-high-end residential and certain short-cycle commercial markets, and a decrease in pricing of DynaEnergetics’ DS perforating systems as a result of industry consolidation in the United States.
Previous report
Gross profit percentage was 24.2% versus 30.6% in 2023. The decline compared to the prior year was primarily attributableto lower customer pricing at DynaEnergetics as well as lower absorption of fixed manufacturing overhead costs as a result of the decrease in net sales.
Previous report
General and administrative expenses decreased $14,333 for the nine months ended September 30, 2024 compared with the same period in 2023. 2023 included nonrecurring CEO transition expenses and related accelerated stock-based compensation of $7,383, andpatent infringement litigation costs at DynaEnergetics of $3,610. The remaining year-over-year decrease was primarily attributable to lower variable compensation costs of $1,477, internal leadership and sales meeting expense of $1,176 and outside service costs, primarily related to Arcadia Products and NobelClad ERP implementations, of $710.
Previous report
Selling and distribution expenses increased $600 for the nine months ended September 30, 2024 compared with the same period in 2023. The higher expense was driven by an increase in bad debt expense of $4,838 at DynaEnergetics and Arcadia Products. This increase was partially offset by lower marketing consulting costs of $1,166, compensation costs of $2,578, and business related travel of $185.
Previous report
Amortization of purchased intangible assets decreased $1,124 for the nine months ended September 30, 2024 compared to the same period in 2023 as the Arcadia Products customer relationship purchased intangible asset is amortized using an accelerated amortization method.
Previous report
Goodwill impairment of $141,725 for the nine months ended September 30, 2024 relates to full impairment of Arcadia Products’ goodwill due in part to recent financial performance not in accordance with expectations and downward revisions to the near-term forecast.
Previous report
Strategic review expenses of $5,952 for the nine months ended September 30, 2024 relate primarily to the review of strategic alternatives for DynaEnergetics and NobelClad. In connection with this process, strategic review expenses primarily included $3,189 in professional service fees and $2,060 in employee retention compensation, including $279 of stock-based compensation. On October 21, 2024, the Company announced that the Board is no longer actively marketing the DynaEnergetics and NobelClad segments.
Previous report
Restructuring expenses and asset impairmentsof $2,348 for the nine months ended September 30, 2024 relate to the abandonment of a planned manufacturing expansion at DynaEnergetics and employee severance associated with headcount reductions at DynaEnergetics and Arcadia Products.
Previous report
Operating loss of $130,562 for the nine months ended September 30, 2024 compared to operating income of $51,919 in the same period last year. The current period operating loss is primarily attributable to the goodwill impairment charge as well as decreased financial performance at DynaEnergetics and Arcadia Products.
Previous report
Other expense, netof $1,213 forthe nine months ended September 30, 2024 primarily related to net realized foreign currency exchange losses. Currency gains and losses can arise when subsidiaries enter into inter-company and third-party transactions that are denominated in currencies other than their functional currency, including foreign currency forward contracts used to offset foreign exchange rate fluctuations on certain foreign currency denominated asset and liability positions.
Previous report
Net (loss) income attributable to DMC Global Inc. for thenine months ended September 30, 2024 was$(94,748), compared to$23,495 for the same period in 2023 primarily due to the factors discussed above.
Previous report
Adjusted EBITDA decreased for the nine months ended September 30, 2024 compared with the same period in 2023 primarily due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
Previous report
(1)Calculated using diluted weighted average shares outstanding of 19,648,253
Previous report
(2)Net loss attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest.
Previous report
(1)Calculated using diluted weighted average shares outstanding of 19,540,978
Previous report
Net sales decreased $13,637 for the three months ended September 30, 2024 compared to the same period in 2023 primarily due tolower sales volumes in longer-cycle ultra-high-end residential markets. Additionally, weak construction activity and internal operational disruptions negatively impacted short-cycle commercial sales.
Previous report
Goodwill impairmentof $141,725 for the three months ended September 30, 2024 relates to full impairment of Arcadia Products’ goodwill due in part to recent financial performance not in accordance with expectations and downward revisions to the near-term forecast.
Previous report
Operating lossof $145,122 for the three months ended September 30, 2024 decreased compared to operating income of $6,476 in the same period in 2023 due to the goodwill impairment charge and decline in gross profit.
Previous report
Net sales decreased $41,460 for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due tolower sales volumes in longer-cycle ultra-high-end residential markets. Additionally, weak construction activity and internal operational disruptions negatively impacted short-cycle commercial sales for portions of 2024.
Previous report
Gross profit percentage decreased to 28.3% for the nine months ended September 30, 2024 primarily due tolower absorption of fixed manufacturing overhead costs as a result of the decrease in net sales as mentioned above.
Previous report
General and administrative expenses were lower by $832 for the nine months ended September 30, 2024 compared to the same period in 2023 due to decreases in outside services costs primarily attributable to the implementation of a new ERP system.
Previous report
Selling and distribution expenses decreased $927 for the nine months ended September 30, 2024 compared to the same period in 2023 due to lower compensation costs of $919.
Showing the first 40 of 67 passages. Open the source sections for the rest.
Reworded paragraphs (38)
Previous wording
DMC Global Inc. (“DMC”, "we", "us", "our", or the "Company") owns and operates Arcadia Products, DynaEnergetics and NobelClad, three innovative, asset-light manufacturing businesses that provide differentiated products and engineered solutions to niche segments of the construction, energy, industrial processing and transportation markets. Each of our businesses provides a unique suite of highly engineered products and differentiated solutions, and each has established a leadership position in its respective market. Our businesses seek to capitalize on their product and service differentiation to expand profit margins, increase cash flow and enhance shareholder value. Based in Broomfield, Colorado, DMC trades on Nasdaq under the symbol “BOOM.”
Current wording
DMC Global Inc. (“DMC”, "we", "us", "our", or the "Company") owns and operates Arcadia Products, DynaEnergetics and NobelClad, three innovative, asset-light manufacturing businesses that provide differentiated products and engineered solutions to segments of the construction, energy, industrial processing and transportation markets. Our businesses seek to capitalize on their product and service differentiation to expand profit margins, increase cash flow and enhance shareholder value. Based in Broomfield, Colorado, DMC trades on Nasdaq under the symbol “BOOM.”
Previous wording
On December 23, 2021, DMC completed the acquisition of 60% of the membership interests in Arcadia Products, LLC, a Colorado limited liability company resulting from the conversion of Arcadia, Inc. (collectively, “Arcadia Products”). Arcadia Products designs, engineers, fabricates, and finishes aluminum framing systems, windows, curtain walls, storefronts, entrance systems, and interior partitions to the commercial construction market. Additionally, Arcadia Products supplies customized windows and doors to the ultra-high-end residential construction market.
Current wording
On December 23, 2021, DMC completed the acquisition of 60% of the membership interests in Arcadia Products, LLC, a Colorado limited liability company resulting from the conversion of Arcadia, Inc. (collectively, “Arcadia Products”). Arcadia Products designs, engineers, fabricates, and finishes aluminum framing systems, windows, curtain walls, storefronts, entrance systems, and interior partitions to the commercial construction market. Additionally, Arcadia Products supplies customized windows and doors to the high-end residential construction market.
Previous wording
NobelClad produces explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints for commuter rail cars, ships, and liquified natural gas (LNG) processing equipment. While most demand for our products is driven by maintenance and retrofit projects at existing plants and facilities, new projects for petrochemical processing, oil refining, and aluminum smelting facilities also account for a significant portion of total demand. These industries tend to be cyclical in nature and the timing of new order inflow remains difficult to predict. We use backlog, defined as all unfilled firm purchase orders and commitments at a point in time, to measure the immediate outlook for our NobelClad business. Most firm purchase orders and commitments are realized and shipped within twelve months. NobelClad's backlog was $59,028 at September 30, 2024 compared to $59,357 at December 31, 2023.
Current wording
NobelClad produces explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints for commuter rail cars, ships, and liquified natural gas (LNG) processing equipment. While most demand for our products is driven by maintenance and retrofit projects at existing plants and facilities, new projects for petrochemical processing, oil refining, and aluminum smelting facilities also account for a significant portion of total demand. These industries tend to be cyclical in nature and the timing of new order inflow remains difficult to predict. We use backlog, defined as all unfilled firm purchase orders and commitments at a point in time, to measure the immediate outlook for our NobelClad business. Most firm purchase orders and commitments are realized and shipped within twelve months. NobelClad's backlog was $41,014 at March 31, 2025 compared to $48,885 at December 31, 2024.
Previous wording
•Consolidated sales were $152,429 in the third quarter of 2024 versus $172,147 in the third quarter of 2023, a decrease of 11%. The decline in sales performance was driven by lower sales at all three business segments.
Current wording
•Consolidated sales were $159,290 in the first quarter of 2025 versus $166,869 in the first quarter of 2024, a decrease of 5%. The decline in consolidated sales performance was driven by lower sales at DynaEnergetics.
Previous wording
•Arcadia Products reported sales of $57,818 in the third quarter of 2024, representing a decrease of 19% compared with the third quarter of 2023. The decrease was primarily due tolower sales volumes in longer-cycle ultra-high-end residential markets. Additionally, weak construction activity and internal operational disruptions negatively impacted short-cycle commercial sales.
Current wording
•Arcadia Products reported sales of $65,580 in the first quarter of 2025, representing an increase of 6% compared to the first quarter of 2024. The increase was primarily attributable to higher sales volumes for longer-cycle commercial projects, partially offset by lower sales volumes in high-end residential markets.
Previous wording
•NobelClad’s sales of $24,932 in the third quarter of 2024 decreased 10% compared with the third quarter of 2023 primarily due to timing of shipments out of backlog.
Current wording
•NobelClad’s sales of $28,159 in the first quarter of 2025 increased 5% compared to the first quarter of 2024 primarily due to timing of shipments out of backlog.
Previous wording
•The Company’s leverage ratio, calculated in accordance with its credit facility, was 1.18 to 1.0 as of September 30, 2024 in comparison to the maximum ratio permitted of 3.0 to 1.0. The Company’s adjusted leverage ratio, calculated using net debt as of September 30, 2024, was 0.96 to 1.0.
Current wording
•The Company’s leverage ratio, calculated in accordance with its credit facility, was 1.38 to 1.0 as of March 31, 2025 in comparison to the maximum ratio permitted of 3.0 to 1.0. The Company’s adjusted leverage ratio, calculated using net debt, a non-GAAP measure, as of March 31, 2025, was 1.11 to 1.0.
Previous wording
•Free-cash flow: defined as cash flows provided by (used in) operating activities less net acquisitions of property, plant and equipment.
Current wording
•Free-cash flow: defined as cash flows from operating activities less net acquisitions of property, plant and equipment.
Previous wording
General and administrative expenses increased $229 for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to higher compensation costs of $118 and outside services costs of $116.
Current wording
General and administrative expenses increased $694 for the three months ended March 31, 2025 compared with the same period in prior year primarily due to higher compensation costs.
Previous wording
Amortization of purchased intangible assets decreased $389 for the three months ended September 30, 2024 compared to the same period in 2023 as the Arcadia Products customer relationship purchased intangible asset is amortized using an accelerated amortization method.
Current wording
Amortization of purchased intangible assets decreased $529 for the three months ended March 31, 2025 compared to the same period in 2024 as the Arcadia Products customer relationship purchased intangible asset is amortized using an accelerated amortization method.
Previous wording
Restructuring expenses and asset impairmentsof $527 for the nine months ended September 30, 2024 relate to employee severance associated with headcount reductions.
Current wording
Restructuring expensesof $325 for the three months ended March 31, 2025 relate to employee severance associated with headcount reductions at Arcadia Products.
Previous wording
Income tax provisionof $7,848 was recorded on loss before income taxes of $151,568 for the three months ended September 30, 2024. Our most significant operations are in the United States, which has a 21% statutory income tax rate, and Germany, which has a 32% combined statutory income tax rate. The mix of income or loss before income taxes between these jurisdictions is one of the primary drivers of the difference between our 21% statutory tax rate and our effective tax rate. The effective rate was also impacted unfavorably by the establishment of a valuation allowance against U.S. deferred tax assets, $3,900 of which was recorded discretely in the third quarter. Additionally, the effective rate was impacted unfavorably by the geographic mix of pretax income, state taxes, and certain compensation expenses that are not tax deductible in the U.S. The operating results of Arcadia Products that are attributable to the redeemable noncontrolling interest holder are not taxed at DMC, which resulted in a partially offsetting favorable impact to the effective tax rate. We recorded an income tax provision of $4,087 on income before income taxes of $15,612 for the three months ended September 30, 2023. The prior year rate was impacted by the same factors previously discussed.
Current wording
Income tax provisionof $2,733 was recorded on income before income taxes of $4,596 for the three months ended March 31, 2025. Our most significant operations are in the United States, which has a 21% statutory income tax rate, and Germany, which has a 32% combined statutory income tax rate. The mix of income or loss before income taxes between these jurisdictions is one of the primary drivers of the difference between our 21% statutory tax rate and our effective tax rate. Additionally, the effective rate was impacted unfavorably by state taxes and a valuation allowance in the U.S. which results in no benefit for losses generated domestically. We recorded an income tax provision of $1,643 on income before income taxes of $3,962 for the three months ended March 31, 2024. The prior year rate was impacted unfavorably by the geographic mix of pretax income, state taxes and certain compensation expenses that are not tax deductible in the U.S. The operating results of Arcadia Products that are attributable to the redeemable noncontrolling interest holder are not taxed at DMC, which resulted in a partially offsetting favorable impact to the effective tax rate.
Previous wording
Net (loss) income attributable to DMC Global Inc. for thethree months ended September 30, 2024 was$(101,323), compared to$8,883 for the same period in 2023 primarily due to the factors discussed above.
Current wording
Net income attributable to DMC Global Inc. for thethree months ended March 31, 2025 was$677, compared to$2,563 for the same period in 2024 primarily due to the factors discussed above.
Previous wording
Adjusted Net (Loss) Income and Adjusted Diluted Earnings per Share decreased for the three months ended September 30, 2024 compared with the same period in 2023 primarily due to the factors discussed above. See "Use of Non-GAAP Financial Measures" above for the explanation of the use of non-GAAP measures. The following is a reconciliation of the most directly comparable GAAP measures to Adjusted Net (Loss) Income and Adjusted Diluted Earnings Per Share.
Current wording
Adjusted Net Income and Adjusted Diluted Earnings per Share decreased for the three months ended March 31, 2025 compared with the same period in 2024 primarily due to the factors discussed above. See "Use of Non-GAAP Financial Measures" above for the explanation of the use of non-GAAP measures. The following is a reconciliation of the most directly comparable GAAP measures to Adjusted Net Income and Adjusted Diluted Earnings Per Share.
Previous wording
(2)Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest
Current wording
(2)Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest for purposes of calculating earnings per share
Previous wording
We primarily evaluate performance and allocate resources based on segment revenues, operating income and Adjusted EBITDA as well as projected future performance. Segment operating income is defined as revenues less expenses identifiable to the segment. DMC consolidated operating income and Adjusted EBITDA include unallocated corporate expenses and unallocated stock-based compensation expense. Stock-based compensation is not allocated to wholly owned segments, DynaEnergetics and NobelClad. Stock-based compensation is allocated to the Arcadia Products segment as 60% of such expense is attributable to the Company, whereas the remaining 40% is attributable to the redeemable noncontrolling interest holder. Segment operating income will reconcile to consolidated income before income taxes by deducting unallocated corporate expenses, unallocated stock-based compensation, other (expense) income, net, and interest expense, net.
Current wording
We primarily evaluate performance and allocate resources based on segment revenues, operating income and Adjusted EBITDA as well as projected future performance. Segment operating income is defined as revenues less expenses identifiable to the segment. DMC consolidated operating income and Adjusted EBITDA include unallocated corporate expenses and unallocated stock-based compensation expense. Stock-based compensation is not allocated to wholly owned segments, DynaEnergetics and NobelClad. Stock-based compensation is allocated to the Arcadia Products segment as 60% of such expense is attributable to the Company, whereas the remaining 40% is attributable to the redeemable noncontrolling interest holder. Segment operating income will reconcile to consolidated income before income taxes by deducting unallocated corporate expenses, unallocated stock-based compensation, other expense, net, and interest expense, net.
Previous wording
Gross profit percentage decreased to 23.5% for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to lower absorption of fixed manufacturing overhead costs as a result of the decrease in net sales as mentioned above.
Current wording
Gross profit percentage increased to 31.0% for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to higher absorption of fixed manufacturing overhead costs as a result of the increase in net sales as mentioned above.
Previous wording
General and administrative expenses decreased $1,910 for the three months ended September 30, 2024 compared with the same period in prior year primarily due to lower variable compensation costs of $1,415, lower outside services costs related to the ERP implementation at Arcadia Products of $382, and lower business related travel expense of $85.
Current wording
General and administrative expenses decreased $197 for the three months ended March 31, 2025 compared with the same period in prior year primarily due to lower business related travel of $190.
Previous wording
Selling and distribution expenses increased $1,402 for the three months ended September 30, 2024 compared with the same period in 2023. The higher expense was driven by an increase in bad debt expense of $3,626 at DynaEnergetics and Arcadia Products. This increase was partially offset by lower compensation costs of $1,726, marketing consulting costs of $403, and business related travel expense of $78.
Current wording
Selling and distribution expenses increased $350 for the three months ended March 31, 2025 compared with the same period in 2024. The higher expense was driven by an increase in bad debt expense of $235 and incentive compensation costs of $152.
Previous wording
Amortization of purchased intangible assets decreased $374 for the three months ended September 30, 2024 compared to the same period in 2023 as the customer relationship purchased intangible asset is amortized using an accelerated amortization method.
Current wording
Amortization of purchased intangible assets decreased $514 for the three months ended March 31, 2025 compared to the same period in 2024 as the customer relationship purchased intangible asset is amortized using an accelerated amortization method.
Previous wording
Restructuring expenses and asset impairmentsof $248 for the three months ended September 30, 2024 relate to employee severance associated with headcount reductions.
Current wording
Restructuring expensesof $325 for the three months ended March 31, 2025 relate to employee severance associated with headcount reductions.
Previous wording
Operating income increased $2,441 for the nine months ended September 30, 2024 compared to the same period in 2023 due primarily to higher gross profit.
Current wording
Operating incomeof $2,996 for the three months ended March 31, 2025 increased compared to operating loss of $588 in the same period in 2024 due primarily to higher gross profit.
Previous wording
Adjusted EBITDA increased for the nine months ended September 30, 2024 compared to the same period in 2023 due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
Current wording
Adjusted EBITDA increased for the three months ended March 31, 2025 compared with the same period in 2024 due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
Previous wording
Gross profit percentage decreased to 12.0% for the three months ended September 30, 2024 due to lower customer pricing, an inventory charge of $1,500, and lower absorption of fixed manufacturing overhead costs as a result of the decrease in net sales.
Current wording
Gross profit percentage decreased to 19.5% for the three months ended March 31, 2025 due to lower customer pricing and lower absorption of fixed manufacturing overhead costs as a result of the decrease in net sales.
Previous wording
General and administrative expenses were lower by $796 for the three months ended September 30, 2024 compared to the same period in 2023 driven by a decrease in compensation costs of $354 and patent infringement litigation costs of $171. The remaining decrease is primarily attributable to a reduction in other outside services of $210.
Current wording
General and administrative expenses were lower by $144 for the three months ended March 31, 2025 compared to the same period in 2024 driven by a decrease in outside service costs of $122.
Previous wording
Selling and distribution expenses were lower by $341 for the three months ended September 30, 2024 compared to the same period in 2023 due primarily to decreases in compensation costs of $261 and bad debt recoveries of $41.
Current wording
Selling and distribution expenses were lower by $747 for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to decreases in compensation costs of $413, marketing consulting costs of $182, rental expense of $61, and business related travel expense of $60.
Previous wording
We have historically financed our operations from a combination of internally generated cash flow, revolving credit borrowings, and various long-term debt arrangements. Our net debt position was $59,704 at September 30, 2024 compared to $72,192 at December 31, 2023. The decrease in net debt during 2024 was due primarily to a reduction in outstanding debt attributable to repayments made on the revolving loan subsequent to the credit agreement amendment executed in February 2024, along with required principal payments on the term loan.
Current wording
We have historically financed our operations from a combination of internally generated cash flow, revolving credit borrowings, and various long-term debt arrangements. Our net debt position was $57,716 at March 31, 2025 compared to $56,529 at December 31, 2024. The increase in net debt during the first quarter was due primarily to net borrowings of $1,500 which assisted in funding the payment of various liabilities, including employee retention bonuses associated with the strategic review and incentive compensation earned in 2024.
Previous wording
The credit facility includes various covenants and restrictions, certain of which relate to the payment of dividends or other distributions to stockholders; redemption of capital stock; incurring additional indebtedness; mortgaging, pledging or disposition of major assets; and maintenance of specified ratios.
Current wording
The credit facility includes various covenants and restrictions, certain of which relate to the payment of dividends or other distributions to stockholders; redemption of capital stock; incurring additional indebtedness; mortgaging, pledging or disposition of major assets; and maintenance of specified ratios. As of March 31, 2025, we were in compliance with all financial covenants and other provisions of our debt agreements.
Previous wording
The leverage ratio is defined in the credit facility as the ratio of Consolidated Funded Indebtedness (as defined in the credit facility) on the last day of any trailing four quarter period to Consolidated EBITDA (as defined in the credit facility) for such period. The maximum leverage ratio permitted by our credit facility is 3.0 to 1.0. The actual leverage ratio as of September 30, 2024, calculated in accordance with the amended credit facility, was 1.18 to 1.0.
Current wording
The leverage ratio is defined in the credit facility as the ratio of Consolidated Funded Indebtedness (as defined in the credit facility) on the last day of any trailing four quarter period to Consolidated EBITDA (as defined in the credit facility) for such period. The maximum leverage ratio permitted by our credit facility is 3.0 to 1.0. The actual leverage ratio as of March 31, 2025, calculated in accordance with the amended credit facility, was 1.38 to 1.0.
Previous wording
The debt service coverage ratio is defined in the credit facility as the ratio of Consolidated EBITDA less the sum of capital distributions paid in cash (other than those made with respect to preferred stock issued under the Operating Agreement), Consolidated Unfunded Capital Expenditures (as defined in the credit facility), and net cash income taxes divided by the sum of cash interest expense, any dividends on the preferred stock paid in cash, and scheduled principal payments on funded indebtedness. Under our credit facility, the minimum debt service coverage ratio permitted is 1.25 to 1.0. The actual debt service coverage ratio for the trailing twelve months ended September 30, 2024 was 2.91 to 1.0.
Current wording
The debt service coverage ratio is defined in the credit facility as the ratio of Consolidated EBITDA less the sum of capital distributions paid in cash (other than those made with respect to preferred stock issued under the Operating Agreement), Consolidated Unfunded Capital Expenditures (as defined in the credit facility), and net cash income taxes divided by the sum of cash interest expense, any dividends on the preferred stock paid in cash, and scheduled principal payments on funded indebtedness. Under our credit facility, the minimum debt service coverage ratio permitted is 1.25 to 1.0. The actual debt service coverage ratio for the trailing twelve months ended March 31, 2025 was 3.43 to 1.0.
Previous wording
The Operating Agreement for Arcadia Products contains a right for the Company to purchase the remaining interest in Arcadia Products from the minority interest holder on or after December 23, 2024 (“Call Option”). Similarly, the minority interest holder of Arcadia Products has the right to sell its remaining interest in Arcadia Products to the Company on or after December 23, 2024 (“Put Option”). Both the Call Option and Put Option enable the respective holder to exercise their rights based upon a predefined calculation as included within the Operating Agreement, subject to a floor value also as defined within the Operating Agreement which is based primarily upon a contractually stated equity value.
Current wording
The Operating Agreement for Arcadia Products contains a right for the Company to purchase the remaining interest in Arcadia Products from the minority interest holder on or after December 23, 2024 (“Call Option”). The minority interest holder of Arcadia Products has the right to sell its remaining interest in Arcadia Products to the Company (“Put Option”). On December 3, 2024, the Company and minority interest holder entered into an amendment to the Operating Agreement whereby the minority interest holder agreed not to exercise the Put Option until on or after September 6, 2026 in exchange for, among other terms, a one-time payment of $2,500. Both the Call Option and Put Option enable the respective holder to exercise their rights based upon a predefined calculation as included within the Operating Agreement, subject to a floor value also as defined within the Operating Agreement which is based primarily upon a contractually stated equity value.
Previous wording
As of September 30, 2024, the settlement amount of the redeemable noncontrolling inte rest is $187,080 and is equal to the floor value as defined within the Operating Agreement. Upon settlement, consideration paid will be net of the $24,902 promissory note outstanding due from the redeemable noncontrolling interest holder. Refer to Note 2 within Item 1 for further information related to the valuation of the redeemable noncontrolling interest and promissory note outstanding.
Current wording
As of March 31, 2025, the settlement amount of the redeemable noncontrolling inte rest was $187,080 and equals the floor value as defined within the Operating Agreement. Upon settlement, consideration paid will be net of the $24,902 promissory note outstanding due from the redeemable noncontrolling interest holder. Refer to Note 2 within Item 1 for further information related to the valuation of the redeemable noncontrolling interest and promissory note outstanding.
Previous wording
Our debt balance, net of deferred debt issuance costs, decreased to $74,215 at September 30, 2024 from $115,851 at December 31, 2023 for the reasons discussed above. Our other contractual obligations and commitments have not materially changed since December 31, 2023.
Current wording
Our debt balance, net of deferred debt issuance costs, increased to $72,421 at March 31, 2025 from $70,818 at December 31, 2024 for the reasons discussed above. Our other contractual obligations and commitments have not materially changed since December 31, 2024.
Previous wording
Cash flows provided by operating activities
Current wording
Net cash provided by operating activities of $4,488 for the three months ended March 31, 2025 decreased compared to $13,440 in the same period last year driven primarily by the use of cash for working capital, which included higher accounts receivable balances due to temporary customer payment delays in DynaEnergetics and lower contract liability balances in NobelClad due to significant project shipments during the quarter for orders which included large customer prepayments.
Previous wording
Net cash provided by investing activities for the nine months ended September 30, 2024 of $1,525 was attributable to proceeds from sales and maturities of marketable securities of $12,619, partially offset by the acquisition of property, plant and equipment of $11,600. Net cash used in investing activities for the nine months ended September 30, 2023 of $14,971 related to the acquisition of property, plant and equipment and investments in marketable securities.
Current wording
Net cash used in investing activities for the three months ended March 31, 2025 of $3,332 was attributable to the acquisition, net of proceeds received, of property, plant and equipment. Net cash provided by investing activities for the three months ended March 31, 2024 of $9,651 related to proceeds from sales and maturities of marketable securities of $12,619, partially offset by the acquisition of property, plant and equipment of$2,968.
Previous wording
Net cash flows used in financing activities for the nine months ended September 30, 2023 of $26,211 primarily included quarterly principal payments and a prepayment on our term loan of $13,750, distributions to the redeemable noncontrolling interest holder of $10,345, and treasury stock purchases of $2,328.
Current wording
Net cash flows used in financing activities for the three months ended March 31, 2025 of $135 included distributions to the redeemable noncontrolling interest holder of $1,151 and treasury stock purchases of $484, which were partially offset by net credit facility borrowings of $1,500.
Previous wording
Net cash flows used in financing activities for the nine months ended September 30, 2024 of $53,424 included net credit facility repayments of $41,500. Additional cash flows used in financing activities included distributions to the redeemable noncontrolling interest holder of $8,321, payment of debt issuance costs of $2,735 and treasury stock purchases of $1,000.
Current wording
Net cash flows used in financing activities for the three months ended March 31, 2024 of $34,296 primarily included net credit facility repayments of $27,500. Additional cash flows used in financing activities included distributions to the redeemable noncontrolling interest holder of $3,125, payment of debt issuance costs of $2,735 and treasury stock purchases of $936.
Previous wording
Preparation of financial statements in conformity with generally accepted accounting principles in the United States requires that management make estimates, judgments and assumptions that affect the amounts reported for revenues, expenses, asset, liabilities, and other related disclosures. Our critical accounting estimates have not changed from those reported in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, except as provided below.
Current wording
Preparation of financial statements in conformity with generally accepted accounting principles in the United States requires that management make estimates, judgments and assumptions that affect the amounts reported for revenues, expenses, assets, liabilities, and other related disclosures. Our critical accounting estimates have not changed from those reported in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Income tax provisionof $12,283 was recorded on loss before income taxes of $138,521 for the nine months ended September 30, 2024. Our most significant operations are in the United States, which has a 21% statutory income tax rate, and Germany, which has a 32% combined statutory income tax rate. The mix of income or loss before income taxes between these jurisdictions is one of the primary drivers of the difference between our 21% statutory tax rate and our effective tax rate. The effective rate was also impacted unfavorably by the establishment of a valuation allowance against U.S. deferred tax assets, $3,900 of which was recorded discretely in the third quarter. Additionally, the effective rate was impacted unfavorably by the geographic mix of pretax income, state taxes, and certain compensation expenses that are not tax deductible in the U.S. The operating results of Arcadia Products that are attributable to the redeemable noncontrolling interest holder are not taxed at DMC, which resulted in a partially offsetting favorable impact to the effective tax rate. We recorded an income tax provision of $13,187 on income before income taxes of $44,377 for the nine months ended September 30, 2023. The prior year rate was impacted by the same factors previously discussed.
Previous report — wording carried elsewhere
Adjusted Net (Loss) Income and Adjusted Diluted Earnings per Share decreased for the nine months ended September 30, 2024 compared with the same period in 2023 primarily due to the factors discussed above. See "Use of Non-GAAP Financial Measures" above for the explanation of the use of non-GAAP measures. The following is a reconciliation of the most directly comparable GAAP measures to Adjusted Net (Loss) Income and Adjusted Diluted Earnings Per Share.
Previous report — wording carried elsewhere
(2)Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest.
Previous report — wording carried elsewhere
Cash flows used in financing activities